AMMB Holdings Berhad AmBank Group Results · 2018-04-18 · AMMB Holdings Berhad AmBank Group...

AMMB Holdings Berhad

AmBankGroup Results Investors Presentation

Q1FY2011 Results Update

17 August 2010

Cheah Tek KuangGroup Managing Director

AMBANK GROUP INVESTOR RELATIONS PRESENTATION Q1FY2011 1(Conventional + Islamic)

Contents

Q1FY2011 Group Financial Performance

Strategy & Outlook

Segment Performance

Appendix

Executive Summary

Based on unaudited 30 June 2010 (Q1 FY2011) financial results


Good start to FY2011P

erf

orm

an

ce

Profit after Tax & MI

ROE

Ris

k,

Ca

pita

l &

F

und

ing

Pro

file

RWCA

Tier 1

Gross Impaired Loans

Gro

wth

Net Lending / Financing

Customer Deposits 1

CASA

LD Ratio 1

EPS(basic, annualised)

88.6%

9.4%

14.7%

N/A

7,437 mil

65,414 mil

57,982 mil

37.9 sen

13.1%

258.2 mil

Q1FY10

91.6%

10.0%

16.7%

3.6%

8,424 mil

71,056 mil

65,083 mil

49.0 sen

15.3%

368.3 mil

Q1FY11

3.0%

0.6%

2.0%

N/A

13.3%

8.6%

12.2%

29.1%

2.2%

42.6%

Change

Underlying PATMI growth : 44.4%

ROA 1.18% 1.58% 0.40%

Note 1 : Includes Senior Notes RM2.74 bil & credit-linked notes RM0.13bil issued

FY09 FY10

88.8%

9.7%

15.2%

N/A

6,755 mil

64,132 mil

56,948 mil

31.6 sen

11.7%

860.8 mil

91.7%

10.3%

15.8%

3.8%

8,372 mil

70,294 mil

64,426 mil

34.7 sen

11.5%

1,008.6 mil

1.04% 1.13%


Staying focused on profitable growth, diversification and sustainability

Staying Ahead

Strong Q1 results Higher revenues and lower allowances

Good loans & CASA growth

FRS139 adopted under BNM transition arrangements (Q1FY2011)

Well diversified Divisional

contributions

Sound contributions from Retail, Business and Corporate & Institutional Banking Divisions

Diversified portfolios yielding higher profits in Life Assurance, General Insurance and Markets & Treasury

Good Investment Banking pipeline

Improved risk and financial disciplines

Proactive risk managementBalance sheet positioned for rising interest ratesImplemented new FTP and FRS disciplinesEnhancing ALM disciplines and preparing for Basel III

FY 2011 Priorities

FY2011 :Profitable growth, diversification & rebalancingFaster non-interest income & CASA growth

Customer satisfactionSound financial performancesWell diversified and sustainable growth


Note 1 : In-house economic research

Malaysia :Stable Outlook

Industry :What is Ahead

AHB :Leveraging Tailwinds

Progressive medium term global economic recovery but with significant volatility

Malaysian economic recovery (GDP 2010 : 8.0% projected1)

Supportive monetary policies, continuous trade surplus

Positive regional recoveries, New Economic Model and 10th

Malaysia Plan to mitigate global risk

Higher lending & RWA growth

New licenceswill put pressures on pricing and resources

OPR increased 25 bps each in Mar, May & Jul 2010; currently at 2.75%, further 25-50 bps expected in next 12 months

Latest Basel III pronouncements indicate higher core capital and stable funding requirements, but with longer transition period

Leverage strategic themes and improving domestic economy

Better positioned for rising interest rates but Basel III could slow down achievement of ROE targets

segments



AmBank Group Results

Investors Presentation

Q1FY2011 Results Update

17 August 2010

Ashok RamamurthyDeputy Group Managing Director &

Group Chief Financial Officer


Contents

Executive Summary

Strategy & Outlook

Segment Performance

Appendix



2.8%

3.8%3.6%

0.4%0.2%

0.4%

Gross NPL %31 Mar 10 (GP3)

Restructured performing loans unlikely to be repaid

in full

Interest on impaired loans no longer suspended

Impairment recognition at customer level vs account

level for Corporates

Gross Impaired Loans %1 Apr 10 (FRS139)

Gross Impaired Loans %30 Jun 10

Gross Impaired Loans %

1,866

2,539 2,469

300129 244

Gross NPL31 Mar 10 (GP3)

Restructured performing loans unlikely to be repaid

in full

Interest on impaired loans no longer suspended

Impairment recognition at customer level vs account

level for Corporates

Gross Impaired Loans1 Apr 10 (FRS139)

Gross Impaired Loans30 Jun 10

Gross Impaired Loans(RM'mil)

Implementation impact of FRS139 : Day 1 Adjustments

36% in gross impaired loans vs

gross NPL

1.0% in gross impaired loans % vs

gross NPL ratio

6.6% in retained earnings from FRS139

adoption

Day 1 adjustment

Based on unaudited 30 June 2010 (Q1 FY2011) financial results, subject to review

2,557

3 63

2,389 2,757

1,804

458 114 6 2,117

14 18 -

31 Mar 10 Collective impairment

Individual impairment

Provision for contingencies

FRS 4 Insurance contracts

Existing GP / SP / IIS

Effective interest rates

Valuation Reclassification Tax 1 Apr 10(Day 1)

30 Jun 10

Retained earnings (RM'mil)


