BANK OF TOKYO-MITSUBISHI UFJ (MALAYSIA) BERHAD

Company No : 302316-U BANK OF TOKYO-MITSUBISHI UFJ (MALAYSIA) BERHAD UNAUDITED INTERIM FINANCIAL REPORT FOR THE QUARTER ENDED 31 DECEMBER 2016

Company No : 302316-U UNAUDITED INTERIM FINANCIAL REPORT FOR THE QUARTER ENDED 31 DECEMBER 2016 Contents Page Unaudited Statement of Financial Position 1 Unaudited Statement of Comprehensive Income 2 Unaudited Statement of Changes in Equity 3 Unaudited Statement of Cash Flows 4-5 Notes to the Unaudited Interim Financial Report 6-23

UNAUDITED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2016 ASSETS RM'000 RM'000 Cash and short-term funds 7,301,435 7,312,418 Securities available-for-sale 688,211 174,874 Loans and advances 17,706,703 17,295,638 Purchased receivables 148,831 31,701 Derivative financial assets 3,119,655 3,144,942 Statutory deposits with Bank Negara Malaysia 3,268 3,268 Amount due from holding company 337,100 550,233 Amount due from related companies 18,139 23,200 Other assets 25,730 30,721 Property, plant and equipment 20,386 24,080 Intangible assets 29,039 20,975 Deferred tax assets - 40,677 Tax recoverable 39,686 6,617 TOTAL ASSETS 29,438,183 28,659,344 LIABILITIES AND SHAREHOLDER'S FUNDS Deposits from customers 8,964,640 7,755,646 Deposits and placements of banks and other financial institutions 3,280 5,000 Collateral deposits 12,400,920 10,109,477 Derivative financial liabilities 2,878,546 2,872,158 Amount due to holding company 2,829,663 5,730,023 Other liabilities 134,137 141,995 Deferred tax liabilities 2,165 - TOTAL LIABILITIES 27,213,351 26,614,299 SHARE CAPITAL 200,000 200,000 RESERVES 2,024,832 1,845,045 SHAREHOLDER'S FUNDS 2,224,832 2,045,045 TOTAL LIABILITIES AND SHAREHOLDER'S FUNDS 29,438,183 28,659,344 COMMITMENTS AND CONTINGENCIES 59,646,640 50,209,237 1

UNAUDITED STATEMENT OF COMPREHENSIVE INCOME FOR THE QUARTER ENDED 31 DECEMBER 2016 4th Quarter Ended Twelve Months Ended RM'000 RM'000 RM'000 RM'000 Operating revenue 113,542 119,573 447,765 426,113 Interest income 136,517 116,741 500,786 388,687 Interest expense (67,541) (55,566) (243,125) (160,363) Net interest income 68,976 61,175 257,661 228,324 Other operating income 44,566 58,398 190,104 197,832 Operating income 113,542 119,573 447,765 426,156 Other operating expenses (43,620) (47,774) (180,889) (158,592) Profit before allowance for losses on loans and advances 69,922 71,799 266,876 267,564 Allowance for impairment on loans and advances (22,034) (37,391) (19,631) (20,395) Allowance for impairment on other assets (237) - (293) 1,926 Profit before tax 47,651 34,408 246,952 249,095 Tax expense (59,439) 4,407 (63,475) (55,959) Profit for the period (11,788) 38,815 183,477 193,136 Other comprehensive income net of tax Change in fair value of securities available-for-sale (2,139) (1,237) (3,690) - Total comprehensive income for the period (13,927) 37,578 179,787 193,136 Profit attributable to : Owner of the Bank (11,788) 38,815 183,477 193,136 Total comprehensive income attributable to : Owner of the Bank (13,927) 37,578 179,787 193,136 Basic earnings per share (sen) (5.9) 19.4 91.7 96.6 2

UNAUDITED STATEMENT OF CHANGES IN EQUITY FOR THE QUARTER ENDED 31 DECEMBER 2016 2016 December <---------------- Attributable to Shareholder of the Bank ----------------> <-------------------- Non-distributable --------------------> Distributable Share Statutory Regulatory Defined Fair value Retained capital reserve reserve benefit reserve profits Total reserve RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 At beginning of the period 200,000 204,187 150,388 (5,362) 2,378 1,493,454 2,045,045 Profit for the period - - - - - 183,477 183,477 Other comprehensive income - - - - (3,690) - (3,690) Total comprehensive income - - - - (3,690) 183,477 179,787 Transfer to regulatory reserve - - 13,961 - - (13,961) - At end of the period 200,000 204,187 164,349 (5,362) (1,312) 1,662,970 2,224,832 2015 December At beginning of the period 200,000 204,187 - (13,323) 43 1,450,706 1,841,613 Profit for the period - - - - 2,335 193,136 195,471 Other comprehensive income - - - - - - - Total comprehensive income - - - - 2,335 193,136 195,471 Transfer to regulatory reserve - - 150,388 7,961 - (150,388) 7,961 At end of the period 200,000 204,187 150,388 (5,362) 2,378 1,493,454 2,045,045 3

