Credit Rating of ICBC Raised by Standard & Poor's Ratings Services Co.

Recently, Standard & Poor's Ratings Services Co. raised long-term and short-term foreign exchange deposit rating of ICBC. Long-term rating of "BB+" is raised to "BBB-" and short-term rating of "B" raised to "A-3". The prospect is "positive". At the same time, Standard & Poor's rates the basic strength of ICBC from "D" up to "D+".

An insider points out that the rating raising Standard & Poor's shows satisfied attitude to disposal of bad loan of as high as RMB 705 Billion (equivalent to US$85 billion) of ICBC. Moreover, Standard & Poor's also holds that financial reconstruction program providing support to assets disposition also obviously raises financial status and debt repayment ability of ICBC, which makes ICBC at a more stable starting point and to smoothly carry out sequential reform.

In addition, bad debt disposition results in reduction of bad loan ratio to 4.58% by the end of June 2005, further increasing reserve coverage rate of bad loan. bad debt disposition substantially improves assets quality of ICBC and implementation of financial reconstruction also increased coverage level of bad debt preparation, indicating further improvement of capital of ICBC.