Strong financial result for Q1FY2011

REPORTEDBusiness Performance

Q1FY10 results

Favourable growth in Q1FY11

Unfavourable growth in Q1FY11

Income :

Good growth from most Divisions, Q1FY11 run-rate better than FY2010 full year

Higher investment & trading income in Q1FY2010 due to a one-time gain on disposal of a bond holding

Non interest income composition

Expenses :

Salary & staffing increases, CPI & ongoing medium term investments; within CTI targets

Provisions / Allowances :

Lower individual & collective impairments (combined)

Includes PER, impairment losses & provisions for commitments & contingencies

Note :1 Q1FY2010 underlying is reinstated for one-offs as at 30 June 2010

UNDERLYING 1

Fee, 54%

Trading,27%

Insurance. 17%

Others,1%

RM'mil Q1FY10 Q1FY11

Net interest income 567.3 692.4 +22.1%

Fee and commission 154.2 161.7 +4.9%

Investment and trading 138.4 80.0 -42.2%

Insurance business 23.8 52.0 +>100.0%

Others 4.4 3.7 -15.9%

Total Income 888.1 989.8 +11.5%

Expenses 352.3 381.2 +8.2%

PBP 535.7 608.6 +13.6%

Impairments / Allowances 182.2 92.4 -49.3%

PBT 353.5 516.2 +46.0%

PAT 265.5 381.7 +43.8%

PATMI 258.2 368.3 +42.6%

PATMI 260.9 376.8 +44.4%

Q1FY11 vs Q1FY10

GG

G

GG

G

GG

G

G

G

G

G


Higher contributions across most Divisions

Business Performance

Retail Banking - income and profit growth via focusing on viable segments

Business Banking - well-balanced profits with income growth and lower provisions

Investment banking good pipeline but slower start

CIB higher incomes from lending, asset-based and international businesses

Life Assurance and General Insurance - higher incomes from larger fund base and better efficiencies

Note 1 : Life Assurance

PATMI

Net Loans / Financing

Retail lending - target / viable segments in highly competitive environment

Business and SME growth - stable & preferred growth sectors

CIB - project financing with government &

Q1FY10 results Favourable growth in Q1FY11 Unfavourable growth in Q1FY11

Retail, 48%

Business,16%

CIB, 15%

Investment,7%

Life, 6%

General, 3%

Markets,16%

Operating-13%

PATMI contribution


Retail Banking Division 134.2 177.2 +32.0%

Business Banking Division 34.8 60.6 +74.1%

Corporate & Institutional

Banking (CIB) 30.1 54.9 +82.4%

Investment Banking Division 64.2 26.3 -59.0%

Assurance 16.2 36.5 +>100%

Life Assurance 4.5 23.7 +>100%

General Insurance 11.7 12.8 +9.4%

Markets and Treasury 45.9 60.4 +31.6%

Operating Segments (67.2) (47.6) +29.2%

Retail Banking Division 42,194.2 43,230.1 +2.5%

Business Banking Division 9,276.7 11,822.4 +27.4%

Corporate & Institutional Banking 6,057.3 10,200.2 +68.4%

Q1FY11 vs Q1FY10

GG

G

GGGGGGG

G

G


Note :1 Net Interest Margin includes Net Financing Income from Islamic Banking business : Q1FY10 0.72% Q1FY11 0.75%2 CTI and CTA excluding assurance3 Other operating income includes net income from insurance business

Higher NIM* and improving efficiency


* Higher NIM :

Benefit from interest in suspense being

disclosed under provisions as per FRS139

requirements

Immediate benefit from BLR increase

Lagged impact of term deposit increase on

cost of funds

Expect NIM to be lower over remaining

FY2011

FY10NIM = 2.98%

Lower CTI mainly due to higher income

Non-interest income / total income decreased

compared to prior corresponding period due

to lower trading fixed income but higher than

FY10 of 29.6%

Q1FY10 results



Q1FY10 Q1FY11

Net Interest Margin

(NIM & NFR composite) 2.75% 3.08% +0.33%

Cost-Income

(CTI) 39.7% 38.5% -1.2%

Cost-Asset

(CTA) 1.57% 1.57% +0.00%

Non-interest income /

Total Income 36.1% 30.0% -6.1%

Q1FY11 vs

Q1FY10

GG

G

GGGGGGGGG


Faster than system CASA growth, loans and customer deposit growth at system


Loans growth targeting

viable segments

CASA proportion

continues to increase

LD ratio within

acceptable levels

Note :1 Customer Deposits : includes RM2.74 bil Senior Notes & RM0.13bil credit-linked notes2 CASA : current accounts & savings accounts 3 CASA proportion : as composition of Deposits from Customers4 LD : net loans / customer deposits

Q1FY10 results




Balance Sheet - Lending / Financing

Gross Loans / Financing 60,793.9 68,523.3 +12.7%

Net Loans / Financing 57,982.0 65,083.3 +12.2%

Balance Sheet - Deposits

Customer Deposits 65,414.1 71,055.7 +8.6%

CASA Deposits 7,436.7 8,423.6 +13.3%

CASA Proportion 11.4% 12.4% +1.0%

LD Ratio 88.6% 91.6% +3.0%

Q1FY11 vs

Q1FY10

GG

G

GGGGGGGG

G

1

2

3

4


Asset quality as per FRS139 / BNM transitional arrangements

Asset Quality Indicators

FY2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY2010 Day 1 Q1FY2011

+Gross impaired loans X Loan loss chargeGross NPL ratio Net NPL ratio Net provisions charge

