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ANNUAL REPORT 2015

OUR VISIONAn outstanding financial services organisation,

highly competitive and profitable, where people make the difference

Whats Inside...Corporate Section Financial Section

02 Hong Leong Bank Story 04 The Business06 Awards & Accolades08 Significant Milestones10 Chairmans Statement16 Group Managing Director/Chief

Executive Officers Review26 Five Year Group Financial Highlights 28 Corporate Social Responsibility34 Corporate Information 36 Notice of Annual General Meeting38 Statement Accompanying Notice

of Annual General Meeting39 Board of Directors Profile 44 Board Audit Committee Report46 Board Risk Management Committee

Report48 Corporate Governance, Risk

Management & Internal Control

61 Directors Report 74 Statements of Financial Position75 Statements of Income 76 Statements of Comprehensive Income77 Statements of Changes in Equity81 Statements of Cash Flows84 Notes to the Financial Statements 231 Statement by Directors231 Statutory Declaration 232 Independent Auditors Report234 Basel II Pillar 3 Disclosures

282 Other Information295 Branch Network

Form of Proxy

HONG LEONG BANK BERHAD2

HONG LEONG BANK STORY

With a heritage of more than 100 years, Hong Leong Bank Berhad is a major financial services company in the region. Apart from its core domestic market, the Bank also has presence in Singapore, Hong Kong, Vietnam, Cambodia and China.

Hong Leong Bank Berhad (Hong Leong Bank) is a public listed company on Bursa Malaysia and a member of the Hong Leong Group. Headquartered in Kuala Lumpur, Hong Leong Bank has a strong Malaysian entrepreneurship heritage.

Hong Leong Bank, originally incorporated as Kwong Lee Mortgage and Remittance Company in 1905 in Kuching, Sarawak and later as Kwong Lee Bank Limited in 1934, is the oldest local financial institution in Malaysia. Kwong Lee Bank Berhad was acquired by the MUI Group in May 1982 and renamed Malayan United Bank Berhad on 2 February 1983. In 1989, it was renamed as MUI Bank. Under the MUI Bank banner, it grew from 11 branches to 35 branches nationwide. On 3rd January 1994, Hong Leong Group acquired MUI Bank Berhad through Hong Leong Credit Berhad (now known as Hong Leong Financial Group Berhad) and renamed it as Hong Leong Bank Berhad. Hong Leong Bank was listed on the Kuala Lumpur Stock Exchange on 17th October 1994 and, since then; has grown by leaps and bounds, organically as well as through mergers and acquisitions. Ever since the merger with EON Bank Group in 2011, Hong Leong Bank is currently Malaysias fifth largest banking group, with over RM180 billion in assets.

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ANNUAL REPORT 2015 3

HONG LEONG BANK STORY

Hong Leong Bank reaches out to its customers in all of the communities in which it operates through various channels. This includes a distribution network of close to 300 branches locally; sales and business centres in Malaysia, Singapore, Hong Kong, Vietnam and Cambodia as well as a comprehensive range of alternate and electronic channels which includes self service terminals, Hong Leong Call Centre, Hong Leong Online Banking and Hong Leong Mobile Banking.

In line with its commitment to remain relevant, Hong Leong Bank launched Mach by Hong Leong Bank in 2012, a sub-brand that brings together bricks and clicks to offer a range of life starter products and services targeted to meet the needs of the Gen-Y community.

In 2008, Hong Leong Bank extended beyond the shores of Malaysia and became the first Malaysian bank to enter the Chinese banking sector with a 20% strategic shareholding in

Bank of Chengdu Co., Ltd. In December 2008, Hong Leong Bank became the first Malaysian and Southeast Asian bank to be granted a license to incorporate and operate a 100% wholly-owned commercial bank in Vietnam. In 2013, Hong Leong Bank proudly launched its 100% wholly-owned commercial bank in Cambodia. In November 2013, Hong Leong Bank set up a representative office in Nanjing.

Building on the foundation of its strong entrepreneurial roots and its firm foundation of values, Hong Leong Bank is committed to embedding itself in the communities within which it operates to meet the needs of its customers. Under the umbrella of the Hong Leong Financial Group, the Groups ability to provide a comprehensive suite of conventional and Islamic financial products and services under one roof makes it truly a leading integrated financial services organisation in Malaysia and Asia.


THE BUSINESS

The Bank provides comprehensive personal financial services, business and corporate banking, trade finance, treasury, branch and transaction banking, wealth management, investment banking, private banking as well as Islamic financial services.

Living up to its tagline Reaching Out to You, the Bank reaches out to its customers through its extensive network of 297 branches throughout Malaysia, 1 branch each in Singapore and Hong Kong, 4 branches/outlets in Vietnam, 5 branches in Cambodia, a representative office in Nanjing, along with close to 1500 self service terminals and a full-serviced call centre. For wealth management services, the Bank offers 16 priority banking centres and one private banking centre in Malaysia as well as one offshore private banking centre each in Singapore and Hong Kong. In addition, the Bank also offers online banking, mobile banking and phone banking services as well as various electronic payment capabilities including cross-border ATM services. Hong Leong Bank is committed to embed itself in the communities that it serves to understand its customers needs and to deliver products and services that will help them fulfill their financial aspirations.

HONG LEONG BANKS KEY BUSINESS PILLARS ARE:

Personal Financial Services Principal business activities cover the provision of retail loans, deposit products, wealth management and priority banking services to individuals.

Business and Corporate Banking Principal business activities include the provision of business banking solutions including working capital and term loans, deposit and liability management products, cash management and trade finance services as well as debt capital market solutions to businesses and companies.

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THE BUSINESS

Global Markets Global Markets assist customers on their investments and hedging needs through various treasury products, ranging from foreign exchange, money market, derivatives including interest rate swaps and interest rate swap options to structured investment products.

Islamic Financial Services The Banks subsidiary, Hong Leong Islamic Bank, focuses on Shariah-compliant commercial banking, Islamic wholesale and investment banking as well as Islamic wealth management.

Regional FootprintIn line with its growth strategy, Hong Leong Bank has been expanding its footprint in the Asian region.

Singapore OperationsOur Singapore branch, HL Bank Singapore, is a recognised boutique investment bank offering principally investment banking, private banking and treasury services. In 2014, HL Bank Singapore embarked on a transformational journey towards an integrated business model, expanding into health banking and consumer banking propositions.

Hong Kong OperationsThe Banks branch in Hong Kong offers Treasury and Wealth Management products and services. It is also the first bank in Hong Kong to launch an Islamic banking window.

Vietnam OperationsHong Leong Bank Vietnam Limited commenced its green field operations in October 2009. A subsidiary of the Bank, Hong Leong Bank Vietnam Limited is geared towards becoming a locally embedded and full-fledged commercial bank in Vietnam.

Cambodia OperationsIn July 2013, Hong Leong Bank (Cambodia) PLC commenced operations as a 100% wholly owned subsidiary to carry out full commercial banking operations. The Bank offers a full range of personal financial services and business banking products.

Investment in ChinaVia its 20% shareholding in Bank of Chengdu Co., Ltd (Bank of Chengdu), the Bank is also the first Malaysian bank

to make a strategic investment into China. Bank of Chengdu is a leading city commercial bank in Western and Central China based in Chengdu, the capital of Sichuan Province. With a network of over 160 branches and outlets, it carries out a full-fledged commercial banking business.

A significant milestone was achieved in March 2010, when Sichuan Jincheng Consumer Finance Ltd, a joint venture company between the Bank in partnership with the Bank of Chengdu, obtained regulatory approval as first batch of companies to start consumer finance operations in central and western China.

In November 2013, Hong Leong Bank set up a representative office in Nanjing which commenced its operation in February the following year.


AWARDS & ACCOLADES

Malaysia Investor Relations Award 2015Category: Most Improved Service from IR Team

The Asian Banker Achievement Awards 2015Category: Best Retail Payment Project

15th National Customer Experience Industry Award 2014Category: 3rd Place for Best In House Inbound Contact Centre (above 100 seats)

ACE Malaysia Corporate Award 2014Category: 3rd Place for Best In House Inbound Contact Centre (above 100 seats)

CIO Awards 2015Category: Growth PEx mobile payment solution

PR Asia Awards 2015Category: Silver for Best Crisis Management

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AWARDS & ACCOLADES

IDC Financial Insights Innovation Award 2015 Category: Next Generation IT Infrastructure

J.P. Morgan Quality Recognition Award 2014Category: MT 103 Elite Quality Recognition Award MT 202 Elite Quality Recognition Award

Asia Islamic Banking Excellence Awards 2014Category: YM Raja Teh Maimunah Most Talented Woman Professional in Islamic Banking

Global Islamic Finance Award 2014Category: Best Sukuk Deal - Al Bayan

The Asset Triple A Islamic Finance Awards 2015Category: Best Bank for Digital Innovation

Not shown in picture:Global Banking and Finance Review 2015Category: Best Internet Bank Malaysia

Worlds Best Islamic Financial Institutions 2014Category: Deal of the Year 2014

CFI.co Islamic Finance Awards 2014Category: Best Islamic Banking Team Malaysia 2014

Event Port Women of Excellence Award 2014Category: Top Three League


SIGNIFICANT MILESTONES

Started in Kuching, Sarawak, Malaysia, under the name

of Kwong Lee Mortgage and Remittance Company

1905

Entered China Banking Sector with a 20% strategic stake in

Bank of Chengdu Co., Ltd.

