Integrated Report 2020 Rhb Bank Berhad Www

RHB BANK BERHAD

WWW.RHBGROUP.COM

INTEGRATED REPORT 2020 To the Beat of the Nation This year, like no other, has been a year that truly impacted every single person within the community, some more than others. As the pandemic reshaped the very fabric of life and society as we knew it and tested our very purpose, RHB Banking Group responded with empathy and conviction. Being close to the pulse of the nation, we knew that our communities needed help, quickly. And that is exactly what we did. We mobilised our people across Malaysia and regionally, wherever we have a presence, to help those most affected by this unprecedented health and economic crisis.

We also extended assistance to our frontliners who worked tirelessly every single night and day to protect the rest of us, and we helped the most vulnerable members of society - the orphans, the disadvantaged and the less fortunate. We reached out to our customers, both individuals and business owners, to soften the blow on their disrupted livelihoods and supported our employees whose family members were impacted by the pandemic. It is our hope that the help we have given has made a difference in their lives and lightened their burden, if even for the briefest moment. RHB Bank Berhad - Integrated Report 2020 throughout thisReport. specific businessesare presented responded inthecontext of our of theeffects andhow we differing magnitudes.Descriptions business indifferent ways andin The pandemicaffected our Provision of ▪ * Contributions of ▪ The #JomSapot* campaignthat ▪ RM5.10billioninrescheduling ▪ Total loanandfinancingfacilities ▪ Payment assistance of ▪ pandemic included: Our initiatives duringtheCOVID-19 WITH YOU TOGETHER STANDING March and April 2020. the movement control order in hospitals across Malaysia during medical frontliners from eight meals to an estimated 2,000 communities. vulnerable anddisadvantaged customers to supportlocal businesses. the power of socialmedia to appeal to JomSapot isauniquecampaign that leverages Laos and efforts inMalaysia, Cambodia, million to various COVID-19 relief extra cost. SME outlets drive their salesat no has helpedmore than5,600local corporate customers and restructuring assistance for customers. to RM2.62billionto 4,216SME through relief fundsamounting customers asof end-March 2021. and RM4.9billionto 1,732SME billion to 180,984individuals Thailand targeted at 20,000packed about aboutRM3 WHAT’S INSIDE THIS REPORT RM16.5

Key Business Highlights Business Key Onboarded more than23,000 ▪ Total SMEe-Solutions customers ▪ Launchedthefirst ▪ OUR SMEECOSYSTEMS WE CONTINUED TO ENHANCE Customer Satisfaction NPSachievement: EXCELLENCE ACHIEVING CUSTOMER RHBMotion Code Credit Card/i ▪ INNOVATION CONTINUED DRIVEFOR 14 The Group hasbecome Malaysia’s Finance Malaysia 100. last two years, according to Brand our connected ecosystem. more than113,000SMEs within new-to-bank SMEs. We now have to more than10,000in2020. grew by 83.4%from 6,000in2019 Relationship Managers. enables remote interaction with customer onboarding process and Malaysia that automates the SME financingmobileappin industry spendby 22%. 100% year-on-year,outpacing Cards-in-Force increased by 18 2018: th most most valuable brand over the th +11 14 2019: th AI-powered 14 2020: over

RM3.1billionextended asat ▪ SUSTAINABILITY ▪ STAFF WORKING THE AGILE WAY First bankto provide areal- ▪ 1

ST 2,000 2019: 130 2018: green activities. December 2020insupportof appointments aheadof time. customers to booktheir banking branches via mobileapp,allowing time digitalqueuesystem for Best ASEAN Green SRISukuk Awards The AssetTriple Finance AIslamic INMALAYSIA Employee Engagement Score Arranger &Sole Lead Manager) (Sole Principal Adviser, Sole Lead million GreenRM17.0 Sukuk GreenPasukhas Assets’ of (2019: 90%) 92% 4,000 2020:

Proxy ▪ Notice of 151 Listof 150 List 148 147 146 145 157 06 04 03 STAKEHOLDERS’ INFORMATION WE ARE RHBBANK 02 What WeDo Group Corporate Structure WeWho Are Changes inShare Capital Classification of Shareholders Analysis of Shareholdings the 55 Statement Accompanying Notice of ABOUTREPORT THIS of Form

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(30) Inside this Annual General Meeting Report Largest Shareholders 10 08 Our Investment Case Where WeOperate 110 106 104 102 101 96 94 How ▪ Business Governance for aSustainable Profile of Group Senior Management Group Senior Management Profile of theShariah Committee Key Operating Companies Profiles of theChairmenof the Profile of theBoard of Directors Our Board at aGlance During the YearDuring Our Governance Practices OUR GOVERNANCE

We Strengthened 22 16 12 LEADERSHIP STATEMENTS

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50 Our 48 46 43 39 Regional Market Landscape 33 90 60 OUR STRATEGIC REVIEW OUR PERFORMANCE REVIEW Financial Officer’s Review 135 133 132 127 Risks andOpportunities Our Value Creating Business Model Our Material Matters StakeholdersEngaging with Sustainability Review Operations ▪ Singapore International Business ▪ Group Insurance ▪ Group Shariah Business ▪ Group ▪ Group ▪ Group Retail Banking ▪ Group ▪ Segmental Operational Review Banking Strategic Roadmap -FIT22 Governance Progress and ▪ Stakeholder ▪ and Internal Control Statement onRisk Management Disclosures Additional Compliance Information Shariah Committee Report Board Audit Committee Report Corporate Integrity ▪ Group Compliance ▪ Accountability ▪ Governance Framework ▪ Chairman Ethical Business Conduct Milestones Wholesale Banking Business Analysis and Communications www.rhbgroup.com Transaction and

RHB Bank Berhad - Integrated Report 2020 02 RHB Bank Berhad - Integrated Report 2020 location-specific data isstated where applicable, while someinformation may only belimited to geographical sectors. are constantly strivingto improve our data collection to ensure better coverage and disclosures in the future and thus The scope of thisReportcovers only strategies, initiatives Banking inRHB andactivities Group across ASEAN. We to ‘RHB BankRHB Berhad anditssubsidiary companies across the Association of Southeast Asian Nations (“ASEAN”). References BankRHB Berhad company isapublic listed ontheMain Marketof Bursa Malaysia Securities Berhad. This Report covers BOUNDARIESSCOPE AND by navigational icons, asseenhere, for thereader’s easeof reference. The Report will bereferring to anddiscussing theGroup’s of sixcapitals value creation indetail. Each capitalis represented All information presented isasat31December 2020,unlessotherwise stated. Throughout thepreparation of thisReport, we have been NAVIGATION ICONS been global, national andregional economic conditions; interest rates; exchange rates; andcredit or matters that have not Factors on forward-looking statements. thatcan arisefrom unforeseen events beyond theGroup’s control. Readers are not cautioned to unduereliance put not beconstrued asaguarantee of future operating or financialresults considering thepotential risksanduncertainties ‘anticipates’, ‘believes’, ‘estimates’, ‘may’, ‘plans’, ‘projects’, ‘should’, ‘would’ and‘will’. Such statements should Forward-looking objectives, strategies, plansandinitiatives inthecontext of our businessandsustainability efforts. and information available atthat point intime. These statements canalsobeusedto describetheGroup’s future financial performance of theGroupbased onthebeliefs of theGroupas well asassumptions madeby Management This Reportcontains certain forward-looking statements respectwith to thebusiness,operational, financialandnon- FORWARD-LOOKING STATEMENTS to changes indirection by theManagement or theBoard of Directors. International Financial Reporting Standards and • Malaysian Financial Reporting Standards • • • • • • • guided by bestpractices asprescribed by international informed investment decisions. Group’s outlookfor theshort,mediumandlongterm, sofar asto enableour stakeholders to make better- Social andGovernance (“ESG”),further elaborated inour Sustainability Report. The Report alsoprovides the details non-financialperformance in2020, which incorporates our progress intheareas of Environmental, strategic initiatives to our stakeholders. As we strive for long-term sustainable value creation, thisReport also balanced andcomprehensive information inrelation to financialperformance andtheprogress of our Covering frameworks, guidelinesandbestpractices. our first integrated report in2019,guidedby both localandinternational RHB BANKING GROUP continues itsjourney into Integrated Reporting, following REPORTING FRAMEWORK other regulatory requirements asapplicable and Guidelines Bank Negara Malaysia Policy (“BNM”) Documents 2016 Companies Act Bursa Malaysia’s Corporate Governance Guide (2 Bursa Malaysia Sustainability Reporting Guide (“MMLR”) Malaysia”) Main Market ListingRequirements Bursa Malaysia Securities Berhad’s (“Bursa (“MCCG”) Malaysian Code onCorporate Governance integrated reporting frameworks. Locally, nd reviewed Banking Group’, ‘theOrganisation’, ‘theGroup’, ‘RHB’ edition) that the could or period

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which caters for thediverse needsof our efforts increating sustainable value M by anindependent auditor’s report financial results, further supported Our Integrated Report issupplemented by our fullsuite of onlinepublications, broad stakeholder baseaspartof our communicate our value creation comprehensive integrated reporting. statements andanalysis of the approach to sustainability and OUR SUITEOF REPORTS Details theGroup’s financial Capital Manufactured strategies, performance and outlook to our stakeholders Our primary Report usedto Communicates theGroup’s These canbeaccessed at Sustainability Report Integrated Report www.rhbgroup.com Financial Report N Capital Natural

Our Strategic Pillars: F countries inthe ASEAN region. wide, RHB’s presence alsospanseight other With more than14,000employees Group- across targeted products andsegments. has strong market leadership inMalaysia with a significant presence in ASEAN, RHB Ranked amongthetop banks inMalaysia and relationships built with stakeholders. a cohesive andinspired workforce and customer experiences, underpinnedby that supportssimple,fast andseamless segment offerings andanecosystem to customers through differentiated committed to delivering complete solutions regional financialservices provider that is RHB BANKING GROUP isamultinational WE ARE RHBBANK Email :[email protected] Tel :+603 92068118 Malaysia FundOur Journey CUSTOMER CONTACT CENTRE I Invest ToWin STATEMENTS LEADERSHIP T Organisation Transform the 196501000373 (6171-M) COMPANY REGISTRATION NO. Corporate Website: Fax :+60392819314 Tel :+60392878888 50400 Kuala Lumpur Level 10, REGISTERED OFFICE (MAICSA Hasnita Sulaiman (LS 0006901) Azman Shah Md Yaman COMPANY SECRETARIES RHB Centre, OUR STRATEGIC REVIEW No. 7060582) Tower Our Reports: IR Jalan Report Integrated One Tun Razak www.rhbgroup.com OUR PERFORMANCE CORPORATE INFORMATION REVIEW FR Report Financial For Seksyen 13,46200Petaling Jalan Rakyat, Kuala Lumpur Level 10,1Sentral Chartered Accountants PricewaterhouseCoopers PLT AUDITORS Email :[email protected] Fax :+60378904670 Helpdesk No. :+60378904700 No. 5, Fax :+60321731288 Tel :+60321731188 50706 Kuala Lumpur P.O.Box 10192 11 Boardroom Share Registrars SdnBhd SHARE REGISTRAR OUR GOVERNANCE th shareholders’ Floor, Menara Symphony SR Employees across ninecountries Jalan Professor More than RM271.1 Report Sustainability RM7.2 WHO WE ARE WE WHO Total Income Total Assets enquiries KhooKay www.rhbgroup.com 14,000 Others: Sentral 19 Jaya, Selangor billion STAKEHOLDERS’ INFORMATION billion COVID-19 Kim 03

RHB Bank Berhad - Integrated Report 2020 04 RHB Bank Berhad - Integrated Report 2020 RHB Bank Berhad 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% RHB Leasing Sdn Bhd RHB Bank (L)Ltd RHB Islamic Bank Berhad RHB Research Institute Singapore Pte Ltd Summit Nominees Pte Ltd RHB Nominees Singapore Pte Ltd (formerly know asRHBBank Lao Limited) RHB Bank LaoSole Co., Ltd (formerly known asRHBIndochina Bank Limited) RHB Bank (Cambodia) Plc RHB Delta Sdn Bhd UMBC Sdn Bhd* Utama Gilang Sdn Bhd RHB Investment Ltd (Singapore) Banfora Pte Ltd (Singapore) RHB Bank Nominees Pte Ltd (Singapore) Utama Assets Sdn Bhd RHB CapitalProperties Sdn Bhd RHB CapitalNominees (Tempatan) Sdn Bhd 100% 100% RHB CapitalNominees (Asing)Sdn Bhd RHB Corporate Services Sdn Bhd as at 15March 2021 GROUP CORPORATE STRUCTURE (2) (2) (3) # (4) # (1) 100% RHB Investment Bank Berhad 99.95% 100% 100% 100% 100% 100% 100% 100% 100% 99% RHB Hong Kong Limited RHB International Investments Pte Ltd RHBIB Nominees (Tempatan) Sdn Berhad RHB International RHB Research Sdn Bhd RHB Futures andOptions Sdn Bhd* (formerly known as Vietnam Securities Corporation) RHB Securities (formerly known asRHBIndochina Securities Plc.) RHB Securities (Cambodia) Plc. RHB Securities (Thailand) Public Company PT RHBSekuritas Indonesia 99.62% 100% 100% 100% 100% 100% 100% 100% RHB Finance Hong Kong Limited RHB Futures Hong Kong Limited RHB Securities Hong Kong Limited RHB PT RHB Asset Management Indonesia RHB RHB RHB CapitalHong Kong Limited 40% Asset Management Pte Ltd Asset Management Limited Wealth Management Hong Kong Limited Vietnam Company RHB GC-Millennium CapitalPteLtd Asset Management Sdn Bhd* (10) (8) Limited (7) (7) (6) (10) (9) Limited

(5) (7) 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% WE ARE RHBBANK 80% 80% Malaysian TrusteesBerhad TrusteesRHB Berhad RHB Unit Trust Management Berhad RHB Marketing Services Sdn Bhd RHB Progressive Sdn Bhd RHB Excel Sdn Bhd RHB Nominees (Asing)Sdn Bhd RHB Nominees (Tempatan) Sdn Bhd RHB Nominees Sdn Bhd RHB Merchant Nominees (Tempatan) Sdn Bhd RHB Research Institute Sdn Bhd RHB Asset Management Sdn Bhd RHBIM Berhad* KE-ZAN Nominees (Asing)Sdn Bhd Sdn Bhd KE-ZAN Nominees (Tempatan) TCL TCL Sdn Berhad RHBIB Nominees (Asing) Sdn Bhd RHB Private Equity Holdings 100% Nominees (Asing)Sdn Bhd Nominees (Tempatan) Sdn Bhd RHB Merchant Nominees (Asing)Sdn Bhd (10) (10) (13) (11) STATEMENTS LEADERSHIP (13) (11) (10) (12) (2) (10) (10) (13) 40.05% 94.7% 100% 100% 100% 100% OUR STRATEGIC RHB Finexasia.Com Sdn Bhd* RHB Insurance Berhad 100% REVIEW Sdn Bhd* RHB Islamic Asset Management Asset Management Berhad RHB Islamic International RHB Private Equity RHB Private Equity (Cayman Islands) Sdn Bhd* RHB Stock 188.Com Fund Ltd Management Ltd OUR PERFORMANCE REVIEW 59.95% 20% 20% OUR GOVERNANCE 1 Inactive # Dormant company * Notes: 8 The company 7 The company 6 Jointly 5 4 3 2 10 9 5 The company 15 14 13 12 11 100% 100% 100% 100% 100% owned subsidiary The company becamea direct wholly- 28 February The company changed itsnameon 22 December 2020. for members’ voluntary winding-up on 17 March 2021. 21 August 2020and was dissolved on for members’ voluntary winding-up on 21 The company changed itsnameon 31 The company changed itsnameon 2011. voluntary The company commenced members’ 1 March 2021. voluntary The company commenced members’ Berhad on19February subsidiary of RHBInvestment Bank The company becamea wholly-owned on 25 for voluntary winding-up on3 August 2020. The company commenced members’ voluntary winding-up on28March 2012. The company commenced members’ 2020. voluntary winding-up on30September The company commenced members’ (v) Futures andOptions Sdn Bhd;(iv) RHB (iii) (ii) (i) by: Directshareholdings of 20.00%eachheld

January January voluntary RHB Bank Berhad. and RHB Nominees (Asing)Sdn Bhd; RHB Nominees (Tempatan) Sdn Bhd; RHB Investment Bank Berhad; June 2020. RHB Kawal Sdn Bhd RHBF Sdn Bhd RHB Property Management RHB Capital(Jersey) Limited RHB Equities Sdn Bhd controlled entity. 100%

winding-up on16February winding-up on30 2021. 2020. 2020. liquidation anddissolution Sdn Bhd commenced theapplication commenced theapplication commenced theapplication RHB (Philippines) Inc of www.rhbgroup.com RHBBank (L)Ltd on 2019. (14) STAKEHOLDERS’ June 2017. INFORMATION (14)

(15) 05

RHB Bank Berhad - Integrated Report 2020 06 RHB Bank Berhad - Integrated Report 2020 * welcomes thefuture. past, celebrates thepresent and Together We Progress honours our together. Our brand promise of to realise our greater potential as we move forward inunison, on our exciting journey of progress and welcome everyone to joinus We thank you for believing inus future ahead. and actions,preparing abrighter next generation through our words tirelessly cultivate andnurture the excellence continues as we Our legacy andpursuit of across the ASEAN region. a presence ineight other countries footprint throughout Malaysia, with established ourselves astrongwith your continuous support, we have improve to serve better. them With us to constantly innovate and customers andpartners, inspiring understanding of theneedsof our Our experience gives usanin-depth will continue to doso with pride. businesses grow andsucceed, and have beenhelpingpeopleand For continue servingthecommunity. foundation of our commitment to Our strong heritage isthe International Business. has been integrated under Group As atFebruary 2021, Singapore operations more than100 years, WHATDO WE we

platforms. our branches andour digital which are offered through Cards, Payments andDeposits, Personal Financing, Credit Auto Financing, ASB Financing, Bancassurance, Mortgages, Wealthinclude Management, retail products andservices banking solutions.Our Shariah-compliant consumer provides conventional and Group Retail Banking (“GRB”) GROUP RETAIL BANKING Singapore*. Insurance andGroup International Business, which includesRHB Group Wholesale Banking, Group Shariah Business, Group Group Retail Banking, Group Business & Transaction Banking, businesses are structured into sixbusiness pillars, namely financial services groups inMalaysia. The Group’s core RHB Banking Group isoneof thelargest fully integrated Together We Progress corporates. solutions for SMEs andlarge trade andcashmanagement Transaction Banking caters to Groupenterprises, while (“SMEs”) andfamily-owned Small andMedium Enterprises provides financingsolutionsto Group Business Banking business, amongothers. FX, remittance andinterbank chain financingsolutions, and services includingsupply solutions andtrade finance, deposits, cashmanagement loansandfinancing,including range of businesssolutions Banking (“GBTB”) offers a wide Group Business & Transaction TRANSACTION BANKING GROUP BUSINESS& decisions. clients to make soundinvestment and research capability enableour Finally, itsforex trading platform cross-border transactions. security businesssolutionsand products andsolutions,trust management services, treasury boost performance with cash also helpsitscustomers GroupBanking Wholesale development andtrustee services. management advisory, product unit trustfunds,investment include themanagement of Asset Management offerings support businessexpansion. Shariah-compliant financingto various typesof conventional and centre onfinancialstructuringand Corporate Banking solutions corporate finance. marketscapital raising, fund and and Acquisitions (“M&A”) and include advisory services, Mergers Investment Banking solutions services to our customers. comprehensive andcoordinated Asset Management, andprovides Treasury andGlobal Markets and Corporate Banking, Group Investment Banking, Group segments, namely Group comprises four core business GroupBanking Wholesale BANKING GROUP WHOLESALE Our Businesses • • • • • Established in1964 Securities Services Capital Markets and Commercial Banking, Established in1990 Asset Management Securities Services Capital Markets and • • WE ARE RHBBANK Our Businesses Established in2008 Securities Services Capital Markets and Commercial Banking, • • • share of 10.0%. financing assets with amarket Islamic bankinMalaysia by are ranked asthethird-largest managementactivities. We investment bankingandasset Investment Banking Group on Shariah advisory for the RHB Islamic alsoprovides Banking andIslamic Treasury. Banking, Business & Transaction Corporate &Investment business units-Retail Banking, financial services through four Shariah-compliant bankingand Islamic Banking arm,providing RHB Islamic Bank istheGroup’s BUSINESS GROUP SHARIAH Thailand Indonesia Established in1961 Asset Management Banking Capital Markets &Retail Corporate, Commercial, Cambodia Singapore STATEMENTS LEADERSHIP agent offices. more than2,230authorised 700 Pos Malaysia branches and 15 nationwide branches, over support from our network of convenience of service and Customers have access to protection andpeace of mind. and other products for better range of general insurance able to offer acomprehensive corporate customers. We are insurance for our retail and RHB Insurance provides general GROUP INSURANCE REGIONAL PRESENCE IR OUR STRATEGIC REVIEW For more information, refer to page 08 targeted segments. focus ongrowing profitably in and Vietnam, we continue to investment bankinginIndonesia banking inLaosandBrunei, and countries, i.e.commercial synergies. In singlebusiness model” focused onoptimising businesses asa“one country the management of the banking, we have integrated banking andinvestment presence inboth commercial Thailand wherehave we in Singapore, Cambodia and To better serve our clients country. to conduct businessinthe Malaysian companies seeking liaison andadvisory services for office inMyanmar to offer We alsomaintain representative Brunei, Indonesia and Vietnam. Laos, Cambodia, Thailand, of branches across Singapore, through anestablishednetwork We have astrong presence banking portfolios overseas. banking andinvestment comprises both our commercial Group International Business BUSINESS GROUP INTERNATIONAL OUR PERFORMANCE REVIEW OUR GOVERNANCE Management businesses. Markets, Brokerage and Asset Treasury, as well asCapital and Investment Banking, Commercial Banking, Corporate pillars, namely Retail Banking, streamlined into seven Our core businessesare and personal financialneeds. for SMEs, advisingboth business aiming to bethecatalyst bank segments, at thesametime Commercial andRetail upon itsstrengths inCorporate, the Group, we continue to build As akey regional contributor to financial institutions. the Republic’s mosttrusted and isestablishedasoneof branches around theisland through anetwork of seven financial services to customers Today, RHBSingapore provides objectives. corporates fulfiltheir business helping individuals,SMEs and excellence to its clients; has beenoffering service more thanhalf acentury established in1961andfor RHB Singapore was first * RHB SINGAPORE* Business. under Group International operations hasbeen integrated As atFebruary 2021, Singapore • Lao PDR • Established in2014 Services Commercial Banking www.rhbgroup.com • • Myanmar Established in1965 • • Brunei Established in2014 Representative Office • • • Vietnam STAKEHOLDERS’ Services Commercial Banking INFORMATION Established in2008 Securities Services Representative Office 07

RHB Bank Berhad - Integrated Report 2020 08 RHB Bank Berhad - Integrated Report 2020 “ OUR KEY businesses andcommunities.” excellence above allas we provide financialservices to we have apresence, RHBprioritisescustomer service and capitalmarkets services. In allthecountries where commercial banking,corporate andinvestment banking in ASEAN, offering services includingretail banking, RHB’s regional footprint extends across ninecountries 14,000 and offices intheregion We employ more than 364 WHERE WE OPERATEWHERE WE https://www.rhbgroup.com or log onto on our BRANCHNETWORK Scan theQRcode for thedetails employees across branches

REGIONALPRESENCE

2019 -9 2020 -8 Branches/Offices 2019 -718 2020 -660 Employees 2019 -16 2020 -15 Branches/Offices 2019 -349 2020 -333 Employees SINGAPORE INDONESIA 2019 2020 Branches/Offices 2019 2020 Employees 2019 -12 2020 -12 Branches/Offices 2019 -209 2020 -201 Employees MALAYSIA - 289 - 311 - 12,638 - 12,530 THAILAND IDR165.5 INDONESIA 2020: bil SGD139.2 SINGAPORE 2020: IDR172.7 mil 2019: bil THB860.3 THAILAND SGD136.9 2020: mil 2019: mil THB766.9 2019: mil RM6,439.1

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HOW WE CREATE SUSTAINABLE VALUE SUSTAINABILITY VISION: BUILDING Building asustainablefuture for theGroup andcontributing respective focus area not only advances our sustainability journey, butalsocreates value across our sixcapitalsand 6 4 centred around three thematic pillars. Each pillar andits positively contributes to theUnited Nation Sustainable 8 1 to sustainabledevelopment through impactfulactions Environmental Stewardship Ethics &Governance ENRICHING &EMPOWERING COMMUNITIES Community Enrichment Financing Sustainable SUSTAINABLE &RESPONSIBLEBANKING OUR STRATEGIC SUSTAINABILITY FRAMEWORK REVIEW EMBEDDING GOOD PRACTICESEMBEDDING GOOD Development Goals SDGs”). (“UN 2 Key Capitals: Key Capitals: Key Capitals: Banking Customer Centric Primary SDGs: Primary SDGs: Primary SDGs: F F H H I OUR PERFORMANCE S S M 7 5 N REVIEW A Sustainable Procurement People &Workplace 9 SUSTAINABLE Financial Education 3 Digitalisation FUTURE OUR GOVERNANCE

HOW WE SHARE VALUE Personnel Costs employees: To Written-off Amortisation & Depreciation, Retained Profit Group in the To reinvest Cash dividend of capital: providers To Taxation Government: To the www.rhbgroup.com STAKEHOLDERS’ INFORMATION 15% 13% 41% 5% 26% 11

RHB Bank Berhad - Integrated Report 2020 12 RHB Bank Berhad - Integrated Report 2020 CHALLENGES OVERCOMING RISING TOGETHERIN A F MESSAGE FROM OURCHAIRMAN S H N responsive to theneedsof our customers andthecommunity ina encountered before. The Group’s ability to stay resilient andremain of communities across theglobeonascalethat hasnever been pandemic was unprecedented, affecting businessesandthelivelihoods The year 2020 was like noother. The upheaval brought aboutby the our journey andprogress thusfar. to share with our shareholders andallother stakeholders present theGroup’s Integrated Report 2020(“IR”),and On behalf of theBoard of Directors, Iampleased to DEAR VALUEDSHAREHOLDERS, turbulent year demonstrated our commitment to staying trueto our brand promise of Together We Progress. It isindeedanhonour to bepartof Banking RHB Group. With my appointment asChairmanof theBoard on 24 March 2021,Iamcertainly lookingforward to working with my fellow Board members to helptake the Group to greater heights. TAN SRI AHMAD BADRI MOHDZAHIR

Chairman WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 13 STATEMENTS REVIEW REVIEW INFORMATION

A YEAR OF DISRUPTION Malaysia’s economic growth in 2020 contracted alongside global economies, largely due to the impact of movement control orders that were imposed to contain the spread of the pandemic. The Malaysia’s Gross Domestic Product disruptions to economic and business activities, together with subdued consumer sentiment and border closures, led to Malaysia’s gross domestic product contracting by 5.6% compared to the 4.3% contracted by growth recorded in 2019. 5.6% The Malaysian government responded to the economic impact of the pandemic by pumping in a total compared to the 4.3% of RM305 billion comprising, amongst others, the Prihatin Rakyat Economic Stimulus Package and growth recorded in 2019 the Penjana Short-term Economic Recovery Plan. This was a necessary effort to support businesses and livelihoods, thus helping to pave the way towards faster economic recovery. To further stimulate the economy, Bank Negara Malaysia (“BNM”) reduced the Overnight Policy Rate (“OPR”) by a total Overnight Policy Rate of 125 bps to 1.75%, the lowest it has ever been thus far. fell a total of During this critical time, RHB, alongside other financial institutions, stepped up to provide assistance 125 bps to individuals and businesses, in particular to Small and Medium Enterprises (“SMEs”), through a to 1.75%, the lowest it has blanket six-month moratorium on loan and financing facilities that began in March 2020. This was ever been thus far followed by the introduction of a Payment Assistance programme to further focus on the financial needs of B40 and microenterprise borrowers, which will continue until 30 June 2021.

NAVIGATING THE COVID-19 PANDEMIC

While we were successful in navigating most of the immediate of the Group’s safety measures, Work-From-Home (“WFH”) challenges brought about by the pandemic, it also became arrangements were adopted from the start of the Movement apparent that our strategies needed to be revisited and realigned Control Order (“MCO”) in March 2020, which saw up to 80% of to meet the changing market landscape and to address changes our Malaysian employees working from home. While the need to in customer preferences. WFH has gradually reduced in tandem with the downward trend of COVID-19 cases, RHBians of all levels continue to largely work In the first half of 2020, we reassessed and re-prioritised our together in a virtual setting, putting in place plans and executing FIT22 strategies, focusing our efforts on improving readiness initiatives to keep the business going while ensuring that we stay in responding to the impact of the economic slowdown. We connected with our customers, and with all other stakeholders. accelerated the digitalisation of customer journeys and IT modernisation plans, transformed our credit risk management We were also cognisant of the challenges faced by communities process and upskilled our employees so as to future-proof around us due to the pandemic, particularly the B40 segment. them. Through these efforts, we were able to improve customer In doing our part to help the community weather the financial experience and deliver banking services in a safe and seamless hardships, the Group contributed more than RM3 million to manner. the Ministry of Health and humanitarian organisation MERCY Malaysia for the purpose of buying medical equipment, while

In addition to the welfare of our customers, safeguarding the an estimated 2,000 medical frontliners from eight hospitals 2020 Report Integrated health and safety of our employees was also of paramount within Malaysia benefited from 20,000 packed meals during the importance during this period. To minimise the potential movement control order in March and April 2020. The funds spread and impact of the pandemic, the Group implemented were also channelled towards providing financial assistance to various measures and put in place stringent Standard Operating deserving families in Malaysia, Laos and Cambodia.

Procedures (“SOPs”) for its operations across the region. As part - Berhad RHB Bank

www.rhbgroup.com 14 RHB Bank Berhad - Integrated Report 2020 DIVIDEND total approval dividend, subjectto theshareholders’ The DRP will beappliedto thefinal in whole or inpart,their cashdividend. options to our shareholders to reinvest, Reinvestment Plan (“DRP”)to give the establishment of aDividend The Group hasalsoproposed payout ratio of 34.8%. sen per share, representing adividend per with theinterim dividendof 10.0sen Meeting. dividend times, theGroup proposed afinal throughout thesemostchallenging for their supportandloyalty, especially and asareward to our Shareholders Premised onour strong fundamentals

share dividend a dividendpayout ratio of for 17.65 sen of FY2020,representing at paid

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ADVANCING SUSTAINABILITY ENHANCING OURGOVERNANCE PRACTICES diversity anddepth of experience within our Board. Joshua In 30%, culminating inaMerit Award for Board Diversity from theMSWG in2017. Boardroom Diversity Policy in 2013to increase the proportion of female Directors to Board composition has also continued being a point of focus with the adoption of the conducted by theMinority Shareholders Watchdog Group (“MSWG”). The Bank’s for Corporate Governance Disclosures at thenational level in yearly assessments These efforts alsoresulted intheBank beingaregular recipient of theExcellence Award Capital Markets Forum over in terms of excellent corporate governance disclosures, asrecognised by the ASEAN advancing The Bank has also made significant improvements in the area of corporate governance, our improvement from 2019. we cap have beenmaintained an AA rating intheMSCIESGRatings. Our latest feather inthe first-ever Group adopted voting inabsentia andremote participation for shareholders at our to encourage shareholders’ participation at our Annual General Meeting (“AGM”), the As aprecautionary measure to ensure thehealthandsafety of our shareholders and ever Group-wide corruption riskassessment exercise. for theGroup over thenext three to five years, following thecompletion of our first- remains Our sustainability journey hasshown encouraging progress thusfar astheGroup through lending,investment as well asadvisory andcapitalmarket activities. December 2020,theGroup hasextended RM3.1billioninsupportof green activities opportunities that supportthecountry’s transition to alow-carbon economy. As at risk management policiesanddecision-makingprocess as well asexploring business and Governance (“ESG”)practices into our businessandoperations by enhancingour The Group continues to take apractical approach to integrating Environmental, Social Looking and good workplace conduct, in line with national aspirations in combating corruption. function to oversee theGroup’s overall anti-corruption efforts andaugment integrity quarter of 2020,theGroup set upanIntegrity andGovernance divisionasadedicated The Board remained committed to improving itsgovernance practices. In thefirst SR IR 2020,

are AGM for is For further details, pleaserefer to our Sustainability Report 2020. For further details, pleaserefer to the Corporate Governance Overview Statement onpages 110 to where in Jaganathan, a ahead, we

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WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 15 STATEMENTS REVIEW REVIEW INFORMATION

OUR INTEGRATED REPORTING MILESTONE

The Group continues to progress in its journey towards integrated reporting as we seek to present our value creation journey more comprehensively and cohesively. I am pleased to share that the RHB Bank Integrated Report 2019 was recognised at the National Annual Corporate Reporting Awards 2020 (“NACRA”) ceremony, receiving a Gold Award in the category of companies with more than RM10 billion in market capitalisation, reflecting our focus on delivering balanced and transparent corporate reports that are guided by local and international reporting frameworks and best practices.

This recognition affirms that the Group is on the right track in articulating how we create sustainable value over time, and we are fully committed to improving our corporate reporting further for the benefit of our shareholders and the rest of our stakeholders.

ACKNOWLEDGEMENTS

In February 2021, we witnessed the retirement of Tan Sri Azlan Our deepest gratitude goes to our Group Senior Management Zainol as Group Chairman following 16 years of service since led by the Group Managing Director, Dato’ Khairussaleh Ramli, he joined the Group in 2005. On behalf of the Board, I would for their strong leadership in ensuring business continuity and like to record our deepest gratitude to Tan Sri Azlan for his the continued health and safety of our employees as well as our invaluable contribution to the Group. He has steered the Group customers throughout the pandemic. To all RHBians, particularly with discipline and commitment, and over the course of his our frontliners at the Branches who continue to serve our tenure the Group has achieved many significant milestones while customers throughout these critical times, my most heartfelt generating solid returns for our shareholders. thanks for your extraordinary commitment, professionalism and unity. We wish Tan Sri Azlan all the best in his journey ahead. Our sincere appreciation also goes to the Ministry of Finance, On behalf of the Board of Directors, I would like to express my Bank Negara Malaysia, the Securities Commission Malaysia, sincere appreciation to our esteemed shareholders for their Bursa Malaysia and other regulatory bodies in the countries that continued trust in the Group, and to our customers as well as we operate in for their continuous support and guidance. business partners for their loyalty and support during these most challenging times. Last but not least, I would like to thank our Board of Directors for their continued dedication and guidance. I look forward We would also like to bid farewell and convey our deepest thanks to working with my fellow Board members and the Senior to our Board members, Tan Sri Saw Choo Boon and Abdul Aziz Management Team in taking the Group to a new level of success. Peru Mohamed, who both stepped down in 2020 following the completion of their respective terms. TAN SRI AHMAD BADRI MOHD ZAHIR Chairman 24 March 2021 Integrated Report 2020 Report Integrated - Berhad RHB Bank

www.rhbgroup.com 16 RHB Bank Berhad - Integrated Report 2020 And so,our journey began. Progress. the leastdisruptions. We were truly holdingonto our brand promise of Together We key priority, while at thesametimeensuringour operations andbusinesscontinued with clear. Supporting our customers, employees andthecommunities around usbecamethe remained resilient intheface of theturbulence that we were facing, our purpose was during thesedifficulttimes.In addition to ensuringbusinesscontinuity andthat we us to play aneffective andsustainedrole insupportingour customers andstakeholders servicesAs afinancial group, we neededto remain inapositionof strength soasto enable which affected allareas of our operations. of many and we hadto respond, seemingly overnight, to ashiftingbusinesslandscape The slowdown ineconomic activitiesasaresult of thepandemicthreatened thelivelihoods GROWTH OURSELVES FOR AND READY THE PANDEMIC STEER THROUGH STRENGTHAS WE IN APOSITIONOF WE ARE of theCOVID-19 pandemic. as a whole, asthe world faced thefar-reaching impacts not only for RHBBanking Group butfor theeconomy The financial year 2020hasindeedbeenchallenging, DEAR VALUEDSHAREHOLDERS, GROUP MANAGING DIRECTOR’S STATEMENT F I Group Managing Director Managing Group DATO’ KHAIRUSSALEH RAMLI S H M N Order (“MCO”). the pandemicandMovement Control those customers who may beimpacted by financial positionsandidentify upfront evaluate andassessour customers’ leaders, sprearheaded by myself, to in August to comprise our key business furtherenhancedestablished, whichwas In May 2020,aCredit War Room was previous economic crises. anything we had experienced during face inthelonger term would far exceed that thedifficultiesour customers would economic environment. We anticipated already feeling thestrain from theslowing especiallythose who werecustomers, swiftly to putplansinmotion to helpour As thepandemicspread, theGroup moved HELPING OURCUSTOMERS WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 17 STATEMENTS REVIEW REVIEW INFORMATION

“ With focus and perseverance in driving our FIT22 strategy Dividend Payout Ratio over the past three years, we have certainly returned meaningful value to our shareholders. Total shareholder returns have improved and since then, the Group has 34.8% in 2020 recorded historic highs in our dividend payout ratios, in vs 50.1% in 2019 addition to rising revenues and a lower cost base.”

2020 HIGHLIGHTS:

In FY2020, the Group’s total income grew by 1.8% year- As a result, the Group recorded a net profit of RM2,032.5 on-year, affected by the net modification loss arising million, which was an 18.1% decline from 2019. Return from the loan moratorium provided to our customers. on Equity (“ROE”) was 7.7% compared to 10.3% in Excluding the impact of the net modification loss, total 2019. However, our fundamentals remained sound income growth was 5.3% year-on-year. With sustained as demonstrated by our strong capital and liquidity and disciplined cost management, our Cost-to-Income positions despite operating under an extremely tough Ratio also improved further to 47.1% compared to and unprecedented economic and health environment. 48.0% in 2019. The Group also carried higher credit Our Common Equity Tier-1 Ratio remained stable at costs in 2020 compared to 2019, mainly due to our 16.2% in FY2020 while the Group’s loan loss coverage proactiveness in setting aside pre-emptive provisions ratio, excluding regulatory reserves, was well above to cater for potential deterioration of asset quality due 100% and reached a high of 119.7%. to the pandemic.

HELPING OUR CUSTOMERS In pre-empting the needs of our customers, As the effects of the pandemic reverberated HELPING OUR CUSTOMERS WHEN IT particularly businesses that had been throughout the year, SMEs continued to bear a MATTERS MOST greater brunt of the impact from the pull back financially impacted due to prolonged (as of March 2021) business closure and the MCO, the Group in economic activity. In providing a boost to started to proactively extend assistance to accelerate their businesses, we launched the Small and Medium Enterprises (“SMEs”). Total loan and financing facilities unique #JomSapot campaign that leveraged through Payment Assistance: the power of social media to appeal to From a broader perspective, the Group, RM16.5 billion customers to support local businesses. alongside all other banks in the country, to 180,984 individuals and More than 5,600 outlets operated by provided assistance to customers by offering SMEs have signed up as of February 2021, a six-month moratorium on loans and significantly increasing their business activity, financing facilities. The financial assistance RM4.9 billion while also providing an uplift to the Group’s granted to our customers did not end there. to SME customers 1,732 growth in deposits, cards and digital adoption. However, following the end of the six-month The success of the campaign was also noted by moratorium, we continued to offer payment Facebook, which showcased the campaign as a

assistance to our customers, especially Global Case Study to demonstrate the positive 2020 Report Integrated the more vulnerable B40 segment and RM5.10 billion and effective use of social media platforms. microenterprises. A range of special relief rescheduling and restructuring assistance for corporate customers funds and grants were also made available Our efforts and the impact that we made to SMEs, leveraging our own funds as well in helping our customers to ease their as facilitating the delivery of government Total loan and financing facilities financial hardships have instilled a sense of

assistance to businesses. accomplishment in all RHBians, guided by - Berhad RHB Bank through relief funds: our underlying brand promise of Together RM2.62 billion We Progress. We remain committed towards to 4,216 SME customers supporting our customers throughout this challenging period.

www.rhbgroup.com 18 RHB Bank Berhad - Integrated Report 2020 pandemic. changes inthebusinessandoperating landscapeasaresult of the Internet amongst our customer base grew significantly this year, with The penetration rate of Internet Banking andMobile Banking Digital In recognition of thesechangingtrends, we further refined our launch in April 2019. rapidly, with more than670,000customers onboarded since its 2019. Usage of the new RHB Mobile Banking App also increased 2019 andMobile Banking increasing to 22%compared to 16.6%in particularly inSingapore andCambodia. platform solutionsanddigitalenablement inour regional offices, The Group alsofast-tracked thedevelopment of digitalpayment transactional focus to anengagement andacquisition focus. customer journeys andmoving our digitalchannelsfrom a the modernisation of our IT infrastructure, centred onimproving needed Procedures (“SOPs”) to beputinplace as well asprocesses that Group’s Senior Management ontheappropriate Standard Operating PWG monitored, coordinated andmaderecommendations to the (“PWG”) was establishedat theearly stages of theoutbreak. The To address health and safety issues, the Pandemic Working Group and secure environment. would be able to conduct their transactions seamlessly in asafe would benodisruption inbankingservices andthat our customers As anessential service provider, our focus was to ensure that there “ HOW THE PANDEMIC CHANGEDOUROPERATING LANDSCAPE 75.5% total transactions viaour digitalchannelsincreased to As at December 2020, SIGNIFICANT INCREASEINDIGITAL ADOPTION AND TRANSACTIONS DURING THE PANDEMIC pandemic andtheprolonged MCO period.” effectiveness andefficiency throughout the key task was to sustainour operational As afinancialservices institution,our contactless transactions, as well astheperformance of bankingtransactions through digitalplatforms. less of their income onnon-essential items, arapid shiftinconsumer preference towards onlineshoppingand Since March 2020, we have observed spendingpatterns andshoppinghabitschanging, with peoplespending The COVID-19 pandemichas, without adoubt, resulted inafundamental shiftinconsumer behaviour. Transformation to Banking be adopted registering GROUP MANAGING DIRECTOR’S STATEMENT Journey and/or an

revised to increase accelerate to cater to digital 54%

to the from innovation continuous 46.9% and in

In originations digital offerings. During the year under review, we saw mortgage Our customers responded positively to our new and enhanced providing themenhanced convenience, connectivity andspeed. the transition to our digitalservices isasseamlesspossible, they could continue supporting us with their services. while working with our criticalthird-party vendors to ensure that functions within Head Office to minimise operational disruptions, environment. We implemented split operations for certain critical ensured that our core functionscontinued to operate inasafe While theseadaptations were takingplace, theGroup also the nation. offering only critical services incertain selected locations across stages of theMCO, our branches operated with limited capacity, to thenew normalgiven their frontline nature. During theearly no longer required. Branch operations, too, had to quickly adapt efficient astravelling or commuting to andfrom meetings was Meetings shifted to virtual platforms, to andenabled us be more performing their roles andresponsibilities ina virtual setting. and Virtual Private Networks (“VPNs”) to enablethemto continue would not be affected, we equipped our employees with laptops to safeguard their healthandsafety. To ensure that productivity total (“WFH”) From safely. onboard customers through digitalmeansquickly, efficiently and Your-Customer (“e-KYC”) process, which will enable the Bank to security, andthisincludes theintroduction of theElectronic Know- areas intheimmediate future isto enhance compliance and customer-centric solutions to themarket. One of our key focus to further accelerate theintroduction of various innovative and Agile@Scale team, who stepped uptheir pace duringthepandemic features across itsdigitaltouchpoints, backed by theefforts of our The Group continues to addgreater functionality andenhanced of Platform, which saw further enhancements with theintroduction SME financial theRHBFinancing (SME)Mobile March mortgage customers, a customer arrangements assistance 2020, acquired acceptance, we the

perspective, coming saw Group via involving

an the compared began encouraging through MyHome we up facilitating App in continue the to to App 80% 20.0% 55% SME August 2020. double to of of Work-From-Home

Online in

make applications our 2019. to

employees Financing sure 39.5% For

that our for of

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 19 STATEMENTS REVIEW REVIEW INFORMATION

MANAGING THE HEALTH AND SAFETY OF OUR EMPLOYEES

The health and safety of more than 14,000 of our employees across Malaysia and RHB HUMANITARIAN FUND the ASEAN region remains our top priority during this pandemic. Stringent SOPs, in compliance with government guidelines, were put in place to ensure our colleagues who Collected more than remained at the office and at branches adhere to the enhanced hygiene and physical distancing requirements. In addition, the workspace layout was reviewed to optimise RM500,000 seating capacity while at the same time complying with the SOPs. from RHBians, which was used to help employees and families The prolonged pandemic placed a new focus on the well-being of RHBians, physically and affected by the pandemic mentally. The lack of physical contact over a prolonged period with colleagues, for those working at home, coupled with other challenges brought about by the pandemic further heightened stress levels, leading to mental health concerns amongst our employees. To COVID-19 SUPPORT address these concerns, we introduced our internal RHB Wellness Programme aimed at promoting good health and mental well-being. In November 2020, we launched the RHB - Provided financial assistance Wellness Hotline and Remote Therapy Programme to provide assistance to our employees to employees who contracted who needed help in managing their stress levels and overall mental health. COVID-19 - Free screening at private We recognised that it was also important to put in place an effective communications hospitals for employees identified channel to address the mental health impact, as well as to allay anxiety and fears, by as primary contacts keeping our employees informed of the actions that were being taken in relation to the pandemic through live and pre-recorded messages and notices. These were broadcast through our internal communications platforms, which included interactive sessions via PRIORITISING STAFF HEALTH AND Workplace@FB to increase employee engagement. We made it a point to consistently and WELLNESS clearly provide updates and explain why and how they would be impacted, making it clear Spent more than that the Board and Senior Management were addressing their concerns and managing the challenges in the best way possible. RM11 million on wellness activities, personal Our collective efforts in managing the crisis were well received by our employees, and protective equipment, COVID-19 this was reflected in our annual Employee Engagement Survey (“EES”) where we achieved swab tests and financial assistance an improved score of 92, from 90 in 2019. This was driven largely by the positive for COVID-19 positive employees response received on how the Group had responded to the pandemic through effective and consistent communication, which fostered a feeling of trust in how the situation To learn more about how we helped our surrounding the COVID-19 pandemic was being managed. employees navigate the pandemic’s challenges, SR please refer to the Community Enrichment section in our Sustainability Report 2020.

DEVELOPING A WORKFORCE OF THE FUTURE

Beyond managing the challenges posed by the pandemic, the Group also accelerated preparations to develop RHBians further to ensure better preparedness in facing a future requiring the mastery of new skills in the area of digitalisation, analytics, automation, customer preferences and risk management and compliance. In November 2020, we launched our Workforce of the Future Programme, aimed at providing a structured approach to the upskilling of capabilities, opening up new career progression opportunities within the Group, and ensuring we remain competitive amid a fast-evolving business landscape.

Alongside this, we remain focused on developing our talent and ensuring the effective execution of our succession management 2020 Report Integrated programme.

SR To learn more about how we are preparing the Workforce of the Future, please refer to our Sustainability Report 2020. - Berhad RHB Bank

www.rhbgroup.com 20 RHB Bank Berhad - Integrated Report 2020 new appointments androtations amongSenior Management. continues to buildthestrength of our leadership benchthrough customer experience andcustomer-centricity. The Group also areas focus suchasimproving compliance capabilities,especially inthe economic landscape. This includeslookingat other key areas of year and will continue to dosoinline with theshiftingmarket and We have madespecificadjustments to our strategies inthepast ourecosystems. various Group upfor further success as we draw customers deeper into implementation of Agile@Scale, factors which have alsoset the RHBians, consistent investments into digitalisation andthebroad was madepossiblethrough thededication andhard work of all improved from +9in2019to +11in2020. This achievement steadily improving Net Promoter Scores (“NPS”) in Malaysia, which Our efforts have reaped thedesired results asevidenced by our delivering ahost of innovative and first-to-market products. centric approach by reimagining customer journeys andby The strategy hasalsoresulted inustakingafar more customer- “ FIT22 STRATEGY REACHES ITSMIDPOINT rising revenues andbetter-managed costs.” our dividendpayout ratios, intandem with and theGroup hasrecorded historic highsin have since shown significant improvement our shareholders. Total shareholder returns return meaningfulandsustainable value to the pastthree years, we have beenableto perseverance indrivingthisstrategy over against itsoriginaltargets. With focus and performance continues to track strongly its midway mark,andtheGroup’s of I ampleasedto report that the execution our of

AML/CFT, FIT22strategy MORE CUSTOMERS ARE RECOMMENDING US which increased from +9in2019 driving GROUP MANAGING DIRECTOR’S STATEMENT Net Promoter Score operational +11 in 2020 hasnow excellence reached and enhancing

palm oil,oil&gas,andmanufacturing of iron, steel &other metals. and cement manufacturing, to the existing three sectors, namely (“ERA”) with theexpansion of our Industry-Specific ESGRisk Assessment operations. Our riskmanagement practices were enhanced in2020 and Governance (“ESG”) considerations into our business and incremental improvements inintegrating Environmental, Social I amproud to share that theGroup is continuing to make and to embedaculture of sustainability across theGroup. integrating sustainablepractices into our businessandoperations, practices as we continued to take a practical approach towards The year 2020saw the Group intensifying its sustainability STRENGTHENING OURSUSTAINABILITY PRACTICES aligned to core sustainability principles. principles of Value-Based Intermediation (“VBI”), which are in thisarea through itsadvocacy of Bank Negara Malaysia’s green financing,our Islamic arm was animportant contributor investment, advisory andcapitalmarket activities.Beyond 31 December 2020to supportgreen activitiesthrough lending, Commitment, we have extended RM3.1billionasof intensity per employee in2020compared to 2016. the Group recorded a38%reduction inGHGemissions West Malaysia. Coupled with various energy-saving initiatives, and reporting coverage to allmainbuildingsandbranches in expanded our Greenhouse Gas (“GHG”)emissionsinventory To helpusmanage our own impactontheenvironment, we was inline aid theconservation of ecosystem. themarine This initiative recycled plasticdebitcard to facilitate contributions that will developed Malaysia and the Asia-Pacific’s first eco-friendly Demonstrating itssupportof VBI principles, RHBIslamic Bank to alow-carbon economy. Under towards sustainabledevelopment andsupportingthetransition The Group remained committed to contributing positively been issued. Harmoni. marine wildlife and habitats under umbrella the themeof RHB Ocean Harmoni, one of RHB’s multipleprojects to conserve tool to As of include with UNSDG14:Life Below Operational GHGEmissions Support for Value-Based Intermediation (“VBI”) Green FinancingCommitment December two more 2020,more than20,500cards have sectors our Green Financing - power

Water

producers/energy andpartof

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 21 STATEMENTS REVIEW REVIEW INFORMATION

STRENGTHENING OUR SUSTAINABILITY PRACTICES ACKNOWLEDGEMENTS

Looking ahead, greater focus will be placed on managing climate- I would like to express my sincere gratitude to our shareholders, related risks as well as driving the Group’s green financing customers and business partners for your loyalty and understanding commitment of RM5 billion by 2025, in line with regulatory during these most challenging times. Rest assured that the Group requirements and the developments within the marketplace. will continue to stand by you, our valued customers and the community. The Group also strongly believes in nurturing future generations, and continued to do so via our RHB X-Cel Academic Excellence To my fellow RHBians, Terima Kasih, Khob Chai, Som Orkhoon, Kob Programme and RHB X-Cel Star scholarship programme targeted Khun Krub, Kyay Zuu Tin Par Tal and Cam on Ban for your monumental at underprivileged students from the B40 segment. Due to efforts in staying the course. Your hard work, dedication and movement controls arising from the COVID-19 pandemic, the sacrifice in a year that has been extremely unpredictable and programmes were conducted online, whereby we managed to uncertain have been exemplary. reach out to our targeted group and impacted the lives of more than 1,000 students. We also granted 11 scholarships to RHB My heartfelt appreciation goes to my fellow colleagues in the X-Cel students, bringing our total number of RHB X-Cel Star Group Management Committee who have been the backbone of scholars to 21. the organisation and who have collectively stood by me and the Board of Directors in ensuring customers were attended to, our 2021 will, by any measure, continue to be a challenging year as we business continues to grow, and our operations are uninterrupted face economic uncertainty and an economic recovery that will be throughout these trying times. closely linked to the state of the pandemic. While a broader global recovery will likely begin in tandem with the steady roll-out of the I would also like to record my deepest appreciation to the Board COVID-19 Immunisation Programme, the Group remains cautious of Directors for your support, wisdom and invaluable insights that given the lingering effects of the pandemic. have helped us navigate through a difficult and challenging year.

“ Amidst this backdrop, our sustained focus Lastly, thank you to Bank Negara Malaysia, Bursa Malaysia, Securities Commission Malaysia and the regulatory authorities in will be on assisting our customers through the countries we operate in for their continued guidance over the this difficult period. We will continue years.

to extend payment assistance to our In closing, I would like to thank our former Group Chairman, Tan customers until June 2021 and lend a Sri Azlan Zainol, for his leadership and guidance over the past 16 years in steering the Bank to where it is today. A warm welcome to helping hand to the communities that are in our new Group Chairman, Tan Sri Ahmad Badri Mohd Zahir, whose need of support to ensure that they are able leadership the Group looks forward to in further strengthening our foundations and striving for even greater achievements. to cope and eventually stage meaningful recoveries.”

Operationally, our fundamentals remain sound as reflected by our strong capital, liquidity and loan loss coverage positions. We will maintain prudence and continue to focus on maintaining credit discipline, intensifying our efforts in recovery and collection. In short, we are in a position of strength as we steer through the

pandemic and ready ourselves for growth as economic conditions 2020 Report Integrated recover.

With all this in mind, I assure you that our value creation journey will be an exciting one that my team and I are committed to

delivering. - Berhad RHB Bank DATO’ KHAIRUSSALEH RAMLI Group Managing Director 24 March 2021

www.rhbgroup.com 22 RHB Bank Berhad - Integrated Report 2020 FOR OURSTAKEHOLDERS CREATING VALUE term. coverage positions,thesefundamentals placed usinasoundpositionfor sustainablegrowth over thelong compared with a year ago. Together with theresilience exhibited by our strong capital,liquidity andloanloss positions. provisions andenhancingprudent riskmanagement practices, while stillmaintaining strong capitalandliquidity rein onour spending.Given thechallengingoperating environment, theGroup remained prudent, buildingour The Group continued to manage our operating expenses through disciplinedcost management, keeping atight business segments declinedinthefinancial year under review. additional included provisions set aside for potential COVID-19 impact. Consequently, profit for most This was mainly dueto theimpactof net modification lossandhigher allowances for credit losses which year ended31December 2020,adeclineof 18.1%from last year. RHB achieved anet profit of RM2,032.5millionfor thefinancial review, theGroup’s fundamentals remained strong. brought aboutby The Group continued to create value for our stakeholders despite theunprecedented disruption Loan loss GROUP coverage, F thepandemic. Chief Group NIK RIZAL KAMIL excluding Officer Financial CHIEF regulatory Although Malaysia’s GDP

FINANCIAL reserves, rose above BANKING GROUP RETAIL 100% contracted by OFFICER’SREVIEW as at * integrated under Group International Business. As atFebruary 2021,Singapore operations hasbeen end-December SINGAPORE* RHB BANK BUSINESS BANKING GROUP 5.6%inthe

2020 INTERNATIONAL WHOLESALE

BUSINESS* BANKING GROUP GROUP year under INSURANCE BUSINESS SHARIAH GROUP RHB

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 23 STATEMENTS REVIEW REVIEW INFORMATION

GROUP RETAIL BANKING GROUP SHARIAH BUSINESS

• Group Retail Banking reported a pre-tax profit of RM850.6 million, • RHB Islamic Bank recorded pre-tax profit of RM450.5 million, 19.5% lower than the previous year, mainly due to lower non-fund lower than the previous year due to net modification loss and based income and higher allowances for credit losses on loans. higher allowances for credit losses. • Retail loans and financing rose 5.4% year-on-year to RM95.0 billion, • Gross financing recorded a robust double-digit growth of 11.0% primarily driven by growth in mortgages, personal financing and auto year-on-year to RM67.2 billion. financing. • Islamic business contributed 40.5% of the Group’s total • Retail deposits increased by 15.5% year-on-year to RM66.7 billion, domestic gross loans and financing, up from 38.1% a year ago. mainly contributed by growth in fixed deposits and CASA.

