STANDARD CHARTERED TO ACQUIRE KOREA FIRST BANK FOR US$3.3 BILLION

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1 10th January 2005 STANDARD CHARTERED TO ACQUIRE KOREA FIRST BANK FOR US$3.3 BILLION PROVIDES A STRONG PLATFORM FOR GROWTH IN ASIA S THIRD LARGEST ECONOMY Standard Chartered PLC ( Standard Chartered ) announces it has entered into an agreement to acquire the entire share capital of Korea First Bank for approximately Korean Won (KRW) 3.4 trillion (US$3.3 billion) in cash. The acquisition, which is subject to certain conditions including regulatory consents, is expected to be completed by the end of April Key points: A stated strategic objective for Standard Chartered is to build a bigger presence in the Republic of Korea (South Korea, hereafter referred to as Korea ), which is the world s 10 th largest economy, Asia s third largest and is expected to grow by 4.3% in Korea s banking sector generates a revenue pool estimated to be worth approximately US$44 billion, over three times the size of Hong Kong, according to Standard Chartered estimates. This acquisition will significantly increase Standard Chartered s presence in Korea, increasing the revenue contribution to 16% of Standard Chartered s total revenue, based on figures for the first half of Korea First Bank will also represent approximately 22% of Standard Chartered s assets post acquisition, using pro forma data as at 30 June 2004, making it Standard Chartered s second largest market, by assets, after Hong Kong. Korea First Bank is the seventh largest banking group in Korea by assets, with a market share of approximately 6% and over 3 million retail customers. Korea First Bank has a strong track record of credit quality with one of the lowest ratios of non-performing loans (1.4%: September 2004). The purchase price represents 1.87x the net asset value of Korea First Bank as at 30 September The acquisition of Korea First Bank is expected to be earnings accretive in Standard Chartered intends to finance the acquisition with the proceeds from a placing of Standard Chartered PLC ordinary shares for approximately GBP1 billion together with other funding resources. 1

2 Bryan Sanderson, Chairman of Standard Chartered said: The heart of our strategy is to create value for our shareholders, particularly in Asia. We have highlighted Korea as one of a number of key markets in which we want to build a larger presence. It is the third largest banking market in Asia and offers outstanding opportunities to create substantial value for our shareholders. Mervyn Davies, Group Chief Executive of Standard Chartered said: I am delighted we have reached an agreement to acquire Korea First Bank. It is a major move forward for the Group. This is a well managed, conservatively run bank with a highly skilled workforce. This is a significant acquisition in a key growth market. It is a big step towards our aspiration to lead the way in Asia, Africa and the Middle East. ANALYSTS BRIEFING There will be a joint presentation for analysts and investors at 09:00 am this morning, Monday 10 January The presentation will take place at UBS Investment Bank s London offices, 1 Finsbury Avenue, London EC2M 2PP, and will be hosted by Bryan Sanderson, Chairman, Mervyn Davies, Group Chief Executive and Peter Sands, Group Finance Director. There will also be a presentation 5.00pm HK time, at UBS Investment Bank s Hong Kong offices, 52/F Two International Finance Centre, 8 Finance Street, Central, Hong Kong. A webcast of the presentation will also be available on the Standard Chartered, Investor Relations website. If you are outside the United States, you can access this on the following link. 2

3 CONTACTS Investors Betty Ku Romy Murray Head of Investor Relations, Asia Pacific Head of Investor Relations (0) betty.ku@hk.standardchartered.com romy.c.murray@uk.standardchartered.com Press Paul Marriage Head of Corporate Communications + 44 (0) paul.marriage@uk.standardchartered.com Lavina Chan Kay Oh Head of Corporate Affairs Head of Corporate Affairs Hong Kong Korea lavina.chan@hk.standardchartered.com kay.oh@kr.standardchartered.com Roland Rudd Morgan Bone Finsbury Finsbury + 44 (0) (0) roland.rudd@finsbury.com morgan.bone@finsbury.com Advisers and Joint Brokers John Cryan Steven Sun UBS Limited UBS AG, Hong Kong Branch +44 (0) Tim Waddell Christopher Smith UBS Limited UBS Limited +44 (0) (0) John Paynter Richard Locke Cazenove & Co. Ltd Cazenove & Co. Ltd +44 (0) (0)

