Chinabank 2004

COVER SHEET
8745 Paseo de Roxas cor. Villar St., 1226 Makati City 4 4 3

SEC Registration Number
C H I N A B A N K I N G C O R P O R A T I O N
(Company’s Full Name)
1 1 F C H I N A B A N K B L D G 8 7 4 5 P A S E O
D E R O X A S C O R V I L L A R S T M A K A T I
(Business Address: No., Street City/ Town / Province)
ARSENIO L. LIM, JR. 885-5133

Contact Person Company Telephone Number
0 4 0 8 1 7 - A 0 5 0 6
Month Day FORM TYPE Month Day
Annual Meeting
Secondary License Type, If Applicable
C F D
Dept. Requiring this Doc. Amended Articles Number / Section
Total Amount of Borrowings
1,840
Total No. of Stockholders Domestic Foreign
To be accomplished by SEC Personnel concerned
File Number LCU
Document ID Cashier
STAMPS
Remarks: Please use BLACK ink for scanning purposes

CHINA BANK
China Banking Corporation
SECURITIES AND EXCHANGE COMMISSION

SEC FORM 17-A
1. For the fiscal year ended December 31, 2004
2. SEC Identification Number NA (Exempt Securities)
3. BIR Tax Identification No. 320-000-444-210-NV
4. Exact name of registrant as specified in its charter CHINA BANKING CORPORATION
5. PHILIPPINES 6. Industry Classification Code

Province, Country or other jurisdiction of (For SEC use only)
incorporation or organization
7. 8745 Paseo de Roxas corner Villar Street, Makati City 1226 P.O. 2182
Address of principal office Postal Code
8. 885-5555
Registrant’s telephone number, including area code
9. Not Applicable
Former name, former address, and former fiscal year, if changed since last report
10. Securities registered pursuant to Sections 4 and 8 of the RSA

Number of Shares of Common Stock
Title of Each Class Outstanding and Amount of Debt Outstanding
Common stock, P100 par value 36,542,512 shares
11. Are any or all of these securities listed on the Philippine Stock Exchange
Yes [ x ] No [ ]
12. Check whether the registrant:
(a) has filed all reports required to be filed by Section 11 of the Revised Securities Act (RSA) and RSA Rule 11
11 (a) - 1 thereunder and Sections 26 and 141 of the Corporation Code of the Philippines during the preceding 12
months (or for such shorter period that the registrant was required to file such reports):
Yes [ x ] No [ ]
(b) has been subject to such filing requirements for the past 90 days?
Yes [ x ] No [ ]
13. Aggregate market value of the voting stock held by non-affiliates: Not Applicable
Portions of the Company’s 2004 Annual report to stockholders are incorporated by reference into Parts I & II of this report
CHINA BANKING CORPORATION
SECURITIES AND EXCHANGE COMMISSION ... SEC FORM 17-A
PART I BUSINESS AND GENERAL INFORMATION

ITEM 1. BUSINESS
Historical Background. China Bank was incorporated on July 20, 1920 and commenced business on August 16 of the same
year as the first privately owned local commercial bank in the Philippines.
China Bank was listed on the local stock exchange in 1947 and became the first bank in Southeast Asia to process deposit
accounts on-line in 1969, and the first Philippine bank to offer telephone banking in 1988. The Bank acquired its universal
banking license in 1991.
China Bank provides a wide range of domestic and international banking services and is one of the largest commercial
banks in the country in terms of assets and capital.
Business Milestones. Within a business arena dominated by intensified competition for market share, narrowing trading
margins and regulatory pressure, in 2004, China Bank had a 3rd straight year of record income as it posted a profit after tax
of P2.72 billion from P2.62 billion income in 2003. Another key financial milestone for 2004 was the P 11.9 billion increase in
loans, its fastest pace in seven years. Comprehensive collection and restructuring efforts also cut past due loan level by P
1.2 billion and non-performing loan ratio to 11.40% from 14.68%. CASA deposit base reached a new high of P 21.7 billion,
with broader retention rates for newly acquired accounts. The launching of our CASA revival program last November should
reinvigorate the thrust to build-up traditional funding sources. Return on owners’ equity after appraisal increment of 14.37%
again surpassed industry benchmarks. Similarly, our exceptional capital adequacy ratio of 32.74% is reflective of the Bank’s
status as one of the best capitalized banks in the industry. These indicators were among the key factors that underpinned
the decision of credit rating agencies Fitch Ratings & Capital Intelligence to retain China Bank’s credit rating at C/D and BB-,
respectively.
Despite an exigent environment, China Bank remained vigilant for fresh opportunities to improve market share and
consolidate its presence as a multi-category service provider. We clearly defined China Bank’s value to customers as the
ability to offer superior access to services and a selection of competitively priced fund- and fee-based products. In terms of
customer service delivery & profitability, the evaluation of our banking channel economics merited greater attention last
year, as shifting clients to more convenient electronic channels would be mutually beneficial in the long-run. Given the
constraints on the opening of new branches, China Bank’s ATM network was expanded to 188 locations, while broadening
the suite of available ATM- & Tellerphone-based services. By capturing client transactions across multiple touchpoints, our
non-traditional income streams were maximized. On the corporate banking side, our newly established cash management
unit became a significant engine for acquisition of business clients besides capturing payments flows from existing
accounts. Check warehousing was introduced in the middle of 2004 to complement our bills & tax payments services.
For retail banking, the centerpiece for 2004 was the implementation of the branch-based marketing program throughout the
network. By institutionalizing a set of quantifiable and consistent measures for all branches, network performance could be
better monitored and targeted toward desired segments – maximizing the business potentials at each area. Establishment
of key metrics at all retail levels ensures that selling and cross-selling efforts become a collective responsibility. Given the
constraints on the opening of new branches, network expansion focused on in-branch and off-branch ATMs.
The Bank received recognition as “Outstanding Commercial Bank” by the Consumer Union of the Phils for 2004 and also
by Parangal ng Bayan Foundation, Inc., National Consumer Excellence Awards for 2005. The Bank also launched this
year its “Grateful at 85” promo in preparation for its 85th anniversary in 2005.
For improved client recall and to better highlight the affiliation with China Bank, the subsidiary company officially changed its
name from CBC Insurance Brokers, Inc. to Chinabank Insurance Brokers, Inc. Building on its strong performance from the
previous years, Chinabank Insurance Brokers, Inc. capped the year 2004 with business strategies and accomplishments
geared towards achieving business efficacy and customer satisfaction. The new name also signifies a new identity that
echoes the China Bank brand – “your success is our business” and “banking with principles”. The launch of the “My Great
Life Dollar Plan” paved the way for Chinabank Insurance’s first dollar denominated life insurance which is also an
investment product.
This product innovation was introduced and offered in partnership with another industry leader, Great Pacific Life
(GrepaLife) of the Yuchengco Group of Companies. Motor car insurance business was also reinforced by improving the
claims monitoring and service process turnaround. Their linkage with China Bank’s Consumer Banking Group Auto Loans’
current computer system allows for a seamless service delivery system for motor car quotations.
Realizing the significant role technology plays in uninterrupted banking service to clients, China Bank – Properties and
Computer Center, Inc. (CBC-PCCI) focused on providing the groundwork necessary to deliver effective and secure products
and services to clients and users. These are all attuned to the rapid technological changes in the industry.
For 2004, the Group implemented e-banking as China Bank’s answer to the demands of the advances in the internet
banking front. Technology Group put in place network security for Internet banking. This resulted in the certification of
external auditor SGV of our Bank upon passing the Network Assessment & Vulnerability Test or Ethical Hacking. The
Group also successfully backed up the Online Clearing System accessed by unlimited users and which also links our Metro
Manila and provincial branches to the government institution, Philippine Clearing House. There were other significant IT
projects - Trade, Trust and Consumer which supported the overall positive performance of the Bank. Lastly, more teller
terminals in the branches were converted to Mosaic NT, the latest generation of software which allows for automatic
upgrading and troubleshooting over the network.
CBC Forex Corp., another subsidiary of China Bank which handles the Bank’s business of dealing and broking in all
currencies, registered a net income of P5.49 million in 2004.
(1) Business of Issuer
Principal Products and Services. The Bank’s products and services include deposits and related services, international
banking services, loans and credit facilities, trust, investment services, insurance products and other services such as
acceptance of various bill payments and donations to charitable institutions. The income from these products/services are
divided into two categories, namely (1) interest income from the Bank’s deposit taking and lending/investment activities
which accounts for 80% of revenues and (2) other income (includes service charges, fees & commissions, trading gain,
foreign exchange gain, trust fees, income from sale of acquired assets and other miscellaneous income) which account for
20% of revenues.
Distribution Network. As of end 2004, China Bank distributed its products and services through its 141 branch network with
79 branches in Metro Manila and 62 in the provinces. In 2004, Santiago City branch was opened in Feb. and two (2)
branches were relocated namely Cebu-Banilad Branch and Cubao-Araneta Branch in order to improve network productivity,
operational efficiency and customer service.
The Banks’ ATM service, known as CBC Tellercard, complements the branch network in delivering services to its
customers. As of end 2004, there were 188 ATMs nationwide Twenty three (23) ATMs were installed this year, namely:
(1) Dipolog Center Mall; (2) Gilmore IT Center; (3) Power Plant R3; (4) Market! Market! 1; (5) Medical City; (6) Pacific Mall;
(7) Greenbelt 3; (8) Caltex SLX 1; (9) SM City-Marilao; (10) SM City-Batangas; (11) SM City-Baguio; (12) Malanday Branch;
(13) Market! Market! 2; (14) Metropoint Mall; (15) Robinson’s Galleria; (16) Lorma Hospital; (17) Greenhills Lifestyle Center;
(18) Alabang Mall; (19) Greenhills Theater Mall; (20) Gaisano Mall; (21) Glorietta 1; (22) Rockwell-Loft and (23) Shopwise-
Araneta. As a founding member of the BancNet consortium, TellerCard holders have access to more than 3,000 ATMs
nationwide of both BancNet and Megalink networks.
Status of New Products/Services. By 2004, China Bank offered and launched investment and cash management
products. The line of investment products included high-yielding instruments Money L.I.F.T. (Long-term Investment Free of
Tax)-2 months and Diamond Savings Account, a term deposit product supported by a passbook. These high-yielding
investment options are available through its 141 branches nationwide. Consumer products such as the Contract to Sell
(CTS) financing and salary loan were also offered this year. Cash management products were further boosted with the
launching of the BIR Tax Payments (eFPs or electronic Filing and Payment system), payroll processing service, PDC’s
warehousing and auto-debit arrangement.
Competition. As the 12th largest commercial bank among the 41 commercial banks in the Philippines, China Bank had
assets of P113.86 billion as of Dec 2004, which translated to a market share of about 2.95% of the commercial banking
sector.
The Bank mainly caters to the Chinese-Filipino commercial sector. Its core banking franchise stems mainly from its 84-year
history in the Philippines, a factor that has enabled it to become deeply entrenched within the socioeconomic fabric of the
Chinese-Filipino community. The Bank’s market comprises the corporate, commercial, middle and retail markets. The Bank
also tapped the consumer market through its housing and auto loan business and high net worth market through its Private
Banking Unit.
Sources and Availability of raw materials and the names of principal suppliers. Not applicable.
Disclose how dependent the business is upon a single customer or a few customers. Not applicable.
Transactions with and/or dependence on related parties. In the ordinary course of business, the Bank has loans and other
transactions with its subsidiaries and affiliates, and with certain directors, officers, stockholders and related interest
(DOSRI). These loans and other transactions are made on the same terms as with other individuals and business of
comparable risks and in compliance with all regulatory requirements. Other related party transactions conducted in the
normal course of business include the availment of computer and general banking services of an affiliate to meet the Bank’s
reporting requirements.
Trademarks, Licenses, Franchises, etc. China Bank is operating under a universal banking license obtained in 1991.
Need for any government approval of principal products or services. The Bank informs the BSP of all its products and
services.
Effect of existing or probable governmental regulations on the business. The bank strictly complied with the Bangko Sentral
ng Pilipinas (BSP) requirements in terms of reserves, liquidity position, limits on loan exposure, cap on foreign exchange
holdings, provision for losses, anti-money laundering provisions and other reportorial requirements.
Amount Spent on Research and Development Activities.

(In ‘000) 2004 2003 2002
Education & Training P 5,698 P 4,976 P 4,527
Advertising Expenses 11,173 4,965 5,266

Technology 76,640 81,877 33,058
Cost and effect of compliance with environmental laws. Not applicable.
No. of Employees. As of Dec. 2004, China Bank has a total manpower of 2,738 and plans to hire additional
workforce of 323 in 2005.
(A) Additional Requirements as to Certain Issues or Issuers. Not Applicable

(i) Debt Issues
(ii) Investment Company Securities
Products & Services
DEPOSITS AND RELATED SERVICES TRUST AND INVESTMENT MANAGEMENT SERVICES
ChinaCheck Plus Account
Savings Account Investment Management
MoneyPlus Savings Account Investment Advisory
Investment Agency
Diamond Savings Account
Corporate Trust
Certificates of Time Deposits Collateral/Mortgage Trust
Manager’s Checks Estate Planning
Gift Checks Testamentary Trust
TellerCard (ATM Card) Living Trust
TellerPhone (Telephone banking) Life Insurance Trust
Educational Trust
Government Securities
Employee Benefit Planning
5-Year Money L.I.F.T. (Long-Term Investment Free of Tax) Retirement Plan
Provident Plan
LOANS AND CREDIT FACILITIES Other Fiduciary Services
Agricultural, Commercial and Industrial Financing Custodianship
Personal Loans Escrow Agency
Pre-export Financing (Direct and Indirect Exporters) Loan Agency
Special Lending Programs China Bank Dollar Fund
Countryside Loan Fund (CLF)
Agricultural Loan Fund (ALF)
Industrial Guarantee and Loan Fund (IGLF)
Japan Bank for International Cooperation -
Industrial Support Service Expansion Program (ISSEP)
Japan Export Import Bank (JEXIM) for
Private Sector Development Financing
Industrial Restructuring Project Fund (IRPF)
Asian Development Bank Financing INTERNATIONAL BANKING SERVICES
Industrial Investment Credit Project (IICP) Import and Export Financing
Domestic Shipping Modernization Program (DSMP) Foreign and Domestic Commercial Letters of Credit
Environmental Infrastructure Support Credit Program Standby Letters of Credit
(EISCP) Collection of Clean and Documentary Bills
SSS-GSIS Special Financing Program Bank Guaranty (Shipside Bond)
SSS Industry Loan Program Foreign and Domestic Remittances
Special Financing Program for Tourism Projects Purchase and Sale of Foreign Exchange
Hospital Financing Program Travel Funds
Financing Program for Educational Institutions Servicing of Foreign Loans and Investments
Special Financing Program for Vocational and Trade Inquiry
Technical Schools Trust Receipt Facility
Guarantee Programs Correspondent Banking Services
Small Business Guarantee Finance Corporation LC Confirmations/LC Advising
(SB Corp.) Cash Management Tie-ups with Foreign Correspondent
Trade and Investment Development Cooperation Banks
(Designated as Philippine Export and Import Credit Cash Management Tie-ups with Non-Bank Money Transfer
Agency – PHILEXIM) Service Providers
Overseas Chinese Credit Guarantee Funds (OCCGF) Foreign Currency Checks and Drafts Clearing Services
Export - Import Bank of the United States (USEXIM) Foreign Currency Deposit Unit Services
Guarantee US$ Savings and Time Deposit
Consumer Loans Foreign Currency Loans
HOMEPlus Real Estate Loan
AUTOPlus Vehicle Loan
INSURANCE PRODUCTS CASH MANAGEMENT SERVICES
Life Insurance Automatic Debit Arrangement (ADA)
Endowment Plans, Group Life Insurance Multi-Channel Bills Payment Services (includes Over-
Mortgage Redemption Insurance/Term Insurance the-Counter, ATM and TellerPhone)
Dollar-Denominated Life Insurance Plans BancNet Payment System (ATM, Point-of-Sale and
Non-Life Insurance BancNet Online)
Fire Insurance Post-Dated Check Warehousing Service
Building and Content Cash and Check Deposit Pick-up Services
Fire and Allied Perils Comprehensive Payroll Offering (Crediting and Outsourcing)
Motor Car Insurance BIR Online Tax Payments
Surety/Fidelity Bond/Judicial Bonds SSSNet Employee Contribution Facility
Marine Insurance – Cargo / Hull Casualty SSS Sickness, Maternity and Employee’s
Comprehensive General Liability (C.G.L.) Compensation (SMEC)
Products Liability (Local and Export) Payment thru the Bank Program
Accident and Health
Personal and Travel Insurance ACCEPTANCE OF PAYMENTS
1. Student Personal Accident Insurance Cable TV Companies
2. Group Personal Accident Insurance Home Cable
HMO Plans Sky Cable
Contractor’s / Erector’s All Risk Insurance Insurance / Pre-need
Industrial All Risk (IAR) Insurance CBC Insurance Brokers
Electronic Equipment Insurance Manila Bankers Insurance
Medical Insurance Pacific Plans
Specialized Insurance Programs Loans
Special Scheme – Captive Insurance Company China Bank Loan Payments
Risk Management Services/Risk Survey Report
Government Institutions
ACCEPTANCE OF PAYMENTS BIR
Credit Cards NSO Helpline Plus
AIG Visa/Mastercard PhilHealth
Allied Bank Visa PNCC-Skyway
Banco Filipino Visa PSC – EPass
Bankard/RCBC
SSS
Citibank Visa/Mastercard
Internet
East West Card
Edsamail
HSBC Cards
Infocom
Metrobank Card
Security Bank Diners/Mastercard ACCEPTANCE OF DONATIONS
Standard Chartered Visa/Mastercard Bantay Bata
Telecommunications Church of Jesus Christ of Latter Day Saints
Digitel
Knowledge Channel
Extelcom
Piso Para sa Pasig
Globe Telecoms
ICC – Bayantel
OTHER SERVICES
Innove (formerly Islacom)
SSS Pension Accounts
PLDT
Direct Deposit Facility for U.S. Pensioners
Smart Communications Safe Deposit Box
Beeper 150 Domestic Collections
Mobiline Western Union Money Transfer Service
Piltel Prepaid Card Reloads
Utility Company Phonecards (Landline and Cellphone)
Meralco Internet Cards
Satellite TV
Internet game
ITEM 2. PROPERTIES
The Bank conducts its business in its Makati headquarters situated on a 2,977 square meter lot (2 parcels) with a multi
storey building appraised at P1.8 BN, with business address at 8745 Paseo de Roxas cor. Villar St., Makati City. Its
Binondo operations are located at a 1,233 sq. m. lot at the corner of Dasmarinas and Juan Luna streets (4 parcels of
land with two multi-storey commercial buildings).
Other properties include land & buildings of the different branches such as
1) Caloocan - 2-storey mezzanine commercial bldg situated at No. 167 Rizal Ave. Ext. and J.
Teodoro, Bgy. Calaanan, Caloocan City
2) Baguio Penthouse - 3-level duplex residential building, Park Road, Baguio City
3) Davao - Phase 3 of the Ecoland Commercial Center, Matina, Davao
4) San Juan - Brgy. San Pedro Cruz, Municipality of San Juan
5) Cebu Bus. Park, Cebu - Samar loop cor. Panay Road, Cebu Business Park, Cebu City
6) Trece Martires, Cavite - Unnamed Road, Bo. San Agustin, Trece Martires, Cavite
7) Laguna Bel-Air - Lot 17, Blk 66, Road Lot 1-B Laguna Bel Air Subd., Sta Rosa, Laguna
8) Iloilo-Rizal Drive - Rizal cor. Gomez Sts. Brgy. Ortiz, Iloilo City
9) Silang, Cavite - E. Aguinaldo Highway, Bo. Biuso, Silang, Cavite
10) Dolores, San Fernando - 460 sq.m. at Lazatin, Blvd., Dolores, San Fernando, Pampanga
11) Las Piñas - Alabang-Zapote Road cor. Aries, Pamplona, Las Piñas City
12) Valenzuela - MacArthur Highway, Valenzuela City
13) Rosario, Cavite - Gen. Trias Drive, Rosario, Cavite
14) Imus, Cavite - Nueno Avenue, Tanzang Luma, Imus, Cavite
15) Tarlac - Panganiban St., San Nicolas Tarlac City, Tarlac
16) Visayas Avenue - Visayas Ave., cor. Congressional Ext. Quezon City
17) Cabanatuan - Lot 6 Blk 3, Maharlika Highway, Dicarma, Cabanatuan City
18) Libertad, Pasay City - No. 184 Libertad St., Pasay City
19) Dasmariñas, Cavite - Gen Emilio Aguinaldo Highway, Dasmariñas, Cavite
20) Angeles City - 347.07 sq.m. 2 parcels of land
21) Roosevelt - # 291 Roosevelt Ave., San Francisco Del Monte, Quezon City
22) San Juan - No. 169 Blumentritt St., San Juan, Metro Manila
23) Navotas - No. 551 M. Naval St., Bankulasi, Navotas, MM
24) Cebu-Manalili - M. Velez cor. V. Rama Ave., Cebu City
25) Bacolod - Araneta St., Bacolod City
26) Lapasan - C.M. Recto Ave. National Highway, Lapasan, Cagayan de Oro City
27) General Santos - 600 sq.m. lot at Bo. Lagao, Gen Santos City
28) Sorsogon - Ramon Magsaysay Ave., Sorsogon, Sorsogon
29) Zamboanga - Gov. Lim Avenue, Zamboanga City
30) Dipolog - Gen. Luna cor. G. Gonzales Sts., Dipolog City
38) Davao (Recto) - C.M. Recto co. J.P. Rizal Sts., Davao City
39) Cebu - Jakosalem & Magallanes St., Cebu City
40)Potrero - McArthur Highway, Potrero, Malabon City
41) West Avenue - No. 2 West Ave., Bgy. Philam, District of Diliman Quezon City
42)Talisay, Cebu - Talisay, Cebu City
43) Banilad, Cebu - Barangay of Banilad, Cebu City
44) San Fernando, Pampanga - V. Tiomico St., Sto. Rosario, San Fernando Pampanga
45) E. Rodriguez Sr. Blvd. - E. Rodriguez Sr. Ave. New Manila, Quezon City
46) Banawe - Banaue Ave., Quezon City
48) Cainta, Rizal - 415 sq.m. lot at Felix Ave., Cainta, Rizal (beside Sta Lucia East Mall)
49) Quiapo - No. 216-220 Villalobos St., Quiapo, Manila
50) Cubao-Aurora - Aurora Blvd. Cor. Miami, Cubao, Quezon City
51)San Pablo City - Rizal Ave., Poblacion, San Pablo City
52) General Santos - 500 sq.m. lot at Queennies Vill., Dadiangas Heights, Bo. Lagao, Gen. Santos
53) Cainta, Rizal - 623 sq.m. lot at Felix Ave., Cainta, Rizal (beside Sta Lucia East Mall)
54) Dolores, San Fernando - 900 sq.m. at Lazatin, Blvd., Dolores, San Fernando, Pampanga
These properties are free from any lien or encumbrance.