2008

Renamed as MUI Bank, operating in 35 branches

1989

Incorporated as Kwong Lee Bank Limited

1934Acquired MUI Bank through Hong Leong Credit Berhad

(Now known as Hong Leong Financial Group Berhad)

1994

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SIGNIFICANT MILESTONES

Hong Leong Bank completed merger with

EON Bank Group

2011

Hong Leong Bank Cambodia commenced its

operations

Set up of representative office in Nanjing, China

2013

Hong Leong Bank Vietnam (HLBVN) opened

its doors in Ho Chi Minh City

2009Launched Mach by Hong Leong Bank, a next generation Banking sub-brand

2012


CHAIRMANS STATEMENT

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CHAIRMANS STATEMENT

ECONOMIC ENVIRONMENT AND OUTLOOK

The global economy started the year 2014 on a stronger footing, and grew at a moderate pace of 3.4%, led by faster growth in the US and sustained growth in Asia. However, as the year progressed, the world economy began to witness uneven growth across major economies - with the US gaining traction but weak business sentiments manifesting in the Eurozone and Asia. China was showing more evident signs of a slowdown while Japan slipped into recession again, dragging neighboring economies along.

As a result of the uneven global growth, major central banks adopted diverging monetary policies. The US Federal Reserves ended its quantitative easing programme, while other major central banks namely the European Central Bank, Bank of Japan, and Peoples Bank of China extended their monetary stimulus during the year to support growth in their economies.

For 2014, although the Malaysian economy managed to register a good growth rate of 6.0% (2013: 4.7%), driven primarily by robust domestic demand, there were already signs of harsher economic headwinds towards the latter part of 2014 with lower commodity prices, a more subdued property sector and a marked drop in oil prices. Real GDP growth expanded at a slower pace of 5.3% in the first half of 2015, amidst increased challenges from domestic and external headwinds.

Dear Shareholders and Stakeholders

The financial year 2015 (FY2015) has been a challenging year as we faced a number of economic headwinds in addition to an increasingly dynamic operating environment. Despite these challenges, Hong Leong Bank Group (the Group) remains committed towards delivering a strong and sustainable financial performance predicated on the core principles of the Group as well as advancing its key strategic priorities. In short, the Group will continue to create progressive and substantive business value over time for its shareholders.

I am pleased to present to you the Annual Report and Financial Statements of the Group and of Hong Leong Bank(the Bank) for the financial year ended 30 June 2015.


CHAIRMANS STATEMENT

CONTINUOUS QUEST FOR SUSTAINABILITY

The Group remains steadfast towards building long-term, sustainable value for all its stakeholders. Towards this end, efforts for the year continued to evolve around strengthening key business drivers, embedding excellent customer service, integrating multiple distribution channels, and leveraging on technology to offer first-class digital solutions.

LONG TERM VALUE CREATION FOR ALL STAKEHOLDERS

It has been a tough operating environment for banks given the global and domestic uncertainties. In addition, across the banking industry, margins remain under pressure with higher capital requirements reducing returns.

Amidst these challenges, the Group delivered a commendable set of results. Profit before tax for FY2015 was up 5.1% year-on-year (y-o-y) to RM2,746 million, boosted by improved net interest income, impairment write-back reflective of improved asset quality and higher profit contribution from associates. This year also witnessed a record net profit of RM2,233 million, representing a 6.2% YOY growth.

Total assets continued to grow from RM170 billion as at 30 June 2014 to RM184 billion as at 30 June 2015.

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CHAIRMANS STATEMENT

Total assets continued to grow from RM170.4 billion as at 30 June 2014 to RM184.0 billion as at 30 June 2015. Total gross loans and financing hit RM113.4 billion, recording the highest loan growth of 8.9% since the merger of EON Bank. Total customer deposits expanded another 7.7% to a total of RM140.3 billion.

The Bank is pleased to announce that its earnings per share (EPS) improved by 5.9% y-o-y to 126 sen, whilst its return on equity remained robust at 14.3% for FY2015. Our share price closed at RM13.40 for FY2015, representing a 63% appreciation over five years, outperforming both the FBM KLCI Index and FBM KLFin Index by approximately 30%.

The Board had proposed a final dividend of 26 sen per share, payable on 18 November 2015, subject to the approval of shareholders in the coming Annual General Meeting on 27 October 2015. For the financial year ended 30 June 2015, the total dividends for HLB would be 41 sen per share, translating into a payout ratio of approximately 32%.

UPHOLDING EXCELLENT ASSET QUALITY

In line with the Groups commitment to protect long-term value, asset quality

will remain a priority. Key asset quality indicators continue to outperform the industry with gross impaired loans ratio improving significantly by 35 basis points to another record low of 0.84% in the fourth quarter of FY2015. Loan impairment coverage was at 136%, the highest in the banking system.

SUSTAINING GROWTH IN ISLAMIC BANKING

Islamic finance remains an important component in the growth of the Malaysian financial sector. Islamic banking assets had consistently recorded double-digit annual growth rate since year 2000 and now represents 22% of the nations domestic banking assets.

This achievement is a result of Bank Negara Malaysias (BNM) continuous efforts to strengthen operational standards in the area of Shariah governance and regulatory framework. The introduction of the Islamic Financial Services Act 2013 and its supporting standards provided greater certainty and clarity to Shariah contract-based financial products and offerings.

Hong Leong Islamic Bank Berhad (HLISB) has continually recorded healthy growth since its inception in 2005. For FY2015, HLISB recorded a profit after tax of RM200 million, while gross Islamic financing

expanded by 11% to RM16.1 billion. HLISB contributed 13% and 14% of the Groups total deposits and financing respectively.

Significant steps were taken to enhance the intermediation of Islamic finance throughout the year, anchored by improved delivery channels through concept branches and the digital banking space. In January 2015, the first concept branch was launched by the Ministry of Science, Technology and Innovation in Putrajaya, paving the way for more cost-efficient delivery channels for higher traffic retail locations. Additionally, to promote greater cross-border transactions, a foreign remittance service was also launched, utilising cash recycling machines to convert the Malaysian Ringgit into Indonesian Rupiah (IDR) and remit IDR to Indonesia. In recognition of HLISBs efforts, The Asset, a leading issuer and investor-focused publication in Asia, awarded HLISB the Triple-A Islamic Finance Awards 2015 under the category of Best Bank for Digital Innovation.

Going forward, HLISB will continue to play a pivotal role in supporting the Islamic Banking agenda in the country, where it is committed to drive growth in new business segments and enhance its offerings for both retail and corporate segments.


CHAIRMANS STATEMENT

REGIONAL GROWTH

The Group continued to make significant inroads in growing our reach and presence in the region. Total profit contribution from international operations remained steady despite the uncertainties surrounding the regional economies and contributed 15.4% to the Groups pre-tax profit in FY2015.

Bank of Chengdu Co Ltd (BOCD) remains the Groups leading contributor towards the Groups international operations. Amidst a slower economy resulting from continued implementation of policy reforms in China, BOCD continues to contribute positively to the Group with its profit contribution improving by 8.9% y-o-y to RM401 million, translating to 14.6% of the Groups profit before tax.

In FY2015, HL Bank Singapore (HLBS) continues to demonstrate strong business momentum with a robust 32% y-o-y loans growth to RM3.5 billion. In the coming year, new strategic priorities for HLBS would include the expansion of its new Personal Financial Services business, with focus on hire purchase as well as a niche health banking segment.

In just two years, Hong Leong Bank (Cambodia) PLC (HLBCAM), our green-field operation, recorded an impressive gross loans growth of 205.1% y-o-y to RM266 million with deposits concurrently growing 196.3% to RM171 million. Four new branches were opened during the year, bringing the total number of branches in Cambodia to five locations. Some of these branches were designed and equipped with digital facilities

(similar to the Groups MACH branch proposition) as well as priority and SME banking lounges, to enable HLBCAM to better serve the affluent and tech savvy customers.

At Hong Leong Bank Vietnam (HLBVN), protecting asset quality remained a top priority whilst maintaining our growth momentum albeit in a recovering economy. Total gross loans and deposits for HLBVN for FY2015 stood at RM319 million and RM544 million respectively. In terms of its distribution network, the Bank maintained its four outlets in Vietnam. Moving forward, to augment its limited branch presence, HLBVN will invest into the development of a digital-based infrastructure and product offerings to expand its distribution and reach in Vietnam.

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CHAIRMANS STATEMENT

OUTLOOK

Moving forward, the global economic growth is expected to remain sluggish as uncertainties surrounding global policy shifts and increased financial markets volatility would have repercussions on macroeconomic conditions.

In the local context, the Malaysian economy is expected to soften and expand at a slower pace between 4.3% to 4.8% for 2015; impacted by both domestic and external headwinds, reduced domestic demand, lower commodity & oil prices and potential downside risks to global growth.

