RHB Capital Records 18-Month Profit of RM903 million

Kuala Lumpur, Feb 28, 2005: RHB Capital Bhd (“RHB Capital” or “The Group”) has achieved a consolidated profit before Irredeemable Non-cumulative Convertible Preference Shares (“INCPS”) dividends, taxation and zakat of RM903.5 million for the 18-month period to December 31, 2004, which is also the new financial year end for the Group. For the quarter ended December 31, 2004, profit before INCPS dividends, taxation and zakat was RM128.1 million.

RHB Capital Executive Chairman Dato Sri Sulaiman Abdul Rahman Taib attributed the Group’s respectable financial performance to its strong management team and the contribution from its staff in promoting the Group’s new and existing financial products and services, as well as executing the many cross-selling activities across the Group successfully.

Since RHB Capital has changed its financial year end from June 30 to December 31, there is no comparison with the previous corresponding period.

During the period under review, RHB Capital generated a total net interest income of RM2.1 billion, while income from Islamic Banking business was commendable at RM197.1 million. Underpinned by the Group’s intensified focus on Consumer Banking and Commercial Banking, RHB Capital’s gross loans, advances and financing increased to RM48.5 billion, with the financing of landed residential property, purchase of transport vehicles and consumption credit now constituting 35% of its portfolio.

Total non-interest income earned during the 18-month period was RM939.0 million, which was augmented by the Group’s concentrated efforts in enhancing its fee income generation capability. RHB Capital has recently launched its Bancassurance initiatives and developed a dedicated sales team that can address “individual objectives” at different life stages of its clients. The Group also actively cross-markets more than 80 unit trust funds managed by reputable fund houses to its clients.

The asset quality of the Group continued to improve. This was achieved on the back of the positive impact arising from RHB Bank’s effective credit framework and intensive recovery efforts. The Group has also strengthened its risk management framework. Net non-performing loans (“NPL”) ratio declined to 5.95% as compared to 8.51% in June 2003.

RHB Capital’s shareholders funds increased to RM4.2 billion while its asset base grew to RM82.1 billion as at December 2004. Net tangible assets per share increased to RM1.67, while the Group’s net earnings per share improved to 25.1 sen for the 18-month period to December 2004.

Among the Group’s key subsidiaries, RHB Bank Bhd (“RHB Bank”) attained a profit before INCPS dividends, taxation and zakat of RM639.4 million during the 18-month period under review, maintaining its role as the Group’s largest profit contributor. RHB Bank has launched a string of exciting new initiatives which includes the EVO card for the consumer segment as well as RHB BizPower for the SMI business segment.

RHB Bank remains strongly capitalised with its shareholders’ equity and INCPS amounting to RM5.4 billion as at December 31, 2004, while its Risk-Weighted Capital Adequacy Ratio stood at a comfortable 14.2%.

On the Group’s Investment Banking operations, RHB Sakura Merchant Bankers Bhd (“RHB Sakura”) concluded the financial year end positively, recording a profit before taxation of RM94.4 million. Among the notable mandates completed successfully during the period was AirAsia Berhad’s successful initial public offering, in which RHB Sakura acted as the financial adviser, joint bookrunner for the institutional offering as well as the joint managing underwriter for the retail offering.

Besides RHB Bank and RHB Sakura, the other significant contributors to Group profit were RHB Delta Finance Bhd, RHB Securities Sdn Bhd and RHB Insurance Bhd. RHB Delta Finance Bhd reported a strong improvement in its pretax profit to RM136.3 million. RHB Securities Sdn Bhd turned around from a pretax loss of RM31.1 million in the previous financial year to attain a pretax profit of RM43.2 million in the period under review, on the back of a more buoyant equity market. RHB Insurance Bhd continued to chart encouraging growth, registering a pretax profit of RM34.0 million for the period.

Dato Sri Sulaiman commented that the financial period ended December 31, 2004 was a significant milestone for RHB Capital as the Group has effectively strengthened its management team, implemented Group-wide cross-selling processes and launched several initiatives successfully, including the well received RHB Di Hati nationwide roadshow. RHB Capital will continue to launch a series of new initiatives and financial solutions in the current financial year, which includes the launching of RHB Islamic Bank.

“As a financial group with wide business exposure and an extensive array of financial solutions, we are strategically positioned to leverage on the current demands as well as financial needs of our customers. As reflected by our recent new product initiatives and innovative marketing approaches, we would continue to enhance the foundation for sustained growth that would reward our shareholders and stakeholders in the coming years.”

Audited Consolidated Results for financial period ended 31 December 2004 for RHB Capital Berhad will be accessible @ www.rhb.com.my after midnight March 01, 2005. For easy reference, a table of financial highlights for RHB Capital Berhad is as follows:

Rashid Hussain Bhd Results 311204 (click here)

RHB CapitalBhd Results 311204 (click here)

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.

A leader in financial services, the RHB group of companies (Bursa Malaysia: 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.