Operating income rose 17.78% to RMB151.593 billion
(2005: RMB128.714 billion)

Profit before tax rose 18.70% to RMB65.717 billion 
(2005: RMB55.364 billion) 
Adjusted net profit increased 18.02% to RMB46.319 billion（1）
(2005: RMB39.248 billion) 

Return on average assets of 0.92%
(2005: 1.11%) 

Return on average equity of 15.00%
(2005: 21.59%)

Net interest margin of 2.79%
(2005: 2.78%)

Total assets increased by 18.81% to RMB5,448.511 billion
(As at 31st December 2005: RMB4,585.742 billion)

Proposed cash dividend per share for 2006 is RMB0.092
(Final dividend per share for 2005: RMB0.015)  

Capital adequacy ratio of 12.11% （2）
(As at the end of 2005: 13.59% )

Core capital adequacy ratio of 9.92% （2）
(As at the end of 2005: 11.08%)

Cost-to-income ratio of 43.97%
(2005: 45.13%)
Non-performing loan ratio of 3.29%
(As at the end of 2005: 3.84%)

Note: (1)Calculated by excluding the effect of the tax exemption in 2005 granted by the People’s Republic of China (“PRC”) government in relation to the restructuring of the Bank from the net profit. (2) Calculated in accordance with the guideline issued by the China Banking Regulatory Commission (the “CBRC”) and the consolidated financial statements prepared in accordance with the Accounting Standards for Business Enterprises, the Accounting Regulations for Financial Enterprises (2001) and other relevant regulations issued by the Ministry of Finance of the PRC.

Hong Kong, 16 April 2007 – China Construction Bank Corporation (“CCB” or the “Bank“) (Stock Code:0939) today announced its 2006 annual results. 2006 was the first complete year of operations for the Bank after its listing in Hong Kong. In 2006, CCB achieved good operating results by executing resolutions made in the general meeting of shareholder and by the Board of Directors (the “Board”) according to applied laws and regulations, such as “Corporate Law” and “Law on Commercial Banks”, strengthening unity and relying on the efforts of all employees. CCB delivered rapid growth in its business, preliminary positive results from business strategy transformation, significant improvements in operational structure, a gradual progress in reforms, continuous improvements in basic management and internal risk control, a stable enhancement in asset quality, as well as a considerable increase in profitability, fulfilling its commitments to investors and the market. As of 31 December 2006, the total assets of CCB were RMB5,448.511 billion, an increase of RMB862.769 billion or 18.81% from 2005. Capital adequacy ratio was 12.11%. Profit before tax rose by RMB10.353 billion or 18.70% from 2005 to RMB65.717 billion in 2006. The Bank’s earnings per share for 2006 were RMB0.21 (2005: RMB0.24), with return on average assets at 0.92% and return on average equity at 15.00%. The Board has recommended a cash dividend of RMB 0.092 per share for 2006.
Rapid Business Growth and Results in Strategy Transformation
In 2006, CCB not only maintained traditional advantages to drive stable growth in its operations, but also accelerated the transformation of its business strategy and the development of businesses in retail banking, fee-based services, small-sized corporate business and overseas operations. This led to a rapid and comprehensive development in the Bank’s operations and, as a result, set a solid foundation for a faster increase in operating income. During the year, the Bank achieved an operating income of RMB 151.593 billion, an increase of 17.78%, and recorded a net interest income of RMB 140.368 billion, an increase of 20.43%, compared to 2005.

CCB continued to enhance its traditional strengths in the infrastructure loan business and provided great support to infrastructure projects and corporations as well as basic and pillar industries. In addition, the Bank offered its clients a complete set of professional services for project assessment, consultation of project costs and final accounts upon completion of construction. At the end of 2006, the Bank’s fixed assets loan balance was RMB1,038.24 billion, which represented an increase of RMB195.825 billion compared to the beginning of 2006 and accounted for 50.45% of the Bank’s corporate loans.