4 DESCRIPTION OF KOREA FIRST BANK Korea First Bank is a Korean retail and wholesale bank with a national network of branches. It is the seventh largest nationwide commercial bank in Korea, as measured by assets, and the fifth largest as measured by branches. Historically Korea First Bank was a wholesale-based bank, but following a change of control in December 1999, the bank was substantially restructured and refocused as a mortgage-led consumer business. As at 30 September 2004, mortgages made up 45% of total loans. The bank has been restructured through a number of initiatives including implementing a new operating platform, setting up shared service centres, centralising risk management and creating a focus on profitability rather than volume. Korea First Bank is a nationally networked bank with: A Korean banking market share of around 6% 404 branches Approximately 2,100 ATMs and cash deposit machines 68,000 corporate and public customers 3.3 million retail customers Over 1.1 million credit cards in circulation 2.6 million e-banking clients 5,169 employees. As at 30 September 2004, Korea First Bank had: Total assets of KRW44.1 trillion (US$41.9 billion) Total loans of KRW31.5 trillion (US$30.0 billion) Net assets of KRW1.8 trillion (US$1.6 billion) A total capital adequacy ratio of 12.1% and a tier 1 ratio of 7.0% For the nine months ended 30 September 2004, revenues were KRW785 billion (US$747 million) and profits before tax of KRW134 billion (US$127 million). Profits before tax were KRW95 billion (US$90 million) in 2002 and KRW93 billion (US$88 million) in Korea First Bank recorded profits after tax and extraordinary items were KRW102 billion (US$97 million) in 2002 and a loss after tax and extraordinary items of KRW13 billion (US$12 million) in Net assets of Korea First Bank were KRW1,733 billion (US$1,649 million) at 30 June 2004 and KRW1,803 billion (US$1,716 million) at 30 September DETAILS OF THE ACQUISITION Under the terms of the share purchase agreement dated 10 January 2005 between Standard Chartered Bank and KFB Newbridge Holdings (Private) Limited ("KFB Newbridge"), KFB Newbridge will exercise its rights to require the other shareholders of Korea First Bank (being the Ministry of Finance and Economy of the Republic of Korea and the Korea Deposit Insurance Corporation (the "Government Shareholders")) to accede to the share purchase agreement and sell to Standard Chartered 100 per cent. of the shares in Korea First Bank. KFB Newbridge is a company established to hold the investment of private equity investors in Korea First Bank. 4

5 The total consideration payable in cash to the shareholders of Korea First Bank is approximately KRW 3.4 trillion (approximately US$3.3 billion). The transaction, which is subject to certain conditions including regulatory consents, is expected to be completed by the end of April Unless otherwise approved by the parties, such approval not to be unreasonably withheld or delayed, completion must take place within 150 days of this announcement, failing which the agreement will terminate. In addition to the share purchase agreement, Standard Chartered Bank has entered into a transition agreement with Korea First Bank dated 10 January, 2005 in relation to, among other things, the carrying on of business by Korea First Bank prior to completion of the transaction. To the best of the knowledge, information and belief of Standard Chartered's directors having made all reasonable enquiry, KFB Newbridge, the Government Shareholders and Korea First Bank are third parties independent of Standard Chartered and connected persons of Standard Chartered. ACQUISITION RATIONALE AND BENEFITS Korea s banking sector has a revenue pool of approximately US$44 billion. Korea First Bank represents a robust platform for growth in both wholesale and consumer banking. Standard Chartered expects to leverage Korea First Bank s nationwide platform to capture new product and customer segments and drive earnings growth. Korea First Bank has been restructured by its current management team and would now benefit from the product and management breadth brought by an international partner which is expected to facilitate significant growth. This acquisition will provide additional diversification of Standard Chartered s earnings base. Korea is one of the largest consumer and wholesale banking markets in the world and there is opportunity to create value by the introduction of more sophisticated banking products. Korea shares many characteristics with other Asian markets in which Standard Chartered operates successfully and the acquisition presents an opportunity to acquire a well managed bank with a sizeable national distribution network that would serve as a strong platform for growth. The acquisition is expected to be earnings accretive in Standard Chartered will look to grow Korea First Bank in ways that will include: In Consumer Banking Building relationships focused on market segments e.g. for small and medium-sized enterprises ( SMEs ) and wealth management products; Cross-selling to mortgage and personal loan customers; Product development and innovation in trade and cash management for SMEs, mortgages, deposit and investment products; Sharing best practice techniques in customer segmentation, credit scoring and risk management. 5