RHB INSURANCE

GROUP BUSINESS BANKING • RHB Insurance registered a pre-tax profit of RM150.6 million, an increase of 6.3% year- on-year attributed to higher underwriting • Group Business Banking recorded a 51.7% surplus. year-on-year decline in pre-tax profit to RM230.8 million due to lower non-fund based income and higher allowances for PERFORMANCE credit losses on loans. REVIEW OF • Gross loans and financing expanded by 11.3% year-on-year to RM28.8 billion, driven KEY BUSINESS UNITS by growth in the SME and Commercial portfolios of 11.9% and 9.5%, respectively. GROUP INTERNATIONAL BUSINESS* • Deposits grew 16.1% year-on-year to RM32.8 billion, attributed to growth in current account and fixed deposits. • Group International Business excluding Singapore registered a pre-tax loss of RM4.5 million mainly due to losses in Thailand and Laos, and lower profitability in Cambodia.

GROUP WHOLESALE BANKING

• Group Wholesale Banking posted a marginal drop in pre-tax profit to RM1,872.3 million. RHB BANK SINGAPORE* • Group Corporate and Investment Banking registered a pre-tax profit of RM606.1 million, a 2.1% decrease on the back of higher allowances • RHB Bank Singapore reported a pre-tax profit of SGD4.6 million, for credit losses on loans and other financial assets. Gross loans and 81.3% lower year-on-year attributed to higher write-back of financing dropped marginally by 1.9% to RM42.6 billion. Deposits allowances for credit losses in FY2019. grew strongly by 10.8% year-on-year to RM58.0 billion, primarily due • Loans and advances grew by 23.4% year-on-year to SGD5.1 billion, to growth in current account and fixed deposits. while deposits increased by 8.5% to SGD5.8 billion. • Group Treasury and Global Markets recorded a 0.9% growth in pre- tax profit to RM1,266.3 million over the year, predominantly due to higher net trading and investment income. Total deposits dropped by 23.2% to RM24.2 billion, mainly due to lower money market time deposits. * As at February 2021, Singapore operations has been integrated under Group International Business.

IR For more information, refer to pages 60 to 89.

CONCLUSION AND MOVING FORWARD 2020 Report Integrated 2020 was a challenging year, weighed down mainly by the rapid spread of COVID-19 and its impact on the economy. Despite the challenges, our performance remained strong, as seen in our underlying revenue growth, continuous management of costs, and prudent risk management.

We remain highly vigilant in our credit portfolio and continue to closely monitor our asset quality while proactively engaging with and - Berhad RHB Bank supporting our customers. We are confident that we will be able to navigate through the impact of the pandemic by prioritising FIT22 initiatives, such as digitalisation of customer journeys, transformation of credit risk management, and readying our workforce for the future.

www.rhbgroup.com 24 RHB Bank Berhad - Integrated Report 2020 N1 GROUP FINANCIAL HIGHLIGHTS Total income PROFITABILITY (RM’million) Operating profit before allowances Profit before taxation Net profit attributable to equity holders of theBank Net return onaverage equity FINANCIAL RATIOS (%) Shareholders’ equity Deposits from customers Total liabilities Gross loans,advances andfinancing Financial investments portfolio Total assets FINANCIAL POSITION(RM’million) Common equity tier 1capitalratio Net return onaverage assets Tier 1capitalratio Gross impaired loansratio Total capitalratio Gross loansto depositsratio CAPITAL ADEQUACY RATIOS (%)

Ratios are after proposed finaldividend. 24% 23% 5% 3% 2% TOTAL ASSETS TOTAL ASSETS 2020 2019 6% 3% GROUP

67% 67% N1 CHIEF SIMPLIFIED GROUP STATEMENTS OF FINANCIAL POSITION Other assets Statutory deposits funds Cash andshort-term portfolio Financial investments financing Loans, advances and FINANCIAL 8% 8% 2% 2% 1% 1% 5% 4% TOTAL LIABILITIES TOTAL LIABILITIES OFFICER’SREVIEW 10% 10% & EQUITY & EQUITY 2020 2019 75% 74% 190,555 231,782 176,175 257,592 25,775 58,678 7,058 3,670 3,394 2,482 10.3% 16.3% 0.99% 16.3% 1.97% 18.6% 92.5% 2019 equity Shareholders’ liabilities Other obligations Subordinated debt securities Borrowings andsenior institutions and other financial placements of banks Deposits and customers Deposits from

244,093 203,471 186,114 271,150 27,024 63,371 16.2% 0.77% 16.2% 1.71% 18.4% 7,186 3,799 2,644 2,033 91.5% 2020 7.7% WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 25 STATEMENTS REVIEW REVIEW INFORMATION

ANALYSIS OF THE FINANCIAL STATEMENTS OTHER OPERATING/NON-FUND BASED INCOME • The Group posted a net profit of RM2,032.5 million, a decrease • Non-fund based income improved by 11.2% to RM2,336.1 million, of 18.1% from the previous financial year, mainly due to net contributed largely by higher net trading and investment income, modification loss arising from the moratorium extended to our brokerage income and insurance underwriting surplus. customers and higher allowances for credit losses. • Total income increased by 1.8% to RM7,185.7 million, mainly OPERATING EXPENSES attributed to higher net fund based and non-fund based income with • Operating expenses were relatively constant year-on-year at year-on-year growth of 6.3% and 11.2%, respectively, and partially RM3,386.7 million. Cost-to-income ratio improved to 47.1% offset by net modification loss of RM418.0 million. compared with 48.0% a year ago. • Operating profit before allowances improved by 3.5% to RM3,799.0 million, primarily due to prudent funding cost and operating expenses ALLOWANCES FOR CREDIT LOSSES management. • Allowances for credit losses increased to RM1,145.1 million, predominantly due to pre-emptive provisions set aside to absorb NET INTEREST/FUND BASED INCOME potential worsening in asset quality as the extent of the pandemic’s • Gross fund based income decreased by 10.7% while funding and impact was still uncertain. interest expense dropped by 23.8% year-on-year, supported by 28.3% • Full-year credit charge ratio was at 0.58% compared with 0.18% in CASA growth and the redemption of certain capital instruments over the previous year. the course of 2019 and 2020. As a result, net fund based income grew by 6.3% from a year ago to RM5,267.6 million, whereas NIM stood at 2.06%, lower than 2.12% a year ago due to the impact of OPR cuts.

TOTAL ASSETS TOTAL LIABILITIES AND EQUITY • Total assets for the Group increased by 5.3% from December 2019 • Total liabilities increased by 5.3% to RM244.1 billion as at 31 to RM271.1 billion as at 31 December 2020, primarily due to an December 2020, mainly due to higher deposits from customers. increase in loans, advances and financing, and in the financial • Shareholders’ equity rose by 4.8% to RM27.0 billion, with higher investments portfolio. retained earnings and marked-to-market gains on financial assets • Loans and financing remained the largest component of total assets measured at FVOCI. Net assets per share grew from RM6.43 to at 67.3% (2019: 67.3%). RM6.74. • The Group continued its focus on growing responsibly, strengthening risk management and cautiously managing our funding and liquidity position. DEPOSITS FROM CUSTOMERS • Customer deposits increased by 6.8% year-on-year to RM203.5 CASH & SHORT-TERM FUNDS AND DEPOSITS & PLACEMENTS billion, largely attributed to growth in CASA and fixed deposits. CASA WITH BANKS AND OTHER FINANCIAL INSTITUTIONS increased by 28.3% year-on-year, with CASA composition at 30.9% as • The Group’s total cash & short-term funds and deposits & placements at 31 December 2020. with banks and other financial institutions grew by 17.7% to RM15.0 • Liquidity coverage ratio (“LCR”) remained healthy at 146.9%. billion as at 31 December 2020. • Deposits for domestic operations increased by 7.0%, while overseas operations registered an increase of 4.9%, with Singapore growing at FINANCIAL INVESTMENTS PORTFOLIO 8.5%. • The Group’s financial investments portfolio comprises financial assets at fair value through profit or loss (“FVTPL”), financial assets at fair DEPOSITS AND PLACEMENTS OF BANKS AND OTHER FINANCIAL value through other comprehensive income (“FVOCI”) and financial INSTITUTIONS investments at amortised cost. Deposits and placements of banks and other financial institutions • The Group’s financial investments portfolio increased by 8.0% to dropped by 2.3% to RM21.0 billion, largely due to lower deposits from RM63.4 billion. licensed banks.

LOANS, ADVANCES AND FINANCING SENIOR DEBT SECURITIES • The Group’s gross loans and financing grew by 5.6% year-on-year Senior debt securities increased by 7.5% to RM3.5 billion. to RM186.1 billion, mainly supported by growth in mortgages, auto finance, SME and Singapore. Domestic loans and financing grew 4.5% SUBORDINATED OBLIGATIONS year-on-year. The Group’s domestic loans market share stood at 9.1% Subordinated obligations remained constant year-on-year at as at end-December 2020. RM2.7 billion. • Overseas gross loans increased by 16.0%, mainly attributed to growth in Singapore and Cambodia. Integrated Report 2020 Report Integrated ASSET QUALITY • Gross impaired loans were RM3.2 billion as at 31 December 2020, with a gross impaired loans ratio of 1.71% compared with RM3.5 billion and 1.97% as at 31 December 2019. • We continued to be prudent in loan loss provision with loan loss coverage, excluding regulatory reserves, standing at 119.7% as at end-December 2020. - Berhad RHB Bank CAPITAL ADEQUACY As at 31 December 2020, the common equity tier-1 (“CET-1”) ratio and total capital ratio of the Group remained strong at 16.2% and 18.4%, respectively, among the highest in the industry.

www.rhbgroup.com 26 RHB Bank Berhad - Integrated Report 2020 FIVE-YEAR GROUP FINANCIAL SUMMARY Dividend payout ratio Dividend yield Ordinary Shares Gross impaired loansratio Gross loansto depositsratio Asset Quality Cost-to-income ratio Net return onaverage assets Net return onaverage equity Profitability Ratios FINANCIAL RATIOS (%) Market capitalisation (RM’million) Share price -(RM) Basic earningsper share -(sen) Net tangibleassets per share -(RM) Net assets per share -(RM) Gross dividendper share -(sen) SHARE INFORMATION Commitments andcontingencies Shareholders’ equity Deposits from customers Total liabilities Gross loans,advances andfinancing Total assets KEY BALANCE SHEET DATA (RM’million) Net profit attributable to equity holders of theBank Profit before taxation Operating profit before allowances OPERATING RESULTS (RM’million) GROUP CHIEF FINANCIAL 196,190 165,636 214,905 154,469 236,679 18,887 21,745 12.00 1,682 2,232 3,095 2016 28.6 2.43 93.3 50.0 4.71 43.6 2.5 0.7 8.6 4.7 5.4

172,226 166,865 207,012 160,026 228,713 20,050 21,667 15.00 1,950 2,558 3,200 2017 30.8 2.23 96.0 49.9 5.00 48.6 3.0 0.8 9.1 4.6 5.4 OFFICER’SREVIEW

172,941 178,856 219,770 168,879 243,166 21,213 23,358 20.50 2,305 3,119 3,448 2018 10.3 35.7 2.06 94.4 49.3 5.29 57.5 3.9 1.0 5.0 5.8

150,428 190,555 231,782 176,175 257,592 23,178 25,775 31.00 2,482 3,394 3,670 2019 10.3 50.1 1.97 92.5 48.0 5.78 61.9 5.4 1.0 5.6 6.4

157,480 203,471 244,093 186,114 271,150 21,855 27,024 2,033 2,644 3,799 17.65 2020 91.5 5.45 1.71 50.7 34.8 47.1 7.7 3.2 0.8 5.9 6.7 WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 27 STATEMENTS REVIEW REVIEW INFORMATION

FIVE-YEAR GROUP FINANCIAL HIGHLIGHTS

GROSS LOANS, ADVANCES TOTAL ASSETS PROFIT BEFORE TAX AND FINANCING (RM’MILLION) (RM’MILLION) (RM’MILLION) 186,114 186,114 3,394 271,150 271,150 176,175 3,119 257,592 168,879 160,026 243,166 236,679 154,469 228,713 2,644 2,644 2,558 2,232

2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

DEPOSITS FROM CUSTOMERS SHAREHOLDERS’ EQUITY NET DIVIDENDS (RM’MILLION) (RM’MILLION) (RM’MILLION) 203,471 203,471 27,024 27,024 25,775 190,555 1,243 178,856 23,358 166,865 165,636 21,745 21,667 822 708 602 481

2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

GROUP QUARTERLY PERFORMANCE

2019 2020 First Second Third Fourth First Second Third Fourth Quarter Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total

Financial Performance (RM’million)

Total income 1,724 1,769 1,730 1,833 7,058 1,729 1,558 1,830 2,068 7,186

Net fund based income 1,206 1,205 1,261 1,285 4,957 1,259 1,238 1,240 1,532 5,268

Non-fund based income 518 564 470 548 2,100 470 713 591 562 2,336

Operating profit before allowances 899 930 908 933 3,670 912 732 976 1,179 3,799

Profit before tax 829 856 844 866 3,394 761 519 790 574 2,644 2020 Report Integrated

Net profit attributable to equity holders of the Bank 630 615 616 621 2,482 571 401 622 439 2,033

Earnings per share (sen) 15.7 15.3 15.4 15.5 61.9 14.2 10.0 15.5 10.9 50.7

Dividend per share (sen) - 12.5 - 18.5 31.0 - - 10.0 7.65* 17.65 - Berhad RHB Bank

* Proposed Final Dividend

www.rhbgroup.com 28 RHB Bank Berhad - Integrated Report 2020 KEY INTEREST BEARING ASSETS AND LIABILITIES Borrowings/Subordinated obligations/Senior Deposits from customers &depositsandplacements of banksand Interest Bearing Liabilities Gross loans,advances andfinancing Financial investments at amortisedcost Financial assets at fair Cash andshort-term funds&depositsandplacements with banksand Earning AssetsInterest 2020 Borrowings/Subordinated obligations/Hybrid Deposits from customers &depositsandplacements of banksand Interest Bearing Liabilities Gross loans,advances andfinancing Financial investments at amortisedcost Financial assets at fair Financial assets at fair Cash andshort-term funds&depositsandplacements with banksand Earning AssetsInterest 2019 Financial assets at fair other financialinstitutions Senior debt securities other financialinstitutions other financialinstitutions other financialinstitutions GROUP

value through other value through profit or value through other value through profit or CHIEF comprehensive income comprehensive income debt securities loss loss Tier-1 CapitalSecurities/ FINANCIAL

OFFICER’SREVIEW (RM’million) 224,506 186,114 212,095 176,175 Amount 42,903 16,005 14,974 14,249 39,805 12,724 6,899 4,462 7,204 4,623 interest rate Effective 3.63 3.42 2.07 4.41 3.92 3.50 1.47 3.78 3.87 3.83 2.86 5.31 4.04 2.71 (%) (RM’million) income/ expense Interest 1,463 4,497 7,949 1,347 5,794 9,022 237 593 342 636 143 277 71 90 WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 29 STATEMENTS REVIEW REVIEW INFORMATION

STATEMENT OF VALUE ADDED

2019 2020

Value added (RM’million)

Net Interest Income 3,603 3,761

Income from Islamic Business 1,614 1,666

Non-interest income 1,841 2,177

Net modification loss - (418)

Less: Overheads excluding personnel costs, depreciation, amortisation & write off (1,059) (1,048)

Less: Allowance for credit losses & impairment (276) (1,155)

Profit/(Loss) from discontinued operations (44) 35

Value added available for distribution 5,679 5,018

DISTRIBUTION OF VALUE ADDED

26% 26%

35% 41% 2019 2020 6% 5%

18% 15% 15% 13%

To employees: To the Government: To providers of capital: To reinvest in the Group:

Personnel Costs Taxation Cash dividend Depreciation, Amortisation Retained Profit & Written-off

CAPITAL MANAGEMENT

Overview The Group’s capital management approach is focused on maintaining a healthy capital position to support its business growth while optimising returns to our shareholders at the same time. The capital structure and framework are designed to meet not only the regulatory requirements but also to satisfy the expectations of the various stakeholders, including shareholders, investors, and rating agencies. Integrated Report 2020 Report Integrated To this end, the Group Capital Management Framework (“CMF”) has been established to provide integrated oversight of our capital management activities. This oversight cuts across the risk, finance, and treasury functions, bringing greater value to the business. - Berhad RHB Bank

www.rhbgroup.com 30 RHB Bank Berhad - Integrated Report 2020 profile andbusinessstrategy. and quality of capitalconsistent with theGroup’s overall risk that the Group anditssubsidiariesmaintain anappropriate level planning andassessment process within theGroup andfor ensuring Committee (“GCRC”) are responsible for overseeing thecapital The Board Risk Committee (“BRC”) andGroup Capitaland Risk (iii) i) Forecasting (ii) (i) year we actively monitor andmanage thecapitalpositionover athree- Capital Adequacy Assessment Process (“ICAAP”)through which The Group achieves theseobjectives through theannualInternal various stakeholders andsupportitsstrategic businessobjectives. to meet regulatory requirements and the expectations of its sustainability. The Group manages its capital position proactively Effective capitalmanagement iscrucialto maintain business CAPITAL MONITORING AND PLANNING The key maturity profiles of capitalsecurities. Determining therequirements for capitalissuance andthe Group’s riskappetite; and changes andstakeholder expectations; entity levels, takinginto account anticipated future regulatory conditions for allbankingsubsidiaries,both at Group and Setting capitaltargets under both normalandstressed market horizon, involving thefollowing criticalactivities: PRINCIPLE PRINCIPLE PRINCIPLE PRINCIPLE PRINCIPLE PRINCIPLE 6 5 4 3 2 1 principlesof capital theGroup CMF GROUP demand Capital Reporting andMonitoring Capital Analytics Capital Management Activities –Capital Allocation/Structuring/Optimisation Capital Management Activities –CapitalPlanning Capital Management Activities –CapitalStrategy Capital Management Governance for are asfollows: This isessential to ensure thecomplete, timely andaccurate production of capitalinformation for management decisions. demand requirements. This provides insights to formulate theGroup’s capitalmanagement strategy andhelpsdetermine capitalsupply and entities to maximisereturns andensure optimum capitalutilisation. Robust capitalmanagement activitiesallow theGroup to efficiently structure capitalallocation across itsbusinessesand sustainability. The Group hasformulated acomprehensive and forward-looking capitalplanto supportbusinessgrowth andensure Capital strategy isaligned with theoverall businessstrategy, riskprofile andregulatory requirements. responsibilities within theorganisation. Governance processes to oversee capitalmanagement activitieshave beenimplemented andclearly defines roles and

material CHIEF GROUP CAPITAL MANAGEMENT FRAMEWORK risks based FINANCIAL on the

(iv) (i) The key capitalinitiatives undertaken in2020 were asfollows: CAPITAL INITIATIVES DURING THE YEAR (iii) (ii) approval intheupcoming Annual General Meeting. receiving cash. The Proposed DRP issubjectto shareholders’ to reinvest their dividendsinRHB Bank’s shares, inlieuof provide theshareholders of RHBBank with anopportunity Bank was proposed (“Proposed DRP”). The Proposed DRP will The establishment of adividendreinvestment planfor RHB and by RHB Bank in May 2020 and November 2020, respectively; Obligations RM300 millionandBasel III-compliant Tier 2Subordinated Basel II Tier 2Subordinated Obligations amounting to Obligations Two tranches of Basel III-compliant Tier 2Subordinated redeemed in April 2020; to RM200 millionof RHBInvestment Bank Berhad were Basel III-compliant Tier 2Subordinated Obligations amounting respectively; Bank”)(“RHB were redeemed in April 2020andMay 2020, OFFICER’SREVIEW amounting amounting to to RM500 RM500 million million of

each RHB Bank were Berhad issued

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 31 STATEMENTS REVIEW REVIEW INFORMATION

CAPITAL ADEQUACY RATIOS

Minimum capital requirements Under BNM’s Capital Adequacy Framework (Capital Components) and Capital Adequacy Framework for Islamic Banks (Capital Components), all financial institutions are required to maintain a regulatory minimum Common Equity Tier 1 Capital (“CET 1”), Tier 1 Capital (“Tier 1”) and Total Capital Ratio of 4.5%, 6.0% and 8.0%, respectively.

Capital buffer requirements Financial institutions are required to maintain additional capital buffers, i.e. the Capital Conservation Buffer (“CCB”) and the Countercyclical Capital Buffer (“CCyB”), over and above the regulatory minimum capital ratios. The CCB is intended to enable the banking system to withstand future periods of stress and was phased in at 0.625% each year, starting from 1 January 2016, to reach a total of 2.5% by 2019.

The CCyB is the weighted average of the prevailing CCyB rates applied in the jurisdictions in which a financial institution has credit exposure. This buffer is intended to protect the banking sector as a whole from the build-up of systemic risk during an economic upswing when aggregate credit growth tends to be excessive. Application of the CCyB above the minimum capital ratios is in the range of 0% to 2.5%. The CCyB has not yet been announced, and BNM will communicate any decision on the CCyB rate up to 12 months before the date from which the rate applies.

On 5 February 2020, BNM issued a policy document on the Domestic Systemically Important Banks (“D-SIBs”) Framework that sets out the assessment methodology to identify D-SIBs in Malaysia and the relevant reporting requirements. Financial institutions designated as D-SIBs are required to maintain higher capital buffers to meet regulatory capital requirements that include a Higher Loss Absorbency (“HLA”) requirement.

Pursuant to the D-SIBs Framework, the applicable HLA requirement ranges from 0.5% to 1.0% of risk-weighted assets, at the consolidated level. The HLA requirement for designated D-SIBs came into effect on 31 January 2021. RHB Bank is not identified as a D-SIB pursuant to the latest D-SIB listing published in BNM’s Financial Stability Review for First Half 2020.

The table below provides the relevant capital ratios of the key regulated banking entities of the Group, all of which are well above the minimum regulatory requirements.

RHB RHB RHB RHB Minimum Bank RHB Islamic Investment Investment Regulatory As at 31 December 2020 Group Bank Bank Group Bank Ratio N1

Before proposed dividends:

CET 1 Ratio 16.416% 14.945% 14.877% 38.246% 36.116% 7.000%

Tier 1 Ratio 16.416% 14.945% 14.877% 38.296% 36.116% 8.500%

Total Capital Ratio 18.598% 17.231% 17.977% 43.790% 46.862% 10.500%

After proposed dividends:

CET 1 Ratio 16.188% 14.632% 14.714% 38.246% 36.116% 7.000%

Tier 1 Ratio 16.188% 14.632% 14.714% 38.296% 36.116% 8.500% 2020 Report Integrated

Total Capital Ratio 18.370% 16.918% 17.815% 43.790% 46.862% 10.500%

N1 Including Capital Conservation Buffer of 2.50%. - Berhad RHB Bank

www.rhbgroup.com 32 RHB Bank Berhad - Integrated Report 2020 Group All businessandfunctionalunitsacross theGroup, particularly formation of strategies. in-depth analysis of balance sheet positionsto supportthe shareholders’ returns. It entails regular review, monitoring and while achieving thedesired businessgrowth andmaximising costminimise through effective asset andliability management Balance sheet management aimsto optimise returns and Overview BALANCE SHEET MANAGEMENT and These factors are deliberated onandreviewed by Group the Asset changing businesslandscapeandcompetitive market environment. to adapt to regulatory requirements, macroeconomic outlook, The overarching strategies are reviewed andupdated promptly through theagreed strategies. and shapingtheoptimal balance sheet positionof theGroup management. The synergy amongtheseunitsisessential indriving overseas offices), are collectively responsible for balance sheet Management andthestrategic businessunits(both localand with customers andour increasing focus ondigitalchannels. wholesale businessesis managed through our strong relationship ongoing long-term strategy. Deposit acquisition from retail and Diversification of deposit and fundingsources hasbeenour December of +28.3% year-on-year andimproved theCASA ratio to 30.9%in These continuous efforts resulted instrong growth inGroup CASA of funds. cost management while maintaining thestability andsustainability various internal and regulated limits. This isto ensure effective funding sources are reviewed regularly andmonitored against composition mix,currency andmaturity profile of deposit,and equity, long-term debt andcore customer deposits. The The foundation of RHB’s balance sheet isbuiltonshareholders’ BALANCE SHEET STRUCTURE units to achieve effective balance sheet management. to have acohesive strategy driven by thebusinessandfunctional competitive economic andbusinesslandscape. Therefore, itis vital maximising shareholders’ returns againstthebackdrop of the the balance sheet inthechangingregulatory environment and The Group’s challenge isto strike abalance between optimising are made with respect to theriskappetite of theGroup. Liability Treasury 2020(December

Committee

& Global GROUP (“GALCO”), Markets, 2019:25.7%). where Group CHIEF conscious Finance, considerations Group FINANCIAL Risk

adjusted returns. capital allocation will beadopted andmonitored to improve risk- To support asset growth in these targeted segments, disciplined customer baseinthemid-andlarge-cap segments, respectively. and SMEsegments, to deepenour wallet share andenlarge the continue to focus onkey segments, especially thedomesticRetail In with our agility to embrace changes, enabledusto remain resilient. and vigilant monitoring of balance sheet management, together the economy. However, our solid foundation, insightful analysis spared from thedebilitating effects of theCOVID-19 pandemicon The year 2020 was challengingfor allbanks,andRHB was not 31 December 2020. The tablebelow shows theasset fundingstructure asat quality given the weak economy in2020. of asset quality, as the Group placed greater emphasis on credit loan growth was achieved andmanaged with careful consideration increased by RM9.2billionto RM182.4billionasat end-2020. The management, theGroup’s total net loans,advances andfinancing of fundsto supportasset growth. Through strategic balance sheet Our stabledepositbaseandlong-term debt are theprimary sources N1 line

Total Shareholders’ Funds includingnon-controlling interest. billion RM182.4 billion RM27.1 Total Shareholders’ with Advances & Net Loans, Financing Funds the OFFICER’SREVIEW N1 Group’s ASSET FUNDING five-year STRUCTURE

FIT22 strategic Securities Portfolio RM203.5 Deposits from Customers RM63.4 plan, billion billion we will

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 33 STATEMENTS REVIEW REVIEW INFORMATION REGIONAL MARKET LANDSCAPE as at 4 April 2021

MALAYSIA

ECONOMIC REVIEW

Malaysia’s real Gross Domestic Product (“GDP”) growth contracted by On the investment side, businesses held back on injecting capital amid 5.6% year-on-year in 2020 from an expansion of 4.3% in the year prior, excess capacity and a highly uncertain operating environment. In addition, marking the first economic recession since the 2009 Global Financial the MCO temporarily disrupted activities, causing delays in both private and Crisis. The contraction in economic growth reflected, among others, the public sectors’ projects. On the upside, the export sector managed to sustain impact from global lockdowns as well as the effect of the government’s itself with strong demand for palm oil and electronic & electrical goods. Movement Control Order (“MCO”) to manage the spread of COVID-19 Imports were however hampered as the MCO and the weak economy which disrupted business activities. reduced demand. The net effect of the weaker imports helped the Malaysian economy register a strong trade surplus. The impact of the pandemic on private consumption was severe as businesses either cut jobs or lowered wages in order to stay afloat, On prices, the inflation rate contracted following the fall in domestic fuel leading to a rise in unemployment and a downward spiral in household prices and weak aggregate demand with CPI averaged at -1.1% year-on- spending. However, support from the government through massive year. With sharply weakening economic growth and muted inflationary stimulus packages consisting of cash handouts, a moratorium and pressure, the central bank cut the overnight policy rate by 125 bps to payment assistance with regard to loans and financing facilities and wage 1.75% throughout 2020. The cuts came over and above other measures subsidies, as well as tax relief, managed to reduce the impact on the that included a reduction in the statutory reserve requirement, special economy. financing facilities and purchase of government bonds in the secondary market.

ECONOMIC OUTLOOK GDP GROWTH For 2021, we expect GDP to register at 5.4% year-on-year. On % YoY the consumption side, we see spending to rebound due to five 15 reasons: First, the continued easing of restrictive COVID-19 10 related measures is likely to unleash pent up demand. Second, 5 high frequency data and anecdotal evidence suggests that the 0 -5 manufacturing sector may have rebounded which suggests early -10 signs of recovery in broad economic activity. Third, with the -15 recovery in manufacturing already ensuing, the balance of risks is -20 skewed towards the unemployment rate dropping sooner rather -25 than later. Fourth, the unconditional withdrawal from the pension fund under the i-Sinar programme to provide some support to 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 consumer spending. Lastly, the recently announced PEMERKASA GDP Domestic demand Exports stimulus package will provide support to the consumer as well. Malaysia’s economy was greatly affected in 2020 On the external side, the commodities and electrical & electronics CONSUMER CONFIDENCE & RETAIL SALES sectors will continue to power export growth for much of 2021. % YoY Index Exports for commodities are elevated amid the strong growth in 20 140 palm oil and crude oil prices, while high demand for technology 10 120 products propel the electrical & electronic exports. We expect 100 0 these trends to remain at least for the next 1-2 quarters. 80 -10 60 -20 Inflation is expected to grow at 2.5% year-on-year due to two 40 fronts: First, higher commodity prices are likely to translate to -30 20 stronger cost-push pressures. Although domestic fuel prices are -40 0 capped by the Government we still expect some pass-through Jul/16 Jul/17 Jul/18 Jul/19 Jul/20 Jan/16 Jan/17 Jan/18 Jan/19 Jan/20 Jan/21 Apr/16 Apr/17 Apr/18 Apr/19 Apr/20 effects to food and services cost. Second, demand side pressure Oct/16 Oct/17 Oct/18 Oct/19 Oct/20 could also arise if capacity utilization rates and wage pressures Retail sales (RHS) Consumer confidence ensue. On the fiscal front, deficit is likely to improve at 6% from Confidence rebounded but retail still weak 6.2% last year amid better economic growth. Despite the lower deficit, government spending still induces a mild positive fiscal MALAYSIAN TRADE PERFORMANCE impulse to the economy. % YoY MYR billion 50 25 We expect Bank Negara Malaysia (“BNM”) to keep the interest 40 20 30 15 Integrated Report 2020 Report Integrated rates unchanged at 1.75% this year as focus will be more on 20 10 targeted measures rather than a blanket Overnight Policy Rate 10 5 (“OPR”) cut. In our view, in case downside risks to growth emerge, 0 0 fiscal policy rather than OPR cuts will be utilised to stabilise -10 -5 economic activity. -20 -10 -30 -15 -40 -20 - Berhad RHB Bank Feb/17 Feb/21 Feb/18 Feb/19 Feb/20 Aug/17 Aug/20 Aug/18 Aug/19 Nov/19 Nov/17 Nov/20 Nov/18 May/17 May/18 May/19 May/20

Trade Balance (RHS) Exports Imports Strong exports and weak imports led to high trade balance

www.rhbgroup.com 34 RHB Bank Berhad - Integrated Report 2020

lower followed by further relief assistance programmes by banks,resulted in The six-month automatic repayment moratorium for individualsandSMEs, on-year) despite theeconomic disruptions brought by about COVID-19. System loangrowth was sustainedat 3.4%in2020(2019:+3.9% year- 2021. borders reopen with thegeneral availability of COVID-19 vaccines in2H challenging until businessesfully regain their footing andinternational The bankingsector’s operating environment isexpected to remain and sustainaccess to credit while loanimpairments were kept low. entering thepandemicenabledthemto supporttherelief measures with thebankingsector. Banks’ strong capitalandliquidity buffers Swift andbroad-ranging measures were taken by BNMincoordination economic activitiesandheightened stress onMalaysia’s financialsystem. The COVID-19 pandemicled to anunprecedented contraction in BANKING SECTOR REVIEW&OUTLOOK Key Trends Affecting theBanking Industry growth isprojected to improve to 4.0% year-on-year in2021. government. As economic activitiesregain momentum, system loan personal consumption, schemesoffered andfinancing by BNMandthe by increased lending to households for purchase of passenger cars and Assistance In response toprolonged the restrictionson movement governmentthe and activities, announced inBudget2021 enhancements to the Targeted Payment footprint andcontinued corporate socialresponsibility. expected to leadby exampleto make certaintheir ownoperations are inline directionthis with and to ensure improvementsin their ownenvironmental likelywill comeinto sharper focustoin 2021due increased investorregulatory demandandlocal developments.Notwithstanding Malaysianthis, banksare will borrowers arewho registeredBantuan inthe Prihatin Nasional database,and incomeshousehold whose have beenreducedbanks to due pandemic, the Task Urgentpandemic. criesfor climate actioncontinueglobally while Malaysia,within regulators are encouraging theadoption of recommendations from the Environmental,Social and Governance matters (“ESG”) are now ingreater focusfollowing and economicsocial the fallout arisingfrom COVID-19the 2.0 canalsobeexpected to affect themomentum of recovery, althoughtheimpact will likely bemilder thanexperienced intheearlier MCO. their will individuals andbusinesses, theunservedwhile enhancingfinancialsolutionsto andunderserved segments. firstthe quarter of 2022. Thesebanks digital havewill objective the of enablinginnovative applicationof technologyfinancial the to uplift well-beingof its taxonomy will provide acommon language to categorise economic activitiesbasedontheir impactonclimate change. Change andPrinciples-based Taxonomy (“CCPT”) aligntheirtoinstitutions helpfinancial understanding andassessments of climate-related risks. The well-functioningeconomy andadvancesgoals the leadingtoenvironment. asustainable Bank Negara Malaysia isexpected toClimatethe soonfinalise is placing greaterBNM on theneedfor emphasis toinstitutions have financial alarger role inshapingresponsible behaviour thata stableand underpins key developments inthecyber threat andregulatory landscapes,andcontinually work onimproving their cyber resilience inaholisticmanner. As economiccontinueactivities to migrate online,malware, cyber-attacksfraudand digital continuewill to proliferate. Banks need towill keepabreast of Private Networks (“VPNs”). transformation. Thetowards shift work-from-homefor non-frontlinestaff isalsochanging work processes andincreasingneed for the secure Virtual industry. Rising demandfor online,mobileandcallcentre services have accelerated theneedforto bankinginstitutions quickly enhance their digital The shutdownof economic andmovementactivities restrictions following COVID-19 the havepandemic resulted infundamentalbanking in the shifts BNM Licensing accept be MALAYSIA

Force household loan is granted in the on (“TPA”) requests repayments. Framework Climate-related final automatic to programme. further stages from as at 4 April 2021 REGIONAL for Loans

borrowers of expedite approval

Digital developing Financial Eligible disbursements Banks immediate to for either borrowers Disclosures

the a in reduction licensing December

defer relief. were, in

(“TCFD”). loan MARKET in the The framework

monthly 2020 however, Technological Drivers bottom repayments Competitive Drivers enhanced Regulatory Drivers Social Drivers following ESG

instalments. for 40% matters boosted

TPA digital for income a

is six-month three such

available banking, This LANDSCAPE group impairments. targeted payment assistance helpedcontain theriseinoutstanding The April 2020automatic repayment moratorium andfollowed by ratio recovery, severe thanexperienced in2Q20andimproving prospects of 2H2021 affect growth in1Q21.However, with theimpactexpected to beless 125 Net Interest Margin (“NIM”)narrowed in2020onthecumulative well asbanks’ strong provision buffers. extensive fiscal andfinancialsupportprovided to impacted borrowers as programmes expire. Default risks will, however, bemitigated by the 2021. Asset quality will likely deteriorate in2021asthe various relief credit risk development will continue to be a challenge and priority in coverage adjustments andmanagement overlay. This strengthened loanloss banks booked additionalprovisions for macroeconomic variable (“MEV”) to assessandmanage risks.Given uncertainty over therecovery path, borrowers’ repayment information, bankstook proactive measures July months as will sustainable

2020. bps public from and edged (“B40”) be or cuts applications we believe BNM based 23 to

The consultation. reduce up and As November in 107.5% financing reimposition the marginally on at microenterprises monthly end-2020, borrowers’ Overnight need in

and It 2020 plans December

will maintain OPRat 1.75%through 2021. instalments to ESG of be to

banking self-declaration

1.57% Policy the to submitted 30 investment issue with MCO June

Rate 2020 (2019: system borrowings by up 2021. in

50% by to (“OPR”) the continue (2019:

five 30 1.51%). of gross The for first

June reduced digital

of six reimposition between impaired 80.9%). quarter

to below 2021. In months. gain bank the income

BNM RM150,000 traction

January of licences absence Monitoring loan

For 2021 of and/or issued

MCO (“GIL”) M40 and

and by will

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 35 STATEMENTS REVIEW REVIEW INFORMATION

SINGAPORE

ECONOMIC REVIEW

Singapore ended 2020 with a contraction of 5.4% year-on-year from The Consumer Price Index (“CPI”) was subdued due to domestic a small expansion of 1.4% in 2019, its first full-year recession in two disinflationary pressures and low commodity prices. Core CPI, which decades. All sectors registered negative growth in the second quarter of excludes accommodation and transport components, remained low, 2020 due to a Circuit Breaker, otherwise known as stay-at-home orders, averaging -0.2% year-on-year in 2020. Headline CPI for 2020 averaged from 7 April 2020 to 1 June 2020, although a mild recovery was seen -0.2% year-on-year in 2020 from +0.6% in 2019, which was within following the phased reopening of the economy towards the end of Monetary Authority of Singapore (“MAS”) expectations of -0.5-0%. the year. The Government allocated close to SGD100 billion (19.9% of GDP) of stimulus through five separate packages in 2020 to support the In October 2020, MAS maintained its stance of 0% rate appreciation for economy during the downturn. the Singapore Dollar Nominal Effective Exchange Rate (“S$NEER”) since its initial change in March 2020. This was to allow some fiscal space to Non-oil domestic exports performed better than expected, with growth take the lead for economic recovery. of 4.4% year-on-year from a contraction of 8.8% in 2019. Growth was driven by shipment of non-monetary gold as it is perceived as a safe- haven asset. Additionally, electronic exports remained resilient on the back of strong demand for semiconductors given the new norm of telecommuting and digital solutions across different sectors.

ECONOMIC OUTLOOK

We expect GDP growth to rebound to 5.8% year-on-year in 2021 GDP GROWTH as the low-base effect comes into play in 2Q21 and 3Q21. The % YoY country’s progressive vaccination should also support the pace of 15 recovery. This should improve business and consumer sentiments 10 5 thus facilitating further resumption of economic activities. 0 Private consumption growth will gradually improve but will still -5 be affected by the soft labour market. Investment should also -10 pick-up on account of strong manufacturing performance and -15 recovery in the construction sector. The Government’s active -20 effort to vaccinate foreign workers beginning from 12 March -25 2021 should support recovery in the sector over the next few 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 quarters. GDP Domestic demand Exports

On the external front, we anticipate net exports to remain Singapore’s 2020 GDP contracted for the first time in almost two decades resilient, particularly the electronics segment, amid the rise in SINGAPORE’S PURCHASING MANAGERS INDEX (“PMI”) global semiconductor demand. Our analysis indicates that major Index global semiconductor players have ramped up capacity to address 56 the greater demand for semiconductor output – particularly 54 chips. Meanwhile, higher oil prices may further support overall 52 trade performance. However, exports for transport-related 50 Above 50 indicates expansion output should still be affected by the closures of international 48 46 borders. 44 42 We expect the 2021 budget to register a deficit of -1.8% of GDP 40 versus the 2020 estimate of -13.8%. Government consumption is Jun/16 Jun/17 Jun/18 Jun/19 Jun/20 Sep/16 Sep/17 Sep/18 Sep/19 Sep/20 Mar/17 Mar/18 Mar/19 Mar/20 Mar/21 likely to moderate as broad spending are replaced with targeted Dec/16 Dec/17 Dec/18 Dec/19 Dec/20 programmes to the struggling aviation and tourism sectors, and PMI: Manufacturing (Mfg) PMI (Mfg): New Orders PMI (Mfg): New Export Orders to the low to medium-income groups of the population. Our Singapore’s PMI fell sharply below 50 in 2020 inflation forecast is at 1.1% as we anticipate external sources of inflation such as oil and food prices to drive prices movements SINGAPORE’S NON-OIL DOMESTIC EXPORTS higher over the next 1 to 2 quarters. However, we expect the soft % YoY labour market and spare economic capacity to cap demand-side 25 20 pressures. 15 Integrated Report 2020 Report Integrated 10 We anticipate MAS to maintain a 0% per annum rate of 5 appreciation of the policy band for 2021. The neutral stance 0 would provide support for the fiscal measures implemented -5 by the Government, which are adequate to keep the upward -10 -15 trajectory of growth intact. -20 - Berhad RHB Bank Jul/19 Jul/17 Jul/20 Jul/18 Jan/21 Jan/18 Jan/19 Jan/20 Sep/18 Sep/19 Sep/20 Sep/17 Mar/17 Mar/21 Mar/18 Mar/19 Mar/20 Nov/17 Nov/20 Nov/18 Nov/19 May/17 May/20 May/18 May/19

Non-oil Domestic Exports 3-Month Moving Average Singapore’s non-oil domestic exports expanded by 4.4% year-on-year

www.rhbgroup.com 36 RHB Bank Berhad - Integrated Report 2020

(-10.2% (-15.3% This was, however, offset by contractions inloansfor general commerce +4.2%). units contracted, albeitby amodest-1.2% year-on-year in2020(2019: banks’ lendingbusiness.Banks’ loansfor domesticand Asian currency The subduedeconomic activity and weak external demand weighed on economic downturn, bankspre-emptively increased their provisions. and communications sectors. In anticipation of adeepandprolonged most evident inthegeneral commerce andtransportation, storage December 2020,from 2.01%a year ago. Asset quality pressures were Asset capital andliquidity positions. economy’s requirements for credit. Banks continued to maintain strong position of strength, andhasplayed animportant role insupportingthe Singapore’s bankingsector entered theCOVID-19 downturn from a BANKING SECTOR REVIEW&OUTLOOK Key Trends Affecting theBanking Industry year Further pandemic. The measures includeddeferring mortgage repayments andallowing conversion of revolving unsecured debt to term loansat alower interest rate. In March 2020,MASandthefinancialindustry introduced apackage of measures to helpeasethefinancialstrain onindividualscausedby theCOVID-19 techniques. and financialimplications of suchrisks,andencourage collaborative development of relevant capabilitiesinstress testing andrelated quantitative assessment of both short-term andlong-term scenarios featuring climate risks will helpregulators andbankinginstitutionsto jointly increase awareness of theeconomic two years, MAS will incorporate abroader range of climate risksinthematic scenarios aspartof theannualIndustry-Wide Stress Test (“IWST”). The inclusion Central banksandregulators globally, includingMAS,have begunefforts to better assesstheimpactof climate change onfinancialstability. Over thenext be ableto apply loans, pegged at 60%of their monthly instalment for aperiodof upto ninemonths. As for unsecured revolving credit facilities, eligibleborrowers would also and The government enhanced itsriskshare proportion andloanquantum for corporate loansunder theEnterprise Singapore temporary bridgingloanprogramme FY2019’s In In are expected to commence operations by early 2022. In December 2020,MASissuedfour digitalbanklicences –two digitalfull-banklicences andtwo digital wholesale banklicences. The successful applicants The pre-emptive measure to bolster banks’ resilience andcapacity to supportlendingto businessesandindividualsthrough theuncertain period. the banks are well prepared for thetransition by end-2021. of theSIBORbenchmarkinthree to four years to focus onaSORA-centred approach. MAS will alsobestepping upsupervisory engagement to ensure that (“CPF”) investments Singaporeans to use their National Digital Identity (“SingPass”) to retrieve their personal financialinformation –suchasfor deposits,credit cards, loansand clearly provide soundfinancialadvice backed upby data shouldscoop upmarket share from other incumbents. overnight transition from SORto theSingapore Overnight Rate Average (“SORA”) –arobust benchmark underpinnedby actualtransactions inadeepandliquid to first system that consolidates financialinformation across major banksandrelevant government agencies, isaimedat returning more decision-makingpower July December citizens

while impending working capitalloanscheme. London SINGAPORE quality

Loans

2020, year-on-year) andconsumers (-0.5% balances relief year-on-year), unsecured DPS, lending on Interbank –

2020, measures what to MAS deteriorated from end and to convert existing unsecured credit balances to alower-cost term loanuntil 30 the from to they called of offer seven MAS building SGD

financial government Offered LIBOR as at 4 April 2021 REGIONAL

were should

transportation, shareholders interbank and on participating with and announced locally would the Rate do institutions A construction Smart agencies. with system new (“LIBOR”) funding

incorporated mean the banks, their MASSGDfacility Nation in option storage that NPL October market. SingPass

increased finances. is along year-on-year). expected

sector SOR and ratio of banks In

and with MARKET receiving 2020 Digital will is As July

grew rising 5.8% an headquartered Technological Drivers information to

be other Competitive Drivers was introduced to provide low-cost source of

communications online 2020, Regulatory Drivers with be

Government 7.7% discontinued year-on-year. Social Drivers to the discontinued

information banks the account 2.56% year-on- dividends financial asymmetry allowing in Group in management after Singapore

such after to industry LANDSCAPE

be eligible solid capitalandliquidity positions will continue to provide buffers. expected to stay low, while asset quality stress shouldalsoease.Banks’ NIM pressures will ebbasinterest rates stabilise,althoughthey are consumer sentiment improving, loangrowth isexpected to strengthen. trajectory. Still, with businessactivitiesregaining momentum and Singapore’s economy isprojected to recover in2021,butonanuneven and higher levels of precautionary savings. actions, constrained consumption dueto COVID-19 lockdown measures liquidity infinancialmarkets from globalcentral bankmonetary policy Banking system depositsexpanded by 11.8% year-on-year onincreased (“SOR”). Margin pressures were alsoexacerbated by thesurge indeposits. Singapore Interbank Offered Rate (“SIBOR”) and the Swap Offer Rate During the year, NIMs compressed sharply dueto thesteep falls inthe end-2021.

launched

between as end-2021. paid Housing

to issued for individuals for cap

financial the access

FY2020 The As Development a their Singapore joint Swap Association June 2021. to

total to providers industry in Singapore Offer make scrip fundingto FIs to facilitate lendingto SMEs. dividends Financial

Board Rate

reduced

in consultation of and

lieu Government Banks (“SOR”) customers (“HDB”) per of Data instalment

cash.

in share uses Exchange Singapore recommending loans The e-services. narrows, (“DPS”) USD dividend payments and LIBOR (“SGFinDex”) (“ABS”) Central for banks SGFinDex,

the FY2020 restrictions in on recommended its that discontinuation Provident their computation, that openly at a

property world’s- 60% were allows Fund

and of a a

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 37 STATEMENTS REVIEW REVIEW INFORMATION

CAMBODIA

ECONOMIC REVIEW

Cambodia’s economy is estimated to have contracted by 1.9% in 2020, its first contraction after two decades of strong growth. The tourism and hospitality industries, which are estimated to have contributed about 21% of GDP, were most severely affected by the COVID-19 pandemic.

The global apparel industry was affected by lockdowns and impacted Cambodia’s garment manufacturing industry, which is the biggest employer in the economy and accounts for about 16% of GDP and 80% of total exports. The decline in demand in the garment industry has led to closures of factories, leading to an increase in the unemployment rate and lower household income.

We also note a decline in investments and construction proposals in 2020, partly due to investors’ confidence in the global recovery. In line with the contraction in economic growth, inflation was moderate at 2.9%, although higher than 2019 (1.9%) due to higher price of foodstuff.

ECONOMIC OUTLOOK

We expect Cambodia to return to a positive growth trajectory in 2021. The rebound is mainly due to the low base effect as well as the recovery in global demand. Government spending and investments on infrastructure projects is expected to contribute to the recovery of the domestic economy. Private consumption is expected to improve in line with the improvement in household income as unemployment moderates.

Externally, we see a recovery in exports of goods such as bicycles, electronics as well as agriculture products. Exports of garment products expected to improve once recovery in the apparel industry occurs via online shopping. The recently-signed Cambodia-China Free Trade Agreement and the Regional Comprehensive Economic Partnership (“RCEP”) free trade deal will be a key contributor to help in the recovery for 2021.

BANKING SECTOR REVIEW & OUTLOOK

In tandem with multiple stimulus packages introduced by the government, the central bank also took steps to help mitigate the impact of the pandemic on the economy, businesses and individuals. Some of the measures were fiscal in nature, meant to help banks maintain their resilience, while others were targeted at businesses and individuals who were suffering from a loss of revenue and income.

To support market liquidity, the National Bank of Cambodia (“NBC”) reduced reserve requirement ratios to 7% for both local currency and foreign currency deposits, down from 8% for local currency and 12.5% for foreign currency deposits, for a period of six months from April 2020. The central bank also postponed full implementation of the Capital Conservative Buffer to maintain the 50% current requirement.

In March 2020, the NBC also reduced interest rates by 50 bps for all Liquidity-Providing Collateralised Operation (“LPCO”) maturities. Through the LPCO facility, the central bank influences real interest rates, as it is unable to influence the US dollar interest rates due to the highly dollarised economy.

The central bank also directed all banks to restructure loans to ease the burden of those who were impacted by loss of revenue due to the pandemic. A total of USD3.01 billion of bank loans (9.96% of total loans) and USD1.13 billion of micro-finance institution loans (16.6% of total loans) were restructured in 2020 as a result of the NBC’s intervention. Due to the various steps taken, strong growth was still registered in loans, deposits and bank assets. In 2020, bank assets grew by 16.2% year-on-year to USD50.7 billion while bank loans increased by 15.3% in 2020 compared to the 23.8% year-on-year growth registered in 2019.

Looking ahead, the banking industry is expected to continue its growth trajectory, albeit at a slower pace, in tandem with the anticipated economic recovery. Banks will continue to focus closely on maintaining asset quality in view of the expiry of the loan moratorium at the end of June 2021. Integrated Report 2020 Report Integrated Sources: • http://documents1.worldbank.org/curated/en/986491608013945613/pdf/Cambodia-Economic-Update-Restrained-Recovery-Special-Focus-Adapting-to- COVID-19-in-an-Uncertain-World.pdf • NBC Annual Report 2020 - Berhad RHB Bank

www.rhbgroup.com 38 RHB Bank Berhad - Integrated Report 2020 year’s 75bpsreduction inpolicy we believe NIM could slipfurther dueto thetail-end impact from last expected to stay elevated. While the policy rate is expected to bestable, asset quality stress will remain apriority andimpairment allowances are may beadversely impacted by theprolonged pandemic. Managing (2019: by rise in2019. Asset quality stress was evident for sectors directly impacted (“NPLs”) in Inevitably, thebroad-based economic slowdown resulted inthedeterioration by 29% year-on-year while retail loans were up a modest 2% year-on-year. move to safeguard operating cashflows. loans,however, SME contracted the corporate segment. Businesses drew down credit linesinapre-emptive inflation to -0.9%in2020againstanaverage of 0.7%in2019. relief resumption of loanrepayments asrelief programmes expire. The endof Going into 2021, we expect loangrowth to moderate, partly dueto the deposit rates andreducing excess liquidity. compression, banksfocused onmanagingcost of funds by lowering by blunt theimpactof COVID-19. The central bankalsocutthepolicy rate a total stimuluspackage of THB2.4 trillionor about14.2%of GDP to cushioning theimpactof thepandemic. The government announced government consumption andinvestment played acrucialrole in With business outlookandprivate consumption remaining weak, were subsequently postponeddueto asecond wave of infections. contain thespread of COVID-19 infections including Thailand, theplans implementing a‘travel bubble’ amongcountries that have managed to which impacted services exports. While there were discussionsof since March this year ledto asharpdecline inforeign tourist arrivals For in production of agricultural products. thus impacted by theoverall weaker demandfor vehicles andthedecline sector faced its worst drought infour decades. Thailand’s exports were global lockdown to thespread curb of COVID-19 while theagriculture in 2020.Industries astourism such andautomotive were impacted by the growth the pandemic. The country recorded itsbiggest declinesince 1998during Thailand’s economic growth fell into recession dueto theCOVID-19 ECONOMIC REVIEW system With financial institutions providing continued access to credit, banking debt restructuring for affected borrowers. debt consolidation to utilisethesamecollaterals for retail customers and rate ceiling andhigher credit limitsfor credit cards andpersonal loans, customers, soft loansfor SMEs owners, andbusiness alower interest relief measures includedaloanpayment holiday for retail andnon-retail financial relief programmes for retail borrowers and businesses. The the globalCOVID-19 outbreak, theBank of Thailand (“BoT”) rolled out With major segments of thecountry’s economy adversely impacted by Thailand’s bankingsector faced another challenging year in2020. BANKING SECTOR REVIEW&OUTLOOK BoT’s strengthen loanlossreserves to circa 148%. wholesale andretail. Banks were vigilant andtook pre-emptive provisions to

banks’ international a

Asian the total

THAILAND assistance lowering -50 loans was tourism increased

asset Financial of bps) led

75 expanded quality. travel primarily of saw bps industry, will 9.5%

policy Crisis

to NIMs also restrictions, The as at 4 April 2021 REGIONAL year-on-year, by a

record by

as likely international 5.4% rate come banking

the GDP

by year-on-year lead rate. 52% low under

such growth 75 system’s

compared of to

year-on-year bps

as 0.5%, pressure. higher travel aviation, contracted to

gross (2019: in

restrictions with a NPLs line low To

Non-performing tourism MARKET increase the +2.0%).

mitigate with as 6.1% of 4.8%

some 0.50% the implemented – year-on-year in The year-on-year hotels, the decline borrowers lending in stronger margin Loans 2020 F&B, in to

% Contribution to GDP LANDSCAPE Bank of Thailand Cut Rate To Record Low of 0.5% To Fight The Pandemic Foreign tourists absence felt amidstCOVID-19 Pandemic A rebound inGDP growth expected in2021 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000 following theimpactof thesecond wave of COVID-19 infections. of 2021aseconomic recovery going forward remains highly uncertain the following arebound intheeconomy. We expect Bank of Thailand to keep fiscal deficit-to-GDP will narrow to 3.0% in2021,from -4.6%in2020 We forecast inflation to rise to 1.0% in 2021 from -0.8% in 2020; while of thetourism sector. Thailand’s slow vaccine rollout is a key factor that could delay the recovery however islikely to remain weak amidstslow recovery of tourism sector. 2021, mainly dueto therecovery of globaldemand.Exportsof services On theexternal front, we expect goods exports to rebound to 3.8%in budget allocation thefor theEastern Economic Corridor project. water. On investment, we expect growth to pickupsupported by higher including THB210 billionincashhandoutsandsubsidy for electricity and projected to expand in2021supported by government’s fiscalmeasures of the second wave of COVID-19 infections. Private consumption is demand, althoughdragged by theslower tourism recovery andtheimpact the low baseeffect in2020as well asthegradual improvement inglobal We expect GDP growth to rebound to 3.2% year-on-year supported by ECONOMIC OUTLOOK 500,000 persons -15.0 -10.0 % pa 10.0 15.0 -5.0 5.0 0.0 0.5 1.0 1.5 2.0 2.5 policy 0 0 2015 2016 2016

interest Growth Domestic Demand 2016 2017 2017 rate Visitor Arrivals POLICY RATE AND INFLATION RATE Policy Rate unchanged 2018 2017 VISITOR ARRIVALS 2018 GDP GROWTH 2019 Net Exports 2018 at a Inflation (RHS) YoY % 2019 record 2020 2019 low 2020 GDP 2021

of 2020

0.5% RHB Forecast 2022 for 2021 2021

the % YoY % % YoY % -100.0 -80.0 -60.0 -40.0 -20.0 0.0 20.0 40.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 rest

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 39 STATEMENTS REVIEW REVIEW INFORMATION ENGAGING WITH STAKEHOLDERS S

RHB defines stakeholders* as groups who affect and/or could be affected by the Group’s activities, products or services and associated performance.

The Group takes an inclusive and systematic approach to engaging with our various stakeholders to better understand and respond to their needs and concerns. Engaging with stakeholders also influences our decision-making and direction, as well as materiality assessments.

*The Group referred to Bursa Malaysia’s Sustainability Reporting Guide (2nd edition) and AA1000 Stakeholder Engagement Standard 2015 to identify key stakeholders.

STAKEHOLDER GROUP

SHAREHOLDERS AND INVESTORS

We provide our shareholders and investors with relevant information in order to make informed investment decisions on RHB as well as share with them our financial performance and the Group’s strategic direction.

