MEDIA RELEASE
For Immediate Release

Great Eastern’s Net Profit of $237 Million for 2009 Q1
Sharp increase due to large non-recurring item

Singapore, 5 May 2009: Great Eastern Holdings Limited announces Profit Attributable to Shareholders of $237 million for the first quarter of 2009, a sharp increase from $45 million for the first quarter of 2008. The increase is mainly due to a large non-recurring item from the Malaysian insurance operations.

Insurance Operations
Profit from the life and general insurance operations registered a sharp increase to $277.6 million (Q1-08: $14.4 million). This included non-recurring profit of $213.1 million principally arising out of the implementation of a new risk based regulatory capital framework in Malaysia ($180.0 million). In Singapore, the Group commenced an exercise to achieve portfolio matching of the assets and liabilities of the Non Participating fund and this also contributed to the non-recurring profit.

Excluding the non-recurring profit, the insurance operations achieved a growth in profit to $64.5 million, higher than $14.4 million in Q1-08.

New business sales measured on a weighted basis for the life assurance operations fell 25% from $172 million to $130 million. Most of the decline was registered by the Singapore operations (55% lower than last year) as a result of a sharp fall in the sales of savings and investment products in the current economic climate. Moreover, last year’s Q1 had benefitted from a surge in sales activities ahead of new rules limiting withdrawals from the CPF Investment Scheme from 1 April 2008.

Malaysia, however, continued to enjoy a strong growth in Q1-09 with the launch of new products and a significant growth in the tied agency’s performance. Malaysia’s new business weighted premium grew 63% year-on-year.

In China, the business operations had a good quarter, with sales nearly quadrupling year-on-year in terms of new business weighted premium, albeit from a small base. The growth was driven largely by a huge increase in the number of agents from under 500 a year ago to 2,400 as at end March 2009.

Market Share
The Group maintained its leadership position in the life insurance business in Singapore with a market share in excess of 22%. In Malaysia, the Group is also set to retain its pole position in the life insurance industry.

Profit from Investments
Profit from investments in the Shareholders’ Fund fell to $6.2 million (Q1-08: $61.8 million) as a result of realised and mark-to-market losses of $21.5 million. Last year’s profit had also included a one-off gain of $42.2 million from the sale of shares in Straits Trading Company Ltd.

Fees and Other Income
For Lion Global Investors Ltd, fees and other income declined 35% year-on-year to $14.6 million (Q1-08: $22.3 million) as a result of a decrease in the assets under management ($26.5 billion on 31 March 2009 compared to $34.3 billion on 31 March 2008).

Total Assets
The Group’s total assets as at 31 March 2009 amounted to $44.2 billion, a marginal increase from $44.0 billion as at 31 December 2008.

Regulatory Capital
The insurance subsidiaries of the Group have complied with the capital ratios prescribed by the Insurance Regulations of the jurisdiction in which they operate. In Singapore and Malaysia, the Capital Adequacy Ratios of the insurance subsidiaries both exceeded 200%, well above the minimum regulatory ratios of 120% and 130% respectively in each country.

Comments from Group CEO
Group CEO Mr Ng Keng Hooi said, “Despite a challenging business and investment operating climate, which has continued into Q1-09, the Group has delivered higher profits from its core insurance operations. The ongoing financial crisis and recessionary conditions will likely impact the earnings of the insurance operations and the Group will therefore continue with the exercise to manage its portfolio of assets and liabilities to minimise future earnings volatility.

We are able to reassure our customers that the Group is strongly capitalised with Capital Adequacy Ratios in excess of 200% in our key markets of Singapore and Malaysia, and that the capital position is able to withstand further deterioration of the financial markets through the results of our regular stress tests.

On the business front, we will focus on improving the volume of new business sales, especially in the sales of protection products and to help agents maintain their selling activities amidst the economic slowdown. The liberalisation of the financial sector announced recently by the Malaysian Government presents exciting opportunities and augurs well to enhance the Group's sizeable business and investments in the country.”

About Great Eastern
Founded on 26 Aug 1908, Great Eastern Life Assurance Co Ltd has the distinction of being the oldest and most established life insurance company in Singapore and Malaysia. In Nov 1999, Great Eastern Holdings Ltd was incorporated and became the holding company of Great Eastern Life. Overseas Assurance Corporation Ltd, incorporated in 1920 as the first composite insurer in Singapore, merged with Great Eastern Holdings in Dec 2000.

Today, Great Eastern is the largest insurance group and the market leader in Singapore and Malaysia, with $44.7 billion in assets and 3 million policyholders, and with two successful distribution channels - the tied agency force and bancassurance. The Company also operates in China, Indonesia, Vietnam and Brunei.

Great Eastern is a subsidiary of OCBC Bank, Singapore’s longest established bank with assets of $181 billion and a network of over 460 branches and representative offices in 15 countries and territories. Great Eastern’s subsidiary, Lion Global Investors, is one of the largest asset management companies in Southeast Asia.

For more information, please contact:

Tony Cheong
Chief Financial Officer
Tel: 6248 2317
Email: TonyCheongJK@lifeisgreat.com.sg

or

Boon-Gek Mudeliar
Head (Corporate Communications)
Tel: 6248 2215
Email: Boon-GekMudeliar@lifeisgreat.com.sg

Financial Highlights