China Merchants Bank Co., Ltd.

2007 Results Announcement

March 2008

1

Forward-Looking Statement Disclaimer

This presentation and subsequent discussions may contain forward-looking statements

that involve risks and uncertainties. These statements are generally indicated by the

use of forward-looking terminology such as believe, expect, anticipate, estimate, plan,

project, target, may, will or may be expressed to be results of actions that may or are

expected to occur in the future. You should not place undue reliance on these forward-

looking statements, which reflect our belief only as of the date of this presentation.

These forward-looking statements are based on our own information and on information

from other sources we believe to be reliable. They relate to future events or our future

financial, business or other performance and are subject to a number of uncertainties

that may cause our actual results to differ materially.

2

Agenda

3 Summary

1 Highlights

2 Financial Analysis

3

2007 Snapshot

We achieved record results in 2007

Operating Environment Measures

Continued macroeconomic tightening

policy

Restricted loan growth

6 times interest rate hike in one year

Deposit reserve rate raised from 9% to

14.5%

Accelerated disintermediation

Rapid development of direct financing

Deposits converted into investments

Accelerated appreciation of RMB

Strategic change in business model

bearing fruit

Retail business

Non-interest income business

SME business

Further strengthened the management

of

– ALM

– Credit risk

– Liquidity risk

– FX risk

Breakthrough in business diversification

33.4% stake in China Merchants Fund

Setting up financial leasing company

NY branch approved

NIM expansion due to interest rate

hikes

Strong equity market

Non-interest income business

Inter-bank business

Opportunities

challenges

4

(RMB mn)

Selected Balance Sheet data 2007 2006 % Growth

Total loans 673,167 565,702 19.0%

Investments securities 244,123 178,885 36.5%

Total assets 1,310,552 934,102 40.3%

Customer deposits 943,534 773,757 21.9%

Shareholders' equity 67,984 55,160 23.2%

Selected P&L data 2007 2006 % Growth

Net interest income 33,902 21,509 57.6%

Non-interest income(adjusted) 7,184 3,357 114.0%

Operating income(adjusted) 41,086 24,866 65.2%

Pre-provision operating profit 24,348 13,775 76.8%

Pre-tax profit 21,043 10,084 108.7%

Net profit 15,243 6,794 124.4%

Financial Highlights

Strong financial results with net profit of RMB15.2 billion, an increase of 124.4%

compared to 2006

Notes: adjusted by gain from investment in an associate

5

Key ratios 2007 2006 Change(percentage point)

Return on average equities 24.8% 16.7% 8.0%

Return on average assets 1.36% 0.81% 0.54%

Net interest margin 3.11% 2.72% 0.39%

Net fee income as % of operating income (adjusted) 15.7% 10.1% 5.6%

Non-interest income ratio (adjusted) 17.5% 13.5% 4.0%

Cost to income ratio (excluding business tax) 34.9% 38.3% 3.3%

Credit cost 0.49% 0.68% 0.20%

Non performing loan ratio 1.54% 2.12% 0.58%

Special mentioned loan ratio 2.13% 2.03% 0.11%

Coverage ratio 180.4% 135.6% 44.8%

Loan to deposit ratio 71.3% 73.1% 1.8%

Capital adequacy ratio 10.7% 11.4% 0.7%

Effective tax rate 27.6% 32.6% 5.1%

Number of branches 579 504 −

Financial Highlights

Expanding net interest margin, rapidly growing fee income, improving asset

quality and declining cost to income ratio

Notes: adjusted by gain from investment in an associate

6

Agenda

3 Summary

1 Highlights

2 Financial Analysis

7

(RMB mn except for EPS) 2007 2006 Growth %

Net interest income 33,902 21,509 57.6%

Net fee and commissions 6,439 2,514 156.1%

Non-interest income 7,184 3,357 114.0%

Operating income 41,086 24,866 65.2%

Operating expense (16,738) (11,091) 50.9%

Pre-provision operating profit 24,348 13,775 76.8%

Provisions (3,305) (3,691) (10.5%)

