Rhbbank.Com.My Delivering Results
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rhbbank.com.my delivering results RHB BANK BERHAD ANNUAL REPORT 2005 Our Mission To become the most admired, innovative and profitable financial services company in Malaysia with distribution capabilities in neighbouring Asian countries. Our Core Values • CUSTOMER FOCUS • QUALITY SERVICE • TEAMWORK • RESPECT Delivering Results • INNOVATION Our philosophy is simple - treat customers as real people with real needs. Then follow it up with innovative products and corporate section services that surpass their expectations. You can’t get any Financial Highlights 4 more customer centric than that. After all, we are in the business Corporate Information 6 of delivering results for our Board of Directors 8 customers. Profile of the Board of Directors 10 RHB Group Corporate Structure 15 Chairman’s Report 2005 16 Operations Review 22 RHB Group Achievements and Awards 31 Corporate Highlights 32 Corporate Governance Statement 35 Terms of Reference of Board Committees 39 Internal Control Statement 44 Audit Committee Report 46 Responsibility Statement 49 financial section contents Statutory Financial Statements 50 RHB Bank Branchers 166 annos. Quid, annos. Quid, qui deperiit qui deperiit minor uno minor uno annos. Quid, annos. Quid, qui deperiit qui deperiit minor uno minor uno We know that customers – individuals and businesses alike – require products and services that are easy and intuitive to use, and customer interactions as straightforward and hassle-free as possible. And that’s just the way our approach has been for all our customers since day one of our operations. RHB CAPITAL BERHAD • 312952-H ◆ ANNUAL REPORT 2005 1 Our goal is to introduce cutting-edge technologies that drive markets and bring tangible benefits to our customers, helping businesses to be more productive and more competitive – locally or regionally. And we will continue to be there, for each and every one of our customers. We are passionate about our brand promise of providing superior customer satisfaction. It is in our DNA. We are and will always be true to this commitment. That’s why our focus is always centred around our customers. And this will never change. financial highlights RHB BANK 12 months 18 months 12 months 12 months 12 months Ended Ended Ended Ended Ended 31 Dec 31 Dec 30 June 30 June 30 June 2005 2004 2003 2002 2001 INCOME (RM MILLION) 1. Operating Profit 975.28 1,267.48 927.29 934.23 975.43 2. Profit Before INCPS div, tax & zakat 478.33 594.50 410.32 228.02 465.70 BALANCE SHEET (RM MILLION) 1. Total Assets 74,154 71,320 60,766 48,499 49,237 2. Gross Loans and Advances 39,281 40,480 41,078 35,173 35,211 3. Total Deposits 50,615 51,552 46,754 36,677 36,945 4. Paid-up Capital 1,950 1,950 1,950 1,950 1,950 5. INCPS and Shareholders' Equity 5,457 5,333 5,140 4,906 4,864 ORDINARY DIVIDENDS (PAID) 1. Gross Dividend Rate (%) 11.50 10.13 1.22 3.80 6.60 2. Net Dividend (Paid) (RM Million) 161.46 142.22 17.13 53.35 92.66 Final gross dividend of 4.1% less tax amounting to RM57.56 million in respect of current financial year 2005 will be proposed for shareholders' approval at the forthcoming Annual General meeting. 