”. 2006 is another record year for the local financial field in the wake of macao ’ s high economic growth and the prolonged favourable economic situation of the neighbouring regions. while the banking sector continues with the enhancement of risk management, it has also strived to diversify its range of financial products, broaden up its business network, implement different operational strategies and improve service quality. accordingly, the sector succeeds in widening up its revenue source, expanding its operational scope, enhancing its quality of service and achieving better operational efficiency. as per statistics as at year end, total assets of the banking sector jumped 26. 5 % to mop273. 8 billion ; deposits increased by 24. 2 % to mop229. 9 billion ; loans stood at mop76. 4 billion, representing an increase of 17. 1 % ; non - performing loan ratio was at record low of 1. 1 %. overall annual profit jumped remarkably year - on - year by 30. 1 % to mop3. 96 billion. capital adequacy ratio was 14. 7 %, far better than the benchmark set by the basel committee. as for the insurance sector, continued growth was also witnessed in 2006. as at year end, gross premium registered a 10. 5 % growth to mop2. 48 billion. growth momentum of non - life insurance continued to be strong by posting a year - on - year increase of 27. 4 % to mop720 million. life insurance remained stable with total premium grew at a rate of 4. 7 % to mop1. 75 billion. private pension fund scheme has also secured a faster development. as at the end of 2006, the number of registered entities hugely increased by 44. 4 % to 309. workforce covered by the scheme increased by 46. 3 % to 63, 000. assets under fund management increased by 21. 4 % to mop2. 8 billion. other trades such as money exchange, cash remittance and securities are also developing fastly with year - on - year growth of 22 %, 34 % and 70 % respectively. we continue to adopt a prudent investment strategy in managing the msar reserves. as a result, it is capable of posting reasonable return in a turbulent market environment. as at the end of the year, the exchange reserves of the msar reached mop73. 1 billion, representing an increase of 36. 8 % when compared with the previous year. as regards

may face higher and additional disclosure requirements which will be broadened gradually with an aim to maintain tighter market discipline. we will continue to reinforce cooperation with overseas supervisory authorities and strengthen cross - border comprehensive supervision in an effort to coordinate with the global implementation of basel ii. on the insurance supervision front, while our initiatives are meant to facilitate stable market development, ensure fair market competition and protect the legitimate interest of the consumers, we also tend to fine tune the relevant laws and regulations, popularize insurance knowledge and promote development of the industry. in 2006, in response to the new laws on anti - money laundering ( aml ) and combating the financing of terrorism ( cft ) implemented in macao, we revised the “ guidelines on prevention and combating money laundering and financing of terrorism in insurance ”. besides, the limit of indemnity of the employee ’ s compensation insurance ordinance was adjusted upward to cope with the market situation. a 24 - hr hotline was established to provide speedy response to public enquiries. anti - money laundering and combating terrorism financing carry weight in supervision. we have not only revised the related guidelines but also made special organization restructuring to support the cause. both the banking supervision department and insurance supervision department have established their own special taskforce. a cross - departmental working committee is also established for coordination purpose. to enforce its execution, apart from routine offsite inspection, the banking supervision department has already completed the first round aml onsite inspection on all institutions. reports of the related findings and recommendations were sent to the entities for their reference. indeed, we summarized our findings and discovered some common issues which we shared with the institutions in the form of a circular. an explanatory seminar is expected to be convened in april for sharing this information. regarding insurance supervision, the related department has already embarked on an overall aml onsite inspection. inspection will first be carried out on all life insurance companies, followed by non - life insurance companies. a report similar in nature to the one compiled by the banking supervision department will be prepared subsequently. support and coordination from the business sector is expected. in the past year, we actively participated in the msar government trans - departmental aml taskforce. we assisted and coordinated in the establishment of the financial intelligence office. moreover, we approached the international monetary fund and received its technical assistance. the asia pacific group on money laundering / offshore group of banking supervisors ( apg / ogbs ) conducted a second mutual evaluation on our