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Guoco Group Limited
(Incorporated in Bermuda with limited liability)
our website: www.guoco.com

2000/2001 INTERIM ANNOUNCEMENT

RESULTS

The Board of Directors of Guoco Group ("the Company" or "the Group") is pleased to announce the unaudited consolidated net profit of the Group, after taxation and minority interests, for the six months ended 31st December, 2000 together with comparative figures for the corresponding period last year as follows:

Consolidated Profit and Loss Account

                                   Six months ended 31st December
                                             2000            1999   
                                       (unaudited)     (unaudited)   Change
                               Note       HK$'000         HK$'000         %

Turnover                       2 & 3    6,166,555       5,203,913     +18.5
Cost of property sales                   (477,665)       (325,960)  
Interest expenses of banking 
  operations                           (3,269,843)     (2,663,604)
Other attributable costs                  (77,392)        (68,615)
                                        ---------       ---------
                                        2,341,655       2,145,734
Other revenue                               8,220           8,634
Other net income/(loss)                    85,612        (102,708)
Administrative expenses                  (951,538)       (875,980)
Other operating expenses                  (15,255)        (13,770)
Provisions for bad and doubtful
  loans and advances for banking 
  operations                             (159,424)       (183,143)
                                        ---------       ---------
Operating profit before finance 
  cost                                  1,309,270         978,767   
Finance cost for non-banking 
  operations                             (233,767)       (183,019)
                                        ---------       ---------
Operating profit                 2      1,075,503         795,748     +35.2
Provision for diminution in 
  value of development properties               -         (98,053)  
Net profit on disposal of 
  investment properties                         -         276,961   
Net loss on disposal of fixed 
  assets                                     (694)        (30,939)  
                                        ---------       --------- 
Operating profit on ordinary 
  activities                            1,074,809         943,717   
Share of profits less losses of 
  associates                              164,533          86,784   
Share of profits less losses of 
  jointly controlled entities              22,493          11,012   
                                        ---------       ---------
Profit from ordinary activities 
  before taxation                       1,261,835       1,041,513   
Taxation                         4       (271,554)       (232,469)  
                                        ---------       ---------
Profit from ordinary activities           990,281         809,044   
Minority interests                       (347,168)       (339,296)  
                                        ---------       ---------       
Profit attributable to 
  shareholders                            643,113         469,748     +36.9
Appropriation:       
  Dividends                               (85,326)        (63,995)
                                        ---------       ---------
Retained profit for the period            557,787         405,753
                                        =========       =========
Earnings per share       
  Basic                          5        HK$1.51         HK$1.10     +37.3
                                        =========       =========
  Diluted                        5        HK$1.49         HK$1.09   
                                        =========       =========

Consolidated Balance Sheet

                                         At 31st December     At 30th June
                                                     2000             2000
                                               (unaudited)        (audited)
                                                  HK$'000          HK$'000

