BOC Hong Kong : Connected Transactions

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The Board is pleased to announce that on the date of this announcement, BOCHK has entered into the Acquisition Agreements with Bank of China in relation to the acquisition of (i) the Indonesia Business and (ii) the Cambodia Business respectively, as part of the restructuring exercise of the Group in the ASEAN region.

As Bank of China is the controlling shareholder and a connected person of the Company, the Proposed Acquisitions constitute connected transactions of the Company under Chapter 14A of the Listing Rules. Given that one or more of the applicable percentage ratios in respect of the Proposed Acquisitions are more than 0.1% but less than 5%, the Proposed Acquisitions are subject to the reporting and announcement requirements but exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

Reference is made to the joint announcement made by Bank of China and the Company on 21 May 2015 and the announcement by the Company on 6 June 2016 with respect to the potential restructuring of the Group in the ASEAN region, and the announcements by the Company on 30 June 2016, 17 October 2016 and 6 January 2017 with respect to the acquisition of subsidiaries by the Company from Bank of China in Malaysia and Thailand.

The Board is pleased to announce that on the date of this announcement, BOCHK has entered into the Acquisition Agreements with Bank of China in relation to the acquisition of (i) the Indonesia Business and (ii) the Cambodia Business, respectively, as part of the restructuring exercise of the Group in the ASEAN region.

Goldman Sachs (Asia) L.L.C. acted as financial adviser to BOCHK in relation to the Proposed Acquisitions.

Seller: Bank of China Buyer: BOCHK

The consideration for the proposed acquisition of the Indonesia Business is IDR2,989.6 billion (equivalent to approximately RMB1.439 billion, calculated using the agreed exchange rate in respect of the Indonesia Asset Purchase Agreement), which will be paid in cash at completion in Hong Kong Dollars, using the then applicable HKD-CNH exchange rate mutually agreed by the parties on an arm's length basis. The consideration is subject to adjustments as set out in the paragraph below headed "Completion Adjustments".

Completion of the proposed acquisition of the Indonesia Business is conditional upon the satisfaction or waiver (as appropriate) of certain conditions precedent set out in the Indonesia Asset Purchase Agreement:

1. Bank of China and BOCHK each having obtained all the requisite regulatory approvals by the Long Stop Date; and

2. no circumstances having arisen prior to the Completion Date which would have a material adverse effect on the economic environment (including but not limited to change of exchange rate and tax rate), financial condition, business prospects, regulatory status or any regulatory approval of or exemptions applicable to, Bank of China, BOCHK or BOC Jakarta Branch.

Subject to the satisfaction or waiver (as appropriate) of the conditions precedent in the Indonesia Asset Purchase Agreement, completion will take place on the Completion Date pursuant to the Indonesia Asset Purchase Agreement. Upon completion, BOC Jakarta Branch will become a branch owned by BOCHK, and all the assets and liabilities arising in connection with the Indonesia Business will be transferred to and assumed by BOCHK.

As BOC Jakarta Branch will remain in the Group post-completion, Bank of China has given an undertaking in the Indonesia Asset Purchase Agreement to continue to provide support

and services including but not limited to information technology support to BOC Jakarta Branch.

In the event that pursuant to mutual agreement of BOCHK and Bank of China or as a result of a change in applicable laws relating to capital requirements, such that Bank of China is required to make further head office investment injection into BOC Jakarta Branch after the date of the Indonesia Asset Purchase Agreement, BOCHK will pay to Bank of China the amount of the further injected capital (together with the applicable financing cost) on the Completion Date. The aforesaid amounts, if applicable, will be paid in Hong Kong Dollars, using the then applicable HKD-CNH exchange rate as mutually agreed by the parties on an arm's length basis.

In addition, subject to completion having taken place, in the event that a net profit (or loss) is recorded in respect of BOC Jakarta Branch during the Relevant Period, as set out in the completion account, BOCHK or Bank of China, as the case may be, will pay to the other party the amount of the net profit (or loss), as the case may be. The aforesaid amounts, if applicable, will be paid in Hong Kong Dollars, using the then applicable HKD-CNH exchange rate as mutually agreed by the parties on an arm's length basis.

Seller: Bank of China Buyer: BOCHK

The consideration for the proposed acquisition of the Cambodia Business is USD171 million (equivalent to approximately RMB1,079 million, calculated using the agreed exchange rate in respect of the Cambodia Asset Purchase Agreement), which will be paid in cash at completion in Hong Kong Dollars, using the then applicable HKD-CNH exchange rate mutually agreed by the parties on an arm's length basis. The consideration is subject to adjustments as set out in the paragraph below headed "Completion Adjustments".

Completion of the proposed acquisition of the Cambodia Business is conditional upon the satisfaction or waiver (as appropriate) of certain conditions precedent set out in the Cambodia Asset Purchase Agreement:

1. Bank of China and BOCHK each having obtained all the requisite regulatory approvals by the Long Stop Date; and

2. no circumstances having arisen prior to the Completion Date which would have a material adverse effect on the economic environment (including but not limited to change of exchange rate and tax rate), financial condition, business prospects, regulatory status or any regulatory approval of or exemptions applicable to, Bank of China, BOCHK or BOC Phnom Penh Branch.

Subject to the satisfaction or waiver (as appropriate) of the conditions precedent in the Cambodia Asset Purchase Agreement, completion will take place on the Completion Date pursuant to the Cambodia Asset Purchase Agreement. Upon completion, BOC Phnom Penh Branch will become a branch owned by BOCHK, and all the assets and liabilities arising in connection with the Cambodia Business will be transferred to and assumed by BOCHK.

As BOC Phnom Penh Branch will remain in the Group post-completion, Bank of China has given an undertaking in the Cambodia Asset Purchase Agreement to continue to provide support and services including but not limited to information technology support to BOC Phnom Penh Branch.

In the event that pursuant to mutual agreement of BOCHK and Bank of China or as a result of a change in applicable laws relating to capital requirements, such that Bank of China is required to make further capital injection into BOC Phnom Penh Branch after the date of the Cambodia Asset Purchase Agreement, BOCHK will pay to Bank of China the amount of the further injected capital (together with the applicable financing cost) on the Completion Date. The aforesaid amounts, if applicable, will be paid in Hong Kong Dollars, using the then applicable HKD-CNH exchange rate as mutually agreed by the parties on an arm's length basis.

In addition, subject to completion having taken place, in the event that a net profit (or loss) is recorded in respect of BOC Phnom Penh Branch during the Relevant Period, as set out in the completion account, BOCHK or Bank of China, as the case may be, will pay to the other party the amount of the net profit (or loss), as the case may be. The aforesaid amounts, if applicable, will be paid in Hong Kong Dollars, using the then applicable HKD-CNH exchange rate as mutually agreed by the parties on an arm's length basis.

BOC Jakarta Branch was established in Indonesia in 1938 as an overseas branch of Bank of China. BOC Jakarta Branch holds a licence in Indonesia to operate as a branch with full banking authority (i.e. as a commercial bank) offering a wide range of commercial banking products and services, including deposit-taking, lending, foreign exchange, factoring, trade financing, Renminbi trade settlement and clearing products and services. BOC Jakarta Branch is operating through a network of a main branch and eight sub-branches.

The net asset value of the Indonesia Business as at 31 December 2016 was IDR1,706,000 million (equivalent to approximately HK$982 million).