Malayan Banking Bhd. · MYX:MAYBANK

Malayan Banking Bhd — Q1 2018 Earnings Presentation

54 slides from Malayan Banking Bhd's earnings presentation, May 28, 2018

  1. Slide 1: Investor Presentation: Financial Results 1Q FY2018

    Humanising Financial Services Investor Presentation Financial Results First Quarter FY2018 ended 31 March 2018 28 May 2018 www.maybank.com 0

  2. Slide 2: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 18 Appendix: 1. Financial Performance 21 2. Community Financial Services 33 3. Global Banking 36 4. Maybank Singapore 40 5. Maybank Indonesia 43 6. Other segments 46 7. Affiliates 51 1 Financial Results: 1Q FY2018 ended 31

  3. Slide 3: Malaysia: Macroeconomic Implications Following 14th General Election Outcome

    Malaysia: Macroeconomic Implications Following 14th General Election Outcome Outlook for 2018 1 • We are maintaining our houseview (Maybank Kim Eng Research) over key macroeconomic indicators for 2018, mainly: o GDP forecast of 5.3%, pending further economic policy measure announcements by the new g

  4. Slide 4: Maybank Group 1Q FY2018 Overview

    Maybank Group 1Q FY2018 Overview Operating profit growth of 15.4% YoY to RM2.55 billion supported by strong revenue growth and contained costs 1 • Higher net income of 5.4% YoY as net fee based income grew 12.6% on stronger net earned insurance premiums • Net fund based income up 2.9% YoY on Group l

  5. Slide 5: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 18 Appendix: 1. Financial Performance 21 2. Community Financial Services 33 3. Global Banking 36 4. Maybank Singapore 40 5. Maybank Indonesia 43 6. Other segments 46 7. Affiliates 51 4 Financial Results: 1Q FY2018 ended 31

  6. Slide 6: P&L Summary: 1Q FY2018

    P&L Summary: 1Q FY2018 Strong PPOP growth of 10.8% YoY to RM3.05 billion led net profit rise of 9.9% More 1Q 1Q 4Q details on RM million YoY QoQ FY2018 FY2017 FY2017 s.23 Net fund based income * 4,237.9 4,117.9 2.9% 4,161.3 1.8% s.9/ 23/24 Net fee based income * 1,589.9 1,412.1 12.6% 1,895.2 (16.1)%

  7. Slide 7: Net Fund Based Income: 1Q FY2018 (1/3)

    Net Fund Based Income: 1Q FY2018 (1/3) NIM expansion of 9 bps QoQ mainly from asset repricing in Malaysia and Singapore Net Interest Margin (%) QoQ Trend 2 Year Trend 2.43 2.39 2.39 2.36 2.35 2.30 2.27 1Q FY2017 2Q FY2017 3Q FY2017 4Q FY2017 1Q FY2018 FY2016 FY2017 6

  8. Slide 8: Net Fund Based Income: 1Q FY2018 YoY Trends (2/3)

    Net Fund Based Income: 1Q FY2018 YoY Trends (2/3) Loans growth across home markets predominantly supported by CASA growth Group Malaysia Singapore Indonesia Gross Loans (YoY) Community Financial Services Global Banking  1.5% (Reported)  6.7%  5.5%  2.9%  5.7% (Normalised) SGD billion IDR trilli

  9. Slide 9: Net Fund Based Income: 1Q FY2018 QoQ Trends (3/3)

    Net Fund Based Income: 1Q FY2018 QoQ Trends (3/3) Loans growth in Malaysia and Singapore supported by strong Group liquidity growth Group Malaysia Singapore Indonesia Gross Loans (QoQ) Community Financial Services Global Banking  (0.1)% (Reported)  1.2%  1.7%  (2.3)%  1.4% (Normalised) SGD bill

  10. Slide 10: Net Fee Based Income: 1Q FY2018

    Net Fee Based Income: 1Q FY2018 Net fee based income growth driven by higher net earned insurance premiums RM million 1Q FY2017 1Q FY2018 YoY Commission, service charges and fees 839 836  (0.4)% Investment & Trading Income 232 109  (52.9)% Unrealised gain/ (losses) on securities 206 (135)  >(100)

  11. Slide 11: Overhead: 1Q FY2018

    Overhead: 1Q FY2018 Group cost-to-income ratio of 47.6%, as income growth outpaces flat expenses, resulting in positive JAWS position 1Q 1Q 4Q RM million YoY QoQ FY2018 FY2017 FY2017 Personnel Costs 1,590.6 1,504.0 5.8% 1,556.5 2.2% Establishment Costs 457.2 482.3 (5.2)% 559.4 (18.3)% Marketing Expe