Engagement Platform

- Annual and Extraordinary General Meetings - Quarterly and annual financial results announcements - Meetings and briefings with analysts and fund managers - Online communications (email, corporate website, social media) - Annual Reports/Integrated Reports - Meetings/discussions - Sustainability Reports - Roadshows and conferences - Bursa Malaysia announcements

Stakeholder Concern/Expectation RHB’s Response To Concern/Expectation

- Resilient revenue growth and cost - Ensuring timely and comprehensive disclosures management - Emphasising cost management as well as liquidity and capital management to support - Asset quality and management of credit growth risk - Putting in place strong corporate governance policies and ensuring adequate Board - Approach to and progress in oversight sustainability or ESG, which includes - Appointment of five Independent Non-Executive Directors and one Senior Independent climate-related risks. Non-Executive Director to RHB Bank Berhad’s Board - Ethical and responsible business - Putting in place a robust Sustainability Framework with action plans to drive the practices Group’s sustainability agenda and integrate ESG matters into the Group’s core business - Corporate governance and operations - Dividend payout - Ensuring business continuity, the health and safety of our employees and continuous - Measures to mitigate effects of the support to our customers during these difficult times pandemic - Ensuring the Group’s readiness in responding to the impact of the economic slowdown - Financial assistance available to such as by digitalisation of customer journeys, transforming credit risk management customers and impact on the Group’s and readying the workforce for the future profitability - Providing support to customers through moratorium and payment assistance programmes - Remaining prudent and continuing to set aside pre-emptive provisions to cater for potential adverse impacts on to asset quality Integrated Report 2020 Report Integrated - Berhad RHB Bank

www.rhbgroup.com 40 RHB Bank Berhad - Integrated Report 2020 STAKEHOLDER GROUP partners instrategic alliances to capitaliseonmutually beneficial businessopportunitiesinthemarket. In drivingbusinessperformance anddelivering superior products andservices to our customers, we engage ourwith business right financialsolutionsfor them. creating value for our customers. We interact with customers to better understand their requirements sothat we canpropose the A key winning formula that differentiates usfrom our competitors isour capability inbuildingtrust,delivering convenience and ------Fair - Fair - - Engagement Platform Engagement Platform &informal engagements - Formal - BUSINESS PARTNERS - - - - CUSTOMERS Stakeholder Concern/Expectation Stakeholder Concern/Expectation Safety at branches andsalescentres affected by COVID-19 programme to assistcustomers who are Availability of payment assistance pandemic Accessibility to bankingservices duringthe activities environment in which to conduct banking Cybersecurity andhaving asafe with quickandconvenient bankingoptions Personalised financialadvice andsolutions dealings Promptness of payment Privacy andconfidentiality vendors’ performance New policiesandguidelinesthat may affect User-friendliness of e-Procurement System

Company visits Relationship Manager engagements Group meetings One-to-one meetings website, socialmedia) Online communications (email, corporate treatment andfair evaluation of

vendor ENGAGING conduct of proposals business

- - - - groups andservice designengagement - Focus - - WITH STAKEHOLDERS Achieving ISO/IEC 27001Information Security ------Ensuring products andservices are delivered inline ------mechanism Tender process andsupplier feedback website andsocialmedia) Online communications (email, corporate Interaction programmes Seminars andforums Surveys andfeedback Customer networking events

programme to includeBoard members andthird parties Organising mandatory IT security awareness training for employees andexpanding thetraining diligence process Subscribing to Third Party IT Security Risk Rating Services aspartof enhancingthird party due the constantly evolving technology landscape as continuous strengthening of IT security controls, takinginto consideration thenew normand Enhancing frameworks andpoliciesrelating to technology andcyber riskmanagement as well Simplifying language andminimisinglegaljargon incommunication materials andcontents BankingRHB Group (achievementNPS of +11in2020) overall customer experience through itspeople,process, technology andproducts, asseeninhigher Driving service excellence through theRHB Way Service Culture initiative that focuses onimproving their appointments aheadof time Providing real-time digitalqueuesystem for branches via mobileappfor customers to book of customers allowed into thepremises at any onetime Implementing strictSOPs to ensure safety of customers at branches, includinglimitingnumber continue to beimpacted by thepandemic Assistance and Targeted Payment Assistance programmes for individualsas well asSMEs that Providing automatic six-month moratorium, followed by further assistance through Payment core e-Banking andtransaction systems financial accessibility Strengthening digitalpropositions to deliver enhanced customer experiences andenhancing Consumers (“FTFC”) Policy Payments will bemadeaccording to the Terms of Agreement, onor before duedates via digitaltransfer Proposals are evaluated fairly basedonmeritandagainstaset of clearly identified criteria without theinvolvement of project owners Proposals from vendors are submitted digitally to ensure confidentiality andtransparency, continuity management andsystem infrastructure understanding of our Business Partners’ working environment and work culture, business Conducting visits to theoffice premises or sites of our Business Partners to gainagood network of suppliers Conducting training onan annualbasis,aspartof thesupportinfrastructure provided for RHB’s sessions reiterate our commitment towards sourcing transparently andmaintaining fair practices tax, supplier performance, payment-related matters andcontract renewal. These engagement Conducting engagement sessionscovering topics onguidelinesandprocedures, salesandservice RHB’s Response To Concern/Expectation RHB’s Response To Concern/Expectation Management Systems re-certification of ------

with industry leaders andexperts Certification andimmersion programme Solution Co-Design Workshops Centres Branches, Sales &Service Centres, Call Service Clinics Customer Advocacy Complaint resolution discussionsand with BNM’s Fair

Treatment of Financial our

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 41 STATEMENTS REVIEW REVIEW INFORMATION

STAKEHOLDER GROUP

EMPLOYEES

We are committed to being a preferred employer with a highly productive, agile and engaged workforce that delivers exceptional service to customers while ensuring our employees’ health, safety and well-being. Employee engagement is a critical driver of business success in today’s competitive marketplace.

Engagement Platform

- Intranet (My1Portal and MyLink2HR) and email - Annual Employee Engagement Survey (“EES”) and Internal - RHB’s internal social media channel, Workplace by Facebook and Customer Effectiveness Survey recognition via ThanksBot - Formal and confidential grievance channel - Social, sports and recreational activities - Formal meetings - GMD Chat Sessions and Townhalls conducted - Engagement sessions during festive seasons across the region - Senior Leadership Forum

Stakeholder Concern/Expectation RHB’s Response To Concern/Expectation

- Employees’ goals and objectives - Employee Wellness Programme - Rewards and recognition - Re-skilling/upskilling employees through various development interventions such as RHB - Sustainable engagement Managers Programme & Future Skills Programme - Work organisation - Conducting an EES on an annual basis to gauge employees’ level of satisfaction and obtain - Career development feedback on areas for improvement. In 2020, the EES score improved from 90 to 92 - Learning and development - Conducting roadshows to share our redefined five-year strategic direction at the branches - Employees’ Safety and Health and via live updates on FB Workplace for continuous engagement with employees - Tools for employees to work remotely - Conducting salary benchmarking exercise for comparison against the market and retention programmes - Conducting quarterly Senior Leadership Forums and Group-wide townhalls to share with senior leaders the Group’s strategic performance and achievements and to provide status updates on key initiatives via live updates - Conducting a robust Employee Value Proposition programme to attract and retain talents - Regularly communicating updates on COVID-19 pandemic-related matters to keep employees abreast of latest developments in ensuring safety and health - Ensuring strict adherence to Standard Operating Procedures (“SOPs”) within office and branch premises; allowing Work-From-Home (“WFH”) arrangements; implementing split operations for key functions; allowing staff rotation at branches together with shorter operation hours

REGULATORY AUTHORITIES & POLICYMAKERS

We actively engage with regulatory authorities on matters that impact our business and operations.

Engagement Platform

- Regular updates and reporting to regulatory authorities - Engaging with regulatory authorities to consult, update, - Actively participating in and contributing to industry and share and seek directives on implementation of new products regulatory working groups, briefings, forums, conferences and and services or initiatives, policies, decisions or regulatory consultation papers frameworks

Stakeholder Concern/Expectation RHB’s Response To Concern/Expectation

- Effective management of the Group’s overall - Strengthening Board and Management oversight compliance with rules and regulations - Continuing to integrate ESG, including climate change considerations, into the Group’s core - Balancing between preserving the stability business and operations of the banking system, the concerns of - Ensuring strong liquidity and capital levels to withstand potential shocks to the banking depositors and sustaining economic activity system, protect depositors and enable sustained economic activity - AML practices - Continuing to drive commitment to green financing Integrated Report 2020 Report Integrated - Integration of ESG matters, particularly - Strengthening compliance capabilities climate change, into the Group’s core - Involvement in regulator-industry-led committees such as the Joint Committee on Climate business and operations - Progress against Value-based Change (“JC3”) Intermediation (“VBI”) - Continuously improving and strengthening compliance functions, including implementing - Good corporate governance new measures and putting in place new systems and controls to enhance the Group’s overall - Ethical and responsible business practices compliance risk governance in line with FTFC policy - Embedding FTFC principles and RHB Way’s Tone of Voice into customer communications - Asset quality and management of credit risk - Ensuring simplified language in contracts and banking documents - Policies and regulations - Berhad RHB Bank - Clear, relevant and timely communication to customers

www.rhbgroup.com 42 RHB Bank Berhad - Integrated Report 2020 STAKEHOLDER GROUP industry matters. With our financialindustry peers, we pursue industry-wideimprovements through discussionsandconsensus onfinancial Note: This stakeholder group includesNGOs and the media. We actively engage with communities, includingchildren and youth from theunderprivileged andunderserved segments. ------Financial impact of - Financial impact of - - Fraud risk - - - - Engagement Platform Engagement Platform Association of - - Industry FINANCIAL INDUSTRY PEERS - - COMMUNITIES Contributions to mitigate impactof COVID-19 core business andoperations Integration of ESGmatters into theGroup’s underprivileged Empowerment of theunderserved and impacted by thepandemic Access to financing,especially for those especially for theB40communities Opportunities for equalaccess to education, restrictions on movement Promotion of financialliteracy despite Compliance matters Customer experience core businessandoperations Integration of ESGmatters into theGroup’s change reporting initiatives by BNM Impacts of regulatory changes andclimate Malaysia Association of Banks inMalaysia Non-Governmental Organisations (“NGOs”) Interaction anddiscussion with related government bodiesand community engagement initiatives associations or government organisations through RHB’s Collaboration andpartnerships with non-profit organisations, Stakeholder Concern/Expectation Stakeholder Concern/Expectation organisation meetings/sessions Islamic Banking andFinancial Institutions of ENGAGING interest rate cuts thepandemic with: WITH STAKEHOLDERS Facilitating thedisbursement of ------Facilitating thedisbursement of - - - - - Involvement inregulator-industry-led committees suchas - announced by BNM via the Programme which was introduced inOctober 2020.RHB will continue providing support Supporting BNM’s six-month automatic moratorium andthePayment Assistance awareness programmes andinitiatives Encouraging apositive compliance culture within theGroup through compliance well ashow to combat risksassociated with fraud and money-laundering Continuously discussing with our peers theimpactsof new policiesandguidelines,as Promoting access to financing through digitalisation transition to alow-carbon economy Identifying opportunitiesthat will contribute to sustainabledevelopment andthe public disclosure (public documents, reports) Reaffirmed our approach to sustainability andintegration of ESGconsiderations through and Laos various parties,to assistfrontliners and vulnerable communities inMalaysia, Cambodia Contributed fundsthrough theMinistry of Health andMercy Malaysia, andalso via announced by Bank Negara Malaysia (“BNM”) Investment Impact Change (“JC3”) and until followed up with the Targeted Payment Assistance Programme which will beinplace Introduced thePayment Assistance Programme inOctober 2020, which was then our RHBX-Cel Academic Excellence andRHBX-Cel Star Scholarship programmes Nurturing andempowering children and youth from underprivileged segments through B40 students to ensure they were not left behindduringthepandemic Conducted onlineclassesandeducational sessionsthrough socialmediafor targeted students onmanagingtheir finances The Money Ma$ter Programme isastructured financialliteracy programme to educate

June 2021 Targeted Payment - - - - - RHB’s Response To Concern/Expectation RHB’s Response To Concern/Expectation Assessment Framework (“VBIAF”)Sectoral Guide working groups suchas Persatuan Insurans Am Malaysia Malaysian Investment Banking Association Innovative digitalplatforms to promote financialaccessibility On-ground community engagement activities media) Online communications (email, corporate website andsocial Assistance Programme relief relief fundsfor fundsfor Value-Based Intermediation Financing and SMEs suchastheSpecial Relief SMEs suchastheSpecial Relief which will beinplace till Joint Committee onClimate Working Group June 2021 Facility Facility

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 43 STATEMENTS REVIEW REVIEW INFORMATION OUR MATERIAL MATTERS F I S H M N “ The Group’s material matters discussed below describe why they are important to us, as well as where to find our responses to mitigate or manage their effects.”

Sustainable Financing

WHAT IT MEANS TO RHB RELEVANT STAKEHOLDER GROUPS RHB’S RESPONSE TO THE MATTER Integration of ESG considerations into the Group’s core business • Shareholders & Investors • IR Engaging with Stakeholders activities and decision-making processes. This includes identifying • Customers opportunities that will contribute to sustainable development and the IR • Business Partners • Risks & Opportunities transition to a low-carbon economy. • Regulators & Policymakers • SR Sustainable Financing • Financial Industry Peers

Financial Inclusion & Education

WHAT IT MEANS TO RHB RELEVANT STAKEHOLDER GROUPS RHB’S RESPONSE TO THE MATTER We strive to provide financial access and inclusion through various • Shareholders & Investors • IR Our Value Creating Business products and services, including promoting financial literacy to • Customers Model customers and the community, particularly youths and the underserved. • Business Partners • Regulators & Policymakers • SR Sustainable Financing • Financial Industry Peers • SR Financial Education • Communities

Customer Relationship Management

WHAT IT MEANS TO RHB RELEVANT STAKEHOLDER GROUPS RHB’S RESPONSE TO THE MATTER We are committed to delivering service excellence to our customers • Customers • IR Engaging with Stakeholders in line with our Customer Service Charter and strive to gain the • Business Partners trust and confidence of our customers, ultimately helping them • Employees • SR Customer Centric Banking to achieve their goals. We offer innovative financial solutions and • Regulators & Policymakers unique customer experiences by focusing on digital innovations, allowing us to provide simple, fast, and seamless experiences.

Data Protection & Cybersecurity

WHAT IT MEANS TO RHB RELEVANT STAKEHOLDER GROUPS RHB’S RESPONSE TO THE MATTER We have put in place a robust digital infrastructure, stringent • Customers • IR Engaging with Stakeholders controls and governance measures to protect customers’ data • Business Partners privacy while continuously enhancing our cybersecurity capabilities SR • Employees • Ethics & Governance to ensure a safe and secure environment for customers to conduct • Regulators & Policymakers their banking transactions. • Financial Industry Peers

Fair Treatment of Financial Consumers

WHAT IT MEANS TO RHB RELEVANT STAKEHOLDER GROUPS RHB’S RESPONSE TO THE MATTER We are committed to treating our customers fairly in the conduct • Customers • IR Engaging with Stakeholders of our business, as well as providing them with accurate, adequate, • Business Partners and easily understood information on the products and services SR • Employees • Customer Centric Banking they receive. • Regulators & Policymakers

Digitalisation and Investment in Technology 2020 Report Integrated

WHAT IT MEANS TO RHB RELEVANT STAKEHOLDER GROUPS RHB’S RESPONSE TO THE MATTER Our digital transformation journey aims to deliver convenience • Shareholders & Investors • IR Group Managing Director’s and create value for our customers. We identify opportunities and • Customers Statement mitigate risks by investing in technology and channel improvements • Business Partners and delivering innovative products and services, while encouraging IR - Berhad RHB Bank • Employees • Our Value Creating Business digital consumption among customers. Model

• SR Digitalisation

www.rhbgroup.com 44 RHB Bank Berhad - Integrated Report 2020 the management of risks within theGroup. Risk Management Framework sets outthestrategic direction for environment, includingbusinesscontinuity management. The Group growth andkey to theproactive riskmanagement of our operating Effective riskmanagement isfundamental indrivingsustainable WHAT IT MEANS TO RHB and sustainablebusinessgrowth. shareholders andstakeholders, leadingto long-term value creation through strengthened policiesandgovernance will gainthetrustof of anti-bribery andcorruption, fraud riskandanti-competition business practices, regulatory compliance andactive management Upholding good businessconduct that encompasses ethical WHAT IT MEANS TO RHB professional growth andmaximisetheir potential. with theright sets of development skillsandtools to expand their FIT22 strategic priorities. the ability to stay relevant andagile while delivering theGroup’s Our goal isto builda workforce that isfuture-proof, givingthem WHAT IT MEANS TO RHB engagement. diverse workforce by prioritisingtalent management andemployee To ensure long-term growth for our business, we manage our sustainability practices inthemanagement of our humancapital. We continue to foster talent development while embedding WHAT IT MEANS TO RHB through theselectionof sustainableandlocalsuppliers. purchaser of goods andservices, we canhave asignificant impact promoting sustainablepractices across itssupply chain. As alarge ethical, fair andtransparent, reflecting theGroup’s commitment to We strive to ensure that our procurement practices are responsible, WHAT IT MEANS TO RHB competition and to better combat new threats. at ways to strengthen our resilience intheface of increasing landscape. As afinancialservices provider, we consistently look to new developments inthemarket andthechangingregulatory It isessential for usto beableto respond swiftly andeffectively WHAT IT MEANS TO RHB Employee Training &Education Talent Management Sustainable Procurement Dynamic Regulatory Landscape Risk Management Good Business Governance OUR MATERIAL We dosoby equippingour employees

MATTERS RELEVANT STAKEHOLDER GROUPS • • • RELEVANT STAKEHOLDER GROUPS • • • RELEVANT STAKEHOLDER GROUPS • RELEVANT STAKEHOLDER GROUPS • Employees RELEVANT STAKEHOLDER GROUPS • RELEVANT STAKEHOLDER GROUPS • • • • • Employees Employees Employees Employees Customers Regulators &Policymakers Business Partners Regulators &Policymakers Business Partners Business Partners Regulators &Policymakers Business Partners Shareholders &Investors RHB’S RESPONSE TO THE MATTERRESPONSE TO THE RHB’S Sustainable Financing • • • MATTERRESPONSE TO THE RHB’S • MATTERRESPONSE TO THE RHB’S • • MATTERRESPONSE TO THE RHB’S • • MATTERRESPONSE TO THE RHB’S • • MATTERRESPONSE TO THE RHB’S Regional Market Landscape • • SR SR SR SR SR IR IR IR IR IR IR IR and Internal Control Statement onRisk Management Risks &Opportunities Ethics &Governance People& Workplace Statement Group Managing Director’s People& Workplace Statement Group Managing Director’s Sustainable Procurement Engaging with Stakeholders Statement Group Managing Director’s WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 45 STATEMENTS REVIEW REVIEW INFORMATION

Employee Health, Safety and Wellness (previously Employee Health and Safety)

WHAT IT MEANS TO RHB RELEVANT STAKEHOLDER GROUPS RHB’S RESPONSE TO THE MATTER Ensuring the health and well-being of our employees is important • Employees • IR Engaging with Stakeholders in order to increase productivity and efficiency and to promote • Regulators & Policymakers agility. • SR People & Workplace

Diversity & Equal Opportunity

WHAT IT MEANS TO RHB RELEVANT STAKEHOLDER GROUPS RHB’S RESPONSE TO THE MATTER Our ability to connect with customers and deliver excellent • Employees • IR Our Value Creating Business performance is fuelled by a diverse and inclusive workplace and Model culture. We are committed to equal opportunity and inclusivity across gender, age, ethnicity, disability, and nationality. • SR People & Workplace

Environmental Stewardship

WHAT IT MEANS TO RHB RELEVANT STAKEHOLDER GROUPS RHB’S RESPONSE TO THE MATTER We strongly advocate the responsible use of natural resources such • Employees • IR Our Value Creating Business as energy, water and paper and the minimisation of waste produced • Regulators & Policymakers Model through sustainable practices. We have a role to play in encouraging • Communities eco-efficiency practices in our business and operations to minimise • SR Environmental Stewardship our own environmental impact.

Climate Change

WHAT IT MEANS TO RHB RELEVANT STAKEHOLDER GROUPS RHB’S RESPONSE TO THE MATTER The Group acknowledges the position and role it has in supporting • Shareholders & Investors • IR Engaging with Stakeholders the transition to a low-carbon economy in line with national and • Customers global commitments. We approach this through managing our own SR • Regulators & Policymakers • Environmental Stewardship operational footprint, supporting customers and clients in the • Communities transition to a low-carbon economy and seizing opportunities for • Financial Industry Peers climate adaptation and mitigation.

Community Enrichment (previously Nurturing Future Generations)

WHAT IT MEANS TO RHB RELEVANT STAKEHOLDER GROUPS RHB’S RESPONSE TO THE MATTER The Group is committed to enriching and empowering local • Business Partners • IR Our Value Creating Business communities in which we operate, particularly the underprivileged • Employees Model and youth. This is driven by our community engagement initiatives • Communities and through RHB Foundation. • SR Community Enrichment

Financial Performance

WHAT IT MEANS TO RHB RELEVANT STAKEHOLDER GROUPS RHB’S RESPONSE TO THE MATTER 2020 Report Integrated We deliver robust financial performance and maintain a strong • Shareholders & Investors • IR Our Investment Case balance sheet through a comprehensive business model and • Customers time-tested strategies which generate long-term value for our IR • Business Partners • Group Managing Director’s stakeholders. • Employees Statement • IR Group Chief Financial Officer’s Review - Berhad RHB Bank

• SR Financial & Non-Financial Highlights

www.rhbgroup.com 46 RHB Bank Berhad - Integrated Report 2020 M N H S F I RESOURCES THROUGH THE OPTIMALUSEOF CREATING MEANINGFULVALUE • • • RHB, thekey inputsfor thisinclude: RHB. This consists of: management groups. This alsoincludestheBank’s brand andreputation built between communities, stakeholders andother relevant Social andRelationship Capital - - This consists of: impact ontheenvironment. resource consumption, andhasresponsibility for theresultant the organisation. The Group doesitspartinmanagingnatural services that supportthepast,current or future prosperity of environmental resources andprocesses that provide goods or Natural Capital RHB Insurance Online Banking RHB TradeSmart Online Banking RHB Reflex Online Banking RHB Financing(SME)Mobile App MyHome App RHB RHB Now Internet Banking Our onlineandmobilebankingplatforms: Kiosks, CashRecycler Machines andCoin Deposit Machines Cash Deposit Machines, ChequeDeposit Machines, EPF 1,744 self-service terminals inMalaysia consisting of ATMs, 364 branches andoffices across ninecountries technology that facilitate theBank’s services to customers: physical branches, data centres andequipment anddigital Manufactured Capital employees more than14,000 products andservices to create employees which enabletheGroup to deliver itsstrategy, Human Capital knowledge, systems or property suchassoftware or licenses or proprietary knowledge-based intangibles that caninclude intellectual Intellectual Capital RM27.0 billion Shareholder’s Equity Financial Capital Strategic Partnerships Digital transformation initiatives The Agile@Scale initiative Indirect inputssuchasfinancing activitiesby theGroup by theGroup Direct inputssuchasenergy, water and waste management covers theskillsandexperience of allRHB includes RHB’s renewable andnon-renewable is defined asthepoolof fundsavailable to encompasses organisational and procedures. For includes RHB’s infrastructure, i.e. OUR and development RM19.8 millioninvested for training RM203.5 billion Deposits from Customers: value for describes therelationships RHB Insurance Mobile App RHB TradeSmart Mobile App RHB Reflex Mobile App RHB SMEOnline Financing Partners App RHB RHB Now Mobile Banking App Fi na nc ia RHB,thisconsists of: l

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Transform theOrganisation journeys, agility, analyticsanddigital Investing intechnological anddigital T F initiatives that will differentiate us I Boosting revenue from prioritised model that prioritisescustomer Building a winning operating customer segments. from our peers. enablement. Invest ToWin Our

Journey Group Insurance requirement at 146.9% Ratio above regulatory Liquidity LIQUIDITY RISK IR Page Coverage 53 Group Shariah Group Retail Business Banking Business

’s RHB’s KEY INITIATIVES WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 47 STATEMENTS REVIEW REVIEW INFORMATION F Continued execution of the Group’s five-year FIT22 strategy: • Grow the Affluent and Wealth space, by enhancing the Group’s product suite • Grow the Retail and SME segments through the use of our digital and end-to-end banking solutions • Grow the large and mid-cap segments by increasing penetration and share of wallet • Expand through a segment-led approach rather than a product-led approach by creating strong value propositions for each segment • Protect asset quality and improve end-to-end credit management • Drive operating efficiency and manage costs ADDRESSING CHALLENGES OF THE OPERATING I • RHB Digital Academy provides digital-related foundational and upskilling training to RHB staff ENVIRONMENT • Execution of the Group’s Agile@Scale initiative which is a way of • Economy • Regulation working with Design Thinking to prioritise customer journeys, promote agility, drive the use of analytics and accelerate digital • Customers • Technology enablement • Competition • Digitalisation of customer journeys across Retail, SME and Insurance • Accelerated digital initiatives in Cambodia and Singapore Group • Institutionalised new analytics use cases to cross-sell/upsell to Retail Business & IR Pages 33 to 38 and SME customers as well as enable identification of potential mule Transaction accounts and fraud through big data processing for AML purposes Banking • RHB has allocated RM200 million to implement and enhance its digital capabilities over five years from 2017-2022, of which 60% has been utilised to date • Investments into Digital Academy training in 2020: RM1,597,244 Group Wholesale To find out more about our digital initiatives that help to enhance our Banking SR SHARIAH intellectual capital, please refer to our Sustainability Report. RHB’s Group Sustainability NON-COMPLIANCE Framework outlines the vision, RISK H • Embarked on an end-to-end workforce transformation to develop a governance and principles, Workforce Of The Future which will future-proof our employees and sustainability pillars and focus prepare them to meet future demands that will require skills in digital, IR areas of the Group, helping us Page 57 analytics and automation, among others • Our Employee Value Proposition (“EVP”) drives and enhances our to embed sustainability or ESG human capital. Across its five pillars, we strive to create a high- considerations in our business performing and inclusive workplace which empowers our employees and operations. and leads to greater employee satisfaction and higher retention rates Core • We implement robust mentoring, talent management and learning and development programmes to unlock the potential of our people Robust Corporate Governance Segments • We engage our employees by focusing on strong leadership, Ecosystem consistent communications from Senior Management, strategies to improve customer service, innovating new ways to work via Agile and We are committed to the paying close attention to career development opportunities highest standards of governance To find out more about our initiatives to improve our human capital, SR and regularly review our please refer to our Sustainability Report. corporate governance practices REGULATORY and disclosures. NON-COMPLIANCE RISK M • Continued enhancements to the SME Ecosystem and Homeowners ecosystem RHB Singapore - RHB Financing (SME) Mobile App IR Page 56 - SME e-Solution enhancements - Partnership with Finology for online approval of mortgage applications through Loanplus • Joy@work for salary crediting account Group • Launched the RHB WWF Debit Card-i, the first eco-friendly debit card International in Malaysia and the Asia Pacific Business N • Expanded operational GHG emissions reporting boundary to all main buildings and branches in West Malaysia • Implemented several eco-efficiency initiatives to reduce energy, water and paper consumption TECHNOLOGY RISK • Committed to RM5 billion in support of green activities through lending, investment, advisory and capital market activities by 2025

IR Page 55 To find out more about our initiatives to preserve our natural capital, SR please refer to our Sustainability Report.

S S Community Contributions K • Contributions to the Community through a host of initiatives that S 2020 Report Integrated OPERATIONAL RISK I support the underserved and underprivileged members of the R Operational losses Y community E K • RHB Way 2.0 - to intensify service culture and elevate customer against total revenue G N experience to deliver our brand promise of Together We Progress and was low at 0.22% I improve our Net Promoter Score AG AN Helping Our Customers IR Page M 54 • Launched #JomSapot to enable SMEs to promote their products on Facebook and a purpose-built microsite for free - Berhad RHB Bank • Provided a moratorium of up to six months without compound interest to all customers including individuals and SMEs, and thereafter provided payment assistance to our customers who continued to be impacted by the pandemic

To find out more about how we build relationships and nurture our SR communities, please refer to ourwww.rhbgroup.com Sustainability Report. 46 RHB Bank Berhad - Integrated Report 2020 M N H S F I RESOURCES THROUGH THE OPTIMALUSEOF CREATING MEANINGFULVALUE • • • RHB, thekey inputsfor thisinclude: RHB. This consists of: management groups. This alsoincludestheBank’s brand andreputation built between communities, stakeholders andother relevant Social andRelationship Capital - - This consists of: impact ontheenvironment. resource consumption, andhasresponsibility for theresultant the organisation. The Group doesitspartinmanagingnatural services that supportthepast,current or future prosperity of environmental resources andprocesses that provide goods or Natural Capital RHB Insurance Online Banking RHB TradeSmart Online Banking RHB Reflex Online Banking RHB Financing(SME)Mobile App MyHome App RHB RHB Now Internet Banking Our onlineandmobilebankingplatforms: Kiosks, CashRecycler Machines andCoin Deposit Machines Cash Deposit Machines, ChequeDeposit Machines, EPF 1,744 self-service terminals inMalaysia consisting of ATMs, 364 branches andoffices across ninecountries technology that facilitate theBank’s services to customers: physical branches, data centres andequipment anddigital Manufactured Capital employees more than14,000 products andservices to create employees which enabletheGroup to deliver itsstrategy, Human Capital knowledge, systems or property suchassoftware or licenses or proprietary knowledge-based intangibles that caninclude intellectual Intellectual Capital RM27.0 billion Shareholder’s Equity Financial Capital Strategic Partnerships Digital transformation initiatives The Agile@Scale initiative Indirect inputssuchasfinancing activitiesby theGroup by theGroup Direct inputssuchasenergy, water and waste management covers theskillsandexperience of allRHB includes RHB’s renewable andnon-renewable is defined asthepoolof fundsavailable to encompasses organisational and procedures. For includes RHB’s infrastructure, i.e. OUR and development RM19.8 millioninvested for training RM203.5 billion Deposits from Customers: value for describes therelationships RHB Insurance Mobile App RHB TradeSmart Mobile App RHB Reflex Mobile App RHB SMEOnline Financing Partners App RHB RHB Now Mobile Banking App Fi na nc ia RHB,thisconsists of: l

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’s RHB’s WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ STATEMENTS REVIEW REVIEW INFORMATION CREATING VALUE FOR OUR STAKEHOLDERS

F • Total income increased by 1.8% An evident trade-off of • Total assets increased by 5.3% our Financial Capital was Trade-offs: • Profit fell by 18.1% mainly due to modification loss arising seen in our various long- from the moratorium and higher allowances for credit losses term investments across • Dividend payout ratio of 34.8% in 2020 vs 50.1% in 2019, the Group to ensure to conserve capital sustainable business growth. DELIVERING ADDRESSING CHALLENGES • At this point there are 4,377 employees working the Agile Significant amounts of way and producing good business results for the Group Financial and Human OF THE OPERATING SUSTAINABLE I • Delivered cumulative incremental revenue of Capital have been invested Trade-offs: ENVIRONMENT FINANCIAL RM204 million through analytics use cases since 2018* into improving Intellectual • Economy • Regulation • Delivered revenue uplift of RM63.48 million from Capital by driving our digitalisation of customer journeys • Customers • Technology OUTCOMES digital transformation • Digital and Agile@Scale-related training - average training and the Agile way of • Competition hours for 12,530 Malaysia Operations Staff was 3.91 hours We stand guided by our core working to improve the Group’s efficiency and Group values as we consistently deliver * For Analytics COE only productivity. Business & IR Pages 33 to 38 sustainable financial outcomes. Transaction We take the long-term view H Diversity of Workforce • 36 training hours per Banking into consideration to ensure the Investment in the • Employees: employee in 2020, a form of Financial Male: reduction from an average prosperity of the business and the 5,731 (40.6%) Capital focused on Trade-offs: Female: 8,400 (59.4%) of 72 hours in 2019 due to Group well-being of our stakeholders. leadership and technical/ • Employee Engagement the COVID-19 pandemic Wholesale functional development score of 92% • Staff attrition: 11.1% programmes. In return, Banking SHARIAH we have witnessed RHB’s Group Sustainability NON-COMPLIANCE great benefits for our employees. Framework outlines the vision, RISK governance and principles, ROE • Increased percentage of transactions via digital channels to sustainability pillars and focus M We have diverted IR 75.5% (FY2020) and improved penetration rates of Internet Page 57 resources to drive areas of the Group, helping us Banking to 54.9% and Mobile Banking to 22.8% digitalisation initiatives to embed sustainability or ESG • 85.7% of all customers are using non-OTC channels, as we strongly believe Trade-offs: including Cards and ATM usage considerations in our business that building relationships 7.7% • Approximately 40% of new mortgage applications acquired and operations. and engagement with through the MyHome App Core customers in a safe and • Onboarded more than 670,000 users on the RHB mobile convenient environment Robust Corporate Governance banking app since its launch in April 2019 Segments will propel business • SME unsecured loans acquired via SME online financing - Ecosystem growth and improve 61.34% TOTAL INCOME brand recognition. We are committed to the highest standards of governance N • Operational GHG emissions (West Malaysia): and regularly review our 26,232 tCO eq REGULATORY 2 corporate governance practices RM7.2 billion • Electricity Consumption (West Malaysia): 40,147 MWh NON-COMPLIANCE • Paper Consumption (Group): Approximately 149,000 reams and disclosures. In order to promote eco- RISK efficient practices and Trade-offs: Green and Sustainable Deals manage natural resource • extended as at December 2020 to support RHB Singapore RM3.1 billion consumption, there was IR Page 56 green activities through lending, investment, advisory and an increase in cost to NET PROFIT capital market activities adopt more modern and • Cypark Renewable Energy Perpetual Sukuk Musyarakah efficient technology in our Programme: Principal Adviser, Lead Manager and Lead operations. Group Arranger for the issuance of Malaysia’s 1st ever ESG-related International RM2.0 billion Unrated Perpetual Sukuk of up to RM500 million, of which RM165 million has been issued Business

S Brand Value • Maintained position as Malaysia’s 14th most valuable brand th TECHNOLOGY RISK DIVIDEND PAYOUT (14 in 2019) valued at USD830 million, amidst challenging market conditions. • Putra Brand Awards 2020 – RHB clinched the Gold (Silver IR Page 55 in 2019) as voted by Malaysians as their preferred brand in RM0.7 billion the Banking, Investment & Insurance category. RHB supports the Customer Experience communities around • Achieved 98% of SLA target for timeliness in providing S us through our Financial K responses to Complainants OPERATIONAL RISK IS Capital and time R volunteered by our Operational losses Y Community Contributions Trade-offs: E employees. We view DIVIDEND PER SHARE • Total Group community investment: Close to RM4.4 million against total revenue K this as an important G for 2020 (for both Group Corporate Responsibility and N trade-off as the resources was low at 0.22% I RHBF) which impacted more than 20,000 underprivileged G expended will lead to A community members in Malaysia, Cambodia and Laos AN continued goodwill, M • Allocated RM3.2 million to the RHB X-Cel Academic IR Page 54 17.65 sen brand recognition and Excellence programme to support students from the B40 an opportunity to serve segment from 2018 to 2020 the unbanked and • Allocated RM4.2 million to support 60 RHB X-Cel Star underserved. scholars from 2019 to 2020 • Contributed RM3 million to various community initiatives, and to frontliners, to mitigate the effects of COVID-19

Customer Satisfaction Net Promoter Score (“NPS”) • Achievement of +11 in 2020 48 RHB Bank Berhad - Integrated Report 2020 The Group’s aspirations, namely value for our stakeholders asevidenced by robust growth inallkey businessmetrics through thethree pillars that encapsulate the

a DELIVERING ONOURSTRATEGIES

n Group F s fast, nimbleand customer-centric organisation. time to market, thereby transforming RHBinto a the organisation to drive productivity andimprove We will implement the Agile way of working across enablement, as well asdeveloping our talent pool. customer journeys, agility, analyticsanddigital Building a winning operating modelthat prioritises - - - capital by focusing onthree key segments: segments, as well asthrough optimising theuseof Boosting revenue from prioritisedcustomer

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m O respectively. aim to increase share of wallet andpenetration, The large andmid-capcompanies, where we services ecosystem financing as well asacomplete financial The SMEsegment, where we intend to provide revenue poolgrowth isthefastest The Affluent and Wealth space where the

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Journey from our peers. differentiate us initiativesthat will and digital technological Investing in in the (“F”),Invest to third year

of • Branch • LaunchedtheRHBMyHome • Mortgage • • LaunchedtheRHB#JomSapot campaign,allowing SMEs to promote their • • • Retained our • Retail depositscontinued to outpace theindustry, growing by • • with positive results inthefollowing areas: challenges posedby theCOVID-19 pandemic,our sustainedefforts were rewarded Overall, we saw steady growth across thethree key segments. Despite the Launched • • customers andemployees. In 2020, we: increasingly profound as we continued to increase the value that we create for our the Group. The benefits that we realised from drivingthistransformation became We adopted Agile over two years ago, andhave scaledupitsimplementation across Launchedthefirst • SME in agood positionto continue strivingfor innovation andsustainablegrowth: changing customer demands.In 2020, we achieved several key milestones that put us optimisation, which improved operational excellence andhelpeduskeep up with We benefited from our investments indigitalisation suchasautomation andprocess

its

Win (“I”)and deployment. for The first bankinMalaysia to roll outreal-time mobilee-ticketing services allowing principle approval of their onlinemortgage applications through theRHBMyHome App. Partnered with alocalfintech company to enablecustomers to receive instant in- homeowners with leadingservice providers through asingleecosystem. Both platforms to enableus deliver aseamlessmove-in experience, connecting using socialmedia. and services through afree onlineplatform andconnect with potential customers loans growing by 23.4% year-on-year and13.3% year-on-year, respectively. Singapore andCambodiacontinued to leadour overseas businesses with gross and 64.6%,respectively. Our client penetration rate for large-cap and mid-cap clients increased to 81.8% No. 13in2019Malaysia’s 100Leading Graduate Employers. category andimproved our overall ranking to a Top 10positionfrom Managers. the customer onboarding process andenablesremote interaction with Relationship improved our We maintained our 23.6%market share of fee income amonglarge-cap clients and 2020. SME loansincreased by 11.3% year-on-year, anddepositsincreased by 16.1%in compared with theindustry’s 6.6%. at preparing our employees for future roles. business owners. About one-third of thesecustomers were Small Medium Enterprises (“SME”) Management (“AUM”) for thePremier customer baserose by 20.1% year-on-year. The Affluent customer baseincreased by 13.6% year-on-year while Assets Under Agile in2019). adopted the Agile way of working to more than4,000(2,127employees adopted Scaled up Agile across theGroup, doublingthenumber of employees who have five-year same-day Workforce of

FIT22 second-placed employer market share of appointments in50selected branches asapilot to nationwide Transform theOrganisation (“T”). AI-powered SMEfinancingmobileappinMalaysia that automates strategic theFuture, aGroup-wide targeted upskillinginitiative aimed fee income to 25.0%amongour -FIT22 website inadditionto our initiatives. ranking intheBanking andFinancial Services We continued existing RHBMyHome to mid-capclients. 15.5% create

2020 Achievements year-on-year sustainable products

App.

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In FY2020, we took steps to adjust and adapt our strategies given the unprecedented and lasting impact of the pandemic. Thus, the Group refreshed a number of the FIT22 initiatives to incorporate an even stronger focus on driving business resilience, improving operational excellence and enhancing customer-centricity. Below, we share the Group’s achievements under FIT22 in 2020 and our priorities in 2021.

2020 Achievements 2021 Priorities

We observed increased penetration and uptake in our We are committed to exploring innovative methods to draw our various digital offerings, which demonstrates that our ecosystems customers deeper into our ecosystems: have improved and are making great strides towards maturity. • Growing the Affluent customer base by continuously improving our value proposition and enhancing our product suite. In the Retail segment, we almost doubled the number of • Growing the Retail segment through deposits and products by improving digital mortgages originating from the RHB MyHome App to onboarding through ‘branchless services’ and accelerating growth in mortgage 39.5% in 2020 from 20.0% in 2019, with contributions of loans by continuing to build on the homeowner’s ecosystem. • Increasing SME loan growth by driving end-to-end banking solutions through leads from the RHB Partners App significantly increasing online and digital channels to improve our customer value proposition. from 25.0% in 2019 to 68.8% in 2020. • Improving our penetration into other segments such as large-cap, mid-cap and commercial. In the SME segment, we continued to build on our SME • Improving our overseas presence through differentiated propositions for target ecosystem to provide our customers with value-added segments in each country. solutions on a single platform. Our SME e-Solutions platform currently offers accounting and payroll, human In addition, we recognise the need to be resilient during a period of economic resource management and electronic point-of-sales uncertainty. We will judiciously practise cost management to strengthen our solutions. capital and balance sheet to weather potential economic stress, especially those arising from the pandemic.

Investments Following COVID-19, digital efforts and IT modernisation will be accelerated. In • Launched RHB Live FX @ Reflex, a digital foreign anticipation of a shift in customer preferences towards digital platforms, we will exchange (“FX”) service that offers real-time executed introduce several new solutions. FX rates and seamless processing of spot and forward transactions. For SMEs, our online financing facility will undergo a transformation to enable remote application and approval for small ticket business loans. For retail banking, Mobile App we seek to attract and engage with new customers with the roll-out of the • Onboarded more than 370,000 customers on the latest versions of our internet and mobile banking applications, facilitate digital RHB Mobile App in 2020, bringing the total number of account opening through Electronic Know-Your-Customers (“e-KYC”) and improve onboarded customers to more than 679,000 since the new customer onboarding by implementing a new system. mobile app was launched in April 2019. The Group will continue to enhance customer journeys through growing our Analytics communication channels and recruiting an energised team of Customer Journey • Continuously invested in analytics and targeted Group- Owners in order to better tailor our services exclusively to customer demand. wide adoption to enable a more customer-centric and Superior customer experience will be delivered holistically through improved ease cost-efficient RHB. We saw incremental benefits of of banking with RHB, ultimately strengthening the carefully nurtured customer RM119.5 million from our analytics efforts: relationships. - RM104.5 million in revenue uplift - RM15 million in compliance cost avoidance Increasingly stringent regulatory requirements will be met through our continuous efforts to manage compliance effectively. We will continue our investments in Campaign Automation data science and platform optimisation to automate and digitalise compliance • Implemented a multichannel campaign management tools. Moreover, as part of the Agile approach and to disrupt the status quo, our programme leveraging big data to automate and assist cross- approach to compliance will be newly positioned as a business value generator by selling and upselling efforts for Retail and SME customers. setting up a Compliance Innovation Team.

• Improved our position to third place in 2020 from After spending the past two years embedding the foundations of Agile fourth place in the 2019 Banking and Financial Services within the Group, our goal in 2021 is to maximise the impact of this new way category and improved our overall standing to 17 from of working. By the end of the year, 80% of RHBians will have transitioned

25 in the Graduan UK Top 50 Employers ranking. to Agile as we continue to scale up enabler programmes and remove any 2020 Report Integrated • Improved our Employee Engagement Survey (“EES”) potential obstacles. score to 92% in 2020 from 90% in 2019. • Improved our Internal Customer Effectiveness Survey score to 77% in 2020 from 75% in 2019. Recognising that customer needs, business models and required skills to succeed are all changing rapidly, we will focus on implementing our Workforce of the Future programme. This aims to provide our people with upskilling opportunities to ensure that they have the necessary future-ready capabilities to progress their careers within the Group and take on new roles, - Berhad RHB Bank such as in the areas of digital, IT and analytics.

www.rhbgroup.com 50 RHB Bank Berhad - Integrated Report 2020 welfare in view of theongoing COVID-19 pandemic. and guidelines. The significant risksandhow theGroup mitigated themare discussedbelow. The Group’s riskmanagement for activities eachof thesignificant riskareas are reinforced by aframework andsupplemented by policies SIGNIFICANT RISKS This COVID-19 pandemic,geopolitical uncertainties andcybercrimes. The market saw significant volatility, particularly due to the able to maintain strong performance andsoundriskfundamentals. Despite achallengingmacroeconomic environment, theGroup was risk management of theGroup’s operating environment. value while maintaining theGroup’s competitive advantage. It isthusacentral partof theproactive Effective riskmanagement isfundamental indrivingsustainablegrowth andenhancingshareholder actions. the potential impactand to identify appropriate riskmanagement portfolio reviews andstress-testing exercises inorder to analyse continued to assess thesesituations on anongoing basisthrough payment assistance andloanrestructuring. Additionally, theGroup clients via various financialrelief measures includingoffering Group continuously supported impacted retail andnon-retail necessary steps were taken to maintain stable operations. The The riskto impacted segments may have beenincreasing but for theeconomy. sovereign credit rating, which presented potential fiscalchallenges 1. Credit • • Risk Definition Material Matters: Risk Management, Financial Performance, Sustainable Financing was CREDIT RISK regarding ESGissues. probability (“ESG”) considerations. Companies that place higher emphasisonESGissues will have lessregulatory risk;for instance, alower both investment, hedgingandtrading activitiesfrom both on-andoff-balance sheet transactions. with The riskof lossarisingfrom customers’ or counterparties’ failure to fulfiltheir financialandcontractual obligations inaccordance Furthermore, further the market risk

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1. CREDIT RISK (CONT’D)

2020 HIGHLIGHTS

The COVID-19 pandemic in 2020 led to disruptions in the labour market and global economic conditions on an unprecedented scale. With the exception of several select industries, most companies experienced deterioration in financial health as the economy fell into recession during the pandemic. This resulted in a cascading effect that affected the jobs and the salaries of the population at large. The Group, as part of the Malaysian financial system, helped to cushion the blow on borrowers/customers by providing substantial financial relief measures, including offering Payment Assistance, loan restructuring and moratoriums.

Credit Risk 2020 Quantitative Highlights:

Gross Loans, Advances and Financing (RM’million) - The Group’s gross loans and financing grew by 5.6% year- 2019 176,175 on-year to RM186.1 billion. This was mainly due to growth

2020 186,114 in the mortgages, SME and Singapore segments. Domestic loans and financing grew by 4.5% year-on-year. Gross Impaired Loans/Financing Ratio (%) - Gross impaired loans were RM3.2 billion as at 31 December 2020, with a gross impaired loans/financing ratio of 1.71% 2019 1.97 compared with RM3.5 billion and 1.97% as at 31 December 2020 1.71 2019. - The average credit risk was 39.3% as at 31 December Average Credit Risk Weight (%) 2020, with total credit risk weighted assets of RM117.4

2019 37.0 billion compared with RM105.1 billion and 37.0% as at 31 December 2019. 2020 39.3

MANAGEMENT RESPONSE

19 Managing the impact of COVID-19 Other actions • A Credit War Room was established to steer, coordinate and • The Group embarked on a credit transformation journey aligned ensure the effective implementation of the Group’s payment to the FIT22 strategic roadmap in order for the Bank to support assistance strategy in relation to borrowers/customers affected business growth responsibly and protect asset quality during by the COVID-19 pandemic. The Credit War Room is headed these challenging times. Through this programme, strategic by the Group Managing Director, in line with Bank Negara initiatives were identified and undertaken to enable an end-to- Malaysia’s (“BNM”) requirement for financial institutions to set end credit management change. up a dedicated function led by a chief executive officer. • ESG considerations were integrated into lending, advisory and • In addition to the extension of payment assistance mentioned investment decision-making in order to manage and minimise above, there was continued close monitoring of the performance negative impacts and promote sustainable development to and emerging risks of the portfolios in order to actively assess create a positive impact through identified opportunities. the impact of the COVID-19 pandemic on the portfolios. • The Bank continuously embraced sustainability risk • Ad hoc stress testing was conducted to assess the impact of considerations in credit decision-making with the general and COVID-19 on the portfolios. Advanced analytics and machine industry-specific ESG risk assessment tool for the ESG-Sensitive learning were adopted to enhance credit risk measurement and Sectors. expected credit loss. • Transformation initiatives will continue into 2021 by enhancing • Credit risk undertakings and appetites/limits were revised, as a existing capabilities and building new ones that are benchmarked result of the slowdown in economic and business activities. to industry best practices.

FORWARD-LOOKING VIEW

• The COVID-19 pandemic will remain a concern in 2021 with the resurgence in positive cases globally, which will cast uncertainties on the outlook for 2021. • Mass deployment of the vaccine and its effectiveness remain key to the recovery of the global and local economy. 2020 Report Integrated • The Group will continue to adopt a cautious approach, as risks still remain with new outbreaks, vaccination delays, unemployment and business shutdowns becoming permanent. Credit underwriting standards will continue to be enhanced to address the pandemic situation, ensuring that the Group’s credit risk policies remain effective and comprehensive to identify, measure, monitor and control all risks. - Berhad RHB Bank

www.rhbgroup.com 52 RHB Bank Berhad - Integrated Report 2020 2. 19 • The • Risk Definition Material Matters: Risk Management, Financial Performance, Dynamic Regulatory Landscape Market Risk 2020Quantitative Highlights: interest/profit rates, equity It was a challenging year for financial markets due to the COVID-19 pandemic. The Group’s position was exposed to higher volatility in • • • Managing theimpactof COVID-19 MARKET RISK 2020 2019 Market RWA Foreign exchange riskandcommodities riskinthetrading andbankingbooks - The interest/profit rates andequity - currency exchange rates andcommodity prices. Under thisdefinition, market riskconstitutes: to ensure risksarisingfrom market volatilities are mitigated. vaccine andlocalpoliticalevents, structural limitsandinternal controls will continue to bereviewed or restructured proactively In view of financialmarkets continuing to beinfluenced by theuncertain globalmarket outlook, thesuccess of theCOVID-19 analysis. adjusted riskappetites, combined with more stress scenario levels to highlight new risks,revised objectives, strategies and risk management committees at theManagement andBoard There was anincrease inengagement with andreporting to the normal presented by theCOVID-19 pandemic. strategies. These changes were necessary vis-à-vis thenew direction of riskmitigation corresponded with new business outlooks andconditions. This was alsoto ensure that the appetites within ashortspanof timedueto adverse market to review, assess,adjustandseekapproval onselective risk the businessunits worked together with Risk Management There was anincrease inproactive riskmanagement where market riskare independent of theGroup’s trading operations. responsibility for the measurement, analysis and reporting of The established market risk management functions that assume risk of (RM’million)

losses RISKS AND OPPORTUNITIES RISKS AND arising prices andforeign exchange rates, resulting inProfit &Loss from adverse movements riskspertainingto financialinstruments inthetrading book 3,845 FORWARD-LOOKING VIEW MANAGEMENT RESPONSE in 2020 HIGHLIGHTS 4,314 market drivers, • • • Other actions cumulatively inMalaysia andoverseas operations. in positions,namely foreign exchange, which increased The increase inexposures was contributed by anincrease events takingplace would betriggered through thismechanism. were within theinternal thresholds set andthat any extreme Trading exposures were monitored daily to ensure that risks risks dueto market volatilities. the Group’s financialmarket activitiesandidentified potential measurement methodologies and limits, successfully controlled The establishedframework, encompassing riskpoliciesand and remained effective. The market riskgovernance structure andprocesses were sound such as volatility. interest/profit rates, credit spreads, equity

prices,

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3. LIQUIDITY RISK

Material Matters:

Risk Management, Financial Performance, Sustainable Financing

Risk Definition • The risk of the Group being unable to maintain sufficient liquidity to meet its financial commitments and obligations when they fall due and to transact at a reasonable cost. Liquidity risk also arises from the inability to manage unplanned decreases or changes in funding sources.

2020 HIGHLIGHTS

• In response to the COVID-19 pandemic and its repercussions, the Group committed to supporting the payment assistance programme for our customers. While this impacted the Group’s cash flow, the liquidity positions remained strong. As at December 2020, total customer deposits increased by 6.8%, nearly matching gross loan growth of 5.6% and largely attributed to retail deposits and CASA. • Notwithstanding the challenges presented by the COVID-19 pandemic, there was no material concern about the Group’s liquidity positions. The Group’s LCR and Net Stable Funding Ratio remained above 100% throughout this challenging period.

Liquidity Risk 2020 Quantitative Highlights:

High Quality Liquid Assets (“HQLA”) (RM’billion) Loan-to-Deposit Ratio (“LDR”) (%)

2019 48.43 2019 92.5

2020 49.03 2020 91.5

Liquidity Coverage Ratio (“LCR”) (%)

2019 152.7 Holding of HQLA was ample with LCR way above the minimum regulatory requirement of 100%. In addition, the LDR was 2020 146.9 maintained at a comfortable level of about 91%.

MANAGEMENT RESPONSE

19 Managing the impact of COVID-19 • Several stress tests were conducted to assess the COVID-19 pandemic’s impact on the cash inflow and outflow of our customers. The frequency of monitoring for alerts was stepped up to detect and identify any possible liquidity issues. In addition, the Management team met more frequently to manage and ensure comfortable liquidity positions. • In line with BNM’s relief measures to ensure access to financing continued to be available, there was a temporary relaxation of liquidity thresholds in 2020. • An integrated Crisis Simulation Exercise (“CSE”) was conducted whilst the Group was also managing the on-going concerns of COVID-19 outbreak and the consequential movement control orders. The integrated CSE tested on scenarios involving loss of workforce, cyber threats and liquidity crisis management. The exercise achieved its objectives in enhancing Management’s ability to manage the crisis and tested on the effectiveness of managing various scenarios, including a liquidity crisis.

FORWARD-LOOKING VIEW

• Notwithstanding concessions granted by Bank Negara Malaysia (“BNM”) in view of the COVID-19 pandemic, the Group sustained liquidity compliance ratios of above 100% and will continue to maintain this minimum level in 2021. It is a Group priority to maintain comfortable liquidity positions to ensure liquidity is sufficient at all times and depositors’ funds are protected. • The Group will continue to ensure there is ample liquidity to provide targeted payment assistance to customers in weathering the effects of the economic challenges arising from the COVID-19 pandemic. Integrated Report 2020 Report Integrated • The Group will also diversify its deposit base with a focus on growing Retail and SME deposits while reducing the concentration of large Corporate depositors. - Berhad RHB Bank

www.rhbgroup.com 54 RHB Bank Berhad - Integrated Report 2020 4. 19 • • • • • The • Risk Definition Material Matters: Risk Management, Financial Performance, Good Business Governance, Data Protection &Cybersecurity, Business Continuity Management Operational Risk 2020Quantitative Highlights: • • • Managing theimpactof COVID-19 OPERATIONAL RISK 2020 2019 Operational RWA IT, legalandShariah non-compliance risksbutexcludes strategic andreputational risks. these initiatives. Support theGroup’s agenda ondigitalisation andoperational optimisation inensuringadequate operational riskassessment of business growth after movement controls are lifted. Embrace thenew normsandconstantly review work processes andcontrol mechanismsto effectively supportoperations and of defence, andinculcate effective operational riskawareness andmanagement. Continue to enhance theBusiness Risk andCompliance Officer (“BRCO”) programme to promote riskownership at thefirst line Enhance theriskculture programme to improve employees’ understanding andappreciation of proactive riskmanagement. Continue theimplementation of theGroup’s Pandemic Strategy to manage the COVID-19 pandemic situation. cybersecurity concerns. involved splitoperations and work-from-home arrangements. This ledto heightened operational risks,especially peopleriskandincreasing In response to theCOVID-19 pandemic,theGroup embarked onaGroup Pandemic Strategy for allbusinessandfunctionalunits, which provider, continued to beof service to thecommunity. managing thepandemiccauseddisruptions to thebusinessandoperations of theGroup. Nonetheless, theGroup, asanessential service The COVID-19 pandemicoutbreak andthecorresponding Movement Control Order (“MCO”) implemented by theauthoritiestowards - - - outbreak,the whereby: Group’s Pandemic Strategy was activated at theearly stages of To ensure thecontinued provision of essential services, the risk channels andself-service terminals. transactions through the various onlineandmobile Customers were encouraged to perform their financial provision of services; and functions were identified andtriggered to ensure continued All third-party service providers and enablers of essential operating from different locations; All critical services were identified and split into teams of

loss

(RM’million) RISKS AND OPPORTUNITIES RISKS AND resulting from inadequate or

failed FORWARD-LOOKING VIEW 12,058 MANAGEMENT RESPONSE internal 12,678 2020 HIGHLIGHTS processes, • • 2020 was dueto theincrease ingross income. operational The Group adopted thebasicindicator approach incomputing - - Facilitated - - were implemented: To mitigate cybersecurity concerns, thefollowing measures ------among staff andcustomers: new norms were implemented to minimise the risk of infection To mitigate thepeopleriskarisingfrom theCOVID-19 pandemic, people, Enhanced cyber threat monitoring Provided asecured onlineconferencing tool Bank-issued laptops and Virtual Private Networks (“VPNs”) Provided guidance to staff onremote working arrangements requirements Established protocol oncontact tracing andquarantine Hygiene andfrequent sanitisation Compulsory wearing of masks within our premises Provision of personal protective equipment Physical distancingpractices andcrowd control Temperature screening at theentrances of all RHB premises RWA. systems remote The increase working and/or in within

external operational a secured events. RWA environment

of It

also 5.14% through includes in

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5. TECHNOLOGY & CYBER RISK

Material Matters:

Risk Management, Financial Performance, Good Business Governance, Data Protection & Cybersecurity, Digitalisation & Investment in Technology

Risk Definition • Technology risk is the business risk associated with the use, ownership, operation, involvement, influence, and adoption of Information Technology (“IT”) within an enterprise. • Cyber risk refers to threats or vulnerabilities emanating from the connectivity of internal infrastructure to external networks such as the Internet.