3. Net Preference Dividends (Paid) (RM'Million) 98.50 127.80 78.69 78.69 78.69 FINANCIAL RATIOS 1. Net Tangible Assets Backing per 50 Sen Ordinary Share (sen) 81.97 78.78 73.05 90.72 89.63 2. Return on Average Shareholders'Equity (%) 9.43 7.99* 9.07 4.24 11.26 3. Earnings per 50 Sen Ordinary Share (Sen) 6.90 7.90 6.50 2.00 5.87 *Pro-rated to 12 months 4 RHB BANK BERHAD • 6171-M ◆ ANNUAL REPORT 2005 1,267.48 74,154 71,320 60,766 975.43 975.28 934.23 927.29 49,237 48,499 operating total profit assets (RM million) (RM million) ’01 ’02 ’03 ’04* ’05 ’01 ’02 ’03 ’04* ’05 51,552 594.50 50,615 46,754 478.33 465.70 36,945 36,677 410.32 profit before total taxation 228.02 deposits (RM million) (RM million) ’01 ’02 ’03 ’04* ’05 ’01 ’02 ’03 ’04* ’05 5,457 5,333 5,140 41,078 4,906 40,480 39,281 4,864 35,211 35,173 INCPS and shareholders’ gross loans equity and advances (RM million) (RM million) ’01 ’02 ’03 ’04* ’05 ’01 ’02 ’03 ’04* ’05 * The Bank changed its financial year end from 30 June to 31 December with effect from the financial period ended 31 December 2004 and accordingly, the results for that financial period are for eighteen months. Certain figures for the 18 months period ended 31 December 2004 have been restated arising from the retrospective application of the revised BNM/GP8. RHB BANK BERHAD • 6171-M ◆ ANNUAL REPORT 2005 5 corporate information BOARD OF DIRECTORS YBhg. Datuk Azlan Zainol Chairman, Non-Independent Non-Executive Director YBhg. Dato Abdullah Mat Noh Deputy Chairman, Non-Independent Non-Executive Director Tuan Haji Khairuddin Ahmad Non-Independent Non-Executive Director Encik Vaseehar Hassan Abdul Razack Non-Independent Non-Executive Director YBhg. Dato' Mohd Salleh Hj Harun Independent Non-Executive Director YBhg. Dato' Othman Jusoh Non-Independent Non-Executive Director Prof. Dr Balachandran A. Shanmugam Independent Non-Executive Director Encik Johari Abdul Muid Non-Independent Non-Executive Director Encik Ismael Fariz Ali Non-Independent Non-Executive Director YBhg. Dato' Mohamed Khadar Merican Independent Non-Executive Director SECRETARIES LOANS COMMITTEE NOMINATING COMMITTEE Encik Azman Shah Md Yaman YBhg. Dato Abdullah Mat Noh YBhg. Dato' Mohd Salleh Hj Harun Chairman Chairman Puan Norazzah Sulaiman Encik Vaseehar Hassan Abdul Razack YBhg. Dato' Othman Jusoh Encik Ismael Fariz Ali YBhg. Dato Abdullah Mat Noh BOARD COMMITTEES Encik Johari Abdul Muid Prof. Dr Balachandran A. Shanmugam AUDIT COMMITTEE YBhg. Dato' Mohamed Khadar Merican Tuan Haji Khairuddin Ahmad YBhg. Dato' Mohd Salleh Hj Harun Chairman REMUNERATION AND HUMAN Tuan Haji Khairuddin Ahmad MANAGEMENT RESOURCE COMMITTEE Prof. Dr Balachandran Mr. Michael J Barrett A. Shanmugam YBhg. Dato' Mohd Salleh Hj Harun Chief Executive Officer Chairman Mr. Thomas TC Chen Encik Vaseehar Hassan Abdul Razack Chief Operating Officer EXECUTIVE COMMITTEE Encik Ismael Fariz Ali YBhg. Datuk Azlan Zainol Chairman RISK MANAGEMENT COMMITTEE BUSINESS DIVISION HEADS YBhg. Dato Abdullah Mat Noh YBhg. Dato' Mohd Salleh Hj Harun Mr. Michael Lim Kheng Boon Encik Vaseehar Hassan Abdul Razack Chairman Treasury Encik Ismael Fariz Ali Tuan Haji Khairuddin Ahmad Tuan Haji Abd Halim Haji Abd Hamid RHB Delta YBhg. Dato' Mohamed Khadar