Investor Presentation 1st Sem 2017 Results

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This presentation and the information contained herein as well as the materials distributed herewith ("Presentation") are the sole and exclusive property of China Banking Corporation (“China Bank”) and shall only be used for the purpose intended herein. None of the information contained in this Presentation constitutes a solicitation, offer, opinion, or recommendation by China Bank to buy or to sell any securities or financial instrument or to provide any investment service or investment advice. The information contained in this Presentation is based on carefully selected sources believed to be reliable but no representation or warranty as to its accuracy or completeness is made. All statements in this Presentation, other than statements of historical facts, that address activities, events, or developments that China Bank expects or anticipates will or may occur in the future (including but not limited to projections, targets, estimates and business plans) are forwardlooking statements. China Bank’s actual results or developments may differ materially from those expressed or implied in these forward-looking statements as a result of various factors and uncertainties, including but not limited to price fluctuations, actual demand, exchange rate fluctuations, market shares, competition, changes in legal, financial and regulatory frameworks, international economic and financial market conditions, political risks, cost estimates, and other risks and factors beyond our control. Your use of the Presentation shall be at your sole risk and you shall form your own conclusions as to the reliability of any information presented and as to any conclusions to be drawn therefrom. China Bank shall not be directly or indirectly liable, in any way, for any inaccuracies, errors, or omissions in the Presentation , including but not limited to any quotes or financial data contained therein, nor for any damages resulting therefrom. Any opinion/data/forward-looking statements herein reflected may be subject to change by China Bank without notice.

Investor Relations: Investor Relations (IR) Team: 28/F, BDO Equitable Tower, 8751 , Makati City Alexander C. Escucha , 1226 Senior Vice President acescucha@.ph Phone: (632) 885-5601 Fax: (632) 892-0238 Aerol Paul B. Banal, SM Email: [email protected] Vicky N. Quisido, AM Website: www.chinabank.ph [email protected]

1 Presentation Outline

EconomicEconomic EnvironmentEnvironment

Company Profile

Key Investment Merits

Corporate and Financial Highlights

2 Economic Environment— Philippines

Philippine GDP

8.0% 7.6% 7.1% 6.8% 7.0% 6.6% 6.7% Philippine Economy on Higher Growth Trajectory 6.2% 6.4% 5.9% 6.0%  The Philippines shows solid economic 5.0% performance amidst global economic 4.2% turbulence. 4.0% 3.7%

3.0%  With increasing investment rate and young and educated workforce, there is sufficient scope 2.0% 1.1% for potential growth to rise further, aided by 1.0% greater capital formation.

0.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q12017  The current administration aims for a steady acceleration of growth (7.0-8.0%) supported by sustained and deepened structural reforms. 90 7.0% 80  Reforms include comprehensive tax reform, 83 6.0% 79 sustained investment in infrastructure, human 70 75 72 69 5.0% capital development, easing of restrictions on 60 65 62 62 foreign investments, reduction of cost of doing 50 57 58 58 4.0% business, and strengthening of agro-industrial linkages 40 3.0%

Thousands 30 2.0% 20 1.0% 10

- 0.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q12017

GDP per Capita (Php '000) Growth Rate

3 Economic Environment— Philippines

BPO - a strong driver of employment and revenues… 50.0 1,800 2,000 9.0% 66.0% 8.0% 40.0 1,600 65.0% 7.0% 1,148 6.0% 64.0% 1,044 30.0 958 1,200

858 5.0%

777 63.0%

4.0%

20.0 640 38.9 800

8.0%

527 7.5%

7.4% 7.4%

7.3%

7.1%

7.0% 7.0% 424 3.0% 6.8% 62.0%

371 6.3%

298 22.9 5.5% 10.0 236 20.5 400 2.0% 15.8 18.0 11.0 13.2 61.0% 4.5 6.1 7.1 8.9 1.0% 3.4 - - 0.0% 60.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2022F 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Revenues (US$ Bn) Employment ('000s) Unemployment Rate Labor Participation Rate

Sustained growth of OFW remittance over the years… 30.0 25% 20% 25.0 20% 20.0 13% 13% 15% 15.0 9% 7% 10% 7% 6% 7% 10.0 5% 4% 5% 5.0 5% 12.8 14.5 16.4 17.3 18.8 20.1 21.4 23.0 24.6 25.6 26.8 - 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