2020 HIGHLIGHTS

• Increased digitalisation leads to higher susceptibility to cyber risk. Digitalisation introduces user mobility with an emphasis on ease of access – anytime, anywhere and anyhow. This involves the use of cloud computing, cloud services, the sharing of an Application Programming Interface, which allows an application to talk to another application, and the opening up of the backend systems to be accessed remotely. Recognising that such access is easily available from most financial institutions, hackers and cybercriminals have started to target financial institutions to exploit the new digital business model. • The MCO implemented by the government due to the COVID-19 pandemic led to employees working from home or in split operations. Virtual meetings using video conferencing tools were introduced to avoid face-to-face meetings. • The new norm introduced new inherent risks within the work-from-home and split operations arrangements. As such, additional measures were implemented to enhance security controls, which included securing remote access connectivity via VPN and Two-Factor- Authentication, enforcing strict policies for virtual meetings and protecting the devices used by staff with advanced security tools. • A rise in phishing emails was detected and controls were promptly implemented to address the threats with no losses reported. • There was an increased focus on digital transformation initiatives and dedicated management committees to facilitate increased speed- to-market and responsiveness to customer feedback/demands. • We increased leveraging cloud technology with the deployment of new tools and collaborated with partners who were also leveraging this technology.

MANAGEMENT RESPONSE

• The rapid adoption of digitalisation led to new inherent risks that • Systems were established to monitor network activities for were never in existence in a traditional on-premises computing anomalies and security breaches and increased attention system. To address these emerging risks, there was a need to was given to infrastructure readiness, compatibility, capacity, revamp the current security infrastructure – from perimeter- security and resiliency to support digitalisation projects. based security to cloud computing and data-centric security. • Internet-facing application systems were subjected to RHB adopted a multi-pronged approach: regular vulnerability assessments/penetration testing where - Gradual deployment of digital-friendly cloud-based security weaknesses detected were duly resolved with attestation from infrastructure and the hiring of support personnel with skill external consultants. sets covering cloud security. • Centralised monitoring of system health status and capacity - Establishing proper governance in the management of utilisation were conducted to facilitate early detection and cloud/digital deployment and the introduction of policies faster response to potential IT issues. to strengthen the security controls covering the overall digitalisation initiative. - Continuous assessment of third parties’ cybersecurity postures and subscription to threat intelligence services for better visibility of the current cyber landscape.

FORWARD-LOOKING VIEW

• The threat of cyber risk incidents remains ever-present, more so during this time of increased reliance on IT solutions for video conferencing and Work-From-Home (“WFH”) arrangements, which expose the Group to additional cyber risk vulnerabilities. As Integrated Report 2020 Report Integrated such, we have subscribed to threat intelligence resources in order to stay updated on cyber risk attacks faced by the industry and any emerging new risks. - Berhad RHB Bank

www.rhbgroup.com 56 RHB Bank Berhad - Integrated Report 2020 6. • Losses • Risk Definition Material Matters: Risk Management, Financial Performance, Good Business Governance, Dynamic Regulatory Landscape IR Furthermore, • • REGULATORY NON-COMPLIANCE RISK branches or subsidiariesconducts itsactivities. Advisory Council) relevant to afinancialinstitution’s activitiesinalljurisdictions which thefinancialinstitutionor any of its result of failure to comply with alllaws, rules,standards andregulatory requirements (includingany rulingof theShariah programmes andinitiatives. its oversight responsibilities, thefocus will beonpromoting compliance behaviour through various compliance awareness Group Compliance will continue with itsefforts to buildapositive compliance culture across theGroup. Apart from strengthening on pages 120 to For more information onGroup Compliance’s highlights andinitiatives in2020andour key prioritiesmoving forward, pleaserefer to the section onGroup Compliance requirements amidstthenew normal. compliance awareness andadherence to regulatory presented challenges interms of ensuringcontinued The COVID-19 pandemic and the imposition of the MCO pandemic, where digitalchannelsbecameanecessity. security becameimminent, more sodueto theCOVID-19 digitalisation andautomation, thethreat to information arising 122 of this Integrated Report. from RISKS AND OPPORTUNITIES RISKS AND as the 2020 HIGHLIGHTS regulatory Group

moved sanctions, towards financial FORWARD-LOOKING VIEW embracing loss or

reputational • • • • • procedural gaps vis-à-vis regulatory requirements. Increased compliance andregulatory reviews to detect need for any additionalsecurity measures. regular reviews of processes andcontrols to establishthe relation to theexisting systems of theGroup, including Heightened cyber risk assessments were carried out in requirements. for thenew normal while ensuringadherence to regulatory business processes were updated where required, to cater conducted to ensure that theGroup’s operational and An overall review of policies,circulars andguidelines was learning, offering amore interesting way to learn. topics In addition, shortexplainer videos on various compliance webinars. through virtual instructor-led training platforms suchas the new normal where compliance trainings were delivered Development of alternative learningplatforms to cater for damage were which explored MANAGEMENT RESPONSE a financial to provide institution bite-sized may compliance

suffer

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7. SHARIAH NON-COMPLIANCE RISK

Material Matters:

Risk Management, Financial Performance, Good Business Governance, Dynamic Regulatory Landscape

Risk Definition • The risk of legal or regulatory sanctions, financial loss or non-financial implications, including reputational damage, which RHB may suffer arising from the failure to comply with the rulings of the Shariah Advisory Council (“SAC”) of local regulatory bodies (such as the SAC of the BNM for Malaysia operations), standards on Shariah matters issued by the local regulator or decisions or advice of the Shariah committee/advisor appointed by the respective RHB entities.

2020 HIGHLIGHTS MANAGEMENT RESPONSE

• In 2020, there were 24 potential Shariah non-compliance • Operationalisation of the Shariah requirements on shared events detected through stringent Shariah review and audit services and shared operations platforms and recent changes processes, of which only four events were resolved as actual in the policy and regulatory requirements made by BNM Shariah non-compliance events by the Shariah Committee. continued to be the focus areas under the Shariah risk Robust efforts in terms of Shariah governance are underway management processes. In addition, it was acknowledged that to ensure all findings raised are adequately addressed to staff training and awareness was key in managing Shariah risk mitigate the likelihood of recurrence or repeated potential among the business and functional units. Shariah non-compliance findings. • Furthermore, regular independent assessment activities through Shariah review and audit functions provided assurance of the quality level and effectiveness of RHB’s internal control and risk management systems and governance processes. • The Shariah Operational Risk Management (“Shariah ORM”) process was streamlined based on the Group’s existing operational risk management tools and methodologies to specifically manage Shariah risk in line with RHB Group policies and guidelines. • Shariah Risk Awareness training was conducted during the financial year 2020 to instil awareness of Shariah risk and guide the business units in identifying Shariah risk and its control measures within their daily operations.

FORWARD-LOOKING VIEW

• Working closely with the relevant stakeholders and strengthening efforts such as developing the Shariah Risk Profiling Methodology and Shariah Non-Compliance Stress Scenarios to ensure that all recently issued BNM policies and guidelines are fully complied with. • The Shariah Risk Awareness training programme to continue in 2021 with an enhancement to be made to incorporate a skill enrichment module with regards to the Shariah ORM processes. Integrated Report 2020 Report Integrated - Berhad RHB Bank

www.rhbgroup.com 58 RHB Bank Berhad - Integrated Report 2020 8. • • • Risk Definition Material Matters: Environmental Stewardship, Climate Change, Financial Performance Sustainable Financing, Financial Inclusion &Education, Good Business Governance, Risk Management, Dynamic Regulatory Landscape, SR • • • SUSTAINABILITY RISK guidelines or controls to manage different issuesidentified under sustainability risk. positive impacts. This will besupported by thedevelopment or enhancement of relevant existing frameworks, policies, by minimisingthefinancingof activities that generate negative impactsand identifying financingopportunitiesthat create Deeper understanding of risksrelated to sustainability issues will improve theGroup’s contribution to sustainabledevelopment with regard to sustainability andclimate change. Group’s businessoperations andportfolios. This will alsotake into account thechangingregulatory landscapethat isemerging Moving forward, theGroup will continue to increase awareness onsustainability andtheimpactof climate change across the can leadto adeclineinthefinancialinstitution’s reputational image, costly litigation or lossof revenue. from theGroup’s own operations as well asthrough customers’, clients’ or investees’ operations. If left unmanaged, theserisks Sustainability Risk is defined as Environmental, Social and Governance (“ESG”) risks, including climate-related risks, arising Sustainability Report 2020. For more information on the policies,guidelinesandcontrols, pleaserefer to the Credit Risk in portion this section and the Sustainable Financing section of our and data. pushing investor demandfor enhanced ESG-related disclosure Apart from the above, ESG investment continued to accelerate, expectations amonginvestors, regulators andconsumers. COVID-19 andclimate change awareness amplifiedESG and impactcouldthe ESG bepotentially extremely high. ESG riskevents may seemunlikely to occur, butif they did, The Group remained cognisant that somesustainability or sustainability agenda. to ‘sustainability risk’ inline with theGroup’s direction and The Group expanded thedefinition of ‘environmental risk’ RISKS AND OPPORTUNITIES RISKS AND 2020 HIGHLIGHTS FORWARD-LOOKING VIEW • • - Among theinitiatives andcontrols putinplace were: Palm Oil (“ISPO”). Sustainable Palm Oil (“RSPO”)andIndonesian Sustainable of Malaysian Sustainable Palm Oil (“MSPO”),Roundtable on international or local standards or principles such as those continued to take place, taking into account publicly endorsed existing sustainability or ESG-related frameworks andpolicies and strived for continuous improvements. Enhancements to To thisend,theGroup adopted aprecautionary approach - related policies were enhanced with theinclusionof ESGrisk- The RHBGroup Credit Policy andlocalcountry credit Thailand. Sectors was implemented for Malaysia, Singapore and The ESGRisk Assessment (“ERA”) tool for ESG-Sensitive Cambodia, LaosandBrunei. implemented across Malaysia, Singapore, Thailand, policies MANAGEMENT RESPONSE into the List of

Prohibited Credits and

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 59 STATEMENTS REVIEW REVIEW INFORMATION

OTHER RISKS Corruption Risk Interest Rate Risk in the Banking Book/Rate of Return Risk in the Banking Book Corruption risk is the risk faced by the Group in the event RHB’s directors, officers, employees, agents or other business partners Interest rate risk/rate of return risk in the banking book refers to are implicated in an act of bribery or corruption, whether directly or the risk to the Group’s earnings and economic value of equity due indirectly, with or without their knowledge and consent/permission, to adverse movements in the interest rate/benchmark rate. The risk to secure, retain or influence an improper business decision or may arise from the mismatches in the timing of repricing of assets and advantage. These abhorrent acts are prohibited by the Group, as they liabilities from both on- and off-balance sheet positions in the banking are violations of the law and the code of ethics. book, changes in slope and shape of the yield curve, basis risk and optionality risk. RHB’s corruption risk is mitigated via the Group’s existing policies and procedures, primarily the Group Code of Ethics & Conduct, Earnings-at-Risk (“EaR”) and Economic Value of Equity (“EVE”) are Anti-Bribery & Corruption Policy, Group Whistleblowing Policy and used to assess interest rate risk/rate of return risk in the banking Guidelines on Gifts & Hospitality. In supplementing the Group’s efforts book. They are computed based on the repricing gap profile of the to ensure good business conduct by its directors, employees, vendors banking book using BNM’s standard template. Assets and liabilities are and other business partners, the Group has put in place several control bucketed based on their remaining tenure to maturity or next reprice mechanisms, not limited to the following: dates. The measurement of EaR and EVE is conducted on a monthly • Core Shared Values (“P.R.I.D.E.”) basis. The Group Asset and Liability Committee (“ALCO”) supports • Procurement Integrity Commitment the Board Committees in establishing policies, strategies and limits • Code of Ethics and Business Conduct for the management of balance sheet risk exposure. The Group Asset • Group Fit & Proper Policy and Liability Management (“ALM”) within Group Risk Management • Group Corporate Sponsorship & Donation Policy supports the Group ALCO in the monthly monitoring and reporting • Policy on Related Party Transactions of the interest rate risk/rate of return risk profile of the banking book. • Group Fraud Risk Management Policy • Whistleblowing or ‘Speak Up’ channels and avenues The primary objective in managing balance sheet risk is to manage • Ethics & Integrity Resource Portal the net interest/profit income and economic value of equity, as well • Awareness & Knowledge Sharing Sessions as ensuring that interest rate risk/rate of return risk exposures are • Readiness assessment vis-a-vis the T.R.U.S.T. framework maintained within defined risk tolerances. In order to achieve a balance between profitability from banking activities and minimising risk to The whistleblowing channel established by the Group earnings and capital from changes in interest rate/benchmark rate, ensures employees are accorded the opportunity to report risk appetite, Management Action Triggers and escalation procedures any issues relating to employee wrongdoing through an are set. Stress testing is also performed regularly to determine the appropriate channel without the threat of repercussions. The adequacy of capital in meeting the impact of extreme interest/ Group’s Whistleblowing Policy and channel can be found at benchmark rate movements on the balance sheet. Such tests are also https://www.rhbgroup.com/others/about-us/index.html?corporate- performed to provide early warnings of potential extreme losses, governance=true facilitating proactive management of interest rate risk/rate of return risk in the banking book in an environment of rapid financial market Ensuring adequate risk mitigation allows the Group to create value for changes. its stakeholders by: • Securing RHB Banking Group’s reputation as a corruption-free Reputational Risk organisation with strong fundamentals and ethical business practices. Reputational risk is defined as the risk of negative publicity regarding • Strengthening RHB Banking Group’s brand promise of Together the conduct of the Group or of any of the entities within the Group or We Progress. its business practices or associations, whether true or not, which will • Safeguarding RHB Banking Group’s assets from mismanagement. adversely affect its revenues, operations or customer base, or require • Improving operational cost efficiency with minimal wastage for costly litigation or other defensive measures. It also undermines public the Group. confidence in the Group, affecting the share price. • Protecting the Group from legal and regulatory penalties such as those imposed by the Corporate Liability Provision introduced via Reputational risk in the Group is managed and controlled through Section 17A of the MACC Act 2009. codes of conduct, governance practices and risk management practices, policies, procedures and training. The Group has developed and implemented a Reputational Risk Management Policy. The key elements in the management of reputational risk include: • Practising good corporate governance and a culture of integrity to promote the execution and achievement of corporate strategies and business objectives.

• Managing reputational risk within a very low-risk appetite with 2020 Report Integrated zero tolerance for incidences that affect the Group’s reputation. • Adopting sound risk management practices that include the practice of building “reputation capital” and earning the goodwill of key stakeholders. • Maintaining proper mechanisms to monitor and escalate material lapses/breaches of internal and regulatory policies/guidelines that may place the Group’s reputation at risk. - Berhad RHB Bank • Maintaining proper channels of communication in dealing with internal and external stakeholders.

www.rhbgroup.com 60 RHB Bank Berhad - Integrated Report 2020 banking seamlessly with usnomatter where they were. both internally andexternally sothat our customers could continue ecosystems while accelerating enhancement efforts inthisarea to ensure minimalto nodisruptions. We alsoleveraged our digital work-from-home arrangements andprotecting our core functions ways of working, includingshiftingamajority of our workforce to we neededto safeguard our employees. This meant adopting new To ensure we could sustainthislevel of activity alsomeant that what was a very challenging year. customers cameoutontop postthepandemicdrove usforward in customers, we uncovered itand we madeit work. Making sure our or knowledge and network of connections as a means to help our just that. If ever there was someavenue to utiliseour expertise initiated special relief programmes to help our customers, we did individuals andbusinesses. Where we could leverage government- rolled outmoratoriums andpayment assistance programmes to help customers. Across our retail andcommercial banking franchises, we landscape threw upcountless opportunitiesfor usto helpour The unprecedented impactof thepandemic onthebanking pandemic was simple-Help Our Customers. Our approach to managingtheimpactof the from our Malaysian operations. Group’s total income was derived to continued to bethemaincontributor income from our Malaysia operations In terms of geographical location, respectively. Banking contributed 11% and 8%, Banking andGroup Investment Banking andGroupwith 18% Business Group Treasury &Global Markets income. This was followed by earning 36% of the Group’s total once againthetop contributor, FY2019. unchanged when compared to business segments were largely revenue contributed by theGroup’s In income. FY2020, with Group In 15%. the FY2020, Retail OPERATIONAL Group F proportions Banking I 88% Corporate S of

was the of

(excluding Singapore) Group International Business Group Retail Banking 19% 3% 3% REVIEW SEGMENTAL ANALYSIS 12% 5% 11% GEOGRAPHICAL TOTAL INCOME BY BUSINESS INCOME BY LOCATION SEGMENT 6% TOTAL 2019 2019 Group Business Banking the challenges ahead within their respective operational areas. outline how they are progressing their strategies andnavigating In thesectionsahead,Group’s various businessdivisions convenient, seamlessandenrichedbankingexperiences. our Agile@Scale capabilitiesto enable our customers to enjoy on our product and service offerings by leveraging technology and digital adoption andengagement, we will naturally improve further With consumer preferences having gravitated towards higher of opportunitiesto continue creating value for our stakeholders. and innovation to ensure we are ableto capture the greatest number significantly altered landscapeandthis will require perseverance Nevertheless, we acknowledge that we are already operating ina for theeconomy andthebankingsector. confidence in2021 shouldthenimprovewhich growth prospects This positive development will boost business andconsumer potential given the ongoing roll-out of COVID-19 vaccines. lingering pandemic, we remain cautiously optimistic of theupside due to uneven economic recoveries around the world andthe While prospects for thecoming year will continue to beuncertain WAYTHE AHEAD 15% Group Insurance Malaysia 89% 37% Group Corporate Banking 18% Overseas 3% Singapore 4% 5% 12% 11% GEOGRAPHICAL TOTAL INCOME BY BUSINESS INCOME BY LOCATION SEGMENT 8% TOTAL 2020 2020 Group Treasury &Global Markets Group Investment Banking 15% 88% 36% WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 61 STATEMENTS REVIEW REVIEW INFORMATION

GROUP RETAIL BANKING

Who We Are Rakesh Kaul Head, Group Retail Banking Group Retail Banking provides conventional and Shariah- compliant consumer banking solutions, positioning ourselves as the preferred banking partner for our retail customers. OVERALL PERFORMANCE: We provide a broad spectrum of products and services ranging from Wealth Management, Bancassurance, Mortgages, Auto Financing and ASB Financing to Personal Financing, Credit Despite the pandemic, the Cards, Payments and Deposits. Group Retail Banking differentiates itself in the marketplace underlying business momentum by leveraging the Agile way of working to deliver superior products and services to customers. remained very solid. Gross loans The Agile working culture has helped us produce digital-first solutions, a component of the grew by 5.4% and customer business that has overtaken traditional ways of banking, across most of our retail channels. deposits grew by 15.5% in 2020.

We remained resilient in the face of the pandemic by leveraging our digital solutions as well Due to high allowances for credit as personalised and innovative services to help support our customers, especially those who losses, however pre-tax profit was were impacted financially during the pandemic. lower by 21.8% to RM765.1 million.

Total Income

RM2,554.3 million

Pre-Tax Profit

RM765.1 million

Total Retail Customers

AWARDS & RECOGNITION 3.9 million Asian Banking & Finance Retail Banking Award 2020 • Mortgage & Home Loan Product of the Year (Malaysia) - MyHome Ecosystem • Credit Card Initiative of the Year (Malaysia) - Motion Code Credit Card Gross Loans

International Business Award 2020 • Best Retail Bank Malaysia 2020 billion

RM95.0 2020 Report Integrated

Malaysian e-Payments Excellence Awards (“MEEA”) • Top JomPAY Acquirers • Top FPX Acquirers Customer Deposits

The Digital Banker Global Retail Banking Innovation Award - Berhad RHB Bank billion • Best Product Innovation - Motion Code Credit Card RM66.7

www.rhbgroup.com 62 RHB Bank Berhad - Integrated Report 2020 CONSUMER LIFESTYLE 51% 33% SEGMENT RETAIL CUSTOMERS’ DEPOSITS RETAIL GROSS LOANS CONTRIBUTION CONTRIBUTION GROUP GROSS Retail Retail RM203.5 RM186.1 CUSTOMERS’ BILLION BILLION DEPOSITS GROUP LOANS GROUP consumer behaviour dueto thepandemic. Lazada and Partnered with leading onlinemarketplaces asShopee, such cards. the Asia-Pacific to produce eco-friendly recycled plastic debit WWF Embedded good sustainability practices by launchingthe RHB traditional static three-digit code. Card/-i featuring adynamicCVV Continued drivingour innovative RHBMotion Code Credit Cards Others Others Debit Card-i, becoming thefirst bankinMalaysia and 67% Taobao inresponse to themarked change in 49% KEY BUSINESSINITIATIVES RETAIL RETAIL LOANS &FINANCING RETAIL DEPOSITS GROWTH security 2018 2018 BANKING HOW WECREATE VALUE 75% 25% 52.5 66% 34% 84.6 Conventional Conventional code, inplace of (RM’BILLION) (RM’BILLION) GROWTH 2019 2019 66% 34% 57.7 62% 38% 90.1

2020 2020 Islamic Islamic the

68% 32% 66.7 59% 41% 95.0

growth in2020for RHB witnessed 80% year-on-year spending were issued. overall onlinespending. contributing to a10% year-on-year growth in Over card outpaced the industry’s average by 22%. The proportion of onlinespendingusingthe (“CIF”) increased by RHB Motion Code Credit Card/-i Cards-in-Force 20,500RHB 31% RETAIL CUSTOMERS’ DEPOSITS 71% COMPOSITION OF PRODUCT Auto Finance Mortgages RETAIL GROSS LOANS BY OUTCOMES COMPOSITION RETAIL GROSS CASA WWF CUSTOMERS’ BILLION BILLION Shopee, Lazadaand over RM95.0 RM66.7 DEPOSITS LOANS RETAIL 100% Debit Card-i cards Unsecured (PF, CC) ASB year-on-year. FD 9% 69% 8% Taobao, 12%

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 63 STATEMENTS REVIEW REVIEW INFORMATION

SEGMENT KEY BUSINESS INITIATIVES OUTCOMES

LIFESTYLE Personal Finance CONSUMER • Enhanced overall asset quality by building on • Our portfolio composition ratio of Deduction at Source the deduction at source portfolio. vs Non-Deduction at Source improved from 55% in 2019 • Continued enhancing credit underwriting to 57% in 2020. through risk-based pricing.

HOMEOWNERS Homeowner Ecosystem • Added a wider selection of payment • Mortgage portfolio grew by 7.0%. solutions to the RHB MyHome website, • The MyHome App contributed 39% of new mortgage and forged new partnerships with interior originations in 2020, compared with 20% in 2019. design and renovation service providers. • Partnered with solution provider Finology allowing instant online approval in principle of mortgage loan applications.

AFFLUENT • Widened product spread for investors • Launched Malaysian Ringgit denominated Autocallable through new and innovative offerings. Structured Investment and Perpetual Sukuk/Bonds. • Continued to grow the Premier banking • Wealth fee income grew by 43% in 2020. segment by attracting business owners • Grew premier base by 14%, with 79,000 Premier banking and High Net Worth individuals through customers. enhanced Premier Proposition. • Introduced Premier Regional Recognition which allows seamless regional account opening (CASA). • Launched preferential product pricing for existing Premier customers for Hire Purchase, Share Trading, Will Writing and Trustees products. • Onboarded ten new Premier Partnerships offering exclusive discounts and privileges to our Premier customers.

AUTO • Enhanced collaboration with automotive • Auto Finance grew by 7.4%, outpacing industry growth of FINANCING industry players via unique offerings such 5.6% in 2020. as variable rate Auto Finance products and • Auto Finance market share grew by 0.2% to 5.4% in providing Instant Approval In Principle to 2020. hirers.

BANCASSURANCE • Entered new BancaTakaful agreement with • With the new BancaTakaful partnership, advisory Syarikat Takaful Malaysia Bhd (“STMB”) in products developed by STMB are being added to our August 2020. product offerings. • Introduced e-submission and remote sales • The e-submission process has accelerated time taken for process for Banca life products. enrolment and has improved customer experience. • Maintained credit insurance offerings.

DEPOSITS • Enhanced onboarding process and • Total deposits showed strong growth, outpacing the streamlined deposits product suite. industry over the past three years, with market share on • Focused on providing tailored payroll an increasing trend from 7.3% in 2018 to 8.3% in 2020. 2020 Report Integrated solutions to SME and Corporate • Total deposits grew by 15.5% from RM57.7 billion in customers through expansion of our Joy@ 2019 to RM66.7 billion in 2020. Work programme. • CASA ratio improved to 31.1% in 2020 from 29.2% in • Enhancements to the Multi-Currency 2019 through our customer segmentation approach. Account (“MCA”) Debit Card included • Instant issuance of MCA Debit cards has improved

instant issuance at branches and improved customer experience. - Berhad RHB Bank onboarding process for our Premier customers.

www.rhbgroup.com 64 RHB Bank Berhad - Integrated Report 2020 PROGRESS AGAINST FIT22STRATEGIC INITIATIVES gap with retail assets Boost retail depositsto narrow the leveraging SMEcustomer base Grow Affluent andWealth business, superior customer service Execute RHBWay to deliver differentiation customer-centricity to create Build ecosystems through enhanced efficiencies, reach andperformance of theFuture’ strategies for greater ‘Community Banking’ and‘Branch Improve services andsales via 19 serving our customers safely andeffectively. branches at any one time. Our focus shifted to three key initiatives to enable us to continue in high-riskareas, shortening openinghours andlimitingthenumber of customers allowed into with strictSOPs inplace at allour physical touchpoints, includingby temporarily closingbranches During thepandemic,our top priority was puttingcustomer andemployee safety at theforefront • minimising exposure. time at thebranch and reducingphysical waiting ahead of time,thereby banking appointments customers to booktheir system that allowed real-time digitalqueue Malaysia to provide a also thefirst bankin restrictions.RHB was the movement-related customer needsdespite tremendously inmeeting digital ecosystem helped investments inbuildinga service. Our significant best possiblecustomer experiences to deliver the activating new digital swiftly enablingand to simplify our processes, continuedchannels, we Across allour business Solutions Accelerate our Digital Navigating COVID-19 andtheChallenges Presented FIT22 INITIATIVES GROUP • within theseindustries. was offered to customers and maximumassistance impacted wereidentified were mostseverely addition, industriesthat and structured. In provided wereconsistent that theresponses we programmes andensured payment assistance debt advisory and offered comprehensive difficult period. The Bank customers weatherthis objective of assistingour the pandemic with the related matters during on customer credit- fast decision-making War Room which enabled We mobilisedaCredit Programme Payment Assistance RETAIL • Loan-to-deposit• ratio improved to 142%in2020from 156%in2019. Deposits• grew • Total • • • • • Wealth andbancassurance fee income increased by 14%in2020. compared to 12%in2019. CASA grew by 23%in2020from RM16.9billionin2019to RM20.7billionin2020. delivering superior customer service. Recipient of multipleCustomer Experience Excellence Awards as validation of our efforts in delivered closeto RM10millioninsavings through Operational Excellence projects. NPS improved to +11points, ranking us4 68%of - - Our Homeowners’ ecosystem continued to gaintraction: 16% from RM56billionin2019to RM66billionin2020. virtually) ledby respective regions andbranches, contributing to branch AUM growth of Approximately 2,300community events were heldthroughout 2020(both physically and 39% of loanacceptances were via RHBMyHome Acceptance vs 20%in2019. BANKING Affluent customer leadsreferred digitally • by pandemic. finances during the personal andbusiness to manage andsustain share insights onhow and industry experts to speakers from theBank which engaged qualified the RHBMoney Chat, virtual events suchas organisedand webinars the economic crisis. We help Malaysians navigate financial guidance to programme by providing the payment assistance the Bank went beyond financial institution, As aresponsible Financial Guidance 15.5%from RM57.7billionin2019to RM66.7billionin2020. basegrew

by OUTCOMES through RHBPartners 15,000 th outof the16banksranked inMalaysia. We also with total communities around us. meet andexceed theevolving needsof the the Group will ensure that itcontinues to has become muchmore important and are also cognisant that community banking With thepandemicasbackdrop, we online experiences. of customers who are more accustomed to attracting a younger andtech-savvy cohort more convenience andefficiency, while also customer onboarding that will provide even is leadingtowards fulldigitalisation of Electronic Know-Your-Customer (“e-KYC”) For how we distribute our products and services. approach bankingbutalsotherefinement of This will not only require changinghow we digitally connected services. which will provide seamless,convenient and therefore to reimagine customer journeys digital-first banking.Our response is behaviour that isincreasingly prioritising adapting to radically changingconsumer The retail bankingsector isconstantly

OUTLOOK AND PROSPECTSOUTLOOK AND example, AUM growing by vs 25%in2019. BNM’s call 18.8%in2020 to introduce

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 65 STATEMENTS REVIEW REVIEW INFORMATION

GROUP BUSINESS AND

TRANSACTION BANKING Jeffery Ng Eow Oo Head, Group Business and Transaction Banking

Who We Are OVERALL Group Business & Transaction Banking (“GBTB”) comprises the PERFORMANCE: Group Business Banking and the Group Transaction Banking Group Business and Transaction segments. Banking recorded pre-tax profit of

Group Business Banking provides financing solutions to SMEs and family-owned enterprises, RM230.8 million, 51.7% lower than while Group Transaction Banking caters to trade and cash management solutions for local the RM477.7 million recorded in SMEs, large corporates and financial institutions. 2019 due to higher allowances for credit losses on loans and lower GBTB offers a wide range of business solutions including financing, deposits, cash non-interest income. management solutions and trade finance and services including supply chain financing solutions, foreign exchange, remittance and interbank business. Despite the OPR cuts and We aspire to be the preferred SME and Transaction Bank in Malaysia by leveraging our challenging market environment, SME Ecosystem to enhance the capabilities and competitiveness of the SMEs towards total income and maintainable improving the efficiency of their businesses. operating profit were above 2019 levels largely due to higher asset and deposit base coupled with better margins for assets. Deposits grew by 16.1% mainly due to Current Account Savings Account (“CASA”) growth while the gross impaired loans ratio remained stable, improving to 2.29%.

Total Income

RM1,136.5 million

Net Interest Income Growth

AWARDS & RECOGNITION 3.2% Syarikat Jaminan Pembiayaan Perniagaan Bhd (“SJPP”) 2020 Integrated Report 2020 Report Integrated • Top Performance Award Pre-Tax Profit Alpha Southeast Asia Awards 2020 • Best Digital Bank in Malaysia • Best Trade Finance Bank in Malaysia RM230.8 million - Berhad RHB Bank

Retail Banker International Asia Trailblazer Summit and Awards 2020 • Highly Commended – Excellence in SME Banking Category

www.rhbgroup.com 66 RHB Bank Berhad - Integrated Report 2020 KEY BUSINESSINITIATIVES coverage comprehensive end-to-end management with Enhanced asset quality efficiency profitability &cost of working to drive waythe Agile and Leveraged digitalisation key differentiator connected ecosystem as Continued to buildon growth Small Businesses to drive Expanded our focus on GBTB TOTALINCOME 2018

1,066 (RM’MILLION) 2019 1,126 2020 1,137 GROUP BUSINESS AND TRANSACTION BANKING GBTB GROSS LOANS 2018

25,249 (RM’MILLION) 2019 • • Since theinception of • • • • • Pushing On with Our Digital Journey Gross Loans grew • 25,884

113,000 SMEs within theconnected ecosystem. In 2020, we onboarded more than23,000new-to-bank SMEs and now have more than and Retail &Services. management andtargets sectors suchasEducation, Manufacturing, Property Management partners that cover theareas of payroll, accounting, point of salesandinventory base. Our direct Application Programming Interface (“API”) isintegrated with solution expanded our partnerships with uniquesolutionproviders to help widen our customer Our connected ecosystem continues to beastandoutsolutionfor SMEs. In 2020, we 2020 20.5%. the Special Relief from SMEs dueto increased engagement with our customers, as well asimplementation of processing, from 40%in2019to 63%in2020. Continuously increased operational efficiency by improving turnaround timefor trade bills due to various recovery strategies that reduced our non-performing loanportfolio. Substantial improvements ingross impaired loansratio to 2.29%from 2.82%in2019 Financing andthelaunchof More thantripledthedigitalacquisition of smallticket financing SME via our SME Online new-to-bank, andaddedmore RM213millionto than CASA under management. consecutive year to more than10,000customers, of which approximately 3,200are e-Solutions for SMEs have doubledthenumber of customers we serve for thesecond 28,818 HOW WECREATE VALUE 2018 Fund andother by 14,577 RM2.9billion(11.3%) Retail theFIT22strategy 2019 15,164 2020 our

16,568 SME SEGMENT (RM’MILLION) mobileappfor government schemes. OUTCOMES in2018,assets have grown by 2018 Middle Market year-on-year, driven by 4,415 SMEfinancing. 2019 4,699 2020 5,661 strong momentum GBTB CUSTOMERS’ 2018 RM4.9billionor DEPOSITS 25,301 (RM’MILLION) 2019 28,294 2020 32,839

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 67 STATEMENTS REVIEW REVIEW INFORMATION

PROGRESS AGAINST FIT22 STRATEGIC INITIATIVES Navigating COVID-19 and the 19 FIT22 INITIATIVES OUTCOMES Challenges Presented

Continue to win in SME Space Market share as at December 2020 The six-month moratorium introduced stood at 9.66% (December 2019: by the government gave GBTB the 9.56%). We have increased our market opportunity to re-engage with customers share from 9.03% since inception of facing financial difficulties and to assess FIT22. Today we are the 4th largest SME what they needed. We extended payment Bank. assistance to those businesses struggling financially, whereas payment assistance was aimed at helping microenterprises weather the storm. Additionally, we Grow contribution to 20% of Contribution of 17.3% to Group continued to provide our own financing Group’s total domestic loans domestic loans. through the RHB Biz Relief Financing by 2022 facility and facilitated government assistance for SMEs through the Special Relief Facility.

The movement restrictions to contain the pandemic also helped accelerate GBTB SME ECOSYSTEM UPDATES the transition to digital transactions and 2019 2020 pushed us to continue improving our processes from the back to the front office. Loans disbursed to SMEs RM4.8 billion RM5.4 billion With customers now being able to apply SME loan market share 9.6% 9.7% for financing online or through our mobile Total no. of SME customers 200,000 208,000 applications, the focus is very much on Reflex customers 100,000 113,000 improving our turnaround time, upskilling Business Solution Partners Accounting Interfaced with new our relationship managers, reducing Point of Sales technology partners (Talenox, manual processes and introducing robotic Inventory Management Storehub, SQL and iKEY) in process automation wherever possible. Payroll & HR 2020 SME ecosystem comprises: • RHB Reflex and • Digitalisation of onboarding Reflex Mobile Cash process via SME Web Management Portal and RHB Financing • Financial Supply Chain (SME) Mobile App • Financing • Initiatives and integration • SME e-Solutions with new technology • SME Digital Journey partners to drive acquisition SME e-Solutions platform >6,000 >10,000 customers

OUTLOOK AND PROSPECTS Going forward, our main priority will be on improving turnaround time in both approvals and disbursements as a means to further Integrated Report 2020 Report Integrated improve our competitiveness within the market. This will be carried out through the enhancement of our credit management process, which will simplify processes and enable speedier turnaround times. Our digital initiatives in the area of smaller lending amounts and the SME ecosystem will continue to lend us competitive advantages.

In terms of business growth, we have identified industries and regional growth areas to expand into in the middle market and commercial sectors. In the context of asset quality and considering the challenges SMEs will experience throughout 2021, GBTB will - Berhad RHB Bank closely monitor our assets and will proactively engage with and offer assistance to our customers where needed.

www.rhbgroup.com 68 RHB Bank Berhad - Integrated Report 2020 GROUP WHOLESALE BANKING WHOLESALE GROUP GROUP CORPORATE BANKINGGROUP customer experiences that are thehallmarksof our long-term relationships ourwith clients. clients’ needs and to progress together. We have built on the trust given by delivering excellent The businessprovides bespoke structured financing and win-win value propositions to meet our share; protecting asset quality;andstrengthening compliance andriskculture. new-to-bank clients; continuing to drive ancillary businessesacross theGroup to grow wallet market share position in Malaysia, capitalising on our current clientele base; as well as acquiring We aspire to continue growing responsibly andmaintaining our top three corporate lending and Thailand andpartner with our clients incountries where we have presence. presence, extends across Southeast Asia to supportour clients’ growth regionally. Optimising our regional hedging, project financingandsyndication, as well asfundingof corporate exercises. Our reach Financial corporate clients listed onstock exchanges locally andabroad. Conventional andShariah-compliant financingsolutionsto Group Corporate Banking provides acomprehensive suite of WeWho Are solutions we selectively provided OPERATIONAL

seize include opportunities working to capital grow

funding, in countries REVIEW trade such financing, as Singapore, foreign Indonesia currency

expected credit losses. largely dueto higher allowances for a profit registered at RM372.2million, growth supported by loansandassets compared to corresponding year for the year increased by 2.0% Group Corporate Banking’s revenue PERFORMANCE: OVERALL decrease Head, Group Corporate Banking 2018 2018 HOW WECREATE VALUE

962.7 51,368.8 Wendy Ting Wei Ling of LOANS& ASSETS TOTAL INCOME

1.5%. of (RM’MILLION) (RM’MILLION)

51.7% 2019 2019

934.8 53,723.5 However, year-on-year, 2020 2020 953.3 54,507.2 pre-tax

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 69 STATEMENTS REVIEW REVIEW INFORMATION

KEY BUSINESS INITIATIVES OUTCOMES Navigating COVID-19 and the 19 Challenges Presented Deployment of selective • New business acquisitions increased by strategies for growth and circa 75.0% year-on-year while financial The continued uncertainty in the global new business acquisitions assets recorded 1.5% growth year-on- and domestic economy and intense year. competition, coupled with the prolonged adverse conditions brought on by the COVID-19 pandemic, made it a particularly Continued to intensify • Deployment of cash management challenging year for Group Corporate collaboration with internal products and services to extend reach to Banking. We continued to strive to overcome these challenges by following product partners and both public and private sectors resulted in CASA growth of 38.0% year-on-year. through with our selective penetration businesses to deliver strategies for new-to-bank mid-cap holistic financial solutions clients and increasing collaboration with product partners to deepen wallet share and proactively engaging with customers vulnerable to the impact of COVID-19 to Protected asset quality • Payment assistance granted to 22.0% of ensure a mutually beneficial outcome. and proactively managed total Group Corporate Banking clients during the pandemic. watchlist accounts with In addition, we also established a task force constant engagement with to proactively identify customers in need clients of repayment assistance and provide the appropriate financing solutions to meet their financial obligations. PROGRESS AGAINST FIT22 STRATEGIC INITIATIVES FIT22 INITIATIVES OUTCOMES

To deepen wallet share of large-cap • We recorded 0.6% and 1.7% segment and grow mid-cap segment asset growth for large-cap and assets through intensification of mid-cap segments with marginal collaborative action with product growth in fee-based income. partners, and deployment of ‘go to market’ approaches to bundle a comprehensive range of products and services

OUTLOOK AND PROSPECTS We anticipate further challenges due to the COVID-19 pandemic that may impact certain vulnerable sectors and will proactively manage, control and mitigate the risks to better support our customers. We will continue to focus on our existing relationships with our clients to purposefully cast a wider net while targeting to continue to grow mid-cap and large-cap companies to enhance our lending base cum risk-adjusted return on capital.

The improvements and enhancements to the efficiency of our middle office capabilities is an ongoing process, driven by the Group- wide digitalisation strategy and other new initiatives in the pipeline, demonstrating our efforts to further streamline administrative

functions and credit processes to improve productivity and enhance customer service delivery on the back of a strong risk and 2020 Report Integrated compliance culture.

Looking ahead, Green Financing is expected to gain more traction as investors look for financial instruments that will produce positive and favourable outcomes. We will continue to drive our Green Financing commitment and promote funding for activities that will

support the transition to a low-carbon economy. Our commitment to supporting customers who are undertaking green economic - Berhad RHB Bank activities is evident from the 38% increase registered for Green Financing in 2020.

www.rhbgroup.com 70 RHB Bank Berhad - Integrated Report 2020 GROUP GROUP TREASURY AND GLOBAL MARKETS returns for theGroup. In addition,GTGM invests theGroup’s excess liquidity andcapitalto optimise its assets growth demandsas well asitsshortterm liabilitiesandobligations. liquidity positioninorder to ensure that theGroup hasaccess to liquidity to meet GTGM isalsoresponsible to manage RHBBanking Group’s overall fundingand services through digitalofferings to provide convenience. products that meet our customers’ requirements andimproving delivery of our customer value propositions, adopting anoutside-inapproach indeveloping Our customer centricity approach continues to drive our focus to enhance Thailand. our diverse customers inMalaysia, Singapore, Indonesia and catering to thefunding,hedgingandinvestment needsof Islamic Treasury, Money andCapitalMarket Instruments Foreignincluding Exchange (“FX”),Structured Products, comprehensive suite of Treasury products andsolutions Group Treasury andGlobal Markets (“GTGM”) offers a WeWho Are GROUP

WHOLESALE BANKING

of reduction inother operating expenses by growth innet income of 1.9%and on-year to RM1,266.3million,driven Our pre-tax profit increased 0.9% year- net interest income (“NII”). but was offset by a17.2%decrease in from investment andtrading activities, on-year innon-interest income (“NOII”) driven by strong growth of 32.2% year- year-on-year to RM1,426.7million, GTGM’s net income increased by 1.9% PERFORMANCE: OVERALL previous year. as compared to a write-back inthe credit lossesonfinancialinvestments

RM1,266.3 RM1,426.7 1.5%, Non-Interest Income Growth Securities Portfolio Growth Mohd Rashid Mohamad offset Group Treasurer Pre-Tax Profit 32.2% Total Income 7.6% by

higher

allowances million million for

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 71 STATEMENTS REVIEW REVIEW INFORMATION

HOW WE CREATE VALUE

FVTPL 4% GTGM TOTAL INCOME & PRE-TAX PROFIT GROWTH OVER TIME AC (RM’MILLION) 20%

TOTAL GTGM 1,427

FIXED INCOME 1,401 1,377 1,266 1,255 PORTFOLIO SIZE 1,217 Total Income

Pre-Tax Profit FVOCI 76% 2018 2019 2020

KEY BUSINESS INITIATIVES OUTCOMES

Sustained product & Product and process innovation is a constant Group Treasury and Global Markets sales process innovation initiative and the COVID-19 pandemic intensified our efforts to ensure we consistently provided customers with value added products and solutions delivered conveniently and executed efficiently irrespective of market conditions. In 2020, we helped alleviate supply chain disruption by providing flexibility in meeting our customers’ requirements through streamlining credit approvals to ensure expeditious access to FX facilities.

We launched RHB Live FX via Reflex in September 2020 to offer Corporate and Commercial Digitalising the customer’s customers competitive real-time foreign exchange (“FX”) rates on a single online digital forex journey platform, allowing our customers to monitor, book and execute FX transactions online. The system is designed for transaction convenience by providing simple and seamless execution for spot and forward contracts, more competitive pricing and operational efficiency to enhance customers’ FX experience. The digital platform has garnered strong customer traction, registering an average of six deals per customer since launch.

Providing innovative yield- In 2020, we focused on sales and distribution of Bonds/Sukuk and yield-enhancing enhancing structured structured products to targeted investor groups. products, bonds and sukuk Equities Linked (“ELI”) and Autocallable structured investment products were launched to offer investors a low entry point to access the equity market and benefit from very attractive company valuations. We saw strong take-up from High Net Worth (“HNW”) clients, registering year-on-year volume growth of 26% for our structured investment products.

Our Debt Market teams crafted innovative capital instruments to better manage the capital and liquidity requirements of issuers through the issuance of Perpetual and ESG Bonds and Sukuk, while providing investors with superior yielding assets to mitigate against lower trending interest rates. Integrated Report 2020 Report Integrated

Capitalising on trading The Trading desk successfully navigated extreme market volatility during the year by opportunities implementing a disciplined and well-executed structured trading strategy, contributing to a 15% increase in Return on Equity (“ROE”) for the desk. - Berhad RHB Bank

www.rhbgroup.com 72 RHB Bank Berhad - Integrated Report 2020 a market events to ensure we identify, manage and mitigate riskeffectively. GTGM’s technological transformation will alsoremain GTGM will continue to prioritisetheinterests of our customers andstakeholders andexercise steadfast vigilance with regard to aligned with thehigher economic growth trajectory. invested instrengthening customer-centricity by delivering relevant Treasury products andsolutions with simplicity andhighefficacy, 2021 is expected to support business activities and provide further catalysts to Corporatethe and Commercial sector. We are fully In Malaysia, themultiplier effect from government infrastructure investment from thehigher development expenditure plannedfor strengthen our commitment to delivering convenience, enhancing value andbuildingtrust with our customers andstakeholders. KEY BUSINESSINITIATIVES operating costs Active management of costs Optimisation of funding 19 capital The unprecedented economic challenges brought onby theCOVID-19 pandemicledto significant businessdisruption, curtailed based GTGM alsosuccessfully managed itsmarket andcredit exposure by applyingdisciplinedtacticaltrading andinvestment practices business cycle disruption following theCOVID-19 pandemic. recommendations andrestructuring andhedgingsolutionsto increase awareness of new market opportunitiesandblunt theeffect of stakeholders. a robust andcompetitively priced liquidity positionto meet expected as well asunforeseen requirements of our customers and For effectively mitigating againsttheelevated riskfrom uncertain market conditions. Given thisscenario, GTGM pivoted itsbusinessstrategy to capitaliseonuniqueopportunitiesfrom new economic challenges while political uncertainties. the pandemicandcontinued to bedriven by other riskfactors suchastheUSandChinatrade war, geopolitical tension anddomestic via Our Corporate andCommercial customers. key

Reflex

instance, focus sales Navigating COVID-19 andtheChallenges Presented on investment sound was in teams 2021 we designed Asset embarked were GROUP and in tandem Liability led fully to to deliver upon

immersed an with

Management acute a

transaction RHB digitalisation

WHOLESALE BANKING converting our usualmarket outlookupdate event into a webinar to reach a wider audience. pandemic. eventual normalisation of interest rates when theeconomy recovers from theeffects of the of Overnight Policy Rate (“OPR”)cuts while positioning ourselves to benefit from the of thefundingcosts optimisation plan. This provided somebuffer to cushionthe impact quality liquidassets. We alsohedged long-term assets andshort-term liabilitiesaspart funding andentered into long-term repurchase agreements leveraging our excess high- pricing for theGroup. We capitalisedonthelow interest rate environment to manage our to theadvertising of We improved businessefficiency by reallocating budgets for travelling andcustomer visits The Funding deskcontinuously deterioration in Banking providing (“ALM”) convenience OUTLOOK AND PROSPECTSOUTLOOK AND Group’s roadmap in strategies. our cross-border

FIT22 theRHBLive FXplatform to create greater customers to at embolden competitive strategic We

implemented optimised fundingcosts to enablecompetitive product trade with our initiatives. flows. effective real-time OUTCOMES

customer Financial prudent Our FX bespoke

value

rates digitalisation ALM market proposition. on FX, strategies a volatility Interest single awareness, as journey online Within to

spiked Rate ensure

will digital this, and from intensify well as we Commodities RHB platform the maintained

Live start as we for FX of

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 73 STATEMENTS REVIEW REVIEW INFORMATION

GROUP INVESTMENT BANKING

Who We Are RHB Investment Bank is one of the key capital market players in Malaysia with dominant market share across key capital market Jaimie Sia Zui Keng Acting Chief Executive Officer of products. In 2020, RHB Investment Bank closed the year with RHB Investment Bank Berhad and Top 3 league table positions in Ringgit Bonds, Sukuk, M&A and Acting Head, Group Investment Banking RHB Banking Group Equity Broking as well as Top 5 in Equity Capital Markets and Call Warrants in Malaysia. OVERALL PERFORMANCE: RHB Investment Bank offers a full range of capital market products and services covering primary market (advisory and fundraising via equity and debt instruments) and secondary Group Investment Banking recorded market (securities trading for both institutional and retail clients). The Group Investment pre-tax profit of RM154.5 million in Banking (“GIB”) team of RHB Banking Group comprises experienced deal origination and 2020, which was significantly higher product specialists and is supported by an award-winning research team. The team leverages than the pre-tax profit for 2019 of the RHB Banking Group’s regional platform to provide cross-border transactional services to RM1.0 million, on the back of the strong clients across ASEAN. performance of the Retail Equities business in Malaysia. Total income was RM627.7 million, 42.5% higher than the RM440.6 million recorded in 2019.

Total Income

RM627.7 million

Non-Interest Income Composition 88%

Pre-Tax Profit

RM154.5 million

AWARDS & RECOGNITION

Bursa Excellence Awards 2020 The EDGE Best Deal and Call Awards 2020 14th Annual Best Deal & Solution Awards • Best Retail Equities Participating • Best Share Placement 2020 Organisation – Investment Bank (Champion) Sunway REIT’s RM710.0 million Equity • Best Local Currency Infrastructure Sukuk

• Best Retail Derivatives Trading Participant Private Placement Pelabuhan Tanjung Pelepas Berhad’s 2020 Report Integrated (Champion) (Principal Adviser, Joint Placement Agent & RM1.895 billion Sukuk Murahabah Joint Bookrunner) (Tranche 1 & 2) Islamic MTN IFR Asia Awards 2020 (Sole Principal Adviser, Sole Lead Arranger, • Malaysia Capital Markets Deal The Asset Triple A Islamic Finance Awards Lead Manager & Bookrunner) MR D.I.Y Group (M) Berhad’s RM1.5 • Best ASEAN Green SRI Sukuk • Best Islamic Finance Project Finance of

billion IPO Pasukhas Green Assets’ RM17.0 million The Year - Berhad RHB Bank (Joint Global Coordinator, Joint Bookrunner, Green Sukuk Pengerang LNG (Two) Berhad’s RM1.7 Joint Managing Underwriter & Joint (Sole Principal Adviser, Sole Lead Arranger million Project Financing Sukuk Murabahah Underwriter) & Sole Lead Manager) (Lead Manager)

www.rhbgroup.com 74 RHB Bank Berhad - Integrated Report 2020 KEY BUSINESSINITIATIVES excellence Improving operational position inRetail Equities Maintained leadership capital markets Market dominance inthe client coverage Wider andmore effective LEAGUE TABLES/RANKINGS (AS AT 31DECEMBER 2020) (source: Bursa, Bloomberg &RHB) Ringgit Bonds Ringgit Sukuk Mergers & AcquisitionsMergers Equity CapitalMarkets Equity(by Broking volume) Equity Broking (by value) Call Warrants GROUP

WHOLESALE BANKING We alsocompleted theRM1.5billionIPOof • Leading positioninfee share of • • • • • • Secured 27mandates (with total dealsize of • • Sunway Berhad, thelargest rights issueexercise inMalaysia in2020. be listed onBursa Securities since 2017,as well astheRM977.8millionRights Issue for 2019. new accounts were openedandabout21,000accounts were reactivated inthe whole of Dealogic) (“e-KYC”) for digitalclient onboarding. Automating processes, especially theimplementation of Electronic Know-Your-Customer performance. Implementation of initiatives to lower systems cost without compromising on during theMCO periodfrom March to accounts andreactivating more than40,000dormant accounts (with no trading in 2019) Gained traction inonlineaccounts for customers by 13,000new openingalmost industry growth by 10.3%Q-o-Qthis year. Average Trade Value (“ATV”) in Q2 andQ32020.Our foreign retail ATV surpassed Ranked asNo. 1amongst9investment banksand21brokers inlocalandforeign retail cap. The market leader inCapital Markets by completed dealcount for mid-capandlarge- selling of RHBBanking Group’s core products. which increased thenumber of Investment Bank (“IB”)mandates secured andthecross- Broadened client coverage with 84more clients across large-cap, mid-capandsmall-cap during thepeakof (source: Dealogic) HOW WECREATE VALUE theMovement Control Order Position 3 3 3 5 3 4 4

wallet (mid-cap: OUTCOMES June alone.In comparison, approximately RM10.72billion) andcompleted ten deals Mr (“MCO”) period D.I.Y. Group Berhad, thelargest IPOto Top 3,large-cap: No. 1).(source: Market Share (%) from March to 13.7 14.4 26.0 10.8 10.3 12.2 9.2 June 2020. 29,000

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 75 STATEMENTS REVIEW REVIEW INFORMATION

PROGRESS AGAINST FIT22 STRATEGIC INITIATIVES FIT22 INITIATIVES OUTCOMES

Continue to maintain share Defended #1 position for fee share of wallet, which increased from 23.4% in 2018 to 25.2% of wallet for large-cap from in 2019, despite a drop to 23.6% in 2020. 93 listed corporates to achieve a minimum product holding of 4.3

Enhance penetration into Focused on the mid-cap market segment as a key business driver supported by a dedicated mid-cap by covering 11% Corporate Finance team. of listed companies on Bursa Malaysia Onboarded and mandated 23 new mid-cap clients in 2020.

19 Navigating COVID-19 and the Challenges Presented

At the peak of the first MCO, GIB had as many as 80% of its Coverage and Product teams working from home as we continued to reach out to corporate clients to close or discuss new deals. Our remisiers were also primarily working from home during the MCO and were able to effectively support our Retail clients through our online platform.

Despite the challenges posed by the pandemic, GIB was able to identify and capitalise on pockets of opportunities during the pandemic to increase our market share. The lower interest rate environment, in particular, was beneficial for certain asset classes and the origination of specific deal types while the bull run on Bursa Malaysia due to increased retail participation helped boost our securities income.

OUTLOOK AND PROSPECTS We expect the mid-cap segment, and increasingly the small-cap segment, to continue to be important drivers of revenue to complement our strength in the large-cap space. Hence, we remain focused on delivering strongly in these areas in 2021 by proactively generating ideas with product partners and creating value for our clients. This will allow us to build a healthy deal pipeline and increase cross- selling of RHB Banking Group products.

We will also continue to drive technological improvements in our trading business to ensure the reliability of our systems and will be increasingly digitalising manual processes in our operations. Together with the traction gained in online account acquisition, RHBIB aims to maintain our position as the No. 1 retail broker in Malaysia.

GIB is exploring an expansion of our revenue stream in equity derivatives through the launch of new products, in line with Bursa Malaysia’s recent expansion of its market-making framework to increase efficiency. In the capital markets business, GIB will increase participation in ESG-related deals in addition to establishing a team to focus on Project Advisory to meet the projected demand for

structured financial products given the focus on infrastructure projects as outlined in Budget 2021. 2020 Report Integrated - Berhad RHB Bank

www.rhbgroup.com 76 RHB Bank Berhad - Integrated Report 2020 GROUP ASSET MANAGEMENT ASSET GROUP No. Effective August 2020, Asset Management became partof the Group Wholesale Banking segment corporate trustservices andescrow account management. Our trustee services cover estate planning, will-writing, private trust,REITs, covering various asset classesacross conventional and Shariah-compliant products. mandates, management, tailor-made structures for discretionary andnon-discretionary The solutions we provide cover equities,fixed income, mixed assets, cash and trustee services. funds, investment management advisory, product development services andofferings includingthemanagement of unittrust Group Asset Management manages afullsuite of investment WeWho Are 3 2 5 4 1 Bonds for 2020 Local Currency in AsianHouses Top Investment Awards 2020 Management Institutional Asset Commended Year -Highly Company of the Asset Management bonds for 2020 local currency Investorsin Asian most AstuteThe Best Awards 2020 Best of the Award Title private GROUP retirement AWARDS &RECOGNITION Providers Research BenchmarkThe Asset NewsInsurance Asia ETF Institutional Investor, Awards 2020for Sustainable Investing The AssetTriple A Asia Asset ManagementAsia Asset Presented By schemes/pension and

Asset Servicing WHOLESALE BANKING funds

• Asset Management• Asset • Top Investment House • Best Islamic Bond • Most Astute Investor • Best Islamic Fund House Category • Most Astute Investor and Management Sdn Bhd (Malaysia) -RHB Asset - Highly Commended Company of the Year (Malaysia) -Ranked 1 Manager Management Berhad International Asset (Malaysia) -RHBIslamic (Malaysia) -Ranked 1 (Malaysia) -Ranked 6 alternative investments th st st

* MALAYSIA PERFORMANCE ASSET MANAGEMENT trustee business. & Islamic businessinMalaysia andits AM Malaysia refers to itsConventional PRE-TAX PROFIT – AM MALAYSIA* Head, Group Asset Management 2018 2018 HOW WECREATE VALUE Growth (2020 vs 2019) 53.7 50.3 Eliza Ong Yin Suen 2019 (RM’BILLION)

62.7 (RM’MILLION) 12.1% AUM 2019 54.3 2020 70.3 2020 56.5 WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 77 STATEMENTS REVIEW REVIEW INFORMATION

KEY BUSINESS INITIATIVES OUTCOMES

Product innovation to We continued adding to our full suite of product offerings with the launch of a total of 16 new drive business growth funds across Malaysia and our regional offices, which garnered Assets Under Management (“AUM”) of RM1.8 billion as at end-2020. The new funds launched included Fund of Funds (“FOF”), mixed asset and equity and ESG thematic funds as well as multi-currency bond asset class for both Conventional and Shariah-compliant funds.

