Cimb Investment

CIMB Investment Bank Berhad (18417-M)
Annual Report 2008
Open
to a landscape
of borderless
possibilities,
opportunities and
capabilities.
Contents
001 Corporate Profile 039 Statement on Internal Control
002 Corporate Information 046 Risk Management
004 Chairman’s Message 052 Notable Deals
010 Board of Directors 057 Notable Achievements
012 Board of Directors’ Profiles 061 Snapshot of Corporate Events
018 Statement on Corporate Governance 063 Financial Statements
033 Audit Committee Report 177 Corporate Directory
CIMB Investment Bank Berhad
(18417-M)
Corporate Profile
CIMB INVESTMENT BANK Berhad

CIMB Investment Bank is the investment banking
arm of CIMB Group and has served the investment
banking needs of Malaysian corporations for over
3 decades.
With its regional offices in Malaysia, Singapore,

Indonesia, Hong Kong, Thailand, the UK and
the US, CIMB Investment Bank is well placed to
serve its clients in Malaysia as well as regionally.
Constantly at Malaysia’s forefront in corporate
advisory as well as equity and debt capital
markets, it has been named Best Investment
Bank in Malaysia by various respected financial
publications, among them, Euromoney, The Asset
and Finance Asia.
Annual Report 2008 00

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Corporate Information
BOARD OF DIRECTORS Audit Committee Board Risk Committee
Dato’ Hamzah Bakar Dato’ Zainal Abidin Putih Dato’ Hamzah Bakar
Chairman Chairman Chairman
Independent Non-Executive Director
Dato’ Hamzah Bakar Dato’ Sri Nazir Razak
Dato’ Sri Nazir Razak Member Member
Deputy Chairman
Non-Independent Non-Executive Director Datuk Dr Syed Muhamad Syed Abdul Kadir Dato’ Zainal Abidin Putih
Member Member
Dato’ Charon Wardini Mokhzani
Executive Director Tan Sri G K Rama Iyer Zahardin Omardin
Member Member
Dato’ Zainal Abidin Putih
Independent Non-Executive Director Nomination and Remuneration Nicholas R H Bloy
Committee Member
Zahardin Omardin
Independent Non-Executive Director Tan Sri Dato’ Seri Haidar Mohamed Nor
Chairman
Nicholas R H Bloy
Non-Independent Non-Executive Director Dato’ Hamzah Bakar
Member

Member
Datuk Dr Syed Muhamad Syed Abdul Kadir

Member
Dato’ Robert Cheim Dau Meng

Member
00 Annual Report 2008

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Corporate Information
COMPANY SECRETAry GROUP MANAGEMENT COMMITTEE GROUP MANAGEMENT COMMITTEE

(Continued)
Datin Rossaya Mohd Nashir Dato’ Sri Nazir Razak
(LS 0007591) Group Managing Director/ Peter England
Chief Executive Ofﬁcer Retail Banking
REGISTERED OFFICE
Dato’ Mohd Shukri Hussin Sulaiman Mohd Tahir
5th Floor, Bangunan CIMB Executive Director, BCHB Consumer Sales and Distribution
Jalan Semantan
Damansara Heights Dato’ Charon Wardini Mokhzani Tan Leng Hock
50490 Kuala Lumpur Deputy Chief Executive Officer, Business Banking
Tel : 603 2093 0379 Corporate and Investment Banking
Fax : 603 2093 9688 Abdul Karim Md Lassim
Dr Gan Wee Beng Auto Finance
www.ib.cimb.com Deputy Chief Executive Officer,
Group Risk Management Jean Yap Yoke Yuen
DATE OF INCORPORATION Direct Banking and Cards
Lee Kok Kwan
Incorporated in Kuala Lumpur, Deputy Chief Executive Officer, Raja Noorma Othman
Malaysia on 24 April 1974 as a public Group Treasury and Investments Group Asset Management
company (Co. No. 18417-M) under the
Companies Act, 1965 Dato’ Robert Cheim Dau Meng Iswaraan Suppiah
Adviser, Corporate and Investment Group Information and Operations
PRINCIPAL BANKER Banking
Hamidah Naziadin
CIMB Bank Berhad Kenny Kim Group Corporate Resources
6 Jalan Tun Perak Group Chief Financial Officer
PO Box 10753 Group Strategy and Finance Peter Miller
50050 Kuala Lumpur Group Insurance
Tunku Dato’ Ahmad Burhanuddin
AUDITORS Group Customer Care and Ahmad Shazli Kamarulzaman
Management Support Group Special Asset Management
PricewaterhouseCoopers
Level 10, 1 Sentral, Jalan Travers Badlisyah Abdul Ghani Lim Tiang Siew
Kuala Lumpur Sentral Islamic Banking Group Chief Internal Auditor
PO Box 10192
50706 Kuala Lumpur

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Chairman’s Message

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CIMB Investment Bank continued to dominate the ringgit

capital markets in 2008, advising the lion’s share of
domestic and cross-border mergers and acquisitions
(M&As) as well as numerous equity/equity-linked and
debt capital market transactions. For our efforts, we
were named Investment Bank of the Year for Malaysia by
Finance Asia, our eighth straight win. Despite the global
financial crisis, which sapped liquidity, unnerved investors
and shrank transaction volumes in capital markets
worldwide, CIMB Investment Bank posted a net profit of
RM113.4 million for the financial year ended 31 December
2008 and continues to maintain a very healthy balance
sheet. While net profit declined 47.1% from the previous
year, it was nonetheless a respectable performance in
comparison with many of our global peers.

0
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Dear Shareholders,
The year 2008 was a challenging year for investment banking but I am proud to
report that CIMB Investment Bank remained profitable, retained its leadership
position and made significant strides regionally.
ACCELERATED GROWTH
CIMB Investment Bank topped the • Magnum Corporation Berhad’s CIMB Investment Bank also
domestic M&A league table with privatisation, which was undertaken originated numerous debt and Islamic
an estimated market share of 35% jointly by Multi-Purpose Holdings capital market transactions, including
by deal value and advised RM5.7 Berhad and CVC Capital Partners, PLUS Expressways Berhad’s Islamic
billion worth of equity issues. A host a leading global private equity firm; Medium Term Notes programme,
of large, innovative and pioneering Syarikat Prasarana Nasional Berhad’s
deals resulted in CIMB Investment • UEM World Berhad’s multifaceted government guaranteed Sukuk
Bank, once again, winning numerous restructuring and M&A transaction; Ijarah, and even ringgit issuances
investment banking awards from for foreign entities including Islamic
various international finance • The merger of media companies Development Bank and The Export-
publications including Asiamoney, Sin Chew Media Corporation Import Bank of Korea.
Euromoney, Finance Asia, The Berhad, Nanyang Press Holdings
Asset, Alpha Southeast Asia and IFR Berhad and Media Chinese Operating Environment
Asia. Several of our more notable International Ltd, and the dual The year began on a positive note as
M&A and equity/equity-linked primary listing of the merged the Kuala Lumpur Composite Index
transactions include: entity on Bursa Malaysia and the (KLCI) broke the 1,500-point barrier
Hong Kong Stock Exchange; in January. At the time, the Malaysian
• Telekom Malaysia Berhad’s stock market was favoured by foreign
demerger, which involved its • Khazanah Nasional Berhad’s investors, becoming one of the
fixed-line, broadband and mobile exchangeable sukuk, which region’s best-performing bourses in
businesses, and which was one was the first-ever issuance of a the first few weeks of 2008. However,
of the largest demerger exercises zero periodic payment Islamic the good run ended soon after, as a
in the region last year; exchangeable sukuk in the series of de-rating catalysts affected
international markets; and the market, including the unexpected
• Abu Dhabi Commercial Bank’s results of the general election in March
strategic investment in RHB • The listing of the MyETF Dow and the global credit crunch.
Capital Berhad, which to date, Jones Islamic Market Malaysia
is the largest investment by a exchange traded fund on Bursa
Middle East strategic investor in Malaysia.
a Malaysian financial institution;

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In 2008, the KLCI lost 568 points expenditures. Consumer spending Performance by Business
or a hefty 39%, but still managed softened to 6.7% in the second half Divisions
to outperform many of the regional of 2008, from 10.3% in the first half
indices, due in part to Malaysia of the year, while capital investment Corporate Finance
frequently being a “lower-beta” over the same period reversed to a Global uncertainty and tighter credit
market when compared to many contraction of 3.4% from a growth were not conducive conditions for
other Asian bourses. Other factors of 5.8%. With inflation concerns fund-raising and M&As, especially in
that dragged the market lower in for 2009 taking a backseat, Bank the second half of 2008. The volume
2008 include weaker consumer Negara Malaysia cut interest rates for of M&A transactions in Malaysia
sentiment and corporate earnings the first time in over five years - by 25 shrank considerably, with only
downgrades. Consumer confidence basis points to 3.25% in November RM103.0 billion worth of M&A deals
was dealt a big blow by the massive 2008 - to support growth and avert announced in 2008, a notable decline
energy price hikes in June and July, an economic downturn. from the RM123.6 billion in deal value
when petrol prices surged 41% and recorded in 2007. CIMB Investment
electricity tariffs rose by between 18% Financial Performance Bank continued to capture the largest
and 26%. The resulting escalation The decline in the equity and debt market share, advising on 29 deals
in operating costs, combined capital markets, especially in the (exceeding RM50 million) representing
with slower domestic and global second half of the year, took their toll 35% of the year’s deals by value. We
demand, caused corporate earnings on CIMB Investment Bank’s earnings. topped the domestic M&A league
for Malaysian-listed companies to For the financial year ended 31 table, well ahead of our nearest
contract by an estimated 9% in 2008. December 2008, CIMB Investment competitor, which had an estimated
While earnings downgrades occurred Bank posted a net profit of RM113.4 market share of 17.7%.
across the board, they were, as million, representing a 47.1% fall from
expected, most pronounced in the RM214.5 million earned in the The market saw RM14.5 billion worth
cyclical sectors such as plantations, previous year. Still, I am pleased to of equity and equity-linked issues
construction and property. report that our proven expertise in (excluding private placements and
advisory services stood us in good special issues) in 2008, a 12.7%
On the economic front, Malaysia’s stead in these trying times. Profits drop from the RM16.6 billion issued
real gross domestic product (GDP) from advisory and related fees grew in 2007.
grew by 7.1% in the first half of a commendable 11.7% to RM91.9
2008, fuelled by a combination of million. Our equity-related business Once again, CIMB Investment Bank
domestic demand and robust export however, suffered the brunt of the led the market by advising on RM5.7
growth, which benefited from strong slowdown with income falling to billion worth of equity/equity-linked
commodity prices. However the pace RM26.1 million, a fraction of the issues. New listings or initial public
of growth moderated in the second previous year’s income of RM125.5 offerings (IPOs) fell considerably,
half of the year as softer external million. In 2008, CIMB Investment more than halving in value from the
demand, which was exacerbated by Bank distributed net dividends of previous year. Only 23 IPOs with a
the global credit crunch, weakened RM225 million, representing a gross total issue size of RM1.2 billion made
trade activities. Domestic conditions dividend of RM304.05 per share. it to market in 2008, against the 27
also displayed weakening signs. Real The board also recommended IPOs that were made in 2007 with a
GDP growth eased to 4.7% in the third the distribution of net preference total issue size of RM2.7 billion.
quarter of 2008 and subsequently fell dividends totaling RM70 million,
to 0.1% in the fourth quarter of 2008, representing a gross preference
taking the full year growth to 4.6%. The dividend of RM93.33 per share on
downturn in loan indicators provided one million redeemable preference
further signals of slowing private shares of one sen each.

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Equities greater variety of equity and foreign A full-fledged stock broking centre
I am pleased to report that exchange derivative products and was set up in Melaka (operational
despite weak equity market an exclusive discretionary fixed 19 January 2009), adding to the four
conditions, CIMB Investment Bank income fund. Early in the year, private existing stock broking offices in Kuala
successfully completed some notable banking advised its clients to reduce Lumpur, Penang, Kota Kinabalu and
transactions in 2008. These include their exposure to equities. This not Kuching. This widened network offers
Khazanah Nasional’s USD550 million only helped shield the value of their individual investors better access to
exchangeable sukuk issue, the managed assets from the effects of its share broking and investment-
USD129 million share placement for plunging stock markets, the clients’ related services.
Hong Kong-listed Parkson Retail growing interest in products like fixed
Group, the IPO and listing of Key income, foreign exchange derivatives To encourage trading, the division
Asic on the MESDAQ market and a and discretionary funds helped offset teamed up with the group’s consumer
RM203 million rights issue for Wah the large drop in volumes experienced bank, CIMB Bank in March 2008 and
Seong Corporation. Meanwhile, the by the equities and unit trust business. launched Clicks Trader, CIMB Bank’s
equity capital markets division broke I am especially proud of the fact that online share trading service which
new ground in Islamic finance when this year, private banking fully utilised charges a flat brokerage fee of only
it completed the IPO and listing of the the resources offered by the group’s RM8.88 per order. In January 2009,
MyETF exchange traded fund (ETF) universal banking structure to roll out Clicks Trader investors received
on Bursa Malaysia in January 2008. customised retail banking products further incentive in the form of zero
MyETF is the first Shariah-compliant and services for its clients. The brokerage fees for their transactions
ETF to be listed in Asia and represents response was encouraging to say the over a specified period.
another milestone in Malaysia’s quest least, yielding strong growth in both
to become an international Islamic deposits and loans for the group. Outlook for 2009
finance centre. CIMB Investment In recognition of its efforts in 2008, We believe 2009 will be a year of two
Bank continued to dominate the private banking won two awards different halves, the first half being
equity derivatives market in Malaysia from respected industry publications: much more difficult than the second
in 2008, with the issuance of 41 call Best Private Bank in Malaysia from one. Factors that are expected to drive
warrants, 13 of which were issued on Finance Asia and Best Private Wealth the market lower in the first half include
foreign shares and equity indices. Management House in Malaysia from weak global economies and Malaysia’s
Alpha Southeast Asia. relatively expensive valuations. Based
Private Banking on the six major bear markets that
The private banking division Retail Equities occurred over the last three decades,
weathered the sharp plunge in equity The global financial crisis made 2008 it took an average of 15 to 17 months
values relatively well. Its assets under a volatile year for the retail equities for each bear market to bottom out.
management at the end of 2008 was division. Investors shied away from This suggests that the KLCI may
RM3.9 billion, only 11% down from stock markets worldwide while on reach its trough in the second quarter
the previous year, thanks to a wider home ground, the value of shares of 2009. On the macroeconomic front,
range of products and services and traded on Bursa Malaysia shrank by the global financial crisis will affect
a growing clientele that continually 46%. As a result, the division saw its Malaysia most in the form of falling
poured their assets into the bank turnover and income fall by 60% and exports and industrial output. The
throughout the year. Business growth 62% respectively, over the year. In the economic uncertainty worldwide will
was encouraging, with the number of face of these challenging conditions, increase unemployment and weaken
financial advisors rising 17% while the the division doubled its efforts to reach demand domestically.
client base increased 19% during the out to retail investors in Malaysia by
year. The expanded range of private adding six share trading centres and Our economic research team believes
banking products and services now extending its CIMB Bank branch that against this backdrop, the
boasts overseas equities trading, a broking centres to 28 nationwide. Malaysian economy is set to contract

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slightly in 2009 from a growth of 4.6% ACKNOWLEDGEMENTS

in the year before. The manufacturing
sector will contract in 2009, causing In spite of the challenging environment,
growth in the services sector to CIMB Investment Bank managed to
experience a sharp pullback. The report a healthy profit for the year. In
construction sector will remain in this regard, and on behalf of my fellow
growth mode while growth in the directors, I would like to say that we
agriculture and mining sectors will are privileged to have such dedicated
continue to contract due to lower and skilled management and staff in
prices. these trying times. Their tremendous
efforts kept the bank profitable and
The economy is expected to recover at the top of its game in 2008, and
and show moderate growth in late are a great source of comfort and
2009, assuming the manufacturing assurance as we face the challenges
sector registers a smaller drop of 2009.
and fiscal spending has a stronger
impact. As export income slows and Of course, it would not have been
labour market conditions worsen, possible to build Malaysia’s foremost
private consumption and investment investment bank without the loyal
will also moderate, though the latter support of our shareholders, clients,
may be partly offset by increased partners, colleagues across CIMB
public expenditure. Group and friends. Thanks to all of
you, we are well positioned to pursue
Bank Negara Malaysia has already our vision of becoming the most valued
reduced lending rates twice in 2009 investment bank in Southeast Asia.
- a drastic 75 bps cut in the overnight
policy rate in January and another Finally, I would like to thank my
50 bps cut in February - as targeted fellow directors for their foresight
fiscal action is needed to stimulate and guidance during this volatile
the domestic economy. year. It has been a pleasure to serve
alongside such dynamic and insightful
Hence, some positive macroeconomic minds and I look forward to another
factors are expected to emerge in year of hard work, great progress and
mid-2009, after the market digests much success.
the brunt of first quarter earnings
results in May, which are expected Thank you.
to disappoint. By the middle of the
year, investors will begin focusing
on prospects ahead, namely the
possibility of gradual economic
recovery in early 2010. Further, the
market may get a boost after the
appointment of the country’s new
prime minister in March; a similar
smooth transition of power in 2003 Dato’ Hamzah Bakar
caused Bursa Malaysia to rally, Chairman
climbing over 40%.

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Board of Directors
From left to right:

Dato’ Charon Wardini Mokhzani
Dato’ Sri Nazir Razak
0010
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Board of Directors
From left to right:

Dato’ Hamzah Bakar
Zahardin Omardin
Nicholas R H Bloy

011
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Board of Directors’ Profiles
DATO’ HAMZAH BAKAR
Dato’ Hamzah Bakar, a Malaysian, aged 65, was appointed

an Independent Non-Executive Director of the Bank on 26
September 2000 and elected its Chairman on 28 June
2006. He is Chairman of the Board Risk Committee and a
member of the Audit Committee and the Nomination and
Remuneration Committee. He also sits on the Board of
Bumiputra-Commerce Holdings Berhad (BCHB) and CIMB
Group.
Presently, he is Chairman of SapuraCrest Petroleum Berhad

and a Director of Scomi Group Berhad. He served for 20
years in various senior management and Board positions
in Petroliam Nasional Berhad (Petronas), including Senior Vice President for
Refining and Marketing, Senior Vice President for Corporate Planning and
Development and Main Board Director. Prior to Petronas, he was a Director of
the Economic Planning Unit in the Prime Minister’s Department.
He holds a Bachelor of Science (Hons) degree in Economics from the Queen’s

University of Belfast, Northern Ireland and a Master of Arts degree in Public
Policy and Administration, with Development Economics, from the University of
Wisconsin, United States of America.
He does not have any family relationship with other directors and/or major
shareholders of the Company nor does he have any conflict of interest with the
Bank. He has not been convicted of any offence within the past ten years.
Dato’ Hamzah attended 13 of the 14 Board meetings held in 2008.

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DATO’ SRI NAZIR RAZAK
Dato’ Sri Nazir Razak, a Malaysian, aged 42, was appointed

a Non-Independent Executive Director on 15 November
1996 and re-designated to Non-Independent Non-Executive
Director on 1 July 2006. Dato’ Sri Nazir was elected Deputy
Chairman on 20 March 2007. He is presently the Group
Managing Director/Chief Executive Officer of BCHB and
CIMB Group and is also a Director and Deputy Chairman of
CIMB Bank and CIMB Islamic.
Dato’ Sri Nazir graduated from the University of Bristol

with a Bachelor of Science (Hons) degree and obtained
a Master of Philosophy from the University of Cambridge.
He joined Commerce International Merchant Bankers Berhad’s (now known as
CIMB Investment Bank) corporate advisory department in 1989 and managed
various fund raising, privatisation, listing and corporate restructuring exercises.
In 1993 he transferred to the bank’s stockbroking arm where he rose to the
position of Executive Director. He moved back to CIMB Investment Bank as
Deputy Chief Executive on 1 June 1996 and became Chief Executive on 1 June
1999. He assumed the position of Group Managing Director/Chief Executive Officer
of BCHB Group on 7 November 2006.
Dato’ Sri Nazir is a member of the National Economic Council, the Employees
Provident Fund’s Investment Panel, the Securities Commission’s Capital Market
Advisory Council, Bursa Malaysia’s Securities Market Consultative Panel,
the MasterCard Asia/Pacific Regional Advisory Board and the Asia Business
Council. He holds directorships in Multimedia Development Corporation and
Malaysian Electronic Payment System (1997) Sdn Bhd. He is an Executive
Committee member of the Malaysia International Islamic Financial Centre. He is
also a trustee of both the Rahah Foundation and the Pride Foundation.
Dato’ Sri Nazir was the winner of Malaysia’s CEO of the Year Award 2004
organised by Business Times and American Express Global Corporate Services.
In 2005, he was named one of the “25 Stars of Asia” by BusinessWeek magazine
and one of the World Economic Forum’s Young Global Leaders. In 2006 and
2007, Asiamoney listed him among the top 100 most powerful and influential
people in business and finance in the Asia-Pacific region. In 2006, Dato’ Sri
Nazir was named one of Asia’s 50 most influential figures of the last decade
(1996-2006) by Finance Asia magazine. In 2008, Institutional Investor ranked
Dato’ Sri Nazir second in its Asia’s Best CEO (Bank) survey.
Company. He has not been convicted of any offence within the past ten years.
Dato’ Sri Nazir attended 13 of the 14 Board meetings held in 2008.

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DATO’ CHARON WARDINI MOKHZANI
Dato’ Charon Wardini Mokhzani, a Malaysian, aged 45,

became an Executive Director on 2 May 2006. He is
also the Deputy Chief Executive Officer, Corporate and
Investment Banking, CIMB Group, having been the Bank’s
Deputy Chief Executive since 1 August 2004. He heads
the Corporate and Investment Banking Division and co-
heads the Corporate Client Solutions Division of the Group.
He is the Chairman of CIMB-Principal Asset Management
Berhad and CIMB-Mapletree Management Sdn Bhd and a
Director of CIMB-GK Pte Ltd and CIMB Bank (L) Limited.
He is a council member of the Malaysia Investment Banking

Association and the Institute of Bankers Malaysia and a director of Akademi
ibbm Sdn Bhd. He is also a director of Cagamas Holdings Berhad and a
member of the Board of the Yayasan Tuanku Syed Putra Perlis.
Prior to joining the Bank, he was Managing Partner of Zaid Ibrahim & Co.,
Malaysia’s largest law firm, as well as an Independent Director of CIMB Berhad
when it was first listed until July 2003. Before that, he worked in corporate
finance at Rashid Hussain Securities Sdn Bhd and as an advocate and solicitor
with Shearn Delamore & Co. International legal publications have recognised him
as having been one of the leading corporate and finance lawyers in Malaysia.
Dato’ Charon was educated at the Malay College Kuala Kangsar and Bloxham
School, England and read Philosophy, Politics and Economics at Balliol College,
University of Oxford (BA Hons) and Law at the School of Oriental and African
Studies, University of London (LLB Hons). He is a barrister of the Middle Temple
and an advocate and solicitor of the High Court of Malaya.
shareholders of the Bank nor does he have any conflict of interest with the
Dato’ Charon attended all 14 the Board Meetings held in 2008.

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DATO’ ZAINAL ABIDIN PUTIH
Dato’ Zainal Abidin Putih, a Malaysian, aged 63, was

appointed as an Independent Non-Executive Director of
the Bank on 30 June 2004. He is the Chairman of the
Audit Committee and a member of the Nomination and
Remuneration Committee and the Board Risk Committee.
Dato’ Zainal also sits on the Boards of BCHB, CIMB Group,

and CIMB Bank.
Dato’ Zainal has extensive experience in audit, management

consulting and taxation, having been involved as a practising
accountant throughout his career. He was the Chairman of
Pengurusan Danaharta Nasional Berhad up to 31 December 2005.
He is currently the Chairman of the Malaysian Accounting Standards Board and

sits on the Boards of Esso Malaysia Berhad and Tenaga Nasional Berhad, both
public listed companies. Dato’ Zainal is also the Chairman of Mobile Money
International Sdn Bhd and holds directorships in a number of private companies.
He is also a Trustee of the National Heart Institute Foundation.
He was an Adviser with Ernst & Young Malaysia until his retirement on
31 December 2004 and was formerly the Country Managing Partner of Hanafiah
Raslan and Mohamad which merged with Arthur Andersen in 1990. He is also
a Past President of the Malaysian Institute of Certified Public Accountants
and previously served as a member of the Malaysian Communication and
Multimedia Commission. He was previously a member of the Investment Panel
of the Employees Provident Fund. He qualified as a Chartered Accountant from
the Institute of Chartered Accountants in England and Wales and is a member
of the Malaysian Institute of Accountants and the Malaysian Institute of Certified
Public Accountants.
Company. He has not been convicted of any offence within the past ten years.
Dato’ Zainal attended all the 14 Board meetings held in 2008.

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ZAHARDIN OMARDIN
Zahardin Omardin, a Malaysian, aged 64, was appointed

an Independent Non-Executive Director of the Bank on 5
May 2004. He also sits on the Board of CIMB (L) Limited.
He is presently a Partner of Messrs. Chew Kar Meng,

Zahardin & Partners and has previously served on the
Boards of various companies including Rakyat First
Merchant Bankers Berhad. He was formerly the Head of
Legal and Secretarial Department/Company Secretary
of British American Tobacco (M) Berhad. He qualified as
a Barrister-at-Law from the Inns of Court School of Law,
United Kingdom in 1973. Upon graduation, he worked
at The Royal Courts of Justice and the Tax Office in London, after which he
returned to Malaysia to practise law.
He attended 13 of the 14 Board Meetings held in 2008.

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Nicholas R H Bloy
Nicholas R H Bloy, a British national, aged 46, was

appointed a Non-Independent Non-Executive Director of
the Bank on 1 February 2001.
He is a Co-Founder and Managing Partner of Navis Capital

Partner Limited, a firm managing private equity funds in the
Asian region. He was previously an International Director/
Partner with The Boston Consulting Group International
Incorporated in Asia, prior to which he worked with Bain &
Co in London. He holds a Bachelor of Arts (Hons) degree
from the University College, London and a Masters in
Business Administration degree from INSEAD.
He attended 9 of the 14 Board Meetings held in 2008.

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Statement on Corporate Governance
The Bank has always recognised the importance of sound corporate governance standards and practices as a safeguard
in balancing the Bank’s risk-taking activities and business prudence. The Board of Directors (Board) is fully supportive of
the Bank’s initiatives and has given full commitment to ensure the adoption of high standards of governance in all aspects
of the Bank’s business.
The governance framework adopted by the Bank is based on the principles and best practices recommended by the
Malaysian Code on Corporate Governance (Revised 2007) (the Code). As a financial services provider, the Bank is also
guided by the Bank Negara Malaysia Guidelines on Corporate Governance for Licensed Institutions (Revised BNM/GP1)
as well as international best practices. The Bank’s Corporate Governance practices are also entrenched in its brand
values: Value Creation, Enabling People and Integrity.
This Statement on Corporate Governance serves to outline how the Bank has applied the principles and best practices
set out in the Code and the Revised BNM/GP1.
BOARD OF DIRECTORS
The Board and Board Balance
The structure and composition of the Board comply with the requirements of the Code, Revised BNM/GP1 and in particular
the “Green Book on Enhancing Board Effectiveness” (Green Book) as part of the Government Linked Companies (GLC)
Transformation Programme initiated by the Putrajaya Committee on GLC High Performance framework.
The Board comprises 6 members, with 1 Executive Director, 2 Non-Independent Non-Executive Directors and 3 Independent
Non-Executive Directors. The Independent Non-Executive Directors constitute 50% of the Board composition, ensuring
the required check and balance for making the Board independent, able and competent in discharging its duties and
responsibilities.
The Board is led by the Chairman, Dato’ Hamzah Bakar, who is an Independent Non-Executive Director. Dato’ Hamzah is
a distinguished figure in the corporate sector, particularly in the oil and gas industry, having served for 20 years in various
senior management and board positions in Petroliam Nasional Berhad (Petronas). Prior to joining Petronas, he served in
the Economic Planning Unit (EPU) of the Prime Minister’s Department for 12 years.
Dato’ Sri Nazir Razak, the Deputy Chairman, is also the Group Managing Director/Chief Executive Officer (Group MD/
CEO) of the Bumiputra-Commerce Holdings Berhad Group (BCHB/the Group). He is a dynamic and prominent banker
with numerous awards and accolades conferred upon him for his vast contributions towards the Group as well as the
financial sector in Malaysia.
Dato’ Charon Wardini Mokhzani, the Executive Director (ED) of the Bank, has been with the Group since August 2004. He
assumed the position of the ED on 2 May 2006 and is recognised as one of the leading corporate and finance lawyers in
Malaysia. He leads and oversees the development and implementation of strategies and policies approved by the Board
to build the Corporate and Investment banking business, both domestically and internationally. As ED, he keeps the
Board fully informed and updated of all important aspects of the Bank’s operations.
The Directors of the Bank have met the criteria for appointment of Directors as set out by the Revised BNM/GP1.
All Independent Directors act independently from Management, of mind and in appearance, and do not participate in
any business transaction that may impair their independent judgment and decision-making. Both the Board size and
composition also meet the recommendations of the GLC Green Book and serves as a foundation for an effective and high
performing Board to lead and control the Bank.
Brief backgrounds of each Director are presented on pages 012 to 017 of the Annual Report.

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Directors’ Code of Ethics
The Code of Ethics as set out in the BNM Guidelines on the Code of Conduct for Directors, Officers and Employees in
the Banking Industry (BNM/GP7), the Companies Act 1965 and the Code of Ethics for Company Directors issued by the
Companies Commission of Malaysia are constantly adhered to by the Directors of the Bank. Amongst others, a Director
must act with utmost good faith towards the company in any transaction and act honestly and responsibly in the exercise
of his powers in discharging his duties.
Duties and Responsibilities of the Board
The Board is the ultimate decision-making body of the Bank, except with respect to matters reserved for shareholders.
It acts as an advisor to Management and defines and enforces standards of accountability, all with a view to enabling
Management to execute its responsibilities effectively.
The Board’s principal responsibilities include:
• To provide clear objectives and policies within which senior executives of the Bank are to operate.
• To ensure that there are adequate controls and systems in place to facilitate the implementation of the Bank’s
policies.
• To monitor Management’s success in implementing the approved strategies, plans and budget.
• To understand the principal risks of all aspects of the business in which the Bank is engaged in and ensure that
systems are in place to effectively monitor and manage these risks with a view to the long-term viability and success
of the Bank.
• To monitor and assess development which may affect the Bank’s strategic plans.
• To review the adequacy and the integrity of the Bank’s internal control systems and management information systems,
including systems for compliance with applicable laws, regulations, rules, directives and guidelines.
• To monitor market and liquidity risks, the quality of the Bank’s exposure and changes in the Bank’s resources.
• To avoid conflicts of interest and ensure disclosure of possible conflicts of interest.
• To uphold and observe banking and relevant laws, rulings and regulations.
Matters that are reserved for the Board include, amongst others, the following:
• To approve strategic/business plans and annual budget.

• To approve new investments, divestments, mergers and acquisitions, including the establishment of subsidiaries,
joint ventures or strategic alliances both locally and abroad.
• To approve the acquisition and disposal of assets of the Bank.
• To approve annual financial statements and quarterly results.
• To approve appointment of new Directors, CEO and other senior management positions based on recommendations
of the Nomination and Remuneration Committee of BCHB.
• To approve the Bank’s credit transactions and exposure with connected parties in line with BNM/GP6 Guidelines on
Credit Transactions and Exposures with Connected Parties.
The duties and responsibilities of the Chairman and the ED are distinct and separate. The Chairman leads and oversees
the Board and presides at all meetings of the Board. The Chairman facilitates the flow of information between Management
and the Board, and in consultation with Management, sets the agenda for each Board meeting. The ED leads the Bank’s
management and is accountable to the Board and ultimately to shareholders. The ED is primarily responsible for the day-
to-day operations of the Bank’s business, strategic planning, budgeting, financial reporting, compliance with regulations
and risk management.

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Appointments to the Boards
The appointment and re-appointment of Directors in the Bank are under the purview of the Nomimation and Remuneration
Committee of BCHB, which is responsible for assessing and recommending the nomination of Directors to the respective
Boards of the Group. This process is undertaken through a comprehensive evaluation of the skills, knowledge and
experience of the Directors before a recommendation for the nomination to the respective Boards is made. The proposed
appointment and re-appointment of Directors are submitted to BNM for final approval.
Re-appointment and Re-election of Directors
In accordance with the Bank’s Articles of Association, one-third of the Directors shall retire from office at each Annual
General Meeting (AGM) and are eligible to offer themselves for re-election. The proposal for the re-appointment and
re-election are recommended to the Nomination and Remuneration Committee for approval prior to the shareholders’
approval at the AGM. New Directors appointed by the Board in each financial year are subject to re-election by the
shareholders at the next AGM following their appointments.
Number of Directorships
In accordance with the Revised BNM/GP1, Directors do not hold more than 10 directorships in listed companies and not
more than 15 in non-listed companies. The Directors of the Bank further comply with the GLC Green Book which caps
directorships in listed companies to 5 and non-listed companies to 10. The ED also complies with the Revised BNM/
GP1 requirements, which limit his directorships to not more than 5 in the Group. The list of directorships of Directors is
submitted and confirmed by each Director and is presented to the Board on a quarterly basis.
Meetings and Supply of Information to the Board
The Board is kept abreast with various information on the business of the Bank through monthly Board meetings as well
as the dissemination of pertinent reports. Board Meetings are conducted based on a structured agenda. The Board meets
to discuss and determine the strategic business direction and is apprised of the financial performance of the Bank. In
addition, various reports from Board Committees are presented for the Board’s information by the respective Committees’
Chairmen. At the end of every quarter, the Board reviews and approves the Bank’s quarterly results, reviews Directors’
training programmes and Directors’ disclosures of directorships and shareholdings. Urgent or important business issues
that affect the Bank are deliberated and approved as and when required via Special Meetings. All deliberations at Board
meetings, including dissenting views, are duly minuted as true records of the proceedings. The draft minutes are circulated
to the Directors for their review and comments prior to finalisation. Once confirmed, the minutes are signed by the
Chairman of the meeting in accordance with the provision of Section 156 of the Companies Act, 1965.
In line with the GLC Green Book, the Board meeting papers are targeted for dissemination to the Directors at least 7 days
prior to Board meetings to facilitate the Directors in discharging their duties effectively.
At the Board meetings, the ED provides comprehensive explanation of significant issues relating to the Bank’s business
together with updates on the Bank’s financial performance. The Chairman of the Audit Committee provides a summary of
the audit reports deliberated at Audit Committee meetings for the Board’s notation. Significant audit findings by the Group
Internal Audit Division are also escalated to the Board. In addition, the Head of Group Compliance reports the status of
legal and regulatory compliance for all the business and support functions in the Bank, while the Head of Group Risk
Management briefs the Board on the risk positions of the various activities undertaken by the Bank. Any Director who has
interest in any proposal or transaction recommended by Management is duty bound to declare his interest and abstains
from deliberation and decision of the proposal. This process is duly recorded in the minutes of the proceedings.

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Information on the Bank is fully accessible by all Directors through the management team and the Company Secretary.
Members of senior management are occasionally invited to attend Board meetings to present proposals relating to their
respective businesses and operations, while the Company Secretary serves and advises the Board on matters relating
to the affairs of the Board, including changes in statutory and regulatory requirements, compliance with requirements on
training, quorum and attendance at Board meetings.
There were 14 Board meetings held in 2008 and Directors’ attendance at meetings held in 2008 are as follows:
No. of Meetings
Directors Held Attended
Dato’ Hamzah Bakar 14 13

Chairman/Independent Non-Executive Director
Dato’ Sri Nazir Razak 14 13

Deputy Chairman/Non-Independent Non-Executive Director

Dato’ Zainal Abidin Putih 14 14

Dato’ Charon Wardini Mokhzani 14 14
Executive Director

Nicholas R H Bloy 14 9
Non-Independent Non-Executive Director

Zahardin Omardin 14 13
Board meetings are usually held at the Board Room, 10th Floor, Bangunan CIMB, Jalan Semantan, Damansara Heights,
50490 Kuala Lumpur.
Directors’ Training
Directors’ training is an ongoing process to enhance Directors’ knowledge on the latest developments and key challenges
in the financial sector, both in Malaysia and globally. Directors are encouraged to attend training programmes as well as
conferences and seminars which are organised internally and by external parties. Whenever required, specific training
programmes are arranged for Directors to facilitate them in discharging their duties.
New Directors are introduced to the Bank’s and the Group’s businesses via an induction programme organised by
Management. Heads of Divisions brief new Directors on their respective areas of responsibility to equip the Directors with
the background knowledge of the Bank and the Group as well as provide them a platform to establish initial interaction
with Management. On a yearly basis, the Directors are also invited to attend the Group’s Annual Management Dialogue
where the senior management brainstorm and discuss the current trends and future direction of the Group.

