The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

THE HKCB BANK HOLDING COMPANY LIMITED

(Incorporated in Bermuda with limited liability)

MAJOR TRANSACTION

PROPOSED DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL OF

THE HONGKONG CHINESE BANK, LIMITED AND ITS SUBSIDIARIES

PROPOSED CHANGE OF COMPANY NAME

Further to its latest announcement dated 21st September, 2001, the Board of Directors of the Company wishes to announce that the Company has, on 31st October, 2001, entered into a conditional agreement with CITIC Ka Wah pursuant to which the Company has agreed to sell or procure the sale of, and CITIC Ka Wah has agreed to purchase, the entire issued share capital of HKCB and its subsidiaries.

The transaction constitutes a major transaction for the Company under the Listing Rules and is therefore subject to the approval by the Company's shareholders. As permitted by the Listing Rules, a written approval of the transaction from Lippo CRE, a shareholder with an approximately 58.78 per cent. shareholding interest in the issued share capital of the Company, has been obtained. Completion of the Sale and Purchase Agreement is conditional upon fulfillment of various conditions as set out under the section headed "Conditions Precedent" of this announcement.

As a consequence of the Disposal, the directors of the Company are considering to make some adjustments to the board and senior management structure of the Group after completion of the transactions.

It is intended that the name of the Company will be changed upon completion of the transaction. As a result, the Company will despatch to its shareholders as soon as practicable a circular containing, inter alia, a notice to convene a special general meeting of the Company at which a special resolution will be proposed to change the name of the Company. The proposed new name of the Company will be included in such circular.

Trading in the shares of the Company has been suspended since 10:00 a.m. on 31st October, 2001 and application has been made to the Stock Exchange for resumption of trading with effect from 10:00 a.m. on 2nd November, 2001.

INTRODUCTION

Further to its latest announcement dated 21st September, 2001, the Board of Directors wishes to announce that the Company has, on 31st October, 2001, entered into a conditional agreement with CITIC Ka Wah pursuant to which the Company has agreed to sell or procure the sale of, and CITIC Ka Wah has agreed to purchase, the entire issued share capital of HKCB and its subsidiaries.

ING Barings has been appointed as financial adviser to the Company on the transaction.

SALE AND PURCHASE AGREEMENT

Date of the Sale and Purchase Agreement

31st October, 2001

Parties to the Sale and Purchase Agreement

Vendor: The Company

Purchaser: CITIC Ka Wah

CITIC Ka Wah is independent of and not connected with the Company, the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or any of their associates (as such term is defined in the Listing Rules).

Sale and Purchase of the Sale Shares

The Company shall sell or procure the sale of and CITIC Ka Wah shall purchase 2,393,341,176 shares of HK$1.00 each in the capital of HKCB, representing its entire issued share capital.

The sale of HKCB also involves the sale of HKCB Finance, a wholly-owned subsidiary of HKCB, as well as other subsidiaries of HKCB and a portfolio of mortgage loans which are currently owned by a wholly-owned subsidiary of the Company and which prior to Completion will be assigned to a newly incorporated subsidiary of HKCB. HKCB Finance is engaged in the provision of consumer finance and related services. HKCB will also transfer its 50% equity interest in Reliance HKCB Insurance Company Limited to the Company, which will not be included in the sale.

The terms of the transaction were arrived at after arm's length negotiations between the Company and CITIC Ka Wah and the Board of Directors (including the independent non-executive directors) considers the terms to be on normal commercial terms and are fair and reasonable and in the interests of all shareholders of the Company.

As the mortgage lending business is a banking related business, the parties agreed, as a commercial matter, to effect the transfer of a portfolio of residential mortgages from Hong Kong Housing Loan Limited, a wholly-owned subsidiary of the Company, for cash at book value (net of provisions) as at 31st October, 2001 to a newly incorporated subsidiary of HKCB.

