Ompliance Monitoring Work for Credit Management, and Conducted the Credit Inspection Across the Whole Bank and Focused on Major Branches, as Well as Special Inspection in the Important Regions Such as Loans Made Through

ompliance monitoring work for credit management, and conducted the credit inspection across the whole bank and focused on major branches, as well as special inspection in the important regions such as loans made through government financing vehicle, real estate loans, bill business, warehouse pledge business, and big credit. There was no major credit case occurred in the year. Based on the CBRC 5-tier classifications, the Bank categorize credit assets risk into ten tiers, including tier-1 normal, tier-2 normal, tier-3 normal, tier-4 normal, tier-5 normal, tier-1 special mention, tier-2 special mention, subordinated, doubtful, and loss, and beside that a “write-off” tier is set aside. The Bank applies different management policies to different loan classifications.

The Bank set professional NPL collection and disposal team, and conducted centralized and specialized NPL collection and disposal, and got involved into asset security and risk release work early for problematic loans, which obtained good result.

In 2009, the Bank enhanced risk management measures on credit card, improved credit card approval strategy and information verification method, upgraded approval process and post-lending collection, enhanced anti-fraud measures, and initiated and rolled out the security credit line to become the avant-garde of practicing security credit line in China.

（2） Market risk

The principal market risk facing the Bank comes from position of interest rate and exchange rate products. Either trading business or non-trading business of the Bank could incur market risk. The target of market risk management is to avoid excessive loss of revenue or equity caused by it, meanwhile to offset the impact of volatility risk of financial instruments on the Bank. The Bank set up the Asset/Liability Committee to formulate policies of market risk management and to determine the targets of both market risk management and position limit on market risk. The committee is also...