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Some of the programmes attended by the Directors in 2008 which were organised by the Group as well as other relevant
bodies were as follows:
• BNM Financial Institutions Directors’ Education Programme

• Corporate Governance: Roles and Responsibilities of Directors
• Update on Corporate Governance Regulatory Framework and Current Issues: Effective Governance - the Way Forward
• Institut Bank-Bank Malaysia (IBBM) Directors’ Programme: Economic Capital & Performance Management under
Basel II
• IBBM Directors’ Programme: Derivatives - Effective or Costly?
• IBBM Directors’ Programme: Compliance Management in a Banking Environment
• Financial Reporting Framework Strategic Planning Workshop
• Invest Malaysia 2008 Conference
• International Accounting Standards Board Regional Meeting & Public Seminar - International Financial Reporting
Standard: A Global and Regional Perspective
• The Futurist Forum 2008: Mindset - A Framework to Anticipate The Future
• Khazanah Megatrends Forum: Shifting Sands - Threats & Opportunities
• Khazanah Global Lectures: Building Tomorrow’s Minds Today
• Roundtable Conference on the Islamic Bond Market in Thailand
• World Standard Setters’ Conference
• Workshop on Shariah and Legal Issues in Islamic Finance
• 21st Asia Venture Capital Journal (AVCJ) Private Equity & Venture Forum, Hong Kong
• The Second Asian Mergers & Acquisition (M&A) Conference 2009: How has the Asian M&A Landscape Changed
Since the Credit Crunch
Board Committees
In discharging its duties, the Board delegates specific responsibilities to various Board Committees. These Committees
operate within clearly defined terms of reference. However, as the Bank’s business is organised functionally within
the Group’s Universal Banking framework, the Group has adopted a combined oversight structure for several Board
Committees in the Group. Apart from maximising Group synergy, this structure also ensures effectiveness in the oversight
function at Group level. Reports of the respective Committees’ meetings are presented to the Board for information and
where required, for further deliberation.
The Committees reporting to the Board are as follows:
• Audit Committee
• Board Risk Committee
• Nomination and Remuneration Committee
• Compensation Review Committee
• Shariah Committee
Audit Committee
Pursuant to BNM approval, the Bank leverages on the CIMB Group Audit Committee which resides at CIMB Bank. The
CIMB Group Audit Committee provides an independent oversight function over the Bank’s financial reporting and internal
control system.

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All Audit Committee members are Independent Non-Executive Directors of the Group and are financially literate, in line
with the requirements of the Code and BNM/GP1. Dato’ Zainal Abidin Putih, the Chairman of the Audit Committee, has
been a practicing accountant throughout his career and has extensive experience in audit, management consulting and
taxation. The performance of the Audit Committee is reviewed annually by the Nomination and Remuneration Committee
to determine that the Audit Committee has discharged its duties in accordance with its terms of reference.
The Audit Committee met 23 times in 2008 and the attendance of the members are as follows:
No. of Meetings
Members Held Attended
Dato’ Zainal Abidin Putih - Chairman 23 23

Independent Non-Executive Director of CIMB Bank and the Bank

Independent Non-Executive Director of the Bank

Datuk Dr Syed Muhamad Syed Abdul Kadir 23 23
Independent Non-Executive Director of CIMB Bank and CIMB Islamic Bank

Tan Sri G K Rama Iyer 23 23
Independent Non-Executive Director of CIMB Bank

The Audit Committee Report and its activities for the financial year ended 31 December 2008 are set out under pages
033 to 038 of the Annual Report.
Board Risk Committee
The Board Risk Committee reports to the Board and consists solely of the Non-Executive Directors of the Bank.
The primary responsibility of the Board Risk Committee is to ensure that the integrated risk management functions within the
Bank are effectively discharged. A total of 11 meetings were held in 2008 and the attendance of members are as follows:
No. of Meetings
Dato’ Hamzah Bakar - Chairman 11 10


Deputy Chairman/Non-Independent Non-Executive Director of the Bank

Zahardin Omardin 11 11
Non-Independent Non-Executive Director of the Bank

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The terms of reference of the Board Risk Committee are as follows:
• Reviewing and recommending risk management strategies, policies and risk tolerance for Board’s approval.
• Reviewing and assessing adequacy of risk management policies and framework in identifying, measuring, monitoring
and controlling risk and the extent to which these are operating effectively.
• Ensuring infrastructure, resources and systems are in place for risk management.
• Reviewing management’s periodic reports on risk exposure, risk portfolio composition and risk management
activities.
• Approving the appointment of members to the Group Risk, Market Risk, Credit Risk, Liquidity Risk and Operational
Risk Committees and determining their terms of references.
• Approving global Capital-at-Risk limits and the authorities of Group Risk, Market Risk, Credit Risk, Liquidity Risk and
Operational Risk Committees’ policies to control risk.
• Reviewing and approving proposals recommended by the Risk Committees including proposals on new products
and service offerings of the Group.
• Providing strategic guidance and reviewing decisions made by the various Risk Committees.
• Appointing external consultants, from time to time, to review and advise the Board Risk Committee on the risk
management matters.
Details of the Bank’s risk management framework are elaborated in pages 046 to 051 of this Annual Report.
Nomination and Remuneration Committee
Pursuant to BNM approval, the Board leverages on the Nomination and Remuneration Committee of BCHB, which is
responsible for ensuring a consistent framework for the appointment of new Directors in the Group and that rewards
and remuneration packages are commensurate with each of their expected responsibilities and contributions. It has
established a formal and transparent procedure for the appointment of Directors, Board Committees, CEO and key senior
management in the Group. A similar procedure has also been applied in developing the remuneration policy for Directors,
CEO and key senior management.
Reports and recommendations of the Nomination and Remuneration Committee are escalated to the Board for approval
or decision.
The Nomination and Remuneration Committee comprises of Non-Executive Directors of BCHB and is chaired by Tan Sri
Dato’ Seri Haidar Mohamed Nor.

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The members of the Nomination and Remuneration Committee and their attendance at meetings held in 2008 are as
follows:
No. of Meetings
Tan Sri Dato’ Seri Haidar Mohamed Nor - Chairman 4 4

Senior Independent Non-Executive Director of BCHB and CIMB Bank

Independent Non-Executive Director of BCHB and the Bank

Independent Non-Executive Director of BCHB, CIMB Bank and the Bank

Independent Non-Executive Director of BCHB, CIMB Bank and CIMB Islamic Bank
Dato’ Robert Cheim Dau Meng 4 3

Non-Independent Non-Executive Director of BCHB
The terms of reference of the Nomination and Remuneration Committee with regard to the nomination role are as
follows:
• Establishing clear, formal and transparent procedures for the re-election and appointment of the Board.
• Establishing minimum requirements for the Board, namely required mix of skills, experience, qualification and other core
competencies required of each director. The Nomination and Remuneration Committee is also responsible for establishing
the minimum requirements for the CEO. The requirements and criteria should be approved by the full Board.
• Recommending and assessing the nominees for directorship, Board committee members as well as nominees for the
CEO and ensuring compliance with section 56 of the Banking and Financial Institutions Act 1989 and section 23 of
the Islamic Banking Act 1983 (for the banking subsidiaries) and the corresponding sections of the Insurance Act 1996
and the Takaful Act 1984 (for insurance and takaful subsidiaries). This includes assessing directors for reappointment,
before an application for approval is submitted to BNM. The actual decision as to who shall be nominated should be
the responsibility of the Board. Subsequent to the assessment, in the event where there are changes concerning a
director that would affect his contribution and attendance to the Board, the Chairman shall request for a follow-up
assessment on the director, as and when it is required.
• Overseeing the overall composition of the Boards and the Board committees in terms of the appropriate size and
skills, and the balance between executive directors, non-executive directors and independent directors through
annual reviews.
• Recommending to the Board for the removal of a director/CEO from the Board/management if the director/CEO is
ineffective, errant and negligent in discharging his responsibilities.
• Establishing a mechanism for the formal assessment of the effectiveness of the Board as a whole and the contribution
of each director to the effectiveness of the Board, the contribution of the Board’s various committees and the
performance of the CEO and other key senior management officers. Annual assessment should be conducted based
on an objective performance criterion. Such performance criteria should be approved by the full Board.
• Ensuring that all directors receive an appropriate continuous training programme in order to keep abreast with the
latest development in the industry.
• Recommending to the Board the removal of key senior management officers if they are ineffective, errant and negligent
in discharging their responsibilities.

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• Overseeing the appointment, management succession planning and performance evaluation of key senior management
officers.
• Whenever key expatriates at financial institutions are employed, to ensure there is in place a process for the transfer
of expertise and skills from the expatriates to the staff of the financial institutions.
• Assessing on an annual basis that the directors and key senior management officers are not disqualified under
section 56 of the Banking and Financial Institutions Act 1989 and/or section 23 of the Islamic Banking Act 1983 and
the corresponding sections of the Insurance Act 1996 and the Takaful Act 1984.
• The nomination role of the Nomination and Remuneration Committee should not be delegated with decision-making
powers but should report to the full Board for decision.
The terms of reference of the Nomination and Remuneration Committee with regard to the remuneration role are as
follows:
• Recommending a framework of remuneration for directors, CEO and key senior management officers of the BCHB
Group for the full Board’s approval. The remuneration framework should support the BCHB Group culture, objectives
and strategy and should reflect the responsibility and commitment, which goes with board membership and
responsibilities of the CEO and senior management officers. The framework should cover all aspects of remuneration
including director’s fees, salaries, allowances, bonuses, options and benefits-in-kind.
• Recommending specific remuneration packages for the key senior management officers as defined under ‘Meeting’.
The remuneration package should be structured such that it is competitive and consistent with the BCHB Group’s
culture, objectives and strategy. Salary scales drawn up should be within the scope of the general business policy
and not be dependent on short-term performance to avoid incentives for excessive risk taking. As for non-executive
directors and independent directors, the level of remuneration should be linked to their level of responsibilities
undertaken and contribution to the effective functioning of the Board. In addition, the remuneration of each Board
member may differ based on their level of expertise, knowledge and experience.
• To recommend to the Board, performance-related assessment programmes to assess the effectiveness of the Boards,
the Committees of the Board and individual directors on an annual basis.
• To recommend to the Board the appointment, and remuneration, of Shariah Committee members of the Islamic
subsidiaries, and external advisors as advised and deemed necessary to fulfill its obligation and responsibilities.
Annual/periodic reviews of the remuneration shall be conducted by the Nomination and Remuneration Committee if
deemed necessary.
Following the regional expansion of the Group, the Nomination and Remuneration Committee had conducted a review of
its terms of reference and recommended that its scope be expanded to include oversight over the nomination of Directors
and CEOs of the Group’s entities in other regional jurisdictions.
The Nomination and Remuneration Committee also facilitates the Board in reviewing, on an annual basis, the effectiveness
of the Board and Board Committees. The Group has adopted a process to evaluate the effectiveness of the Board and the
Board Committees by conducting an annual Board Effectiveness Assessment (BEA) exercise. In line with the expanded
scope of the Nomination and Remuneration Committee, the BEA was further enhanced to include the following 3 new
sections:
• Shareholders
• Accountability and Audit
• Disclosure by the Company
The inclusion of these new sections provides a more comprehensive feedback by the Board and Board Committees to
better enable the Nomination and Remuneration Committee in the evaluation of Directors’ performance. At the end of the
BEA exercise, the Directors’ responses are collated and a summary of the findings is submitted to the Nomination and

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Remunaration Committee for deliberation. A recommendation to the Board is made on whether a follow-up assessment is
required, where necessary. The deliberations of the Nomination and Remunaration Committee on the findings of the BEA
are duly minuted at the meetings of the Nomination and Remunaration Committee and the Boards respectively.
The enhanced BEA now also includes a process for the Nomination and Remunaration Committee to undertake individual
assessment of Directors of the Bank who are eligible for re-appointment, prior to recommendations being made to BNM.
This individual assessment process involves a set of questionnaires that measure the Directors’ performance in terms of
knowledge, contribution of ideas, competency and integrity.
Separate assessments are conducted by the Nomination and Remunaration Committee on the ED of the Bank based on
his pre-determined Key Performance Indicators (KPIs).
Compensation Review Committee
The Compensation Review Committee reports to the Board and assists the Board in ensuring that there is a common
oversight of the employees’ remuneration and compensation paradigm. This covers provision and allocation of staff
bonuses as well as salary increments and adjustments.
The members of the Compensation Review Committee and their attendance at meetings held in 2008 are as follows:
No. of Meetings
Dato’ Hamzah Bakar - Chairman 2 2



Non-Independent Non-Executive Director of the Bank

Dato’ Robert Cheim Dau Meng 2 2
Non-Independent Non-Executive Director of BCHB

Deputy Chairman/Non-Independent Non-Executive Director of the Bank

The terms of reference of the Compensation Review Committee are as follows:
• To oversee the remuneration packages for all employees in the BCHB Group (except Group MD/CEO and Executive
Directors).
• To ensure that the remuneration packages are consistent with the Group’s objectives and strategies.
• To ensure that the compensation framework is continually reviewed and benchmarked to best industry practice.
• To recommend related staff remuneration packages to the respective Boards in the BCHB Group for approval.

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Shariah Committee
Pursuant to BNM approval, the Islamic Banking business of the Bank leverages on the advise of the Shariah Committee
of CIMB Islamic Bank.
In compliance with BNM’s Guidelines on the Governance of Shariah Committee for Islamic Financial Institutions (BNM/
GPSi), the Shariah Committee ensures that the operations of the Islamic banking business are Shariah-compliant. In
advising on such matters, the Shariah Committee ensures that the rulings on Islamic products and services comply
with the judgements or the ijtihad of the relevant Shariah authorities, including the Shariah Advisory Council of BNM and
Securities Commission in Malaysia and the Fatwa issued by Dewan Syariah Nasional - Majelis Ulama Indonesia and the
Brunei State Mufti’s Office, wherever applicable. The Shariah Committee also takes into consideration Shariah Courts’
judgements and rulings published by the National and State Fatwa Councils.
The members of the Shariah Committee of CIMB Islamic Bank and their attendance at meetings held in 2008 are as follows:
No. of Meetings
Members Nationality Held Attended
Sheikh Professor Dr Mohammad Hashim Kamali - Chairman Canadian 5 3

Independent Non-Executive Director of CIMB Islamic Bank (Malaysian Permanent
Resident)

Sheikh Nedham Yaqoobi Bahraini 5 4
Sheikh Dr Haji Mohd Nai’m Haji Mokhtar Malaysian 5 4
Sheikh Associate Professor Dr Shafaai Musa Malaysian 5 5

Sheikh Dr Haji Zainudin Jaffar Malaysian 5 5

Sheikh Dr Yousef Abdullah Al Shubaily Saudi Arabian 1* 1
(Appointed on 28 October 2008)
Note:
* Reflects the number of meetings held during the time the member held office.
Management Committees
The following Management committees have been established to assist senior management of the Group in managing
the various business and support activities in the Group, of which the Bank is part of:
• Group Management Committee

• Group Executive Committee
• Group Human Resource Committee
• Consumer Banking Committee
• Balance Sheet Management Committee
• Commitments Committee
• Cost Management Committee
• Crisis Management Committee
• Disciplinary Committee

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• Marketing and Communications Committee

• IT Strategy Committee
• Occupational Safety and Health Committee
Regional Committees
• Regional Integration Committee

• Regional Corporate Banking Committee
• Regional Consumer Banking Committee
• Regional Customer Care Committee
• Regional Legal Committee
• Regional Marketing and Communications Committee
• Regional Private Banking Committee
• Regional Special Asset Management Committee
DIRECTORS’ REMUNERATION
The level and make-up of remuneration
The level of remuneration of the Directors is sufficient to attract and retain Directors in the Bank. The Nomination and
Remuneration Committee has established the remuneration framework of Directors and key senior management of the
Bank. This includes fees and meeting allowances for Non-Executive Directors which are based on industry standards
and set by reference to the responsibilities taken on by them. In order that it remains competitive and consistent with
the culture, objective and strategy of the Group, the compensation framework of Non-Executive Directors are reviewed
periodically to ensure that they remain market-competitive. The compensation package of the ED is based on KPIs that
are linked to the Bank’s and the individual’s performance.
External advisors or consultants may be engaged by the Nomination and Remuneration Committee to advise on specific
areas where necessary. Remuneration of the Directors in office during the financial year is also disclosed in the Group’s
Financial Statements.
The aggregate remuneration paid to the Directors of the Bank in 2008 was as follows:
Salary
and/or other Benefits-
Fees remuneration in-kind Total
RM’000 RM’000 RM’000 RM’000
Executive Directors
Dato’ Charon Wardini Mokhzani - 2,269 47 2,316

Non-Executive Directors
Dato’ Hamzah Bakar 36 195 24 255
Dato’ Sri Nazir Razak - 5,028 97 5,125
Dato’ Zainal Abidin Putih 24 67 - 91
Nicholas R H Bloy 24 44 - 68
Zahardin Omardin 24 63 - 87
108 5,397 121 5,626
Total 108 7,666 168 7,942

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SHAREHOLDERS
Major developments within the Group are consistently communicated to shareholders and investors in a timely and
accurate manner.
One of the important channels of communication to shareholders and investors is the Annual Report which contains
comprehensive information of the Group. The contents of the Annual Report are consistently enhanced to reflect
transparency and accountability in line with best corporate governance practices.
The AGM provides a forum for the Board and Senior Management to communicate with shareholders of the Group.
At the AGM, the Group MD/CEO of BCHB conducts a brief presentation on the Group’s financial performance and
prospects; and shareholders are given the opportunity to seek clarification on the Group’s performance and the Directors’
stewardship of the Group and the Bank.
Another form of communication for shareholders is through the Bank’s website, www.ib.cimb.com. The Bank’s website
provides up-to-date information on financial results, and guides investors to direct queries on the Bank to the Investor
Relations team. Information posted on the Bank’s website reinforce the Bank’s commitment to provide a true and fair view
of the Bank’s operations.
The primary contacts for Investor Relations in the Bank and in the Group are:
Dato’ Sri Nazir Razak, Group MD/CEO, BCHB

Tel : 603 - 2084 8602
Email : nazir.razak@cimb.com
Dato’ Charon Wardini Mokhzani, ED

Tel : 603 - 2093 8601
Email : charon.mokhzani@cimb.com
Lee Kok Kwan, Deputy CEO, Group Treasury and Investments

Tel : 603 - 2084 8828
Email : kkwan.lee@cimb.com
Steven Tan Chek Chye, Investor Relations

Tel : 603 - 2084 9696
Email : steven.tan@cimb.com
ACCOUNTABILITY AND AUDIT
Financial Reporting
As required by the Companies Act, 1965 and the Banking and Financial Institutions Act, 1989, Financial Statements
for each financial year are prepared in accordance with the Malaysian Accounting Standards Board’s (MASB) Approved
Accounting Standards and the BNM Guidelines. The Financial Statements give a true and fair view of the state of affairs
of the Bank as at 31 December 2008.

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Appropriate accounting policies have been consistently applied in presenting the Financial Statements, supported
by prudent judgement and estimates prepared on going concern basis. The Directors ensure that financial reporting
presents a balanced and comprehensible assessment of the Bank’s financial position and prospects in all its reports
to the shareholders, investment community and regulatory authorities. The Directors’ Statement of Responsibility for
preparing the Financial Statements is prepared together with the Bank’s audited Financial Statements.
The Audit Committee assists the Board in overseeing the financial reporting process. The Bank’s quarterly, half-yearly
and annual Financial Statements are reviewed by the Audit Committee and approved by the Board prior to submission to
BNM within the stipulated time frame.
Statement of Directors’ Responsibility
In preparing the Financial Statements, the Directors have ensured that accounting standards approved by the MASB
in Malaysia and the provisions of the Companies Act, 1965 have been complied with and reasonable and prudent
judgements and estimates have been made. The Directors have also overall responsibilities for taking such steps as are
reasonably open to them to safeguard the assets of the Bank and for the implementation and continued operation of
adequate accountings and internal control systems for the prevention and detection of fraud and other irregularities.
The Board is satisfied that it has met its obligation to present a balanced and understandable assessment of the Bank’s
position and prospects in the Directors’ Report as set out on pages 064 to 069 and the Financial Statements section of
this Annual Report.
Internal Control
The Board has overall responsibility for maintaining sound internal control systems that cover financial controls, effective
and efficient operations, compliance with law and regulations as well as risk management. The size and complexity
of the Group necessitate the managing of a wide and diverse spectrum of risks. The nature of these risks means that
events may occur which would give rise to unanticipated or unavoidable losses. The inherent system of internal controls
is designed to provide a reasonable though not absolute assurance against the risk of material errors, fraud or losses
occurring. The Statement on Internal Control which provides an overview of the state of internal control is set out on
pages 039 to 045 of the Annual Report.
The persons overseeing Internal Control matters in the Bank and in the Group are:
Risk Management and Control:

Dr Gan Wee Beng, Deputy CEO, Group Risk Management
Tel : 603 - 2084 2252
Email : weebeng.gan@cimb.com
Internal Control:
Lim Tiang Siew, Group Chief Internal Auditor
Tel : 603 - 2084 8677
Email : tiangsiew.lim@cimb.com
Operational Control and Information Technology Security:

Iswaraan Suppiah, Head, Group Information and Operations
Tel : 603 - 2084 9276
Email : iswaraan.suppiah@cimb.com

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Relationship with Auditors
The Bank’s internal audit function is performed in-house by the Group Internal Audit Division, which regularly audits
the internal control practices and reports significant findings to the Audit Committee with recommended corrective
actions. Management is responsible to ensure that corrective actions on reported weaknesses are undertaken within an
appropriate time frame. A report of the Audit Committee and its terms of reference is included in pages 033 to 038 of this
Annual Report.
The Board and the Audit Committee maintain a formal and appropriate relationship with the external auditors. In line
with the Code, the Audit Committee convened 2 meetings with the external auditors in 2008 without the presence of
Management. Apart from that, the external auditors were also invited to attend Audit Committee meetings. The Audit
Committee reviews the independence of external auditors annually and ensures that other non-audit work are not in
conflict with the functions of external auditors. The Audit Committee also ensures that there is a rotation of the Engagement
Partner of the external auditors every 5 years.

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Audit Committee Report
The CIMB Group Audit Committee is committed to its role of ensuring proper corporate governance practices and to
provide oversight on CIMB Group’s financial reporting, risk management and internal control systems.
COMPOSITION
The Audit Committee was formed in July 2006 to consolidate the various Audit Committees within CIMB Group. The
restructuring of the Audit Committee has been duly approved by Bank Negara Malaysia (“BNM”) and is in accordance
with BNM/GP1 (Guidelines on Corporate Governance for Licensed Institution).
The Audit Committee comprises four (4) independent non-executive directors who represent the boards of all the Malaysian
banks within the Group except for CIMB Bank (L) Limited. In 2008, a total of twenty three (23) Audit Committee meetings
were held and all the Audit Committee members have met the minimum 75% attendance as per BNM guidelines.
Details of the Audit Committee membership and meetings held are as follows:
No. of Meetings

Independent Non-Executive Director of CIMB Bank and CIMB Investment Bank
Tan Sri G K Rama Iyer 23 23

Independent Non-Executive Director of CIMB Bank

Independent Non-Executive Director of CIMB Investment Bank

Independent Non-Executive Director of CIMB Bank and CIMB Islamic Bank
The Chairman of the Committee, Dato’ Zainal Abidin Putih is a member of the Malaysian Institute of Accountants (MIA)
and also meets the requirements of Section 15.10 (1) of the Listing Rules which requires at least one qualified accountant
as a member of the Audit Committee.
The Chairman of the Audit Committee reports to the Board on all matters deliberated during the Audit Committee
meetings. Minutes of each meeting are also distributed to each member of the Board.
AUTHORITY
The Audit Committee, in discharging its duties, shall have explicit authority to investigate any matter within its terms of
reference, full access to and co-operation from management and full discretion to invite any director or executive officer to
attend its meetings, and reasonable resources to enable it to discharge its functions properly. The Audit Committee shall
have full and unrestricted access to information and be able to obtain independent professional advice, such expenses
to be borne by the Group.

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TERMS OF REFERENCE OF AUDIT COMMITTEE
• To review the effectiveness of internal controls, risk management processes and governance within CIMB Group and
its subsidiaries, taking into account the requirements in revised Malaysian Code of Corporate Governance, Listing
Requirements of Bursa Malaysia Securities Berhad, BNM/GP1 (Guidelines on Corporate Governance for Licensed
Institution), BNM/GP1-i (Guidelines on Directorship in the Islamic Bank), BNM/GPIS1 (Guidelines on Management of
IT Environment), BNM/GPi13 (Guidelines on Audit Committee and Internal Audit Department for Insurance Company),
other relevant guidelines issued by regulators, including the effectiveness of management in discharging its duties.
• To perform the following in relation to Internal Audit functions:
a) To ensure the internal audit function is well placed to undertake review or investigation on behalf of the Audit
Committee (AC), and be placed under the direct authority and supervision of the AC.
b) To review the internal audit scope, internal audit programme, internal audit findings and recommended actions
to be taken by the Management. The reports of internal auditors and the AC are not subject to clearance of the
Group Chief Executive.
c) To oversee the functions of the Internal Audit department and ensuring compliance with the BNM/GP10 (Guidelines
on Minimum Audit Standards for Internal Auditors of Financial Institutions) and BNM/GPi13 (Guidelines on Audit
Committee and Internal Audit Department for Insurance Company).
d) To review the competency and resources of the internal audit function and that it has the necessary authority to
carry out its work.
e) To evaluate the performance and decide on the remuneration package of the internal auditors.
f) To approve the appointment, transfer and dismissal of Chief Internal Auditor or senior staff members of the
internal audit function and to be informed of resignation of internal audit staff members and provide the resigning
staff member an opportunity to submit his/her reasons for resigning.
• To review the effectiveness of External Auditors:
a) To consider the appointment of external auditors, the audit fee and question of resignation or dismissal.
b) To review with the external auditors, the scope of their audit plan, the findings on system of internal accounting
controls (including management action) and the relevant audit reports.
c) To assess objectivity, performance and independence of external auditors (e.g. by reviewing and assessing the
various relationships between the external auditors and the CIMB Group or any other entity).
d) To approve the provision of non-audit services by the external auditors.
e) To ensure that there are proper checks and balances in place so that the provision of non-audit services does not
interfere with the exercise of independent judgement of the auditors.
f) To ensure that the accounts are prepared in a timely and accurate manner with frequent reviews of the adequacy
of provisions against contingencies and bad and doubtful debts.
g) The AC shall meet with the external auditors at least twice a year without the presence of the CIMB Group and
its subsidiaries management or executive board members to discuss on key concerns and to obtain feedback.
• To review the audit findings, internal control and compliance issues identified/reported by the internal auditors,
external auditors and regulatory auditors as the case may be and to ensure that appropriate and prompt remedial
actions are taken, where appropriate, by management.
• To engage on a continuous basis with senior management, such as the chairman, the chief executive officer, the
chief financial officer, the head of internal audit, the head of risk division and the external auditors in order to be kept
informed of matters affecting the company.

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• To convene meetings with external auditors, internal auditors or both, excluding the attendance of other directors and
employees of the company and its subsidiaries, whenever deemed necessary.
• To review the Annual Financial Statements for submission to the Board of Directors of major entities within the CIMB
Group and ensure prompt publication of annual accounts.
• To review the quarterly results of the financial statements, prior to the approval by the Board of Directors, focusing
particularly on the following:
a) Deliberation on any changes in the accounting policy;

b) Adoption of or implementation of any new accounting standards;
c) Changes to legal or regulatory requirements; and
d) Compliance with accounting standards and other legal or regulatory requirements.
• To review all related party transactions, as submitted by the Management that may arise within the CIMB Group and
keep the Board informed of such transactions.
• To obtain external professional advice and to invite outsiders with relevant experience to be present where
necessary.
• To review and deliberate reports from designated Compliance Officers of Exempt Dealer status entities.
INTERNAL AUDIT FUNCTION
• The Group Internal Audit Division (GIAD) is independent and reports directly to the Audit Committee (AC).
• GIAD supports the AC in discharging its responsibilities. GIAD conducts audits for the BCHB Group, except for
CIMB Niaga which is supported by its own Internal Audit Department. However, in ensuring proper group audit
oversight, CIMB Niaga’s internal audit department submits quarterly reports to GIAD, highlighting key audit issues
and concerns.
• GIAD provides independent assurance on the adequacy and effectiveness of the internal control systems implemented
by Management. An annual audit plan is developed based on assessment of risk priorities, exposures and strategies/
goals of the Group.
• GIAD assists the Board, Audit Committee and Management in ensuring effective discharge of their responsibilities in
establishing cost-effective controls, risk management and recommending measures to mitigate identified risks and to
ensure proper governance.
• GIAD provides periodic reports to the Audit Committee, reporting on the outcomes of the audits conducted which
highlight the effectiveness of the systems of internal control and significant risks. The Audit Committee reviews and
evaluates the key concerns and issues raised by GIAD and ensure that appropriate and prompt remedial actions are
taken by Management.
• GIAD also undertakes fraud investigation of the BCHB Group as and when requested by the Audit Committee.


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SUMMARY OF ACTIVITIES
During the year under review, the Audit Committee carried out its duties as set out in the terms of reference. Key activities
include:
• Reviewed and approved the annual audit plan, scope of work and resource requirement of the GIAD.
• Reviewed the external auditor’s audit plan, scope of work and results of the annual audit for the Group.
• Reviewed the internal control issues identified by the group internal auditors, external auditors and regulatory
examiners, as well as Management’s response to the recommendations and the implementation of agreed action
plans.
• Reviewed write-off proposals as presented by the Management and recommended them for the Board’s approval.
• Reviewed the annual audited financial statements of the Group with external auditors prior to submission to the Board
of Directors and BNM for their approvals.
• Reviewed the proposals for non-audit services rendered by the external auditors.
• Initiated field visits to various CIMB Group business and operational units. The primary objectives of the visits are as
follows:
a) To engage in dialogues and discuss the audit reports thoroughly, openly and professionally and to find ways of
improving current operations.
b) To meet various management staff and to get first hand information on their operating environment and
strategy.
c) To agree on action plans going forward.
• Initiated meetings with Head of Divisions, where heads presented their business plans, operational concerns and
challenges and relevant Management action plans for the year.
• In compliance with the Code of Corporate Governance, the AC held several meetings with external auditors without
Management’s presence to discuss key concerns and obtain feedback on the Group’s state of internal control.
• Considered and recommended to the Board the re-appointment of the external auditors and their audit fees.

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TRAININGS ATTENDED
During the year, the members attended several trainings to keep abreast of latest developments. Some of the training
courses attended are as follows:
No Members Date of Training Training Course
1. Dato’ Zainal Abidin Putih January 2008 • FRF Strategic Planning Workshop
• 49th Anniversary Commemorative Lecture -
Enhancing Confidence in the Capital Market
March 2008 • Corporate Governance Assessment
May 2008 • Dialogue on “Convergence to IFRS and the Roles

of MASB”
June 2008 • Panelist: Live Audit Committee Simulation at the

Asia Pacific Audit & Governance Summit
July 2008 • IASB Regional Standard-Setters Meeting & Public

Seminar - IFRS
• Breakfast Talk: “The Audit Committee’s Top 10
Best Practices”
August 2008 • The Futurist Forum 2008: “Mindset: A Framework

to Anticipate The Future”
• Khazanah Global Lectures: “Building Tomorrow’s
Minds Today” by Dr A P J Abdul Kalam (former
president of India)
September 2008 • World Standard Setters Conference
October 2008 • Public Forum on Convergence

• Khazanah Megatrends Forum Shifting Sands:
Threats & Opportunities
• Convergence with IFRS by 2012
2. Tan Sri G K Rama Iyer March 2008 • 5th Khazanah Global Lectures Presentation by
Mr Carlos Ghosn, President and CEO, Renault &
Nissan Motor Corporation.
April 2008 • MIER 13th Corporate Briefing

• IBBM - Directors’ Programme: Compliance
Management in a Banking Environment

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No Members Date of Training Training Course
June 2008 • Transparency International Malaysia - CEO Forum:

Transparency in Motion
• PEM Seminar on Mid Term Review: 9th Malaysian
Plan
July 2008 • MIER 23rd National Economic Briefing
August 2008 • Khazanah Global Lectures: “Building Tomorrow’s

Minds Today” by Dr A P J Abdul Kalam
November 2008 • India Economic Summit 2008

• Professor Daniel Quinn Mills - Corporate
Governance: Roles & Responsibilities of Directors
December 2008 • MIER National Outlook Conference 2009-2010
3. Dato’ Hamzah Bakar March 2008 • 5th Khazanah Global Lectures Presentation by Mr
Carlos Ghosn, President and CEO, Renault &
Nissan Motor Corporation
April 2008 • IBBM - Directors’ Programme: Derivatives -

Effective or Costly?
May 2008 • IBBM - Directors’ & Senior Management

Programme - Economic Capital & Performance
Management under Basel II
4. Datuk Dr Syed Muhamad April 2008 • Update on Corporate Governance Regulatory

Syed Abdul Kadir Framework and Current Issues “Effective
Governance the Way Forward”
• IBBM - Directors’ Programme Derivatives -
Effective or Costly?
• IBBM - Directors’ Programme: Compliance
Management in a Banking Environment
May 2008 • IBBM - Directors’ & Senior Management

Programme - Economic Capital & Performance
Management under Basel II
August 2008 • National Human Resources Masterplan at National

Productivity Centre
• Khazanah Global Lectures: “Building Tomorrow’s
Minds Today” by Dr A P J Abdul Kalam (former
President of India)

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Statement on Internal Control
BOARD RESPONSIBILITY
The Board is responsible for the Group’s system of internal control which includes the establishment of an appropriate
control environment framework as well as reviewing its adequacy and integrity. The system of internal control addresses
the need for effective and efficient business operations, sound financial reporting and control procedures, and compliance
with relevant laws and regulations. The Board also recognises that reviewing the Group’s system of internal control is
a concerted and continuing process, designed to manage and appropriately mitigate the risk of failure in achieving
business objectives. Accordingly, the Group’s system of internal control provides reasonable assurance against material
misstatement and mismanagement.
RISK MANAGEMENT AND CONTROL FRAMEWORK
The Board recognises that risk management is an integral part of the Group’s day-to-day operations and that the
identification, assessment and management of risks will affect the achievement of the Group’s business objectives
as well as protect shareholders’ value. In pursuing these objectives, the Group has adopted the Enterprise-wide Risk
Management (EWRM) Framework to manage its risks and opportunities. The Board has also established the Board Risk
Committee, with the primary responsibility of ensuring the effective functioning of the EWRM Framework.
The EWRM Framework involves an on-going process of identifying, evaluating, monitoring and managing the significant
risks affecting the achievement of its business objectives. It provides the Board and the Management with a tool to
anticipate and manage both the existing and potential risks, taking into consideration the changing risk profiles as dictated
by changes in business and regulatory environment, the Group’s strategies and functional activities throughout the year.
INFORMATION TECHNOLOGY SECURITY
In 2008, the Group continued to improve its Information Architecture with efforts in prevention, detection and response
against internal threats, such as misuse of privileges, leakage of confidential data and external threats, such as third-party
phishing websites and continued threats from aggressive malware.
New and improved systems have been installed to closely monitor the usage of Information Technology (IT) resources for
staff. The monitoring occurs at the desktop level, such as web-surfing monitoring and email transmissions, and also at
server and network level, where additional logs are centrally collated and monitored for suspicious activity.
Externally, the Group has minimised the possibility of network-based attacks to the external email infrastructure, and the
IT Department under the Group Information and Operations Division (GIOD-IT) has also commenced a project to allow
a more comprehensive system for tracking of email communications based on its content. Significantly, we have also
achieved WebTrust certification for both CIMB Clicks and CIMB Biz-Channel banking platforms.
The Group maintains a strong knowledge of and continues to refine its mitigation strategies against Information Technology
threats by participating in specific forums on Information Security and industry dialogues such as the Internet Banking Task
Force. These initiatives contribute towards a systematic methodology to ensure the confidentiality, integrity, availability and
non-repudiation of information and Information Systems against current or any potential threats prevalent in the evolving
and changing internet world. This enables the Group to retain its customer trust and maintain high rates of utilisation for
the Group’s products and services.

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In 2008, an IT Risk Framework was developed and is continually maintained to ensure that risks are correctly identified
and the necessary remedial actions are in place.
KEY INTERNAL CONTROL PROCESSES
The key processes that the Board has established in reviewing the adequacy and integrity of the system of internal
control, including compliance with applicable laws, regulations, rules, directives and guidelines, are as follows:
• Risk Committees
The Board has established various risk committees within the Group with distinct lines of responsibility and function,
which are clearly defined in the terms of reference. These committees have the authority to examine matters within
the scope and report pertinent issues and recommendations to the Board.
The Board Risk Committee determines the Group’s risk policy objectives and assumes responsibility on behalf of the
Board for supervision of risk management. The Board Risk Committee reports directly to the Board of the Group. It
oversees the EWRM Framework and provides strategic guidance and reviews decisions made by the various Risk
Committees.
The day-to-day responsibility of risk management supervision and control is delegated to the Group Risk Committee,
which reports directly to the Board Risk Committee. The Group Risk Committee comprising the Senior Management
of the Group, performs the oversight function for capital allocation and overall management of risks, guided by the
risk appetite defined by the Board.
The Group Risk Committee is supported by specialised sub-committees; namely, Credit Risk Committee, Liquidity
Risk Committee, Market Risk Committee and Operational Risk Committee. Delegated by the Board, these committees
meet weekly/monthly to review and deliberate on the risk exposure profile reports.
• Group Management Committee
The day-to-day operations of the Group is managed by the Group Chief Executive, who in turn is assisted by
the Group Management Committee (GMC) which ensures that effective operations of the Group are conducted in
accordance with corporate objectives, strategies, approved annual budget as well as policies and procedures. Policy
guidelines and authority limits are imposed on the delegated members with regard to daily banking and financing
operations, extension of credit, investments as well as acquisitions and disposals of assets.
The GMC members are principally responsible for the performance of their respective business divisions as well
as overseeing the Group’s strategy, cross-divisional synergies, regulatory issues and other key matters within the
Group.
• Internal Policies and Procedures
Clearly documented internal policies and procedures of all business units have been approved by the Board for
application across the Group. Policies and procedures serve as a day-to-day operational guide to ensure compliance
with internal controls and the applicable laws and regulations. Regular reviews and updates are performed to reflect
changing risks or processes and internal control improvements while ensuring that documentation remains current.