UNAUDITED STATEMENT OF CASH FLOWS FOR THE QUARTER ENDED 31 DECEMBER 2016 Cash Flows From Operating Activities RM'000 RM'000 Profit before tax 246,952 249,095 Adjustments for: Gain on disposal of property, plant and equipment (13) - Depreciation of property, plant and equipment 4,860 4,127 Amortisation of intangible assets 5,882 3,653 Provision for retirement benefits 3,313 4,665 Dividend income (274) (274) Interest income from securities available-for-sale (4,654) (12,120) Allowance for impairment on loan and advances 21,957 20,030 Allowance for impairment on purchased receivables 293 365 Writeback for impairment on other assets - (1,926) Writeback of provisionfor diminution in value of securities AFS (12) - Unrealised loss on changes in fair value of derivative financial instruments (9,069) (65,676) Operating profit before changes in working capital 269,235 201,939 (Increase)/Decrease in operating assets: Loans and advances (433,022) (9,333,125) Purchased receivables (117,423) 158,058 Statutory deposits with Bank Negara Malaysia - - Other assets (219,726) 672 Increase/(Decrease) in operating liabilities: Deposits from customers 1,208,994 1,294,427 Deposits and placements of banks and other financial institutions (1,720) (26,030) Net movement in inter-company balances (3,477,856) 3,771,071 Other liabilities 2,322,578 6,693,952 Sukuk - - Cash generated from/(used in) operations (448,940) 2,760,964 Income taxes paid (53,702) (75,445) Income tax refund - 3,000 Payment of staff gratuties (1,562) (583) Net cash generated from/(used in) operating activities (504,204) 2,687,936 4

UNAUDITED STATEMENT OF CASH FLOWS Cash Flows From Investing Activities RM'000 RM'000 Purchase of property, plant and equipment (1,166) (8,333) Purchase of intangible assets (13,948) (10,160) Proceeds from sale of securities available-for-sale 90,000 750,000 Proceeds from disposal of property, plant and equipment 15 - Purchase of securities available-for-sale (381,445) (300,042) Dividend received 274 274 Interest income from securities available-for-sale 3,801 2,674 Net cash generated from/(used in) investing activities (302,469) 434,413 Cash Flows From Financing Activities Net proceeds from issuance of sukuk - - Redemption of sukuk - (160,240) Net cash (used in)/from financing activities - (160,240) Net increase in cash and cash equivalents (806,673) 2,962,109 Cash and cash equivalents at beginning of quarter 8,271,299 4,923,341 Cash and cash equivalents at end of quarter 7,464,626 7,885,450 Analysis of cash and cash equivalents Cash and short term funds 7,301,435 7,312,418 Amount due from holding and related companies - current accounts 163,694 573,433 Amount due to holding and related companies - current accounts (503) (401) 7,464,626 7,885,450 5