Consideration

The aggregate consideration, arrived at after arm's length negotiations between the Company and CITIC Ka Wah after considering, among other things, the net asset value of HKCB, for the Sale Shares shall be the sum of HK$4,200,000,000 which shall be payable by CITIC Ka Wah to the Company in the following manner:

(i) an amount of HK$42,000,000 has been paid by way of a cash deposit which is held by the Escrow Agent pending Completion at which time it shall be released to the Company;

(ii) as to an amount of HK$3,318,000,000 (together with the deposit referred to in (i) above, representing 80 per cent. of the consideration), in cash on Completion;

(iii) as to an amount of HK$590,000,000 (representing approximately 14 per cent. of the consideration), by the delivery to the Company, on Completion, of 1,180 Certificates of Deposit; and

(iv) as to an amount of HK$250,000,000 (representing approximately 6 per cent. of the consideration), by the delivery to the Escrow Agent, on Completion, of 500 Certificates of Deposit to be held by the Escrow Agent in accordance with the provisions of the Sale and Purchase Agreement. (Please also refer to the section below headed "NPL Adjustments")

The aggregate consideration (before any NPL Adjustments) for the Sale Shares represents approximately 1.42 times the adjusted consolidated net asset value of HKCB as at 31st December, 2000 of approximately HK$2,960 million, representing an adjusted consolidated net asset value of HK$1.24 per Share, adjusted to take into account, among other things, the valuations of HKCB's properties and investment portfolio and the estimated consolidated earnings of HKCB for the three months ended 31st March, 2001.

Conditions Precedent

Completion of the Sale and Purchase Agreement is conditional upon the following:

(i) CITIC Ka Wah and any holding company or other controller of CITIC Ka Wah having been approved by the Monetary Authority as a majority shareholder controller (as such expression is defined in the Banking Ordinance) of HKCB and HKCB Finance under Section 70 of the Banking Ordinance and the chief executive and directors of HKCB and HKCB Finance which CITIC Ka Wah proposes to appoint on Completion having been approved for appointment by the Monetary Authority under Section 71 of the Banking Ordinance;

(ii) completion of the transfer of a portfolio of residential mortgages from Hong Kong Housing Loan Limited, a wholly-owned subsidiary of the Company, for cash at book value (net of provisions) as at 31st October, 2001 to a newly incorporated subsidiary of HKCB;

(iii) written consent from the Cayman Islands Monetary Authority to the change of control of HKCB, as contemplated by the Sale and Purchase Agreement;

(iv) written approval from the SFC (in accordance with Section 26A of the Securities and Futures Commission Ordinance) to the change in the shareholding in HKCB (being an exempt dealer licensed by the SFC in accordance with the Securities Ordinance) as contemplated by the Sale and Purchase Agreement;

(v) if required, the written consent from the Insurance Authority of Hong Kong to the change of control of HKCB Insurance Agency Limited, a wholly-owned subsidiary of HKCB, as contemplated by the Sale and Purchase Agreement; and

(vi) a simple majority of the shareholders of each of the Company, CITIC Ka Wah, Lippo China Resources Limited and Lippo Limited (excluding those shareholders prohibited by Rule 14.26 of the Listing Rules or the Stock Exchange from voting on the relevant resolution) having approved the transactions contemplated by the Sale and Purchase Agreement pursuant to the Listing Rules or, if permitted by the Stock Exchange, written approvals pursuant to Rule 14.10 of the Listing Rules. (Please refer to section headed "MAJOR TRANSACTION" below)

Completion of the Sale and Purchase Agreement is expected to occur on the third day following the fulfillment (or waiver in the case of condition (ii) above) of the conditions referred to above but shall not occur on a date falling less than two and a half months from the date of the Sale and Purchase Agreement.

If the conditions precedent referred to above are not fulfilled (or waived) by the Long Stop Date, the Sale and Purchase Agreement shall, save as otherwise provided in the Sale and Purchase Agreement, become null and void from the beginning and none of the parties shall have any rights against any other party.

