Excerpts:

Gross income of China Minsheng Bank in 1H07E was Rmb11.29bn, an increase of 47.42% YoY; net interest income was Rmb10.077bn, an increase of 44.32% YoY; service charge revenue was Rmb985mn, an increase of 59.13% YoY; after-tax net profit was Rmb2.821bn, an increase of 65.81% YoY; EPS was Rmb0.23.

Loans kept fast growth rate. China Minsheng Bank's loans balance was Rmb541.885bn in 1H07E, an increase of 14.78% over the end of 2006 (adjusted). Deposits balance of China Minsheng Bank was Rmb641.83bn, an increase of 10.03% over the end of 2006. Negative growth of deposit that appeared at the end of Q1 in 2007 was eased.

Increases of loans and interest difference promoted rapid growth of interest income. As the loans volume of the company was expanded, the sources of interest income of the company were expanded. In addition, as China Minsheng Bank’s current deposit accounts for a relatively high proportion (43.2%) of total deposits, successive rate increases of the Central Bank has not notably increased the liability cost of the company and the enlargement of interest difference has helped the net interest income’s surge.

The proportion of non-interest income is rising. Non-interest income of China Minsheng Bank in 1H07E was Rmb1.213bn, an increase of 79.4% YoY, and net service charge income was Rmb985mn, an increase of 59.1% YoY. Intermediary service of China Minsheng Bank is keeping high growth, and the proportion of service charge is second only to China Merchants Bank (15.23%) among all the nationwide listed commercial banks.

The cost/income ratio is higher. The operating expenses of China Minsheng Bank added up to Rmb4.882bn in 1H07E, an increase of 51.56% YoY. Large increase (83.6%) of the operating expenses resulted from the surge of the staff's salary expenses.

Assets are of high quality and the proportion of the non-performing loans is reducing. The proportion of the non-performing loans of China Minsheng Bank dropped by 0.13 percentage points YoY in 1H07E to 1.10%, the lowest among all the nationwide commercial banks. Consolidated coverage of the company was 118.16%, much better in the listed banks.

March firmly towards mixed operation. China Minsheng Bank announced on August 22: recently the company has communicated with Shaanxi International Trust & Investment Corp., Ltd. on the strategic cooperation between the two companies and the specific details are still under discussion. We can find out from this, just as the board of directors of Bank of Communications purchased 85% of the stock rights of Hubei International Trust & Investment Corp., Ltd. on May 31, 2007 (under examination and approval), the commercial banks are speeding up the paces of mixed operation. If the advantage complementation of the banks and the trust industry is facilitated, the comprehensive profit ability of the commercial banks will be promoted. Although there is uncertainty of the cooperation between China Minsheng Bank and Shaanxi International Trust & Investment Corp., Ltd., the idea of the company to march into mixed operation is very clear.