CCB achieved rapid development in the business of personal-finance services as its standards were further enhanced in its centralized operation, professional sales and marketing activities and operating workflow. Both the balance and the increment for 2006 of personal loans topped those of other Chinese banks. In the residential mortgage business, the Bank launched 10 new repayment services, including new choices of loans and repayment methods to respond to various needs from clients. As of 31 December 2006, the Bank’s personal loan balance rose by 28.90% to RMB585.085 billion, of which the residential mortgage loan balance was RMB428.039 billion, an increase of 22.92% from 2005.

The Bank’s fee-based services showed sound development, where management and sales systems were optimized. CCB maintained its leading position among other banks in China in the credit-card business, and was the first Chinese bank to attain a credit-card (including semi-debit card) circulation above 10 million, of which 6.34 million were dual-currency credit cards, with a total card spending of RMB40.467 billion in 2006. The number of new cards issued and card spending in 2006 doubled those of the preceding year. In the electronic banking business, CCB doubled its business in several major service sectors. The transaction amount of electronic banking reached 30.7 trillion in 2006, representing a year-on-year growth of 227% . Compared with the same period in 2005, the Bank’s international settlement volume grew by 35.05% to US$190.3 billion. Driving the growth of its wealth-management sector with innovations, CCB successfully marketed a series of "Profit from Interest" and "Profit from Exchange" products which attracted a number of premium clients. Furthermore, the launch of services in response to the QDII scheme was a breakthrough in representing clients wishing to manage offshore investments. With a rapid expansion in custodial operations, CCB launched 20 custodial funds in 2006, one of the highest among the players nationwide.
Rapid development was also seen in the Bank’s emerging banking services, as highlighted by the recognition of CCB as one of the first dealers for exchange, settlement and sales among banks in the renminbi business, as well as the receipt of the award of best financing solution for SMEs. CCB secured the largest domestic market share in commercial paper underwriting, recording a total of RMB65.775 billion, an increase of 56.24% over the preceding year. Our customer-driven foreign exchange trading as well as purchases and sales of foreign exchange reached the volume of US$123.3 billion, 27.51% higher than in 2005. Loans to small businesses developed rapidly, reaching a growth of 26.43% while maintaining stringent risk control. It represented healthy development in the Bank’s loan business.
Cautious Operation, Continuous Development and Optimized Asset Structure
Complying with the macro-control measures and industrial policies enforced by the Chinese government, CCB granted loans cautiously in 2006, and optimized structure of its loans. At the end of 2006, loan balance for infrastructure projects and corporations as well as basic and pillar industries was RMB711.456 billion, accounting for 24.76% of the bank’s total loans. In addition, CCB revised its policies of industrial entry and withdrawal, to reduce excessive productivity and potential excess of industrial loans, while allocating repaid loans to demand from borrowers in the infrastructure as well as quality clients. With these structural improvements in its loan business, 83.56% of the Bank’s corporate lending was rated class “A” and above in its internal credit-rating system, advancing 5.70 percentage points when compared with 2005. Meanwhile, the weight of personal loans in all sorts of loans rose by 1.90 percentage points to 20.36%.

