Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. 中信銀行股份有限公司 China CITIC Bank Corporation Limited (A joint stock limited company incorporated in the People's Republic of China with limited liability) (Stock Code: 0998) ANNOUNCEMENT CONTINUING CONNECTED TRANSACTIONS REVISION OF EXISTING ANNUAL CAPS OF CONTINUING CONNECTED TRANSACTIONS Reference is made to our Continuing Connected Transactions Announcement dated 8 December 2014 containing, among others, the non-exempt continuing connected transactions and their annual caps stated in the Comprehensive Service Framework Agreement signed between the Bank and CITIC Group. Due to the reasons as set out in this announcement, on 23 March 2016, the Board approved to revise the existing annual caps for the years ending 31 December 2016 and 31 December 2017 in respect of the Comprehensive Service Framework Agreement signed between the Bank and CITIC Group. As the highest applicable percentage ratio in respect of the revised annual caps for the Comprehensive Service Framework Agreement is more than 0.1% but less than 5%, the transactions contemplated thereunder constitute continuing connected transactions under Chapter 14A of the Hong Kong Listing Rules and are subject to the annual reporting, announcement and annual review requirements set out in Chapter 14A of the Hong Kong Listing Rules, but exempt for the approval by independent Shareholders. 1. CONTINUING CONNECTED TRANSACTIONS WITH CITIC GROUP BACKGROUND AND GENERAL INFORMATION ON THE BANK AND CITIC GROUP AND ITS ASSOCIATE The Bank is a competitive and fast-growing national commercial bank in China with a strong and established branch network and market position. With our market leading capabilities, we provide a full range of financial products and services to our customers nationwide, with corporate banking, retail banking and financial market operations being our principal business activities. 1
As CITIC Group is a controlling shareholder of the Bank, CITIC Group and its associates constitute our connected persons under Chapter 14A of the Hong Kong Listing Rules. The Bank conducts transactions with CITIC Group and its associates in the ordinary and usual course of our business and on normal commercial terms. Information of CITIC Group and its associates is as below: CITIC Group is a state-owned comprehensive transnational holding conglomerate engaging in various areas including financing, resources and energy, manufacturing, engineering contracting, real estate and infrastructure, and its principal businesses include banking, securities, insurance, trust, asset management, futures, leasing, funds, credit cards and other financial industries, energy and transportation, medicine and biology, aviation and other manufacturing industries, as well as numerous industries such as education and press and cultural media. CITIC Limited is a company incorporated in Hong Kong and listed on the Main Board of the Hong Kong Stock Exchange (stock code: 0267). Its businesses extend globally covering financial services, real estate and infrastructure, engineering contracting, resources and energy, manufacturing and other segments. CITIC Securities is one of the first batch of securities companies in the PRC approved by the CSRC to conduct securities business and is listed on the Shanghai Stock Exchange (stock code: 600030) and the Hong Kong Stock Exchange (stock code: 6030). Its principal businesses include securities brokerage, securities trading, securities underwriting, securities proprietary trading, assets management and investment advisory services. CITIC Trust is a limited liability company established in the PRC. Its principal businesses include trust asset management, financial advisory and private equity investment fund management. CITIC Prudential Fund is a joint venture fund management company jointly established by CITIC Trust, Prudential Plc and China-Singapore Suzhou Industrial Park Ventures Co., Ltd. Its principal businesses include investment into equity fund, blend fund, bond fund, index structured fund, QDII fund and money market fund, etc. CITIC Loyalty is a company with limited liability incorporated in the PRC. Its principle businesses include providing services for branches and subsidiaries of CITIC Group such as client loyalty management, exchange of general accumulated points and custody of points. CITIC Networks is a limited liability company established in the PRC. Its principal businesses include development of application software, system integration, IT services and IT-related consulting services. Honglian Nine Five is a limited liability company established in the PRC. It owns several permits for the operation of national value-added telecommunication businesses and resources of special service numbers granted by the Ministry of Industry And Information Technology of the PRC. Its principal businesses include project outsourcing of call center services by providing systems, equipment, premises and staff, consultancy services, training services, digital information services, marketing consultancy services and interactive marketing services. 2