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• Performance Review
The Board receives and reviews regular reports from the management on key financial and operating statistics as
well as legal and regulatory matters. Each business unit is subject to performance reviews in monthly GMC meetings.
The performance of each business unit is assessed against the approved budgets and business objectives whilst
explanation is provided for significant variances. The review also details fresh business proposals, achievements for
the month and listing of defaulted accounts.
• Internal Audit
The Group Internal Audit Division (GIAD) provides independent assurance on the efficiency and effectiveness of the
internal control systems implemented by Management. An annual audit plan is developed based on an assessment
of risk priorities, exposures, and strategies and goals of the Group.
GIAD assists the Board and Audit Committee in the effective discharge of their responsibilities in establishing cost-
effective controls, risk management, recommending measures to mitigate identified risks and ensuring proper
governance. GIAD also investigates incidents of fraud, establishes the root cause and makes the necessary
recommendation to the Audit Committee.
GIAD provides periodic reports to the Audit Committee, reporting on the outcome of the audits conducted which
highlight the effectiveness of the system of internal control and significant risks. The Audit Committee reviews and
evaluates the key concerns and issues raised by GIAD and ensures that appropriate and prompt remedial action is
taken by Management.
The Audit Committee also conducts “on the ground” visits to all regions in Malaysia and overseas operation entities.
This enables the Audit Committee to actively interact with the relevant management staff on the expectations of the
Group with regards to compliance and internal controls.
• Institutional Integrity Unit
The Institutional Integrity Unit (IIU) was established as a unit within the Group Chief Executive’s Office to undertake
investigations of complaints of irregularities and fraud perpetrated by staff as well as allegations of misconduct
and unethical practices. The IIU also plays a consultative role in providing feedback on preventative measures and
remedial action in enhancing organisational value. The establishment of this Unit is aimed at instilling in all staff an
awareness of management’s non-tolerance of fraud, unethical practices and irregularities.
• Regional Compliance Framework
With the regional expansion, the Group has implemented the Group Compliance Policy and Procedures (Compliance
P&P) and Conflict Management Policies (collectively referred to as the “P&Ps”) across the entities in the jurisdictions
where the Group has had its presence since 2007. The Group had undertaken a review of the P&Ps in 2008 to ensure
that the processes are current and reflect the changing financial environment. In line with the Group’s growth, relevant
conflict management processes have also been put in place to manage potential conflict issues.
Pursuant to the Compliance P&P, appropriate governance has been established and compliance reports are submitted
to the Board of the Group to ensure proper oversight.

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• Group-Wide Chinese Wall Policy
The Group places high importance in ensuring that its Chinese Wall Policy is adhered to and kept updated. The
Group-wide Chinese Wall Policy covers both the relevant Group committees and organisational structures which are
most likely to be in possession of price-sensitive non-public information. The Policy, which is clearly communicated to
the relevant departments and their affected staff, also sets out clear procedures to control the flow of such information
within the Group to minimise the risk of any breach of the insider trading provisions under the Capital Markets and
Services Act 2007 (the CMSA). These established arrangements provide our Group with a defence to the insider
trading prohibition under the CMSA by managing in an integrated manner, the information flows arising from the
convergence of various business practices.
• New Product Approval Policy and Procedures
New Product Approval Policy and Procedures is enforced for all new investment bank and consumer bank products,
inclusive of both conventional and Islamic products. New products are products that are offered by the relevant
banking entities of the Group for the first time or a combination of or variation to existing products which have material
change in the risk profile, as determined by the Chief Risk Officer. Group Risk Management is tasked to coordinate
the product approval process together with the product owners.
For the introduction of any new investment bank product that is offered by the Group for the first time, initial clearance
is obtained from Group Risk Committee (GRC). Similarly, for new consumer bank products, initial clearance is
sought from either GRC, Consumer Banking Committee (CBC) or Balance Sheet Management Committee (BSMC).
Introduction of Islamic products will require the endorsement from the Shariah Committee.
The acceptance and sign-off of the relevant divisions or departments is obtained from Risk Management, Risk
Monitoring, Operations, IT, Compliance, Legal, Finance, Audit and Consumer Sales & Distribution as well as other
relevant divisions, where applicable.
Where necessary, the product should also be deliberated at the Operational Risk Committee (ORC) for matters that
would impact the Group’s operations. On pricing issues for consumer bank products, approval from BSMC should
also be sought. Final approval is obtained from GRC for investment bank products and ORC for consumer bank
products.
The Group will continue to adopt appropriate risk assessment measures to ensure that the interest of all stakeholders
are protected when new products are introduced.
• Exceptions Management Procedure
The Board has put in place an “Exceptions Management Procedure” formalising the reporting escalation process,
when internal or external breaches are detected. This procedure advocates timely remedial measures and strengthens
transparency and management oversight.
When an exception occurs, the Monitoring Officer alerts Risk Management & Analytics Department (RMA) providing
relevant details such as date, description and type of the exception as well as identifies the parties involved. A copy
of the e-mail will also be sent to the relevant Head of Department (HOD) involved and the originator of the exception.
Within 24 hours of being informed of the exception, the originator(s) must provide a written explanation in the form of
an Incident Report endorsed by the HOD, to the Monitoring Officer and RMA.
Exceptions are summarised and reported to the Group Risk Committee on a monthly basis.

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• Code of Ethics
Upon joining the Group, new staff are required to acknowledge in writing, their acceptance and understanding
of Bank Negara Malaysia (BNM)’s code of ethics. The importance of the code of ethics is emphasised during the
Group’s Induction programme. Bi-annually,existing staff are required to sign off electronically via the Group’s intranet,
acknowledging their observance to the code of ethics.
• Human Resources Policies and Procedures
The Human Resources (HR) policies and procedures are in place encompassing the full spectrum of human resources
management such as the recruitment of new employees as well as separation of employees which includes resignation
and termination of staff. The policies and procedures are constantly reviewed and any changes are communicated to
the staff via e-mail or through memoranda. The policies are also readily available through the Group’s intranet where
staff can easily access these policies at their convenience.
One of the challenging issues facing the Group is dealing with fraud cases involving employees. In this regard, staff
are periodically reminded of the relevant policies via e-mail or memoranda. Several training initiatives such as AMLA
sessions are also carried out regularly to further emphasise the Group’s view on non-tolerance to fraud. The same is
also highlighted during the Group’s Induction programme for new employees. In instances where the Group is alerted
of fraud cases, prompt investigation is conducted. Swift and stern action which could include dismissal of service
and filing of civil suit for recovery of losses could be taken against the offenders. Such firm actions are taken in order
to send a clear message to staff that the Group views fraud very seriously.
The Board affirms that a sound internal control framework is the foundation for efficient business operations within the
Group. During the period, the Group has instituted numerous initiatives to strengthen its systems of internal control.
These include:
• Basel II
BNM, on 17 September 2004, reiterated a two-phased approach for implementing the standards recommended
by the Bank for International Settlements set out in “International Convergence of Capital Measurement and Capital
Standards: A Revised Framework” (Basel II) in Malaysia. In the first phase, banking institutions are required to adopt
the Standardised Approach for credit risk by the end of 2008. In the second phase, qualified banking institutions are
allowed to migrate directly to the Internal Rating-Based approach (IRB Approach) by January 2010.
The Group has been making significant progress in its preparations and has undertaken various compliance and risk
management projects towards satisfying the Basel II requirements across various risk categories. A Basel II Steering
Committee chaired by the Group Chief Executive Officer, has been set up to oversee the implementation initiatives
across the Group with the assistance of various sub-committees.
BNM had on 3 September 2007 approved our application for direct migration to the Internal Rating-Based approach.
Regular meetings are held with BNM to ensure implementation initiatives are in line with their expectations.
• Business Continuity Management
Business Continuity Management (BCM) Department identifies all activities and operations that are critical to sustaining
the Group’s business operations with the intention of ensuring that all associated operational risks are eliminated
or minimised. The department manages the BCM activities for local operations, foreign subsidiaries and overseas
branches.

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Business Continuity Plans (BCP) were established for business as usual (BAU) mission-critical functions. Such plans
are also extended to foreign subsidiaries and the overseas branches for adoption, with consideration given to meeting
regulatory requirements in their respective jurisdictions.
Disaster Recovery Plans (DRP) have been established between BCM, GIOD-IT and the IT service providers. The
banking entities within the Group have subscribed to various Disaster Recovery (DR) sites with internal resources
or independent service providers, which serves as the IT-DR & BCP back-up sites. Alternate DR sites are currently
available at Akademi CIMB Putra, Bangi Data Centre, Menara Southern Bank, Wisma AMGM, Menara Milenium,
Kompakar CRC (M) Sdn Bhd, Menara Choy Fook Onn and Plaza Pantai to cater as alternate business sites should
any of the primary sites be unavailable.
As an example, during the Semantan Landslide Crisis on 4 December 2008, a total of 12 alternate sites were
mobilised and the BCM team with the assistance of others, successfully relocated approximately 795 staff from
the two affected buildings in 3 days. This included the procurement of 250 new personal computers, relocation of
servers from the 2 buildings to Menara Southern Bank, accomodating 135 personnel at the Hewlett Packard (M) Sdn
Bhd (HP) Backup Site in Glenmarie and the setting up of 116 personal computers for affected employees at Bursa
Malaysia Berhad. Critical operations resumed without any significant disruptions on 5 December 2008 and all other
operations resumed on 9 December 2008.
In our effort to continuously improve the business continuity and standardise the BCM methodology for the Group,
we had, in 2008 initiated the Business Impact Analysis and Risk Assessment project. This will ensure that the BCP
and DRP are adequate and meet the business requirements.
• Control and Risk Self Assessment (CRSA)
The CRSA utilises a robust risk and control based methodology, to assist business divisions and support functions
to identify, assess and profile its operational risk in a systematic and controlled manner. Deployment of CRSA is
facilitated by the Operational Risk Unit and action plans are formulated by business lines, and operational support on
specific control and risk concerns identified, to mitigate and manage identified risk.
To further enhance the consumer bank’s corporate governance, the Group has implemented a Self-Assessment
Review Programme (ShARP) to include the consumer bank business, in particular, at the branch network, credit
operations and backroom operations, in its effort to expand the coverage of these CRSA initiatives. The plan is to
eventually extend the ShARP to cover other strategic business units within the Group. The program involves the
concept of empowering the strategic business units as well as the product and process owners to continuously
evaluate and provide assurance that it has appropriate controls in place to manage a broad range of risks, arising
from day-to-day business activities.
ShARP also strongly complements approaches taken by the Group to adopt the “Risk-Based Supervisory Approach”
by BNM in assessing significant activities that affect the stability and soundness of financial institutions. ShARP
also creates an operational risk profile database that can be tapped into by internal audit, risk management and
compliance functions within the Group to minimize duplication of efforts and resources whilst enhancing internal
controls and compliance. The benefits of ShARP, amongst others, is to promote a risk and compliance conscious
culture within the organisation, nurture common understanding and risk language throughout the Group, provide
clearer definition of accountability for internal control and compliance, thus enhancing the assurance process.

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• Loss Event Database and Key Risk Indicator
The Group has in place a Loss Event Database, which captures and tracks the actual and potential operational
risk-related losses in the Group, as well as Key Risk Indicators reporting, which provides the Group with analysis of
changes in risk trends and general risk profiles. Losses reported for the Loss Event Database and Key Risk Indicators
are summarised and reported to the Operational Risk Committee on a regular basis.
• Compliance and Fraud Detection
In an effort to ensure that fraud is contained and minimised, the Group constantly monitors new trends and development
on fraud to implement controls and detection tools. Training programmes are being introduced in forensic psychology
and sociology from the fraud perspective and on the detection of forgeries.
The Group also has in place a Whistle Blowing Policy which is documented under the Protection Information Disclosure
Policy section in the HR Policy Manual. The policy defines the rights of informants and the protection accorded to
them. In addition, the channels of escalation are also documented to guide staff in directing their information to the
appropriate designated officers.
• Anti-Money Laundering/Counter Financing of Terrorism (AML/CFT)
The AML/CFT initiatives gained further momentum in 2008. The implementation of AML/CFT system was extended
to include a nation-wide rollout to Islamic banking, Direct Banking and Cards, Auto Finance, Trade Finance and the
stockbroking business. With this, additional users were therefore trained to utilise a system that enables an automated
identification and tracking of possible money laundering and financing of terrorism activities. The recognition of this
tracking system culminated in CIMB Bank being awarded the prestigious MIS IT Excellence Awards 2008 for the Best
Knowledge Management category. AML/CFT training methodologies was another area which was given added boost
with the introduction of enhanced E-Learning modules.
CONCLUSION
The Board is of the view that the present system of internal control is adequate for the Group to manage its risks and
to achieve its business objectives. However, given the challenging environment that the Group operates in, the Board is
committed to ensure that the Group continuously reviews its internal control systems to effectively protect stakeholders’
interests and safeguard the Group’s assets.

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Risk Management
Risk management is an integral part of the Bank’s business. An effective risk management system is critical for the Bank
to achieve continued profitability and sustainable growth in shareholder’s value, more so in today’s globalised, yet inter-
linked financial and economic environment.
Enterprise Risk Management and Control Framework
CIMB Group employs the Enterprise Wide Risk Management (EWRM) framework to manage its risk and opportunity
effectively. The EWRM framework involves an on-going process of identifying, evaluating, monitoring, managing and
reporting significant risks affecting the Group, implemented through a number of committees established by the Board of
Directors. The framework provides the Board and its management with a tool to anticipate and manage both the existing
and potential risk, taking into consideration the changing risk profiles, as dictated by changes in business strategies and
regulatory environment and functional activities throughout the year.
CIMB Group employs a Capital-at-Risk (CaR) framework as the common measure of risk across the Group. The CaR
framework provides the basis of allocating economic capital within the Bank, to cushion against unexpected losses. CaR
can be aggregated, thus allowing measurement of the Bank’s total risk. It also provides a yardstick for evaluating risk-
return relationship in different lines of business. The CaR framework also enables measurement of return of risk-adjusted-
capital, to compare profitability across different businesses and for performance measurement in the Bank.
CIMB Group performs a group wide stress test on a biannual basis to evaluate the financial impact on the Group
in the event of projected adverse economic and financial situations. This process enables the Group to assess the
sufficiency of its liquidity surplus and reserves, and whether it could continue to meet its minimum capital requirement
under such scenario. Such group wide stress test allows management to gain a better understanding of how portfolios
and investments are likely to react to changing economic conditions and how the Group can best prepare for and react
to them. In addition, the Group performs ad-hoc stress tests on selected portfolio to evaluate its performance under a
given stress scenario.
Risk Management Organisation
At the apex of the Bank’s risk management structure is the Board Risk Committee (the BRC), which comprises exclusively
of non-executive Directors of the Bank. In line with best practices, the BRC determines the risk policy objectives for the
Bank, and assumes ultimate responsibility for risk management. The BRC also decides the yearly allocation of risk capital
to support all risks taken by the Bank.
The day-to-day responsibility for risk management and control is delegated to the Group Risk Committee (the GRC).
The GRC, comprises of senior management of CIMB Group, undertakes the oversight function for capital allocation
and overall risk limits, in line with the risk appetite determined by the Board of Directors. The GRC is supported by
four specialised sub-committees, namely the Market and International Risk Committee, the Credit Risk Committee, the
Liquidity Risk Committee and the Operational Risk Committee, each addressing one of the following:
• Market risk, arising from changes in market prices from exposure to interest rates, currency exchange rate, credit
spreads, equity and commodities prices;
• Credit risk, arising from losses due to obligor, counterparty or issuer failing to perform its contractual obligations to
the Bank;

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Risk Management
• Liquidity risk, arising from a bank’s inability to meet its present and future funding needs on a timely basis, from
mismatches between the size of assets and liabilities or their maturities; and
• Operational risk, arising from internal processes which may result from inadequacies or failures in processes, controls
or projects due to fraud, unauthorised activities, error, omission, inefficiency, systems failures or from external
events.
The roles and responsibilities of the committees and sub-committees are set out in the chart below:
BOARD OF DIRECTORS
BOARD RISK COMMITTEE
• Review and recommend risk policies and strategies for approval

• Oversee entire EWRM and provide strategic guidance to various risk committees
GROUP RISK COMMITTEE
• Review and advise on risk policies and strategies

• Oversee management of risk, capital allocation and asset liability management
process across the Group
Market and International Risk Credit Risk Committee Liquidity Risk Committee Operational Risk Committee
Committee (MIRC) (CRC) (LRC) (ORC)
• Oversee exposures to • Credit approval authority • Oversee the Group’s overall • Oversee issues relating to the
market risks liquidity management operational risk and internal
• Assign and review the
control environment
• Evaluate and approve Inter-bank Limits, Sectorial • Ensure Group is able to meet
proposals for primary and Exposures, Global its cash flow obligations in • Review and evaluate
secondary market deals for Counterparty Credit Limits a timely and cost effective all Business Continuity
debt and equity instruments and Global Country Limits manner Management (BCM)/ Disaster
Recovery (DR) activities
Group Risk Division (GRD)
The primary oversight body is the Group Risk Division, comprising of Group Risk Management (GRM) and Group Credit
(GC), which are independent of business units and assist the Management and the various risk committees in monitoring
and controlling the Group’s risk exposures.
The key responsibilities of GRD are to identify, analyse, monitor, review and report the principal risks to which the Bank
is exposed. It also helps to create shareholder value through proper allocation of risk capital, development of risk-based
pricing framework and facilitate development of new business and products.

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Risk Management
Group Risk Management (GRM)
GRM monitors risk-taking activities, initiates and proposes risk policies, risk measurement methodologies, risk limits
and risk capital allocation, performs independent review of loan assets quality and loan recovery plan, coordinates new
products deployments and develops the risk-based product pricing framework for loan portfolios.
In propagating and ensuring compliance to the Market Risk framework, GRM reviews and analyses treasury trading
strategy, positions and activities vis-à-vis changes in the financial market and performs mark-to-market as part of financial
valuation. Further, GRM also conducts validation on the risk pricing parameters and models used.
GRM is also tasked with the co-ordination of the Group’s effort towards implementation of the Basel II framework in
compliance with the International Covergence of Capital Measurement and Capital Standards prescribed by the Bank of
International Settlements and as adopted by BNM. In this regard, GRM develops, implements and validates all internal
rating and scoring models and closely monitors the usage of the rating and scoring systems to ensure relevance to
current market conditions and integrity of the ratings.
On an annual basis, GRM proposes the global CaR limit to the GRC and BRC for approval. This limit is allocated by the
GRC to the various businesses of the Group through MIRC and CRC. The appropriate market and credit allocations are
given by the various business units to execute their business plans each year. GRC also ensures that the aggregate risk
exposure does not exceed the global CaR limit approved by the BRC.
Group Credit (GC)
GC is authorized to approve applications for credit facilities of up to RM10 million extended to small and medium
enterprises. Otherwise, GC carries out independent assessments of all credit risk related proposals originating from the
various business units such as loans and advances, fixed income, derivatives, sales and trading, prior to submission to the
CRC, the EXCO or Board for approval. GC also reviews the Bank’s holdings of all fixed income assets and recommends
the internal ratings for CRC’s approval. GC is also responsible for tracking and analyzing loans which turn NPL within 1
year of approval.
Key Areas of Risk Management
1. Credit Risk
Credit and counterparty risk is defined as the possibility of losses due to an obligor or market counterparty or issuer
of securities failing to perform its contractual obligations to the Bank.
Credit risk arises primarily from lending activities through loans as well as commitments to support clients’ obligations
to third parties, i.e. guarantees. In sales and trading activities, credit risk arises from the possibility that counterparties
will not be able or willing to fulfil their obligation on transactions on or before settlement date. In derivatives activities,
credit risk arises when counterparties to derivative contracts, such as interest rate swaps, are not able to or willing to
fulfil their obligation to pay the Bank the positive fair value or receivable resulting from the execution of contract terms.
Credit risk may also arise where the downgrading of an entity’s rating causes the fair value of the Bank’s investment
in that entity’s financial instruments to fall.
Credit risk remains the most significant risk to which the Bank is exposed. The purpose of credit risk management
is to keep credit risk exposure to an acceptable level vis-à-vis the capital, and to ensure the returns commensurate
with risk.

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Risk Management
All credit exposures are subjected to an internal rating, based on a combination of quantitative and qualitative criteria.
Adherence to set credit limits is monitored daily by GRM, which combines all exposures for each counterparty,
including off balance sheet items and potential exposure. Compliance to the Group-wide credit policy limits the
exposure to any one counterparty or group, industry sector and rating classification.
Credit exposures are evaluated by CRC and are monitored against approved limits on a regular basis. Adherence to
and compliance with single customer limit as well as assessing the quality of collateral are approaches adopted to
address concentration risk to any large sector/ industry, or to a particular counterparty group or individual.
The result of severe disruption of the US sub-prime mortgage market were felt across the global financial market in
2008, and were reflected in wider credit spread, higher volatility, tighter liquidity and ultimately, the collapse of several
large global investment banks. At the onset of the financial crisis, GC has conducted numerous reviews to scale down
the Group’s exposure in several industries/sectors, countries and counterparties that are affected by the sub-prime
and global financial crisis.
2. Market Risk
Market risk is defined as any fluctuation in the value of the portfolio resulting from changes in market prices, such as
interest rates, currency exchange rates, credit spreads, equity prices and commodities prices.
Market risk results from trading activities that can arise from customer-related businesses or from proprietary positions.
The Bank hedges the exposures to market risk by employing varied strategies, including the use of derivative
instruments.
The Bank adopts various measures in its risk management process to manage market risk. An accurate and timely
valuation of position is critical to providing the Bank with its current market exposure. GRM values the exposure using
market price or a pricing model where appropriate.
The Bank also adopts a value-at-risk (VAR) approach in the measurement of market risk. Backtesting is performed
to validate and reassess the accuracy of the existing VAR model. VAR is a statistical measure of the potential losses
that could occur as a result of movements in market rates and prices over a specified time horizon within a given
confidence level. Backtesting involves the comparison of the daily model-generated VAR forecast against the actual
or hypothetical profit or loss data over the corresponding period.
Stress testing is conducted to capture the potential market risk exposures from an unexpected market movement.
In formulating stress scenario, consideration is given to various aspects of the market; for example identification of
areas where unexpected losses can occur and areas where historical correlation may no longer hold true.
Policies and procedures governing risk-taking translate limits and management triggers which complements the
global CaR limit. Limits constitute the key mechanism to control allowable risk taking, and are regularly reviewed in
the face of changing business needs, market conditions, and regulatory changes.
Risk Middle Office (RMO) within GRM undertakes monitoring and oversight process at Group Treasury and Equity
Market & Derivatives trading floor, which includes reviewing and analyzing treasury trading strategy, positions and
activities vis-à-vis changes in the financial market, monitoring limit usage, assessing limit adequacy, and verifying
transaction prices.
Exposures to several of the Group’s global investment banking counterparties were reduced and further mitigated,
hence containing losses due to the global financial crisis.

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Risk Management
3. Liquidity Risk
Liquidity risk is defined as the risk to earnings or shareholders fund from the Group’s inability to meet its present and
future (both anticipated and unanticipated) funding needs on a timely basis, arising from mismatches between the
size or maturities of assets and liabilities.
CIMB Group’s liquidity risk management policy is to maintain hiqh quality and well diversified portfolios of liquid
assets and sources of funds. Management action triggers have been established to alert management to potential
and emerging liquidity pressures. The Group’s early warning system and contingency funding plans are in place
to alert and enable management to act effectively and efficiently during a liquidity crisis and under adverse market
conditions.
The Group’s liquidity risk management organization and its strong liquidity position helped the Group manage through
the credit and liquidity turmoil that affected global financial markets in 2008. The Liquidity Risk Committee meets
at least once a month to discuss the liquidity risk and funding profile and is chaired by the Head of Group Risk
Division. The Asset Liability Management function, which is responsible for the independent monitoring of CIMB
Group’s liquidity risk profile, worked closely with Group Treasury in intensifying its surveillance on market conditions
and performed frequent stress testing on liquidity positions. Liquidity positions are monitored on a daily basis and
complied with regulatory requirements for liquidity risk. The Group maintained large buffers of liquidity throughout
2008. As result, contingency funding plans were not required to be executed as there was sufficient liquidity to ensure
safe and sound operations from a strategic, structural and tactical perspective.
4. Operational Risk
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people or systems, or from
external events.
The existing Operational Risk Management Framework, which is revised periodically to cater for changing business
conditions, is designed objectively to monitor and control operational risk effectively leading to a sound and stable
operational environment within the Bank. All operational risks, both inherent and anticipated, are properly identified,
captured, mitigated, monitored, and reported in a systematic and consistent manner. The Operational Risk Committee
(ORC) has oversight responsibility for all operational activities conducted on a day-to-day basis.
The adoption of the Control Risk Self Assessment (CRSA) and the Self Assessment Review Project (ShARP) are
part of the Group’s initiatives to ensure that operational risks within the processes in each business unit are properly
identified, analyzed and mitigated on a periodic basis. Relevant Key Risk Indicators (KRI) is in use to track changes
that may highlight new risk concerns and potential areas of weaknesses in operational control.
Each new or varied product and changes to the process flow are subjected to a rigorous risk review through sign-offs
from the relevant support units where all critical risks are being identified and assessed independently from the risk
takers or product owners.
CIMB continues to stress the importance of adhering to internal controls and established procedures to deter fraud
and to minimize losses due to staff negligence. In order to demonstrate the seriousness of such offences, strict
disciplinary actions are instituted against staff concerned.

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Risk Management
5. Basel II Implementation
BNM has announced a two-phase approach for implementing the standards recommended by the Bank for
International Settlements set out in “International Convergence of Capital Measurement and Capital Standards:
A Revised Framework” (Basel II) in Malaysia. In the first phase, banking institutions will be required to adopt the
Standardised Approach for credit risk by the end of 2008. In the second phase, qualified banking institutions will be
allowed to migrate directly to the Internal Rating-Based approach (IRB Approach) by January 2010.
BNM has approved the Group’s application for direct migration to IRB. The approach for credit risk will be Advance
IRB for retail exposure and Foundation IRB for corporate exposure. Operational risk will be based on Basic Indicator
Approach and working towards Standarised Approach in 2010. Regular meetings are held with BNM to ensure
implementation initiatives are in line with their expectations.
A Basel II Steering Committee chaired by the Group CEO has been set up to oversee the implementation initiatives
across the Group with assistance of various sub-committees. Significant progress has been achieved in various
workstreams, primarily, in rating models calibration and risk datamart.
The Bank employs an economic capital allocation framework, whereby capital is allocated to all business units.
All major categories of risk are measured. This is in line with the Second Pillar of Basel II framework – Supervisory
Review Process and also BNM’s Internal Capital Adequacy Assessment Process, which requires banks adopting IRB
approach to develop a robust risk management framework (methodologies and process) to assess the adequacy of
its internal economic capital in relation to the risk profile.
Ongoing efforts are in place to enhance the operational risk loss event reporting and data collection for the enlarged
Group. Initiatives are being made to promote a web based application to ensure loss event incidents are being
reported and captured on a timely basis and in an accurate manner. The integrated loss event database is crucial to
prepare the Group to adopt a more advanced operational measurement model.

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Notable Deals
Key M&A Deals - Domestic
TELEKOM MALAYSIA BERHAD
Telekom Malaysia Berhad’s RM28 billion demerger of its fixed-line voice, data
and broadband services, and its mobile businesses; the subsequent listing
of TM International Berhad on Bursa Malaysia; and the acquisition by TM
International Berhad from Khazanah Nasional Berhad of its equity interests in
Sunshare Investments Ltd and PT Excelcomindo Pratama Tbk.
UEM WORLD BERHAD
UEM World Berhad’s RM1.7 billion restructuring and M&A transaction

involving the restricted offer for sale of shares in its listed subsidiaries in
Malaysia, the reorganisation of UEM Land Berhad, the dividend-in-specie of
shares in UEM Land, the listing of UEM Land on Bursa Malaysia, and other
related transactions.
KL-KUALA SELANGOR EXPRESSWAY BERHAD
KL-Kuala Selangor Expressway Berhad’s RM1.4 billion privatisation of the

KL-Kuala Selangor Expressway, on a build, operate and transfer basis.
OCBC CAPITAL (MALAYSIA) SDN BHD
OCBC CAPITAL OCBC Capital (Malaysia) Sdn Bhd’s RM735 million conditional take-over of
(MALAYSIA) SDN BHD all voting shares in Pacificmas Berhad not already held by OCBC Capital
(Malaysia).
DiGi.com Berhad
DiGi.Com Berhad’s RM685 million issuance of new ordinary shares in relation

to the formation of an alliance involving DiGi.Com Berhad, TIME dotCom
Berhad and their related companies, which included the transfer of the 3G
spectrum assignment to a wholly-owned subsidiary of DiGi.Com Berhad.
KUALA LUMPUR KEPONG BERHAD
Kuala Lumpur Kepong Berhad’s RM241 million takeover of the remaining voting
shares in Ladang Perbadanan-Fima Berhad not already held by Kuala Lumpur
Kepong.
PLUS EXPRESSWAYS BERHAD
PLUS Expressways Berhad’s RM134 million acquisition of the entire issued and
paid-up share capital of Konsortium Lebuhraya Butterworth-Kulim Sdn Bhd.

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Notable Deals
KEY M&A DEALS - CROSS BORDER
MAGNUM HOLDINGS SDN BHD
Magnum Holdings Sdn Bhd’s RM4.9 billion privatisation of Magnum

Corporation Berhad. This transaction was effectively a joint-privatisation by
Multi-Purpose Holdings Berhad and CVC Capital Partners.
ABU DHABI COMMERCIAL BANK P.J.S.C
Abu Dhabi Commercial Bank P.J.S.C’s RM3.9 billion acquisition of 25% equity
stake in RHB Capital Berhad from the Employees Provident Fund Board.
MAJESTIC MASTERPIECE SDN BHD
MAJESTIC MASTERPIECE Majestic Masterpiece Sdn Bhd’s RM681 million takeover of the remaining
SDN BHD shares in UBG Berhad not already held by Majestic Masterpiece.
BUMIPUTRA-COMMERCE HOLDINGS BERHAD
Bumiputra-Commerce Holdings Berhad’s RM4.1 billion (equivalent) merger

of its indirect subsidiary, PT Bank Niaga Tbk and PT Bank Lippo Tbk, an
indirect subsidiary of Khazanah Nasional Berhad.
BUMIPUTRA-COMMERCE HOLDINGS BERHAD
Bumiputra-Commerce Holdings Berhad’s RM1.4 billion (equivalent) acquisition

of 42% of BankThai Public Company Limited from the Financial Institutions
Development Fund.
FABER GROUP BERHAD
Faber Group Berhad’s USD68 million disposal of its 70% effective interest in
a hotel business in Hanoi, Vietnam.

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Notable Deals
KEY EQUITY & EQUITY-LINKED DEALS - DOMESTIC
MyETF DOW JONES ISLAMIC MARKET MALAYSIA TITANS
MyETF Dow Jones Islamic Market Malaysia Titans’ listing of 840 million units
of this Shariah-compliant exchange traded fund on Bursa Malaysia.
RESORTS WORLD BHd
Resorts World Bhd’s RM522 million non-renounceable offer for sale by

Resorts World Limited of 594 million ordinary shares in Genting International
Public Limited Company to the entitled shareholders on a pro-rata basis.
Wah Seong Corporation Berhad
Wah Seong Corporation Berhad’s RM203 million Rights Issue of ordinary

shares with free detachable warrants.
ADVANCE SYNERGY BERHAD
Advance Synergy Berhad’s RM177 million nominal value renounceable two-

call rights issue of Irredeemable Convertible Unsecured Loan Stocks.
YTL Corporation Berhad
YTL Corporation Berhad’s RM100 million renounceable restricted offer for sale
of ordinary shares in YTL Power International Berhad to entitled shareholders
of YTL Corporation.
Key Asic Berhad
Key Asic Berhad’s RM81 million IPO and listing on the MESDAQ Market of
Bursa Malaysia.
KEY EQUITY & EQUITY-LINKED DEALS - CROSS BORDER
Khazanah Nasional Berhad
Khazanah Nasional Berhad’s USD550.0 million Exchangeable Trust Certificates

(Islamic Exchangeable Sukuk) issuance with concurrent USD129.0 million
delta hedge placement.
MEDIA CHINESE INTERNATIONAL LIMITED
Media Chinese International Limited’s RM2.0 billion merger of Sin Chew Media
Corporation Berhad, Nanyang Press Holdings Berhad and Media Chinese
International Ltd and the subsequent first dual primary listing of the merged entity
on Bursa Malaysia and the Hong Kong Stock Exchange.

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Notable Deals
KEY DEBT TRANSACTIONS - DOMESTIC
CIMB Bank BERHAD
CIMB Bank Berhad’s RM4.0 billion Non-Innovative Tier 1 Stapled Securities

Issuance Programme, RM1.0 billion Innovative Tier 1 Capital Securities
Issuance, and RM1.5 billion Tier 2 Subordinated Bonds.
PLUS Expressways BERHAD
PLUS Expressways Berhad’s RM4.0 billion Islamic Medium Term Notes

(MTN) Programme.
Syarikat Prasarana NASIONAL BERHAD
Syarikat Prasarana Nasional Berhad’s RM2.0 billion Government Guaranteed

Sukuk Ijarah.
Malaysia Debt Ventures BERHAD
Malaysia Debt Ventures Berhad’s RM1.5 billion Islamic MTN Programme.
MRCB Southern Link BERHAD
MRCB Southern Link Berhad’s RM1.1 billion Istisna’ Sukuk.
Sabah Development Bank BERHAD
Sabah Development Bank Berhad’s RM500.0 million Commercial Papers

(CP) Programme and RM1.0 billion MTN Programme with a combined limit
of RM1.0 billion.
UMW Toyota Capital SDN BHD
UMW Toyota Capital Sdn Bhd’s RM1.0 billion Islamic CP/MTN Programme.

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Notable Deals
KEY DEBT TRANSACTIONS - DOMESTIC (Cont’d.)
Gamuda BERHAD
Gamuda Berhad’s RM100.0 million Islamic CP Programme and RM800.0

million Islamic MTN Programme with a combined limit of RM800.0 million.
DiGi Telecommunications Sdn Bhd
DiGi Telecommunications Sdn Bhd’s RM700.0 million CP/MTN Programme.
KEY DEBT TRANSACTIONS - CROSS BORDER
Islamic Development Bank
Islamic Development Bank’s RM1.0 billion Trust Certificate Issuance

Programme.
National Agricultural Cooperative Federation
National Agricultural Cooperative Federation’s RM3.3 billion MTN Programme.
Industrial Bank of Korea
Industrial Bank of Korea’s RM3.0 billion Multi-currency Conventional/Islamic

MTN Programme.
The Export-Import Bank of Korea
The Export-Import Bank of Korea’s RM3.0 billion Multi-currency Conventional/

Islamic MTN Programme.
Woori Bank
Woori Bank’s RM1.0 billion MTN Programme.

