In a statement revealed on 12 May 2008, Bank of Ningbo Co. Ltd (002142) denied a rumor regarding Ping An Insurance (Group) Company of China Ltd (601318) will buy a 5% stake in the bank. Being a city-based municipal commercial bank, the bank has high-quality assets, a sound local economic environment and a good credit environment, and analysts say it isn't a surprise that some financial institutions want to buy a stake in Bank of Ningbo. The bank’s equity is relatively well-dispersed, as only two of its top 10 shareholders control more than a 10% stake in the bank. Inflation and RMB appreciation have had an adverse impact on export-oriented enterprises, who were major borrowers of Bank of Ningbo. Analysts thus expect the bank to be exposed to more risks. In its 1Q 2008 Report, the bank presented a 10% increase in non-performing loans in comparison with that at the end of 2007.

Speed of setting up branches and profitability are two important factors while considering investment in city located commercial banks. In comparison with its two competitors, Bank of Beijing Co. Ltd (601169) and Bank of Nanjing Co. Ltd (601009), Bank of Ningbo is lagging behind in setting up branches.

On 8 May 2008 Bank of Ningbo closed at RMB 13.87 per share, down 3.01%.

Source: China Business News

Date: 12 May 2008

CN01/MZ/KM/WH