RHB Capital 12 Months’ Net Profit Up 20%

-- Net Profit Rises to RM300 million

Kuala Lumpur, 27th August 2004:- RHB Capital Berhad ("RHB Capital") announced today its financial performance for the twelve months ended 30 June 2004. The Group recorded an increase in consolidated profit before Irredeemable Non-Cumulative Convertible Preference Shares ("INCPS") dividend, taxation and zakat of 20% to RM626.9 million, while net profit similarly improved by 20% to RM301.2 million, from RM250.6 million in the previous corresponding period. The major factors that contributed to the improved financial performance were better results achieved by RHB Capital’s Skim Perbankan Islam ("SPI") operations and the continued decline in its loan loss provisions.

For the twelve-month period ended 30 June 2004, net interest income declined marginally by 2% to RM1.4 billion due to the competitive lending environment. However, income from SPI operations grew strongly by 21% during the period under review to RM127.5 million. Lending under SPI operations expanded strongly by 21% to RM3.4 billion.

Total non-interest income eased 9% as investment income achieved was normalized after the above-average gains posted by the RHB Capital Group in the previous financial period. During the period under review, the Group maintained its focus on implementing measures that would enhance as well as generate additional streams of sustainable non-interest income, via new product initiatives. As a reflection of the initiatives launched, core subsidiary RHB Bank Berhad’s ("RHB Bank") fee-income improved by 18% to RM261.4 million.

For the period under review, overhead expenses were up 10%, reflecting the operational costs of the enlarged and merged RHB Bank. To enhance the operational efficiency and promote continuous human resource development at RHB Bank, the Group has invested in new Information Technology, operations and training facilities in Bangi, Selangor, which became fully operational during the period under review.

Benefiting from intensive recovery efforts, which have resulted in successful loan recoveries, RHB Capital’s loan loss provisions continued to trend downward as it declined by 40% to RM393.1 million. Asset quality continued to show notable improvement as the net NPL amount was reduced by 15% while the net NPL ratio fell to 7.30% as at June 2004 from 8.51% in the previous corresponding period.

RHB Bank remained as the Group’s largest profit contributing subsidiary. It achieved a pretax profit (before INCPS dividend, taxation and zakat) improvement of 5% to RM428.9 million for the twelve months ended 30 June 2004. Meanwhile, the Bank’s shareholders’ equity and INCPS increased by 3% to RM5.3 billion. Being strongly capitalised, RHB Bank’s Risk-Weighted Capital Adequacy Ratio strengthened to 14.0% as at 30 June 2004, up from 13.0% in the previous corresponding period.

Other major profit contributors for the period under review were RHB Bank’s Labuan offshore unit, which achieved a pretax profit of RM82.7 million, and RHB Delta Finance and RHB Leasing, which recorded a combined pretax profit of RM81.4 million.

RHB Capital’s emphasis on consumer banking has yielded strong results as lending to the consumer segment (consisting mainly of the financing for the purchase of landed residential property, purchase of transport vehicles and consumption credit) expanded by 15% to RM15.1 billion. Concurrently, led by RHB Delta, the Group’s financing of transport vehicles grew strongly by 45% to RM2.0 billion.

The Group has also launched new financial products and solutions catered especially to the commercial and SMI banking clients’ requirements. "RHB BizPower" is tailor-made to SMI applicants and the lending programme is based on a sophisticated score card mechanism while ‘ eHR 2 ’ is an electronic payroll service in which the transaction is conducted via the Internet using a 128-bit Secure Socket Layer (SSL) Encryption technology.

Deposits from customers for the twelve-month period increased by 1% to RM49.2 billion. With active asset-liability management, RHB Capital’s funding structure has improved as demand and savings deposits constituted 34% of deposits from customers as at 30 June 2004, as compared to 29% during the previous corresponding period.

RHB Capital’s shareholders’ funds improved by 6% to RM4.1 billion while its total asset base expanded by 13% to RM78.8 billion. The Group’s net tangible assets per share increased by 8% to RM1.59 as RHB Capital achieved an Earnings Per Share improvement of 20% to 16.5 sen for the 12-month period ended 30 June 2004.

RHB Capital Executive Chairman Dato Sri Sulaiman Abdul Rahman Taib concluded that, "in line with the favourable improvement in the Malaysian economy, the Group has achieved a commendable financial performance during the period under review, with marked improvement across key subsidiaries. The growth at RHB Bank is encouraging, with a marked increase in lending in our targeted segments of consumer mortgages, vehicle loans, and credit cards, thus amply reflecting our concerted push in consumer banking. We already have in place key strategies to enhance our market position and would continually look to develop people-centric solutions for our customers, and find new ways to differentiate ourselves and grow our business."

Audited Consolidated Results for financial period ended 30 June 2004 for RHB Capital Berhad and Rashid Hussain Berhad are accessible @ www.rhb.com.my after midnight August 27, 2004. For easy reference, a table of financial highlights for RHB Capital Berhad follows:

This release contains forward-looking statements such as the outlook for the RHB group of companies. Although RHB believes that the expectations reflected in such future statements are reasonable at this time, there can be no assurance that such expectations will prove correct. Actual performance may be materially different from that anticipated or described herein, and RHB’s financial and business plans may be subject to change.

Click here to view Audited Consolidated Results:

RHB Capital

RashidHussain Berhad

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A leader in financial services, the RHB group of companies (KLSE: RHBCAP) offers innovation and experience in investment & commercial banking and insurance services & products. RHB has earned numerous awards by industry observers and editors. Today, RHB managers and staff serve customers via a network of almost 300 branches and outlets in Malaysia, Brunei, Thailand and Singapore.

www.rhb.com.my

For Investor contact: V. Kanesan at Tel: 603-92802534 For Press contact: Yeoh Guan Jin at Tel: 603-92802536