CHIYU BANKING CORPORATION LIMITED CERTIFICATES OF DEPOSIT. Summary Term Sheet

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1 CHIYU BANKING CORPORATION LIMITED CERTIFICATES OF DEPOSIT Summary Term Sheet Issuing Bank : Chiyu Banking Corporation Limited (the Bank ). CD Identification : CYB 0302 Issue : Negotiable Fixed Rate Certificates of Deposit ( CD ) to be issued under the Bank s HK$2,000,000,000 Certificate of Deposit Programme (the Programme ). Currency : US dollars. Denominations : US$5,000 Principal Amount : Principal Amount of CD applied for must be a minimum of US$5,000 or in a higher integral multiple of US$5,000. Issue Price : At par (100% of the Principal Amount) Subscription Period : 17 October 2003 (9:00 am) to 23 October 2003 (12:00 noon). Subscription is on a first-come-first-served basis. Subscription Price Subscription Fee Subscription Price Payment Date : The aggregate of the Issue Price and the applicable Subscription Fee calculated by reference to the Principal Amount subscribed. : 0.15% flat of the Principal Amount subscribed for; provided that if the Principal Amount subscribed for equals to or is greater than HK$1,000,000 (or its US$ equivalent), the subscription fee shall be 0.10% flat of the Principal Amount. : 23 October Deposit Date : 29 October Maturity Date : On or about 29 October 2008 or, if the Bank exercises the call option, the relevant Call Option Exercise Date. Call Option The Bank may redeem the CD in whole but not in part on any Interest Payment Date in or after October 2006 (each a ''Call Option Exercise Date'') by giving not less than 5 days prior written notice. Notice of exercise of the call option will be deemed to have been given to the CD holder if sent to the last known address of any person comprising the CD holder appearing in the records of the Bank. 1

2 Interest Rate Basis : Fixed Rate Interest Rate : Up to (and excluding) the Interest Payment Date falling in October 2006, 3.00% per annum; thereafter, up to (and excluding) the Interest Payment Date in October 2008 (or, if the Bank exercises the call option, the relevant Call Option Exercise Date), 3.10%% per annum. Interest Payment Dates : 6 monthly. Interest Payments : Interest will be payable on each Interest Payment Date and will be calculated on the basis of the actual number of days lapsed in a 360- day year. : Payments of principal and interest made under the CD (and receipts from the sale of CD made on behalf of a CD holder) will be credited to the specified settlement account of the CD holder opened/maintained with the Bank in accordance with the terms and conditions specified for that account. Redemption Price : At par (100% of the Principal Amount) Form : The CD will be represented initially by a permanent global CD representing notional interests in definitive CD. The permanent global CD will only be exchangeable for CD in definitive form in very limited circumstances specified in such permanent global CD. Documentation : The CD will be issued pursuant to and subject to the Programme. Status : The deposits to be evidenced by the CD constitute the direct, unconditional, unsubordinated and unsecured obligations of the Bank and will at all times, under the laws of Hong Kong, rank equally and rateably without preference or priority among themselves, equally and rateably in all respects with the obligations of the Bank with respect to all other present and future deposits and at least equally and rateably in all respects with all other present and future unsubordinated and unsecured obligations of the Bank except (in each case) for Small Deposit Priorities, other obligations in respect of taxes and other obligations subject to statutory liens or preferences. Interest and Withholding Tax Tax Call : If taxes, duties or other governmental charges of whatsoever nature are imposed or levied by or on behalf of Hong Kong or any authority in Hong Kong on any payments of principal or interest under a CD, deductions or withholdings may be made to those payments to satisfy those taxes, duties or charges. : If the Bank is or will be obliged to make any additional payments on CD as a result of taxes then, subject to certain notice requirements, it may redeem those CD on the next Interest Payment Date. 2

3 Listing : Nil. Custody, Clearing System and Settlement Monthly Transaction Statement Transfer Restrictions Stamp Duty : Central Moneymarkets Unit Service (the CMU Service ) operated by the Hong Kong Monetary Authority. : Monthly transaction statements will be issued in connection with the CD. : The CD may only be resold or transferred by the CD holder to the Bank before the Maturity Date (or, if the Bank exercises the call option, the relevant Call Option Exercise Date) at a price to be quoted from time to time by the Bank. : Under present Hong Kong laws, no stamp duty is required at issue of, or upon any subsequent transfer or delivery of the CD. Subscription Channel : Through the Bank s retail branch network in Hong Kong and subscription telephone hotline, and under the condition that the applicants must open/maintain a settlement account and a securities account with the Bank. Language Version : In the event of any inconsistency between the English version and the Chinese version of this Summary Term Sheet, the Subscription Instruction Form for the CD, the Information Memorandum or other documents relating to the CD, the English version shall prevail. Governing Law : The laws of the Hong Kong Special Administrative Region. Important Notice This Summary Term Sheet describes the specific terms applicable to CD to be issued to customers of the Bank. An Information Memorandum which sets out a summary of the Programme and the terms and conditions of the CD is available on request at any branch of the Bank. This Summary Term Sheet does not itself constitute an offer of, or an invitation by or on behalf of the Bank to any person to subscribe for or purchase any CD or any interests in CD issued by the Bank. This Summary Term Sheet must not be reproduced in any form, in whole or in part, for any purpose whatsoever and it must not be transmitted to any other person. Notes to Summary Term Sheet The CD will be held in scripless form and physical delivery of the CD is not offered. The Bank is obliged to pay interest to the CD holders on each Interest Payment Date. If an Interest Payment Date shall fall on a day which is not a Hong Kong banking day (for this purpose, a Saturday is not a Hong Kong banking day), the Interest Payment Date will be the next immediate Hong Kong banking day unless such day falls in the next calendar month, in which case interest will be paid on the preceding Hong Kong banking day. Interest will be paid directly into the designated settlement account of the CD holders maintained with the Bank. The Bank shall determine in its sole and absolute discretion whether to accept any subscription request for the CD. 3