Description of Property the Bank intends to acquire in the next 12 months. The Bank has no plans to acquire properties in
the next twelve (12) months.
The Bank’s schedule of Bank premises, furniture, fixtures & equipment as of Dec. 31, 2004:
Accounts Amount (In Million Pesos)

Bank Premises-Land P 1,825
Building under construction
Bank Premises-Building 588
Bank Premises-Appraisal 348
Leasehold Rights & Improvements 75
Furnitures, Fixtures & Equipment 1,876
Less:
Accumulated Depreciation-Bldg. 160
Accumulated Depreciation-FFE 1,525
P 3,027
Cost of computer equipment is lodged with CBC-Properties & Computer Center, Inc.
ITEM 3. LEGAL PROCEEDINGS
• There are pending cases for and against the Bank arising from normal business activities. In the opinion of the
Bank’s management and legal counsel, there are no material pending legal proceedings to which the Bank or
any of its subsidiaries or affiliates is a party or of which any of their property is the subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
• Annual Stockholders Meeting -- May 06, 2004

• Directors Elected - Gilbert U. Dee, Chairman of the Board
Hans T. Sy, Vice Chairman and Chairman of the Executive Committee
Peter S. Dee, President and CEO
Pilar N. Liao, Independent Director
Joaquin Dee, Director
Dy Tiong, Director
Herbert T. Sy, Director
Henry T. Sy, Jr., Director
Harley T. Sy, Director
Donato T. Faylona, Independent Director
Alberto S. Yao, Independent Director
Henry Sy, Sr., Advisor to the Board
Robert T. Dee, Jr., Advisor to the Board
PART II OPERATIONAL AND FINANCIAL INFORMATION
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(1) Market Information
• Principal market where the equity is traded -- Philippine Stock Exchange Inc. (PSE)
• Market Value 2003 HIGH LOW CLOSE

.
Jan - Mar 566.67* 516.67* 554.17*

Apr - Jun 633.33* 583.33* 604.16*
Jul - Sept 670.00 608.30* 660.00
Oct - Dec 675.00 660.00 670.00
2004 HIGH LOW CLOSE

.
Jan - Mar 680.00 650.00 665.00

Apr - Jun 685.00 620.00 650.00
Jul - Sept 555.00 520.00 530.00
Oct - Dec 600.00 520.00 560.00
* - Adjusted for 20% stock dividend on 15 July 2003
2004 HIGH LOW CLOSE

.
Jan - Mar 566.67** 541.67** 554.17**

Apr - Jun 570.83** 516.67** 541.67**
Jul - Sept 555.00 516.67** 530.00
Oct - Dec 600.00 520.00 560.00
** - adjusted for 20% stock dividend on 19 July 2004
• Market value as of March 31, 2005 (last trading day): P685.00

(2) Holders
• Top 20 Stockholders
(As of 12/31/2004)
Name of Stockholders Number of Shares Percent Share
1. Sysmart Corporation 7,457,473 20.408

2. PCD Nominee Corporation (Filipino) 5,389,793 14.749
3. SM Investments Corporation 3,509,967 9.605
4. The Int’l. Commercial Bank of China 2,952,268 8.079
5. Shoe Mart, Inc. 2,461,744 6.737
6. Henry Sy, Sr. 2,021,761 5.533
7. CBC Employees Retirement Plan 914,469 2.502
8. Joaquin Dee &/or Leticia Ty Dee 877,635 2.402
9. JJACCIS Development 716,850 1.962
10. GDSK Development Corporation 618,714 1.693
11. PCD Nominee Corporation (Non-Fil) 395,330 1.082
12. Domingo T. Dee 226,896 0.621
13. Gilbert U. Dee 214,578 0.587
14. Estate of Allen Cham 170,757 0.467
15. Regina Y. Dee 162,518 0.445
16. Hydee Management & Resource Corp. 161,187 0.441
17. SM Development Corp. 147,002 0.402
18. Kuan Yan Tan’s Charity (Phil.), Inc. 123,030 0.337
19. The First Resources Mgt. & Sec. Corp. 112,197 0.307
20. Reliance Commodities, Inc. 106,539 0.292
TOTAL 28,740,708 78.650%
Total number of shareholders (As of 12/31/2004) – 1,852
(3) Dividends
Chinabank’s Dividend history has been mainly in the form of stock dividends.
2004 2003 2002 2001 2000
Stock Dividend 20% 20% 10% 10%
Cash Dividend 5% 5% 8%
Authorized and Issued Capital

Authorized Capital - P5.0 billion divided into 50 million shares
Issued Shares - 36,542,512
There is no restriction that limits the ability to pay dividends other than what is required in the Corporation
Code. However, any dividends declared by the Bank are subject to the approval primarily of Bangko Sentral ng
Pilipinas, the Philippine Stock Exchange and the Securities and Exchange Commission.
(4) Unregistered Securities
There were no unregistered securities sold by the Bank for the past three (3) years, however there were new securities
issued resulting from the declaration of stock dividend to come from the Bank’s unissued shares which were exempt from
registration requirement under Sec 10.1 (d) of the Securities Regulation Code.

Compliance with leading practices on corporate governance
The Bank’s Manual on Corporate Governance has been revised to incorporate amendments introduced by various
governance-related circulars issued by the regulators which include among others, the creation of Corporate Governance
Committee, Risk Management Committee and Compensation or Remuneration Committee and the adoption of
corresponding Committee Charter, and the PSE Revised Disclosure Rules.
Also, the Bank has an evaluation system for the Board of Directors and for the Individual Board, to determine and measure
compliance with the provisions and requirements of the Manual. This is done annually where the results are summarized
and reported to the Board of Directors by the Compliance Officer.
To enjoin compliance, a copy of the Bank’s Manual on Corporate Governance, as amended, is made available to all
employees. Also, orientation is conducted for supervisors and officers to raise the level of awareness and understanding of
the principles, concepts and elements of good corporate governance.
ITEM 6. MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
A. Management’s Discussion and Analysis (MD & A) or Plan of Operation
(1) Financial and Operating Highlights

Highlights of the balance sheet and income statement for the last three (3) fiscal years:
2004 2003 2002
(In Million Pesos) (As restated) (As restated)
Gross Revenues 10,678 11,174 10,403
Gross Expenses 7,961 8,558 7,811
Net Income 2,717 2,616 2,592
Total Resources 113,860 103,350 107,931
Loan Portfolio (Net) 48,458 38,209 34,351
Total Deposits 85,806 72,112 83,151
Capital Funds 19,641 17,093 14,562
(In %)
Return on Assets 2.46 2.57 2.73
Return on Average Equity 14.37 16.82 19.36
BIS Capital Adequacy Ratios 32.74 26.17 24.53
Net Interest Margin 5.08 4.47 4.02
(2) Management’s Discussion and Analysis
The Bank posted a 3rd straight year of record income at P2.72 billion, 3.87% above 2003 figures and 4.83% from 2002
figures. The resulting Return on Average Equity (ROE) of 14.37%, 16.82% and 19.36% and Return on Assets of 2.46%,
2.57% and 2.73% in 2004, 2003 and 2002, respectively reflect industry best performance. Income was boosted by higher
interest margins coupled with lower provisioning at P856 million vs. P1.65 billion in 2003 and P2.32 billion in 2002.
Fund-based revenues reached P8.56 billion, expanding by 18.81% and 31.13% from 2003 and 2002 respectively, mainly
from interest income on loans, low-risk investment securities and IBCL. Interest expenses slightly declined by 0.52% in
2004 from P3.52 billion in 2003 but was slightly up by P205 million from 2002 as a result of lower interest cost on dollar
deposits and pay-offs of high yielding peso deposits such as More Than Double Your Money (MTDYM)-5 at the start of the
year. Consequently, net interest income expanded by 37.29% and 56.58% from P3.68 billion and P 3.23 billion in 2003 and
2002, respectively to P5.05 billion in 2004. Net interest margin improved to 5.08% from 4.47% in 2003 and 4.02% in
2002.

Fee-based revenues dropped by 46.60% from 2003 & 45.30% from 2002 to P2.12 billion in 2004 which can be attributed
to the decline in trading gains by 87.74% and 89.47% from P2.46 billion in 2003 and P2.87 billion in 2002 respectively. This
was expected as a substantial part of the GS inventory was sold in 2004 and 2003. On the other hand, services, fees and
commissions grew by 33.91% from P467 million in 2003 and 34.97% in 2002. Higher in-clearing service charges such as
no sufficient fund (NSF) and clearing house operating memo (CHOM) boosted service and collection charges. Foreign
exchange gain also increased by 14.94% in 2004 from P642 million in 2003 and by 323.67% from P174 million in 2002 as
our Treasury Group maximized opportunities from the higher peso-dollar exchange rate. Miscellaneous income also
expanded by 9.02% to P95.5 million in 2004 from P87.6 million in 2003 and by 21.22% from P95 million in 2002 .
Despite the drop in taxes and licenses by 10.05% to P385 million and slight increase by 2.06% from 2003, operating
expenses grew to P3.28 billion or by 4.76% in 2004 from P3.13 billion in 2003 and 18.05% from P2.85 billion in 2002.
Compensation and fringe benefits grew by P195 million to P1.22 billion in 2004 from P1.02 billion in 2003 and by P276
million in 2004 from P943 million in 2002 mainly due to higher salary and other fringe benefits. Miscellaneous
expenses were down by 21.09% or P150.17 million to P561.90 million from P712.16 million in 2003 and up by 1.90% or
P10.50 million from 2002 as a result of reclassification of accounts.
With substantial loan loss reserves already provided in the previous 2 years, China Bank’s provision for probable losses
slowed to P856 million. The resulting loan loss coverage ratio (ratio of reserves to bad loans) of 82.19%, remained
one of the highest in the industry. This brings cumulative loan loss reserves to P6.25 billion in 2004, down by 4.5%
from 2003 due to write-offs effected by end of year. NPL ratio stood at 11.40% in 2004, better than last year’s 14.68% .
Going forward, changes in market/borrowing rates, volatility of peso/dollar exchange rates and other external factors are
potential concerns.
Total resources grew by P 10.51 billion to P 113.86 billion in 2004, mainly from higher loans volume and Investment in
Bonds and Other Debt Instruments (IBODI). The bank’s gross loan portfolio for 2004 grew by P11.9 billion from 2003 and
P17.7 billion from 2002 due to additional exposure to prime companies in telecommunications, shipping, medical services,
food and agribusiness and real estate as well as higher volume of retail loans (housing & auto).
Items on the asset side such as Cash & Other Cash Items increased by 22.79% from 2003 and 36.90% from 2002 due to
year-end build-up. There was a growth in Due from BSP of 86.35% which can be attributed to an increase in BSP
reserves from higher deposits . Meanwhile, Due from Other Banks dropped by 57.31% and 71.30% from 2003 and 2002,
respectively as a result of lower placements with other banks. Interbank loans also declined by 60.20% to P2.42 billion
from P6.09 billion in Dec. 2003 due to lower overnight bank placements. For 2004, IBODI increased by 27.30% to P34.39
billion in 2004 from P27.02 billion in 2003 and by 2.52% from P33.55 billion in 2002 from higher investment in government
securities. Trading account securities (TAS) decreased by 26.55% from 2003 and 16.60% from 2002 due to
reclassification of accounts.
On the liabilities side, total deposits was up by 17.30% to P85.81 billion in 2004 from P 72.11 billion in 2003 and 3.19%
from P83.15 billion in 2002 which can be attributed to higher CASA deposits and the introduction of new high yielding long-
term deposits. Again, year-on-year CASA growth was one of the best ever for the Bank, and signified the eighth straight
year of over P 1 billion build-up in low-cost CASA deposits.
Interbank loans payable dropped by 87.81% to P732 million from P6.00 billion in 2003 and 70.76% from P2.50 billion in 2002 as there
was no need for additional bank borrowings. Accrued Taxes, Interest & Other Expenses declined by 29.07% from 2003 and 4.20% from
2002 due to the payout of accrual interest on maturing MTDYM deposits last January. Other liabilities grew by 6.12% from 2003 due to
adjustments involving reclassification to proper accounts for the whole year 2004.
Total capital funds reached P19.64 billion, up by 14.91% from 2003 and 29.07% from 2002. The BIS Capital Adequacy Ratio (CAR)
reached a new high of 32.74%, reflective of the Bank’s status as one of the best capitalized banks in the industry. Again, this is an
improvement from the CAR of 26.17% in 2003 and 24.53% in 2002.
Changes in market rates and borrowing costs as well as movements in the peso/dollar exchange rate may affect the Bank’s liquidity.
Despite an exigent environment, China Bank remained vigilant for fresh opportunities to hike market share and consolidate
its presence as a multi-category service provider. On the corporate banking side, the Bank’s newly established Cash
Management unit became a significant engine for acquisition of business clients through the launching/offering of services
such as BIR tax payments (electronic Filing and Payment system), payroll processing, check warehousing and auto-debit
arrangements. For the retail banking, branch-based marketing program was implemented throughout the network.
Consumer products were also introduced in 2004 such as the Contract to Sell (CTS) financing and salary loans. We have
also reorganized our support units such as the Centralized Operations Group which included the International Banking and
Loans & Discounts. Another newly-formed group in 2004 was Credit Management, which includes Remedial Management,
Securities Custodianship and Credit Division. Technology-related capital investment accounted for the bulk of the Bank’s
capital expenditures for the year 2004. These include additional business applications, upgrade of computer mainframe
hardware (CPU and storage) for the core banking system and e-banking projects.
There were no key variable and other qualitative and quantitative factors which affected the Bank’s financial condition that
did not arise from the Bank’s normal course of operations. Also, changes in the bank’s financial condition or operations
are due more to external factors such as interest rate movements and cost of borrowings rather than cyclical aspects.
In the normal course of the Bank’s operations, there are various outstanding commitments and contingent liabilities which
are not reflected in the accompanying financial statements. Management does not anticipate any material losses as a
result of these transactions.
The following is a summary of contingencies and commitments with their equivalent peso contractual amounts:
2004 2003
Trust Department accounts P 38,184,795,281 P 33,560,644,456
Forward exchange sold 7,729,720,647 13,071,690,696
Unused commercial letters of credit 2,061,265,436 1,920,913,124
Outstanding guarantees issued 2,637,888,695 1,342,660,084
Deficiency claims receivable 779,131,078 491,142,262
Late deposits/payments received 218,321,220 119,022,748
Outward bills for collection 219,272,685 95,017,647
Inward bills for collection 134,308,337 91,467,555
Forward exchange bought 27,026,647 25,355,946
Others 731,573,297 615,480,142
There are pending assessments and pre-assessments from the Bureau of Internal Revenue (BIR) pertaining to withholding
tax at source and DST for the years 1982 to 1986 and GRT for the years 1999 and 2000. In addition, the Bank has received
tax assessments from the BIR on two industry issues. The Bank, through its tax counsel, is contesting these assessments
and pre-assessments on the ground that the factual situations were not considered which, if considered, will not give rise to
material tax deficiencies. The Bank, together with other member banks of the Bankers’ Association of the Philippines (BAP)
, is contesting these pending assessments and pre-assessments of the BIR. Discussions are ongoing between the BAP
and the BIR for the appropriate settlement and disposition of these tax issues. No provision has been made in the
accompanying financial statements for these contingencies.
Several suits and claims relating to the Bank’s lending operations and labor-related cases remain unsettled. In the opinion
of management, these suits and claims, if decided adversely, will not involve sums having a material effect on the financial
statements of the Bank.
(3) Plan of Operations
Prospects for the banking industry and China Bank in particular could be tied to the resilience of the Philippine economy.
In 2005, with the GDP forecast of 5.3%-6.3% p.a. and better outlook for the banking industry such as loans growth, stronger
retail/consumer market, reduced NPL/NPA due to SPAV, China Bank believes a 10% p.a. growth would be a challenge.
To sustain its profitability, the Bank will continue to expand its market base and business volume through growth in CASA
and loans. It will also intensify its revenue, pursue its replacement strategy through quality loans growth and build up of
fee-based income. The Bank will also improve its asset quality through reduced NPL, disposal of ROPOA and
strengthening of its credit management , change in lending process & structure.
Another priority for the Bank this year is the implementation of internet banking solutions and the full implementation of the
Sales Mgt. System to clearly target market segments, monitor performance as well as support customer acquisition &
retention.
The Bank will also continue to improve its overall operating efficiency through superior technology and review of core
banking platform, implementation of automation projects and streamlining processes. Technology-related capital
investment will account for the bulk of the Bank’s capital expenditures for the year 2005. These include operating software
for insurance brokerage, upgrade of network and communications systems, automated solutions and e-banking projects.
ITEM 7. FINANCIAL STATEMENTS

