ANNOUNCEMENT CONTINUING CONNECTED TRANSACTIONS

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1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. 中 信 銀 行 股 份 有 限 公 司 China CITIC Bank Corporation Limited (A joint stock limited company incorporated in the People s Republic of China with limited liability) (Stock Code: 998) SUMMARY ANNOUNCEMENT CONTINUING CONNECTED TRANSACTIONS In light of the expiries of the CITIC Bank and CITIC Group Capital Market Transactions Framework Agreement, CITIC Bank and CITIC Group Financial Consulting and Asset Management Service Framework Agreement, CITIC Bank and CITIC Group Third-Party Escrow Service Framework Agreement, CITIC Bank and CITIC Group Asset Custody Service Framework Agreement, CITIC Bank and CITIC Group Loan Asset Transfer Framework Agreement, CITIC Bank and CITIC Group Wealth Management Service Framework Agreement, CITIC Bank and CITIC Group Comprehensive Service Framework Agreement, CITIC Bank and CITIC Group Investment Product Agency Sales Service Framework Agreement and CITIC Bank and CITIC Group Call Centre Outsourcing Service Framework Agreement on 31 December On 27 March 2014, we entered into the new CITIC Bank and CITIC Group Third-Party Escrow Service Framework Agreement, CITIC Bank and CITIC Group Asset Custody Service Framework Agreement, CITIC Bank and CITIC Group Financial Consulting and Asset Management Service Framework Agreement, CITIC Bank and CITIC Group Capital Transactions Framework Agreement, CITIC Bank and CITIC Group Comprehensive Service Framework Agreement with CITIC Group, CITIC Bank and CITIC Group Asset Transfer Framework Agreement, and CITIC Bank and CITIC Group Wealth Management and Investment Service Framework Agreement, which will expire on 31 December 2014, and are renewable subject to the agreement of the parties and the compliance with the Hong Kong Listing Rules. In light of the expiry of the CITIC Bank and BBVA Interbank Transactions Master Agreement on 31 December 2013 and to comply with the Shanghai Listing Rules, on 27 March 2014, we entered into a new CITIC Bank and BBVA Capital Transactions Framework Agreement with BBVA, which will expire on 31 December 2014 and is renewable subject to the agreement of the parties and the compliance with the Shanghai Listing Rules. As the highest applicable percentage ratios calculated in accordance with Chapter 14A of the Hong Kong Listing Rules in respect of the respective annual caps under the CITIC Bank and

2 CITIC Group Third-Party Escrow Service Framework Agreement, CITIC Bank and CITIC Group Asset Custody Service Framework Agreement CITIC Bank and CITIC Group Financial Consulting and Asset Management Service Framework Agreement, CITIC Bank and CITIC Group Capital Transactions Framework Agreement, CITIC Bank and CITIC Group Comprehensive Service Framework Agreement and the non-principal-guaranteed wealth management services & agency banking service under the CITIC Bank and CITIC Group Wealth Management and Investment Service Framework Agreement do not exceed 5%, the transactions contemplated thereunder are subject to reporting and announcement requirements but are exempted from Independent Shareholders approval requirement. under Chapter 14A of the Hong Kong Listing Rules. The principal-guaranteed wealth management services under the CITIC Bank and CITIC Group Wealth Management and Investment Service Framework Agreement is a connected transaction exempted Independent Shareholders approval under Rule 14A.65(4) of the Hong Kong Listing Rules. As the highest applicable percentage ratios calculated in accordance with Chapter 14A of the Hong Kong Listing Rules in respect of the annual cap concerning investment service under the CITIC Bank and CITIC Group Wealth Management and Investment Service Framework Agreement and the annual cap under the CITIC Bank and CITIC Group Asset Transfer Framework Agreement exceed 5%, the investment service under the CITIC Bank and CITIC Group Wealth Management and Investment Service Framework Agreement and the transactions contemplated under the CITIC Bank and CITIC Group Asset Transfer Framework Agreement is subject to reporting, announcement and Independent Shareholders approval requirements under Chapter 14A of the Hong Kong Listing Rules. BOARD CONFIRMATION The Board (including the independent non-executive directors of the Bank) considers that the abovementioned continuing connected transactions and their respective proposed annual caps have been conducted on normal commercial terms or on terms no more favorable than those available to independent third parties and were entered into in the ordinary and usual course of business of the Bank, are fair and reasonable and in the interests of the Bank and the Shareholders as a whole. An Independent Board Committee has been formed to advise the Independent Shareholders in connection with the terms of the annual caps for the continuing connected transactions under the CITIC Bank and CITIC Group Asset Transfer Framework Agreement and CITIC Bank and CITIC Group Wealth Management and Investment Service Framework Agreement. An independent financial adviser will be appointed in due course to advise the Independent Board Committee on the above. DESPATCH OF CIRCULAR A circular containing, among other things, (i) details of the continuing connected transactions under the CITIC Bank and CITIC Group Asset Transfer Framework Agreement and CITIC Bank and CITIC Group Wealth Management and Investment Service Framework Agreement; (ii) a letter from the independent financial adviser to the Independent Board Committee and the Independent Shareholders containing its advice on the annual caps for the continuing connected transactions under the CITIC Bank and CITIC Group Loan Asset Transfer Framework Agreement and CITIC Bank and CITIC Group Wealth Management and - 2 -