Pre-tax profit 21,043 10,084 108.7%

Income tax (5,800) (3,290) 76.3%

Net profit 15,243 6,794 124.4%

EPS (fully diluted) 1.04 0.53 96.2%

Summary of Income Statement

8

(RMB mn) 2007 2006 Growth %

Total loans 673,167 565,702 19.0%

Provisions for impairment loans (18,750) (16,282) 15.2%

Investments securities 244,123 178,885 36.5%

Placement with other banks 239,564 104,410 129.4%

Total assets 1,310,552 934,102 40.3%

Interbank deposits 265,123 76,603 246.1%

Convertable bonds 13 22 (40.9%)

Subordinated debts 3,500 3,500 −

Other debts 9,992 9,987 0.1%

Total liabilities 1,242,568 878,942 41.4%

Shareholders' equity 67,984 55,160 23.2%

Balance sheet growth driven by inter-bank placement

Summary of Balance Sheet

9

Strong Growth in Net Interest Income

Net interest income Net interest margin

Rapid growth in net interest income with widening net interest margin

21,509

33,902

0

8,000

16,000

24,000

32,000

40,000

2006 2007

(RM

B m

n)

2.72%

3.11%

0.0%

0.7%

1.4%

2.1%

2.8%

3.5%

2006 2007

10

Significant Increase in Asset Yields

Average interest-earning assets Average yield

42.6%37.5%

10.7%

12.9% 13.3%

11.3% 15.7%

18.2% 17.8%

20.1%

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2006 2007

(RM

B m

n)

Corporate loans Retail loans

Discounted bills Investment securities

Other interest earning assets

791,176

1,089,612

4.30%

3.34%

3.85%

1.59%

6.17%

5.60%6.04%

5.89%

2.93%3.15%

2.88%

1.57%

4.73%

4.30%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

2006 2007

Corporate loansRetail loansDiscounted billsInvestmentsInterbank loansBalace with central bankTotal interest earning assets

11

Cost of liabilities

Average interest-bearing liabilities Average cost

Actively managing liabilities to control cost

Source:

1 Debts included certificate of deposits, convertible bonds, financial bonds and

subordinate debts

89.6% 78.9%

8.4%

19.6%

2.0%

1.4%

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2006 2007

(RM

B m

n)

Deposits Interbank deposits and placements Debts

775,435

1,001,327

2.03%

3.13%

1.77%

1.50%1.68%

2.38%

3.10%

1.61%

0.0%

0.7%

1.4%

2.1%

2.8%

3.5%

2006 2007

DepositsInterbank deposits and placements

DebtsTotal interest bearing liabilities

12

Others

14.6%

Real estates

9.7%

Wholesale and

retail

13.1%

Transportation

17.0%

Manufactoring

29.8%Commercial

services

6.7%

Utilities

9.2%

Steady Loan Growth

Loan growth

Corporate loans breakdown(2007)

Retail loans breakdown(2007)

Asset allocation

Source: Others include construction, mining, education, IT and software and

other industries

63.6% 66.2%

18.4% 7.8%

18.0% 26.0

0

200,000

400,000

600,000

800,000

2006 2007

(RM

B m

n)

Corporate loans Discounted bills Retail loans

565,702

673,167

Others

12.9%

Mortgages

74.9%

Credit cards

12.2%

49.4% 47.4%

11.1%4.0%

19.2%18.6%

20.3% 30.0%

0%

20%

40%

60%

80%

100%

2006 2007

Loans (corporate and retail) Discounted bills

Investment securities Others

13

Improving Asset Quality

Credit costs

NPL coverage ratioNPL balance and NPL ratio

Special mention loan balance and ratio

Both NPL balance and NPL ratio fell. NPL coverage ratio continued to increase

12,006

10,394

1.54%

2.12%

10,000

12,000

14,000

16,000

2006 2007

(RM

B m

n)

