<P><FONT face=黑体 size=5><STRONG>花旗：工商银行－1季度业绩表明07年利润比预期高10％</STRONG></FONT></P>
<P><FONT face=黑体 size=5><STRONG>26 April 2007 | 9 pages</STRONG></FONT></P>
<P><FONT face=黑体 size=5><STRONG>Industrial &amp; Commercial Bank of China(1398.HK)</STRONG></FONT></P>
<P><FONT face=黑体 size=5><STRONG>Hold: 1Q Run Rate Suggests FY07 Profits 10% Higher Than Our Forecast</STRONG></FONT></P>

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<P> 1Q07 results review — Net profit of Rmb18.7bn (IFRS) accounts for 27.6% of<BR>our full-year forecast of Rmb67.8bn. Earnings momentum has clearly picked up<BR>from 2006 with accelerating NIM expansion and fee income growth, continued<BR>declines in the cost/income ratio and stable bad debt charges. If this trend<BR>continues into 2Q, it would pose an upside risk to our forecasts.<BR> Key highlights — NII of Rmb48.1bn was driven by an estimated 14bps increase<BR>in NIM from 2.42% in 2H06, loan growth of 4.6% qoq and deposit growth of<BR>3.3% qoq. Net fee income of Rmb6.5bn represented an annualized growth rate<BR>of 58% (2006: 55%) and accounted for 11.8% (2006: 9%) of operating income.<BR>The costs/income ratio was 35.6% compared with 40.5% in 1H06.<BR> Key highlights continued — The NPL ratio fell to 3.6% from 3.8% in 2006, while<BR>the coverage ratio rose to 74.5% from 70.5%. Bad debt charges of Rmb7.3bn<BR>accounted for 80bps of average loans. The corporate tax rate was 32.4%. Its<BR>tier-1 ratio and CAR were 12% and 13.8%, respectively. ROAE and ROAA rose<BR>to 15.4% and 0.95%, respectively.</P>