PROPOSED RENOUNCEABLE RIGHTS ISSUE OF NEW ORDINARY SHARES OF RM1.00 EACH IN HLFG ( HLFG SHARES ) TO RAISE GROSS PROCEEDS OF UP TO RM1.

HONG LEONG FINANCIAL GROUP BERHAD ( HLFG ) PROPOSED RENOUNCEABLE RIGHTS ISSUE OF NEW ORDINARY SHARES OF RM1.00 EACH IN HLFG ( HLFG SHARES ) TO RAISE GROSS PROCEEDS OF UP TO RM1.1 BILLION 1. INTRODUCTION On behalf of HLFG, Hong Leong Investment Bank Berhad ( HLIB ) is pleased to announce that HLFG proposes to undertake a renounceable rights issue of new HLFG Shares ( Rights Shares ) to raise gross proceeds of up to RM1.1 billion ( Proposed Rights Issue ). 2. DETAILS OF THE PROPOSED RIGHTS ISSUE HLFG proposes to undertake a renounceable rights issue to the shareholders of HLFG as at the close of business on an entitlement date to be determined later ( Entitlement Date ) ( Entitled Shareholders ) to raise gross proceeds of up to RM1.1 billion ( Intended Gross Proceeds ). 2.1 Basis and quantum The entitlement basis for the Proposed Rights Issue ( Entitlement Basis ) and the issue price for the Rights Shares ( Issue Price ) have not been fixed at this juncture to provide flexibility to the Board of Directors of HLFG ( Board ) to determine the Entitlement Basis and the Issue Price at a later date. Notwithstanding the above, the Intended Gross Proceeds have been determined upfront to provide clarity to HLFG s shareholders with respect to the capital outlay required to fully subscribe for their respective entitlements under the Proposed Rights Issue. This can be approximated by multiplying the Intended Gross Proceeds with their respective percentage shareholdings in HLFG. For illustration purposes only, based on the 1,052,767,789 HLFG Shares in issue as at 7 August 2015, being the latest practicable date prior to the date of this announcement ( LPD ), and the Intended Gross Proceeds of up to RM1.1 billion, the capital outlay by an Entitled Shareholder holding 1,000 HLFG Shares who wishes to subscribe for his/her entitlement in full is approximately RM1,044.86. The actual capital outlay by the Entitled Shareholders to fully subscribe for their entitlements under the Proposed Rights Issue will depend on the final Entitlement Basis and Issue Price. The Issue Price and the Entitlement Basis will be determined by the Board and announced closer to the implementation of the Proposed Rights Issue after taking into consideration, amongst others, the following: (i) (ii) (iii) the issued and paid-up share capital of HLFG as at the Entitlement Date; the then prevailing market conditions; and the resultant theoretical ex-rights price ( TERP ), calculated based on the 5-day volume-weighted average market price ( VWAMP ) of HLFG Shares up to and including the last market day immediately preceding the price-fixing date. In any event, the Issue Price will not be lower than the par value of HLFG Shares of RM1.00 each. The Entitlement Basis and the corresponding number of Rights Shares to be issued can only be determined in conjunction with the fixing of the Issue Price such that the Intended Gross Proceeds are raised. The Board intends to fix the Entitlement Basis such that the occurrence of odd lots and fractional entitlements is minimised. 1