3 Investment Service Framework Agreement; and (iii) the recommendation of the Independent Board Committee in respect of the annual caps for the continuing connected transactions under the CITIC Bank and CITIC Group Asset Transfer Framework Agreement and CITIC Bank and CITIC Group Wealth Management and Investment Service Framework Agreement, together with a notice to convene the AGM will be dispatched to Shareholders in accordance with the Hong Kong Listing Rules as soon as practicable. 1. CONTINUING CONNECTED TRANSACTIONS WITH CITIC GROUP 1.1 BACKGROUND AND GENERAL INFORMATION ON THE BANK AND CITIC GROUP AND ITS ASSOCIATE We are a competitive and fast growing national commercial bank in China with a strong and established branch network and market position. With our market leading capabilities, we provide a full range of financial products and services to our customers nationwide, with corporate banking, personal banking and treasury capital market operations being our principal business activities. We conduct transactions with our connected persons, including CITIC Group and its associates, in the ordinary and usual course of our business and on normal commercial terms. The main connected persons from CITIC Group with whom we conduct our businesses include but not limited to: CITIC Group is a state-owned transnational holding conglomerate established in the PRC pursuant to the approval of the State Council of the PRC. Members of CITIC Group conduct businesses in banking, securities, trust, insurance, fund management and other financial service industries as well as information technology, energy, manufacturing and other industries. CITIC Group is our substantial Shareholder and therefore, is our connected person pursuant to Rule14A.11(1) of the Hong Kong Listing Rules. CITIC Limited was incorporated in December 2011, jointly established by CITIC Group, with most of its operational net assets as its contribution, and its wholly-owned subsidiary Beijing CITIC Enterprise Management Corporation. CITIC Limited is an associate of CITIC Group, and therefore is our connected person pursuant to 14A.11(4) of the Hong Kong Listing Rules. CITIC Holdings is a holding company established by CITIC Group with the approval of the State Council of the PRC and the authorization of People s Bank of China to supervise, and invest in, domestic and overseas financial enterprises. As entrusted by CITIC Group, CITIC Holdings is fully in charge of the overall management of the financial enterprises or institutions in which CITIC Group have invested, including banks, securities companies, insurance companies, trust companies, asset management companies, futures trading companies, funds and credit card companies. CITIC Holdings enhances business cooperation, information communication, resource sharing and risk management among CITIC Group s financial subsidiaries through playing its roles in organization, coordination, services, conciliation and supervision. In this way, it ensures the promotion of the integrated CITIC Group financial service brand and enhances the overall advantages of all the subsidiaries under CITIC Group, and provides a full range of services to both domestic and overseas customers. CITIC Holdings is an associate of CITIC Group, and therefore is our connected person pursuant to Rule14A.11 (4) of the Hong Kong Listing Rules

4 CITIC Securities is one of the first group of securities companies in the PRC that was approved by China Securities Regulatory Commission to conduct securities business. Its principal businesses include securities brokerage, securities trading, securities underwriting, proprietary trading, asset management and investment advisory services. The ordinary shares of CITIC Securities are listed and traded on the Shanghai Stock Exchange and the Hong Kong Stock Exchange. CITIC Trust is a limited liability company established in the PRC. Its principal businesses include trust asset management, financial advisory and private equity investment fund management. CITIC Trust is an associate of CITIC Group, and therefore is our connected person pursuant to Rule14A.11(4) of the Hong Kong Listing Rules. CITIC Prudential Life is a joint venture life insurance company established by CITIC Group and Prudential plc in the PRC. CITIC Prudential Life is the first Chinese-British joint venture life insurance company in China. Its principal businesses include the promotion and sales of various insurance products covering protection, savings, investment, pension and medical care and the provision of wealth management services. CITIC Prudential Life is an associate of CITIC Group, and therefore is our connected person pursuant to Rule14A.11(4) of the Hong Kong Listing Rules. CITIC Funds is a limited liability company established in the PRC. Its principal businesses include asset management service, investment advisory and financial management service. CITIC Funds is an associate of CITIC Group, and therefore is our connected person pursuant to Rule14A.11(4) of the Hong Kong Listing Rules. CITIC CP is a joint venture asset management company established by CITIC Trust and CITIC Prudential Fund in the PRC. Its principal businesses include asset management for special clients and other services that are permitted by the Securities & Futures Commission. CITIC Asset Management is an associate of CITIC Group, and therefore is our connected person pursuant to Rule14A.11 (4) of the Hong Kong Listing Rules. CITIC Prudential Fund is joint venture fund management company established by CITIC Trust, Prudential Plc and Suzhou Industrial Park development Group. CITIC Prudential Fund is an associate of CITIC Group, and therefore is our connected person pursuant to Rule14A.11 (4) of the Hong Kong Listing Rules. CITIC Asset Management is a limited liability company established in the PRC. Its principal businesses include asset management, short-term pawning, financial leasing, commercial factoring and private equity investment. CITIC Prudential Fund is an associate of CITIC Group, and therefore is our connected person pursuant to Rule14A.11(4) of the Hong Kong Listing Rules. CITIC Networks is a limited liability company established in the PRC. Its principal businesses include development of application software, system integration, IT services and IT-related consulting services. CITIC Networks is an associate of CITIC Group, and therefore is our connected person pursuant to Rule14A.11 (4) of the Hong Kong Listing Rules. Beijing Honglian is a limited liability company established in the PRC. It owns several permits for the operation of national telecommunication businesses and resources of special service numbers granted by the ministry of industry and information technology (MIIT) and - 4 -