  12. Slide 12: Asset Quality

    Asset Quality Net credit charge off of 41 bps with Group GIL ratio at 2.37% Allowances for losses on loans Group Gross Impaired Loans (GIL) Ratio Composition Allowances for losses on loans Mar Dec Sep Jun Mar GIL Ratio Components Loan loss coverage incl. Regulatory Reserve 2018 2017 2017 2017 2017 L

  13. Slide 13: Asset Quality by Line of Business

    Asset Quality by Line of Business QoQ uptick seen in selected segments and markets Consumer Mortgage Auto Finance Credit Cards 2.48% 2.67% 2.22% 2.38% 2.14% 2.30% 1.44% 2.37% 1.40% 1.84% 1.76% 1.23% 1.73% 1.08% 0.98% 2.08% 1.95% 1.86% 1.75% 1.79% 0.60% 0.60% 0.63% 0.61% 0.83% 0.53% 0.53% 0.53% 0.50%

  14. Slide 14: Oil & Gas Exposure: 31 March 2018

    Oil & Gas Exposure: 31 March 2018 Maybank Group’s exposure to direct and indirect oil and gas borrowers Direct & Indirect Oil & Gas: Borrowers with O&G related exposure Loan Borrowers’ Status: Oil & Gas 84% comes exposure from supporting 17% Maybank Group 3.49% upstream 36% Malaysia 1.99% Normal Sin

  15. Slide 15: Liquidity Management: 31 March 2018

    Liquidity Management: 31 March 2018 Maintained well-diversified funding sources and strong liquidity risk indicators Funding Breakdown Borrowings and Liquidity Risk Indicators Capital Instruments by Currency LDR LTF LTFE LCR 145.6% 137.0% 153.3% FI Deposits, 6% 134.4% 133.1% Equity, HKD, 11% JPY, 6%

  16. Slide 16: Strong Capital Position: 31 March 2018

    Strong Capital Position: 31 March 2018 Total capital and fully loaded CET1 capital ratios (assuming 85% dividend reinvestment rate) at 18.48% and 13.73% respectively Before proposed After proposed Regulatory Requirements dividend dividend, assuming 85% reinvestment rate Jan 2019 2018 Onwards 19.38%

  17. Slide 17: Financial Statements Impact Arising from MFRS Adoption

    Financial Statements Impact Arising from MFRS 9 Adoption Day 1 impact analysis & 31 March 2018 positions 1 Impact of MFRS 9 on Impaired Loans, Advances 2 Impact of MFRS 9 on Impaired Losses on & Financing Financial Assets Allowances ECL Allowances ECL 521 10,964 10,275 8,261 376 375 Stage 1+2 4,388

  18. Slide 18: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 18 Appendix: 1. Financial Performance 21 2. Community Financial Services 33 3. Global Banking 36 4. Maybank Singapore 40 5. Maybank Indonesia 43 6. Other segments 46 7. Affiliates 51 17Financial Results: 1Q FY2018 ended 31

  19. Slide 19: Market Outlook

    Market Outlook 2018 industry outlook for Singapore and Indonesia Key Indicators Industry Outlook • GDP (f): 3.5% (2018) vs 3.6% (2017) • System loan (f): 7%-8% (2018) vs 8.0% (2017) • Loan growth supported by lending opportunities in the region as well as pick- • 3M SIBOR (f): 1.65% (2018) vs up in

  20. Slide 20: Maybank Performance Outlook

    Maybank Performance Outlook Group guidance for remaining FY2018 1 Effective NIM management in rising rate environment 2 Maintain pricing discipline of loans under new MFRS 9 environment 3 Maintain stable liquidity risk indicators ahead of NSFR adoption in 2019 4 Managed cost growth with CIR ~48% 5 M

  21. Slide 21: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 18 Appendix: 1. Financial Performance 21 2. Community Financial Services 33 3. Global Banking 36 4. Maybank Singapore 40 5. Maybank Indonesia 43 6. Other segments 46 7. Affiliates 51 20Financial Results: 1Q FY2018 ended 31

