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Securities Abbreviation: Industrial Bank Securities Code: 601166 No.: T 2014-18

Industrial Bank Co., Ltd.

Announcement on Associated Transactions of

Non-public Offering of Preferred Shares

The Company and all the members of the Board of Directors warrant the truthfulness, accuracy and completeness of the announcement and will bear the joint and several liabilities for any false record, misleading statement or major omission in the announcement.

Important content notes:

i. Transaction Contents

Industrial Bank Co., Ltd. (hereinafter referred to as “IB” or the “Company”) plans for non-public offering of no more than 300 million domestic preferred shares to no more than 200 qualified investors meeting the provisions of the Preferred Stock Pilot Administrative Measures and other laws and regulations (hereinafter referred to as the “non-public offering” or this “offering”). The par value of each preferred share is RMB 100, and such shares will be offered at the par value. The total funds raised through this offering should not exceed RMB 30 billion.

On June 5, 2014, the Company signed and entered into a conditionally effective subscription agreement with the shareholder, Fujian Provincial Department of Finance, which plans to subscribe 25,000,000 domestic preferred shares of this offering, with a subscription amount hitting RMB 2.5 billion. The final amount of subscription shall not exceed the total amount of shares approved by competent authorities. Fujian Provincial Department of Finance will not participate in the process of inquiry on the dividend yield ratio of the preferred shares offered this time, and accept the dividend yield ratio determined finally by the Company and the sponsor institution (lead underwriter) in accordance with relevant procedure and requirements formulated by competent authorities including China Securities Regulatory Commission (hereinafter referred to as the “CSRC”).

ii. Issue Concerning Withdrawal from Voting

The matter that Fujian Provincial Department of Finance subscribes this offering constitutes an associated transaction, so the associated directors, Mr. Gao Jianping and Mr. Liao Shizhong have withdrawn from voting upon the deliberation of relevant proposals.

iii. Influence of Associated Transaction

This associated transaction is priced under the conditions not preferable to those for similar transactions with non-associated parties. With the decision-making procedure meeting relevant regulatory requirements and provisions of the Company’s Articles of Incorporation and fair and reasonable trading terms, the associated transaction, under no condition, may impair the interests of the Company and shareholders, especially those of the small- and medium-sized shareholders, nor the independence of the Company.

I. Overview of Associated Transaction

i. Basic Information

The Company’s plans for non-public offering of no more than 300 million domestic preferred shares to no more than 200 qualified investors meets the provisions of the Preferred Stock Pilot Administrative Measures and other laws and regulations. The par value of each preferred share is RMB 100, and such shares will be offered at the par value. The total funds raised through this offering should not exceed RMB 30 billion.

Fujian Provincial Department of Finance will not participate in the process of inquiry on the dividend yield ratio of the preferred shares offered this time, and accept the dividend yield ratio determined finally by the Company and the sponsor institution (lead underwriter) in accordance with procedure and requirements formulated by competent authorities including the CSRC.

ii. The Transaction Constitutes an Associated Transaction

Prior to this offering, Fujian Provincial Department of Finance holds 17.86% of ordinary shares of the Company, being the largest shareholder of ordinary shares and the associated legal person of the Company.

In accordance with relevant provisions of the Administrative Measures for the Associated Transactions between Commercial Banks and their Insiders and Shareholders issued by China Banking Regulatory Commission (hereinafter referred to as the “CBRC”), the Guidelines of the Shanghai Stock Exchange on Affiliated Transactions of Listed Companies, the Articles of Incorporation and the Administrative Measures on Associated Transactions of the Company, the subscription of Fujian Provincial Department of Finance of the preferred shares offered this time constitutes an associated transaction, and the relevant approval procedures have been gone through.

iii. Voting of the Board of Directors

On June 6, 2014, the Company held the 6th session of the 8th Board of Directors, deliberating and approving the proposals regarding this offering. When the Board of Directors of the Company deliberated relevant proposal on the associated transaction involved in this offering, the associated directors withdrew from voting.
This offering still needs to be approved by the General Shareholders’ Meeting. When the General Shareholders’ Meeting of the Company deliberates the matters regarding the associated transaction involved in the offering, relevant shareholders will withdraw from voting. In addition, this offering cannot be implemented until it is approved by regulatory authorities including the CBRC and the CSRC.

iv. Voting and Opinion of Independent Directors

The foregoing associated transaction has received the prior consent of independent directors of the Company before it was submitted to the Board of Directors of the Company for deliberation. All independent directors voted for the transaction when the Board of Directors deliberated relevant proposal and expressed their independent opinion to give consent to the abovementioned associated transaction.