4 CD holders may sell the CD back to the Bank at the market price quoted by the Bank at its sole and absolute discretion. Transactions Depending on the terms and conditions governing the Bank's relationship with a customer, if the Bank quotes terms for a CD, whether orally or in writing, and the customer accepts those terms, whether orally or in writing, that acceptance may constitute a binding transaction. Accordingly, the customer may be bound to place, and the Bank may be bound to accept, the deposit on the terms agreed. That transaction may not be subject to receipt of any written confirmation and if the customer fails to place a deposit after the terms are agreed, the customer may be liable for the Bank's costs and losses, including the cost of unwinding any hedging position taken by the Bank to cover the deposit. After agreeing the terms for a CD issue and sale, the Bank may deliver to a customer a written confirmation of the terms of that CD issue and sale. The confirmation will be deemed to be agreed by the customer unless the customer notifies the Bank in writing of any errors within the time frame stipulated in the confirmation. Determinations Any determination made by the Bank under the terms and conditions of the CD will be conclusive and binding in the absence of manifest error. Call Option The Bank has the sole discretion but not an obligation, to exercise its option to redeem the CD upon giving not less than 5 days prior notice before the relevant Call Option Exercise Date. If the call option is exercised by the Bank, the relevant CD will mature on the relevant Call Option Exercise Date. CD holders will receive 100% of their Principal Amount and the accrued but unpaid interest. If the call option is not exercised, the relevant CD will mature on or about 29 October Risk Disclosure The obligation to pay a CD holder any interest or principal under the terms of a CD, and any other obligations owed to a CD holder under the terms of a CD, lie with the Bank as issuer of the CD. If a CD holder buys a CD and does not hold the CD to maturity, but instead re-sells it to the Bank, the CD holder may incur a loss on his initial investment. This is because, during the term of the CD, the market price of the CD will fluctuate. The market price of a CD may move up or down, compared with the amount of the initial purchase price, depending on many factors, including movements in prevailing interest rates, changes in the perceived credit standing of the Bank and factors generally affecting the market for similar securities or deposits. A CD holder is as likely to incur losses as to realise profits as a result of these market price movements. A customer should carefully consider whether the purchase of a CD is a suitable investment in light of the customer's financial position and investment objectives, particularly if he or she may wish to sell the CD before its stated maturity. If the Bank exercises the call option, the CD holder will not be able to enjoy the interest payment on the CD after the Bank has redeemed the CD on the relevant Call Option Exercise Date. If the Bank does not exercise the call option, the CD holder will enjoy the interest payment on the CD until, and will only receive the Principal Amount of the CD on, the Maturity Date of the CD in The CD may only be resold or transferred by the CD holder to the Bank before the Maturity Date (or, if the Bank exercises the call option, the relevant Call Option Exercise Date) at a market price (which may be less than their Principal Amount) to be quoted from time to time by the Bank. If the CD are redeemed by the Bank because of a Tax Call, the customer may not be able to enjoy the same return when reinvesting in other instruments or markets. 4

5 Independent Decision Each customer is deemed to have made its own independent decision to make each deposit to be evidenced by a CD and must not rely on any communication (written or oral) from the Bank or any of its employees as a recommendation or as investment advice. By applying to the Bank to purchase CD, a customer represents and warrants to the Bank the following: - The customer fully understands and accepts the risks and returns associated with the CD. - The customer acknowledges that the risk disclosure statements have been provided in a language of the customer's choice and the customer has been invited to read the risk disclosure statements, to ask questions and take independent advice if the customer wishes. - The customer has made his or her own independent judgment and decision without relying on the Bank or its employees to enter into any dealings in the CD ( Transactions ) and the customer fully understands the risks and consequences in doing so and agrees to bear all consequences of Transactions. The Bank and its employees shall have no liability whatsoever in respect of the customer's entering into any or all of the Transactions. - The customer has full power and authority to enter into these terms and conditions and to exercise the customer's rights and perform the customer's obligations under these terms and conditions. Securities Law Restrictions The CD are not available for subscription by any person who is a United States Person within the meaning given to that term by Regulation S under the U.S. Securities Act of Chiyu Banking Corporation Limited 16 October