6 In Wholesale Banking Leveraging Standard Chartered s international network to realise opportunities in trade finance, global markets, regional cash management; Growing the client base in multinational corporations, financial institutions and middle market companies; Broadening the range of fee-based products across global markets and commercial banking products; Restructuring funding utilising Standard Chartered s offshore funding capability. STANDARD CHARTERED IN KOREA Standard Chartered first opened in Korea in the late nineteenth century and was the first European bank to be invited back into the country in It operates today through a branch in Seoul, with total assets of approximately US$3.3 billion supported by 170 employees and about 300 direct sales agents. Standard Chartered s business has historically focused on commercial banking, treasury and debt capital markets. In September 2003, Standard Chartered opened a consumer banking business, which it has grown organically. FINANCIAL IMPACT OF THE ACQUISITION Standard Chartered has agreed, after arm s length negotiations with KFB Newbridge, to pay approximately KRW3.4 trillion (US$3.3 billion) for a 100% interest in Korea First Bank. The agreed purchase price represents approximately 1.87x the net asset value of Korea First Bank as at 30 September The consideration will be met by an institutional placing of new Standard Chartered shares of approximately 10% of Standard Chartered s existing shares in issue, together with other funding resources. Assuming the acquisition and placing had completed as at 30 June 2004, Standard Chartered s tier 1 ratio would have been in the range of 7.4% to 7.7% and its core equity ratio would have been in the range of 5.7% to 6.0%. Based on Standard Chartered s forecasts for business growth and transaction benefits, the acquisition is expected to be earnings accretive in PLACING Standard Chartered intends to finance the acquisition in part with the proceeds of a placing of new ordinary shares of US$0.50 each, representing approximately 10 per cent of the issued ordinary share capital of Standard Chartered (the Placing ). Cazenove & Co. Ltd ( Cazenove ) and UBS Limited ( UBS and together with Cazenove, the Managers ) are acting as joint lead managers and joint brokers to the Placing. The Placing will be conducted in accordance with the terms and conditions set out in the Appendix. The Placing will be effected, subject to the satisfaction of certain conditions, by way of an accelerated bookbuilt placing of approximately million ordinary shares of US$0.50 each in the capital of the Company (the Placing Shares ). The placing price in respect of the Placing Shares will be decided by the Managers at the close of the bookbuilding exercise. 6