FOR THE QUARTER ENDED 31 DECEMBER 2016 1 BASIS OF PREPARATION The unaudited interim financial report for the quarter ended 31 December 2016 have been prepared under the historical cost convention except for securities available-for-sale and derivative financial instruments which are stated at fair value. The unaudited condensed interim financial report have been prepared in accordance with MFRS 134 : Interim Financial Reporting issued by the Malaysian Accounting Standard Board ("MASB") and Bank Negara Malaysia's Guidelines on Financial Reporting. The unaudited interim financial report should be read in conjunction with the audited financial statements of the Bank for the financial year ended 31 December 2015. The explanatory notes attached to the interim financial report provide an explanation of events and transactions that are significant to an understanding of the changes in the financial position and performance of the Bank since the year ended 31 December 2015. The following are accounting standards, amendments and interpretations of the MFRS that have been issued by the Malaysian Accounting Standards Board ("MASB") but have not been adopted by the Bank: MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2016 MFRS 14, Regulatory Deferral Accounts Amendments to MFRS 5, Non-current Assets Held for Sale and Discontinued Operations (Annual Improvements 2012-2014 Cycle) Amendments to MFRS 7, Financial Instruments: Disclosures (Annual Improvements 2012-2014 Cycle) Amendments to MFRS 10, Consolidated Financial Statements, MFRS 12, Disclosure of Interests in Other Entities and MFRS 128, Investments in Associates and Joint Ventures Investment Entities: Applying the Consolidation Exception Amendments to MFRS 11, Joint Arrangements Accounting for Acquisitions of Interests in Joint Operations Amendments to MFRS 101, Presentation of Financial Statements Disclosure Initiative Amendments to MFRS 116, Property, Plant and Equipment and MFRS 138, Intangible Assets Clarification of Acceptable Methods of Depreciation and Amortisation Amendments to MFRS 116, Property, Plant and Equipment and MFRS 141, Agriculture Agriculture: Bearer Plants Amendments to MFRS 119, Employee Benefits (Annual Improvements 2012-2014 Cycle) Amendments to MFRS 127, Separate Financial Statements Equity Method in Separate Financial Statements Amendments to MFRS 134, Interim Financial Reporting (Annual Improvements 2012-2014 Cycle) MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2018 MFRS 9, Financial Instruments (2014) MFRS 15, Revenue from Contracts with Customers MFRSs, Interpretations and amendments effective for annual periods effective for date yet to be confirmed Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in Associates and Joint Ventures - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture The Bank plans to apply the abovementioned accounting standards, amendments and interpretations: from the annual period beginning on 1 January 2016 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2016, from the annual period beginning on 1 April 2018 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2018. The initial application of the abovementioned accounting standards, amendments or interpretations are not expected to have any material impacts to the finanicial statements of the Bank except as mentioned below: MFRS 9, Financial Instruments MFRS 9 replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement on the classification and measurement of financial assets and financial liabilities. Upon adoption of MFRS 9, financial assets will be measured at either fair value or amortised cost. It is expected that the Bank's investment in unquoted shares will be measured at fair value through other comprehensive income. The adoption of MFRS 9 will result in a change in accounting policy. The Bank is currently assesing the financial impact of adopting MFRS 9. MFRS 15, Revenue from Contracts with Customers MFRS 15 replaces the guidance in MFRS 111, Construction Contracts, MFRS 118, Revenue, IC Interpretation 13, Customer Loyalty Programmes, IC Interpretation 15, Agreements for Construction of Real Estate, IC Interpretation 18, Transfers of Assets from Customers and IC Interpretation 131, Revenue Barter Transactions Involving Advertising Services. The Bank is currently assessing the financial impact that may arise from the adoption of MFRS 15. 6

2 AUDIT REPORT The audit report on the audited financial statements for the financial year ended 31 December 2015 was not subject to any qualification. 3 SEASONAL OR CYCLICAL FACTORS The business operations of the Bank have not been affected by any material seasonal cyclical factors. 4 EXCEPTIONAL OR EXTRAORDINARY ITEMS There were no exceptional or extraordinary items for the financial period ended 31 December 2016. 5 CHANGES IN ESTIMATES There were no significant changes in estimates of amounts reported in prior financial years that have a material effects on the financial results and position of the Bank for the financial period ended 31 December 2016. 6 CHANGES IN DEBT AND EQUITY SECURITIES There were no issuance and repayment of debt and equity securities during the financial period ended 31 December 2016. 7 DIVIDEND PAID No dividend was paid during the financial period ended 31 December 2016. 8 SUBSEQUENT EVENTS There were no material events subsequent to the balance sheet date that require disclosure or adjustments to the unaudited condensed interim financial report. 10 REVIEW OF PERFORMANCE The Bank's profit before taxation for the financial period ended 31 December 2016 was RM246.9 million, a decrease of 14.81% or RM42.9 million compared to the corresponding period last year. Operating income increased by RM21.6 million from RM426.1 million to RM447.8 million whilst operating expenses increased by RM22.3 million mainly attributed to higher amortisation expenses and cash collateral fees during the financial period. Total assets increased marginally from RM28.6 billion to RM29.4 billion compared to 31 December 2015. The Bank's CET 1/Tier 1 capital ratio and total capital ratio remained strong at 14.9993% and 16.0686% respectively. 7