Embedding ESG into the Rolled out a Sustainability Investment Framework which aims to integrate sustainability business considerations into our investment process for better-informed investment decisions. Training on this framework has also been rolled out for the investment team and fund managers. We recently launched an ESG-themed fund, namely RHB i-Global Sustainable Disruptor Fund, in 2021, our first-ever Shariah sustainable and responsible investment fund subject to ESG criteria and methodology.

Digitalising our business In June 2020, we launched ‘RHBAM MyInvest’, an online platform, in line with the Employees’ for greater efficiency Provident Fund (“EPF”)’s initiative to enable its members to execute investment transactions electronically for EPF-approved unit trust funds. Additionally, in order to enhance operational efficiency and customer satisfaction, we implemented a trustee system which went live at the end of 2020, together with enhancements to our back-office systems.

PROGRESS AGAINST FIT22 STRATEGIC INITIATIVES FIT22 INITIATIVES OUTCOMES

Grow Affluent and Wealth We will continue to focus on the retail business while investing and expanding our agency force business and institutional business to cater to various segments of our investors and their investment goals. We will continue to deepen our collaboration within the Group through various cross-selling initiatives.

With the above in mind, we will also continue to develop new funds with attractive and unique features and strategies to meet both our existing and prospective customers’ investment needs.

Boost operational excellence System enhancements will continuously be implemented throughout 2021 to further increase to improve productivity and customer satisfaction and overall productivity and efficiency, in line with the Group’s digital customer service transformation plan as part of its five-year FIT22 IT Strategic Roadmap.

OUTLOOK AND PROSPECTS 19 Navigating COVID-19 and the Challenges Presented Given a relatively uncertain economic With the lingering pandemic as the background, we will monitor our funds’ performance closely environment going forward, both and conduct timely asset allocation strategies. Given the uncertain market environment, we domestically and globally, we expect have taken and will continue to take the necessary defensive measures to protect against any policy rates to remain accommodative anticipated downside risk. In addition, we will continually evaluate our analysis in credit and for slightly longer until we see a equity research taking into consideration the various risks, exposures, and impacts arising from 2020 Report Integrated sustained recovery in economic the COVID-19 pandemic in the respective sectors, markets and countries. activities. As such, our range of funds We will continue to provide regular market outlook and fund updates to our investors and and strategic solutions will offer our distributors to keep them abreast of any significant developments. customers investment opportunities that suit their investment goals and risk - Berhad RHB Bank As part of the new normal following the pandemic, we will continue to invest in the necessary appetites. safety and health equipment, as well as digitalisation initiatives through the automation of business processes to further strengthen internal controls, improve efficiency and ensure minimal service disruptions to meet the current and future needs of our investors and stakeholders.

www.rhbgroup.com 78 RHB Bank Berhad - Integrated Report 2020 BUSINESS SHARIAHGROUP convenience of ATMs andmobileinternet banking. as well asRHBBank branches, totalling 208locations nationwide, with the added the largest inthecountry with services available at allRHBIslamic Bank branches Investment Banking businessstreams. Our customer touchpoint network isoneof Banking (covering retail, corporate andcommercial businesssegments) and nationwide to fulfiltheneedsof customers, cuttingacross theCommercial Our products andservices are delivered inafast, efficient andseamlessmanner Banking, Business & Transaction Banking and Treasury. four businessunits,namely Retail Banking, Corporate arm, providing Shariah-compliant financialservices under RHB Islamic Bank isRHBBanking Group’s Islamic banking WeWho Are OPERATIONAL REVIEW Managing Director/Chief PERFORMANCE: OVERALL Head, Group Shariah Business Islamic Contribution to Group RM450.5 Domestic Financing Assets Domestic RM86.9 StateZakat Authorities RM4.0 Dato’ Adissadikin Ali RM9.5 RHB Islamic Bank/ Zakat Distributed to Pre-Tax Profit 40.5% Total Assets 6.9% CASA ROE Executive Officer, million billion billion million WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 79 STATEMENTS REVIEW REVIEW INFORMATION

HOW WE CREATE VALUE

GROSS FINANCING – 3 YEARS PRE-TAX PROFIT CUSTOMERS’ ISLAMIC (RM’MILLION) TREND DEPOSITS CONTRIBUTION (RM’MILLION) (RM’MILLION) TO GROUP DOMESTIC Group Retail Banking FINANCING ASSETS Group Corporate Banking (%)

Group Business & Transaction Banking 5,283 4,233 40.5 795.5 60,830 38.1 3,549 23,032 34.2 54,417 22,330 579.2 45,732 20,291 450.5 38,895 34,007 28,414

2018 2019 2020 2018 2019 2020 2018 2019 2020 2018 2019 2020

KEY BUSINESS INITIATIVES OUTCOMES

Increase product Business Segment Business Track Products Launched innovation to ensure RHB Retail Consumer Product • Personal Financing-i for Private Sector Islamic’s offerings are on Management • Personal Financing-i for Civil Sector par with competitors (Variable Rate) • Personal Financing-i for Pensioner (Variable) Cards & Unsecured Business • RHB WWF Debit Card-i Non-retail Business Banking • CMTF-i Full Flexi Redraw • Unsecured Business Financing-i

Value-Based Ocean Harmoni initiative Intermediation (“VBI”) • We are the first bank in Malaysia and the Asia Pacific region to launch an eco-friendly and sustainability as debit card created out of recycled plastic, to raise public awareness on the conservation approaches to secure more and environmental sustainability of marine ecosystems. new business/projects • The unique product is part of the Bank’s Ocean Harmoni initiative, and created in collaboration with WWF-Malaysia and Universiti Malaysia Terengganu (“UMT”). • More than 20,500 cards have been issued since its launch and for each RHB WWF

Debit Card-i issued, RM3 will be contributed by cardholders to UMT’s ocean research 2020 Report Integrated and development activities. Customers also have the option to contribute up to 100% of their ‘Hibah’, i.e. returns from their savings or current accounts opened under the Ocean Harmoni initiative.

SR For more details about the Ocean Harmoni initiative, please refer to our Sustainability Report. - Berhad RHB Bank

www.rhbgroup.com 80 RHB Bank Berhad - Integrated Report 2020 PROGRESS AGAINST FIT22STRATEGIC INITIATIVES In customers. understanding of their needs.In doingso, we will enhance andupgrade our products andservices to create even more value for our As aleadingdomesticIslamic financialinstitution,RHBIslamic Bank will continue to engage with our customers to gainabetter lives of thosearound us. In addition, we are alsoexploring ways to play aneven bigger role inthearea of socialfinance to create aneven larger impactonthe journey isexpected to gradually create sustainable value andpositive impactonboth community andenvironment. and 10%Business Banking of 60%Retail, 30%Corporate Target to achieve businessmix in financingassets Target to reach Top 3position contribution to theGroup Target 40%of financingasset 19 optimise cost andaccelerate their digitalisation journeys to supporttheir cost-conscious approach. investments preferred to have easy access to cashandliquidity. To overcome this, we quickly introduced savings anddepositsproducts as well as challenges RHB Islamic Bank’s key focus was onensuringthesafety of theemployees anditscommitment to assistingcustomers weather the regards FIT22 INITIATIVES Navigating COVID-19 andtheChallenges Presented to that our linked

VBI arose GROUP SHARIAHBUSINESS to journey, as savings a result we and continue of deposits.

the respectively. Business mix Maintained Top 3positioninfinancingassets. Achieved anencouraging 40.5%financingasset contribution in2020. pandemic. to For forge

our OUTLOOK AND PROSPECTSOUTLOOK AND ahead, was ontrack at 58%,34%and 8%for For

government

our aligning

retail and customers, our

corporate VBI initiatives OUTCOMES we customers, noted to Retail, Corporate andBusiness Banking, that the Group’s we many focused

had Sustainability a on precautionary introducing

Framework.

initiatives mindset This

and to

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 81 STATEMENTS REVIEW REVIEW INFORMATION

GROUP INSURANCE

Kong Shu Yin Who We Are Managing Director/Chief Executive Officer, RHB Insurance provides general insurance for our retail and corporate RHB Insurance Berhad customers. It is the 11th largest insurer in Malaysia with 3.84% market share and ranks among the Top 10 insurers for Fire, Personal Accident & Motor. OVERALL PERFORMANCE:

Gross Written Premium

RM678.7 million

Pre-Tax Profit

RM150.6 million

Combined ratio 82.6%

Claim ratio 48.6%

ROE

20.0% 2020 Report Integrated - Berhad RHB Bank

www.rhbgroup.com 82 RHB Bank Berhad - Integrated Report 2020 KEY BUSINESSINITIATIVES insurance Grow individualmedical adequacy pricing accuracy and Improve motor premium RHB Way experience through the Enhance customer personal linesbusiness business model,to grow a conventional agency initiativesdigital with ecosystem -combining Build ageneral insurance 13% GROUP INSURANCE 16% 9% CONTRIBUTION BY SALES CHANNEL AND CLASSOF 2% • • • • • • BUSINESS REVENUE in 2019to RM7.5millionin2020. Premiums for our Medisure Supreme Insurance product grew by 74%from RM4.3million previous year, despite theextremely challenging year for theindustry. Recorded only aminimalcontraction inGross Written Premiums of ascompared 3% to the allow wider deviations from thestandard tariffs. We optimised our pricingmethodology, while alsoseekingapproval from regulators to surveys. 2020, and we continue to evaluate our performance through annualcustomer satisfaction Our Net Promoter Scores have remained positive andconsistent at +17inboth 2019and customers acquired from traditional channels.For Adopted omni-channeldistributionby leveraging digitalcapabilities to service efficiency andimprove theoverall customer journey. to reduce physical processes andpaperwork where appropriate to achieve greater Streamlined andsimplifiedsalesunderwritingprocesses through digitalisation an onlinetravel insurance product inSeptember 2020. RHB Insurance Mobile App andonlineinsurance, through which we launched 1% 2% HOW WECREATE VALUE 57% OUTCOMES 2020 by Channel example, Others Franchise Channel Commercial, Corporate Broking Bancassurance Retail Agency Affinity Business we actively promoted the

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 83 STATEMENTS REVIEW REVIEW INFORMATION

PROGRESS AGAINST FIT22 STRATEGIC INITIATIVES FIT22 INITIATIVES OUTCOMES

To be the Top 5 in General Despite a challenging economic environment, we managed to deliver a commendable profit insurance growth of 12.2% year-on-year compared to a 58.3% year-on-year increase in 2019. The higher increase in 2019 was due to the restructuring of the hospital and surgical segment of the business.

Continued improvement to our customer experience journey with focus on purchase, claims and service experience has led to consistently high Net Promoter Score (“NPS”).

Scale up Banca Retail and The focus on these sectors and the deployment of General Insurance Specialists have achieved SME business acquisition significant achievements in Gross Written Premium (“GWP”) in East Malaysia (from 12% in 2019 to 24% in 2020) with better customer experience being reported. It has also increased overall Banca Retail bank branch GWP with year-on-year growth of 4% to RM17.5 million in 2020 compared to RM16.8 million in 2019.

19 Navigating COVID-19 and the Challenges Presented

RHB Insurance launched special schemes aimed at helping our customers through this difficult economic environment with a total allocation of RM5 million. This included the Cov-Aid Premium Relief Scheme that provides financial relief of up to 50% for both new and existing SME policyholders and the Cov-Aid Premium Instalment Scheme to help individuals and SME clients whose income or business was affected by COVID-19. Since its launch in April 2020, the Relief Scheme has utilised more than RM650,000 while the Premium Instalment Scheme has impacted RM2 million of gross premiums.

During this challenging time, we strived to ensure that existing policies continued to be renewed while conducting more frequent pricing reviews given the uncertainty brought about by the persistence of COVID-19 and its wide-ranging effects. In addition, RHB Insurance continued to create innovative products and offerings for customers in lower-risk exposure segments. We remained engaged with our agency force through digital platforms, ensuring that they stayed up to date in terms of training and knowledge, allowing them to better advise policyholders on the best solutions for their specific circumstances.

OUTLOOK AND PROSPECTS We will continue to design and develop sustainable products and services for our customers to defend and capture market share in the markets we are present in. An example of a sustainable product we are planning, which is also in support of a low-carbon economy, is an insurance product for the motor segment which will provide lower premiums for vehicles that are seldom used. Integrated Report 2020 Report Integrated - Berhad RHB Bank

www.rhbgroup.com 84 RHB Bank Berhad - Integrated Report 2020 BUSINESS INTERNATIONALGROUP expanded commercial bankingoperations, excluding Singapore. the purposeof thisReport, theinformation provided covers only theactivitiesof our overseas operations, Thailand, Laos,Brunei, Indonesia, through anestablishednetwork of branches across Singapore, Cambodia, and investment bankingportfolios overseas. We have astrong presence RHB’s Group International Business comprises both our commercial banking WeWho Are For country. offer liaisonandadvisory services for Malaysian companies seekingto conduct businessinthe offerings andmergers &acquisition. We alsomaintain arepresentative office inMyanmar to loans, depositsand wealth management solutionsto trade financing&services, initialpublic We offer a wide variety of products andservices for customers of allsegments ranging from

the year to other

2020, include

than Group OPERATIONAL Singapore Singapore. International as However, well Vietnam andHong Kong. as Business our effective

overseas included February investment REVIEW our

overseas 2021,

banking the commercial portfolio operations. has banking been For

contributed by Cambodia. book grew 2.3% year-on-year, mainly our Group International Business loans foreign exchange translation impact, asset growth, albeitcautiously. Excluding environment, we continued to pursue Notwithstanding the challenging standpoints. both profitability and asset quality the countries within our portfolio, from international travel materially impacted activities and the disruption to The slowdown of the world’s economic economic challenges due to COVID-19. the world continued to battle with the one for Group International Business as The year 2020proved to beadifficult PERFORMANCE: OVERALL overseas operations. Note: Performance excludes Singapore andIB Head, Group International Business RM202.2 SyedTaufik Ahmad Albar RM4.5 RM4.1 RM4.1 Customers’ Deposits Total Income Pre-Tax Loss Gross Loans million billion billion million WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 85 STATEMENTS REVIEW REVIEW INFORMATION

HOW WE CREATE VALUE

BREAKDOWN OF LOANS BREAKDOWN OF DEPOSITS GROUP INTERNATIONAL BUSINESS CONTRIBUTION TO GROUP CONTRIBUTION TO GROUP REVENUE CONTRIBUTION TO THE INTERNATIONAL BUSINESS TOTAL INTERNATIONAL BUSINESS TOTAL GROUP OVER TIME (3 YEARS) (RM’MILLION) (RM’MILLION) (RM’MILLION)

Term Loans Others CASA Others Group RHB Banking International Group Business

177.0

2018 6,805.6 1,447 1,246 2,521 184.5 2,718 1,654 2,208

2,873 2019 7,057.5 2,695

2,021 202.2 1,974 1,751 1,395

2020 7,185.7

2018 2019 2020 2018 2019 2020

Note: Performance excludes Singapore and IB overseas operations.

DELIVERING GROWTH, OPERATIONAL EFFICIENCY AND ASSET QUALITY IN FOCUS SEGMENTS We continue to seek growth in key segments and sectors within each of the overseas countries, to ensure we maintain the required momentum for our long-term strategic goals. At the same time, we continually look for ways to improve operational efficiencies across all our overseas operations to be able to serve our customers more effectively.

COUNTRIES INITIATIVES AND OUTCOMES

Cambodia • Opened our first Premier Banking Centre in Cambodia to provide personalised services to the affluent segment. This helped contribute to robust year-on-year growth of 56% in retail deposits achieved in 2020. • Successfully enhanced our remittance ecosystem with other banks, which enabled more attractive foreign exchange rates for our customers. • Increased the number of registered internet banking and mobile banking users by 30% in

2020. 2020 Report Integrated • Implemented the Cambodian Shared Switch, a shared system in collaboration with other banks to enable individuals to perform various interbank transactions. • Launched our customer call centre for better customer experience. We achieved a zero abandoned call rate in 2020.

• Fully integrated our anti-money laundering system into the core banking system for - Berhad RHB Bank enhanced transaction monitoring as well as real-time sanctions screening.

www.rhbgroup.com 86 RHB Bank Berhad - Integrated Report 2020 Thailand Laos andBrunei 19 who were mostimpacted by thepandemic. and provided moratoriums or financingrestructuring to those In deployed various financialassistance schemes. discussed with themtheir specificchallenges andsuccessfully and services sectors were affected more thanothers. We In Thailand, we noted that customers inthetourism, real estate restructuring options. customers-at-risk individually to offer various rescheduling and our service standards. We also proactively engaged with with cost-cutting initiatives without compromising on In Cambodia, we noted somerevenue pressure and responded assistance. customers with restructuring solutionsandtargeted financial working remotely or insplitteams as we sought to helpour employees inallthe countries we operate inadapted well to of our customers andchangingthe way we worked. Overall, our ability to meet with customers, affecting thelivelihoods of some impacted the way our businesses operated, disrupting our The pandemicbrought aboutunprecedented challenges and Laos, Navigating COVID-19 andtheChallenges Presented COUNTRIES we discussed GROUP possible solutions INTERNATIONAL • • • • • • In Laos,by •

targeted financialassistance. Closely monitored accounts impacted by COVID-19 andsupported customers with disposals. in our loanrecovery strategies through seekingpotential investors andundertakingasset amount of our legacy impaired loanscompared to 2019by employing alternative solutions Despite thechallengingeconomy, we managed to achieve more thandoubletherecovery Thailand (“BOT”) with theaimof improving theproductivity andefficiency of our employees. Participated intheRegulatory Data Transformation (“RDT”) project ledby theBank of to increase synergies andboostfee income. Pursued active collaboration with other businessfunctions within RHBBanking Group (“ICT”) services andbusinessessupplyingproducts andservices to thegovernment. renewable energy, medicalandhealthcare, Information andCommunications Technology We recalibrated our growth efforts andshifted focus to different industriessuchas gross impaired loansat 3.82%,below industry level. In Brunei, we achieved 28.0%higher non-interest income andcontinued to maintain our 0.36% compared control andloanrecovery, we managed to significantly lower pre-impaired loansto with our

customers mobilisingour with 5.25%in2019.

INITIATIVESOUTCOMES AND businessdevelopment teams to supportour deposit box facility at our new branch. top clientele, while we are alsoplanningto introduce asafe In Brunei, loansgrowth isexpected to begenerated from our loans andachieving higher recovery amounts. with theoverall aimof preventing formation of new impaired In as well asdrive growth of fee income through specificdeals. In Thailand, we will target mid-capcustomers for loansgrowth, payments capabilitiesfor our businesscustomers. solution that provides cashmanagement andtrade and solutions, will berolled outin2021.It isanintegrated banking In Cambodia,RHBReflex, which isoneof our key digital due to thepersistence of theCOVID-19 pandemic. attention to our asset quality given theeconomic uncertainty offerings. As a group, we will collectively bepaying closer and leveraging digitaltechnology to improve our product exploring growth opportunities,enhancingour customer service Moving into 2021,our businessesineachcountry will continue Laos, we BUSINESS will continue OUTLOOK AND PROSPECTSOUTLOOK AND to prioritise asset quality efforts incredit

management

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 87 STATEMENTS REVIEW REVIEW INFORMATION

SINGAPORE OPERATIONS

Danny Quah Boon Leng Head, Singapore Operations Who We Are RHB Singapore has been in operation for over five decades and is a key OVERALL regional contributor to the Group. We continue to build on our strengths PERFORMANCE: in the mid-cap segment, aiming to be the catalyst bank for customers with both business and personal financial needs. The bank’s core businesses are Our Singapore Operations recorded streamlined into seven pillars, namely Retail Banking, Commercial Banking, pre-tax profit of SGD5.4 million, a decrease of 78.7% year-on-year due Corporate and Investment Banking and Treasury, as well as Capital to higher allowances for credit losses. Markets, Brokerage and Asset Management. Gross loans were higher by 23.4% We focus on niche market segmentation, offering products that meet our customers’ needs. at SGD5.1 billion due to higher We offer a complete suite of services to Malaysian companies with development plans in contributions from the Corporate, Singapore and likewise, Singaporean enterprises seeking opportunities regionally. On the Commercial and Retail Banking corporate and client coverage front, RHB is looking at driving deals involving Singapore assets among overseas conglomerates while providing end-to-end solutions. segments while Customers’ Deposits were also higher by 8.5% year-on- year at SGD5.8 billion driven by an increase in Current Account Savings Account (“CASA”) balances.

Pre-Tax Profit

SGD5.4 million

Gross Loans

SGD5.1 billion

Customers’ Deposits

AWARDS & RECOGNITION Best Small to Mid-Cap Corporate Finance Award 2020 SGD5.8 billion

Global Banking & Finance Awards® 2020 • Best CSR Bank Singapore 2020 Total Income

HumanResources Online million 2020 Report Integrated • Best Candidate Experience – In-House SGD139.2

Loyalty & Engagement Awards Cost-to-Income Ratio • Best Employee Engagement Strategy (Gold) • Best Use of CSR (Silver) 82.7% - Berhad RHB Bank Marketing Events Awards - Best Event by an In-house Team (Bronze)

www.rhbgroup.com 88 RHB Bank Berhad - Integrated Report 2020 its suite of wholesale banking solutions. Singapore under one entity, creating amore holisticcustomer experience for itscorporate andinstitutionalclients inSingapore and theregion through equities sales, were transferred to RHBBank, Singapore. This allows for better alignment of thecapitalmarkets and wholesale businessof RHBBank, markets businessesunder RHBSS, encompassing client coverage, research andcorporate advisory services, equity capitalmarkets andinstitutional In September 2020,theGroup completed thedisposalof itsentire equity interest inRHBSecurities Singapore (“RHBSS”). As partof theexercise, capital CORPORATE UPDATE KEY BUSINESSINITIATIVES • • transactions of remote/non face-to-face enhancement of therange Digitalisation programme and • • • • COVID-19 response: opportunities and investment banking network for financing Tapping onregional financing Commitment to green model business anddistribution Restructured key linesof network transformation Commenced branch media platforms. presence through social Enhanced onlineanddigital Scheme for SMEs Government Support Tapped into the PERCENTAGE OF RHB Singapore RHB Banking Group CONTRIBUTION TO THE GROUPTO THE GROSS LOANS 8% 2020 SINGAPORE OPERATIONS 92% RSMEloansoutstanding increased by • RHBSingapore • We alsoraised athree-year • RHBSingapore successfully • • • • • The RHBSingapore Facebook page saw • RHB Singapore RHB Banking Group 126.8% year-on-year. Bancassurance revenue rose by 178.0% year-on-year. Financing Facility Singapore. The purchase consideration was funded via amixof equity anddebt, with an Acquisition (“M&A”) transaction between aMalaysian conglomerate andalisted regional real estate developer in conglomerate. lead arrangers andbookrunners, for themulti-finance company of alarge Indonesian-based business player inSingapore. support theacquisition anddevelopment of atop-tier colocation data centre for amajor property utilises Electronic Know-Your-Customer (“e-KYC”) to conduct therequisite duediligence. Monthly new account openings increased tenfold after thelaunchof thenew digitalservice which Savings or new-to-bank andexisting customers candownload theRHBMobile SGappandopenanew With thelaunchof thedigitalaccount openingfunction onour Mobile Banking platform, 25.0% As at December 2020,theRetail Business hasturnedprofitable andrevenue increased by Loans The Commercial Banking team supported SMEs with loanmoratoriums and Temporary Bridging engagement rate of 7.13%. schemes that supported SMEs. portfolio rebalancing towards secured lending via properties andEnterprise Singapore government healthy at 28%compared to 2019. This was due to theactive management of asset quality and PERCENTAGE OF CONTRIBUTION TOTAL INCOME TO THE GROUPTO THE valued at SGD585millionduringthepandemic. year-on-year. 6% Fixed Deposit account 2020 HOW WECREATE VALUE was theSole Lead of millionsecured by upto SGD35 Wealth Management fee income increased by term loanfacility arranged atwo-bank clubgreen term loanfacility 94% with SingPass andMyInfo. Arranger 659%to reach SGD165millionandrevenue increased by Corporate &Investment Banking Retail Banking OUTCOMES a33%increase infan base,andheightened average net for of anotable cross-border million,together USD255 25% 16% listed shares. Total Commercial Banking RHB SINGAPORE

TOTAL INCOME year-on-year BY BUSINESS SEGMENT 4% 2020 121.1% Mergers &

asset growth remained with seven other year-on-year,

of Asset Management 28% 27% millionto SGD150 Acquisitions Treasury

while mandated

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 89 STATEMENTS REVIEW REVIEW INFORMATION

PROGRESS AGAINST FIT22 STRATEGIC INITIATIVES FIT22 INITIATIVES OUTCOMES

Position overseas IB With capital markets being integrated into the bank, there will be greater collaboration to businesses to focus on more effectively provide a one stop shop solution for our corporate clients in Singapore and niche markets the region. This alignment creates more focus for cross-selling the full spectrum of wholesale banking products to address our clients’ advisory and strategic funding requirements, and solidifying relationships with our targeted clients.

Enhance customer journey The digitalisation of account opening via Mobile Banking Singapore has enabled customers to open accounts without visiting the branch. In addition, we have streamlined the registration process, enabling customers’ access to Mobile Banking services when they open a bank account, without the need for additional registration forms. The overall turnaround time for account opening, including the issuance of online banking services, has been reduced by approximately 30 minutes per customer.

19 Navigating COVID-19 and the Challenges Presented OUTLOOK AND PROSPECTS The Bank will remain focused on sustaining and growing the The global COVID-19 pandemic has left a marked impact on business, cognisant of the effect of structural changes that have businesses and the Singapore economy, which slipped into taken place, with flexible working arrangements likely being the a year-on-year contraction from the first quarter of 2020. norm and the acceleration of digital transformation throughout Following the reopening of the economy in June, there were the economy. preliminary signs of recovery in the later part of the year. Many open economies, including Singapore’s, have found it To protect asset quality, we will continue to closely monitor challenging to find sustained momentum in a global recovery customers that we have extended loan moratoriums to and that is largely unsynchronised as different countries grapple will also actively engage with these customers to consider with repeated outbreaks and differing levels of lockdowns. rescheduling or restructuring when the loan moratorium ends. With regards to loans, there will be a focus on being more On the flip side, the pandemic has accelerated technology prudent, extending more secured loans and selectively pursuing adoption and digitalisation, surfacing opportunities that have better-quality structured unsecured deals. For real estate enabled various sectors to continue staying afloat during lending, we will focus on good quality assets with a diversified these challenging times. In RHB Singapore’s context, we have tenancy base. employed video conferencing tools to stay connected with our customers and to extend our banking services through digital With the roll-out of the MY-SG Affluent Wealth corridor platforms. We have also tweaked and redesigned some of our programme, our new Regional Premier Banking proposition will processes to facilitate online transactions. offer a suite of wealth management and financing solutions to local, Malaysian and regional clients, boosting customer Over and above this, the Bank navigated the nation’s Circuit experience and improving the customer journey. Breaker by activating its Business Continuity Plan which included split site and flexible working arrangements to In the context of digitalisation, we will continue to develop and mitigate the impact on business operations. We enabled staff strengthen our digital financial solutions and digital capabilities,

with secure remote access to relevant systems to work-from- to help customers achieve sustainable business growth through 2020 Report Integrated home for both support functions and selected customer sales productivity enhancement. The long-term goal in our digital and service roles. For employees that needed to be on-site, journey is to deepen relationships with key customer groups we responded quickly with workflow and process changes, through the broadening of product offerings and ease of access. prioritising the safety of both employees and customers. - Berhad RHB Bank

www.rhbgroup.com 90 RHB Bank Berhad - Integrated Report 2020 “ Our CREATING stakeholders andprogressively widen our impact.” institution, andthrough our sustainability journey, we are ableto create value for our by The OUR APPROACHSUSTAINABILITYTO create value for our stakeholders andprotect our planet asthe world continues to struggle with theCOVID-19 pandemic. Going forward, we aspire to strengthen our approach to sustainability andembeditaspartof our daily operations inorder to Our efforts inembeddingsustainablepractices inour businessandoperations have madegood progress. related risks. across theGroup’s businessandoperations to supportthecountry’s transition to alow-carbon economy as well asmitigate and its focus areas, we strive to further integrate sustainability or Environmental, Social andGovernance (“ESG”)considerations For • For • Obtained S&P GlobalESGScore Maintained arating of MSCI ESGRatings Malaysia EMASIndex Notably, inTop 25% Constituent of FTSE4Good Index Series ESG ACCOLADESRECOGNITIONOUR AND from this Sustainability Review. excludedbeen has Reportand this throughout included COVID-19is toresponseOur Disclaimer: For • from 2019 our SR approach to sustainability Framework Report. For further details, pleaserefer to our Sustainability Report 2020.

vision towards Building aSustainable Future.

Material Matters, refer Sustainability stakeholders, a score FTSE4Good Bursa Malaysia Index comprises SUSTAINABILITY of F

by 43/100 their Governance, refer

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pillar

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 91 STATEMENTS REVIEW REVIEW INFORMATION

Pillar 1: Management Approach Sustainable Sustainable and responsible banking reflects our role as a financial institution. We integrate ESG considerations into our lending, capital market & Responsible advisory and investment decision-making in order to manage and minimise negative impacts as well as promote sustainable development to create a Banking positive impact through identified opportunities.

Focus Areas Sustainable Financing

• Further integrated ESG Risk Management - Developed five ESG Risk Assessment (“ERA”) tools for ESG-Sensitive Sectors - Palm Oil, Oil ALIGNMENT & & Gas, Manufacturing of Iron, Steel & Other Metals, Power Producer and Manufacturing of CONTRIBUTION Cement • RM5 billion Green Financing Commitment by 2025 Key Capitals : - RM3.1 billion extended as at December 2020 in support of green activities through lending, investment, advisory and capital market activities, of which RM521.6 million was for renewable F I M energy • Integrated ESG considerations as part of investment decision-making process Value to Stakeholder(s): • RHB Research published an ESG thematic report and outlined an ESG scoring system for FBM KLCI stocks under its coverage • Shareholders & Investors • Key Sustainable and Responsible Investment (“SRI”)/ESG programmes and deals that focused on • Customers social and sustainable development • Business Partners - Cagamas ASEAN Sustainability SRI Sukuk - Originated, priced and distributed Cagamas’ • Regulators & Policymakers inaugural ESG Sukuk. Proceeds from the RM100 million raised will be utilised to finance affordable housing and employment generation assets in the form of loans to SMEs Primary SDGs: - Sukuk Prihatin - One of the distributor banks for Malaysian government’s Sukuk Prihatin with more than RM6 million raised and distributed by RHB. Proceeds will be channelled to help communities and businesses affected by the economic downturn • Introduced affordable insurance coverage in collaboration with Tokio Marine Insurance through Perlindungan Tenang - for Malaysians from low-and middle-income groups; first phase of campaign saw approximately 15,000 lives insured • Championed the conservation of the marine ecosystem in support of UN SDG 14: Life Below Water through RHB Islamic’s Ocean Harmoni initiative - Launched Malaysia and APAC’s 1st eco-friendly recycled debit card under Ocean Harmoni in collaboration with WWF-Malaysia and University Malaysia Terengganu (“UMT”)

Customer Centric Banking

• The Group achieved a significant improvement in Group Net Promoter Score to +11 • Enhanced our service culture with the roll-out of RHB Way 2.0 across the Group • More than 5,000 frontline staff completed training modules on disability-related service to better understand the special needs of differently-abled customers • Developed Fair Treatment of Financial Consumers (“FTFC”) Charter outlining commitments to protect the interests and financial well-being of our customers

Digitalisation 2020 Report Integrated

• Accelerated the digitalisation of customer journeys across the Group in order to deliver convenience as well as a safe and seamless customer experience • As at December 2020, total transactions via our digital channels increased to 75.5% • Increased usage of the new RHB Mobile Banking App with more than 670,000 customers onboarded since its launch in April 2019 - Berhad RHB Bank

www.rhbgroup.com 92 RHB Bank Berhad - Integrated Report 2020 • • • Primary SDGs: Value to Stakeholder(s): Key Capitals: CONTRIBUTION ALIGNMENT & F Regulators &Policymakers Business Partners Employees H Good Practices Embedding S N Pillar 2: Focus Areas SUSTAINABILITY • 93%of • • • • Promoted diverse andinclusive leadership • • • • • • • • Total • •

IR Environmental Stewardship People &Workplace Ethics &Governance Sustainable Procurement our expectations. business partners andagents (RHBInsurance) indicated their commitment to thispolicy to align with suppliers, andselected businesspartners andagents, of which 334suppliers as well as312other In December 2020, we communicated andshared RHB’s Anti-Bribery andCorruption Policy with all goods andservices areas that hasthecapacity Completed theinstallation of arainwater harvesting system ontherooftop of RHBComplex inBangi Group’s operational GHGemissionsof 26,232tCO two mainbuildingsin2019to allmainbuildingsandbranches in West Malaysia Expanded operational GHGemissionsfor Scope 1,Scope 2andScope 3 reporting boundariesfrom Improved Employee Engagement Score to 92%, higher thantheMalaysian financialindustry average Corruption Policy. Established theGroup Integrity &Governance division(“GIG”)to oversee the Anti-Bribery and awareness programmes for Safety, Health and Wellness 2019 dueto theCOVID-19 pandemic.More than6,800employees took partin various training and RM19.8 milliontotal investment inemployee training in2020,areduction of RM23millionfrom 30% by 2022) across Group Mandatory IT Security Awareness e-learningmodulecompleted by Board members andemployees Declaration of RHB’s commitment to taxtransparency Guidelines to strengthen ethics andintegrity practices Enhancement of Anti-Bribery andCorruption Policy, Whistleblowing Policy andGifts andHospitality 2021, 99.4%of therequired 13,914employees have completed thetraining Board members andRHBemployees trained on Anti-Bribery and Corruption via e-learning. As of March Total electricity consumption for West Malaysia of 40,147MWh year-on-year decrease in this Report, onpages 110 to To read more aboutour ethics and governance, pleaserefer to the Corporate Governance Overview Statement section ground initiatives. stakeholders through awareness-building, learninganddevelopment andon- We aimto nurture asustainableculture amonginternal andexternal existing businesstools andprocesses, product designandoperations. Group’s vision and values, strategy andgoals, policiesandprocedures, We strive to integrate responsible values and ESG considerations into the Management Approach water suppliers inMalaysia are localbusinesses, consumption for to store 1,750litres of REVIEW 126. RHBCentre andRHBComplex is120,352m with 25.3%

water with RM572.9millionspent ontheprocurement of for 2 eq for the women in

West Malaysia represented a9.5% watering of Top andSenior plants and 3 Management (target: washing of common

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 93 STATEMENTS REVIEW REVIEW INFORMATION

Pillar 3: Management Approach Enriching & RHB, through our community engagement arm, RHB Foundation, reaches out to the communities in which we operate to enrich and empower the Empowering underserved and the underprivileged, focusing on children and youth. Our aim is to implement meaningful, diverse and inclusive initiatives that will generate Communities long-lasting positive social impacts on the communities. Education is one of our key focus areas as we seek to Nurture Future Generations and develop them into holistic individuals. Focus Areas Community Enrichment

• Total amount of investment towards community enrichment and empowerment initiatives was approximately RM4.4 million in 2020, which impacted more than 20,000 underprivileged members of ALIGNMENT & the community in Malaysia, Cambodia and Laos CONTRIBUTION • RHB X-Cel Academic Excellence Programme has benefited up to 1,000 selected students annually from low-income/B40 backgrounds nationwide Key Capitals : • 94.5% of RHB X-Cel students who participated agreed or strongly agreed that the programme had H S benefited them and had better prepared them for their Sijil Pelajaran Malaysia (“SPM”) exams • As at December 2020, a total of 21 students were awarded RHB X-Cel Star Scholarships which had Value to Stakeholder(s): enabled them to continue their education at reputable public universities in Malaysia • Communities • Customers • Employees • Regulators & Policymakers

Primary SDGs:

Financial Education Integrated Report 2020 Report Integrated • Our financial literacy programmes have reached out to 24,000 students within and outside Malaysia, of whom 22,000 students had attended the classes physically prior to the pandemic • Throughout 2020 and until today, our programmes have continued to benefit many of our students via online classes, while attracting 2,200 engagements for online video series and educational tips via social media • Provided financial guidance and education to customers through RHB Money Chat during the - Berhad RHB Bank pandemic, whereby a series of online videos were developed and shared with customers. The series attracted about 7.5million views to date and is on a positive trajectory

www.rhbgroup.com 94 RHB Bank Berhad - Integrated Report 2020 BOARD SKILLS EXAMPLE LEADING THROUGH GOOD GOVERNANCE Non-Executive Director Non-Independent TAN SRIONGLEONG HUAT @WONG JOO HWA Non-Executive Chairman Non-Independent TAN SRI AHMAD BADRI MOHDZAHIR Leadership andManagement 100%

(%) as at 15March 2021 BOARD ATOUR AGLANCE Banking 60% Group Chief Executive Officer Group Managing Director/ DATO’ KHAIRUSSALEH RAMLI Non-Executive Director Senior Independent TAN SRIDRREBECCA FATIMA STA MARIA Finance 20% years old BOARD COMPOSITION 61-65 66 years old66 years 5 Group Chief Executive Officer Group Managing Director/ & above Treasury Capital&Securities 1 AGE 1 Markets 60% 1 years old 51-55 years old 56-60 3 Non-Executive Chairman Non-Independent 1 WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 95 STATEMENTS REVIEW REVIEW INFORMATION

DATO’ MOHAMAD NASIR AB LATIF ONG AI LIN LIM CHENG TECK Non-Independent Independent Independent Non-Executive Director Non-Executive Director Non-Executive Director

SHARIFATU LAILA SYED ALI DONALD JOSHUA JAGANATHAN DATUK IAIN JOHN LO Independent Independent Independent Non-Executive Director Non-Executive Director Non-Executive Director

1 5 2 1 Non-Independent Independent Non-Independent Senior Independent Non-Executive Chairman Non-Executive Directors Non-Executive Directors Non-Executive Director

Indian 1 5 - 9 years Female Eurasian 2 3 1 4 BOARD Malay BOARD ETHNICITY DIVERSITY TENURE

7 4 8 2020 Report Integrated Male Chinese < 5 years

20% 20% 10% 10% - Berhad RHB Bank International Trade Governance Risk and Compliance MIS & Technology Cybersecurity & Data Privacy

www.rhbgroup.com 96 RHB Bank Berhad - Integrated Report 2020 Non-Independent Non-Executive Chairman TAN SRI AHMAD BADRI MOHDZAHIR * Nasional Berhad and Tenaga Nasional Berhad, amongstothers. Malaysia, Kumpulan Wang Persaraan (Diperbadankan), Permodalan Tan Sri Ahmad Badri previously served on the Boards of Bank Negara loan management, financialmarket andactuarialscience. since 2014andis vastly experienced inthefieldsof strategic investment, Provident Fund on 1 May 2020. He has sat on the EPF Investment Panel Tan Sri Ahmad Badri was appointed astheChairmanof theEmployees ofGeneral Treasury. for nearly 30 years in various capacities,thelastbeingSecretary Finance Division of the Ministry of Finance in 1989 where he served Sdn Bhd prior to hisappointment asthe Assistant Secretary inthe career asaSenior Valuation Executive at C.H. Williams, Talhar & Wong Tan Sri Ahmad Badri Mohd Zahir (“Tan Sri Ahmad Badri”) started his Skills andExperience • Public Companies: • Listed Entities: Other Directorship(s) • • Qualifications 16 November 2020* ofDate Appointment Nil Sime Darby Berhad Technology Degree inLandandProperty Management, MARA University of Master inBusiness Administration, University of Hull, United Kingdom Subsequently formalised asChairmanof RHB Bank Berhad on24March 2021. Age: 61Gender: Male Nationality: Malaysian PROFILE OF THE BOARD OF DIRECTORS Attendance 2/2 of Payments Network Malaysia Sdn Bhd. He alsositsasaNon-Independent Non-Executive Director ontheBoard Southeast Asia. Alpha from Finance Asia andthe“Best CFO inMalaysia Award” in2012from have earnedhimthe“Best CFO inMalaysia Award” in2010and 2011 the Asian Institute of Chartered Bankers. His knowledge andexperience He isalsoaCouncil Member of the Association of Banks inMalaysia and positions in well-established regional financialinstitutions. financial services andcapitalmarkets industry, where hehasheldsenior Dato’ KhairussalehRamli hasmore than25 years of experience inthe Skills andExperience • Public Companies: • Listed Entities: Other Directorship(s) • • • Qualifications 13 December 2013* ofDate Appointment * Nil RHB Foundation (Chairman/Trustee) Fellow Chartered Banker of the Asian Institute of Chartered Bankers Advanced Management Programme, Harvard Business School University, St. Louis, USA Bachelor of Science inBusiness Administration from Washington of RHBBanking Group on5May 2015. Subsequently appointed asGroup Managing Director/Group Chief Executive Officer Group Managing Director/Group Chief Executive Officer DATO’ KHAIRUSSALEH RAMLI Age: 53Gender: Male Nationality: Malaysian Attendance 13/13 WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 97 STATEMENTS REVIEW REVIEW INFORMATION

Chairman/Chairperson BAC Board Audit Committee BRC Board Risk Committee

Member BNRC Board Nominating & Remuneration Committee BCC Board Credit Committee

Attendance Attendance 13/13 13/13 TAN SRI ONG LEONG HUAT @ WONG JOO HWA TAN SRI DR REBECCA FATIMA STA MARIA Non-Independent Non-Executive Director Senior Independent Non-Executive Director

Age: 76 Gender: Male Nationality: Malaysian Age: 63 Gender: Female Nationality: Malaysian

Date of Appointment BCC Date of Appointment BNRC 20 November 2012 1 August 2016

Qualifications Qualifications • Senior Cambridge, Federation of Malaysia Certificate awarded by • Bachelor of Arts (Honours) in English Literature from the University of Methodist English School Malaya • Capital Markets and Services Representative’s Licence issued by the • Diploma in Public Administration from the National Institute of Public Securities Commission of Malaysia under the Capital Markets and Administration (“INTAN”) Services Act, 2007 for dealing in securities • M.S. in Counselling from Universiti Pertanian Malaysia (now known as Universiti Putra Malaysia) Other Directorship(s) • Ph.D from the University of Georgia in Athens, USA Listed Entities: • OSK Holdings Berhad (Executive Chairman) Other Directorship(s) Listed Entities: Public Companies: • Sunway Berhad • RHB Investment Bank Berhad • Hartalega Holdings Berhad • PJ Development Holdings Berhad (Executive Chairman) • Eco World International Berhad • OSK Property Holdings Berhad (Executive Chairman) • KE-ZAN Holdings Berhad Public Companies: • OSK Foundation (Trustee) • Institute for Democracy and Economic Affairs (“IDEAS”) • MyKasih Foundation (Trustee) Skills and Experience • Hartalega Foundation (Trustee) For over 17 years since 1969, Tan Sri Ong Leong Huat @ Wong Joo Hwa (“Tan Sri Ong”) was attached to a leading financial institution where he Skills and Experience last held the position of Senior General Manager. He was the Managing Tan Sri Dr Rebecca Fatima Sta Maria was previously the Secretary- Director/Chief Executive Officer (“CEO”) of OSK Investment Bank General of the Ministry of International Trade and Industry (“MITI”). Berhad (now known as OSKIB Sdn Bhd) from July 1985 to January 2007 She began her career in the Administrative and Diplomatic Service in and thereafter was appointed as the Group Managing Director/CEO. He 1981 and served in various capacities in the then Ministry of Trade and was then re-designated as a Non-Independent Non-Executive Director Industry. and subsequently resigned on 30 April 2013. She was involved in handling trade-related matters of the Ministry,

Tan Sri Ong was also a Director of MESDAQ from July 1999 to March including administering Malaysia’s interests under bilateral and regional 2020 Report Integrated 2002 and a member of the Capital Market Advisory Council appointed Free Trade Agreements (“FTAs”), as well as Malaysia’s engagements in by the Securities Commission in 2004 to advise on issues relating to the various international organisations such as ASEAN, APEC and WTO. implementation of the Capital Market Master Plan. He was a Director After 35 years in civil service, serving six trade ministers and overseeing on the Board of Bursa Malaysia Berhad from 2008 to 2015 and was 12 trade pacts, she retired as the Secretary-General of MITI in July previously a Member of the Securities Market Consultative Panel of 2016. She is now the Executive Director of the Asia-Pacific Economic

Bursa Malaysia. Cooperation (“APEC”) Secretariat based in Singapore. - Berhad RHB Bank

www.rhbgroup.com 98 RHB Bank Berhad - Integrated Report 2020 Non-Independent Non-Executive Director DATO’ MOHAMADNASIR AB LATIF Persaraan (Diperbadankan). He iscurrently theChairmanof theInvestment Panel of Kumpulan Wang retirement inDecember 2019. Executive Officer (Investment) in 2013 and retained this position until his Department (July 2009to 2013).He was lastappointed asDeputy Chief (1995 to 2003)andGeneral Manager of theInternational Equity Investment Senior Manager intheInvestment andEconomics Research Department Enforcement Officer (1990to 1995),Senior Research Officer, Manager and Provident Fund Board in1982andheldseveral positionsincludingState Dato’ Mohamad Nasir Ab Latif started hiscareer with theEmployees Skills andExperience • • Public Companies: • • • • Listed Entities: Other Directorship(s) • • • Qualifications 16 March 2020 ofDate Appointment PLUS Malaysia Berhad (Chairman) RHB Islamic Bank Berhad (Chairman) Malaysia Airports Holdings Berhad United Plantations Berhad Yinson Holdings Berhad Malaysian Resources Corporation Berhad United Kingdom Master of Science inInvestment Analysis from theUniversity of Stirling, Certified CharteredAccountants Certified Diploma in Accounting and Finance from the Association of Malaysia Bachelor’s Degree inSocial Science (Economics) from Universiti Sains Age: 62Gender: Male Nationality: Malaysian PROFILE OF THE BOARD OF DIRECTORS Attendance BNRC 11/11 Malaysia. “Cybersecurity Lifetime Achievement Award” in2018 by CyberSecurity International at their inaugural awards in2012.She was also awarded the Continuity Professional inMalaysia” award from Disaster Recovery Institute Her knowledge and experience earnedher the“Best Certified Business organisations. provident fundsand sovereign funds,as well asnon-governmental markets, transportation, aviation, manufacturing andtrading, cybersecurity, financial services, telecommunications andmultimedia, energy, capital ministries agencies andorganisations in various sectors encompassing Her extensive experience includescollaboration with regulators, government Lanka, CambodiaandMalaysia. the United Kingdom, Singapore, Indonesia, Thailand, Vietnam, Philippines, Sri cybersecurity, technology riskandgovernance anddata privacy services in management, governance risk andcompliance, information security, She hasover 30 years of experience inproviding businesscontinuity (“ISACA”)—Malaysia Chapter. the pastPresident of theInformation Systems Audit andControl Association Information Security Practice Leader for PwCMalaysia. She hasalsoserved as Director of PwCin1993and was theBusiness Continuity Management and financial auditservices. She was thenappointed asPartner/Senior Executive Manager. At PwC,she built theIT auditpractice, an integral part of the firm’s in 1978, prior to joining PricewaterhouseCoopers (“PwC”) in 1991 as Senior Ong Ai Lin beganher career with Deloitte Haskins &Sells (“DH&S”)inLondon Skills andExperience • • Public Companies: • • Listed Entities: Other Directorship(s) • • • Qualifications 1 July2017 ofDate Appointment FIDE Forum (Trustee) RHB Islamic Bank Berhad IHH Healthcare Berhad Tenaga Nasional Berhad Member of theMalaysian Institute of Accountants Associate of theInstitute of Chartered Accountants inEngland and Wales United Kingdom Bachelor of Arts (Honours) inEconomics from theUniversity of Leeds, Independent Non-Executive Director LIN ONG AI Age: 65Gender: Female Nationality: Malaysian Attendance BAC BRC 13/13 WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 99 STATEMENTS REVIEW REVIEW INFORMATION

Attendance Attendance 13/13 13/13 LIM CHENG TECK SHARIFATU LAILA SYED ALI Independent Non-Executive Director Independent Non-Executive Director

Age: 60 Gender: Male Nationality: Singaporean Age: 58 Gender: Female Nationality: Malaysian

Date of Appointment BRC BCC Date of Appointment BAC* BNRC* 28 November 2018 15 March 2019

Qualifications Qualifications • Master of Business Administration from Brunel University, United Kingdom • Master of Business Administration, University of Malaya, Malaysia • Bachelor of Arts from the National University of Singapore • Bachelor of Science (Honours), Universiti Kebangsaan Malaysia, Malaysia • Advanced Management Programme, Harvard Business School, USA Other Directorship(s) Listed Entities: Other Directorship(s) • Nil Listed Entities: • Bursa Malaysia Berhad Public Companies: • Nil Public Companies: • RHB Investment Bank Berhad* Skills and Experience • Minority Shareholders Watchdog Group Lim Cheng Teck was the Regional Chief Executive Officer for ASEAN at Standard Chartered Bank. He first joined Standard Chartered Bank in 1988 Skills and Experience and has held various roles within the bank’s Corporate and Institutional Sharifatu Laila Syed Ali (“Sharifa”) has extensive experience in the field of Banking Division before being appointed as the Chief Operating Officer for investment management and portfolio investing, having served various Standard Chartered Bank (China) Ltd in 2005. In 2006, he was appointed as premier institutions and government-linked investment funds over a period the Chief Executive Officer of Standard Chartered Bank (Singapore) Ltd. He of more than 30 years. She played a key role in the setting up of Valuecap Sdn returned to China in 2009 to take up the role of Chief Executive Officer and Bhd (“Valuecap”), a government-led initiative, whose founding shareholders Executive Vice Chairman of Standard Chartered Bank (China) Ltd. were Khazanah Nasional Berhad, Kumpulan Wang Amanah Pencen and Permodalan Nasional Berhad (“PNB”). He has served on several Standard Chartered Bank subsidiary boards, notably as the Chairman of Standard Chartered Bank (Mauritius) Ltd, Standard Sharifa began her career at PNB and subsequently moved on to hold various Chartered Bank (Thailand) Ltd, Standard Chartered Bank (Singapore) Ltd, and senior leadership positions at the Employees Provident Fund including Head as the Deputy Chairman of Standard Chartered Bank (Malaysia) Ltd and the of Treasury & Equity Markets, gaining broad exposure within the domestic President Commissioner of PT Bank Permata, Indonesia. He has also served and regional capital markets environment over a period of 15 years. Following as a Non-Executive Director of Standard Chartered Bank (Taiwan) Ltd. He a brief period as Head of Investments at the Pilgrims Fund, she was appointed has previously served as a Director on the boards of Clifford Capital Pte Ltd the Chief Executive Officer of Valuecap in October 2002. She became Group and the Singapore International Chamber of Commerce, a Governor of the Chief Executive Officer of Valuecap in 2015. Singapore International Foundation and a Council Member of the Institute of Banking and Finance Singapore and the Singapore National Employers Under her stewardship, the Group spearheaded the country’s move into new Federation. frontiers within the domestic markets, including launching Malaysia’s first exchange traded fund (Ringgit & USD) and various Environmental, Social and Additionally, he was the Chairman of the Overseas Financial Service Governance (“ESG”)-type Funds. Pursuant to her departure from Valuecap, Commission the China Chamber of Commerce, the Vice Chairman of the she served as an Advisor to the Board of Directors of Valuecap, afterwhich

Association of Banks in Singapore and a Member of the Monetary Authority she took on various roles in other Boards and Committees. She is also a 2020 Report Integrated of Singapore’s Financial Centre Development Committee. Having served in Member of the Invesment Committee of University of Malaya. the banking arena for over 28 years, he retired from Standard Chartered Bank in April 2016 and continued as a senior advisor on a non-executive role till * Resigned on 31 March 2021. April 2017.

Further, he had a short stint of service as the Chief Executive Officer of Pontiac Land Group from March 2017 to May 2018. Currently, he sits on the - Berhad RHB Bank Advisory Board of Sim Kee Boon Institute of Financial Economics, Singapore Management University as well as the Boards of Minterest Holdings Pte Ltd and Bright Vision Community Hospital, Singapore.

www.rhbgroup.com 100 RHB Bank Berhad - Integrated Report 2020 Independent Non-Executive Director DONALD JOSHUA JAGANATHAN of theMalaysian Financial Reporting Foundation. Council Member of theMalaysian Institute of Accountants andMember Board Executive Committee of theMalaysian Insurance Institute, Directors of Payments Network Malaysia Sdn Bhd, Chairman of the He alsoheldprevious positions astheChairmanof theBoard of International Association of Insurance Supervisors (“IAIS”). the including Basel Committee on Banking Supervision (“BCBS”) and the as theMalaysian representative ininternational supervisory bodies, activities with thebankingand insurance institutes. He alsoserved banking andinsurance industry inMalaysia, training anddevelopment and management oversight over thesupervisionandregulation of the Financial Stability Report. His work experience included leadership over thefinancialstability function,includingoversight of BNM’s 36 years, rising to the rank of Assistant Governor, with key responsibilities Donald hashadafulfillingcareer with Bank Negara Malaysia (“BNM”)for AccreditationBerhad. Agency He alsoserves as the Chairman of theBoard of Directors of theFinance Banking School andtheChairmanof its Talent Development Committee. Committee. He is also a member of the Board of Directors of the Asian Asian Institute of Chartered Bankers andtheChairmanof itsEducation Donald Joshua Jaganathan (“Donald”) serves asaCouncil Member of the Skills andExperience • • • • Public Companies: • Listed Entities: Other Directorship(s) • • • • • Qualifications 2020 17 August ofDate Appointment Nil Zurich Life Insurance Malaysia Berhad RHB Insurance Berhad Finance Accreditation(Chairman)Berhad Agency Asian Institute of Chartered Bankers Advanced Management Programme, Harvard Business School Fellow Chartered Banker of the Asian Institute of Chartered Bankers Management, United Kingdom Master inBusiness Administration from theCranfield School of Member of theMalaysian Institute of Accountants Bachelor of Accounting (Hons) from theUniversity of Malaya Age: 61Gender: Male Nationality: Malaysian PROFILE OF THE BOARD OF DIRECTORS BRC Attendance BAC BNRC 6/6 and new development. business businesses with accountability for regional acquisitions, divestments Commercial Vice President for Shell’s exploration, production andgas Shell Petroleum. In 2017,Datuk Iain was appointed as Asia Pacific Chairman andManaging Director of Sarawak Shell Berhad andSabah Board in2009 and served till2012 when hereturned to Malaysia as appointed asaBoard Director of Singapore’s Economic Development joint ventures inMalaysia, Middle East, ChinaandRussia. He was areas of responsibilities includedgovernance of LNGandChemicals and corporate roles basedinMalaysia, Singapore andNetherlands. His moving onto undertake various engineering,businessdevelopment He joinedSarawak Shell Berhad asaField Engineer in1990before 2016. Chairman of Shell Refining Company Bhd tillthecompany was soldin businesses both inMalaysia as well asabroad. Datuk Iain was the 30 years in Shell’s exploration and production, gas and downstream has extensive experience andheldabroad range of roles over thepast Shell Malaysia Limited on31 March 2021.He isaproven leader who Datuk Iain John Lo (“Datuk Iain”) retired astheCountry Chairmanof Skills andExperience • Public Companies: • Listed Entities: Other Directorship(s) • • Qualifications 15 September 2020 ofDate Appointment * Nil RHB Investment Bank Berhad* Master of Science inCivilEngineering from UCLA California, Los Angeles (“UCLA”) Bachelor of Science inCivilEngineering from theUniversity of Appointed on1 April 2021. Independent Non-Executive Director DATUK IAIN JOHN LO Age: 59Gender: Male Nationality: Malaysian Attendance BAC* BNRC* 4/4 WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 101 STATEMENTS REVIEW REVIEW INFORMATION PROFILES OF THE CHAIRMEN OF THE KEY OPERATING COMPANIES

CHAIRMAN OF RHB ISLAMIC BANK BERHAD CHAIRMAN OF RHB INSURANCE BERHAD

DATO’ MOHAMAD NASIR AB LATIF Non-Independent Non-Executive Chairman

IR For more details, go to page 98.

