ANALYSTS/FUND MANAGERS BRIEFING 1H FY2016 RESULTS 1 ...€¦ · 1H FY2016 RESULTS 1 SEPTEMBER 2016....

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www.affin.com.my ANALYSTS/FUND MANAGERS BRIEFING 1H FY2016 RESULTS 1 SEPTEMBER 2016

Transcript of ANALYSTS/FUND MANAGERS BRIEFING 1H FY2016 RESULTS 1 ...€¦ · 1H FY2016 RESULTS 1 SEPTEMBER 2016....

Page 1: ANALYSTS/FUND MANAGERS BRIEFING 1H FY2016 RESULTS 1 ...€¦ · 1H FY2016 RESULTS 1 SEPTEMBER 2016. KEY HIGHLIGHTS & RATIOS PROFIT BEFORE TAX BY SEGMENTS STRATEGIC DIRECTION –AFFINITY

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ANALYSTS/FUND MANAGERS BRIEFING1H FY2016 RESULTS

1 SEPTEMBER 2016

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KEY HIGHLIGHTS & RATIOS

PROFIT BEFORE TAX BY SEGMENTS

STRATEGIC DIRECTION – AFFINITY PROGRAM

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Key Highlights

Income Statement ( RM’mil ) 1H2015 1H2016 Change (%)Profit Before Tax and Zakat 226.6 338.7 49.5Net Profit 177.3 258.5 45.8Earnings per share ( sen ) 8.72 13.02 49.3

Balance Sheet ( RM’ bil ) 1H2015 1H2016 Change (%)Total Assets 65.0 68.3 5.1Gross Loans, advances & financing 42.2 43.3 2.6Deposits from customers 49.7 46.5 (6.4)

Key Financial Indicators 1H2015 1H2016 Change (%)Cost-to-income ratio 60.44 61.97 1.53Gross impaired loans ratio 2.04 1.98 (0.06)Loan Loss Reserve(including regulatory reserve)

79.40 93.60 14.20

Loan to deposits ratio 84.87 93.15 8.28

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CET 1 / Tier 1 / CCR1H2015 1H2016

Industry average (1H2016)

AFFIN Bank Berhad 12.20 12.07 12.70AFFIN Islamic Bank Berhad 11.84 12.28 12.15AFFIN Hwang Investment Bank Berhad

31.04 34.73 34.44

Total Capital Ratio1H2015 1H2016

Industry average (1H2016)

AFFIN Bank Berhad 13.44 14.87 16.18AFFIN Islamic Bank Berhad 13.34 13.42 15.98AFFIN Hwang Investment Bank Berhad

31.04 34.73 34.82

Key Highlights – Capital Adequacy

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156.4 159.6

72.7 54.0

94.558.7

Total Income Composition

1,251.2

111.1 241.9

24.9 41.4

1,291.1

124.3 228.2

40.8 33.4

Gross Interest income Islamic Bankingincome

Fees & brokerageincome

Income from financialinstruments

Other income

RM M

illio

n

Income Composition (RM Million)

1H2015 1H2016

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Key Ratios

1.88 1.93

1H2015 1H2016

Net Interest Margin (%)

2.94 2.97

1H2015 1H2016

Cost of funds (%)

46.0 47.054.8 60.4 62.0

2012 2013 2014 2015 1H2016

Cost to income ratio (%)

39

15

1H2015 1H2016

Credit Cost (bps)

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Loans, advances & financing growth

* Inclusive of regulatory reserve

11.7%

7.9%9.6%

6.9%

-1.4%

10.4% 10.6%

8.7%

7.9%

2.8%

2012 2013 2014 2015 1H2016

Loan Growth

AFFIN Industry

39.8

16.7 17.6

16.8 12.8

8.7 12.9

1H2015 1H2016

RM b

illion

Loans by business segment

Consumer Corporate SMEs

40.7%

29.5%

29.8%

39.7%

39.8%

20.5%

42.2 43.334.7 37.541.1 43.9 43.3

2012 2013 2014 2015 1H2016

Total Loans

79.4 93.6

1H2015 1H2016

Loan Loss Reserve (%)

