Ping An to Become SDB s Strategic Investor

June 12th, Ping An Insurance (Group) Company of China, Ltd. ( Ping An or the Group ) announced that its board of Directors has approved the subscription of not less than 370 million but not more than 585 million new shares in Shenzhen Development Bank (SDB). In addition, at no later than December 31, 2010, Ping An will purchase from Newbridge Capital, SDB s largest shareholder, a 16.

76% stake in the issued share capital of SDB. Upon completion of the transactions, Ping An will hold in total no more than 30% of the issued capital of SDB. The transactions will be pending for approvals by related government regulators.

Ping An, through its non-wholly owned subsidiary, Ping An Life Insurance Company of China, Ltd. ( Ping An Life ), has entered into a Share Subscription Agreement with SDB to subscribe for no more than 585,000,000 SDB shares in cash at a subscription price of RMB18.26 per share (the average trading price of SDB shares for the 20 trading days prior to the suspension).

The subscription shares are subject to a lock up period of three years. The consideration will be no more than RMB10.683 billion. The consideration will be funded by Ping An Life s internal resources and traditional life insurance fund maturing in no less than 20 years. In addition, Ping An will purchase, by way of cash or share swap, 520,414,439 SDB s shares from Newbridge before the end of 2010.

The SDB shares involved represent 16.76% of the existing issued share capital of SDB. The consideration will be RMB11.449 billion if it is satisfied by cash, at a subscription price of RMB22 per share. The consideration will be funded by Ping An s internal resources. If Ping An pays with its newly issued H shares, Ping An will issue 299,088,758 of its H shares to Newbridge.

The issue price for Ping An s H shares will be calculated based on their average trading price for the 30 trading days prior to suspension. (Based on one H-share for every 1.74 SDB share; SDB shares at RMB26 per share). Upon completion of the transaction, Newbridge will become a shareholder of Ping An, holding a total of 299,088,758 Ping An H shares, or 4.

1% of all existing Ping An shares. At any time prior to the completion of the transaction, Ping An and Ping An Life shall take legal and feasible means to undertake its holding in the SDB Shares will not exceed 30% of the then issued share capital of SDB.

Should all transactions be completed before the end of 2009 after obtaining all necessary approvals, the net asset value of SDB will be increased to RMB6.7-10.7 billion by the end of 2009. The addition of core capital will substantially enhance the Core Capital Adequacy Ratio (CCAR) and Capital Adequacy Ratio (CAR) of the bank by between 2.2% and 3.5%, on a pro forma basis as of end March 2009. CCAR is thus estimated to be improved to between 7.4% and 8.8% while CAR to between 10.7% and 12.1%, above the 10% target set at the beginning of the year.

As part of the Subscription Agreement, upon completion of the Offering, Ping An Life and its related parties will have the right to nominate three candidates for SDB s Board of Directors, including one independent director, subject to applicable laws and regulations. Within 18 months after the Offering is completed, Ping An Life and its related parties will have the right to nominate another three directors to replace directors who have resigned. The appointments are subject to shareholders approval.

The management teams at Ping An, SDB and Newbridge believe the transactions will complement and enhance each other s strength and capabilities, unleashing benefits in the areas of strategic development, finance and synergy, and bringing long term benefits to all parties concerned. The smooth completion of the transactions is likely to promote further the healthy development of China s capital market, marking a significant step in the reforms and progress of China s financial and insurance industries.

Frank Newman, Chairman and Chief Executive Officer of SDB, indicated that the introduction of Ping Aa as strategic investor will substantially enhance SDB capital base quickly, improve CAR, and enable the Bank to achieve more successes in the future, promoting long term healthy development of the bank. And potential cooperative programs with PAG can provide significant opportunities for business growth for the bank.

According to Weijian Shan, partner of TPG Capital (formerly Newbridge Capital), since the firm s investment in SDB in 2004, it has invested substantial efforts in improving the bank s asset quality and helping it manage risk more effectively, which have now helped the bank achieve their best performance ever. Both Ping An and SDB are headquartered in Shenzhen, China. They both boast similar corporate governance structure, management culture, as well as having a management team with extensive international exposure. Their cooperation will help improve the bank s shareholding structure through the smooth transfer of the single largest sharholding to Ping An. It is also significant for the healthy development of the bank in the long term. For Newbridge, the transactions represent a good return for its investment, through which it could also become a shareholder of Ping An, allowing it to share the award of the insurer s future financial growth.