The Rights Shares will be provisionally allotted to the Entitled Shareholders. Any fractional entitlements of the Rights Shares under the Proposed Rights Issue will be dealt with in such manner as the Board in its absolute discretion deems fit or expedient and in the best interest of HLFG. 2.2 Renunciation of the Rights Shares The Proposed Rights Issue is renounceable in full or in part. Accordingly, the Entitled Shareholders can subscribe for and/or renounce their entitlements to the Rights Shares in full or in part. Any Rights Shares which are not subscribed or validly subscribed will be made available to other Entitled Shareholders and/or their renouncee(s) and/or transferee(s) (if applicable) pursuant to their application for excess Rights Shares. The Board intends to allocate the excess Rights Shares in a fair and equitable manner on a basis to be determined and announced later. 2.3 Ranking of the Rights Shares The Rights Shares will, upon allotment and issue, rank pari passu in all respects with the then existing HLFG Shares in issue, save and except that they will not be entitled to any dividends, rights, allotments and/or other distributions, in respect of which the entitlement date is prior to the date of allotment of the Rights Shares. 2.4 Listing of and quotation for the Rights Shares An application will be made to Bursa Malaysia Securities Berhad ( Bursa Securities ) for the listing of and quotation for the Rights Shares on the Main Market of Bursa Securities. 2.5 Subscription basis and major shareholders undertakings The Proposed Rights Issue will be undertaken on a full subscription basis. In this respect, HLFG has procured undertakings from its major shareholders, namely Hong Leong Company (Malaysia) Berhad ( HLCM ) and Guoco Assets Sdn Bhd ( GASB ), to subscribe and/or procure the subscription in full for their respective entitlements to the Rights Shares, of which the allocation shall be in proportion to their respective shareholdings in HLFG as at the Entitlement Date. For illustration purposes, based on the shareholdings of HLCM and GASB as at the LPD and the Intended Gross Proceeds of up to RM1.1 billion, the amount of their respective full entitlements for the Rights Shares under the Proposed Rights Issue are as follows: Major shareholder Shareholdings as at the LPD Entitlement amount Shares held % RM million % HLCM 546,773,354 51.94 571.30 51.94 GASB 267,079,946 25.37 279.06 25.37 Total 813,853,300 77.31 850.36 77.31 The actual number of Rights Shares and the entitlements of HLCM and GASB under the Proposed Rights Issue will only be determined in conjunction with the fixing of the Entitlement Basis and the Issue Price. The remaining portion of the Rights Shares for which no undertaking has been sought will be fully underwritten by underwriters. Such underwriting arrangements will be in place prior to the announcement of the Entitlement Date. 2

2.6 Utilisation of proceeds Pursuant to the announcement made by HLIB on 12 August 2015, on behalf of Hong Leong Bank Berhad ( HLB ), a subsidiary of HLFG, in relation to the proposed renounceable rights issue of new ordinary shares to be undertaken by HLB to raise gross proceeds of up to RM3.0 billion ( Proposed HLB Rights Issue ), HLFG and Hong Leong Equities Sdn Bhd ( HLE ), a wholly-owned subsidiary of HLFG, have undertaken to subscribe and/or procure the subscription in full for their respective entitlements under the Proposed HLB Rights Issue. Based on the aggregate direct shareholdings of HLFG and HLE of approximately 64.23% in HLB as at the LPD and the intended gross proceeds of up to RM3.0 billion to be raised from the Proposed HLB Rights Issue, the capital outlay required by HLFG and HLE to fully subscribe for their entitlements under the Proposed HLB Rights Issue is expected to be approximately RM1.9 billion. Accordingly, the Intended Gross Proceeds are proposed to be utilised in the following manner: Proposed utilisation Note Amount (RM million) Part subscription of HLFG s entitlement under the Proposed HLB Rights Issue Defrayment of estimated expenses in relation to the Proposed Rights Issue Estimated timeframe for utilisation of proceeds from the date of listing of the Rights Shares (1) 1,097.5 Within 3 months 2.5 Within 1 month Intended Gross Proceeds 1,100.0 Notes: (1) The Intended Gross Proceeds, after defraying the expenses to be incurred in relation to the Proposed Rights Issue, will be utilised to partially fund the subscription of HLFG s entitlement under the Proposed HLB Rights Issue. Any remaining balance of the capital outlay required for the full subscription of HLFG s and HLE s entitlements under the Proposed HLB Rights Issue shall be financed via a combination of bank borrowings, commercial papers, medium term notes and/or available cash. The estimated expenses in relation to the Proposed Rights Issue of approximately RM2.5 million comprise professional fees, underwriting fees, fees payable to the relevant authorities and other miscellaneous expenses. Any surplus/shortfall from the expenses incurred for the Proposed Rights Issue will be correspondingly contributed to/funded from the portion allocated for the subscription of HLFG s entitlement under the Proposed HLB Rights Issue. The exact gross proceeds to be raised cannot be determined at this juncture as it would depend on the final Issue Price and Entitlement Basis. Any differences between the Intended Gross Proceeds and the actual gross proceeds raised will be adjusted from the portion allocated for the subscription of HLFG s entitlement under the Proposed HLB Rights Issue. Pending the utilisation of the proceeds by HLFG, the proceeds may be placed in interestbearing deposit accounts or as investment in money markets as the Board may deem fit. 3