OFW Remittance (US$ Bn) Growth Rate

4 Economic Environment— Philippine Banking Industry

5 Competitive Landscape

Private Banks – CHIB No 6 in Assets, No 5 in Loans, Deposits

ASSETS LOANS (Net) DEPOSITS CAPITAL ROE Institution Amt Mkt Amt Mkt Amt Mkt Amt Mkt Share Jan-Jun Jan-Jun Branches (June 2017) Share Share Share (in P Bn) (in P Bn) (in P Bn) (in P Bn) (%) '17 '16 (%) (%) (%) BDO 2,472 17.73% 1,640 21.13% 1,980 18.48% 289 19.45% 10.19% 13.12% 1,126 MBT 1,972 14.14% 1,168 15.05% 1,462 13.64% 205 13.80% 9.46% 9.25% 959 BPI 1,709 12.26% 1,059 13.65% 1,434 13.38% 171 11.49% 13.70% 16.40% 838 PNB 818 5.87% 445 5.73% 625 5.83% 108 7.25% 4.80% 8.10% 679 SECB 774 5.55% 333 4.29% 380 3.54% 99 6.69% 10.55% 13.64% 291 CHIB 654 4.69% 403 5.19% 554 5.17% 76 5.12% 10.44% 10.74% 561 UBP 549 3.94% 264 3.40% 435 4.05% 64 4.34% 12.70% 12.93% 314 RCBC 537 3.85% 323 4.16% 383 3.57% 63 4.27% 7.50% 8.81% 475 EW 310 2.22% 209 2.69% 255 2.38% 36 2.43% 14.10% 9.80% 446 Gov't Banks 2,021 14.50% 838 10.79% 1,664 15.53% 143 9.61% LBP 1,485 10.65% 586 7.55% 1,319 12.31% 97 6.55% 12.67% 19.35% 373 DBP 536 3.84% 251 3.24% 345 3.22% 45 3.04% 11.34% 10.07% 121 Foreign Banks 1,093 7.84% 600 7.74% 689 6.43% 121 8.16% Other Local Banks 1,032 7.40% 480 6.19% 857 8.00% 110 7.38% TOTAL 13,941 100% 7,760 100% 10,717 100% 1,486 100% Source: Published SOCs, ROE-SEC-17Q Reports except LBP & DBP

6 Presentation Outline

Economic Environment

CompanyCompany ProfileProfile

Key Investment Merits

Corporate and Financial Highlights

7 Snapshot of China Bank

Long history as the oldest privately owned bank in the Philippines, established in 1920

Listed since the establishment of the Exchange by 1927

Strong presence in the entrepreneur, middle market and business segments

Longest relationship with Chinese-, serving this community up to the 4th generation

8 Primary Business

A. Deposits & Related Services B. Internet Banking and Mobile Banking Services (Retail & Corporate)

Corporate Consumer Wealth Management Corporate, Commercial & SME Consumer loans Trust and investment lending (mortgages, vehicle, management personal, teacher loans) Cash management Credit cards Wealth management, Private Banking Factoring Remittances Life insurance and investments (MCBLife) Investment Banking (China Bank Capital Corp), securities brokerage Treasury and Foreign Exchange Trading Non life insurance (China Bank Insurance Brokerage)

9 Bank Milestones

Expand portfolio in SME, MME and Consumer segments further enhanced by recent strategic acquisitions

1920 1927 2007 2012 2013 2014 2015 2016

Listed in Stock Exchange Increased stake in China Bank JV to 40% Securities Corp Acquired Manila Bank with 75 branch licenses and renamed to

Acquisition Bancassurance joint venture with 5% stake

10 Bank Strategy – Continued Network Expansion

As of June 2017

China No. of China Bank % Share Branches Bank Savings Total Total Metro 217 72 289 52% Manila 99 69 168 30% Visayas 55 9 64 11% Mindanao 35 5 40 7% Total 406 155 561 100%

900 848 805 800 CHIB CBS 740 661 700 PDB ATM 561 600 511 561 475 517 541 431 500 383 445 470 155 366 376 150 361 78 165 400 78 276 316 293 78 250 269 72 300 33 216 25 188 2 16 141 200 148 1 391 406 1 352 283 295 314 248 253 268 100 187 215 141 148 0 2004 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Jun-17