We shall remain vigilant to the risks we take, be judicious in our spending whilst investing in our future strategic plans and look for opportunities to capitalise and grow in these challenging times.

In closing, I would like to take this opportunity to thank the Board of Directors, our customers, business partners and shareholders for their continuous support and trust. My special appreciation goes to the entire team at the Bank and the Group for their passion, commitment, dedication and professionalism. My sincere thanks also go to Bank Negara Malaysia, the Ministry of Finance, Government agencies and regulatory authorities for their invaluable assistance, continuous guidance and support.

QUEK LENG CHANChairman

21 September 2015


GROUP MANAGING DIRECTOR/CHIEF EXECUTIVE OFFICERS REVIEW

Dear Shareholders, Customers and Business Partners

It has been a challenging year for the banking industry amidst volatility and uncertainties in the commodity, financial markets as well as global economies coupled with a highly competitive operating landscape. Despite the prevalent headwinds, the Group has made meaningful strides in delivering a commendable set of financial results whilst ensuring that we continue to focus on creating long-term value for all our stakeholders.


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Guided by the Groups core values, I am convinced that the Group has accomplished most of the strategic objectives outlined at the start of the year. We have reinvigorated loans growth and regained traction in areas where we lagged, strengthened the wealth management business, introduced first-to-market propositions in digital offerings while maintaining a strong presence via our extensive network.

I am pleased to present to you the Annual Report and Financial Statements of Hong Leong Bank Berhad (the Group or Bank) for the financial year 2014/2015.

ECONOMIC ENVIRONMENT

Global growth for the year especially for developing markets has been uneven during the year resulting in the implementation of divergent monetary policies, with the US being the lone central bank ending quantitative easing, paving the way for policy normalisation. Slowdown anxieties in China, protracted concerns over contagion from Greece, geopolitical jitters, and steep fall in oil prices have dampened overall growth outlook and will continue to pose downside risks to global growth going forward. Growth in the Asian economies has also moderated amid increased challenges on both the domestic and external fronts.

STEADY PROFIT GROWTH

For the financial year ended 30 June 2015 (FY2015), we are pleased to announce that the Group achieved a record profit after tax of RM2,233 million, representing a 6.2% year-on-year (y-o-y) growth.

Net interest income improved by 2.3% y-o-y to RM3,140 million largely on the back of enlarged loan base and expansion in our securities portfolio. Net interest margin for the Bank came in within our expectation at 2.01% amidst intensified competition for both loans and deposits against a backdrop of increased liquidity requirement standards.

In addition, non-interest income regained momentum towards the second half of the year bolstered by improved treasury market activities and stronger wealth management contribution, leading to total non-interest income of RM927 million for FY2015.

During the year, total operating expenses grew a marginal 1% to RM1,814 million translating into a healthy cost-to-income ratio of 44.6%. This was accomplished by managing down the expenses in our business-as-usual operations, reflected by a 2% y-o-y decline while carefully reinvesting back the savings into new investments to ensure sustainability of future business growth.

We strive to continuously deliver value and returns to our shareholders. Return on equity remained strong at 14.3%, one of the highest in the banking industry while earnings per share enhanced to 126 sen. Net assets per share rose by 15.4% to RM9.51 as return on assets remained robust at 1.3%.

LOAN GROWTH MOMENTUM CONTINUES

Gross loans and financing continued to gain pace, expanding by 8.9% y-o-y to close at RM113.4 billion, the highest pace of growth since 2011. Retail segment remained the key growth driver, contributing 69% of the Groups total loan portfolio. Retail loans for FY2015 expanded by a strong 10.4% y-o-y, led by growth in mortgages and transport vehicle loans which outpaced industry growth.

Business and Corporate Banking maintained its growth momentum with 2.3% quarter-on-quarter (q-o-q) expansion amidst a challenging and highly competitive business environment. Loans and Financing to SMEs continued to register a healthy 9.1% y-o-y growth to RM17.8 billion.

Loans growth was also supported by our overseas operations recording a strong 34.3% y-o-y loan expansion, led by Singapore and Cambodia.



STRONG FUNDING AND LIQUIDITY POSITIONS

We continued to maintain a prudent approach towards liquidity management. Our Loans-to-Deposits Ratio stood at 80.9%, amongst the most prudent in the industry. Our funding position remains stable and supportive of business growth, on the back of the Groups strong retail deposit franchise.

Total customer deposits expanded by 7.7% y-o-y or a strong 2.7% q-o-q to RM140.3 billion as at 30 June 2015. Individual deposit mix for the Group was 50.1%, amongst the highest retail concentration in the banking industry, whilst CASA grew 5.3% y-o-y representing a mix of 25.6%.

SUPERIOR ASSET QUALITY AND ROBUST CAPITAL LEVELS

Whilst the Group continued to embark on its strategic growth initiatives, upholding our superior asset quality through a combination of prudent credit risk management approach and proactive recovery management remained our utmost priority.

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The Group maintained its leading position in key asset quality indicators, continuously outperforming the banking system. Gross impaired loans ratio improved significantly by 35 basis points to another record low of 0.84% in FY2015. Our loan impairment coverage at 136% was the highest in the banking system.

The Group capital levels remained healthy with Common Equity Tier 1, Tier 1 and Total Capital Ratios at 10.8%, 11.9% and 14.3% respectively, well above the regulatory minimum requirements. The Group will continue to undertake proactive capital management and maintain a healthy capital level, which is supportive of future business expansions.

HUMAN RESOURCES

Our people are our greatest assets and we believe our people are the key differentiator of our success. As the talent war within the financial services industry intensifies, we continued to build our employer branding to attract new talent whilst focusing on internal talent development to ensure that our human capital resource remains relevant and resilient.

In keeping up with the fast-changing trends in recruitment, the Group invested into upgrading its recruitment processes by leveraging on technology and social media, as well as talent mapping tools to ensure proper job fit. This had resulted in a more efficient and seamless hiring process whilst building our employer branding through social media to reach out and engage talents in the market place. At the same time, we also encouraged our employees to organise and participate in Corporate Social Responsibility activities to promote holistic people development and to inculcate purpose and pride as an employee of the Group.

STRONGER REGIONAL FRANCHISE

Regional expansions continue to be an important agenda for the Group as we continued to focus on appropriate customer segments and scalable business propositions which would create substantive business value.

Total profit contribution from international operations accounted for 15.4% of the Groups pre-tax profit in FY2015. Despite the slowing economy in China, Bank of Chengdu (BOCD) continued to be a key contributor to the Group with profit contribution from BOCD expanding 8.9% y-o-y to RM401 million, contributing to 14.6% of the Groups profit before tax in FY2015. HLB Hong Kong continues to focus on the Global Market business and leverage on BOCD to develop its trade services.

During the year, HL Bank Singapore (HLBS) has embarked on a transformational journey towards an integrated business model, expanding into consumer banking and health banking. It has been an eventful year for the health banking segment bolstered by various initiatives that were rolled out including the launch of an internet based medical concierge in Singapore, further strengthening the foundation of our regional health banking proposition. For FY2015, HLBS achieved an impressive loan growth of 32% y-o-y to RM3.5 billion, and remained the largest overseas contributor to the Group in respect of gross loans.



Hong Leong Bank (Cambodia) PLC (HLBCAM), recorded an impressive 205.1% y-o-y gross loans growth to RM266 million whilst deposits grew 196.3% to RM171 million after only two years of operations. Four new branches were opened in the year, bringing the total number of branches in Cambodia to five locations. HLBCAMs immediate focus would be capturing new business opportunities through our expanded distribution channels, as well as building a robust operational support function to deliver excellent customer experience. In May 2015, HLBCAM has also successfully launched its internet banking platform.

Whilst seeking opportunities to grow loans in a recovering economy in Vietnam, Hong Leong Bank Vietnam (HLBVN) continued to emphasise on protecting asset quality as a top priority. HLBVN remained focused on scaling up market share in key sectors of the economy as well as building business propositions with Malaysian companies seeking to expand into Vietnam. Total gross loans and deposits for HLBVN for FY2015 stood at RM319 million and RM544 million respectively.

STRATEGIC PRIORITIES

We remain committed towards driving operational excellence in business execution to deliver sustainable profitability and long-term value. Following through from the momentum built from last years initiatives, the Bank focused primarily on four strategic pillars in FY2015:

1. Strengthen business drivers by focusing resources on target market segments, improving efficiency and productivity

2. Entrench service excellence at every step of the customers journey3. Deepen community embedment and integrate multiple distribution channels4. Leverage on Best in Class technology platforms to offer digital solutions and

e-payment capabilities

Aligning all our key action plans to these four pillars, we made good progress over the year and are pleased to highlight some of our major achievements:

1. Leverage on Analytics and Excellent Customer Experience to Drive Transformation

The Group started to leverage on Big Data analytics by capturing customers experience with the Groups products and services with its new social media and analytics capability. This initiative provided insights to enhance the Groups service as well as to generate leads for more effective cross-selling and acquisitions. As of September 2014, the Group implemented web chat for live chat inquiries, secured email, intelligent FAQ for self service and video chat for branch support. Continued efforts to enhance customer turnaround time had resulted in over 70% of the customers at the branch being served within 5 minutes. Significant progress was also seen at the call centre, with 83% of customers calls being answered within 20 seconds.