0.0%

0.6%

1.2%

1.8%

2.4%

NPL balance NPL ratio

135.6%

180.4%

100%

150%

200%

2006 2007

0.68%

0.49%

0.4%

0.6%

0.8%

2006 2007

11,45814,342

2.13%2.03%

0

8,000

16,000

24,000

32,000

2006 2007

(RM

B m

n)

0.0%

0.8%

1.6%

2.4%

Special mentioned loans balance Special mentioned loans ratio

14

55.7%56.9%

44.3%

43.1%

0

130,000

260,000

390,000

520,000

650,000

2006 2007

(RM

B m

n)

Demand Time

461,798

617,001

48.9% 58.4%

51.1%41.6%

0

70,000

140,000

210,000

280,000

350,000

2006 2007

(RM

B m

n)

Demand Time

311,959 326,533

Customer Deposits

Customer deposits Customer deposits composition (by customer type)

Retail deposits composition (by maturity term)Corporate deposits composition (by maturity term)

Customer deposits grew 21.9%. Deposit composition remained stable

52.9%57.4%

47.1%

42.6%

0

250,000

500,000

750,000

1,000,000

2006 2007

(RM

B m

n)

Demand Time

773,757

943,534

65.4%59.7%

34.6% 40.3%

0%

25%

50%

75%

100%

2006 2007

Corporate Retail

15

Strong Growth of Retail Banking

Detailed retail NPL ratios (To come)

Retail loan YoY growthRetail loans

Retail NPL balances and ratio

Significant growth in retail business

74.9%79.8%

12.2%

9.9%

12.9%

10.3%

26.0%

18.0%

0

100,000

200,000

300,000

400,000

2006 2007

(RM

B m

n)

0%

10%

20%

30%

Mortgage Credit cards Others as % of total loans

101,983

175,026

110.2%

61.1%71.6%

0%

40%

80%

120%

Credit cards Mortgage Total

554

809

0.46%

0.54%

0

600

1,200

1,800

2006 2007

(RM

B m

n)

0.0%

0.2%

0.4%

0.6%

Retail NPLs balance Retail NPL ratio

0.26%

0.40%

1.92%

1.53%

0.29%

0.74%

0.46%0.54%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

2006 2007

Mortgage Credit cards Others Total

16

311,959

326,533

300,000

310,000

320,000

330,000

2006 2007

（RM

B m

n）

38.943.6

0

15

30

45

2006 2007

(Mill

ions)

Retail Deposits

Number of Sunflower customers

Retail deposits

Number of All-in-one cards issued

140

290

0

70

140

210

280

350

2006 2007

(000')

Deposit costs

1.53%

1.75%

1.47% 1.55%

0.0%

0.5%

1.0%

1.5%

2.0%

2006 2007

Corporate deposits Retail deposits

17

10.3

20.7

0

5

10

15

20

25

2006 2007

(Mill

ions)

66.4

131.3

0

50

100

150

2006 2007

(RM

B b

n)

Leading Credit Card Business

Credit card NPLs and coverage ratio

Credit card revolversNumber of credit cards issued

Credit card transaction volumes

Strong growth in credit card business

155

409

125.4%116.8%

0

250

500

750

1,000

2006 2007

(RM

B m

n)

0%

40%

80%

120%

160%

Credit cards NPLs ratio Credit cards NPLs coverage ratio

20% 22%

36% 37%

0%

10%

20%

30%

40%

2006 2007

% of customers with revolving balance

Interest bearing balance/outstanding receivables

18

Continued Growth in Corporate Banking

Corporate loan yield

Corporate NPL balance and ratio

Corporate loan

Corporate NPL coverage ratio

Significant increase in corporate loan yield, asset quality further improved

359,883

445,865

200,000

300,000

400,000

500,000

2006 2007

(RM

B m

n)

