Contents :

BACKGROUND INFORMATION

On 22 March 2006, the company announced the following KPIs for financial years 2006 and 2007 :-

Financial Year 2006 Headline KPIs

1. After Tax Return on Equity (ROE) - 8.9% (as compared to ROE of 8.0 % in FY 2005)
2. After Tax Return on Assets (ROA) - 0.9%(as compared to ROA of 0.7 % in FY 2005)
3. Net NPL Ratio - 10.6% (as compared to ratio of 14.2% in FY 2005)
4. Earnings Per Share (EPS) - 25.0 Sen (as compared to EPS of 20.0 Sen in FY 2005)

Financial Year 2007 Headline KPIs

1. After Tax Return on Equity (ROE) - 9.8%
2. After Tax Return on Assets (ROA) - 1.0%
3. Net NPL Ratio - 8.0%
4. Earnings Per Share (EPS) - 28.0 Sen

The headline KPIs represent the main corporate targets set by the Company for the period and should not be constituted as being forecasts. In this respect please note the following;

These headline KPIs are targets or aspirations set by the Company as a transparent performance management practice. These headlines shall not be construed as either forecasts, projections or estimates of the Company or representations of any future performance, occurrence or matter as the headlines are merely a set of targets/aspirations of future performance aligned to the Company's strategy.

The KPIs have been developed based on the Group’s strategic plan and based on the assumption that there will be no significant changes in the prevailing economic and political conditions, present legislation and government regulations and on the assumption that the business of the Group will continue to grow as projected and the amount of non-performing loans, provision for loan loss and financing and recoveries will not vary significantly from the amount projected.

HEADLINES KPIs ACHIEVED AS AT 30 JUNE 2006

1. After Tax Return on Equity (ROE) – 6.4%
2. After Tax Return on Assets (ROA) – 0.6%
3. Net NPL Ratio – 13.4%
4. Earnings Per Share (EPS) – 8.5 Sen

The Group is continuing its acquisition and rationalisation exercises to strengthen the Group to be in line with Bank Negara Malaysia (BNM)’s Financial Sector Master Plan guidelines and to enhance shareholders’ value.

The acquisition of the life insurance business of Tahan Insurance Malaysia Berhad (Tahan) was completed on 30 June 2006. The Ministry of Finance issued the licence on 30 June 2006 for AXA Affin Life Insurance Berhad (AALIB) to carry on life insurance business after all the conditions precedent in the conditional business transfer agreement entered into by the company, National Mutual International Pty Ltd and Tahan dated 18 November 2005 were fulfilled. Consequently, the life insurance business of Tahan was transferred to AALIB and AALIB will be able to offer its life insurance products and services effective from 30 June 2006.

The sale and transfer of the discount house business of Affin Discount Berhad (ADB) to Affin Investment Bank Berhad (AIBB) (formerly known as Affin Merchant Bank Berhad) for the formation of Affin Investment Bank was completed on 1 July 2006. On the same date, AIBB had also completed the acquisition of Affin Fund Management Sdn Bhd (AFM) from the company after all the requisite approvals for the acquisition had been obtained. The transfer of the assets and liabilities of Affin Securities Sdn Bhd to AIBB is expected to be completed by the 4th Quarter of 2006 to form a full fledged Investment Bank in accordance to the guidelines on investment banks jointly issued by BNM and the Securities Commission.

On 16 January 2006, Affin Islamic Bank Berhad (Affin Islamic), a wholly owned subsidiary of Affin Bank Berhad (ABB) had entered into a Business Transfer Agreement with ABB for the sale and transfer of the assets and liabilities of the Islamic Banking Business of ABB to Affin Islamic. The Minister of Finance, had on 18 January 2006 issued the Islamic Banking Licence to Affin Islamic to undertake the Islamic Banking Business. Affin Islamic has commenced its business operations on 3 April 2006 upon vesting order from the High Court of Malaya on 1 April 2006.