11 Comprehensive Financial Services Platform

China Bank’s organization anchored on three engines of growth:

1 2 3 Savings Bank & Other Relationship Banking Financial Markets Business Units

Retail Banking Lending China Bank Business Segment Treasury Savings, Inc. - SME Institutional - Consumer Banking China Bank Capital Corp - Corporate Manulife- - Investment Banking China Bank - Commercial - Securities Brokerage Life Assurance Corporation (MCBLife)

Wealth China Bank Consumer Management Insurance Banking Brokers, Inc. - Housing/Auto - Remittance - Credit Card Trust

12 Presentation Outline

Economic Environment

Company Profile

KeyKey InvestmentInvestment MeritsMerits

Corporate and Financial Highlights

13 Key Investment Merits

1 Established strength in affluent Chinese-Filipino business segment

2 Strong balance sheet with sustainable growth

3 Diversified and well collateralized loan portfolio

4 Improving asset quality and loan loss coverage

5 Funding – strong brand franchise / retail base

6 Healthy capital position

Well diversified income stream, effective cost management , growing distribution 7 network supported by robust infrastructure

8 Sustained delivery of shareholder returns

9 Strong Support from Shareholders and Synergies with the SM Group

10 Experienced and competent management team

14 1 Established Strength in Affluent Chinese-Filipino Business Segment

Loyal and highly valuable customer Predominantly focused on the base SME/MME segments

Multi-generational relationships Agile and entrepreneurial mindset

Sustainable and profitable niche client relationships

15 2 Strong Balance Sheet with Sustainable Growth

Organic growth and strategic acquisitions Total Assets (PHP in B)

633 658

89 83 527 556 77 471 76 414 15 21

324 9 257 262 550 569 4 2 479 451 399 403 315 255 258

2010 2011 2012 2013 2014 2015 2016 1H2016 1H2017

China Bank China Bank Savings Planters Development Bank

16 2 Strong Balance Sheet with Sustainable Growth

Emphasis on core-recurring income

Assets Mix (PHP in B)

633 658 17% 16% 556 527 471 14% 13% 414 12% 16% 324 61% 60% 58% 257 262 20% 59% 62% 53% 29% 24% 59% 46% 55% 31% 26% 28% 23% 28% 23% 25% 21% 21%

2010 2011 2012 2013 2014 2015 2016 1H2016 1H2017

Others Net Loans Investment Securities

17 2 Strong Balance Sheet with Sustainable Growth

Healthy liquidity

72.73% 75.00% 71.43% 71.60% 69.90% 70.52% 70.04% 70.00% 67.20% 64.50% 64.64% 62.25% 63.00% 62.47% 63.21% 65.00% 60.99% 60.00% 57.99% 61.63% 55.33% 61.09% 60.33% 55.00% 58.64% 58.80% 58.33% 55.39% 50.00% 53.31%

45.00%

40.00% 2011 2012 2013 2014 2015 2016 1H2016 1H2017

Loans (Net) to Total Assets Loans (Net) to Customer Deposits Loans (Net) to Stable Funds

Source: Capital Intelligence Rating report where; Customer Deposits, Savings, Demand, Time Stable funds - total customer deposits + medium &long term funding + subordinated debt + hybrid capital + free capital (total capital-subsidiaries & affiliates-fixed assets)

18 3 Diversified and Well Collateralized Loan Portfolio

Loans growth faster in consumer segment

Gross Loans (PHP in B)

Corporate Commercial Consumer 6-yr CAGR 2010-2016

394 404 Consumer 28% 15% 16% 317 331 298 15% 21% 15% 22% 14% Commercial 30% 228 23% 198 13% 43% 12% 45% 154 126 12% 39% 41% 11% 63% 63% Corporate 31% 14% 28% 62% 43% 40% 47% 48% 61% 57%

2010 2011 2012 2013 2014 2015 2016* 1H2016 1H2017 * Loans were reclassified into corporate (accounts with assets of 100M up) from commercial loans

19 3 Diversified and Well Collateralized Loan Portfolio

Loans continue to grow fast in consumer segment (CHIB & CBS)