11 PROSPECTS The Bank's strategy is to continue its profit growth in 2016 by focusing on on-going new product offerings for treasury and related services especially in the area of transactional banking activities, Islamic financing, investment banking, green technology financing, forex and derivative products to meet different needs of new and existing customers including Government Linked Companies (GLCs). The Bank is also focusing on corporate advisory services to provide best options and solution to customers' changing needs. Treasury and related services has been extended to non-japanese clients which is looking at recovery at both the local and global business scenes. On Islamic finance, the Bank has identified and captured potential deals from both domestic and overseas market. The Bank aims to be a hub for Islamic Banking business within BTMU global network. The Bank intends to introduce a few new products to achieve its target. As a good corporate citizen, the Bank would embark on promoting Green Technology finance. The Bank would introduce Green Technology Financing Scheme (GTFS) to customers that will increase awareness for preservation of the environment and eco-friendly business trends. Loan growth in corporate loans, syndicated loans and bilateral deals will continue to be a component of this strategy through business expansion with non-japanese clients being high on the target list. On deposit-taking, the Bank will promote wholesale deposits, foreign currency deposits and sturctured deposit products. The Bank will also leverage on its alliance with a local strategic partner to increase its loan growth in sizeable deals and other non-interest income. The profit growth strategy will also be supported by cost control measures with the expense ratio being targeted at less than 30%. 12 SECURITIES AVAILABLE-FOR-SALE RM'000 RM'000 At fair value Money market instruments 685,218 171,881 At cost Unquoted bonds # 27 27 Unquoted shares 2,966 2,966 688,211 174,874 # Unquoted bonds are stated net of impairment loss amounting to RM2,429,000 (2015 December : RM2,429,000). 8

13 LOANS AND ADVANCES RM'000 RM'000 (a) By type At amortised cost Overdrafts 15,650 11,041 Term loans Housing loans 13,710 13,078 Other term loans 13,338,018 11,426,378 Revolving credits 4,308,963 5,855,887 Bills receivable 65,040 21,447 Claims on customers under acceptance credits 60,110 40,633 Staff loans 5,788 5,466 17,807,279 17,373,930 Unearned interest (223) (188) Gross loans and advances 17,807,056 17,373,742 Impairment allowances on loans and advances Individual assessment (3,276) (3,037) Collective assessment (97,077) (75,067) Net loans and advances 17,706,703 17,295,638 Loans and advances to customers amounting to RM9,220,904,000 (2015 December: RM7,208,396,000) contain embedded derivatives. The carrying amounts of the embedded derivatives are separately recognised as derivative financial assets and derivative financial liabilities as appropriate. (b) By maturity structure Maturing within one year 5,917,661 7,495,070 More than one year to three years 5,479,070 5,590,940 More than three years to five years 4,170,314 2,709,998 More than five years 2,240,011 1,577,734 17,807,056 17,373,742 (c) By type of customer Domestic financial institutions - - Domestic non-bank financial institutions 5,611,561 4,783,208 Domestic business enterprises Small medium enterprises 1,827,466 1,626,388 Others 7,620,416 7,035,599 Individuals 19,400 18,435 Foreign entities 2,728,213 3,910,112 17,807,056 17,373,742 9

13 LOANS AND ADVANCES (CONTD.) RM'000 RM'000 (d) By interest rate sensitivity: Fixed rate Staff loans 1,940 5,466 Other fixed rate loans - - Variable rates 17,805,116 17,368,276 17,807,056 17,373,742 (e) By economic sector: Agricultural, hunting, forestry and fishing 746,115 1,371,052 Mining and quarrying 200,556 199,172 Manufacturing 2,580,367 2,745,410 Electricity, gas and water 2,612,446 2,069,112 Construction 1,048,924 362,291 Wholesale and retail trade and restaurants and hotels 1,044,123 732,177 Transport, storage and communication 1,187,596 665,147 Finance, insurance, real estate and business services 8,351,196 9,204,941 Households 19,498 18,544 Others 16,235 5,896 17,807,056 17,373,742 (f) By geographical location: Malaysia 16,427,614 16,261,837 Other countries 1,357,754 1,111,905 17,785,368 17,373,742 (g) Movements in impaired loans and advances are as follows: At beginning of the period 4,429 4,601 Impaired during the period 847 1,309 Amount recovered (57) (50) Reclassified as non-impaired (704) (880) Amount written off (19) (551) At end of the period 4,496 4,429 10

