2008-09-26

[Shenzhen, China] 18:00, Sep 25, 2008

　　Shenzhen Development Bank (“SDB”; SZSE 000001) filed today, with the Shenzhen Stock Exchange, its report on today’s meeting of the Board of Directors. The full text is available at www.cninfo.com.cn. This press release summarizes key matters resolved at the meeting.

　　The board approved shareholder proposals for bond issues over the next 3 years: issuance of up to 10 billion Yuan subordinated debt, extension of validity of the proposal to issue up to 8 billion Yuan hybrid bonds, and issuance of up to 10 billion Yuan financial bonds, in tranches over the next 36 months. The Bank also announced that the Bank and Bao Steel Group agreed to terminate the Share Subscription Agreement that was entered in Nov. 2007.

The subordinated debt and hybrid bonds would add to the total capital of the bank, thus supporting CAR and future growth. The financial bonds would provide a potential relatively low-cost source of additional medium-term funding for business growth.

　　SDB delivered strong performance in the first half of 2008 – Net income reached 2.144 billion yuan, up 1.020 billion Yuan or 91% compared to a year ago. CAR reached 8.53% and Core CAR was 6.15% at 06/30/2008, above the regulatory requirements of 8% and 4% respectively. In order to further improve the Bank’s capital base, the board passed the proposals to issue up to 10 billion of subordinated debt and approved extending the validity period of the proposal to issue up to 8 billion hybrid bonds in the next 36 months. The term of subordinate debt will range between 5 to 15 years and the term for hybrid bonds will be 15 years or more. The actual issue time, the amount for each issue, maturity, & coupon rate will be decided by the Bank based on future growth, the market situation, and other factors, and tranches of issuance will be announced at from time to time.

　　The Bank and Bao Steel Group mutually agreed to terminate the Share Subscription Agreement which was reached on Nov 30th 2007. It was then agreed that the Bank would issue 120 mm ordinary shares to Baosteel Group (“the Issue”) as long as the prerequisites prescribed by the Share Subscription Agreement were satisfied within a specified time. As the Long Stop Day has passed and the requisite approvals have not been completely satisfied, the Bank and Baosteel Group mutually agreed to terminate the Subscription Agreement and the Issue.

　　In addition to the capital plans, the board reached a resolution to issue 10 billion Yuan of financial bonds with maturity between 1 to 10 years. Funds raised through financial bonds, although not counted into capital, will provide additional medium term funding for the Bank. The Bank will announce the details upon the actual issuance of each tranche.

　　The Board adjusted the proposed dividend plan for the first half of 2008 to 3 shares per 10 shares from the previous 2 shares per 10 shares while cash dividend per 10 shares will be raised to 0.335 yuan (tax included) from 0.23 yuan (tax included) previously.

　　The above proposals regarding bonds and dividend payout will take effect upon approval at a Shareholders’ Meeting to be held on Oct 15, 2008.

　　The Board also approved a plan for sale of packages of NPL totaling up to 2.676 billion yuan, similar to what the Bank successfully achieved last year, selling 1,295 mm Yuan NPL.

Abut SDB

　　Shenzhen Development Bank, the first joint-stock owned company to list on the Shenzhen Stock Exchange (SZSE 000001), is a national bank headquartered in Shenzhen, with RMB 441.8 billion Yuan in assets as of 2008/06/30. SDB provides a broad range of services to commercial, retail, and government customers, through 260 branches and sub-branches in 18 major cities across China. 16.76% of the Bank’s shares are owned by Newbridge Asia AIV III, L.P.