4.3 5.8

4.6 3.2

2.0 1.5 1.0 2.5 2.5

39.3% 32.2%36.7%

56.6%

67.3%75.1%

99.5%

-60%

-20%

20%

60%

100%

-

5.0

10.0

15.0

FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 Day 1 Q1FY2011RM'bil

6.06

7.60

6.145.53

3.60

2.431.87

*

Net NPL Gross NPL Loan loss coverage Gross impaired loans * Allowance coverage

FRS 139

Gross impaired loans

*Allowance coverage

93.7%89.1%

2.24%1.92% 1.73%

3.18%

0.97% 0.60%0.88%

14.8%

17.4%

12.4%

10.4%

6.3%

4.1%2.8%

10.9%

13.8%

9.6%

6.2%

3.7%2.6%

1.5%

0%

5%

10%

15%

20%

FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 Q1FY2011

+x

Loan loss charge


FRS 139

+3.6%3.8%

0.56%

FRS139 adopted under BNM transitional arrangements

Historical figures are under GP3 basis and not comparable

Continue to enhance :

Collections systems

Credit / risk tools

Risk management / NPL management team


FY08

RM'bil

Retail

Biz / Corp

9.5

6.1

1.8

12.0

10.2

1.5

Business Banking (ex GLR)


Banking

Loan Rehabilitation

68.4%

15.8%

25.6%

FY08

RM'bil

Retail

Biz / Corp

24.2

13.2

2.3 0.9 1.0

2.1

24.7

13.6

2.5

0.9

Auto Financing Mortgage Asset Financing Credit Cards Line of Credit Co-Op

RM'bil June '10 Jun '09

2.6%

10.2%2.0%

8.2%

12.1%

1.8%

10.2

5.5

1.8

12.0

10.3

1.5

Business Banking (ex GLR)


Banking

Loan Rehabilitation

86.4%

15.8%

17.7%

0.9

1.9

Retail : targeting profitable segments

Business & Corporate : harness synergies via deepening customer relationships

Increasing composition of variable rate loans

Increasing composition of Business / Corporate loans

Portfolio rebalancing : Focus on viable segments and diversification

Gross Loan / Financing movement (before netting loans sold to Cagamas)

by Interest Rate Type

Loan Composition %36.2% 19.9% 3.7% 1.3% 2.8%1.3% 17.5% 15.1% 2.2%

Retail (65.2%) Business / Corporate (34.8%)

by Retail & Business / Corporate

RM'bil Mar-08 Mar-09 Mar-10 Jun-10

Retail 73.7% 72.4% 65.2% 65.2%

Biz / Corp 26.3% 27.6% 34.8% 34.8%

RM'bil Mar-08 Mar-09 Mar-10 Jun-10Fixed rate :

Conventional 46.5% 42.9% 39.3% 38.5%Islamic 15.1% 16.9% 17.8% 19.1%

Variable rate :Conventional 38.3% 40.0% 42.6% 42.1%Islamic 0.1% 0.3% 0.3% 0.3%


511.2

6.6

121.3

638.2 618.2

298.5

123.7

1,058.5

161.7 80.0 52.0

297.4

Fee income Trading & Investment income

Insurance business Total non-interest income

Non-Interest Income, RM'mil

FY09 FY10 Q1FY11

37.1

49.5

57.461.9 62.6

5.3

6.3

6.8

8.4 8.4

FY07 FY08 FY09 FY10 Q1FY11RM'bil

CASA All Other Deposits 1

Continuing growth in non-interest income and CASA

Non Interest & Non Financing Income Composition % Customer Deposits by Type

Note :1 CASA composition : as composition of Deposits from Customers

CASA

FD + NID + Senior Notes + Credit-Linked Notes + Treasury Deposits

12.6% 11.2% 10.5%

Total 42.4b 55.8b 64.1b

CASAcomposition

70.3b

12.2%

CASA CAGR15.7%

Slower CASA growth in Q1FY11 in line with industry trend

71.1b

12.4%

FY2010 trading & investment income recorded a one-time gain on disposal of a bond holding (~1.5%)

% non-interest income / total incomeFY09 : 21.8% FY10 : 29.6% Q1FY11 : 30.0%


28.2 31.6 34.7 48.96

1 2 3 4 5

EPS, basicsen/share

(13.3)-0.17%

1.02% 1.04% 1.13% 1.58%

1 2 3 4 5

ROA, %

-5.8%

11.5% 11.7% 11.5% 15.3%

ROE, %

Improved returns; strong capital adequacy

Note :1 FY2007 capital adequacy ratios as per the published financial statements of AHB for FY2008

Innovative T1 (AmBank (M) Berhad) :

Approved = RM500 mil

Q1FY10 issuance = RM300 mil

Q2FY10 issuance = RM185 mil

Tier 2 :

Q3FY10 : 7th tranche MTN RM98 mil, total to-date RM1.56 bil

RWCA will improve 0.4% - 0.5% :

proformaACE : 8.4%, proformaT1 : 10.5% & proformaRWCA : 17.1%

Capital management plan :