NPL Adjustments

The Company and CITIC Ka Wah have agreed that the following adjustments will be made in relation to the NPLs of HKCB and HKCB Finance:

(i) adjustments would be made in favour of CITIC Ka Wah if new NPLs of HKCB and HKCB Finance as at 31st December, 2001 exceeds the writeback of the existing NPLs of HKCB and HKCB Finance which are classified as NPLs as at 31st December, 2000 by more than HK$275 million; and

(ii) adjustments would be made in favour of the Company if the writeback of the existing NPLs of HKCB and HKCB Finance which are classified as NPLs as at 31st December, 2000 exceeds new NPLs of HKCB and HKCB Finance as at 31st December, 2001 by more than HK$275 million.

The amount of the adjustments will be determined by reference to the difference in the provisions made in respect of the new NPLs and the provisions released in respect of the recovered NPLs, subject to a maximum adjustment of HK$250 million either way.

For the purpose of the above adjustments, part of the consideration of the transaction, namely 500 Certificates of Deposit in an aggregate amount of HK$250,000,000, would be delivered by CITIC Ka Wah to the Escrow Agent on Completion. Any adjustments which are made in favour of CITIC Ka Wah would be made by way of a deduction of the number of Certificates of Deposit delivered by the Escrow Agent to the Company. Any adjustments which are made in favour of the Company would be made by way of issue of additional Certificates of Deposit by CITIC Ka Wah to the Company.

Liquid Asset Undertaking

The Company has undertaken to CITIC Ka Wah that it will maintain an amount of cash and liquid assets in an aggregate of at least HK$350 million (which shall include the 500 Certificates of Deposit held in escrow) for a period of 12 months from the Completion Date.

Before the release of the above 500 Certificates of Deposit from the Escrow Agent, the HK$100 million over the HK$250 million cap (and in the event the 500 Certificates of Deposit being released from the Escrow Agent, the amount of HK$350 million) is intended to cover any unidentified potential liabilities which may arise from claims against any breach of representations and warranties pursuant to the Sale and Purchase Agreement. The amount is arrived at after arm's length negotiations between the relevant parties.

SPECIAL CASH DIVIDEND

Conditional upon completion of the transaction, the Company will declare the Special Cash Dividend, amounting to not less than approximately HK$1,352 million in aggregate, equivalent to not less than HK$1.00 per share in the Company. The Special Cash Dividend would be paid to shareholders of the Company whose names appear on the register of members of the Company as at the Record Date. The Special Cash Dividend is expected to be paid on the Completion Date and will be financed in whole by the net proceeds of the transaction. The Company will make a further announcement upon determination of the Record Date.

RATIONALE FOR THE TRANSACTION AND FUTURE OF THE COMPANY

Notwithstanding that the business of HKCB has achieved respectable growth in the past few years, taking into account the recent trend of consolidation in the banking industry, the directors of the Company believe that the prospects of HKCB, as an independent entity, would be enhanced if it was a part of a larger banking group. Accordingly, the directors of the Company, including the independent non-executive directors of the Company, believe that the transaction represents a good opportunity for the Company to realise its investment in HKCB under the present operating environment.

Following the disposal of HKCB, which is the Group's major subsidiary, the Group's principal activities will include securities brokerage, underwriting, money lending, investment advisory and funds management, which generated total turnover of approximately HK$248 million for the year ended 31st December, 2000. The Group's operating income net of interest expense attributable to the aforesaid businesses accounted for approximately 18.7 per cent. of the operating income net of interest expense of the Group. Part of the net proceeds of the transaction will be used as working capital for the Group and a part will be used to recapitalise the Group's securities brokerage business. The management of the Group is also exploring a wide variety of alternatives for the application of the proceeds to opportunities that are consistent with the management's objective of creating additional value for shareholders and opportunities which the management of the Group is confident to be developed. As of the date of this announcement, no definitive investment opportunities have been identified by the Group although the current preference of the Group is to explore opportunities in the financial sector. Any acquisitions made by the Group in the future would be made in accordance with the Listing Rules, where applicable.