2.7 Abridged prospectus and foreign addressed shareholders The abridged prospectus together with the accompanying documents to be issued in connection with the Proposed Rights Issue (collectively, the Documents ) are not and will not be made to comply with the laws of any country or jurisdiction other than Malaysia, and have not and will not be registered under any applicable securities legislation of any country or jurisdiction other than Malaysia, and the Proposed Rights Issue will not be offered for purchase or subscription in any country or jurisdiction other than Malaysia. Accordingly, the Documents will only be sent to Entitled Shareholders who have a registered address or an address for service in Malaysia as registered in the Record of Depositors of HLFG as at the Entitlement Date. Entitled Shareholders who have not provided an address in Malaysia for the service of the Documents should consult their professional advisers and seek advice as to the laws of any jurisdiction which they may be subject to. 3. RATIONALE FOR THE PROPOSED RIGHTS ISSUE The Proposed Rights Issue is undertaken as part of HLFG s capital management strategy to strengthen its capital position to support the continuous business growth of HLFG and its subsidiaries (collectively, the HLFG Group ). The Proposed Rights Issue will also facilitate the build-up of an adequate level of capital buffer in preparation for the forthcoming regulatory capital requirements. In addition to the above, the Proposed Rights Issue will allow HLFG, as a major shareholder of HLB, to raise the necessary proceeds to partially fund the subscription of its entitlement under the Proposed HLB Rights Issue in a manner that avoids diluting the equity interests of HLFG s shareholders (assuming all shareholders fully subscribe for their respective entitlements under the Proposed Rights Issue). Further, the Proposed Rights Issue will also provide the Entitled Shareholders with an opportunity to increase their equity participation in HLFG on a pro-rata basis which will be at a discount to the prevailing market price of the HLFG Shares. Based on the above and after due consideration of the various options available to HLFG, the Board is of the view that the Proposed Rights Issue is the most appropriate avenue of fund raising for HLFG at this juncture. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 4

4. EFFECTS OF THE PROPOSED RIGHTS ISSUE For the purposes of illustrating the effects of the Proposed Rights Issue, the Issue Price is assumed to be RM11.84, which represents a discount of RM3.28 or 21.69% to the TERP of RM15.12, calculated based on the 5-day VWAMP of HLFG Shares up to and including the LPD of RM15.41, and the Entitlement Basis is assumed to be 3 Rights Shares for every 34 HLFG Shares held as at the Entitlement Date ( Assumptions ). The Board wishes to emphasise that the pro forma effects of the Proposed Rights Issue on the issued and paid-up share capital of HLFG, the shareholdings of HLFG s substantial shareholders, as well as the net assets ( NA ), gearing, earnings and earnings per share ( EPS ) of the HLFG Group are presented solely for illustration purposes based on the Assumptions and should not be regarded as an indication or reference to the final Issue Price or the Entitlement Basis of the Proposed Rights Issue, both of which will be determined by the Board and announced closer to the implementation of the Proposed Rights Issue. 4.1 Share capital The pro forma effects of the Proposed Rights Issue on the issued and paid-up share capital of HLFG as at the LPD are as follows: Shares Share capital ( 000) (RM 000) Existing as at the LPD 1,052,768 1,052,768 To be issued pursuant to the Proposed Rights Issue 92,891 92,891 Enlarged issued and paid up share capital 1,145,659 1,145,659 THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 5