13 LOANS AND ADVANCES (CONTD.) RM'000 RM'000 (h) Impaired loans according to economic sectors are as follows: Manufacturing - - Finance, insurance and business services 3,581 3,369 Household 915 1,060 4,496 4,429 (i) Impaired loans by geographical location are as follows: Malaysia 4,496 4,429 (j) (i) Movements in impairment allowances on loans and advances are as follows: Allowance for individual assessment At beginning of the period 3,037 2,838 Allowance made during the period 239 199 At end of the period 3,276 3,037 (ii) Allowance for collective assessment At beginning of the period 75,067 55,402 Allowance made during the period 22,010 19,665 At end of the period 97,077 75,067 14 PURCHASED RECEIVABLES RM'000 RM'000 Purchased receivables 149,489 32,066 Allowance for individual assessment - - Allowance for collective assessment (658) (365) 148,831 31,701 Purchased receivables relate to receivables acquired by the Bank under the account receivables purchasing and vendors financing product. These amounts owing from obligors have a tenure of one to two months. Included in purchased receivables are non-recourse bills receivable amounting to RM106,963,000 (2015 December: RM4,331,000). (a) Movements in impairment allowances on purchased receivables RM'000 RM'000 (i) Allowance for individual assessment At beginning of the period - - Allowance made during the period - - At end of the period - - (ii) Allowance for collective assessment At 1 January 365 - Allowance made during the year 293 365 At 31 December 11 658 365

RM'000 RM'000 15 DEPOSITS FROM CUSTOMERS At amortised cost Demand deposits 3,959,866 3,314,168 Money market deposits 989,857 707,234 Savings deposits 18,460 14,516 Fixed deposits 3,996,457 3,719,728 8,964,640 7,755,646 (a) The maturity structure of fixed deposits are as follows: Due within six months 3,932,784 3,649,215 Six months to one year 49,641 57,272 Above one year 14,032 13,241 3,996,457 3,719,728 (b) The deposits are sourced from the following customers: Business enterprises 8,871,625 7,667,485 Individuals 93,015 88,161 8,964,640 7,755,646 16 DEPOSITS AND PLACEMENTS OF BANKS AND OTHER FINANCIAL INSTITUTIONS RM'000 RM'000 At amortised cost Non-bank financial institutions 3,280 5,000 12

17 COMMITMENTS AND CONTINGENCIES Positive Fair Value of Derivative Positive Fair Value of Derivative Credit Risk- Credit Risk- Principal Equivalent Weighted Principal Equivalent Weighted Amount Contracts Amount Assets Amount Contracts Amount Assets RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 Credit-related Exposures Direct credit subsitutes 2,975 2,975 1,488 4,005 4,005 2,003 Transaction-related contingent items 1,270,695 635,347 403,418 1,348,176 674,088 384,352 Short-term self-liquidating trade-related contingencies 131,502 26,300 26,300 19,211 3,842 3,842 Other commitments, such as formal standby facilties and credit lines, with an original maturity of : - not exceeding one year 44,860 8,972 8,972 412,644 82,529 82,529 - exceeding one year 158,787 79,393 79,388 152,131 76,066 76,019 Any commitments that are unconditionally cancelled at any time by the Bank without prior notice or that effectively provide for automatic cancellation due to deterioration in a borrower's creditworthiness 4,797,258 - - 3,955,295 - - Securitisation exposures - - - 500,000 100,000 75,000 6,406,077 752,988 519,565 6,391,462 940,530 623,745 Derivative Financial Instruments: Foreign exchange related contracts - less than one year 13,284,479 741,386 884,857 494,133 10,988,419 696,158 912,661 414,844 - one year to less than five years 15,616,392 1,953,517 441,296 423,061 12,593,822 1,952,480 1,948,059 810,919 - five years and above 5,050,571 302,244 1,106,641 704,221 6,143,526 402,886 1,175,178 742,109 Interest rate related contracts - less than one year 1,680,663 2,104 4,348 1,521 2,868,572 1,785 5,428 1,524 - one year to less than five years 10,940,696 68,332 144,378 64,225 6,793,533 50,080 75,437 32,710 - five years and above 6,602,729 51,567 337,374 197,449 4,426,945 41,528 216,581 150,519 Currency options - less than one year 65,033 504 1,479 1,479 2,958 25 70 70 53,240,563 3,119,655 2,920,373 1,886,089 43,817,775 3,144,942 4,333,414 2,152,695 Total 59,646,640 3,119,655 3,673,361 2,405,654 50,209,237 3,144,942 5,273,944 2,776,440 13

