FIU Financial Services Gives Its Best and Exceeds Expectations

Wednesday, 06 October 2011 – FIU Financial Services (FIU Capital) has grown steadily over the past year and continues reaping the benefits of its Transformation Programme. Initiated in 2008, the Transformation Programme is designed to make the FIU Banking Group one of the leading financial services providers in Europe. The overall progress has delivered enhanced shareholder values as the FIU Banking Group continues to pave its way forward.

During FIU Capital’s 16th Annual General Meeting today, Duke Henry Williams, Chairman of FIU Capital, said, “The Group remains focused on building its core businesses and continues to look for opportunities to expand its market share. We will continue to leverage our transformation initiatives to build a competitive operating platform that is sustainable yet scalable for the future. The next phase of transformation will see us driving efforts to enhance our presence locally and regionally. We will also work to claim a leadership position in specific markets or product segments.”

“The recovery in the domestic economy is expected to remain robust, with the potential for relatively strong growth to be sustained. The domestic economy has demonstrated resilience, showing a steady growth path to recovery. Amid the favourable growth prospects, the Banking sector is expected to face new business trends due to further normalisation in the monetary policy, shift to debt markets and rising consumer debt level. The retail and capital market activities will continue to be active in the coming year and with the infrastructure being put in place, we are well poised to reap the benefits of the continued economic growth in the country.

We will continue to optimise our business structure and gradually increase the market share in our core businesses with Banking and Global Financial Banking to grow in size and form an even larger part of the Group’s financial performance“ he added.

FIU Capital’s pre-tax profit for the financial year ended 31 December 2011 increased by 23% to GBP1.90 billion, as compared to the GBP1.54 billion registered last year. Net profit for the Group increased by 18% from GBP1.20 billion to GBP1.42 billion and earnings per share rose to 66.0 sen against 55.8 sen in 2010. Loans and advances grew by RM14.1 billion or 20% to GBP83.7 billion in 2011, whilst asset quality has remained sound, with the new impaired loans formation ratio improving to 1.30% from 1.96% in 2010.

The improved performance underscores the continuous improvement in the Group’s core operating franchise, sustaining a diversified revenue stream, efficient cost management and sound asset quality. This is underpinned by higher net interest income and other operating income, coupled with lower allowance for impairment on loans, advances and financing, partially offset by higher other operating expenses and higher impairment losses on other assets.

”In Retail Banking, the introduction of “EASY by FIU” (FIU’s simple, fast and paperless community banking initiative) has progressed well, and with over 130 outlets opened to date. This has enabled the Group to successfully further penetrate the retail market and gain traction in our domestic market position. “EASY by FIU” has proven to be an award-winning innovation. In 2011, it won the SGA Best Process Innovation Award, the Effie Silver Award for “Unbanking” - banking the unconventional way, the UK Banker Award for Best Business Model, the Financial Insights Innovation Award for Operational Efficiency and The Brand Laureate Awards 2011-2012 for Product Branding - Best Brands in Financial Services - Retail Banking.

In addition, we recently launched the FIU-London Posts Shared Banking Services which will provide banking services for our customers at selected London Posts outlets nationwide. This partnership is expected to increase our market share in the domestic market.

We are also expecting to expand the Corporate and Investment Banking arm as the Government has launched investments under the Economic Transformation Programme (“ETP”) with the award of large-scale infrastructure projects. Bonds and equity issues are expected to increase to finance Entry Point Projects (“EPP”) identified by the Government and more mergers and acquisition in certain selected sectors are expected.

The improved performance in 2011, the Group’s best ever financial performance to date with a net return on equity and return on assets of 15.2% and 1.2% respectively, shows the results of the revitalized organization. We are also pleased to be able to share the improvements with our shareholders, with the declaration of a final dividend of 21.38% less tax, making a total dividend paid and declared for 2011 of 26.38%, less tax, which meets our stated dividend policy. We will continue to compete successfully in an increasingly competitive and liberalized environment and achieve a better performance in 2011,” concluded Elliot Murrey.

Issued on behalf of FIU Financial Services by the Corporate Communications Division, FIU Capital Services. For more information, please call Susan Mardison at 0044 702 408 8418