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CIMB wishes to announce that CAFM, its 70%-owned subsidiary, had on 9 December 2004 entered into a conditional business rationalisation agreement (Business Rationalisation Agreement) with CTB, another 70%-owned subsidiary of CIMB, in relation to the Proposed Business Rationalisation.

CIMB proposes to undertake a rationalisation of its fund management and unit trust businesses through CTB.
In relation thereto, CAFM had on 9 December 2004, entered into the Business Rationalisation Agreement with CTB for the purpose of the Proposed Business Rationalisation whereby CAFM shall sell and transfer to CTB the assets and liabilities (Assets and Liabilities) in relation to or utilised in the fund management business of CAFM (CAFM Business) (Proposed Transfer) to CTB to form a single fund management and unit trust entity under CTB. The Proposed Business Rationalisation is made in view of the Securities Industry (Amendment) Act 2003, which revoked the Securities Industry (Exempt Fund Manager) Order 1997.

CTB will assume the obligations and responsibilities in discharging all the liabilities and other obligations of CAFM pursuant to the CAFM Business and in consideration, CAFM will transfer and vest in CTB all its rights, titles and interests in the Assets including all rights of enforcements, demands, claims and entitlements of CAFM arising from or in connection with the fund management business of CAFM up to and including the completion date of the Proposed Business Rationalisation (Completion Date).

The consideration for the Proposed Transfer shall be the net book value of the Assets and Liabilities as at the Completion Date and shall be satisfied by CTB wholly in cash and will be financed by CTB from internally-generated funds and borrowings. The costs of integration in the Proposed Business Rationalisation will be borne by CTB, unless agreed otherwise.
The Proposed Business Rationalisation is expected to be completed in the second quarter of the financial year ending 31 December 2005.

CAFM was incorporated in Malaysia on 20 February 1995 under the Companies Act, 1965 (Act) as a private limited company under its present name.

CAFM has an authorised share capital of RM10,000,000 comprising 10,000,000 ordinary shares of RM1.00 each of which RM5,500,000 comprising 5,500,000 ordinary shares of RM1.00 each have been issued and fully paid-up as at 31 October 2004.

The principal activity of CAFM is the business of fund management. CAFM manages funds on behalf of CTB and other clients totalling approximately RM4.33 billion as at 31 October 2004.

The latest audited net tangible assets (NTA) and profit after tax (PAT) of CAFM for the financial year ended 31 December 2003 were RM14,378,322 and RM3,408,400 respectively.
Principal Australia (Holdings) Pty Ltd (PAH) holds the remaining 30% equity interest in CAFM.

CTB was incorporated in Malaysia on 13 June 1994 under the Act as a private limited company under the name of Emount Sdn Bhd. On 31 October 1995, its name was changed to CIMB OCBC Unit Trust Management Sdn Bhd and it was converted into a public limited company on 4 November 1995. Subsequently, on 20 June 1997, its name was changed to Commerce-BT Unit Trust Management Berhad. It assumed its present name on 11 February 2000.

CTB has an authorised share capital of RM10,000,000 comprising 10,000,000 ordinary shares of RM1.00 each of which RM7,000,000 comprising 7,000,000 ordinary shares of RM1.00 each have been issued and fully paid-up as at 31 October 2004.

The principal activities of CTB are the establishment and management of unit trust funds. CTB currently has 12 unit trust schemes with total funds managed of approximately RM2.34 billion as at 31 October 2004.

The latest audited NTA and PAT of CTB for the financial year ended 31 December 2003 were RM13,906,489 and RM3,320,229 respectively.

PAH holds the remaining 30% equity interest in CTB.

The Proposed Business Rationalisation will enable CIMB to combine its investment management businesses into one single entity. This is expected to create operating synergies as a result of the pooling of the assets, resources and businesses of CAFM and CTB.

The Proposed Business Rationalisation is conditional upon the following approvals:

(i) Securities Commission (SC), for the following:

(a) the Proposed Business Rationalisation;

(b) transfer of the licences currently held by CAFM, and issued by the SC, to CTB; and

(c) transfer of the relevant licences issued by the SC, and held by certain employees of CAFM with CAFM as principal, to reflect CTB as principal;

(ii) the High Court of Malaya, for the Proposed Business Rationalisation;

(iii) the shareholders of CAFM and CTB; and

(iv) any other relevant authorities.

7.1 Share Capital

The Proposed Business Rationalisation will not have any effect on the issued and paid-up share capital of CIMB.

7.2 NTA

The Proposed Business Rationalisation will not have any effect on the NTA of CIMB.

7.3 Earnings

Barring any unforeseen circumstances, the Board of CIMB believes that the Proposed Business Rationalisation will contribute positively to the earnings of CIMB and its subsidiaries (CIMB Group) for the financial year ending 31 December 2005.

Other than those arising from operating synergies within the CIMB Group as a result of the pooling of assets and resources of CAFM and CTB, the Proposed Business Rationalisation will not have any material effect on the earnings of the CIMB Group.

7.4 Substantial Shareholders
The Proposed Business Rationalisation will not have any effect on the substantial shareholders of CIMB.

Save as disclosed below, none of the Directors and substantial shareholders of the CIMB Group or persons connected with the Directors and substantial shareholders of the CIMB Group have any interest, direct and indirect in the Proposed Business Rationalisation.

PAH is a substantial shareholder of both CAFM and CTB.

The Board of CIMB is of the opinion that the Proposed Business Rationalisation does not result in any departure from the SC Guidelines.

The Board of CIMB is of the opinion that the Proposed Business Rationalisation, if implemented, will be in the best and long-term interest of CIMB.

The Business Rationalisation Agreement dated 9 December 2004 is available for inspection at the registered office of CIMB at 7th Floor, Bangunan CIMB, Jalan Semantan, Damansara Heights, 50490 Kuala Lumpur during normal business hours from Mondays to Fridays (except public holidays) for a period of three (3) months from the date of this announcement.

This announcement is dated 10 December 2004.

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