YBhg. Dato' Othman Jusoh Merican Encik Emran Ismail Prof Dr Balachandran Corporate Banking A. Shanmugam Mr. Philip Lu Nam Ann Commercial Banking/ SMIs Mr. Michael Lor Chee Leng Consumer Banking 6 RHB BANK BERHAD • 6171-M ◆ ANNUAL REPORT 2005 DIVISION HEADS RHB BANK (L) LTD REGISTERED OFFICE Ms. Toh Ay Leng YBhg. Dato' Ahmad Dato' Hj Ibrahim Level 10, Tower One General Manager East Malaysia & Brunei RHB Centre Jalan Tun Razak YM Tengku Mohamad Rizam Aziz RHB CAPITAL NOMINEES 50400 Kuala Lumpur Technology Banking (TEMPATAN) SDN BHD and RHB Tel : 603-92878888 CAPITAL NOMINEES (ASING) Mr. Rupert Koh Hock Joo Fax : 603-92806507 SDN BHD Finance Encik Drahman Jaladin Cik Zurina Mohd Nordin BUSINESS ADDRESS Human Resource Senior Manager Head Office Ms. Wong Yih Yin Towers Two & Three Group Internal Audit OVERSEAS LOCATIONS RHB Centre Mr. Rajaretnam Soloman Daniel Jalan Tun Razak Credit Management SINGAPORE 50400 Kuala Lumpur Malaysia Encik Abdul Razak Mohd Ismail Mr. Lim Hun Joo Information Technology Country Head, Singapore Or Cik Rozita Abd Hafiz BRUNEI, BANDAR SERI BEGAWAN P.O. Box No. 10145 Operations & Services 50907 Kuala Lumpur Mr. Ee Yew Chai Encik Apandi Klompot Tel : 603-92878888 Loan Recovery Branch Manager, Brunei Fax : 603-92879000 (General) Telex : MA32813 RHBANK Dr. Joseph Eby Ruin THAILAND, BANGKOK Risk Management MA31032 RHBANK Mr. Tai Chong Yih MA30437 RHBANK Mr. V. Rajendra Pillay Swift : RHBBMYKL Country Head, Bangkok Legal & Regulatory Compliance Call Centre : 603-92068118 Mr. V. Maslamani Direct Service Internet : Compliance JAPANESE BUSINESS GROUP 603-92068228 Encik Azman Shah Md Yaman ADVISER Secretariat AUDITORS Mr. Akira Miyama PricewaterhouseCoopers Executive Director for Japanese Business MANAGEMENT OF Chartered Accountants 11th Floor, Wisma Sime Darby SUBSIDIARIES Jalan Raja Laut 50350 Kuala Lumpur RHB ISLAMIC BANK BERHAD Encik Khalid Bhaimia Chief Executive Officer RHB BANK BERHAD • 6171-M ◆ ANNUAL REPORT 2005 7 from left to right: board of Datuk Azlan Zainol Dato Abdullah Mat Noh Vaseehar Hassan Abdul Razack Haji Khairuddin Ahmad Dato' Mohd Salleh Hj Harun Prof. Dr Balachandran A. Shanmugam Dato' Othman Jusoh Johari Abdul Muid Ismael Fariz Ali Dato’ Mohamed Khadar Merican 8 RHB BANK BERHAD • 6171-M ◆ ANNUAL REPORT 2005 directors RHB BANK BERHAD • 6171-M ◆ ANNUAL REPORT 2005 9 profile of the board of directors YBHG DATUK AZLAN ZAINOL YBHG DATO ABDULLAH MAT NOH (56 years of age - Malaysian) (65 years of age - Malaysian) Non-Independent Non-Executive Chairman Non-Independent Non-Executive Deputy Chairman YBhg. Datuk Azlan Zainol (YBhg. Datuk Azlan) is YBhg. Dato Abdullah Mat Noh (YBhg. Dato Abdullah) currently the Chief Executive Officer of the Employees was formerly the President/Chief Executive Officer of Provident Fund, Malaysia (EPF) since April 2001. YBhg. Bank Utama (Malaysia) Berhad. Prior to joining Bank Datuk Azlan has 25 years experience in the banking and Utama in April 1999, he was attached to Standard finance sector, having served as the Managing Director Chartered Bank Malaysia Berhad for 36 years where his of AmBank Berhad and prior to that, as the Managing last position was the Senior Manager of its East Malaysia Director of AmFinance Berhad.