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2. Focus on Wealth Management Propositions

We continued to strengthen our Priority Banking Relationship Managers team to offer higher customer engagement and to drive new investment accounts in partnership with HL Asset Management (HLAM). As a result, new Unit Trust investment accounts grew by 43% y-o-y.

The team of insurance specialists set up in partnership with Hong Leong Assurance continued to support the growth of the Bancassurance business. The total number of Bancassurance customers doubled in FY2015 and the Banks total insurance premiums expanded by 37% y-o-y.

3. Drive Retail Community Bank (RCB)

RCB is a focus area for the Bank to better service our retail SME customers through the Banks extensive branch network and the development of branch community intelligence.

We have targeted new CASA acquisition through the introduction of new products and solutions, tactical campaigns and promotions to improve brand recognition and customer loyalty.

4. Digital Banking

The fourth strategic priority of the Group was to continue investing into digital technology to leverage on Best in Class technological platforms to offer digital solutions and e-payment capabilities. Since the implementation of the new retail digital banking platform, the Group had achieved the following as compared to same period of last year: 28% increase in Online Banking users, out of which 17% are mobile

banking users 207% increase in Mobile Banking users 36% increase in transactional users 58% increase in financial transaction volume

First to market digital solutions and applications introduced by the Group during the year include: The first bank in Malaysia to offer its online banking services, Hong

Leong Connect, on Apple Watch, where customers can view their Savings, Current and Credit Card accounts balances right from the device on their wrists

Card-less Withdrawal - allows users to initiate an ATM withdrawal from their mobile phone without an ATM card

PEx+ - Merchant payment function where customers can pay for their purchases using their mobile phone

Setting up HLB on social media and Live Chat at our corporate website. The launching of Express Remit - the ability to remit foreign currency

via direct debit to the receivers Bank account on a real-time basis via the cash deposit machine



Over the year, the Group had won several awards and accolades in recognition of our efforts and best practices in technology: Best Retail Payment Project

Award by The Asian Banker, along with its IT Partner, Silverlake (The Asian Banker Technology Implementation Awards 2015, Hong Kong)

CIO of the Bank was recognised as one of Top 5 CIOs in the 2015 CIO 100

Winner of the Growth Category for PEx Mobile Payment Solution

Best Internet Bank 2015 by Global Banking and Financial Review

REVIEW BY BUSINESS SEGMENTS

PERSONAL FINANCIAL SERVICES (PFS)

PFS continued to show healthy domestic loan and deposit growth which were in line with the industry, accounting for 69% and 52% of the Groups portfolio respectively on the back of strong business fundamentals and prudent management despite a slower domestic economy and intense competition. In addition, asset quality continues to improve, as reflected by a further reduction of Gross impaired loans ratio in FY2015 on the back of prudent risk management standards.

PFS remained the main profit contributor to the Group, contributing 58% of the Groups revenue and 40% of its pre-tax profits.

Key highlights for the year:

PFS Loans Loan growth in FY2015 was led by the

Mortgage portfolio which registered a stronger than industry growth of 15% y-o-y, owing to the strong foundation that has been built over the years as well as our extensive branch network reach to the communities that we serve and a wide offering of products

CASA promotion and two micro SME deposit programmes in October 2014 and Mar 2015.

Retail Wealth Management Services

The Groups overall insurance premium posted a 37% growth, mainly contributed by regular premium and single premium sales, whilst its fee income rose by a healthy 42% y-o-y.

We continued to leverage on our partnership with HLA to place dedicated teams of Insurance Specialists in branches to further penetrate the regular premium business.

Priority Banking PFS continued to enhance Priority

Banking (PB) propositions and product offerings to PB customers. The PB customer base grew 8% over FY2014 whilst total liquid assets grew 10% y-o-y. We continued to strengthen our PB Relationship Managers and deepened customer engagement to grow new investment accounts, resulting in total number of new Unit Trust investment accounts growing by 43% over the last financial year. We remain focused on building our platform to serve our PB customers by offering total banking solutions that are consistent to their needs.

Retail Community Business Retail Community Business (RCB),

a new initiative targeting the retail SME segment via integrated banking solutions was launched during the year leveraging on the Groups wide branch franchise to support community business sales and services. RCB deposit base grew 15% over the last year and will continue to be a key focus segment for the Group in the coming year.

and services that caters to different customer needs.

Auto loans regained traction and improved to RM17.7 billion as at 30 June 2015, underpinned by our extensive branch network which allows us to tap into the auto dealerships within our reach. Sales management for this portfolio was decentralised to enable more efficient sales executions and to facilitate the building of regional market share. At the same time, loan processes were continually reviewed and re-engineered to improve turn-around time and customer experience.

Driving value and relevance continue to be the mainstay of the Groups credit cards proposition. We continue to strive for innovation and differentiation at local and international point of sale whilst exploring potential commercial and e-commerce opportunities. Headlining our achievements in FY2015, the Credit Card division bagged 2 awards at the recent Cards International and Electronic Payments International (CEPI) Asia Trailblazer Awards 2014. Hong Leong Bank Wise Card triumphed as the winner in Best Credit Card Product of the Year Asia Pacific whilst the GSC Hong Leong Credit Card was also awarded the Best Card Marketing Campaign. We also won a VISA award for the Highest Payment Volume Growth for Gold Card for the second consecutive year.

PFS Deposits Our retail deposit business grew in

tandem with industry and maintained its third position with an 11.5% market share. Significant deposit promotions for the year included collaboration with The Star publication for Win With Words contest in June 2014; the first scented Hello Kitty fruity debit card debut in March 2015, a tie-up with IKEA for Chinese New Year

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Mach Mach had been successfully

expanding the Groups presence into the younger, tech-savvy market and continued to spearhead the brand on digital and social fronts in this segment. Customer base grew by an impressive 72% y-o-y. Mach expanded its branch footprint to twelve, with the latest branch located at Setia City Mall.

The Hong Leong Bank Facebook page was launched for less than a year and Mach is already achieving a high engagement level, drawing a total of over 160,000 likes.

BUSINESS AND CORPORATE BANKING

For FY2015, the Groups Business and Corporate Banking division contributed 22% and 29% respectively to the Groups revenue and profit. The divisions loan assets grew a modest 3% amidst

moderating loans growth in the banking system and intensified margin compression. Concurrently, deposits grew 7% despite stiff competition. The Groups focus on securing sustainable, low cost deposits had assisted in cushioning the pressure of increased cost of funds.

The Groups strategy remained focused on supporting growth sectors that were expected to largely benefit SMEs as we forecasted the growth of the Malaysian economy to be continually led predominantly by domestic activities, mainly attributable to the SME Master Plan and the Economic Transformation Programme initiatives.

In our pursuit to entrench ourselves within the SME community and to promote SME development, we continued to engage and maintain strong ties with the various local trade associations and business partners. In FY2015, loans approved to domestic SME business enterprises grew 31.2%. The Groups strong presence

across Malaysia helped us understand the challenges faced by SMEs and this has enabled us to address their business needs more effectively.

The Corporate and Structured Finance segment offers corporate clients a comprehensive suite of products and services, leveraging on our alliances and close collaborations with Hong Leong Investment Bank (HLIB), Hong Leong Islamic Bank (HLISB) and Global Markets. The division leverages on market opportunities that are in line with Malaysias GDP growth areas for sustainable growth with a view to reshape the portfolio into one with more recurring business.

Several strategic cost management initiatives involving improvements to the value chain were also implemented to increase our efficiency and cost competitiveness.



GLOBAL MARKETS

Global Markets (GM) turned in a strong performance for FY2015, with its pre-tax profit growing 8.7% y-o-y driven by higher bond investment yields and fixed income trading profitability, contributing 15% of the Groups profit.

We continued to focus on key Corporate, Retail and Wealth Management client relationships in the core product areas of Foreign Exchange, Fixed Income and Derivatives, and Structured Products with special attention accorded to Islamic segment due to the strong product suite from HLISB.

Our lead franchise position was affirmed by Asiamoney, by winning leading positions across many categories, and for being accorded the top place in FX Product and Services, and Interest Rate

products. The Asset had also recognised our continued strength in Fixed Income with top three positions in Sales, Research and Investment.

ISLAMIC BANKING

FY2015 saw changes in the regulatory and Shariah requirements in the Islamic banking industry. Hence during the year, considerable efforts were directed towards ensuring that the operations of HLISB were in compliance. Amongst the key initiatives was the completion of the reclassification exercise of Islamic deposits under the Islamic Financial Services Act 2013.

HLISB remains mindful of the importance of Shariah governance and compliance, and will continue to focus on the active management of underlying assets to meet depositors expectations while observing the Shariah tenets of risk-return contracts.

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Our Islamic scholars are well versed with the constant developments of Shariah regulations, and possess the necessary skills and expertise in developing appropriate and compliant products and offerings.

