ICBC Announces 2006 Performance

April 3 2007, Beijing - Industrial and Commercial Bank of China Limited ("ICBC", stock ticker code: SH: 601398 HK: 1398) announced today the overall performance for year 2006. This is the first annual performance announcement since ICBC's simultaneous listing of A-share in China and H-share in Hong Kong.

In 2006, ICBC achieved growth by 31.2% in profit after tax under the condition of 10.4% growth in loan balance and 16.3% growth in assets balance, reaching RMB 49.88 billion (or RMB 49.336 billion in profit after tax per Chinese accounting standards) in after-tax profit. ICBC's earning per share is RMB 0.

18 and its weighted average return on equity reached 15.37%. The board of directors planned to distribute RMB 0.016 dividend per share for all shareholders for the period since its listing in October till the closing of the year.

On October 27 2006, ICBC blazed new trail and successfully launched listing on both A-share and H-share markets and broke multiple records including the largest IPO in the history of global capital market. It earned reputation of the "Century Offer" in international medias and financial circle. The IPO further boosted ICBC's capital resources and influence on the international market.

Till the end of 2006, the total market capitalization of the bank was in excess of USD 250 billion, qualifying it both as the biggest listed company on A-stock market and as the biggest bank in Asia and one of the top-three listed banks around the world. Furthermore, ICBC has also been included multiple key indexes including Hang Seng Index, MSCI China Index, H-share Index, and Shanghai Composite Index.

ICBC is the most heavily weighted stock for Shanghai Composite Index and is the mostly weighted financial stock in MSCI China Index.

In addition to ICBC's success in local and overseas IPO in 2006, ICBC has fulfilled annual operation plan and saw new improvement in the competitiveness and management capacity. The IPO also made great contribution to ICBC's strategic transition and innovative development for all services. ICBC witnessed positive changes in operation mode and growth model, significant improvement in business structure, income structure, channel structure, and customer structure, and saw remarkable improvements in profitability, risk control and ability for sustainable development.

Fulfillment of key financial objectives

ICBC's annual post-tax profit reached RMB 49.88 billion (or RMB 49.336 billion in profit after tax per Chinese accounting standards), representing year-on-year growth by 31.2%. ICBC's average return on assets increased by 0.05 percentage points from the prior year to 0.71%. Due to the thrilling growth in net profit after tax, ICBC's weighted average equity return reached 15.37% despite the gigantic size of equity financing. ICBC's Cost/Income ratio kept sustained at optimistic level of 36.3%.

Increasing profitability in asset/liability services

ICBC asset/liability service continued growth pattern on the ground of optimized structure and created stable sources of income. Through efforts of financial service product sales and deposit diversion, the customer deposit in 2006 kept increasing by 10.7% to RMB 614.557 billion while the liability structure was further optimized.

The loan increased by 10.4% to RMB 341.618 billion with main allocation to promising sectors such as communication, energy, and infrastructure facilities and to the small and mid-sized companies and consumer loans that feature fairly high yield. The loans to small and mid-size companies increased by 71.

8% to RMB 59.7 billion; the consumer loans increased by 11.9% to RMB 61.067 billion. ICBC generated RMB 163.118 billion net interest income, representing net interest yield of 2.39% and 0.04 percentage points increase from previous year's level. The bank further optimized its bond investment structure and generated RMB 66.

883 billion interest income from securities investment.

Rapid development in fee-based services and rising services

The rapid growth in ICBC fee-based services and rising services significantly drove up ICBC's service charge and commission income to RMB 16.344 billion, representing growth of 55.0%, 9.0% weight in net operating income, year-on-year increased by 2.86 percentage points, and further improvement in income structure.

ICBC launched types of financial service products tailored to the customers' investment needs and sold a total RMB 432.8 billion financial products in the year, representing year-on-year growth of 93%. ICBC credit card issuance reached 10.47 million cards generating annual consumption size of RMB 105 billion.

ICBC was the first bank that realized the goal of "10-million breakthrough in credit card issuance and RMB 100-billion breakthrough in credit card consumption", becoming the biggest credit card issuer in China. ICBC's corporate RMB settlement and international settlement reached RMB 260 trillion and USD 399.

6 billion respectively, marking the further advantage of ICBC as China's number-one settlement bank. ICBC saw consolidated advantages in investment banking, asset custody, annuity management, and cash management services. ICBC realized RMB 45.2 trillion transactions through Internet Banking. The weight of off-counter services increased by 4.

2 percentage points to 30.1%, marking the strengthened product distribution and service diversion ability over our electronic channels.

Thorough improvement in retail banking

Retail banking is both ICBC's traditional advantage and one of the strategic services that boosts ICBC's future performance. ICBC registers China's largest personal banking customer base. Till the end of 2006, ICBC managed bank accounts for over 170 million individuals. The key services of ICBC keep the leadership in China.