5 mainly operates value-added telecommunications business. Its business scope includes project outsourcing of call center services by providing systems, equipment, premises and staff, consultancy services, training services, digital information services, marketing consultancy services and interactive marketing services. Beijing Honglian is an associate of CITIC Group and, therefore, is our connected person pursuant to Rule14A.11 (4) of the Hong Kong Listing Rules. Guangdong Honglian is a limited liability company established in the PRC. Its main business includes telephone information services, services, development of telecommunications technology, sale of telecommunications products, connection of computerized information network to international network, domestic commerce, commodity supply and sale (excluding goods under exclusive operational rights, special control or exclusive sales agreements), production of interactive television programme ordering device (operated with approval of construction project environmental influence review), lease of self-owned premises, real estate brokerage, concurrent agency of automobile, health, and life insurance (operated with a license of concurrent insurance brokerage), labor dispatch, and call center business (operated with value-added telecommunication business operation permit). Guangdong Honglian is an associate of CITIC Group and, therefore, is our connected person pursuant to Rule14A.11 (4) of the Hong Kong Listing Rules. CITIC Guoan is a wholly-owned subsidiary of CITIC Group, and its business include information industry (such as investing and operating cable television, telecommunication value-added services, satellite communication, network system integration, software development and advertising), tourism and real estate, high technology and resources development, etc. It is a sustainably developing comprehensive large-scale enterprise group and one of the largest industrial subsidiaries of CITIC Group. CITIC Guoan is an associate of CITIC Group and therefore, is our connected person pursuant to Rule14A.11(4) of the Hong Kong Listing Rules. 1.2 CONTINUING CONNECTED TRANSACTIONS (1) CITIC Bank and CITIC Group Third-Party Escrow Service Framework Agreement Description of the transaction We entered into the Third-Party Escrow Service Framework Agreement with CITIC Group on 11 August 2010, pursuant to which the service provider offers third party escrow services to the service recipient in connection with the transaction settlement funds of the customers of securities companies. The agreement expired on 31 December In light of the expiry of the Third-Party Escrow Service Framework Agreement, the Bank entered into the CITIC Bank and CITIC Group Third-Party Escrow Service Framework Agreement on 27 March The CITIC Bank and CITIC Group Third-Party Escrow Service Framework Agreement has a term of 1 year and expiring on 31 December 2014, and is renewable subject to the agreement of the parties and compliance with the Hong Kong Listing Rules. In accordance with the Securities Law of People's Republic of China, the Bank establishes ledger accounts with details of securities transaction settlement funds for the securities investment customers shared by the securities companies and the Bank, conducts the directed - 5 -

6 transfers of transaction settlement funds of customers between banks and securities companies, provides services to securities companies for their funds transfer and settlement with registration and settlement companies and other settlement subjects, monitors customers transaction settlement funds and verifies the total amount of such funds against the ledger accounts, thereby monitoring the safety and security of customers transaction settlement funds. Principal terms of the CITIC Bank and CITIC Group Third-Party Escrow Service Framework Agreement The principal terms of the CITIC Bank and CITIC Group Third-Party Escrow Service Framework Agreement are set out as follows: To provide third-party escrow services in connection with the transaction settlement funds of the customers of different securities companies. The service recipient shall, and shall procure its associates to, pay service fees to the service provider with respect to the third-party escrow services we provide if appropriate. The services to be provided under the agreement include but not limited to fund transfer, payment of interest and other settlement-related matters. The custody services to be provided by the third party under the agreement shall be made on terms no more favorable than those available to comparable independent third parties. Pricing The normal scale of service fees charged by the Bank for third-party escrow services are based on the total balance of the customers accounts under management as at the end of each quarter multiplied by the annual rate ranging from 0.5% to 2.7% (which is to be converted into a daily rate.) The service rate is determined based on the market prevailing prices and is subject to re-pricing on a periodic basis Historical amounts and proposed annual caps Actual Historical Amount for the Year ended 31 December (RMB in millions) Proposed Annual Cap for the Year ending 31 December (RMB in millions) Amount of service fees

7 Basis for the proposed cap In arriving at the above annual caps, the historical information and the following factors have been considered: (1) after the global financial crisis, the domestic capital market in PRC is expected to grow along with the recovery and development of China s economy; (2) the demand for PRC enterprises and individuals to invest in capital market and engage in securities transactions are expected to grow along with the market recovery and development. The cumulative volume of stock transactions in the securities market of China in 2013 amounted to approximately RMB trillion, increasing by 49% compared to that in 2012 in the amount of RMB billion; (3) the Bank will continue to vigorously promote the development of its third-party escrow business for the customers securities transactions funds based on the market conditions. The Bank is expecting the relevant business to maintain a reasonable growth; and (4) the development room for third-party escrow services of the Bank has been further expanded along with the maturity and development of margin trading and short-selling business in the securities industry. Requirements of the Hong Kong Listing Rules As the annual caps for the third-party escrow services under the CITIC Bank and CITIC Group Third-Party Escrow Framework Service Agreement do not exceed 5% of each of the applicable percentage ratios as set forth in the Hong Kong Listing Rules on an annual basis, such services constitute the connected transactions under Rule 14A.34 of the Hong Kong Listing Rules and are subject to the reporting and announcement requirements set out in Rules 14A.45 to 14A.47 and the annual review requirement set out in Rules 14A.37 and 14A.38 of the Hong Kong Listing Rules. (2) CITIC Bank and CITIC Group Asset Custody Service Framework Agreement Description of the transaction The asset custody business conducted between the Bank, the CITIC Group and its associates covers safekeeping for financial assets and/or funds, settlement, evaluation, investment monitoring and information disclosure. As an important intermediary business of commercial banks, the revenue derived from asset custody business has become a significant source of non-interest income of the Bank. In the meantime, third-party supervising services are conducted between the Bank, the CITIC Group and its associates for supervision of the goods due to enterprise financing so that relevant service fees are payable by the service recipient to the service provider. In light of the expiry of the Asset Custody Service Framework Agreement, the Bank entered into the CITIC Bank and CITIC Group Asset Custody Service Framework Agreement with CITIC Group on 27 March 2014, pursuant to which the Bank, the CITIC Group and its associates provides services relating to the safekeeping for financial assets and/or any other asset custody services and third-party supervising services. The CITIC Bank and CITIC Group Asset Custody Service Framework Agreement has a term of 1 year and will expire on 31 December 2014, and is renewable subject to the agreement of the parties and compliance with the Hong Kong Listing Rules