7 The Placing has been fully underwritten by UBS, subject to certain terms and conditions in the Placing Agreement. The books will open with immediate effect. The timing of the closing of the books, pricing and allocations is at the discretion of the Managers. Details of the placing price will be announced as soon as practicable after the close of the bookbuilding exercise. The Placing Shares will be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of US$0.50 each in the capital of Standard Chartered including the right to receive all dividends and other distributions declared, made or paid after the date of issue. Application will be made for the Placing Shares to be admitted to the Official List maintained by the UK Listing Authority (the Official List ), to be admitted to trading by the London Stock Exchange plc (the London Stock Exchange ) on its market for listed securities ( UK Admission ) and to The Stock Exchange of Hong Kong Limited (the Hong Kong Stock Exchange ) for listing of and permission to deal in the Placing Shares on the Hong Kong Stock Exchange. The ordinary shares of Standard Chartered are listed on the Official List and are also listed on the Hong Kong Stock Exchange. The Appendix of this announcement sets out further information and terms and conditions regarding the Placing. CURRENT TRADING AND PROFIT ESTIMATE On 8 December, Standard Chartered gave a trading update and stated that it was comfortable with the current profit before tax market consensus for the year ended 31 December Trading since 8 December has been in line with the expectations set out in the trading update. The directors of Standard Chartered expect that for the year ended 31 December 2004 profit before tax will be not less than US$2,100 million. This figure includes a number of one-off items which together generated a profit of US$85 million before tax. The directors also expect that total revenue for the year ended 31 December 2004 will be approximately US$5,340 million. GENERAL This announcement has been issued by Standard Chartered and is the sole responsibility of Standard Chartered. UBS Investment Bank is acting as financial adviser to Standard Chartered in connection with the acquisition. Standard Chartered has also received financial advice from Cazenove & Co. Ltd. Cazenove & Co. Ltd and UBS Limited are acting as joint lead managers and joint brokers to the Placing.Cazenove & Co. Ltd and UBS Limited, both of which are regulated in the United Kingdom by The Financial Services Authority, are acting exclusively for Standard Chartered and no one else in connection with the proposed acquisition and the Placing and will not be responsible to anyone other than Standard Chartered for providing the protections afforded to customers of Cazenove & Co. Ltd or UBS Limited, or for giving advice in relation to the Placing or any other matters referred to in this press announcement. This announcement is for information purposes only and does not constitute an offer or an invitation to acquire or dispose of any securities or investment advice in any jurisdiction. This announcement does not constitute an offer 7

8 to sell or issue or the solicitation of an offer to buy or acquire any securities in the capital of Standard Chartered in the United States, Canada, Australia or Japan or any jurisdiction in which such an offer or solicitation is unlawful and should not be relied upon in connection with any decision to acquire the Placing Shares or any other securities in the capital of Standard Chartered. The Placing Shares have not been and will not be registered under the US Securities Act of 1933 (the Securities Act ) or under the securities laws of any state of the United States and may not be offered or sold within the United States unless they are registered with the US Securities and Exchange Commission or an exemption from registration is available. No public offering of the Placing Shares will be made in the United States. This announcement includes "forward-looking statements". All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's products and services), are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors which could cause the actual results, performance or achievements of the Company or those markets and economies to be materially different from future results, performance or achievements expressed or implied by such forwardlooking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future and such assumptions may or may not prove to be correct. These forward-looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation (other than pursuant to the Listing Rules of the UKLA or the Listing Rules of the Hong Kong Stock Exchange ) or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. 8

9 NOTES TO EDITORS: Standard Chartered leading the way in Asia, Africa and the Middle East Standard Chartered employs 30,000 people in over 500 locations in more than 50 countries in the Asia Pacific Region, South Asia, the Middle East, Africa, the United Kingdom and the Americas. It is one of the world s most international banks, with a management team comprising 70 nationalities. Standard Chartered is listed on both the London Stock Exchange and the Stock Exchange of Hong Kong and is in the top 25 FTSE-100 companies, by market capitalisation. It serves both consumer and wholesale banking customers. Consumer Banking provides credit cards, personal loans, mortgages, deposit taking and wealth management services to individuals and small to medium sized enterprises. Wholesale Banking provides corporate and institutional clients with services in trade finance, cash management, lending, custody, foreign exchange, debt capital markets and corporate finance. Standard Chartered is well-established in growth markets and aims to be the right partner for its customers. The Bank combines deep local knowledge with global capability. The Bank is trusted across its network for its standard of governance and its commitment to making a difference in the communities in which it operates. 9