The Company is aware of the obligations under Rule 14.35 of the Listing Rules regarding a company whose assets consist substantially of cash and thus ceases to trade and paragraph 38 of the Listing Agreement in relation to the sufficiency of operations or have tangible assets of sufficient value. Based on their assessment of the remaining businesses of the Group, the directors of the Company are of the view that the Group will continue to comply with paragraph 38 of the Listing Agreement and will not result in the circumstances under Rule 14.35 of the Listing Rules after the Disposal. It is the Company's intention to remain suitable for listing and the Company will inform shareholders of its plan in due course. However, no negotiation or agreement has been entered into by the Company in relation to any future investment at this time. To the extent that the net proceeds of the transaction are not immediately used for the above purposes, they will be placed with banks and other financial institutions on term deposit.

As a consequence of the Disposal, the directors of the Company are considering to make some adjustments to the board and senior management structure of the Group after completion of the transactions.

CHANGE OF COMPANY NAME

MAJOR TRANSACTION

A circular containing details of the transaction will be despatched to the shareholders of the Company as soon as practicable and in accordance with the provisions of the Listing Rules.

INFORMATION ON HKCB

HKCB is a Hong Kong licensed bank with unaudited consolidated total assets of HK$22.1 billion as at 30th June, 2001. It currently operates 24 branches in Hong Kong and provides a wide range of banking, financial and related services to corporate and individual customers. HKCB Finance, the principal subsidiary of HKCB, has 14 branches in Hong Kong and provides a wide range of consumer finance and related services.

Audited consolidated net profit before tax of HKCB, after adjustment to take into account the valuation of investment properties (in accordance with the revised SSAP 2.113 "Accounting for investment properties") amounted to HK$111.6 million and HK$55.7 million for the years ended 31st December, 2000 and 1999 respectively. Audited consolidated net profit after tax of HKCB, after adjustment to take into account the valuation of investment properties (in accordance with the revised SSAP 2.113 "Accounting for investment properties") amounted to HK$100.3 million and HK$45.5 million for the years ended 31st December, 2000 and 1999 respectively. The consolidated net asset value of HKCB was HK$1.35 per Share and HK$1.30 per Share as at 31st December, 2000 and 1999 respectively, as adjusted to take into account the valuation of investment properties (in accordance with the revised SSAP 2.113 "Accounting for investment properties"). Based on the published unaudited consolidated accounts of HKCB in respect of the six months ended 30th June, 2001, consolidated net profit before tax amounted to HK$120.7 million, consolidated net profit after tax amounted to HK$114.8 million and the consolidated net asset value was HK$1.39 per Share. The consolidated net tangible assets of HKCB amounted to HK$3,321 million, HK$3,242 million and HK$3,101 million as at 30th June, 2001, 31st December, 2000 and 1999 respectively, as adjusted to take into account the valuation of investment properties (in accordance with the revised SSAP 2.113 "Accounting for investment properties").

INFORMATION ON CITIC KA WAH

CITIC Ka Wah is a licensed bank in Hong Kong.

SUSPENSION AND RESUMPTION OF TRADING OF SHARES

DEFINITIONS

In this announcement, the following terms and expressions shall have the following meanings:

"Banking Ordinance" means the Banking Ordinance (Chapter 155 of the Laws of Hong Kong);

"Board of Directors" means the board of directors of the Company;

"Certificates of Deposit" means interest bearing certificates of deposit each in the amount of HK$500,000 to be issued by CITIC Ka Wah;

"CITIC Ka Wah" means CITIC Ka Wah Bank Limited, a company incorporated in Hong Kong whose securities are listed on the Stock Exchange;

"Company" means The HKCB Bank Holding Company Limited, a company incorporated in Bermuda whose securities are listed on the Stock Exchange;

"Completion" means completion of the Sale and Purchase Agreement;

"Completion Date" means the date of which Completion takes place;

"Escrow Agent" means HSBC Trustee (Hong Kong) Limited;

"Group" means the Company and its subsidiaries;