CITIC Construction is a wholly-owned tier-1 subsidiary of CITIC Group engaging in engineering contracting and has been ranked among the Top 50 International Contractors by ENR for consecutive years. Its principal businesses include overall contracting of EPC projects, financing construction of PPP and BOT and project management, providing proprietors with a whole solution package for life cycle including specific feasibility study, project establishment, financing, engineering construction and operation service starting from preliminary planning. 2. CONTINUING CONNECTED TRANSACTIONS Comprehensive Service Framework Agreement General Information of the Transaction We entered into a Comprehensive Service Framework Agreement with CITIC Group on 8 December 2014. The agreement has a term of three years from 1 January 2015 to 31 December 2017, and is renewable subject to the agreement of the parties and the compliance with the Hong Kong Listing Rules. In light of the impending revisions of the current annual caps under the Comprehensive Service Framework Agreement, the Bank entered into a new Comprehensive Service Framework Agreement with CITIC Group on 23 March 2016 effective from 23 March 2016 to 31 December 2017, and is renewable subject to the agreement of the parties and the compliance with the Hong Kong Listing Rules. Reasons and Benefits of the Revision of the Existing Annual Caps for the Comprehensive Service Framework Agreement The revision of the existing annual caps for the Comprehensive Service Framework Agreement is mainly for the purpose of meeting the business development needs of our Bank. Following the constantly deepening strategic transformation and rapid development and innovation of our business service, our competence to provide comprehensive financial service to clients has been constantly enhanced, our brand marketing keeps strengthening, and the demand for our outsourcing service has increased significantly. Meanwhile, along with the increase in our investment in information technology and infrastructure projects, we plan to have more cooperation with CITIC Group and its associates in technology and services. Save as aforementioned, we have also expanded our scope of service, and started to provide comprehensive services including electronic banking online services. Therefore, we intend to revise the existing annual caps as the transaction amount under the Comprehensive Service Framework Agreement is growing rapidly. Principal Terms of the Comprehensive Service Framework Agreement The principal terms of the Comprehensive Service Framework Agreement are set out as follows: Services conducted between the Bank and CITIC Group and its associates include but not limited to: medical insurance and enterprise annuity; merchandise service procurement (including conference hosting service); outsourcing services; valueadded services (including credit exchange service for clients of bank cards and electronic banking online service); advertising services; technology services; and 3
property leasing. Both parties of the agreement shall provide the services prescribed in the agreement. The service recipient shall pay service fees to the service provider. The terms of the agreement shall be no less favorable to the Bank than those available to/from independent third parties. Pricing Services under the Comprehensive Service Framework Agreement will adopt the prevailing market prices or rates normally applicable to transactions conducted with independent third parties. Such price and rates shall be determined through arm s length negotiation and on normal commercial terms. Historical Amounts and Proposed Annual Caps Historical Amount for the Year ended 31 December (RMB in millions) Approved Annual Cap for the Year ending 31 December (RMB in millions) Proposed Revised Annual Cap for the Year ending 31 December (RMB in millions) Amount of service fees 2013 2014 2015 2016 2017 2016 2017 522.71 671.46 901.00 1,600.00 1,900.00 2,700.00 3,000.00 Basis for the Proposed Annual Cap In arriving at the above annual caps, the Directors have considered the historical figures for such transactions and have taken into consideration that along with our business development, our demand for technology services, business support services, outsourcing business, product procurement services, advertisement services, value-added services, and property leasing has been growing constantly. For example, (1) for our value-added services provided by the bank to CITIC Group and its associates, the exchanged credits have a wide range of usages. The customer experience is performing well, the amount of exchanges keeps increasing, and the trading volume has been growing