According to the statistics by the People's Bank of China, till the end of 2006, ICBC's personal loan and deposit balances were ranked top in China banking sector taking market shares of 15.0% and 19.7% respectively. In 2006, ICBC started to launch the strategy for "First Retail Bank" and accelerated product innovation, service upgrade, and market development for personal financial services.

By the closing of 2006, ICBC maintained total 16.92 million mid and high-end customers, marking a growth rate of 13%. Among them, there were 2.36 million high-end customers hold ICBC's financial service accounts, increased by 25.5% from the prior year. ICBC bankcard issuance further expanded by 29.9% to 188.

63 million cards, which supported ICBC's number-one position in the sector for bankcard consumption and interbank transaction. The number of Personal Internet Banking customers was increased by 56.5% to 23.25 million accounts. ICBC Personal Banking revenue reached RMB 62.257 billion in 2006 and increased contribution to overall revenue to 34.

3%.

Evident strength in technologies

The increasingly maturing technical platform and management system re-diverted more efforts into the new product R&D and converted the technological advantage into strengths in customer service and market competition. After being the first bank for overall data aggregation in China, ICBC spearheaded in 2006 for data logics consolidation along lines of corporate banking and personal banking and established the visionary core service application platform addressing the development needs in future. The launch and running of application systems such as customer information and risk management systems further converted the bank's IT advantage into productivity, which further boosted the development in banking business. In 2006, ICBC was awarded the "Global Banking Network Application/Innovation" by The Banker in UK and was successfully included in the list of China Top-500 IT Corporations, ranking 2nd.

Further improvement in risk management

ICBC continued improving its total risk management system. While managing the declining non-performance loan balance and its ratio in overall loan balance, ICBC NPL reserve rate increased by 16.36 percentage points on year-on-year basis to 70.56%. ICBC launched internal rating method in non-retail loan sector that further improved its credit risk management ability.

ICBC saw decreasing bank-wide NPL balance down to 3.79%. In order to adapt to the marketization in interest rate and RMB exchange rate, ICBC took system reform and saw improving management system over market risk and liquidity risk. ICBC further perfected internal control system and kept boosting the risk control ability; it has controlled its operation risk to a fairly low level in banking sector home and abroad.

Thorough launch of talent strategy

ICBC rolled out multiple tiers of staff training and especially adopted training for the management and the specialized talents. Leveraging on platform of strategic cooperation with Goldman Sachs investment syndicate, ICBC instituted training on risk management, fund transaction, and leadership ability to increase the staff value. Through implementing human resource development and corporate culture construction, ICBC has built the first-class bankers and professional team and has formed a competitive human resources system.

During the last year, ICBC's achievements in reform and development were recognized home and abroad. ICBC received multiple credits including "Best Bank of Emerging Market", "Best Bank of China", "Best State-owned Retail Bank of China", "Best Consumer Internet Bank in China", "Best Custody Bank of China", and "Best RMB Cash Management Bank of China" awarded by The Banker, Global Finance, Global Custodian, The Asia Banker, and Asiamoney. ICBC IPO also picked the awards of "Best IPO", "Best Equity", "Equity Deal of the Year" issued from The Banker, IFR, Euromoney, and The Asset. The international rating institutions such as Moody, Standard and Poor, and Fitch upgraded ICBC's credit rating.

Mr. Jianqing Jiang, the Chairman of the Board of ICBC, noted that 2007 marks the first year of full opening of China banking sector. It is also the beginning year for ICBC to turn into a modern international financial corporation right at this historical fresh start. ICBC will adapt to the new trends of economy and finance to achieve its goal for sustained corporate value appreciation and shareholder interest maximization.

ICBC will emphasize on the perfection of corporate governance, thoroughly deepen the branch institution reform, promote for the bank-wide efficient running of the new systems and new mechanisms according to the requirements of local and international regulatory institutions and the requirement of the capital market.

ICBC will also accelerate innovation and service improvement to constantly boost our core competence for better ability of sustainable development.

Mr. Kaisheng Yang, the Vice Chairman of the Board of ICBC and the President of ICBC, indicated that ICBC will head for the goal of a first-class financial institution and will reinforce its premier positions in China retail banking. ICBC will build China's best bank and achieve leapfrog development in treasury service and intermediary services. It is moving towards to be a large global financial corporation by boosting core value from IT advantage in offering quality services to customers and maximize return to shareholders.

Annex:
1.Key Performance Highlights Business Results
2.Key Performance Highlights Financials

Annex

1.Key Performance Highlights Business Results

Note: The C/I ratio is computed as per operating expenses (excl. business tax and surtax) divided by operating income. In 2005 C/I ratio, the operating expenses and operating income excluded items relating to special T-bond interest income and expenditure.

2.Key Performance Highlights Financials