27 Mar 2011

Final Resolution Proposal in Respect of Relevant Minibonds

The Board of Directors of BOC Hong Kong (Holdings) Limited (“the Company”, stock code “2388”; ADR OTC Symbol: “BHKLY”) today issued an announcement in relation to the Bank of China (Hong Kong) Group (the “BOCHK Group”, comprising Bank of China (Hong Kong) Limited, Nanyang Commercial Bank Limited and Chiyu Banking Corporation Limited) as Distributing Banks of Lehman Brothers Minibonds (“Minibonds”) on the final resolution proposal in respect of the recovery and distribution of the net value of the underlying collaterals of Relevant Minibonds(1). (For details of the announcement, please refer to the attachment.)

According to the Conditional Agreement(2) entered into among Lehman Brothers, the Trustee (HSBC Bank USA, NA), the Receivers (from PricewaterhouseCoopers) and other parties, investors of the Relevant Minibonds will be able, upon the Conditional Agreement becoming unconditional, to recover between 70% and 93% of the amounts they invested. The BOCHK Group understands that, after extensive negotiations with Lehman Brothers, the Receivers believe that the proposed level of collateral recovery represents the best possible outcome for investors of the Relevant Minibonds given the legal uncertainty surrounding the priority of competing claims over the Collateral.

In addition to the collateral recovery payment to investors, as a goodwill gesture, the BOCHK Group together with the other thirteen Distributing Banks have agreed to offer Ex-gratia Payments to Eligible Customers(3). The Ex-gratia Payments to which each Eligible Customer will be notionally entitled is equal to 50% of any shortfall in the recovery of the amount invested. Based on the recovery rates as advised by the Receivers, the total level of recovery to Eligible Customers, after taking into account the offer of Ex-gratia Payments, will be in the range of 85% to 96.5% of the principal amount of their investment.

The BOCHK Group will also increase the funding available to the Trustee under the Expense Funding Agreement to pay for all fees, expenses and other amounts which may be incurred

Page 1 of 4 in connection with the recovery of the collateral and the Trustee’s role in respect of the Minibonds. Without this funding, the Trustee would have been entitled to retain all or a part of the Collateral to indemnify it (and its agents) for liabilities and expenses arising from the settlement process. Such retention would reduce the amounts available to holders of the Relevant Minibonds.

Mr He Guangbei, Vice Chairman and Chief Executive of the Company, said: “Since the occurrence of the Lehman Brothers Minibonds incident, the Distributing Banks have shown themselves to be fully aware of their social responsibility and have been striving to safeguard the interests of the investing public. We have been doing our very best to seek a comprehensive, fair and reasonable resolution. Now we are glad to see that there are major breakthroughs which will enable an overwhelming majority of investors to receive the Recovery Payment for their investment.”

“The Distributing Banks have demonstrated their greatest sincerity and effort to assist in and expedite the resolution of the Lehman Minibonds incident. We hope and believe that the current proposal will receive the support from the customers and the public alike. It is also my sincere wish that with the final resolution to the Minibonds issue, we can leave it all behind us and move forward together,” added Mr He.

As of the date of this press release, the BOCHK Group had repurchased a total of approximately HK$5.9 billion in nominal value of the principal amount of Minibonds under the Repurchase Scheme(4) or pursuant to settlement agreements with customers. As a result, for the financial years ended 31 December 2009 and 2010, the BOCHK Group had recognised in aggregate approximately a loss of HK$4 billion through making provisions for the Minibonds repurchased and the funding under the original terms of Expenses Funding Agreement. Taking into account of the expected recovery payments, the Ex-gratia Payment Scheme and the increased funding under the Expenses Funding Agreement, the BOCHK Group estimates that it will write back part of the provisions in respect of the Minibonds it repurchased and will effectively reduce the original loss to approximately HK$1 billion.

Shareholders of the BOCHK Group, potential investors of securities of the BOCHK Group

Page 2 of 4 and customers of the Relevant Minibonds should note that any information provided by the BOCHK Group on the potential and estimated payments to the customers of the Relevant Minibonds pursuant to the Conditional Agreement and the Ex-gratia Payment Scheme is an estimation only, and there is no guarantee that the payments would be made or such payments will be in the amounts described in this release. Shareholders and potential investors of securities of the BOCHK Group should therefore exercise caution when dealing in the securities of the BOCHK Group.

Details of the calculation of recovery and Ex-gratia Payments for customers will be set out on the websites of the Bank of China (Hong Kong) Limited (www.bochk.com), Nanyang Commercial Bank Limited (www.ncb.com.hk) and Chiyu Banking Corporation Limited (www.chiyubank.com) and in letters to be sent by the BOCHK Group to customers. The BOCHK Group has set up hotlines at 2105-8212 (Bank of China (Hong Kong)), 2105-8243 (Nanyang Commercial Bank) and 2105-8239 (Chiyu Banking Corporation) to answer customer enquiries.

Remarks: (1) Relevant Minibonds refer to Series 10-12; 15-23; 25-36. (2) The Conditional Agreement is conditional upon the following: (i) the US Bankruptcy Court confirming that its previous orders which lay down procedures for Lehman Brothers to enter into settlements in respect of claims arising under certain derivatives contracts apply to settlements relating to the Collateral ; and (ii) the passing of extraordinary resolutions for each and every series of the Relevant Minibonds. (3) For the purpose of the Ex-gratia Payment Scheme, Eligible Customers are either those investors who were eligible to participate in the Repurchase Scheme or those who would have been eligible under the Repurchase Scheme had they not previously reached a settlement with the Distributing Banks on a case-by-case basis. (4) Repurchase Scheme: The BOCHK Group has repurchased certain series of Minibonds according to the agreement entered into by the BOCHK Group with SFC, the HKMA and the other thirteen Distributing Banks on 22 July 2009.

Attachment: Full Announcement

Page 3 of 4 - End - About BOC Hong Kong (Holdings) Limited

BOC Hong Kong (Holdings) Limited (“the Company”) was incorporated in Hong Kong on 12 September 2001 to hold the entire equity interest in Bank of China (Hong Kong) Limited (“BOCHK”), its principal operating subsidiary. The Company is a subsidiary of Bank of China Limited (HK Stock Code:“3988”) which holds approximately 66.06% equity interest in the Company.

The Group is a leading listed commercial banking group in Hong Kong. With nearly 270 branches, 530 ATMs and other delivery channels in Hong Kong, the Group offers a comprehensive range of financial products and services to individual and corporate customers. BOCHK is one of the three note issuing banks in Hong Kong. In addition, the Group and its subsidiaries now have 25 branches and sub-branches in the Mainland of China to provide cross-border banking services to customers in Hong Kong and the Mainland. BOCHK is appointed by the People’s Bank of China as the Clearing Bank for Renminbi (RMB) business in Hong Kong. On 13 July 2010, BOCHK was authorised as the Clearing Bank of RMB banknotes business for the Taiwan region.

The Company began trading on the main board of the Stock Exchange of Hong Kong on 25 July 2002, with stock code “2388”, US OTC Symbol: “BHKLY”.

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