rapidly. It is estimated that in the next two years, the trading volume will increase significantly; and (2) with the rapid growth in the number of customers for our credit card business and retail banking business, our calling business has been constantly enlarged, bringing an increase in relevant expenses. REQUIREMENTS OF THE HONG KONG LISTING RULES As the highest applicable percentage ratio in respect of the revised annual caps for the Comprehensive Service Framework Agreement is more than 0.1% but less than 5%, the transactions contemplated thereunder constitute continuing connected transactions under Chapter 14A of the Hong Kong Listing Rules and are subject to the annual reporting, announcement and annual review requirements set out in Chapter 14A of the Hong Kong 4
Listing Rules, but exempt for the approval by independent Shareholders. BOARD CONFIRMATION The Board considers that the abovementioned continuing connected transactions and their respective proposed annual caps have been conducted in the ordinary and usual course of business of the Bank and on normal commercial terms. As a consequence, the Board is of the view that these continuing connected transactions contemplated under the abovementioned agreements are fair and reasonable and are in the interests of the Bank and the Shareholders as a whole. Our Independent Non-executive Directors are of the view that these continuing connected transactions are in the ordinary and usual course of business of the Bank and on normal commercial terms and that these continuing connected transactions are in the interests of the Bank and the Shareholders as a whole. As each of Directors Chang Zhenming, Zhu Xiaohuang, Li Qingping and Sun Deshun are connected with the proposed continuing connected transactions between the Bank and CITIC Group, they have abstained from voting on the Board resolutions approving the above agreements and the continuing connected transactions thereunder. Other than disclosed above, none of the Directors has material interest in these continuing connected transactions, or has abstained from voting on the Board resolutions approving the abovementioned agreements and the continuing connected transactions thereunder. 3. DEFINITIONS Unless the context requires otherwise, the following expressions in this announcement shall have the meanings set out below. associate(s) Bank, we or us Board has the meaning ascribed to it under the Hong Kong Listing Rules China CITIC Bank Corporation Limited ( 中信銀行股份有限公司 ), a joint stock limited company incorporated in the PRC and the H Shares and A Shares of which are listed on the Hong Kong Stock Exchange (stock code: 0 998) and the Shanghai Stock Exchange (stock code: 601998), respectively, and, unless the text requires otherwise, including all its subsidiaries the board of directors of the Bank CITIC Construction CITIC Construction Co., Ltd ( 中信建設有限責任公司 ) CITIC Financial Leasing CITIC Financial Leasing Co., Ltd. ( 中信金融租賃有限公司 ) CITIC Group CITIC Group Corporation ( 中國中信集團有限公司 ), formerly known as CITIC Group ( 中國中信集團公司 ) CITIC Limited CITIC Limited ( 中國中信股份有限公司 ) 5
CITIC Loyalty CITIC Loyalty Business Technology Co., Ltd ( 中信樂益通商務科技有限公司 ) CITIC Networks CITIC Networks Co., Ltd ( 中信網絡有限責任公司 ) CITIC Prudential Fund CITIC Prudential Fund Limited ( 信誠基金管理有限責任公司 ) CITIC Securities CITIC Trust CNBC Capital Comprehensive Service Framework Agreement connected person(s) CSRC Director(s) Hong Kong Hong Kong Listing Rules Hong Kong Stock Exchange Honglian Nine Five Independent Non-executive Director PRC or China RMB Share(s) Shareholder(s) CITIC Securities Company Limited ( 中信證券股份有限責任公司 ) CITIC Trust Co., Ltd ( 中信信托有限責任公司 ) CNBC (Hong Kong) Capital Limited the comprehensive service framework agreement entered into between the Bank and CITIC Group has the meaning ascribed to it under the Hong Kong Listing Rules China Securities Regulatory Committee director(s) of the Bank the Hong Kong Special Administrative Region of the PRC the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited The Stock Exchange of Hong Kong Limited Honglian Nine Five Information Industry Corp. ( 鴻聯九五信息產業股份有限公司 ) independent non-executive director of the Bank the People s Republic of China, but for the purposes of this announcement only, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan Renminbi, the lawful currency of the PRC ordinary share(s) with a par value of RMB1.00 each in the share capital of the Bank the holders of the Share(s) 6
By order of the Board of China CITIC Bank Corporation Limited Chang Zhenming Chairman Beijing, the PRC 23 March 2016 As at the date of this announcement, the executive directors of the Bank are Ms. Li Qingping and Mr. Sun Deshun; the non-executive directors are Mr. Chang Zhenming, Dr. Zhu Xiaohuang and Mr. Zhang Xiaowei; and the independent non-executive directors are Mr. Li Zheping, Ms. Wu Xiaoqing, Mr. Wong Luen Cheung Andrew and Mr. Yuan Ming. 7