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On behalf of the Board of Directors of AFFIN, AFFIN Investment Bank Berhad (“AFFIN Investment”) is pleased to announce that Bank Negara Malaysia (“BNM”) had vide its letter dated 25 January 2008 informed that BNM had obtained the approval from Minister of Finance for the following:

(i) Pursuant to Section 45(1)(a) and (b) of the Banking and Financial Institutions Act 1989 (“BAFIA”) for AFFIN Capital Sdn Bhd (formerly known as AFFIN Capital Holdings Sdn Bhd) (“ACSB”), a wholly-owned subsidiary of AFFIN, to acquire the entire equity interest in AFFIN Bank Berhad (“AFFIN Bank”) and AFFIN Investment;

(ii) Pursuant to Section 45(3) of the BAFIA for AFFIN to subscribe to the issuance of new ordinary shares of RM1.00 each in AFFIN Bank and AFFIN Investment;

(iii) Pursuant to Section 46 of BAFIA for ACSB to hold shares in AFFIN Bank and AFFIN Investment in excess of the maximum permissible limit;

(iv) Pursuant to Section 49 of the BAFIA for AFFIN and ACSB to enter into an agreement or arrangement which would result in the change in the control of AFFIN Bank and AFFIN Investment, after (i) above; and

(v) Pursuant to Section 22 of the Islamic Banking Act 1983 for ACSB and AFFIN Bank to enter into an arrangement or agreement for ACSB to acquire from AFFIN Bank the entire equity interest in AFFIN Islamic Bank Berhad (“AFFIN Islamic”), which would result in a change in the control or management of AFFIN Islamic.

Further, BNM informed that following the above internal restructuring exercise, in addition to AFFIN, ACSB is now designated as a Financial Holding Company in view of its holding of the licensed institutions comprising AFFIN Bank, AFFIN Investment and AFFIN Islamic (collectively the “Banking Subsidiaries”). In this regard, ACSB will be subjected to the following conditions:

(i) its investment should be confined to the financial sector and prior approval of BNM is to be obtained for any new investments; and

(ii) compliance with the Guidelines on Corporate Governance for Licensed Institutions (Revised BNM/GP1).

The approval from MOF represents a key milestone for the proposed rationalisation by AFFIN to put together its banking businesses undertaken by AFFIN Bank, AFFIN Investment and AFFIN Islamic under ACSB (“Proposed Formation of AFFIN Banking Group”). The Banking Subsidiaries with ACSB as their immediate holding company will be re-branded as the “AFFIN Banking Group”.

The Proposed Formation of AFFIN Banking Group is part of AFFIN’s continuous effort to review its business model and corporate structure to ensure it remains effective amidst the competitive banking industry. The Proposed Formation of AFFIN Banking Group is expected to bring greater focus and efficiency in delivery capabilities through a comprehensive and seamless range of products and services. Over the long term, it is expected that the Proposed Formation of AFFIN Banking Group will result in sustainable, positive and tangible benefits to the shareholders of AFFIN.


This announcement is dated 28 January 2008.