1. Optimisecapital profile & buffer

2. Increase scenario modeling

3. Streamline corporate structures

4. Develop dynamic dividend policy

5. Proactively manage Basel III requirements

FY2007 FY2008 FY2009 FY2010 Q1FY2011*

ACE 5.8% 7.7% 7.8% 8.2% 7.9%

Tier 1 6.8% 8.5% 9.7% 10.3% 10.0%

RWCA 10.1% 14.1% 15.2% 15.8% 16.7%

Capital adequacy : AHB

Tier 1 RWCA

AmBank (M) Berhad 10.7% 16.4%

AmBank (M) Berhad(Group) 9.6% 16.3%

AmInvestmentBank Berhad 29.4% 31.2%

AmInvestmentGroup Berhad 25.4% 31.1%

AmIslamic Bank Berhad 9.6% 15.1%

Capital adequacy : by legal entity, Q1FY2011*

FY07 FY08 FY09 FY10 Q1FY11 FY07 FY08 FY09 FY10 Q1FY11 FY07 FY08 FY09 FY10 Q1FY11

Q1FY11 / FY10 change 3.7%FY10 / FY09 change 0.2%



Improved ROE, ROA and EPS in Q1FY11

* Unappropriatedprofits for Q1FY2011 not included


Contents

Executive Summary


Segment Performance

Appendix

Strategy & Outlook


MTA1

Develop a liability-led business, grow assets in targeted segments and expand wealth management

Grow diversified & profitable assets, increase liabilities, fee base business & international trade finance leveraging on ANZ

Deliver innovative and quality high-impact and high-value clients and leverage ANZ for x-border businesses

Retail Banking*

Business Banking*


Banking*

Deliver comprehensive solutions, lead in capital markets, funds management, stock broking and enhance domestic & overseas distribution via ANZ

Investment Banking*

Deliver substantive, integrated and client-led business with full suite of FX, Rates, Commodities and FI offerings with ANZ collaborations

Markets & Treasury*

Leverage Friends Provident to deliver premium product & customer propositions & improve efficiencies

Life Assurance

Leverage Insurance Australia Group to become a scale specialist in motor and niche specialist in commercial and non-motor lines

General Insurance

1 - Medium Term Aspirations FY 2010 FY 2015

*Conventional + Islamic


Increasing profit momentum

Retail Banking *

Business Banking *

CIB *

Investment Banking *

Markets & Treasury *

Life Assurance

General Insurance

Accelerate CASA & deposit growth, profitable asset growth & lower credit costsInvest for medium term outcomesStrong profit growth benefiting from new FTP rules and lower provisions for FY 2011

Income growth from larger asset base & growth in non-interest incomesProactively manage existing accounts for cross-sell & transactional depositsStrong profit growth benefiting from new FTP rules and lower provisions for FY 2011

Income growth from larger asset base & feesIncrease focus on cross-selling & growing depositsStrong profit growth benefiting from new FTP rules and lower provisions for FY 2011

Leverage upturn in capital marketsIncrease regional biz via closer collaboration with ANZReasonable profit growth for FY 2011

New products, improve new biz IRR & leverage strategic partnership with Friends ProvidentStrong growth in profits transferred to Shareholders for FY 2011

Higher contribution from new products, increase share of wallet from retail & biz customersPossible synergistic benefits from MAA acquisitionReasonable profit growth for FY 2011

Momentum from FX & Derivatives set to increaseStrong profit growth for FY 2011

*Conventional + Islamic


- RM282.5 mil

RM668.5 mil

RM860.8 mil

RM1,008.6 mil

RM368.3 mil

>20%14 18%

CAGR ^

- 5.8% 11.5% 11.7% 11.5% 15.3% 12 - 13% *FY13 onwards :

15 18%*

37.1% 39.6% 43.3% 42.0% 38.5% 40 - 42% 40 - 42%

6.2% 3.7% 2.6% 1.5%

3.8% 3.6% circa 3.6% circa 2.5%

5.0 sen/ share

(loss year)

6.0 sen/ share

18.3%

8.0 sen/ share

19.0%

10.5 sen/ share

28.1%

- 35 40%

payout payout

Medium Term Aspirations

PATMI

ROE

CTI

Net NPL ratio


Dividend

Gross

Payout

* *

* Adjusted for possible Basel III impacts on ACE^ Previously 12-15% sustainable profit growth

FY07 FY 08 FY 09 FY 10 Q1FY 11 FY 2011Medium Term

Aspirations (MTA)

*

Previous guidance: 16-20%


Summary

1. GoodFY2011start

2. Favourable Malaysian / regional economy butcautiousglobaloutlook

3. Strong growth foundations and clear strategies(MTA)

4. International connectivitywith ANZ

5. Disciplinedexecutionandgovernance


Contents

Executive Summary


Strategy & Outlook

Appendix

Segment Performance


PATPBPExpensesIncome

Retail Banking Division : improved asset quality main contributor to higher profits

Income growth - profitable segments and pricing for risk

Expenses - growing footprints and upgrade in risk tools, people cost and IT systems

Lower loan loss allowances driving higher profits

Q1FY2010 loans and deposits adjusted for segment realignment

Aspirations

Develop a liability-led business, complemented with asset growth in certain segments and products, and grow scale in wealth management in both Mass and Mass Affluent segments

