Bumiputra-Commerce Holdings Berhad (50841-W) Annual Report 2008 Open to a landscape of borderless In 2008, possibilities, opportunities Southeast Asia and capabilities. became our home. Contents Cover Rationale In 2008, Southeast Asia truly became our home with the completion 002 Five Year Group Financial Highlights 102 Statement on Corporate Governance of BCHB Group’s universal banking footprint across 4 major markets 004 Group Financial Highlights 122 Audit Committee Report - Malaysia, Indonesia, Singapore and Thailand. Children reflect our 006 Our Vision 127 Statement on Internal Control 007 Core Philosophies of the Group 134 Risk Management enthusiasm and excitement, and the growth and synergy opportunities 010 Corporate Profile 142 Notable Deals that lie ahead as we further explore prospects in the region. The 012 Corporate Structure 150 Notable Achievements inspiring Southeast Asian landmarks featured in the dividers aim to 013 Corporate History 156 Our Alliances invite all stakeholders to share our journey. With the largest retail 018 Chairman’s Message 158 International Advisory Panel network of 1,150 branches across the region, we continue to pursue 024 Performance Review by 159 Investor Relations Group Chief Executive an expanding horizon of initiatives for future growth. 160 Snapshot of Corporate Events 056 Corporate Information 174 Corporate Social Responsibility 058 Corporate Organisation Chart 190 Recreation 060 Board of Directors 191 Shareholders’ Statistics 062 Board of Directors’ Profiles 194 Top 10 Properties of the Group 072 Company Secretary’s Profile 195 Notice of Annual General Meeting 073 Group Management Committee’s Profiles 197 Statement Accompanying Notice 086 Heads of International Subsidiaries’ Profiles of Annual General Meeting 087 Group Shariah Committee’s Profiles 206 Group Corporate Directory 090 Functional Divisions Proxy Form 098 Boards of Major Subsidiaries Bumiputra-Commerce Holdings Berhad (50841-W) Five Year Group Financial Highlights Total Income Profit Before Taxation Profit After Taxation Net Earnings Per Share RM ’000 RM ’000 RM ’000 Sen 3,685,803 2,793,273 9,010,661 83.87 95,904,058 15,710,051 7,740,512 90,334,759 182,801,239 139,751,258 2,715,659 1,952,038 6,392,570 156,952,209 11,784,530 57.82 69,095,880 111,241,419 62,603,030 2,002,042 1,504,427 9,637,453 48.74 4,722,980 8,959,476 113,525,964 112,382,591 81,740,235 4,154,822 81,623,044 1,309,967 30.45 27.61 826,825 1,052,647 734,540 08 07 06 05 04 08 07 06 05 04 08 07 06 05 04 08 07 06 05 04 2008 2007 2006 2005 2004 1. INCOME (RM’000) (i) Net interest income 4,660,596 4,395,930 3,656,447 2,986,247 2,690,511 (ii) Non-interest income 3,079,916 4,614,731 2,736,123 1,736,733 1,464,311 (iii) Profit before allowances 3,618,707 4,783,547 3,034,600 2,444,881 2,201,415 (iv) Profit before taxation 2,715,659 3,685,803 2,002,042 1,309,967 1,052,647 (v) Net profit for the financial year 1,952,038 2,793,273 1,504,427 826,825 734,540 2. BALANCE SHEET (RM’000) Assets (i) Total assets excluding contra 206,735,710 182,801,239 156,952,209 113,525,964 112,382,591 (ii) Total assets including contra 227,813,224 200,028,450 171,670,775 124,197,350 121,076,245 (iii) Loans, advances and financing 117,382,074 95,904,058 90,334,759 69,095,880 62,603,030 Liabilities and Shareholders’ Funds (i) Total deposits 160,543,494 139,751,258 111,241,419 81,740,235 81,623,044 (ii) Paid-up capital 3,578,078 3,374,181 3,184,429 2,756,398 2,691,740 (iii) Total shareholders’ funds 17,063,951 15,710,051 11,784,530 9,637,453 8,959,476 002 Annual Report 2008 Bumiputra-Commerce Holdings Berhad (50841-W) Five Year Group Financial Highlights Total Assets Loans, Advances and Total Deposits Shareholders’ Funds Financing RM ’000 RM ’000 RM ’000 RM ’000 117,382,074 3,685,803 2,793,273 9,010,661 17,063,951 83.87 206,735,710 160,543,494 95,904,058 15,710,051 90,334,759 182,801,239 139,751,258 6,392,570 156,952,209 11,784,530 69,095,880 111,241,419 62,603,030 2,002,042 1,504,427 9,637,453 48.74 4,722,980 8,959,476 113,525,964 112,382,591 81,740,235 4,154,822 81,623,044 1,309,967 30.45 27.61 826,825 1,052,647 734,540 08 07 06 05 04 08 07 06 05 04 08 07 06 05 04 