Bank of China Limited Formed

With the approval of the State Council, Bank of China Limited, resultant from an entire conversion, was solemnly formed on August 26, 2004, signifying a milestone development of the venerable Bank of China. This has laid a firm groundwork for its listing.

At the forming meeting, the head of China Banking Regulatory Commission (CBRC) declared the sanction of the forming of Bank of China Limited and granted Financial License, and the leader of the State Administration for Industry and Commerce issued Business License to Bank of China Limited. Mr. Zhou Xiaochuan, Governor of the People's Bank of China (PBOC), also Director of the Office of Panel for the Joint Stock Reform of State-Wholly-owned Commercial Banks Under the State Council, Mr.

Guo Shuqing, Chairman of the Central Huijin Investment Company Limited, Mr.Xiao Gang, Chairman of Bank of China, delivered speeches successively at the meeting, and Mr. Li Lihui, Vice Chairman and President of the Bank, presided over the forming meeting.

On August 23, the exclusive promoter, the Central Huijin Investment Company Limited, held the incorporating meeting of Bank of China Limited . The meeting, in compliance with the relevant laws and regulations of the State, passed upon deliberation, Articles of Association of Bank of China Limited (draft) and motions relating to members of the boards of directors and supervisors.

Bank of China has been converted from a commercial bank wholly owned by the State to a joint stock commercial bank whose stake is controlled by the State, abbreviated to Bank of China. The Bank has fully succeeded to all assets, liabilities and business of the former Bank of China, continued to employ the staff and, the business scope remains unchanged.

Subsequent to the incorporating meeting, the first meetings of the first Boards of Directors and of supervisors were held promptly.

In pursuance of the decision made by the State Council on the pilot joint stock reform of the banks wholly owned by the State and the requirements of the PBOC and the CBRC on the reform of the corporate governance and the regulatory directives, Bank of China has done large amount of painstaking and elaborate spade-work for the joint stock reform and the incorporation of the new bank.

Grasping the opportunities of the additional capital of USD22.5 billion injected by the State, the Bank has speeded up the write-off of the asset losses, expedited the disposal of the non-performing loans, ameliorated fundamentally its asset quality and financial position. It meanwhile enabled itself to change the internal operating mechanism, deepen the internal reform, work out a clear-cut strategy, build up and refine a scientific decision making system, and an internal control and risk management system; further integrate the business and management process; and establish a market-oriented and standardized human resources management system and an effective incentive and accountability mechanism.

Besides, it has set up a prudent accounting and financial system, made information disclosure more transparent, and quickened the construction of IT and the payment system. Taking a series of steps toward instructive explorations, the Bank has gained obvious achievements.

Bank of China Limited has enacted the new Articles of Association in accordance with the relevant rules and regulations of the State, and constructed a governance framework of a modern joint stock company feathering a general meeting of share holders, board of directors, board of supervisors and top management.

Bank of China Limited has a registered capital of RMB186.39 billion and holds the identical number of shares. With the approval of the State Council, Central Huijin Investment Company Limited has started to hold 100 per cent of the equity capital of Bank of China Limited, to exercise, according to law, the rights and obligations as stakeholder of Bank of China Limited, play an active role in establishing a sound corporate governance mechanism and devote itself to the running of Bank of China Limited into a modern joint stock commercial bank with adequate capital, strict internal control, safe operation, and satisfactory services and results.

The members of the Panel for the Joint Stock Reform of State-Wholly-owned Commercial Banks Under the State Council, leaders of the ministries of the State, members on the new boards of directors and supervisors and top management of Bank of China Limited , leaders and representatives of the staff, retirees and retired veteran cadres of the Head Office, representatives from other financial institutions, from key customers, reporters and correspondents of major domestic and international press circles, 1000 odd persons in all, attended the forming meeting of the Bank in the Head Office building, Beijing.

Present, too, at the local assembly halls were the heads and representatives of the staff from the branches in provinces, autonomous regions and Municipalities Directly Under the Central Government, and those branches directly under Bank of China Limited, BOCHK, and Macau Branch.