  22. Slide 22: International & Malaysia Portfolio Mix 1Q FY2018

    International & Malaysia Portfolio Mix 1Q FY2018 Net Operating Income Profit Before Tax Gross loans* 1Q FY2018 (Jan 18 – Mar 18) Overseas: 7.3% Overseas: 10.8% Overseas: 8.1% 38.8% 12.0% 36.6% 5.5% 40.8% 7.2% RM5.83 RM2.56 RM493.4 billion 20.3% billion billion 19.5% 25.4% 59.2% 61.2% 63.4% Malaysia

  23. Slide 23: Segmental Performance of Businesses: 1Q FY2018 (1/2)

    Segmental Performance of Businesses: 1Q FY2018 (1/2) Net Operating Income 1Q FY2017  +5.4% Group Global Banking (GB)  +0.2% 1Q FY2018 1Q FY2017: 2,294 1Q FY2018: 2,298 5,530 5,828  +0.9%  (1.2)%  +27.0%  (93.7)%  (9.6)% 3,292 3,322 RM million 1,900 1,878 327 416 345 312 67 4 Total Group Commu

  24. Slide 24: Segmental Performance of Businesses: 1Q FY2018 (2/2)

    Segmental Performance of Businesses: 1Q FY2018 (2/2) Net Fund Based Income 1Q FY2017  +2.9% Group Global Banking (GB)  +0.5% 1Q FY2018 1Q FY2017: 1,327 1Q FY2018: 1,333 4,118 4,238  +0.8%  (2.2)%  +38.3%  +>100%  +9.5% 2,520 2,541 RM million 1,254 1,227 75 104 (2) 2 254 278 Total Group Commun

  25. Slide 25: Net Fee Based Income: QoQ

    Net Fee Based Income: QoQ RM million 4Q FY2017 1Q FY2018 QoQ Commission, service charges and fees 923 836  (9.4)% Investment & Trading Income 211 109  (48.2)% Unrealised gain/ (losses) on securities 2 (135)  >(100)% Unrealised gain/ (losses) on derivatives (183) (146)  (20.1)% Foreign Exchange P

  26. Slide 26: Unaudited Income Statement for Insurance and Takaful Business

    Unaudited Income Statement for Insurance and Takaful Business RM million 1Q FY2018 1Q FY2017 YoY 4Q FY2017 QoQ Net interest income 278.2 251.1 10.8% 276.0 0.8% Net earned premiums 1,511.4 1,253.9 20.5% 1,433.8 5.4% Other operating income (62.1) 259.8 (>100)% 290.2 (>100)% Total operating income 1,72

  27. Slide 27: Group Gross Loans Growth: 31 March 2018

    Group Gross Loans Growth: 31 March 2018 % of 31 Mar 31 Dec YTD 31 Mar YoY Portfolio 2018 2017 Annualised 2017 Group Gross Loans 493.4 493.8  (0.4)% 486.1  1.5% Malaysia (RM billion) 59% 288.9 285.5  4.6% 270.7  6.7% Community Financial Services - reported 71% 205.7 203.7  4.0% 195.6  5.2% Comm

  28. Slide 28: Malaysia Loans Growth: 31 March 2018

    Malaysia Loans Growth: 31 March 2018 % of 31 Mar 31 Dec YTD 31 Mar RM billion YoY Portfolio 2018 2017 Annualised 2017 Community Financial Services – reported 71% 205.7 203.7  4.0% 195.6  5.2% Community Financial Services - rebased¹ 71% 205.7 203.2  4.8% 195.6  5.2% Consumer 57% 165.8 163.3  6.1

  29. Slide 29: Group Loans Growth vs Risk-Weighted Assets Growth

    Group Loans Growth vs Risk-Weighted Assets Growth: 31 March 2018 Group Gross Loans Total Group RWA  +1.5% YoY  (3.7)% YoY  (0.1)% QoQ  (1.2)% QoQ 493.8 493.4 384.9 486.1 375.1 370.5 37.9  +1.3% 40.1 40.6 Operational RWA RM billion RM billion 15.9 14.4 Market RWA  +16.3% 16.7 331.1  (2.3)% Cre

  30. Slide 30: Group Deposits Growth: 31 March 2018

    Group Deposits Growth: 31 March 2018 % of 31 Mar 31 Dec YTD 31 Mar YoY Portfolio 2018 2017 Annualised 2017 Group Gross Deposits 532.1 526.6  4.2% 508.1  4.7% Malaysia (RM billion) 63% 336.4 317.8  23.5% 301.8  11.5% Savings Deposits 13% 42.5 40.7  17.8% 41.2  3.1% Current Accounts 25% 82.9 87.

