ALLIANCE BANK IS FIRST ACQUIRING BANK IN MALAYSIA TO INTRODUCE VERIFIED BY VISA

e-Commerce merchants offer increased security for internet transactions

16 February 2004, Kuala Lumpur - Visa Asia Pacific today announced that Alliance Bank is the first acquiring bank in Malaysia to introduce Verified by Visa, the secure online authentication service for internet payment. Alliance Bank's e-commerce merchants are now able to offer a more secure e-commerce environment for Visa cardholders enrolled with Verified by Visa around the world.

Leading online merchants including Air Asia, Cosway, Holiday Tours and Travel, Lelong.com and Mobile 88 are the first to participate in Verified by Visa.

Verified by Visa enables card issuers to authenticate the identity of Visa cardholders who are shopping online at participating merchants, using a pre-registered password known only to the cardholder. Cardholders can therefore carry out transactions in an environment that is as secure in the virtual world as it is in the physical world.

Besides benefiting consumers, Verified by Visa also delivers benefits to merchants and financial institutions. Statistics show that since April 2003, the number of e-commerce disputes involving Visa card transactions in Asia Pacific has dropped by 50 percent, providing merchants and financial institutions with significant savings from the reduction in losses from unauthorized card usage and reduced dispute-handling charges.

In addition, merchants who have adopted Verified by Visa benefit from guaranteed payment for the most common type of e-commerce disputes such as cardholders claiming they did not perform the transaction. Merchants are therefore assured of the same level of security for online card transactions as they receive in a face-to-face environment today.

Visa Asia Pacific's country manager for Malaysia, Brunei and Guam Jeffrey Perera said, "Visa is delighted that Alliance Bank and its e-commerce merchants are taking the lead in rolling out Verified by Visa in Malaysia. There are currently 255 million Visa cardholders around the world already registered for Verified by Visa. These Visa cardholders will be able to enjoy extra security and increased confidence when they shop at participating Malaysian e-commerce merchants."

"This is a significant first step in enhancing internet security for Malaysia's growing e-commerce community. We at Visa are working closely with our member banks to bring Verified by Visa to Malaysian cardholders soon," Perera added.

Alliance Bank's Senior General Manager for eBanking, See Beng Keong said, "We are privileged to be the first in Malaysia to offer the Verified by Visa experience and we are confident that this will be well-received by our online users as well as our e-commerce merchants. Verified by Visa complements our Internet Banking offering, where our priority is to enhance online payment security in order to encourage consumers to fully embrace Internet banking.

Most importantly for our Internet-based merchants, Verified by Visa is able to mitigate online card fraud and provide assurance of payment to them, hence addressing a key issue in their online business model. We intend to be a key player in this emerging market. At the same time, this will drive increased enrolment for our allianceonline Business banking service."

Wide Adoption of Verified by Visa
Visa's Director of Chip and e/m-Commerce Implementation for Southeast Asia, Jack Pan said, "The number of cardholders enrolled with Verified by Visa in Asia Pacific has increased more than 14 fold from 1.4 million to 20 million over the past six months. This is a significant milestone and we continue to see tremendous growth as consumers benefit from an increasingly secure e-commerce environment. We are delighted with the momentum behind Verified by Visa, and look forward to enabling more online merchants and shoppers in Malaysia the near future."

The improved performance of the PBT in the Merchant Bank level is mainly contributed by an increase in non-interest income and higher recovery on non-performing loans (NPLs). Islamic Banking income surged ten-fold to RM3.4 million as at end September 2003. Net NPL ratio improved to 12.7% as at end September 2003 due to increase in recovery efforts from repayment. There was an improvement in the RWCR to 33.5% as at end September 2003, which was significantly above the minimum requirement of 8.0% and the industry's average of 18.9%.

There are currently 4,000 leading Internet merchants around the world already signed up for Verified by Visa, including 1,000 in Asia Pacific. They offer a wide range of products and services including books, travel, hotels, consumer electronics, government services, healthcare and beauty products.

First introduced in Asia Pacific in 2002, Verified by Visa is based on 3-D Secure, a globally interoperable technology for secure payments that is being used by all major payment associations. It allows participating card-issuing banks to validate a cardholder's identity through authentication methods including passwords, chip cards or biometrics during the online checkout process. When cardholders shop at participating online stores, they enter their password in the same way they would enter PIN at an ATM, giving them the same assurances they have when using their card in a physical store. Verified by Visa allows consumers secure online shopping wherever they are, whether at home, the office or using their laptop or mobile phone.

High Awareness of Verified by Visa Drives e-Commerce
Ongoing consumer research has shown that over 30 percent of all Internet users in nine key Asia Pacific markets have now heard of Verified by Visa, and awareness and usage is growing rapidly. More significantly, in all markets where Verified by Visa has been implemented, research has found that awareness of Verified by Visa increases both the frequency and value of online spending as well as preference for Visa cards. e-Commerce sales across Asia Pacific have now risen by 75 percent when compared to levels one year ago. According to AC Nielson Research, Visa is the preferred method of online payment, with at least 40 percent of online payments being made with Visa credit or debit cards.

Visa International
Visa is the world's leading payment brand generating more than US$2.7 trillion in annual card sales volume. Visa has unsurpassed acceptance in more than 150 countries. The Visa organization plays a pivotal role in developing innovative payment products and technologies to benefit its 21,000 member financial institutions and their cardholders. Visa is a leader in Internet based payments and is pioneering the creation of u-commerce, or universal commerce, the ability to conduct commerce anywhere, anytime and any way. For more information, visit www.corporate.visa.com.

Visa Asia Pacific
In Asia Pacific, Visa has a greater market share than all other payment card brands combined with 62 percent of all card purchases at the point of sale being made using Visa cards. There are currently 198 million Visa-branded cards in the region. During the twelve months ended 30 September 2003, US$428 billion was spent at point of sale or withdrawn from ATMs in Asia Pacific using Visa cards. Visa Asia Pacific's Internet address is www.visa-asia.com.

About Alliance Bank and allianceonline
Alliance Bank Malaysia Berhad has had more than 4 decades of proud history in contributing to the financial community with its innovative and entrepreneurial spirit to business. Alliance Bank's new business direction is focused on delivering growth and performance in the housing, infrastructure, plantations and services sectors.

As a full-fledged financial services provider, Alliance Bank continuously strives to provide its customers with excellence and innovation in its services and products. With over 30,000 active users, Alliance Bank has been continuously enhancing its allianceonline business and personal banking services capabilities and performance. A wide range of self-service payment and cash management services for business and personal banking was implemented and has been well-received by the allianceonline users. The comprehensive credit card and account debiting payment services for both physical and virtual channels augur well for the business community and public at large. The Verify by Visa (VbV) credit card payment acceptance service, 1st in Malaysia, is yet another innovative service from Alliance Bank.

Alliance Bank has over 3,000 employees in 82 branches throughout the country, including Sabah and Sarawak.