NON-CURRENT ASSETS
  Investment properties                         1,374,579        1,371,953
  Fixed assets                                  4,996,309        5,101,071
  Interest in associates                        4,104,137        4,064,706
  Interest in jointly controlled entities          75,848           37,590
  Held-to-maturity securities and investment 
    securities                                    681,444          682,418
                                             ------------     ------------
                                               11,232,317       11,257,738
                                             ............     ............
CURRENT ASSETS   
  Development properties                        6,121,733        6,258,648
  Properties held for resale                      790,516          792,685
  Advances to customers less provisions        66,956,452       65,337,118
  Other assets                                  3,026,710        2,856,100
  Held-to-maturity securities and investment
    securities                                 25,141,350       25,360,048
  Other investments in securities               3,255,454        2,838,162
  Certificates of deposit held                    134,428          588,420
  Placements with banks and other financial 
    institutions                               12,657,364       10,654,757
  Cash and short term funds                    38,266,388       32,271,967
                                             ------------     ------------
                                              156,350,395      146,957,905
                                             ............     ............
CURRENT LIABILITIES   
  Other payables and provisions                18,126,408       14,647,208
  Current portion of bank loans and other 
    borrowings                                  3,617,768        2,154,583
  Insurance funds                                  22,360           21,266
  Deposits and balances of other banks and   
    other financial institutions                3,328,455        4,415,028
  Current, fixed, savings and other deposits 
    of customers                              105,985,280      101,515,792
  Certificates of deposit issued                8,342,998        7,060,751
  Taxation                                        414,023          342,222
  Proposed dividend                                85,326          234,645
                                             ------------     ------------
                                              139,922,618      130,391,495
                                             ............     ............
Net current assets                             16,427,777       16,566,410
                                             ------------     ------------
TOTAL ASSETS LESS CURRENT LIABILITIES          27,660,094       27,824,148
                                             ............     ............
NON-CURRENT LIABILITIES   
  Non-current portion of bank loans and 
    other borrowings                            9,402,659       10,257,514
  Deferred taxation                                25,730           15,801
                                             ------------     ------------
                                                9,428,389       10,273,315
                                             ............     ............
  Minority interests                            6,425,436        6,200,603
                                             ~~~~~~~~~~~~     ~~~~~~~~~~~~
NET ASSETS                                     11,806,269       11,350,230
                                             ============     ============
CAPITAL AND RESERVES
  Share capital                                 1,663,705        1,662,905
  Reserves                                     10,142,564        9,687,325
                                             ------------      -----------
                                               11,806,269       11,350,230
                                             ============     ============

1. Accounting policies

The interim financial report has been prepared in accordance with the requirements of the Main Board Listing Rules of The Stock Exchange of Hong Kong Limited, including compliance with Statement of Standard Accounting Practice 2.125 "Interim financial reporting" issued by the Hong Kong Society of Accountants.

The same accounting policies adopted in the 1999/2000 annual accounts have been applied to the interim financial report.

2. Segmental information

The analysis of the principal activities and geographical location of the operations of the Company and its subsidiaries during the financial period are as follows:

Principal activities

                               Group turnover      Operating profit/(loss)
                              Six months ended         Six months ended 
                                31st December            31st December
                              2000         1999         2000         1999 
                        (unaudited)  (unaudited)  (unaudited)  (unaudited) 
                           HK$'000      HK$'000      HK$'000      HK$'000 

Treasury and investment        
  management               124,218       56,102      124,773     (116,199)
Property development          
  and investment           548,334      399,789       74,476       60,478
Stockbroking                51,124       53,258       19,857       25,358
Insurance                   78,118       73,783        3,455       20,082
                         ---------    ---------    ---------    ---------
                           801,794      582,932      222,561      (10,281)
Less: Finance cost for         
        non-banking 
        operations                                  (233,767)    (183,019)
                                                   ---------    ---------
                                                     (11,206)    (193,300)
Banking and financing    5,364,761    4,620,981    1,086,709      989,048
                         ---------    ---------    ---------    ---------
                         6,166,555    5,203,913    1,075,503      795,748
                         =========    =========    =========    =========

Geographical locations of operations

                                                        Group turnover
                                            Six months ended 31st December
                                                        2000          1999
                                                 (unaudited)    (unaudited)

Hong Kong                                               85%            88%
Asia (excluding Hong Kong)                              13%            11%
Others                                                   2%             1%
                                                 ----------     ----------
                                                       100%           100%
                                                 ==========     ==========

3. Turnover

An analysis of the amount of each significant category of revenue recognised in turnover during the period is as follows:

                                            Six months ended 31st December
                                                       2000           1999
                                                 (unaudited)    (unaudited)
                                                    HK$'000        HK$'000

Interest income from banking operations           4,839,045      4,159,789
Interest income from non-banking operations          30,760         25,436
Income from sale of investments in securities        73,235         24,814
Securities commission, brokerage and other income    51,124         53,258
Gross insurance premiums                             78,118         73,783
Income from sale of properties                      476,277        313,976
Rental income from properties                        72,057         85,813
Other income from banking operations                525,716        461,192
Dividend income from listed securities               20,223          5,852
                                                 ----------     ----------
                                                  6,166,555      5,203,913
                                                 ==========     ==========