  31. Slide 31: LDR and CASA Ratio

    LDR and CASA Ratio Group LDR CASA CASA (without IA) Malaysia 95.7% 93.8% 94.0% 93.4% 92.5% 90.8% 90.9% 90.7% 91.2% 87.0% 37.4% 36.8% 36.8% 37.3% 35.3% 41.2% 40.4% 39.5% 40.2% 37.3% 35.7% 35.1% 35.0% 35.4% 33.5% 38.4% 37.6% 36.6% 37.1% 34.5% Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Mar 17 Jun 17 Sep 17 Dec

  32. Slide 32: Key Operating Ratios: QoQ

    Key Operating Ratios: QoQ % 1Q FY2018 1Q FY2017 YoY 4Q FY2017 QoQ Return on Equity 10.5 10.0 0.5% 12.4 (1.9)% Net Interest Margin 2.39 2.43 (4) bps 2.30 9 bps Fee to Income Ratio 27.3 25.5 1.8% 31.3 (4.0)% Loans-to-Deposit Ratio 1 92.5 95.7 (3.2)% 93.4 (0.9)% Cost to Income Ratio 2 47.6 50.1 (2.5)%

  33. Slide 33: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 18 Appendix: 1. Financial Performance 21 2. Community Financial Services 33 3. Global Banking 36 4. Maybank Singapore 40 5. Maybank Indonesia 43 6. Other segments 46 7. Affiliates 51 32Financial Results: 1Q FY2018 ended 31

  34. Slide 34: Community Financial Services: Overview of Market Share for Malaysia

    Community Financial Services: Overview of Market Share for Malaysia Dec-17 Market Market share Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 vs position Mar-18 Loans Total consumer (Household) 17.5% 17.5% 17.5% 17.6% 17.6% # 2 Auto (Purchase of transport vehicles) 1 25.4% 25.7% 26.1% 26.5% 26.7% # 2 Total mort

  35. Slide 35: Community Financial Services: Overview of Malaysia Portfolio

    Community Financial Services: Overview of Malaysia Portfolio Total CFS loans on an upward trend of 5.2% YoY and 1.0% Individual customer TFA grew 3.5% YoY to RM305.6 billion QoQ driven by HNW & Affluent Banking customer TFA  +5.2% YoY  +3.5% YoY  +1.0% QoQ  +1.2% QoQ 195.6 203.6 205.7 295.2 302.

  36. Slide 36: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 18 Appendix: 1. Financial Performance 21 2. Community Financial Services 33 3. Global Banking 36 4. Maybank Singapore 40 5. Maybank Indonesia 43 6. Other segments 46 7. Affiliates 51 35Financial Results: 1Q FY2018 ended 31

  37. Slide 37: Global Banking: Overview of Malaysia Corporate Banking Portfolio

    Global Banking: Overview of Malaysia Corporate Banking Portfolio Total GB loans increased 8.8% YoY to RM83.2 billion Trade Finance market share 25.1% 24.7% RM billion 24.5% 24.4% 23.5% 41.5  +9.7% YoY Term Loan 42.0 37.9 Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 30.4  +13.0% YoY Short Term Note: Market s

  38. Slide 38: Global Banking: Overview of Group Securities and Global Markets Portfolio

    Global Banking: Overview of Group Securities and Global Markets Portfolio Group Securities Portfolio¹ grew 4.0% YoY Group Securities Portfolio¹: 34.6% Foreign Securities as at March FY2018 1Q FY2017 1Q FY2018 Others Others (NIDs, BA, etc) Government (NIDs, BA, etc) Government 8.0% Securities Securit

  39. Slide 39: Global Banking: Overview of Group Investment Banking Portfolio

    Global Banking: Overview of Group Investment Banking Portfolio 1Q FY2018 Total Income Breakdown by Country Total Income for Maybank Kim Eng Hong Kong Others  +27.0% YoY Philippines 4% 3% 5% Indonesia 415.6 4% 327.4 Malaysia RM415.6 37% RM million Thailand million 16% 1Q FY2017 1Q FY2018 Singapore 3

  40. Slide 40: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 18 Appendix: 1. Financial Performance 21 2. Community Financial Services 33 3. Global Banking 36 4. Maybank Singapore 40 5. Maybank Indonesia 43 6. Other segments 46 7. Affiliates 51 39Financial Results: 1Q FY2018 ended 31