II. Introduction of the Associated Parties

Fujian Provincial Department of Finance is a legal person of governmental agency, with Chen Xiaoping serving as the legal representative, at the domicile: No. 5 Zhongshan Road, Fuzhou.

Prior to this offering, Fujian Provincial Department of Finance holds 17.86% of ordinary shares of the Company, being the largest shareholder of ordinary shares.

III. Pricing Policy and Reference for the Associated Transaction

i. Pricing Method

1. Par value per share and subscription price

The par value per share of the preferred shares of this offering is RMB 100 and such shares will be offered at the par value.

2. Dividend yield ratio and determining principle

For the preferred shares of this offering, each five years starting from the deadline for the payment of this offering constitutes a interest period, and the dividend yield ratio for each interest period is the same.

The dividend yield ratio in the first interest period shall be determined in the way of inquiry or other ways recognized by the regulatory authorities by the Board of Directors of the Company based on the authorization of the General Shareholders’ Meeting, considering factors such as national policies, market situation, specific company situation and requirements of investors. Meanwhile, the ratio shall not be higher than the annual mean rate of return on weighted average net assets received by shareholders of ordinary shares of the Company in the latest two accounting years before the offering.

The dividend yield ratio of the preferred shares of this offering is the sum of benchmark interest rate and basic interest spread:

Dividend yield ratio=benchmark interest rate + basic interest spread

The benchmark interest rate refers to the mean rate of return on treasury bonds with a repayment period of five years in the first 20 trading days prior to the deadline for subscription payment of this offering or the date of adjustment of benchmark interest rate (excluded). The benchmark interest rate will be adjusted once each five years starting from the deadline for subscription payment of this offering.

The basic interest spread is the remaining part of the dividend yield rate for the first interest period after deducting the benchmark interest rate. The basic interest spread is subject to no adjustment after it is determined upon offering.

ii. Fairness of Pricing

The pricing principle of this offering conforms to the relevant provisions and requirements of relevant laws and regulations including the Company Law of the People’s Republic of China, the Securities Law of the People’s Republic of China, and the Preferred Stock Pilot Administrative Measures. This associated transaction is priced under the conditions not preferable to those for similar transactions with non-associated parties, with fair and reasonable trading terms.

IV. Main Contents of Conditionally Effective Subscription Agreement of Shares

1. The parties hereto and time of execution

The parties hereto are “Industrial Bank Co., Ltd. (Party A)” and “Fujian Provincial Department of Finance (Party B)” signed and entered into the agreement on June 5, 2014.

2. Method and price of subscription, and method of payment

Party B agrees to subscribe 25,000,000 domestic preferred shares offered by Party A this time, and the final amount of subscription shall not exceed the total amount of shares approved by competent authorities.

The par value per share of the preferred shares subscribed by Party B this time is RMB 100 and such shares will be subscribed at the par value.

Party B agrees to subscribe the preferred shares offered by Party A this time with cash in accordance with the provisions of the agreement.

Party B will not participate in the process of inquiry on the dividend yield ratio of the preferred shares offered this time, and accept the dividend yield ratio determined finally by Party A and the sponsor institution (lead underwriter) in accordance with procedure and requirements that competent authorities including the CSRC.

Party B agrees to transfer the total subscription price into the designated receiving account in cash in a lump sum based on the payment notice offered by Party A and the sponsor institution (the lead underwriter) of this offering after the agreement comes into effect.

3. Existence and effectiveness of agreement

This agreement shall come into existence on the day when the legal representatives or authorized representatives of both parties sign and seal hereon.

The agreement shall come into effect after all the following requirements are met:

(1) The Board of Directors and General Shareholders’ Meeting of the issuer both approve this offering and the agreement;

(2) The competent authorities of Party B have approved the issue that Party B, with cash, subscribes the domestic preferred shares offered by Party A this time;

(3) CBRC has approved this offering and other matters regarding administrative license involved in the performance of this offering;

(4) CSRC has approved this offering.