4th Quarter Ended Twelve Months Ended RM'000 RM'000 RM'000 RM'000 18 INTEREST INCOME Loans and advances 85,304 60,018 301,730 196,822 Money at call and deposit placements with financial institutions 47,777 53,457 193,024 179,745 Securities available-for-sale 3,436 3,266 6,032 12,120 136,517 116,741 500,786 388,687 19 INTEREST EXPENSE Deposits and placements of banks and other financial institutions 39,775 28,313 130,703 61,366 Deposits from other customers 27,766 27,253 112,422 98,997 67,541 55,566 243,125 160,363 20 OTHER OPERATING INCOME Fee income Commission 440 192 1,153 847 Guarantee fees 1,345 1,023 4,416 3,626 Service charges and fees (661) 928 2,069 3,452 Commitment fees 131 195 694 790 Other fee income 6,544 759 17,764 18,149 7,799 3,097 26,096 26,864 Investment income Gross dividends 37 37 274 274 Realised gain/(loss) in fair value of derivative financial instruments 57,049 26,763 71,190 170,542 Unrealised gain/(loss) in fair value of derivative financial instruments (40,295) (32,660) 9,069 (102,791) Net premium (paid)/received for options (3) - (75) (532) 16,788 (5,860) 80,458 67,493 Other income Foreign exchange gain/(loss) 19,967 55,910 82,422 95,536 Other operating income 12 5,251 1,128 7,939 19,979 61,161 83,550 103,475 44,566 58,398 190,104 197,832 14

4th Quarter Ended Twelve Months Ended RM'000 RM'000 RM'000 RM'000 21 OTHER OPERATING EXPENSES Personnel expenses 21,367 22,205 86,223 85,821 Establishment related expenses 4,515 3,915 17,776 14,915 Promotion and marketing related expenses 512 631 2,061 2,181 Administrative and other expenses 17,226 21,023 74,829 55,675 43,620 47,774 180,889 158,592 Personnel expenses - Wages, salaries and bonus 16,496 16,828 67,682 66,709 - Defined benefit plan 825 1,507 3,312 4,665 - Defined contribution plan 1,459 1,450 7,391 6,890 - Other employee benefits 2,587 2,420 7,838 7,557 21,367 22,205 86,223 85,821 Establishment related expenses - Depreciation of property, plant and equipment 1,185 1,032 4,860 4,127 - Amortisation of intangible assets 1,719 1,056 5,882 3,653 - Hire of equipment 159 208 764 863 - Repair and maintenance 81 128 610 494 - Rental of premises 1,249 1,242 4,978 4,930 - Others 122 249 682 848 4,515 3,915 17,776 14,915 Promotion and marketing related expenses - Advertising and publicity 72 68 259 298 - Others 440 563 1,802 1,883 512 631 2,061 2,181 Administrative and other expenses - Collateral deposit fees 14,395 15,698 59,117 36,837 - Communication expenses 200 440 1,167 1,316 - Legal and professional fees 579 271 1,189 4,223 - Others 2,052 4,614 13,356 13,299 17,226 21,023 74,829 55,675 22 (ALLOWANCE)/WRITEBACK FOR IMPAIRMENT ON LOANS AND ADVANCES Allowance for impaired loans and advances - Collective assessment (22,010) (36,783) (22,010) (20,030) - Individual assessment (55) (347) 2,326 (199) Impaired loans and advances written off - (166) - (166) Bad debts written back 31 (95) 53 - (22,034) (37,391) (19,631) (20,395) 15

FOR THE QUARTER ENDED 31 DECEMBER 2016 23 CAPITAL ADEQUACY (a) (b) The capital adequacy ratios consist of total capital and risk-weighted assets derived from balances of the Bank. With effect from 1 January 2013, the capital adequacy ratios are computed in accordance with BNM's Guidelines on Capital Adequacy Framework (Capital Components and Basel II - Risk Weighted Assets) ("CAF") issued on 28 November 2012. The Bank adopted the Standardised Approach for Credit Risk and Market Risk and the Basic Indicator Approach for Operational Risk. The capital adequacy ratios of the Bank are as follows: Common equity Tier 1 ("CET 1") capital ratio 14.999% 14.873% Tier 1 capital ratio 14.999% 14.873% Total capital ratio 16.069% 15.983% (c) The components of Tier 1 and Tier 2 capital of the Bank are as follows: RM'000 RM'000 CET 1 and Tier 1 capital Paid-up share capital 200,000 200,000 Retained profits 1,493,454 1,493,454 Other reserves 361,862 351,591 2,055,316 2,045,045 Less Deferred tax assets - (40,677) Intangible assets (29,039) (20,975) 55% of fair value reserve 1,674 (1,308) Regulatory reserve (164,349) (150,388) 1,863,602 1,831,697 Tier 2 capital Impairment allowance for collective assessment * and regulatory reserve 132,857 136,740 Total Capital 1,996,459 1,968,437 * Excludes impairment allowance on collective assessment on impaired loans restricted from Tier 2 capital of the Bank of RM311,000 (2015 December: RM261,000). 16