4. Taxation

                                            Six months ended 31st December
                                                       2000           1999
                                                 (unaudited)    (unaudited)
                                                    HK$'000        HK$'000

Hong Kong taxation                                  162,497        169,660 
Overseas taxation                                    15,068         42,222 
Deferred taxation                                     9,913        (24,923)
                                                 ----------     ----------
                                                    187,478        186,959
Share of associates' taxation                        79,950         43,536
Share of jointly controlled entities' taxation        4,126          1,974
                                                 ----------     ----------
                                                    271,554        232,469
                                                 ==========     ==========

The provision for Hong Kong profits tax is calculated by applying the estimated annual effective tax rate of 16% (1999: 16%) to the profits for the six months ended 31st December, 2000. Taxation for overseas subsidiaries is similarly calculated using the estimated annual effective rates of taxation that would be applicable to the relevant countries.

5. Earnings per share

(a) Basic earnings per share

The calculation of basic earnings per share is based on the profit attributable to shareholders of HK$643,113,000 (1999: HK$469,748,000) and on the 426,631,086 shares (1999: 426,631,086 shares) in issue during the period.

(b) Diluted earnings per share

The calculation of diluted earnings per share is based on the profit attributable to shareholders of HK$636,213,000 (1999: HK$463,263,000) and the weighted average number of 426,631,086 shares (1999: 426,892,180 shares) in issue during the period after adjusting for the effect of all dilutive potential ordinary shares.

6. Hong Kong dollar amounts

The accounts of the Company are maintained in United States dollars. The accounting figures shown above have been translated from United States dollars into Hong Kong dollar equivalents at the rates ruling at the respective financial period ends for presentation purposes only (2000: US$1:HK$7.79925; 1999: US$1:HK$7.7715).

7. Comparative figures

Certain comparative figures relating to the consolidated profit and loss account for the six months ended 31st December, 1999 have been reclassified to conform with the current period's presentation.

FINANCIAL RESULTS

The unaudited consolidated profit attributable to shareholders of the Group for the six months ended 31st December, 2000 is HK$643 million, which represents an increase of 37% over the corresponding period last year. Basic earnings per share grew 37.3% to HK$1.51. Consolidated shareholders' funds have also expanded to HK$11.8 billion, representing an increase of 4% over the last financial year end of 30th June, 2000.

REVIEW OF OPERATIONS

Dao Heng Bank Group Limited ("DHBG") - 71.3% owned by the Group

The unaudited profit attributable to shareholders of DHBG for the six months ended 31st December, 2000 is HK$945 million, which represents an increase of 18% comparing with the corresponding period last year. Earnings per share are HK$1.36.

As at 31st December, 2000, total deposits were HK$118.2 billion, reflecting a growth rate of 4.3% compared with the previous financial year. Total loans grew 2.5% to HK$67.0 billion with the modest result attributed to low transaction volumes in the property market combined with continued slack credit demand from the business sector. DHBG's loans to deposits ratio of 56.7% and loans to assets ratio of 44.3% continue to remain at very conservative levels, providing ample opportunity for growth when loan demand picks up.

Shareholders' funds increased 5.4% to HK$13.2 billion with Dao Heng Bank Limited's consolidated capital adequacy ratio at a 22.8% (of which the Tier 1 ratio was 18.4%). DHBG continued to exhibit a highly liquid balance sheet, with 50.8% of total assets held in the form of government securities, interbank placements, and negotiable securities. The average liquidity ratio of Dao Heng Bank Limited for the period was 52.4%.

The past six months has seen continued expansion of DHBG's consumer banking franchise, through both the acquisition of new customers as well as the introduction of numerous new product offerings. The key thrust is to expand Dao Heng's share of its customers' total financial needs, thereby improving profitability by providing value-added products and services to its customers.