Under excessive liquidity, CCB, having been complying regulations for commercial banks, retained its abundant capital as reserves and used it for investment in low-risk products, such as central bank bills and bonds, and prohibited the use of capital in investing the real estate and stock markets, or irregular call loans. At the end of 2006, the Bank’s investment in bonds reached RMB1,899.775 billion, an increment of RMB497.576 billion, or 35.49%, for the year. Incremental bond amount surpassed the amount of loans in 2006.
Innovative Financial Services and Historical High Increment in Intermediary Business
CCB is committed to its “customer-focused” philosophy, establishing an innovation-focused corporate culture with the involvement and co-operation of all of its employees. The Bank developed a professional R&D team, comprise of members from each of its operation units, management and technology departments, and established institutes for the research and development of the personal finance and e-banking businesses. CCB's fee -based services were boosted by its quick response to the market and its capability for innovation. In 2006, the Bank’s net fee and commission income amounted to RMB 13.571 billion, an increase of 60.51% when compared with 2005. With an advance of 2.38 percentage points, this revenue amounted for 8.95% of the total operating income of the Bank.
In the segments of personal finance and wealth management services, CCB was a pioneer, launching a countrywide reminbi business for bank deposits and cash withdrawal, which allows clients to make cash deposits and withdrawals, transfers and account inquiries at any of the Bank's domestic outlets. Through a collaboration with Bank of America, we concluded the free cash withdrawal project at ATMs, and launched direct remittance services, which have benefited customers of both banks. The Bank successfully launched 19 batches of the “Profit from Interest” RMB wealth management products, and 17 batches of  “Profit from Exchange” personal foreign currency deposits products. In addition, CCB acted as a retail agency for the initial offerings of 33 funds in 2006 with a total fund size of RMB64.6 billion, maintaining the largest market share in China.
In corporate finance, CCB developed a settlement business for the equity transfer of non-listed companies, became the first bank to pilot a program in the loan business of standardized warrants, and obtained permission to operate collateral business in the futures exchanges, and was the only bank selected to conduct pilot programs on the third-party custody of settled funds in the B-share market. The Bank’s market competitiveness for asset-management services was further strengthened. In 2006, income from management fees rose by 56% from a year earlier. By engaging in these innovative business sectors, the Bank delivered a 77.42% increase in net fees and commission income to RMB5.635 billion.
Improved Internal Management Reforms and Boost in Management Capability
The Bank progressed in its international management reforms in 2006 to further enhance its risk and cost management ability. As a result, the Bank’s credit and asset quality saw a continuous improvement in 2006, with the amount of non-performing loans dropping by RMB70 million and the non-performing loan ratio dropping by 0.55 percentage points year-on-year. Cost-to-income ratio was 43.97%, down 1.16 percentage points when compared with 2005.

Reforms in risk management helped set up a preliminary framework for a comprehensive risk control system, creating a vertical reporting mechanism that runs from the Chief Risk Officer, to risk supervisors at tier-one and tier-two branches, to risk managers in County branches. A parallel operation system of risk managers and client managers was also established.

Optimization and integration of auditing systems gave rise to eight auditing branches and 30 auditing departments, all of which report directly to the headquarters. The comprehensive auditing system provided substantial important auditing information to the Bank and hence enhanced its auditing standards.

CCB restructured the accounting and operational management by segregating core operations into front and back office functions. Centralized handling of batch businesses at its back-office not only improved the service quality of front-office and increased customer satisfaction by releasing front-office’s sales and servicing ability, but also helped save a large amount of manpower and other resources by boosting the back-office’s ability to handle batch businesses.

The Bank’s headquarters debuted a new round of human resources management system reforms last year. The introduction of post management to the Bank’s original level-based management system marked an important advancement to a market-based human resources management mode. The Bank also actively referred to the latest human resources management methods to reinforce its staff training. In 2006, the Bank offered a total of 7,071 off-the-job training sessions to 402,200 enrolments, boosting the overall quality of its staff force.

New Heights in Strategic Partnership and Overseas M&A

In 2006, CCB enhanced its partnership with two strategic investors, namely Bank of America and Temasek Holdings (Private) Limited (“Temasek”), with milestone results. Among the 20 joint projects with Bank of America that focused on retail banking, risk management and information technology, six were duly completed, showing impressive performance. In addition, 32 improvement measures in staff deployment, business processes, and the branch environment were implemented as part of the Bank’s network transformation project at pilot branches in Jiangsu and Sichuan provinces. As a result, the average daily number of customers at the pilot branches recorded a 25% increase, and the waiting time for 96% of customers was reduced to within 10 minutes. Furthermore, CCB took reference from the management expertise of Bank of America and Temasek in capital transaction and global cash management. The management principles of “Six Sigma” were also introduced and implemented successfully with a collaborative effort.

CCB also achieved a significant breakthrough in overseas expansion. Taking an important leap in its overseas development strategy, CCB acquired Bank of America (Asia) Limited for HK$9.71 billion in 2006, and renamed the bank as “China Construction Bank (Asia) Corporation Limited” in December 2006. After completing the acquisition, CCB successfully doubled the scale of its business in Hong Kong, with its total amount of customer loans jumping from the 16th to the 9th highest in the city. The acquisition also enabled CCB to rapidly build up a retail-banking platform covering Hong Kong and Macau, thus laying a solid foundation for the Bank to enhance its customer service capabilities and market competitiveness in Hong Kong, Macau and Southeast Asia.