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Notable Achievements
• Best for Roadshow and Company visits

• Most Improved Brokerage in the last 12 Months
• Best in Sales Trading
• Best Execution
2008 Deal Awards • Best Overall Sales Service
• 2008 Country Deals of the Year • Best Local Brokerage
Deal: Binariang’s RM12 billion (USD3.6 billion) • Best Analyst (Terence Wong)
multi-tranche bond
• Best Deal of the Year for Malaysia cash management poll
Deal: Merger between Sime Darby Bhd, Kumpulan • Best Local Cash Management Bank - Malaysia
Guthrie Bhd, Golden Hope and subsidiaries
FX poll
Best Banks 2008 Awards • Best Domestic Provider of FX Service - Malaysia
• Best Domestic Equity House - Malaysia (As voted by corporates)
• Best Domestic Debt House - Malaysia • Best for Innovative FX Products & Structured Ideas
- Malaysia
SUMMER Awards • Best FX Prime Broking Services - Malaysia
• Best Domestic Equity House - Malaysia
• Best Domestic Debt House - Malaysia Structured Product poll
• Best Local Cash Management Bank - Malaysia • Best Domestic Provider for Local Currency Products
(As voted by small-sized corporates) - Structured Interest-Rate Products
• Best Local Cash Management Bank - Malaysia
(As voted by medium-sized corporates)
• Best Local Cash Management Bank - Malaysia
(As voted by large-sized corporates)
• Best Domestic Provider In Malaysia for Local
Currency Products - Structured Interest-rate Products
Brokers POLL FOR MALAYSIA AWARDS Country Awards for Achievement 2008
• Best for Overall Country Research - Domestic Banking Awards
• Best Research House Coverage • Best Investment Bank - Malaysia
(Strategy, Macroeconomics, Capital Goods, Consumer • Best Equity House - Malaysia
Services, Food, Beverage & Tobacco, Utilities) • Best Bond House - Malaysia

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COUNTRY Awards National Mergers and Acquisitions

• Best Domestic Investment Bank Awards 2008
• Best Equity House • Deal Maker of the Year
• Best Deal Deal: Merger of Sime Darby Bhd, Golden Hope
Deal: Issuance of USD550 million Islamic Exchangeable Plantations Bhd and Kumpulan Guthrie Bhd
Bonds, exchangeable into the shares in Parkson Retail • Deal of the Year
Group Limited Deal: Merger of Sime Darby Bhd, Golden Hope
Plantations Bhd and Kumpulan Guthrie Bhd
2008 best of bonds Awards • Strategic Deal of the Year
• 1st in Overall Malaysian Ringgit Government & Deal: Merger of Sime Darby Bhd, Golden Hope
Corporate Bond Market Plantations Bhd and Kumpulan Guthrie Bhd
• 1st in Malaysian Ringgit Corporate Bonds • Cross Border Deal of the Year
• 3rd in Malaysian Ringgit Government Bonds Awarded for CIMB Investment Bank’s role in the
disposal of 49% of Commerce Life Assurance Berhad
Triple A Awards for Derivatives and and Commerce Takaful Berhad to Aviva International Plc
Structured Products 2008 and disposal of 100% of Commerce Assurance Berhad
• Best Derivatives House, Malaysia to Allianz Malaysia Berhad
• Best Local Currency Structured Product
Triple A Awards
• Best Equity-linked Deal
Deal: Issuance of USD550 million Khazanah Nasional
concurrent sukuk exchangeable and USD96.8 million
equity placement into Parkson Retail Group
• Best Project Finance
Project: RM1.26 billion MRCB Southern Link Berhad

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RAM League Awards 2008 AWARDS FOR EXCELLENCE 2008

• RAM Award of Distinction - Special Merit Award for • Best Investment Bank - Malaysia
CIMB Investment Bank’s ability as the Malaysian Top
Lead Manager in the Corporate Sukuk Market
• RAM Award of Distinction - Special Merit Award for
CIMB Investment Bank’s ability as the Malaysian Top
Lead Manager in the Corporate Bond Market
• RAM Lead Manager Award - Ist in terms of issue
value
• RAM Lead Manager Award - Ist in terms of number of Best Financial Institution Awards
deals in Southeast Asia 2008
• RAM Award of Distinction - Blueprint Awards for • Best Investment Bank - Malaysia
Malaysian Innovation of The Year • Best Equity House - Malaysia
Deal: RM6.2 billion Senior & RM1.7 billion Cumulative • Best Bond House - Malaysia
Non-Convertible Junior Sukuk Musyarakah issued by
Malakoff Corporation Southeast Asia DEAL AWARDS 2008
• RAM Award of Distinction - Blueprint Awards for • Best Equity Linked Deal of the Year
Outstanding Deal of The Year Deal: Khazanah’s USD550 million Exchangeable Sukuk
Deal: RM22 billion Senior & RM3.02 billion Cumulative • Best Cash Management Solution
Non-Convertible Junior Sukuk Musyarakah issued by • Best Islamic Financing Deal of the Year
Binariang GSM Sdn Bhd Deal: Syarikat Prasarana Negara’s RM2.0 billion Sukuk
Ijarah, one of the largest bond issues of the year

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IFR Asia AWARDS 2008

• Malaysia Capital Markets Deal • Benchmark Deal of the Year 2008
Deal: Binariang GSM’s RM15.35 billion Islamic Issuance Deal: The Export-Import Bank of Korea (KEXIM)
Conventional and/or Islamic Medium Term Notes
Programme of up to RM3.0 billion in Ringgit Malaysia
and/or Foreign Currencies
• Innovative Deal of the Year 2008
Deal: CIMB Bank Berhad Non-Innovative Tier 1 Stapled
Securities Programme of up to RM4.0 billion
• No.1 in Conventional Bonds Issue Count 2008
“Best of the Breeds” Asian M&A 2008 Awards • No.1 in Conventional Bonds Issue Value 2008
• Top Asian Investment Bank for Asia Ex-Japan
M&A Deals
Asia Risk Awards for Excellence 2008

• House of the Year, Malaysia: CIMB Group

(18417-M)
Snapshot of Corporate Events
24 January 2008 19 February 2008
From left: Patrick Tan, Ong Liang Heng, Kong Sooi Lin, Shamsun Dato’ Sri Nazir Razak and Sung Tae Kim, CEO and President of
Anwar Bin Hussain, Lee Chin Tok and Chu Kok Wei at the Alpha Daewoo Securities, exchange documents after the signing of a
Southeast Asia Awards ceremony. strategic alliance agreement between CIMB Investment Bank and
Daewoo Securities Co. Ltd.
27 February 2008 14 March 2008
Kok Kong Chin speaking at The Second Annual Regional Capital CIMB wins nine awards at the RAM League Awards 2008.
Markets Conference 2008. Representing CIMB were (from left) Lee Chin Tok, Badlisyah Abdul
Ghani, Thomas Meow, Dato’ Sri Nazir Razak, Kong Sooi Lin, Nor
Masliza Binti Sulaiman, Lee Kok Kwan and Winnie Sia.

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Snapshot of Corporate Events
29 April 2008 21 May 2008
Dato’ Charon Wardini Mokhzani addressing the Hong Kong Dato’ Charon Wardini Mokhzani speaking to the investors at Plus
investment banking fraternity at the breakfast talk organised by the Expressway Berhad’s issuance of the Sukuk Musyarakah Medium
Hong Kong Securities Institute. Term Notes Programme.
2 June 2008 20 June 2008
Dato’ Shukri Hussin, President Commissioner of Bank Niaga, Dato’ Sri Nazir Razak and Khun Thongurai Linpiti, Head of
exchanges documents with Md Ali Md Dewal, President Commissioner Financial Institutions Development Fund, at the signing ceremony
of Bank Lippo to mark the launch of the Niaga-Lippo merger. The of CIMB Group’s acquisition of 42.13% stake in BankThai Public
Deputy Prime Minister of Malaysia, Dato’ Sri Mohd Najib bin Tun Abdul Company Ltd.
Razak, and Managing Director of Khazanah Nasional Berhad, Tan Sri
Azman Mokhtar, witnessed the ceremory.

Financial Statements
064 Directors’ Report 075 Statements of Changes in Equity
070 Statement by Directors 079 Cash Flow Statements
070 Statutory Declaration 082 Summary of Significant

Accounting Policies
071 Independent Auditors’ Report
096 Notes to the Financial Statements
073 Balance Sheets
074 Income Statements

(18417-M)
Directors’ Report
For the financial year ended 31 December 2008
The Directors have pleasure in submitting their Report and the Audited Financial Statements of the Group and of CIMB Investment
Bank Berhad (“the Bank”) for the financial year ended 31 December 2008.
Principal activities
The principal activities of the Bank during the financial year are investment banking and the provision of related financial services.
The principal activities of the subsidiaries during the financial year are set out in Note 12 to the Financial Statements. There was no
significant change in the nature of these activities during the financial year.
Financial results
The Group The Bank

RM’000 RM’000
Net profit after taxation and zakat 113,435 112,484
Dividends
The dividends on redeemable preference shares paid or declared by the Bank since 31 December 2007 were as follows:
RM’000
In respect of the financial year ended 31 December 2007:

Final gross dividend of 20,270.27 sen per redeemable preference share,
less 26% income tax, paid on 7 May 2008 150,000
In respect of the financial year ended 31 December 2008:

Interim gross dividend of 10,135.14 sen per redeemable preference share,
less 26% income tax, paid on 25 August 2008 75,000
225,000
The Directors now recommend the payment of a final gross dividend of 9,333.33 sen per share on 1,000,000 redeemable preference
shares of RM0.01 each, less 25% income tax, amounting to RM70,000,000 which, subject to the approval of members at the
forthcoming Annual General Meeting of the Bank, will be paid on 27 March 2009 to shareholders registered on the Bank’s Register
of Members at the close of business on 27 February 2009.
Reserves, provisions and allowances

There were no material transfers to or from reserves or provisions or allowances during the financial year other than those disclosed
in the Financial Statements and Notes to the Financial Statements.
Modified CIMBB Executive Employees Share Options Scheme (“EESOS”)

Prior to the CIMB Berhad (“CIMBB”) Restructuring and consistent with the fair treatment to all Executive Employees and continuance
of the CIMBB EESOS, a trust was set up to subscribe for all the remaining CIMBB shares through an accelerated vesting of the
unexercisable tranches under the CIMBB EESOS in 2005. The EESOS Trustee had opted for new shares in the ultimate holding
company, Bumiputra-Commerce Holdings Berhad (“BCHB”), at the ratio of approximately 1.146 BCHB shares for one CIMBB
share held pursuant to the CIMBB scheme.
The Modified EESOS has been disclosed accordingly in Note 43 to the Financial Statements.

(18417-M)
Directors’ Report
Bad and doubtful debts, and financing

Before the Financial Statements of the Group and of the Bank were made out, the Directors took reasonable steps to ascertain that
proper action had been taken in relation to the writing off of bad debts and financing and the making of allowance for doubtful debts
and financing, and satisfied themselves that all known bad debts and financing had been written off and that adequate allowance
had been made for doubtful debts and financing.
At the date of this Report, the Directors are not aware of any circumstances which would render the amounts written off for bad
debts and financing, or the amount of the allowance for doubtful debts and financing in the Financial Statements of the Group and
the Bank, inadequate to any substantial extent.
Current assets
Before the Financial Statements of the Group and of the Bank were made out, the Directors took reasonable steps to ascertain that
any current assets, other than debts and financing, which were unlikely to realise in the ordinary course of business, their values as
shown in the accounting records of the Group and the Bank had been written down to an amount which they might be expected
so to realise.
At the date of this Report, the Directors are not aware of any circumstances which would render the values attributed to current
assets in the Financial Statements of the Group and the Bank misleading.
Valuation methods
At the date of this Report, the Directors are not aware of any circumstances which have arisen which render adherence to the
existing method of valuation of assets or liabilities of the Group and the Bank misleading or inappropriate.
Contingent and other liabilities

At the date of this Report, there does not exist:
(a) any charge on the assets of the Group or the Bank which has arisen since the end of the financial year which secures the
liability of any other person; or
(b) any contingent liability of the Group or the Bank which has arisen since the end of the financial year other than in the ordinary
course of banking business.
No contingent or other liability of any company in the Group has become enforceable or is likely to become enforceable within the
period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the
ability of the Bank and its subsidiaries to meet their obligations when they fall due.
Change of circumstances
At the date of this Report, the Directors are not aware of any circumstances not otherwise dealt with in this Report or the Financial
Statements of the Group and of the Bank, that would render any amount stated in the Financial Statements misleading.

(18417-M)
Directors’ Report
Items of an unusual nature

In the opinion of the Directors:
(a) the results of the Group’s and the Bank’s operations for the financial year have not been substantially affected by any item,
transaction or event of a material and unusual nature other than those disclosed in Note 49 to the Financial Statements; and
(b) there has not arisen in the interval between the end of the financial year and the date of this Report any item, transaction or
event of a material and unusual nature likely to affect substantially the results of the operations of the Group or the Bank for the
financial year in which this Report is made.
Directors
The names of the Directors of the Bank in office since the date of the last Report and at the date of this Report are:
Dato’ Hamzah bin Bakar

Dato’ Sri Mohamed Nazir bin Abdul Razak
Dato’ Zainal Abidin bin Putih
Nicholas Rupert Heylett Bloy
Zahardin bin Omardin
Dato’ Charon Wardini bin Mokhzani
In accordance with Articles 75A and 75B of the Bank’s Articles of Association, Dato’ Sri Mohamed Nazir bin Abdul Razak and
Zahardin bin Omardin retire from the Board at the forthcoming Annual General Meeting and being eligible, offer themselves for re-
election.
Directors’ interests in shares and share options

According to the Register of Directors’ Shareholdings, the beneficial interests of the Directors who held office at the end of the
financial year, in the shares and share options of the holding and ultimate holding company during the financial year are as
follows:
Number of ordinary shares of RM1 each

As at As at
1 January Acquired Disposed 31 December
Ultimate holding company

Bumiputra-Commerce Holdings Berhad
Dato’ Sri Mohamed Nazir bin Abdul Razak* 28,053,261 350,000 (450,000) 27,953,261
Zahardin bin Omardin 9,146 - - 9,146
Dato’ Charon Wardini bin Mokhzani** 68,695 45,000 (50,000) 63,695
Dato’ Zainal Abidin bin Putih*** 15,000 40,000 - 55,000
* Include shareholding of spouse, details of which are follows:
As at As at
Datin Sri Azlina binti Abdul Aziz 4,450,000 - (450,000) 4,000,000

(18417-M)
Directors’ Report
Directors’ interests in shares and share options (Continued)

** Include shareholding of spouse, details of which are follows:
Number of ordinary shares of RM1 each

As at As at
Datin Saidah binti Rastam 5,038 - (5,000) 38
*** Include shareholding of spouse and children, details of which are follows:
As at As at
Datin Jasmine binti Abdullah Heng 10,000 - - 10,000

Mohamad Ari Zulkarnian 5,000 - - 5,000
Number of share options over ordinary shares of RM1

each granted under the Executive Employees Share
Options Scheme (“EESOS 3”)
As at As at
1 January Granted Exercised 31 December
Ultimate holding company

Bumiputra-Commerce Holdings Berhad
Dato’ Charon Wardini bin Mokhzani 706,375 - (45,000) 661,375
The options which were due to expire on 29 December 2008, have been extended to expire on 29 December 2009. The
applicable option prices are as follows:
RM
Exercise price from 30 December 2007 to 29 December 2008 4.19

Exercise price from 30 December 2008 to 29 December 2009 4.40
Other than as disclosed above, according to the Register of Directors’ Shareholdings, the Directors in the office at the end of the
financial year did not hold any interest in shares, warrants, share options and debentures in the Bank or of its related corporations
during the financial year.
Directors’ benefits
Since the end of the previous financial year, no Director of the Bank has received or become entitled to receive any benefit (other
than the benefit included in the aggregate amount of emoluments received or due and receivable by Directors shown in Note 35
to the Financial Statements or the fixed salary as a full time employee of the Bank) by reason of a contract made by the Bank or a
related corporation with the Director or with a firm of which the Director is a member or with a company in which the Director has
a substantial financial interest.
Neither at the end of the financial year, nor at any time during the financial year, did there subsist any other arrangements to which
the Bank is a party with the object or objects of enabling Directors of the Bank to acquire benefits by means of the acquisition of
shares in, or debentures of, the Bank or any other body corporate other than share options of the ultimate holding company.

(18417-M)
Directors’ Report
2008 Business Plan And Strategy

The financial year ended 31 December 2008 was a challenging year both locally and globally. Although our underlying business
performance was solid in the first half of the year, the deterioration in global credit markets has impacted our business and put
pressure on the domestic market in the second half of the year. The performance in 2008 demonstrated the resilience of our
business model and the Bank is well positioned going into the new financial year with a strong management team.
Outlook for 2009

The outlook is cautious going into the new financial year and the Bank will continue with its conservative stance until signs
of improvement in economic conditions are evident. The Bank will remain vigilant given the potential impact of global market
developments on Malaysia’s capital and equity markets in 2009 and will continue to focus on its growth strategy and expanding
its market share in Malaysia and this region. Human capital development and talent management will continue to remain a key
management agenda for the Bank to ensure that we have a high performing work force and culture to achieve our vision and
delivering the best customer experience and long term shareholders’ value.
Ratings by External Rating Agencies

Details of the ratings of the Bank and its debt securities are as follows:
Rating Agency Date Rating Classification Rating Received
Rating Agency Malaysia Berhad Jan-08 Long term AA2

Short term P1
Outlook Stable
Moody’s Investors Service Dec-08 Long term deposits A3

Short term deposits P1
Subordinated debt Baa1
Outlook Stable
Fitch Ratings Jun-08 Long term BBB+

Senior unsecured debt BBB+
Subordinated debt BBB
Outlook Stable
Standard & Poor’s Sep-08 Long term BBB

Short term A2
Subordinated debt BBB-
Outlook Stable

(18417-M)
Directors’ Report
Shariah Committee
Effective 1 January 2007, with the integration of the Shariah Committees of CIMB Investment Bank Berhad and CIMB Islamic
Bank Berhad (“CIMB Islamic”), all the Islamic banking businesses of the CIMB Group came under the purview of the CIMB Islamic
Shariah Committee, which resides at CIMB Islamic.
As per BNM/GPS1 (Guideline on the Governance of Shariah Committee for Islamic Financial Institutions), the Shariah Committee
advises the Group on the operations of its Islamic banking business to ensure that the Group is not involved in any elements or
activities which are not approved under Shariah. In advising on such matters, the Shariah Committee also considers the views
of the Shariah Council or Committees of relevant authorities like Bank Negara Malaysia and the Securities Commission on issues
relating to the activities and operations of Islamic banking and financing.
Composition of the Shariah Committee:
1. Sheikh Professor Dr. Mohammad Hashim Kamali (Chairman)

2. Sheikh Nedham Muhammad Seleh Yaqooby
3. Sheikh Dr. Haji Mohd Nai’m bin Haji Mokhtar
4. Sheikh Associate Professor Dr. Shafaai bin Musa
5. Sheikh Dr. Haji Zainudin bin Jaffar
6. Sheikh Dr. Yousef Abdullah AlShubaily (appointed on 28 October 2008)
Significant events during the financial year

Significant events during the financial year are disclosed in Note 44 to the Financial Statements.
Subsequent events after the financial year end

There were no significant events after the financial year end.
Holding and ultimate holding companies

The immediate holding company is CIMB Group Sdn Bhd and the Directors regard BCHB as the Bank’s ultimate holding company
during the financial year. Both companies are incorporated in Malaysia.
Auditors
The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.
Signed on behalf of the Board of Directors in accordance with their resolution.

Director

Director
Kuala Lumpur
27 March 2009

(18417-M)
Statement by Directors
Pursuant to Section 169(15) of the Companies Act, 1965
We, Dato’ Hamzah bin Bakar and Dato’ Charon Wardini bin Mokhzani, being two of the Directors of CIMB Investment Bank Berhad,
state that, in the opinion of the Directors, the Financial Statements set out on pages 073 to 176 are drawn up so as to give a true
and fair view of the state of affairs of the Group and the Bank as at 31 December 2008 and of the results and the cash flows of the
Group and the Bank for the financial year ended on that date in accordance with the provisions of the Companies Act, 1965, MASB
Approved Accounting Standards in Malaysia for Entities Other Than Private Entities and Bank Negara Malaysia Guidelines.
Signed on behalf of the Board of Directors in accordance with their resolution.

Director

Director
Kuala Lumpur
27 March 2009
Statutory Declaration
Pursuant to Section 169(16) of the Companies Act, 1965
I, Kim Kenny, being the officer primarily responsible for the financial management of CIMB Investment Bank Berhad, do solemnly
and sincerely declare that, the Financial Statements set out on pages 073 to 176 are, in my opinion, correct and I make this solemn
declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.
Kim Kenny
Subscribed and solemnly declared by the above named Kim Kenny at Kuala Lumpur before me, on 27 March 2009.
Commissioner for Oaths

(18417-M)
Independent Auditors’ Report

To the members of CIMB Investement Bank Berhad
Company No: 18417-M (Incorporated in Malaysia)
Report on the Financial Statements

We have audited the Financial Statements of CIMB Investment Bank Berhad, which comprise the balance sheets as at 31 December
2008 of the Group and of the Bank, and the income statements, statements of changes in equity and cash flow statements of the
Group and of the Bank for the year then ended, and a summary of significant accounting policies and other explanatory notes, as
set out on pages 073 to 176.
Directors’ Responsibility for the Financial Statements

The Directors of the Bank are responsible for the preparation and fair presentation of these Financial Statements in accordance
with the Companies Act, 1965, the MASB Approved Accounting Standards in Malaysia for Entities Other Than Private Entities and
Bank Negara Malaysia Guidelines. This responsibility includes: designing, implementing and maintaining internal control relevant
to the preparation and fair presentation of Financial Statements that are free from material misstatement, whether due to fraud
or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the
circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on these Financial Statements based on our audit. We conducted our audit in accordance
with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance whether the Financial Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Statements.
The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the Financial
Statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Group’s
and the Bank’s preparation and fair presentation of the Financial Statements in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Bank’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by the directors, as well as evaluating the overall presentation of the Financial Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the Financial Statements have been properly drawn up in accordance with the Companies Act, 1965, the MASB
Approved Accounting Standards in Malaysia for Entities Other Than Private Entities and Bank Negara Malaysia Guidelines so as
to give a true and fair view of the financial position of the Group and of the Bank as of 31 December 2008 and of their financial
performance and cash flows for the year then ended.

(18417-M)
Independent Auditors’ Report

To the members of CIMB Investement Bank Berhad
Company No: 18417-M (Incorporated in Malaysia)
Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965, in Malaysia, we also report the following:
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Bank and its
subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.
(b) We have considered the Financial Statements and the auditors’ reports of all the subsidiaries of which we have not acted as
auditors, which are indicated in Note 12 to the Financial Statements.
(c) We are satisfied that the Financial Statements of the subsidiaries that have been consolidated with the Bank’s Financial
Statements are in form and content appropriate and proper for the purposes of the preparation of the Financial Statements of
the Group and we have received satisfactory information and explanations required by us for those purposes.
(d) The audit reports on the Financial Statements of the subsidiaries did not contain any qualification or any adverse comment
made under Section 174(3) of the Act.
Other Matters
This report is made solely to the members of the Bank, as a body, in accordance with Section 174 of the Companies Act, 1965 in
Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
PricewaterhouseCoopers Sridharan Nair

(No. AF: 1146) (No. 2656/05/10 (J))
Chartered Accountants Chartered Accountant
Kuala Lumpur
27 March 2009

(18417-M)
Balance Sheets
As at 31 December 2008
The Group The Bank

2008 2007 2008 2007
Note RM’000 RM’000 RM’000 RM’000
Assets
Cash and short term funds 2 2,877,447 1,582,837 2,727,873 1,408,220
Securities purchased under resale agreements 287,184 20,559 287,184 20,559
Deposits and placements with banks
and other financial institutions 3 201,224 305,548 200,100 304,442
Securities held for trading 4 676,555 168,337 676,555 168,337
Available-for-sale securities 5 522,331 519,651 519,924 517,244
Held-to-maturity investments 6 346,450 330,700 346,450 330,700
Derivative financial instruments 7 126,185 210,050 126,185 210,050
Loans, advances and financing 8 50,083 348,404 50,083 348,404
Other assets 9 275,824 773,271 274,647 772,140
Deferred tax assets 10 11,396 - 11,262 -
Tax recoverable 687 213 - -
Statutory deposits with Bank Negara Malaysia 11 12,805 10,340 12,805 10,340
Investment in subsidiaries 12 - - 19,420 19,420
Investment in associates 13 4,169 - - -
Property, plant and equipment 14 66,586 63,917 67,570 63,612
Prepaid lease payments 15 16,253 16,625 16,253 16,625
Goodwill on consolidation 16 964 964 - -
Amount due from related companies 38 19,525 9,745 19,534 47,168
Total assets 5,495,668 4,361,161 5,355,845 4,237,261
Liabilities
Deposits from customers 17 1,336,057 805,500 1,336,057 805,500
Deposits and placements of banks
and other financial institutions 18 2,438,241 950,823 2,438,241 950,823
Derivative financial instruments 7 11,076 155,290 11,076 155,290
Other liabilities 19 663,809 1,252,571 534,082 1,096,459
Provision for taxation and zakat 20 40,892 51,404 39,440 51,328
Deferred tax liabilities 10 - 2,215 - 2,192
Other borrowings 21 7,000 - - -
Long term borrowings 22 346,462 330,568 346,462 330,568
Amount due to related companies 38 3,557 43,424 15,266 86,607
Total liabilities 4,847,094 3,591,795 4,720,624 3,478,767
Capital and reserves attributable

to equity holders of the Bank
Share capital 23 219,242 219,242 219,242 219,242
Redeemable preference shares 24 10 - 10 -
Reserves 25 429,322 550,124 415,969 539,252
Total equity 648,574 769,366 635,221 758,494
Total equity and liabilities 5,495,668 4,361,161 5,355,845 4,237,261
Commitments and contingencies

Principal 7 4,230,613 5,404,713 4,230,613 5,404,713
Credit equivalent 7 118,882 73,199 118,882 73,199

(18417-M)
Income Statements
The Group The Bank

2008 2007 2008 2007
Note RM’000 RM’000 RM’000 RM’000
Interest income 26 101,228 97,378 98,974 94,548

Interest expense 27 (72,450) (51,614) (72,074) (51,536)
Net interest income 28,778 45,764 26,900 43,012

Income from Islamic Banking operations 50 50,286 61,935 50,286 61,935
Write back of losses on loans,
advances and financing 28 4,931 3,312 4,931 3,312
Write back of/(allowance for)
other receivables (net) 1,761 (1,613) 2,208 (1,252)
85,756 109,398 84,325 107,007

Net fee and commission income 29 128,368 112,458 128,368 112,458
Dividend income 30 313 1,133 (4,071) 165,468
Net trading (loss)/income 31 (7,080) 36,988 (7,080) 36,988
(Loss)/gain arising from sale
of available-for-sale securities 32 (1,805) 18,732 (507) 18,732
Income from asset management
and securities services 11,795 17,036 11,795 17,036
Brokerage income 91,994 170,808 88,533 164,914
Other non-interest income 33 25,059 6,520 25,173 6,168
Non-interest income 248,644 363,675 242,211 521,764
Net income 334,400 473,073 326,536 628,771

Overheads 34 (185,206) (191,913) (180,869) (189,159)
149,194 281,160 145,667 439,612

Share of results of associates 13 689 - - -
Profit before taxation 149,883 281,160 145,667 439,612

Taxation 36 (36,448) (66,672) (33,183) (110,962)
Net profit after taxation attributable

to equity holders of the Bank 113,435 214,488 112,484 328,650
Dividend per share (sen)

- Interim dividend of Nil sen per ordinary
share (2007: 124.96 sen) less taxation 37 - 91.22 - 91.22
- Interim dividend of 10,135.14 sen
per redeemable preference share
(2007: Nil sen) less taxation 37 7,500.00 - 7,500.00 -
- Final dividend of Nil sen per ordinary
share (2007: 124.96 sen) less taxation 37 - 91.22 - 91.22
- Final dividend in respect of previous year
of 20,270.27 sen per redeemable
preference share (2007: Nil sen)
less taxation 37 15,000.00 - 15,000.00 -

Attributable to equity holders of the Bank
Revaluation
reserve on
Redeemable Exchange available-
Share preference Share fluctuation Statutory Options for-sale Retained
capital shares premium reserve reserve reserve securities profits Total
Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
The Group
Balance as at 1 January 2008 219,242 - 33,489 (519) 293,577 15,841 (6,312) 214,048 769,366
Net profit for the financial year - - - - - - - 113,435 113,435
Net gain/(loss) recognised directly in equity:
- currency translation difference - - - 226 - - - - 226
- revaluation reserve on available-for-sale securities 25(iii) - - - - - - (10,868) - (10,868)
Issuance of redeemable preference shares - 10 - - - - - (10) -

Dividends paid 37 - - - - - - - (225,000) (225,000)
Issuance of ESOS 25(iv) - - - - - 1,415 - - 1,415
Balance as at 31 December 2008 219,242 10 33,489 (293) 293,577 17,256 (17,180) 102,473 648,574
Statements of Changes in Equity
Annual Report 2008

075
(18417-M)
Attributable to equity holders of the Bank
076
(18417-M)
Revaluation
reserve on
Exchange available-
Share Share fluctuation Statutory Options for-sale Retained
Annual Report 2008

capital premium reserve reserve reserve securities profits Total

Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
The Group
Balance as at 1 January 2007 219,242 33,489 (418) 293,577 12,468 9,975 399,560 967,893
Net profit for the financial year - - - - - - 214,488 214,488
- currency translation difference - - (101) - - - - (101)
- revaluation reserve on available-for-sale securities 25(iii) - - - - - (16,287) - (16,287)
Dividends paid 37 - - - - - - (400,000) (400,000)
Issuance of ESOS 25(iv) - - - - 3,373 - - 3,373
Balance as at 31 December 2007 219,242 33,489 (519) 293,577 15,841 (6,312) 214,048 769,366
Non-distributable Distributable
Revaluation
reserve on
Redeemable available-
Share preference Share Statutory Merger for-sale Options Capital Retained
capital shares premium reserve reserve securities reserve reserve profits Total
Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
The Bank
Balance as at 1 January 2008 219,242 - 33,489 293,577 (272,007) (5,014) 15,806 271,377 202,024 758,494
Net profit for the financial year - - - - - - - - 112,484 112,484
- revaluation reserve on available-for-sale securities 25(iii) - - - - - (12,166) - - - (12,166)
Issuance of redeemable preference shares - 10 - - - - - - (10) -
Dividends paid 37 - - - - - - - - (225,000) (225,000)
Issuance of ESOS 25(iv) - - - - - - 1,409 - - 1,409
Balance as at 31 December 2008 219,242 10 33,489 293,577 (272,007) (17,180) 17,215 271,377 89,498 635,221
Annual Report 2008

077
(18417-M)
Non-distributable Distributable
078
(18417-M)
Revaluation
reserve on
available-
Share Share Statutory Merger for-sale Options Capital Retained
Annual Report 2008

capital premium reserve reserve securities reserve reserve profits Total

Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
The Bank
Balance as at 1 January 2007 219,242 33,489 293,577 (272,007) 11,273 12,446 271,377 273,374 842,771
Net profit for the financial year - - - - - - - 328,650 328,650
- revaluation reserve on available-for-sale securities 25(iii) - - - - (16,287) - - - (16,287)
Dividends paid 37 - - - - - - - (400,000) (400,000)
Issuance of ESOS 25(iv) - - - - - 3,360 - - 3,360
Balance as at 31 December 2007 219,242 33,489 293,577 (272,007) (5,014) 15,806 271,377 202,024 758,494
(18417-M)
Cash Flow Statements

The Group The Bank

2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Operating activities
Add/(less) adjustments:
Write back of losses on loans,
advances and financing (4,931) (3,312) (4,931) (3,312)
Interest income on available-for-sale securities (28,095) (26,982) (28,095) (26,982)
Interest income on held-to-maturity investments (16,869) (16,790) (16,869) (16,790)
Interest expense on long term borrowings 17,060 21,114 16,684 18,733
Depreciation of property, plant and equipment 19,881 12,223 18,516 12,088
Amortisation of prepaid lease payments 372 372 372 372
(Write back of)/allowance for other receivables (1,761) 1,613 (2,208) 1,252
Accretion of discount less amortisation of premium (515) (552) (515) (552)
Unrealised loss on securities held for trading 9,395 3,894 9,395 3,894
Unrealised loss on derivative financial instruments - 5,150 - 5,150
Gain on disposal of property, plant and equipment (431) (422) (431) (422)
Loss/(gain) from sale of available-for-sale securities 1,805 (18,732) 507 (18,732)
Gross dividends from subsidiaries - - 4,384 (164,335)
Gross dividends from securities held for trading (313) (1,133) (313) (1,133)
Unrealised foreign exchange loss/(gain) (5,411) 74 (5,641) 9
Share of results of associates (689) - - -
ESOS expense 1,415 3,373 1,409 3,360
Cash flow from operating profit before changes in

operating assets and liabilities 140,796 261,050 137,931 252,212
Operating assets
Securities purchased under resale agreements (266,625) 166,380 (266,625) 141,519
Deposits and placements with banks and other
financial institutions 104,324 (253,764) 104,342 (262,142)
Securities held for trading (517,099) (32,325) (517,099) (32,325)
Derivative financial instruments (60,349) (59,910) (60,349) (59,910)
Loans, advances and financing 303,254 194,462 303,254 194,462
Other assets 499,371 (208,829) 500,094 (210,508)
Statutory deposits with Bank Negara Malaysia (2,465) (10,340) (2,465) (10,340)
Amount due from related companies (9,780) 24,912 (9,780) 24,913
Amount due from immediate holding company - 112 - 112
Amount due from subsidiaries - - 37,414 (37,287)

(18417-M)

The Group The Bank

2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Operating liabilities
Deposits from customers 530,557 763,670 530,557 763,670
Deposits and placements of banks and
other financial institutions 1,493,023 185,451 1,493,023 185,451
Other liabilities (570,176) 327,375 (543,673) 264,426
Amount due to ultimate holding company (1,065) 1,052 (1,065) 1,052
Amount due to holding company (100) 100 (100) 100
Amount due to related companies (42,082) 19,409 (42,060) 19,407
Amount due to subsidiaries - - (28,116) (80,647)
Cash from operating activities 1,601,584 1,378,805 1,635,283 1,154,165

Taxation paid (57,036) (41,450) (55,777) (39,917)
Net cash from operating activities 1,544,548 1,337,355 1,579,506 1,114,248
Investing activities
Dividends received from subsidiaries - - (3,200) 119,965
Dividends received from
securities held for trading 255 827 255 922
Interest income received from
available-for-sale securities 28,026 21,439 28,026 21,439
Interest income received from
held-to-maturity investments 16,703 17,025 16,703 17,025
Net purchase of available-for-sale securities (19,304) (5,245) (19,226) (5,245)
Purchase of property, plant and equipment (23,486) (32,551) (23,410) (32,413)
Acquisition of associates (100) - - -
Proceeds from disposal of property,
plant and equipment 1,367 6,064 1,367 6,064
Net cash from investing activities 3,461 7,559 515 127,757
Financing activities
Interest paid on long term borrowings (16,775) (35,994) (16,518) (35,994)
Drawdown of other borrowings 17,000 - - -
Repayment of other borrowings (10,000) - - -
Dividends paid (225,000) (400,000) (225,000) (400,000)
Net cash used in financing activities (234,775) (435,994) (241,518) (435,994)

(18417-M)

The Group The Bank

2008 2007 2008 2007
Note RM’000 RM’000 RM’000 RM’000
Net increase in cash and cash

equivalents during the financial year 1,313,234 908,920 1,338,503 806,011
Cash and cash equivalents at beginning
of the financial year 1,356,930 448,451 1,182,313 376,632
Effects of exchange rate changes 246 (441) 20 (330)
Cash and cash equivalents at end

of the financial year 2,670,410 1,356,930 2,520,836 1,182,313
Cash and cash equivalents

comprise the following:
Cash and short term funds 2 2,877,447 1,582,837 2,727,873 1,408,220
Adjustment for monies held in trust:
Clients’ trust and dealers’
representatives’ balances (193,698) (212,227) (193,698) (212,227)
Remisiers’ balances (13,339) (13,680) (13,339) (13,680)
Cash and cash equivalents 2,670,410 1,356,930 2,520,836 1,182,313

(18417-M)
Summary of Significant Accounting Policies

The following accounting policies have been used consistently in dealing with items which are considered material in relation to the
Financial Statements.
A Basis of preparation of the Financial Statements

The Financial Statements of the Group and Bank are prepared under the historical cost convention, and modified by the
revaluation of available-for-sale securities, securities held for trading and all derivative contracts.
The Financial Statements of the Group and the Bank have been prepared in accordance with the Financial Reporting Standards,
MASB Approved Accounting Standards in Malaysia for Entities Other Than Private Entities, Bank Negara Malaysia (“BNM”)
Guidelines, Shariah requirements and the provisions of the Companies Act, 1965.
The Financial Statements incorporate those activities relating to Skim Perbankan Islam (“SPI”) which have been undertaken by
the Bank. SPI refers generally to the acceptance of deposits and dealing in Islamic Securities under Shariah principles.
BNM has granted indulgence to the Group and the Bank and other local banks in Malaysia from complying with the requirements
on the impairment of loans under the revised ‘Guideline on Financial Reporting for Licensed Institutions’ (“BNM/GP8”). Paragraph
4, Appendix A of the revised BNM/GP8 requires the impaired loans to be measured at their estimated recoverable amount. This
requirement is principally similar to the requirement under FRS 139 - Financial Instruments: Recognition and Measurement.
In view of the deferment of the implementation of FRS 139 in Malaysia, the Group and the Bank and other local banks in
Malaysia will be deemed to be in compliance with the requirement on the impairment of loans under the revised BNM/GP8 if
the allowance for non-performing loans, advances and financing is computed based on BNM’s guidelines on the ‘Classification
of Non-Performing Loans and Provision for Substandard, Bad and Doubtful Debts’ (“BNM/GP3”) requirements.
The preparation of Financial Statements in conformity with the provisions of the Companies Act, 1965, Financial Reporting
Standards and Bank Negara Malaysia Guidelines requires the use of certain critical accounting estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
Financial Statements, and the reported amounts of income and expenses during the reported period. It also requires Directors
to exercise their judgement in the process of applying the Group and the Bank’s accounting policies. Although these estimates
and judgement are based on the Directors’ best knowledge of current events and actions, actual results may differ from those
estimates.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to
the Financial Statements, are disclosed in Note 44.
(a) Standards, amendments to published standards and interpretations that are effective and applicable to the
Group and Bank
The new accounting standards, amendments to published standards and interpretations that are effective and applicable
to the Group and the Bank for the financial year ended 31 December 2008 are as follows:
• Amendment to FRS 121 The Effects of Changes in Foreign Exchange Rates - Net Investment in a Foreign Operations
• Amendment to FRS 112 Income Taxes
• Amendment to FRS 107 Cash Flow Statements
• Amendment to FRS 118 Revenue
• Amendment to FRS 137 Provisions, Contingent Liabilities and Contingent Assets
• Amendment to FRS138 Intangible Assets
• IC Interpretation 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities
• IC Interpretation 2 Members’ Shares in Co-operative Entities and Similar Instruments
• IC Interpretation 8 Scope of FRS 2

(18417-M)

A Basis of preparation of the Financial Statements (Continued)

(a) Standards, amendments to published standards and interpretations that are effective and applicable to the
Group and Bank (Continued)
All changes in accounting policies have been made in accordance with the transition provisions in the respective standards,
amendments to published standards and interpretations. All standards, amendments and interpretations adopted by the
Group and the Bank require retrospective application.
The adoption of the new accounting standards, amendments to published standards and interpretations did not have a
material impact on the Financial Statements of the Group and Bank.
(b) Standards, amendments to published standards and interpretations to existing standards that are applicable
to the Group but not yet effective
The new and revised standards, amendments to published standards and interpretations that are applicable to the Group
but which the Group and the Bank have not early adopted, are as follows:
• FRS 8 Operating Segments (effective for accounting periods beginning on or after 1 July 2009). This new standard
establishes principles for measurement and disclosure of reportable and operating segments in the separate and
consolidated financial statements of an entity. The Group and the Bank will apply this standard when effective.
• FRS 139 Financial Instruments: Recognition and Measurement (effective for accounting periods beginning on or after
1 January 2010). This new standard establishes principles for recognising and measuring financial assets, financial
liabilities and some contracts to buy and sell non-financial items. Hedge accounting is permitted only under strict
circumstances. The Group and the Bank will apply this standard when effective.
• However, with effect from 1 January 2005, the revised BNM/GP8 has adopted certain FRS 139 principles in recognising
and measuring financial assets, financial liabilities, derivative financial instruments and hedge accounting. The relevant
accounting policies are set out in Notes E, F and I to the Financial Statements.
• FRS 4 Insurance Contracts (effective for accounting periods beginning on or after 1 January 2010). This new standard
establishes principles for recognising and measuring insurance contracts including reinsurance contracts. The Group
and the Bank will apply this standard when effective.
• FRS 7 Financial Instruments: Disclosures (effective for accounting periods beginning on or after 1 January 2010). This
new standard establishes disclosure requirements for financial instruments. Qualitative and quantitative information
about exposure to risks arising from financial instruments are required. The Group and the Bank will apply this standard
when effective.
• IC Interpretation 9 Reassessment of Embedded Derivatives (effective for accounting periods beginning on or after
1 January 2010). This new standard requires an entity to assess whether an embedded derivative is required to be
separated from the host contract and accounted for as a derivative when the entity first becomes a party to the
contract. Subsequent reassessment is disallowed unless changes to the terms of contract significantly modify the
cash flows of the original contract. The Group and the Bank will apply this standard when effective.
• IC Interpretation 10 Interim Financial Reporting and Impairment (effective for accounting periods beginning on or after
1 January 2010). This new standard disallows reversal of impairment losses recognised in a previous interim period in
respect of goodwill or an investment in either an equity instrument or a financial asset carried at cost. The Group and
the Bank will apply this standard when effective.