4.2 Substantial shareholders shareholdings In the event that all the Entitled Shareholders subscribe in full for their entitlements under the Proposed Rights Issue, there will be no effect on the shareholdings of the substantial shareholders of HLFG save for the proportionate increase in the total number of HLFG Shares held by each of the substantial shareholders following the Proposed Rights Issue. The pro forma effects of the Proposed Rights Issue on the shareholdings of the substantial shareholders of HLFG as at the LPD are as follows: As at the LPD After the Proposed Rights Issue Direct Indirect Direct Indirect Shares Shares Shares Shares Substantial shareholders ( 000) % ( 000) % ( 000) % ( 000) % HLCM 546,773 51.94 (1) 267,084 25.37 595,018 51.94 (1) 290,650 25.37 YBhg Tan Sri Quek Leng Chan 4,990 0.47 824,437 78.31 5,430 0.47 897,182 78.31 HL Holdings Sdn Bhd - - (3) 813,857 77.31 - - (3) 885,668 77.31 Kwek Holdings Pte Ltd - - Mr Kwek Leng Beng 1,241 0.12 818,380 77.74 1,351 0.12 Hong Realty (Private) Limited - - Hong Leong Investment Holdings Pte Ltd - - Davos Investment Holdings Private Limited - - Mr Kwek Leng Kee - - Mr Quek Leng Chye 1,925 0.18 818,380 77.74 2,095 0.18 GASB 267,080 25.37 - - 290,646 25.37 - - GuoLine Overseas Limited - - 267,080 25.37 - - 290,646 25.37 Guoco Group Limited - - 267,080 25.37 - - 290,646 25.37 GuoLine Capital Assets Limited - - 267,080 25.37 - - 290,646 25.37 Notes: (1) Held through subsidiaries. Held through HLCM and company(ies) in which the substantial shareholder has interest. (3) Held through HLCM. Held through GASB. 6

4.3 NA and gearing The pro forma effects of the Proposed Rights Issue, based on the audited consolidated NA of HLFG as at 30 June 2014 and assuming the Proposed Rights Issue has been completed on 30 June 2014, are set out below: (I) (II) Audited as at 30 June 2014 Adjustments for completed transactions (1) After (I) and the Proposed Rights Issue (RM 000) (RM 000) (RM 000) Share capital 1,052,768 1,052,768 1,145,659 Share premium 117,229 117,229 1,121,671 Treasury shares for executive share option scheme ( ESOS ) (25,422) (14,303) (3) (16,797) Statutory reserve 2,454,525 2,454,525 2,454,525 Regulatory reserve 10,266 10,266 10,266 Fair value reserve 287,257 287,257 287,257 Other capital reserve 134,848 134,848 134,848 Share options reserve 7,806 7,806 7,806 Exchange fluctuation reserve (12,347) (12,347) (12,347) Retained profits 7,447,552 7,467,850 7,467,850 NA attributable to owners of the parent 11,474,482 11,505,899 12,600,738 Non-controlling interests 5,530,249 5,530,249 6,537,475 Total equity 17,004,731 17,036,148 19,138,213 Shares in circulation ( 000) 1,047,613 1,050,381 1,143,061 NA per HLFG Share attributable to owners of the parent (RM) 10.95 10.95 11.02 Total borrowings (5) (RM 000) 12,619,237 12,619,237 (6) 13,448,300 Gearing (7) (times) 0.74 0.74 0.70 Notes: (1) Adjustments for the following events from 1 July 2014 up to and including the LPD: (i) the exercise of 3,050,300 options pursuant to the ESOS of HLFG which was established on 23 January 2006 at exercise prices ranging from RM8.09 to RM11.77 each, which were satisfied by total cash consideration of approximately RM35.7 million; and (ii) the purchase of 283,100 HLFG Shares from the open market, which are to be held in trusts established for the purpose of the ESOS, for a total purchase consideration of approximately RM4.3 million. After adjusting for the following: (i) estimated expenses of RM2.5 million in relation to the Proposed Rights Issue; and (ii) utilisation of the net proceeds arising from the Proposed Rights Issue for the subscription of HLFG s entitlement under the Proposed HLB Rights Issue and assuming the Proposed HLB Rights Issue is fully subscribed. (3) The HLFG Shares held in trusts established for the purpose of the ESOS, which are classified as treasury shares for ESOS, are entitled to the subscription of Rights Shares amounting to approximately RM2.5 million, which is a non-cash transaction for the HLFG Group. Excluding the HLFG Shares classified as treasury shares for ESOS. (5) Comprises borrowings (excluding deposits), subordinated obligations, non-innovative Tier 1 stapled securities and innovative Tier 1 capital securities. 7