Please refer to the attached Audited Financial Statements for 2004.
ITEM 8. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL

DISCLOSURE.
There were no changes and disagreements with our accountant on any matter of accounting and financial disclosure. For
the last two (2) years, Mr. Wilson P. Tan, Partner, Sycip, Gorres Velayo & Co. (SGV), with office located at 6760 Ayala
Avenue, Makati City, 1226 Philippines, has been our accountant/auditor.
PART III CONTROL AND COMPENSATION INFORMATION
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(1) Incumbent Directors and/or Nominees for the position of directors including independent directors and executive
officers and the relevant data about them are listed hereunder:
a. Incumbent Directors and/or Nominees, including independent directors.
1. Gilbert U. Dee (GUD) Incumbent – Nominee Director
2. Hans T. Sy (HS) Incumbent – Nominee Director
3. Peter S. Dee (PSD) Incumbent – Nominee Director
4. Joaquin Dee (JD) Incumbent – Nominee Director
5. Dy Tiong (DT) Incumbent – Nominee Director
6. Herbert T. Sy (HTS) Incumbent – Nominee Director
7. Henry T. Sy, Jr. (HTS, Jr.) Incumbent – Nominee Director
8. Harley T. Sy (HSY) Incumbent – Nominee Director
9. Pilar N. Liao (PNL) Incumbent – Nominee Independent Director
10. Donato T. Faylona (DTF) Incumbent – Nominee Independent Director *
11. Alberto S. Yao (ASY) Incumbent – Nominee Independent Director
12. Robert F. Kuan (RFK) Nominee Independent Director
* Per his letter dated April 6, 2005, he is declining his nomination as Director.
Gilbert U. Dee, 69, Chairman of the Board, holds a Bachelor of Science degree in Banking from De La Salle University. He obtained his
MBA in Finance from University of Southern California in 1959. He became the Chairman of the Board in 1989 and a Director since 1969.
He has been a director/officer for more than five (5) years in companies engaged in banking, finance and investment, manufacturing and
auto dealership. He holds directorships in affiliates/subsidiaries and other corporations such as CBC Properties & Computer Center, Inc.
th
(CBC-PCCI), Union Motor Corp. and Super Industrial Corp., among other corporations. GUD and PSD are related within the 5 civil degree
by consanguinity.
Hans T. Sy, 49, Vice Chairman and Chairman of the Executive Committee (ExCom), holds a Bachelor of Science degree in Mechanical
Engineering from De La Salle University. He became Vice Chairman and Chairman of the ExCom since 1989 and a Director since 1986.
He has been director/officer for more than five (5) years in companies engaged in banking, retailing, real estate development, mall
operations, construction, cement, food and rubber manufacturing, finance and investment, insurance and entertainment. He holds
directorships in affiliates/subsidiaries and other corporations such as Best Rubber Corp., ACE Hardware Phils. Inc., Family Entertainment
Center, Inc., HS Food, Inc., Land Building Corp., Market-Watch Investors Co., Inc., Shoemart, Inc., Multi-Realty Dev’t. Corp., Shopping
Center Mgt. Corp., SM Development Corp., SM Investments Corp., Wonderfoods, Inc., among other corporations. HS, HTS, HTS, Jr. and
nd
HSY are related within the 2 civil degree by consanguinity.
Peter S. Dee, 63, President & Chief Executive Officer (CEO), holds a Bachelor of Science degree in Commerce from De La Salle
University/University of the East. He became President & CEO in 1989 and has been a Director since 1977. He has been a director/officer
for more than five (5) years in companies engaged in banking, paint, food and beverage, manufacturing, real estate development, finance
and insurance. He holds directorships in affiliates/subsidiaries and other corporations such as CBC Properties & Computers Center, Inc.,
CBC Forex Corp., Chinabank Insurance Brokers, Inc., Cityland Dev’t. Corp., Hydee Mgt. & Resources Corp., Sinclair (Phils.), Inc., Can
th
Lacquer, Inc. and GDSK Dev’t. Corp., among other corporations. PSD and GUD are related within the 5 civil degree by consanguinity.
Joaquin Dee, 69, Director, holds a Bachelor of Arts degree in Commerce from Letran College. He has been a Director since 1984 and has
been a director/officer for more than five (5) years in companies engaged in banking, liquor manufacturing, flour trading and real estate
development. He holds directorships in the following corporations: JJACCIS Dev’t. Corp. and Enterprise Realty Corp., among other
corporations.
Dy Tiong, 75, Director, holds a Bachelor of Science degree in Business Administration from National Jean Kuan College. He has been a
Director since 1985. He has also been a director/officer for more than five (5) years in companies engaged in banking, finance, investment,
insurance and education. He holds directorships in following corporations: Panelon Phils. and Chiang Kai Shek College, among other
corporations.
Herbert T. Sy, 48, Director, holds a Bachelor of Science degree in Management from De La Salle University. He has been a Director since
1993 and has been a director/officer for more than five (5) years in companies engaged in banking, food retailing, rubber manufacturing,
investment, car service and car accessories, real estate development and mall operations. He holds directorships in the following
corporations: Best Rubber Corp., SM Autoservice & Car Accessories (Phils.), Inc., Café Elysee, Inc., SM Prime Holdings, Inc. and
Supervalue, Inc., among other corporations. HTS, HS, HTS, Jr. and HSY are related within the 2nd civil degree by consanguinity.
Henry T. Sy, Jr., 51, Director, holds a Bachelor of Science degree in Management from De La Salle University. He has been a Director
since June 2000. Mr. Sy, Jr. has been a director/officer for more than five (5) years in companies engaged in banking, real estate
development, construction, mall operations, cement, food & rubber manufacturing, finance and investment. He holds directorships in the
following corporations: SM Prime Holdings, SM Investments Corp., SM Synergy Properties Holdings Corp., Shoemart Inc., Sysmart Corp.,
Highlands Prime, Inc. & SM Development Corp., among other corporations. HTS, Jr., HS, HTS and HSY are related within the 2nd civil
degree by consanguinity.
Harley T. Sy, 45, Director, holds a Bachelor of Science degree in Commerce, major in Finance from De La Salle University. He became a
Director in May 2001. He has been a director/officer for more than five (5) years in companies engaged in banking, retailing, food, real
estate development, finance and investment. His directorships include the following: ACE Hardware Phils., SM Investments Corp.,
Shoemart, Inc. and H.S. Food, Inc., among other corporations. HSY, HTS, HS and HTS, Jr. are related within the 2nd civil degree by
consanguinity.

Pilar N. Liao, 74, Director, holds a Bachelor’s degree in Home Economics from the College of the Holy Spirit. She became
a Director in May 1985. She has also been a director/officer for more than five (5) years in companies engaged in banking,
office equipment, systems and supplies. She is also a Director of Speed Office System.
Donato T. Faylona, 57, has been engaged in the general practice of law since 1974. Presently, a partner in Herrera
Teehankee Faylona & Cabrera Law Offices in-charge of litigation, a position he has held since joining the firm in 1988, has
extensively appeared in trial courts and administrative bodies such as the Securities and Exchange Commision, Civil
Aeronautics Board and House Land Use and Regulatory Board. Directly handled and supervised appellate practice in the
Court of Appeals and in the Supreme Court. Has likewise extensive practice in corporate law involving joint venture
agreements, mergers and acquisitions and maintenance of corporate books. His directorship include the following:
Gendiesel Philippines, Inc., Dream 6750, Inc., Jadwani Int’l., Inc., VAJ Industries, Inc., VSD Realty and Dev’t. Corp., Orient
Wood Industrial Co., Inc., Tagum Agro-Industrial Corp., Phil-Gulf, Inc., and Casa Benita Dev’t. Corp.
Alberto S. Yao, 58, Director, holds a Bachelor of Science in Business Administration from Mapua Institute of Technology.
He became a director in July 2004. He has been a director/officer for more than five (5) years in companies engaged in
manufacturing and distribution of tires, Mattel and other leading toys, infants and children’s footwear. His directorship/
officership in other corporations include Richphil House, Inc., Megarich Property Ventures and Crestland Empire Venture
Corporation.
Robert F. Kuan, 57, holds a Bachelor of Science degree in Business Administration from UP. He obtained his MBA from
AIM in 1975. He took up Top Management Program exclusively for company Presidents and Chief Executive Officers at
Bali, Indonesia in 1993. He has been the Chairman of the Board of Trustees of St. Luke’s Medical Center and Member of
Board of Trustees of St Luke’s College of Medicine since 1996, and Brent International School of Manila since 1989. He is
the founder and the President of Chowking Food Corporation from 1985 until March 2000. He is a recipient of several
awards and citations in the field of business, such as Business Leadership Award (Pillar Category) from Aurelio Periquet,
Jr. Foundation, TOFIL Awardee in the field of Business and Entrerpreneurship for the year 2003, 1999 Franchise
Excellence Awardee from the Philippine Franchise Association, 1999 Most Outstanding Professional Awardee in the field of
Business Administration from UP Alumni Association, among others.
GUD- Nominated by Linda Susan T. Mendoza, no relation
HS-Nominated by SM Investments Corp./Shoemart, Inc./Henry Sy, Sr./Sysmart Corp.
PSD – Nominated by Nancy D. Yang, sister
JD – Nominated by Christopher Dee, son
DT – Nominated by Johnny Cheng, T.K., Jr. son-in-law
HTS – Nominated by SM Investments Corp./ Shoemart, Inc./Henry Sy, Sr. / Sysmart Corp.
HTS, Jr. – Nominated by SM Investments Corp./Shoemart, Inc./Henry Sy, Sr./Sysmart Corp.
HSY – Nominated by SM Investments Corp./Shoemart, Inc./Henry Sy, Sr./Sysmart Corp.
PNL – Nominated by Patrick Stephen Liao, son
ASY – Nominated by Gregorio U. Kilayko, no relation
DTF – Nominated by Regina Capital Development Corp. by Marita A. Limingan
RFK – Nominated by Regina Capital Development Corp. by Marita A. Limingan
b. Principal Officers
Ricardo R. Chua, 53, Executive Vice President (EVP) and Chief Operating Officer (COO), holds a Bachelor’s Degree in
Commerce, major in Accounting from the University of the East. He obtained his MBA from Asian Institute of Management
(AIM) in 1975. He became the COO in December 1995. He has been involved in the banking industry for more than 5
years. He is presently the President & COO of Chinabank Insurance Brokers, Inc. (CBC-IBI), Director of CBC Forex Corp.
(CBC-CFC), Director and General Manager of CBC Properties and Computer Center, Inc. (CBC-PCCI).
Reynaldo L. Lao, 61, Senior Vice President (SVP) and Head of the Consumer Banking Group, holds a Bachelor’s degree
in Management from University of the East. He obtained his MBA from Ateneo de Manila and graduated from the Asian
Institute of Management’s Management Development Program in 1972. He has been an SVP since 1995. He has been
involved in the banking industry for more than 5 years. He is a Director of Chinabank Insurance Brokers, Inc. (CBC-IBI).
Nancy D. Yang, 65, Senior Vice President (SVP) and Head of the Branch Banking Group, holds a Bachelor of Arts degree
from PWU and a degree in Human Development & Child Psychology from Merill Palmer Institute, Detroit, Michigan, USA,
1960-61. She has been a SVP since 1995. She has been involved in the banking industry for more than 5 years. She is a
Director of CBC Properties & Computer Center, Inc. (CBC-PCCI) and Chinabank Insurance Brokers, Inc. (CBC-IBI). PSD
and NDY are related within 2nd civil degree by consanguinity.
Samuel L. Chiong, 54, Senior Vice President (SVP), and Assistant Group Head of Branch Banking Group, holds a
Bachelor of Arts degree in Economics from Ateneo de Manila. He took the Advanced Bank Management Program from the
Asian Institute of Management (AIM) in 1989. He has been involved in the banking industry for more than 5 years. He
became SVP in February 2004.
Antonio S. Espedido, Jr., 49, Senior Vice President (SVP), and Head of Treasury Group, holds a Bachelor of Science in
Business Administration from University of San Francisco. He has been in the banking industry since 1984. He became
SVP in July 2004. He is a Director of CBC Forex Corporation (CBC-CFC).
Ramon R. Zamora, 55, Senior Vice President (SVP) and Head of the International Banking Group, holds a Bachelor of Arts
degree in Economics from Ateneo de Manila. He has been an SVP since April 2004. He has been involved in the banking
industry for more than 5 years. He is a Director of CBC Forex Corp. (CBC-CFC).
Margarita L. San Juan, 51, First Vice President (FVP), Account Management Group, holds a B.S.B.A. Major in Financial
Management degree from UP. She took the Advance Bank Management Program from Asian Institute Management (AIM)
in 1992. She became FVP in January 1997.
Rene J. Sarmiento, 51, First Vice President (FVP) and Head of the Trust Group, holds a Bachelor of Science degree in
Commerce, major in Accounting from De La Salle University. He obtained his MBA from AIM in 1978. He has been involved
in the banking industry for more than 5 years. He has been an FVP since July 2002.
Alexander C. Escucha, 48, First Vice President (FVP) and Head of Corporate Planning Division, holds a Bachelor of Arts
degree in Economics from UP. He has been involved in the banking industry for more than 5 years. He became FVP in
September 2002.
Rhodora Z. Canto, 55, First Vice President (FVP) and Head of Credit Management Group, holds a Bachelor of Science in
Business Administration from University of the Philippines. She obtained her MBA from AIM in 1975. She has been in the
banking industry for more than 5 years. She became FVP in June 2004.
Note: To the best of our knowledge, no nominees for director (1) own directly/indirectly or a beneficial owner of more than 5% of the Bank’s outstanding
shares (2) have any transaction with or involving the Bank or any of its subsidiaries in which a director-nominee and members of their immediate family have
a direct/indirect material interest, and (3) have been involved for the past five (5) years in any legal proceeding affecting/involving themselves and/or a material
or substantial portion of their property before any court of law or administrative body in the Philippines or elsewhere, save in the usual routine cases particularly
of the Bank.
(2) Significant Employees
There is no person other than the executive officers who is expected to make a significant contribution to
the Bank.
(3) Family Relationships. (Please refer to Item 9 (1) )

(4) Involvement in Certain Legal Proceedings
To the knowledge and/or information of the Bank, there are no events that occurred during the past five
(5) years that are material to an evaluation of the ability or integrity of any director, nominee for election as
director, executive officer, underwriter or control person of the Bank.
Moreover, Criminal Case No. B-2003-345, RTC Branch 89, Bacoor, Cavite, formerly I.S. No. B-01-130
supposedly against Mr. Harley T, Sy, among others, was considered withdrawn per Court Order dated 03
August 2004 signed by Executive Judge Eduardo Israel Tanguanco, RTC, Bacoor, Cavite, signed xerox
copy of which was furnished to OCS by Mr. Sy’s office, and which OCS, particularly, Ms. Amy De Leon and
Mr. Arsenio L. Lim, Jr. found to be the true xerox copy of the signed original thereof shown to them for the
purpose of comparison.
ITEM 10. EXECUTIVE COMPENSATION

2005 a 2004 b 2003 b
Top 5 Senior Officers P 63,349,454.00 P 59,411,516.00 P 40,613,912.00
Regular Salaries P 20,056,416.00 P 18,570,756.00 P 17,092,752.00

Regular Bonuses 3,342,736.00 3,095,126.00 23,521,160.00
Profit Sharing 39,950,302.00 37,745,634.00
1. Gilbert U. Dee Chairman of the Board

2. Peter S. Dee President & CEO
3. Ricardo R. Chua Exec. Vice Pres. & COO
4. Reynaldo L. Lao Sr. Vice Pres & Head, Consumer Banking Group
5. Nancy D. Yang Sr. Vice-Pres. & Head, Branch Banking Group
Board of Directors & Officers P 485,534,627.00 P 455,876,247.00 P 349,558,479.00
Regular Salaries P 264.283,016.00 P 244,706,496.00 P 221,321,808.00

Regular Bonuses 44,047,169.00 40,784,416.00 128,236,671.00
Profit Sharing 177,204,442.00 170,385,335.00
a b
- Estimated - Actual
Components of the 2004 Data are as follows: Components of the 2005 Data are as follows:
1. Annual Salary consisting of 12 months Basic Salary 1. Annual Salary consisting of 12 months Basic Salary
(December, 2004 figures) (2004 figures plus 8.0%)
2. Regular Bonuses equivalent to 2 months Basic Salary 2. Regular Bonuses equivalent to 2 months Basic Salary
(December, 2004 figures) (2004 figures plus 8.0%)
3. Officers’ 2003 Profit Sharing (Taxable Portion) to be paid in 3. Officers’ 2004 Profit Sharing (Taxable Portion) to be paid in 2005
June 2004 (Actual 2003 PS paid in 2004, plus 10%)
4. PSD/GUD’s 2003 Taxable PS (As Officer/EXCOM Member) 4. PSD/GUD’s 2004 Taxable PS (As Officer/EXCOM Member)
Paid in 2004 (Actual 2003 PS paid in 2004, plus 10%)
5. EXCOM Members’ 2003 Taxable PS paid in June 2004 5. EXCOM Members’ 2004 Taxable PS – actual 2003 PS paid in
6. Directors’ 2003 Taxable PS paid in May 2004 2004 plus 10%
6. Directors’ 2004 PS to be paid in 2005 – same as actual 2003 PS
paid in 2004
There are no compensation arrangements for members of the Board of Directors, other than four (4%) percent that is
provided under Article VIII , Sec. 1 (a) on the Distribution of Net Earnings and Five Hundred Pesos (P500.00) Per Diem per
director per meeting attended under Article IV Sec. 11 of the Bank’s By-Laws, and there are no warrants/options held by
CEO, the named executive officers, and all officers and directors as a group.
1
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(1) Security ownership of certain record & beneficial owners of more than 5%
1) Title of Class 2) Name and Address 3) Amount & Nature 4) Percent of Class
of record/beneficial of record/beneficial
Owner ownership ( indicate
by “r” or “b”)
Common Sysmart Corp. 745,747,300.00 “r” 20.408

Rm. 326 Makati Stock
Exchange Bldg., Ayala
Ave., Makati City
Common PCD Nominee Corp. (Fil.) 538,979,300.00 “r” 14.749

G/F MSE Bldg.,
6767 Ayala Avenue,
Makati City
Common SM Investment Corp. 350,996,700.00 “r” 9.605

Ave., Makati City
Common The Int’l Commercial 295,226,800.00 “r” 8.079

Bank of China
100 Chin Lin Road,
Taipei, 10424 Taiwan,
Republic of China
Common Shoemart, Inc. 246,174,400.00 “r” 6.737

Ave., Makati City
Common Henry Sy, Sr. 202,176,100.00 “r” 5.533

Ave., Makati City
HENRY SY, SR. is the record and beneficial owner of the following China Bank’s common shares as of December 31, 2004:
No. of Percentage
Shares of Holdings
Direct Holdings: 2,021,761 5.53%
Indirect Holdings:
1. Holdings from various brokers 80,916 .22%
2. 25% ownership in SM Investment Corporation 1,488,100 4.07%
3. 21.31% ownership in Shoemart, Incorporated 535,832 1.47%
4. 99.98% ownership in Sysmart Corporation 7,571,377 20.72%
Total holdings direct and indirect 11,697,986 32.01%
Except as stated above, the Bank has no knowledge of any person or any group who directly or indirectly is the
beneficial owner of more than 5% of the Bank’s outstanding shares or who has a voting power, voting trust or any
similar agreement with respect to shares comprising more than 5%of the Bank’s outstanding common stock.
HENRY SY, SR’s family are known to have substantial holdings in Shoemart, Inc., SM Investment and Sysmart
Corporation and as such, could direct the voting or disposition of the shares of said companies while Donato T. Faylona
is the proxy and represents International Commercial Bank of China in the Board.
The Bank is not aware of any additional shares which the above-listed beneficial or record owners have the right, if any,
to acquire within thirty (30)days, from options, warrants, rights, conversion privilege or similar obligation, or otherwise.
(2) Security Ownership of Management
1) Title of Class 2) Name and Position 3) Amount* and Nature of 4) Percentage of Class
record/beneficial ownership
(indicated by “r” or “b”)
A. Director
Common Gilbert U. Dee, Chairman 214,578 “r” 0.587

Common Hans T. Sy, Vice-Chairman 43,526 “r” 0.119
Common Peter S. Dee, President & CEO 106,290 “r” 0.291
Common Joaquin Dee, Director 877,635 “r” 2.402
Common Dy Tiong, Director 3,367 “r” 0.009
Common Herbert T. Sy, Director 6,950 “r” 0.019
Common Henry T. Sy, Jr., Director 33,549 “r” 0.092
Common Pilar N. Liao, Director 198 “r” 0.001
Common Harley T. Sy, Director 1,584 “r” 0.004
Common Donato T. Faylona, Director 12 “b” 0.000
Common Alberto S. Yao, Director 120 “b” 0.000
Total 1,287,809 3.524
B. Executive Officers
Common Ricardo R. Chua, EVP & COO 1,982 “r” 0.005

Common Nancy Dee Yang, SVP 40,164 “r” 0.110
Common Samuel L. Chiong 720 “r” 0.002
Common Rene J. Sarmiento, FVP 360 “r” 0.001
Common Margarita L. San Juan 1,296 “r” 0.004
Total 44,522 0.122
C. Directors and Principal Officers (as a group) 1,332,331 “r” 3.646
* The figures indicated in column 3 are those directly owned of record by the above-named Directors and Officers.
There are no directors or officers who beneficially own more than 10% shares of the Bank as nobody among them
indicated in SEC Form 23-A which we sent to them in writing and which upon inquiry they personally confirmed to
us, own more than 10% shares of the Bank.