Against market headwinds and operational exposures throughout the year, HLISB demonstrated satisfactory growth with a profit after tax of RM200 million for FY2015, on the back of growth in profit income of 8% to RM975 million. Operating expenses marginally increased by 2% or RM4 million due to efforts made in line with business expansion activities and compliance-related activities. Total assets stood at RM23.3 billion as at 30 June 2015, with an expansion in gross financing of 11% y-o-y to RM16.1 billion, fuelled by growth in retail and business banking segments. Core deposits demonstrated a healthy growth of 19% y-o-y to RM15.0 billion, driven primarily by the increase in Commodity Murabahah deposits.

Retail deposits base have enlarged by 28% y-o-y to RM7.6 billion, with an improvement in the retail deposit mix to 41.1% as compared to 35.3% a year ago. HLISBs asset quality indicators remained healthy during the financial year under review, where gross impaired financing ratio and financing impairment allowance coverage ratio improved to 0.7% and 139%, from 1.3% and 117% respectively. HLISB remains well capitalised with a total capital ratio of 15.2%.

We are optimistic in the development of the Islamic finance sector. The industry had been receiving favourable attention and gaining traction with countries such as China, where regional hubs continued to be set up to cater for the rising growth of this industry. Malaysia remained the preferred choice for Sukuk issuances, with a total of 65.6% of new global issuances of Sukuk originated in Malaysia, and it is poised to become the market leader in Islamic finance.

We believe the business momentum will be sustained in light of the positive environment, along with HLISBs strategy and the strength of its customer franchise. HLISB will continue to focus on growth, to lead in digital offerings and remain committed to deliver value to shareholders over the medium to long term.

OUTLOOK

Given an uncertain backdrop, we expect a more gradual recovery in the global economy in the mid-term. Weaknesses in several major economies continue to pose downside risks to the global economy and given the openness of the Malaysian economy, we remain cautiously optimistic that the domestic economy will continue to see moderate growth in the coming year. The diverse structure of the Malaysian economy and exports profile had cushioned the impact of the decline in oil prices. Malaysia will need to focus on strengthening and growing its domestic sector, which will continue to be the key driver of growth, anchored by private sector activity with further support from manufactured exports.

ACKNOWLEDGEMENTS

I would like to express my appreciation to our valued customers and clients, our supportive shareholders, Board of Directors, Bank Negara Malaysia and the Ministry of Finance, Government Agencies, and other authorities, and last but not least, my dedicated team, for their continued support and confidence in the Group.

TAN KONG KHOONGroup Managing Director/Chief Executive Officer

21 September 2015


FIVE YEAR GROUP FINANCIAL HIGHLIGHTS

GROUPFY11

RMMillionFY12

RMMillionFY13

RMMillionFY14

RMMillionFY15

RMMillion

Total Assets 145,499 158,167 163,586 170,351 184,020Gross Loans 84,022 90,571 97,209 104,169 113,418Customer Deposits 114,857 123,096 123,637 130,252 140,276Shareholders Fund 7,468 11,704 13,037 14,530 16,790Profit Before Tax 1,415 2,236 2,393 2,613 2,746Profit After Tax 1,137 1,744 1,856 2,102 2,233Net dividend per share (sen) *18.0 *28.5 *33.8 41.0 41.0

* Franked Dividend System. Net dividend per share figure represented dividend receivable by shareholders after 25% tax.

BANKFY11

RMMillionFY12

RMMillionFY13

RMMillionFY14

RMMillionFY15

RMMillion

Total Assets 87,650 140,690 145,500 148,822 160,681Gross Loans 39,416 78,023 83,308 89,225 96,691Customer Deposits 65,924 108,940 109,169 114,099 122,337Shareholders Fund 6,567 10,403 11,340 12,330 13,428Profit Before Tax 1,079 1,778 1,974 2,058 2,279Profit After Tax 807 1,325 1,450 1,591 1,776

RMMillion

Y-o-Y:+8.9%

Loan growth momentum continues, in-line with industryLoan grew 8.9% y-o-y

Strong customer deposits franchiseIndividuals deposit mix at 50.1%, Liquidity position healthy

73.2% 73.6%

78.6% 80.0% 80.9%

Total Deposits (RMmil) Individuals Deposit Mix % LD Ratio

114,

857

44.8

%

123,

096

48.3

%

123,

637

53.5

%

130,

252

51.2

%

140,

276

50.1

%84,0

22

90,5

71

104,

169

113,

418

97,2

09

FY15

FY13

FY14

FY11

FY12

FY15

FY13

FY14

FY11

FY12

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FIVE YEAR GROUP FINANCIAL HIGHLIGHTS

Resilient profitability growthPAT up 6.2% y-o-y

Shareholder value remained intactNA per share up 15.4%, ROE at 14.3%

GIL (RMmil) HLB GIL Ratio Industry GIL Ratio

PBT PAT

RMMillion

1,915

1,53

2

1,35

9

1,23

2

948

Y-o-Y: PBT: +5.1% PAT: +6.2%

NAV/Share (RM) EPS (sen)

78

105 106119

126

2.28%

2.87%

1.69%

2.22%

1.40%

1.96%

1.18%

1.77%

0.84%

1.61%

Superior asset qualityGross impaired loan (GIL) ratio at 0.84%, a record low

Capital remained healthy, supportive of growthCET1 at 10.8%; Total Capital Ratio at 14.3%

1,415

1,137

2,23

6

1,744

2,39

3

1,856

2,61

3

2,10

2

2,74

6

2,23

3

5.14

6.68

7.41

8.24

9.51

FY15

FY13

FY14

FY11

FY12

FY15

FY13

FY14

FY11

FY12

FY15

FY13

FY14

FY11

FY12

ROE %

16.3% 18.0% 15.0% 15.3% 14.3%

Total Capital % Tier 1 % CET 1%

11.9%

14.1%

8.3%

15.4%

11.6% 11.9%

14.8%

10.2%

11.9%

14.6%

10.5% 10.8%

14.3%

FY15

FY13

FY14

FY11

FY12

Basel II Basel lll


CORPORATE SOCIAL RESPONSIBILITY

At Hong Leong Bank Berhad (HLBB), we strive to go beyond CSR and integrate sustainability in everything that we do. We need to move away from a list of check boxes to meaningful action to ensure impact to create real change for the better. This has impacted our actions this past year and will continue to affect our thinking moving forward. We take this effort seriously and are not simply motivated by trying to enhance our corporate image. We need to genuinely transform by integrating sustainability into the heart of our businesses and we are slowly making inroads into this. We believe in serving our communities, which include our employees, customers, business partners and the environment, as our partners. We have a common understanding that without the community, there is no company. The Hong Leong Group sees CSR, or more accurately, sustainability, as integral to its mission. The Group contributes to the socio-economic development of the nation through its business growth, promoting education, providing aid to marginalised communities, supporting and developing local talent, propagating green practices and practicing sustainable supply-chain in its operations.

We believe in serving our communities, which include our employees, customers, business partners and the environment, as our partners. We have a common understanding that without the community, there is no company.

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Below is our commitment to each of the focus areas under the Hong Leong Group Sustainability Plan:

WORKPLACE

HLBB is committed to upholding the human rights of our employees and treating them with dignity and respect. We strive to deliver innovative solutions as well as to create an inspiring and conducive working environment.

HLBB also aims to ensure that the health, safety and welfare of our employees are well taken care of and we acknowledge our responsibility towards employees who may be affected by our activities.

The Bank identifies and hires local talent through our Graduate Development Programme a programme in which we

hire fresh local graduates to undergo a training program under the Business & Corporate Banking Department for 18 months. This programme aims to identify and develop young graduates into relevant fields of talents to support the growth of the Group. It entails classroom training, on-the-job familiarisation, learning assignments as well as mentoring. For the non-executives, various in-house and external programmes were conducted to enhance their technical competencies as well as supervisory skills in order to develop a competent workforce that is knowledgeable and highly motivated.

Since its founding, HLBB has demonstrated an on-going commitment to people and to fair employment practices. HLBBs growth and expansion throughout the region has created a more diverse work force by tapping on our people who have different experiences, perspectives and cultures.

This has allowed the Group to build on its creativity and innovation which helps the organisation to realise its full potential.

We believe that a well-managed, diverse and inclusive work force expands the Groups base of knowledge, skills and cross-cultural understanding, which in turn, enables us to understand, relate and respond to our diverse and changing customers throughout the world. Our overall commitment is reflected in our diversity and inclusion philosophy.

Consistent with our Best Work Environment practices, we maintain a work environment free from discrimination and we comply with all applicable laws pertaining to non-discrimination and equal opportunity. This is evidenced by the diverse ethnic and social backgrounds of members, staff and clients.



ENVIRONMENT

HLBB endeavours to identify and minimise the negative environmental impacts of our products and business activities. We take steps to reduce environmental impact wherever possible.

Our environmental initiatives include smart and careful consumption of resources, water, emissions to air, waste generation, energy use and procurement processes. We are committed to minimising our environmental impact and encouraging greater sustainability throughout our business.

In January 2015, HLBB participated in the HLFG Energy Conservation Campaign. Following HLFGs Do Good Week campaign rolled out during financial year 2014, the Do Good Week -Energy Conservation initiative was introduced to change energy-using behavior and develop an energy-management work culture amongst employees by introducing valuable energy efficiency measures. The year-long initiative, which kicked off in January 2015, aims to inculcate a shared sense of responsibility towards the environment, besides developing a corporate image of a responsible business which cares for the environment.

