PA Banking Business Introduction PA Banking Business Introduction

November 2007November 2007

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AgendaAgenda

PA Banking Business Overview

Transition Plan and New Achievements

Vision of PA Banking Business

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AgendaAgenda

PA Banking Business Overview

Transition Plan and New Achievements

Vision of PA Banking Business

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BackgroundBackground

Integrated SZCB and Ping An Bank and renamed toIntegrated SZCB and Ping An Bank and renamed toShenzhen Ping An Bank (SZPAB) in August 2007Shenzhen Ping An Bank (SZPAB) in August 2007

Purchased Fujian Asia Bank Ltd. and renamed toPurchased Fujian Asia Bank Ltd. and renamed toPing An Bank in 2003 Ping An Bank in 2003

Unified banking brand

Successfully acquired Shenzhen Commercial Bank (SZCB) in 2006Successfully acquired Shenzhen Commercial Bank (SZCB) in 2006

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Achievements toAchievements to--datedate

u Professional management team in place

u New matrix based organization structure in place

u Bank merger completed, expanding foot print to 3 cities

u Launched Credit Card

u Launched Wealth Management

u Launched SME business

u Launched Cross-Selling campaign

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Main AchievementsMain Achievements

1. SZCB fully acquired/merged PAB and organization/staff integration is completed

2. The new bank is renamed as SZPAB, with a new brand image established

3. Established Shanghai and Fuzhou branches; realize a business presence across different regions

4. SH and FZ branches start to use uniform banking system and provide full-range banking services. Credit card launched in SH and Jixiang Debit Card launched in FZ

Banking Business Integration CompletedBanking Business Integration Completed

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Credit Card LaunchedCredit Card Launched

n Initial development stage in China

n Increased recognition and use of credit cards

n Gradual establishment of credit bureau system

OpportunitiesOpportunities StrengthStrength

The card with the best services and insurance protection

n Strong Ping An brand name

n Large existing customer base

n Extended distribution channels

WanLiTong CardPing An Card

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Wealth Management LaunchedWealth Management LaunchedØ Launched first Anchor WM center in Yitian branch (April.9th)Ø 5 Anchor WM Centers by end of OctoberØ Flagship Anchor WM Centre opening on Oct 15Ø Launched 8 kinds of WM products

SZPAB Anchor Wealth Management Center

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SME LaunchedSME Launched

Ø Launched SME business and “Yingdongli”

Ø Start with 3 SME pilot centers and 5 pilot sub-branches in Shenzhen

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Cross Selling Campaign LaunchedCross Selling Campaign Launched

ValueValuepropositionproposition

MarketMarketpositioningpositioning

TargetTargetcustomercustomer

n Fully leverage PAG’s resource advantages (customers, brands, management, IT, etc.) for fast expansion of market share, hence substantially improve profitability and market competitiveness

n Specialized and integrated financial services:

u Build one-stop and integrated financial service system

u Build all-around 24-hour service platform

u Build a team of management, operations and sales force with strong innovative and service-oriented mindset, and strong capabilities of management and business development, to fully implement customer-centred operation

n Diversified product: Rely on Group’s product resources to enrich product offering, continue product innovation, and provide diversified and integrated financial products to target customers

n Customer segments of Ping An Group (Life, P&C, pension, trust, security, asset management, etc.)

n Customer segments of Shenzhen Ping An Bank (all customers of Shenzhen Ping An Bank)

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(RMB million)

Net interest income

G&A expenses

Net profit

Net interest spread

Average interest earning assets balance

Average interest bearing liabilities balance

1H 20061H 20061H 20071H 2007

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(9)

1

0.6%

1,170

681

1,488

(900)

1,086

2.4%

118,411

110,507

Ø 1H 2007 operation results recognized some non-recurring items amounting to RMB 409 million, which mainly included gain from non-performing assets disposals and reversals of litigation provision

Significant Profit Contribution to the Group

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Cost-to-income ratio

Loan to deposit ratio

Non-performing loans ratio

Loan loss provisions/non-performing loans ratio

Capital adequacy ratio

1H 20061H 20061H 20071H 2007

46.3%

52.6%

1.1%

66.0%

10.6%

Ø The drop in non-performing loans ratio was mainly due to the disposal of RMB 2.8billion non-performing assets package to Cinda Asset Management Company in the second quarter of 2007