(18417-M)

B Economic entities in the Group

(a) Subsidiaries
The Bank treats as subsidiaries those corporations, partnerships or other entities (including special purpose entities) in
which the Bank has the power to exercise control over the financial and operating policies so as to obtain benefits from
their activities, generally accompanying a shareholding of more than half of the voting rights. The existence and effect
of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Bank
controls another entity.
Investment in subsidiaries is stated at cost less accumulated impairment losses. Where there is an indication of impairment,
the carrying amount of the investment is assessed. A write down is made if the carrying amount exceeds its recoverable
amount.
External costs directly attributable to an acquisition, other than the cost of issuing shares and other capital instruments,
are included as part of the cost of acquisition.
The consolidated Financial Statements include the audited Financial Statements of the Bank and all its subsidiaries made
up to the end of the financial year.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and de-consolidated from
the date that control ceases. Subsidiaries are consolidated using the purchase method of accounting, except for business
combinations involving entities or businesses under common control with agreement dates on/after 1 January 2006,
which are accounted for using the pooling-of-interests method.
Under the purchase method of accounting, the results of subsidiaries acquired or disposed of during the year are included
from the date of acquisition up to the date of disposal. The cost of an acquisition is measured at the fair value of the assets
given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable
to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination
are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The
excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired at the date
of acquisition is reflected as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary
acquired, the difference is recognised directly in the income statement.
Minority interests represents that portion of the profit or loss and net assets of a subsidiary attributable to equity interests
that are not owned, directly or indirectly through subsidiaries, by the parent. It is measured at the minorities’ share of the
fair value of the subsidiaries’ identifiable assets and liabilities at the acquisition date and the minorities’ share of changes
in the subsidiaries’ equity since that date.
The Directors note that business combinations involving entities or businesses under common control are outside the
scope of FRS 3 - ‘Business Combinations’ and that there is no guidance elsewhere in FRS covering such transactions.
FRS contain specific guidance to be followed where a transaction falls outside the scope of FRS. This guidance is included
in paragraphs 10 to 12 of FRS 108 - ‘Accounting Policies, Changes in Accounting Estimates and Errors’. This requires,
inter alia, that where FRS does not include guidance for a particular issue, the Directors may also consider the most
recent pronouncements of other standard-setting bodies that use a similar conceptual framework to develop accounting
standards. In this regard, it is noted that the United States Financial Accounting Standards Board (‘FASB’) has issued an
accounting standard covering business combinations (‘FAS 141’) that is similar in a number of respects to FRS 3.

(18417-M)

B Economic entities in the Group (Continued)

(a) Subsidiaries (Continued)
In contrast to FRS 3, FAS 141 does include, as an Appendix, limited accounting guidance for transactions under common
control which, as with FRS 3, are outside the scope of that accounting standard. The guidance contained in FAS 141
indicates that a form of accounting that is similar to pooling-of-interests method, which was previously set out in Accounting
Principles Board (‘APB’) Opinion No. 16, may be used when accounting for transactions under common control.
Having considered the requirements of FRS 108, and the guidance included within FAS 141, the Directors consider
appropriate to use a form of accounting which is similar to pooling-of-interests when dealing with business combinations
involving entities or businesses under common control.
Under the pooling-of-interests method of accounting, the results of entities or businesses under common control are
presented as if the merger had been effected throughout the current and previous years. The assets and liabilities combined
are accounted for based on the carrying amounts from the perspective of the common control shareholder at the date of
transfer. On consolidation, the cost of the merger is cancelled with the values of the shares received. Any resulting credit
difference is classified as equity and regarded as a non-distributable reserve. Any resulting debit difference is adjusted
against any suitable reserve. Any share premium, capital redemption reserve and any other reserves which are attributable
to share capital of the merged enterprises, to the extent that they have not been cancelled by a debit difference, are
reclassified and presented as movement in other capital reserve.
All material transactions and balances between group companies are eliminated and the consolidated Financial Statements
reflect external transactions only. Where necessary, accounting policies of subsidiaries have been changed to ensure
consistency with the policies adopted by the Group.
Where more than one exchange transaction is involved, any adjustment to the fair values of the subsidiary’s identifiable assets,
liabilities and contingent liabilities relating to previously held interests of the Group is accounted for as a revaluation.
The gain or loss on disposal of a subsidiary is the difference between net disposal proceeds and the Group’s share of
its net assets as of the date of disposal, including the cumulative amount of any exchange differences that relate to the
subsidiary, and is recognised in the consolidated income statement.
(b) Investment in associates

The Group treats as associates, corporations, partnerships or other entities in which the Group exercises significant
influence, but which it does not control, generally accompanying a shareholding of between 20% and 50% of the voting
rights. Significant influence is the power to participate in the financial and operating policy decisions of the associates but
not the power to exercise control over those policies.
Investments in associates are stated at cost adjusted for goodwill identified on acquisition less accumulated impairment
losses. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down to
its recoverable amount.
Investments in associates are accounted for in the consolidated Financial Statements by the equity method of
accounting.

(18417-M)

B Economic entities in the Group (Continued)

(b) Investment in associates (Continued)
The Group’s share of its associates’ post-acquisition profits or losses is recognised in the consolidated income statement,
and its share of post-acquisition movements in reserves is recognised in the consolidated balance sheet. The cumulative
post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of
losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the
Group’s interest is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has
incurred legal or constructive obligations or made payments on behalf of the associate.
C Recognition of profit income and interest income

Interest income on financial assets is recognised on an accrual basis. Interest income on housing and term loans is recognised
by reference to rest periods which are either daily, monthly or yearly. Accretion of discount and amortisation of premium for
securities are recognised on an effective yield basis.
Where an account is classified as non-performing, interest accrued and recognised as income prior to the date the loans are
classified as non-performing is reversed out of income and set off against the accrued interest receivable amount in the balance
sheet. Subsequently, the interest earned on non-performing loans is recognised as income on a cash basis instead of being
accrued and suspended at the same time as prescribed previously. Customers’ accounts are classified as non-performing
where repayments are in arrears for 3 months or more from the first day of default for loans and overdrafts.
The Bank’s policy on recognition of interest income on loans and advances is in conformity with BNM/GP3 and the revised
BNM/GP8.
Income from Islamic banking business is recognised on an accrual basis in accordance with the principles of Shariah.
D Recognition of fees and other income

Fees from advisory and corporate finance activities are recognised as income based on completion of each stage of the
engagement and issuance of invoice.
Loans, advances and financing, and debt securities arrangement fees, management and participation fees, underwriting
commissions, acceptance and placement fees are recognised as income when all conditions precedent are fulfilled.
Portfolio management fees and income from asset management and securities services are recognised as income based on
the time apportionment method.
Brokerage fees are recognised as income based on inception of such transactions.
Dividends from subsidiaries and available-for-sale securities are recognised when the right to receive payment is established.
E Securities
The Group and the Bank classify the securities portfolio into the following categories: securities held for trading, available-for-
sale securities and held-to-maturity investments. Management determines the classification of securities at initial recognition.
(i) Securities held for trading

This category comprises securities held for trading and those designated at fair value through profit or loss at inception.
Securities are classified into this category if acquired principally for the purpose of selling in the short term or if so designated
by management. Derivatives are also categorised as held for trading unless they are designated as hedges.

(18417-M)

E Securities (Continued)
(ii) Available-for-sale securities
Available-for-sale securities are those intended to be held for an indefinite period of time, which may be sold in response
to needs for liquidity or changes in interest rates, exchange rates or equity prices.
(iii) Held-to-maturity investments

Held-to-maturity investments are non-derivative instruments with fixed or determinable payments and fixed maturities that
the Group and the Bank’s management have the positive intent and ability to hold to maturity. If the Group or the Bank sell
other than an insignificant amount of held-to-maturity investments, the entire category will be tainted and reclassified as
available-for-sale securities.
Securities are initially recognised at fair value plus transaction costs for all securities not carried at fair value through profit and
loss and securities not held for trading. Securities are derecognised when the rights to receive cash flows from the securities
have expired or where the Group or the Company have transferred substantially all risks and rewards of ownership.
Securities held for trading and available-for-sale securities are subsequently carried at fair value, except for investments in equity
instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured in
which case the investments are stated at cost. Gains and losses arising from changes in the fair value of the securities held for
trading category are included in the income statement in the period which they arise. Gains and losses arising from changes
in fair value of available-for-sale securities are recognised directly in equity, until the securities are derecognised or impaired at
which time the cumulative gains or loss previously recognised in equity are recognised in the income statement.
Held-to-maturity investments are subsequently measured at amortised cost using the effective interest method. Gains or
losses arising from the derecognition or impairment of the securities is recognised in the income statement.
Interest from securities held for trading, available-for-sale securities and held-to-maturity investments is calculated using the
effective interest method and is recognised in the income statement. Dividends from available-for sale and held for trading
equity investments are recognised in the income statement when the events right to receive payment is established.
The fair values of quoted securities in active markets are based on market prices. If the market for an instrument is not active
and for unquoted securities, the Group and the Bank establish fair value by using valuation techniques. These include the use
of recent arm’s length transactions, discounted cash flow analysis and other valuation techniques commonly used by market
participants.
F Derivative financial instruments and hedge accounting

erivatives are initially recognised at fair value on the date of which a derivative contract is entered into and are subsequently
D
re-measured at their fair value. Fair values are obtained from quoted market prices in active markets, including recent market
transactions, and valuation techniques, including discounted cash flow models and option pricing models, as appropriate. All
derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative. Changes in the fair value
of any derivatives that do not qualify for hedge accounting are recognised immediately in the income statement.
The best evidence of fair value of a derivative at initial recognition is the transaction price (ie. the fair value of the consideration
given or received) unless the fair value of the instrument is evidenced by comparison with other observable current market
transactions in the same instrument (ie. without modification or repackaging) or based on a valuation technique whose
variables include only data from observable markets. When such evidence exists, the Group and the Bank recognise profits
immediately.

(18417-M)

F Derivative financial instruments and hedge accounting (Continued)

The method of recognising the resulting fair value gain or loss depends on whether the derivative is designated as a hedging
instrument, and if so, the nature of the item being hedged. The Group and the Bank designate certain derivatives as either: (1)
hedges of the fair value of recognised assets or liabilities or firm commitments (fair value hedge) or (2) hedges of highly probable
future cash flows attributable to a recognised asset or liability, or a forecasted transaction (cash flow hedge) or (3) hedges of a
net investment in a foreign operation (net investment hedge). Hedge accounting is used for derivatives designated in this way
provided certain criterias are met.
At the inception of the transaction, the Group and the Bank document the relationship between hedging instruments and
hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group
and the Bank also documents their assessment, both at hedge inception and on an ongoing basis, of whether the derivatives
that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.
(1) Fair value hedge

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income
statement, together with any changes in the fair value of the hedged assets or liabilities that are attributable to the hedged
risk.
If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item
for which the effective interest or profit method is used is amortised to the income statement over the period to maturity.
The adjustment to the carrying amount of a hedged equity security remains in retained earnings until the disposal of the
equity security.
(2) Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges
are recognised in equity. The gain and loss relating to the ineffective portion is recognised immediately in the income
statement. Amounts accumulated in equity are recycled to the income statement in the periods in which the hedged item
affects the income statement.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any
cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is
ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative
gain or loss that was reported in equity is immediately transferred to the income statement.
(3) Net investment hedge

Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the
hedging instrument relating to the effective portion of the hedge is recognised in equity. The gain or loss relating to the
ineffective portion is recognised immediately in the income statement.
Gains and losses accumulated in the equity are included in the income statement when the foreign operation is partially
disposed or sold.
(4) Derivatives that do not quality for hedge accounting

Certain derivative instruments do not quality for hedge accounting. Changes in the fair value of derivative instruments that
do not quality for hedge accounting are recognised immediately in the income statement.

(18417-M)

G Loans, advances, financing and other receivables

Loans, advances, financing and other receivables include staff loans and amounts due from clients arising from the sharebroking
arm of the Bank. They are carried at the recoverable amount represented by the gross value of the outstanding balance
adjusted for allowance for bad and doubtful debts and unearned income.
H Allowance for bad and doubtful debts and financing

Specific allowances are made for doubtful debts which have been individually reviewed and specifically identified as bad or
doubtful.
A general allowance based on a percentage of the loan portfolio is also made to cover possible losses which are not specifically
identified, at the balance sheet date.
Any uncollectible loan or portion of a loan classified as bad is written off after taking into consideration the realisable value of
collateral, if any, when in the judgement of the Directors, there is no prospect of recovery.
The Group and the Bank’s allowances for non-performing loans and financing is in conformity with the requirements of Bank
Negara Malaysia’s “Guidelines on the Classification of Non-Performing Loans and Provision for Substandard, Bad and Doubtful
Debts, BNM/GP3”, Revised BNM/GP8 as well as requirements for allowance for losses on loans and financing under Rule
1104 of Bursa Malaysia Securities Berhad.
I Impairment of securities portfolio

The Group and the Bank assess at, each balance sheet date, whether there is objective evidence that the securities are
impaired. A security or a group of securities is impaired and impairment losses are incurred if, and only if, there is objective
evidence of impairment as a result of one or more events that occurred after the initial recognition of the securities (a ‘loss
event’) and that loss event has an impact on the estimated future cash flows of the securities that can be reliably estimated.
(i) Securities carried at amortised cost

If there is an objective evidence that an impairment loss on held-to-maturity instruments held at amortised cost has been
incurred, the amount of loss is measured as the difference between the securities’ carrying amount and the present value
of estimated future cash flows discounted at the securities’ original effective interest rate. The carrying amount of the
securities is reduced through the use of an allowance account and the amount of the loss is recognised in the income
statement.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised, the previously recognised impairment loss is reversed by adjusting
the allowance account. The amount of the reversal is recognised in the income statement.
(ii) Securities carried at fair value

In the case of equity instruments classified as available-for-sale securities, a significant or prolonged decline in the fair value
of the security below its cost is considered in determining whether the securities are impaired. If there is objective evidence
that an impairment loss on available-for-sale securities has been incurred, the cumulative loss - measured as the difference
between the acquisition cost and the current fair value, less any impairment loss on the securities previously recognised in
income statement – is removed from equity and recognised in the income statement. Impairment losses recognised in the
income statement on equity instruments are not reversed through the income statement. If, in a subsequent period, the fair
value of a debt instrument classified as available-for-sale securities increases and the increase can be related objectively to
an event occurring after the impairment was recognised in the income statement, the impairment loss is reversed through
the income statement.

(18417-M)

J Sale and repurchase agreements

Securities purchased under resale agreements are securities which the Group and the Bank have purchased with a commitment
to resell at future dates. The commitment to resell the securities is reflected as an asset on the balance sheet.
Conversely, obligations on securities sold under repurchase agreements are securities which the Group and the Bank had
sold from its portfolio, with a commitment to repurchase at future dates. Such financing transactions and the obligation to
repurchase the securities are reflected as a liability on the balance sheet.
The difference between sale and repurchase price as well as purchase and resale price is treated as interest and accrued over
the life of the resale or repurchase agreement using the effective yield method.
K Intangibles
(a) Goodwill
Goodwill represents the excess of the cost of acquisition of subsidiaries and jointly controlled entities and associates
over the fair value of the Group’s share of the identifiable assets at the date of acquisition. Goodwill is tested annually for
impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed.
Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those
cash-generating units or groups of cash-generating units that are expected to benefit from the synergies of the business
combination in which the goodwill arose. The Group allocates goodwill to each business segment (see Note 16).
Goodwill on acquisitions of associates and jointly controlled entities respectively are included in investments in associates
and jointly controlled entities. Such goodwill is tested for impairment as part of the overall balance.
Under the current applicable approved accounting standards for business combinations, FRS 3 – Business Combinations
which applies to the accounting for business combinations for which the agreement date is on or after 1 January 2006, the
provisions of the standard are applied prospectively and no retrospective changes in respect of accounting for business
combinations prior to 1 January 2006 have been made. Under FRS 3, previously recognised negative goodwill (if any) has
been derecognised with a corresponding adjustment to the opening balances of retained earnings.
(b) Other intangible assets

Other intangible assets include computer software. Other intangible assets are initially recognised when they are separable
or arise from contractual or other legal rights, the cost can be measured reliably and, in the case of intangible assets not
acquired in a business combination, where it is probable that future economic benefits attributable to the assets will flow
from their use. The value of intangible assets which are acquired in a business combination is generally determined using
income approach methodologies and replacement cost. Acquired computer software licences are capitalised on the basis
of the costs incurred to acquire and bring to use the specific software.
Intangible assets that have an indefinite useful life, or are not yet ready for use, are tested for impairment annually. This
impairment test may be performed at any time during the year, provided it is performed at the same time every year. An
intangible asset recognised during the current period is tested before the end of the current year.
Intangible assets that have a finite useful life are stated at cost less amortisation and accumulated impairment losses and
are amortised over their estimated useful lives.

(18417-M)

L Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Cost
includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s
carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the Group and the Bank and the cost of the item can be measured reliably. The carrying
amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during
the financial period in which they are incurred.
Depreciation is calculated to write off the cost of the fixed assets on a straight line basis over the expected useful lives of the
assets concerned. The principal annual rates are:
Building on leasehold land 50 years or over the balance period of the lease, whichever is shorter
Office equipment and furniture 3 to 10 years
- mobile phones 3 years
- office equipment 5 years
- furniture and fixtures 10 years
Computer equipment and software 3 years
Renovation 5 years or over the period of the tenancy, whichever is shorter
Motor vehicles 5 years
Depreciation on assets under construction commences when the assets are ready for their intended use.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
Property, plant and equipment are reviewed for impairment at each balance sheet date and whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. Where the carrying amount of an asset is greater
than its estimated recoverable amount, it is written down to its recoverable amount. The impairment loss is charged to the
income statement. Any subsequent increase in recoverable amount is recognised in the income statement.
Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are included in non-interest
income.
M Long term borrowings

Long term borrowings comprise mainly negotiable certificates of deposits and subordinated notes issued by the Bank with
remaining maturity of more than one year. These long term borrowings are initially recognised at cost, being the issue proceeds
received, net of transaction costs incurred. In subsequent periods, long term borrowings are stated at amortised cost using the
effective yield method; any difference between proceeds (net of transaction costs) and the redemption value is recognised in
the income statement over the period of the long term borrowings. The Bank engages in long term borrowings for the purpose
of hedging its interest rate, liquidity and foreign exchange positions. The interest expense is recognised on an accrual basis
and charged to the income statement.
N Currency translations
(a) Functional and presentation currency
Items included in the Financial Statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated Financial Statements are
presented in Ringgit Malaysia, which is the Bank’s functional and presentation currency.

(18417-M)

N Currency translations (Continued)

(b) Foreign currency transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised
in the income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment
hedges.
Changes in the fair value of monetary securities denominated in foreign currency classified as available-for-sale are
analysed between translation differences resulting from changes in the amortised cost of the security and other changes
in the carrying amount of the security. Translation differences related to changes in the amortised cost are recognised in
the income statement, and other changes in the carrying amount are recognised in equity.
Translation differences on non-monetary financial assets and liabilities, such as equity instruments held at fair value through
profit or loss, are reported as part of the fair value gain or loss. Translation differences on non-monetary financial assets
such as equities classified as available-for-sale are included in the available-for-sale reserve in equity.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations and of
borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders’ equity.
When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognised
in the income statement as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate.
(c) Group companies

The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency as
follows:
• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance
sheet;
• income and expenses for each income statement are translated at average exchange rates (unless this average is
not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the rate on the dates of the transactions); and
• all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations, and of
borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders’ equity.
When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognised
in the income statement as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate.

(18417-M)

O Income and deferred taxes

Current tax expense is determined according to the tax laws of each jurisdiction in which the Group operates and includes all
taxes based upon the taxable profits.
Deferred income tax is recognised in full, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the Financial Statements. However, deferred income tax is not accounted
for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of
the transaction affects neither accounting nor taxable profit or loss.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the
temporary differences can be utilised.
Deferred income tax is recognised on temporary differences arising on investments in subsidiaries, associates and joint ventures
except where the timing of the reversal of the temporary difference can be controlled by the Group and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred income tax related to fair value re-measurement of available-for-sale securities, which are charged or credited directly
to equity, is also credited or charged directly to equity and is subsequently recognised in the income statement together with
the deferred gain or loss.
Deferred income tax is determined using tax rates (and tax laws) that have been enacted or substantially enacted at the balance
sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
P Zakat
This represents business zakat which is a contribution payable by the Bank to comply with the principles of Shariah. Zakat
provision is calculated based on ‘Adjusted Growth’ method, at 2.5% for individual Bumiputra shareholders of the ultimate
holding company.
Q Provisions
Provisions are recognised by the Group and the Bank when all of the following conditions have been met:
(i) the Group and the Bank have a present legal or constructive obligation as a result of past events:
(ii) it is probable that an outflow of resources to settle the obligation will be required; and
(iii) a reliable estimate of the amount of obligation can be made.
Where the Group and the Bank expect a provision to be reimbursed, the reimbursement is recognised as a separate asset but
only when the reimbursement is virtually certain. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small.
Provisions are measured at the present values of the expenditures expected to be required to settle the obligation using a pre-
tax rate that reflects current market assessments of the time value of money and risks specific to the obligation. The increase
in the provision due to passage of time is recognised as interest expense.

(18417-M)

R Employee benefits
(i) Short term employee benefits
The Group and the Bank recognise a liability and an expense for bonuses. The Group and the Bank recognise a provision
where contractually obliged or where there is a past practice that has created a constructive obligation.
Wages, salaries, paid annual leave and sick leave, bonuses, and non-monetary benefits are accrued in the period in which
the associated services are rendered by employees of the Group and Bank.
(ii) Post employment benefit - defined contribution plans

A defined contribution plan is a pension plan under which the Group and the Bank pay fixed contributions into a fund and
will have no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay
all employees’ benefits relating to employee service in the current and prior periods.
The Group and the Bank contribute to the national defined contribution plan (the Employees’ Provident Fund) on a
mandatory basis and the amounts contributed to the plan are charged to the income statement in the financial year to
which they relate. Once the contributions have been paid, the Group and the Bank have no further payment obligations.
(iii) Share-based compensation

The ultimate holding company of the Bank and the Group operate an equity-settled, share-based compensation plan
for the employees of the Bank and the Group under the Modified EESOS and Modified CEO option. Employee services
received in exchange for the grant of the share options are recognised as an expense in the income statement over the
vesting periods of the grant with a corresponding increase in equity.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the share options
granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets).
Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At
each balance sheet date, the Group revises its estimates of the number of share options that are expected to vest. It
recognises the impact of the revision of original estimates, if any, in the income statement, with a corresponding adjustment
to equity.
The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and
share premium when the options are exercised.
As allowed in the transitional provisions for FRS 2, the Bank and the Group have elected not to apply FRS 2 to those equity
settled share options which were granted:
(i) Before 31 December 2004

(ii) After 31 December 2004 but had vested before 1 January 2006.
FRS 2 only applies to transactions involving a transfer of equity instruments between shareholders and option holders,
hence entitlements based on ordinary shares of the ultimate holding company granted under the Management Equity
Scheme (‘MES’) is out of the scope of FRS 2.
S Assets purchased under lease

(i) Operating lease
Leasehold land
Leasehold land that normally has an indefinite economic life and title is not expected to pass to the lessee by the end of the
lease term is treated as an operating lease. The payment made on entering into or acquiring a leasehold land is accounted
as prepaid lease payments that are amortised over the lease term in accordance with the pattern of benefits provided.

(18417-M)

T Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, bank balances and deposit placements maturing less than one month,
held for the purpose of meeting short term commitments and that are readily convertible into known amounts of cash without
significant risk of changes in value.
U Segment reporting
Segment reporting is presented for enhanced assessment of the Group’s risks and returns. A business segment is a group
of assets and operations engaged in providing products or services that are subject to risk and returns that are different from
those of other business segments. A geographical segment is engaged in providing products or services within a particular
economic environment that are subject to risks and returns that are different from those components.
Segment revenue, expense, assets and liabilities are those amounts resulting from the operating activities of a segment that
are directly attributable to the segment and the relevant portion that can be allocated on a reasonable basis to the segment.
Segment revenue, expense, segment assets and segment liabilities are determined before intra-group balances and intra-
group transactions are eliminated as part of the consolidation process, except to the extent that such intra-group balances
and transactions are between group enterprises within a single segment.
V Share capital
(a) Classification
Ordinary shares and non-redeemable preference shares with discretionary dividends are classified as equity. Other shares
are classified as equity and/or liability according to the economic substance of the particular instrument. Distributions to
holders of a financial instrument, classified as an equity instrument, are charged directly to equity.
(b) Share issue costs

Incremental external costs directly attributable to the issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds.
(c) Dividends
Dividends on cumulative redeemable preference shares are recognised as a liability and expressed on an accrual
basis. Dividends on ordinary shares are recognised as a liability when the shareholders’ right to receive the dividend is
established.

(18417-M)
Notes to the Financial Statements

1 General information
The principal activities of the Bank are investment banking and the provision of related financial services. The principal activities
of its subsidiaries during the financial year are set out in Note 12 to the Financial Statements. There was no significant change
in the nature of these activities during the financial year.
The immediate holding company is CIMB Group Sdn Bhd and the Directors regard Bumiputra-Commerce Holdings Berhad
(“BCHB”) as the Bank’s ultimate holding company during the financial year. Both companies are incorporated in Malaysia.
The Bank is a public limited liability company, incorporated and domiciled in Malaysia.
The address of the registered office and the principal place of business of the Bank is:
5th Floor
Bangunan CIMB
Jalan Semantan
Damansara Heights
50490 Kuala Lumpur
2 Cash and short term funds

The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Cash and balances with banks

and other financial institutions 133,245 122,944 60,312 73,177
Money at call and deposit placements
maturing within one month 2,744,202 1,459,893 2,667,561 1,335,043
2,877,447 1,582,837 2,727,873 1,408,220
Included in cash and short term funds of the Group and the Bank are trust accounts maintained in trust for clients and dealer
representatives amounting to RM193,698,000 (2007: RM212,227,000) and remisiers amounting to RM13,339,000 (2007:
RM13,680,000).
3 Deposits and placements with banks and other financial institutions

The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Licensed banks 201,224 172,268 200,100 172,162

Other financial institutions - 133,280 - 132,280
201,224 305,548 200,100 304,442
Included in deposits and placements with financial institutions are RM200,100,000 (2007: RM172,162,000) maintained with a
related licensed bank in Malaysia.

(18417-M)

4 Securities held for trading

The Group and the Bank
2008 2007
RM’000 RM’000
Money market instruments:

Unquoted
Negotiable instruments of deposits 620,364 -
Quoted securities:
In Malaysia
Shares 3,987 27,189
Warrants 445 792
4,432 27,981
Unquoted securities:
In Malaysia
Private and Islamic debt securities 51,759 140,356
676,555 168,337
Included in securities held for trading are securities amounting to RM Nil (2007: RM11,823,000) invested by asset management
companies on behalf of the Group and the Bank respectively.
5 Available-for-sale securities
The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000

Unquoted
Commercial papers - 4,923 - 4,923
In Malaysia
Shares 2,200 2,200 - -
Private debt securities 519,924 512,321 519,924 512,321
522,124 514,521 519,924 512,321

Outside Malaysia
Shares 207 207 - -
522,331 519,651 519,924 517,244
Securities amounting to RM519,924,000 (2007: RM512,321,000) were invested by asset management companies on behalf
of the Group and the Bank respectively.

(18417-M)

6 Held-to-maturity investments

2008 2007
RM’000 RM’000
In Malaysia
Subordinated debt 346,450 330,700
7 Derivative financial instruments, commitments and contingencies

(i) Derivative financial instruments
The following tables summarise the contractual or underlying principal amounts of derivative financial instruments held at
fair value through the income statement. The principal or contractual amounts of these instruments reflect the volume of
transactions outstanding at balance sheet date, and do not represent amounts at risk.
Trading derivative financial instruments are revalued on a gross position basis and the unrealised gains or losses are
reflected in “Derivative Financial Instruments” Assets and Liabilities respectively.

Principal Fair values
amount Assets Liabilities
RM’000 RM’000 RM’000
At 31 December 2008
Held for trading purposes
Interest rate derivatives
Interest rate swaps 2,386,260 115,213 (104)
Equity derivatives
Equity options 1,797,494 10,972 (10,972)
Total derivative assets/(liabilities) 4,183,754 126,185 (11,076)
At 31 December 2007
Interest rate derivatives
Interest rate swaps 1,471,000 58,301 (3,541)
Equity derivatives
Equity options 3,816,735 151,749 (151,749)
Total derivative assets/(liabilities) 5,287,735 210,050 (155,290)

(18417-M)

7 Derivative financial instruments, commitments and contingencies (Continued)

(ii) Commitments and contingencies
In the normal course of business, the Group and the Bank enter into various commitments and incur certain contingent
liabilities with legal recourse to their customers. No material losses are anticipated as a result of these transactions and
hence, they are not provided for in the Financial Statements.
These commitments and contingencies are not secured over the assets of the Group and the Bank.
The commitments and contingencies constitute the following:
2008 2007
Risk Risk
Credit weighted Credit weighted
Principal equivalent amount Principal equivalent amount
The Group and The Bank RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Credit risk related instruments

Obligations under underwriting
agreements - - - 114,798 57,399 15,760
Irrevocable commitments
to extend credit:
- Maturity exceeding one year 1,859 930 465 2,180 1,090 545
Forward assets purchases 25,000 2 1 - - -
Forward assets sold 20,000 - - - - -
46,859 932 466 116,978 58,489 16,305

Derivative related instruments
Interest/profit rate related contracts:
- Less than one year - - - 100,000 1,000 200
- One year to less than five years 2,386,260 68,461 13,692 1,371,000 13,710 2,742
Equity related contracts:
- Less than one year 566,737 340 68 - - -
- One year to less than five years 1,230,757 49,149 9,830 3,816,735 * - -
4,183,754 117,950 23,590 5,287,735 14,710 2,942
4,230,613 118,882 24,056 5,404,713 73,199 19,247
* The principal amount which was previously reported as RM23,766,012 has been restated in the current year to show only exposure to external parties.
There was no impact to the fair values, credit equivalents and risk weighted amounts stated in the previous year.
Credit risk related instruments

Obligations under underwriting agreements arise from underwriting agreements relating to the issue of securities, whereby
the Group is obliged to subscribe or purchase the securities in the event the securities are not taken up when issued.
Irrevocable commitments to extend credit include all obligations on the part of the Group to provide funding facilities.

(18417-M)

7 Derivative financial instruments, commitments and contingencies (Continued)

(ii) Commitments and contingencies (Continued)
Derivative related instruments
The Group utilises the following financial instruments for both trading and hedging purposes:
Interest/profit rate related contracts

Interest rate futures are agreements to buy or sell standard quantity of placements at an agreed rate of interest on a
standard future date.
Interest rate swaps involve the exchange of interest obligations with a counterparty for a specified period without
exchanging the underlying principal.
Interest rate caps and floors give the buyer the ability to fix the maximum or minimum rate of interest. There is no facility to
deposit or drawdown funds, instead the writer pays to the buyer the amount by which the market rate exceeds or is less
than the cap rate or the floor rate respectively.
Equity related contracts

Equity futures are exchange-traded agreements to buy and sell standard quantity of a basket of equities in the form of
published indices, at an agreed price on a standard future date.
Equity options oblige the option writer to pay to the buyer the amount by which the market index exceeds the agreed
strike rate.
Credit equivalent
The above transactions are categorised and credit equivalents calculated under BNM guidelines for the risk based
measurement of capital adequacy. The credit equivalent amounts are a measure of the potential loss to the Group in the
event of possible non-performance by a counterparty.
The credit equivalent exposure from obligations under underwriting agreements is 50% of the face value. As for irrevocable
commitment to extend credit, the credit equivalent exposure for commitments with maturity exceeding one year is 50%,
while commitments with an original maturity of up to one year, or which can be unconditionally cancelled at any one time
is 0%.
The Group is not exposed to credit risk for the full face value of their interest rate related contingencies, but only to the
potential cost of replacing the contracts if the counterparty defaults. The credit equivalent exposure is calculated using
the current exposure method and is disclosed for each product class. This amount is based on the summation of two
elements, that are the replacement costs (obtained by marked-to-market) of all contracts including the netting of unrealised
gains and losses on derivatives contracts under bilateral netting arrangements and the amount of potential future exposure
calculated by applying given “add-on” factors to the principal value of each contract.