Schedule K Capital Stock (1)

Title of issue Number of Number of Number of Number of Directors, Others
(2) shares shares shares shares officers and
authorized issued and reserved held employees
outstanding for options, by
at shown warrants affiliates
under conversion (3)
related and other
balance rights
sheet
caption
CHINA BANK 50,000,000 36,542,512 - NONE - - NONE - (SEE LIST
BELOW)
Stockholdings of Officers and Employees as of December 31, 2004

Total Outstanding
Full Name Position Share
1. Abello, Orlando Mauricio Officer 19
2. Alameda, Evelyn Tumacder R. Officer 72
3. Alano, Ma. Hildelita P. Officer 72
4. Alvarez, Alejandro I., Jr. Officer 14
5. Aviles, Lucille M. Employee 19
6. Bernabe, Virginia ITF John Officer 126
7. Bognot, Renito R. Officer 434
8. Capacio, Victoria Officer 14
9. Cariño, Lilibeth R. Officer 36
10. Carreon, Antonio R. Officer 26
11. Chua, Victoria L. Officer 225
12. Cruz, Remedios C. Officer 336
13. Cuevas, Charmaine Officer 14
14. Dy, Patricia Chua Officer 66
15. Encinas-Tiu, Mary Ann Habalo Officer 40
16. Escuadro, Ma. Stella Paz P. Officer 14
17. Evangelista, Adela A. Officer 129
18. Galang, Hyacinth M. Officer 48
19. Gamboa, Raul C. Officer 300
20. Gan, Rosemarie C. Officer 434
21. German, Mercedes E. Officer 8
22. Go, Patrick U. Officer 919
23. Hidalgo, Bienvenido C. Officer 1,190
24. Javier, Jose Leslie P. Officer 1,008
25. Labalan, Melecio C. Jr. Officer 487
26. Lazaro-Manuel, Gina Torres Officer 40
27. Lee, Eric Y. Officer 138
28. Liamson, Estela A. Officer 14
29. Lim, Arsenio, Jr. L. Officer 9
30. Llorca, Marcelino J., Jr. Officer 180
31. Lopez, Jeanett J. Officer 28
32. Lucero, Mary Luz S. Employee 12
33. Marquez, Delia Officer 198
34. Mayor, Josefina G. Officer 19
35. Meniado, Maribel S. Employee 600
36. Miguel, Gigi Iluminada T. Officer 120
37. Milan, Zenaida Officer 62
38. Ngkaion, James Officer 453
39. Ngo, Melanie K. Officer 12
40. Ochoco-Soriano, Anita C. Officer 19
41. Ong, Gloria T. Officer 1,065
42. Ong, Hermenegildo Supervisor 40
43. Orencia, Rafael C. Officer 33
44. Pacheco, Ma. Rosario Officer 14
45. Paggabao, Emma Z. Officer 14
46. Pajarillo, Maria Vida G. Employee 14
47. Purificacion, Noreen Officer 14
48. Qua Tee, Elizabeth Officer 548
49. Quintanilla, Alvin A. Officer 14
50 Ramirez, Betty Choa Officer 19
51. Rosario, Reylenita M. Del Officer 16
52. San Diego, Nycette O. Officer 14
53. Santos, Estefania A. Officer 62
54. Say, Elizabeth C. Officer 225
55. Sia, Henry D. &/or Evelyn R. Sia Officer 72
56. Sun, Antonio G. Officer 19
57. Sy, Celso M. Officer 856
58. Sy, Teresita Gabaldon Officer 33
59. Tam, Linda-Susan A. Employee 216
60. Tan, Annaliza M. Officer 86
61. Tan, Belenette C. Officer 68
62. Tan, Phillip M. Officer 33
63. Tan, Shirley T. Officer 217
64. Tan, William Winston O. Employee 2,978
65. Torralba, Edna A. Officer 129
66. Torres, Ruben M. Officer 115
67. Trinidad, Ferdinand C. &/or Salina E. Trinidad Employee 7
68. Tsai, Philip Officer 216
69. Ty, Jasmin Ongchan Officer 216
70. Uy, Johnny L. Officer 33
71. Uy, Norberto L. Officer 525
72. Uy, Virginia Yu Officer 318
73. Uyquiengco, Roberto C. Officer 225
74. Virtusio, Ma. Cecilia E. Officer 132
75. Yabut, Rosario D. Officer 216
76. Yap, George C. Officer 14
77. Yong, Vivian L. Officer 40
78. Yuchenkang, Marilyn Officer 318
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There is no transaction with or involving the Bank or any of its subsidiaries in which a director, executive officer, or
stockholder owning five (5%) percent or more of total outstanding shares and members of their immediate family had or is to
have a direct or indirect material interest.
• The Bank retains the following law firms:
• Angara Abello Concepcion Regala & Cruz Law Offices
• Cruz Durian Agabin Atienza Alday & Tuazon
• Lim Vigilia Alcala Dumlao & Orencia
• External auditor -- Sycip, Gorres, Velayo & Company

PART IV EXHIBITS AND SCHEDULES
(a) Exhibits
Subsidiaries and Investments
(i) CBC Properties and Computer Center, Inc. - 40% owned by China Bank and renders computer services
solely to China Bank. It was incorporated last April 14, 1982.
Ownership Structure
Name % Share
1. China Banking Corporation 40.0

2. Gilbert U. Dee 12.0
3. Peter S. Dee 12.0
4. Ricardo R. Chua 12.0
5. Honorio O. Reyes-Lao 12.0
6. Nancy D. Yang 12.0
100.0
Officers:
Gilbert U. Dee – Chairman of the Board / Director
Peter S. Dee – President / Director
Ricardo R. Chua - General Manager / Director
Phillip Tan – Vice President
Edith N. Young – Senior Assistant Vice President
Augusto P. Samonte – Assistant Vice President
Arsenio L. Lim, Jr. – Corporate Secretary
No. Of Employees - 60
(ii) CBC Forex Corporation — is 100% owned by China Bank Corp. Its primary purpose is to engage in the
business of dealing and broking in all currencies; to enter into spot and forward foreign exchange contracts with
local or foreign individuals and other entities; and to act as brokers for the purpose of bringing together sellers and
buyers of foreign exchange. It was incorporated last January 9, 1997.
Ownership Structure: % Share

China Banking Corporation - 99.995
Peter S. Dee - 0.001
Ricardo R. Chua - 0.001
Antonio S. Espedido, Jr. - 0.001
Ramon R. Zamora - 0.001
Minda A. Lim - 0.001
100.000
Board of Directors:
1. Peter S. Dee - Chairman of the Board
2. Ricardo R. Chua - Director
3. Ramon R. Zamora - Director
4. Antonio S. Espedido, Jr. - Director
5. Minda A. Lim – Director and President
Officers:
Peter S. Dee - Chairman of the Board
Minda A. Lim - President
Belenette Ching Tan - Corporate Secretary
Charis Tepoot - Chief Dealer & Treasurer
(iii) Chinabank Insurance Brokers, Inc. — is 100% owned by China Bank Corp. Its primary purpose is to act as
a broker in soliciting, procuring, negotiating, receiving, managing and forwarding applications for fire, casualty, plate
glass, automobiles, trucks and other motor vehicles, accident, health, burglary, rent, marine, credit, disability, life
insurance, and all other kinds of insurance, including reinsurance contracts or in any other manner aiding in taking
out insurance, collecting payment of premiums due on such policies and doing such other business as may be
delegated to brokers or such companies in the conduct of a general insurance brokerage business. It was
incorporated last January 16, 1998.
Ownership Structure
Name # of Shares
1. China Banking Corporation 14,995
2. Peter S. Dee 1
3. Ricardo R. Chua 1
4. Nancy D. Yang 1
5. Reynaldo L. Lao 1
6. Ramon R. Zamora 1
15,000
Officers
Peter S. Dee - Chairman of the Board
Ricardo R. Chua - President
Ramon R. Zamora - Treasurer
Gerard E. Reonisto - General Manager
Omar D. Vigilia - Corporate Secretary
No. of Employees - 16
(b) Reports on SEC Form 17-C

REPORT DATE REPORTED
Board of Directors’ approval of the Rules February 04, 2004

Governing the Nomination and Election of
Directors
Executive Committee’s approval of the February 18, 2004

retirement of Mr. Honorio Reyes Lao as Senior
Vice President, and the promotion of Mr.
Samuel L. Chiong from First Vice President to
Senior Vice President
Board of Directors’ approval to adopt as part of March 03, 2004

the Bank’s Code of Corporate Governance
Sec. 4.2 of the PSE’s Revised Disclosure
Rules entitled “Selective Disclosure of Material
Information”
Executive Committee’s approval of the March 10, 2004

promotion of Mr. Ramon R. Zamora from First
Vice President and Head, International
Banking Group to Senior Vice President and
Head, International Banking Group
Nomination Committee’s approval to extend March 24, 2004

the deadline of nomination for Directors to
April 05, 2004
Board of Directors’ approval to declare Twenty May 05, 2004

(20%) percent stock dividend to come from the
Bank’s unissued shares and Five (5%) percent
cash dividend or Five Pesos (P5.00) per share
Election of Directors and Officers and May 06, 2004

confirmation by the stockholders of the cash
and stock dividend declaration
Amendment to report dated May 06, 2004, the May 19,2004

election of Ms. Pilar N. Liao, an independent
director as Chairman of Audit Committee, in
lieu of Mr. Joaquin Dee, and Mr. Joaquin Dee
as Chairman of Compliance Committee in lieu
of Mr. Dy Tiong
Nomination Committee opened the nomination May 20, 2004

for Directors and set the deadline for
submission of nominees on June 01, 2004 in
compliance with BSP’s requirements to have a
short list of nominees for directors to fill
possible vacancies
The resignation of Ms. Yvonne S. Yuchengco May 24, 2004

as a Director
The Board of Directors’ acceptance of Ms. June 02, 2004

Yvonne S. Yuchengco’s resignation as a
Director
Executive Committee’s approval of the June 09, 2004

appointment of Ms. Rhodora Z. Canto as First
Vice President II and Head, Credit
Management Group effective June 16, 2004
Executive Committee’s approval of the June 16, 2004

appointment of Mr. Antonio S. Espedido, Jr.
as Senior Vice President and Head, Treasury
Group effective on July 01, 2004
BSP’s approval of the Twenty (20%) percent June 17, 2004

stock dividend and Five (5%) percent cash
dividend
Nomination Committee’s approval to re-open June 17, 2004

the nomination for independent and non-
independent directors and set the deadline on
July 06, 2004
Amendment on the report regarding the June 18, 2004

appointment of Mr. Antonio S. Espedido, Jr.
Appointment of Mr. Antonio S. Espedido, Jr. as June 23, 2004

Senior Vice President, and Head, Treasury
Group effective July 16, 2004, in lieu of July
01, 2004
Board of Directors’ resolution to - (a) elect Mr. July 07, 2004

Alberto S. Yao as Independent Director to take
the position vacated by Ms. Yvonne S.
Yuchengco, and as Chairman of Audit
Committee in lieu of Ms. Pilar N. Liao (b) fix
July 22, 2004 as record date and August 17,
2004 as the payment/issuance dates of the
cash and stock dividends, and the closing of
books from 23 July to 06 August 2004 (c)
make CBC Properties and Computer Center,
Inc. wholly owned subsidiary of the Bank, and
(d) change the business name of the Bank’s
subsidiary, CBC Insurance Brokers, Inc. to
Chinabank Insurance Brokers, Inc.
PSE’s approval of the listing of the Bank’s August 09, 2004

additional common shares to cover the 20%
stock dividend
Retirement from service of Mr. Danilo A. August 20, 2004

Alcoseba, Senior Vice President and Head,
Treasury Group
Board of Directors’ approval of the organization September 02, 2004

and incorporation initially of a wholly owned
Special Purpose Vehicle (SPV) with authorized
capital of P500 million and Paid –up capital of
P31,250,000.00.
Board of Directors’ approval of the creation of December 09, 2004

Risk Management Committee, Compensation
or Remuneration Committee and Corporate
Governance Committee in compliance with
BSP Circular No. 456, Series of 2004
SIGNATURES
Pursuant to the requirement of Section 17 of the Code and Section 141 of the Corporation Code, this report is signed on
behalf of the issuer by the undersigned, thereunto duly authorized, in the city of Makati on this 5th day of April 2005.
By:
(SGD) PETER S. DEE (SGD) RICARDO R. CHUA

Principal Executive Officer Comptroller
(SGD) RICARDO R. CHUA (SGD) ZACARIAS B. ANTONIO

Principal Operating Officer Principal Accounting Officer
(SGD) ANTONIO S. ESPEDIDO, JR. (SGD) ARSENIO L. LIM, JR.

Principal Financial Officer Corporate Secretary
SUBSCRIBED AND SWORN to before me this 5th day of April 2005 affiant (s) exhibiting to me their Community Tax
Certificates, as follows:
NAMES COMMUNITY DATE OF PLACE OF

TAX CERT. NO. ISSUE ISSUE
PETER S. DEE 13997135 02/11/05 Manila

RICARDO R. CHUA 23044331 03/11/05 Mandaluyong
ANTONIO S. ESPEDIDO, JR. 09572840 04/01/04 Muntinlupa
ZACARIAS B. ANTONIO 0217392 01/20/05 Manila
ARSENIO L. LIM, JR. 15189755 01/18/05 Makati
Doc. No.: 43 (SGD) FLORA DE PANO-SOLLER

Page No.: 10 Notary Public for Makati City
Book No.: 43 Appl No. M-101 until 31 December
Series of 2005 11th Floor China Bank Building
Paseo de Roxas, Makati City
PTR# 9441574:01-07-05; Makati City
IBP# 631501;01-03-05; Quezon City
Roll of Attorneys No. 39191
STATEMENT OF MANAGEMENT’S RESPONSIBILITY
FOR
FINANCIAL STATEMENTS
The Management of China Banking Corporation is responsible for all information and representations contained in the
consolidated financial statements for the years ended December 31, 2004 and 2003. The financial statements have been
prepared in conformity with generally accepted accounting principles and reflect amounts that are based on best estimates
and informed judgment of management with an appropriate consideration of materiality.
In this regard, management maintains a system of accounting and reporting which provides for the necessary internal
controls to ensure that transactions are properly authorized and recorded, assets are safeguarded against unauthorized use
or disposition and liabilities are recognized. The management likewise discloses to the company’s audit committee and to its
external auditor: (i) all significant deficiencies in the design or operation of internal controls that could adversely affect its
ability to record, process, and report financial data; (ii) material weaknesses in the internal controls; and (iii) any fraud that
involves management or other employees who exercise significant roles in internal controls.
The Board of Directors reviews the consolidated financial statements before such statements are approved and submitted to
the stockholders of the company.
Sycip, Gorres, Velayo & Co., the independent auditors appointed by the stockholders, have examined the consolidated
financial statements of the Company in accordance with generally accepted auditing standards and have expressed their
opinion on the fairness of presentation upon completion of such examination, in their report to stockholders.
(SGD) Ricardo R. Chua (SGD) Peter S. Dee

Executive Vice President & COO President & CEO
(SGD) Gilbert U. Dee

Chairman of the Board
Republic of the Philippines

Makati City S.S
Subscribed and sworn to before me this 22nd day of March, 2005, affiants exhibiting to me their
Community Tax Certifcates Nos. as follows:
Name Community Tax Certificate No. Date and Place of Issue

Gilbert U. Dee 00011355 February 10, 2005, Manila
Peter S. Dee 13997135 February 11, 2005, Manila
Ricardo R. Chua 23044331 March 11, 2005, Mandaluyong City
FLORA DE PANO-SOLLER
Notary Public
Until December 31, 2005
PTR No.9441574:01-07-05; Makati
IBP#631501; 01-03-05; Quezon City
Roll of Attorneys No. 39191
Doc. No.: 43
Page No: 10
Book No: 43
Series of 2005
Financial Statements
December 31, 2004 and 2003
and Years Ended December 31, 2004, 2003 and 2002
and
Report of Independent Auditors

SGV & CO SyCip Gorres Velayo &
Co.
Phone:
0307
(632) 891-
6760 Ayala Avenue Fax: (632) 819-0872

1226 Makati City www.sgv.com.ph
Philippines
BOA/PRC Reg. No. 0001
SEC Accreditation No.
The Stockholders and the Board of Directors

8745 Paseo de Roxas corner Villar Street
Makati City
We have audited the accompanying statements of condition of China Banking Corporation as of December 31,
2004 and 2003 and the related statements of income, changes in capital funds and cash flows for each of the
three years in the period ended December 31, 2004. These financial statements are the responsibility of the
Bank’s management. Our responsibility is to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted in the Philippines. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of China Banking Corporation as of December 31, 2004 and 2003, and the results of its operations and
its cash flows for each of the three years in the period ended December 31, 2004 in conformity with accounting
principles generally accepted in the Philippines.
Wilson P. Tan
Partner
CPA Certificate No. 76737
SEC Accreditation No. 0100-A
Tax Identification No. 102-098-469
PTR No. 9404036, January 3, 2005, Makati City
March 30, 2005
SGV & Co is a member practice of Ernst & Young Global

Report of Independent Auditors
The Stockholders and the Board of Directors

We have audited the accompanying statements of condition of China Banking Corporation as of December 31,
2004 and 2003 and the related statements of income, changes in capital funds and cash flows for each of the
three years in the period ended December 31, 2004. These financial statements are the responsibility of the
Bank’s management. Our responsibility is to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted in the Philippines. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of China Banking Corporation as of December 31, 2004 and 2003, and the results of its operations and
its cash flows for each of the three years in the period ended December 31, 2004 in conformity with accounting
principles generally accepted in the Philippines.
Wilson P. Tan
Partner
CPA Certificate No. 76737
SEC Accreditation No. 0100-A
Tax Identification No. 102-098-469
PTR No. 9404036, January 3, 2005, Makati City
March 30, 2005

STATEMENTS OF CONDITION
December 31
2003
2004 (As restated)
RESOURCES
Cash and Other Cash Items (Note 9) P
= 2,168,590,090 P = 1,766,041,157
Due from Bangko Sentral ng Pilipinas (Note 9) 2,346,840,957 1,259,370,585
Due from Other Banks 1,281,921,787 3,002,835,554
Interbank Loans Receivable and Securities
Purchased Under Resale Agreement 2,423,410,000 6,088,600,000
Trading and Investment Securities (Notes 3 and 9) 45,389,234,791 41,937,080,532
Receivables from Customers - net (Note 4) 48,457,790,936 38,208,551,280
Bank Premises, Furniture, Fixtures and Equipment
(Note 5)
At cost 854,240,321 823,368,382
At revalued amount 2,172,405,858 2,210,492,967
Equity Investments (Note 6) 245,499,158 193,896,087
Real and Other Properties Owned or Acquired - net
of allowance for probable losses of P
= 696,627,547 in
2004 and P = 440,845,495 in 2003 4,372,636,805 4,329,598,020
Other Resources - net (Notes 7 and 16) 4,147,097,734 3,530,205,727
P
= 113,859,668,437 P 103,350,040,291
LIABILITIES AND CAPITAL FUNDS
Liabilities
Deposit Liabilities (Notes 9 and 18)
Demand P
= 13,159,345,624 P= 11,218,629,625
Savings 34,071,380,872 14,547,571,798
Time 38,575,346,201 46,345,761,056
85,806,072,697 72,111,962,479
Bills Payable (Note 10) 4,334,942,904 9,308,809,023
Manager’s Checks 229,476,068 220,264,851
Accrued Interest, Taxes and Other Expenses (Note 2,118,552,705
11) 2,986,874,288
Other Liabilities (Note 12) 1,729,340,326 1,629,545,704
94,218,384,700 86,257,456,345
Capital Funds
Capital stock (Note 13) 3,654,251,200 3,045,267,600
Capital paid in excess of par value 671,504,726 671,504,726
Surplus reserves (Notes 13 and 17) 363,312,450 327,886,436
Surplus (Notes 2, 13 and 17) 13,669,066,767 11,748,201,737
Net unrealized gain on available-for-sale securities 42,364,800
(Note 3) 19,417,200
Revaluation increment on land (Notes 2 and 5) 1,240,783,794 1,280,306,247
19,641,283,737 17,092,583,946
P
= 113,859,668,437 P
= 103,350,040,291
See accompanying Notes to Financial Statements.

