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21 April 2006
THE PHILIPPINE STOCK EXCHANGE, INC
PSE Center, Exchange RoadOrtigas Center, Pasig CityAttention:
MS. JURISITA M. QUINTOS
Senior Vice President – Operations GroupListing and Disclosures DepartmentDear Ms. Quintos:Pursuant to existing rules and regulations, we are submitting to your good office ChinaBank’s SEC-17A Report (Annual Report) and audited Financial Statements for the year2005.For your information and guidance.Very truly yours,ALEXANDER C. ESCUCHAFirst Vice President &Corporate Information Officer
 
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SECURITIES AND EXCHANGE COMMISSIONSEC FORM 17-A
1. For the fiscal year ended December 31, 20052. SEC Identification Number NA (Exempt Securities)3. BIR Tax Identification No. 320-000-444-210-NV4. Exact name of registrant as specified in its charter CHINA BANKING CORPORATION5. PHILIPPINES6. Industry Classification CodeProvince, Country or other jurisdiction of (For SEC use only)incorporation or organization7. China Bank Bldg., 8745 Paseo de Roxas corner Villar Street, Makati City 1226 P.O. 2182
 
Address of principal officePostal Code8. (632) 885-5555
 
Registrant’s telephone number, including area code9. Not ApplicableFormer name, former address, and former fiscal year, if changed since last report10. Securities registered pursuant to Sections 4 and 8 of the RSANumber of Shares of Common StockTitle of Each Class Outstanding and Amount of Debt Outstanding
 
Common stock, P100 par value 49,331,550
 
shares11. Are any or all of these securities listed on the Philippine Stock ExchangeYes [ x ] No [ ]12. Check whether the registrant:has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17.1thereunder or Section 11 of the RSA and RSA Rule 11 (a)-1 thereunder, and Sections 26 and141 of The Corporation Code of the Philippines during the preceding twelve (12) months (or forsuch shorter period that the registrant was required to file such reports.Yes [ x ] No [ ](b) has been subject to such filing requirements for the past ninety (90) days.Yes [ x ]No [ ]13. Aggregate market value of the voting stock held by non-affiliates: Not Applicable14. Portions of the Company’s 2005 Annual report to stockholders are incorporated by reference intoParts I & II of this report
 
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PART I - BUSINESS AND GENERAL INFORMATION
Item 1. Business
(1) Description of Business
Business Development.
China Banking Corporation (CBC) is the 11
th
largest commercial bank inthe country in terms of assets. The Bank enjoys a remarkable and enviable status within thePhilippine banking community. CBC’s consecutive years of record earnings, balance sheet strength,capital adequacy and reputation for banking excellence make it a major player within the bankingarena. Driven by a strong commitment to customer service, CBC continues to develop and offercustomer-focused and innovative products & services such as deposit accounts, retail andcorporate loans, trust, treasury, cash management & ATM services, and recently, electronic Bankingvia
China Bank Online 
to answer the needs of an increasingly demanding clientele.
Historical Background.
China Bank was incorporated on July 20, 1920 and commenced business onAugust 16 of the same year as the first privately owned local commercial bank in the Philippines. Itresumed operations after World War II on July 23, 1945, five months after the liberation of Manila. Itplayed a key role in the post-war reconstruction and economic recovery by providing financial supportto businesses and entrepreneurs. China Bank was listed on the local stock exchange in 1947 andacquired its universal banking license in 1991.
Business Milestone.
China Bank became the first bank in Southeast Asia to process depositaccounts on-line in 1969, and the first Philippine bank to offer telephone banking in 1988. It joinedseven other banks in setting up BancNet, the country’s largest ATM network in 1988. In 1994, ChinaBank launched its consumer loans, HomePlus and AutoPlus. 1996 saw the launching of its interest-earning checking account “China Check Plus”. The Bank also issued its US Dollar Floating RateCertificate of Deposit in 1996, its first time to access the foreign capital markets. China BankInsurance Brokers started its operations in 1998. In 2002, CBC hit the P100 billion mark in totalresources. In 2005, it launched China Bank Online e-banking portal for retail and corporatecustomers. China Bank has transformed itself from a middle of the pack bank to industry bestperformer. In the last three years, the Bank has emerged as a strong competitor by being morecustomer-focused through its Branch Based Marketing (BBM) Program and Sales ManagementSystem that led to record a P3.8 billion growth in CASA and greater customer loyalty. The Bankalso successfully pursued its expanded business models for wealth management, investmentmanagement and fixed income securities trading. Consumer lending, particularly contract to sellfinancing, was also a growth area in terms of interest revenues. CBC’s cash management servicesand expanded trust/private banking businesses are expected to provide greater income streams inthe coming years.Now on its 85
th
year, China Bank is one of the most profitable and best capitalized banks in thecountry with total resources of P133 billion and total capital funds of P 22 billion.China Bank’s hard work and dedication did not go unnoticed, having been awarded “OutstandingCommercial Bank” by Consumers Union of the Philippines, National Consumers Quality Awards andParangal ng Bayan Foundation. The Bank through its HomePlus Loan product, was also recognizedas “Most Outstanding Real Estate Loan” by the Philippine Quality Awards for Business Excellence.The Bank’s subsidiary, China Bank Insurance Brokers, Inc
.
sustained its growth momentum in 2005posting a 14.8% improvement in revenue and 6.7% improvement in net income (before tax) – unaudited. Improvement in collection efforts were made so that they now have one of the lowestreceivables turnover in the industry. China Bank Insurance Brokers, Inc. also establishedrelationships with foreign brokers and can now better assess how local premium prices compare withglobal benchmarks. The Group also increased their sub-agents for motor car insurance whichresulted in a 23% increase in non-China Bank motor insurance business.
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