(18417-M)

8 Loans, advances and financing

2008 2007
RM’000 RM’000
(i) By type
Revolving credits - 300,337
Staff loans of which RM291,513 (2007:RM 318,000) are to Directors 49,733 52,221
Other loans 1,438 1,865
Gross loans, advances and financing 51,171 354,423

Allowance for bad and doubtful debts:
- Specific (218) -
- General (870) (6,019)
Net loans, advances and financing 50,083 348,404
(ii) The maturity structure of loans, advances and financing is as follows:

Within one year 397 300,413
One year to less than three years 1,221 1,211
Three years to less than five years 5,432 4,926
Five years and more 44,121 47,873
51,171 354,423
(iii) By type of customers

Domestic business enterprises
- Others - 300,337
Individuals 51,171 54,086
51,171 354,423
(iv) By interest /profit rate sensitivity

Fixed rate
- Other fixed rate loan/financing 51,171 354,423
(v) By economic purpose:

Personal use 2 7
Purchase of residential landed property 39,616 41,042
Purchase of non-residential landed property 626 663
Purchase of securities 1 1
Purchase of transport vehicles 10,926 12,373
Working capital - 300,337
51,171 354,423

(18417-M)

8 Loans, advances and financing (Continued)

2008 2007
RM’000 RM’000
(vi) Non-performing loans, advances and financing by sector

Purchase of residential landed property 302 277
Purchase of transport vehicles 156 -
Gross non-performing loans, advances and financing 458 277

(vii) Movements in the non-performing loans, advances and financing are as follows:
At 1 January 277 277
Classified as non-performing during the financial year 262 -
Amount written back in respect of recoveries/reclassification (81) -
At 31 December 458 277

Specific allowance (218) -
Net non-performing loans 240 277
Ratio of net non-performing loans, advances and financing to gross loans,

advances and financing net of specific allowance 0.47% 0.08%
(viii) Movements in the allowance for bad and doubtful debts accounts are as follows:
General allowance
At 1 January 6,019 9,331
Amount written back to income statement (5,149) (3,312)
At 31 December 870 6,019
As % of gross loans, advances and financing less specific allowance 1.71% 1.70%
Specific allowance
At 1 January - -
Allowance made during the financial year 218 -
At 31 December 218 -

(18417-M)

9 Other assets
The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Interest and dividend receivable 12,803 6,019 12,794 5,984

Due from brokers and clients net
of allowance for doubtful debts
of RM10,235,000 (2007: RM12,634,000) 229,154 698,107 229,038 698,107
Other debtors, deposits and prepayments
net of allowance for doubtful debts
of RM11,768,000 (2007: RM14,201,000) 33,867 69,145 32,815 68,049
275,824 773,271 274,647 772,140
10 Deferred taxation
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current
tax liabilities and when the deferred taxes relate to the same tax authority. The following amounts, determined after appropriate
offsetting, are shown in the balance sheet.
The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Deferred taxation (net) 11,396 (2,215) 11,262 (2,192)
The gross movement on the deferred income tax account is as follows:

The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
At 1 January (2,215) (3,555) (2,192) (3,515)

(Charged)/credited to income statement (Note 36)
- Loans, advances and financing (1,350) (895) (1,351) (895)
- Excess of capital allowance over depreciation 74 (284) 74 (284)
- Available-for-sale securities - 2,316 - 2,316
- Other temporary differences 7,306 186 7,150 186
6,030 1,323 5,873 1,323
Transferred to equity:
- Revaluation reserve - available-for-sale securities 7,581 17 7,581 -
At 31 December 11,396 (2,215) 11,262 (2,192)

(18417-M)

10 Deferred taxation (Continued)

The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Deferred tax assets (before offsetting)

Loans, advances and financing 274 1,625 274 1,625
Revaluation reserve - available-for-sale securities 5,727 - 5,727 -
Other temporary differences 8,563 1,273 8,424 1,273
14,564 2,898 14,425 2,898

Offsetting (3,168) (2,898) (3,163) (2,898)
Deferred tax assets (after offsetting) 11,396 - 11,262 -
Deferred tax liabilities (before offsetting)

Property, plant and equipment (3,168) (3,249) (3,163) (3,236)
Revaluation reserve – available-for-sale securities - (1,854) - (1,854)
Other temporary differences - (10) - -
(3,168) (5,113) (3,163) (5,090)

Offsetting 3,168 2,898 3,163 2,898
Deferred tax liabilities (after offsetting) - (2,215) - (2,192)
Deferred tax assets and liabilities have been calculated to take into account the effect of a change in the Malaysian statutory
tax rate from 27% to 26% and 25% for assessment years 2008 and 2009 respectively.
11 Statutory deposits with Bank Negara Malaysia
The non-interest bearing statutory deposits are maintained with Bank Negara Malaysia in compliance with Section 37(1)(c) of
the Central Bank of Malaysia Act, 1958 (revised 1994), the amounts of which are determined at set percentages of total eligible
liabilities.
12 Investment in subsidiaries
The Bank
2008 2007
RM’000 RM’000
Unquoted shares, at cost 19,420 19,420

(18417-M)

12 Investment in subsidiaries (Continued)

The subsidiaries of the Bank are as follows:
Percentage of equity held
through
the Bank’s
directly by the subsidiary
Bank company
2008 2007 2008 2007 Paid up capital
Name of subsidiary Principal activities % % % % as at 31.12.2008
CIMB Holdings Sdn Bhd Investment holding 100 100 - - RM10,370,000

CIMB Securities (Hong Kong) Limited*
(Incorporated in Hong Kong) Dormant - - 100 100 HK$5,000,000
CIMBS Sdn Bhd Dormant - - 100 100 RM2
CIMSEC Nominees (Tempatan) Sdn Bhd Nominee services 100 100 - - RM10,000
CIMSEC Nominees (Asing) Sdn Bhd Nominee services 100 100 - - RM10,000
CIMSEC Nominees Sdn Bhd Nominee services 100 100 - - RM10,000
CIMB Futures Sdn Bhd Futures broking 100 100 - - RM9,000,000
CIMB Nominees (Tempatan) Sdn Bhd Nominee services 100 100 - - RM10,000
CIMB Nominees (Asing) Sdn Bhd Nominee services 100 100 - - RM10,000
CIMB Discount House Berhad Dormant 100 100 - - RM2
* Audited by other member firms of PricewaterhouseCoopers International Limited which is separate and independent legal entities from
PricewaterhouseCoopers Malaysia.
13 Investment in associate
The Group
2008 2007
RM’000 RM’000
Unquoted shares, at cost 4,169 -
The Group
2008 2007
RM’000 RM’000
Share of net assets other than premium of associates 1,992 -

Premium on acquisition 2,177 -
4,169 -

(18417-M)

13 Investment in associate (Continued)

The Group’s share of income and expenses of associates is as follows :
The Group
2008 2007
RM’000 RM’000
Income 2,178 -
Expenses (1,171) -
Profit before taxation 1,007 -

Taxation (318) -
Profit for the financial year 689 -
The Group’s share of the assets and liabilities of the associates is as follows :
The Group
2008 2007
RM’000 RM’000
Non-current assets 107 -

Current assets 2,665 -
Current liabilities (780) -
Net assets 1,992 -
Percentage of equity held

through
the Bank’s
directly by the subsidiary
Bank company
2008 2007 2008 2007 Paid up capital
Name of associates Principal activities % % % % as at 31.12.2008
CIMB Trustee Berhad Trustee services - - 20 - RM500,000

BHLB Trustee Berhad Trustee services - - 20 - RM1,7500,000

(18417-M)

14 Property, plant and equipment
Bulding on Office Computer

leasehold equipment equipment
land-50 years and and Motor
or more furniture software* vehicles Renovation Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
The Group
2008
Cost
At 1 January 7,135 24,608 26,289 42,956 9,280 110,268
Additions - 1,176 7,388 10,901 4,021 23,486
Disposals - (30) (11) (2,539) (167) (2,747)
At 31 December 7,135 25,754 33,666 51,318 13,134 131,007
Accumulated depreciation
At 1 January 763 15,408 16,422 12,939 819 46,351
Charge for the financial year 143 3,232 5,865 8,766 1,875 19,881
Disposals - (21) (8) (1,782) - (1,811)
At 31 December 906 18,619 22,279 19,923 2,694 64,421
Net book value as
at 31 December 6,229 7,135 11,387 31,395 10,440 66,586
2007
Cost
At 1 January 7,135 10,401 31,056 30,554 6,034 85,180
Additions - 2,626 6,994 14,566 8,365 32,551
Disposals - (8) (124) (2,164) (5,788) (8,084)
Reclassification - 11,589 (11,637) - 669 621
At 31 December 7,135 24,608 26,289 42,956 9,280 110,268
At 1 January 620 1,007 23,141 11,077 105 35,950
Charge for the financial year 143 3,047 4,989 3,330 714 12,223
Disposals - (6) (124) (1,477) - (1,607)
Reclassification - 11,360 (11,584) 9 - (215)
At 31 December 763 15,408 16,422 12,939 819 46,351
Net book value as
at 31 December 6,372 9,200 9,867 30,017 8,461 63,917
* Computer software are mostly integral to the systems of the Bank and Group and accordingly have not been reclassified as intangibles
under FRS 138: Intangible Assets. The impact of applying FRS 138 on the non-integral software is immaterial and has not been adjusted in
the Financial Statements.

(18417-M)

14 Property, plant and equipment (Continued)

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
The Bank
2008
Cost
At 1 January 7,135 24,311 26,025 42,956 8,950 109,377
Additions - 1,167 7,321 10,901 4,021 23,410
Disposal - (30) (11) (2,539) (167) (2,747)
7,135 25,448 33,335 51,318 12,804 130,040
At 1 January 762 15,210 16,205 12,939 649 45,765

Charge for the financial year 143 3,196 5,831 7,537 1,809 18,516
Disposal - (21) (8) (1,782) - (1,811)
905 18,385 22,028 18,694 2,458 62,470
Net book value as

at 31 December 6,230 7,063 11,307 32,624 10,346 67,570
* Computer software are mostly integral to the systems of the Bank and Group and accordingly have not been reclassified as intangibles under FRS 138:
Intangible Assets. The impact of applying FRS 138 on the non-integral software is immaterial and has not been adjusted in the Financial Statements.

(18417-M)

14 Property, plant and equipment (Continued)

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
The Bank
2007
Cost
At 1 January 7,135 9,936 30,753 30,554 5,788 84,166
Additions - 2,621 6,944 14,566 8,282 32,413
Disposal - (8) (124) (2,164) (5,788) (8,084)
Reclassification/adjustment - 11,762 (11,548) - 668 882
7,135 24,311 26,025 42,956 8,950 109,377
At 1 January 619 659 22,873 11,086 - 35,237

Charge for the financial year 143 3,000 4,966 3,330 649 12,088
Disposal - (6) (124) (1,477) - (1,607)
Reclassification/adjustment - 11,557 (11,510) - - 47
762 15,210 16,205 12,939 649 45,765
Net book value as

at 31 December 6,373 9,101 9,820 30,017 8,301 63,612
* Computer software are mostly integral to the systems of the Bank and Group and accordingly have not been reclassified as intangibles under FRS 138:
Intangible Assets. The impact of applying FRS 138 on the non-integral software is immaterial and has not been adjusted in the Financial Statements.

(18417-M)

15 Prepaid lease payments
The Group and the bank

Leasehold land
- 50 years or more
RM’000
2008
Cost
At 1 January/31 December 18,609
At 1 January 1,984
Amortisation for the financial year 372
2,356
Net book value as at 31 December 16,253
2007
Cost
At 1 January/31 December 18,609
At 1 January 1,612
Amortisation for the financial year 372
1,984
Net book value as at 31 December 16,625
16 Goodwill on consolidation
The Group
2008 2007
RM’000 RM’000
At 1 January/31 December 964 964
Allocation of goodwill to cash-generating units

Goodwill has been allocated to the following cash-generating-units (“CGUs”). These CGUs do not carry any intangible assets
with indefinite useful lives:
Acquisition CGU RM’000
CIMBS Sdn. Bhd. Stock-broking 964

(18417-M)

16 Goodwill on consolidation (Continued)

Goodwill is tied to the stock-broking business of the Group, originally arising from the acquisition of CIMBS Sdn Bhd, the net
assets and business of the operations, for which, have been transferred to the Bank.
Impairment test for goodwill

The recoverable amount of CGUs is determined based on the higher of value-in-use and fair value less cost to sell calculations.
These calculations use pre-tax cash flow projections based on the 2009 financial budgets approved by management, projected
for 5 years based on the average to year historical Gross Domestic Product (“GDP”) growth of the country covering a five year
period, revised for current economic conditions. Cash flows beyond the five-year period are extrapolated using an estimated
growth rate of 5.0% (2007: 5.6%). The discount rate used is 9.80% (2007: 8.43%) which reflects the specific risks relating to
the CGUs.
17 Deposits from customers

2008 2007
RM’000 RM’000
Negotiable instruments of deposits 1,188,130 730,500

Others 147,927 75,000
1,336,057 805,500
(i) The maturity structure of negotiable instruments of deposits

One year to less than three years 914,650 730,500
Three years to less than five years 273,480 -
1,188,130 730,500
(ii) By type of customers:

- Local government and statutory authorities 78,500 83,500
- Business enterprises 197,927 145,000
- Individuals 1,059,630 577,000
1,336,057 805,500
18 Deposits and placements of banks and other financial institutions

2008 2007
RM’000 RM’000
Licensed banks 2,059,888 769,293

Other financial institutions 378,353 181,530
2,438,241 950,823

(18417-M)

19 Other liabilities
The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Interest and dividend payable 6,887 12,156 6,665 11,980

Due to brokers and clients 545,153 1,062,628 419,383 925,302
Liabilities on quoted securities 445 792 445 792
Others 111,324 176,995 107,589 158,385
663,809 1,252,571 534,082 1,096,459
Liabilities on quoted securities comprise an equity based financial instrument issued by the Bank on the securities of third party
corporations. The securities derive their values based on the price of the underlying third party corporation securities. These
securities do not meet the definition of derivative financial liabilities. As such, the securities are classified in other liabilities and
are measured at fair value through the income statement under a special exemption granted by BNM, dated 9 August 2007.
20 Provision for taxation and zakat

The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Taxation 40,892 51,399 39,440 51,323

Zakat - 5 - 5
40,892 51,404 39,440 51,328
21 Other borrowings
The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Subordinated loan 7,000 - - -
On 4 March 2008 and 7 November 2008, a subsidiary of the Bank had issued RM4 million and RM3 million in aggregate
principal amounts of Subordinated Loan (“the Loan”) to the Bank’s immediate holding company, CIMBG Sdn Bhd. The debt
bears interest at the rate of 5% per annum and has a repayment term of 3 years subject to approval of Bursa Malaysia
Derivatives Berhad.

(18417-M)

22 Long term borrowings

The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Subordinated notes 346,462 330,568 346,462 330,568
On 15 April 2004, the Bank issued USD100 million in aggregate principal amount of Subordinated Notes (“the Notes”) due
2014 callable with step-up in 2009. The Notes bear interest at the rate of 5% per annum from, and including 15 April 2004
to, but excluding 15 April 2009 and, thereafter, at a rate per annum equal to the US Treasury Rate Plus 3.7%. The interest is
payable semi-annually in arrears on 15 April and 15 October in each year, commencing on 15 October 2004. The Notes were
issued at a price of 99.843 per cent of the principal amount of the Notes. The Notes will, subject to the prior written approval
of BNM, be redeemable in whole but not in part, at the option of the Bank in the event of certain changes affecting taxation in
Malaysia at any time at their principal amount plus accrued interest.
The Notes constitute liabilities of the Bank, and are subordinated in right of payment to the deposit liabilities of the Bank in
accordance with the terms and conditions of the issue.
23 Share capital
2008 2007
RM’000 RM’000
Authorised ordinary shares of RM1 each

At 1 January/31 December 500,000 500,000
Issued and fully paid ordinary shares of RM1 each

At 1 January/31 December 219,242 219,242
24 Redeemable preference shares

2008 2007
RM’000 RM’000
Authorised redeemable preference shares of RM0.01 each

At 1 January - -
Created during the financial year 10 -
At 31 December 10 -
Issued and fully paid redeemable preference shares of RM0.01 each

At 1 January - -
Created during the financial year 10 -
At 31 December 10 -

(18417-M)

24 Redeemable preference shares (Continued)

On 30 January 2008, the Bank had allotted and issued 1,000,000 Redeemable Preference Shares (“RPS”) of RM0.01 each to
its ultimate holding company Bumiputra-Commerce Holdings Berhad at an issue price of RM0.01 sen per share.
The main features of the RPS are as follows:
(i) The RPS do not carry any fixed dividends
(ii) The RPS will rank superior to ordinary shares in the event of winding up or liquidation of the Bank
(iii) The RPS rank pari passu in all aspects among themselves
(iv) The RPS carry no right to vote at any general meeting of the ordinary shareholders of the Bank
(v) The RPS are not convertible to ordinary shares of the Bank
(vi) The RPS may only be redeemed subject to BNM’s approval at the option of the Bank (but not the holder) at anytime from
the issue date
25 Reserves
(i) Included in the Group’s and the Bank’s reserves are statutory reserves of RM293,577,000 (2007: RM293,577,000),
maintained in compliance with Section 36 of the Banking And Financial Institutions Act, 1989. These statutory reserves
are not distributable by way of dividends.
(ii) Pursuant to the Finance Act, 2007 which was gazetted on 28 December 2007, dividends paid, credited or distributed to
shareholders are not tax deductible by the Bank, but is exempted from tax in the hands of the shareholders (“single tier
system”). During the year, the Bank has utilised the credit in the Section 108 balance to distribute dividend payments to
its shareholders as allowed by the transitional provision under the Finance Act, 2007. As at 31 December 2008, the Bank
has sufficient credit in the Section 108 balance to pay franked dividends out of its entire retained earnings.
(iii) Revaluation reserve – available-for-sale securities

The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
At 1 January (6,312) 9,975 (5,014) 11,273

Net (loss)/gain from changes in fair value (20,254) 2,428 (20,254) 2,445
Net loss/(gain) transferred
to income statement on disposal 1,805 (18,732) 507 (18,732)
Deferred taxation 7,581 17 7,581 -
Net change in available-for-sale securities (10,868) (16,287) (12,166) (16,287)
At 31 December (17,180) (6,312) (17,180) (5,014)

(18417-M)

25 Reserves (Continued)
(iv) Options reserve - employee share option scheme
The share options granted to Directors and employees of the Group are that of the Bank’s ultimate holding company,
BCHB. The terms of the share options granted are disclosed in Note 43.
Movements in the number of share options outstanding and their related weighted average exercise prices for share
options scoped in under FRS 2, are as follows:
2008 2007
Average Average
exercise exercise
price Options price Options
RM/share (units ‘000) RM/share (units ‘000)
At start of financial year 4.73 14,173 4.61 14,200

Arising from modification of EESOS 2 & 3 3.90 8,143 - -
Forfeited 4.59 (117) 4.22 (27)
Exercised 3.95 (6,753) - -
At end of financial year 4.65 15,446 4.73 14,173
On 26 September 2008, the Board of Directors had approved the extension of the expiry date from 29 December 2008
to 29 December 2009 for EESOS 2 and EESOS 3 which were previously not in scope under FRS 2. The extension of the
expiry date of these options is deemed as a modification in the terms of the share option scheme and as such FRS 2 is
applicable for the current financial year onwards.
Out of the outstanding options, all 15,446,213 units (2007: 4,229,298 units) of options were exercisable. The weighted
average share price during the period was RM9.66 (2007: RM10.72) per share.
The options outstanding at year end had exercise prices ranging from RM4.05 to RM4.84 (2007: RM4.39 to RM4.84), and
a weighted average remaining contractual life of 1 year (2007: 2 years).
The weighted average fair value of options granted under EESOS 2, EESOS 3 and Tranche 4 of EESOS 4, which are
deemed as an equity-settled payment under FRS 2- Share-based Payment, determined using the Trinomial valuation
model was RM3.84, RM3.53 and RM1.50 per option respectively. The significant inputs into the model were as follows:
EESOS 2 EESOS 3 EESOS 4
Valuation assumptions:
- expected volatility 41.00% 41.00% 28.45%
- expected dividend yield 3.23% 3.23% 2.04%
- expected option life 1 year 1 year 5 years
Weighted average share price at grant date RM7.75 RM7.75 RM4.40
Weighted average risk-free interest rate 3.55% 3.55% 3.49%
The volatility measured at the standard deviation on daily share price returns is based on prices over the last 1 year from
grant date.

(18417-M)

26 Interest income
The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Loans, advances and financing

- interest income other than recoveries 7,193 21,158 7,193 21,158
- recoveries from non-performing loans 10 - 10 -
Money at call and deposit placements
with banks and other financial institutions 31,404 20,503 31,182 20,095
Securities purchased under resale agreements 8,023 2,534 5,991 112
Securities held for trading 3,032 4,799 3,032 4,799
Available-for-sale securities 28,095 26,982 28,095 26,982
Held-to-maturity investments 16,869 16,790 16,869 16,790
Others 6,087 4,060 6,087 4,060
100,713 96,826 98,459 93,996

Amortisation of premium less accretion of discount 515 552 515 552
101,228 97,378 98,974 94,548
27 Interest expense
The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000

and other financial institutions 36,313 28,953 36,313 28,953
Deposits from customers 12,984 4,305 12,984 4,305
Obligations on securities sold
under repurchase agreements - 26 - 26
Negotiable certificates of deposits 1,932 672 1,932 672
Subordinated notes 16,846 16,353 16,846 16,353
Others 4,375 1,305 3,999 1,227
72,450 51,614 72,074 51,536

(18417-M)

28 Write back of losses on loans, advances and financing

The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Allowance for bad and doubtful debts on

loans, advances and financing :
(a) Specific allowance
- made in the financial year (218) - (218) -

(b) General allowance
- written back in the financial year 5,149 3,312 5,149 3,312
4,931 3,312 4,931 3,312
29 Net fee and commission income

The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Fees on loans, advances and financing 2,770 222 2,770 222

Portfolio management fees 10,177 6,363 10,177 6,363
Advisory and arrangement fees 85,341 56,439 85,341 56,439
Guarantee fees - 149 - 149
Underwriting commissions 1,256 19,660 1,256 19,660
Placement fees 9,152 20,342 9,152 20,342
Other fee income 19,672 9,283 19,672 9,283
128,368 112,458 128,368 112,458
30 Dividend income
The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Securities held for trading 313 1,133 313 1,133

Subsidiaries - - (4,384) 164,335
313 1,133 (4,071) 165,468
The dividend loss from subsidiary in 2008 for the Bank arose from over-declaration of dividends by the Bank’s subsidiary, CIMB
Holdings Sdn Bhd in 2007. The dividend declaration was subsequently revised in 2008. Hence, the Bank has reversed the
over-recognition of the dividends in 2008 resulting in a dividend loss.

(18417-M)

31 Net trading (loss)/income

The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Gain arising from trading

in securities held for trading
- realised gain 1,952 40,882 1,952 40,882
- unrealised loss (9,395) (3,894) (9,395) (3,894)
Gain arising from trading in derivative
financial instruments
- realised gain 363 5,150 363 5,150
- unrealised loss - (5,150) - (5,150)
(7,080) 36,988 (7,080) 36,988
32 (Loss)/gain arising from sale of available-for-sale securities

The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
(Loss)/gain from sale of available-for-sale securities (1,805) 18,732 (507) 18,732
33 Other non-interest income

The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Foreign exchange gain/(loss)

- unrealised 5,411 (74) 5,641 (9)
- realised 506 417 505 -
Gain on disposal of property,
plant and equipment 431 422 431 422
Gain on disposal of CIMB
Discount House Berhad licence 8,750 - 8,750 -
Other non-operating income 9,961 5,755 9,846 5,755
25,059 6,520 25,173 6,168

(18417-M)

34 Overheads
The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Personnel costs
- Salaries, allowances and bonuses 92,300 88,970 90,856 87,536
- EPF 11,538 9,942 11,399 9,839
- ESOS expense 1,415 3,373 1,409 3,360
- Training fees 395 3,051 391 3,644
- Overtime, meal and transport claims 608 2,092 607 1,377
- Others 8,829 7,549 8,733 7,578
115,085 114,977 113,395 113,334
Establishment costs
- Depreciation of property, plant and equipment 19,881 12,223 18,516 12,088
- Amortisation of prepaid lease payment 372 372 372 372
- Rental 9,240 5,705 8,419 5,197
- Others 8,850 5,562 8,807 5,506
38,343 23,862 36,114 23,163
Marketing expenses
- Advertisement 4,759 3,794 4,753 3,772
- Entertainment expenses 3,967 4,077 3,948 4,077
- Promotional expenses and public relations 160 1,805 159 1,805
- Others 4,087 3,845 4,070 3,736
12,973 13,521 12,930 13,390
Administration and general expenses

- Legal and professional fees 4,845 4,860 4,804 4,812
- Communication 1,885 3,570 1,809 3,477
- Printing and stationery 2,209 3,405 2,188 3,405
- Licensing fee, exchange fee and levies 3,808 10,416 3,808 10,416
- Donations 71 6,207 71 6,207
- Administrative vehicle, travelling
and insurance expenses 3,154 5,205 3,139 5,205
- Others 2,833 5,890 2,611 5,750
18,805 39,553 18,430 39,272
Total overhead expenses 185,206 191,913 180,869 189,159

(18417-M)

34 Overheads (Continued)
The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
The above expenditure includes

the following disclosures:
Directors’ remuneration (Note 35) 8,106 14,826 7,942 14,826
Rental of premises 6,377 3,971 5,556 3,463
Hire of equipment 2,863 1,734 2,863 1,734
Auditors’ remuneration
- Statutory audit (PwC Malaysia) 138 181 110 130
- Statutory audit (other firms) 17 17 17 17
- Half year review 30 30 30 30
- Tax and taxation services 20 32 20 16
Included in the overhead expenses are support costs (including Group CEO’s office) amounting to RM116 million (2007: RM76
million) which were incurred on behalf of CIMB Bank Berhad (“CIMB Bank”) and recovered therefrom during the financial year
based on certain agreed methods such as Capital-at-Risk, head count, actual costs, revenue and time incurred by the relevant
personnel.
35 Directors’ remuneration
The Directors of the Bank in office during the financial year were as follows:
Non-Executive Directors
Dato’ Sri Mohamed Nazir bin Abdul Razak
Dato’ Zainal Abidin bin Putih
Nicholas Rupert Heylett Bloy
Zahardin bin Omardin
Executive Director
The Group The Bank

2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Executive Director and Group CEO

- Salary and other remuneration 2,892 2,782 2,803 2,782
- Bonus 4,561 11,160 4,494 11,160
- Benefits-in-kind 152 375 144 375
Non-executive Directors
- Fees and other remuneration 501 509 501 509
8,106 14,826 7,942 14,826

(18417-M)

35 Directors’ remuneration (continued)

The functions and responsibilities of the Chief Executive Officer (‘CEO’) were carried out by Dato’ Sri Mohamed Nazir bin Abdul
Razak. The salary, other remuneration, bonus (in respect of 2008 payable in 2009) and benefits-in-kind totalling RM5,124,691
(2007: RM11,135,921) for the CEO was paid by the Bank.
Part of the CEO’s remuneration together with other support costs incurred on behalf of CIMB Bank were recovered from CIMB
Bank based on certain methods which have been agreed by both parties (refer to Note 34).
Consistent with the practice for certain key personnel, the bonus for 2008 will be paid in tranches, spread over 2009. In
addition, the final tranche will only be paid out in the third quarter of 2009, after certain key financial performance indicators for
the Group has been met. A similar condition is also imposed on the 2008 bonus of certain key personnel.
The Directors’ remuneration is broadly categorised into the following bands:
2008 2007
Non-executive Executive Non-executive Executive
Directors Directors* Directors Directors*
The Group
RM50,001 to RM100,000 3 - 3 -
RM100,001 to RM500,000 1 1 1 -
RM1,000,001 to RM1,500,000 - - - -
RM1,500,001 to RM2,000,000 - - - -
RM2,000,001 to RM2,500,000 - 1 - 1
RM5,000,001 to RM5,500,000 1 - - -
RM9,000,001 to RM9,500,000 - - - 1
The Bank
RM50,001 to RM100,000 3 - 3 -
RM100,001 to RM500,000 1 - 1 -
RM1,000,001 to RM1,500,000 - - - -
RM1,500,001 to RM2,000,000 - - - -
RM2,000,001 to RM2,500,000 - 1 - 1
RM5,000,001 to RM5,500,000 1 - - -
RM9,000,001 to RM9,500,000 - - - 1
* Includes the remuneration of Dato’ Sri Mohamed Nazir bin Abdul Razak, who was re-designated as non-executive Director on 30 June 2007.

(18417-M)

36 Taxation
(i) Tax expense for the financial year
The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Current tax
- Malaysian income tax 42,439 65,259 39,056 109,639
Foreign tax 39 90 - -
Deferred tax (note 10) (6,030) 1,323 (5,873) 1,323
36,448 66,672 33,183 110,962
Current tax
- Current year 42,478 65,349 39,056 109,639
Deferred tax
- Origination and reversal of temporary differences (6,030) 1,323 (5,873) 1,323
36,448 66,672 33,183 110,962
(ii) Numerical reconciliation of income tax expense

The explanation on the relationship between tax expense and profit before taxation is as follows:
The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000

Tax calculated at a tax rate of 26% (2007: 27%) 38,970 75,913 37,873 118,695
Income not subject to tax (9,440) (15,260) (9,439) (13,674)
Expenses not deductible for tax purposes 7,546 6,786 5,371 6,786
Over provision in prior years (387) - (387) -
Effects of different tax rates (241) (767) (235) (845)
Tax expense 36,448 66,672 33,183 110,962

(18417-M)

37 Dividends
2008 2007
RM’000 RM’000
Final gross dividend of 20,270.27 sen per redeemable preference share,

less 26% income tax, paid on 7 May 2008 150,000 -
Interim gross dividend of 10,135.14 sen per redeemable preference share,
less 26% income tax, paid on 25 August 2008 75,000 -
Final gross dividend of 124.96 sen per ordinary share, less 27% income tax,
paid on 25 May 2007 - 200,000
Interim gross dividend of 124.96 sen per ordinary share, less 27% income tax,
paid on 27 August 2007 - 200,000
225,000 400,000
The gross and net dividends declared per share for each financial year are as follows:
2008 2007
Amount Amount
of of
Gross per Net per dividend Gross per Net per dividend
share share net of tax share share net of tax
Sen Sen RM’000 Sen Sen RM’000
Final dividend paid 20,270.27 15,000.00 150,000 124.96 91.22 200,000

Interim dividend paid 10,135.14 7,500.00 75,000 124.96 91.22 200,000
30,405.41 22,500.00 225,000 249.92 182.44 400,000
The final dividend of 20,270.27 sen per redeemable preference share, less income tax at 26%, amounting to RM150,000,000
in respect of the financial year ended 31 December 2007 was paid to BCHB on 7 May 2008.
An interim dividend of 10,135.4 sen per redeemable preference share, less income tax at 26%, amounting to RM75,000,000
for the financial year ended 31 December 2008 was paid to BCHB on 25 August 2008.
The Directors now recommend the payment of a final gross dividend of 9,333.33 sen per share on 1,000,000 redeemable
preference shares of RM0.01 each, less 25% income tax, amounting to RM70,000,000 which, subject to the approval of
members at the forthcoming Annual General Meeting of the Bank, will be paid on 27 March 2009 to shareholders registered
on the Bank’s Register of Members at the close of business on 27 February 2009.

(18417-M)

38 Amount due from/(to) related companies

The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Amount due from:

- subsidiaries - - 9 37,423
- related companies 19,525 9,745 19,525 9,745
19,525 9,745 19,534 47,168
Amount due to:

- subsidiaries - - (15,069) (43,185)
- related companies (3,368) (42,070) (8) (42,068)
- immediate holding company - (100) - (100)
- ultimate holding company (189) (1,254) (189) (1,254)
(3,557) (43,424) (15,266) (86,607)
The amounts due from/(to) related companies are unsecured, interest free and recallable on demand.
39 Significant related party transactions and balances

(a) Related parties and relationship
Parties are considered to be related if one party has the ability to control the other party or exercise significant influence
over the other party in making financial or operational decisions.
The related parties of, and their relationship with the Group, are as follows:
Related parties Relationship

Bumiputra-Commerce Holdings Berhad (“BCHB”) Ultimate holding company
CIMB Group Sdn Bhd (“CIMBG”) Immediate holding company
CIMB Berhad (“CIMBB”) Subsidiary of ultimate holding company
Subsidiaries of CIMBG as disclosed in its
financial statements Subsidiaries of immediate holding company
Subsidiaries of the Bank as disclosed in Note 12 Subsidiaries
Commerce Capital (Labuan) Ltd. Subsidiary of ultimate holding company
Commerce Asset Realty Sdn. Bhd. Subsidiary of ultimate holding company
Commerce Asset Nominees Sdn. Bhd. Subsidiary of ultimate holding company
Commerce MGI Sdn. Bhd. Subsidiary of ultimate holding company
Commerce Volantia Sdn. Bhd. Subsidiary of ultimate holding company
PT Commerce Kapital Subsidiary of immediate holding company
Rangkaian Segar Sdn. Bhd. Associate of ultimate holding company
Key management personnel Refer to next page

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39 Significant related party transactions and balances (continued)

(a) Related parties and relationship (Continued)
Key management personnel are those persons having the authority and responsibility for planning, directing and controlling
the activities of the Group and the Bank either directly or indirectly. The key management personnel of the Group and the
Bank include all the Directors of the Bank and employees of the Group who make certain critical decisions in relation to
the strategic direction of the Group.
(b) Related party transactions

A number of banking transactions are entered into with related parties in the normal course of business. These include
loans, deposits, securities and derivative transactions. These transactions were carried out on commercial terms and at
market rates.
In addition to related party disclosures mentioned elsewhere in the Financial Statements, set out below are other significant
related party transactions.
Ultimate Immediate Other Key

holding holding related management
company company companies personnel
RM’000 RM’000 RM’000 RM’000
2008
Sales:
Malaysian Government securities - - 5,071 -
Private debt securities - - 1,843,344 -
Commercial paper - - 594,375 -
- - 2,442,790 -
Purchases:
Malaysian Government investment certificates - - 14,994 -
Cagamas bonds - - 190,000 -
Commercial paper 984,898 - 261,168 -
Private debt securities 350,000 - 3,530,364 -
1,334,898 - 4,032,495 -
2008
Income:
Fee income - - 534 23
Interest income - - 58,416 11
- - 58,950 34

Expenditure:
Interest expense - - 37,844 56

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(b) Related party transactions (Continued)

RM’000 RM’000 RM’000 RM’000
2007
Sales:
Cagamas bonds - - 717,000 -
Sub debt bonds and NIDs - - 3,151 -
Private debt securities - - 4,950,336 -
Commercial paper - - 414,969 -
- - 6,095,571 -
Purchases:
Private debt securities 350,000 - 320,331 -
Commercial paper 1,576,900 - 1,196,528 -
1,926,900 - 1,586,808 -
2007
Income:
Fee income - - 3,676 366
Interest income - - 32,623 13
- - 36,299 379
Expenditure:
Interest expense - - 30,122 140
Key management compensation
2008 2007
RM’000 RM’000
Salaries and other short term employee benefits 16,991 43,336

Other long term benefits - 2,142
16,991 45,478
Unit Unit
Share options balance of ultimate holding company 7,613,407 11,635,000
Included in the above table are Directors’ remuneration which are disclosed in Note 35. The share options granted are on
the same terms and additions as those offered to other employees of the Group and the Bank as disclosed in Note 43.

(18417-M)


(c) Related party balances
Other related party balances, other than those carried out in the ordinary course of banking transactions, represent
advances to and from related parties as well as expenses paid on behalf for and by related parties. These balances are
unsecured, carry no interest rate and are repayable on demand.
In addition to related party disclosures mentioned elsewhere in the Financial Statements, set out below are other significant
related party balances.

RM’000 RM’000 RM’000 RM’000
2008
Amount due from:
Cash and balances with banks
and other financial institutions - - 2,045,569 -
and other financial institutions - - 200,000 -
Loans, advances and financing - - - 292
Interest receivable - - 5,366 -
- - 2,250,935 292
Amount due to:

and other financial institutions - - 2,059,888 27,521
Interest payable - - 1,169 724
- - 2,061,057 28,245
Principal
Interest rate contracts:
Swaps - - 1,193,130 -

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(c) Related party balances (Continued)

RM’000 RM’000 RM’000 RM’000
2007
Amount due from:
Cash and balances with banks and other
financial institutions - - 68 -
Money at call and deposit placements maturing
within one month - - 427,315 -
Loans, advances and financing - 300,000 - 318
and other financial institutions - - 282,280 -
Interest receivable - - 4,556 -
- 300,000 714,219 318
Amount due to:

and other financial institutions - - 719,293 22,982
Interest payable - - 989 300
- - 720,282 23,282
Principal
Interest rate contracts:
Swaps - - 735,500 -
(d) Credit transactions and exposures with connected parties
Pursuant to the Guidelines On Credit Transactions and Expenses with Connected Parties issued by BNM, the aggregate
value of outstanding credit exposures of the Bank with connected parties amounted to RM430,761,000 as at 31 December
2008, representing 24.8% of the total outstanding credit exposures of the Bank. There are no credit exposures with
connected parties which are non-performing or in default as at 31 December 2008.

(18417-M)

40 Capital commitments
Capital expenditure not provided for in the Financial Statements are as follows:
The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000
Authorised and contracted for 24,756 - 24,756 -

Authorised but not contracted for - 59,065 - 59,065
24,756 59,065 24,756 59,065
The capital commitments are attributed to:

- projects 16,405 - 16,405 -
- fixed assets 8,351 59,065 8,351 59,065
24,756 59,065 24,756 59,065
41 Lease commitments
The Group and the Bank have lease commitments in respect of rented premises which are classified as operating leases. A
summary of the non-cancellable long-term commitments representing minimum rentals which the Group and the Bank are
obliged to pay is as follows:
The Group The Bank
2008 2007 2008 2007
RM’000 RM’000 RM’000 RM’000

Not later than one year 10,637 5,429 10,637 5,368
Later than one year and not later than five years 28,216 6,899 28,216 6,796
38,853 12,328 38,853 12,164
42 Capital adequacy
The capital adequacy ratios of the Bank’s banking operations are as follows:
2008 2007
RM’000 RM’000
Tier-1 capital 629,641 748,040

Eligible Tier-2 capital 1,105 6,019
Total capital 630,746 754,059

Less:
Investment in subsidiaries (19,420) (19,420)
Capital base before proposed dividend 611,326 734,639

Less: Proposed dividends (70,000) (150,000)
Capital base after proposed dividend 541,326 584,639

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42 Capital adequacy (Continued)

The capital adequacy ratios of the Bank’s banking operations are as follows: (Continued)
2008 2007
RM’000 RM’000
Capital ratios
Before deducting proposed dividends:
Core capital ratio 40.15% 30.09%
Risk-weighted capital ratio 40.15% 30.09%

After deducting proposed dividends:
Components of Tier-1 and Tier-2 capital are as follows:
2008 2007
RM’000 RM’000
Tier-1 capital
Paid up share capital 219,242 219,242
Share premium 33,489 33,489
Retained profit 89,498 201,394
Other reserves 292,947 293,577
635,176 747,702
Deferred tax (assets)/liabilities (5,535) 338
Total Tier-1 capital 629,641 748,040
Tier-2 capital
General allowance for bad and doubtful debts 1,095 6,019
Cumulative preference shares 10 -
Total Tier-2 capital 1,105 6,019
Total capital 630,746 754,059

Less:
Investment in subsidiaries and holding of other banking institutions capital (19,420) (19,420)
Total capital base 611,326 734,639

(18417-M)

42 Capital adequacy (Continued)

Breakdown of risk-weighted assets in the various categories of risk-weights:
2008 2007
Principal Risk weighted Principal Risk weighted
RM’000 RM’000 RM’000 RM’000
0% 590,951 - 80,732 -
10% - - - -
20% 2,731,019 546,204 1,811,600 362,320
50% 40,967 20,484 42,518 21,259
100% 694,746 694,746 1,725,236 1,725,236
4,057,683 1,261,434 3,660,086 2,108,815
Counterparty risk requirement 5 5,404
Total risk weighted assets equivalent for credit risk 1,261,439 2,114,219
Total risk weighted assets equivalent for market risk 261,009 327,066
1,522,448 2,441,285
Pursuant to Bank Negara Malaysia’s circular, ‘Recognition of Deferred Tax Asset (‘DTA’) and Treatment of DTA for RWCR
Purposes’ dated 8 August 2006, deferred tax income/(expenses) are excluded from the calculation of Tier 1 Capital and DTA
is excluded from the calculation of risk-weighted assets.
Effective 1 October 2008, the following approaches have been adopted for the computation of risk weighted assets:
• Adoption of bilateral netting as provided under the Standardised Approach Framework which involves the weighting of net
claims rather than gross claims with the same counterparties arising out of the full range of forwards, swaps, options and
similar derivative contracts.
• Irrevocable commitments to extend credit (undrawn loans) have been revised to include only those undrawn loans whereby
all conditions precedent have been met.
43 Employee benefits
Modified executive Employees Share Options Scheme (“EESOS”)
The share options granted to Directors and employees of the Group are that of the Bank’s ultimate holding company, Bumiputra-
Commerce Holdings Berhad (“BCHB”). The Employee Share Option Scheme (“ESOS 2005/2009”) was granted on 11 March
2005 and is governed by the by-laws approved by BCHB shareholders on 8 September 2005. However, pursuant to the
CIMBB Restructuring, the existing ESOS 2005/2009 was absorbed by a trust, set up to subscribe for all the remaining CIMBB
shares through an accelerated vesting of the unexercisable tranches under the ESOS 2005/2009.
The exercise price under the EESOS is the average of the mean market quotation of the shares of the Company as quoted in
the Daily Official List issued by the Bursa Malaysia Securities Berhad for the five market days preceding the offer date, or the
par value of the shares of the Company of RM1, whichever is the higher.
Options granted are vested across different exercise periods on 11 March 2005, 30 December 2006, 30 December 2007, 30
December 2008 and will expire on 29 December 2009. The Group has no legal or constructive obligation to repurchase or
settle the options in cash.