STATEMENTS OF INCOME
Years Ended December 31
2003 2002
2004 (As restated - Note 2)
INTEREST INCOME ON
Investment securities, interbank loans
receivable, deposits with banks and others P
= 4,685,773,819 P= 3,990,798,315 P= 3,349,643,509
Receivables from customers 3,870,883,544 3,211,300,536 3,175,861,938
8,556,657,363 7,202,098,851 6,525,505,447
INTEREST EXPENSE ON
Deposit liabilities, bills payable and others (Note 3,501,851,516
18) 3,520,145,887 3,297,293,521
NET INTEREST INCOME 5,054,805,847 3,681,952,964 3,228,211,926
PROVISION FOR PROBABLE LOSSES (Note 855,526,104
8) 1,647,468,409 2,321,375,766
NET INTEREST INCOME AFTER PROVISION

FOR PROBABLE LOSSES 4,199,279,743 2,034,484,555 906,836,160
OTHER OPERATING INCOME
Foreign exchange gain - net (Note 18) 737,844,804 641,931,528 174,155,240
Service charges, fees and commissions (Note 625,805,479
18) 467,316,308 463,669,384
Trust fee income (Note 17) 354,260,137 293,210,797 268,568,793
Trading and securities gain - net (Note 3) 301,807,713 2,462,222,188 2,866,285,109
Equity in net earnings of investees (Note 6) 6,043,683 20,128,746 10,112,418
Miscellaneous 95,500,908 87,600,303 95,003,730
2,121,262,724 3,972,409,870 3,877,794,674
OTHER OPERATING EXPENSES
Compensation and fringe benefits (Note 14) 1,219,660,116 1,024,643,824 943,012,541
Taxes and licenses 384,645,317 427,626,809 376,865,004
Occupancy (Note 15) 365,787,191 329,047,794 318,987,051
Entertainment, amusement and recreation 209,217,679
(Note 16) 170,157,049 183,434,266
Insurance 189,591,031 172,396,469 168,567,665
Repairs and maintenance 189,420,713 133,924,528 129,038,348
Depreciation and amortization (Note 5) 163,526,543 164,594,588 177,480,326
Miscellaneous (Note 18) 561,989,529 712,160,100 551,485,405
3,283,838,119 3,134,551,161 2,848,870,606
INCOME BEFORE INCOME TAX 3,036,704,348 2,872,343,264 1,935,760,228
PROVISION FOR (BENEFIT FROM)
INCOME TAX (Note 16) 319,166,324 256,036,026 (656,564,284)
NET INCOME P
= 2,717,538,024 P
= 2,616,307,238 P
= 2,592,324,512
Basic Earnings Per Share (Note 21) P
= 74.37 P
= 71.60 P
= 70.94

STATEMENTS OF CHANGES IN CAPITAL FUNDS
2003 2002
2004 (As restated) (As restated)
CAPITAL STOCK (Note 13)

Common stock - P = 100 par value
Authorized - 50,000,000 shares
Issued and outstanding - 36,542,512 in
2004, 30,452,676 shares in 2003
Balance at beginning of year P
= 3,045,267,600 P= 2,537,784,300 P= 2,537,784,300
Stock dividends - 20% 608,983,600 507,483,300 –
Balance at end of year 3,654,251,200 3,045,267,600 2,537,784,300
CAPITAL PAID IN EXCESS OF PAR VALUE 671,504,726 671,504,726 671,504,726
SURPLUS RESERVES (Notes 13 and 17)

Balance at beginning of year 327,886,436 298,565,356 271,708,477
Transfer from surplus 35,426,014 29,321,080 26,856,879
Balance at end of year 363,312,450 327,886,436 298,565,356
SURPLUS (Notes 13 and 17)

Balance at beginning of year, as previously 11,804,472,026
reported 9,848,590,953 7,480,915,960
Effect of change in accounting for operating
leases (Note 2) (56,270,289) (53,002,859) (47,772,755)
Balance at beginning of year, as restated 11,748,201,737 9,795,588,094 7,433,143,205
Net income 2,717,538,024 2,616,307,238 2,592,324,512
Stock dividends - 20% (608,983,600) (507,483,300) –
Cash dividends - P= 5 per share in 2004
and 2003, P= 8 per share in 2002 (152,263,380) (126,889,215) (203,022,744)
Transfer to surplus reserves (35,426,014) (29,321,080) (26,856,879)
NET UNREALIZED GAIN (LOSS) ON

AVAILABLE-FOR-SALE SECURITIES
(Note 3) 42,364,800 19,417,200 (21,770,800)
REVALUATION INCREMENT ON LAND

(Notes 2 and 5)
Balance at beginning of year, as previously 1,882,803,304
reported 1,882,803,304 1,858,018,635
Effect of change in accounting for income taxes
(Note 2) (602,497,057) (602,497,057) (594,565,963)
Balance at beginning of year, as restated 1,280,306,247 1,280,306,247 1,263,452,672
Net increase (decrease) during the year (39,522,453) – 16,853,575
P
= 19,641,283,737 P= 17,092,583,946 P= 14,561,977,923

STATEMENTS OF CASH FLOWS
2003 2002
CASH FLOWS FROM OPERATING
ACTIVITIES
Income before income tax P
= 3,036,704,348 P = 2,872,343,264 P = 1,935,760,228
Adjustments to reconcile income before income
tax to net cash provided by (used in)
operations:
Provision for probable losses (Note 8) 855,526,104 1,647,468,409 2,321,375,766
Depreciation and amortization (Note 5) 163,526,543 164,594,588 177,480,326
Unrealized market valuation gain on trading
account securities (Note 3) (23,099,283) (72,944,006) (136,946,006)
Equity in net earnings of investees (Note 6) (6,043,683) (20,128,746) (10,112,418)
Amortization of deferred charges 31,059 23,966 672,444
Cash dividends from investees (Note 6) – 6,707,507 23,886,723
Loss (gain) on sale of real and other
properties (51,685,032)
owned or acquired (66,806,962) 56,612,696
Changes in operating resources and
liabilities:
Decrease (increase) in amounts of:
Trading account securities 3,969,257,203 (1,693,335,852) (12,021,461,736)
Receivables from customers (10,019,917,609) (5,960,511,509) (1,018,573,790)
Other resources (1,873,823,226) 388,013,536 225,146,678
Increase (decrease) in amounts of:
Deposit liabilities 13,694,110,218 (11,039,472,447) 22,059,923,439
Manager’s checks 9,211,217 (52,715,189) 61,784,670
Accrued taxes, interest, and
other (883,481,329)
expenses 686,420,655 649,368,937
Other liabilities (420,155,963) (210,490,238) (456,470,176)
Net cash provided by (used in) operations 8,450,160,567 (13,350,833,024) 13,868,447,781
Income taxes paid (196,402,193) (104,741,028) (203,656,930)
Net cash provided by (used in) operating 8,253,758,374
activities (13,455,574,052) 13,664,790,851
CASH FLOWS FROM INVESTING ACTIVITIES
Net additions to:
Bank premises, furniture, fixtures and
equipment (Note 5) (194,398,482) (196,942,484) (185,734,210)
Equity investments (Note 6) (31,250,000) – (920,706)
Proceeds from sale of real and other properties
owned or acquired 577,299,724 417,731,904 387,137,391
Decrease (increase) in:
Investments in bonds and other debt (7,375,364,579)
instruments 6,530,096,270 (8,585,864,978)
Available-for-sale securities – – 14,656,044
Net cash provided by (used in) investing (7,023,713,337)
activities 6,750,885,690 (8,370,726,459)
(Forward)
-2-

2003 2002
CASH FLOWS FROM FINANCING
ACTIVITIES
Increase (decrease) in bills payable (4,973,866,119) P
= 4,071,340,479 P = 307,791,669
Payment of cash dividends (152,263,380) (126,889,215) (203,022,744)
Net cash provided by (used in) financing (5,126,129,499)
activities 3,944,451,264 104,768,925
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (3,896,084,462) (2,760,237,098) 5,398,833,317
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR
Cash and other cash items 1,766,041,157 1,584,083,284 1,490,911,801
Due from Bangko Sentral ng Pilipinas 1,259,370,585 3,271,480,210 1,626,247,405
Due from other banks 3,002,835,554 4,466,935,953 1,444,245,371
Interbank loans receivable and securities
purchased under resale agreement 6,088,600,000 5,554,584,947 4,916,846,500
12,116,847,296 14,877,084,394 9,478,251,077
CASH AND CASH EQUIVALENTS
AT END OF YEAR
Cash and other cash items 2,168,590,090 1,766,041,157 1,584,083,284
Due from Bangko Sentral ng Pilipinas 2,346,840,957 1,259,370,585 3,271,480,210
Due from other banks 1,281,921,787 3,002,835,554 4,466,935,953
Interbank loans receivable and securities
purchased
under resale agreement 2,423,410,000 6,088,600,000 5,554,584,947
P
= 8,220,762,834 P= 12,116,847,296 P
= 14,877,084,394

NOTES TO FINANCIAL STATEMENTS
1. Corporate Information
China Banking Corporation (the Bank) is a publicly listed commercial bank, incorporated in the Philippines. The
Bank acquired its universal banking license in 1991. It provides expanded commercial banking products and
services such as deposit products, loans and trade finance, domestic and foreign fund transfers, treasury
products, trust products, foreign exchange, corporate finance and other investment banking services through a
network of 141 local branches.
The Bank’s principal place of business is at 8745 Paseo de Roxas corner Villar Street, Makati City. In 2004 and
2003, the Bank had an average of 2,685 and 2,717 employees, respectively.
The financial statements were authorized for issue by the Board of Directors (BOD) on March 30, 2005.
2. Summary of Significant Accounting Policies
Basis of Financial Statement Preparation

The Bank’s financial statements have been prepared in accordance with the accounting principles generally
accepted in the Philippines (Philippine GAAP) for the banking industry. These financial statements are prepared
under the historical cost convention modified by the fair value measurement of trading account securities (TAS),
available-for-sale securities (ASS), underwriting accounts (UA), certain derivative financial instruments, and the
revaluation of land account included under bank premises. The accompanying financial statements of the Bank
reflect the accounts maintained in the Regular Banking Unit (RBU) and Foreign Currency Deposit Unit (FCDU).
The financial statements individually prepared for these units are combined after eliminating inter-unit accounts.
For financial reporting purposes, FCDU accounts and foreign currency denominated accounts in RBU are
translated into their equivalents in Philippine pesos based on the Philippine Dealing System weighted average
rate (PDSWAR) prevailing at the end of the year (for resources and liabilities) and at the average PDSWAR for
the year (for income and expenses). Foreign exchange differentials arising from foreign currency transactions
and restatements of foreign currency denominated resources and liabilities, except for past due receivables and
nonmonetary assets, are credited to or charged against operations in the year in which the rates change.
The preparation of the financial statements in accordance with Philippine GAAP requires the Bank to make
estimates and assumptions that affect the reported amounts of resources, liabilities, income and expenses and
disclosure of contingent resources and liabilities. Future events may occur which will cause the assumptions
used in arriving at the estimates to change. The effects of any changes in estimates are reflected in the
financial statements as they become reasonably determinable.
39
Changes in Accounting Policies
On January 1, 2004, the following new accounting standards became effective and were adopted by the Bank:
• Statement of Financial Accounting Standards (SFAS) 12/International Accounting Standard (IAS) 12,
Income Taxes, prescribes the accounting treatment for current and deferred income taxes. The standard
requires the use of the balance sheet liability method of accounting for deferred income taxes. It requires
the recognition of a deferred tax liability and, subject to certain conditions, deferred tax asset for all
temporary differences with certain exceptions. The standard provides for the recognition of a deferred tax
asset when it is probable that taxable income will be available against which the deferred tax asset can be
used. The adoption of this standard resulted in a retroactive downward adjustment to capital funds as of
December 31, 2003 and 2002 amounting to P = 602.5 million and P
= 594.6 million, respectively, representing the
deferred income tax on the revaluation increment on the Land account. Deferred tax liability increased by
the same amounts as of these dates.
• SFAS 17/IAS 17, Leases, prescribes the accounting policies and disclosures applicable to finance and
operating leases. The adoption of the standard resulted in the recognition of lease payments under
operating leases on a straight-line basis. Previously, all leases under operating lease are recognized in the
statements of income on the basis of the terms of the lease agreement. The adoption of this accounting
standard resulted in a retroactive downward adjustment to surplus as of December 31, 2003, 2002, and
2001 amounting to P = 56.3 million, P
= 53.0 million, and P
= 47.8 million, respectively. Net income decreased by P
=
3.3 million in 2003 and P= 5.2 million in 2002.
Additional disclosures required by the new standards were included in the financial statements, where
applicable.
New Accounting Standards Effective in 2005