08 07 06 05 04 2008 2007 2006 2005 2004 3. PER SHARE (i) Gross earnings (sen) ∆ 80.44 110.68 64.86 48.25 39.57 (ii) Net earnings (sen) ∆ 57.82 83.87 48.74 30.45 27.61 (iii) Net tangible assets (RM) 2.69 3.17 2.11 3.26 3.19 (iv) Gross dividend (sen) * 25.00 40.00 15.00 15.00 10.00 4. FINANCIAL RATIO (%) (i) Return on average equity 12.30 20.05 13.98 8.89 8.71 * Gross dividend is computed based on the actual payment made in the respective financial years. ∆ Based on the weighted average number of 3,375,898,000 (2007: 3,330,288,000) ordinary shares of RM1.00 each in issue during the financial year ended 31 December 2008. # Return on average equity ratio is computed based on weighted average monthly shareholders’ funds balances. Annual Report 2008 003 Bumiputra-Commerce Holdings Berhad (50841-W) Group Financial Highlights Financial Year Ended 31 December Changes Income statement and 2008 2007 2006 2008 2007 2006 balance sheet RM’000 RM’000 RM’000 % % % Net interest income 4,660,596 4,395,930 3,656,447 6.02 20.22 22.44 Non-interest income 3,079,916 4,614,731 2,736,123 (33.26) 68.66 57.54 Overheads 4,121,805 4,227,114 3,357,970 (2.49) 25.88 47.40 Profit before allowances 3,618,707 4,783,547 3,034,600 (24.35) 57.63 24.12 Allowance for losses on loans, advances and financing 794,715 1,127,431 1,016,595 (29.51) 10.90 (0.52) Profit before taxation 2,715,659 3,685,803 2,002,042 (26.32) 84.10 52.83 Net profit for the financial year 1,952,038 2,793,273 1,504,427 (30.12) 85.67 81.95 Gross dividends paid 836,868 1,346,833 472,717 (37.86) 184.91 16.29 Loans, advances and financing 117,382,074 95,904,058 90,334,759 22.40 6.17 30.74 Total assets 206,735,710 182,801,239 156,952,209 13.09 16.47 38.25 Deposits from customers 153,424,976 126,866,791 104,219,640 20.93 21.73 40.22 Total liabilities 188,373,261 165,946,629 144,362,889 13.51 14.95 40.95 Shareholders’ funds 17,063,951 15,710,051 11,784,530 8.62 33.31 22.28 Commitments and contingencies 321,678,842 267,168,733 240,722,060 20.40 10.99 61.04 RATIOS % % % % % % Core capital ratio 11.41 10.16 9.72 12.30 4.53 (13.21) Return on average equity 12.30* 20.05* 13.98 (38.65) 43.42 58.26 Return on total assets 0.94 1.53 0.96 (38.21) 59.42 31.51 Cost to income ratio 53.25 46.91 52.53 13.51 (10.69) 8.92 Cost to total assets 1.99 2.31 2.14 (13.78) 8.08 6.47 Gross NPL to gross loans 4.94 7.21 8.84 (31.45) (18.44) 1.73 Net NPL to net loans 2.29 3.85 5.49 (40.49) (29.87) (3.51) Coverage ratio 88.05 69.30 57.51 27.06 20.49 4.22 Loan deposit ratio 76.51 75.59 86.68 1.21 (12.79) (6.77) Equity to assets 8.25 8.59 7.51 (3.96) 14.46 (11.54) Equity to loans 14.54 16.38 13.05 (11.26) 25.57 (6.45) OTHER INFORMATION Earnings per share (Sen) - Basic 57.82 83.87 48.74 (31.06) 72.09 60.06 - Fully diluted 57.76 83.77 48.12 (31.05) 74.09 60.03 Net tangible assets per share (RM) 2.69 3.17 2.11 (15.13) 50.21 (35.28) Gross dividend per share (Sen) 25.00 40.00 15.00 (37.50) 166.67 - Number of shares in issue (‘000) 3,578,078 3,374,181 3,184,429 6.04 5.96 15.53 Weighted average number of shares in issue (‘000) 3,375,898 3,330,288 3,086,650 1.37 7.89 13.69 Share price at year-end (RM) 5.85 11.00 7.75 (46.82) 41.94 35.96 Number of employees 31,932 25,614 24,267 24.67 5.55 32.35 * Based on weighted average monthly shareholders’ funds balances 004 Annual Report 2008 Bumiputra-Commerce Holdings Berhad (50841-W) Group Financial Highlights SELECTED KEY PERFORMANce INdicATORS Return on average Gross dividend Net NPL Loan loss equity per share ratio coverage ratio % Sen % % 88.05 69.30 57.51 40.00 25.00 20.05 15.00 13.98 12.30 5.49 3.85 2.29 08 07 06 08 07 06 08 07 06 08 07 06 Annual Report 2008 005 Bumiputra-Commerce Holdings Berhad (50841-W) Our Vision To be Southeast Asia’s Most Valued Universal Bank 006 Annual Report 2008 Bumiputra-Commerce Holdings Berhad (50841-W) Core Philosophies of the Group We are in We believe In order to the business the best way protect our of creating to create the reputation and value for our most value is business, we customers by enabling our speak and act people with integrity We exist to create value for Enabling our people involves Integrity means speaking and our customers.