5.60%6.17%

0.0%

1.6%

3.2%

4.8%

6.4%

2006 2007

11,4529,585

2.15%

3.18%

0

8,000

16,000

24,000

2006 2007

(RM

B m

n)

0.0%

0.7%

1.4%

2.1%

2.8%

3.5%

Corporate NPLs balance Corporate NPLs ratio

121.4%

169.4%

0%

50%

100%

150%

200%

2006 2007

19

778

2,978

0

1,000

2,000

3,000

2006 2007

(RM

B m

n)

3,357

7,184

0

2,000

4,000

6,000

8,000

2006 2007

(RM

B m

n)

2,988

7,258

0

2,000

4,000

6,000

8,000

2006 2007

(RM

B m

n)

Strong Growth in Fee Income Business

Non-interest income

Fee income breakdown and net fee

income as % of total income

Total fee income

Agency services fee

Agency revenue for mutual fund and asset management product distribution

drive the growth of fee income

Notes: adjusted by gain from investment in associate

9.6% 1.7%

26.1% 33.6% 26.0%

41.0%

20.3%

10.7%

8.9%

5.8%

9.4%

6.8% 10.1%

15.7%

0

2,500

5,000

7,500

10,000

2006 2007

(RM

B m

n)

0%

4%

8%

12%

16%

Trust service Bank cardAgency services Remittance and settlement

Credit commission and loan businesses Othersas % of operating income

20

Improving Operating Efficiency

Cost to income ratio (excluding business tax) Income and cost per staff

Income and cost per branchStaff expenses as a % operating income

Cost to income ratio fell steadily while operating income per staff and per branch

continued to increase

Notes: adjusted by gain from investment in associate

38.3%34.9%

0.0%

12.0%

24.0%

36.0%

48.0%

2006 2007

20.3% 19.7%

0.0%

7.0%

14.0%

21.0%

2006 2007

1,072

1,418

478578

0

400

800

1,200

1,600

2006 2007

(RM

B 0

00')

Operating income per employee Operating expenses per employee

49.3

71.0

22.028.9

0

20

40

60

80

2006 2007

(RM

B m

n)

Operating income per branch Operating expenses per branch

21

Profitability

ROAA ROAA (pre-provision operating profits)

Effective tax rate

Profitability continued to improve

ROAE

0.81%

1.36%

0.00%

0.40%

0.80%

1.20%

1.60%

2006 2007

16.7%

24.8%

0.0%

10.0%

20.0%

30.0%

2006 2007

32.6%

27.6%

0.0%

7.0%

14.0%

21.0%

28.0%

35.0%

2006 2007

1.65%

2.17%

0.0%

0.6%

1.2%

1.8%

2.4%

2006 2007

22

Capital Adequacy Ratios

Capital adequacy ratio Core capital adequacy ratio

Capital adequacy ratios remain stable

11.4%

10.7%

0%

4%

8%

12%

2006 2007

59.0%

53.5%

0%

20%

40%

60%

2006 2007

RWA as % of total assets

9.58%

9.02%

0.0%

2.5%

5.0%

7.5%

10.0%

2006 2007

23

议程

Financial Analysis

1 Highlights

2

3 Summary

24

0.81%

1.36%

2006 2007

RoAA

6,794

15,243

2006 2007

Net profits (RMB mn)

2007 performance highlight

Moderate loan growth Improved business mix

Reduced cost to income ratioEnhanced asset quality

Significant increase in profitability

Substantial bottom line growth

565,702

673,167

2006 2007

Total loans (RMB mn)

12,00610,394

1.54%

2.12%

2006 2007

NPLs balance NPLs ratio

Notes: adjusted by gain from investment in associate

13.5%

17.5%

2006 2007

Non-interest income ratio (adjusted)

38.3%

34.9%

2006 2007

Cost to income ratio (excl business tax)

25

Q&A