New accounting standards based on IASs and International Financial Reporting Standards (IFRS), referred to
as Philippine Accounting Standards (PAS) and Philippine Financial Reporting Standards (PFRS), respectively,
will become effective in 2005. The Bank will adopt the following new accounting standards effective January 1,
2005:
• PAS 19, Employee Benefits, provides for the accounting for long-term and other employee benefits. The
standard requires the use of the projected unit credit method in determining the retirement benefits of the
employees and a change in the manner of computing benefit expense relating to past service cost and actuarial
gains and losses. It requires the Bank to determine the present value of defined benefit obligations and the fair
value of any plan assets with sufficient regularity that the amounts recognized in the financial statements do not
differ materially from the amounts that would be determined at the statement of condition date.
The effect of adopting this standard will result in either a transition liability or asset with a corresponding
adjustment to surplus as of January 1, 2005. The Bank will engage the services of a professionally qualified
actuary to determine the quantitative impact of adopting this standard in 2005.
40
• PAS 21, The Effects of Changes in Foreign Exchange Rates, provides restrictive conditions for the
capitalization of foreign exchange losses. The standard also addresses the accounting for transactions in
foreign currency and translating the financial statements of foreign operations that are included in those of
the reporting enterprise by consolidation, proportionate consolidation and equity method. The adoption of
this standard will have no material impact on the financial statements.
• PAS 30, Disclosures in the Financial Statements of Banks and Similar Financial Institutions, provides
for the required disclosures and presentation in respect of the accounts of banks and similar financial
institutions. It also provides that provision for general banking risks is treated as appropriation of surplus
and should not be included in the determination of net income for the year. The required new disclosures
will be included upon adoption of this standard. Upon adoption of this standard, the Bank will evaluate the
level of allowance for probable losses and consider their sufficiency to cover any losses from non-collection
or non-realization of its loans. Any excess in the general loan loss reserve will result in a retroactive
downward adjustment to retained earnings as of December 31, 2004. To date, the Bank has not yet
determined the financial statement impact of adopting this standard.
• PAS 32, Financial Instruments: Disclosure and Presentation, covers the disclosure and presentation
of all financial instruments. The standard requires more comprehensive disclosures about the Bank’s
financial instruments, whether recognized or unrecognized in the financial statements. New disclosure
requirements include terms and conditions of financial instruments used by the Bank, types of risks
associated with both recognized and unrecognized financial instruments (market risk, price risk, credit risk,
liquidity risk, and cash flow risk), fair value information of both recognized and unrecognized financial assets
and financial liabilities, and the Bank’s financial risk management policies and objectives. The standard also
requires financial instruments to be classified as liabilities or equity in accordance with its substance and not
its legal form.
• PAS 39, Financial Instruments: Recognition and Measurement, establishes the accounting and
reporting standards for the recognition and measurement of the Bank’s financial assets and financial
liabilities. The standard requires a financial asset or financial liability to be recognized initially at fair value.
Subsequent to initial recognition, the Bank should continue to measure financial assets at their fair values,
except for loans and receivables and held-to-maturity investments, which are measured at cost or amortized
cost using the effective interest rate method. Financial liabilities are subsequently measured at cost or
amortized cost, except for liabilities classified as “at fair value through profit and loss” and derivatives, which
are subsequently measured at fair value.
PAS 39 also covers the accounting for derivative instruments. The standard has expanded the definition of
a derivative instrument to include derivatives (derivative-like provisions) embedded in non-derivative
contracts. Under the standard, every derivative instrument is recorded in the statements of condition as
either an asset or liability measured at its fair value. Derivatives that are not hedges are adjusted to fair
value through income. If the derivative is designated and qualifies as a hedge, depending on the nature of
the hedge, changes in the fair value of the derivative are either offset against the change in fair value of the
hedged assets, liabilities, or firm commitments through earnings, or recognized in capital funds until the
hedged item is recognized in income. The Bank must formally document, designate, and assess the
effectiveness of derivative transactions that receive hedge accounting treatment.
41
The Bank has established a task force that will implement the provisions of PAS 32 and
PAS 39 and assess the implications of these standards on the Bank’s financial statements. To date, the
Bank has not yet determined the impact on the financial statements due to the following reasons:
• The Bank is still in the process of establishing policies, procedures and necessary systems related to the
adoption of these standards.
• The system which will incorporate the requirements of PAS 32 and 39 has not yet been implemented.
The Bangko Sentral ng Pilipinas (BSP), through BSP Monetary Board Resolution No. 1869 dated
December 23, 2004, has given the banks and financial institutions until December 31, 2005 to make
ready their infrastructures to be PAS 32 and 39 compliant. Interim reports that will be submitted to the
BSP for 2005 need not be in compliance with the provisions of the said standards.
On the impact of account classification and related measurement, the Bank has already submitted to the
BSP the proposed reclassification of its trading and investment securities portfolio. The effect of the
reclassification will likely result in a retroactive adjustment to retained surplus as of December 31, 2004. The
impact of reclassification will only be quantified after the detailed PAS 39 implementation has been
substantially completed.
The effect of adopting the effective interest rate method in measuring amortized cost for loans, held-to-
maturity investments and available-for-sale securities has not yet been quantified since the existing systems
of the Bank have not yet been reconfigured to adopt the effective interest rate method of amortization. Due
to the volume of transactions, it is impracticable to compute for the financial statement impact manually. The
Bank will report the financial statement implication as soon as the information is available.
PAS 39 requires that if there is objective evidence that an impairment on loans and other financial assets
carried at amortized cost is incurred, the amount of loss is measured as the difference between the assets’
carrying amount and the present value of future cash flows. The effect of adopting this provision will not be
material to the financial assets and liabilities of the Bank, except for impaired loans and other receivables.
Currently, the adequacy of allowance for probable losses on loans and other receivables is determined
based on
management criteria and BSP requirements. The existing systems of the Bank have not yet been
programmed to adopt the discounted cash flow method. Due to the volume of transactions, it is
impracticable to compute for the financial statement impact manually. The Bank will report the financial
statement implication as soon as the information is available.
Currently, the Bank does not intend to adopt hedge accounting. Prior to 2005, the Bank has been following
the fair value method for all its derivative transactions. The effect of adopting the standard will not result in
any retroactive adjustment to capital funds.
42
In 2005, the Bank will perform additional procedures to identify any derivative embedded in both financial
and non-financial contracts that are required to be separately accounted for at fair value under PAS 39.
In general, the effect of adopting these standards will not result in a restatement of prior years’ financial
statements, as allowed by the Securities and Exchange Commission (SEC). Any cumulative effect of
adopting the standards, however, will be charged against the January 1, 2005 surplus. The disclosures
required by these standards will be reflected in the 2005 financial statements, where applicable.
• PAS 40, Investment Property, prescribes the accounting treatment for investment property and related
disclosure requirements. This standard permits the Bank to choose either the fair value model or cost model
in accounting for investment property. Fair value model requires an investment property to be measured at
fair value with fair value changes recognized directly in the statements of income. Cost model requires that
an investment property should be measured at depreciated cost less any accumulated impairment losses.
Upon effectivity of PAS 40, the Bank will adopt the cost model and will carry its investment property
(currently classified under Real and Other Properties Owned or Acquired or ROPOA) at depreciated cost
less any accumulated impairment losses. Existing valuation reserve determined under BSP rules will be
evaluated and adjusted in accordance with PAS 40. Considering the number of the Bank’s ROPOA,
detailed assessment will be made in 2005 in order to quantify the impact of PAS 40.
• PFRS 5, Non-current Assets Held for Sale and Discontinued Operations, specifies the accounting for assets
held for sale and the presentation and disclosure of discontinued operations. It requires assets that meet
the criteria to be classified as held-for-sale to be measured at the lower of carrying amount and fair value
less costs to sell, and the depreciation on such assets to cease. Furthermore, assets that meet the criteria
to be classified as held-for-sale should be presented separately on the face of the statements of condition
and the results of discontinued operations to be presented separately in the statements of income. The
adoption of PFRS 5 will have no material impact on the financial statements of the Bank, except for the
reclassification of ROPOA when they qualify as non-current assets held-for-sale.
The Bank will also adopt the following revised standards in 2005 which, except for PAS 27, are not expected to
have significant impact on the 2005 financial statements. Required disclosures will be included as applicable.
• PAS 1, Presentation of Financial Statements, provides a framework within which an entity assesses
how to present fairly the effects of transactions and other events; provides the base criteria for classifying
liabilities as current or noncurrent; prohibits the presentation of income from operating activities and
extraordinary items as separate line items in the statements of income; and specifies the disclosures about
key sources of estimation uncertainty and judgments that management has made in the process of applying
the entity’s accounting policies. It also requires changes in the presentation of minority interest in the
statements of condition and statements of income.
43
• PAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, removes the concept of
fundamental error and the allowed alternative to retrospective application of voluntary changes in accounting
policies and retrospective restatement to correct prior period errors. It defines material omission or
misstatements, and describes how to apply the concept of materiality when applying accounting policies and
correcting errors.
• PAS 10, Events After the Balance Sheet Date, provides a limited clarification of the accounting for
dividends declared after the statement of condition date.
• PAS 16, Property, Plant and Equipment, provides additional guidance and clarification on the
recognition and measurement of items of property, plant and equipment. It also provides that each part of
an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item
shall be depreciated separately.
• PAS 17, Leases, provides a limited revision to clarify the classification of a lease of land and
buildings and prohibits expensing of initial direct costs in the financial statements of lessors.
• PAS 24, Related Party Disclosures, provides additional guidance and clarity in the scope of the
standard, the definitions and the disclosures for related parties. It also requires disclosure of the
compensation of key management personnel by benefit type.
• PAS 27, Consolidated and Separate Financial Statements, reduces alternatives in accounting for
subsidiaries in consolidated financial statements and in accounting for investments in the separate financial
statements of a parent, venturer or investor. It also requires strict compliance with adoption of uniform
accounting policies and requires the parent to make appropriate adjustments to the subsidiary’s financial
statements to conform them to the parent’s accounting policies for reporting like transactions and other
events in similar circumstances. The effect of adopting this standard will result in a decrease in both the
carrying amounts of the investments and total capital funds by P= 47.5 million, equivalent to the undistributed
retained earnings of said investees in the Bank’s separate financial statements.
• PAS 36, Impairment of Assets, establishes frequency of impairment testing for certain intangibles
and provides additional guidance on the measurement of an asset’s value in use. The standard also
requires annual impairment test of intangible asset with an indefinite useful life, which includes goodwill,
whether or not there is an indication of impairment.
Cash Equivalents
For purposes of reporting cash flows, cash equivalents include amounts due from BSP and other banks and
interbank loans receivable and securities purchased under resale agreement, with original maturities of
three months or less from dates of placements and that are subject to insignificant risk of changes in value.
44
Repurchase and Resale Agreements and Lending Securities
Repurchase agreements, which are limited to transactions with BSP, are contracts under which a party sells
securities and simultaneously agrees to repurchase the same securities at a specified future date at a fixed
price. Resale agreements are contracts under which a party purchases securities and simultaneously agrees to
resell the same securities at a specified future date at a fixed price. Securities sold under repurchase
agreements (repos) are retained in the financial statements as trading or investment securities and the
counterparty liability is included in amounts due to other banks or bills payable, as appropriate. Securities
purchased under resale agreements (reverse repos) are recorded as securities purchased under agreements to
resell. The corresponding interest expense or interest income is accrued when incurred or earned. Securities
lent to counterparties are also retained in the financial statements.
Trading and Investment Securities

Trading Account Securities
TAS consisting of government and private debt and equity securities that are purchased and held principally
with the intention of selling them in the near term. These securities are carried at fair market value; realized and
unrealized gains and losses on these instruments are recognized in “Trading and securities gain - net” under
other operating income in the statements of income. Interest earned on debt instruments is reported as interest
income.
Available-for-Sale Securities
Securities are classified as ASS when purchased and held indefinitely, that is, neither held to maturity nor for
trading purposes, where the Bank anticipates to sell in response to liquidity requirements or in anticipation of
changes in interest rates or other factors.
ASS securities are carried at fair market value; unrealized gains and losses are excluded from the reported net
income and are reported as a separate component of capital funds. Realized gains and losses are included in
“Trading and securities gain - net” under other operating income in the statements of income.
Investments in Bonds and Other Debt Instruments (IBODI)

IBODI are debt securities which the Bank has the positive intent and ability to hold to maturity. These securities
are carried at amortized cost. Realized gains and losses are included in “Trading and securities gain - net”
under other operating income in the statements of income. Unearned discount for certain IBODI investment is
recognized as income over the term of the loan using the effective interest method.
The allowance for probable losses is established by a charge against income to reflect other-than-temporary
impairment in value. Under current BSP regulations, IBODI shall not exceed 50% of adjusted statutory net worth
plus 40% of total deposit liabilities.
When a debt security is transferred from ASS to IBODI, the unrealized holding gain or loss at the date of the
transfer is maintained as a separate component of capital funds and is amortized over the remaining life of the
security as an adjustment of yield in a manner consistent with the amortization of the premium or discount. For
other transfers of investment securities, the unrealized holding gain or loss at the date of transfer is considered
realized and, accordingly, is credited to or charged against current operations.
45
Receivables from Customers
Receivables from customers are stated at the outstanding balance, reduced by unearned discounts and
allowance for probable losses.
Receivables are classified as non-accruing or nonperforming in accordance with BSP regulations, or when, in
the opinion of management, collection of interest or principal is doubtful. Interest income on these receivables is
recognized only to the extent of cash collections received. Receivables are not reclassified as accruing until
interest and principal payments are brought current or the receivables are restructured in accordance with
existing BSP regulations, and future payments appear assured.
Allowance for Probable Losses

The allowance for probable losses, which includes both specific and general loan loss reserves, represents
management’s estimate of probable losses inherent in the portfolio, after consideration of prevailing and
anticipated economic conditions, prior loss experience, estimated recoverable values based on fair market
values of underlying collaterals and prospects of support from guarantors, subsequent collections and
evaluations made by the BSP. The BSP observes certain criteria and guidelines based largely on the
classification of receivables in establishing specific loan loss reserves. To supplement the specific loan loss
reserves, a general reserve on unclassified loans is set aside.
The allowance for probable losses is established through provisions for probable losses charged against current
operations. Receivables are written off against the allowance for probable losses when management believes
that the collectibility of the principal is unlikely.
Bank Premises, Furniture, Fixtures and Equipment

Parcels of land acquired and used by the Bank are stated at appraised values less any impairment in value.
The appraised values were determined as of December 31, 2004 by the Bank’s professionally qualified
appraisers. The appraisal increment resulting from the revaluation, net of deferred income tax, was credited to
Revaluation Increment on Land shown in the statements of changes in capital funds. Buildings, furniture,
fixtures and equipment and leasehold improvements are carried at cost less accumulated depreciation and
amortization and any impairment in value. Depreciation and amortization is computed using the straight-line
method over the estimated useful lives of the respective assets as follows:
Estimated
Useful Life
Buildings 50 years
Furniture, fixtures and equipment 3 to 5 years
Leasehold improvements Shorter of 6 years or the
related lease terms
The useful life and the depreciation and amortization method are reviewed periodically to ensure that the period
and the method of depreciation and amortization are consistent with the expected pattern of economic benefits
from items of bank premises, furniture, fixtures and equipment.
46
Costs of minor repairs and maintenance are charged as expense in the period incurred; significant renewals
and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and the related
accumulated depreciation and amortization and any impairment in value are removed from the accounts and
any resulting gain or loss is credited to or charged against current operations.
Equity Investments
The combined total assets and the results of operations of subsidiaries where the Bank holds more than 50%
equity interest and exercises control are not material (see Note 6). Thus, consolidated financial statements are
not presented, and such equity investments in subsidiaries in the Bank’s financial statements are accounted for
under the equity method.
Investments in unconsolidated subsidiaries and associates (investees) are accounted for under the equity
method. An associate is an enterprise in which the Bank holds 20% to 50% of the voting power or over which it
exercises significant influence and which is neither a subsidiary nor a joint venture. Under the equity method,
investments in these investees are carried in the statements of condition at cost plus post acquisition changes in
the Bank’s share in the net assets of the investees, less any impairment in value. Post acquisition changes
include the share in the investees’ net income or loss, reduced by dividends received. Unrealized gains arising
from transactions with an investee are eliminated to the extent of the interest in the investee against the equity
investment account. Unrealized losses are eliminated similarly but only to the extent that there is no evidence of
impairment of the asset transferred.
Under BSP regulations, the use of the equity method of accounting for investments in shares of stock is
allowable only where ownership is more than 50%. The equity method of accounting for equity interest of 20%
to 50% is used for financial reporting purposes to comply with the provisions of generally accepted accounting
principles and is not intended for BSP reporting purposes.
When there is a significant and apparently permanent decline in value of an individual investment security, as
indicated by a series of operating losses of an investee company or other factors, the carrying amount of the
individual investment is written down to fair value and impairment loss is charged to income.
Other equity investments where the Bank has no significant influence (other than investment securities) are
carried at cost less allowance for decline in value, if any. The allowance for decline in value is set up by a
charge to income (included as provision for probable losses in the statements of income).
Real and Other Properties Owned or Acquired (ROPOA)

These properties are stated at the total outstanding exposure at the time of acquisition or bid price, whichever is
lower, less allowance for probable losses. Nonrefundable taxes such as capital gains tax and documentary
stamp taxes which were paid by the Bank are capitalized provided that the adjusted value of the foreclosed
asset does not exceed fair market value. Holding costs subsequent to foreclosure or acquisition are charged
against operations as incurred. Allowance for probable losses is set up for any anticipated significant shortfalls
from the recorded values based on appraisal reports and current negotiations and programs to dispose of these
properties to other interested parties, including estimated selling cost.
47
Deferred Income Tax
Deferred income tax is provided using the balance sheet liability method on all temporary differences at the
statement of condition date between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes.
Deferred income tax liabilities are recognized for all taxable temporary differences, including asset revaluations.
Deferred income tax assets are recognized for all deductible temporary differences, carryforward of unused tax
credits from excess minimum corporate income tax (MCIT) and unused net operating loss carryover (NOLCO),
to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences and carryforward of unused tax credits and unused NOLCO can be utilized. Deferred income tax,
however, is not recognized when it arises from the initial recognition of an asset or liability in a transaction that is
not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss.
Deferred tax liabilities are not provided on non-taxable temporary differences associated with investments in
domestic subsidiaries, associates and interests in joint ventures.
The carrying amount of deferred income tax assets is reviewed at each statement of condition date and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the
deferred income tax asset to be utilized.
Deferred income tax assets and liabilities are measured at the tax rates applicable to the period when the asset
is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the statement of condition date.
Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Bank and the
revenue can be reliably measured. The following specific recognition criteria must also be met before revenue
is recognized:
Interest Income
Interest on receivables from customers are recognized based on the accrual method of accounting, except in
the case of non-accruing receivables where interest income is recognized only to the extent of cash collections
received.
Unearned discount is recognized as income over the term of the loan. Interest income on non-discounted loans
is accrued monthly as earned, except in the case of non-accruing accounts as required by existing regulations
of the BSP. Interest income on these non-accruing loans is recognized upon actual collection.
Interest on interest-bearing placements and securities are recognized as the interest accrues, taking into
account the effective yield on the assets.
Loan Fees and Service Charges

Loan commitment fees are recognized as earned over the terms of the credit lines granted to each borrower.
48
Loan syndication fees are recognized upon completion of all syndication activities and where the Bank does not
have further obligations to perform under the syndication agreement.
Service charges and penalties are recognized only upon collection or accrued where there is a reasonable
degree of certainty as to their collectibility.
Foreign Exchange Translation and Transactions

Assets and liabilities denominated in foreign currencies are translated to Philippine pesos at the prevailing
PDSWAR at the end of the year. Income and expense items are translated at rates at transaction dates.
Foreign exchange differentials arising from foreign currency transactions and restatements of foreign currency
denominated assets and liabilities are credited to or charged against operations in the year in which the rates
change.
Derivative Financial Instruments

The Bank is a counterparty to forward exchange contracts. These contracts are entered into as a service to
customers and as a means of reducing and managing foreign exchange as well as for trading purposes.
Amounts contracted are recorded as contingent accounts which are not included in the statements of condition.
For a forward exchange contract designated as a hedge, the exchange difference between the contracted
forward rate and the spot rate at contract date is deferred and recognized as income or expense over the term
of the hedge instrument while gain or loss on the revaluation of the forward exchange contract is recognized
currently in the statements of income.
Realized and unrealized gains and losses on contracts which are not designated as hedges are credited to or
charged against current operations.
Retirement Cost
The Bank determines its retirement cost using the projected unit credit method. Under this method, the current
service cost is the present value of retirement benefits payable in the future with respect to services rendered in
the current period. The past service cost is the present value of any units of future benefits credited to the
employees for services in periods prior to the commencement or subsequent amendment of the plan.
Unrecognized experience adjustments and past service costs are amortized over the expected remaining
working lives of employees.
Retirement costs include current service cost plus amortization of past service cost and unrecognized
experience adjustments.
Leases
Operating lease payments are recognized as expense in the statements of income on a straight-line basis over
the lease term.
Impairment of Assets
An assessment is made at each statement of condition date whether there is any indication of impairment of any
long-lived asset, or whether there is any indication that an impairment loss previously recognized for an asset in
prior years may no longer exist or may have decreased. If any such indication exists, the asset’s recoverable
amount is estimated. An asset’s recoverable amount is calculated at the higher of the asset’s value in use or its
net selling price.
49
An impairment loss is recognized only if the carrying amount of an asset exceeds its recoverable amount. An
impairment loss is charged against current operations in the year in which it arises, unless the asset is carried at
a revalued amount in which case the impairment loss is charged to the revaluation increment of the said asset.
A previously recognized impairment loss is reversed only if there has been a change in the estimates used to
determine the recoverable amount of an asset but not, however, to an amount higher than the carrying amount
that would have been determined (net of any depreciation) had no impairment loss been recognized for the
asset in prior years.
A reversal of an impairment loss is credited to current operations, unless the asset is carried at a revalued
amount in which case the reversal of the impairment loss is credited to the revaluation increment of the said
asset.
Related Parties
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or
exercise significant influence over the other party in making financial and operating decisions. Parties are also
considered to be related if they are subject to common control or common significant influence. Related parties
may be individuals or corporate entities.
Provisions
Provisions are recognized when the Bank has a present obligation (legal or constructive) where, as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of
money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessment of the time value of money and, where appropriate, the risks specific to the
liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as an
interest expense.
Contingencies
Contingent liabilities are not recognized in the financial statements. They are disclosed unless the possibility of
an outflow of resources embodying economic benefits is remote. Contingent assets are not recognized in the
financial statements but disclosed when an inflow of economic benefits is probable.
Earnings Per Share

