On 16 March 2007, the Bank received a notification issued by the Ministry of Finance
and the State Administration of Taxation (Cai Shui [2007] No. 40) on the salaries paid
by the Bank to its employees that is allowable as a deductible expense for computing
the Bank’s income tax for 2006. Accordingly, the Bank’s total income tax expense for
2006 is expected to be reduced by approximately RMB 4,600 million.
The Bank conducted an estimate of the Bank’s consolidated financial information for
2006 in accordance with the Accounting Standard System for Business Enterprise
issued by the Ministry of Finance of the People’s Republic of China and the
Accounting Regulations for Financial Institutions. The Bank currently estimates that
its net profit for the year 2006 is expected to exceed the net profit for the year 2005
(RMB 27,942 million) by more than 50%.
Bank of China Ltd.
March 19, 2007
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