10 APPENDIX 1 Further Information on the Placing OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND WHO FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2001, AS AMENDED (THE ORDER) OR ARE PERSONS WHO FALL WITHIN ARTICLE 49(2)(a) TO (d) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER OR WHO ARE PROFESSIONAL INVESTORS AS DEFINED IN THE SECURITIES AND FUTURES ORDINANCE (CAP. 571) OF HONG KONG AND ANY RULES MADE UNDER THAT ORDINANCE OR TO WHOM THEY MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS RELEVANT PERSONS). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. Relevant Persons choosing to participate in the Placing ( Placees ) will be deemed to have read and understood this Appendix in its entirety and to be making any such offer to participate on the terms and conditions, and to be providing the representations, warranties, acknowledgements and undertakings, contained in this Appendix. In particular each such Placee represents, warrants and acknowledges that it: 1. is a person whose ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purpose of its business and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business; and 2. is outside the United States and is purchasing the Placing Shares for its own account or is purchasing the Placing Shares for an account with respect to which it exercises sole investment discretion and that it (and any such account) is outside the United States or it is a dealer or other professional fiduciary in the United States acting on a discretionary basis for non-us beneficial owners (other than an estate or trust), in reliance upon Regulation S under the Securities Act; or if it is not outside the United States is a qualified institutional buyer ( QIB ) as defined in Rule 144A under 10

11 the Securities Act and has executed an investment letter in the form provided to it and has delivered the same to the Managers. This announcement and Appendix do not constitute an offer to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction including, without limitation, the United Kingdom, the United States, Canada, Australia, Hong Kong or Japan. This announcement and the information contained herein is not for publication or distribution, directly or indirectly, to persons in the United States, Canada, Australia, Japan or in any jurisdiction in which such publication or distribution is unlawful. The Placing Shares referred to in this announcement have not been and will not be registered under the Securities Act and may not be offered, sold or transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Any offering to be made in the United States will be made to a limited number of QIBs pursuant to Rule 144A or under another exemption from registration under the Securities Act in a transaction not involving any public offering. The Placing Shares are being offered and sold outside the United States in accordance with Regulation S under the Securities Act. The distribution of this announcement and the Placing and/or issue of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or the Managers that would permit an offer of such Placing Shares or possession or distribution of this announcement or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons to whose attention this announcement is drawn are required by the Company and the Managers to inform themselves about and to observe any such restrictions. In this Appendix, unless the context otherwise requires, the Company means Standard Chartered PLC and Placee includes a person (including individuals, funds or others) on whose behalf a commitment to acquire Placing Shares has been given. Details of the Placing Agreement and the Placing Shares The Managers have entered into a placing agreement (the Placing Agreement ) with the Company whereby each of the Managers has, subject to the satisfaction of certain conditions set out therein, undertaken severally, and not jointly nor jointly and severally, to use its reasonable endeavours as agent of the Company to seek to procure Placees for the Placing Shares. The Placing Shares will when issued be credited as fully paid and will rank pari passu in all respects with the existing issued ordinary shares of US$0.50 per share in the capital of the Company including the right to receive all dividends and other distributions declared, made or paid in respect of such ordinary shares after the date of issue of the Placing Shares (including any dividend proposed, after the date of issue of the Placing Shares, in respect of the financial year ended 31 December 2004). Application for listing and admission to trading Application will be made to the UK Listing Authority (the UKLA ) for admission of the Placing Shares to the Official List of the UKLA (the Official List ), to the London Stock Exchange for admission to trading of the Placing Shares on the London Stock Exchange's market for listed securities ( UK Admission ) and to the Hong Kong Stock Exchange for the approval of the Placing Shares and permission to deal in the Placing Shares on the Hong Kong Stock Exchange. 11