A key instrument to differentiate Dao Heng from its competitors is its advanced Customer Relationship Management System ("CRM"). By using the CRM, DHBG is able to develop an intimate understanding of its customers' financial needs and preferences, allowing it to segment its customers into a wide array of different tiers, each designed to suit that segment's needs. This effort will be particularly important in the year 2001, as DHBG prepares itself for the final phase of deposit deregulation in Hong Kong.

Among the new products launched in DHBG's Personal Banking Division, particular emphasis is being directed to Wealth Management products and services. Yield-enhanced Deposits, Monthly Savings Plan, and sale of third party mutual funds are prominent among the new investment alternatives now being offered to DHBG's customers. In addition, for Premier Banking customers, Dao Heng has introduced a Personal Portfolio Planning Model which assists its Investment Consultants to discuss with customers their preferences for asset allocation based on their personal risk profile. This is the beginning of a concerted effort to penetrate the increasingly important area of Wealth Management, which converts relatively lower value-added deposits into higher value-added investment products, reflecting the changing paradigm of consumer banking which no longer looks solely at on-balance sheet products when evaluating customer relationships and profitability.

Dao Heng Card has exhibited another outstanding performance during the first half of the financial year. All of its key measurements, including cards-in-force, accounts receivable, merchant sales, cardholder spending and profitability, have been growing at a double-digit annualized growth rates. Further new products have been launched including Private Label Cards and Business Cards for the SME sector, as well as Platinum Cards for DHBG's high net-worth customers.

Mortgage Banking Division continues to refine its efficiency and solidify its position as one of the top five mortgage originators in the Hong Kong market. DHBG's state of the art Call Centre, DaoHeng Direct, has excelled in its penetration of the personal line insurance market, with particular emphasis on selling policies to consumers for home-related purposes including our innovative Domestic Helper Insurance policy. Excellent results have been achieved in both Travel and Accident policies. Building upon this experience, DHBG's newly established wholly-owned subsidiary, Dao Heng Assurance Limited will commence operations and gradually introduce a range of bancassurance products beginning in the second quarter of the year 2001.

Demand for business banking related products and services is still sluggish, due to the extended recession and its aftermath. Within this context, progress has been made in introducing various new products and programs to penetrate the market, particularly the SME segment. Another major advance for our Commercial Banking is the launch of the first phase of our B2B program. DHBG will soon be offering cash management services over the web, as well as a bills inquiry service capability for trade finance transactions. These features will be expanded into a broader range of trade finance capabilities later this year.

Dao Heng Markets continues to be one of the major players in the domestic capital market, consistently ranking in the top ten participants for the debt capital markets in Hong Kong. In certain sub-markets, such as market making in exchange fund bills and notes and other quasi-government instruments, Dao Heng ranks in the top two or three in terms of market turnover. The first half year also saw the introduction of bond trading over the internet, as well as further penetration of sales of its yield-enhanced deposits and bonds to retail customers.

First Capital Corporation Ltd ("FCC") - 54.3% owned by the Group

For the six months ended 31st December, 2000, FCC reported a profit after tax and minority interests of S$29.6 million, a decrease of 40% as compared to the previous corresponding period of S$49.2 million, which included a non-recurring profit of S$63.7 million from the sale of Century Square Development Ltd.

FCC currently has four launched developments on the market: Aquarius By The Park, Sanctuary Green, The Gardens at Bishan and The Ladyhill (in which FCC has a 40% interest). The first phase of The Gardens at Bishan and the final phase of Aquarius By The Park were launched during the financial period under review. As at 16th March, 2001, FCC has achieved sales of 82% in Aquarius By The Park, 59% in Sanctuary Green and 14% in The Gardens at Bishan on units offered for sale. Depending on market demand, FCC may launch additional units in The Gardens at Bishan and Sanctuary Green for sale. Although buying sentiment in the upgraders' market was subdued, sales in the high-end residential property market were encouraging. This was evidenced by the sell-out of offered units in The Ladyhill during its soft launch in September last year. Unlike the weaker sentiment in the residential property market, the office sector enjoyed healthy demand. FCC's commercial properties, Tung Centre and Robinson Centre, are enjoying 100% occupancy.