8 Principal terms of the CITIC Bank and CITIC Group Asset Custody Service Framework Agreement The principal terms of the CITIC Bank and CITIC Group Asset Custody Service Framework Agreement are set out as follows: The Bank, the CITIC Group and its associate(s) agree to provide asset custody services in connection with their financial assets and/or funds, including but not limited to, fund assets (including securities investment funds), assets of securities dealers, trust assets, wealth management products, assets of insurance dealers, equity investment funds, enterprise annuities, QDII, QFII, social insurance funds, welfare plan, funds of third-party transaction as well as the account management services.. The service recipient shall, and shall procure its associates to, pay custody fees to the service provider with respect to the asset custody services we provide. The CITIC Group and its associate(s) agree to conduct third-party supervising services with the Bank. The service recipient will pay the service fee. The asset custody services, account management services and third-party supervising services to be provided shall be made on terms not more favorable than those available to comparable independent third parties. Pricing The following factors have been considered in the determination of custody fees payable by the service recipient: (1) the relevant market price. Although the current custody service fees charged by the Bank vary for different types of goods under custody, they are similar to those charged by our competitors in the market; (2) the categories of assets and/or capital under custody. The Bank enters into differentiated custody agreements in regards of different types of assets and/or capital under custody, and the specific custody fees are set out in the respective agreements; (3) The Bank takes various factors into consideration and make timely adjustments accordingly. The Bank determines custody fees based on various factors such as regulatory requirements, market strategy, customer demand, cost structure and content of services. The Bank will also conduct annual review and adjust the custody fees based on the level of industry risk and the fluctuation of the market price charged by our competitors in the market. Historical amounts and proposed annual cap Actual Historical Amount for the Year ended 31 December (RMB in millions) Proposed Annual Cap for the Year ending 31 December (RMB in millions)

9 Amount of service fees Basis for the proposed cap In arriving at the above caps, the Directors have considered the historical figures for similar transactions, have taken into account the current cooperation between the Bank and CITIC Group and its associates in asset custody and third-party supervision business, and analyzed the current status of such business and their expected future development. The cooperation between the Bank and CITIC Group and its associates in asset custody and third-party supervision business have been very close till now. The Bank expects that the PRC economy will recover very soon and maintain a fast growth thereafter, and investment market will become active again. The goods-financing-related business will steadily develop in the future. The cooperation between the Bank and its connected persons in asset custody and and thirdparty supervision businesses will recover gradually and maintain a corresponding growth along with the development of PRC economy. Requirements of the Hong Kong Listing Rules As the annual cap for the transactions stipulated in the CITIC Bank and CITIC Group Asset Custody Service Framework Agreement do not exceed 5% of each of the applicable percentage ratios as set forth in the Hong Kong Listing Rules on an annual basis, such services constitute the connected transactions under Rule 14A.34 of the Hong Kong Listing Rules and are subject to the reporting and announcement requirements set out in Rules 14A.45 to 14A.47 and the annual review requirement set out in Rules 14A.37 and 14A.38 of the Hong Kong Listing Rules. (3) CITIC Bank and CITIC Group Financial Consulting and Asset Management Service Framework Agreement Description of the transaction We entered into the CITIC Bank and CITIC Group Financial Consulting and Asset Management Service Framework Agreement with CITIC Group on 27 December 2012, pursuant to which the Bank provides financial consulting and assets management services to CITIC Group and its associates in its ordinary and usual course of business. The agreement expired on 31 December We entered into a new CITIC Bank and CITIC Group Financial Consulting and Asset Management Service Framework Agreement with CITIC Group on 27 March The agreement has a term of 1 year and will expire on 31 December 2014, and is renewable subject to the consent of the parties and the compliance with the Hong Kong Listing Rules. Principal terms of the CITIC Bank and CITIC Group Consulting and Asset Management Service Framework Agreement The principal terms of the CITIC Bank and CITIC Group Financial Consulting and Asset Management Service Framework Agreement are set out as follows: - 9 -

