12:00PM New York-The fourth largest listed bank in the world Bank of China reported net interest income in the year ended December 31 increased 25.8% to Rmb152.7 billion in 2007 from Rmb121.3 billion a year ago

Annual Earnings Review

Bank of China reported that annual net interest income in the year ended December 31st rose 25.8% from Rmb121.3 billion a year ago to Rmb152.7 billion as net fee and commission income advanced 91.9% on the year to Rmb 27.4 billion.

For the year, net profit attributable to shareholders also increased 31.3% to Rmb56.2 billion from Rmb42.8 billion a year ago. Earnings per share advanced 22.2% to Rmb0.22 per share from 0.18 per share a year earlier.

BOC also proposed the payment of a dividend of Rmb0.10 per share for the year, 25% increase from a year ago. Return on equity in 2007 was 17.4% and return on assets in the year 1.53%. Dividend payout ratio was 62.6% after the bank increased the dividend by 7.9%.

Total asset at the bank increased 14.9% to HK$1.07 trillion and total deposits from customers increased 14.2% to HK$793 billion. The bank reported capital adequacy ratio of 13.08% and liquidity ratio of 50.9%.

Business Review

During 2007, the Bank focused on the development of quality credit business and at the end of 2007 total customer loans grew by 17.2% to Rmb 2,850.561 billion, while and corporate and personal lending grew by 14.53% and 25.71% correspondingly.

Also, the average yield of customer loans grew year-on-year by 46 basis points to 5.94% and the average yield of domestic Rmb loans also advanced by 63 basis points to 6.06%.

Customer deposits saw annual growth of 7.55% and Rmb deposits of financial institutions increased by 88.23%, increasing market share by 2.66%.

As the People’s Bank of China raised the benchmark rates of Rmb-denominated loans and deposits six times, BOC achieved a net interest income increase of 25.85% year-on-year of Rmb 152.745 billion.

In 2007, the Bank operated a total of 366 standardized wealth management centres and more than 1,000 wealth management outlets. Also the number of wealth management customers rose by 18.12%.

The agency business also posted significant gains as the number of funds distributed and total sales volume rose 130% and 322% respectively year-on-year. The net value of assets under custody also advanced by 150% compared to 2006.

During the year, BOC issued 2.34 million new credit cards which brought the total number of credit cards and quasi-credit cards to over 11 million. In addition, the international settlement volume exceeded US$1 trillion for the first time.

IPO financing business rose 162% to HK$528 billion to help 48 newly listed companies.

Total advances to customers at mainland 15 branches increased 60% to HK$30 billion and operating profit before impairment allowances increased 53% or HK$200 million. Customers deposits increased 48.4% to HK$5.8 billion.

Foreign exchange business

Strong growth in foreign exchange trading business generated spread income of Rmb7.647 billion for domestic operation of the Bank in 2007, a rise of 28.78% from a year ago.

However net foreign exchange position declined to US$4.1 billion at the end of the year. Investors have been concerned with the bank’s exposure to foreign loans and worried that losses may be higher than predicted.