Achieving profitable growth, balancing between margins and credit costs

Composition to Group 47.6%47.2% 47.8% 46.4%

Q1FY10 results




Income 453.1 470.9 +3.9%

Expenses 159.7 180.0 +12.7%

PBP 293.4 291.0 -0.8%


PBT 180.7 236.2 +30.7%

PAT 134.2 177.2 +32.0%



Gross Impaired Loans - 1,358.6 -


CASA Deposits 5,924.1 6,851.3 +15.7%

ROA 1.26% 1.61% +0.35%

CTI 35.3% 38.2% +2.9%

Allowance Coverage - 89.8% -

Q1FY11 vs Q1FY10

G

3.06 %



Business Banking Division : Good income and targeted loans growth

Income growth - lending to stable sectors, trade and transactional

Cost increase - expansion in relationship team

Q1FY2010 loans and deposits adjusted for segment realignment

Aspirations

Develop a well diversified, profitable and sustainable client base and grow deposit and cash management, quality loans, international trade finance via leveraging ANZ connectivity, non-

Achieving profit growth post financial consolidation

Composition to Group11.6% 6.5% 14.8% 15.9%

Q1FY10 results



Q1FY11 RM'mil Q1FY10 Q1FY11 Q1FY10

Income 84.2 114.5 +36.0%

Expenses 19.4 24.8 +27.8%

PBP 64.9 89.8 +38.4%


PBT 46.4 80.8 +74.1%

PAT 34.8 60.6 +74.1%



Gross Impaired Loans - 105.9 -


CASA Deposits 932.2 1,419.1 +52.2%

ROA 1.49% 2.11% +0.62%

CTI 23.0% 21.6% -1.4%


0.89%

G


PATIncome Expenses PBP

Corporate & Institutional Banking Division : Good income growth and lower provisions

Diversified loans portfolio - good support for income growth

Provisions benefitted from bad debts recovered

Q1FY2010 loans adjusted for segment realignment

Aspirations

Provide innovative and quality solutions (including syndication and cross-selling) both domestic and cross border via ANZ, targeting high-impact and high-value clients, MNCs and GLCs

Note : 1 Singapore Stock Exchange2 Jakarta Stock Exchange3 AmFraserInternational PteLtd4 PT AmCapitalIndonesia

* Services include : large corporate lending, large corporate deposits, financial institution group, offshore banking, international business, private equity, REITs and loan syndication

Accelerate growth, underpinned by higher CASA, non-interest income and regional presence


Q1FY10 results




Income 60.6 85.9 +41.7%

Expenses 18.3 24.6 +34.4%

PBP 42.3 61.3 +44.9%

Impairments / Allowances 3.1 (10.8) +>100%

PBT 39.2 72.1 +83.9%

PAT 30.1 54.9 +82.4%

CTI 30.1% 28.6% -1.5%


Ave Assets Management 990.0 1,008.5 +1.9%

Ave Volume / Contract Traded (RM'mil/month)

S'pore SE 158,404.3 151,360.6 -4.4%

Jakarta SE 63,087.3 69,238.0 +9.7%

AmFIPL 1,721.5 1,638.9 -4.8%

PTAMCI 511.6 530.5 +3.7%

Market Share as at:

AmFIPL 1.1% 1.1% +0.0%

PTAMCI 0.8% 0.8% +0.0%

Q1FY11 vs Q1FY10

G

G

G

G

G

1

2

3

4

G



Investment Banking Division : Good pipeline but slower start to Q1FY2011

Higher income in Q1FY10 partly due to a one-time gain on disposal of a bond holding

Aspirations

Develop complete, end-to-end, comprehensive solutions and lead in capital markets, funds management, and stock broking underpinned by strong domestic and overseas distribution capability via ANZ

Note :1 Including AmInvestmentManagement, AmInvestment

Services, private banking & AmARA

Reposition as consistent top 3 player whilst delivering sustainable profit growth with lower volatility


Q1FY10 results




Income 120.5 75.4 -37.4%

Expenses 36.1 39.7 +10.0%

PBP 84.3 35.7 -57.7%


PBT 83.6 35.3 -57.8%

PAT 64.2 26.3 -59.0%

CTI 30.0% 52.6% +22.5%

Ave Assets Management 18,459.2 23,529.3 +27.5%

Ave Volume / Contract Traded (RM'mil/month)

Bursa M'sia 57,410.1 59,429.3 +3.5%

Future KL index 436.2 367.3 -15.9%

IB Broking 4,480.2 4,707.1 +5.1%

AmFuture 85.0 75.5 -11.2%

Market Share as at:

IB Broking 7.8% 7.8% +0.0%

AmFuture 20.2% 20.3% +0.1%

Q1FY11 vs Q1FY10

G

G

G

G

1


PATIncome

Life Assurance : Stronger contribution to Shareholders, sound capital adequacy

Higher income - larger fund assets, from enhanced agency network, product bundling and cross selling

Aspirations

Deliver premium product & customer propositions to target segments, streamline process to improve efficiencies and leverage Friends Provident

Becoming a top 5 life assurance company

Composition to Group2.4% 6.2%

Q1FY10 results




Net Income 6.2 23.7 +>100.0%

PAT 4.5 23.7 +>100.0%

Life Assurance

fund assets 2,149.7 2,389.9 +11.2%

CAR ratio 187.2% 232.7% +45.5%

Q1FY11 vs

Q1FY10

GG

G

G

G

G



General Insurance : Higher income and improved efficiencies

Higher income - larger gross written premium, from enhanced up- and cross-selling, and established distribution network

Aspirations

Deliver competitive customer propositions via becoming a scale specialist in motor and niche specialist in commercial and non-motor personal lines, and leverage IAG

