Defi nitions

In this report, unless the context otherwise requires, the following terms shall have the meaning set out below:

Our /the Bank/ Bank of Limited or its predecessors and, except where the context the Group/we/us otherwise requires, all of the subsidiaries of Limited

Articles of Association The performing Articles of Association of our Bank

Basis Point 0.01 of a percentage point

BOC Aviation BOC Aviation PTE. Ltd.

BOC Insurance Company Limited

BOCG Insurance Insurance Company Limited

BOCG Investment Bank of China Group Investment Limited

BOCG Life BOC Group Life Assurance Co., Ltd.

BOCHK Bank of China () Limited, an authorised fi nancial institution incorporated under the laws of Hong Kong and a wholly-owned subsidiary of BOCHK (Holdings)

BOCHK (BVI) BOC Hong Kong (BVI) Limited

BOCHK (Holdings) BOC Hong Kong (Holdings) Limited, a company incorporated under the laws of Hong Kong and the ordinary shares of which are listed on the Hong Kong Stock Exchange

BOCI BOC International Holdings Limited

BOCIM Bank of China Investment Management Co., Ltd.

BOCI China BOC International (China) Limited

BOCI-Prudential BOCI-Prudential Asset Management Ltd.

CARPALs Supervision Indicators A new supervision indicator series regulated by the CBRC, which is applicable to large commercial in Chinese mainland. This series consists of 13 indicators within 7 categories covering the management on capital adequacy, asset quality, risk concentration, provisioning coverage, affi liated institutions, liquidity and swindle prevention and control

CBRC China Banking Regulatory Commission

Central and Southern China The area including, for the purpose of this report, the branches of Henan, Hubei, Hunan, Guangdong, Shenzhen, Guangxi and Hainan

Company Law The Company Law of the People’s Republic of China

Convertible Bonds Corporate bonds that are vested for conversion to the A-Share stock of the Bank

2011 Annual Report 361 Defi nitions

CSRC China Securities Regulatory Commission

Dagong International Dagong International Credit Rating Co., Ltd.

Eastern China The area including, for the purpose of this report, the branches of , Jiangsu, Suzhou, Zhejiang, Ningbo, Anhui, Fujian, Jiangxi and Shandong

Fullerton Financial Fullerton Financial Holdings Pte. Ltd.

Fullerton Management Fullerton Management Pte. Ltd.

G-SIFIs Global Systemically Important Financial Institutions

HKEx Hong Kong Exchanges and Clearing Limited

Hong Kong Listing Rules The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

Hong Kong Stock Exchange The Stock Exchange of Hong Kong Limited

Huijin Central Huijin Investment Ltd.

MOF Ministry of Finance, PRC

NCSSF National Council for Social Security Fund

Northeastern China The area including, for the purpose of this report, the branches of Heilongjiang, Jilin and Liaoning

Northern China The area including, for the purpose of this report, the branches of , Tianjin, Hebei, Shanxi, Inner Mongolia and our Head Offi ce

PBOC People’s Bank of China, PRC

RMB or Renminbi Renminbi, the lawful currency of the PRC

SAFE State Administration of Foreign Exchange, PRC

SFO Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

SSE The Shanghai Stock Exchange

Temasek Temasek Holdings (Private) Limited

UBS UBS AG

Western China The area including, for the purpose of this report, the branches of , Sichuan, Guizhou, Yunnan, Shaanxi, Gansu, Ningxia, Qinghai, Tibet and Xinjiang

362 2011 Annual Report Defi nitions

Notes to Financial Highlights

1. Non-interest income = net fee and commission income + net trading gains/(losses) + net gains/(losses) on investment securities + other operating income

2. Operating income = net interest income + non-interest income

3. Investment securities include securities available for sale, securities held to maturity, securities classifi ed as loans and receivables and fi nancial assets at fair value through profi t or loss.

4. Due to customers include structured deposits. Comparatives for the previous years have been restated accordingly.

5. Dividend per share = total dividend ÷ number of ordinary shares in issue at the year-end

6. Net assets per share = capital and reserves attributable to equity holders of the Bank at the year-end ÷ number of ordinary shares in issue at the year-end

7. Return on average total assets = profi t for the year ÷ average total assets. Average total assets = (total assets at the beginning of the year + total assets at the year-end) ÷ 2

8. Return on average equity = profi t after tax attributable to equity holders of the Bank ÷ average owner’s equity. It is calculated according to No. 9 Preparation and Reporting Rules of Information Disclosure of Public Offering Companies — Calculation and Disclosure of Return on Average Equity and Earnings per Share (Revised in 2010) (CSRC Announcement [2010] No. 2) issued by the CSRC.

9. Net interest margin = net interest income ÷ average balance of interest-earning assets. Average balance is average daily balance derived from the Bank’s management accounts.

10. Non-interest income to operating income = non-interest income ÷ operating income

11. Cost to income ratio is calculated according to the Interim Measures of the Performance Evaluation of State- owned and State Holding Financial Enterprises (Cai Jin [2009] No.3) formulated by the MOF.

2011 Annual Report 363 Defi nitions

12. Loan to deposit ratio = outstanding loans ÷ balance of deposits. It is calculated according to relevant provisions of the PBOC. Of which, the balance of deposits include due to customers and due to fi nancial institutions such as fi nancial holding companies and insurance companies. The following table sets forth the reconciliation of loan to deposit ratio for 2011 (unit: RMB million):

Loans Deposits Loans and advances Due to customers 8,817,961 to customers 6,342,914 Including: structured Deferred gain and loss of deposits 561,087 discounted bills and others 2,645 Due to fi nancial institutions 409,515 Total 6,345,559 Total 9,227,476

13. Identifi ed impaired loans to total loans = identifi ed impaired loans at the year-end ÷ total loans at the year-end

14. Non-performing loans to total loans = non-performing loans at the year-end ÷ total loans at the year-end. It is calculated according to the Guidelines on the Corporate Governance and Supervision of State-owned Commercial Banks (Y.J.F [2006] No.22).

15. Allowance for loan impairment losses to non-performing loans = allowance for loan impairment losses at the year-end ÷ non-performing loans at the year-end. It is calculated according to the Guidelines on the Corporate Governance and Supervision of State-owned Commercial Banks (Y.J.F [2006] No.22).

16. Credit cost = impairment losses on loans ÷ average balance of loans. Average balance of loans = (balance of loans at the beginning of the year + balance of loans at the year-end) ÷ 2

17. Number of employees of the Group includes temporary and contract staff.

18. In 2011, the statistic on number of organisations was adjusted to exclude the non-operating outlets (except representative offi ces) and non-fi nancial institutions. The total employees were adjusted accordingly. Comparatives for the years from 2007 to 2010 have been restated. Due to the equity transfer of BOC Insurance, all the sub-entities of which BOC Insurance was counted domestically. According to the new approach, there was an increase of 19 branches, subsidiaries and representative offi ces in Hong Kong, Macau, Taiwan and other countries over the prior year-end.

364 2011 Annual Report