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MARKETPLACE

HLBB is committed to good business ethics and integrity. For many years now, the Group has had in place internally generated best practices to ensure the economic sustainability of all its companies. Some of these best practices are:

Established Financial Management Disciplines intended to drive excellence in financial management with the objective of preserving and enhancing the quality of the business as an on-going concern.

An established Enterprise Risk Management structure to ensure that a systematic process and delegation of responsibility is clearly set out to guide management.

A code of business conduct and ethics of financial reports which contains disclosures that are true and fair.

In choosing its directors, the Group seeks individuals of high integrity, and with shareholder orientation and a genuine interest in their respective companys businesses. They are tasked with the responsibility of exercising their business judgment to act in what they reasonably believe to be in the

best interest of the company and the shareholders they represent.

The practice of responsible selling and marketing of products and services.

COMMUNITY

The Bank conducts most of its philanthropic activities through Hong Leong Foundation, the charitable arm of Hong Leong Group.

Incorporated in 1992, Hong Leong Foundation is a corporate foundation driven by the interest and passion of the Group. It is funded by contributions from Hong Leong Group Malaysias (the Group) companies and is, effectively, its charitable arm through which most of the Groups philanthropic activities are conducted. HLF expended a total of RM26.9m over the last three years and has the following programmes in place working with our Community Partners:

Community Welfare Programme to address the daily needs of homes, shelters and community centres.

Towards Self-Sufficiency:- Tertiary Scholarship Programme- Reach out and Rise Education

Development Programme - The Hong Leong Masters Scholarship

Programme- After School Care Programme

Community Partner Programme to enable furtherance of the charitys mission and vision:- Good Jobs: Employment Development

Programme- Better Homes: Welfare Home

Transformation Programme- Hong Leong Foundation NGO

Accelerator Programme - Community Welfare Programme

The total funds disbursed by the Foundation in the financial year ended 30 June 2015 were RM6.9 million, benefiting 30 charity organisations. During the year, the Foundation disbursed RM3.2 million in scholarships to benefit around 200 scholars studying in various universities, all of whom are from financially-challenged families. Because gaps of opportunity exist along the entire spectrum of education development, the Foundation has set up a comprehensive programme to empower their scholars: enrichment camps and workshops, internships, mentorships, and other support to help them excel in their formative years in university and beyond.


Since 1993, the Hong Leong Foundation has awarded more than RM29.5 million in scholarships to 1,204 scholars via its scholarship programmes for diplomas, degrees or masters.

HLF SCHOLARSHIP GRADUATES BY YEAR:

In addition to supporting the Hong Leong Groups CSR initiatives, HLBB plays our part as a responsible company that has people at our heart.

During the year, the Bank participated in Hong Leong Groups first ever Futsal Tournament held in December 2014. The Group Futsal Tournament involved the participation of the various operating companies within the Group and ten childrens homes. The Tournament forms part of the larger Group Joint CSR initiative towards building partnerships with the civil society by moving away from the redundant donor-donee relationship into an interactive partnership working towards much more effective solutions.

As part of the tournament, participating companies were required to adopt at least one home and train a team of 11 under-14 futsal players who underwent futsal training with their respective


coaches between the months of October and December 2014. All team players were provided with complete soccer attire consisting of team jerseys, shoes, socks as well as other gear. They were also provided with complimentary insurance policy coverage from Hong Leong MSIG Takaful and received other collaterals and merchandise from Hong Leong Bank Berhad and Hong Leong Islamic Bank. Hong Leong Islamic Bank also opened up a savings account for all the children with a contribution of RM150 each. Every home which participated also received RM7,000 contribution from Hong Leong Foundation through its Community Welfare Programme project.

Participating homes included the Persatuan Kebajikan Kanak Kanak Kajang, House of Love Bukit Tinggi Klang and Rita Home Kapar, Rumah Kasih Harmoni, Sungai Buloh, Yayasan Chow Kit, Asrama Anak-Anak Yatim and Warga Miskin Budi Mulia Nurul Huda, Stepping Stones Living Center, Persatuan Kebajikan Rumah Perlindungan Teratak Nur Insan and Praise Emmanuel Childrens Home.

Amidst the outbreak of floods in the East Coast region of Malaysia end of 2014, the Bank, along with other participants from Hong Leong Financial Group, Hong Leong Islamic Bank, Hong Leong Capital, Hong Leong Investment Bank, Hong Leong Assurance and Hong Leong MSIG Takaful, also contributed towards the HLFG Post Flood Relief Donation Drive held in January 2015. Various donations in kind comprising food, personal care, household goods and back-to-school equipment were collected from employees and were delivered to the flood victims. The effort garnered much participation and overwhelming support from employees throughout the Group who assisted in the collection and packing of donated goods.

Firm in our conviction on the importance of education, the Bank participated in The Community Chest (TCC) programme jointly coordinated with TCC, an independent, not-for-profit, non-governmental charitable organisation. Joining forces with volunteers from other Group operating companies, a total of 96 volunteers were deployed from the Bank to assist 62 impoverished primary schools by equipping them with the required furniture, fittings and equipment; refurbish, repair, extend, renovate and rewire building and facilities to provide safer school environment; construct new buildings and facilities and set up e-classrooms.

46

79

200

63

2810

11

12

13

14

Corporate Section



Overseas, Hong Leong Bank Vietnam (HLBVN) sponsored a charity event Run for the Heart 2014 which was held on Sunday, 2nd November 2014, which aimed to provide assistance to children who suffered from heart disease. Meanwhile, Hong Leong Bank Cambodia (HLBCAM)

This Corporate Social Responsibility Statement is made in accordance with the resolution of the Board of Directors.

was one of the sponsors of the 24-hour charity run organized by Northbridge Community held on 16 May 2014 which was joined by over six hundred children and parents. Participants in the Northbridge International School Cambodia (NISC) 24-Hour Challenge raised donations through pledges to run, walk or ride around the NISC 400 meter track. The goal of the event was to have at least one runner moving on the track for the entire 24 hours and raise awareness and much needed funds for the designated charity. On 1 June, HLBCAM partnered with The Platinum Cineplex at Sorya mall to celebrate International Childrens day with over 300 children of leading private primary schools, customers and an NGO by offering a free Screening of the movie RIO 2 at The Platinum Cineplex. The event served as a good foundation as HLBCAM seeks to introduce a childrens savings account early next year. Another highlight was the 4th Phnom Penh International Half Marathon on 15 June 2014 which saw 70 participants comprising HLBCAM employees and families taking part in the 10km categories. The event organized by National Olympic Committee of Cambodia (NOCC) aimed to raise funds for the national sports development and encourage a Go Green policy. In July 2014, HLBCAM, in cooperation with Platinum Cineplex, created an event, Khmer Movie Marathon, which served to showcase the best 60s, 70s and 90s movies in the movie industry. Proceeds from the ticket sales to the Movie Marathon were donated to Sunshine Organization, an organization which supports poor orphans as well as their education. In conjunction with the Movie Marathon, HLBCAM staff also visited the orphanage to donate clothes, food and daily essentials.


CORPORATE INFORMATION

YBhg Tan Sri Quek Leng Chan (Chairman)

Mr Tan Kong Khoon (Group Managing Director/Chief Executive Officer)

Mr Kwek Leng Hai

Mr Quek Kon Sean

Ms Lim Lean See

YBhg Tan Sri A. Razak bin Ramli

Ms Chok Kwee Bee

YBhg Dato Nicholas John Lough @ Sharif Lough bin Abdullah

YBhg Datuk Wira Azhar bin Abdul Hamid

Ms Christine Moh Suat Moi MAICSA 7005095

Messrs PricewaterhouseCoopersChartered AccountantsLevel 10, 1 Sentral Jalan RakyatKuala Lumpur Sentral50470 Kuala LumpurTel : 03-2173 1188Fax : 03-2173 1288

Hong Leong Share Registration Services Sdn BhdLevel 5, Wisma Hong Leong18 Jalan Perak50450 Kuala LumpurTel : 03-2164 1818 Fax : 03-2164 3703

Level 8, Wisma Hong Leong18 Jalan Perak50450 Kuala LumpurTel : 03-2164 8228 Fax : 03-2164 2503

www.hlb.com.my

DIRECTORS

GROUP COMPANY SECRETARY

AUDITORS

REGISTRAR

REGISTERED OFFICE

WEBSITE


Corporate Section

ANNUAL REPORT 2015 35ANNUAL REPORT 2015 35


NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Seventy-Fourth Annual General Meeting of Hong Leong Bank Berhad (Bank) will be held at the Theatrette, Level 1, Wisma Hong Leong, 18 Jalan Perak, 50450 Kuala Lumpur on Tuesday, 27 October 2015 at 10:00 a.m. in order:

1. To lay before the meeting the audited financial statements together with the reports of the Directors and Auditors thereon for the financial year ended 30 June 2015.