FCC did not acquire any development sites during the period under review. FCC's current land bank is approximately 1.7 million sq.ft. FCC's fund management division reported a small trading profit of S$0.2 million which is lower than the last corresponding period due to a much weaker stock market.

FCC's associates, turned in a profit before tax of S$34.2 million substantially contributed by Benchmark Group.

imGO Limited ("imGO") - 17.6% owned by the Group and 6.6% by FCC

imGO reported a consolidated net profit after taxation of HK$58 million.

In line with its expansion into the wireless sector, imGO has leased an office unit at Exchange Square, Hong Kong, as its new headquarters. imGO has recruited a Chief Executive Officer and is actively identifying investment opportunities in the Asian wireless sector, including greater China, Japan, Korea and Singapore. imGO announced on 5th February, 2001 the closing of a US$10 million dollar funding round with imGO as lead investor in iSilk, a visionary developer of Natural Language Processing and Artificial Intelligence software applications for wireless and other internet platforms.

As previously reported, imGO has the option ("Put Option") during the period from 30th May, 2001 to 29th November, 2001 to require the Company to purchase all (but not part) of imGO's interest in the shares in each of the property owning companies at an aggregate consideration of about HK$606 million. The properties subject to this Put Option are located at The Center, Wu Chung House and the Overseas Trust Bank Building in Hong Kong.

Guoco Properties Limited ("GPL") - 55% owned by the Group and 45% by FCC

GPL has a 75% interest in Corporate Square, a 17-storey office development in Beijing, PRC.

Approximately 14% of the office space in Corporate Square had been sold and about 64% of the office areas had been leased out.

Management of GPL continues to market the remaining office space for sale at prevailing market prices. Negotiations with a potential buyer primarily for the East Core of Corporate Square with a total area of approximately 36,000 sq.m. are in progress.

Guoco Holdings (Philippines), Inc. ("GHPI") - 36.6% owned by the Group

GHPI reported a consolidated net loss of Peso1.022 billion during the first six months of financial year 2000/2001. During this period, GHPI continued to make progress in its key strategies of divesting non-core and non-profitable assets to reduce debt and restructuring loans to improve financial position.

Assets involved in the divestment exercise included 24% equity interest in Zeus Holdings Inc., 40% interest in Dao Heng Bank Inc. and the Homelands Residential Development Project in Calamba Laguna.

In addition, convertible loan notes amounting to approximately Peso800 million with a five-year maturity were also issued in December 2000 to retire an existing bank loan.

As for Pepsi-Cola Products Philippines Inc. ("PCPPI"), strict discipline is being instilled to actively manage its operations in a defined/restricted resource environment to seek optimal use of its existing assets and capital expenditure. PCPPI will continue to focus on cost saving programs to reduce fixed and variable costs and critically review and rationalise capital expenditure to ensure that they conform to desired levels of return. The debt levels of PCPPI are to be prudently managed to enable it to sustain with resilience and to manage growth and resource deployment within the financial capability and constraints of PCPPI.

Hong Leong Credit Berhad ("HLC") - 20.9% owned by the Group

The Malaysian economy continues to show an improving trend of recovery with an annual GDP growth of about 8% expected for 2000 whilst some moderation will likely be seen in 2001 due to the anticipated slowing down in the United States. The HLC Group reported a group profit before tax of RM304.2 million which is an improvement of 5% compared to the corresponding period in previous year.

The banking and finance division benefited from a recovery in consumer confidence and from its strategic marketing moves to focus on the small and medium enterprises and selected retail segments. Gross loans and customer deposits for Hong Leong Bank Group recorded growth during the period. Profitability of the bank had also improved due to better interest margins, lower interest suspension and a move to non-interest related income.

The property division managed to turn around from loss in last financial year to current period profit. The construction and property development activities of Hong Leong Property Berhad, which are currently involved in major projects in Malaysia managed to maintain its profitability. The property investment division enjoyed occupancy rates above 80% for its properties.