Consumer Loans (PHP in B) Housing Auto Personal Credit card

56 52 2% 5% 2% 5% 41 45 2% 5% 29% 1% 28% 5% 33 - 28% 6% 28%

21 29%

16 3% - 30% 65% 64% 10 1% - 65% 34% 66% 7 4% 65% - 48% 67% 56% 66% 44% 48% 2010 2011 2012 2013 2014 2015 2016 1H2016 1H2017 * Excludes CTS & loans to developers

20 3 Diversified and Well Collateralized Loan Portfolio

Loans By Security

404 394

Unsecured Secured 317 331 298 55% 58% 228 53% 198 52% 58%

154 53% 126 53% 51% 60% 45% 42% 48% 42% 47 % 47% 47% 40% 49%

2010 2011 2012 2013 2014 2015 2016 1H 2016 1H2017

21 4 Improving Asset Quality and Loan Loss Coverage

Asset Quality Ratios post PDB integration continue to improve…

NPL Ratios LLR Coverage

3% 180% 2.68% 159% 2.53% 2.63% 153% 157% 153% 160% 3% 2.24% 135% 156% 2.38% 140% 124% 125% 123% 1.99% 1.93% 147% 2% 1.86% 120% 1.57% 91% 94% 100% 1.90% 1.88% 1.81% 2% 1.78% 1.77% 87% 1.57% 1.13% 80% 101% 93% 87% 78% 80% 1% 60% Plantersbank acquired1.11% 1.05% Plantersbank acquired 40% 1% 20%

0% 0%

Parent CHIB Conso Parent CHIB Conso

22 4 Improving Asset Quality and Loan Loss Coverage

Credit Cost – lower than the industry

0.94%

0.92% 0.86%

0.69%

0.56% 0.67% 0.57% 0.44% 0.51% 0.33% 0.38% 0.42% 0.40% 0.35% 0.34% 0.41% 0.41% 0.34% 0.29% 0.31% 0.24% 0.24% 0.19% 0.17% 0.17% 0.16% 0.16% 0.11% 0.13% 0.13%

CHIB Industry

*Industry provision figure as of Mar 2017

23 5 Funding – Strong Brand Franchise / Retail Base Strong branch franchise/retail funding base Deposits (PHP in B), core deposits 70% Peso Deposits (PHP in B) CASA High Cost FCDU

458 468 554 542 463 372 395 326 15% 15% 439 283 399 15% 15% 354 18% 38% 37% 218 20% 272 37% 38% 159 168 213 216 20% 37% 41% 25% 23% 47% 47% 47% 42% 41% 48% 48% 39% 45% 33% 36% 33%

2010 2011 2012 2013 2014 2015 2016 1H2016 1H2017

Loans to Deposits Ratio CASA to Peso Deposits Ratio 80% 57% 56% 67% 71% 60% 70% 62% 73% 46% 48% 70% 71% 72% 50% 60% 55% 55% 50% 49% 40% 44% 41% 40% 30% 30% 20% 20% 10% 10% 2010 2011 2012 2013 2014 2015 2016 1H2017 0% 2010 2011 2012 2013 2014 2015 2016 1H2017

24 5 Funding – Strong Brand Franchise / Retail Base

Stable Margins Credit Ratings

. Investment grade credit rating of Baa2 7% . Same level as the Philippine 6.08% sovereign rating and at part with 6% 5.57% the country’s top 3 biggest banks

5% 4.73% 4.31% 4.32% 4.22% . Upgraded IDR in Sept 2016 to ‘BB+’ 3.97% 4.20% 4.16% from “BB’ and its viability rating to 4% 3.76% 3.30% 3.37% ‘bb+’ from bb (stable outlook) 2.90% 2.98% 3.20% 3% . Affirmed just recently (Feb 2017) 2.21% 3.07% 1.90% 2.06% 2% 1.30% 1.12% 1.17% Ratings reflect the bank’s: 0.98% 1% . Broadly steady asset quality 1.02% . Strong capital buffers 0% . Stable funding & liquidity profile 2010 2011 2012 2013 2014 2015 2016 1H2017 Asset Yield Cost of Funds NIM

25 6 Healthy Capital Position

Capital Adequacy Ratio (CAR) CET 1 Ratio Industry Average CAR

19.0% 18.9% 20.0% 18.5% 17.7% 17.3% 18.0% 15.9% 16.3% 16.3% 16.2% 16.0% 16.0% 16.0% 15.8% 15.7% 15.4% 15.5% 14.9% 15.1% 16.0%

