07/02/2005(Media Release)

Great Eastern Holdings Ltd Hits Record Profit of $402 Million for 2004

Singapore, 7 February 2005: Great Eastern Holdings Limited announces Profit Attributable to Shareholders of $402.0 million for the year 2004, an increase of 29% over $312.2 million for the year 2003. This is a record for the Group, due principally to the profit of $71 million realised in May 2004 upon completion of the Selective Capital Reduction (SCR) exercise. The SCR exercise pertained to the disposal of OCBC Bank shares held by Great Eastern Holdings’ wholly-owned insurance subsidiaries, viz. Great Eastern Life Assurance Co Ltd, Overseas Assurance Corporation Ltd and Great Eastern Life Assurance (M) Bhd. If this one-time disposal profit were to be excluded, Profit Attributable to Shareholders would still have shown an increase over 2003 of 6%.

With higher investment income primarily from the SCR exercise, Great Eastern Life Assurance will give a one-off special bonus in 2004 to most of the Regular Premium Whole Life and Endowment Participating policies. This one-time bonus will amount to $110.5 million in Singapore and RM60.2 million in Malaysia.

The Company is also pleased to announce an Embedded Value per share of $10.30 for 2004, 10% higher than $9.35 for 2003.

Insurance Operations
Group gross premiums totalled $5,375 million in 2004, an increase of 6% over $5,056 million in 2003, due to stronger sales.

For life insurance operations, pre-tax profit contributed by the Participating, Non-Participating and Investment-Linked Funds increased by 36% from $280.7 million to $382.9 million. Pre-tax profit from Participating Fund grew by 25% to $106.3 million, Non-Participating Fund grew by 38% to $227.1 million, and Investment-Linked Fund increased 56% to $49.5 million as a result of growth in the investment-linked segment.

For general insurance operations, pre-tax profit increased by 30% from $25.2 million in 2003 to $32.8 million in 2004, due partly to the higher dividend income including a one-time cash dividend of $3.6 million from Robinson and Company Ltd, and the release of the margin of solvency reserve from the closure of a small overseas branch of a subsidiary.

Overall, pre-tax profit from insurance operations (both life and general) increased by 36% to $415.7 million, with $209.2 million each coming from both the Singapore and Malaysian sectors, and the “other ASEAN sector” registering a loss of $2.7 million.

Profit from Investments
Pre-tax profit from investments of the Shareholders’ Fund totalled $93.8 million, an increase of 2% from $91.7 million in 2003, due mainly to the disposal of OCBC shares under the SCR exercise and higher investment income, including a one-time special cash dividend from Robinson.

Total Assets
The Group’s total assets as at 31 Dec 04 amounted to $36,257 million, 12% higher than $32,352 million a year earlier. The net asset value per share improved 14% from $4.29 as at 31 Dec 03 to $4.91 as at 31 Dec 04.

Market Share
In Singapore, the Group continued to be the market leader in the life insurance business with a market share of 27.8% in terms of weighted premium, due to its strong brand, effective tied agency and bancassurance distribution channels and quality customer service. In Malaysia, Great Eastern also maintained its No.1 position with a market share of 21.1%.

Dividend
On 7 Sep 04, the Company paid a first interim dividend of 7 cents together with a special interim dividend of 5 cents per ordinary share of 50 cents each, less 20% Singapore income tax. On 7 Feb 05, the Directors recommended, for shareholders’ approval, the payment of a final dividend of 20 cents and a special final dividend of 3 cents per ordinary share of 50 cents each, less 20% Singapore income tax. This brings the total dividend payment for the financial year 2004 to 35 cents per ordinary share of 50 cents each.

Outlook for the Next Twelve Months
All insurers in Singapore will adopt the Risk Based Capital (RBC) framework in 2005, as required by the MAS. Based on tests and analyses, the implementation of RBC is not expected to have an unfavourable impact on the Group.

The strong economic growth and improved operating environment in Singapore and Malaysia in 2004 are expected to continue in 2005, provided continuing pressures from geopolitical tensions and oil prices do not significantly dampen growth prospects.

Director and Group CEO Mr Tan Beng Lee said, “We are very happy with the financial performance in 2004. Even if we were to exclude the $71 million one-off profit, this is the second consecutive year of record earnings. We owe this to the strong support of our policyholders and life planners, the Bank’s personal financial consultants, our staff and service providers. The Group will continue to work closely with OCBC Bank to enhance revenue synergies and leverage on each other’s capabilities and strengths, in particular in bancassurance, cross-selling and wealth management, in Singapore and the region. We will also continue to grow the investment-linked business and to expand regionally. Our business strategies are on track to meet the Group’s 2008 goals, although short-term performance may be affected by uncertainties in the equity, foreign exchange and money markets.”

________________________________________________________________

About Great Eastern Holdings
Great Eastern Holdings is the largest insurance group in Singapore and Malaysia, with over S$36 billion in assets and 2.4 million policyholders. With two successful distribution channels – the tied agency force and bancassurance – it is the market leader in both Singapore and Malaysia. It is a subsidiary of OCBC Bank, one of Asia’s leading financial service groups, with one of the highest bank credit ratings in the region.

For more information, please contact:

Boon-Gek Mudeliar
Head (Corporate Communications)
Tel: 6248 2215
or email: Boon-GekMudeliar@lifeisgreat.com.sg
or
Ronnie Tan
SVP (Finance & Corporate Affairs)
Tel: 6248 2310
or email: RonnieTan@lifeisgreat.com.sg