The insurance division recorded a profit for the current period. Combined gross premium for life and general insurance recorded a marginal increase as compared to corresponding period for previous financial year.

As a result of bearish market with substantial fall in the Kuala Lumpur Stock Exchange trading volume for the past six months, HLG Capital Group ("HLG"), the Stockbroking Division, recorded a marginal loss for the period ended 31st December, 2000. Moving forward, HLG plans to acquire a 100% stake in Borneo Securities which operates in Sarawak. This move would enable the company to increase its market share and expand its customer base. The cost of such investment is approximately RM30 million.

For the remaining second half of the current financial year, the operations of the HLC Group particularly its banking and finance division are expected to show improving profit trends barring any major adverse conditions.

Other Financial Services

During the period under review, Dao Heng Securities Limited ("DHS") continued to earn steady brokerage and interest income from its stock brokerage, share margin and corporate finance businesses. DHS has made significant investment in IT related projects and was one of the first group of stock brokerages houses to launch AMS3, the third generation Automated Matching System, the new securities trading platform maintained by the Stock Exchange.

Despite the unfavourable market conditions, Dao Heng Insurance Limited ("DHI") has achieved encouraging progress in the personal line business including the domestic helper and travel insurance. DHI has partnered with Dao Heng Bank's mortgage banking division for its insurance direct business which provides a cost effective and efficient marketing and distribution channel to meet the needs of customers.

During the period under review, Dao Heng Fund Management Limited ("DHFM") collaborated closely with DHBG to build the infrastructure and platform including the establishment of an IVR supported Call Centre so as to provide quality service to customers for the Mandatory Provident Fund Scheme ("MPF"). Addressing the Wealth Management needs of the Group's customers, DHFM has successfully launched third party funds which compliment the existing Dao Heng Unit Trust. The "Dao Heng Monthly Savings Plan" marketing plan was well received and generates a stable and regular inflow of new accounts.

The Group has made significant investment in information technology, virtually all of DHBG's and the Group's other financial services companies' products and services now rely on a sophisticated and interlinked platform of IT programs and systems. The Group has been active in developing its MIS related systems, particularly the CRM and peripheral statistical and behavioural modules, which are helping in our effort to segment our product offerings. A special focus is also centered on developing our profitability measurement systems for customers, products, channels and business units.

A tremendous amount of effort and investment is likewise being expended in the area of e-banking and e-commerce, with a thorough revamp of our website currently underway and numerous new products and services being offered and promoted over the web. These efforts combined with our mobile phone financial services, are keeping DHBG at the forefront of technology in the banking. This leading position was recently acknowledged by the Asian Banker Journal, which named Dao Heng Bank's ec-banking platform as one of the top ten retail internet banking sites in Asia and Dao Heng Securities ranked numbered two for on-line share trading.

FINANCIAL COMMENTARY

Turnover

Overall turnover increased by HK$963 million or 18.5% mainly due to increase in turnover of the banking and finance sectors of HK$744 million. Turnover for the property development and investment sector and treasury and investment management activities also increased by HK$149 million and HK$68 million respectively.

Borrowings

During the period, the Group maintained total borrowings of HK$13 billion. As at 31st December, 2000, unsecured indebtedness comprised approximately 69% of the total borrowings.

The Group's bank loans, overdrafts and other borrowings were repayable as follows:

                               Bank loans   Other borrowings          Total
                                  HK$'000            HK$'000        HK$'000
On demand or within 1 year      1,510,699          2,107,069      3,617,768
                              ...........        ...........    ...........
After 1 year but within 
  2 years                       3,555,538            900,860      4,456,398
After 2 year but within 
  5 years                       2,297,737            608,084      2,905,821
After 5 years                           -          2,040,440      2,040,440
                              -----------        -----------    -----------
                                5,853,275          3,549,384      9,402,659
                              ~~~~~~~~~~~        ~~~~~~~~~~~    ~~~~~~~~~~~
                                7,363,974          5,656,453     13,020,427
                              ===========        ===========    ===========

The loans are secured by the following:

- legal mortgages on investment properties with a book value of HK$366 million;

- legal mortgages on development properties with a book value of HK$5,964 million; and

- certain equity investments with total carrying value of HK$1,416 million.

