SDB completed acquisition of PAB shares through directed issuance The two banks will start integration and the prospect of the new bank is expecting


[SZ, China] July 28, 2011 19:00

  Shenzhen Development Bank (SDB, SZSE 0000001) submitted announcement to SZSE today saying that SDB’s acquisition of PAB shares through directed issuance (“this deal”) has officially closed. According to this deal, SDB issues about 1.638 billion new shares through NPO at a price of RMB 17.75 per share to Ping An Insurance (Group) Company of China, Ltd. (“PAG”) to swap about 7.825 billion PAB shares held by PAG (accounting for 90.75% of the total PAB capital stock) and about RMB 2.69bn cash. After this deal, SDB has about 90.75% shareholding of PAB and PAB becomes a subsidiary controlled by SDB; PAG and its holding subsidiary totally have about 2.684 billion SDB shares and the shareholding is about 52.38%, which means SDB becomes a subsidiary controlled by PAG. The close of this deal is a steady step forward for the integration of SDB and PAB. Within a period in future, SDB and PAB will still operate as independent legal entities for a while without affecting the customers and relevant business.

  Please visit SDB website or for the full announcement. For this press release, please visit SDB website。

Two-bank integration is proceeded steadily and the two banks are proactively promoting advantageous businesses

  As per the announcement, as of July 20, the formalities of PAB equity transfer, payment of PAG subscription cash and SDB new share registration and custody have been finished. SDB officially becomes a controlling shareholder of PAB with 90.75% shareholding and PAG is also officially becomes a controlling shareholder of SDB with 52.38% shareholding.

  SDB expressed that the close of this deal is an important step for implementing “PAB/SDB integration”, which is a significant milestone. At next step, SDB will push ahead with the two-bank integration through the way including but not limited to merging PAB through absorption as per relevant laws, regulations and regulatory requirements and try to complete the integration as soon as possible. PAG will support SDB to conduct the above integration and provide necessary assistance. The specific integration information will be timely announced as per the work progress.

  SDB said that at present, SDB and PAB already started relevant planning and preparations related to integration, which involving organization structure, staff, policy, process, system and culture at different levels and of all businesses. In integration work, the two banks will follow the principles like paying attention to customer experience, enhancing internal control, fully communicating and ensuring IT system security, etc. to properly plan and prepare for the integration. The two banks’ people will, on the basis of fully understanding and analyzing their status quo, choose business model which is better for the bank’s future development, fully leverage their own advantageous products, businesses and management model to get ready for the strong development of the merged bank in the future.

  SDB emphasized that integration will only be taken as phase work for the bank. The two banks will still focus on business development, proactively promote advantageous business no matter in the process of preparation for integration or in the process of implementation. The integration work will also be proceeded around the principle of supporting better development in the future.

As for the timetable of integration, SDB said that they will try to accelerate, but the specific time still depends on the regulatory approval and relevant work progress.

Rely on PAG’s strength, implement Best Bank Strategy

  After two-bank integration, bank’s capital strength will further grow, asset quality remains the best among listed banks. Integration will effectively supplement the strengths of both banks, expand outlet layout as well as fully tap synergy and centralized resource effect. As per 2011 Q1 two banks’ financial reports, the total asset of the merged bank will exceed RMB 1 trillion, and the number of outlets will increase to 369 and the number of CC will exceed 10mn; as per pro forma financial report, in 2011 after the two-bank merger, the net profit of the merged bank is expected to be over RMB 9.5bn. The bank’s market share will grow sharply after integration, the bank will have 369 outlets in 28 cities, covering about 80% of PAG’s customers.

  In the future, relying on PAG’s integrated financial service strength, like strong brand, capital, customer, outlet, IT, IOC, high-end customer, talent and etc. two-bank integration will be steadily conducted on the basis of fairness, openness, transparency, win-win, stability and development, the merged bank will further close the strategic cooperation relationship with PAG and its subordinated subsidiaries, better integrate into PAG’s one-stop financial service platform, as well as march toward the target of “China’s best commercial bank” through continuously enhancing customer experience and providing extensive financial services to consolidate its comprehensive competiveness.

About SDB

  Shenzhen Development Bank (SDB), a national bank headquartered in Shenzhen, is the first joint stock company listed on Shenzhen Stock Exchange (SZSE 000001). As of March 31, 2011, the bank’s total asset has reached RMB 807.6 billion. Through 293 outlets in 20 main cities across China, SDB provides corporate/retail/government customers with various kinds of financial services. After completing the deal, Ping An Insurance (Group) Company of China, Ltd. and its subsidiaries hold 2.684 billion SDB shares, representing about 52.38% of total shares of SDB after the NPO.

  Key items on the balance sheet on March 31, 2011:
  - Total deposit: RMB 582.7 billion
  - Total loan: RMB 422.5 billion
  - Total asset: RMB 807.6 billion

About Ping An

  As China’s first joint stock insurance company, Ping An has developed into a comprehensive integrated financial services group covering insurance, banking, investment and other financial services. As of March 31, 2011, the group’s total asset and net asset have reached RMB 1.231074 trillion and RMB 123.946 billion respectively and over 60 million clients have enjoyed Ping An services in insurance, banking and investment. PAG ranks 147th in “Forbes 2011 Global 2000”, 107th among Financial Times “top 500 of the world” and 383th in “Fortune Global Leading 500”. In financial investment field, Ping An subsidiaries specializing in securities, trust and asset management are taking the lead with excellent performance.

About Ping An Bank

  As a cross-regional joint stock commercial bank, Ping An Bank’s registered capital is RMB 8.623 billion. It is headquartered in Shenzhen with the outlets distributing in Shenzhen, Shanghai, Fuzhou, Quanzhou, Xiamen, Hangzhou, Guangzhou, Dongguan, Huizhou and Zhongshan. As of December 31, 2010, the bank’s total asset, total deposit and total loan are RMB 255.8 billion, RMB 182.1 billion and RMB 130.8 billion respectively. Currently, Through 76 outlets in 10 main cities across China, Ping An Bank provides corporate/retail/government customers with various financial services.