2. To declare a final single tier dividend of 26 sen per share for the financial year ended 30 June 2015 to be paid on 18 November 2015 to members registered in the Record of Depositors on 2 November 2015. (Resolution 1)

3. To approve the payment of Directors fees of RM544,384 for the financial year ended 30 June 2015 (2014: RM414,466), to be divided amongst the Directors in such manner as the Directors may determine. (Resolution 2)

4. To re-elect the following retiring Directors:-

(a) YBhg Datuk Wira Azhar bin Abdul Hamid(b) Mr Kwek Leng Hai(c) YBhg Tan Sri A. Razak bin Ramli

(Resolution 3)(Resolution 4)(Resolution 5)

5. To pass the following motion as an Ordinary Resolution:-

THAT YBhg Tan Sri Quek Leng Chan, a Director who retires in compliance with Section 129 of the Companies Act, 1965, be and is hereby re-appointed a Director of the Bank to hold office until the conclusion of the next Annual General Meeting. (Resolution 6)

6. To re-appoint Messrs PricewaterhouseCoopers as Auditors of the Bank and authorise the Directors to fix their remuneration. (Resolution 7)

SPECIAL BUSINESS

As special business, to consider and, if thought fit, pass the following motions:-

7. Ordinary ResolutionAuthority to Directors to Issue Shares THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby empowered to: (i) issue shares in the Bank, at any time and from time to time, and upon such terms and conditions and for

such purposes as the Directors may, in their absolute discretion, deem fit, (General Mandate) provided that the aggregate number of shares issued pursuant to this General Mandate does not exceed 10% of the issued capital of the Bank (Limitation) for the time being and that the Directors be and are also empowered to obtain approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Bank; and

(ii) further and in addition, issue shares in the Bank in accordance with specific mandates granted to the

Directors (if any) pursuant to resolutions of the shareholders passed on or at any time prior to this Annual General Meeting of the Bank but which have not yet been implemented or fully implemented (Specific Mandates), and that the number of shares issued pursuant to the Specific Mandates shall not be aggregated with the number of shares issued pursuant to the General Mandate and that for the avoidance of doubt, shares issued pursuant to the Specific Mandates are not subject to the Limitation which is only applicable to shares issued pursuant to the General Mandate. (Resolution 8)

Corporate Section



8. Ordinary ResolutionProposed Renewal of and New Shareholders Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature with Hong Leong Company (Malaysia) Berhad (HLCM) and Persons Connected with HLCM

THAT approval be and is hereby given for the Bank and/or its subsidiaries to enter into any of the transactions falling within the types of recurrent related party transactions of a revenue or trading nature as disclosed in Section 2.3 (A) and (B) of the Banks Circular to Shareholders dated 5 October 2015 (the Circular) with HLCM and persons connected with HLCM (Hong Leong Group), as set out in Appendix II of the Circular provided that such transactions are undertaken in the ordinary course of business, on arms length basis and on commercial terms which are not more favourable to the Hong Leong Group than those generally available to and/or from the public and are not, in the Banks opinion, detrimental to the minority shareholders;

AND THAT such approval shall continue to be in force until:

(a) the conclusion of the next Annual General Meeting (AGM) of the Bank at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed; or

(b) the expiration of the period within which the next AGM of the Bank after that date is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Companies Act, 1965); or

(c) revoked or varied by resolution passed by the shareholders in general meeting,

whichever is the earlier;

AND THAT the Directors of the Bank be and are hereby authorised to complete and to do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give effect to the transactions contemplated and/or authorised by this ordinary resolution. (Resolution 9)

9. To consider any other business of which due notice shall have been given.

FURTHER NOTICE IS HEREBY GIVEN that a depositor shall qualify for entitlement to the final dividend only in respect of:

(a) shares transferred into the depositors securities account before 4:00 p.m. on 2 November 2015 in respect of ordinary transfers; and

(b) shares bought on Bursa Securities on a cum entitlement basis according to the Rules of the Bursa Securities.

By Order of the Board

CHRISTINE MOH SUAT MOI (MAICSA 7005095)Group Company Secretary

Kuala Lumpur5 October 2015


NOTES:

1. For the purpose of determining members eligibility to attend this meeting, only members whose names appear in the Record of Depositors as at 21 October 2015 shall be entitled to attend this meeting or appoint proxy(ies) to attend and vote on their behalf.

2. Save for a member who is an exempt authorised nominee, a member entitled to attend and vote at the meeting is entitled to appoint not more than two (2) proxies to attend and vote in his stead. A proxy may but need not be a member of the Bank and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Bank. A member who is an authorised nominee may appoint not more than two (2) proxies in respect of each securities account it holds. A member who is an exempt authorised nominee for multiple beneficial owners in one securities account (Omnibus Account) may appoint any number of proxies in respect of the Omnibus Account.

3. Where two (2) or more proxies are appointed, the proportions of shareholdings to be represented by each proxy must be specified in the instrument appointing the proxies, failing which the appointments shall be invalid.

4. The Form of Proxy must be deposited at the Registered Office of the Bank at Level 8, Wisma Hong Leong, 18 Jalan Perak, 50450 Kuala Lumpur not less than 48 hours before the time and date of the meeting or adjourned meeting.

EXPLANATORY NOTES ON SPECIAL BUSINESS

1. Resolution 8 on Authority to Directors to Issue Shares The proposed Ordinary Resolution, if passed, will:

(i) renew the general mandate given to the Directors of the Bank to issue ordinary shares of the Bank from time to time provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued capital of the Bank for the time being (General Mandate); and

(ii) renew any specific mandates given to the Directors of the Bank to issue ordinary shares of the Bank (Specific Mandates) passed on

or at any time prior to this Annual General Meeting of the Bank and have not yet been implemented or fully implemented.

As at the date of this Notice, no new shares in the Bank were issued pursuant to the General and Specific Mandates granted to the Directors. The General Mandate will enable the Directors to take swift action in case of, inter alia, a need for corporate exercises or in the event

business opportunities or other circumstances arise which involve the issue of new shares and to avoid delay and cost in convening general meetings to approve such issue of shares.

2. Resolution 9 on Recurrent Related Party Transactions of a Revenue or Trading Nature

The proposed Ordinary Resolution, if passed, will empower the Bank and its subsidiaries (HLB Group) to enter into recurrent related party transactions of a revenue or trading nature which are necessary for HLB Groups day-to-day operations, subject to the transactions being in the ordinary course of business and on terms which are not more favourable to the Hong Leong Group than those generally available to the public and are not, in the Banks opinion, detrimental to the minority shareholders of the Bank (Proposed Shareholders Mandate).

Detailed information on the Proposed Shareholders Mandate is set out in the Circular to Shareholders dated 5 October 2015 which is dispatched together with the Banks 2015 Annual Report.

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING(Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)

Details of individuals who are standing for election as Directors

No individual is seeking election as a Director at the forthcoming Seventy-Fourth Annual General Meeting of the Bank.

Statement relating to general mandate for issue of securities in accordance with Paragraph 6.03(3) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad

Details of the general mandate to issue securities in the Bank pursuant to Section 132D of the Companies Act, 1965 are set out in

Explanatory Note 1 of the Notice of Seventy-Fourth Annual General Meeting.


Corporate Section


BOARD OF DIRECTORS PROFILE

YBHG TAN SRI QUEK LENG CHAN Chairman/Non-Executive/Non-Independent

Aged 72, YBhg Tan Sri Quek Leng Chan, a Malaysian, qualified as a Barrister-at-Law from Middle Temple, United Kingdom. He has extensive business experience in various business sectors, including financial services, manufacturing and real estate.

YBhg Tan Sri Quek is the Chairman of Hong Leong Bank Berhad (HLB) and was appointed to the Board of Directors (Board) of HLB on 3 January 1994. He is the Chairman of the Board Credit Supervisory Committee (BCSC) and a member of the Executive Committee (EXCO), Remuneration Committee (RC) and Nominating Committee (NC) of HLB. He is the Chairman & Chief Executive Officer of Hong Leong Company (Malaysia) Berhad (HLCM), a public company; Chairman of Hong Leong Financial Group Berhad (HLFG) and Hong Leong Capital Berhad (HLCB) and GuocoLand (Malaysia) Berhad, companies listed on the Main Market of Bursa Malaysia Securities Berhad (Bursa Securities); and Chairman of Hong Leong Assurance Berhad (HLA) and Hong Leong Foundation; and a member of the Board of Trustees of The Community Chest, all public companies.

MR TAN KONG KHOONGroup Managing Director/Chief Executive Officer/Non-Independent

Aged 58, Mr Tan Kong Khoon, a Singaporean, holds a Bachelor of Business Administration degree from Bishops University, Canada and is an alumnus of the Harvard Business School Advance Management Program.

Mr Tan was the Group Executive, Consumer Banking Group of DBS Bank Ltd (DBS) from 1 December 2010 to 15 April 2013 where he led and managed strategy formulation and execution for consumer banking globally across the DBS Group.

Mr Tan began his banking career with DBS in 1981. Since then, he had successfully built consumer banking franchises across multiple markets in Asia for Citibank, Standard Chartered Bank and ANZ Bank.

From March 2007 to December 2009, Mr Tan was President and Chief Executive Officer of Bank of Ayudhya, the fifth largest bank in Thailand listed on the Thailand Stock Exchange. Under his leadership, Bank of Ayudhya had expanded rapidly in its business and turnover.