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43 Employee benefits (Continued)

Modified executive Employees Share Options Scheme (“EESOS”) (Continued)
The main features of the EESOS are as follows:
• The total number of ordinary shares issued by BCHB under the EESOS shall not exceed 10% of the total issued and paid-
up ordinary shares of the Company
• The subscription price of EESOS options shall be the higher of the weighted average market price of the BCHB’s shares
for the five market days immediately preceding the date at which the EESOS options are granted to the employees, and
the par value of the shares of the BCHB.
• In the event of capital distribution, the subscription price and/or the number of new shares of BCHB may be adjusted in
such a manner as the Board of BCHB in their discretion deem fair and reasonable.
• The share options shall not carry any rights to vote at any general meeting of BCHB. The share option holders shall not be
entitled to any dividends, rights or other entitlement on his unexercised share options.
• Option holders are required to remain in the Group’s employment till the respective vesting dates for the relevant amount
of options to vest in the hands of the holder.
• For the purpose of the Modified EESOS, a total of 41,014,009 share options with adjusted option price were offered to
the Eligible Executives being the date of listing and quotation of the shares issued by BCHB. The total shares options are
categorised as follows:
(i) Modified EESOS 1

4,675,000 share options were offered at an option price of RM1.27 per share option, which have expired as at 29
December 2007;
(ii) Modified EESOS 2

16,021,459 share options were offered at an option price of RM3.49 per share option with expiry date on 29 December
2008. The expiry date was subsequently extended to 29 December 2009;
(iii) Modified EESOS 3

2008. The expiry date was subsequently extended to 29 December 2009; and
(iv) Modified EESOS 4

2009.
The option price above was adjusted using the ratio approximately 1.146 BCHB shares for one CIMBB shares from
the original option prices.

(18417-M)

43 Employee benefits (Continued)

Modified executive Employee Share Option Scheme (“EESOS”) (Continued)
Movements in the number of share options outstanding and their related weighted average exercise prices, for share options
scoped in under FRS 2, are as follows:
2008 2007
RM/share (units ‘000) RM/share (units ‘000)
At start of financial year* 3.90 8,143 3.33 20,088

Arising from modification of EESOS 2 & 3 3.90 (8,143) - -
Forfeited - - 4.39 (1,131)
Exercised - - 3.30 (10,814)
At end of financial year - - 3.90 8,143
The weighted average share price during the period, should the options have been exercised on a regular basis throughout the
period was RMNil (2007: RM10.72) per share.
The options outstanding at year end had exercise price of RM Nil (2007: RM3.86 to RM4.61), and a weighted average
remaining contractual life of 0 years (2007: 2 years).
* Pursuant to the CIMBB Restructuring in 2006, all CIMBB share options have been converted to BCHB share options on the ratio of 1 : 1.146.
The BCHB share options have been classified as balances at the start of the financial year as the option holders retain the right to exercise the
options during the conversion period.
Management Equity Scheme (“MES”)

Entitlements on equity instruments of BCHB, with an exercise price of RM3.48 per share (share price: RM8.45), were granted
to eligible senior management of the CIMB Investment Bank as part of the performance linked compensation scheme by a
substantial shareholder of BCHB. The scheme was initially launched in 1 March 2004 at BCHB level and in November 2007,
both the Nomination and Remuneration Committee of BCHB approved amendments to the terms which provides for the
inclusion of the senior management of CIMB Group in the MES.
The eligibility for participation in the scheme shall be at the discretion of the Nomination and Remuneration Committee of BCHB.
Entitlements of eligible members of senior management are non-assignable and non-transferable whereby the Nomination and
Remuneration Committee of BCHB administers the scheme on behalf of the substantial shareholder. The options granted vest
in proportions across various exercise periods.
In December 2008, the substantial shareholder of BCHB had approved the extension of the MES scheme from 28 February
2009 to 28 February 2012. The MES will continue to be in force till 28 February 2012 after which the voting rights of unexercised
balances will remain with the substantial shareholder of BCHB.
Number of entitlements granted during the financial year is 3,350,000 (2007: 13,925,000) units and number of entitlements
outstanding as at year end is 10,058,000 (2007: 13,723,000) units.
All entitlements have the same reference price, which is at RM3.48 each. The weighted average remaining contractual life is 3.2 years.

(18417-M)

44 Significant event during the financial year

On 30 January 2008, the Bank issued 1,000,000 Redeemable Preference Shares of nominal value RM0.01 each to CIMB
Group Sdn Bhd at an issue price of RM0.01 each, which was approved via an Extraordinary General Meeting. The Redeemable
Preference Shares was subsequently transferred to Bumiputra-Commerce Holdings Berhad.
45 Critical accounting estimates and judgements in applying accounting policies

The Group and the Bank make estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, rarely equal the related actual results. To enhance the information content of the estimates, certain key variables that
are anticipated to have material impact to the Group’s and the Bank’s results and financial position are tested for sensitivity
to changes in the underlying parameters. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amount of assets and liabilities within the next financial year are outlined below:
(a) Fair value of financial instruments

Financial instruments are either priced with reference to a quoted market price for that instrument or by using a valuation
model. Where the fair value is calculated using financial markets pricing models, the methodology is to calculate the
expected cash flows under the terms of each specific contract and these values are discounted back to a present value.
These models use as their basis independently sourced market parameters including, for example, interest rate yields
curves, equities and commodities prices, options volatilities and currency rates. Most market parameters are either directly
observable or are implied from instrument prices.
The process of calculating fair value on illiquid instruments or from a valuation model may require estimation of certain
pricing parameters, assumptions or model characteristics. These estimates are calibrated against industry standards,
economic models and observed transaction prices. Changes in these estimates and assumptions about these factors
could affect the reported fair value of financial instruments.
(b) Impairment of available-for-sale securities and held-to-maturity securities

The Group and the Bank follow the guidance of the Revised BNM/GP8 in determining when an investment is impaired.
This determination requires significant judgment. The Group and the Bank evaluate, among other factors, the duration and
extent to which the fair value of the investment is less than cost; and the financial health and near-term business outlook
for the investee, including factors such as industry and sector performance, changes in technology and operational and
financial cash flow.
(c) Income taxes

Significant judgment is required in determining the capital allowances and deductibility of certain expenses during
the estimation of the provision for income taxes. There are many transactions and calculations for which ultimate tax
determination is uncertain during the ordinary course of business. The Group and the Bank recognise liabilities for
anticipated tax audit issues based on estimates or whether additional tax will be due. Where the final tax outcome of these
matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred
taxation positions in the period in which the determination is made.

(18417-M)

45 Critical accounting estimates and judgements in applying accounting policies (Continued)

(d) Goodwill impairment
The Group tests annually whether goodwill has suffered any impairment in accordance with the accounting policy stated
in Note K of the Summary of Significant Group Accounting Policies.
The first step of the impairment review process requires the identification of independent operating units, dividing the
Group’s business into the various business segments. The goodwill is then allocated to these various business segments.
The first element of this allocation is based on the areas of the business expected to benefit from the synergies derived
from the acquisition. The second element reflects the allocation of the net assets acquired and the difference between the
consideration paid for those net assets and their fair value. This allocation is reviewed following business reorganisation.
The carrying value of the business segment, including the allocated goodwill, is compared to its fair value to determine
whether any impairment exists. Detailed calculations may need to be carried out taking into consideration changes in
market in which a business operates. In the absence of readily available market data, this calculation is usually based
upon discounting expected pre-tax cash flows at the Group’s and the Bank’s cost of capital, which requires exercise of
judgment.
Changes to the assumptions used by management, particularly the discount rate and the terminal growth rate, may
significantly affect the results of the impairment.
46 Segment reporting
The Group is divided into five major business lines - Financial advisory, underwriting and other fees, Debt related, Equity related,
Investments and securities services and Others. The business lines are the basis on which the Group reports its primary
segment information.
Financial advisory, underwriting and other fees mainly comprise fees derived from structured financial solutions, origination of
capital market products including debt and equity, mergers and acquisitions, secondary offerings, asset backed securities,
debt restructurings, corporate advisory, Islamic capital market products and project advisory. In addition, this segment also
includes underwriting of primary equities and debt products.
Debt related mainly comprises proprietary trading and market making in the secondary market for debt, debt related derivatives
and structured products. It also invests in proprietary capital.
Equity related mainly comprises institutional and retail broking business for securities listed on the Exchange. It also includes
income from trading and investing in domestic and regional equities market.
Investments and securities services mainly comprise annuity income derived from fund management, agency and securities
services.
Others mainly comprise income derived from Islamic Banking operations undertaken by the Group.

(18417-M)

46 Segment reporting (Continued)

The following table presents an analysis of the Group’s results and balance sheet positions by business segments:
Financial Investments
advisory, and
underwriting Debt Equity securities
and other fees related related services Others Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
The Group
2008
External net interest income - 28,778 - - - 28,778
Non interest income:
- Fee income 114,583 3,790 - 9,995 - 128,368
- Net trading loss - (4,579) (2,501) - - (7,080)
- Loss arising from sale
of available-for-sale securities - (1,805) - - - (1,805)
- Brokerage income - - 88,704 3,290 - 91,994
- Income from assets management
and securities services - - - 11,795 - 11,795
Other income 776 49,510 313 - 25,059 75,658
Operating income
(exclude allowances) 115,359 75,694 86,516 25,080 25,059 327,708
Segment result 91,947 15,458 26,094 3,970 24,206 161,675

Unallocated costs (12,481) *
Share of results of associates 689
Profit before taxation 149,883

Taxation and zakat (36,448)
Net profit for the financial year

after minority interest 113,435
Segment assets 15,782 5,124,522 275,253 18,514 58,646 5,492,717

Unallocated assets 2,951
Total assets 5,495,668
Segment liabilities 1,766 4,135,248 600,533 3,480 97,323 4,838,350

Unallocated liabilities 8,744
Total liabilities 4,847,094
Other segment items

Incurred capital expenditure:
- addition of property,
plant and equipment 4,848 8,400 4,236 6,002 - 23,486
Depreciation of property,
plant and equipment (4,104) (7,110) (3,586) (5,081) - (19,881)
Amortisation of prepaid
lease payments - - - - (372) (372)
Amortisation of premium
less accretion - 515 - - - 515
Allowances for losses on loans,
advances and financing - 4,931 - - - 4,931
Allowance for other receivables 1,761 - - - - 1,761

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The following table presents an analysis of the Group’s results and balance sheet positions by business segments: (Continued)
Financial Investments
advisory, and
underwriting Debt Equity securities
and other fees related related services Others Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
The Group
2007
External net interest income - 45,764 - - - 45,764
Non interest income:
- Fee income 112,458 - - - - 112,458
- Net trading income - 31,116 5,872 - - 36,988
- Gain arising from sale of
available-for-sale securities - 18,732 - - - 18,732
- Brokerage income - - 170,808 - - 170,808
- Income from assets
management and
securities services - - - 17,036 - 17,036
Other income - - 1,133 - 68,455 69,588
Operating income
(exclude allowances) 112,458 95,612 177,813 17,036 68,455 471,374
Segment result 82,330 21,796 125,549 4,425 58,615 292,715
Unallocated costs (11,555)*
Profit before taxation 281,160
Taxation and zakat (66,672)
Net profit for the financial
year after minority interest 214,488
Segment assets 36,101 3,332,011 911,970 2,463 68,966 4,351,511

Unallocated assets 9,650
Total assets 4,361,161
Segment liabilities 2,517 2,102,532 1,184,320 12,310 - 3,301,679

Unallocated liabilities 290,116
Total liabilities 3,591,795
Other segment items

Incurred capital expenditure:
- addition of property,
plant and equipment 4,441 15,012 8,258 4,505 335 32,551
Depreciation of property,
plant and equipment (1,668) (5,637) (3,101) (1,691) (126) (12,223)
Amortisation of prepaid lease payments - - - - (372) (372)
Accretion of discount less
amortisation of premium - 552 - - - 552
Allowances for losses on loans,
advances and financing - 3,312 - - - 3,312
Allowance for other receivables (1,613) - - - - (1,613)
* The unallocated costs refer to expenditure arising from the Chief Executive Officer’s office and the Corporate Client Solutions Department which are related to
the Group as a whole, hence they are not directly allocated to respective segments.

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The reconciliation for total segments operating income to the net income in the consolidated Financial Statements are as follows:
2008 2007
RM’000 RM’000
Operating income (excluding allowance) 327,708 471,374

Less:
Write back of losses on loans, advances and financing 4,931 3,312
Write back of/(allowance for) other receivables (net) 1,761 (1,613)
Net income 334,400 473,073
The Group’s activities are predominantly carried out in Malaysia, with the Malaysian market contributing approximately 99%
of the gross operating income and the total segment assets in Malaysia approximately 99% of total assets of the Group.
Accordingly, no information on the Group’s operations by geographical segments has been provided.
47 Risk management and use of financial instruments

The Group is a full service investment banking group that offers an extensive range of on and off-balance sheet financial
instruments.
A Financial risk management objectives and policies

Risk management is an integral part of CIMB Group’s business and activities. The extent to which the Group is able to
identify, assess, monitor and manage each of the various types of risk is critical to its soundness and profitability. The
Group has reviewed its risk management processes against the backdrop of its functional transformation into a full-
fledged transaction-based investment bank. In the process, the Group has rationalised the overlaps between the risk
management tasks assumed by individual business units with that of the centralised risk oversight function. The Group’s
risk management is applied on an enterprise-wide basis, ensuring a consistent approach across the Group, as well as
ensuring continuous evaluation. The risk management of the Group is independent of the Group’s operating units and
reports to the Board of the Bank on a regular basis. New businesses, products, activities and entry into new markets are
not embarked upon, unless approved by the Group Risk Committee.
Generally, the objectives of the Group’s integrated risk management framework are to:
• identify the various exposures and operational requirements;
• establish the policies and procedures to measure, monitor, manage and report these exposures, and to ensure that
they are within the Group’s risk profile as approved by the Board of the Bank; and
• set out the appropriate responsibilities and structures required in the risk management process.
(i) An integrated risk management and control framework

CIMB Group adopts an enterprise-wide risk management framework (‘EWRM’) to manage its risks, which is
implemented by a number of committees. The EWRM framework involves the on-going process of identifying,
assessing, managing and reporting significant risks that may affect the achievement of its business objectives. This
robust methodology equips the Board of the Bank and the management with a comprehensive tool-kit to anticipate
and manage both existing and potential risks, taking into consideration changes in the risk profile experienced in the
industry and within the Group.

(18417-M)

47 Risk management and use of financial instruments (Continued)

A Financial risk management objectives and policies (Continued)
(i) An integrated risk management and control framework (Continued)
The Bank employs a Capital-at-Risk (‘CaR’) framework as a common measure of risk within CIMB Group. The CaR
framework focuses on economic capital needed in CIMB Group to cushion against unexpected losses. CaR can be
aggregated, thus allowing measurement of CIMB Group’s total risk, and it provides a basis for risk-return consideration,
and hence limits for risk-taking can be computed and put in place. Risk capital is allocated to business units that utilise
CIMB Group’s balance sheet. The CaR framework also forms the basis of return on risk-adjusted-capital, which is
used by CIMB Group to compare profitability across different businesses and for performance measurement.
(ii) Role of senior management

In line with best practices in corporate governance, the Board Risk Committee determines the risk policy objectives for
CIMB Group, and assumes ultimate responsibility for risk management. The Board Risk Committee also establishes
yearly allocation of risk capital to support all risks undertaken by the Group. The day-to-day responsibility for risk
management and control however, is delegated to the Group Risk Committee, which reports directly to the Board
Risk Committee. Sub-committees delegated from the Group Risk Committee are also in place to manage and control
specific risk areas.
These sub-committees have been delegated specific responsibilities which are clearly defined in each of their terms
of references. These committees have their specific scope of coverage and report to the Board of the Bank with their
recommendations. The Board Risk Committee, reports directly to the Board of CIMB, and oversees the entire EWRM
as well as provides strategic guidance and review decisions made by the various risk committees. The Group Risk
Committee, comprising senior management of CIMB Group, undertakes the oversight function for capital allocation
and overall risk limits, guided by the risk appetite defined by the Board of the Bank. The Group Risk Committee is
further supported by four (4) specialised sub-committees, namely Market Risk Committee, Credit Risk Committee,
Liquidity Risk Committee and Operational Risk Committee.
The roles and responsibilities of the committees and sub-committees are as follows:
Board Risk Committee (‘BRC’)

• Reviews and approves risk policies and strategies, and new products
• Oversees entire risk management function
Group Risk Committee (‘GRC’)

• Reviews and advises on risk policies and strategies
• Oversees management of risk, capital allocation and asset liability management process across CIMB Group
Credit Risk Committee (‘CRC’)

• Credit approval authority
• Oversees counterparty, industry sector, product exposures and sets credit support standards
Market and International Risk Committee (‘MIRC’)

• Oversees exposure to market risks
• Approves proprietary trading activities and investments or underwriting arrangements with defined limits
Liquidity Risk Committee (‘LRC’)

• Reviews trends in the Group’s overall liquidity risk profile
Operational Risk Committee (‘ORC’)

• Oversees issues relating to the CIMB Group’s operational risk and internal control environment

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Key activities
CIMB Group’s EWRM process rests with a number of management committees. The purpose of each committee is to
identify, analyse, monitor and review the principal risks to which the Group is exposed. Essentially, these are:
• market risk – arising from changes in market prices such as interest rates, exchange rates and share prices;
• credit risk – relating to the quality of counterparties with whom the Group deals with, as well as their potential for defaults;
• liquidity risk – relating to the funding of the Group’s activities; and
• operational risk – relating to actual and potential losses arising from a breakdown in controls, and the implementation
of safeguards to ensure the proper functioning of people, systems and facilities. This includes legal and regulatory
issues, and the need to ensure that all work undertaken by the Group meets the strictest standards of legislation and
documentation.
The primary oversight body is the Group Risk Management (‘GRM’), which comprises the Risk Management and Analytics
(‘RMA’), Risk Middle Office (‘RMO’), Credit Rating and Analytics (‘CRA’), Credit Risk Management (‘CRM’) and Business
Credit Management (‘BCM’), which are independent of the Group’s business units. Group Risk Management assists
senior Management and the various risk committees in monitoring, reporting and controlling the Group’s risk exposures
and is the secretariat of the various committees.
The roles of GRM

The key responsibilities of GRM are to identify, analyse, monitor, review and report the principal risks to which the Group
is exposed. It also helps to create shareholder value through proper allocation of risk capital, development of risk-based
pricing framework and facilitate development of new business and products.
RMA monitors risk-taking activities, initiates and proposes risk policies, risk measurement methodologies, risk limits and
risk capital allocation. This is in order to aggregate and control credit, market and operational risks across the enterprise.
RMA also performs independent review of loan assets quality and loan recovery plan, independent valuation of the trading
portfolios and develops the risk-based product pricing framework for loan portfolios. RMO aims to champion the Market
Risk framework and ensures that Risk Committee’s directives are carried out. Key responsibilities include reviewing and
analysing treasury trading strategy, positions and activities vis-à-vis changes in the financial market. Other functions
include coordinating new products, monitoring limits usage and assessing limits adequacy, performing mark-to-market as
part of financial valuation and maintaining partnership with Global Treasury.
CRA focuses on the development of credit rating models and credit scorecard cards. The responsibilities include monitoring
the performance of rating models and scorecard and performing model back testing. CRA is also responsible for the
Project Management Office for Basel II implementation.
CRM carries out independent assessment of all credit risk related proposals originating from the various business units
such as loans and advances, fixed income, derivatives, sales and trading, prior to submission to the Credit Risk Committee
(“CRC”), EXCO, or Board for approval. CRM also reviews the Group’s holdings of all fixed income assets and recommends
the internal ratings for CRC’s approval. CRM is the secretariat for CRC.
BCM approves all types of credit extension up to a limit of RM5million per application (subject to total Group exposure
not exceeding RM25million). BCM also provides guidance and feedback to those involved in credit initiation, and is
responsible for tracking and analysing loans which turn NPL within one (1) year of approval.
On an annual basis, RMA proposes the global CaR limit to GRC and BRC for approval. This limit is allocated by the GRC
to the various businesses of the CIMB Group through MIRC and CRC. The appropriate market and credit allocations are
given by the various business units to execute their business plans each year. GRC also ensures that the CIMB Group’s
aggregate risk exposure does not exceed the global CaR limit approved by the BRC.

(18417-M)


Market Risk
Market risk is defined as any fluctuation in value of a portfolio, resulting from changes in market prices and market
parameters, such as interest rates, exchange rates and share prices.
Market risk can arise either from customer-related businesses or from proprietary positions, due to the Group’s trading
activities. The Group makes markets in debt securities as well as in interest rate and currency derivative instruments,
while equity proprietary activities are carried out by the Group itself, its broking arm and offshore subsidiary. In general, the
Group hedges its trading positions by employing a variety of strategies, including the use of derivative instruments.
The Group manages market risk through risk limits set by the GRC. GRC is assisted by MIRC, whose role amongst others,
is to oversee the Group’s exposure to market risk and to evaluate trading, investment and underwriting proposals within
defined limits. The utilisation of market risk limits is reviewed on a daily basis by RMA, which employs statistical methods
to measure and monitor risks associated with the Group’s trading activities. RMA, together with the RMO, also provides
independent valuation of portfolios and generates daily and weekly risk position reports for the information of the GRC.
The Group has adopted a Value-at-Risk (‘VaR’) approach in the measurement of market risk. VaR is a statistical measure
of the potential losses that could occur due to movements in market rates and prices over a specified time horizon within
a given confidence level. Duration-weighted gap VaR and various other multi-factor models are also employed to assess
market risk.
Credit Risk
Credit and counterparty risk is defined as the possibility of losses due to an unexpected default or a deterioration of
creditworthiness of a business partner.
Credit risk arises in many of the Group’s business activities. In lending activities, it occurs primarily through loans as well as
commitments to support clients’ obligations to third parties, i.e. guarantees. In sales and trading activities, credit risk arises
as a result of the possibility that the Group’s counterparties will not be able or willing to fulfil their obligation on transactions
on or before settlement date. In derivatives activities, credit risk arises when counterparties to derivatives contracts, such
as interest rate swaps, are obligated to pay the Group the positive fair value or receivable, resulting from the execution of
contract terms.
CRC ensures that the risk exposures undertaken match the risk appetite of the Group, and that proper authorisation
procedure are followed. Problematic exposures identified by the business units and management are carefully monitored
and proactive measures taken, to minimise any potential loss to the Group.
Potential credit exposures are evaluated by CRC and are monitored against approved limits on a regular basis. The
mitigation of credit risk exposures adopted by CIMB Group includes restricting concentration of risks to any one large
sector or industry, or to a particular counterparty group or individual, the application of single customer limit, as well as
assessing quality of collateral.
The Group also enters into master agreements that provide for close-out and settlement netting with counterparties,
whenever possible. A master agreement that governs all transactions between two parties, creates the greatest legal
certainty that credit exposure will be netted. It enables the netting of outstanding obligations upon termination of outstanding
transactions if an event of default occurs.

(18417-M)


Credit Risk (Continued)
The extent to which the Group’s overall exposure to credit risk is reduced through a master netting arrangement may
change substantially within a short period following the balance sheet date because the exposure is affected by each
transaction subject to the agreement.
The Bank has issued a board-approved Credit Risk Policy Guide, which outlines risk limits, risk pricing, and credit risk
rating and measurement, reporting and management information system. Key business unit’s policies and procedures
have been documented and approved by the Board for application across the Bank. Regular reviews and updates are
performed to ensure that the documentation is current.
The Bank has established an internal rating system for corporate and business loans that enables credit officers to
categorise the credit risk of individual credit, assists them in making informed decisions on approval and pricing of loans.
Additionally, it assists in tracking and monitoring loans on a portfolio basis. For retail exposures, which are defined as large
homogeneous portfolios of low values, where the incremental risk of any exposure is small, a credit scoring system is
employed.
Liquidity Risk
Liquidity risk is defined as the risk of the Group being unable to fulfil its current or future payment obligations in full and at
the due date. The LRC, whose main role is to oversee the overall liquidity management of the Group, ensures compliance
with the liquidity framework prescribed by BNM, and reviews periodically the assumptions of the liquidity risk management
framework.
The Group’s liquidity risk management focuses on avoiding over dependence on volatile sources of funding, diversification
of sources of funds, and maintenance of sufficient liquid assets. To ensure the Group is able to cover all payment obligations
on due dates as part of the liquidity management process, RMA prepares liquidity analysis in line with BNM’s liquidity
framework. In addition, management action triggers are set to provide early warning on emerging liquidity pressures. The
Group has also developed a contingency funding plan to deal with extreme liquidity crisis situations.
In summary, methods employed in managing liquidity risks by the Group are aimed at providing early warning signals on
liquidity pressure as well as the severity of potential exposures.
Operational Risk
Operational risk includes risks arising from internal processes of an organisation. These may result from inadequacies
or failures in processes and controls or in projects, fraud, unauthorised activities, error, omission, inefficiency, systems
failure or from external events. Operational risks are less direct than credit and market risks, but managing them is critical,
particularly in a rapidly changing environment with increasing transaction volumes and complexity. In order to mitigate
these risks, the Group has established and maintained an effective internal control environment, which incorporates
various control mechanisms at different levels throughout the organisation. These control mechanisms are designed
to better ensure compliance of policies and procedures and that the Group’s various businesses are operating within
established corporate policies and limits. ORC has an oversight responsibility for all operational and other matters that
affect the Group’s day-to-day activities. ORC also reviews the operating policies and procedures for new products and
businesses, to ensure that the supporting infrastructure is in place prior to business launching, as well as conducting
investigations on any malfunctions to determine the root causes and following up with remedial measures.

B Interest rate risk
The table below summarises the Group’s and the Bank’s exposures to interest rate risks. Included in the table are the Group’s and the Bank’s assets
and liabilities at their full carrying amounts, categorised by the earlier of contractual repricing or maturity dates. The off-balance sheet gap represents
the net notional amounts of all interest rate sensitive derivative financial instruments. As interest rates and yield curves change over time, the Group
and the Bank may be exposed to a loss in earnings due to the effects of interest rates on the structure of the balance sheet. Sensitivity to interest rates
arises from mismatches in the repricing dates, cash flows and other characteristics of the assets and their corresponding liability funding.
The Group
Non-trading book
Non-
Up to 1 >1-3 > 3 - 12 >1-5 Over 5 interest Trading
month months months years years sensitive book Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2008
Assets
Cash and short term funds 2,816,669 - - - - 60,778 - 2,877,447
Securities purchased
under resale agreements 177,308 109,876 - - - - - 287,184
Deposits and placements
with banks and other
financial institutions 1,047 200,047 - 100 - 30 - 201,224
Securities held for trading - - - - - 6,259 670,296 676,555
Available-for-sale securities 5,143 - 15,320 258,528 240,933 2,407 - 522,331
Held-to-maturity
investments - - 346,450 - - - - 346,450
Derivative financial
instruments - - - - - 10,972 115,213 126,185
Loans, advances
and financing - 262 131 6,482 42,967 241 - 50,083
Other assets* - - - - - 408,209 - 408,209
Total assets 3,000,167 310,185 361,901 265,110 283,900 488,896 785,509 5,495,668
* Other assets include deferred tax assets, tax recoverable, amount due from related companies, statutory deposits with Bank Negara Malaysia, investment in associates, property, plant
Annual Report 2008

and equipment, prepaid lease payments and goodwill on consolidation.
143
(18417-M)
144
B Interest rate risk (Continued)
(18417-M)
The Group
Non-trading book
Non-
Annual Report 2008


2008
Liabilities
Deposits from customers 122,602 25,325 - 1,188,130 - - - 1,336,057
of banks and other
financial institutions 2,433,241 - - 5,000 - - - 2,438,241
instruments - - - - - 10,972 104 11,076
Long term borrowings - - 346,462 - - - - 346,462
Other borrowings - - - 7,000 - - - 7,000
Other liabilities# - - - - - 708,258 - 708,258
Total liabilities 2,555,843 25,325 346,462 1,200,130 - 719,230 104 4,847,094
Total interest sensitivity gap 444,324 284,860 15,439 (935,020) 283,900 (230,334) 785,405
# Other liabilities include amount due to ultimate holding company and related companies and provision for taxation and zakat.
The Bank
Non-trading book
Non-
2008
Assets
under resale agreements 177,308 109,876 - - - - - 287,184
financial institutions - 200,000 - 100 - - - 200,100
Available-for-sale securities 5,143 - 15,320 258,528 240,933 - - 519,924
Held-to-maturity
investments - - 346,450 - - - - 346,450
instruments - - - - - 10,972 115,213 126,185
Loans, advances
and financing - 262 131 6,482 42,967 241 - 50,083
Other assets* - - - - - - 421,491 421,491
Total assets 2,850,012 310,138 361,901 265,110 283,900 77,784 1,207,000 5,355,845
* Other assets include deferred tax assets, statutory deposits with Bank Negara Malaysia, amount due from subsidiaries and related companies, investment in subsidiaries, prepaid lease
payments and property, plant and equipment.
Annual Report 2008

145
(18417-M)
146
(18417-M)
The Bank
Non-trading book
Non-
Annual Report 2008


2008
Liabilities
Deposits from customers 122,601 25,325 - 1,188,131 - - - 1,336,057
of banks and other
financial institutions 2,433,241 - - 5,000 - - - 2,438,241
instruments - - - - - 10,972 104 11,076
Other liabilities # - - - - - 588,788 - 588,788
Long term borrowings - - 346,462 - - - - 346,462
Total liabilities 2,555,842 25,325 346,462 1,193,131 - 599,760 104 4,720,624
Total interest
sensitivity gap 294,170 284,813 15,439 (928,021) 283,900 (521,976) 1,206,896
# Other liabilities include amount due to ultimate holding company, subsidiaries and related companies and provision for taxation and zakat.
The Group
Non-trading book
Non-
2007
Assets
under resale agreements 20,559 - - - - - - 20,559
financial institutions 21,828 282,350 1,116 254 - - - 305,548
Available-for-sale securities 5,005 - 15,081 198,421 298,737 2,407 - 519,651
Held-to-maturity
investments - - - 330,700 - - - 330,700
instruments - - - - - 151,749 58,301 210,050
Loans, advances
and financing 2 300,337 74 6,137 41,521 333 - 348,404
Other assets* - - - - - 875,075 - 875,075
Total assets 1,550,991 582,687 16,271 535,512 340,258 1,115,340 220,102 4,361,161
* Other assets include tax recoverable, amount due from related companies, statutory deposits with Bank Negara Malaysia, property, plant and equipment, prepaid lease payments and
goodwill on consolidation.
Annual Report 2008

147
(18417-M)
148
(18417-M)
The Group
Non-trading book
Non-
Annual Report 2008


2007
Liabilities
Deposits from customers 75,000 - - 730,500 - - - 805,500
of banks and other
financial institutions 771,713 132,280 41,830 5,000 - - - 950,823
instruments - - - - - 151,749 3,541 155,290
Long term borrowings - - - 330,568 - - - 330,568
Other liabilities# 35 38 - - - 1,349,541 - 1,349,614
Total liabilities 846,748 132,318 41,830 1,066,068 - 1,501,290 3,541 3,591,795
Total interest
sensitivity gap 704,243 450,369 (25,559) (530,556) 340,258 (385,950) 216,561
# Other liabilities include amount due to ultimate holding company, immediate holding company and related companies, provision for taxation and zakat and deferred tax liabilities.
The Bank
Non-trading book
Non-
2007
Assets
under resale agreements 20,559 - - - - - - 20,559
financial institutions 20,792 282,280 1,116 254 - - - 304,442
Available-for-sale securities 5,005 - 15,081 198,421 298,737 - - 517,244
Held-to-maturity
investments - - - 330,700 - - - 330,700
instruments - - - - - 151,749 58,301 210,050
Loans, advances
and financing 2 300,337 74 6,137 41,521 333 - 348,404
Other assets* - - - - - 929,305 - 929,305
Total assets 1,381,401 582,617 16,271 535,512 340,258 1,161,100 220,102 4,237,261
* Other assets include amount due from subsidiaries and related companies, statutory deposits with Bank Negara Malaysia, investment in subsidiaries, prepaid lease payments, and
property, plant and equipment.
Annual Report 2008

149
(18417-M)
150
(18417-M)
The Bank
Non-trading book
Non-
Annual Report 2008


2007
Liabilities
Deposits from customers 75,000 - - 730,500 - - - 805,500
Deposits and
placements of banks and
other financial institutions 771,713 132,280 41,830 5,000 - - - 950,823
instruments - - - - - 151,749 3,541 155,290
Other liabilities # - - - - - 1,236,586 - 1,236,586
Long term borrowings - - - 330,568 - - - 330,568
Total liabilities 846,713 132,280 41,830 1,066,068 - 1,388,335 3,541 3,478,767
Total interest
sensitivity gap 534,688 450,337 (25,559) (530,556) 340,258 (227,235) 216,561
# Other liabilities include amount due to ultimate holding company, immediate holding company, subsidiaries and related companies, provision for taxation and deferred tax liabilities.
Actual repricing dates may differ from contractual dates as contractual terms do not reflect the actual behavioral patterns of assets and liabilities.
Assets and liabilities are assumed to be held until the earlier of contractual repricing or maturity dates. The Bank uses this contractual repricing
information as a base, which is then altered to incorporate consumer behaviour, in managing its interest rate risk.
(18417-M)


The tables below summarises the effective average interest rate by major currencies for each class of financial asset and
financial liability. The calculation of effective average interest rate excludes non-interest bearing financial assets and financial
liabilities.
The Group
2008 2007
MYR USD EUR SGD MYR USD EUR SGD
% % % % % % % %
Financial assets
Cash and short term funds 2.91 1.08 2.00 - 3.18 4.95 4.70 2.13
Securities purchased under
resale agreements 2.84 - - - 3.33 - - -
financial institutions 2.04 - - - 3.51 5.15 - -
Securities held for trading 3.74 - - - 4.60 - - -
Available-for-sale securities 4.86 - - - 4.91 - - -
Held-to-maturity investments - 5.00 - - - 5.00 - -
Loans, advances and financing 3.96 - - - 4.83 - - -
Other assets – due from
brokers and clients 10.00 - - - 10.00 - - -
Financial liabilities
Deposits from customers 3.12 - - - 3.34 - - -
of banks and other
financial institutions 3.28 1.09 - - 3.32 5.15 - -
Other borrowings 5.00 - - - - - - -
Long term borrowings - 5.04 - - - 5.04 - -

(18417-M)


The Bank
2008 2007
MYR USD EUR SGD MYR USD EUR SGD
% % % % % % % %
Financial assets
Cash and short term funds 2.97 1.08 2.00 - 3.23 4.95 4.70 2.13
Securities purchased under
resale agreements 2.84 - - - 3.33 - - -
financial institutions 2.04 - - - 3.52 5.15 - -
Securities held for trading 3.74 - - - 4.60 - - -
Available-for-sale securities 4.86 - - - 4.91 - - -
Held-to-maturity investments - 5.00 - - - 5.00 - -
Loans, advances and financing 3.96 - - - 4.83 - - -
Other assets – due from
brokers and clients 10.00 - - - 10.00 - - -
Deposits from customers 3.12 - - - 3.34 - - -
of banks and other
financial institutions 3.28 1.09 - - 3.32 5.15 - -
Long term borrowings - 5.04 - - - 5.04 - -

C Credit risk
The following table sets out the credit risk concentrations of the Group and the Bank by classes of financial assets:
The Group
Short term
funds and
placements
with banks Securities Securities Available- Loans, On-
and other purchased held for- Held-to- Derivative advances balance Commitments
financial under resale for sale maturity financial and Other sheet and
institutions agreements trading securities investments instruments financing^ assets# total contingencies*
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2008
Agricultural - - 7,359 4,966 - - - 3 12,328 -
Mining and quarrying - - - - - - - 1 1 -
Manufacturing - - - - - - - 432 432 -
Electricity,
gas and water - - - 238,713 - - - 100 238,813 -
Construction - - - 10,193 - - - 504 10,697 -
Real estate - - - 19,037 - - - 28 19,065 -
General commerce - - - - - - - 924 924 -
Transport, storage
and communication - - 7,931 129,985 - - - 917 138,833 -
Finance, insurance
and business
services 2,628,891 25,516 656,833 117,237 346,450 126,185 - 27,006 3,928,118 117,952
Government and
government
agencies 389,468 261,668 - 2,200 - - - 378 653,714 -
Purchase of securities - - - - - - - 229,283 229,283 -
Others - - - - - - 50,953 16,473 67,426 930
3,018,359 287,184 672,123 522,331 346,450 126,185 50,953 276,049 5,299,634 118,882
Shares - - 4,432 - - - - - 4,432 -
Assets not subject
to credit risk 60,312 - - - - - - - 60,312 -
Total 3,078,671 287,184 676,555 522,331 346,450 126,185 50,953 276,049 5,364,378 118,882
Annual Report 2008

^ Gross loans after specific allowance but before general allowance.
# Other assets before allowance for doubtful debts.
153
(18417-M)
* Comprises credit equivalent balances.