JAHANATH MUTHUSAMY CHAIRMAN OF RHB ASSET MANAGEMENT SDN BHD Independent Non-Executive Chairman

Non-Listed Companies: • RHB Investment Bank Berhad (Malaysia) Age: 65 Gender: Male Nationality: Malaysian • The Esplanade Co Ltd (Singapore) • Keppel Land Limited (Singapore) Date of Appointment • Pavilion Energy Singapore Pte Ltd (Singapore) 1 November 2016 (for RHB Insurance Berhad)* • Pavilion Energy Trading & Supply Pte Ltd (Singapore) Board Committee Membership(s) • AXA Insurance Pte Ltd (Singapore) • Board Risk Committee of RHB Insurance • Little Tunny Investment Limited (British Virgin Berhad Islands, (UK)) Qualifications RHB Asset Management Group: • Fellow of the Chartered Insurance Institute, • RHB Asset Management Sdn Bhd (Malaysia) United Kingdom • RHB Islamic International Asset Management • Malaysian Insurance Institute, Malaysia YAP CHEE MENG Berhad (Malaysia) Independent Non-Executive Chairman • RHB Asset Management Pte Ltd (Singapore) Other Directorship(s) • RHB International Investments Pte Ltd Listed Entities: (Singapore) • Nil • PT RHB Asset Management Indonesia Age: 66 Gender: Male Nationality: Singaporean (Indonesia) Public Companies: Date of Appointment • Nil 24 April 2018 (for RHB Asset Management Skills and Experience Sdn Bhd) Yap Chee Meng was KPMG International’s Chief Skills and Experience Operating Officer for the Asia Pacific Region Jahanath Muthusamy (“Jahanath”) has over 40 and a Member of its Global Executive Team from Board Committee Membership(s) years’ experience, having joined the insurance • Investment Committee of RHB Asset 1 October 2010 to 30 September 2013. industry in 1975. During this period, he was Management Sdn Bhd (Chairman) actively involved in the Insurance Institutes • Investment Committee of RHB Islamic Prior to 1 October 2010, he was a Senior and Insurance Associations of both Malaysia International Asset Management Berhad Partner in KPMG Singapore and part of the and Indonesia serving in various capacities. In (Chairman) firm’s leadership team. Yap Chee Meng’s key 2002, Jahanath was seconded to PT Assuransi appointments then (within KPMG locally, AXA as the President and Chief Executive regionally and globally) included as Asia-Pacific Qualifications Officer (“CEO”) and a member of the Board of • Fellow of the Institute of Chartered Head of Financial Services, Singapore Head of Directors. He returned to AXA Affin General Accountants in England and Wales Financial Services and Singapore Head of Real Insurance Malaysia at the end of 2006 and • Fellow of the Institute of Singapore Estates and Specialised REITs Group, as well as assumed the role of CEO and a member of Chartered Accountants Member of KPMG International’s Professional the Board of Directors until his retirement in Indemnity Insurance Steering Committee and October 2012. He remained on the board of Member of KPMG International’s Financial PT Assuransi AXA until 2012. From 2013 to

Other Directorship(s) 2020 Report Integrated Listed Entities: Services Leadership Committee. 2015, he was appointed as a Senior Advisor to • SATS Ltd (Singapore) Solution Providers Pte Ltd, a Swiss insurance • ARA Trust Management (Suntec) Limited – In a career with over 38 years of experience solution provider/consultant based in Suntec REIT (Singapore) in the financial and accounting sector, he has Singapore. also served in various professional/regulatory committees of the Singapore Accounting & * Subsequently appointed as an Independent Corporate Regulatory Authority and the Institute Non-Executive Chairman of RHB Insurance Berhad - Berhad RHB Bank of Certified Public Accountants of Singapore. on 28 May 2020.

www.rhbgroup.com 102 RHB Bank Berhad - Integrated Report 2020 • Other Institutions: Present Membership of Shariah Committees in • • • Other Institutions: Present Membership of Shariah Committees in Nil Other Institutions: Present Membership of Shariah Committees in Date of Appointment: 1 April 2020 Meetings Attended:10/10 Malaysian |45Male NOORDIN ASSOC. PROF. DR.KAMARUZAMAN BIN Date of Appointment: 13 April 2013/1 April 2020 Meetings Attended:9/12 Malaysian |72Male MOHAMED ALI WAN ABDUL RAHIMKAMIL BINWAN Date of Appointment: 2February 2018/1February 2020 Meetings Attended:12/12 Malaysian |46Male DR. AHMAD BASRI BINIBRAHIM Bank Pembangunan Malaysia Berhad (“BPMB”) Limra Assets Employees Provident Fund Swiss Retakaful Chairman PROFILE OF THE SHARIAHCOMMITTEE • & Achievements:Experience • • • • Areas of Expertise: • • • Qualifications: • & Achievements:Experience • Takaful • Areas of Expertise: • • • Qualifications: • • & Achievements:Experience • • • • Areas of Expertise: • • Qualifications: Nasional Berhad (“PNB”). Shariah Management Department, Permodalan Currently the Vice President andHead of the Islamic Criminal Law Islamic Legal Maxims al-Fiqh) Islamic Law Principles of Islamic Jurisprudence (Usul Islamic Law of Transactions United Kingdom Ph.D inIslamic Law, University of Birmingham, Kuala Lumpur Heritage, International Islamic University Malaysia, Master’s Degree inIslamic Revealed Knowledge and Universityof Jordan, Amman, Jordan B.A (Hons) inIslamic Jurisprudence andLegislation, Committee at Kenanga Investment Bank Berhad. Previously, hehasserved asChairmanof Shariah of Employees Provident Fund (“EPF”)Malaysia. this, heiscurrently aShariah committee member and LIMRA Group of Companies. In addition to Reinsurance Company Ltd. (“Swiss Re-Takaful”) Currently theShariah Committee Chairmanof Swiss Islamic Banking &Finance United Kingdom Ph.D inIslamic Studies from University of Wales, in Business Administration from Universiti Malaya, Bachelor’s Degree inShariah andMaster’s Degree Islamic Finance (“ASAS”) Member of the Association of Shariah Advisors in Commission Malaysia (“SC”) Registered Shariah Adviser with Securities trainer andspeaker at various seminars andin- An Islamic CapitalMarket consultant andregular contracts. securities through thesecuritisation of Islamic development of several benchmarkcapitalmarket Capital Market inMalaysia andhasinnovated the Pioneered thedevelopment of theIslamic Corporate Advisory Debt CapitalMarket Islamic CapitalMarket Islamic Banking &Finance Al-Azhar University, Cairo) & Economics, Turkish Cyprus (inassociation with Economics, International Institute of Islamic Banking Post Graduate Degree inIslamic Banking & United Kingdom Professional Member, Institute of Statisticians, • • • • • • • • • • • • • research work. Has received several grants andawards for his OCBC Al-Amin. SIRIM, Great Eastern Takaful Berhad, and CIMB as theCentral Bank of Malaysia (“BNM”),PNB, Islamic law of transactions at various agencies such Has conducted lectures onUsul al-Fiqh andthe specialisation. produced numerous publications inhisfieldsof Possesses vast experience inteaching andhas Berhad Bank. andSME Committee member of Hong Leong Islamic Bank Great Eastern Takaful Sdn. Bhd. andasaShariah Committee at OSKInvestment Bank Berhad and Previously served asChairmanof theShariah (“IIiBF”). the IIUMInstitute of Islamic Banking andFinance and Human Sciences, IIUMandaBoard Member of at theKulliyyah of Islamic Revealed Knowledge Was formerly theDeputy Dean (Academic Affairs) concerning Islamic finance andShariah. numerous training programmes andseminars contributed inbooks,as well asconducted Has published numerous journalarticles, UM. Pengajian Awam at Academy of Islamic Studies of (“INPUMA”), as well astheManager of theUnit the Institute of Public Policy andManagement Department at UM,theDeputy Director of Previously theHead of Shariah Management Studies of University of Malaya (“UM”). of Shariah andManagement, Academy of Islamic Currently alsoaSenior Lecturer at theDepartment Ministry, United Kingdom. by ICG Events andtheUK Trade andIndustry Islamic Finance” at London Sukuk 2011,organised Won theaward for “Outstanding Leadership in Lumpur Islamic Finance Forum 2017. Contribution to Islamic Finance” at theKuala Won theaward for “Most Outstanding Individual International University Malaysia. A Member of theInvestment Committee, Islamic (“LPPKN”), Malaysia. Penduduk danPembangunan Keluarga Negara A Member of theInvestment Committee, Lembaga (“ASAS”). Association of Shariah Advisors inIslamic Finance Commission Malaysia (“SC”)andaMember of the A Registered Shariah Advisor with theSecurities organisers, both locally andinternationally. Finance Institute Malaysia (“IBFIM”)andother event Corporation (“SIDC”),theIslamic Banking and Bank, BNM,theSecurities Industries Development house training workshops organised by the World WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 103 STATEMENTS REVIEW REVIEW INFORMATION

Qualifications: • Undertook in-depth research for the development • Bachelor of Syariah (1st Class Honours), University of new Islamic Capital Market instruments and of Malaya provided technical input for the preparation of various guidelines issued by the Securities Areas of Expertise: Commission Malaysia. • Islamic Banking & Finance • Actively participated in various industry • Islamic Capital Market & Derivatives development initiatives such as the International Organization of Securities Commissions’ (“IOSCO”) Experience & Achievements: Task Force on Islamic Capital Market and the Islamic • A trainer for the Islamic Finance Qualification Financial Services Board’s (“IFSB”) Governance of (“IFQ”) of the Chartered Institute for Securities and Islamic Investment Funds Working Group, and as a MOHD FADHLY BIN MD. YUSOFF Investment (“CISI”). technical member for the publication of Resolutions • A Registered Shariah Advisor with the Securities of the Securities Commission Shariah Advisory Commission Malaysia and a Member of the Council and in Islamic Capital Market educational Malaysian | 50 | Male Association of Shariah Advisors in Islamic Finance and promotional programmes. Meetings Attended: 12/12 (“ASAS”). Date of Appointment: 13 April 2013/1 April 2020 • Was a Manager at the Islamic Capital Market Present Membership of Shariah Committees in Department of the Securities Commission Malaysia Other Institutions: where he was involved in Shariah compliance • Sun Life Malaysia Takaful Berhad supervision in relation to submissions for the • Opus Asset Management Sdn Bhd issuances of Sukuk, structured products, collective • Apex Investment Services Berhad investment schemes and Islamic Real Estate • Universiti Tenaga Nasional Investment Trusts (“REITs”). • National Farmers Organisation (“NAFAS”) • Bank Pembangunan Malaysia Berhad (“BPMB”)

Qualifications: • She formerly headed capital markets research for the • Bachelor of Accountancy, University Putra Malaysia International Shariah Research Academy (“ISRA”), an • Master of Accounting, University of Illinois, Urbana- institution established by Bank Negara Malaysia. Champaign, U.S.A • Has conducted various training programmes on • Certified Shariah Adviser & Auditor (“CSAA”), Islamic banking, Sukuk and Islamic Capital Market Accounting and Auditing Organization for Islamic products, and on risk management and financial Financial Institutions (“AAOIFI”), Bahrain reporting for clients in the ASEAN region, the Gulf Cooperation Council (“GCC”) and the European Areas of Expertise: market. • Finance & Islamic Finance • Has contributed chapters to Housing the Nation • Accounting & Islamic Accounting (Cagamas, 2013), Managing Fund Flows, Risks and • Islamic Capital Market & Derivatives Derivatives: Applications in Islamic Institutions (Sweet SHABNAM BINTI MOHAMAD MOKHTAR Experience & Achievements: & Maxwell, 2012), Islamic Financial System: Principles • Presently the Group Executive Vice President of & Operations Market (ISRA, 2011), Sukuk (Sweet & Malaysian | 43 | Female SHAPE® Knowledge Services, an Islamic finance Maxwell, 2009) and Partnership Accounting, Principles Meetings Attended: 12/12 and Practice (McGraw Hill). Date of Appointment: 1 May 2015/1 April 2020 consulting firm based in Kuwait. • Spearheads research and development activities • From 2010 to 2014, was a Member of the Shariah Present Membership of Shariah Committees in including financial analysis, strategic & business Advisory Panel of the Malaysian Rating Corporation Other Institutions: plan formulation, design and implementation of Berhad (“MARC”). Nil customised surveys, research and training for • Prior positions include adjunct professor of finance different clients at SHAPE®. at both Depaul University (Chicago) and IE Business • A Member of the Association of Shariah Advisors in School (Madrid) and lecturer of accounting, finance Islamic Finance (“ASAS”). and bank management at University Putra Malaysia. Integrated Report 2020 Report Integrated - Berhad RHB Bank

www.rhbgroup.com 104 RHB Bank Berhad - Integrated Report 2020 years old LEADERSHIP TEAM EXPERIENCED ANDEFFECTIVE 51-55 Head, Group Business and Transaction Banking JEFFREY NGEOW OO Group Chief Executive Officer Group Managing Director DATO’ KHAIRUSSALEH RAMLI 56 years old56 years 4 and above 2 AGE GROUP SENIORMANAGEMENT 2 years old 40-45 years old 46-50 7 Female 1 GENDER Group Chief Financial Officer NIK IBRAHIMKAMIL NIK RIZAL KAMIL TAN SRI RHB Islamic Bank/Head, Group Shariah Business Managing Director/Chief Executive Officer, DATO’ ADISSADIKIN ALI Male 14

Indian NATIONALITY

1 Malaysian 14 Head, Group Retail Banking RAKESH KAUL Group Treasurer MOHD RASHIDMOHAMAD > 5 years > 6 MANAGEMENT COMMITTEE’S TENURE GROUP 2 1 year < 1 year - 5 years1 year- 7 WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 105 STATEMENTS REVIEW REVIEW INFORMATION

“ Our experienced leadership team, sets out the direction to deliver on our strategy, where progress is measured against our strategic drivers.”

SYED AHMAD TAUFIK ALBAR WENDY TING WEI LING JAIMIE SIA ZUI KENG

Head, Group International Business Head, Group Corporate Banking Acting Chief Executive Officer of RHB Investment Bank Berhad and Acting Head, Group Investment Banking RHB Banking Group

KONG SHU YIN DR CHONG HAN HWEE ROHAN KRISHNALINGAM Managing Director/Chief Executive Officer, Group Chief Risk Officer Group Chief Digital & Technology Officer RHB Insurance Berhad Integrated Report 2020 Report Integrated

DAVID CHONG MING LIANG DR SIEW CHAN CHEONG JAMALUDDIN BAKRI - Berhad RHB Bank Group Chief Operations Officer Group Chief Strategy Officer Group Human Resource Advisor

www.rhbgroup.com 106 RHB Bank Berhad - Integrated Report 2020 Group Chief Executive Officer Group Managing Director DATO’ KHAIRUSSALEH RAMLI • • • External Memberships: • Appointments: • • • Qualifications: • • • • Experience: • • • • Responsibilities: 5 May 2015 ofDate Appointment: Corporation Sdn Bhd) Sdn Bhd (fka Malaysian Electronic Clearing Director—Payments Network Malaysia Chartered Bankers Council Member of Asian Institute of Malaysia Council Member of the Association of Banks, Chairman, Board of Trustees, RHBFoundation Chartered Bankers (“AICB”) Fellow Chartered Banker, Asian Institute of Business School Advanced Management Programme, Harvard Washington University, St. Louis Bachelor of Science inBusiness Administration, Alpha Southeast Asia in2012 Earned “Best CFO inMalaysia Award” from in 2010and2011 Named “Best CFO inMalaysia” by Finance Asia institutions Held senior positionsinregional financial financial services andcapitalmarkets industry More than25 years of experience inthe invested Maximise theGroup’s return oncapital operations to achieve set targets andgoals Lead theGroup inmanagingitsbusinessesand values Define andshapecorporate culture &brand working closely with theBoard of Directors Set theGroup’s vision &strategic direction, Nationality: Gender: Age: PROFILE OF GROUP SENIORMANAGEMENT 53 Malaysian Male Group Chief Financial Officer KAMIL NIK RIZAL KAMIL TAN SRINIKIBRAHIM • • Qualifications: • • • • • Experience: • Responsibilities: 2 February 2021 ofDate Appointment: and Wales Institute of Chartered Accountants inEngland Fellow Chartered Accountant (“FCA”) with the University of Bristol, United Kingdom a BSc (Hons) Economics & Accounting from MSc Finance from London Business School and and Malaysia been basedintheUnited Kingdom, Singapore, Dutch Shell Plc. group of companies, having finance, strategy, andplanning within theRoyal Held various leadership positionsoverseeing internationally and private companies both domestically and Director ontheboards of several publiclisted Nik Rizal alsoserved asKhazanah’s Nominee Francisco, Istanbul andMumbai whilst headingtheinternational offices inSan Private Equity asset classstrategy execution, projects, value creation activities andoverall Khazanah’s investment anddivestment North America, EMEA andSouth Asia, leading Was alsotheHead of Private Markets for Media & Technology (“TMT”) Khazanah’s investments in Telecommunications, Berhad (“Khazanah”) and was responsible for Director of Investments at KhazanahNasional Prior to thisappointment, was anExecutive investments, domestically andglobally of accounting andfinance as well asstrategic 25 years of working experience inthe areas recovery management, taxation, procurement and reporting, capital andbalance sheet across theGroup, includingbudgeting, effectiveness of the various finance functions Leads Group Finance andensures the Nationality: Gender: Age: 48 Malaysian Male Head, Group Retail Banking RAKESH KAUL • • • External Memberships: • • Qualifications: • • • • Experience: • • • Responsibilities: 2019 1 August ofDate Appointment: AmCham Membership Asia Pacific Visa Client Council in Malaysia (“ABM”) Alternate Representative, Association of Banks Indian Institute of Foreign Trade, New Delhi Birla Institute of Management Technology and Management andInternational Trade from Post Graduate Diplomas inBusiness Bachelor of Commerce, Delhi University Markets India PvtLtd Served ontheBoard of Citigroup Global & Asia (Equity andCurrency Trading) divisionsinIndia Citigroup’s Consumer, Corporate andMarkets Has alsoheld various senior roles across in Malaysia to that, he was theRetail Banking Head for Citi of Retail Commercial Banking at Citi. And prior In hislastrole, served asthe Asia Pacific Head business groups leadership roles across Asian markets and More than20 years of experience in various Cambodia ASEAN markets, primarily inSingapore and Oversee retail portfolios inMalaysia and Community Banking self-service terminals, digitalchannelsand Manage RHB’s vast network of branches, Group conventional andIslamic Banking for the Lead theConsumer portfolio across Nationality: Gender: Age: 47 Male Indian WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 107 STATEMENTS REVIEW REVIEW INFORMATION

JEFFREY NG EOW OO DATO’ ADISSADIKIN ALI MOHD RASHID MOHAMAD SYED AHMAD TAUFIK ALBAR Head, Group Business and Managing Director/Chief Executive Group Treasurer Head, International Business Transaction Banking Officer, RHB Islamic Bank/Head, Group Shariah Business

Age: 47 Age: 50 Age: 53 Age: 48 Gender: Male Gender: Male Gender: Male Gender: Male Nationality: Malaysian Nationality: Malaysian Nationality: Malaysian Nationality: Malaysian

Date of Appointment: Date of Appointment: Date of Appointment: Date of Appointment: 18 December 2017 1 August 2016 3 March 2014 2 February 2021

Responsibilities: Responsibilities: Responsibilities: Responsibilities: • Lead and drive the growth of • Lead, manage and grow Islamic • Lead and drive Group-wide • Lead and drive the growth and Business Banking and Transaction Banking and Shariah Business Treasury and Global Markets performance of the Group’s Banking to ensure alignment within RHB Group businesses in line with the international businesses which with the Group’s strategic strategic direction and cover commercial banking, aspirations, across the Group’s Experience: aspirations of the Group investment banking and asset regional presence, primarily • More than 20 years of management, and oversee covering Malaysia, Singapore and experience in financial services Experience: the non-Retail Loan Recovery Cambodia industry • Started his career in the function with a focus of boosting • Held senior positions in Bank Examination/Supervision recovery efforts Experience: Islam Malaysia and AlKhair Department in Bank Negara • More than 20 years of International Islamic Bank Berhad Malaysia in 1988 after which Experience: experience in the financial • Prior to joining RHB, was the he moved to the Investment • More than 20 years of experience services industry, focusing Managing Director and Chief Operations & Treasury as a finance professional with particularly in the management Operating Officer at Export- Department in 1994 where he domestic and international of the SME segment Import Bank Malaysia Berhad spent more than five years in the exposures in oil & gas, mobile • Prior to his appoinment, he led Monetary Policy Implementation telco, infrastructure and banking the SME business segment for Qualifications: section • Started finance career with Shell Standard Chartered Malaysia • MBA (Finance), University of • Over 20 years of regional and worked in various Shell Chartered Accountant Malaya treasury experience in senior offices in Malaysia, Australia and • He is also a qualified accountant • Bachelor’s Degree in Business level positions within several the Netherlands with early part of career spent (Banking and Finance), Monash financial institutions in Singapore • Held various Finance roles in with PricewaterhouseCoopers University, Australia & Malaysia such as ABN Amro, Axiata Group including as Chief covering the area of assurance • Diploma in Investment Analysis, the Royal Bank of Scotland and Financial Officer of Smart Axiata University Teknologi MARA AmBank Group in Cambodia Qualifications: (“UiTM”), Malaysia • Prior to joining RHB, was the • Chartered Accountant • Advanced Management Program Qualifications: Group Chief Financial Officer of - Malaysian Institute of (“AMP”), Harvard Business • Master’s in Business UEM Group Berhad Accountants (“MIA”) School, Boston, USA Administration with Distinction • Chartered Certified Accountant • Chartered Banker, Asian Institute from the University of Wales, Qualifications: - The Association of Chartered of Chartered Bankers (“AICB”) Cardiff, United Kingdom • Bachelor of Accounting (Hons), Certified Accountant of the • Chartered Banker, Chartered • Bachelor of Accounting (Hons) International Islamic University United Kingdom (“ACCA”) Banker Institute, UK from University Technology Mara Malaysia • Chartered Banker - Asian • Chartered Professional in Islamic (“UiTM”), Shah Alam, Selangor • Master of Economics, Institute of Chartered Bankers Finance, Chartered Institute of International Islamic University (“AICB”) Islamic Finance Professionals, External Memberships: Malaysia • Advance Diploma in Finance - Malaysia • Vice President, Financial Market Tunku Abdul Rahman College Association (“FMA”) Appointments: External Memberships: • Member of Malaysian Institute of • Director, RHB Trustees Berhad External Memberships: • Member of the Board of Industry Accountants (“MIA”) • Director, Malaysian Trustees • Member of the Malaysian Advisors, Faculty of Business • Member of Industry Advisory Berhad Institute of Accountants and Accountancy, University of Council, PayNet • Member of the Association of Malaya, Malaysia • Member of Financial Market External Memberships: Chartered Certified Accountants • President and Council Member, Committee (“FMC”), BNM • Fellow of Chartered Institute of the United Kingdom Association of Islamic Banking of Management Accountants

• Member of the Asian Institute of Institutions Malaysia (“AIBIM”) (“CIMA”), UK 2020 Report Integrated Chartered Bankers • Member of Malaysian Institute of Accountant (“MIA”) - Berhad RHB Bank

www.rhbgroup.com 108 RHB Bank Berhad - Integrated Report 2020 Head, Group Corporate Banking WENDY TING WEILING • • • External Memberships: • Appointments: • • • Qualifications: • • Experience: • Responsibilities: 1 October 2013 ofDate Appointment: Market Association Member of the Asia Pacific Loan Chartered Bankers Member of the Asian Institute of Banks, Malaysia Member of the Association of Director, RHBBank (L)Ltd Programme, INSEAD Senior Leadership Development Booth, Executive Education Development Program, Chicago Graduate, Executive University of Malaysia Administration, National Bachelor of Business Coverage (Private Sector) last positionasDirector, Client MaybankyearsGroup with with Prior to joiningRHB,spent 15 scholar groups within Maybank astheir rotate amongdifferent business banking, with theopportunity to financial services andinvestment in trade finance, capitalmarkets, More than20 years of experience RHB hasfootprints Singapore andregions where Corporate Banking inMalaysia, growth andprofitability of Group Lead anddrive theoverall Nationality: Gender: Age: Female 50 Malaysian PROFILE OF GROUP SENIORMANAGEMENT Banking RHBBanking Group Acting Head, Group Investment RHB Investment Bank Berhad and Acting Chief Executive Officer of JAIMIE SIA ZUIKENG • • Qualifications: • Experience: • • Responsibilities: 1 March 2021 ofDate Appointment: Analyst (“CFA”) charter holder Accredited Chartered Financial from Monash University Bachelor’s Degree inEconomics Group since 2010 Markets, having been with the Corporate Finance andCapital Over 28 years of experience in Capital Markets current positionasHead, Group He alsocontinues to assumehis regional countries operations inMalaysia andthe Investment Banking businessand Oversees theRHBGroup’s Nationality: Gender: Age: 50 Malaysian Male

Officer, RHBInsurance Berhad Managing Director/Chief Executive SHU YIN KONG • • External Memberships: • • • Qualifications: • • • Experience: • Responsibilities: 13 March 2011 ofDate Appointment: Am Malaysia (“PIAM”) Committee, Persatuan Insurans Member of Management Services Berhad Chairman of ISMInsurance Insurance Institute Fellow of theMalaysian Insurance Institute Fellow of theChartered Malaya, Malaysia Civil Engineering, University of Indonesian insurance markets Experienced inthe Thailand and capacities includingCEO insurers inMalaysia in various Worked with oneof thelargest in theinsurance business More than30 years of experience business Manage andgrow theInsurance Nationality: Gender: Age: 60 Malaysian Male Group Chief Risk Officer DR CHONGHANHWEE • • Qualifications: • • • Experience: • • Responsibilities: 28 September 2020 ofDate Appointment: ofTechnology, Australia Economics from Curtin University Doctor of Philosophy in ofTechnology, Australia Honours) from Curtin University Economics andFinance (1 Bachelor of Commerce in Practice since 2012 Services Risk Management where hebuilttheFinancial was aPartner inEY Malaysia Prior to joiningRHB,Dr Chong Middle East the acrossand Australia, ASEAN Assisted financialinstitutions financial sector advising andmanagingriskinthe Over 20 years of experience in and Talentperspectives Strategic,Performance, Analytics to meet thedigitalera from Transform riskmanagement within theindustry benchmarked with good practices development of riskmanagement Shariah, whilst overseeing the credit, operations, market and wide Risk Management across Effective management of Group- Nationality: Gender: Age: 45 Malaysian Male st Class WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 109 STATEMENTS REVIEW REVIEW INFORMATION

ROHAN KRISHNALINGAM DAVID CHONG MING LIANG DR SIEW CHAN CHEONG JAMALUDDIN BAKRI Group Chief Digital & Technology Group Chief Operations Officer Group Chief Strategy Officer Group Human Resource Advisory Officer

Age: 51 Age: 53 Age: 44 Age: 60 Gender: Male Gender: Male Gender: Male Gender: Male Nationality: Malaysian Nationality: Malaysian Nationality: Malaysian Nationality: Malaysian

Date of Appointment: Date of Appointment: Date of Appointment: Date of Appointment: 1 August 2019 2 February 2021 2 May 2019 12 April 2021

Responsibilities: Responsibilities: Responsibilities: Responsibilities: • Responsible for the provision of • Oversee the overall RHB • Drive the Group’s strategic • Develop and execute long- accurate and timely Technology Banking Group’s operations priorities term Human Resources (“HR”) and back office operations and within Malaysia and ASEAN to • Support strategy teams within strategies services support for the relevant achieve excellence, continued each business unit in the • Build HR capability to support business/functional units improvement and optimisation development of business unit- the Group’s long-term strategic • Develop the IT and Digital across the Group’s operation specific strategies and drive goals Strategy towards driving the functions including credit improvement in financial and • Manage various aspects of HR implementation of Digital and IT operations, treasury operations, strategic outcomes functions including strategic transformation banking and payment operations, • Develop and refine valuebased planning and organisational • Lead RHB Banking Group’s investment banking and asset portfolio management of the development, human capital efforts on the digitalisation of management operations, as well Group development, succession RHB Banking Group as the call centre and property • Drive top-down change planning, rewards and • Drive the adoption of Agile@ services initiatives across the Group performance management Scale as part of the Group’s • Provides leadership in driving • Spearhead the Group’s annual strategic focus to create a customer experience and business planning and steer Experience: winning operating model operational excellence strategy the progress of FIT22 strategy • A solid track record with more and programmes Group-wide, execution than 20 years in HR functions, Experience: which includes initiatives on with 15 years being spent • Initially appointed as Group robotic process automation Experience: abroad. Has experience working Chief Operations Officer of RHB • 18 years of experience in with different nationalities and Banking Group in January 2014, Experience: strategy, designing and diverse cultures and working to drive Group-wide digital, • More than 25 years of experience implementing large-scale styles technology and operations in various global consulting transformation programmes, • Partnered with business leaders functions organisations and Malaysian especially for financial services of multinationals and local • Senior Partner with a technology and management consulting firm financial services institutions providers across Europe and Asia organisations in driving various • More than 20 years of • Has covered diversified roles • Developed and implemented HR strategies globally and locally experience with financial services in operational transformation, strategies for large global/ organisations in designing programme management, regional banks and insurance Qualifications: and implementing large-scale strategic planning, analytics and firms, covering business growth, • Masters in Business transformation programmes, CRM, as well as business and operational improvement, talent Administration (Human predominantly in areas of marketing leadership roles and technology strategies Resources) from University of technology and operations • Prior to the current role, was the • Prior to this appointment, he was Hull, United Kingdom • Worked with various industries in Group Chief Digital Officer of the Senior Director for Financial Malaysia and the ASEAN region RHB Group Services with Strategy& (formerly • Strong technology delivery and Booz & Company), which is part of programme management skills, Qualifications: the PwC network, serving financial especially in the implementation • Chartered Certified Accountants, services clients in South East Asia of large-scale technology and IT UK strategic planning • Master of Business Qualifications: • Led major banking and financial Administration, Strathclyde • Ph.D in Engineering from services projects including the University, UK University of Southampton, UK implementation of core banking • MBA from London Business systems, enterprise resource Appointments: School, UK planning (“ERP”) and customer • Director, Financial Park Labuan • BEng (1st Class Hons) Engineering

relationship management Sdn Bhd from University of Southampton, 2020 Report Integrated (“CRM”), IT transformation UK programmes, IT merger integration programmes and industry-wide payment systems Declaration:

Qualifications: Save as disclosed, the Group Senior Management have: • Bachelor of Electrical and 1. no family relationship with any Director and/or major shareholder. - Berhad RHB Bank Electronics Engineering (Honours), University of New 2. no conflict of interest with RHB Bank and have never been convicted of any offence within the past five years nor have had any public sanction South Wales, Australia or penalty imposed on them by the relevant regulatory bodies during the financial year under review.

www.rhbgroup.com 110 RHB Bank Berhad - Integrated Report 2020 our customers andemployees first. Group duringthistime, we always placed theneedsof debt. Despite thefinancialchallenges faced by the businesses hadto withstand heavy lossesandrising of family andfriends. As thepandemicspread globally, downturns andfor many, lossof employment or loss several levels of movement control orders, economic outbreak of theCOVID-19 pandemic. We witnessed A “new normal” emerged in 2020 with the unprecedented GOVERNANCE TO GOOD COMMITMENT AWARD 2019 INDUSTRY EXCELLENCE FINANCIAL SERVICES DISCLOSURE 2019 GOVERNANCE (CG) FOR CORPORATE EXCELLENCE AWARD website at Corporate Governance Report which can bedownloaded from the Group’s corporate This RHBCorporate Governance Overview Statement shouldberead together with its and Performance in CG Disclosure in CG Disclosure in Malaysia in Malaysia Top 9 Top 4 www.rhbgroup.com or the Bursa Malaysia announcement web page. GOVERNANCE FOR A SUSTAINABLE BUSINESS H S Award Recipient 2019 CLASSASEAN ASSET 2015 – Top 50 ASEAN PLCs 2018 – Top 30 ASEAN PLCs 2019 – Top 20 ASEAN PLCs AWARD – GOVERNANCE (CG) ASEAN CORPORATE RECOGNITION OF OURGOVERNANCE PRACTICES Companies (PLCs) in Southeast Asia in Top 20 Public Listed

Company 2020 –PLATINUM AWARD 2019 –PLATINUM AWARD 2018 –PLATINUM AWARD 2017 –GOLD AWARD 2016 –SILVER AWARD GOVERNANCE AWARD GLOBAL GOOD INTERNATIONAL’S THE PINNACLE GROUP Platinum Award (3 – rd Most Transparent Best Governed & timeinarow) shareholders’ participation at our AGM. facilitating voting inabsentia andenhancingremote Code onCorporate Governance (“MCCG”) in For this, we appliedPractice 12.3of theMalaysian virtual Annual General Meeting (“AGM”) for FY2019. face-to-face. In fact, 2020marked RHB’s first ever conducted ina virtual space asopposedto normal conducted itsaffairs where meetings were being The pandemicalsoledto changes inhow theBoard assistance to employees inneed. equipment suchasmasks,andproviding financial the workplace, distributionof personal protective from-home arrangements, physical distancingin protectedwell-being was wellby introducing work- which amongothers ensured that our employees’ Internally, we putinplace a‘Pandemic Working Group’ the burden of our customers. facilitating loanandfinancingmoratoriums to ease The Group supported Malaysian by businesses

(“ESG”) SOCIAL &GOVERNANCE good Malaysia for demonstrating THE FTSE4Good Bursa CONSTITUENT OF CONTINUING ENVIRONMENTAL, Constituent practices since 2016 WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 111 STATEMENTS REVIEW REVIEW INFORMATION

The Board ensured the Group’s operations APPLICATION OF THE PRACTICES ESPOUSED BY THE MCCG during this pandemic were well taken care of and prioritised safety over profit. Our As part of our consious effort to improve our corporate operations were streamlined to follow disclosures, RHB Bank Berhad has adopted and applied all the new Standard Operating Procedures 32 Practices as recommended by the Malaysian Code on (“SOPs”) and other relevant guidelines Corporate Governance. This includes the adoption of three issued by the Ministry of Health. We invested in protective gears such as Step Ups, which are considered examplary practices. face mask and established sanitisation stations and temperature reading for our Detailed application of the MCCG by RHB Bank Berhad can be referred in its employees to ensure the provision of Corporate Governance Report 2020. essential financial services would continue uninterrupted. Our workforce in both our offices and branches were also reduced to minimise the risk exposure. Staff adherence to the SOPs was emphasised while conducting transactions at the branches and Automated Teller Machines TAN SRI AHMAD BADRI (“ATMs”) to protect the safety of both our MOHD ZAHIR employees as well as our customers. Chairman

ORGANISATIONAL CULTURE IN PROMOTING INSTITUTIONAL RESILIENCE

Corporate failures are largely driven by poor governance and an unhealthy corporate culture. That is why we, at RHB, are firm believers that a strong corporate culture contributes to the identity and values of an organisation, attracts and retains talent, and also differentiates and provides competitive advantage and corporate brand identity.

The definition of “behaviour” within our RHB Culture Components of One RHB, Results-oriented and Customer First is being further refined and enhanced, in line with our FY2021 strategic priorities. This will help to guide us on how we should act, feel and think. We will embrace and embed these values into our daily working lives and in our interaction with our colleagues, customers and all other stakeholders.

The Group’s unique personality coupled with a comprehensive performance management scorecard will in turn create a more dynamic and exciting workplace, and will further drive our commitment towards realising our FIT22 aspirations. This will propel the integration of enterprise governance considerations with our business and risk strategies, while we continue to promote a sound compliance environment across the Group.

Hard work, determination, positivity, honesty and integrity are the very qualities that we need to adopt in order for us to come out of Integrated Report 2020 Report Integrated the current and emerging challenges, even stronger and better, while we “Stay Safe, Stay Healthy” and take good care of our loved ones. - Berhad RHB Bank

www.rhbgroup.com 112 RHB Bank Berhad - Integrated Report 2020 Corruption Plan and Anti-Bribery &Corruption Management operations manual. Academy. This will enhance thecapability andcompetency towards thedevelopment of RHBBanking Group’s Organisational Anti- In addition,three members of thedivisioncompleted theCertified Integrity Officer Programme conducted by Malaysia Anti-Corruption the module. year, amandatory e-learningmoduleon Anti-Bribery &Corruption was introduced for allRHBstaff with 99%completion rate for Bribery &Corruption efforts by inculcating good businessethics andpromoting integrity indaily workplace conduct. During the In 2020,theBoard steered theestablishment of theGroup Integrity &Governance division. This divisionoversees theGroup’s Anti- ANTI-BRIBERY &CORRUPTION (“ABC”) an eagleeye ontheperformance of theentities across theGroup. take theGroup’s businessesforward inthischallengingtime. The mainBoard, along with thesubsidiaries’ Board continued to keep As we entered into thethird-year of executing our FIT-22 strategic plan,theBoard continued itsoversight over themanagement to THE YEAR DURING BOARDACTIVITIES OUR GOVERNANCE PRACTICES DURING THE YEAR HOW WESTRENGTHENED • • • • Financial • • • • • • Performance andStrategy strategies Reviewed theimpactof Moratorium to theGroup’s financial Approved dividendpayment for FY2019/2020 Approved contents of theIntegrated Report for FY2019 Approved theoperational budget for FY2020 performance Reviewed impactof COVID-19 on theGroup’s financial Received updates ontheprogress of Agile@Scale of working Group duringtheBoard off-site session Discussed onthechallenges andopportunitiesfaced by the on market conditions andbusinessperformance Received updates from various business unitslocally andabroad Monitored theprogress of FIT22strategic plan the year Reviewed andapproved theGroup’s strategic businessplanfor GOVERNANCE FOR A SUSTAINABLE BUSINESS • • • • • • • Received updates onemployees satisfaction surveys deriving from theannualBEEassessment Discussed onthefindingsandimprovement considerations Reviewed theGroup’s annualCorporate Governance disclosure latest industry andregulatory developments Received various briefing/trainings to equipthemselves with Reviewed theGroup’s risk,compliance andauditreports Approved theBoard Governance Handbook performance Received COVID-19 impactonemployees’ well-being and • Received regular updates from supportingBoard Committees • Approved appointment of senior management personnel • Reviewed half-yearly reports to MACC planning • Approved theset-up of Group Integrity &Governance • Discussed ontalent management &succession to oversee matters relating to integrity, governance and anti-corruption Governance, Risk &Compliance People &Culture WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 113 STATEMENTS REVIEW REVIEW INFORMATION

HOW WE STRENGTHENED OUR GOVERNANCE PRACTICES DURING THE YEAR

BOARD EFFECTIVENESS EVALUATION (“BEE”)

The Board continued to conduct its annual in-house BEE in 2020. The performance of the Board, individual Directors and the Managing Director for 2019 was assessed, with the support of the Board Nominating & Remuneration Committee. The BEE assessment was conducted using the following parameters:

Part A Part B Part A of the assessment evaluated the overall behavior and culture Part B evaluated individual Board members’ contribution to the Board of the Board based on six (6) dimensions, namely decision-making, and aspects on personal qualities and attributes. Directors were communication, board dynamics, mindset, leadership and conduct assessed on specific traits such as agility, energy, social leadership, & culture. These values were identified as key to identifying the contribution & interaction, quality of input, understanding of role and functionality of the Board’s, individual Director’s and Board Committees’ independence. These criteria were used to ensure the Directors on the conduct and performance as a cohesive and collective unit. Board possessed the traits that are suited to oversee and support the Group’s FIT22 strategic plan.

How we conduct our evaluation process?

2017 2018 2019 2020 2021

Internally Internally Internally Externally Internally Facilitated Board Facilitated Board Facilitated Board Facilitated Board Facilitated Board Effectiveness Effectiveness Effectiveness Effectiveness Effectiveness Evaluation Evaluation Evaluation Evaluation Evaluation

An Independent external party will be appointed in 2021 to conduct the BEE for 2020 to provide balance and objective view on the Board, Board Committee and Individual Directors performance.

Report Questions Questions Responses presented Development circulated to reviewed and collated, reviewed along with of internal RHB Banking Group endorsed by and transposed recommendations to questionnaire Directors for BNRC into a report BNRC and entity response Boards

IR For detailed information on the BEE process and results, please refer to Practice 5.1 of RHB Bank Berhad’s CG Report. Integrated Report 2020 Report Integrated

CONTINUOUS PROFESSIONAL DEVELOPMENT

The Board undertook necessary training programmes to ensure members were well equipped with industry and regulatory developments. Detailed information on the training programmes attended by individual Directors is provided under Section B of our - Berhad RHB Bank Corporate Governance Report.

www.rhbgroup.com 114 RHB Bank Berhad - Integrated Report 2020 BOARD AND BOARD COMMITTEES MEETING ATTENDANCE 2020 OUR GOVERNANCE PRACTICES DURING THE YEAR HOW WESTRENGTHENED (8) (7) (6) (5) (4) (3) (2) (1) 10/10 13/13 13/13 13/13 13/13 11/11 13/13 13/13 13/13

5/5 5/5 4/4 6/6 2/2 28 February 2021. Tan Sri Azlan Zainol resigned from the Board on 15 September 2020. Datuk Iain John Lo was appointed to the Board on 2020. 17 August Donald Joshua Jaganathan was appointed to the Board on 29 May 2020. Mr Lim Cheng Teck was appointed to the BRC asmember on on 16March 2020. Dato’ Mohamad Nasir Ab Latif was appointed to the Board as Chairmanon24March 2021. Deputy Chairmanon 16 November 2020. He was appointed Board asaNon-Independent Non-Executive Director/ Tan Sri Ahmad Badri Mohd Zahir was appointed to the retired from the Board on29May 2020. Tan Sri Saw ChooBoon and Abdul Aziz Peru Mohamed Board on20October 2020. Datuk Seri Dr Govindan Kunchamboo retired from the Independent Non-Executive Director Tan Sri Azlan Zainol Independent Non-Executive Director Datuk Iain John Lo Independent Non-Executive Director Donald Joshua Jaganathan Independent Non-Executive Director Sharifatu LailaSyed Ali Independent Non-Executive Director Cheng TeckLim Independent Non-Executive Director Lin Ong Ai Non-Independent Non-Executive Director Dato’ Mohamad Nasir Ab Latif Non-Independent Non-Executive Director Tan Sri Ong Leong Huat @Wong Joo Hwa Group Managing Director Dato’ Ramli Khairussaleh Senior Independent Non-Executive Director Tan Sri Dr Rebecca Fatima Sta Maria Non-Independent Non-Executive Director/Chairman Tan Sri Ahmad Badri Mohd Zahir Independent Non-Executive Director Abdul Aziz Peru Mohamed Non-Independent Non-Executive Director Tan Sri Saw ChooBoon Datuk SeriDr Govindan Kunchamboo Non-Independent Non-Executive Director/Former Chairman GOVERNANCE FOR A SUSTAINABLE BUSINESS (3) (5) BOARD (6) (8) (4) (8)

(2)

(1) (7) Board Roles andResponsibilities • • • • Chairman affairs of theGroup other Senior Management on Group Managing Director and Regularlycommunicate with Board andstakeholders communication between the Ensure effective Meetings Preside over theGeneral deliberations Lead theBoard inits COMMITTEES SUPPORTING THE BOARD BOARD BOARD RISKCOMMITTEE The BRC provides oversight andgovernance of risksfor theGroup. the committee andmakes recommendations to theBoards. It oversees Senior Management’s activitiesinmanagingriskand • • Non-Executive Director Senior Independent reports directly to theGMD, andany person(s) asmay bedecidedby ensures that theriskmanagement process of eachentity within the include theGroupinclude Managing Director (“GMD”),theMD/CEO who Group isputinplace andfunctioning. The BRC alsoensures that the Committee members andkey Senior Management officers who management of theGroup’s riskisinaccordance with arisk-return Senior Management executivesessions with Directors inconducting Lead theIndependent the Board independent members of independent andnon- a conduit between the to theChairmanandbe Act asasoundingboard appointment, performance andremuneration of Directors, Board performance management framework. The BNRC supportstheBoard inreviewing andassessingthe BOARD NOMINATING &REMUNERATION COMMITTEE BOARD CREDIT COMMITTEE The BCC hastheresponsibility of affirming, vetoing or including regular updates onallon-going whistleblowing investigations. additional conditions onalltypesof credit applications oversees theGroup Integrity &Governance divisionandreceives (including understock/futures broking) andalltypesof well astheoperational performance of theGroup. The BAC also entities within theGroup andreviews thefinancialcondition as underwriting applications for amounts above thedefined thresholds of theGroup Credit Committee (“GCC”) andthe systems. The committee ensures ‘check andbalance’ for the management of reporting financial andinternal control Group Investment &Underwriting Committee (“GIUC”),of The BAC isresponsible for independent oversight over which both reside at theManagement level. BOARD AUDITCOMMITTEE

• • Independent Directors Committees Board andBoard brought before the reviewing items deliberating and judgment in Exercise independent management the performance of the Monitor andchallenge BNRC BAC BCC BRC WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 115 STATEMENTS REVIEW REVIEW INFORMATION

HOW WE STRENGTHENED OUR GOVERNANCE PRACTICES DURING THE YEAR BOARD AND BOARD COMMITTEES MEETING ATTENDANCE 2020

BAC BNRC BRC BCC

- - - -

- 8/8 - -

- - - -

- - - 30/30

- 4/4 - -

14/14 4/4 20/20 -

- - 15/15 30/30

14/14 8/8 - -

4/4 2/2 7/7 -

- - - -

9/9 2/3 - -

5/5 3/3 5/5 -

- - - -

Company Secretary Managing Director En Azman Shah Md Yaman leads the Group’s Legal, Secretariat & Governance teams. He is accountable directly to the Board, through the Chairman, on all matters with • The Group Managing regards to the formal functioning of the Board. He leads and maintains policies Director/Chief Executive and principles of good governance. En Azman is a qualified Advocate & Solicitor Officer undertakes the 2020 Report Integrated of the High Court of Malaya with an LLB (Honors) from the International Islamic responsibility to execute University Malaysia (“IIUM”), a Licensed Company Secretary (LS 0006901) and an the Group’s overall affiliate of the Malaysian Institute of Chartered Secretaries & Administrators. strategies En Azman also shoulders the responsibility as the Group’s Chief Integrity and Governance Officer (“CIGO”) within RHB Banking Group. He has completed the Certified

Integrity Officer (“CeIO”) accreditation programme conducted by the Malaysia Anti- - Berhad RHB Bank Corruption Academy (“MACA”).

www.rhbgroup.com 116 RHB Bank Berhad - Integrated Report 2020 " following: for quickreference andeasy guidance, which includesthe The Board hadputinplace aBoard Governance Handbook HIGHLIGHTS OF KEY CG ENHANCEMENT medium andlongterms: following Corporate Governance (“CG”) areas intheshort, In general, theBoard hasfocused and will befocusing onthe PROGRESS AND MILESTONES AND PROGRESS GOVERNANCE responsibilities of theBoard. " requirements governing theoperations and in line with theupdates to theregulatory Charter andapproved recommended changes The Board undertook areview of theBoard Continuing Education Programme Procedures onDirectors’ In-House Orientation & Terms of Reference for allBAC, BNRC, BRC andBCC Group Fit andProper Policy Boardroom Diversity Policy Framework onDirectors’ Expenses Nomination Framework for RHBBanking Group Remuneration Framework &Policy 2019 UPDATED THE BOARD CHARTER GOVERNANCE FOR A SUSTAINABLE BUSINESS SHORT-MEDIUM-TERM TO 2020 Summary of CG Areas Undertaken in2020: 1. 3. • • Corruption Built theGroup’s Capability &Capacity to Combat • Supported Increase inShareholders’ Participation 2. day administration. reports to Group Managing Director onday-to- Audit Committee onGIGcore functionsandalso who reports directly to theBoard andBoard expert inrelation to bribery andcorruption, Officer to advice theGroup assubjectmatter RHB appointed aChief Integrity &Governance and theMalaysian Anti-Corruption Commission. as thefocal point of contact between theGroup the Group. The dedicated unitisalsoresponsible oversee anti-bribery &corruption matters within Integrity &Governance (“GIG”)divisionto The Board approved theformation of aGroup Annual General Meeting. shareholder participation inour first virtual by allowing voting inabsentia andremote RHB adopted Practice 12.3of theMCCG I. following key internal control documents: The Board oversaw theupdate of the Strengthened Relevant Key Internal Controls II. • • GroupPolicy Whistleblowing • • • Group Gifts &Hospitality Guideline whistleblowing. Designated Recipient for Governance Officer asadditional Included Group’s Chief Integrity & [email protected] whistleblowing channel: Added Group’s primary Governance. responsibilities of Group Integrity & Included new roles and gifts andhospitality. Updated listof prohibited items for of theprohibited item. Included ‘facilitation payment’ asone

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 117 STATEMENTS REVIEW REVIEW INFORMATION

GOVERNANCE PROGRESS AND MILESTONES

FOCUS AREAS 2020 – 2025

Medium-Term 2022 Long-Term 2024 4. Increased Transparency in Corporate 2021 – – Reporting 2023 2025 • RHB published its first Integrated Report in-line with the recommendation of Practice 11.2 Strategic CG Focus Areas of the MCCG for greater disclosure, connected information between 1. Strengthening Internal 1. Monitoring 1. Reviewing the progress financial and non-financial and also standardised metrics for easy Controls effectiveness of Key of key milestones set industry/peer comparison. • The Board will Internal Controls within the approved oversee the • The Board will OACP development of review key internal • The Board will evaluate 5. Ensured Protection for our Human an Organisational control documents the progress of the OACP in line with the Capital Anti-Corruption Plan such as the Group expectations of the • A Pandemic Working Group was (“OACP”) for RHB Anti-Bribery & established to protect the well- regulatory bodies and Banking Group. Corruption Policy, being of RHB Banking Group’s enforcement agencies • The Board will Group Whistleblowing and also the agreed employees and at the same time, timeline. to ensure business operations continue to review Policy, Group Gifts & continued amidst the COVID-19 the Group’s existing Hospitality Guideline Fit & Proper Policy. and other relevant 2. Undertaking an Integrity pandemic. Pledge group-wide policies and guidelines • The Board will assess 2. Continuing adoption to ensure the Group the needs to undertake 6. Crafted Strategic Succession Planning of Practice 5.1 of the maintains its good an integrity pledge & Performance Appraisal MCCG compliance standing. group-wide to set the • The Board continued to assess • In-line with • The Board will tone from the top the capability of its directors by recommendation of also oversee the and also ensure all participating in the annual Board employees are aligned the MCCG, the Board implementation of Effectiveness Evaluation. As part with the Group’s zero- of planned rejuvenation in the will undertake an RHB Banking Group’s tolerance stance on boardroom, the Board bid farewell externally facilitated Organisational bribery or corruption to several directors including the BEE FY2020 Anti-Corruption Plan activities. departure of the Group’s exercise in 2021 (“OACP”). Chairman, Tan Sri Azlan Zainol on after conducting 3 3. Conducting Board’s Succession Planning & 28 February 2021. Fresh faces continuous yearly 2. Assessing Boardroom Performance Evaluation came on board in 2020 including Board assessments Effectiveness Evaluation the new Group Chairman who • The Board will internally. (“BEE”) continue with its was initially appointed as Deputy • An independent third • The Board will internally facilitated Chairman. BEE for FY2023 • The Board also concurred with party who carries continue with its in 2024 and later

out Board evaluation internally facilitated 2020 Report Integrated elements of regulatory compliance undertake externally will provide an BEE for FY2021 & to be incorporated in the next facilitated BEE Performance Appraisal Scorecard unbiased perspective FY2022. for FY2024 in the for the Group’s employees as on Director’s following year in 2025. an overlay factor for the overall performance. performance management considerations. - Berhad RHB Bank

www.rhbgroup.com 118 RHB Bank Berhad - Integrated Report 2020 GOVERNANCE of day-to-day operations to themanagement: throughout theorganisation. The Board hasaformal scheduleof matters specifically reserved to itfor decisionasnoted below anddelegates responsibility delivering objectives andmanagingtherisksthat are faced by theGroup. It isalsoresponsible for instillinggood ethical culture, values andbehaviours employees, customers, suppliers andthecommunities in which theGroup operates, while exercising good businessjudgement indeveloping strategy, The Board operates with the view of ensuring long-term sustainable success of the Group, generating value for all stakeholders, including shareholders, THE BOARD’S ROLE IN VALUE CREATION decisions are made. relevant issuesinto consideration before dialogue with senior management taking decision-making process involves atwo-way and views of allour stakeholders. The Board’s engineered takinginto account theneeds RHB Bank Berhad’s governance structure is • • • • • Matters Reserved for theBoard Expansion/entry into new markets/geographical regions Mergersand Acquisitions New investments/divestments New businessplansor changes to existing ones Business andoperating strategies UNDERLYING FRAMEWORK FOUNDATION STAKEHOLDERS RHB BANKING RHB BANK GROUP’S BERHAD GOVERNANCE FOR A SUSTAINABLE BUSINESS VALUES RHB Islamic Bank Other Subsidiaries FRAMEWORK RHB Insurance RHB Investment Bank improved ofthe support with theBoard Nominating &Remuneration Committee. the Board Committees are periodically reviewed by the Board and where required, in-line practicesbest the with andregulatory requirements. The compositionof by theBoard andrespective committees to ensure their mandates are carriedout (“ToR”)of respective the Board Committees. The ToRs are reviewed periodically This delegation of authority isclearly defined the within Terms of Reference Committees, however ultimate oversight andauthority remains with theBoard. for the Board to delegateand responsibilitiesfunctions specific to itsBoard and decisionmakingare not overlooked. The Group’s governance structure allows ManagementBoard andsupporting Committees to ensureinformation critical The Board continues to maintaincommunicationan open channel Seniorwith • • • • • • Progress of FIT22 Acquisitions/disposal of significant assets Partnerships or strategic alliance Joint ventures Set-up of new subsidiaries Corporate restructuring/reorganization CODE OF ETHICS AND CONDUCT STRATEGY Committees Main Board WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 119 STATEMENTS REVIEW REVIEW INFORMATION

The Board promotes sustainability agenda through RHB Bank’s Board has delegated authority to The Group’s Sustainability Management (“SM”) Environmental, Social and Governance (“ESG”) the Group Management Committee (“GMC”) team reports to the Group Chief Communications considerations embedded in the Group’s business on decision-making and implementation of Officer (“GCCO”) as the champion for RHB Banking strategies. The Board also governs the progress of sustainability-related matters. Chaired by the Group’s Sustainability Framework. The SM team the Group’s sustainability journey and execution, Group Managing Director (“GMD”) and comprising provides strategic support and collaborates with ensuring accountability and transparency of its Senior Management, the GMC’s role supplements Sustainability Sponsors, Sustainability Champions ethical and social responsibility footprints. The the Board’s responsibilities. The GMC discusses and others across the Group to implement the Board receives updates on material issues, new sustainability related matters quarterly and Group’s sustainability initiatives. Part of SM’s role developments and progress reports and discusses ensures specific initiatives are executed to and responsibilities include promoting awareness sustainability issues at least once every six months. promote sustainability and incorporates ESG amongst the Group’s employees on the Group’s considerations within RHB Bank’s business and sustainability initiatives. operations, in line with the bank’s corporate strategy and Sustainability Framework.