35.5%

72.6%

8.2%

39.1%

4.9%

Note: The 1H2006 ratios are unaudited proforma results as if SZCB and Ping An Bank were merged in the first half of 2006

SZPAB Key Financial Ratios

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AgendaAgenda

PA Banking Business Overview

Transition Plan and New Achievements

Vision of PA Banking Business

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Transition Plan ObjectivesTransition Plan ObjectivesWe have a very detailed two year transition plan which has the following key objectives

n Establish and build a clear market position leveraging inherent advantages

Market Position

n Establish and develop strong innovation culture and create clearindustry leadership in a number of areas

Innovation

n Establish and maintain a strong Operational Risk and Control environment

Operational Risk

n Build and maintain a high quality Portfolio and Portfolio Management processes

Portfolio Quality

n Achieve superior financial performance and increased market shareFinancial Performance

n Maintain capital levels above all regulatory requirementsCapital

n Establish and maintain a world class Corporate Governance culture and infrastructure

Corporate Governance

n Establish a management team that is able to create and operate aworld class infrastructure to very high standards

Management

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RiskManagement

ØCorporate credit risk

ØRetail credit risk,

ØMarket risk

Transition Plan PillarsTransition Plan Pillars

HRManagement

ØOrganization transformationØHR policy and systemØCommunicationØCompensation, benefits, and incentiveØPerformance mgmtØTraining

5 Finance

ØOrganization centralization

ØFinancial management processes

ØMIS system

IT

ØOrganization centralization

ØCore banking system

ØCard system

ØOther applications to support HR/Risk/MIS, etc

Operations

ØStandardization

ØCentralization

ØOperation risk

ØProductivity

ØService Quality

Audit andCompliance

ØOrganization centralization

ØCulture

ØCapability building

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InfrastrInfrastr--uctureucturepillarspillars

BusinessBusinesspillarspillars

Credit CardØPing An card

ØWanLiTong card

Corporate BankingØDepositØCorporate loanØSME loanØBillsØTrade financeØFX productsØInternational business

TreasuryØBalance sheet management

ØCustomer sales

ØProduct innovation

ØTrading

Retail BankingØDeposit

ØConsumer loan

ØInvestment product

ØWealth management

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Distribution Management ØChannel integration and strategy ØSales distribution

Corporate Governance ØRules and processes ØCommittees

Re-branding ØBrand strategy ØTiming

PAB Integration

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Key Transition Plan AchievementsKey Transition Plan Achievements

nTransition communication programs developedCorporate CulturenPAB mergerMarket Position

nWM/SME/Credit card launchednCash management business roadmap completednSyndicated loan policy implemented

Innovation

nIT remediation well underway nBranch operations diagnostic completednOperation centralization roadmap completed

Operational Risk

nIndependent risk management establishednCredit policy for corporate customers finalized and implementednMarket risk management system and policy established nNew post-loan management system and policy established

Portfolio Quality

n1H budget achievednRemarkable Loan growth achievednCAR maintained at 10%

Financial Strength

nALCO process revised and implementednCompliance department established and key processes establishednMIS infrastructure established (with much more to do)nAll policies within the bank sort out and new policy system of the new bank established

Corporate Governance

nHQ organization change completednManagement team additions completednCorporate/retail segmentation finished

Management

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AgendaAgenda

PA Banking Business Overview

Transition Plan and New Achievements

Vision of PA Banking Business

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Our VisionOur Vision

n Becomes a major contributor to Group growth and profitability by leveraging the Ping An brand, customer base, operational efficiency, culture, talent base and corporate governance

n Delivers market leading integrated financial advice, product and services to consumers; asset based finance and other services to small & medium sized companies; and a full range of banking services to selected large companies

n Is recognized for world-class risk management, control and corporate governance standards

n Is able to attract, retain, train, develop and motivate the strongest talent base in the Chinese banking industry and a company in which employees feel a strong sense of pride

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上海上海ShanghaiShanghai

福州福州FuzhouFuzhou

深圳深圳ShenzhenShenzhen

Nationwide Expansion under One Unified Banking Brand

Thank You!Thank You!