10 The Bank agrees, during the ordinary and usual course of business, to conduct the following services with CITIC Group and its associates including but not limited to 1) bond underwriting services; 2) financing and financial consulting services; 3) financial product agency sales services and 4) asset securitization underwriting. The service recipient shall, and shall procure its associates to, pay service fees to the service provider with respect to the services it provide (if applicable). The services to be provided under the agreement shall be made on terms no more favorable than those available to comparable independent third parties. Pricing Considering the different types of services to be provided by the Bank, the parties will determine the scope of services, service rate and method of payment under individual service agreements according to the prices of various services under the CITIC Bank and CITIC Group Financial Consulting and Asset Management Service Framework Agreement. Specifically, the service fees will be calculated based on the scale of services provided, charging rate, as well as the term of service, and shall be no favorable than the price offered to any independent third parties. Historical amounts and proposed annual cap Actual Historical Amount for the Year ended 31 December (RMB in millions) Proposed Annual Cap for the Year ending 31 December (RMB in millions) Service Fees Basis of the proposed cap In arriving at the above annual cap, the Directors have considered the historical figures for similar transactions and have taken into account the following factors: (1) the development of China s economy and capital market will present continuous growth on demand for the investment consulting services, financing services and asset management services by CITIC Group and its associates in their ordinary and usual course of business; (2) as the era of macro capital management has arrived, the Bank's cooperation with its connected persons in the fields of trust and securities in regards to assets management business will consistently expand and strengthen, including providing service such as agency sale of various management plan or trust plan in regards to trusts, funds, and specialized capital, or codesigning various kinds of assets management products with its connected person; and (3) based on the development of the market and customer's needs, the Bank will expand new

11 room for cooperation with its connected persons including securities, trust, capital and industry funds on such high-yield business in 2014, such as corporate equity financing and private equity fund, achieving relatively rapid growth of revenue. Requirements of the Hong Kong Listing Rules As each of the applicable percentage ratios of the annual cap for the services under the CITIC Bank and CITIC Group Financial Consulting and Asset Management Service Framework Agreement does not exceed 5% as set forth in the Hong Kong Listing Rules on an annual basis, such services constitute continuing connected transactions under Rule 14A.34 of the Hong Kong Listing Rules and are subject to the reporting and announcement requirements set out in Rules 14A.45 to 14A.47 and the annual review requirement set out in Rules 14A.37 and 14A.38 of the Hong Kong Listing Rules. (4) CITIC Bank and CITIC Group Capital Transactions Framework Agreement Description of the transaction The Bank entered into the CITIC Bank and CITIC Group Capital Market Transactions Framework Agreement with the CITIC Group on 27 December 2012, pursuant to which the Bank and CITIC Group and its associates conduct capital transactions in their ordinary and usual course of business in accordance with applicable normal market practices and on normal commercial terms. The agreement expired on 31 December To regulate these on-going transactions, the Bank entered into a new CITIC Bank and CITIC Group Capital Market Transactions Framework Agreement with the CITIC Group on 27]March 2014, pursuant to which the Bank and CITIC Group agreed to conduct capital transactions in their ordinary and usual course of business in accordance with applicable normal market practices and on normal commercial terms. The CITIC Bank and CITIC Group Capital Transactions Framework Agreement has a term of 1 year and will expire on 31 December 2014, and is renewable subject to the agreement of the parties and the compliance with the Hong Kong Listing Rules. The principal terms of the CITIC Bank and CITIC Group Capital Market Transactions Framework Agreement are summarized as follows: Transactions covered under the CITIC Bank and CITIC Group Capital Transactions Framework Agreement include: Capital and metal business, including but are not limited to, foreign currency transactions, inter-bank loan capital, precious metal and derivatives transactions, precious metal leasing settlement agency and bonds investment etc. Pricing The transactions under the CITIC Bank and CITIC Group Capital Market Transactions Framework Agreement will adopt the prevailing market prices or rates normally applicable to transactions conducted with independent third parties. Specifically, the prices adopted in the trading of foreign exchange and precious metal, leasing of precious metal, trading in currency market and trading of bonds shall be determined based on the market prevailing prices; the prices adopted in bond agency and settlement business shall be determined based on the

12 general regulations of the industry; and the prices adopted in the transactions of financial derivative business shall be determined based on the market performance of the traded products, the publicly available market price, as well as the management requirements for various risks by the Bank. Historical amounts and proposed annual caps Actual Historical Amount for the Year ended 31 December (RMB in millions) Proposed Annual Cap for the Year ending 31 December (RMB in millions) Net Trading Gains/Losses ,500 Fair Value Recorded as Assets ,300 Fair Value Recorded as Liabilities ,300 Note: The net trading gains/losses as set forth in the accounts above are negative, mainly because the Bank and CITIC Group and its subsidiaries conducted businesses including agency re-purchase and derivatives of Reminbi exchange rate, and gain revenue arising from interest margin through further transactions with other competitors in the market. The interest paid by the Bank to CITIC Group is only the reflection of the gains/losses of an unilateral transaction, and does not reflect the gains arising from overall transactions by the Bank. Basis for the proposed cap In arriving at the above caps, the Directors have considered the historical figures for the transactions of the same type as well as the growing trend of the businesses in the domestic financial market. On the one hand, the tradable types, scale of transactions, the activeness of participants and transactions will increase significantly, and the types and scale of the businesses in financial market conducted by the Bank and CITIC Group and its subsidiaries will increase accordingly; on the other hand, the establishment of private enterprises will create more cooperation opportunities in cross-border finance, cross-market products, as well as cross-industry service. Requirements of the Hong Kong Listing Rules

