Providential Holdings Files Year-End Report and Issues Corporate Update.

HUNTINGTON BEACH, Calif. -- Providential Holdings, Inc. (OTC BB:PRVHE.OB) (Berlin Stock Exchange and Frankfurt Stock Exchange:PR7 - WKN 935160) (www.phiglobal.com) today commented on financial results for the Fiscal Year ended June 30, 2004 and issued an update on the Company's operating plan.

Total revenues for the year ended June 30, 2004 increased 540% to $9.27 million, compared to $1.44 million for the previous year. Gross profits for the year ended June 30, 2004 increased 298% to $5.55 million, compared to $1.39 million for the year ended June 30, 2003. Gross margin was 59.84% for the latest year, down from 96.09% from the same period in 2003, primarily because over 95% of the revenues from the previous year were derived from M&A advisory services which did not entail any cost of goods sold.

For the year ended June 30, 2004, net loss was $3.85 million, or $0.05 per basic and diluted share. This compares to net loss of $1.05 million, or $0.03 per basic and diluted share, for the same period in 2003. The loss this year was primarily due to one-time non-cash write-offs of $3.02 million resulting from impairments of goodwill in connection with the acquisitions of two new subsidiaries. Without the non-cash write-offs, net loss would have been $0.83 million, or $0.01 per basic and diluted share.

In spite of the substantial increase in revenues for the latest fiscal year, this was far below the Company's estimated revenue and profitability targets, mainly due to the shortfalls from our consumer electronics divisions, the belated launching of our telecommunications services, and the inadequate contributions from a few other business units. The Company was also hoping to reach a timely resolution in order to include Tangshan Yutian Saw Corporation's operating results in our year-end consolidated financial statements. However, we were disappointed at the recent termination of the purchase agreement with Tangshan, which could have added tremendous value to our Company. The termination was necessitated by the delays both in Tangshan's ability to provide financial audits according to the US GAAP to comply with SEC requirements and the Company's ability to remit earnest monies in connection with this purchase and a separate joint venture agreement.

The complex circumstances relating to the Tangshan transaction and other acquisitions have caused egregious delays in the filings of our year-end and September 30, 2004 quarter reports. Our Chairman and CEO wishes to convey his sincere apologies to all our shareholders and investors for these delays and wants to make sure future reports will be filed in a timely manner. For the quarter ended September 30, 2004, the Company has until December 16, 2004 to file Form 10QSB and will submit the filing before this deadline.

Looking forward, we have many promising things to report.

We have taken steps to increase our M&A advisory services in the US, China, Korea, and Vietnam and expect to see more results from these efforts in the coming quarters. We have also worked closely with the International Center for Training and Consulting under the Ministry of Trade, Vietnam, to provide consulting and M&A advisory services to potential Vietnamese companies.

We will continue to work with Tulon Pacific, LLC. to conclude our acquisition plan and grow the cutting tool business as an important component of our portfolio. We have been in negotiations with Bayview Financial and GE Capital to acquire certain assets to set up manufacturing facilities in China or Vietnam.

We will continue to spin off a number of our portfolio companies, including ClearPass Systems, American University, and Providential Oil & Gas, to create value for our shareholders by using these spun-off units to acquire profitable operating companies that may be immediately accretive to the Company's overall valuation. We will announce the effective dates of these spin-offs in the near future. We are also sorry for the delays in the distribution of share dividends from Irvine College, Provimex, and Touchlink Communications and will make sure our shareholders of record receive these dividend shares before the end of December.

We have worked closely with a US-based steel operation partner and continued our negotiations with Hefei Iron & Steel Group Company, Ltd., ("HISG") Hefei, Anhui Province, China. Because this is a complex project that requires resources and skills, we believe the rewards will also be commensurate if and when it is completed.

We have recently set up a new joint venture, namely Provimex-HTV Joint Venture Company, with a Vietnam-based company to provide heating and cooking gas and related gas supply equipment to high rise buildings and premium housings in Vietnam. Providential owns 80% of this joint venture and expects to greatly benefit from the on-going construction boom in Vietnam. Operations are scheduled to start in early 2005.

We have entered into a Memorandum of Intent Agreement with Smart Technologies & Investments, Ltd., a Hong Kong-based company with subsidiary factories located in mainland China, to acquire a substantial interest in Smart Battery International, Ltd. ("SBI"). SBI has received 27x 40-foot container loads of advanced lead acid battery manufacturing equipment, which has a replacement value of over US$4,000,000 from the US, as part of the technology transfer process brought about by its US-based partner. The highly automated equipment enables complete control of the battery making process from start to finish. This gives SBI an advantage over many of its local Chinese competitors who apply manual techniques, which can not guarantee quality specification consistently on some key battery making processes. We plan to start investing into SBI in early 2005 and take SBI public at an appropriate time in the future. We also plan to distribute a portion of SBI as dividends to our shareholders prior to the spin-off.

We have increased our cooperation efforts with CDI, Co., a Vietnam-based company with offices in Tam Ky, Quang Nam Province, to provide consulting and M&A advisory services to emerging Vietnamese companies in this area and to co-develop some key sectors of the Chu Lai Open Economic Zone. We believe this is a long-term initiative that will create significant value for both parties.

On the financial front, we have reached mutually agreeable terms with several major funding partners. We believe these relationships will provide the financial backup to execute our plan for the rest of FY 2005 and beyond. Details regarding these financing arrangements will be announced in the near future.

It is also noteworthy that our Chairman and CEO, fully confident in the future of the Company, has indicated interest in converting about $300,000 of his loan balance to the Company into PRVH restricted shares which will be held for a minimum of two years.

About Providential:

Providential Holdings (www.phiglobal.com) and its subsidiaries engage in a number of diverse business activities, the most important of which are M&A advisory services and cutting tools. The Company acquires and consolidates special opportunities in selective high-growth industries to create additional value, acts as an incubator for emerging companies and technologies, and provides financial consultancy and M&A advisory services to U.S. and foreign companies.

Safe Harbor 

Except for historical information contained herein, the statements in this news release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause a company's actual results in the future to differ materially from forecasted results. These risks and uncertainties include, among other things, the company's ability to attract qualified management, raise sufficient capital, and effectively compete against similar companies.

These and other risks are identified in the company's SEC filings and should be considered in evaluating the forward-looking statements made herein.