154
C Credit risk (Continued)
(18417-M)
The Bank
Short term
funds and
Annual Report 2008

placements
2008
Agricultural - - 7,359 4,966 - - - 3 12,328 -
Manufacturing - - - - - - - 432 432 -
Electricity,
gas and water - - - 238,713 - - - 100 238,813 -
Construction - - - 10,193 - - - 504 10,697 -
Real estate - - - 19,037 - - - 28 19,065 -
General commerce - - - - - - - 924 924 -
Transport, storage
and communication - - 7,931 129,985 - - - 891 138,807 -
Finance, insurance
and business
services 2,551,661 25,516 656,833 117,030 346,450 126,185 - 25,858 3,849,533 117,952
Government and
government
agencies 316,000 261,668 - - - - - 376 578,044 -

Others - - - - - - 50,953 16,472 67,425 930
2,867,661 287,184 672,123 519,924 346,450 126,185 50,953 274,872 5,145,352 118,882
Shares - - 4,432 - - - - - 4,432 -
Assets not subject
to credit risk 60,312 - - - - - - - 60,312 -
Total 2,927,973 287,184 676,555 519,924 346,450 126,185 50,953 274,872 5,210,096 118,882

The Group
Short term
funds and
placements
2007
Agricultural - - 16,801 4,995 - - - 980 22,776 -
Manufacturing - - - 4,964 - - - 1,217 6,181 5,300
Electricity,
gas and water - - 17,277 231,107 - - - 785 249,169 -
Construction - - - 13,313 - - - 962 14,275 -
Real estate - - - 24,113 - - - 448 24,561 -
General commerce - - - - - - - 10,570 10,570 50
Transport, storage
and communication - - 7,893 118,529 - - - 23,865 150,287 -
Finance, insurance
and business
services 1,695,355 20,559 49,175 120,223 330,700 210,050 300,337 25,268 2,751,667 66,759
Government and
government
agencies 114,704 - 50,002 2,200 - - - 2,479 169,385 -
Others - - - - - - 54,086 8,495 62,581 1,090
1,810,059 20,559 141,148 519,444 330,700 210,050 354,423 773,991 4,160,374 73,199
Shares - - 27,189 207 - - - - 27,396 -
Assets not subject
to credit risk 78,326 - - - - - - - 78,326 -
Total 1,888,385 20,559 168,337 519,651 330,700 210,050 354,423 773,991 4,266,096 73,199
Annual Report 2008

155
(18417-M)

156
(18417-M)
The Bank
Short term
funds and
Annual Report 2008

placements
2007
Agricultural - - 16,801 4,995 - - - 980 22,776 -
Manufacturing - - - 4,964 - - - 1,217 6,181 5,300
Electricity,
gas and water - - 17,277 231,107 - - - 785 249,169 -
Construction - - - 13,313 - - - 962 14,275 -
Real estate - - - 24,113 - - - 448 24,561 -
General commerce - - - - - - - 10,570 10,570 50
Transport, storage
and communication - - 7,893 118,529 - - - 23,839 150,261 -
Finance, insurance
and business
services 1,569,485 20,559 49,175 120,223 330,700 210,050 300,337 24,185 2,624,714 66,759
Government and
government agencies 70,000 - 50,002 - - - - 2,457 122,459 -

Others - - - - - - 54,086 8,495 62,581 1,090
1,639,485 20,559 141,148 517,244 330,700 210,050 354,423 772,860 3,986,469 73,199
Shares - - 27,189 - - - - - 27,189 -
Assets not subject
to credit risk 73,177 - - - - - - - 73,177 -
Total 1,712,662 20,559 168,337 517,244 330,700 210,050 354,423 772,860 4,086,835 73,199

Risk concentrations for commitments and contingencies are based on the credit equivalent balances in Note 7.
(18417-M)

48 Fair value of financial instruments

Financial instruments comprise financial assets, financial liabilities and off-balance sheet financial instruments. Fair value is the
amount at which a financial asset could be exchanged or a financial liability settled, between knowledgeable and willing parties
in an arm’s length transaction. The information presented herein represents the estimates of fair values as at the balance sheet
date.
Where available, quoted and observable market prices are used as the measure of fair values. Where such quoted and
observable market prices are not available, fair values are estimated based on a range of methodologies and assumptions
regarding risk characteristics of various financial instruments, discount rates, estimates of future cash flows and other factors.
Changes in the uncertainties and assumptions could materially affect these estimates and the resulting fair value estimates.
Fair value information for non-financial assets and liabilities is excluded as it does not fall within the scope of FRS 132 - Financial
Instruments: Disclosure and Presentation which requires the fair value information to be disclosed. These include investment in
subsidiaries and associates, property, plant and equipment, prepaid lease payments and deferred tax assets.
A range of methodologies and assumptions has been used in deriving the fair values of the Group’s and the Bank’s financial
instruments at balance sheet date. The total fair value of each category of financial instrument is not materially different from
the total carrying value, except for the following financial assets and liabilities:
The Group
2008 2007
Carrying Fair Carrying Fair
amount value Amount value
RM’000 RM’000 RM’000 RM’000
Financial assets
Total 346,450 346,753 330,700 332,106
Deposits from customers 1,336,057 1,341,430 805,500 795,537
Long term borrowings 346,462 346,782 330,568 335,798
Total 1,682,519 1,688,212 1,136,068 1,131,335
The Bank
2008 2007
Carrying Fair Carrying Fair
amount value Amount value
RM’000 RM’000 RM’000 RM’000
Financial assets
Total 346,450 346,753 330,700 332,106

Deposits from customers 1,336,057 1,341,430 805,500 795,537
Long term borrowings 346,462 346,782 330,568 335,798
Total 1,682,519 1,688,212 1,136,068 1,131,335

(18417-M)

48 Fair value of financial instruments (continued)

The fair values of derivative financial instruments at the balance sheet date are as stated in Note 7 to the Financial
Statements.
The derivative financial instruments become favourable (assets) or unfavourable (liabilities) as a result of fluctuations in market
interest or profit rates or foreign exchange rates relative to their terms. The extent to which instruments are favourable or
unfavourable and the aggregate fair values of derivative financial assets and liabilities can fluctuate significantly from time to
time.
The fair values are based on the following methodologies and assumptions:
Securities purchased under resale agreements

The fair values of securities purchased under resale agreements with maturities of less than six months approximate the
carrying values. For securities purchased under resale agreements with maturities of six months and above, the estimated fair
values are based on discounted cash flows using market rates for the remaining term to maturity.
Deposits and placements with banks and other financial institutions

For deposits and placements with banks and other financial institutions with maturities of less than six months, the carrying
value is a reasonable estimate of fair value. For deposits and placements with maturities of six months and above, the estimated
fair values are based on discounted cash flows using prevailing money market interest rates at which similar deposits and
placements would be made with financial institutions of similar credit risk and remaining period to maturity.
Securities held for trading and available-for-sale securities

The estimated fair value is generally based on quoted and observable market prices. Where there is no ready market in
certain securities, fair values have been estimated by reference to market indicative yields or net tangible asset backing of the
investee.
Loans, advances and financing

For floating rate loans, the carrying value is generally a reasonable estimate of fair value.
For fixed rate loans, the fair value is estimated by discounting the estimated future cash flows using the prevailing market rates
of loans with similar credit risks and maturities.
The fair values of impaired floating and fixed rate loans are represented by their carrying value, net of specific allowance and
interest-in-suspense, being the expected recoverable amount.
Deposits from customers

For deposits from customers with maturities of less than six months, the carrying amounts are a reasonable estimate of their
fair value. For deposits with maturities of six months or more, the fair values are estimated using discounted cash flows based
on prevailing market rates for similar deposits from customers.
Deposits and placements of banks and other financial institutions

The estimated fair values of deposits and placements of banks and other financial institutions with maturities of less than six
months approximate the carrying values. For deposits and placements with maturities of six months or more, the fair values
are estimated based on discounted cash flows using prevailing money market interest rates for deposits and placements with
similar remaining period to maturities.

(18417-M)

48 Fair value of financial instruments (continued)

Borrowings
The estimated fair values of borrowings with maturity of less than six months approximate the carrying values. For borrowings
with maturities of six months or more, the fair values are estimated based on discounted cash flows using prevailing market
rates for borrowings with similar risks profile.
Foreign exchange rate, interest rate and equity contracts

The fair values of foreign exchange rate, interest rate and equity contracts are the estimated amounts the Group would receive
or pay to terminate the contracts at the balance sheet date.
49 Business combinations
(a) Acquisitions that took place during the financial year
(i) Acquisition of CIMB Trustee Berhad
On 1 January 2008, CIMB Holdings Berhad, a wholly-owned subsidiary of CIMB Investment Bank Berhad, acquired
20% equity interest in CIMB Trustee Berhad for a consideration of RM100,000.
The share of net assets arising from the acquisition of CIMB Trustee Berhad is as follows:
Acquiree’s
carrying
amount at date
of acquisition
RM’000
Assets
Cash and short-term funds 1,137
Deposits and placements with banks and other financial institutions 5,828
Statutory deposits with Bank Negara Malaysia 100
Other assets 17
Taxation recoverable 53
Property, plant and equipment 423
Total assets 7,558
Liabilities
Deposits from customers 882
Other liabilities 724
Amount owing to related companies 2,113
Total liabilities 3,719
Net Assets 3,839

Share of Net Assets acquired 768
Discount on acquisition (668)
Purchase consideration 100
The acquisition was satisfied via cash balances and the investment is equity accounted in the financial statements of
the Group as an associate. The share of results for the financial year amounted to RM261,665.

(18417-M)

49 Business combinations (Continued)

(a) Acquisitions that took place during the financial year (Continued)
(ii) Acquisition of BHLB Trustee Berhad
On 1 January 2008, CIMB Holdings Berhad, a wholly-owned subsidiary of CIMB Investment Bank Berhad, acquired
20% equity interest in BHLB Trustee Berhad for a consideration of RM3,380,252.
The share of net assets arising from the acquisition of BHLB Trustee Berhad is as follows:
Acquiree’s
carrying
amount at date
of acquisition
RM’000
Assets
Cash and short-term funds 230
Deposits and placements with banks and other financial institutions 2,189
Other assets 1,324
Taxation recoverable 2
Property, plant and equipment 1,169
Amount due from related companies 1
Total assets 4,915
Liabilities
Other liabilities 1,180
Deferred tax liabilities 82
Total libilities 1,262
Net Assets 3,653
Share of Net Assets acquired 731

Premium on acquisition 2,649
Purchase consideration 3,380
The acquisition was satisfied via intercompany balances and the investment is equity accounted in the financial
statements of the Group as an associate. The share of results for the financial year amounted to RM427,378.
There were no acquisitions in the financial year ended 31 December 2007.

(18417-M)

50 The operations of Islamic Banking

The Bank’s Islamic Banking balance sheet as at 31 December 2008
2008 2007
Note RM’000 RM’000
Assets
Cash and short term funds (a) 416,427 816,375
Deposits and placements with banks and other financial institutions (b) 200,000 -
Securities held for trading (c) 620,364 50,002
Derivative financial instruments (d) 120,910 58,301
Other assets (e) 7,868 15,024
Property, plant and equipment (f) 554 812
Amount due from related companies (g) 1,091 1,494
Total assets 1,367,214 942,008
Liabilities and Islamic Banking capital funds

Deposits from customers (h) 1,163,130 680,500
Deposits and placements of banks and other financial institutions (i) 7,500 101,730
Derivative financial instruments (d) 5,801 3,541
Provision for taxation and zakat (j) 37,139 25,066
Other liabilities (k) 1,974 7,374
Amount due to related companies (g) - 6,500
Total liabilities 1,215,544 824,711
Islamic Banking capital funds 55,000 55,000
Reserves 96,670 62,297
Total Islamic Banking capital funds 151,670 117,297
Total liabilities and Islamic Banking capital funds 1,367,214 942,008
Commitments and contingencies

Principal (d) 4,133,754 1,371,000
Credit equivalent (d) 117,596 13,710
The Bank’s Islamic Banking income statement for the financial year ended 31 December 2008
2008 2007
Income derived from investment of depositors’ funds and others (l) 3,066 4,104
Income derived from investment of shareholders’ funds (m) 81,519 71,800
Provision for other receivables (209) -
Transfer to profit equalisation reserve - 796
Other expenses directly attributable to the investment
of the depositors and shareholders’ funds (19) (4)
Total attributable income 84,357 76,696
Income attributable to the depositors (n) (34,071) (14,761)
Total net income 50,286 61,935
Personnel expenses (o) (534) (965)
Other overheads and expenditures (p) (3,302) (3,708)
Profit before taxation and zakat 46,450 57,262
Taxation (q) (12,077) (14,743)
Profit after taxation and zakat 34,373 42,519
(18417-M)

50 The operations of Islamic Banking (Continued)

The Bank’s Islamic Banking statement of changes in equity for the financial year ended 31 December 2008
Islamic
Banking Statutory Retained
capital fund reserve profits Total
RM’000 RM’000 RM’000 RM’000
Balance as at 1 January 2008 55,000 1,336 60,961 117,297

after taxation and zakat - - 34,373 34,373
Balance as at 31 December 2008 55,000 1,336 95,334 151,670
Balance as at 1 January 2007 55,000 1,336 18,442 74,778

after taxation and zakat - - 42,519 42,519
Balance as at 31 December 2007 55,000 1,336 60,961 117,297
Cash flow statement for the financial year ended 31 December 2008
The Bank
2008 2007
Cash flows from operating activities

Profit before taxation and zakat 46,450 57,262
Add/(less) adjustments:
Transfer to profit equalisation reserve - (796)
Net unrealised gain on revaluation of securities held for trading (374) -
Provision for other receivables 209 -
Net unrealised gain on revaluation of derivatives (24,160) (54,759)
Accretion of discount or less amortisation of premium (3) 2
Depreciation of property, plant and equipment 262 421
Cash flow from operating profit before changes in operating assets and liabilities 22,384 2,130
(Increase)/decrease in operating assets

Deposits and placements with banks and other financial institutions (200,000) 288,000
Securities held for trading (569,986) (40,226)
Derivative financial instruments (36,189) (6)
Amount due from related companies 403 66,281
Other assets 6,944 (13,921)
Amount due from holding company - (607)

(18417-M)


Cash flow statement for the financial year ended 31 December 2008 (Continued)
The Bank
2008 2007
Increase/(decrease) in operating liabilities

Deposits from customers 482,630 638,670
Deposits and placements of banks and other financial institutions (94,230) (98,270)
Amount due to related companies (6,500) (27,733)
Other liabilities (5,400) 2,521
Net cash (used in)/from operating activities (399,944) 816,839
Cash flows from investing activities

Purchase of property, plant and equipment (4) (1,233)
Net cash used in financing activities (4) (1,233)
Net (decrease)/increase in cash and cash equivalents

during the financial year (399,948) 815,606
Cash and cash equivalents at beginning of the financial year 816,375 769
Cash and cash equivalents at end of the financial year (a) 416,427 816,375
The Bank
2008 2007
RM’000 RM’000
(a) Cash and short term funds

Cash and balances with banks and other financial institutions 127 375
Money at call and deposit placements maturing within one month 416,300 816,000
416,427 816,375
(b) Deposits and placements with banks and other financial institutions
General investment funds:
Licensed banks 200,000 -
(c) Securities held for trading

Negotiable instruments of deposits 620,364 -
Sukuk Bank Negara Malaysia - 50,002
620,364 50,002

(18417-M)


(d) Derivative financial instruments, commitments and contingencies
(i) Derivative financial instruments
The following tables summarise the contractual or underlying principal amounts of derivative financial instruments held
at fair value through income statement. The principal or contractual amounts of these instruments reflect the volume
of transactions outstanding at balance sheet date, and do not represent amounts at risk.
Trading derivative financial instruments are revalued on a gross position basis and the unrealised gains or losses are
reflected in “”Derivative Financial Instruments”” Assets and Liabilities respectively.
The Bank
Fair values
Principal
amount Assets Liabilities
RM’000 RM’000 RM’000
At 31 December 2008
Islamic profit rate derivatives
Islamic profit rate swaps 2,336,260 115,109 -
Equity options 1,797,494 5,801 (5,801)
4,133,754 120,910 (5,801)
At 31 December 2007
Islamic profit rate derivatives
Islamic profit rate swaps 1,371,000 58,301 (3,541)
(ii) Commitments and contingencies

In the normal course of business, the Group and the Bank enter into various commitments and incur certain contingent
liabilities with legal recourse to their customers. No material losses are anticipated as a result of these transactions and
hence, they are not provided for in the Financial Statements.
These commitments and contingencies are not secured over the assets of the Group and the Bank, except for certain
securities held for trading being pledged as credit support assets for certain over-the-counter derivative contracts.

(18417-M)


(d) Derivative financial instruments, commitments and contingencies (Continued)
(ii) Commitments and contingencies (Continued)
The commitments and contingencies constitute the following:
2008 2007
Risk Risk
Credit weighted Credit weighted
Principal equivalent amount Principal equivalent amount
The Bank RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Profit rate related contracts:

- One year to less
than five years 2,336,260 68,107 13,621 1,371,000 13,710 2,742
Equity related contracts:
- Less than one year 1,797,494 49,489 9,898 - - -
4,133,754 117,596 23,519 1,371,000 13,710 2,742
(e) Other assets

The Bank
2008 2007
RM’000 RM’000
Dividend receivables 7,674 1,202

Other debtors, deposits and prepayments 194 13,822
7,868 15,024
(f) Property, plant and equipment
Office Computer
equipment equipment
and and Motor
furniture software vehicles Renovation Total
RM’000 RM’000 RM’000 RM’000 RM’000
The Bank
2008
Cost
At 1 January 312 109 119 693 1,233
Additions 4 - - - 4
At 31 December 316 109 119 693 1,237
At 1 January 119 66 40 196 421
Charge for the financial year 63 36 24 139 262
At 31 December 182 102 64 335 683
Net book value as at 31 December 134 7 55 358 554

(18417-M)


(f) Property, plant and equipment (Continued)
Office Computer
equipment equipment
and and Motor
furniture software vehicles Renovation Total
RM’000 RM’000 RM’000 RM’000 RM’000
The Bank
2007
Cost
At 1 January - - - - -
Additions 312 109 119 693 1,233
At 31 December 312 109 119 693 1,233
At 1 January - - - - -
Charge for the financial year 119 66 40 196 421
At 31 December 119 66 40 196 421
Net book value as at 31 December 193 43 79 497 812
(g) Amount due from/(to) related companies

The Bank
2008 2007
RM’000 RM’000
(i) Amount due from:

- Holding company - 607
- Related companies 1,091 887
1,091 1,494
(ii) Amount due to:

- Related companies - (6,500)
(h) Deposits from customers

The Bank
2008 2007
RM’000 RM’000
Non-Mudharabah fund:
Fixed rate deposits 1,163,130 680,500
(i) Maturity structure of fixed rate deposits is as follows:

- One year to less than three years 889,650 680,500
- Three years to less than five years 273,480 -
1,163,130 680,500

(18417-M)


The Bank
2008 2007
RM’000 RM’000
(h) Deposits from customers (Continued)

(ii) The deposits are sourced from the following customers
- Government and statutory bodies 78,500 83,500
- Business enterprises 25,000 20,000
- Individual 1,059,630 577,000
1,163,130 680,500

(i) Deposits and placements of banks and other financial institutions
Mudharabah fund:
Licensed banks 2,500 54,900
Other financial institutions 5,000 46,830
7,500 101,730
(j) Provision for taxation and zakat

Taxation 37,139 25,061
Zakat - 5
37,139 25,066
(k) Other liabilities

Dividend payable 1,244 7,237
Profit equalisation reserve - -
Other liabilities 730 137
1,974 7,374
Profit equalisation reserve

At 1 January - 796
Amount written back during the financial year - (796)
At 31 December - -
(l) Income derived from investment of depositors’ funds

Income derived from investment of:
(i) General investment deposits 3,066 4,104
(i) Income derived from investment of general investment deposits

Finance income and hibah:
Securities held for trading 841 821
Money at call and deposits and placements with financial institutions 1,944 3,285
2,785 4,106
Accretion of discount less amortisation of premium 1 (2)
2,786 4,104
Other operating income

Net gain from sale of securities held for trading 8 -
Net unrealised gain on revaluation of securities held for trading 272 -
280 -
3,066 4,104

(18417-M)


The Bank
2008 2007
RM’000 RM’000
(m) Income derived from investment of shareholders’ funds

Finance income and hibah:
Securities held for trading 8,881 771
Money at call and deposits and placements with financial institutions 27,170 13,929
36,051 14,700
Accretion of discounts less amortisation of premium 2 -
36,053 14,700
Other dealing income:

Net gain from sale of securities held for trading 9 -
Net unrealised gain on revaluation of securities held for trading 102 -
Unrealised gain on revaluation of derivatives 24,160 54,759
Net realised gain on derivatives 36,488 11,242
Shariah compliant option premium (16,078) (49,988)
44,681 16,013
Fee and commission income:

Advisory fees 763 489
Arrangement fees 13 40,645
776 41,134
Other income:
Others 9 (47)
81,519 71,800
All unrestricted funds received from the Bank’s deposits are co-mingled into a single pool of funds under general investment
deposits. Restricted funds categorised under specific investment deposits are managed separately, where the utilisation
of the funds is identified and matched with specific funds. Islamic income or profit generated from the general investment
and specific investment deposits’ funds are allocated to various categories of depositors by using the weighted average
rate of return method effective 1 October 2007 (previously, annualised rate of return).

(18417-M)


The Bank
2008 2007
RM’000 RM’000
(n) Income attributable to depositors

Deposits from customers
- Non-Mudharabah Fund 32,728 13,037
Deposits and placements of banks and other financial institutions
- Mudharabah Fund 1,343 1,723
- Non-Mudharabah Fund - 1
34,071 14,761
For the placement of funds by external parties under Mudharabah placement, the depositors shall only be entitled to the profit
sharing of the Islamic income earned from Fund Based Income and Trading Income as the depositors are not investing in the
Fee Based Islamic business except underwriting and guarantee fees. Under a typical Mudharabah Placement Agreement, it
shall be clearly spelt out to the depositors on the above agreement.
The Group distributes Islamic income or profit derived from depositors’ funds based on a pre-determined ratio in the case of
Mudharabah, and on a ratio determined at the discretion of the Group in the case of Non-Mudharabah. The profit or income
distribution rate is arrived based on the framework of the rate of return issued by BNM.
Where an account is classified as non-performing, recognition of profit or income is suspended until it is realised on a cash
basis. Customers’ accounts are classified as non-performing when payments are in arrears for 3 months or more from first day
of default for financing and after 3 months from maturity date.
The Bank
2008 2007
RM’000 RM’000
(o) Personnel costs

- Salaries, allowances and bonuses 499 862
- EPF 24 71
- Others 11 32
534 965
(p) Overhead expenses
Establishment costs
- Rental 269 302
- Others 387 292
656 594
Marketing expenses
- Advertisement 99 502
- Others 1,554 1,645
1,653 2,147
Administration and general expenses
- Legal and professional fees 206 37
- Communication 134 183
- Others 653 747
993 967
3,302 3,708
Included in overheads are fees paid to the Shariah Committee members amounting to RM298,568 (2007: RM307,053).

(18417-M)


(q) Taxation
(i) Tax expense for the financial year
The Bank
2008 2007
RM’000 RM’000
Current year tax

- Malaysian income tax 12,077 14,743
(ii) Numerical reconciliation of income tax expense

The explanation on the relationship between tax expense and profit before taxation is as follows:
The Bank
2008 2007
RM’000 RM’000
Profit before taxation 46,450 57,262
Tax calculated at tax rate of 26% (2007: 27%) 12,077 15,461

Income not taxable for tax purposes - (718)
Tax expense 12,077 14,743
(r) Capital Adequacy Ratio

The capital adequacy ratios of the Bank’s Islamic Banking operation arising from the Bank are as follows:
2008 2007
RM’000 RM’000
Tier-1 capital 151,670 117,297
Total capital base 151,670 117,297
Capital ratios
Components of Tier-1 and Tier-2 capital are as follows:
2008 2007
RM’000 RM’000
Tier-1 capital
Islamic Banking capital fund 55,000 55,000
Reserves 96,670 62,297
Total Tier-1 capital/capital base 151,670 117,297

(18417-M)


(r) Capital Adequacy Ratio (Continued)
Breakdown of risk-weighted assets in the various categories of risk-weights:
2008 2007
Credit Credit
Principal equivalent Principal equivalent
RM’000 RM’000 RM’000 RM’000
0% 316,087 - 70,251 -
20% 420,455 84,091 760,364 152,073
100% 1,018 1,018 14,634 14,634
Total risk-weighted equivalents for credit risk 737,560 85,109 845,249 166,707
Total risk-weighted equivalents for market risk 85,711 18,948
Total risk-weighted assets 170,820 185,655
Pursuant to Bank Negara Malaysia’s circular, “Recognition of Deferred Tax Asset (‘DTA’) and Treatment of DTA for RWCR
Purposes” dated 8 August 2006, deferred tax income/(expenses) is excluded from the calculation of Tier 1 capital and DTA
is excluded from the calculation of risk-weighted assets.
Effective 1 October 2008, the following approaches have been adopted for the computation of risk weighted assets:
• Adoption of bilateral netting as provided under the Standardised Approach Framework which involves the weighting of
net claims rather than gross claims with the same counterparties arising out of the full range of forwards, swaps, options
and similar derivative contracts.
• Irrevocable commitments to extend credit (undrawn financing) have been revised to include only those undrawn financing
whereby all conditions precedent have been met
(s) Related party transactions and balances

(i) Related parties and relationships
The related parties of, and their relationship with the Bank, is disclosed in Note 38.
(ii) Significant related party transactions and balances

A number of banking transactions are entered into with related parties in the normal course of business. These
significant related party transactions were carried out on commercial terms (i.e. terms and conditions obtainable in
transactions with unrelated parties) and at market rates unless otherwise stated.

(18417-M)


(s) Related party transactions and balances (Continued)
2008 2008 2007

Ultimate Other Other
Holding related related
company companies companies
RM’000 RM’000 RM’000
Sales:
Cagamas bonds - - 202,000
Islamic private debt securities - 1,308,170 3,199,607
- 1,308,170 3,401,607
Purchases:
Malaysian Government investment certificates - 14,994 -
Islamic private debt securities 350,000 - 5,086
350,000 14,994 5,086
Income:
Dividend income - 11,291 521
Expenses:
Dividend expense - 1,186 212
Amount due from:

Interbank lending - 200,300 126,000
Profit receivable - 928 6
- 201,228 126,006
Amount due to:

Interbank borrowing - 2,500 4,900
Principal
Profit rate related contracts:
Swaps - 1,168,130 685,500

(t) Profit rate risk
The tables below summarises the Bank’s exposure to profit rate risks. Included in the table are assets and liabilities of the Bank’s Islamic Banking
operations at their carrying value categorised by the earlier of maturity or repricing.
The Bank
Non-trading book
Up to 1 >1 – 3 >3 - 12 >1 - 5 Over 5 Non-profit Trading
2008
Assets
Cash and short term funds 416,300 - - - - 127 - 416,427
and other financial institutions - 200,000 - - - - - 200,000
Securities held for trading - - - - - - 620,364 620,364
Derivative financial instruments - - - - - - 120,910 120,910
Other assets - - - - - 7,868 - 7,868
Property, plant and equipment - - - - - 554 - 554
Amount due from related companies - - - - - 1,091 - 1,091
Total assets 416,300 200,000 - - - 9,640 741,274 1,367,214
Liabilities
Deposits from customers - - - 1,163,130 - - - 1,163,130
and other financial institutions 2,500 - - 5,000 - - - 7,500
Provision for taxation and zakat - - - - - 37,139 - 37,139
Other liabilities - - - - - 1,974 - 1,974
Total liabilities 2,500 - - 1,168,130 - 39,113 5,801 1,215,544
Total profit sensitivity gap 413,800 200,000 - (1,168,130) - (29,473) 735,473
Annual Report 2008

173
(18417-M)
174
(t) Profit rate risk (Continued)
(18417-M)
The tables below summarises the Bank’s exposure to profit rate risks. Included in the table are assets and liabilities of the Bank’s Islamic Banking
operations at their carrying value categorised by the earlier of maturity or repricing.
The Bank
Annual Report 2008

Non-trading book
Up to 1 >1 – 3 >3 - 12 >1 - 5 Over 5 Non-profit Trading
2007
Assets
Cash and short term funds 816,000 - - - - 375 - 816,375
Securities held for trading - - - - - - 50,002 50,002
Other assets - - - - - 15,024 - 15,024
Property, plant and equipment - - - - - 812 - 812
Amount due from related companies - - - - - 1,494 - 1,494
Total assets 816,000 - - - - 17,705 108,303 942,008

Liabilities
Deposits from customers - - - 680,500 - - - 680,500
and other financial institutions 54,900 - 41,830 5,000 - - - 101,730
Provision for taxation and zakat - - - - - 25,066 - 25,066
Other liabilities - - - - - 7,374 - 7,374

Amount due to related companies - - - - - 6,500 - 6,500
Total liabilities 54,900 - 41,830 685,500 - 38,940 3,541 824,711
Total profit sensitivity gap 761,100 - (41,830) (685,500) - (21,235) 104,762

(18417-M)


(u) Fair value of financial instruments
The fair value of financial assets, financial liabilities and off-balance sheet financial instruments of the Bank approximate
their carrying values at each balance sheet date presented.
(v) Maturities of assets

The tables below summarises the Bank’s effective average profit rate for each class of financial asset and financial liability.
The calculation of effective average profit rate excludes non-profit bearing financial assets and financial liabilities.
The Bank
2008 2007
MYR MYR
% %
Financial assets
Cash and short term funds 3.33 3.47
Deposits and placements with banks and other financial institutions 3.64 -
Securities held for trading 3.58 3.55
Deposits from customers 3.08 3.32
Deposits and placements of banks and other financial institutions 3.12 3.52
(w) Credit risk

The following table sets out the credit risk concentrations of the Bank by classes of financial assets:
The Bank
Short term funds and
placements with banks Securities Derivative On- Commitments
and other financial held for financial Other balance and
institutions trading instruments assets sheet total contingencies
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2008
Manufacturing - - - 21 21 -
General commerce - - - 37 37 -
Transport, storage
and communication - - - 2 2 -
Finance, insurance and
business services 300,427 620,364 120,910 7,729 1,049,430 117,596
Government and
government agencies 316,000 - - 57 316,057 -
Others - - - 22 22 -
Total 616,427 620,364 120,910 7,868 1,365,569 117,596

(18417-M)


(w) Credit risk (Continued)
The following table sets out the credit risk concentrations of the Bank by classes of financial assets:
The Bank
Short term funds and
placements with banks Securities Derivative On- Commitments
and other financial held for financial Other balance and
institutions trading instruments assets sheet total contingencies
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2007
Agriculture - - - 180 180 -
Electricity, gas and water - - - 12 12 -
Construction - - - 15 15 -
General commerce - - - 16 16 -
Transport, storage
and communication - - - 13,202 13,202 -
Finance, insurance
and business services 746,320 - 58,301 540 805,161 13,710
Government and
government agencies 70,055 50,002 - 944 121,001 -
Others - - - 115 115 -
Total 816,375 50,002 58,301 15,024 939,702 13,710
51 Comparatives
(a) Restatement of comparatives
Certain comparatives were restated to conform with the current financial year’s presentation. There was no impact to the
financial performance and ratios in relation to the financial year ended 31 December 2007. The restatements are as follows:
As
previously
reported Reclassification As restated
RM ‘000 RM ‘000 RM ‘000
Group
Balance Sheet
Cash and short term funds 1,240,259 342,578 1,582,837
Securities purchased under resale agreements 145,409 (124,850) 20,559
financial institutions 523,276 (217,728) 305,548
Bank
Balance Sheet
Cash and short term funds 1,190,492 217,728 1,408,220
financial institutions 522,170 (217,728) 304,442
The reclassification is in relation to short term placements, maturing within one month, which were previously classified as
deposits and placements with banks and other financial institutions and securities purchased under resale agreements.
52 Authorisation for issue of Financial Statements

The Financial Statements have been authorised for issue in accordance with a resolution of the Board of Directors.

(18417-M)
Corporate Directory
CIMB INVESTMENT BANK BERHAD CIMB INVESTMENT BANK BERHAD

CIMB FUTURES SDN BHD KUCHING BRANCH
10th Floor, Bangunan CIMB Level 1 & 6, Wisma STA
Jalan Semantan Jalan Datuk Abang Abdul Rahim
Damansara Heights 93450 Kuching Sarawak
50490 Kuala Lumpur Tel : 6082 358 888
Tel : 603 2084 8888 Fax : 6082 358 899
Fax : 603 2084 8899
Website : www.cimb.com CIMB INVESTMENT BANK BERHAD
KOTA KINABALU BRANCH
CIMB PRIVATE BANKING 1st & 2nd Floor, Central Building
Lot 7-01 Level 7 Menara Milenium 28 Jalan Sagunting
8 Jalan Damanlela, Bukit Damansara 88000 Kota Kinabalu
50490 Kuala Lumpur Sabah
Tel : 603 2723 8688 Tel : 6088 328 878
Fax : 603 2723 8638 Fax : 6088 218 733
CIMB INVESTMENT BANK BERHAD CIMB Investment Bank Berhad

PENANG BRANCH Melaka Branch
Suite 1.01 Menara Boustead Penang 191 Taman Melaka Raya
No 39 Jalan Sultan Ahmad Shah Melaka
10050 Penang Tel : 606 289 8800
Tel : 604 291 1833 Fax : 606 289 8810
Fax : 604 818 3383
CIMB INVESTMENT BANK BERHAD
BRUNEI BRANCH
14th Floor, PGGMB Building
Jalan Kianggeh
Bandar Seri Begawan BS8111
Brunei Darussalam
Tel : 673 224 1888
Fax : 673 224 0999

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Annual Report 2008

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CIMB Investment Bank Berhad (18417-M)

Annual Report 2008

CIMB INVESTMENT BANK Berhad

With its regional offices in Malaysia, Singapore,

Annual Report 2008 00

BOARD OF DIRECTORS Audit Committee Board Risk Committee

Dato’ Zainal Abidin Putih

Datuk Dr Syed Muhamad Syed Abdul Kadir

Dato’ Robert Cheim Dau Meng

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COMPANY SECRETAry GROUP MANAGEMENT COMMITTEE GROUP MANAGEMENT COMMITTEE

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CIMB Investment Bank continued to dominate the ringgit

Annual Report 2008 00

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Annual Report 2008 00

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slightly in 2009 from a growth of 4.6% ACKNOWLEDGEMENTS

Annual Report 2008 00

From left to right:

From left to right:

Annual Report 2008 0011

Board of Directors’ Profiles

DATO’ HAMZAH BAKAR

Dato’ Hamzah Bakar, a Malaysian, aged 65, was appointed

Presently, he is Chairman of SapuraCrest Petroleum Berhad

He holds a Bachelor of Science (Hons) degree in Economics from the Queen’s

Dato’ Hamzah attended 13 of the 14 Board meetings held in 2008.

012 Annual Report 2008

Board of Directors’ Profiles

DATO’ SRI NAZIR RAZAK

Dato’ Sri Nazir Razak, a Malaysian, aged 42, was appointed

Dato’ Sri Nazir graduated from the University of Bristol

Dato’ Sri Nazir attended 13 of the 14 Board meetings held in 2008.

Annual Report 2008 013

Board of Directors’ Profiles

DATO’ CHARON WARDINI MOKHZANI

Dato’ Charon Wardini Mokhzani, a Malaysian, aged 45,

He is a council member of the Malaysia Investment Banking

Dato’ Charon attended all 14 the Board Meetings held in 2008.

014 Annual Report 2008

Board of Directors’ Profiles

DATO’ ZAINAL ABIDIN PUTIH

Dato’ Zainal Abidin Putih, a Malaysian, aged 63, was

Dato’ Zainal also sits on the Boards of BCHB, CIMB Group,

Dato’ Zainal has extensive experience in audit, management

He is currently the Chairman of the Malaysian Accounting Standards Board and

Dato’ Zainal attended all the 14 Board meetings held in 2008.

Annual Report 2008 015

Board of Directors’ Profiles

Zahardin Omardin, a Malaysian, aged 64, was appointed

He is presently a Partner of Messrs. Chew Kar Meng,

He attended 13 of the 14 Board Meetings held in 2008.

016 Annual Report 2008

Board of Directors’ Profiles

Nicholas R H Bloy, a British national, aged 46, was

He is a Co-Founder and Managing Partner of Navis Capital

He attended 9 of the 14 Board Meetings held in 2008.

Annual Report 2008 017

Statement on Corporate Governance

The Board and Board Balance

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