13 As each of the applicable percentage ratios of the annual caps for the continuing connected transactions to be entered into by the Bank and CITIC Group pursuant to the CITIC Bank and CITIC Group Capital Market Transactions Framework Agreement exceeds 5% as set forth in the Hong Kong Listing Rules on an annual basis, such transactions constitute connected transactions of the Bank under Rule 14A.16(5) of the Hong Kong Listing Rules and are subject to the reporting and announcement requirements and the Independent Shareholders' approval requirement under the Hong Kong Listing Rules. (5) CITIC Bank and CITIC Group Comprehensive Service Framework Agreement Description of the transaction To enhance our management of connected transactions of similar types, we entered into a CITIC Bank and CITIC Group Comprehensive Service Framework Agreement with CITIC Group on 27 December 2012 to cover both technology services and business support services, pursuant to which CITIC Group and its associates will provide various technology services and business support services in the ordinary and usual course of our business. In light of the expiry of the Comprehensive Service Framework Agreement on 31 December 2013, the Bank entered into the CITIC Bank and CITIC Group Comprehensive Service Agreement with CITIC Group on 27 March 2014, with call center service and property leasing integrated. The agreement has a term of 1 year and will expire on 31December 2014, and is renewable subject to the agreement of the parties and the compliance with the Hong Kong Listing Rules. The principal terms of the CITIC Bank and CITIC Group Comprehensive Service Framework Agreement are set out as follows: The CITIC Bank and CITIC Group and its associates conducted the following services, including but not limited to: medical insurance and enterprise annuity; merchandise procurement; outsourcing services; advertising services; technology related services; call center service and property leasing. Both parties of the agreement shall provide the services prescribed in the agreement. The service recipient shall pay the service fees to the service provider with respect to the technology services and business support services they provide. The service fees shall be made on terms no more favorable than those available to comparable independent third parties. Pricing Services under the CITIC Bank and CITIC Group Comprehensive Service Framework Agreement will adopt the prevailing market prices or rates normally applicable to transactions conducted with independent third parties. The parties agree to determine price and rate applicable to a particular type of service through arm s length negotiations and based on the applicable prevailing market prices or rates. Historical amounts and proposed annual cap

14 Actual Historical Amount for the Year ended 31 December (RMB in millions) Proposed Annual Cap for the Year ending 31 December (RMB in millions) Service fees (Expenditure/Income) Basis for the proposed cap For the purpose of better internal management, the Bank merged its original property leasing and call center outsourcing business into the Comprehensive Services Framework Agreement, and at the same time added procurement service to provide individual customers with valueadded services such as point redemption, as a result of which the cap for comprehensive services has significantly increased. In arriving at the above annual caps, the Directors have considered the historical figures for similar transactions and have taken into account the following factors: (1) our business development demand for technology services, business support services, outsourcing business, product procurement services, advertisement services, value-added services, and property leasing; and (2) the volume of various comprehensive services such as technology services and business support services provided by CITIC Group and its associates will maintain stable increase in the future. Requirements of the Hong Kong Listing Rules As each of the applicable percentage ratios of the annual caps for the services to be provided pursuant to the CITIC Bank and CITIC Group Comprehensive Service Framework Agreement does not exceed 5% as set forth in the Hong Kong Listing Rules on an annual basis, such services constitute the continuing connected transactions under Rule 14A.34 of the Hong Kong Listing Rules and are subject to the reporting and announcement requirements set out in Rules 14A.45 to 14A.47 and the annual review requirement set out in Rules 14A.37 and 14A.38 of the Hong Kong Listing Rules. (6) CITIC Bank and CITIC Group Asset Transfer Framework Agreement Description of the transaction The Bank and our branches enter into various transactions with external parties, such as other financial institutions (including CITIC Group and its associates), in which we buy and sell interest in loan and other related assets from and to the external parties. In light of the expiry of the Loan Asset Transfer Framework Agreement with CITIC Group, we entered into the CITIC Bank and CITIC Group Asset Transfer Framework Agreement with CITIC Group on 27 March The CITIC Bank and CITIC Group Asset Transfer

15 Framework Agreement has a term of 1 year and will expire on 31 December 2014, and is renewable subject to the agreement of the parties and the compliance with the Hong Kong Listing Rules. Principal terms of the CITIC Bank and CITIC Group Asset Transfer Framework Agreement The principal terms of the CITIC Bank and CITIC Group Asset Transfer Framework Agreement are set out as follows: The Bank in the course of business buy from or sell to CITIC Group and its associates loan and other related assets (including but not limited to directly or through assets management plan, assets securitization or through factoring or any other form to transfer company and retail loan assets, and inter-bank loan receivables) The transactions to be conducted by the Bank pursuant to the CITIC Bank and CITIC Group Asset Transfer Framework Agreement shall be made on terms no more favorable to CITIC Group and its associates than those available to comparable independent third parties. The agreement shall specify the management rights of the loan and other related assets. The Bank and CITIC Group and its associates shall undertake confidentiality in respect of loan asset transfer transactions. Pricing The price payable by the transferee to the transferor shall be determined on the basis of the following principles: the statutory or guidance prices prescribed by the PRC government; where there is no government-prescribed price or guidance price, the market prices shall prevail; and where there is no such government-prescribed price or guidance price or market price, the price shall be determined by the book value of the assets to be transferred after appropriate discounting to reflect the appropriate risks of the assets to be transferred. The exact terms such as the price, amount, total consideration and their satisfaction for the relevant asset transfer are determined when specific agreements are entered into under the CITIC Bank and CITIC Group Asset Transfer Framework Agreement. The Bank undertakes the following internal procedures to ensure the terms of the CITIC Bank and CITIC Group Asset Transfer Framework Agreement obtained by the Bank from CITIC Group will be no less favorable than those available from/offered to independent third parties. The Bank will compare the market prevailing prices for various financial products with comparable duration, interest rates, securities, as well as other terms and conditions to set fair and reasonable price