(6) Assuming the remaining portion of the capital outlay required for the full subscription of HLFG s and HLE s entitlements under the Proposed HLB Rights Issue of approximately RM829.1 million is financed via borrowings. (7) Computed as total borrowings divided by total equity (including non-controlling interests). 4.4 Earnings and EPS The effects of the Proposed Rights Issue on the consolidated earnings and EPS of HLFG for the financial year ending ( FYE ) 30 June 2016 will depend on, amongst others, the number of Rights Shares to be issued and the level of returns generated from the utilisation of the proceeds to be raised from the Proposed Rights Issue. However, assuming that the consolidated earnings of HLFG remains unchanged, the consolidated EPS of HLFG will be diluted as a result of the increase in the number of HLFG Shares in issue following the allotment and issue of the Rights Shares. 4.5 Convertible securities As at the LPD, HLFG does not have any other outstanding convertible securities, save for 12,100,000 options ( Outstanding Options ) which have been granted to the eligible executives of the HLFG Group under the executive share scheme of HLFG, which comprises an ESOS established on 12 March 2013 and an executive share grant scheme established on 28 February 2014 (collectively, the ESS ). The Outstanding Options granted are subject to the achievement of certain performance criteria by the option holders over a performance period concluding at the end of the FYE 30 June 2017. The achievement of the performance targets and number of HLFG Shares (if any) to be vested shall be determined at the end of the FYE 30 June 2017. As such, none of the Outstanding Options will be exercised by the relevant option holders prior to the implementation of the Proposed Rights Issue. Any necessary adjustments to the terms and conditions of the Outstanding Options arising from the Proposed Rights Issue will be made in accordance with the provisions of the byelaws governing the ESS. 5. APPROVALS REQUIRED The Proposed Rights Issue is conditional upon approvals being obtained from the following: (i) (ii) (iii) (iv) Bank Negara Malaysia, for the increase in the issued and paid-up share capital of HLFG pursuant to the Proposed Rights Issue, which was obtained on 11 August 2015 via its letter dated 10 August 2015; Bursa Securities, for the listing of and quotation for the Rights Shares on the Main Market of Bursa Securities; the shareholders of HLFG at an extraordinary general meeting to be convened; and other relevant authorities/parties, if required. Barring any unforeseen circumstances, the application to Bursa Securities in relation to the Proposed Rights Issue is expected to be made within 2 months from the date of this announcement. 8

6. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM None of the directors and/or major shareholders of HLFG and/or persons connected with them has any interest, direct or indirect, in the Proposed Rights Issue, save for their respective entitlements as shareholders of HLFG under the Proposed Rights Issue, for which all the existing shareholders of HLFG are also entitled to. 7. DIRECTORS STATEMENT The Board, having considered all aspects of the Proposed Rights Issue, including but not limited to the rationale for and effects of the Proposed Rights Issue, is of the opinion that the Proposed Rights Issue is in the best interest of HLFG. 8. ADVISER HLIB has been appointed by HLFG as the Principal Adviser for the Proposed Rights Issue. 9. EXPECTED TIME FRAME FOR COMPLETION Barring any unforeseen circumstances and subject to all approvals being obtained, the Proposed Rights Issue is expected to be completed in the fourth quarter of 2015. This announcement is dated 12 August 2015. 9