Basic earnings per share amounts are computed based on the weighted average number of common shares
outstanding after giving retroactive effect to stock dividends declared during the year. The Bank does not have
any dilutive potential common shares.
Segment Reporting
The Bank’s operating businesses are organized and managed separately according to the nature of the
products and services provided, with each segment representing a strategic business unit that offers different
products and serves different markets. Financial information on business segment is presented in Note 20.
The Bank’s resources producing revenues are located in the Philippines (i.e., one geographical location).
Therefore, geographical segment information is no longer presented.
50
Subsequent Events
Post year-end events that provide additional information about the Bank’s position at the statement of condition
date (adjusting events) are reflected in the financial statements. Post year-end events that are not adjusting
events are disclosed in the notes to the financial statements when material.
3. Trading and Investment Securities
2004 2003
Trading account securities - including net
unrealized gain of P
= 23,099,283 in 2004
and P
= 10,916,838,980
P
= 72,944,006 in 2003 P
= 14,862,996,900
Available-for-sale securities - including net
unrealized gain of P
= 42,364,800 and
P
= 19,417,200 as of December 31, 2004
and 2003, respectively 80,022,400 57,074,800
Investments in bonds and other debt
instruments - net of unearned discount of
P
= 302,935,350 as of December 31, 2004 34,392,373,411
(see Note 17) 27,017,008,832
P
= 45,389,234,791 P
= 41,937,080,532
As of December 31, 2004 and 2003, available-for-sale securities include convertible preferred shares of
Philippine Long Distance Telephone Company (PLDT) amounting to about P = 24.6 million, which were acquired in
connection with the debt restructuring of PLDT’s subsidiary, Pilipino Telephone Company (PILTEL). These
preferred shares are convertible into common shares within seven (7) years beginning June 4, 2001 (date of
issuance), and shall be mandatorily converted into common shares on the date immediately following the
seventh anniversary of the date of issuance. Within 30 days following the mandatory conversion date, the Bank
has an option to put the common shares to PLDT at a strike price per common share of P = 1,700 per share. The
preferred shares are carried at the market value of PLDT common shares with the related net unrealized gain
(loss) included in the statements of changes in capital funds. For BSP reporting purposes, the convertible
preferred shares of PLDT are classified as equity investments.
The following table presents the breakdown of trading and investment securities by contractual maturity dates
as of December 31, 2004 and 2003:
2004 2003
Due Within Due Beyond Due Within Due Beyond
One Year One Year Total One Year One Year Total
Trading account securities P
= 10,916,838,980 P
=– P
= 10,916,838,980 P
= 14,862,996,900 P
=– P
= 14,862,996,900
Available-for-sale securities – 80,022,400 80,022,400 – 57,074,800 57,074,800
Investments in bonds and
other debt instruments 3,302,307,528 31,090,065,883 34,392,373,411 25,146,461 26,991,862,371 27,017,008,832
P
= 14,219,146,508 P
= 31,170,088,283 P
= 45,389,234,791 P
= 14,888,143,361 P
= 27,048,937,171 P
= 41,937,080,532
51
As of December 31, 2004 and 2003, the aggregate market value of IBODI was P = 34.6 billion and P
= 27.2 billion,
respectively. A significant portion of IBODI represents Philippine government debt securities with market value
of P
= 33.9 billion and P
= 24.2 billion as of December 31, 2004 and 2003, respectively.
On December 28, 2004, the Bank became a party to a purchase price sharing agreement (the Agreement) on
the sale of the assets of one of its corporate borrowers, National Steel Corporation (NSC) to a special purpose
vehicle (SPV).
Under the Agreement, the total consideration for NSC’s assets is P

= 13.3 billion with the following terms:
a. Cash downpayment of P = 1.0 billion, and

b. Issuance of zero coupon notes amounting to P = 12.3 billion as follows:
i. P
= 2.0 billion notes payable in five (5) years (termed as Tranche A notes), and
ii. P
= 10.3 billion notes payable in eight (8) years (termed as Tranche B notes)
The downpayment and the notes shall be allocated among NSC’s secured creditor banks and its shareholders
after deducting certain costs incurred for the maintenance of the mortgaged assets as well as other expenses
incurred or to be incurred with the disposition of the assets. The remaining balance of the downpayment shall
be applied in the order of the following:
a. share of a foreign bank amounting to P

= 39.5 million of the Tranche A note;
b. share of preferred claims as provided in the memorandum of agreement (MOA) executed between the
majority of NSC’s secured creditors and shareholders on November 22, 2002; and
c. share of the remaining secured creditors pro rata in proportion to their respective outstanding claims and
NSC’s shareholders pro rata in proportion to their agreed shareholding in the SPV as contemplated in
the MOA.
The Agreement further states that the downpayment shall be deposited in an escrow account with a local bank
pending the finalization of the actual amounts of expenses which shall be deducted therefrom.
The details of the Bank’s share in the notes issued by the SPV are as follows:
Tranche A note Tranche B note
Amount P= 83,509,351 P
= 483,365,246
Term 5 years 8 years
Interest Zero interest Zero interest
Annual Principal Installment
2nd year P
= 9,501,332 –
3rd year 12,092,344 –
4th year 26,801,459 –
5th year 35,114,216 P
= 52,197,612
6th year – 80,277,622
7th year – 81,359,101
8th year – 269,530,911
P
= 83,509,351 P
= 483,365,246
52
The notes shall be fully secured by a mortgage trust indenture (MTI) covering NSC’s assets with the
corresponding mortgage participation certificates to be issued equal to the outstanding balance of both Tranche
A and B notes with a local bank as the trustee for the MTI.
All annual amortizations on both zero interest coupon notes will be covered by a stand-by letter of credit (L/C)
initially for US$4.5 million effective up to October 15, 2005 to cover the first annual amortization on the
outstanding Tranche A note. On or before the expiry of the L/C, another L/C will be issued to cover subsequent
annual amortizations.
As of December 31, 2004, the present value of the notes recorded in the Bank’s IBODI was P
= 263.9 million.
The difference between NSC’s outstanding loan and the present value of the notes was charged to the specific
allowance for probable losses maintained for the NSC loan account.
4. Receivables from Customers
2004 2003
Loans and discounts P
= 50,465,733,871 P
= 39,573,891,161
Customers’ liabilities under letters of credit
or trust receipts 5,661,320,247 4,803,559,898
Bills purchased 1,137,085,697 996,527,011
57,264,139,815 45,373,978,070
Unearned discounts (2,558,823,556) (621,642,969)
Allowance for probable losses (see Note 8) (6,247,525,323) (6,543,783,821)
P
= 48,457,790,936 P= 38,208,551,280
As of December 31, 2004 and 2003, the breakdown of secured and unsecured receivables from customers is
as
follows:
2004 2003
Amounts % Amounts %
Loans secured by:
Real estate P
= 24,380,557,760 42.58 P
= 20,052,308,724 44.19
Shares of stock of other
banks 2,315,515,634 4.04 2,365,839,999 5.22
Chattel mortgage 1,255,391,257 2.19 1,212,246,248 2.67
Deposit hold out 1,524,321,861 2.66 885,493,030 1.95
Others 6,941,667,100 12.13 3,537,104,815 7.80
36,417,453,612 63.60 28,052,992,816 61.83
Unsecured loans 20,846,686,203 36.40 17,320,985,254 38.17
P
= 57,264,139,815 100.00 P
= 45,373,978,070 100.00
As of December 31, 2004 and 2003, receivables from customers amounting to P = 29.2 million and P
= 24.3 million,
respectively, are pledged to secure certain bills payable to the BSP under the Bank’s rediscounting privileges
(see Note 10).
53
As of December 31, 2004 and 2003, information on the concentration of credit as to industry follows:
2004 2003
Amounts % Amounts %
Manufacturing (various industries) P
= 14,575,350,810 25.45 P
= 11,472,810,003 25.29
Wholesale and retail trade 10,935,573,550 19.10 10,215,629,292 22.52
Financial intermediaries 9,855,003,772 17.21 7,800,749,933 17.19
Real estate, renting and business
services 8,456,976,997 14.77 7,726,926,430 17.03
Electricity, gas and water 5,942,793,607 10.38 720,519,000 1.59
Transportation, storage and
communication 2,356,970,248 4.11 2,760,475,366 6.08
Construction 1,681,850,948 2.94 1,371,052,117 3.02
Agriculture 863,693,427 1.51 790,857,695 1.74
Mining and quarrying 73,310,396 0.13 235,340,637 0.52
Public administration and defense 9,404,583 0.01 10,510,571 0.02
Others 2,513,211,477 4.39 2,269,107,026 5.00
P
= 57,264,139,815 100.00 P
= 45,373,978,070 100.00
The BSP considers that loan concentration exists when total loan exposure to a particular industry or economic
sector exceeds 30% of total loan portfolio. As of December 31, 2004 and 2003, the Bank does not have credit
concentration in any particular industry.
Breakdown of receivables from customers by contractual maturity dates as of December 31, 2004 and 2003 is
as follows:
2004 2003
Due within one year = 32,599,679,386 P
P = 28,641,560,413
Due beyond one year 24,664,460,429 16,732,417,657
= 57,264,139,815 P
P = 45,373,978,070
BSP Circular No. 351 allows banks to exclude from nonperforming classification receivables classified as “Loss”
in the latest examination of the BSP which are fully covered by allowance for probable losses, provided that
interest on said receivables shall not be accrued and that such receivables shall be deducted from the total
receivable portfolio for purposes of computing non-performing loans. As of December 31, 2004 and 2003,
nonperforming loans (NPLs) not fully covered by allowance for probable losses are as follows:
2004 2003
Total NPLs P
= 7,600,918,313 P
= 8,794,070,738
Less NPLs fully covered by allowance for
probable losses 682,019,895 988,757,623
P
= 6,918,898,418 P
= 7,805,313,115
54
5. Bank Premises, Furniture, Fixtures and Equipment
Changes in the bank premises, furniture, fixtures and equipment - at cost follow:
2004
Furniture,
Fixtures Leasehold Building Under 2003
and Equipment Buildings Improvements Construction Total Total
At Cost
At January 1 P
= 1,754,828,345 P= 536,216,458 P = 121,158,999 P
= 7,669,607 P = 2,419,873,409 P= 2,263,914,435
Additions 176,864,056 53,212,956 8,474,364 150,468 238,701,844 201,662,596
Disposals (55,523,678) (1,398,827) (123,171) (7,669,607) (64,715,283) (45,703,622)
At December 31 1,876,168,723 588,030,587 129,510,192 150,468 2,593,859,970 2,419,873,409
Accumulated depreciation
and amortization
At January 1 1,415,260,145 143,328,222 37,916,660 - 1,596,505,027 1,461,201,531
Depreciation and
amortization 129,496,475 17,621,135 16,408,933 - 163,526,543 164,594,588
Disposals (19,586,585) (825,336) - - (20,411,921) (29,291,092)
At December 31 1,525,170,035 160,124,021 54,325,593 - 1,739,619,649 1,596,505,027
Net book value P
= 350,998,688 P = 427,906,566 P
= 75,184,599 P
= 150,468 P
= 854,240,321 P = 823,368,382
Depreciation and amortization amounting to P

= 163.5 million in 2004 and P
= 164.6 million in 2003,
are included in the statements of income.
The following details relate to land carried at appraised values:
2004 2003
At cost P
= 347,723,808 P
= 327,689,663
At appraised value = 2,172,405,858 P
P = 2,210,492,967
6. Equity Investments
Percentage
of 2004
Ownership 2003
Equity investments - equity:
Acquisition cost:
CBC Forex Corporation 100 P
= 49,999,500 P
= 49,999,500
First Sovereign Asset Management, 31,250,000
Inc.* 100 –
CBC Finance, Inc. 40 6,000,000 6,000,000
CBC Venture Capital Corporation 60 3,000,000 3,000,000
CBC Insurance Brokers, Inc. 100 1,500,000 1,500,000
CBC Properties and Computer
Center, Inc. 40 280,000 280,000
92,029,500 60,779,500
*Special purpose entity created to avail of the benefits under the SPV act of 2002.
55
2004 2003
Accumulated equity in net earnings:
Balance at beginning of year P
= 41,488,903 P
= 28,067,664
Equity in net earnings 6,043,683 20,128,746
Cash dividends received – (6,707,507)
Balance at end of year (see Note 13) 47,532,586 41,488,903
139,562,086 102,268,403
Equity investments - at cost 310,167,634 310,167,634
449,729,720 412,436,037
Less allowance for probable losses (see 204,230,562
Note 8) 218,539,950
P
= 245,499,158 P = 193,896,087
The combined total assets of subsidiaries where the Bank holds more than 50% of equity but which were not
consolidated, not being material amounts, constituted 0.13% and 0.12% of the total resources of the Bank as of
December 31, 2004 and 2003, respectively.
Equity investments include the Bank’s interest amounting to P

= 31.2 million in a SPV created in 2004 to avail of
the benefits provided under the SPV Act of 2002.
On November 7, 2001, the BOD and stockholders of CBC Finance, Inc. (CBCF) approved the shortening of
CBCF’s corporate existence to December 31, 2001 by amending its articles of incorporation. CBCF’s certificate
of dissolution is still to be obtained from the SEC.
On July 6, 2000, the stockholders of CBC Venture Capital Corporation (CBC VCC) approved its dissolution and the
eventual disposal of its real estate properties and the distribution of its retained earnings. In connection with its
liquidation, in January 2001, CBC VCC sold its real estate properties and terminated some of its employees. CBC
VCC
is awaiting the approval of the regulatory authorities related to its liquidation.
7. Other Resources
2003
2004 (As restated)
Accrued interest receivable P
= 1,529,443,707 P
= 1,162,606,020
Deferred tax assets - net (see Note 16) 1,025,514,898 1,114,520,482
Accounts receivable 445,327,796 320,015,462
Sales contracts receivable 325,638,938 244,907,771
Foreign currency notes and coins on hand 312,170,824 278,817,179
Returned checks and other cash items in
process of collection 268,432,956 284,451,208
Foreign currency checks and other cash items 84,907,482 85,984,969
Miscellaneous 461,530,147 308,526,785
4,452,966,748 3,799,829,876
Less allowance for probable losses (see Note 8) 305,869,014 269,624,149
P
= 4,147,097,734 P
= 3,530,205,727
56
Breakdown of other resources by contractual maturity dates as of December 31, 2004 and 2003 is as follows:
2003
2004 (As restated)
Due within one year P
= 4,435,582,400 P
= 3,761,905,299
Due beyond one year 17,384,348 37,924,577
= 4,452,966,748 P
P = 3,799,829,876
8. Allowance for Probable Losses
Changes in the allowance for probable losses are as follows:
2004 2003
Balance at beginning of year:
Receivables from customers = 6,543,783,821 P
P = 5,061,213,198
ROPOA 440,845,495 348,197,968
Equity investments 218,539,950 229,154,149
Other resources 269,624,149 187,463,156
7,472,793,415 5,826,028,471
Provisions charged to operations 855,526,104 1,647,468,409
Accounts charged off and others (874,067,073) (703,465)
Balance at end of year: 7,454,252,446 7,472,793,415
Receivables from customers 6,247,525,323 6,543,783,821
ROPOA 696,627,547 440,845,495
Equity investments 204,230,562 218,539,950
Other resources 305,869,014 269,624,149
= 7,454,252,446 P
P = 7,472,793,415
As discussed in Note 2, the Bank’s allowance for probable losses has been determined with due consideration
of the BSP’s guidelines on probable loss provisioning. At the current level of allowance for probable losses,
management believes that the Bank has sufficient allowance to cover any losses that may be incurred from the
non-collection or non-realization of its receivables from customers and other risk assets.
9. Deposit Liabilities
Of the total deposit liabilities of the Bank as of December 31, 2004 and 2003, 64.31% and 62.38%, respectively,
are subject to periodic interest repricing. The remaining deposit liabilities earn annual fixed interest rates
ranging from 1% to 12.375% in 2004 and 2003.
57
Available reserves as of December 31, 2004 and 2003 per latest report submitted to the BSP are as follows:
2004 2003
Cash and other cash items P
= 2,669,854,856 P
= 1,766,041,157
Due from BSP 2,333,263,862 1,181,052,510
IBODI 5,388,726,836 4,472,093,009
P
= 10,391,845,554 P
= 7,419,186,676
The following table presents the breakdown of deposit liabilities by contractual settlement dates as of December
31, 2004 and 2003:
2004 2003
Due within one year P
= 74,867,757,077 P
= 58,084,998,931
Due beyond one year 10,938,315,620 14,026,963,548
P
= 85,806,072,697 P
= 72,111,962,479
10. Bills Payable

2004 2003
BSP - rediscounting (see Note 4) P
= 29,239,007 P
= 24,271,501
Others 4,305,703,897 9,284,537,522
= 4,334,942,904 P
P = 9,308,809,023
Bills payable - others mainly represent fundings from the Development Bank of the Philippines, Land Bank of
the Philippines, Government Service Insurance System and Social Security System in connection with certain
financing programs of these institutions.
The following table presents the breakdown of bills payable by contractual maturity dates as of December 31,
2004 and 2003:
2004 2003
Due Within Due Beyond Due Within Due Beyond
One Year One Year Total One Year One Year Total
BSP- rediscounting P
= 29,239,007 P
=– P
= 29,239,007 P
= 24,271,501 P
=– P
= 24,271,501
Others 821,522,286 3,484,181,611 4,305,703,897 6,018,288,000 3,266,249,522 9,284,537,522
P
= 850,761,293 P
= 3,484,181,611 P
= 4,334,942,904 P
= 6,042,559,501 P
= 3,266,249,522 P
= 9,308,809,023
58
11. Accrued Interest, Taxes and Other Expenses
2003
2004 (As restated)
Accrued interest payable = 1,473,998,863 P
P = 2,391,679,485
Accrued other expenses payable 599,244,153 565,044,860
Accrued income tax payable 45,309,689 30,149,943
= 2,118,552,705 P
P = 2,986,874,288
All accrued interest, taxes and other expenses are due within one year from the statement of condition dates.
12. Other Liabilities
2004 2003
Accounts payable (see Note 18) = 541,295,362 P
P = 913,395,903
Other deferred credits 417,874,140 310,098,739
Other credits - Dormant 278,021,619 265,714,365
Acceptances payable 211,574,624 34,728,192
Withholding taxes payable 55,389,168 32,851,690
Due to BSP 34,789,147 12,400,675
Margin deposits 9,897,760 23,802,891
Miscellaneous 180,498,506 36,553,249
= 1,729,340,326 P
P = 1,629,545,704
Breakdown of other liabilities by contractual maturity dates as of December 31, 2004 and 2003 is as follows:
2003
2004 (As restated)
Due within one year = 1,729,340,326 P
P = 1,348,524,142
Due beyond one year – 281,021,562
P = 1,629,545,704
= 1,729,340,326 P
13. Capital Funds
On May 5, 2004 the BOD approved the declaration of 20% stock dividends to stockholders of record as of July
22, 2004. The BSP approved the dividend declaration on June 10, 2004.
On May 7, 2003, the BOD approved the declaration of 20% stock dividends to stockholders of record as of July
18, 2003. The BSP approved the dividend declaration on June 10, 2003.
59
Under existing BSP regulations, the determination of the Bank’s compliance with regulatory requirements and
ratios is based on the amount of the Bank’s “unimpaired capital” (regulatory net worth) reported to the BSP,
determined on the basis of regulatory accounting principles, which differ from Philippine GAAP in some aspects.
Under current banking regulations, the combined capital accounts of a commercial bank should not be less than
an amount equal to ten percent (10%) of its risk assets. Risk assets consist of total assets after exclusion of
cash on hand, due from BSP, loans covered by hold-out or assignment of deposits, loans or acceptances under
letters of credit to the extent covered by margin deposits, and other non-risk items as determined by the
Monetary Board. Under BSP Circular No. 360, effective July 1, 2003, the capital-to-risk assets ratio is to be
inclusive of a market risk charge. Using this formula, the Bank’s capital-to-risk assets ratio (CAR) as of
December 31, 2004 and 2003 were 31.52% and 26.07%, respectively. Under the previous computation
provided under BSP Circular No. 280, which BSP Circular No. 360 above amended, the CAR of the Bank was
27.06% and 24.39% as of December 31, 2004 and 2003, respectively.
A portion of the Bank’s surplus corresponding to the accumulated equity in net earnings of investees amounting
to P
= 47.5 million as of December 31, 2004 and P
= 41.5 million as of December 31, 2003 is not available for
dividend declaration. The accumulated equity in net earnings becomes available for dividends upon receipt by
the Bank of cash dividends from the investees.
14. Retirement Plan
The Bank has a noncontributory and funded retirement plan covering all its officers and regular employees. The
retirement fund is administered by a Board of Trustees and is accounted for separately. The Bank’s annual
contribution to the retirement plan consists of a payment covering the current service cost for the year and the
amortization of the past service cost. Total contributions charged to operations amounted to P = 106.9 million in
2004, P= 173.4 million in 2003 and P
= 137.9 million in 2002, including past service costs of P
= 9.6 million in 2004 and
P
= 50.5 million in 2003 and 2002.
As of December 31, 2003, the latest actuarial valuation, the actuarial accrued
liability amounted to P
= 920.7 million. The fair value of the plan assets amounted to P
=
1,308.2 million. The principal actuarial assumptions used to determine retirement
benefits were a return on plan assets of 10% per annum (p.a.) and salary increases
of 10% p.a., both compounded annually. Actuarial valuations are made at least
every two years.
15. Lease Contracts
The Bank leases the premises for most of its branches. The lease contracts are for periods ranging from 1 to
25 years from the dates of contracts and are renewable under certain terms and conditions. Various leases
contracts include escalation clauses, most of which bear an annual rent increase of 10%.
60
Annual rentals on these lease contracts amounted to P
= 100.8 million in 2004, P
= 122.1 million in 2003, and P
= 112.1
million in 2002.
Future minimum rentals payable under non-cancelable operating leases are as follows:
2004 2003
Within one year P
= 93,898,140 P
= 123,243,455
After one year but not more than five years 263,384,039 291,676,781
After more than five years 74,557,522 219,341,218
= 431,839,701 P
P = 634,261,454
16. Income Taxes
Under Philippine tax laws, the Bank is subject to percentage and other taxes (presented as Taxes and Licenses
in the statements of income) as well as income taxes. In 2002, percentage and other taxes paid consist
principally of gross receipt tax (GRT) and documentary stamp taxes (DST). In January 1, 2003, the Bank was
subject to value added tax (VAT) instead of GRT. However Republic Act 9238 re-imposes GRT on banks and
other financial intermediaries effective January 1, 2004.
Income taxes include the corporate income tax, as discussed below, and final tax paid at the rate of 20% on
gross interest income from government securities and other deposit substitutes. These income taxes, as well as
the deferred tax benefits and provisions, are presented as “Provision for (benefit from) income tax” in the
statements of income.
Under current tax regulations, the corporate income tax rate is 32%. Interest allowed as a deductible expense
is reduced by an amount equivalent to 38% of interest income subjected to final tax. An MCIT of 2% on
modified gross income is computed and compared with the regular income tax. Any excess of the MCIT over
the regular income tax is deferred and can be used as a tax credit against future income tax liability for the next
three years from the year of inception. In addition, the NOLCO is allowed as a deduction from taxable income
in the next three years from the year of inception.
Current tax regulations also provide for the ceiling on the amount of entertainment, amusement and recreation
(EAR) expense that can be claimed as a deduction against taxable income. Under the regulations, EAR
expense allowed as a deductible expense is limited to the actual EAR paid or incurred but not to exceed 1% of
the Bank’s net revenue.
Effective in May 2004, Republic Act No. 9294 restores the tax exemption of FCDUs and offshore banking units
(OBUs). Under such law, the income derived by the FCDU from foreign currency transactions with
nonresidents, OBUs, local commercial banks including branches of foreign banks is tax-exempt while interest
income on foreign currency loans from residents other than OBUs or other depository banks under the
expanded system is subject to 10% gross income tax.
61
The provision for (benefit from) income tax consists of:
2003 2002
Current:
Final tax P
= 167,066,236 P = 87,658,728 P
= 203,544,303
MCIT 44,495,703 28,224,622 17,694,051
211,561,939 115,883,350 221,238,354
Deferred 107,604,385 140,152,676 (877,802,638)
P
= 319,166,324 P= 256,036,026 (P
= 656,564,284)
The components of net deferred tax assets (included under Other Resources account) are as follows:
2003
2004 (As restated)
Deferred tax asset (liability) on:
Allowance for probable losses = 1,570,207,434 P
P = 1,673,514,207
Revaluation increment on land (583,898,256) (602,497,057)
Unamortized past service cost 39,205,720 43,503,332
= 1,025,514,898 P
P = 1,114,520,482
The Bank did not set up deferred tax assets on the following temporary differences:
2003
2004 (As restated)
Allowance for probable losses P
= 1,623,072,642 P
= 1,264,291,383
NOLCO 289,019,588 112,672,139
MCIT 90,414,376 52,196,181
Unrealized loss on conversion 62,370,400 62,370,400
Accrued rent – 4,805,044
P
= 2,064,877,006 P
= 1,496,335,147
The Bank believes that it is highly probable that these temporary differences will not be realized in the future.
As of December 31, 2004 and 2003, deferred income tax liabilities have not been recognized on the
undistributed earnings of certain subsidiaries since such amounts are not taxable. Such undistributed earnings
amounted to P= 47.5 million and P
= 41.5 million in 2004 and 2003, respectively.
As of December 31, 2004, the Bank’s NOLCO consists of:
Original Expired Applied Remaining