16 Historical amounts and proposed annual cap Actual Historical Amount for the Year ended 31 December (RMB in millions) Proposed Annual Cap for the Year ending 31 December (RMB in millions) Amount of Transaction ,457 47,100 Basis for the proposed cap In arriving at the above caps, the Directors have considered the historical figures for similar transactions and have taken into account the following factors: (1) the business scale for the previous year, the expectation for the market financing demand, and the annual work plan of the Bank; (2) as influenced by the "consistent implementation of stable currency policy", which was commenced in 2013 by the People's Bank of China, the growth of credit supply decreases gradually in domestic market, while the market demand for financing remains high, and the loan interest rate keeps increasing. The securitization of credit assets business will become a key solution for the current limited liquidity and credit supply; (3) CITIC Group and its associates have a strong capacity to absorb the loan assets transferred by the Bank. Based on this, the Bank expects the volume of the loan asset transfer transactions between the Bank and CITIC Group and its associates to increase steadily in the near future. (4) In line with the innovative development of the inter-bank products on the market, the Bank anticipates that the interbank asset transfer business of the Bank will have a breakthrough in the several years ahead. Under this presumption, assets transfer business of the Bank will be conducted in the Bank's ordinary and usual course of business, based on which, the Bank will actively research other business model, including asset securitization, in order to ensure the asset scale of the Bank will have a rapid growth. Requirements of the Hong Kong Listing Rules As the annual cap for the loan asset transfer transactions under the CITIC Bank and CITIC Group Asset Transfer Framework Agreement exceed 5% of the applicable percentage ratio as set forth in the Hong Kong Listing Rules on an annual basis, such transactions constitute the non-exempted continuing connected transactions under Rule 14A.16(5) of the Hong Kong Listing Rules and are subject to the reporting, announcement and independent shareholders approval requirements under the Hong Kong Listing Rules. (7) CITIC Bank and CITIC Group Wealth Management and Investment Service Framework Agreement Description of the transaction

17 In order to satisfy the investment need, we entered into a new CITIC Bank and CITIC Group Wealth Management and Investment Service Framework Agreement with CITIC Group on 27 March In light of the expiry of the Wealth Management Service Framework Agreement with CITIC Group on 31 December 2013, we entered into the CITIC Bank and CITIC Group Wealth Management and Investment Service Framework Agreement with CITIC Group on 27 March 2014, which involves principal-guaranteed and non principal-guaranteed wealth management services, agent services and investment on financial products with the Bank's own funds. The CITIC Bank and CITIC Group Wealth Management and Investment Service Framework Agreement has a term of 1 year and will expire on 31 December 2014, and is renewable subject to the agreement of the parties and the compliance with the Hong Kong Listing Rules. The principal terms of the CITIC Bank and CITIC Group Wealth Management and Investment Service Framework Agreement are set out as follows: The Bank agrees to provide wealth management and investment services to CITIC Group and its associates, including principal-guaranteed wealth management services, non principal-guaranteed wealth management services and agent services and agrees to invest on financial products with its own funds; and associates of CITIC Group will provide the Bank with financial intermediary services, including trust services and management services. CITIC Group shall, and shall procure its associates to, pay service fees to the Bank with respect to the wealth management services that the Bank provides. The Bank shall also pay service fees to associates of CITIC Group with respect to the financial intermediary services they provide. The wealth management services to be provided by the Bank and the financial intermediary services to be provided by associates of CITIC Group shall be made on terms no more favorable than those available to comparable independent third parties. Pricing As to the pricing mechanism of the for the wealth management and investment service, the Bank obtains the then prevailing market prices of financial products through such channels as financial advisor terminal and (China Banking Wealth Management) of China Banking Association on a periodic basis, and calculates a competitive prices taking into consideration the demand for financial service provided by financial products together with the its cost. When entering into the specific service agreement, the parties will determine the prices of the financial products no more favorable than CITIC Group and its subsidiaries according to the type and scope of service of the financial products through arm's length negotiation between the parties, and also make real-time adjustment according to the changes of market price. The Bank undertakes the following internal procedures to ensure the terms of the CITIC Group Wealth Management and Investment Service Framework Agreement obtained by the Bank from CITIC Group will be no less favorable than those available from/offered to independent third parties. The Bank will conduct pricing enquiry process to select the favourable price and terms, or solicit several other contermporanous transactions with

18 unrelated third parties for products in similar quantities to determine if the price and terms offered by a connected person are fair and reasonable and comparable to those offered by independent third parties. Historical amounts and proposed annual cap Actual Historical Amount for the Year ended 31 December (RMB in millions) Proposed Annual Caps for the Year ending 31 December (RMB in millions) Non-principal-guaranteed wealth management services & agency banking service Service Fees ,600 Principal-guaranteed wealth management and investment services Proceeds & Cost (Bank Investment) ,300 Daily maximum balance Investment of ,000 Basis of the proposed caps In arriving at the above annual caps, the Directors have considered the historical figures for similar transactions and have taken into account the following factors: (1) along with the deep reforming of the PRC investment and financing system, the direct financing market develops prosperously, and the awareness of risk and the tolerance against risks in the securities market, financial business market, and life insurance market has been constantly improved. Wealth management business has come to an age of mature development; (2) the demand by CITIC Group and its associates for wealth management services are expected to increase. CITIC Group covers a wide range of industries and owns a large scale base. The internal members of CITCI Group have strong demand in increasing the