Reporting to ensure accountability in these governance areas: Islamic Risk Management Committee

Shariah Committee Our Value Creating Business Model Read more on Performance against strategy RHB Investment Bank Board Risk Committee (financial and non-financial: six capitals) Pages 46-47

Corporate Integrity & Ethical Business Conduct Read more on Board Audit Committee Business ethics Pages 123 Board Nominating & Remuneration Committee

Board Risk Committee Sustainability Review Read more on Sustainability Pages 90-93 Board Credit Committee

Statement on Risk Management RHB Insurance Board Risk Committee and Internal Control Read more on Risk governance Pages 95-144

Investment Committee Engaging with Stakeholders Read more on Stakeholder relationship governance Pages 39-42

VARIOUS CHARTERS & GOOD GOVERNANCE POLICIES GUIDELINES

BOARD COMPOSITION AND MEMBERSHIP BOARD & SENIOR MANAGEMENT REMUNERATION

The Board is responsible for ensuring long-term sustainable success of Attractive and fair remuneration is critical to attract, retain and motivate the Group through experienced leadership and establishment of effective Directors and Senior Management with the relevant experience and control and oversight of the Group’s activities. As at 31 March 2021, expertise to lead RHB. The Board ensures the remuneration package offered Integrated Report 2020 Report Integrated there are ten members of the Board, which comprises a Non-Executive promotes the achievement of strategic objectives within the ambient Chairman, a Group Managing Director/Chief Executive Officer and eight of RHB’s cultural components, risk appetite and regulatory compliance. Non-Executive Directors. The Board Nominating & Remuneration Committee (“BNRC”) has been entrusted with discharging the remuneration strategies, as outlined in its The Directors are of the opinion that the existing Board composition Terms of Reference, which can be referred on RHB corporate website. provides extensive relevant business experience and expertise needed to Detailed information on RHB’s remuneration practice can be found per - Berhad RHB Bank oversee the Group’s activities and that individual Directors bring a diverse disclosure under Practice 6.1, Practice 7.1, Practice 7.2 and Section B of range of skills, knowledge and experience (including diverse industries our Corporate Governance Report 2020. and international exposure), which are necessary to provide effective governance and oversight of the Group.

www.rhbgroup.com 120 RHB Bank Berhad - Integrated Report 2020 subsidiaries. extends to allentities within Malaysia anditsoverseas branches and Officer overseeing thecompliance riskmanagement of theGroup which operates onagroup-wide basis with anappointed Group Chief Compliance The Group’s compliance function, which acts asasecond lineof defense, practices throughout theGroup’s business. important guidefor theGroup to enableincorporation of compliance best Compliance Management Framework andPolicy which serve asan requirements. These principlesare further outlinedintheGroup’s is committed to upholdinggood governance principlesandregulatory As a prudent financialservices provider, the RHB Banking Group (“Group”) reputational consequences. Any failure to ensure compliance may result insignificant financial losses,heavy penaltiesand New laws andregulations continue to evolve which consequently increases regulator’s expectations. The regulatory environment for financialinstitutionsisincreasingly complex andalways changing. COMPLIANCE GROUP performance againstriskappetite andanassessment of emerging risks overall riskprofile, key risksandmanagement actions,together with actions. The report anddashboard provide amonthly view of theGroup’s satisfied with theoverall riskprofile, riskaccountabilities andmitigating Committee, Board Risk Committee andtheBoard to ensure that they are reviewed andregularly debated by theexecutive Group Capital&Risk At Group level, consolidated riskreport andriskappetite dashboard are an acceptable level of risk. management process also identifies whether the controls in place result in emerging risksare identified. The riskidentification, evaluation and Group isforward-looking initsriskidentification processes to ensure integrated into theGroup’s overall framework for riskgovernance. The evaluation andmanagement of theprincipalrisksfaced by theGroup is event occurring andthecosts of control. The process for identification, model, future performance, solvency or liquidity, thelikelihood of arisk risks facing theGroup, includingthosethat would threaten itsbusiness systems, theDirectors carriedoutarobust assessment of theprincipal In establishing and reviewing therisk management and internal control effectiveness. risk management andinternal control systems, includingreviewing their Directors acknowledge their responsibilities in relation to the Group’s as thefoundation for thedelivery of effective risk management. The Management are committed to maintaining arobust control framework compliance with applicablelaws andregulations. The Directors andSenior operations andto ensure thequality of internal andexternal reporting in control systems, which are designedto facilitate effective andefficient The Board isresponsible for theGroup’s riskmanagement andinternal RISK MANAGEMENT AND INTERNAL CONTROLS ACCOUNTABILITY GOVERNANCE FOR A SUSTAINABLE BUSINESS

updated. been inplace for the year under review andare periodically reviewed and and compliant with therequirements of Bank Negara Malaysia. They have Business Reporting issuedby theMalaysian Financial Reporting Council on Risk Management &Internal Control, andRelated Financial and reviewed by theBoard andare consistent with Bursa Malaysia’s guidance The Group’s riskmanagement and internal control systems are regularly discussions andto ensure that there are nounresolved issuesof concern. without thepresence of Management andExecutive Director for private have identified), andmeet with theexternal auditor at leasttwice a year (which includedetails of significant auditandaccounting matters that they reports from theGroup’s external auditor, PricewaterhouseCoopers PLT Management andGroup Internal Audit. The Board Audit Committee receives also receives reports of reviews undertaken by Group Risk &Credit reviewed regularly by theBoard andtheBoard Audit Committee, which The effectiveness of the riskmanagement and internal control systems is strategy. systems putinplace are suitable with regard to theGroup’s profile and arrangements are adequate to provide assurance that theriskmanagement pages 135to 144. The Board concluded that theGroup’s riskmanagement provided within the statement on risk management and internal control on risk management systems inrelation to thefinancialreporting process is plan. Information regarding the main features of the internal control and which could affect theGroup’s performance over thelife of theoperating Combating theFinancing of Terrorism (“AML/CFT”). a Chartered Banker and a Certified Professional in Anti-Money Laundering/ holds a Bachelor of Laws degree from University of East Anglia, UK. She is legal practice prior to starting her career in banking in 2001. Puan Fazlina Puan Fazlina hasover 18 years of bankingexperience and was in She reports to theBoard Risk Committee. Banking Group to comply with regulatory requirements. Group-wide compliance strategic plansthat enablesRHB Puan Fazlina Mohamed Ghazalli leadsandexecutes Group Chief Compliance Officer

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 121 STATEMENTS REVIEW REVIEW INFORMATION

MATERIAL RISK

Cybersecurity Cybercrime continues to increase and become more sophisticated, more frequent and widespread. As the Group moves towards embracing digitalisation and automation, the threat to information security becomes imminent, more so, due to the current COVID-19 pandemic where digital channel became a necessity.

ACTION TAKEN • Continuous monitoring and engagement with business units/IT team to ensure awareness on technology related regulatory requirements and the risk of cyber threats. • Heightened cyber-risks assessments in relation to the existing systems of the Group including regular reviews on processes and controls to establish the need for any additional security measures.

Protection of Information The Group has an obligation to ensure that information pertaining to its business and its clients and all activities related to them remain secure, confidential and private.

ACTION TAKEN • Implementation of the Group Chinese Wall and Insider Trading Policy (“Chinese Wall Policy”) to ensure that there is an information barrier between departments to prevent and/or control the flow of material non-public and price sensitive information. • Various engagement sessions and development of training tools for employees to better understand the principle behind the Chinese Wall Policy and secrecy provisions of the Financial Services Act 2013 and Islamic Financial Services Act 2013. • Heightened oversight and monitoring vis-à-vis handling of customer information including ensuring strict observance to BNM’s policy on Management of Customer Information and Permitted Disclosures and the Group’s Data and Information Management Framework and Policy.

Regulatory Compliance As regulatory requirements evolve and constantly change, managing non-compliance risk and meeting regulatory standards and expectations has become a daily focus for the Group.

ACTION TAKEN Instilling a strong compliance culture across all functions of the Group through the following compliance monitoring framework:

• Implementation of comprehensive and clear compliance policies, circulars and guidelines throughout the Group. • Frequent compliance reviews and testing to evaluate effectiveness of current processes and close regulatory gaps. • Effective compliance monitoring and reporting. • Annual compliance risk assessment to identify high risk areas and allocate resources effectively to mitigate such risks. • Promote adherence to regulatory requirements through regular compliance trainings and awareness programmes. • Address employee misconduct that resulted in regulatory non-compliance by incorporating a penalty in the final rating of employee’s performance evaluation.

19 Compliance Amidst COVID-19

The year 2020 has been particularly challenging for many industries, financial and capital market included. The uncertain impact of the COVID-19 2020 Report Integrated pandemic has generated significant instability in the overall economy of the country with the financial sector being one of the most impacted. While the Group, being an essential service provider, continued to operate throughout the movement control order and the subsequent conditional movement control order, it did not come without its own set of challenges.

The Group, like many other industries, was forced to adapt, including using various channels to ensure business continuity while maintaining its

standards to provide quality services to its customers. Amidst the chaos however, what remained constant was regulator’s expectation. Regulatory - Berhad RHB Bank enforcement did not suddenly stop with COVID-19. In fact, with all the relief measures and flexibilities provided, banks were expected to regroup and reassess its existing policies and procedures to cater for the new normal while ensuring no compromise on compliance with regulatory requirements.

www.rhbgroup.com 122 RHB Bank Berhad - Integrated Report 2020 The following are someof thekey initiatives by Group Compliance for 2020initseffort to remain vigilant amidsttheCOVID-19 pandemic: strategies to combat thesameandprotect itsstakeholder’s interest. the economic environment, the Group will not underestimate theemergence of new compliance risksandtheneedto come up with improved The above are by nomeansanexhaustive listof priorities that theGroup hasset for 2021. With thecurrent pandemicanduncertainties surrounding • • • • • The following are our key prioritiesfor 2021: that compliance isembeddedaspartof everyone’s responsibility intheorganisation. continuous vigilance and efforts to influence a widespread change. The Group understands this and is always looking out for new strategies to ensure Cultivating aculture of compliance goes beyond justcommunicating theimportance of obeying regulatory requirements to itsemployees. It requires • • • • • • • • • challenges Increase engagement sessions with regional subsidiariesand branches andprovide supportinterms of skills/knowledge andaddress any gapsor Embrace technology andcontinue to further explore automation anddigitalising compliance monitoring to minimiseerror-prone manualprocesses identification of key financialcrimeriskareas Aim for amore holisticmanagement of financialcrimeriskthrough awareness programmes, improvising existing systems andcontrols and amidst thenew normal Increase compliance oversight inhighly technical areas andcontinuous compliance testing to assesstheGroup’s overall non-compliance risks Enhancing andmaintaining ahighcompliance culture within theGroup compliance issuesanddevelopment throughout the year. Issuance of compliance bulletins andregulatory alertsonkey learning, offering amore interesting way to learn. topics were alsoexplored to provide bite-sized compliance In addition, shortexplainer videos on various compliance virtual instructor-led training platforms as such webinars. new normal where compliance trainings were delivered on Development of alternative learningplatforms to cater for the all ten (10)overseas branches andsubsidiariesof theGroup. A virtual compliance culture programme was alsorolled outat and developments. from theinitiative andexchanged various compliance issues compliance culture. In 2020,atotal of 46branches benefited in 2020line with theGroup’s effort to buildapositive The “A Branch &Compliance Day Programme” was continued compliance requirements. Use of technology andsystem enhancements to meet procedural gaps vis-à-vis regulatory requirements. Increased compliance andregulatory reviews to detect ensuring adherence to regulatory requirements. updated where required, to cater for thenew normal while that theGroup’s operational andbusinessprocesses are Overall review of circulars policies, andguidelinesto ensure and enhancement of AML policies. workaround on AML transaction monitoring, riskassessment implementation of robotic process automation to improve Strengthening of AML/CFT monitoring process through GOVERNANCE FOR A SUSTAINABLE BUSINESS INITIATIVES KEY PRIORITIESFOR 2021 • • • • • • • • expected of themresulting inimproved compliant behavior. by employees onregulatory requirements and what is Increased learningattentiveness andimproved understanding under remote work arrangement. Continual accessibility to learning,particularly for employees address thesame. Timely compliance risksidentification andsolutionsto amidst thenew normal. Business continuity while minimisingnon-compliance risks Management Batch alertmanagement process. alerts management particularly inrelation to the Watch List Productive andefficient AML transaction monitoring and Group. and theneedfor aneffective compliance culture within the Increased awareness amongststaff oncompliance activities undertaking their day-to-day function. and regional representatives inensuringcompliance in and staff, particularly onthechallenges faced by branch Improved understanding between thecompliance team requirements. Reporting Standards as well astheForeign Exchange Notices Enhanced monitoring inthearea of FATCA &Common OUTCOMES WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 123 STATEMENTS REVIEW REVIEW INFORMATION

CORPORATE INTEGRITY AND ETHICAL BUSINESS CONDUCT

TACKLING INTEGRITY & ETHICS

The Board continued to focus on strengthening our corporate integrity and Sustainable & Responsible Banking ethical business conduct. We undertook measures to ensure those who Building a have any business relationship with the Bank are aware, comprehend and sustainable Embedding Good Practices adhere to the laws and regulations governing corrupt practices. In line with this regulatory requirement, RHB introduced an Anti-Bribery & Corruption future (“ABC”) Declaration document to be completed and acknowledged by our Enriching & Empowering Communities business partners, agents and anyone who acts for and on behalf of RHB Banking Group.

In addition, the Group also embarked on the following initiatives: • The Guidelines on Adequate Procedures issued by the Prime Minister’s Department in December 2018; • Undertook annual corruption risk assessment with the results being • The Guideline for the Management of Integrity & Governance Unit elevated to the respective Board Committee(s) and the Boards; issued by the MACC in 2019; and • Communicated with internal and external stakeholders regularly on • Strategic Plan of Integrity and Governance Unit 2019-2021 issued by RHB’s ABC stance, policies and procedures; MACC. • Set-up a dedicated division, namely Group Integrity & Governance with necessary human, operational and financial resources; The Board, with the support of Board Audit Committee (“BAC”), will • Implemented various ABC programmes including mandatory continue to undertake the following activities to ensure the Group e-learning on ABC for all staff and introduced ABC legal clause for continues to uphold high standard of integrity and best practices with new contracts with RHB’s business partners; and regards to anti-bribery and corruption matters: • Continued to build capacity and capability of Group Integrity & Governance, including successful certification of three staff, including • conduct periodic bribery & corruption risk assessment with the results the Group’s Chief Integrity & Governance Officer by Malaysia being elevated to the respective Board Committee(s) and if required, Anti-Corruption Academy. to the Board; • communicate regularly with internal and external stakeholders on The Board continuously ensures that RHB’s ABC policies and frameworks RHB’s ABC stance and existing policies and procedures; are appropriately maintained and updated. As a yardstick to measure the • continue building capacity and capability for Group Integrity & level of our compliance, we are guided by the statutory and supervisory Governance including its staff competency and credibility; and requirements that relate to ABC such as: • manage all ABC and integrity matters within RHB Group, with facilitation by Group Integrity & Governance. • The Malaysian Anti-Corruption Commission (“MACC”) Act 2009;

Anti-Bribery & Corruption Group Anti-Bribery & stance & commitments Corruption Policy

Whistleblowing or “Speak Up” Group Gifts & Hospitality channels and avenues Guideline

Procurement Integrity RHB HAS Group Whistleblowing Policy Commitment ADEQUATE INTERNAL CONTROLS TO CURB BRIBERY & Core Shared Values (“P.R.I.D.E.”) Code of Ethics & Conduct CORRUPTION 2020 Report Integrated

Group Fraud Risk Group Corporate Sponsorship Management Policy & Donation Policy

Policy on Related Party - Berhad RHB Bank Group Fit & Proper Policy Transactions

www.rhbgroup.com 124 RHB Bank Berhad - Integrated Report 2020 opportunity to putquestionsto theBoard, management andchairs of the various committees. The Board encourages shareholders to attend theannualgeneral meeting, notice of which appears inthisIntegrated Report, where shareholders have the ANNUAL GENERAL MEETING financial andother information, including financialreports. The company’s corporate website provides the latest and historical news releases. wires and news distribution service providers) are used to disseminate channels (includingstock exchange news services, corporate website, news financial results onBursa Malaysia. A broad range of publiccommunication In addition, presentations and conference calls take place after publishing roadshow, conference calls,emailandour corporate website. meetings,one-on-one include groupchannels meetings, conferences and rating agencies through adedicated investor relationsCommunication unit. shareholdersinstitutional andfinancialanalysts,managers fund andcredit The Group manages communications its keywith audiences, financial including stakeholders. as key to buildingtrustandunderstanding between theCompany andits We consider ongoing engagement andcommunication with stakeholders on corporate strategies andfinancialdata to theinvesting communities. The Group iscommitted to providing timely andtransparent information INVESTOR RELATIONS STAKEHOLDER COMMUNICATIONS meetings meetings 63 95 2020 2019 GOVERNANCE FOR A SUSTAINABLE BUSINESS participants participants 729 535 QuarterlyResults Announcement Conferences, Roadshows andSpecial Briefings Analyst Briefings 14 September 30 November 27 February 3 December 28 August 8 October Event Date 30 March 17 April 29 May December, causingthe1-year TSR ranking to drop to 4 2020 share price closedlower from Aabar stake selldown inmid- RHB ranked 1 shifted to virtual briefings, improving accessibility to alarger audience. movement control order throughout 2020,IR’s communication mode In light of theCOVID-19 pandemicandtheimplementation of Constantly meets with investment community Corporate website: IR conducted: 4 quarterly results announcements - 1face-to-face briefing RHBSpecial Analyst Briefing Credit Suisse Asia Financials RHB Bank 3Q20Results RHB Bank 2Q20Results RHB Bank 1Q20Results RHB Bank 4Q19Results - 3teleconferences Virtual Corporate Day CitibankPan-Asia Nomura Malaysia Event Description Corporate Forum Investors’ Forum CLSA Flagship Corporate Day

st and2 www.rhbgroup.com nd for 3-and5-year TSR respectively. 1 Special Analyst Briefing Event Location (Country) Face-to-face Briefing Teleconferencing Teleconferencing Teleconferencing Malaysia Malaysia Malaysia Malaysia Malaysia th amongthepeers.

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ANALYST COVERAGE LIST

FIT22 progress update

1 Affin Hwang Investment Bank M&A and divestment opportunity for RHB and overall consolidation of banking industry

2 AmResearch Strategy to achieve ROE

Impact of OPR cut and possibility of further cuts 3 CGS-CIMB Securities CASA growth Macroeconomic and banking outlook

Deposits outlook ESG Framework 4 Citi Investment Research Net interest margin outlook Monetisation of fixed income securities

5 CLSA Securities

6 Credit Suisse Securities Dividend payout ratio Digital transformation strategy and its Target capital ratios progress

7 AllianceDBS Research Liquidity & Overall IT modernisation Funding Strategy AGILE way of 8 Hong Leong Investment Bank working and Capital progress of Management Innovation adoption Plan 9 JP Morgan Securities FOCUS AREAS 10 KAF-Seagroatt & Campbell Securities Moratorium, Payment Assistance Loan & COVID-19 11 Kenanga Investment Bank related issues Loans growth

Asset Cost 12 Macquarie Research Quality Management Mortgage

Auto Finance Group’s measures 13 Maybank Investment Bank to mitigate effects Corporates of the pandemic SME 14 MIDF Amanah Investment Bank Implementation of moratorium and impact on the Group Singapore Credit cost - operations Options under payment 15 Nomura Research macroeconomic factors and assistance management overlays Integrated Report 2020 Report Integrated SME relief funds 16 TA Securities Restructured & Managing digital rescheduling accounts spending Exposure to B40 segment and Micro SME Exposure to vulnerable Improvement in 17 UBS Securities sectors CIR Net modification loss - Berhad RHB Bank Potential rise in impaired 18 UOB Kay Hian loans and credit cost

www.rhbgroup.com 126 RHB Bank Berhad - Integrated Report 2020 CREDIT RATINGS STAKEHOLDER COMMUNICATIONS RHB Investment Bank Berhad RHB Islamic Bank Berhad RAM Rating Services Berhad RAM Rating Services Berhad RAM Rating Services Berhad Moody’s Investors Service RHB Bank Berhad Standard &Poor’s Rating Rating Agency Rating Agency Rating Agency Services GOVERNANCE FOR A SUSTAINABLE BUSINESS Outlook Credit AssessmentBaseline Short-Term Bank Deposits Long-Term Bank Deposits Outlook Short-Term Financial Institution Long-Term Financial Institution Outlook Short-Term Financial Institution Long-Term Financial Institution Outlook Short-Term Financial Institution Long-Term Financial Institution Outlook Short-Term Financial Institution Long-Term Financial Institution Rating Classification Rating Classification Rating Classification Negative Ratings Ratings Ratings Stable Stable Stable Stable BBB+ baa2 AA2 AA2 AA2 A-2 P-2 A3 P1 P1 P1 WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 127 STATEMENTS REVIEW REVIEW INFORMATION BOARD AUDIT COMMITTEE REPORT

COMPOSITION AND ATTENDANCE OF MEETINGS

A total of fourteen (14) Board Audit Committee (“BAC”) meetings were held during the financial year ended 31 December 2020. The BAC comprises the following members and the details of attendance of each member at the BAC meetings held during the year are as follows:

Number of COMPOSITION OF BAC Meetings Attended

Ms Ong Ai Lin 14/14 Chairperson/Independent Non-Executive Director The Board Audit Committee Puan Sharifatu Laila Syed Ali 14/14 Report for the financial year Member/Independent Non-Executive Director ended 31 December 2020 is prepared pursuant to the Listing Mr Donald Joshua Jaganathan Member/Independent Non-Executive Director 4/4 Requirements of the Bursa Appointed as Member of the BAC on 1 October 2020

Malaysia Securities Berhad. Datuk Seri Dr Govindan Kunchamboo Member/Independent Non-Executive Director 9/9 Appointed as Member of the BAC on 1 February 2020 and resigned on 20 October 2020

Tan Sri Saw Choo Boon Member/Non-Independent Non-Executive Director 5/5 Retired as Member of the BAC on 29 May 2020

The BAC undertakes the functions of the Audit Committee of Key matters deliberated at the BAC meetings together with the entities within the Group encompassing RHB Bank, RHB the BAC’s recommendations and decisions are summarised Investment Bank Berhad, RHB Islamic Bank Berhad and RHB and presented to the relevant Boards, in the same month, by Insurance Berhad. the Chairperson or representative of the BAC. This allows the respective Boards to be timely apprised of significant matters The BAC meetings were also attended by the Group Chief Financial deliberated by the BAC and for the Boards to provide direction, if Officer, being the Chairman of the Management Audit Committee necessary. Extracts of the minutes of the BAC meetings held were (“MAC”) of RHB Bank and the Group Chief Internal Auditor provided to the respective Boards for their information. (“Group CIA”) while the attendance of other Senior Management is by invitation, depending on the matters deliberated by the BAC. AUTHORITY

Where required, Management of the relevant functions were also The BAC is authorised by the Board to, among others, review and invited to the BAC meeting to provide explanations on control investigate any matters within its terms of reference; have direct lapses and remediation plans arising from matters highlighted in communication channels with the external and internal auditors the audit reports. as well as regulators; obtain independent professional advice, if necessary, at the Company’s expense; and access to Management

and resources to enable effective discharge of its functions. 2020 Report Integrated The full terms of reference, including the authority, duties and responsibilities of the BAC are published in RHB Bank’s website. - Berhad RHB Bank

www.rhbgroup.com 128 RHB Bank Berhad - Integrated Report 2020 The work carriedoutby theBAC inthedischarge of itsdutiesandresponsibilities duringthefinancial year are summarisedasfollows: SUMMARY OF BAC ACTIVITIES IN2020 Internal Audit Financial Reporting e) d) c) b) a) a) the Board of therespective entities. Audit Charter and recommended the same for approval by Reviewed anddeliberated theupdates madeto theInternal the MAC of therespective entities. Reviewed andapproved the updated Terms of Reference of accordance with thematrix approved by theBoard. and approved theperformance rewards for theGroup CIA in and reviewed theappraisals of senior staff members of GIA, Group CIA. Appraised theperformance of theGroup CIA Reviewed andapproved theBalanced Scorecard for the policies andguidelines,IT project participation. assignments, ad-hocauditprojects, review of frameworks, Audit (“GIA”) for thefinancial year covering theplannedaudit Reviewed theauditactivitiesundertaken by Group Internal and resources as well ascompetency of theinternal auditors. financial year 2020to ensure adequacy of scope, coverage Reviewed andapproved theannualauditplanfor the • • process encompassed thefollowing: recommending them for the Board’s approval. The review and the Group as well as thedraft announcements before the annualaudited financialstatements of RHBBank Reviewed thequarterly unaudited financialresults and to assess their reasonableness. between thecurrent andcorresponding quarter/period Group Chief Financial Officer onany significant changes explanations from the Senior Management including the Reviewed thefinancialstatements andsought the financialstatements. new or updated accounting standards, anditsimpactto Reviewed changes inaccounting policy andadoption of BOARD AUDIT COMMITTEE REPORT i) h) g) f) b) Audit Committees. arising therefrom had been appropriately addressed by these relevant regulatory authoritiesto satisfy itself that allmatters of theoverseas subsidiaries to theextent permitted by the Reviewed theminutes of meetings of the Audit Committees adequately andpromptly addressed by Management. ensure that allmatters highlighted inthesereports hadbeen taken by Management inrespect of thereported findingsto the Management’s response as well astheremedial actions Reviewed thereports issuedby theregulatory authoritiesand highlighted. to address andimprove theinternal control weaknesses tabled to theBAC andprovided directions, where necessary, Reviewed anddeliberated ontheinvestigation reports the areas highlighted. improve thesystem of internal controls anditsprocesses on well asthetimely remedial actionstaken by Management to and Management’s responses to theserecommendations as meetings, internal audit reports, audit recommendations Reviewed anddeliberated ontheminutes of allMAC • • • • • Committee Report: ended 31 December 2020as highlighted in their Audit identified duringthestatutory auditfor thefinancial year Discussed with theexternal auditors thefollowing matters Summary of uncorrected misstatements. Other required communications; and Tax related matters; IT related matters; moratorium dueto COVID-19; credit andimpairment assessment as well aspayment Significant auditandaccounting matters including WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 129 STATEMENTS REVIEW REVIEW INFORMATION

External Audit

a) Reviewed the 2020 audit plan of the external auditors e) Reviewed the external auditors’ performance and for RHB Banking Group covering the audit strategy, risk independence before recommending them to the Board for assessment and areas of audit emphasis for the year. reappointment as external auditors for the Group:

b) Reviewed with the external auditors, the results of their audit • The external auditors have declared in their 2020 audit together with their recommendations and Management’s plan, which was tabled to the BAC in August 2020, that response to their findings as detailed in the following reports, they have maintained their independence for the audit of and provided BAC’s views and directions on the areas of the financial statements of the Group in accordance with concern where necessary: the firm’s requirements and with the provisions of the By-Laws on Professional Independence of the Malaysian Reports issued by Institute of Accountants. They have further declared that External Auditors in 2020 Date tabled to BAC the non-audit services provided to the Group during the year have not compromised their independence as Audit Committee Report for external auditors of the Group. 23 January 2020 the financial year 2019 • The annual assessment on the external auditors covering the key areas of performance, independence and Internal Control Report for the 24 July 2020 objectivity in accordance with the BNM Guidelines on financial year 2019 External Auditor. • The performance of the external auditors was also Limited review of the assessed through a survey completed by the Management unaudited financial statements personnel of the Group based on their dealings with the of RHB Bank and RHB Islamic 24 July 2020 Bank for the financial period external auditors covering areas such as the quality of ended 30 June 2020 audit work, coordination during planning and execution of audit work, technical accounting and business Audit Progress Update Report knowledge, timeliness and staff continuity. 20 November 2020 for the financial year 2020 • A comprehensive review was also conducted in December 2020 prior to the reappointment of the external auditors The BAC further directed the respective MACs to track the to assess its independence and the potential risk of audit findings highlighted by the external auditors in their familiarity threat at all the banking entities within Internal Control Report to ensure timely resolution of all the Group. The comprehensive review covered three matters by Management. main categories, i.e. governance and independence, communication and interaction, and quality of services c) Met with the external auditors on 23 January 2020 and and resources. 21 August 2020 without the presence of Management and Executive Directors to enable the external auditors to discuss The comprehensive review was conducted by Group matters with the BAC privately. Finance and independently verified by GIA prior to tabling to the BAC for deliberation. d) Reviewed the appointment of the external auditors for the provision of non-audit services before recommending them for the Board’s approval. Areas that are considered include the external auditors’ expertise, adequacy of knowledge and experience required for the services rendered, competitiveness of fees quoted and whether its

independence and objectivity would be impaired. 2020 Report Integrated

Reviewed on a quarterly basis, the non-audit services rendered by the external auditors and the related fees taking into consideration the fee threshold established

under the Group policy to ensure that the external auditors’ - Berhad RHB Bank independence and objectivity were not compromised.

www.rhbgroup.com 130 RHB Bank Berhad - Integrated Report 2020 approved by theBAC. appraisal, as well as theGIA’s scope of work andresources, are of theGIA function,theGroup CIA’s appointment andperformance impartiality andobjectivity. To further preserve theindependence to theGroup Managing Director to maintain theGIA function’s The Group CIA reports functionally to theBAC andadministratively and governance processes implemented by theManagement. and effectiveness of theGroup’s riskmanagement, internal control defence, isto provide anindependent assessment ontheadequacy Framework. GIA’s mainresponsibility, beingthethird lineof of Internal Auditors’ latest International Professional Practices of Licensed Institutions (BNM/RH/GL 013-4)andtheInstitute Negara Malaysia (“BNM”)Guidelines onInternal Audit Function is guidedby itsInternal Audit Charter approved by theBoard, Bank RHB Banking Group hasanin-houseinternal auditfunction, which INTERNAL AUDITFUNCTION www.rhbgroup.com. in Section Bof the Corporate Governance Report available at development programmes attended by BAC members are disclosed The detailed information of mandatory andprofessional responsibilities. enhance their knowledge for thedischarge of their dutiesand of latest developments within thebankingindustry as well asto training programmes, conferences andseminars to keep abreast During the year, theBAC members have attended various TRAINING RelatedParty Transactions b) a) effective andthat itsoperations are operating asintended. with independent assurance that theriskmanagement systems, internal controls andgovernance processes of theGroup are degree from theUniversity of Toronto andisamember of Institute of Internal Auditors Malaysia. GIA provides theBoard in thebankingbusiness with more than 10 years’ experience ininternal auditing.He holdsaBachelor of Commerce (Finance) Mr Alex Tan Aun Aun leadstheGIA functionandhereports to theBAC. He hasmore than25 years of multifaceted experience Group Chief Internal Auditor disclosures inaccordance with theregulatory requirements. against theceiling set to ensure proper reporting and RPTs (“RRPTs”) which are individually tracked andmonitored The review covered theaggregate consideration of Recurrent transactions are commercially basedandat arm’s length. situations inensuringthat theterms andconditions of the transactions includingany possibleconflict of interest (“COI”) on aquarterly basiscovering thenature andamount of the Reviewed the reports of related party transactions (“RPTs”) BOARD AUDIT COMMITTEE REPORT c) b) a) summarised asfollows: The mainactivitiesundertaken by GIA duringthefinancial year are Summary of GIA’s Activities to accomplish itsobjectives. continue to beadequate andrelevant to enable theauditfunction authority and responsibility, as defined in the Audit Charter, or asand when necessary to assess whether theGIA’s purpose, The Audit Charter isreviewed by theGroup CIA every two years of theGroup. the Group’s intranet portal, which canbe viewed by allemployees approved by theBoard. The approved Audit Charter ispublishedin authority andresponsibility of internal the auditfunctionandis The Internal Audit Charter (“Audit Charter”) defines the purpose, CharterInternal Audit c) Insurance Business andOverseas Operations. Business, Investment Banking Business, Asset Management, Operations, IT Security, Head Office functions,Shariah Branches, Credit Underwriting, Business Centres, Treasury Audited key areas duringthefinancial year which includedthe Board or regulators duringthe year. hoc reviews andinvestigations requested by Management, the Conducted auditsasper theapproved auditplanas well asad manpower requirements for eachplannedauditableunit. Group which includestheauditobjectives andscope, and Prepared the annual risk-based audit plan for RHB Banking of therelevant partiesinvolved intheRPT process. situations as well asoutliningthedutiesandresponsibilities reporting andmonitoring of RPTs, RRPTs and potential COI governs the process of identifying, evaluating, approving, The Group has inplace an approved policy onRPTs which WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 131 STATEMENTS REVIEW REVIEW INFORMATION

d) Conducted audits as per regulatory requirements such as As at 31 December 2020, GIA has 144 internal auditors with compliance with BNM’s Guidelines on Anti-Money Laundering relevant academic/professional qualifications and experience to and Counter Financing of Terrorism, Disclosure of Customer carry out the activities of the internal audit function. The costs Documents or Information, Single Counterparty Exposure incurred for maintaining the internal audit function for the financial Limit, Outsourcing, Product Transparency & Disclosure and year 2020 amounted to RM27.1 million. PayNet’s applicable rules, procedures and manual for payment and debt securities systems. Professional Proficiency The Group CIA ensures that the internal auditors are suitably e) Carried out ad-hoc compliance and validation reviews as qualified and provided with the necessary trainings and continuous requested by regulators. professional development for the purpose of enhancing their audit and relevant technical skills to perform their duties and f) Monitored and followed up through the respective MACs on responsibilities. the timely rectification of any reported audit findings and the underlying causes highlighted by the internal and external The internal auditors are further required to pursue the relevant auditors, and regulators. The status of any outstanding audit certification programmes such as those offered by the Institute of findings is summarised and reported to the BAC on a monthly Internal Auditors (“IIA”) and Asian Institute of Chartered Banker basis. in order for them to be proficient and competent in the relevant disciplines. g) Performed root cause analysis and shared the results with the Management for the appropriate actions to be taken to Based on each staff’s Individual Development Plan for the year address the identified issues holistically. 2020, the internal auditors attended the relevant technical as well as leadership and management programmes offered by RHB h) Reviewed new or updated framework, policies and guidelines Academy, the Group’s Learning and Development Centre, and as requested by Management to provide feedback on the external programmes. adequacy of internal controls to address the relevant risks. Internal Audit Quality Assurance Review i) Participated in new IT system or new product development To ensure effectiveness of the internal audit function, the Group activities to provide recommendations upfront on the relevant CIA has developed and maintained a quality assurance and control features to be considered by Management. improvement programme that covers all aspects of the internal audit activities. The quality assurance programme assesses the j) Assisted the BAC in the annual exercise on the reappointment effectiveness of processes within the internal audit function and of external auditors by assessing its independence and identifies opportunities for improvement through both internal potential risk of familiarity threat at all the banking entities and external assessments. within the Group. The internal assessment is performed according to the approved k) Attended Management meetings as permanent invitee on a annual Quality Assurance Review (“QAR”) plan by a QAR team consultative and advisory capacity to provide independent within GIA. The Head of QAR function reports directly to the feedback where necessary on internal control related matters. Group CIA to maintain its independence of the internal audit activities within GIA. l) Organised MACs meetings, preparing meeting materials as well as preparing minutes of meetings for submission to BAC. In addition to the internal assessment, external quality assessment is conducted every five years by qualified professionals. The m) Prepared the BAC Report and the Statement on Risk appointment of independent reviewer is subject to the Group’s Management and Internal Control for inclusion in RHB Bank’s established procurement process and endorsed by the BAC. Integrated Report for the year 2020 upon approval by the BAC Integrated Report 2020 Report Integrated and the Board respectively. The external quality assessment covered a broad scope that includes conformance with the Definition of Internal Auditing, the Internal Audit Resources Standards and the Code of Ethics, and the internal audit charter, The Group CIA, in consultation with the BAC and the Group audit plan, policies and procedures in line with the requirements Managing Director, decides on the appropriate resources required of the International Standards for the Professional Practice of for the GIA taking into consideration the size and complexity of Internal Auditing of the IIA, BNM guidelines and industry best - Berhad RHB Bank operations of the Group. The primary organisation chart/structure practices. The results of review by the independent reviewer are of GIA is reviewed and approved by the BAC annually. documented in a report which is tabled to the BAC.

www.rhbgroup.com 132 RHB Bank Berhad - Integrated Report 2020 The results of theassessment are tabledto RHBIslamic’s Board of Directors for endorsement. of aShariah Committee member. discharging itsdutiesandresponsibilities, andeachindividualmember’s level of skillandcompetency intheareas of expertise expected invitees to the Shariah Committee meetings. The questionnaire encompasses considerations ontheeffectiveness of the Committee in exercise is primarily basedonadetailed questionnaire that isdistributed to therespective Committee members andthepermanent effectiveness of individualmembers andtheCommittee asa whole ona yearly basis. The Shariah Committee’s annualassessment In compliance with BNM’s Shariah Governance Policy Document, theShariah Committee undergoes aprocess of assessingthe SHARIAH COMMITTEE’S EFFECTIVENESS ASSESSMENT programmes organised by the Association of Shariah Advisors inIslamic Finance (“ASAS”). The Shariah Committee members alsoenrolled intheCertified Shariah Advisor (“CSA”) andCertified Shariah Practitioner (“CSP”) ENGAGEMENT SESSIONS& TRAININGS ATTENDED Engagement Sessions& Trainings of spreading Shariah knowledge and awareness among RHB In addition,theShariah Committee alsocontributed to theefforts 3. 2. 1. training programmes were heldasfollows: and theBoard of Directors of RHBIslamic Bank, specialin-house communication between theShariah Committee, theManagement As partof theinitiatives aimedat maintaining effective 3. 2. 1. objectives: Islamic”) with thefollowing main Bank Berhad (“theBank” or “RHB established under RHBIslamic The Shariah Committee was Daud Bin Bakar heldon11 August 2020 Shariah Advisory Council of BNM2020by Dato’ Dr. Mohd Enlightenment ontheShariah Resolutions issuedby the RHB Islamic heldon20 July 2020 In-house briefing on 2020 Directors andShariah Committee Members heldon6May Engagement sessionbetween RHBIslamic Bank Board of with Shariah principles. procedures leadingto prompt compliance To ensure theestablishment of appropriate (“SC”). and that of theSecurities Commission (“SAC”) of Bank Negara Malaysia (“BNM”) Committee, theShariah Advisory Council are establishedbetween theShariah To ensure effective working arrangements compliant. business, affairs andactivitiesare Shariah- the Bank to ensure that itsaims,operations, To provide objective andsoundadvice to SHARIAH COMMITTEE REPORT CommodityMurabahahTawarruq Via by En. Mohd Fadhly Md. Yusoff COMPOSITION ANDATTENDANCEMEETINGS OF Kamil Wan Mohamed Ali En. Wan Abdul Rahim A total of eleven (11)regular meetings andone(1)specialmeeting were held duringthefinancial year ended 31December 2020. All existing members satisfied theminimumattendance requirement under BNM’s Dr. Ahmad Basri Ibrahim Shariah Governance Policy Document, which provides that aShariah Committee member isrequired to attend at least75%of theShariah SHARIAH COMMITTEE MEMBER Committee meetings heldineachfinancial year. Details of the attendance of eachmember are asfollows: 1. in anonlinecourse asfollows: Furthermore, one of the Shariah Committee members participated 3. 2. 1. through “Shariah Committee Sharing Series” sessionsasfollows: Banking Group staff by sharinginsights, expertise andexperience 21 October 2020 The Mechanics of Fintech and Artificial Intelligence, Kamaruzaman Noordin heldon8September 2020 The Beauty of Tabarru’ in Takaful by Assoc. Prof. Dr. Mohamad Mokhtar heldon15May 2020 COVID-19: Shock &Faith for Islamic Finance by Pn. Shabnam Ali held on6March 2020 Finance by En. Wan Abdul Rahim Kamil Bin Wan Mohamed Achieving Sustainability andCreating Impact through Islamic

12/12 12/12 9/12 Kamaruzaman Noordin Assoc. Prof. Dr. Mokhtar Pn. Shabnam Mohamad Meetings Attended Number of 10/10 12/12

WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 133 STATEMENTS REVIEW REVIEW INFORMATION ADDITIONAL COMPLIANCE INFORMATION DISCLOSURES

(A) UTILISATION OF PROCEEDS RAISED FROM CORPORATE PROPOSALS

Material Contracts

DISPOSAL BY RHB INVESTMENT BANK BERHAD (“RHB INVESTMENT BANK”), A WHOLLY-OWNED SUBSIDIARY OF RHB BANK, OF ITS ENTIRE EQUITY INTEREST IN RHB SECURITIES SINGAPORE PTE LTD (“RHB SECURITIES SINGAPORE”) (DISPOSAL)

RHB Investment Bank, had on 29 June 2020, entered into a conditional share purchase agreement with Phillip Securities Pte Ltd (“Purchaser”) in respect of the Disposal.

The above Disposal entailed the disposal of RHB Investment Bank’s entire equity interest in RHB Securities Singapore to the Purchaser for a consideration based on the net tangible assets of RHB Securities Singapore preceding the completion date and adjustments mutually agreed between RHB Investment Bank and the Purchaser.

Prior to the completion of the Disposal, RHB Securities Singapore undertook a corporate exercise to transfer certain businesses and assets to RHB Bank (Singapore Branch) (“the Transfer”), subject to approvals from the relevant regulators. Bank Negara Malaysia had vide its letter dated 28 August 2020 approved the following:

(i) RHB Bank to acquire the entire equity interests in RHB Nominees Singapore Pte Ltd, Summit Nominees Pte Ltd and RHB Research Institute Singapore Pte Ltd; and (ii) RHB Bank to acquire the client coverage team, research and advisory services in relation to corporate finance, mergers and acquisitions, equity capital markets and institutional equities sales (collectively referred to as the “Capital Market Services”) and share margin accounts from RHB Securities Singapore, which will be carried on and continued by RHB Bank (Singapore Branch).

RHB Bank had on 28 August 2020, entered into a business transfer agreement with RHB Securities Singapore in respect of the transfer by RHB Securities Singapore of the following businesses and assets to RHB Bank for a cash consideration of SGD20.57 million:

(i) the entire equity interests in RHB Nominees Singapore Pte Ltd, Summit Nominees Pte Ltd and RHB Research Institute Singapore Pte Ltd; and (ii) the Capital Market Services, share margin accounts and the relevant assets and liabilities.

The Transfer was completed on 31 August 2020.

Subsequently on 11 September 2020, RHB Investment Bank completed the Disposal for a consideration of SGD87.62 million.

Accordingly, RHB Securities Singapore has ceased to be a wholly-owned subsidiary of RHB Investment Bank.

Capital and Fund Raising Exercises

During the financial year ended 31 December 2020, the following issuances were made by the RHB Bank Group:

(i) RHB Bank issued two tranches of Subordinated Notes amounting to RM500 million each on 28 May 2020 and 20 November 2020 under a multi-currency medium term note programme of up to RM5 billion (or its equivalent in other foreign currencies) Integrated Report 2020 Report Integrated in nominal value;

(ii) RHB Bank issued Senior Sukuk amounting to RM300 million on 20 October 2020 based on the Shariah principle of Murabahah (via Tawarruq arrangement) (“Senior Sukuk Murabahah”) under a multi-currency Islamic medium term notes programme of up to RM10 billion (or its equivalent in other currencies) in nominal value. - Berhad RHB Bank

www.rhbgroup.com 134 RHB Bank Berhad - Integrated Report 2020

(B) (c) (b) (a) The issuance of DRP Shares issubjectto theapprovals from: relevant authority and/or party, if required. The Proposed DRP issubjectto theapproval from Shareholders at our forthcoming Annual General Meeting (“AGM”) andany other working capital,repayment of borrowings and/or other requirements of RHBBank anditssubsidiaries. DRP Shares. The net fundsretained from theProposed DRP (after thedeductionof any related expenses) may beutilisedto fund The Proposed DRP will potentially result retention inacash for Bank RHB if itsShareholders electto reinvest their dividendin potentially improve thetrading liquidity of RHBBank shares through theissuance of DRP Shares. in RHB Bank by investing in DRP Shares at a discount and from any future capital appreciation. The Proposed DRP may also of Bank’s RHB capitalmanagement strategy, as well asto offer Shareholders theoption to enhance the value of their shareholdings The rationale of theProposed DRP isto provide RHBBank with flexibility inmanagingandstrengthening itscapitalpositionaspart in part,their cashdividenddeclared by RHBBank innew ordinary shares of RHBBank (‘DRP Shares’) (‘Proposed DRP’). reinvestment plan(“Proposed DRP”)that provides itsshareholders (‘Shareholders’) with anoption to electto reinvest, in whole or RHB Bank Berhad (“RHBBank”) announced on17December 2020that itproposes to undertake theestablishment of adividend Proposed Establishment of aDividend Reinvestment Plan disclosed inNote 31and32of theFinancial Statements. Shariah-compliant activitiespurposes within theGroup. Details of theSenior Sukuk Murabahah andSubordinated Notes are The proceeds raised from theSenior Sukuk Murabahah andSubordinated Notes have beenusedfor general working capitaland The Board didnot enter into nor seekmandate from itsshareholders onany RPT duringthepastfinancial year. Committee for deliberation. reviewed by Group Legal prior to independent review by Group Internal Audit before any submissionismadeto theBoard Audit in 2015), which guides the review and reporting of all related party transactions. Under this policy, related party transactions are The Group hasputinplace aPolicy onRelated Party Transaction Review Process (“thePolicy) since 2004(revised andupdated RELATED PARTY TRANSACTIONS Bank Negara Malaysia for theincrease intheissuedshare capitalof RHBBank arisingfrom theissuance of DRP Shares. Shareholders for theallotment and issuance of DRP Shares to betabledat theforthcoming AGM; and Bursa Securities for thelistingandquotation of theDRP Shares ontheMain Market of Bursa Malaysia Securities Berhad; DISCLOSURES ADDITIONAL COMPLIANCE INFORMATION WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 135 STATEMENTS REVIEW REVIEW INFORMATION STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL This Statement on Risk Management and Internal BOARD RESPONSIBILITY Control (“Statement”) is The Board is committed to its overall responsibility in establishing a sound risk prepared pursuant to the management and internal control system in the Group. The Board’s responsibility Listing Requirements of includes reviewing the adequacy and effectiveness of the risk management and internal control system in safeguarding shareholders’ interest and the Group’s Bursa Malaysia Securities assets. While total elimination of risks is not possible, the system has been designed Berhad (“Bursa Malaysia”). to manage the Group’s risk appetite within the established risk tolerance set by the Board and Management to support the achievement of the Group’s business objectives. The system can therefore only provide reasonable and not absolute The Statement has been assurance against the occurrence of any material misstatement, loss or fraud. prepared in accordance with In acknowledging that having a sound risk management and internal control system is imperative, the Board has established a governance structure that ensures effective the guidelines as set out oversight of risks and internal controls in the Group at all levels. To this end, the in the “Statement on Risk Board is assisted by the Board Risk Committee (“BRC”) and Board Audit Committee (“BAC”) which have been delegated with primary oversight responsibilities on the Management and Internal Group’s risk management and internal control system. The Board remains responsible Control: Guidelines for for the governance of risk and for all the actions of the Board Committees with regard to the execution of the delegated oversight responsibilities. Directors of Listed Issuers” endorsed by Bursa Malaysia. The Board has also obtained assurance from the Group Managing Director and the Group Chief Financial Officer that the Group’s risk management and internal control system is operating adequately and effectively. The Statement outlines the key features of the risk management and internal MANAGEMENT RESPONSIBILITY control system of RHB Banking Group (“the Group”) The Management is responsible for the overall implementation of the Group’s policies and processes to identify, evaluate, measure, monitor and report on risks during the year under review. as well as the effectiveness of the internal control systems, taking appropriate and timely remedial actions as required. Its roles include:

• Identifying and evaluating the risks relevant to the Group’s business and achievement of its business objectives and strategies; • Designing and implementing the risk management framework in accordance with the Group’s strategies and risk appetite, and monitoring its effectiveness; and • Reporting in a timely manner to the Board on any changes to the risks or

emerging risks and the appropriate actions taken. 2020 Report Integrated

Accordingly, the Management has provided assurance to the Board that the Group’s risk management and internal control system is operating adequately and effectively with the necessary processes having been implemented. - Berhad RHB Bank

www.rhbgroup.com 136 RHB Bank Berhad - Integrated Report 2020 market risk,liquidity riskandbalance sheet management. matters relating to RHBInvestment Bank Group’s business whilst theGroup Asset and Liability Committee (“Group ALCO”) oversees Group Management Committee. The Investment Bank Risk Management Committee is responsible for oversight of riskmanagement Capital andRisk Committee comprising senior management of theGroup and which reports to therelevant board committees andthe The responsibility for thesupervision of theday-to-day management of enterprise riskandcapitalmatters isdelegated to theGroup models, andriskissuesrelevant anduniqueto itsbusiness. provides oversight andassiststherespective Boards to review theGroup’s overall riskmanagement philosophy, frameworks, policiesand managing specific regulatory and business requirements. Each Board Risk Committee reportswhich directly to the respective Boards ensure consistency inpractices. However, theGroup maintains entity-specific committees to allow for greater flexibility andagility in In order to manage the businessesandrisksacross allsubsidiariesinanintegrated basis,Group level committees are establishedto risk management strategy, appetite, framework andoversight of riskmanagement activities. The Board of Directors sitsat theapex of theriskgovernance structure andisultimately responsible for theGroup’s/respective entities’ Risk Governance andOversight The Group hasinplace ariskmanagement framework approved by theBoard for identifying, measuring,monitoring andreporting

of significant risksfaced by theGroup intheachievement of theGroup’s businessobjectives andstrategies. The Group’s risk management framework ensures that there isaneffective on-going process to identify, evaluate andmanage riskacross the

I D

I O N

INTERNAL CONTROL STATEMENT ONRISKMANAGEMENT AND

RISK DOCUMENTATION

I M S

K E

A A

U S

E R

S E

Group andisrepresented inthefollowing diagram: RISK APPETITE

RISK MANAGEMENT FRAMEWORK R

RISK GOVERNANCE ANDRISK I

R OVERSIGHT

E O

O T RISK CULTURE

L P

E S S RISK INFRASTRUCTURE

R I S K M O N IT O R IN G

RI SK A NA LY TIC S AN D RE PORTING WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 137 STATEMENTS REVIEW REVIEW INFORMATION

Risk Appetite Risk appetite for the Group is defined as the amount and the type The implementation of the BRCO programme is in line of risks that the Group is willing to accept in pursuit of its strategic with the ‘Three Lines of Defence’ model practised globally. and business objectives. Risk tolerance on the other hand, is the There is clear accountability of risk ownership across the acceptable level of variation relative to the achievement of the Group. The model is depicted in the diagram below: Group’s strategic and business objectives. It is measured in the same units as the related objectives. It translates risk appetite into operational metrics, and it can be defined at any level of the Group. FIRST LINE The defined risk appetite and risk tolerance are periodically reviewed by the Management and the Board in line with the Business/Functional Level Group’s business strategies and operating environment. Such review includes identifying and setting new risk appetite metrics • Responsible for managing day-to-day risks for the business entity or removal of risk appetite metrics that and compliance issues are no longer applicable as well as updates on the risk appetite • BRCO is to assist business/functional unit in thresholds to be in line with the Group’s business strategy and risk day-to-day risks and compliance matters posture.

The main business and operations inherent risks that were considered in the risk appetite review include regulatory compliance risk, credit risk, market and liquidity risk, operational risk, technology and cyber risk, and Shariah non-compliance risk. SECOND LINE Risk Culture Risk management is integral to all aspects of the Group’s business Group Risk & Credit Management and operations and is the responsibility of all employees across and Group Compliance the Group. In line with regulatory requirements and industry best practices, the Group subscribes to the principle that “Risk • Responsible for oversight, establishing and Compliance is Everyone’s Responsibility” and hence, risk governance and providing support to management is a core responsibility of the respective businesses business/functional unit on risk and and operating units. This has been articulated and documented in compliance matters the Group Risk Management Framework.

Guided by the said principle, the Group has implemented on-going Risk Culture and Awareness programme which comprises training and awareness campaigns, throughout the Group (including overseas branches and subsidiaries) to promote a healthy risk culture. A strong risk culture minimises the Group’s exposure to THIRD LINE financial and non-financial risks including reputational impact, over time. Group Internal Audit

In addition, the Group has implemented the Business Risk & • Provide independent assurance to the Compliance Officer (“BRCO”) programme that aims to cultivate Board that risk and compliance management proactive risk and compliance management and to establish a functions effectively as designed robust risk culture. The BRCO programme entails the appointment Integrated Report 2020 Report Integrated of BRCO at the respective business and functional units who acts as key liaison on all risk and compliance matters. - Berhad RHB Bank

www.rhbgroup.com 138 RHB Bank Berhad - Integrated Report 2020 implemented consistently across theGroup. documents to ensure clearly defined practices andprocesses are has establishedframeworks, policiesandother relevant control of documentation andinfrastructure. Towards thisend,theGroup management system andprocess mustbesupported by arobust set The Group recognises that effective implementation of therisk Risk Documentation PROCESSES MANAGEMENT RISK exposures are adequately managed andtheexpected returns adequately compensate for theriskstaken. The riskmanagement processes within theGroup seekto identify, evaluate, measure, monitor andcontrol risksothat risk Risk Management Processes INTERNAL CONTROL STATEMENT ONRISKMANAGEMENT AND support aninformed decision-makingprocess. Group’s entities to ensure that therisksidentified remain within theestablishedappetite andto business level are regularly escalated to theSenior Management andrelevant Boards of the Risk analysis andreports prepared at therespective entities andconsolidated level as well as Analytics andReporting: appetite of theGroup andspecificentity, where necessary. order to facilitate andensure that theriskscanbemanaged andcontrolled within therisk The identification andanalysis of theexisting andpotential risksisacontinuing process, in Identification: solvency. as animportant tool asitprovides anassessment of capitaladequacy and and quantitative riskmeasurement methodologies, andtheprocess alsoserves Risks are measured, assessed and aggregated using comprehensive qualitative Assessment andMeasurement: on-going monitoring of riskexposures andriskcontrol/mitigation measures. identification of potential problem onatimely basisby usingcontinuous and of its exposures vis-à-vis its approved appetite andto facilitate early Effective monitoring process ensures that theGroup isaware of thecondition Monitoring: risk exposures are managed within theGroup’s or entity’s riskappetite. managed andmitigated to control theriskof loss. This isalsoto ensure Risks identified duringtheriskidentification process mustbeadequately Controlling: management activities. dataincluding management, to supporttheGroup’s risk risk management functions, andinvested into thetechnology, The Group hasorganised itsresources andtalents into dedicated Risk Infrastructure WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 139 STATEMENTS REVIEW REVIEW INFORMATION

Risk Assessment The Group has an established and comprehensive process for risk identification at every stage of the risk taking activities, namely transactional, product and even at the respective entities and Group level. Risks are also identified through Operational Risk Loss Event reporting and Portfolio thematic analysis. As part of the Group’s periodic material risk assessment, the Group reviews the types and components of material risks, determines its quantum of materiality and refinement of processes taking into consideration the feedback received, including the independent reviews.

Material risk assessment is measured from the dimension of occurrence probability and severity impact. In addition, risk assessment also considers among others, the effectiveness of controls in place, and the impact to financial and non-financial indicators such as reputational risk. These are translated into a heat map matrix to derive the materiality of the risk as shown in the table below.

