2006 Interim Report－A Share.pdf - 中国银行

The following table illustrates the potential impact to the income statement for a 1 per cent fluctuation in the foreign
currency exchange rate against RMB based on the net exposure of the Group excluding the net structural position in
foreign operations as set forth above:
1% appreciation/depreciation in foreign currency
exchange rates against RMB
30 June 2006 31 December 2005
Profit / (loss)
Profit / (loss)
Rmb million
Rmb million
+/- 2,660 +/- 2,090
The above sensitivity analysis in response to potential movements in the foreign currency exchange rates against RMB
is for illustrative purposes and only represents simple scenarios applied to the Bank's net outstanding foreign currency
exposure as at the respective date. Such analysis does not taken into account any further actions that could be
taken by management after the balance sheet date, subject to the approval by the PRC government, to mitigate the
effect of exchange differences, nor for any consequential changes in the foreign currency exposures.
Set forth below are assets, liabilities and off-balance sheet items by currency. Short-term financial assets include
cash, precious metals, due from central banks and government certificates of indebtedness for bank notes issued.
Debt securities also include trading and other debt securities at fair value through profit or loss. Other assets primarily
include interest receivable, fixed assets and deferred tax assets. Short-term financial liabilities include due to
central banks and bank notes in circulation. Other liabilities primarily include interest payable. Option products are
included in net off-balance sheet position using notional amounts, including the Foreign Currency Option Agreement
with Huijin whereby the Bank has acquired the option to sell to Huijin USD 18 billion. The intent of the transaction
was to create an effective economic hedge against a portion of the USD position arising from the USD capital contribution
made by Huijin.
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