15.5% 13.5% 15.1% 13.5% 15.4% 15.2% 14.0% 12.8% 14.5% 14.7% 14.0% 12.2% 12.0% 12.6% 12.6% 11.9% 11.3% 10.0% 80 63 57 59 42 45 35 39 30 25 27 26

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1H2017

Basel II Preemptive rights P15Bn stock rights in implementation P8Bn stock rights in waived (By Laws 2017 Industry data as of Dec 2016 2014 amended)

26 7 Well Diversified Income Stream

Operating Income Mix (PHP in B)

Net Interest Income Trading and Securities Other Fees

21.79 19..,57 18.85 19% 23%

21% 25% 4% 15.10 22% 25% 13.32 13.86 2% 12.74 3% 12.30 21% 21% 10.85 22% 35% 34% 21% 33% 42% 13% 23% 18% 13% 12% 21% 2% 9% 77% 75% 77%

66% 75% 25% 65% 67% 58% 73% 27%

2010 2011 2012 2013 2014 2015 2016 1H2016 1H2017

27 7 Effective Cost Management

… even with cost drag of branch expansion

Cost to Income – Philippine Banks Jun 2017 Cost to Income – China Bank (%)

76.3% 62.2% 62.3% 72.8% 61.3% 60.9% 67.8% 59.2% 59.0% 60.9% 55.9% 53.8% 55.2% 51.6% 52.9% 57.2% 48.7% 53.5% 55.4% 56.0% 57.6%

2010 2011 2012 2013 2014 2015 2016 1H2017

CHIB Conso Ex CBS/PDB

B

BPI

C

UBP

SEC

PNB

MBT

RCB

EWB BDO CHIB Cost to Average Assets – China Bank (%) Cost to Average Assets – Philippine Banks Jun 2017 4.4% 2.90% 2.71% 2.82% 3.5% 2.65% 3.3% 2.41% 2.44% 2.30% 2.32% 2.8% 2.3% 2.3% 2.4% 2.5% 1.6%

2010 2011 2012 2013 2014 2015 2016 1H2017

BPI

UBP

PNB

MBT

EWB

BDO

CHIB

SECB RCBC

28 7 Growing Distribution Network

5th Largest Distribution Network in the Philippines Network Expansion Plan (No. of Branches, ATMs as of June 2017 ) (No. of Branches and ATMs) +467

1,272 PDB CBS 1,272 Branches ATMs CHB ATMs 3,832 1,191 1,200 4,200 1,135 1,116 2,325 1,032 3,700 1,000 959 3,079 848 3,200 805 844 740 +189 1,143 730 800 2,700 661 692 720 685 614 672 +50 848 200 561 182 191 1,511 2,200 517 541 172 600 561 576 470 162 495 1,700 361 150 155 447 318 657 78 165 78 400 1,200 +139 314 294 500 510 520 530 700 406 452 352 391 200 148 314 200 148

- (300) BDO MBT BPI PNB CHIB RCB EWB UBP SECB

29 7 … Brand Refresh, Modern Branch Look and Feel…

30 7 Supported by Robust Infrastructure

Customer-centric technology initiatives…

. Aug 2015 - New Core banking . New Treasury system -- platform (P.L.U.S.) Calypso . July 2016 – Upgrade Retail . Replace Trust/Asset Internet China Bank Online . EMV Compliant, ahead of schedule Management system . Cash Management / Corporate Online . Digital Banking

transformation/ Mobile Since 2015 ATM cards, machines – initiative 1 of the first in PHL

…supported by robust infrastructure platform

Calypso Treasury System

31 8 Sustained Delivery of Shareholder Returns

Consistent dividends track record Dividend Yield – consistently (In Mn) above industry average Cash Dividends Cash Payout

9.00% 2.2 41.9% 45% 8.53%

8.00% 36.5% 40% 2.0 31.0% 33.5% 6.79% 33.1% 35% 7.00% 31.0% 31.1% 28.5% 1.8 27.9% 30% 6.00% 25.7% 5.28% 25% 5.00% 4.75% 1.6 20% 4.00% 3.55% 1.99 1.85 1.4 15% 3.00% 2.58% 2.57% 2.72% 1.72 2.28% 2.26% 1.59 1.54 1.56 10% 2.00% 1.2 1.42 1.29 5% 1.00% 1.17 1.06 1.0 0% 0.00% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