12 Bookbuild Commencing today each of the Managers will be conducting an accelerated bookbuilding process (the Bookbuilding Process ) for participation in the Placing by the Placees. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares. Participation in the Bookbuilding Process Persons who are eligible to participate in the Placing should communicate their bid by telephone to their usual sales contact at either of the Managers. Standard Chartered will make a further announcement following the close of the Bookbuilding Process detailing the price at which the Placing Shares have been placed (the Pricing Announcement ). Each of Cazenove and UBS is arranging the Placing severally, and not jointly or jointly and severally, as an agent of the Company. The timing of the closing of the books, pricing and allocations is at the discretion of the Managers. Details of the placing price will be announced as soon as practicable after the close of the bookbuilding exercise. The Managers may, at their sole discretion, accept bids that are received after the Bookbuilding Process has closed. Each Placee s allocation, and the price payable (the Placing Price ), will be confirmed to Placees orally by the relevant Manager following the close of the Bookbuilding Process, and a conditional advice note will be dispatched as soon as possible thereafter. The relevant Manager s oral confirmation to such Placee will constitute a legally binding commitment upon such Placee to acquire the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company s Memorandum and Articles of Association. Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to the relevant Manager, to pay to it in cleared funds an amount equal to the product of the Placing Price and the amount of Placing Shares such Placee has agreed to acquire. All obligations under the Placing will be subject to fulfilment of the conditions referred to below under Conditions of the Placing. Conditions of the Placing The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms. Each Manager s obligations under the Placing Agreement are conditional on, inter alia: 1. publication of the Pricing Announcement through a Regulatory Information Service by no later than 7.00 a.m. (London time) on 11 January 2005 (or by such later time and/or date as the Company and the Managers, may agree) and in newspapers in Hong Kong pursuant to the HK Listing Rules no later than 12 January 2005 (or such later time and/or date as the Company and the Managers may agree); 2. UK Admission occurring no later than 8.00 a.m. (London time) on 13 January 2005 or such later time and/or date (not later than 25 January 2005) as the Managers may determine; 12

13 3. the Listing Committee of the Hong Kong Stock Exchange granting listing of and permission to deal in the Placing Shares, and such listing and permission not being revoked prior to UK Admission; 4. the representations warranties or undertakings given by the Company in the Placing Agreement being true and accurate and not misleading; 5. the fulfilment by the Company of its obligations under the Placing Agreement; and 6. the agreement relating to the acquisition of Korea First Bank by the Company s subsidiary, Standard Chartered Bank, remaining in full force and effect and not having been terminated or lapsed, there having been no material breach of the terms thereof which is material in the context of the Placing and no event having arisen at any time prior to UK Admission which gives any party thereto a right to terminate such agreement (save to the extent that UBS has consented to the Company not exercising such right to terminate). If the conditions above are not satisfied or waived in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as the Company and the Managers may agree) the Placing will lapse and the Placee's rights and obligations shall cease and determine at such time and each Placee agrees that no claim can be made by the Placee in respect thereof. The Managers, may, in their absolute discretion and upon such terms as they think fit, waive compliance or extend the time and/or date for fulfilment by Standard Chartered with the whole or any part of any of Standard Chartered s obligations in relation to the conditions in the Placing Agreement. The Managers reserve the right to waive or to extend the time and/or date for fulfilment of any of the conditions in the Placing Agreement. Any such extension or waiver will not affect Placees commitments as set out in this Appendix. None of Cazenove, UBS or the Company shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision it may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition. By participating in the Placing each Placee agrees with each of the Managers that the exercise by the Company or the Managers of any right or other discretion under the Placing Agreement shall be within the absolute discretion of the Company, Cazenove or UBS (as the case may be) and that none of the Company, Cazenove or UBS need make any reference to such Placee and that none of the Company, Cazenove or UBS shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise. By participating in the Placing each Placee agrees that its rights and obligations terminate only in the circumstances described above and will not be capable of rescission or termination by it after oral confirmation by the relevant Manager following the close of the Bookbuilding Process. No Prospectus No offering document, listing particulars or prospectus has been or will be submitted to be approved by the UK Listing Authority or The Stock Exchange of Hong Kong Limited or filed with the Registrar of Companies in England and Wales or the Registrar of Companies in Hong Kong in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in 13