Capital Commitments

As at 31st December, 2000, the Group had outstanding capital commitments as follows:

                                                                    HK$'000
Authorised and contracted for                                        84,957
Authorised but not contracted for                                    37,047
                                                                 ----------
                                                                    122,004
                                                                 ==========

These commitments primarily represented capital expenditure for branch renovation and IT equipment of banking subsidiaries and amounts relating to the Group's share of capital commitments of a jointly controlled entity.

Capital and Finance

The Group's consolidated shareholders' funds as at 31st December, 2000, after reflecting the current period retained profits and adjusting for the major items set up below amounted to HK$11,806 million, representing a net asset value of HK$27.7 per share.

The major adjustments are as follows:

- revaluation surplus for investment properties of an associate of HK$44 million;

- realisation of investment property revaluation reserve on disposal of investment properties by an associate of HK$39 million; and

- exchange losses on translation of net investments in subsidiaries and associates of HK$117 million.

Dao Heng Bank Limited's consolidated capital adequacy ratio as at 31st December, 2000 was 22.8% of which Tier I ratio was 18.4%.

HUMAN RESOURCES AND TRAINING

The Group, including its subsidiaries in Hong Kong and overseas, employed approximately 3,600 employees as at 31st December, 2000. The Group continued to follow a measured approach towards the size of its workforce and is committed to provide its staff with ongoing development programmes.

The remuneration policy for the Group's employees is reviewed by management on a regular basis. Remuneration packages are structured to take into account the level and composition of pay and general market conditions in the respective countries and businesses in which the Group operates. Bonus and other merit payments are linked to the financial performance of the Group and individual performance as incentives to optimise performance. In addition, share options have been granted to certain eligible directors and employees of the Group in accordance with the terms of the approved share option schemes adopted by the Group.

OUTLOOK

The Group's core markets of Hong Kong, Singapore and Malaysia have recovered at different pace and amplitude after the Asian financial crisis. The implications of a hard landing versus a soft landing of a US correction needs to be fully considered in the management of those group businesses which are particularly reliant upon the US markets. The Group will continue to focus on strengthening its core financial services businesses as a major thrust of the Group going forward with particular emphasis on cost efficient universal banking. With the strengthened position of our financial services operations, the Group is on the right track for further growth.

INTERIM DIVIDEND

The Directors have declared an interim dividend of HK$0.20 per share amounting to HK$85,326,000 (1999/2000 interim dividend: HK$0.15 per share amounting to HK$63,995,000) for the financial year ending 30th June, 2001 which will be payable on 17th April, 2001 to the shareholders whose names appear on the Register of Members on 12th April, 2001.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SHARES

During the period, neither the Company nor any of its subsidiaries had purchased, sold or redeemed any of the Company's listed shares.

COMPLIANCE WITH CODE OF BEST PRACTICE

None of the Directors of the Company is aware of information which would reasonably indicate that the Company was not in compliance with the Code of Best Practice, as adopted by the Company, at any time during the six months ended 31st December, 2000.

STATUTORY ACCOUNTS

The information in this interim results is unaudited and does not constitute statutory accounts.

CLOSURE OF REGISTER OF MEMBERS

The Register of Members will be closed from 9th April, 2001 to 12th April, 2001, both days inclusive, during which period no transfer of shares can be effected.

In order to qualify for the above dividend, all share transfers accompanied by the requisite share certificates must be lodged with the Company's Branch Share Registrars in Hong Kong, Central Registration Hong Kong Limited, at 17th Floor, Hopewell Centre, 183 Queen's Road East, Hong Kong, for registration not later than 4:00 p.m. on 6th April, 2001.



By order of the Board
Doris W.N. Wong
Company Secretary

Hong Kong, 16th March, 2001


Source: Guoco Group Limited
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