Inception Year Amount Amount Amount Balance Expiry Year
2002 P
= 112,672,139 P
=– P
=– P = 112,672,139 2005
2004 176,347,449 – – 176,347,449 2007
P
= 289,019,588 P
=– P
=– P = 289,019,588
62
As of December 31, 2004, the Bank’s MCIT consists of:
Original Expired Applied Remaining

Inception Year Amount Amount Amount Balance Expiry Year
2001 P
= 6,277,508 P
= 6,277,508 P
=– P
=– 2004
2002 17,694,051 – – 17,694,051 2005
2003 28,224,622 – – 28,224,622 2006
2004 44,495,703 – – 44,495,703 2007
P
= 96,691,884 P
= 6,277,508 P
=– P
= 90,414,376
The reconciliation of the statutory income tax to the provision for (benefit from) income tax follows:
2003 2002
Statutory income tax P
= 971,745,391 P
= 919,149,845 P
= 619,443,273
Tax effects of:
FCDU income (501,318,541) (244,106,843) (384,252,550)
Nondeductible expenses 155,204,931 236,415,443 144,630,951
Interest income subjected to
final tax (117,126,233) (888,743,943) (963,407,787)
Others (189,339,224) 233,321,524 (72,978,171)
Provision for (benefit from) income tax P
= 319,166,324 P= 256,036,026 (P
= 656,564,284)
17. Trust Operations
Securities and other properties (other than deposits) held by the Bank in fiduciary or agency capacities for
clients and beneficiaries are not included in the accompanying statements of condition since these are not
resources of the Bank (see Note 19).
In compliance with the requirements of current banking regulations relative to the Bank’s trust functions: (a)
government securities with a total face value of P
= 365.5 million and P
= 302.5 million as of December 31, 2004 and
2003, respectively, are deposited with the BSP as security for the Bank’s faithful compliance with its fiduciary
obligations; and (b) a certain percentage of the Bank’s trust fee income (included under Other Operating Income
in the statements of income) is transferred to surplus reserve. This yearly transfer is required until the surplus
reserve for trust function equals 20% of the Bank’s authorized capital stock.
18. Related Party Transactions
In the ordinary course of business, the Bank has loans and other transactions with its subsidiaries and affiliates,
and with certain directors, officers, stockholders and related interests (DOSRI). Under the Bank’s policy, these
loans and other transactions are made substantially on the same terms as with other individuals and businesses
of comparable risks. The amount of individual
63
loans to DOSRI, of which 70% must be secured, should not exceed the amount of their respective deposits and
book value of their respective investments in the Bank. In the aggregate, loans to DOSRI generally should not
exceed the Bank’s total capital funds or 15% of the Bank’s total loan
portfolio, whichever is lower. As of December 31, 2004 and 2003, the Bank has complied with all these
regulatory requirements.
BSP Circular No. 423 dated March 15, 2004 amended the definition of DOSRI accounts.
The following table shows information relating to the loans, other credit accommodations and guarantees
classified as DOSRI accounts under regulations existing prior to said circular, and new DOSRI loans, other
credit accommodations granted under said circular
2004 2003
Total outstanding DOSRI loans P
= 3,137,125,624 P
= 3,271,363,324
Percent of DOSRI accounts granted under
regulations existing prior to BSP Circular No.
423 4.46% –
Percent of DOSRI accounts granted under BSP
Circular No. 423 0.91% –
Percent of DOSRI loans to total loans 5.48% 7.21%
Percent of unsecured DOSRI loans to
total DOSRI loans 14.87% 7.94%
Percent of past due DOSRI loans to
total DOSRI loans 3.34% 2.04%
Percent of non-performing DOSRI loans to
total DOSRI loans – –
The following table shows information relating to the loans, other credit accommodations and guarantees, as
well as availments of previously approved loans and committed credit lines not considered DOSRI accounts
prior to the issuance of said circular but are allowed a transition period of two years from the effectivity of said
circular or until said loan, other credit accommodations and guarantees become past due, or are extended,
renewed or restructured, whichever comes later, as of December 31, 2004:
2004
Total outstanding non-DOSRI accounts prior to BSP
Circular No. 423 P
= 59,251,783
Percent of unsecured non-DOSRI accounts prior to BSP
Circular No. 423 to total loans 0.09%
Percent of past due non-DOSRI accounts prior to BSP
Circular No. 423 to total loans 0.02%
Percent of non-performing non-DOSRI accounts prior to
BSP Circular No. 423 to total loans 0.02%
Other related party transactions conducted in the normal course of business include the availment of computer
and general banking services of an affiliate to meet the Bank’s reporting requirements.
64
The year-end balances in respect of related parties (other than DOSRI) included in the financial statements are
as follows:
Related Party Accounts 2004 2003

CBC Insurance Brokers, Inc. Deposit liabilities P
= 4,336,828 P
= 4,630,104
Accounts payable 195,585 2,826,080
CBC Properties and Computer Deposit liabilities 2,736,215 3,844,823
Center, Inc. Accounts payable 1,525,435 207,201
CBC Forex Corporation Deposit liabilities 278,631 336,345
The income and expenses in respect of related parties included in the financial statements are as follows:
Related Party Nature of Transaction 2004 2003

CBC Insurance Brokers, Inc. Interest expense P
=– P
= 44,885
CBC Properties and Computer
Center, Inc. Computer services 33,401,798 32,373,835
CBC Forex Corporation Service fees 12,006 31,517
Income from foreign
exchange –
transactions 36,766
19. Commitments and Contingent Liabilities
In the normal course of the Bank’s operations, there are various outstanding commitments and contingent
liabilities which are not reflected in the accompanying financial statements. Management does not anticipate
any material losses as a result of these transactions.
The following is a summary of contingencies and commitments with their equivalent peso contractual amounts:
2004 2003
Trust department accounts (see Note 17) = 38,184,795,281 P
P = 33,560,644,456
Forward exchange sold 7,729,720,647 13,071,690,696
Outstanding guarantees issued 2,637,888,695 1,342,660,084
Unused commercial letters of credit 2,061,265,436 1,920,913,124
Deficiency claims receivable 779,131,078 491,142,262
Outward bills for collection 219,272,685 95,017,647
Late deposits/payments received 218,321,220 119,022,748
Inward bills for collection 134,308,337 91,467,555
Forward exchange bought 27,026,647 25,355,946
Others 731,573,297 615,480,142
There are pending assessments and pre-assessments from the Bureau of Internal Revenue (BIR) pertaining to
withholding tax at source and DST for the years 1982 to 1986 and GRT for the years 1999 and 2000. In
addition, the Bank has received tax assessments from the BIR on two industry issues. The Bank, through its tax
counsel, is contesting these assessments and pre-assessments on the ground that the factual situations were
not considered which, if considered, will not give rise
65
to material tax deficiencies. The Bank, together with other member banks of the Bankers’ Association of the
Philippines (BAP), is contesting these pending assessments and pre-assessments of the BIR. Discussions are
ongoing between the BAP and the BIR for the appropriate settlement and disposition of these tax issues. No
provision has been made in the accompanying financial statements for these contingencies.
Several suits and claims relating to the Bank’s lending operations and labor-related cases remain unsettled. In
the opinion of management, these suits and claims, if decided adversely, will not involve sums having a material
effect on the financial statements of the Bank.
20. Segment Information
The Bank’s operating businesses are recognized and managed separately according to the nature of services
provided and the markets served, with each segment representing a strategic business unit. The Bank’s
business segments are as follows:
Consumer Banking - principally handling housing and auto loans for individual and corporate customers;
Account Management - principally administering all the lending, trade finance and corollary banking products
and services extended to corporate and institutional customers;
Branch Banking - principally handling retail and commercial loans, individual and corporate deposits, overdrafts
and fund transfer facilities, trade facilities and all other bank services for retail customers; and
Treasury - principally providing money market, trading and treasury services, as well as the management of the
Bank’s funding operations by use of government securities, placements and acceptances with other banks.
These segments are the basis on which the Bank reports its primary segment information. Other operations of
the Bank include the operations and financial control groups. Transactions between segments are at estimated
market rates on an arm’s length basis. Interest is charged or credited to business segments based on a pool
rate, which approximates the marginal cost of funds.
The following tables present relevant information regarding business segments as of and for the years ended
December 31, 2004 and 2003.
66
Segment information for the years ended December 31, 2004 and 2003 are as follows (in thousands):
Consumer Banking Account Management Branch Banking

2004 2003 2004 2003 2004 2003
Results of operations
Net interest income P
= 190,760 P
= 163,472 P
= 782,058 P
= 542,090 P
= 1,979,528 P
= 1,709,171
Other operating income (loss) 20,950 10,823 176,181 (8,866) 804,794 537,077
Total revenue 211,710 174,295 958,239 533,224 2,784,322 2,246,248
Other operating expense (71,402) (60,925) (208,886) (139,668) (1,622,211) (1,393,714)
Income before income tax 140,308 113,370 749,353 393,556 1,162,111 852,534
Income tax provision – – – – – –
Net income P
= 140,308 P
= 113,370 P
= 749,353 P
= 393,556 P
= 1,162,111 P
= 852,534
Total Assets P
= 4,562,663 P
= 3,578,923 P
= 26,892,138 P
= 32,482,099 P
= 45,473,334 P
= 37,184,077
Total Liabilities P
= 273,687 P
= 69,687 P
= 5,966,294 P
= 4,307,269 P
= 83,011,623 P
= 72,075,290
Depreciation and Amortization P
= 1,729 P
= 1,326 P
= 2,218 P
= 1,912 P
= 78,298 P
= 76,543
Capital Expenditures P
= 766 P
= 1,488 P
= 814 P
= 6,704 P
= 44,491 P
= 45,711
Treasury Others Total

2004 2003 2004 2003 2004 2003
Results of operations
Net interest income (loss) P
= 1,661,601 P
= 1,900,805 P
= 440,859 (P
= 633,585) P
= 5,054,806 P
= 3,681,953
Other operating income 939,451 3,181,619 179,887 251,757 2,121,263 3,972,410
Total revenue (loss) 2,601,052 5,082,424 620,746 (381,828) 7,176,069 7,654,363
Other operating expense (166,346) (278,185) (2,070,520) (2,909,528) (4,139,365) (4,782,020)
Income (loss) before income 2,434,706 4,804,239 (1,449,774) (3,291,356) 3,036,704 2,872,343
tax
Income tax provision – – 319,166 256,036 319,166 256,036
Net income (loss) P
= 2,434,706 P
= 4,804,239 (P
= 1,768,940) (P
= 3,547,392) P
= 2,717,538 P
= 2,616,307
Total Assets P
= 53,716,413 P
= 48,013,262 (P
= 16,784,880) (P
= 17,908,321) P
= 113,859,668 P
= 103,350,040
Total Liabilities P
= 6,443,377 P
= 9,202,479 (P
= 1,476,596) P
= 602,731 P
= 94,218,385 P
= 86,257,456
Depreciation and Amortization P
= 3,332 P
= 6,118 P
= 77,950 P
= 78,696 P
= 163,527 P
= 164,595
Capital Expenditures P
= 6,962 P
= 2,460 P
= 41,177 P
= 97,910 P
= 94,210 P
= 154,273
67
21. Earnings Per Share (EPS)
Basic earnings per share amounts are calculated by dividing the net income for the year by the weighted
average number of common shares outstanding during the year (adjusted for stock dividends).
The following reflects the income and share data used in the basic earnings per share computations:
2003 2002
2004 (As restated - Note 2)
P
=
a. Net income 2,717,538,024P
= 2,616,307,238 P
= 2,592,324,512
b. Weighted average number of
common shares outstanding 36,542,512 36,542,512 36,542,512
c. Earnings per share (a/b)
Weighted average number of outstanding common shares in 2003 and 2002 was recomputed after giving retroactive effects to stock dividends
declared on May 5, 2004 and May 7, 2003 (see Note 13).
Before consideration of the 20% stock dividend declared in 2004 and 2003, the EPS for 2003 and 2002
were P
= 86.02 and P= 102.36, respectively.
22. Financial Performance
The following basic ratios measure the financial performance of the Bank:
2003 2002
Return on average equity 14.37% 16.82% 19.36%
Return on average assets 2.46 2.57 2.73
Net interest margin 5.08 4.47 4.02
23. Notes to Statements of Cash Flows
The following table presents supplemental cash flow disclosure on interest:
2004 2003 2002

Interest received P
= 8,189,819,676 P= 7,584,601,516 P= 5,834,494,099
Interest paid 4,419,532,137 3,014,927,959 2,778,750,200
68

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COVER SHEET

8745 Paseo de Roxas cor. Villar St., 1226 Makati City 4 4 3

(Company’s Full Name)

ARSENIO L. LIM, JR. 885-5133

Secondary License Type, If Applicable

To be accomplished by SEC Personnel concerned

File Number LCU

Remarks: Please use BLACK ink for scanning purposes

SECURITIES AND EXCHANGE COMMISSION

1. For the fiscal year ended December 31, 2004

2. SEC Identification Number NA (Exempt Securities)

3. BIR Tax Identification No. 320-000-444-210-NV

4. Exact name of registrant as specified in its charter CHINA BANKING CORPORATION

5. PHILIPPINES 6. Industry Classification Code

10. Securities registered pursuant to Sections 4 and 8 of the RSA

Common stock, P100 par value 36,542,512 shares

12. Check whether the registrant:

PART I BUSINESS AND GENERAL INFORMATION

(1) Business of Issuer

Amount Spent on Research and Development Activities.

Education & Training P 5,698 P 4,976 P 4,527

Advertising Expenses 11,173 4,965 5,266

Cost and effect of compliance with environmental laws. Not applicable.

(A) Additional Requirements as to Certain Issues or Issuers. Not Applicable

CHINA BANKING CORPORATION

Accounts Amount (In Million Pesos)

ITEM 3. LEGAL PROCEEDINGS

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

• Annual Stockholders Meeting -- May 06, 2004

PART II OPERATIONAL AND FINANCIAL INFORMATION

(1) Market Information

• Market Value 2003 HIGH LOW CLOSE

Jan - Mar 566.67* 516.67* 554.17*

2004 HIGH LOW CLOSE

Jan - Mar 680.00 650.00 665.00

* - Adjusted for 20% stock dividend on 15 July 2003

2004 HIGH LOW CLOSE

Jan - Mar 566.67** 541.67** 554.17**

** - adjusted for 20% stock dividend on 19 July 2004

• Market value as of March 31, 2005 (last trading day): P685.00

Name of Stockholders Number of Shares Percent Share

1. Sysmart Corporation 7,457,473 20.408

TOTAL 28,740,708 78.650%

Total number of shareholders (As of 12/31/2004) – 1,852

Authorized and Issued Capital

(4) Unregistered Securities

CHINA BANKING CORPORATION

ITEM 6. MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

A. Management’s Discussion and Analysis (MD & A) or Plan of Operation

(1) Financial and Operating Highlights

(2) Management’s Discussion and Analysis

CHINA BANKING CORPORATION

(3) Plan of Operations

ITEM 7. FINANCIAL STATEMENTS

ITEM 8. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL

PART III CONTROL AND COMPENSATION INFORMATION

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

CHINA BANKING CORPORATION

(2) Significant Employees

(3) Family Relationships. (Please refer to Item 9 (1) )

(4) Involvement in Certain Legal Proceedings

ITEM 10. EXECUTIVE COMPENSATION

Regular Salaries P 20,056,416.00 P 18,570,756.00 P 17,092,752.00

Jan - Mar 566.67 541.67 554.17**