Becoming a well-diversified and profitable top 3 general insurance provider


Q1FY10 results




Income 27.4 42.6 +55.5%

Expenses 18.2 20.7 +13.7%

PBP 9.2 21.9 +>100%

Impairments / Allowances - - N/A

PBT 11.7 21.9 +87.2%

PAT 11.7 12.8 +9.4%

CTI 66.4% 48.6% -17.8%

General Insurance fund

assets922.7 1,042.0 +12.9%

Q1FY11 vs Q1FY10

GG

G

G

G

G


PATIncome Expenses PBP

Markets and Treasury : Income diversification and increasing momentum

Higher interest income from HFT, FX and derivatives

Expenses reflect continuous investment in FX, rates, derivatives & commodities establishment

Provisions reflect reversal in AFS impairment

Aspirations

Provide substantive, integrated and client-led business underpinned by a full suite of FX, Rates, Commodities and FI offerings, with ANZ collaborations

To serve our clients with superior & competitive financial solutions


Q1FY10 results




Income 79.5 86.1 +8.3%

Expenses 9.3 13.1 +40.9%

PBP 70.3 73.0 +3.8%

Impairments / Allowances 8.2 (7.3) ->100%

PBT 62.1 80.2 +29.1%

PAT 45.9 60.4 +31.6%

CTI 11.6% 15.2% +3.6%

Total Group:

Financial assets HFT 2,255.6 2,737.9 +21.4%

Financial investments

AFS 7,122.3 7,593.6 +6.6%

Financial investments

HTM 766.9 199.5 -74.0%

Q1FY11 vs Q1FY10

GG

G

G

G

G

G

GGG

G



Group Operating Segments

Higher income from :

Loan Rehab units (recovery rate as scheduled)

Shareholders fund, Corporate & Shared Services (consolidation adjustments)

Composition to Group9.2% 20.5% 2.1% -9.0%

Defining the journey to a Customer Service Delivery Channel

Q1FY10 results




Income 56.5 90.6 +60.4%

Expenses 91.3 78.1 -14.5%

PBP (34.8) 12.5 +>100.0%

Impairments / Allowances 39.1 46.5 +18.9%

PBT (73.9) (34.0) +54.0%

PAT (59.9) (34.2) +42.9%

PATMI (67.2) (47.6) +29.2%

Q1FY11 vs Q1FY10

GG

G

G

G

G

G

GGG


Islamic Banking

Q1FY11 income run-rate higher than FY2010 full-year

Higher income in Q1FY10 due to a one-time gain in disposal of a bond holding recorded in income derived from Islamic Banking Funds

Underlying branding position remains strong and expected to provide growth support

Aspirations

To become the Islamic Bank of choice and ensure a high degree of value for our customers, employees & stakeholders

* Results incorporated under respective business divisions

Increase contribution to overall merged bank portfolio

Composition to Group

Q1FY10 results




19.6% 20.1% 19.3% 15.5%


Income 234.3 194.2 -17.1%

Expenses 64.2 76.5 +19.1%

PBP 170.1 117.7 -30.8%

Impairments / Allowances 23.1 37.3 +61.7%

PBT 147.0 80.4 -45.3%

PAT 109.1 59.3 -45.6%

Net Financing 9,885.6 12,785.7 +29.3%

Gross Impaired Financing - 191.6 -

Customer Deposits 13,678.3 13,287.3 -2.9%

CASA Deposits 2,156.8 2,047.1 -5.1%

ROA 2.77% 1.34% -1.43%

CTI 27.4% 39.4% 12.0%


Q1FY11 vs Q1FY10

G

1.35%


Contents

Executive Summary


Strategy & Outlook

Segment Performance

Appendix



Listing

Stock code

Tickers

Bursa Malaysia Securities Berhad, Main Market

AMMB / 1015

AMM MK (Bloomberg) AMMB.KL (Reuters)

Issued share capital

Market capitalisation

RM3,014.2 mil

RM15.04 bil , USD4.62 bil

Price

Price performance

RM4.99, 30/6/10 RM5.26, 52-wk high RM3.40, 52-wk low

1 month 3 months 12 months 24 months 36 months

AMMB +2.0% -0.2% +47.6% +56.9% +17.5%

KLCI +2.3% -0.5% +22.2% +10.7% -3.0%

Volume (daily average) 4mil, 1 month 4.5mil, 3 months 6.2mil, 12 months

Market ratios EPS, 49.0sen PE, 10.19 PBV, 1.54


AmBank Group snapshotAmBankGroup snapshot

AmBankGroup, PATMI :

AmBankGroup,

Source :1 Bloomberg (Global 1,000 banks by Market Capitalization as at 1 July 2010)2

Agency Malaysia Berhad

30+ years of banking heritage & franchise

Top 20 listed company on Bursa SahamMalaysia & rank 176th globally (by market cap amongst banks1)

Diversifiedbusiness fundamentals with 3 consecutive years of record performance

Upgraded credit ratings2 and well capitalized - Tier 1 CAR 10.0% & RWCA 16.7%

Strategic partnership with ANZ (one of 11 AA rated banks in the world) and

Assurance business partners :

InsuranceAustralia Group (IAG) general

Friends Provident (FP) lifePATMI = profit after tax and minority interests

215 202

400

-282

669

861

1,009

1.2 bil estimate

2004 2005 2006 2007 2008 2009 2010 2011e

CAGR22.8%[2008 -2010]26.0% [2006 -2010]