Very High

High

Medium Occurrence Probability Occurrence

Low

Very Low

Very Low Low Medium High Very High

Severity Impact

The use of the above matrix is a simple mechanism to increase visibility of risks and assist in decision-making. The Group considers residual risks which fall within the Red zones are ‘Material’, which may have severe impact on the Group financially and/or non-financially. Significant efforts will be taken to manage and mitigate these risks events. Integrated Report 2020 Report Integrated - Berhad RHB Bank

www.rhbgroup.com 140 RHB Bank Berhad - Integrated Report 2020 as well as changes to the businessandoperational environment. and approval process to cater to changes inlaws andregulations by thebusinessandfunctionalunitsthrough astructured review These policies,guidelinesandprocesses are reviewed andupdated Group’s intranet portalfor easeof reference andcompliance. Group-wide as well asmadeavailable to employees through the businesses andoperations are documented andcommunicated Policies, guidelinesandprocesses governing theGroup’s Policies andGuidelines Group’s businessandoperations. Sustainable Future” by embeddingsustainability practices into the The Group aspires to meet itssustainability vision of “Build a to our businessandoperations as well asto our stakeholders. each pillar, we have identified key focus areas that are important Practices andEnriching andEmpowering Communities. Within pillars, i.e.Sustainable and Responsible Banking, Embedding Good development. The Framework consists three thematic sustainability mitigating negative impactsandcontributing towards sustainable which sets outtheGroup’s approach inmanagingmaterial matters, The Group hasinplace theGroup’s Sustainability Framework Group’s businessstrategies. Environmental, Social andGovernance (“ESG”)measures into the sustainable business success by embedding appropriate The Board isresponsible to promote theGroup’s longterm Sustainability Management accountability. ensuring effective supervisionof day-to-day business conduct and operate smoothly as well asdepictingthespanof control in framework inensuringthat theGroup’s businessandoperations and reporting. The organisational structure provides thebasic defined linesof accountability andresponsibility, authority limits The Group hasaformal organisational structure with clearly Organisation Structure The key processes establishedby theBoard that provide effective governance andoversight of internal control systems include: compliance with laws, regulations andinternal policies. for assuringtheachievement of theGroup’s objectives inoperational effectiveness andefficiency, reliable financialreporting and objectives. It encompasses thepolicies,procedures, processes, organisational structures andother control aspectsthat are implemented The Group’s system of internal control isdesignedto manage andreduce risksthat will hinder theGroup from achieving itsgoals and KEY INTERNAL CONTROL PROCESSES Control Environment andControl Activities SR Sustainability Framework andinitiatives. Please refer to our Sustainability Report 2020for more details onour Group INTERNAL CONTROL STATEMENT ONRISKMANAGEMENT AND requirements information onmanaging technology riskholistically. Management, inadditionto complying with various regulatory and ISO/IEC 20000:2011-Information Technology Service ISO/IEC27001:2013 -Information Security Management System security management, theGroup hasobtained certifications of In order to strengthen andenhance thelevel of information cyber threats andincidents. a structured process of prompt monitoring andtimely response to Strategy andCyber Security Response Plan to ensure that there is locally, theGroup hasestablishedaCyber Threat Management With theincreasing number of cyber threats globally as well as service providers. staff of alllevels, Board members as well as third party technology continuous programme to raise thelevel of security awareness of equally important to thetechnology andprocess controls is the are enforced throughout theIT infrastructure andsystem. But depth strategy isused where multiplelayers of IT Security controls organisational structures with competent resources. Defence in and procedures are well establishedandsupported by proper and technology. IT Security policies,standards, guidelines of ariskbasedcontrol approach covering people,process IT security intheGroup isachieved through theimplementation assets andIT infrastructure. confidentiality, integrity andavailability of theGroup’s information The Group regards IT security asa very highpriority to ensure the Information Technology (“IT”)Security needs. the organisation structure, businessenvironment or operational MOA isreviewed periodically andupdated inline with changes in and beaccountable for their decisionsandactions. The Group the Management isempowered to discharge their responsibilities for the various levels of Management intheGroup. Accordingly, which defines theapproving authority with itsapproving limits The Board hasapproved theGroup Manual of Authority (“MOA”) Authority Limits WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 141 STATEMENTS REVIEW REVIEW INFORMATION

Control Environment and Control Activities

In addition, the rapid adoption of digitalisation has led to increased sign the Employee Declaration of Compliance Form upon joining the risks to traditional on-premises computing system. To address this Group. emerging risk, the Group has adopted a multi-pronged approach: • Gradual deployment of digital solutions with increased The Group has also established the Gifts and Hospitality Guideline to investment in security infrastructure and the hiring of support promote integrity and transparency for giving and receiving gifts. The personnel with skillset covering digital fraud and cloud security Guideline complements the Code and are designed to help the Group • Establishing proper governance in the management of digital and its employees understand the respective parties’ obligations in deployment including independent third party security reviews upholding corporate integrity and transparency about gifting. and introduction of policies to strengthen the security controls covering the overall digitalisation initiative Group Anti-Money Laundering and Counter Financing of Terrorism • Continuous assessment of third party’s cyber security posture Policy and subscription of threat intelligence service for better visibility The Group Anti-Money Laundering and Counter Financing of of the current cyber landscape. Terrorism (“AML/CFT”) Policy (“Group AML/CFT Policy”) is drawn • Enforcement of secure coding practices that applies security up in accordance with the Anti-Money Laundering, Anti-Terrorism considerations to how software will be coded and encrypted to Financing and Proceeds of Unlawful Activities Act 2001 and Bank best defend against cyber-attack or vulnerabilities. Negara Malaysia’s standards on AML/CFT. It sets out the high level standards towards building a stronger and robust AML/CFT Budgeting Process compliance regime within the Group, facilitates consistency in A robust budgeting process is established requiring all key operating managing the AML/CFT compliance risk across the local and regional entities in the Group to prepare budgets and business plans annually entities within the Group, and sets out the Group’s policy statements for approval by the respective Boards. The Group’s budget and in respect of the general principles and key measures to which the business plans as well as strategic initiatives, taking into account the Group adheres to. established risk appetite, goes through a challenged session with Management prior to deliberation at the Board where the Group Pursuant to the Group AML/CFT Policy, the entities and/or employees budget is presented. within the Group are required to adopt Risk Based Approach (“RBA”) to customer acceptance and implement the AML/CFT Compliance Human Capital Management Programme framework. This includes customer due diligence (“CDD”) One of the key constituents of any internal control system is its requirements, monitoring of customer activities/transactions, people and that our system of risk management and internal control is reporting of suspicious transactions, record keeping, AML/CFT dependent on the responsibility, integrity and sound judgement that training, protection of customer information, and enforcement employees apply to their work. Hence, the Group has in place policies actions for non-compliance to the requirements. and procedures that govern recruitment, appointment, performance management and rewards as well as matters relating to discipline, The Group AML/CFT Policy also outlines the roles and responsibilities termination and dismissal. as well as establishes clear accountability of the Board of Directors, Senior Management and all employees within the Group. For sustainable growth, the Group places emphasis on human capital development, talent management and succession planning. The Board has an oversight responsibility for establishing the AML/ To enhance employee competencies, structured and technical CFT policies/guidelines and minimum standards while the Senior trainings as well as management and leadership workshops are Management is accountable for the implementation and management provided to them based on their identified needs during the annual of AML/CFT compliance programmes in accordance with the policies performance assessment. For talent management, initiatives such and guidelines as approved by the Board. as Leadership Development Programme, Individual Development Plan and mentoring are implemented to develop identified talents in Group Fraud Risk Management Policy the Group to facilitate the continuous supply of high potentials and The Group Fraud Risk Management Policy is designed to promote Integrated Report 2020 Report Integrated suitable successors for future leadership roles. consistent organisational behaviour through the development, implementation, and regular review of fraud prevention, detection Group Code of Ethics and Conduct and response strategies. The Policy defines the core governing The Group Code of Ethics and Conduct (“the Code”) is established to principles for fraud management within the Group which include ensure a high standard of ethical and professional conduct is upheld leadership and ethical culture, fraud awareness and prevention, fraud by all employees in performing their duties and responsibilities. It is a control and detection, fraud reporting and escalation as well as fraud - Berhad RHB Bank requirement that all employees of the Group understand and observe response with appropriate corrective actions. the Code. New recruits are briefed on the Code and are required to

www.rhbgroup.com 142 RHB Bank Berhad - Integrated Report 2020 information of anddeliberation by theGMC. key activity results and new businessproposal or process for monthly meeting, covering areas such as financialperformance, present their respective management reports to theGMCat its The headsof thecore businesses and functionsintheGroup being putinplace to meet suchtargets. reasons for any significant variances as well asmeasures that are quarterly financialperformance againstapproved targets andthe receive andreview financialreports ontheGroup’s monthly and The Board andthe Group Management Committee (“GMC”) initiatives undertaken by theGroup duringthe year. all key financialandoperational indicators as well askey strategic the annualbudget approved by theBoard. This information covers to monitor itsperformance againstthestrategic businessplanand Regular and comprehensive information isprovided by Management Performance Review or berecovered inatimely manner. the event of any disruption, criticalbusinessprocesses cancontinue equip staff with theskillsandprocesses required to ensure that in Simulation exercises anddrillsare conducted to familiarise and adequacy, effectiveness andreadiness of thebusinessrecoveries. and testing of theBCMplansare conducted regularly to ensure manner intheevent of any disruption. Reviews, assessments, updates to ensure thecriticalbusinessfunctionsare recovered inatimely A soundBCMProgramme hasbeenimplemented intheGroup plans, andreports to GCRC. the Group’s businesscontinuity framework, policies,budget and Committee isthe management committee establishedto oversee through theBRC andGCRC. The Group Business Continuity The Board has an oversight function on the Group’s BCM readiness and other regulatory guidelinesandinternational standards. based ongood businesscontinuity practices, Bank Negara Malaysia stakeholders, reputation andbrand. The Group’s BCMProgramme is response and recovery mechanism to safeguard the interest of key and Programme to buildorganisational resilience andaneffective of a sound Business Continuity Management Framework(“BCM”) of theorganisation. Hence, theGroup isaware of theimportance interest of itskey stakeholders that collectively ensure the viability its employees, protect itsassets includingdata, andsafeguard the uninterrupted services critical to its customers, ensure the safety of The Group recognises andisfully committed to theneedto provide Information andCommunication Business Continuity Management INTERNAL CONTROL STATEMENT ONRISKMANAGEMENT AND risk. across thefinancialservices industry inmanagingcybersecurity cyber-attack incident while receiving insights onbestpractices assessment of theGroup’s capabilitiesandreadiness inmanaging by theSecurities Commission of Malaysia. The simulations allow also participated incapitalmarket cyber drillsimulation organised readiness to respond to crisisunder multiplescenarios. The Group Simulation Exercise to further assesstheManagement andstaff SOPs, theGroup hasalsoconducted a wide-scale integrated Crisis programme. Despite challenges in adapting to thenew norm and and enhance theGroup’s maturity inconduct of itsBCP/DRP test activitiesof RHBBanking Group to progressively develop laid outits5-year planfor BCP/Disaster Recovery Plan (“DRP”) initiatives to enhance our BCM programme. The Group has Moving intandem with COVID-19 coordination are somenew Standard Operating Procedures (“SOPs”) for allRHBstaff. and provided constant advisory and updates on theCOVID-19 arrangements, utilisation of digitalplatform for any meetings the Group which includessplitoperations and work-from-home Plan (“BCP”)pandemicstrategy for allbusinessfunctionsacross essential services. The Group hasactivated itsBusiness Continuity and riskof infection while ensuringcontinuous provision of measures since January 2020to mitigate andmanage theoutbreak pandemic outbreak. We have taken proactive andprecautionary 2020 was proven to beachallenging year to due COVID-19 situations as well asmanage riskseffectively. to undertake informed decision-makingandbekept upto date on any potential risksthat may arise. This enablesthedecisionmakers Management andtheBoard with necessary steps taken to mitigate with material riskandlossesare escalated promptly to Senior incident management reporting process ensures that allincidences of incidents according to thelevel of severity. The established been implemented to ensure proper escalation andmanagement comprehensive incident management reporting guidelinehas To complement theGroup’s internal control monitoring, a Incident Management Reporting Governance (“CG”) Report, available at be found under Practice 3.2of theRHBBank Berhad’s Corporate doings by personnel within theGroup. Details of theGWBP can Group indealing with disclosure of questionableactionsor wrong mechanism and sets a standardminimum to be adhered by the Group in2007andlastupdated in2020. The GWBP provides proper A Group Whistleblowing Policy (“GWBP”) was establishedby the Group Whistleblowing Policy www.rhbgroup.com. WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 143 STATEMENTS REVIEW REVIEW INFORMATION

Monitoring

Board Committees Group Compliance The Board has in place, Board Committees that are set up to Compliance is the collective responsibility of the Board, Senior support the Board in its oversight function. The Board Committees Management and every employee of the Group. The compliance include the BRC, BAC, Board Nominating & Remuneration function forms an integral part of the Group’s risk management Committee, Board Credit Committee, Investment Bank Board Risk and internal control framework. In view that a strong compliance Committee (“IBBRC”), Islamic Board Risk Committee (“BRC-i”) and culture reflects a corporate culture of high integrity and ethics, Insurance Board Risk Committee (“Insurance BRC”). These Board everyone is expected to promote self-regulation and be Committees have been delegated with specific duties to review accountable for their own activities while maintaining ethical and consider all matters within their scope of responsibility as principles and behaviour. defined in their respective Terms of Reference (“ToR”). Detailed responsibilities of these Board Committees can be found under In addition to day-to-day monitoring, Group Compliance’s RHB Bank Berhad’s CG Report, Board Charter and their respective commitment towards instilling a strong compliance culture ToRs available at www.rhbgroup.com. across the Group is demonstrated through the establishment of a robust compliance monitoring framework which includes, among Group Management Committee others, implementation of comprehensive compliance policies, The GMC comprises the Group Managing Director as the Chairman, frequent compliance reviews and testing, annual compliance risk the Chief Executive Officers/Managing Directors of the relevant assessment to identify high risk areas and conduct of regular key operating subsidiaries and the key Senior Management of training/awareness sessions across the Group to ensure that all the Group. The GMC provides the leadership and direction in the employees are well informed of the latest regulatory requirements implementation of strategies and policies approved by the Board and expectations. and meets monthly to discuss and deliberate strategic matters that impact the Group’s operations. Further, the Boards and Senior Management are also apprised of the Group’s state of compliance through the submission of the Management Audit Committees Group Compliance report on a periodic basis. Management Audit Committees (“MACs”) are established at the key operating entities in the Group to ensure timely rectification Shariah Compliance of any audit findings and the underlying causes highlighted by In line with the Shariah Governance Policy for Islamic Financial the internal and external auditors, and regulators. The status Institutions issued by Bank Negara Malaysia, a comprehensive of rectification of all audit findings and the mitigation action Shariah Governance Framework has also been put in place by plans implemented by Management to adequately address the the Group which encompasses the Group’s Shariah governance underlying causes are closely monitored by the MACs at every structure, the key principles and components underpinning the meeting. same, the reporting structure as well as its roles and responsibilities.

The MACs comprising senior level representatives from different Various activities involving reviews, assessment, trainings and business/functional groups are chaired by the Group Chief briefings aimed at creating Shariah awareness as well as continuous Financial Officer/Managing Director of the entity concerned. The learning programmes were conducted throughout the year to MACs meet monthly/bi-monthly and the minutes of meetings educate employees on the importance of Shariah requirements together with the relevant audit reports are subsequently tabled and compliance surveillance. to the BAC for information, deliberation and direction for further action where required. Integrated Report 2020 Report Integrated - Berhad RHB Bank

www.rhbgroup.com 144 RHB Bank Berhad - Integrated Report 2020 Audit Committee Report of thisIntegrated Report. Further information ontheGIA functionisprovided intheBoard Director to ensure GIA’s independence from Management. functionally to theBAC andadministratively to theGroup Managing GIA isheadedby theGroup Chief Internal Auditor who reports and deliberation. Audit reports are alsotabledto Shariah Committee for notification tabled to MACs and BAC ona monthly basis. In addition, Shariah comments andrecommendations, andManagement’s response are annually. Audit reports which includedetailed auditfindings,GIA’s The risk-based internal auditplan is approved by the BAC risk assessment methodology. strategies andareas of focus, which are identified basedonGIA’s units andfrequency of auditsinline with theGroup’s key risks, adopts arisk-based approach indetermining theauditable operations, subsidiariesas well asoutsourced activities.GIA Group, includingthat of itsbranches, businesscentres, overseas The internal audituniverse covers allkey activitiesof the processes implemented by theManagement. the Group’s riskmanagement, internal control andgovernance an independent appraisal ontheadequacy andeffectiveness of Group Internal Audit (“GIA”) isestablishedby the Board to provide INTERNAL AUDIT INTERNAL CONTROL STATEMENT ONRISKMANAGEMENT AND internal control systems of theGroup. on theadequacy andeffectiveness of theriskmanagement and AAPG 3doesnot require theexternal auditors to form anopinion Malaysian Institute of Accountants. Audit and Assurance Practice Guide (“AAPG”) 3issuedby the Their limited assurance review was performed inaccordance with reviewed thisStatement onRisk Management andInternal Control. Requirements of Bursa Malaysia, theexternal auditors have As required by paragraph 15.23of theMain Market Listing REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS review andupto thedate of approval of thisStatement. operating adequately andeffectively for thefinancial year under that theGroup’s riskmanagement andinternal control system is assurance received from theManagement, theBoard isof the view Based onthemonthly updates from itsBoard Committees andthe of theGroup’s riskmanagement andinternal control system. BRC confirms that ithasreviewed theadequacy andeffectiveness The Board, through theBAC, BRC, IBBRC, BRC-i andInsurance CONCLUSION WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 145 STATEMENTS REVIEW REVIEW INFORMATION ANALYSIS OF SHAREHOLDINGS as at 15 March 2021

Number of Issued Shares : 4,010,045,621 ordinary shares Class of Shares : Ordinary shares Voting Rights : Each shareholder present in person or by proxy at any Shareholders’ Meeting shall have one vote for each ordinary share held Number of Shareholders : 20,211

No. of % of No. of Shares % of Category Shareholders Shareholders Held Shareholdings

Less than 100 shares 1,954 9.67 44,392 0.00 100 – 1,000 shares 4,113 20.35 2,378,841 0.06 1,001 – 10,000 shares 10,909 53.98 38,290,608 0.95 10,001 – 100,000 shares 2,363 11.69 69,992,217 1.75 100,001 to less than 5% of the issued shares 870 4.30 2,037,810,768 50.82 5% and above of the issued shares 2 0.01 1,861,528,795 46.42 Total 20,211 100.00 4,010,045,621 100.00

SUBSTANTIAL SHAREHOLDERS

No. of Shares No. Name of Substantial Shareholders Direct % Indirect %

1. Employees Provident Fund Board (“EPF”)1 1,659,876,604 41.39 - - 2. OSK Holdings Berhad 406,171,518 10.13 - - 3. Kumpulan Wang Persaraan (Diperbadankan) 201,652,191 5.03 42,185,400 1.05 4. Tan Sri Ong Leong Huat @ Wong Joo Hwa2 - - 406,171,518 10.13 5. OSK Equity Holdings Sdn Bhd2 - - 406,171,518 10.13 6. Puan Sri Khor Chai Moi 29,997 * 406,171,5182 10.13

Notes: * Negligible percentage. 1 The interest of EPF is held through various fund managers. 2 Deemed interested pursuant to Section 8(4) of the Companies Act 2016, by virtue of shares held through OSK Holdings Berhad.

DIRECTORS’ INTEREST IN SECURITIES OF THE COMPANY AND ITS RELATED CORPORATION

Shareholdings No. of Shares The Company Held %

Tan Sri Ong Leong Huat @ Wong Joo Hwa Integrated Report 2020 Report Integrated - Indirect1 406,202,949 10.13 Ong Ai Lin - Direct 25,000 *

Notes: - Berhad RHB Bank * Negligible percentage. 1 Deemed interested pursuant to Sections 8(4) and 59 of the Companies Act 2016, by virtue of shares held through OSK Holdings Berhad and his family members.

www.rhbgroup.com 146 RHB Bank Berhad - Integrated Report 2020 Category Total Others Nominees Government Agencies/

Body Corporate Others Indian Chinese Bumiputera Individual Institutions Other Types of Companies Foundation/Charities Investments Trusts/ Banks/Finance Companies as at 15March 2021 CLASSIFICATION OF SHAREHOLDERS

Malaysian No. of Shareholders 18,654 14,054 3,027 331 547 585 34 68 0 2 6 Foreign 1,557 1,094 446 17 0 0 0 0 0 0 0 3,262,877,314 2,400,036,281 209,850,612 562,846,377 78,152,459 Malaysian 6,005,290 1,920,751 3,328,070 385,473 352,001 Shareholdings 0 747,168,307 715,939,824 25,981,449 5,247,034 Foreign 0 0 0 0 0 0 0 % of Total Shareholdings Malaysian 81.36 59.85 14.03 0.00 0.15 5.23 0.01 0.01 0.05 1.95 0.08 Foreign 18.63 17.85 0.00 0.00 0.65 0.00 0.00 0.13 0.00 0.00 0.00 WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 147 STATEMENTS REVIEW REVIEW INFORMATION CHANGES IN SHARE CAPITAL as at 15 March 2021

The number of issued shares of the Company as at 15 March 2021 is 4,010,045,621 ordinary shares.

The changes on the number of issued shares since 1999 are as follows:-

Cumulative No. of Issued Shares

No. of Shares Preference Ordinary Date Allotted Description Shares Shares

03/06/1999 308,500,000 Issued pursuant to Sale of Shares Agreement between 308,500,000 3,899,971,952 (preference shares) RHB Bank Berhad (“RHB Bank”), Rashid Hussain Berhad (as promoter), Sime Darby Financial Services Holdings Sdn Bhd and KUB Malaysia Berhad for the acquisition of 90.36% equity interest in Sime Bank Berhad.

03/06/1999 1,000,000,000 Issued pursuant to Subscription Agreement dated 30 1,308,500,000 3,899,971,952 (preference shares) November 1998 between Danamodal Nasional Berhad, RHB Capital Berhad (“RHB Capital”) and RHB Bank.

01/09/1999 4,469,561 Issued pursuant to the compulsory acquisition of the 1,312,969,561 3,899,971,952 (preference shares) remaining 9.64% equity interest in Sime Bank Berhad.

23/09/1999 55,129,584 Issued pursuant to the compulsory acquisition of the 1,368,099,145 3,899,971,952 (preference shares) remaining 9.64% equity interest in Sime Bank Berhad.

27/03/2008 2,736,198,290 Issued pursuant to the Conversion Notice received by - 6,636,170,242 (ordinary shares of RHB Bank in respect of the Irredeemable Non-Cumulative RM0.50 each) Convertible Preference Shares (“INCPS”) holder, RHB Capital’s intention to convert its entire 1,368,099,145 INCPS of RM1.00 each into new ordinary shares of RM0.50 each in RHB Bank.

31/10/2014 94,802,428 Issued pursuant to Rights Issue on the basis of 1 new - 6,730,972,670 (ordinary shares of ordinary share for every 70 existing ordinary shares held. RM0.50 each)

03/04/2015 190,197,391 Issued pursuant to Rights Issue on the basis of 28.26 new - 6,921,170,061 (ordinary shares of ordinary shares for every 1,000 existing ordinary shares held. RM0.50 each)

18/02/2016 Not applicable Consolidation of every 2 existing ordinary shares of RM0.50 - 3,460,585,030 each into 1 new ordinary share of RM1.00 each.

07/04/2016 101,618,705 Issued pursuant to Rights Issue on the basis of 29.3646 new - 3,562,203,735 (ordinary shares of ordinary shares for every 1,000 existing ordinary shares held. RM1.00 each)

14/04/2016 447,841,886 Cash. - 4,010,045,621 2020 Report Integrated (ordinary shares of RM1.00 each) - Berhad RHB Bank

www.rhbgroup.com 148 RHB Bank Berhad - Integrated Report 2020 No. 10 18 17 16 15 14 13 12 11 5 3 9 8 7 6 4 2 1 RHB NOMINEES(TEMPATAN) SDNBHD PUBLIC INVEST NOMINEES(TEMPATAN) SDNBHD AMANAHRAYABERHAD TRUSTEES PERMODALAN NASIONAL BERHAD RHB NOMINEES(TEMPATAN) SDNBHD CITIGROUP NOMINEES(TEMPATAN) SDNBHD HSBC NOMINEES(ASING)SDNBHD HSBC NOMINEES(ASING)SDNBHD CITIGROUP NOMINEES(TEMPATAN) SDNBHD CITIGROUP NOMINEES(ASING) SDNBHD HSBC NOMINEES(ASING)SDNBHD CARTABAN NOMINEES(TEMPATAN) SDNBHD AMANAHRAYABERHAD TRUSTEES CARTABAN NOMINEES(ASING)SDNBHD CITIGROUP NOMINEES(TEMPATAN) SDNBHD OSK HOLDINGSBERHAD KUMPULAN WANG PERSARAAN (DIPERBADANKAN) EXEMPT AN FOR STATE STREET BANK & TRUST COMPANY (WEST CLT OD67) (OSK ICMMTN T2) MALAYSIAN TRUSTEES BERHADPLEDGEDSECURITIES ACCOUNT FOR OSKHOLDINGSBHD (OSK ICM T1) MALAYSIAN TRUSTEES BERHADPLEDGEDSECURITIES ACCOUNT FOR OSKHOLDINGSBHD GREAT EASTERNLIFE ASSURANCE (MALAYSIA) BERHAD(PAR 1) FOREXEMPT AIABHD AN FOR OSKHOLDINGSBERHAD AMANAH SAHAM BUMIPUTERA EMPLOYEES PROVIDENT FUNDBOARD JPMCB NA FOR VANGUARD TOTAL INTERNATIONAL STOCK INDEXFUND JPMCB NA FOR VANGUARD EMERGING MARKETS STOCK INDEXFUND GREAT EASTERNLIFE ASSURANCE (MALAYSIA) BERHAD(PAR 3) CBNY FOR NORGES BANK (FI17) EXEMPT AN FOR JPMORGAN CHASEBANK, NATIONAL ASSOCIATION (SINGAPOREJPMPB) PAMB FOR PRULINK EQUITY FUND AMANAH SAHAM MALAYSIA 3 CITIGROUP NOMINEES(TEMPATAN) SDNBHD Name as at 15March 2021 LIST OF THIRTY (30)LARGEST SHAREHOLDERS

1,659,876,604 No. of Shares 158,071,518 201,652,191 143,400,000 198,002,400 53,233,900 59,200,000 66,431,404 84,478,273 20,543,969 21,588,300 22,222,500 24,682,888 31,400,000 32,298,607 36,876,760 39,020,517 45,500,000 Shareholdings 41.39 1.33 3.94 5.03 1.48 1.66 2.11 0.51 0.54 0.55 0.62 0.78 0.81 0.92 0.97 1.13 3.58 4.94 % WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 149 STATEMENTS REVIEW REVIEW INFORMATION

Shareholdings No. Name No. of Shares %

19 HONG LEONG ASSURANCE BERHAD 20,439,500 0.51 AS BENEFICIAL OWNER (LIFE PAR)

20 GUOLINE (SINGAPORE) PTE LTD 19,560,000 0.49

21 AMANAHRAYA TRUSTEES BERHAD 17,712,300 0.44 AMANAH SAHAM MALAYSIA 2 – WAWASAN

22 CITIGROUP NOMINEES (ASING) SDN BHD 16,177,200 0.40 EXEMPT AN FOR CITIBANK NEW YORK (NORGES BANK 14)

23 HSBC NOMINEES (ASING) SDN BHD 15,853,300 0.40 J.P. MORGAN SECURITIES PLC

24 CITIGROUP NOMINEES (TEMPATAN) SDN BHD 15,749,800 0.39 GREAT EASTERN LIFE ASSURANCE (MALAYSIA) BERHAD (LSF)

25 MAYBANK NOMINEES (TEMPATAN) SDN BHD 15,472,600 0.39 PLEDGED SECURITIES ACCOUNT FOR CHUA MA YU

26 HSBC NOMINEES (ASING) SDN BHD 13,749,200 0.34 TNTC FOR THE HIGHCLERE INTERNATIONAL INVESTORS EMERGING MARKETS SMID FUND

27 CITIGROUP NOMINEES (ASING) SDN BHD 13,200,079 0.33 UBS AG

28 CITIGROUP NOMINEES (TEMPATAN) SDN BHD 12,475,600 0.31 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) (PRINCIPAL EQITS)

29 HSBC NOMINEES (ASING) SDN BHD 12,275,350 0.31 JPMCB NA FOR BLACKROCK INSTITUTIONAL TRUST COMPANY, N.A. INVESTMENT FUNDS FOR EMPLOYEE BENEFIT TRUSTS

30 HSBC NOMINEES (ASING) SDN BHD 12,129,195 0.30 JPMBL SA FOR STICHTING DEPOSITARY APG EMERGING MARKETS EQUITY POOL Integrated Report 2020 Report Integrated - Berhad RHB Bank

www.rhbgroup.com 150 RHB Bank Berhad - Integrated Report 2020 10. 9. 8. 7. 6. SINGAPORE 5. Perak 4. Selangor 3. 2. Penang 1. Kuala Lumpur MALAYSIA Location Geylang Road No. 537/539 Yio ChuKang Road 1/1A/1B East Coast Road 14A/B, 16A/B&18A/B 01-03 Sim Lim Tower Besar 10, Jalan 90 Cecil Street Ipoh Jalan TunSambanthan No. 2,4,6&8 Bandar Baru Bangi Jalan Institusi Lot No. 8 Seberang Prai Tmn Inderawasih Jalan ChainFerry Unit 11&12 Georgetown 44 Lebuh Pantai Jalan TunRazak RHB Centre 424&426 Tower 1, Tower 2&3, LIST OF TOP TEN (10)PROPERTIES Berhad RHB Bank Berhad RHB Bank Berhad RHB Bank Berhad RHB Bank Pte Ltd Banfora Berhad RHB Bank Berhad RHB Bank Berhad RHB Bank Berhad RHB Bank Berhad RHB Bank Owner shophouses 3 storey buildings of office First Floor shophouses 3 storey 3 unitsof buildings of office Ground Floor buildings 2 commecial building office 4 storey Park Block 5 storey Car IT Block & storey Block, 7 Training 5 storey office Block, 6 storey building commercial 3 storey 2 unitsof building commercial 6½ storey 1 unitof office building 16 storey 12 storey & of Property Description 374 101 442 543 796 890 55,713 603 896 10,270 (sq m.) Area Land Branch Bank Branch Bank Branch Bank Branch Bank Building Commercial Branch Bank Centre Training Branch Bank Branch Bank Space Office Usage 97 40 62 42 41 23 20 26 61 31 &25 (Years) building Age of Freehold Freehold Freehold Freehold Leasehold Freehold Leasehold Freehold Freehold Freehold Tenure - - - - 2980 - 2090 - - - Lease on Expiry Year of 8,832 9,741 13,488 25,558 148,229 4,435 61,394 3,374 3,218 189,028 (RM’ 000) 31.12.2020 Value Net Book 1999 1999 1999 1999 1997 1991 1992 1998 1968 2016 Revaluation or Acquisition Year of WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 151 STATEMENTS REVIEW REVIEW INFORMATION NOTICE OF 55TH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 55th Annual General Meeting (“AGM”) of RHB Bank Berhad (“RHB Bank” or “Company”) will be held at, and broadcasted live from Meeting Room 3, Level 16, Tower Three, RHB Centre, Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia (“Broadcast Venue”) on Tuesday, 25 May 2021, at 10.00 a.m. to transact the following businesses:

AGENDA

AS ORDINARY BUSINESS:

1. To receive the Audited Financial Statements of the Company for the financial year ended (Please refer to 31 December 2020 and the Directors’ and Auditors’ Reports thereon. Explanatory Note 1)

2. To approve a single-tier final dividend of 7.65 sen per share in respect of the financial year ended Ordinary Resolution 1 31 December 2020.

3. To re-elect the following Directors who retire by rotation pursuant to Clause 94 of the Company’s Constitution and who being eligible offer themselves for re-election:

(1) Tan Sri Ong Leong Huat @ Wong Joo Hwa Ordinary Resolution 2 (2) Ms Ong Ai Lin Ordinary Resolution 3

4. To re-elect the following Directors who retire pursuant to Clause 98 of the Company’s Constitution and who being eligible offer themselves for re-election:

(1) Tan Sri Ahmad Badri Mohd Zahir Ordinary Resolution 4 (2) Mr Donald Joshua Jaganathan Ordinary Resolution 5 (3) Datuk Iain John Lo Ordinary Resolution 6

5. To approve the payment of Directors’ fees and Board Committees’ allowances to the Non- Ordinary Resolution 7 Executive Directors from the 55th AGM of the Company to the 56th AGM of the Company.

6. To approve the payment of Directors’ remuneration (excluding Directors’ fees and Board Ordinary Resolution 8 Committees’ allowances) of an amount up to RM1,600,000 to the Non-Executive Directors from the 55th AGM of the Company to the 56th AGM of the Company.

7. To re-appoint Messrs PricewaterhouseCoopers PLT as Auditors of the Company to hold office Ordinary Resolution 9 until the conclusion of the 56th AGM of the Company, at a remuneration to be determined by the Directors.

AS SPECIAL BUSINESS:

To consider and if thought fit, to pass the following resolutions:

8. AUTHORITY FOR DIRECTORS TO ISSUE SHARES Ordinary Resolution 10

“THAT subject always to the Companies Act 2016, the Company’s Constitution and approval of the relevant government/regulatory authorities, the Directors be and are hereby authorised pursuant to Sections 75 and 76 of the Companies Act 2016, to issue and allot shares in the

Company at any time and upon such terms and conditions and for such purposes as the Directors 2020 Report Integrated may, in their absolute discretion deem fit, provided that the aggregate number of shares to be issued does not exceed 10% of the total number of issued shares of the Company for the time being, AND THAT the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and that such authority shall continue to be in force until the conclusion of the next AGM of the Company.” - Berhad RHB Bank

www.rhbgroup.com 152 RHB Bank Berhad - Integrated Report 2020 “ 9. 11. “ 10. (ii) (i) and to theextent permitted by law: IN NEWORDINARY SHARESOF RHBBANK (“RHBBANK (“PROPOSED SHARES”) DRP”) WITH BANK(“SHAREHOLDERS”) OPTION AN TOELECT TOREINVEST DIVIDEND CASH THEIR PROPOSED DIVIDENDREINVESTMENT PLAN THAT PROVIDES THE SHAREHOLDERSOF RHB Companies Act 2016. Companies Act To transact any other business of which due notice shall have been given in accordance with the best interest of theCompany and/or asmay beimposedor agreed to by any relevant authorities.” of theProposed DRP, astheBoard may, initsabsolute discretion, deemfitor expedient, and in the modifications and/or amendments, includingamendment, modification, suspensionandtermination full effect to theissuance of DRP Shares, with fullpowers to assent to any conditions, variations, or any part of its powers as may be necessary or expedient in order to implement, finalise and give behalf of the Company, all such documents and impose such terms and conditions or delegate all transactions, arrangements, deedsand undertakingsandto execute, signanddeliver for andon AND THAT theBoard beandishereby authorisedto doallsuchacts and enter into allsuch effected before thedate of allotment of theDRP Shares; entitled to any dividends,rights, benefits, entitlements and/or other distributionsthat may be the thenexisting issuedshares inRHB Bank, save andexcept that theDRP Shares shallnot be AND THAT theDRP Shares shall,uponallotment andissuance, rank equally inallrespects with Company’snext AGM; authority to allot andissuetheDRP Shares shallcontinue to beinforce until theconclusion of the applying theaforementioned discount infixingtheissueprice of theDRP Shares and that such the Price Fixing Date. The 5-day VWAP of RHBBank Shares shall be adjusted ex-dividend before 5-day volume weighted average market price (“VWAP”) of RHB Bank Shares immediately before (“Price FixingDate”), shall be fixed by the Board at a price of not more than a 10% discount to the which will bedetermined by theBoard ontheprice-fixing date to bedetermined andannounced and inthebestinterest of theCompany PROVIDED THAT theissue price of theDRP Shares, conditions and to suchpersons as the Board may, initsabsolute discretion, deem fitor expedient, DRP Shares from timeto time asmay be required to be allotted and issued, upon the terms and being obtained, approval beandishereby given to theBoard to allot andissuesuchnumber of DRP (“DRP SHARES”)(“ISSUANCE OF DRP SHARES”) PURSUANTALLOTMENTSHARES BANK RHB TOOFISSUANCENEW PROPOSED AND THE interest of theCompany and/or asmay beimposedor agreed to by any relevant authorities.” Proposed DRP, astheBoard may, initsabsolute discretion, deemfitor expedient, andinthebest and/or amendments, includingamendment, modification, suspensionandtermination of the effect to theProposed DRP, with fullpowers to assent to any conditions, variations, modifications any of part itspowers asmay benecessary or expedient inorder to implement, finaliseandgive full behalf of theCompany, allsuchdocuments andimposesuchterms andconditions or delegate allor transactions, arrangements, deedsandundertakingsto execute, signanddeliver for andon AND THAT theBoard beandishereby authorisedto doallsuchactsandenter into allsuch THAT subjectto theapprovals of therelevant authoritiesfor theProposed DRP beingobtained THAT subjectto thepassingof Ordinary Resolution 11andtheapprovals of allrelevant authorities (b) (a) the board of directors of theCompany (“Board”) beandishereby authorised: the Proposed DRP beandishereby approved andauthorised; (as the case may be) (whether interim, final, special or any other typesof cashdividend); apply to any cashdividenddeclared and/or approved by theCompany or by theBoard to determine, at their soleandabsolute discretion, whether theProposed DRP will the Dividend Reinvestment Plan Statement; and to establishandimplement theProposed DRP basedontheterms and conditions of NOTICE OF 55 TH ANNUAL GENERAL MEETING Ordinary Resolution 11 Ordinary Resolution 12 WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 153 STATEMENTS REVIEW REVIEW INFORMATION

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS HEREBY GIVEN THAT subject to the shareholders’ approval for the payment of a single-tier final dividend of 7.65 sen per share in respect of the financial year ended 31 December 2020 (“Final Dividend”) under Ordinary Resolution 1 at the 55th AGM of the Company to be held on Tuesday, 25 May 2021, the Final Dividend will be paid on 8 July 2021 to Depositors whose names appear in the Record of Depositors of the Company as at 10 June 2021.

A Depositor shall qualify for entitlement to the Final Dividend only in respect of:

(a) Securities transferred into the Depositor’s securities account before 4.30 p.m. on 10 June 2021 in respect of transfers;

(b) Securities deposited into the Depositor’s securities account before 12.30 p.m. on 8 June 2021 in respect of securities exempted from mandatory deposits; and

(c) Securities bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.

BY ORDER OF THE BOARD

Azman Shah Md Yaman (LS 0006901) (SSM PC No.: 201908001628) Hasnita Sulaiman (MAICSA No. 7060582) (SSM PC No.: 201908001631) Company Secretaries

Kuala Lumpur 27 April 2021

NOTES:

Virtual AGM

1. The 55th AGM of the Company will be conducted entirely on a virtual basis through live streaming and online remote voting via Remote Participation and Electronic Voting facilities which are available on the website of the Share Registrar of the Company, Boardroom Share Registrars Sdn Bhd, at Boardroom Smart Investor Portal at www.boardroomlimited.my. Please follow the procedures provided in the Administrative Details for the 55th AGM in order to register, participate and vote remotely.

2. The Broadcast Venue of the 55th AGM is strictly for the purpose of complying with Section 327(2) of the Companies Act 2016 which requires the Chairman of the meeting to be present at the main venue of the meeting. The venue of the 55th AGM is to inform members where the virtual AGM production and streaming would be conducted from. Member(s)/proxy(ies) from the public will not be allowed to be physically present at the meeting venue.

Appointment of Proxy

1. In respect of deposited securities, only members whose names appear in the Record of Depositors on 19 May 2021 (General Meeting Record of Depositors) shall be entitled to participate and vote remotely at the forthcoming 55th AGM using the remote participation and electronic voting facilities.

2. A member of the Company entitled to participate and vote remotely at the forthcoming 55th AGM is entitled to appoint one or more

proxies to participate and vote remotely in his/her place. A proxy may but need not be a member of the Company. 2020 Report Integrated

3. The Form of Proxy must be signed by the appointer or his/her attorney duly authorised in writing or in the case of a corporation, be executed under its common seal or under the hand of its attorney duly authorised in writing.

4. If the Form of Proxy is returned without any indication as to how the proxy shall vote, the proxy will vote or abstain as he/she thinks fit. - Berhad RHB Bank 5. Where a member appoints two proxies, the appointment shall be invalid unless he/she specifies the proportion of his/her holdings to be represented by each proxy. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 (“SICDA”), it may appoint at least one proxy in respect of each Securities Account which is credited with ordinary shares of the Company. www.rhbgroup.com 154 RHB Bank Berhad - Integrated Report 2020 3. 2. 1. Explanatory Notes 7. 6. 3.1 Ordinary Resolutions 2,3,4,5and6–Re-election of Retiring Directors be imposedby theregulatory authority. The proposed single-tier finaldividendasper Ordinary Resolution 1shallbesubjected to thefulfilment of thecondition(s) asmay Ordinary Resolution 1-Payment of Single-Tier FinalDividend a formal approval of theshareholders for the Audited Financial Statements. Hence, this Agenda item isnot putforward for voting. Item 1of the Agenda ismeant for discussiononly astheprovision of Section 340(1)(a) of theCompanies Act 2016doesnot require Item 1of the Agenda – Audited FinancialStatements for Financial Year Ended 31December 2020 Boardroom Share Registrars Sdn Bhd, 11 The Form of Proxy or other instruments of appointment mustbedeposited at theoffice of theshare registrar of theCompany, authorised nomineedefined under SICDA which isexempted from compliance with theprovisions of subsection25A(1)of SICDA. authorised nomineemay appoint inrespect of eachOmnibus Account itholds. An exempt authorisednomineerefers to an beneficial owners inonesecuritiesaccount (“Omnibus Account”), there isnolimitto thenumber of proxies which theexempt Where amember of theCompany isanexempt authorisednominee which holds ordinary shares intheCompany for multiple Jaya, Selangor, Malaysia or lodged electronically via “Boardroom Smart Investor Portal” at 48 hours before thetimefixed for holdingtheforthcoming 55 (a) 94 of theCompany’s Constitution. be eligiblefor re-election. With thecurrent Board size of ten (10),two (2)Directors are to retire inaccordance with Clause not of amultiple three (3),thenthenumber nearest to one-third (1/3),shallretire by rotation at an AGM of theCompany and Clause 94of theCompany’s Constitution provides that one-third (1/3)of theDirectors for thetimebeing,or if their number is (b)

Forofpurpose the determiningeligibility the ofDirectors the to standfor re-election at the55 (ii) (i) & Remuneration Committee (“BNRC”) hasassessedeachof theretiring Directors, andconsidered thefollowing: • • criteria which includethefollowing: the Board hasconducted itsannualassessment of theDirectors of theCompany basedontherelevant performance In line with Standard 13.1of thePolicy Document onCorporate Governance issuedby Bank Negara Malaysia (“ with therecommendations of theMalaysian Code on Corporate Governance. high performance Board. In addition,theBoard will alsoengage anindependent external party onaperiodicbasisinline Based on the results of theBEE,individualDirectors met theperformance criteria required of aneffective anda

NOTICE OF 55 the Board andBoard Committees andadequacy of training, as well astheBoard Effectiveness Evaluation (“BEE”);and The Directors’ attributes, competencies,contributions in respect of decisionmaking,roles played andcontributions to The level of independence assessment isbenchmarked againstbestpractices andregulatory provisions. Leadership, Contribution &Interaction, Quality of Input, Understanding of Role and Independence. attributes. The questionnaires were crafted to assess theDirectors onspecifictraits suchas Agility, Energy, Social Part B evaluated individual Board member’s contribution to the Board and aspects on personal qualities and Part B:Board of Directors’ Self &Peer-Assessment actual incident(s) encountered injustifyingtherating. respondent was encouraged to provide example(s) which can illustrate therelevant practice(s), situation(s) or Some of theselected questions were accompanied by acomment box for explanation onthechosenrating. The collective unitandalsospecifically on theattributes of individual Board Committee’s conduct &performance. decision making,communication, board dynamics,mind-set, leadership andconduct &culture of theBoard asa Part A evaluated the overall behaviours and culture of the Board based on six (6) identified dimensions, namely Part A: Evaluation of theBoard(s) th Floor, Menara Symphony, No. 5, Jalan Prof. KhooKay Kim,Seksyen 13,46200Petaling TH ANNUAL GENERAL MEETING th AGM or any adjournment thereof. www.boardroomlimited.my th AGM, theBoard Nominating not later than BNM”), WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 155 STATEMENTS REVIEW REVIEW INFORMATION

(c) Based on the above, the Board approved the BNRC’s recommendation that Tan Sri Ong Leong Huat @ Wong Joo Hwa and Ms Ong Ai Lin who retire in accordance with Clause 94 of the Company’s Constitution are eligible to stand for re- election. These two (2) retiring Directors had abstained from deliberations and decisions on their own eligibility to stand for re-election at the relevant Board meeting.

Section 54(2)(a) of the Financial Services Act 2013 (“FSA”) provides that the appointment, election, re-appointment and re- election as a Chairman, Director or Chief Executive Officer of the Company is subject to the prior written approval of BNM. In this respect, the approval of BNM on the proposed re-election of Tan Sri Ong Leong Huat @ Wong Joo Hwa and Ms Ong Ai Lin as Directors under Ordinary Resolutions 2 and 3 has been obtained.

3.2 Clause 98 of the Company’s Constitution provides that any Director so appointed shall hold office only until the next following AGM, and shall then be eligible for re-election but shall not be taken into account in determining the retirement of Directors by rotation at such meeting.

(1) Tan Sri Ahmad Badri Mohd Zahir was appointed as a Non-Independent Non-Executive Director/Deputy Chairman and formalised as the Chairman of the Company on 16 November 2020 and 24 March 2021, respectively. BNM had, on 9 November 2020, provided its concurrence on his re-election as Director (under Ordinary Resolution 4) pursuant to Section 54(2)(a) of the FSA.

(2) Mr Donald Joshua Jaganathan was appointed as an Independent Non-Executive Director of the Company on 17 August 2020. BNM had, on 14 August 2020, provided its concurrence on his re-election as Director (under Ordinary Resolution 5) pursuant to Section 54(2)(a) of the FSA.

(3) Datuk Iain John Lo was appointed as an Independent Non-Executive Director of the Company on 15 September 2020. BNM had, on 9 September 2020, provided its concurrence on his re-election as Director (under Ordinary Resolution 6) pursuant to Section 54(2)(a) of the FSA.

4. Ordinary Resolution 7 – Payment of Directors’ Fees and Board Committees’ Allowances to the Non-Executive Directors

The Non-Executive Chairman and Non-Executive Directors are entitled to annual Directors’ fees and annual Board Committees’ allowances. In line with the current economic condition and as part of RHB Banking Group’s (“Group”) initiative to exercise financial prudence in view of the impact of the COVID-19 pandemic to the Group and its stakeholders, the Board of RHB Bank had, on 1 April 2021, agreed on a voluntary 10% reduction of annual Directors’ Fees payable to the Non-Executive Directors on prorated basis for a period of 6 months from the 55th AGM of the Company, and thereafter the normal Directors’ fees be paid for the remaining months until the 56th AGM of the Company. The Directors’ fees and Board Committees’ allowances are as set out below:

Non-Executive Non-Executive Directors/ Chairman Members No. Description (RM) (RM)

1 Annual Directors’ Fees (pro-rated) 180,000.00 157,500.00 (for a period of 6 months from the 55th AGM of the Company) 2 Annual Directors’ Fees (pro-rated) 200,000.00 175,000.00 (after the above 6 months’ period until the 56th AGM of the Company)

Annual Board Committees’ Allowances 3 Board Audit Committee 40,000.00 30,000.00 Integrated Report 2020 Report Integrated 4 Board Nominating & Remuneration Committee 40,000.00 30,000.00 5 Board Risk Committee 40,000.00 30,000.00 6 Board Credit Committee 50,000.00 40,000.00 - Berhad RHB Bank

www.rhbgroup.com 156 RHB Bank Berhad - Integrated Report 2020 5. 6.

of theCompany for thefinancial year ending31 December 2021,under Ordinary Resolution 9. (c) (b) (a) Notes: and other emoluments payable to theNon-Executive Directors. The current remuneration policy isasset outbelow: The proposed Directors’ Remuneration (excluding Directors’ fees andBoard Committees’ allowances) comprises theallowances the Non-Executive Directors Ordinary Resolution 8 – Payment of Directors’ Remuneration (excluding Directors’ Fees and Board Committees’ Allowances) to approval to besought at the55 year ending 31 December 2021. The Board, at its meeting on 27 January 2021, approved the recommendation for shareholders’ BAC recommended there-appointment of PricewaterhouseCoopers astheexternal auditors of theCompany for thefinancial Having satisfied itself with their performance and fulfilment of criteria as set out in BNM’s Guidelines on External Auditors, the the external auditors, basedonqualifyingcriteria for theappointment of auditors andterms of auditengagements. Auditors. The assessment covered a wide spectrumof matters asperformance, such suitability, independence andobjectivity of the Company, Messrs PricewaterhouseCoopers PLT (“PricewaterhouseCoopers”) in accordance with BNM’s Guidelines on External The Board Audit Committee (“BAC Ordinary Resolution 9– Appointment of Auditors to theCompany throughout therelevant period. and/or asand when deemedappropriate, particularly after they have discharged their responsibilities andrendered their services is of the view that itisjust andequitablefor theNon-Executive Directors to bepaidtheDirectors’ remuneration onamonthly basis deemed appropriate, if theproposed Ordinary Resolutions 7and8have beenpassedat the55 Payment of theNon-Executive Directors’ remuneration will bemadeby theCompany on amonthly basisand/or asand when Directors involved inthesemeetings. factors includingthenumber of scheduledmeetings for theBoard andBoard Committees as well asthenumber of Non-Executive Non-Executive Directors includingtheNon-Executive Chairmanof theBoard of theCompany, theBoard hadconsidered various In determining theestimated total amount of remuneration (excluding Directors’ fees andBoard Committees’ allowances) for the The Group Managing Director/Chief Executive Officer doesnot receive any Director’s remuneration. No. 4 3 2 1 directorship uponhis/her exit from theGroup, either uponretirement or resignation. A farewell gift with the value of upto RM3,000.00 will begranted to aNon-Executive Director for theentire tenure of subsidiaries of Banking RHB Group (the Group). The abovementioned Board Committees are Centralised Committees which are shared by theCompany anditsrelevant roles inleadership andoversight, andthe wide-ranging scope of responsibilities expected of him. The monthly fixed allowance isgiven to theChairmanof theCompany asaSpecial Allowance, inrecognition of thesignificant peripherals for meeting purposes,Directors’ business-use credit card, bankingbenefits andair travel coverage, etc. Club membership, Directors &Officers liability insurance coverage, driver, car andpetrol allowance, electronic devices and Other Benefits: Farewell Pot Scheme (for theentire tenure of directorship) (b) (a) Meeting Allowance (per meeting): MonthlyFixed Allowance Description Board Committees Board of theCompany NOTICE OF 55 (b) th (a) AGM of theCompany onthere-appointment of PricewaterhouseCoopers astheexternal auditors ”), at its meeting on 25 January 2021, conducted its annual assessment on the external auditors of TH ANNUAL GENERAL MEETING (c) th Non-Executive AGM of theCompany. The Board 25,000.00 Chairman 3,000.00 1,500.00 1,500.00 (RM) Non-Executive Not Applicable Directors 3,000.00 1,500.00 1,500.00 (RM) WE ARE RHB BANK LEADERSHIP OUR STRATEGIC OUR PERFORMANCE OUR GOVERNANCE STAKEHOLDERS’ 157 STATEMENTS REVIEW REVIEW INFORMATION

7. Ordinary Resolution 10 – Authority for Directors to Issue Shares

The proposed Ordinary Resolution 10 is to renew the general mandate to the Directors of the Company to issue ordinary shares of the Company from time to time pursuant to Sections 75 and 76 of the Companies Act 2016. The resolution, if passed, will give powers to the Directors of the Company to issue ordinary shares in the capital of the Company provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the total number of issued shares of the Company for the time being (“General Mandate”), without having to convene a general meeting. The General Mandate, unless revoked or varied at a general meeting, will expire at the conclusion of the next AGM of the Company.

The General Mandate will enable the Directors to take swift action in case of, inter alia, a need for corporate exercises or in the event business opportunities or other circumstances arise which involve the issue of new shares and to avoid delay and cost in convening general meetings to approve such issue of shares. In any event, the exercise of the mandate is only to be undertaken if the Board considers it to be in the best interest of the Company.

8. Ordinary Resolutions 11 and 12 – Proposed DRP and Issuance of DRP Shares

The proposed Ordinary Resolution 11 if passed, will provide the shareholders of the Company with an option to elect to reinvest their cash dividend in new ordinary shares of the Company via the Proposed DRP.

The proposed Ordinary Resolution 12 if passed, will give authority to the Directors to allot and issue new RHB Bank Shares pursuant to the Proposed DRP in respect of dividends declared after this AGM, and such authority shall expire at the conclusion of the next AGM of the Company.

The details of the Proposed DRP are set out in the Circular to Shareholders dated 27 April 2021 which is available on RHB Bank’s website, www.rhbgroup.com.

STATEMENT ACCOMPANYING NOTICE OF THE 55TH AGM OF THE COMPANY Additional information pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad is set out in Annexure A to the Notice of the 55th AGM of the Company.

Annexure A STATEMENT ACCOMPANYING NOTICE OF THE 55TH AGM OF THE COMPANY

(Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)

(i) Further details of individuals who are standing for election as Directors (excluding Directors standing for re-election)

No individual is seeking election as a Director at the 55th AGM of the Company.

(ii) A statement relating to general mandate for issue of security in accordance with paragraph 6.03(3) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad 2020 Report Integrated

The proposed Ordinary Resolution 10 for the general mandate for issue of securities is a renewal mandate. As at the date of this Notice, no new shares were issued pursuant to the general mandate granted to the Directors at the last AGM held on 29 May 2020. - Berhad RHB Bank

www.rhbgroup.com This page is intentionally left blank. PROXY FORM

No. of Ordinary Shares held CDS Account No. Registration No. 196501000373 (6171-M) (Incorporated in Malaysia under the then Companies Ordinances, 1940 – 1946)

I/We NRIC/Passport/Company No. (Name in block letters) of (Full address) being a member of RHB BANK BERHAD (“RHB Bank” or “Company”) hereby appoint:

Name NRIC No. (Mandatory) (Name in block letters) of (Full address) and/or*

Name NRIC No. (Mandatory) (Name in block letters) of (Full address) or failing him/her, the CHAIRMAN OF THE MEETING, as my/our* proxy to vote for me/us* and on my/our* behalf at the 55th Annual General Meeting (“AGM”) of the Company to be held at, and broadcasted live from Meeting Room 3, Level 16, Tower Three, RHB Centre, Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia (“Broadcast Venue”) on Tuesday, 25 May 2021 at 10.00 a.m. or at any adjournment thereof.

The proportion of my/our* holdings to be represented by my/our* proxies are as follows:

First Proxy (1) Second Proxy (2)

My/Our proxy* is to vote as indicated below: Resolutions For Against Ordinary Resolution 1 To approve a single-tier final dividend of 7.65 sen per share in respect of the financial year ended 31 December 2020. To re-elect the following Directors pursuant to Clause 94 of the Company’s Constitution: Ordinary Resolution 2 (1) Tan Sri Ong Leong Huat @ Wong Joo Hwa Ordinary Resolution 3 (2) Ms Ong Ai Lin To re-elect the following Directors pursuant to Clause 98 of the Company’s Constitution: Ordinary Resolution 4 (1) Tan Sri Ahmad Badri Mohd Zahir Ordinary Resolution 5 (2) Mr Donald Joshua Jaganathan Ordinary Resolution 6 (2) Datuk Iain John Lo Ordinary Resolution 7 To approve the payment of Directors’ fees and Board Committees’ allowances to the Non- Executive Directors from 55th AGM of the Company until the 56th AGM of the Company. Ordinary Resolution 8 To approve the payment of Directors’ remuneration (excluding Directors’ fees and Board Committees’ allowances) of an amount up to RM1,600,000 to the Non-Executive Directors from the 55th AGM of the Company to the 56th AGM of the Company. Ordinary Resolution 9 To re-appoint Messrs PricewaterhouseCoopers PLT as Auditors of the Company to hold office until the conclusion of the 56th AGM of the Company, at a remuneration to be determined by the Directors. Ordinary Resolution 10 To authorise the Directors to issue shares pursuant to Sections 75 and 76 of the Companies Act 2016. Ordinary Resolution 11 To approve the proposed Dividend Reinvestment Plan that provides the Shareholders of the Company with an option to elect to reinvest their cash dividend in new ordinary shares of RHB Bank (“RHB Bank Shares”) (“Proposed DRP”). Ordinary Resolution 12 To approve the allotment and issuance of new RHB Bank Shares pursuant to the Proposed DRP.

(Please indicate with an “X” in the spaces provided above as to how you wish to cast your vote. If no specific directions as to voting are given, the proxy shall vote or abstain from voting at his/her full discretion.)

Dated , 2021

Signature * Delete if not applicable (If shareholder is a corporation, this part should be executed under its seal) Notes:- 1. In respect of deposited securities, only members whose names appear in the Record of Depositors on 19 May 2021 (General Meeting Record of Depositors) shall be entitled to participate and vote remotely at the forthcoming 55th AGM using the remote participation and electronic voting facilities. 2. A member of the Company entitled to participate and vote remotely at the forthcoming 55th AGM is entitled to appoint one or more proxies to participate and vote remotely in his/her place. A proxy may but need not be a member of the Company. 3. The Form of Proxy must be signed by the appointer or his/her attorney duly authorised in writing or in the case of a corporation, be executed under its common seal or under the hand of its attorney duly authorised in writing. 4. If the Form of Proxy is returned without any indication as to how the proxy shall vote, the proxy will vote or abstain as he/she thinks fit. 5. Where a member appoints two proxies, the appointment shall be invalid unless he/she specifies the proportion of his/her holdings to be represented by each proxy. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 (“SICDA”), it may appoint at least one proxy in respect of each Securities Account which is credited with ordinary shares of the Company. 6. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“Omnibus Account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each Omnibus Account it holds. An exempt authorised nominee refers to an authorised nominee defined under SICDA which is exempted from compliance with the provisions of subsection 25A(1) of SICDA. 7. The Form of Proxy or other instruments of appointment must be deposited at the office of the share registrar of the Company, Boardroom Share Registrars Sdn Bhd, 11th Floor, Menara Symphony, No. 5, Jalan Prof. Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, Selangor, Malaysia or lodged electronically via “Boardroom Smart Investor Portal” at www.boardroomlimited.my not later than 48 hours before the time fixed for holding the forthcoming 55th AGM or any adjournment thereof.

PLEASE FOLD HERE

Postage Stamp

The Share Registrar of RHB BANK BERHAD BOARDROOM SHARE REGISTRARS SDN BHD 11th Floor, Menara Symphony No. 5, Jalan Prof. Khoo Kay Kim Seksyen 13 46200 Petaling Jaya Selangor Malaysia

PLEASE FOLD HERE w w w . r h b g r o u p . c o m

RHB Bank Berhad 196501000373 (6171-M)

Level 10, Tower One, RHB Centre, Jalan Tun Razak 50400 Kuala Lumpur, Malaysia Tel : +603-9287 8888 Fax : +603-9281 9314 facebook.com/RHBGroup twitter.com/RHBGroup

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