ALLIANCE BANK RM600 MIL TIER II SUB-BOND OVER 2 TIMES SUBSCRIBED

Kuala Lumpur, 18 May 2006 - Alliance Bank Malaysia Berhad ("Alliance Bank") has successfully launched and priced its new RM600 million Tier II subordinated bond issue ("Subordinated Bonds"). The Subordinated Bonds have a 10 year maturity with a call from the 5th anniversary of the issue date.

Through a two and a half day book building process which began on 15 May 2006, the deal built up an impressive order book with RM1.27 billion in bids from a wide group of investors. The order book closed with over 2 times subscription, amidst a volatile and bearish market condition, with a total of 22 investors given allocation. In terms of investor distribution, 53% went to insurers, 27% government agencies, 9% funds, 8% private banking and 3% financial institutions.

"Price guidance for the deal was released on Monday, 15 May 2006 at the 5-year swap rate plus 85 basis points to 110 basis points. Final pricing came at 6.09% fixed rate, which equated to 91 basis points over 5-year swap rate on 17 May 2006, which represents the tight end of the price guidance.

The Subordinated Bonds, unless redeemed at the end of 5 years from the issue date, shall carry a revised coupon rate of 7.59% per annum from 5th year onwards until the final redemption of the bonds, which represents a 150 basis points step-up from the original coupon rate.

Bridget Lai, Group Chief Executive Officer of Alliance Bank said, "The strong response to the Sub-Debt Bonds is a reflection of the growing confidence of the investors in the banking group."

The proceeds from the Subordinated Bonds will be utilised for general working capital, including to refinance its existing RM535 million subordinated bonds at the end of June 2006.

Alliance Merchant Bank Berhad and HSBC Bank Malaysia Berhad are the Joint Lead Arrangers, Joint Lead Managers and Joint Bookrunners for the Subordinated Bonds.

Spokespersons from the Joint Lead Arrangers, Chua Bee Chin, Acting Chief Executive Officer of Alliance Merchant Bank and Zarir J. Cama, Deputy Chairman and Chief Executive Officer of HSBC Bank Malaysia Berhad said, "The deal was priced at the tight end of the marketing range despite volatile market conditions. Through an accelerated book-building process, we managed to attract a quality order book, which was over two times subscribed."