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On behalf of the Board of Directors of CIMB, Commerce International Merchant Bankers Berhad (Commerce International), is pleased to announce that CIMB had approved a payment of a special gross dividend of 21.29 sen per share or RM180,965,000 (net dividend of 15.33 sen per share or RM130,305,000) in respect of the financial year ending 31 December 2003 on its issued and paid-up capital of 850,000,000 ordinary shares of RM1.00 each, out of its retained profits to its shareholders (Special Dividend).


2. RATIONALE

The Special Dividend is a capital repayment to shareholders of CIMB following the declaration of a special dividend to CIMB by Commerce International, of RM181,111,111 and RM130,400,000 gross and net of tax, respectively.

The Board of Directors is of the opinion that Commerce International has a capital base that is in excess of operating requirements. This is reflected in the merchant banks high risk-weighted capital ratio (RWCR) of 23.02% as at 31 December 2002. Commercial Internationals pro-forma RWCR after the payment of the special dividend is 20.06%, which is still comfortably higher than the minimum regulatory requirement of 8%.

The Special Dividend would reduce CIMB Groups shareholders funds from RM1.43 billion to RM1.30 billion and thereby improve the CIMB Groups prospective return on equity.

The Special Dividend will not have any effect on the issued and paid-up share capital and the substantial shareholders of CIMB.

The Special Dividend is not expected to have any material impact on the earnings of the CIMB Group for the financial year ending 31 December 2003.

In conjunction with, and as an integral part of the listing of and quotation for the entire issued and paid-up capital of CIMB on the Main Board of the KLSE, CIMB together with its major shareholder, Commerce Assets Holdings Berhad (CAHB) had established the following schemes :-

(1) an Executive Employee Shares Option Scheme (Executive ESOS) which shall not exceed 10% of the issued and paid-up share capital of CIMB at any one time for the executive (including an Executive Director except for the Chief Executive of Commerce International) of CIMB and/or its subsidiaries who meets the criteria of eligibility for participation in the Executive ESOS as set out in Clause 4 of the Executive ESOS Bye-Laws as provided in the Prospectus dated 2 December 2002;

(2) an Employee Equity Scheme (EES) representing approximately 4.86% of the issued and paid-up share capital of CIMB (offer for sale by CAHB) for the CIMB Group Employees to reward their contribution to the CIMB Group; and

(3) a share option to the Chief Executive of Commerce International to purchase CIMB shares held by CAHB representing approximately 4.94% of the issued and paid-up capital of CIMB as at the date of listing of CIMB (CEO Option),

to motivate, reward and retain the employees, eligible executives and CEO of Commerce International.

The Special Dividend is at the net rate of 15.33% and as a result thereof, any dividend declared or provided for in the accounts for any period which is more than 3% of the nominal value of the CIMB shares, shall be deemed as Capital Distribution.

Accordingly the subscription price to the Executive ESOS (Subscription Price), strike price to the EES (Strike Price) and option price to the CEO Option (Option Price) shall be adjusted by the Directors upon the approval of CAHB (for the EES and CEO Option) and CIMB (for the Executive ESOS) Board of Directors in a meeting to be conducted at a later date. The extent of the deemed Capital Distribution shall be 12.33% for the purpose of the price adjustment.

The price adjustments to the Subscription Price, Strike Price and Option Price for the aforesaid shall be made based on the volume weighted average price of CIMB on 15 April 2003.

3.5 Effective Date of the Price Adjustments

The effective date of the price adjustments to the Subscription Price, Strike Price and Option Price for the Executive ESOS, EES and CEO Option respectively, shall be effective from 7 May 2003, being the ex-date for the Special Dividend.

	Audited as at 31.1.2002 RM000		Proforma After the Special Dividend RM000
FINANCED BY:
Share capital	850,000		850,000
Reserves	580,524		450,219
Shareholders equity	1,430,524		1,300,219
Minority interest	-		-
	1,430,524		1,300,219
NTA (RM000)	1,430,524		1,300,219
NTA per share (RM)	1.68		1.53

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