Company Profile

Head Office Address China Bank Building 8745 Paseo de Roxas corner Villar Street, Makati City 1226 Philippines

China Banking Corporation (or China Bank) is the first privately-owned local commercial bank in the Philippines. It was incorporated on July 20, 1920 and started its operations on August 16, 1920. China Bank went public on December 1, 1965. It was the first bank in Southeast Asia to process deposit accounts on-line in 1969. It was also the first Philippine bank to offer telephone banking in 1988. In August 26, 1991, the Bank was issued a license to engage in universal banking. Its financial products and services include deposits and related services, international banking services, insurance products, loans and credit facilities, trust and investment services, cash management services, and other services such as acceptance of various bill payments and donations to charitable institutions. It derives its revenue from interest income (deposit taking and lending/investment activities) and other income including service charges, fees & commissions, trading and foreign exchange gain, trust fees, income from acquired assets, and other miscellaneous income. In 2010, its 90th year, China Bank posted a net income of P5.0 billion or 22% increase. It ranked as the 8th largest commercial bank with assets of P257 billion as of December 2010 and was the 4th largest bank in market value. The Banks capital strength as measured by its return on equity and

assets of 15.37% and 2.10%, respectively, is among the best in the industry. China Bank declared cash dividends of P12 per share plus 10% stock dividends, which when combined with the appreciation in share price gave its stockholders one of the best yields in the banking industry. China Bank was also the most active among the major banks in terms of network expansion, opening a total of 22 branches -- 253 for the main bank and 16 for China Bank Savings Inc -bringing the total branch network to 269 by year-end 2010. In the same year, China Bank was again recognized by the Bureau of Treasury as one of the Top Ten Best Performing Government Securities Eligible dealers (GSED) in the Primary Market for 2010. China Bank was a silver awardee in corporate governance by the Institute of Corporate Directors, recognizing its performance in protecting the rights and equitable treatment of its shareholders, role of stakeholders, disclosure and transparency, and Board responsibilities. For 2011, China Banks core strategies are to continue to expand and diversify its revenue sources, broaden its distribution channels, maximize total customer relationships and strengthen the organization for better competitiveness.

China Bank History

2010

China Bank was included in the 30-stock PSE index (PSEi) starting May 12; Silver awardee on corporate governance, one of the top-scoring Publicly Listed Company by the Institute of Corporate Directors (ICD); celebrated its 90th anniversary. China Bank was once again recognized by the Bureau of Treasury for its active role in money market and capital development, naming the Bank as one of the "Top Ten Best Performing Government Securities Eligible Dealers (GSED) in the Primary Market for 2010." China Bank was cited by Stern Stewart & Co., a leading worldwide management consulting firm based in New York, as one of the top 100 listed companies throughout Southeast Asia in terms of delivering shareholder value for the period 2002-2008. China Bank was one of only 11 Philippine companies and one of two Philippine banks to be included in the ASEAN 100 Relative Wealth Added Index.The year also saw the opening of China Bank Cebu Business Center. Located at Cebu Business Park in Mabolo, Cebu City, it is the bank's 14th branch in Cebu and its main business hub in the region. China Bank offered its maiden issue of fixed rate long-term negotiable certificates of deposit (LTNCDs) to expand its asset base, gain access to long-term funding from individual and corporate investors, and to diversify the maturity profile of its deposits.From an initial amount of P3 billion, the floatation was upsized to the BSPapproved amount of P5 billion due to overwhelming response. Then on September 8, 2008,China Bank's savings bank subsidiaryformally opened its doors to the publicas China Bank Savings, Inc. (ChinaBank Savings). China Bank embarked on new ventures: Signed a Bancassurance joint venture agreement with Manulife, acquired Manila Bank, launched a raffle promo dubbed "P8.7 million at 87", and continued expanding its branch network. China Bank was awarded Best Website Banking and Finance by the Philippine Webby Awards. The Bank also launched its On-time Remittance Card, Private Banking Service, and Corporate Internet Banking module on the same year. China Bank is an Annual National Consumer Awardee for Outstanding Commercial Bank, given by Parangal ng Bayan. The Bank also received a National Consumer Quality Award and Global Excellence Award for the same distinction. To celebrate its 85th anniversary, the Bank gave away a total of P8.5 million in prizes for its "Grateful at 85" deposit and loan raffle promo. The same year, China Bank launched its "On-time Remittance" service and its multi-functional and

2009

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2007

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superior internet and mobile banking channel, China Bank Online.

2004

China Bank was recognized as Outstanding Commercial Bank by Consumers Union of the Philippines and Most Outstanding Commercial Bank by the Philippine Marketing Excellence Awards (National Awards). The same year, the Bank launched Cash Management Services for businesses and corporate clients.

2002 2000

China Bank hit the P100 billion mark in total resources.