23 CAPITAL ADEQUACY (CONT'D) (d) The components of risk-weighted assets of the Bank are as follows: 2016 December Risk- Gross Net Weighted Capital Exposure Class Exposures Exposures Assets Requirements RM'000 RM'000 RM'000 RM'000 (i) Credit Risk On-Balance Sheet Exposures : Sovereigns/Central Banks 5,771,277 5,771,277 - - Public Sector Entities 39,686 39,686 7,937 635 Banks, Development Financial Institutions & MDBs 2,582,366 2,582,366 574,540 45,963 Insurance Cos, Securities Firms & Fund Managers - - - - Corporates 17,595,016 7,011,904 7,294,660 583,573 Regulatory Retail 1,914 1,914 1,914 153 Residential Mortgages 14,614 14,614 6,381 510 Other Assets 335,246 335,246 331,688 26,535 Equity Exposures 2,993 2,993 2,993 239 Defaulted Exposures 2,953 2,953 2,787 223 Total On-Balance Sheet Exposures 26,346,065 15,762,953 8,222,900 657,831 Off-Balance Sheet Exposures : Credit-related exposures 752,988 752,988 519,565 41,565 Securitisation exposures - - - - Derivatives financial instruments 2,920,373 2,920,373 1,886,089 150,887 Total Off-Balance Sheet Exposures 3,673,361 3,673,361 2,405,654 192,452 Total On and Off-Balance Sheet Exposures 30,019,426 19,436,314 10,628,554 850,283 (ii) Large Exposure Risk Requirement - - - - Long Position Short Position (iii) Market Risk Interest Rate Risk 577,037 (494,110) 1,036,594 82,928 Foreign Exchange Risk 103,411 (1,946) 103,411 8,273 680,448 (496,055) 1,140,005 91,201 (iv) Operational Risk 656,072 52,486 Total RWA and Capital Requirements 30,019,426 19,436,314 12,424,632 993,970 17

23 CAPITAL ADEQUACY (CONTD.) (d) The components of risk-weighted assets of the Bank are as follows: 2015 December Risk- Gross Net Weighted Capital Exposure Class Exposures Exposures Assets Requirements RM'000 RM'000 RM'000 RM'000 (i) Credit Risk On-Balance Sheet Exposures: Sovereigns/Central Banks 7,169,409 7,169,409 - - Public Sector Entities 21,132 21,132 4,226 338 Banks, Development Financial Institutions & MDBs 1,364,647 1,364,647 700,818 56,065 Insurance Cos, Securities Firms & Fund Managers - - - - Corporates 16,818,179 7,350,703 7,356,190 588,495 Regulatory Retail 1,851 1,851 1,851 148 Residential Mortgages 13,608 13,608 5,191 415 Equity Exposures 2,993 2,993 2,993 239 Other Assets 91,693 91,693 88,535 7,083 Defaulted Exposures 3,103 3,103 2,937 235 Total On-Balance Sheet Exposures 25,486,615 16,019,139 8,162,741 653,018 Off-Balance Sheet Exposures : Credit-related exposures 840,530 840,530 548,745 43,900 Securitisation exposures 100,000 100,000 75,000 6,000 Derivatives financial instruments 4,333,414 4,333,414 2,152,695 172,216 Total Off-Balance Sheet Exposures 5,273,944 5,273,944 2,776,440 222,116 Total On and Off-Balance Sheet Exposures 30,760,559 21,293,083 10,939,181 875,134 (ii) Large Exposure Risk Requirement - - - - Long Position Short Position (iii) Market Risk Interest Rate Risk 321,750 (264,057) 721,162 57,693 Foreign Exchange Risk 47,742 (49,075) 49,075 3,926 369,492 (313,132) 770,237 61,619 (iv) Operational Risk 606,309 48,505 Total RWA and Capital Requirements 30,760,559 21,293,083 12,315,727 985,258 18

24 CREDIT TRANSACTIONS AND EXPOSURES WITH CONNECTED PARTIES RM'000 RM'000 Outstanding credit exposures with connected parties 959,827 614,230 Total credit exposures 25,789,734 26,571,295 Percentage of outstanding credit exposures to connected parties - as a proportion of total credit exposures 3.7% 2.3% - as a proportion of total capital 48.1% 31.2% There are currently no exposures to connected parties which are classified as impaired. The credit exposures above are derived based on Bank Negara Malaysia's revised Guidelines on Credit Transactions and Exposures with Connected Parties, which are effective on 1 January 2008. 19