Mr Tan was appointed as the Group Managing Director/Chief Executive Officer of HLB on 1 July 2013. He is a member of the BCSC and EXCO of HLB.



MR QUEK KON SEANNon-Executive Director/Non-Independent

Aged 35, Mr Quek Kon Sean, a Malaysian, obtained a Bachelor of Science degree and Master of Science in Economics from the London School of Economics and Political Science. He started his career in investment banking prior to assuming the role of Executive Director of HLFG. He is currently the Managing Director, Centre for Business Value of HL Management Co Sdn Bhd.

Mr Quek was appointed to the Board of HLB on 10 July 2006 and is a member of the BCSC of HLB.

Mr Quek is also a Director of HLFG and HLCB, both companies listed on the Main Market of Bursa Securities and HLA, a public company.

MR KWEK LENG HAINon-Executive Director/Non-Independent

Aged 62, Mr Kwek Leng Hai, a Singaporean, qualified as a chartered accountant and has extensive experience in financial services, manufacturing and property investment.

Mr Kwek was appointed to the Board of HLB on 3 January 1994. He is also a Director of Hong Leong Islamic Bank Berhad (HLISB) and HLCM, both public companies.

Mr Kwek is the President and Chief Executive Officer of Guoco Group Limited (GGL) and has been an Executive Director of GGL since 1990. He is also the Chairman of Lam Soon (Hong Kong) Limited (LSHK). Both GGL and LSHK are listed in Hong Kong. Mr Kwek is also a director of GGLs key subsidiaries including GuocoLand Limited and GuocoLeisure Limited, both public listed companies in Singapore. He is also a director of Bank of Chengdu Co., Ltd.

Corporate Section



MS LIM LEAN SEE Non-Executive Director/Independent

Aged 62, Ms Lim Lean See, a Malaysian, holds an Associateship in Accounting and an Associateship in Secretarial and Administrative Practice both from the Curtin University, Australia. Her professional qualifications include being a Fellow of the Australian Society of Certified Practising Accountants, Registered Accountant with the Malaysian Institute of Accountants, a Trade Member of Financial Planning Association of Malaysia and a member of the Institut Bank-Bank Malaysia.

Ms Lim has 33 years of experience in the banking industry and has held various senior positions including the Head of Corporate Banking and Head of Business Banking Division, the last being the Chief Representative of a foreign bank Representative Office with the corporate rank of an Executive Director.

Ms Lim was appointed to the Board of HLB on 5 May 2010 and is the Chairman of the Board Audit Committee (BAC) and a member of the NC and Board Risk Management Committee (BRMC) of HLB.

Ms Lim is also a Director of HLFG, a company listed on the Main Market of Bursa Securities.

YBHG TAN SRI A. RAZAK BIN RAMLINon-Executive Director/Independent

Aged 66, YBhg Tan Sri A. Razak bin Ramli, a Malaysian, obtained a Bachelor of Arts (Honours) degree in Public Administration from the University of Tasmania, Australia and has a diploma in Gestion Publique from Institut International dAdministration Publique, Paris, France. He has served in various Ministries including the Public Services Department and Economic Planning Unit in the Prime Ministers Department and the Ministry of International Trade and Industry (MITI). YBhg Tan Sri A. Razak was the Chairman of APEC Senior Officials when Malaysia hosted APEC, and held various positions in MITI including Deputy Secretary General (Industry), Deputy Secretary General (Trade) and retired as the Secretary General of MITI.

YBhg Tan Sri A. Razak was appointed to the Board of HLB on 11 January 2011 and is the Chairman of the NC of HLB.

YBhg Tan Sri A. Razak is the Chairman of Shangri-La Hotels (Malaysia) Berhad and Favelle Favco Berhad and a Director of Lafarge Malaysia Berhad, companies listed on the Main Market of Bursa Securities. He is also the Chairman of Hong Leong MSIG Takaful Berhad, HLISB and Ophir Holdings Berhad and a Director of Hong Leong Investment Bank Berhad, all public companies.


MS CHOK KWEE BEE Non-Executive Director/Independent

Aged 63, Ms Chok Kwee Bee, a Malaysian, holds a Bachelor of Arts (Honours) degree in Business Studies from Kingston University, United Kingdom and is also a member of the Associate of the Chartered Institute of Bankers, United Kingdom.

Ms Chok is presently the Managing Director of Teak Capital Sdn Bhd, a venture capital management company. Prior to that, she was with Walden International, a Silicon Valley based venture capital firm, overseeing the operations and investments of Walden International and BI Walden in Malaysia. Ms Chok was also previously Head of Corporate Finance at AmInvestment Bank Berhad. She previously held posts as Director of Malaysian Exchange of Securities Dealing & Automated Quotation Bhd, Chairman of the Corporate Finance Sub-Committee of Association of Merchant Banks, a member of the Securities Commission Capital Market Advisory Council and the Chairman of the Malaysian Venture Capital and Private Equity Association.

Ms Chok is currently a Director of Aemulus Holdings Berhad, a public company. She is also a member of the Malaysian Venture Capital Development Council of the Securities Commission and a Non-Executive Board Member of the Audit Oversight Board. She also sits on the board of several portfolio companies.

Ms Chok was appointed to the Board of HLB on 2 December 2013 and is a member of the BRMC and NC of HLB.

YBHG DATO NICHOLAS JOHN LOUGH @ SHARIF LOUGH BIN ABDULLAHNon-Executive Director/Independent

Aged 63, YBhg Dato Nicholas John Lough @ Sharif Lough bin Abdullah, a British and Malaysian Permanent Resident, holds aGemmology Diploma from The National Association of Goldsmiths, London, Great Britain and is a Fellow member of The Gemmological Association of Great Britain.

YBhg Dato Lough has extensive experience in the corporate sector, serving in various capacities, including Group Executive Director of Melewar Corporation Berhad from 1987 to 1995.

YBhg Dato Lough is currently a Director of GLM REIT Management Sdn Bhd, the Manager of Tower Real Estate Investment Trust and Scicom (MSC) Berhad, both listed on the Main Market of Bursa Securities. He is also a Director of Royce Pharma Berhad, a public company.

YBhg Dato Lough was appointed to the Board of HLB on 23 June 2014 and is the Chairman of the BRMC and RC, and a member of the BAC of HLB.


Corporate Section


YBHG DATUK WIRA AZHAR BIN ABDUL HAMID Non-Executive Director/Independent

Aged 54, YBhg Datuk Wira Azhar bin Abdul Hamid, a Malaysian, is a Chartered Accountant by training. He is a Fellow member of the Association of Chartered Certified Accountants, United Kingdom and a member of the Malaysian Institute of Accountants.

YBhg Datuk Wira Azhar is presently the Group Managing Director of Tradewinds Corporation Berhad. Prior to that, he was the Chief Executive Officer of Mass Rapid Transit Corporation Sdn Bhd from 2011 to 2014. He was with the Sime Darby Group from 2003 to 2010 where he served in various senior capacities including Managing Director of Sime Darby Plantation Sdn Bhd and Acting President & Group Chief Executive, overseeing the entire Groups operations.

YBhg Datuk Wira Azhar began his senior executive career in 1989 in the United Kingdom, where he served British Telecom Plc as Internal Audit Manager. He returned to Malaysia in 1991 and joined Malaysian Cooperative Insurance Society as Head of Internal Audit. From 1994 to 2001, he was with the Sime Darby Group serving Sime Tyres International Sdn Bhd as Financial Controller, Sime Conoco Sdn Bhd as Business Development Director and the Groups Engineering, Oil & Gas Division as Group General Manager. From 2001 to 2002, YBhg Datuk Wira Azhar was the Group Chief Executive of Pernas International Holdings Bhd.

YBhg Datuk Wira Azhar was appointed to the Board of HLB on 15 May 2015.

YBhg Datuk Wira Azhar is currently a Director of ICON Offshore Berhad and Hume Industries Berhad (formerly known as Narra Industries Berhad), both companies listed on the Main Market of Bursa Securities.


Notes:

1. Family Relationship with Director and/or Major Shareholder YBhg Tan Sri Quek Leng Chan, Mr Kwek Leng Hai and Mr Quek Leng Chye, a deemed major shareholder of HLB, are

brothers. YBhg Tan Sri Quek Leng Chan is the father of Mr Quek Kon Sean. Save as disclosed herein, none of the Directors has any family relationship with any other Director and/or major shareholder of HLB.

2. Conflict of Interest None of the Directors has any conflict of interest with HLB.

3. Conviction of Offences None of the Directors has been convicted of any offences in the past 10 years.

4. Attendance of Directors Details of Board meeting attendance of each Director are disclosed in the Statement on Corporate Governance, Risk

Management and Internal Control in the Annual Report.


CONSTITUTION

The Board Audit Committee of Hong Leong Bank Berhad (HLB or the Bank) has been established since 18 August 1994 and was re-designated as the Board Audit & Risk Management Committee (BARMC) on 10 January 2002. Subsequently, on 2 October 2006, the Board of Directors decided to reconstitute the Board Audit Committee (BAC) separately from the Board Risk Management Com

ar2015

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