To celebrate the Bank's 80th anniversary, China Bank donated P1 million to Tabang Mindanaw to help the victims of armed conflict in Mindanao.

1999 1997

China Bank's Treasury operations were automated using the Flexcube System. China Bank's subsidiary, China Bank Insurance Brokers, Inc. commenced operations. China Bank issued US Dollar Floating Rate Certificate of Deposit, the first access to foreign capital markets. The Bank also launched the highly successful deposit promo "Cash and Cars in a Plus". China Bank launched China Check Plus, an interest-earning current account.

1996

1995

China Bank celebrated its diamond anniversary and raised its authorized capital to P2.54 billion.

1994 1991

China Bank launched the 2 main products of consumer loans: HomePlus and AutoPlus.

China Bank acquired its universal bank license, making it possible to offer a more diverse selection of products and services.

1990

China Bank joined seven other banks in to create BancNet, the country's largest ATM network. To strengthen its position among the major players in the banking industry, China Bank transferred its corporate headquarters to its present location along Paseo de Roxas in Makati City.

1988

China Bank upgraded its on-line system and launched TellerCard, the Bank's ATM banking service. The same year, the Bank introduced TellerPhone, the first telephone banking in the Philippines.

1969

China Bank computerized its operations, becoming the first bank in Southeast Asia to process both savings and current accounts on-line. The Bank opened a branch in Makati City where the Head Office building is now located.

1948 1945

China Bank opened its first branch in Cebu City.

China Bank resumes its operations after World War II on July 23, five months after the liberation of Manila. It played a key role in the post-war reconstruction and economic recovery by providing financial support to businesses and entrepreneurs.

1924 1920

Due to the growth of the Bank's business, China Bank moved to a new office at the corner of Dasmarias and Juan Luna Streets in Binondo. On August 16, China Bank opened its doors to the banking public at No. 90 Rosario St. in Binondo, Manila with an initial capital of P10 million. It was the first privately-owned commercial bank in the Philippines. Bar topnotcher Don Albino Sycip was Chairman of the Board and business leader and philanthropist Mr. Dee C. Chuan was President.

Mission Statement
We will be a leading provider of quality services consistently delivered to institutions, entrepreneurs, and individuals here and abroad, to meet their financial needs and exceed their rising expectations. We will be a primary catalyst in the creation of wealth for our customers, driven by a desire to help them succeed, through a highly motivated team of competent and empowered professionals, guided by in-depth knowledge of their needs and supported by leading-edge technology. We will maintain the highest ethical standards, sense of responsibility, and fairness with respect to our customers, employees, shareholders, and the communities we serve.

Board of Directors and Advisor

Gilbert U. Dee Vice Chairman of the Board

Hans T. Sy Chairman of the Board

Peter S. Dee Director and Chief Executive Officer

Henry Sy, Sr. Honorary Chairman and Advisor to the Board

Joaquin T. Dee Director

Jose T. Sio Director

Herbert T. Sy Director

Harley T. Sy Director

Ricardo R. Chua Director, Executive Vice President and Chief Operating Officer

Pilar N. Liao Advisor to the Board

Robert F. Kuan Independent Director

Alberto S. Yao Independent Director

Dy Tiong Independent Director

Awards and Distinctions

2010

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Silver Award - 2009 Corporate Governance Scorecard Institute of Corporate Directors One of the Ten Best Performing Goverment Securities Eligible Dealers (GSED) Bureau of Treasury P38.8B San Miguel Brewery Bonds Issue - Domestic Bond Deal of the Year, Philippine Capital Markets and Best Local Currency Bond in Asia (China Bank acted as joint lead manager) IFR Asia Magazine and The Asset Magazine One of the 100 Best-Performing Companies in Southeast Asia - ASEAN 100 Relative Wealth Added (RWA) Index Stern Stewart & Co., Outstanding Commercial Bank Consumers Union of the Philippines (CUP) People's Choice Best Corporate Website 10th Philippine Web Awards (PWA) Outstanding Commercial Bank Consumers Union of the Philippines (CUP) Best Banking & Finance Website 9th Philippine Web Awards (PWA) Cited No. 2 in Corporate Governance, next to PLDT (No. 1) and ahead of Ayala Corporation (No. 3) Institute of Corporate Directors Best Commercial Bank Asian Brand Excellence Most Outstanding Real Estate Financing Bank Asian Business and Marketing Awards Most Outstanding Real Estate Loan Philippine Quality Awards for Business Excellence (National Awards) Best Managed Philippine Brand Real Estate Financing Philippine Star Brand Outstanding Commercial Bank Parangal ng Bayan Award Outstanding Commercial Bank Global Excellence Awards