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Deposits

2012 2013 2014 2015 1H2016AFFIN 79.6 79.1 82.6 86.8 93.2Industry 82.1 84.6 86.2 86.5 87.8

- 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0

100.0

%

Gross Loan/Deposit from customers ratioAFFIN vs Industry

14.3 12.9

28.2 27.2

7.2 6.4

1H2015 1H2016RM

billi

on

Deposits

Consumer Corporate SMEs

27.7%

58.5%

13.8%

28.6%

56.9%

14.5%

49.7 46.5

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Impaired Loans

790.0 741.0 748.0 834.0 859.6

2012 2013 2014 2015 1H2016

Gross NPL/Impaired Loans

2.28 1.98 1.82 1.90 1.98

2.00 1.85 1.66 1.60 1.66

2012 2013 2014 2015 1H2016

Gross Impaired Loan ratio

Gross Impaired Loan ratio (%)Gross Impaired Loan ratio - industry (%)

1.13 0.92 0.84

1.02 1.06

1.40 1.30 1.20 1.20 1.20

2012 2013 2014 2015 1H2016

Net Impaired Loan ratio

Net Impaired Loan ratio (%)Net Impaired Loan ratio - industry (%)

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KEY HIGHLIGHTS & RATIOS

PROFIT BEFORE TAX BY SEGMENTS

STRATEGIC DIRECTION – AFFINITY PROGRAM

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AFFIN BANK BERHAD

Profit Before Tax (RM million) Net Income (RM million)

• The Bank registered a profit before tax of RM198.8mln for the 1HFY16 as compared to the previous year's corresponding period of RM125.3mln, an increase of RM73.5mln or 58.7% due to higher net interest income, other operating income and lower allowance for impairment losses on loans, advances and financing.

• The Bank has recently opened two more branches in Denai Alam and Tabuan Jaya, expanding our branch network to 108 branches. Separately, our Digitalization Initiatives is currently on track and we will be coming to the market soon.

Key Highlights

0

50

100

150

200

250

1H15 1H16

PBT

0

100

200

300

400

500

600

1H15 1H16

Net Income

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AFFIN ISLAMIC BANK BERHAD

Profit Before Tax (RM million) Net Income (RM million)

Key Highlights

• The Bank registered a profit before tax of RM68.5mln as compared to the previous year's correponding period of RM51.9mln, an increase of RM16.6mln or 32.0% due to higher net financing income mainly due to growth in average financing, higher other operating income mainly from higher gain on sale of AFS, higher forex gain and non-operating income and higher write-back on allowances for losses on financing and advances.

• Our Strategic Thrust going forward will be to expand products offering, increase smart partnership business, maximizing resources, target new customer segment and promote our Priority Islamic Policy.

0

20

40

60

80

1H15 1H16

PBT

0

30

60

90

120

150

1H15 1H16

Net income

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AFFIN HWANG INVESTMENT BANK GROUP

Profit Before Tax (RM million) Operating Income (RM million)

1H 2016 PBT of RM55.6m is slightly lower than 1H 2015 at RM57.1m Significant improvement in operating expenses offset by lower income contribution mainly from

initial service charge on sale of unit trust in 1Q 2016 Fee income continued to dominate No. 1 Bursa ranking for Value & Volume traded No. 3 Unit Trust industry ranking with RM21.9 billion in AUM Total Assets Under Administration at RM34.0 billion

Key Highlights

186.1

41.1 37.1

172.6

40.6 35.5

0

50

100

150

200

Fee income Net int income Other income

1H2015 1H2016

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AXA AFFIN GENERAL INSURANCE BERHAD

Operating Income (RM million)Profit Before Tax (RM million)