Overall Review and Prospects
“Over the past year, while we maintained a healthy growth in our traditional core business as we also actively expanded our retail, international, treasury and wealth management businesses, thus boosting the development of our small-and- medium-sized enterprise business, as well as other emerging business segments,” said Mr. Zhang Jianguo, President of CCB. “This further accelerated our business growth, which, together with the remarkable results in the optimization of our asset, liability and income structures, fulfilled our promises to prospective investors and the market made in our pre-listing roadshow.”
“Looking forward to the coming year, we will persist in our commitment to a ‘customer-focused’ philosophy, with an aim to uplift our management-system reforms, enhance our risk management and internal controls, as well as speed up our business transformation, structural adjustment and product innovation,” said Mr. Guo Shuqing, Chairman of CCB. “Thanks to the support of our customers, shareholders and the community, together with the combined efforts of our Board of Directors, Board of Supervisors, Management and staff force, we are confident that we can leverage upcoming opportunities to strive for even better results.”

Background Information:

The history of the China Construction Bank Corporation (“the Bank”), today one of the four largest commercial banks in China, dates back to 1954 when the People’s Construction Bank of China was founded.  This entity was renamed China Construction Bank in 1996. China Construction Bank Corporation was formed in September 2004 when it separated from its predecessor, China Construction Bank, and assumed its commercial banking business and related assets and liabilities. Headquartered in Beijing, CCB had a network of 13,629 branches and sub-branches in Mainland China as of the end of 2006, and maintained overseas branches in Hong Kong, Singapore, Frankfurt, Johannesburg, Tokyo and Seoul, representative offices in London and New York. The Bank holds 100% interest of China Construction Bank (Asia) Corporation Limited, 75.1% interest of Sino-German Bausparkasse, and a 65% interest in CCB Principal Asset Management Co. Ltd.  It has a total of 297,506 staff.

In July 2006, the Bank was ranked first among all Mainland Chinese banks and 11th among all banks worldwide on the “Top 100 Banks in China” and “Top 1000 World Banks” listings complied by The Banker magazine, based on the tier-one capital of the banks worldwide. It became the first H-share constituent of the Hang Seng Index on September 11, 2006. In November 2006, the Bank was ranked fourth in the “2006 Asian Banks Competitiveness Ranking” jointly announced by 21st Century Business Herald, the Faculty of Business Administration of the Chinese University of Hong Kong, and Guanghua School of Management of Peking University – making it the most competitive bank in mainland China. The Bank also won the “Most Responsible Corporate Citizen in China 2006” in an event hosted by China News Weekly and the Red Cross Society of China Foundation, and was recently named “Best Domestic Bank in China 2006” by the Asset Magazine.

The business of CCB consists of three principal business segments:

-Corporate banking, which provides financial products and services to corporations, government agencies and financial institutions, including corporate loans, trade financing, deposit taking, agency services, consulting and advisory, cash management, remittance, settlement, custody and guarantee services;

-Personal banking, which provides financial products and services to individual customers, including personal loans, deposit taking, bank cards, personal wealth management, remittance and securities agency services; and

-Treasury operations, which manages money market activities, consisting of inter-bank transactions and repurchase transactions; manages our investment portfolio, including securities held for both trading and investment purposes; and conducts trading on behalf of customers, including foreign currency and derivatives trading on their accounts.

Shares of CCB began trading on the Stock Exchange of Hong Kong Limited on 27 October 2005 (Stock Code: 0939).

- End -

Forward Looking Statements

This press release contains certain forward-looking statements regarding the Group's financial condition, operating results and businesses. Such forward looking statements represent the Group's expectations of or beliefs in future events, and involve known or unknown risks and uncertain factors that may lead to material deviations of actual results, performance or events from the results, performance or events explicitly stated or implied in such statements. Certain statements, e.g., those containing words such as "potential”, "estimate", and similar wordings or different expressions of such wording, may all be considered "forward looking statements".