2009 2008 2007

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2006

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2005

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Outstanding Commercial Bank National Consumers Quality Awards Outstanding Commercial Bank Consumers Union of the Philippines (CUP) Most Outstanding Commercial Bank Philippine Marketing Excellence Awards Best Annual Reports Category Management Association of the Philippines 1st Place for the Tabang Mindanaw Print Advertisement Carousel of Bank Ads (21st National Convention of Bankers Institute of the Philippines) Best Performer in Treasury Bonds in the Primary Market Category Best Performing Government Securities Eligible Dealers Award (Bureau of Treasury)

2004 2003 2001 1999

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The

Early Years

The Philippine National Bank was established as a governmentowned banking institution on July 22, 1916 with headquarters in the old Masonic Temple along Escolta, Manila. Its primary mandate was to provide financial services to Philippine industry and agriculture and support the government's economic development effort. World War I, then raging in Europe, generated huge demand for the country's major exports namely: sugar, copra,

coconut oil, Manila hemp and tobacco. However, not much was being done to develop the industries that produced these sought-after crops since access to credit facilities was limited then. To solve this problem, Henderson Martin, Vice Governor of the Philippines, together with Mr. Miguel Cuaderno (who later became Central Bank governor) drafted the charter for a national bank. In February 4, 1916, Public Act 2612 was passed by the Philippine legislature providing for the establishment of the PNB to replace the small P1 million government-owned Agricultural Bank. PNB's first head office was the Masonic Temple along Escolta, the then "Wall Street of the Philippines" in the bustling district of Sta. Cruz in Manila. An American, H. Parker Willis, was its first president. "The First Universal Bank in the country" With PNB's establishment, Filipinos found a bank of their own. PNB was authorized to grant short and long-term loans to agriculture and industry. The Filipino farmers then could avail of loans with interest between 8% to 10% per annum. PNB was also authorized to receive deposits, open foreign credits and rediscount bills. It was also given the special power to issue circulating notes. As such, PNB functioned as the de facto Central Bank of the country until 1949.

On July 24, 1916, PNB established its first branch in Iloilo. In 1917, PNB marked its entry in the field of international banking when it opened its New York Branch. The following year, it established five more domestic branches and another overseas branch in Shanghai, China. PNB briefly ceased operations in January 1942 but reopened the next month under the supervision of Japanese authorities. After the Second World War, PNB reopened immediately and acquired the assets and assumed the liabilities of the banking division of the National Treasury. With the establishment of the Central Bank in 1949, PNB's role as issuer of currency notes, custodianship of bank reserves, sole depository of government funds and clearing house of the banking system ceased. "PNB launched the first on-line Electronic Data Processing System in the entire Far East" In 1955, it was authorized to operate as an investment bank with powers to own shares and to issue debentures.

In 1963, it established the National Investment and Development Corporation to engage primarily in long-term and equity financing of business ventures. PNB transferred to its new Head Office along Escolta in 1966 and launched the first online Electronic Data Processing System in the entire Far East. Between 1967 and 1979, PNB continued to expand its operations by opening offices in London, Singapore, Djakarta, Honolulu and Amsterdam. In the domestic field, it opened 14 provincial branches. It was also during this period that the Bank started the Dollar Remittance Program. In 1980, PNB became the first universal bank in the country. However, it encountered operational difficulties in the mid-80s as a result of the economic downturn triggered by the assassination of Senator Benigno S. Aquino, Jr and had to be assisted by the government in 1986. Privatization of PNB The privatization of the Bank started when 30 per cent of its outstanding stocks was offered to the public and its stocks were listed in the stock exchange in 1989. In 1992, PNB became the first Philippine bank to reach the P100 billion mark in assets. Also in 1992, a second public offering of its shares was issued to continue its privatization. In 1995, the Bank moved to its new headquarters at the PNB Financial Center in Roxas Boulevard, Pasay City. In 1996, the Securities and Exchange Commission approved the Bank's new Articles of Incorporation and by-laws and the change in the status of PNB from a government-based to a private corporation with the control of the government reduced to 46 per cent. At the turnover rites on July 23, 1996, President Fidel V. Ramos declared: PNB is the bank for the Filipino wherever he or she may be-- in the country's centers of commerce and industry, in the far reaches of the countryside, and even in many places across the globe." A New Beginning In early 2000, the Lucio Tan Group became the single biggest private stockholder. The group pumped in nearly P20 billion fresh capital in less than one year. This was done