"HKCB" means The Hongkong Chinese Bank, Limited, a company incorporated in Hong Kong, a licensed bank and a wholly-owned subsidiary of the Company;

"HKCB Finance" means HKCB Finance Limited, a company incorporated in Hong Kong and a wholly-owned subsidiary of HKCB;

"ING Barings" ING Barings, a division of ING Bank N.V., a banking corporation duly organised and existing under the law of The Netherlands, an exempt dealer under the Securities Ordinance in Hong Kong Special Administrative Region;

"Lippo CRE" means Lippo CRE (Financial Services) Limited, a company incorporated in the Cayman Islands;

"Listing Rules" means the Rules Governing the Listing of Securities on the Stock Exchange;

"Long Stop Date" means 31st March, 2002 or such later date as may be agreed between the Company and CITIC Ka Wah or as may be fixed pursuant to the provisions of the Sale and Purchase Agreement;

"Monetary Authority" means the Hong Kong Monetary Authority;

"NPLs" means loans and advances that are classified as Substandard, Doubtful or Loss (as such expressions are defined in the Monetary Authority Guidelines issued by the Monetary Authority);

"Record Date" a date to be determined by the Board of Directors which shall be before the Completion Date;

"Sale and Purchase Agreement" means the conditional sale and purchase agreement dated 31st October, 2001 between the Company and CITIC Ka Wah in relation to the sale and purchase of the entire issued share capital of HKCB and its subsidiaries;

"Sale Shares" means 2,393,341,176 shares of HK$1.00 each in the capital of HKCB, representing the entire issued share capital of HKCB;

"Securities and Futures means the Securities and Futures Commission Ordinance

Commission Ordinance" (Chapter 24 of the Laws of Hong Kong);

"Securities Ordinance" means the Securities Ordinance (Chapter 333 of the Laws of Hong Kong);

"SFC" means the Securities and Futures Commission of Hong Kong;

"Share(s)" means share(s) of HK$1.00 each in the issued share capital of HKCB;

"Special Cash Dividend" means a special cash dividend and/or cash distribution of not less than HK$1.00 per share of HK$1.00 each in the issued share capital of the Company;

"SSAP" means the Statement of Standard Accounting Practice issued by the Hong Kong Society of Accountants;

"Stock Exchange" means The Stock Exchange of Hong Kong Limited.

By Order of the Board

THE HKCB BANK HOLDING COMPANY LIMITED

Dr. Mochtar Riady

Chairman

1st November, 2001

"Please also refer to the published version of this announcement in the South China Morning Post"

AI assistant

3SBio Inc. M&A Activity 2001

INTRODUCTION

SALE AND PURCHASE AGREEMENT

Date of the Sale and Purchase Agreement

Parties to the Sale and Purchase Agreement

Sale and Purchase of the Sale Shares

Consideration

Conditions Precedent

NPL Adjustments

Liquid Asset Undertaking

SPECIAL CASH DIVIDEND

RATIONALE FOR THE TRANSACTION AND FUTURE OF THE COMPANY

CHANGE OF COMPANY NAME

MAJOR TRANSACTION

INFORMATION ON HKCB

INFORMATION ON CITIC KA WAH

SUSPENSION AND RESUMPTION OF TRADING OF SHARES

DEFINITIONS

AI assistant

3SBio Inc. — M&A Activity 2001

INTRODUCTION

SALE AND PURCHASE AGREEMENT

Date of the Sale and Purchase Agreement

Parties to the Sale and Purchase Agreement

Sale and Purchase of the Sale Shares

Consideration

Conditions Precedent

NPL Adjustments

Liquid Asset Undertaking

SPECIAL CASH DIVIDEND

RATIONALE FOR THE TRANSACTION AND FUTURE OF THE COMPANY

CHANGE OF COMPANY NAME

MAJOR TRANSACTION

INFORMATION ON HKCB

INFORMATION ON CITIC KA WAH

SUSPENSION AND RESUMPTION OF TRADING OF SHARES

DEFINITIONS

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3SBio Inc. M&A Activity 2001