4. Breaching liability clause

(1) Where the approval of competent authorities results in any difference (insufficiency) between the final amount of subscribed shares and the value agreed in the announcement on the resolution of the Board of Directors or the agreement, Party A shall not be responsible for any insufficiency in offering

(2) In case that any party hereto breaches the provisions of the agreement or make the agreement not performed in part or whole due to its fault, the liability arising therefrom shall be borne by the breaching party. If either party hereto violates the representation or warranty of the agreement and causes losses to the other party, the breaching party shall assume relevant compensation liability. If both parties hereto breach the agreement, both parties shall assume the corresponding part of liability arising from its breach respectively.

(3) If the agreement cannot be performed due to any force majeure, neither party will bear any legal liability. However, the affected party shall lose no time to notify the other party to take necessary measures so as to minimize losses.

V. Purpose of Associated Transaction and Influence of the Associated Transaction on the Company

i. Purpose of this Associated Transaction

With this non-public offering of preferred shares, the Company plans to supplement Tier 1 capital with a view to meeting the increasingly strict capital regulation requirements, improving the capital structure of the Company, building up risk resistance, and supporting the sustained and sound development of various businesses of the Company.

ii. Influence on the Operation and Financial Situation of the Company

The completion of this offering will help further improve the capital sufficiency of the Company, enhance the risk resistance of the Company, support the steady, sound and coordinated development of businesses of the Company, and improve the profitability and core competitive edges of the Company.

VI. Opinions of Independent Directors

Constituting an associated transaction, the subscription of Fujian Provincial Department of Finance of the preferred shares offered this time has received the prior consent of independent directors of the Company before it was submitted to the Board of Directors of the Company for deliberation. When the Board of Directors of the Company deliberated relevant proposals on the plan and the associated transaction of this offering, the independent directors of the Company, including Deng Ruilin, Li Ruoshan, Zhang Jie, Zhou Qinye, and Paul M. Theil gave an unanimous consent on the plan of this offering and the associated transaction involved in this offering, and gave special opinions on the offering of preferred shares and associated transaction as follows:

i. On June 5, 2014, Fujian Provincial Department of Finance signed and entered into a conditionally effective agreement on subscription of preferred shares with the Company, subscribing 25,000,000 preferred shares, with a subscription amount hitting RMB 2.5 billion. Fujian Provincial Department of Finance is the largest shareholder of the Company, so the preferred shares offered this time constitutes an associated transaction. Fujian Provincial Department of Finance warrants not participating in the process of inquiry of this offering, and accepting the dividend yield ratio determined finally by the Company and the sponsor institution (lead underwriter) in accordance with procedure and requirements formulated by competent authorities including the CSRC. The trading terms are fair and reasonable and the terms and execution procedure of the subscription agreement are lawful and compliant, not impairing the interests of the Company and shareholders, especially small- and medium-sized shareholders.

ii. On June 5, 2014, the Audit and Associated Transactions Control Committee of the Board of Directors of the Company held a meeting, agreeing, after deliberation, to submit the proposal on associated transaction involved in this offering to the Board of Directors for deliberation, and the 6th session of the 8th Board of Directors also deliberated and approved the said proposal on June 6, 2014. When the Board of Directors of the Company deliberated the relevant matters involved in the foregoing associated transaction, the associated directors have withdrawn from voting. The decision-making procedure is in compliance with relevant regulatory requirements and relevant provisions of the Articles of Incorporation. When the General Shareholders’ Meeting of the Company deliberates relevant matters on the associated transaction involved in this offering, the associated shareholders will withdraw from voting.

VII. Documents for Reference

i. Resolution of the Audit and Associated Transactions Control Committee of the Board of Directors;

ii. Resolution of the Board of Directors;

iii. Special opinions of independent directors on the offering of preferred shares and associated transaction;

iv. The Agreement on the Subscription of Preferred Shares of Non-public Offering of Industrial Bank Co., Ltd. between Industrial Bank Co., Ltd. and Fujian Provincial Department of Finance.

It is hereby to announce as foregoing.

Board of Directors of Industrial Bank Co., Ltd.

June 6, 2014