-1.6%

-5.1%

5.7%3.8% 4.6%

4.8%

8.5% 8.6%

6.3%

10.1%11.2%

7.8%

11.7%

-10%

-5%

0%

5%

10%

15%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 May 2010

YoYMalaysia lending growth vsGDP growth

GDP growth Lending growth

5.00

-1.70

8.00

6.58

-1.25

10.85

5.70

4.55

5.80

4.60

-2.20

5.31

8.40

5.30

4.93

1.00

4.46

-3

-1

1

3

5

7

9

11

2005 2006 2007 2008 2009 2010f

%ASEAN economies real GDP growth

Vietnam

Singapore

Malaysia

Indonesia

Philippines

Thailand

-Pacific trading partners

Note: 1 AmResearchforecastSources : Bloomberg, BNM, in-house economic research

Malaysia, moving from recovery to growth

13.14%

9.66%8.71% 8.23% 7.81% 7.46% 7.14% 7.01%

7.73%6.63% 6.65% 6.06% 6.07%

0%

5%

10%

15% Malaysia average lending rate vsOPR & BLR

Average lending rate Average OPR Average BLR

Malaysia :Key statistics 1 2010e 2011e

GDP 8.0% 6.0%

Inflation 2.5% 3.0%

OPR 2.75-3% 3.3%

Fiscal deficit 5.3% 4.4%

Exchange rate (RMvsUSD) 3.1 3

Relativedebt / loans toGDP, 2009

Malaysia Singapore Indonesia Thailand Philippines

National debt / GDP 69.5% 117.9% 0.07% 60.7% 349.9%

Total external debt / GDP 44.7% 481.3% 74.6% 1.3% 172.4%

Housing loans / GDP 40.3% 37.0% n.a. 21.7% n.a.

Auto financingloans/ GDP 22.0% 4.9% n.a. 9.0% 6.6%


10MP : Key macroeconomic targets9MP

2006 201010MP

2011 - 2015

GDP 4.1%pa 6.0% pa

GDP per capita US$8,256 US$12,139

Private expenditure 5.7% pa 8.6% pa

Public expenditure 5.4% pa 4.9% pa

Exports 1.3% pa 10.6% pa

Fiscal deficit -5.3% of GDP -2.8% of GDP

Inflation 2.8% pa NA

Unemploymentrate 3.6% 3.1%

10th Malaysia Plan (2011 2015) and New Economic Model : Moving Malaysia to the rank of high income economies

10th Malaysia Plan (10MP) snapshots

Government Transformation Programme& New Economic Model

GDP growth target 6% pa (2006/2010 : 4.2%)

Primary policy thrust to re-energize private sector amid leaner public sector

RM230bil for development expenditure

Private Finance Initiative Fund RM20bil to attract private investments worth at least RM200bil in National Key Economic Areas (NKEAs)

12 NKEAs, comprising 11 sectors and 1 geographical area Greater KL

New Economic Model : Goals

IskandarMalaysiaNorthern Corridor Economic RegionEast Coast Economic RegionSarawak Corridor Renewable EnergySabah Development Corridor

Key growth engines

10MP allocation for development expenditure

Cluster corridors

O&G (11.1%1)Palm oil & related productsFinancial services (12.7%1)Wholesale & retail (15.1%1)TourismICT (10.2%1)Education (2.0%1)Electrical & electronicsBusiness services (3.3%1)Private healthcareAgriculture services (2%1)Greater Kuala Lumpur

NKEAs

Note: 1 target % contribution to GDP by 2015Sources: AmResearch, media

Economic sector, 55%

Social sector, 30%

Security sector, 10%

General admin, 5%


97.9 155.0

465.8

99.2

172.9

481.9

Savings Current Account Fixed Deposits

Industry Deposits by Type June '09 June '10

11.6% 3.4%1.3%

117.7 199.9

24.9 33.8

366.5 127.7

222.5

27.7 40.5

417.1

Purchase of Transport Vehicles

Purchase of Residential Properties

Credit Cards Personal Use Business & Corporate Loans

Industry Loans Growth by Sector June '09 June '10

11.3% 11.4% 19.6% 13.8%8.5%

Industry Growth : Loans by Sector, Deposits by Type

composition : 15.3% 26.6% 3.3% 4.8% 49.9%

Retail loans growth : 11.2%

Retail loans composition : 50.1%

CASA growth : 7.6%

composition : 13.2% 22.9% 63.9%

Banking System Loans

June 2010 835.5

June 2009 742.8

12.5%

Banking SystemCoreDeposits

June 2010 753.9

June 2009 718.7

4.9%


10,218.9

14,975.6 18,291.3

15,954.4 19,272.6 20,176.9

13.8%

16.6%15.5%

14.1%12.8% 12.2%

-10.0%

0.0%

10.0%

20.0%

-

10,000

20,000

30,000

Market ShareAUM

Asset Under Management Market Share

1,164.8 1,430.1 1,700.9 2,034.8

2,387.7 2,389.9

340.9 382.6 352.2 449.0

583.4

125.1

-1200

-400

400

-

2,000

4,000

Gross PremiumFund Assets

Life Fund Assets Gross Premium

601.8 696.3 811.3

901.8

1,018.6 1,042.0

438.2 476.3 545.6 585.8

624.4

161.2

-2000

-1000

0

-

500

1,000

1,500

Gross PremiumFund Assets

General Fund Assets* Gross Premium

39,940.8 92,845.4 50,044.2 46,490.8 26,417.8

7.2%8.0% 8.0% 7.7% 7.6%

-5.0%

0.0%

5.0%

10.0%

-

40,000

80,000

120,000

Market ShareTrading Value

Trading Value Market Share

Good momentum in Assurance and key Investment Banking portfolios

FY06 FY07 FY08 FY09 FY10 Q1FY10 FY06 FY07 FY08 FY09 FY10 Q1FY10

General Insurance

* Prior to December 2008, based on general funds per BNM DGI returns. December 2008 & post December 2008 )

