Major Shareholder:

• Dah Sing Financial Group ¡V 80.0% interest

The Group was established on 11 March 2004 as the holding company for the banking business of the Group is carried out through its subsidiaries with banking licenses. All description of the banking business of the Group in the prospectus refers to the banking business carried out through these subsidiaries. The Group's operations comprise three main lines of business carried out through its banking subsidiaries; personal banking, commercial banking and treasury. The Group's operations are primarily based in Hong Kong. Although it has recently opened its first Mainland China branch in Shenzhen and also has an interest in an offshore private bank licensed in Guernsey.

The Group's personal banking business carried out through its banking subsidiaries, offers retail, private and VIP banking services, including deposit-taking, mortgage lending, credit cards, personal loans, overdrafts and wealth management products and services,. The Group's commercial banking services, carried out through its banking subsidiaries, include a variety of lending and deposit-taking services for commercial and institutional customers. The Group has operates, through Dah Sing Bank, a treasury business, which is responsible for securities investment, funding, foreign exchange, cash management and interest rate risk management.

The Group is headquarter in Hong Kong and, as at 31 December 2003, its local banking subsidiaries had a network of 43 branches and three sales and services centres, with approximately 1,200 employees and more than 700,000 customers. The Group's principal subsidiary, Dah Sing Bank, has been active in the banking business since 1947 and, in the past ten years, has established a significant position in the personal banking market in Hong Kong.

The Directors believe that the Group has the following competitive advantages:

• Management: Management of the Group has shown its ability to identity and execute opportunities to expand into new business areas or grow existing businesses which offer an attractive combination of risk and return and to decrease focus on products and services which do not.
• Brand: ¡§Dah Sing¡¨ has become a well known brand in Hong Kong, as a result of more than 50 years in the banking business and more than 16 years as part of a listed group, the Group's customer base of over 700,000 customer, its branch network, advertising and its wide range of personal banking and commercial banking products and services.
• Personal Banking: the group provides an innovative and wide-ranging personal banking product and service franchise. The Group's particular strength has been in the credit card consumer finance sectors, which provides a broad customer base from which to expand its wealth management and other businesses.
• Commercial banking: The Group has long-standing commercial banking client relationships, particularly in the SME sector.
• Treasury: The Group has a treasury management infrastructure which has enabled it to take advantage of the high degree of liquidity in the Hong Kong market to profitably deploy deposits taken by the Group. This has resulted in the treasury division becoming a significant contributor to profit in recent years.
• Risk management: Coupled with the group's determination to grow its core businesses is a focus on risk management, which has enable the Group's local banking subsidiaries to maintain an average non-performing loan ratio that is below the average of all Retail Banks in Hong Kong.

• An economic downturn in Hong Kong may materially and adversely affect the Group's financial condition and results of operations;
• The Group is facing significant competition, which may have an adverse effect on its financial condition and result of operations;
• Expansion of the Group's operations, including expansion into new markets, may represent a risk if not managed effectively.
• The Group's business is vulnerable to volatility in interest rate.
• The Group's business is subject to interest rate risk.
• The Group's personal banking portfolio carries a higher degree of credit risk than its other types of lending.

The Group intends to continue its strategy of focusing on the personal banking market where it believes there are attractive opportunities for growth. This will involve increasing the Group's customer base both through consumer lending products such as credit cards and personal loans, as well as wealth management products and services.

The Group intends to make full use of its substantial customer base by cross-selling additional products and services. It also intends to continue its efforts to increase distribution to its products and services through improved service quality and as a result of the training of its staff. Also, the Group will continue to seek attractive new areas of business. for example, recent initiatives have included a significant increase in the Group's wealth management business and increased investments in debt securities in the wholesale banking market.

The Group will continue to seek to operate in a variety of different business areas with different risk characteristics, so as to gain the benefits of risk diversification, as well as being able to generate positive returned in a range of different market conditions. Also, the Group believes that there will be many opportunities which will arise as a result of Hong Kong' increasing business and economic integration with Mainland China. it has already opened its first Mainland China branch in Shenzhen, and will continue to seek opportunities for further expansion in Mainland China as and when they become available.

The net proceeds with respects to the New Shares pursuant to the Global Offering (After deduction of underwriting fees and estimated expenses payable by the Company in relation to the Global Offering, assuming that the Over-allotment Options is not exercised an assuming a price of HK$13.26 per share, being the midpoint of the stated offer price range of HK$12.66 to HK$13.86 per share) are estimated to be approximately HK$1,275 million (or if the Over-allotment Option is exercised in full, approximately HK$1,469 million.

The net proceeds received by the Company pursuant ot the Global Offering will form part of the assets of the Group and will, together with its other assets, be deployed in its existing banking businesses in furtherance of the strategy of the Group. Whilst the group intends to grow in the future by expanding in Mainland china and seeking joint ventures and/or alliance in Mainland china, pending the identification of any specific opportunity in this regard noe of the proceeds of the global offering have been earmarked for such use.