14 this announcement (including this Appendix). Each Placee, by participating in the Placing, agrees that the content of this announcement (including this Appendix) is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty or statement made by or on behalf of either of the Managers or the Company and none of the Managers or the Company will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement. Each Placee acknowledges, agrees and warrants that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation. Registration and Settlement Settlement of transactions in the Placing Shares following UK Admission will take place within the CREST system. The Managers and the Company reserve the right to require settlement for and delivery of the Placing Shares to Placees by such other means that it deems necessary if delivery or settlement is not practicable within the CREST system within the timetable set out in this announcement and Appendix. Each Placee allocated Placing Shares in the Placing will be sent a conditional advice note stating the number of Placing Shares allocated to it, the Placing Price and the aggregate amount owed by such Placee to the relevant Manager. In agreeing to subscribe for the allocation of Placing Shares set out in the conditional advice note, such Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST instructions or the certificated settlement instructions which it has in place with Cazenove or UBS, as the case may be. If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the conditional advice note is copied and delivered immediately to the relevant person within that organisation. Settlement through CREST will be on a T+3 basis unless otherwise notified by the relevant Manager. Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of 5 percentage points above prevailing LIBOR as determined by the Managers. Each Placee is deemed to agree that if it does not comply with these obligations, the relevant Manager may sell any or all of the Placing Shares allocated to it on such Placee s behalf and retain from the proceeds, for such Manager s own account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee s behalf. Representations and Warranties By participating in the Placing each prospective Placee (and any person acting on such Placee s behalf) unless otherwise agreed by the Managers and the Company: 1. represents and warrants that it has read this announcement (including this Appendix) in its entirety; 14

15 2. acknowledges that no offering document or prospectus has been prepared in connection with the placing of the Placing Shares; 3. acknowledges that the content of this announcement is exclusively the responsibility of the Company and that neither of the Managers nor any person acting on their behalf has or shall have any liability for any information or representation relating to the Company. Each Placee further represents, warrants and agrees that, except as otherwise provided in paragraph 8 below, the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the Placing Shares is contained in this announcement, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares; 4. represents and warrants that it has neither received nor relied on any other information, representation, warranty or statement made by either of the Managers or the Company and neither of the Managers or the Company will be liable for any Placee's decision to accept this invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing; 5. undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only; 6. represents and warrants that it is, or at the time the Placing Shares are acquired it will be, the beneficial owner of such Placing Shares, or that the beneficial owner of such Placing Shares is not a resident of Australia, Canada or Japan; 7. acknowledges that the Placing Shares have not been and will not be registered in the United States under the Securities Act or under the securities legislation of Australia, Canada or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within those jurisdictions; 8. if the Placing Shares were offered to it in the United States, represents and warrants that in making its investment decision, (i) it has relied on its own examination of the Company and the terms of the Placing, including the merits and risks involved, (ii) it has made its own assessment of the Company, the Placing Shares and the terms of the Placing based on such information as is publicly available, (iii) it has consulted its own independent advisors or otherwise has satisfied itself concerning, without limitation, the effects of United States federal, state and local income tax laws and foreign tax laws generally and the US Employee Retirement Income Security Act of 1974, the US Investment Company Act of 1940 and the Securities Act and (iv) it has received all information that it believes is necessary or appropriate in order to make an investment decision in respect of the Company and the Placing Shares; 9. represents and warrants that it is either (i) a QIB, or the beneficial owner of the Placing Shares is a QIB, and it or the beneficial owner has duly executed an investment letter in the form provided to it by either of the Managers, or (ii) is purchasing the Placing Shares in an "offshore transaction" in accordance with Rule 903 or Rule 904 under the Securities Act, and has such knowledge and experience in financial and business matters as to be capable of evaluating 15