25 THE OPERATIONS OF ISLAMIC BANKING UNAUDITED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2016 ASSETS RM'000 RM'000 Cash and short-term funds (a) 27,092 26,150 Other assets 4 2 TOTAL ASSETS 27,096 26,152 LIABILITIES AND ISLAMIC BANKING FUNDS Other liabilities 4,435 3,257 TOTAL LIABILITIES 4,435 3,257 CAPITAL FUND 25,000 25,000 RESERVE (2,339) (2,105) ISLAMIC BANKING FUNDS 22,661 22,895 TOTAL LIABILITIES AND ISLAMIC BANKING FUNDS 27,096 26,152 COMMITMENTS AND CONTINGENCIES - - 20

25 THE OPERATIONS OF ISLAMIC BANKING (CONTD.) UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME FOR THE QUARTER ENDED 31 DECEMBER 2016 4th Quarter Ended Twelve Months Ended RM'000 RM'000 RM'000 RM'000 Income attributable to depositors - - - (49) - - - (49) Income derived from investment of Islamic Banking Capital funds (b) 326 200 944 831 Other operating expenses (c) (75) (534) (1,178) (2,185) Loss before tax 251 (334) (234) (1,403) Tax expense - - - - Loss for the period 251 (334) (234) (1,403) UNAUDITED STATEMENT OF CHANGES IN EQUITY FOR THE QUARTER ENDED 31 DECEMBER 2016 Capital Accumulated Total Fund Losses RM '000 RM '000 RM '000 2016 December At beginning of the period 25,000 (2,105) 22,895 Loss for the period - (234) (234) At end of the period 25,000 (2,339) 22,661 2015 December At beginning of the period 25,000 (702) 24,298 Loss for the period - (1,403) (1,403) At end of the period 25,000 (2,105) 22,895 21

25 THE OPERATIONS OF ISLAMIC BANKING (CONTD.) Shariah Committee The Shariah Committee was established under BNM's "Guidelines on the Governance of Shariah Committee for the Islamic Financial Institutions" (BNM/GPS1) to advise the Board of Directors on Shariah matters in its Islamic Banking business operations and to provide technical assistance in ensuring the Islamic Banking products and services offered by the Bank and the relevant documentation are in compliance with Shariah principles. The committee comprises: Dr. Luqman bin Haji Abdullah, Assoc. Prof. Dr. Abdul Karim bin Ali, Assoc. Prof. Dr. Syed Musa Alhabshi, Assoc. Prof. Dr. Mek Wok binti Mahmud and Dr. Safinar binti Salleh. Basis of measurement The financial statements of the Islamic Banking business have been prepared on the basis consistent with that of the Bank as disclosed in Note 1 to the audited financial statements of the Bank for financial year ended 31 December 2015. (a) Cash and short-term funds RM'000 RM'000 Cash and balances with banks and other financial institution 27,092 26,150 (b) Income derived from investment of Islamic Banking Capital funds 4th Quarter Ended Twelve Months Ended RM'000 RM'000 RM'000 RM'000 Money at call and placements with financial institutions 326 200 944 831 (c) Other Operating Expenses 4th Quarter Ended Twelve Months Ended RM'000 RM'000 RM'000 RM'000 Personnel expenses 59 458 1,051 1,867 Other expenses 16 76 127 318 75 534 1,178 2,185 22

25 THE OPERATIONS OF ISLAMIC BANKING (CONTD.) (d) Capital Adequacy The capital adequacy ratios of the Islamic Banking business of the Bank are computed in accordance with the Capital Adequacy Framework for Islamic Banks (CAFIB). The Bank's Islamic Banking business has adopted the Standardised Approach for Credit Risk and Market Risk, and the Basic Indicator Approach for Operational Risk. The capital adequacy ratios of the Bank's Islamic Banking business are as follows: Common equity tier 1 capital ratio 100.000% 100.000% Tier 1 capital ratio 100.000% 100.000% Total capital ratio 100.000% 100.000% The components of Tier 1 and Tier 2 capital of the Bank's Islamic Banking business are as follows: RM'000 RM'000 CET 1 and Tier 1 capital Paid-up share capital 25,000 25,000 Accumulated losses (2,339) (2,105) 22,661 22,895 Tier 2 capital - - Total capital 22,661 22,895 23