32 Strong Support from Shareholders and Synergies with the 9 SM Group

Current Shareholdings Distinct Benefits for China Bank

27% 38% Access to the SM Group’s SMIC @ 19.9% ecosystem of merchants, 9% suppliers and contractors

26%

SM Group - Sr. First became Shareholder in 1979 Priority rights to place branches Foreign Shareholders and ATMs in shopping malls Dee Group owned by SM Prime Holdings, Inc. Others

Snapshot of SM Group Business Lines Superior network locations for opening mini-branches in SM Group’s Savemore supermarkets

Access to SM Group’s retail network Financial Retail Property to promote new products such as its Services upcoming payment cards products

Source: Company filings, presentations, and Public Ownership Report.

33 Strong Support from Shareholders and Synergies with the 9 SM Group Benefits of SM Group Synergy

Priority rights to locate branches and ATMs in SM shopping malls

CBS mini-branches in SM Group’s Savemore, CityMall locations, ATMs at Alfamart

Access to SM Group’s ecosystem of merchants, suppliers and contractors

Access to SM Group’s retail network to promote new products

34 10 Board of Directors

• Honorary Chairman and Advisor to the Board • Chairman of the Board since May 5, 2011 since 1997 • Vice Chairman from 1989 to 2011 • He is also the Chairman of listed companies of • China Bank Board Director since May 21, 1986, SM Investments Corporation, BDO Unibank, • Director and President of SM Prime Holdings, Inc., Inc. (Emeritus), and SM Prime Holdings, Inc. and serves as Adviser to the Board of SM (Emeritus) Investments Corporation as well as occupies positions in various companies of the SM Group

Henry Sy, Sr. Hans T. Sy Honorary Chairman Chairman

• Vice Chairman of the Board since May 5, 2011 • President and Chief Executive Officer since • Chairman from 1989 to 2011 September 1, 2014 • China Bank Board Director since 1969 • Director of the Bank since May 8, 2008 • Chairman of the Boards of Union Motor • Chief Operating Officer from 1995 - 2014

Corporation and China Bank subsidiary CBC • Joined CHIB in 1975 (42 years) Properties and Computer Center, Inc. (CBC- • Director of the China Bank Savings, Inc. (CBSI),

PCCI), and Director of Super Industrial Chinabank Insurance Brokers, Inc. (CBC-IBI), CBC- Corporation PCCI, Chinabank Capital Corp. (CBCC), Manulife

China Bank Life Assurance Corp. (MCBLife),

Gilbert U. Dee Bankers Association of the Philippines (BAP) Ricardo R. Chua Vice Chairman • President of BancNet, Inc. Director & President

• Member of the Board since April 14, 1977 • Director since 1984 • President and Chief Executive Officer of the • Director/ President of JJACCIS Development Bank from 1985 to 2014 Corporation and Enterprise Realty Corporation, and • Director in CBC-PCCI, CBC-IBI and CBC Forex, Director/ Treasurer of Suntree Holdings Corporation Hydee Management & Resources Corporation, Commonwealth Foods, Inc., and GDSK Development Corporation • Independent Director in City & Land Developers, Inc. and Cityland Development

Corporation Peter S. Dee Joaquin T. Dee Director Director

35 10 Board of Directors

• Director since 1993 • Director since 2001 • Director of SM Prime Holdings, Inc. • Former President of SM Investments Corp. • Director of Supervalue, Inc., Super • Director of SM Synergy Properties Holdings Corp., Shopping Market, Inc., National Sybase Equity Investments Corp., and Tagaytay University and Sanford Marketing Corp. Resort Development Corporation

Herbert T. Sy Harley T. Sy Director Director

• Director since November 7, 2007 • Lead Independent Director and was first elected • Chairman of SM Investments Corp. to the China Bank Board on May 5, 2005 • Director of Atlas Consolidated Mining • Member of the Boards of Trustees of St. Luke’s and Development Corporation, Belle Medical Center, SLMC Global City, Inc., St. Luke’s Corp., and BDO Unibank, Inc. College of Medicine – William H. Quasha • Adviser to the Board of Directors in Memorial, and Brent International School, Inc Premium Leisure Corporation & SM • Independent Director of Seaoil Phils., Inc. and Prime Holdings, Inc. Towers Watson Insurance Brokers Philippine Inc.,

• Director in OCLP (Ortigas) Holdings, Inc., CBSI and CBCC

Manila North Tollways Corporation, and • Independent Director of , CityMall Commercial Centers Inc. Robert F. Kuan Incorporated Jose T. Sio • President of SM Foundation, Inc. and Independent Director Director GlobalFund Holdings, Inc.