2006 2007 2008 2009 H1CY2010

Stock Broking

Institutional funds : Unit trust funds ratio at 44 : 56

Institutional & Unit Trust Funds

4.7%

Life Assurance

0.1%

2.3%


23.0 23.6 25.526.8

27.3[38%]

4.99.0

10.9 11.212.0[17%]

12.5

20.2

26.329.6

27.7[39%]

1.9

3.0

1.4

2.6 4.1 [6%]


Others Biz enterprises Government Individuals

51.9%60.9% 62.6% 65.1%

26.9%

27.8% 27.8% 20.9%

9.2%

6.0% 4.5% 7.5%

0.1%11.0%

1.0% 5.2%5.1% 6.5%

FY07 FY08 FY09 FY10RM'bil

Non-interest sensitive Islamic > 5 years 1-5 yrs 3-12 mths 0-3 mths

4.8 2.1 1.60.4 1.3

0.51.4

0.70.5 0.5

1.3

1.4 0.90.9 0.9

10.9

2.12.9

2.5 1.2


Other FI's BNM Merchant banks Banks

Funding profile reflecting current interest regime

Individual and government funds grew 3.2% in Q1FY11

Diversified funding profiles

Reduce dependency on inter-banking funding

Note -profit organisationsand similar - includes Senior Notes RM2.74 bil & credit-linked notes RM0.13bil

Adjusted Customer Deposits by Sources

Deposits of Banks & Other Financial Institutions

Adjusted Customer Deposits : Interest / Profit Rate Pricing Profile

Individuals

Government

Biz enterprises

Others 1 + Senior Notes + Credit-Linked Notes

0 3 months

3 12 months

1 5 years

Non - sensitive

> 5 yearsIslamic

BanksMerchant

BNM

17.4b 7.1b 6.1b 4.3b

CentralisedCapital & Balance Sheet Management

Manage regulatory and economic capital, liquidity funding, and FTP and balance sheet risks

Formulate capital management frameworks, including dividend policy

Formulate capital management plan aligned to strategic plans, and stress tests

Manage efficient internal capital allocation

Execute capital and funding transactions for competitive advantage

RM7 bil Senior Notes term funding program : RM1.42bil via book building & RM1.32bil via private placements issued to-date

Total 3.9b


10.1 9.5 8.5

-8.5 -8.4 -10.5

-7.3 -7.9-9.8

-0.4 -0.6

-0.4

Interest / Profit Rate Risk : Non-Interest Sensitive

21.5 25.3 23.6

-3.4 -3.5 -2.5

0.8 0.80.1

Interest / Profit Rate Risk : > 5 years

10.0 10.8 13.4

-4.9 -5.1 -7.4

-4.0 -2.9

-9.3

Interest / Profit Rate Risk : 1 - 5 years

34.9 42.9 49.2

-58.8 -64.3 -65.8

3.2 2.29.3

Interest / Profit Rate Risk : 0 - 12 months

Balance sheet repositioned for rising interest rates

Note : Net mismatch comprises on-balance sheet and off-balance sheet interest rate gap sensitivity

FY2008 FY2009 FY2010 FY2008 FY2009 FY2010

Net mismatch : -20.6 -19.2 -7.3

Net mismatch : 18.9 22.5 21.2 Net mismatch : -6.1 -7.4 -12.2

Net mismatch : 1.1 2.9 -3.3Mismatch profileNet mismatch > 12 months

FY2008 13.9 bil

FY2009 18.0 bil

FY2010 5.7 bil

Assets Liabilities Equity Off balance sheet gap / derivatives


Strategic partnership with global partner, ANZ

Competitive positioning : continues to strengthen

Sound size and market position in key business

segments

1

2

3

4

5

6

Well diversified universal bank & # 4 largest banking group (market capitalization) # 4 retail bank, # 5 business and CIB lendingTop 2 investment bank , #5 Islamic banking, #7 general insurance Strong customer-focus, leadin

customer satisfaction

Segmentation focus and positioning strategies & differentiating through products & services

Large retail and corporate client base provides high cross-selling potential

Award-winning products and services

Improving recall

Expanding distribution footprint (branch network 190), #3 largest ATM network (787), 377 ATMs @ 7/11 and

eChannels: internet banking, mobile banking and 24 hours call centre

Pioneer in weekend banking concept

~7,200 sales agents, direct sales teams, marketing & personal bankers, financial services and insurance agents

Strategic partnership with ANZ (since May 07), 1 of 11 AA rated global banksLeveraging ANZ : strengthen strategy formulation, financial management, risk management, distribution channel management, deposits strategy and product development

Strong key shareholders, common aspirations

AIGB privatisation & internal business restructuring completed

Insurance biz partnership (2009)

Improvement in stock valuation &upgrades in credit ratings

Experienced management team with key ANZappointments

Industry experts, international and domestic best practices

Performance based culture, all levels

Strengtheningcompetitive positioning

AMMB Holdings Berhad AmBank Group Results · 2018-04-18 · AMMB Holdings Berhad AmBank Group...

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