Kuala Lumpur, 21 March 2008 - Alliance Financial Group Berhad (AFGB) announced today that it is subscribing for 200,000,000 Irredeemable Non-Cumulative Convertible Preference Shares (INCCPS) of RM0.01 each in its wholly owned subsidiary, Alliance Bank Malaysia Berhad (Alliance Bank) at a subscription price of RM1.00 per share with preferential dividend of 5 sen per preference share.

AFGB will utilize RM200 million of the proceeds from its warrants which expired in June 2007 to subscribe for the INCCPS. AFGB had received a total proceeds of RM466 million for the exercise of the 2002/2007 warrants, and RM200 million had been utilized earlier to redeem its Commercial Papers of RM200 million upon maturity on 18 September 2007.

The subscription of INCCPS is to fund the continued future growth of Alliance Bank and has been approved by Bank Negara Malaysia. Alliance Bank's capital adequacy ratio (CAR) will be strengthened upon completion of the INCCPS issuance.

"We are confident of Alliance Bank's prospects and with this capital injection, the Bank will be assured that its growth is adequately funded," said the AFGB Chairman, Datuk Oh Chong Peng.

Up to nine months ended 31 December 2007, Alliance Bank achieved an annualized loans growth of 13.1%. The growth is largely contributed by consumer products and the commercial/SME segments.

AFGB registered a profit before taxation of RM393.7 million for the 9 months ended 31 December 2007, an increase of RM309.1 million compared to the corresponding period last year. Asset quality continued to improve with net non-performing loans (NPLs) ratio declining from 4.4% as at 30 September 2007 to 3.7% as at 31 December 2007 (31 March 2007: 5.5%). Gross NPLs provisioning coverage further improved to 77% compared to 72% at 30 September 2007 (31 March 2007: 67%).

ALLIANCE FINANCIAL GROUP BERHAD