• Independent Director and was first • Elected as Independent Director to the China elected to the China Bank Board on Bank Board last May 4, 2017 July 7, 2004 • Independent Director of China Bank Savings • President & CEO of Richwell Trading • Formerly Senior Vice President and Group Head of Corporation, Richwell Philippines, Inc., the Account Management Group (known now as Europlay Distributor Co., Inc., and Institutional Banking Group) until her retirement on

Internationale Globale Marques, Inc.; Feb. 12, 2012 President of Richphil House Alberto S. Yao Incorporated, and Megarich Property Margarita L, San Juan Independent Director Ventures Corp. Independent Director • Director of CBSI and CBCC

36 10 Experienced and Competent Management Team

Hans T. Sy Gilbert U. Dee Chairman of the Board Vice Chairman of the Board

Ricardo R. Chua William C. Whang President and Executive Vice President and Chief Executive Officer (CEO) Chief Operating Officer (COO)

Romeo D. Uyan Rosemarie C. Gan Executive Vice President and Executive Vice President and Treasurer Head of Retail Banking Business

President of China Bank Capital Corp.

Alberto Emilio V. Ramos Alexander C. Escucha Executive Vice President and Senior Vice President and President of China Bank Savings Head of Investor and Corporate

Relations Group

Patrick D. Cheng Lilian Yu Senior Vice President, Trust Officer and First Vice President and Head of Trust and Asset Management Group Deputy Group Head, Institutional Banking

Group

37 10 Experienced and Competent Management Team

Renato K. De Borja Benedict L. Chan First Vice President and First Vice President and Head of Consumer Banking Business Head of Treasury – Trading and Sales (Housing/Auto, Remittance and Credit Cards)

Lilibeth R. Carino Jose L. Osmeña First Vice President and First Vice President and Head, Consumer Banking Group Deputy Group Head of Retail

Branch Banking

Ryan Martin L. Tapia Virgilio O. Chua Chief Operating Officer and Managing Director, Treasurer and Managing Director, Head of Mergers and Acquisitions and Advisory, Head of Investment Banking, China Bank China Bank Capital Corp. Capital Corp.

Delia Marquez Ananias S. Cornelio III First Vice President and First Vice President and Comptroller Chief Risk Officer

Atty. Marissa B. Espino Atty. Corazon I. Morando Vice President and Vice President and Chief Compliance Officer Corporate Secretary

38 Presentation Outline

Economic Environment

Company Profile

Key Investment Merits

CorporateCorporate andand FinancialFinancial HighlightsHighlights

39 Corporate Update during the 1st half of 2017

Full subscription of P15 Bn Stock Rights Offer

Investment Grade Credit Rating from Moody’s – Baa2

Full Settlement of USD 158 Mn syndicated loan – ahead of June 2018 maturity

LTNCD Tranche 2 worth P6.35 Bn, following the P9.58 Bn release in Nov 2016 due 2022

PEACe Bond Ruling - The SC ordered BIR to return P5 Bn worth of withholding tax and additionally pay 6% interest p.a. (starting 2011) to PEACe bondholders, including China Bank.

40 Financial Performance

Net Income (PBN) Net Interest Income (PBN) Operating Income (PBN)

12.3 3.60 9.23 10.8 1.34 0.75 0.30 0.99 1.43 1.16

3.27 7.95 9.23 7.95

1H2016 1H2017 1H2016 1H2017 1H2016 1H2017

Assets (PBN) Loans Net (PBN)

Deposits (PBN) 658 580 60% 554 397 560 540 55% 324 51.4% 520 51.7% 500 50% 480 463 556 460 440 45% 420 400 40% 1H2016 1H2017 Deposits CASA to Total Deposits Ratio 1H2016 1H2017 1H2016 1H2017 41 Financial Highlights