According to Ma Mingzhe, Chairman and Chief Executive Officer of Ping An, becoming a strategic investor in Shenzhen Development Bank is in line with the insurer s stated development strategy. As a pioneer of China s integrated financial services industry approved by the Chinese government, Ping An is dedicated to developing its integrated financial platform to support the balanced development of its three core businesses: insurance, banking and investment.

Should the transactions be approved, it will help Ping An secure strategic cooperation with a large-scale, nation-wide commercial bank while enhancing its product range, customer base and cross-selling capabilities. It will take the Group closer to its strategic goal of providing each of its customers with one-stop-shop service with access to multiple products through just one account.

Financially, we are optimistic about the long-term development of China financial industry and that of SDB. The transactions will not only reward Ping An with good returns on investment as a major shareholder, they will also improve further the asset structure, stabilise solvency ratio and enhance embedded value of the Group, facilitating its healthy development in the long run.

In the past five years, the management of SDB has implemented successful business reforms which had helped lift operation and management at the bank. Its total assets had increased by 1.6 times to over RMB520 billion in five years. The bank has a non-performing loan ratio of just 0.61% and a provision coverage ratio of 130%.

Currently, Ping An does not have banking business in at least 14 of the cities now covered by SDB s network, and these markets are among the fastest growth areas of SDB s development. Those are the markets where Ping An already have established No.1 or No.2 status in life insurance, property and casualty insurance and annuity.

This has created room for both Ping An and SDB to develop cross-selling and other synergistic opportunities.

Ping An joined hands with HSBC in 2003 to acquire Fujian Asia Bank. In 2006, Ping An made another acquisition to become the largest shareholder of Shenzhen Commercial Bank (SZCB), which was later renamed to Ping An Bank. Ping An has a clear strategy for the development of its banking business, as well as a management team with international experience.

In recent years, through capital injections and restructuring at SZCB, Ping An has gradually but firmly been laying a solid foundation for the development of a national banking business. In 2007 and 2008, Ping An Bank contributed a total of RMB3 billion in profit to the Group. To date, the bank is a leader in a wide range of banking industry performance indicators: non-performing loan ratio at lower than 1%, provision coverage ratio at 153.

7%, capital adequacy ratio at 10.7% and core capital adequacy ratio of 10.5%. Ping An Bank has so far issued over 2 million credit cards. Its customers are of high-quality, its credit card utilization and credit card spending are among the highest in the industry, paving the way for further development in the future.

For this transaction, Ping An has hired Goldman Sachs (Asia) Company Ltd and China International Capital Corporation Ltd as its financial advisors.

About Ping An

Ping An is the first financial conglomerate to establish in China with insurance as its core business together with a diverse range of businesses including securities, trust, banking, asset management and enterprise annuity. Ping An was founded in 1988 and is headquartered in Shenzhen. The Group has listed its shares on the Hong Kong Stock Exchange since June 2004, and on the Shanghai Stock Exchange since March 2007, under the name of Ping An .

As at 31st December 2008, under International Financial Reporting Standards (IFRS), consolidated total assets and total equity of the Group were RMB 754.7 billion and RMB 85.7 billion respectively. The Group employs around 356,000 life agents and 83,000 staff. In June, with a market capitalization of USD42.

7 billion, Ping An was named one of Financial Time s Global 500 for the second time, ranking 87th on the list, 17th among global financial institutions and 3rd among insurers. Ping An has made the lists of Forbes Global Listed Companies 2000 and Fortune Magazine Global 500 previously, topping all Chinese non-state owned enterprises numerous times.

About Shenzhen Development Bank

Shenzhen Development Bank, the first joint-stock owned company to list on the Shenzhen Stock Exchange (SZSE 000001), is a national Bank founded on December 28, 1987 with headquarters in Shenzhen. As at March 31st, 2009, its total asset amounted to RMB 521.9 billion. SDB provides a broad range of services to corporate, retail, and government customers, through 286 branches and sub-branches in 19 major cities across China. It is the first Chinese bank to obtain approval to conduct offshore online banking businesses.

In 2004, when it signed up Newbridge as a strategic investor, Shenzhen Development Bank became the first joint-stock bank in China to have a foreign investor as its biggest investor. The strategic investment by Newbridge has helped internationalize the bank s management system as well as enhancing its management philosophy, risk management, financial management and business development.

Selected balance sheet items at March 31, 2009

Total Deposits: RMB400.7 billion
Total Lending: RMB319.4 billion
Total Assets: RMB521.9 billion