In view of a recent report by someone in the media that CCB “saw a 27.26% drop in total profit due to sub-prime losses”, a person-in-charge of the relevant business in CCB held a discussion meeting in which he pointed out that the reporting was inconsistent with the facts.  According to his analysis, the inconsistency was probably caused by mistaking the effects of allowance withdrawals for sub-prime related impairment losses on CCB’s pre-tax profit in its treasury business as the effects on the total profit for CCB.

In CCB’s announcement of its 2007 results, under the section on treasury business, it has been disclosed that, as at December 31st 2007, the pre-tax profit for CCB’s treasury business in 2007 was RMB13,347 million, representing a decline of 27.26% from the previous year, and this decline was mainly caused by factors such as the withdrawal of allowances for impairment losses resulting from the ownership of US sub-prime bonds.

2007 was in fact a bumper year for CCB.  According to international financial reporting standards, as at December 31st 2007, CCB realised a profit before tax of RMB100,816 million, up RMB35,099 million from the previous year or a growth of 53.41%; the net profit achieved was RMB69,142 million, an increase of RMB22,823 million or 49.27%.