Income Statement (In Millions) 1H 1H Change 2017 2016 Amt % Net interest Income 9,230 7,947 1,283 16.1 Non-Interest Income 3,067 2,902 165 5.7 Total Operating Income 12,297 10,849 1,448 13.3 Total Operating Expenses 7,815 6,917 897 13.0 Income before Income Tax 4,483 3,932 551 14.0 Provision for Income Tax 883 663 220 33.1 Net Income 3,599 3,269 331 10.1 Attributable to: Equity Holders of the Parent Bank 3,596 3,274 321 9.8 Non-controlling Interest 4 (6) 10 (163.6) Ratios: Net Interest Margin (%) 3.07 3.16 Cost-to-Income Ratio (%) 60.91 61.37 Return on Average Equity (%) 10.44 10.74 Return on Average Assets (%) 1.33 1.22

42 Financial Highlights

Balance Sheet (In Millions) 1H 1H Change 2017 2016 Amt % Total Assets 657,509 555,547 101,962 18.4 Loans & Receivables (Net) 396,669 324,026 72,643 22.4 Total Deposits 554,039 462,625 91,415 19.8 Low Cost Deposits 284,656 239,042 45,614 19.1 Time Deposits 269,384 223,583 45,801 20.5 Total Equity 80,115 62,472 17,643 28.2 Ratios: Loans to Deposits 71.60 70.04 Non-Performing Loans 1.81 2.63 NPL Coverage 92.85 80.47 Car Tier / CET 1 14.65 12.28 CAR Total 15.50 13.20

43 Awards and Recognition

 Highest corporate governance standards as recognized by the general market  Highly respected senior management team  On average, over 20 years of Industry experience  Successful track record of managing acquisitions and achieving financial results  Bell Award for Corporate Governance for the 5th Straight Year from The Philippine Stock Exchange (Top 5 of 268 listed companies)

2016 Asia Pacific Entrepreneurship  *Asian Corporate Director Recognition Award 2016 - Award – Financial Services Sector from Enterprise Asia Award (for Mr. Ricardo Corporate Governance Asia Awards R. Chua, CEO) Recipient of Asian Corporate Director 2016 Asia Pacific Entrepreneurship Award – Financial Recognition award from  Corporate Governance Services Sector from Enterprise Asia Award (for Mr. Asia – Chairman Hans T. Ricardo R. Chua, CEO) Sy  Ranked among top 50 publicly-listed companies in ASEAN Corporate Governance Scorecard Country Reports and Assessments 2013-2014  Gold Award for Outstanding Company 2011 and

2012 from Institute of Corporate Directors Recipient of the Bell Award for Corporate Governance for the 5th straight year by PSE, Gold award from ICD in 2011 & 2012

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Awards and Recognition

Top Corporate Best Core Issue Manager / Best Investor Banking System Best Bank for Debt Top Corporate Issue Arranger Relations Bank Implementation Capital Markets Banking and Finance Manager / Arranger Investment House Philippines Philippines Philippines Firm of the Year Bank Category Category

2016 2016 2016 2016 2016 2017

Best Investor Asia’s Best CEO Relations Best Managed Asian Corporate Best in Investor (Investor Professional - Fund for Bond Director Recognition Relations Company - Relations) – Philippines Long-Term Award - Philippines Philippines SVP Alexander C. Dollar Chairman Hans T. Sy China Bank Pres. & CEO Escucha Category Ricardo R. Chua 2015, 2016 2015, 2016, 2015, 2016, 2015, 2016 2016

Php42.15B Loan Facility to San Php31.97B Loan Facility to Php38.8B San Miguel Brewery Buenaventura Power Limited Therma Visayas Bond Issue Company Best PR Tool for Triple A Best Best Collecting China Bank Commercial Triple Power Most Innovative Local Currency Bond House 2015 Annual Bank Deal - Philippines Deal – Philippines Bond– Philippines Report

2016 2016 2016 2016 2016 2017

45 More than your banker, the right partner.

Investor Relations: Investor Relations (IR) Team: 28/F, BDO Equitable Tower, 8751 Paseo de Roxas, Makati City Alexander C. Escucha Philippines, 1226 Senior Vice President [email protected] Phone: (632) 885-5601 Fax: (632) 892-0238 Aerol Paul B. Banal, SM Email: [email protected] Vicky N. Quisido, AM Website: www.chinabank.ph [email protected]

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