KENANGA ANNUAL REPORT 2020

9 ANNUAL REPORT 2020 // KENANGA INVESTMENT BANK BERHAD I am confident that the Group will continue to build a business that is fundamentally grounded in sustainable value, as well as, professional values that will secure our place as Malaysia’s largest independent investment bank for many years to come. DIGITALISATION AND TECHNOLOGY As I mentioned earlier, the year 2020 posed extraordinary challenges for capital markets around the world. In this highly uncertain environment, Kenanga Group’s digital transformation, coupled with its strong presence in the retail market, placed us in prime position to meet the unexpected surge in demand for online broking services. Our capacity to respond quickly to the “New Normal”, including a 70% work from home ratio, as well as, split team operations— without compromising quality, effectiveness, and security— provided clear confirmation that our digital transformation remains the key to the creation of a strong, adaptable and resilient company that will safeguard the interests of all our customers and stakeholders. In 2020, we also undertook two endeavours that will be instrumental in our technological evolution in the coming years. The first was our acquisition of a 4.99% equity interest in Malaysia’s leading e-money player, Merchantrade Asia Sdn Bhd, which will allow us to maximise new digital opportunities together. Second was our partnership with Bay Group Holdings Sdn Bhd ( “CapBay” )—an award-winning digital supply chain financing company—which will allow us to help transform the traditional factoring market in Malaysia. These developments build on several digital initiatives in recent years, including our joint-venture with Rakuten Securities Inc., Japan, to create the first fully online stock trading platform in Malaysia - Rakuten Trade Sdn Bhd - which enjoyed a significant increase in interest during the lockdown, as well as, the initiation of our first-in-the-market algorithmic trading solution and robo-advisory platform, which we expect to roll out in 2021. For the Financial Year Ended 31 December 2020 ( “FYE2020” ), KIBB and its Group of Companies ( “Kenanga Group” or “the Group” ) recorded a Profit Before Tax ( “PBT” ) of RM134.7 million, compared to RM43.0 million in 2019. This is the Group’s highest PBT in a financial year since it received its investment bank licence in 2007, and it has been surpassed only once in its history of almost 50 years. This exceptional result is mainly attributable to surge in trading volume on the local bourse, which drove higher income from our stockbroking and investment management businesses. With this in view, the Board of Directors is pleased to declare a total Single Tier Interim Dividend of 8.8 sen per share in respect of the FYE2020 comprising Ordinary Interim Dividend of 4.00 sen per share and Special Interim Dividend of 4.80 sen per share. 2020 has witnessed the Malaysian business community as a whole playing an integral role in helping our country weather the storm of the pandemic. In terms of Kenanga Group’s response to the COVID-19 new normal, we have been very fortunate to have been able to pivot almost seamlessly to a digital workspace that has allowed us to continue operating with maximum efficiency and minimal disruption even at the height of Malaysia’s lockdown. This good fortune has been the direct result of the Group’s digital preparedness, which began five years ago and which now allows us to respond to the challenges of the pandemic with rapidity and relevance to the market and to the changing needs of our customers. Throughout the course of 2020, the Group made a consistent response to the COVID-19 crisis through a message of quiet confidence, trust in our partners and responsibility towards our customers, staff and shareholders. I take this opportunity to thank and congratulate the Group’s Management team as a whole, who has worked tirelessly throughout the year and under immense pressure to ensure uninterrupted transition to online and work from home procedures both for our employees, as well as, our large family of remisiers nationwide—and it is all the more remarkable that this all took place during a massive surge in business activity.