41.4 47.1

0

10

20

30

40

50

1H2015 1H2016

1H2015 1H2016

71.5

92.9

0

20

40

60

80

100

1H2015 1H2016

1H2015 1H2016

1H2016 PBT of RM92.9 million is significantly higher than 1H2015 of RM71.5 million Growth in health and motor insurance businesses Improvement in net underwriting results and higher investment income GWP increased by RM99.4 million (14.6%) in 1H2016 vs 1H2015 NWP increased by RM78.7 million (13.7%) in 1H2016 vs 1H2015

Key highlights

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AXA AFFIN Life Insurance Berhad

Gross Premium (RM Million) Loss Before Tax (RM Million)

1H 2016 results affected by movement in MGS rates and change in treatment of expense allocationfollowing interpretation of BNM Guideline. Protection and health gross premium growth accelerated, +16% vs. 1H 2015. Value of new business +13% vs. 1H 2015 on comparable basis.

Single Premium Single Premium

First Year Premium

First Year Premium

Renewal Premium

Renewal Premium

1H 2015 1H 2016

Gross Premium grew 9% to RM166m

+21% (5.4)

(16.4)

1H2015 1H2016

Higher pre-tax loss amidst low interest rate

Key highlights

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KEY HIGHLIGHTS & RATIOS

PROFIT BEFORE TAX BY SEGMENTS

STRATEGIC DIRECTION – AFFINITY PROGRAM

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AFFIN Bank Group is addressing its current challenges and opportunities through a comprehensive transformation program

Regulatory and Compliance

Risks

Costs

Delivery

Human Capital

Technology

Challenging Operating

Environment

Business Model Focus &

Positioning

Digital BankingInnovation and

Models

CURRENT & IMMEDIATE FUTURE & EMERGING

AFFIN BANK’S CHALLENGES & OPPORTUNITIES

Compliance Complexity

Management

System Loan and Deposit

Growth

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The blueprint for the Bank’s transformation comprises seven key pillars covering business scope, operations enablers and performance management

Pillar 6 People & Organization

Pillar 5 Technology

Pillar 2Delivery

Channels

Pillar 3Products & Solutions

Pillar 4Operations

Pillar 7 PerformanceManagement

Pillar 1Target

Customer Segments

Business Scope Components:Addresses strategic questions on who are our customers, what do they need and how do we reach them

Operations Enablers: Links and supports the execution and delivery capability with the business model goals around Operations, Technology and People

Performance Management Components:Ensures goals and model discipline through a comprehensive set of metrics

Target Transformation Blueprint- 7 Pillars to Address

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Implementation Complexity/Risk

Benefit Impact

Capabilities building projects and Quick Wins are analysed against benefit impact and complexity and risk of implementation to stage out the implementation roadmap

Financial Impact

o Revenue Lift

o Cost Savings

Elapsed Time

Dependencies

Expertise/ Skillsets

Effort

Cost

Transformation Implementation Framework

Strategic Foundation

Operational Foundation

Low Complexity 1 to 6 months

Moderate Complexity 1 to 12 monthsSignificant Complexity 12 to 24 months

Strategic Foundation Building Projects

Operational Foundation Building Projects

Direct Financial Improvement ProjectsQ

uick

Win

s

• 32 Transformation Projects• 9 QuickWins• 5 BAU IT• 27 BAU Compliance

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PHASE 1

PROGRAM ANALYSIS & PLANNING

PHASE 2

DETAIL DESIGN & QUICK WINS

IMPLEMENTATION

PHASE 3

CAPABILITIES BUILDING & IMPLEMENTATION

• Establish a robust foundation for the Program based on requisite analyses and validation of aspirational targets and parameters.

• Create a comprehensive plan for the Program including governance, resources and schedule.

• Detail identified capabilities and capability changes to the required level for building.

• Undertake capability building and implementation planning.

• Build, Test and Deploy planned capabilities. Based on established prioritized schedule, capabilities building will be initiated.

• Continuously track and monitor progress and accomplishment.

• Create and implement benefits realization plan.

Phase Objectives

Estimated Duration

January to June 2016 April 2016- June 2019

Execution of identified capability building projects- detail design and implementation, is expected to take up to 36 months.

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THANK YOU