16 the merits and risks of an investment in the Placing Shares, is able to bear the economic risk of an investment in the Placing Shares and is able to sustain a complete loss of the investment in the Placing Shares and represents and, in the case of (i) above, warrants that it is subscribing for the Placing Shares for its own account or for one or more accounts as to each of which it exercises sole investment discretion and each of which is a QIB, for investment purposes and not with a view to any distribution or for resale in connection with, the distribution thereof in whole or in part, in the United States; 10. acknowledges that the Placing Shares offered and sold in the United States are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act and represents and warrants that, so long as the Placing Shares are "restricted securities", it will not deposit the Placing Shares into any unrestricted depositary receipt facility in the United States established or maintained by any depositary bank in respect of the Company's ordinary shares and will only transfer the Placing Shares in accordance with paragraph 11 below; 11. acknowledges that the Placing Shares have not been and will not be registered under the Securities Act or with any State or other jurisdiction of the United States, nor approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other United States regulatory authority, and agrees that for so long as the Placing Shares are restricted securities it will not reoffer, resell, pledge or otherwise transfer the Placing Shares except (i) outside the United States in offshore transactions in accordance with Rule 904 of Regulation S under the Securities Act, (ii) in a transaction not involving any general solicitation or general advertising pursuant to Rule 144A (if available) or (iii) pursuant to an effective registration statement under the Securities Act, and in any case in compliance with all applicable laws; 12. acknowledges that where it is acquiring the Placing Shares for one or more managed accounts, it represents and warrants that it is authorised in writing by each managed account (i) to acquire the Placing Shares for each managed account, and (ii) to execute and deliver an investment letter in the form provided to it by either of the Managers on behalf of each managed account. Each Placee agrees to indemnify and hold the Company and the Managers harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations and warranties in this paragraph 12. Each Placee agrees that the provisions of this paragraph 12 shall survive the resale of the Placing Shares by or on behalf of the managed accounts; 13. acknowledges that no representation has been made as to the availability of any other exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares; 14. represents and warrants that the allocation, allotment, issue and delivery to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that it is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability; 15. represents and warrants that it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 16

17 2000, the Criminal Justice Act 1993 and the Money Laundering Regulations (2003) (the Regulations ) and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations; 16. represents and warrants that it and any person acting on its behalf falls within paragraph 3(a) of Schedule 11 to FSMA, being a person whose ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business, and within Article 19 and/or 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001, as amended, and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business; 17. represents and warrants, if it is a Placee in Hong Kong, that it is a Professional Investor as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that ordinance; 18. represents and warrants that it is independent of, and is not connected with, the Company, any director or the chief executive of the Company, a substantial shareholder of the Company, or any of their respective associates (as defined in the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange); and that it is not acting in concert (as defined in the Hong Kong Code on Takeovers and Mergers) with the Company, any director or the chief executive of the Company, a substantial shareholder of the Company or any of its subsidiaries, or any of their respective associates (as defined in the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange); and the Placee has not offered or sold and will not offer to sell any Placing Shares to a director or chief executive of the Company, a substantial shareholder of the Company or any of its subsidiaries, or any respective associates (as defined in the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange); 19. acknowledges that the Announcement has not been and will not be registered as a prospectus with the Monetary Authority of Singapore. Accordingly, the Placee represents and warrants that this press announcement and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Placing Shares has not been and will not be circulated or distributed, and will not offer or sell the Placing Shares or cause the Placing Shares to be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than under circumstances in which such offer, sale or invitation does not constitute an offer or sale, or invitation for subscription or purchase, of the Placing Shares to the public in Singapore; 20. represents and warrants that it has not offered or sold and, prior to the expiry of a period of six months from UK Admission, will not offer or sell any Placing Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995, as amended; 17

18 21. represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person; 22. represents and warrants that it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving the United Kingdom; 23. represents and warrants that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to this participation and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this announcement) and will honour such obligations; 24. undertakes that it will make payment for the Placing Shares allocated to it in accordance with this announcement (including this Appendix) and the conditional advice note on the due time and date set out therein, failing which the relevant Placing Shares may be placed with other subscribers or sold at such price as the Managers may determine and without liability to such Placee; 25. acknowledges that participation in the Placing is on the basis that it is not and will not be a client of either of the Managers and that neither of the Managers has duties or responsibilities to it for providing the protections afforded to their clients or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of such Manager s rights and obligations thereunder including any rights to waive or vary any conditions; 26. undertakes that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. Neither of the Managers nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company and each of the Managers in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock account of Apollo Nominees Limited as nominee for the Placees who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions; 27. acknowledges that any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and it submits (on behalf of itself and on behalf of any Placee on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or either of the Managers in any jurisdiction in which the relevant Placee is 18