19 value of their laid up capital. In addition, a certain well managed enterprises also has a large demand of capital, all of which lead to huge room in the developing of transaction resources. (3) there are many non-banking financial enterprises inside the CITIC Group, which rank high in their own sections. These large-scale enterprises act actively in the market, which will deepen the cooperation with non-banking financial enterprises inside the CITIC Group in the coming several years, and will definitely have a significant growth in terms of transaction volume. The scope of financial business will include investments in the financial products (including trust scheme, beneficiary right of trust, assets management scheme of securities companies and the specific scheme of funds) issued or formed by such financial institutions as securities companies, funds, insurance companies and trusts; (4) in the past years, the Bank developed relatively slowly in the field of proprietary capital investment financial product business and had a small base. Considering from the aspects of reasonable arrangement of capital, diversified investment of capital, safety of investment as well as increase of capital income, the Bank will enlarge the scale of this business in the coming several years. (5) The Bank has a sufficient knowledge of and confidence for the quality of the assets of related parties, and will try to have more of the existing proprietary capital invested the financial products with a structure of good quality. Taking into consideration the factors mentioned above, the Bank used the daily maximum balance of the principal of the investment products held by the Bank, rather than the annual aggregated transaction amount as the basis for the annual cap. The reasons and basis for such approach are: 1) Given that when the price is fair and refunding may increase efficiency of the Bank's funds before the maturity date of such investment products, the Bank may transfer the financial investment products purchased from its connected persons to third parties before the maturity date and use the returned principal and returns to purchase new financial investment products. On such rolling basis, the actual risk exposed to the Bank for this investment business is the maximum balance of principal instead of the annual aggregate amount, which cannot reflect the actual position and risk exposure of such transaction borne by the Bank as a result. Therefore our Directors are of the view that the daily maximum balance of the principal of the Investment Products held by the Bank, rather than the annual aggregated transaction amount should be deemed as the basis for the annual cap. In addition, taking the daily maximum balance as the basis of connected transaction is in line with the accounting treatment approach. 2) It is difficult to estimate the aggregate amount of the financial investment products purchased and sold because the transfer of the investment products is dependent on the conditions of the capital market which is beyond the control of the Bank. Any change in demand for the financial products in the capital market and the quick change in the market conditions, such as the changes in macroeconomic condition, official interest rate, liquidity of the market, foreign exchange rate and financial regulatory framework, will necessarily result in significant increase or decrease of the trading volume of investment products as well as the market price, duration, terms and conditions thereof. 3) It is very likely that the actual amount of the aggregated transaction amount of the purchase of the investment products deviates from the annual caps set beforehand. In particular, in the case that the annual cap is about to be exceeded, the Bank would not be able to purchase any new investment products for several months if the highest applicable ratio calculated under Chapter 14A using the annual caps exceeds 5%, as shareholders meeting would need to be convened to revise the caps and the Bank is required under its articles of

20 association to give not less than 45-day notice to shareholders to convene shareholders meeting. Such delay or suspension in business would have a direct adverse impact on the profitability of the Bank which in turn would be materially detrimental to the interest of the shareholders of the Bank as a whole. In addition, the Independent Financial Adviser is of the view that as the daily maximum balance more properly reflects the counterparty risk faced by the Bank, using aggregate amount in calculating annual cap may be less meaningful or even misleading for Independent Shareholders. The Independent Financial Adviser also noted that daily maximum balance is commonly used by companies listed on the Stock Exchange for financial services involving deposits services provided by connected person, which is similar in nature to purchasing financial investment products from connected persons of the Bank. Reasons for the considerable difference between the historical figures and the proposed caps (1) the applied limits for non-principal-guaranteed wealth management business have increase dramatically, mainly because 1) the Bank's original agency sales business has been consolidated into this business, 2) the Bank anticipates that agency sales business would grow rapidly. Except for the wealth management products, we plan to introduce external institutional products so as to offer more options for customers, which is in line with the guiding principle of customer-orientation; and 3) the products sold / managed by CITIC Group and its associates have established good reputation and industry rankings, which will bring about better investment returns to customers. (2) for daily maximum balance of principal-guaranteed wealth management: we anticipate more cooperation with interbank institutions on sales of wealth management products; interbank institutions are usually of huge size and so is the amount of each such transaction entered into with them, which will result in higher daily balance. (3) for daily maximum balance of investment: the capital demands of CITIC Group and its associates are expected to keep growing steadily and the potential of cooperation with the Bank to meet such demands by issuing relevant wealth management products is expect to be huge; investment on securities dealers, funds, insurance, trust and other products (such as trust plan, trust beneficiary right, asset management plan of securities dealers and special plan of funds) by using the Bank's own capital is rapidly developing, whilst the maturity term of which is relatively short; we anticipate a rapid expansion of such transaction going forward and therefore a higher cap is proposed. Requirements of the Hong Kong Listing Rules The principal-guaranteed wealth management services under the CITIC Bank and CITIC Group Wealth Management and Investment Service Framework Agreement is a connected transaction exempted from the requirement of Independent Shareholders approval under Rule 14A.65(4) of the Hong Kong Listing Rules. Furthermore, as each of the applicable percentage ratios in respect of the proposed annual cap under non-principal-guaranteed wealth management services & agency banking service does not exceed 5%, the nonprincipal-guaranteed wealth management services & agency banking service is only subject to reporting and announcement requirements and is exempted from the Independent Shareholders approval requirement under Chapter 14A of the Hong Kong Listing Rules