to emphasize the commitment of the new stockholders' group to the improvement of the Bank's financial condition, which has been incurring losses in operations, due to poor asset quality. In late-2000, the bank suffered a liquidity crisis and the National Government stepped in to support the bank, implementing a capital restructuring of the Bank, and injecting PHP25bn of liquidity assistance. In May 2002, the Government and the Lucio Tan Group sealed the Memorandum of Agreement (MOA) that embodies the provisions that will help turn the Bank around. It includes, among others, the settlement of government's liquidity assistance by way of increasing government's stake in the Bank from 16.58% to 44.98% that is now equal to the Lucio Tan Group's 44.98% from 68%. At the same time, the bank started operating under a 5-year Rehabilitation program. In August 2005, the government, as part of its privatization program, sold down a further 32.45% stake in the Bank via an auction. The Lucio Tan Group, as the other majority holder exercised its right of first refusal, reducing the government share to 12.5% and raising that of the Lucio Tan Groups to 77.43%. In June 2007, PNB settled its P6.1 billion loan to Philippine Deposit Insurance Corporation (PDIC), more than four years ahead of the loans due date. The loan repayment was a clear indication of the Banks renewed financial health. In August 2007, the bank completed its Tier 1 follow-on equity offering where it raised about P5.0 billion in Tier 1 capital. Together with the sale of 89 million primary shares, 71.8 million secondary shares owned by the national government thru PDIC and DOF were sold to the public and thus bringing about a complete exit of the government from PNB. Since the inception of the rehabilitation program, PNB has exceeded the targets of the program. While the program called for profits starting 2005, the bank became profitable as early as 2003. Within four years, PNB increased its net income sixteen times from P52 million in 2003 to P820 million in 2006. With its successful exit from the governments Rehab program and the strong income performance, PNB has demonstrated its ability to sustain its heightened competitiveness based on the three tenets of reducing non performing assets, strengthening core businesses and increasing profitability. The Bank remains as one of the largest banks in the country with a wide array of competitive banking products to answer for the diverse needs of its huge clientele including more than 2 million depositors. PNB maintains its leadership in the overseas remittance business with remittance centers in the United States, Canada, England, Spain, the Netherlands, France, Germany, Austria, Italy, Hong Kong, Japan, Singapore, Malaysia and the Middle East countries. Through its subsidiaries, the Bank also engages in a number of diversified financial and related businesses such as remittance servicing, investment banking, non-life insurance,

stock brokerage, leasing and financing and foreign exchange trading. The Bank, through its associate, is also engaged in other services such as life insurance.
Mission Statement We are a leading, dynamic Filipino financial services group with a global presence committed to delivering a whole range of quality products and services that will create value and enrich the lives of our customers, employees, shareholders and the communities we serve. Vision 2010 and Beyond To be the most admired financial services organization in the country in terms of:

Financial performance rank #1 or #2 in its businesses in terms of return on equity Innovativeness in products, services, distribution and the use of cutting-edge technology Customer perception o The preferred financial services provider o The customer-centered organization with a passion for service excellence Social responsibility the employer of choice, a good corporate citizen and partner in nation-building Long-term vision developing competitive advantage on a sustained basis by anticipating changes in customers preferences and in the manner of doing business

Board of Directors
Florencia G. Tarriela Carlos A. Pedrosa Florido P. Casuela Estelito P. Mendoza Omar Byron T. Mier Feliciano L. Miranda, Jr. Washington Z. SyCip John G. Tan Lucio C. Tan Lucio K. Tan, Jr. Deogracias N. Vistan Jose Ngaw Chairperson Vice Chairman Director Director Director Director Director Director Director Director Director Board Advisor

Senior Management Team

Carlos A. Pedrosa President & Chief Executive Officer Horacio E. Cebrero III

Executive Vice President Treasury Group

Jovencio B. Hernandez Executive Vice President Retail Banking Group

Carmen G. Huang Executive Vice President Chief Financial Officer

Ma. Elena B. Piccio Executive Vice President Institutional Banking Group

Alvin C. Go First Senior Vice President & Chief Legal Counsel Legal Group

Edgardo T. Nallas First Senior Vice President Human Resource Group

Emeline C. Centeno Senior Vice President Corporate Planning and Research Division

Elfren Antonio S. Sarte Senior Vice President Consumer Finance Group

Awards and Accolades

PNB RECEIVES SSS BEST COLLECTING BANK FOR OFW REMITTANCES AWARD

PNB is SSS Best Collecting Bank for OFW Remittances. PNB Global Operations Sector OIC and SVP John Medina (3rd from left) received the SSS Balikat ng Bayan Award as Best Collecting Bank for OFW Remittances on behalf of PNB. Also present during the Awarding Ceremony are, from left: SSS Chairman Thelmo Cunanan, BSP Governor Amando Tetangco and SSS President and CEO Romulo Neri. PNB RECEIVES SSS BEST COLLECTING BANK FOR OFW REMITTANCES AWARD Philippine National Bank (PNB) was recently named as Best Collecting Bank for OFW Remittances by the Social Security System under its 2009 Balikat ng Bayan Awards. This is the fifth straight year that PNB was given this award. The distinction recognizes PNB