  41. Slide 41: Maybank Singapore: P&L Summary

    Maybank Singapore: P&L Summary 1Q 1Q SGD million YoY FY2018 FY2017 Net fund based income 186.17 167.01 11.5% Net fee based income 104.65 79.90 31.0% Net income 290.82 246.91 17.8% Overhead expenses (104.03) (91.32) 13.9% Operating profit 186.79 155.59 20.1% Profit before taxation 163.33 89.63 82.2%

  42. Slide 42: Maybank Singapore: Overview of Loans and Deposits Portfolio

    Maybank Singapore: Overview of Loans and Deposits Portfolio Diversified Loan Portfolio Consumer deposits account for 52% of deposits  +5.5% YoY  +3.6% YoY 42.3 46.2 43.8 39.1 40.6 41.2 Other Consumer - 3.5 3.5 3.6 (Consumer) Time Deposits 1.9 2.1 2.2 Car Loan 15.3 15.8 15.8 Consumer Consumer 41% 5

  43. Slide 43: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 18 Appendix: 1. Financial Performance 21 2. Community Financial Services 33 3. Global Banking 36 4. Maybank Singapore 40 5. Maybank Indonesia 43 6. Other segments 46 7. Affiliates 51 42Financial Results: 1Q FY2018 ended 31

  44. Slide 44: Maybank Indonesia: P&L Summary

    Maybank Indonesia: P&L Summary IDR billion 1Q FY2018 1Q FY2017 YoY 4Q FY2017 QoQ Net Fund Based income 1,890 1,900 (0.5)% 1,975 (4.3)% Net Fee Based income 528 567 (6.9)% 588 (10.2)% Net income 2,418 2,467 (2.0)% 2,563 (5.7)% Overhead expenses (1,508) (1,444) 4.5% (1,300) 16.1% Personnel (648) (612)

  45. Slide 45: Maybank Indonesia: Financial Ratios and Loans Portfolio Breakdown

    Maybank Indonesia: Financial Ratios and Loans Portfolio Breakdown Key Operating Ratios Loans Portfolio Breakdown 31 Mar 31 Dec 31 Mar Key Operating Ratios Mar 18 Dec 17 Mar 17 YoY IDR Trillion QoQ YoY 2018 2017 2017 Profitability & Efficiency CFS 94.9 95.3  (0.4)% 93.8  1.1% Return on Assets 1.46%

  46. Slide 46: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 18 Appendix: 1. Financial Performance 21 2. Community Financial Services 33 3. Global Banking 36 4. Maybank Singapore 40 5. Maybank Indonesia 43 6. Other segments 46 7. Affiliates 51 45Financial Results: 1Q FY2018 ended 31

  47. Slide 47: Islamic Banking: Performance Overview

    Islamic Banking: Performance Overview Group Islamic Banking Financial Performance Maybank Islamic: Total Gross Financing grew to RM167.8 billion 1Q 1Q RM million YoY FY2018 FY2017 Mar 17 13% Total Income 1,217.5 1,148.4 6.0% Mar 18 43.8 8% 2% 38.9 Profit Before Tax 455.3 662.3 (31.2)% 36.4 33.7 3

  48. Slide 48: Islamic Banking: Market Share

    Islamic Banking: Market Share Maybank Islamic Market Share (Malaysia) Market Share by Product (Malaysia) 33.5% 33.6% 33.6% 33.8% 33.6% Key Products Mar 18 Mar 17 Automobile Financing 45.0% 44.7% 31.2% Home 27.5% 28.3% 30.4% 29.8% 29.6% 29.7% Term financing 31.3% 29.5% Mar 17 Jun 17 Sep 17 Dec 17 Mar

  49. Slide 49: Insurance and Takaful: Performance Overview

    Insurance and Takaful: Performance Overview Gross Premium Life / Family (New Business) Market Share Single Premium  >100% 1Q FY2018 AIA Ins. & Tak. 21.5% Regular Premium  2.5% Credit Premium  51.0% 1Q FY2017 Prudential Ins. & Tak. 14.4% No. 4 in Life/Family Group Premium  6.1% GE Ins. & Tak. 13.

  50. Slide 50: Maybank Philippines: Performance Overview

    Maybank Philippines: Performance Overview Key Highlights Revenue and PBT  Revenue increased by 2.3% YoY, led by higher net interest income (NII).  +2.3% YoY  Increase in NII contributed by higher interest income from term loans. 1,357.9 1,388.7  PBT decreased by 29.6% YoY mainly due to higher ov

  51. Slide 51: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 18 Appendix: 1. Financial Performance 21 2. Community Financial Services 33 3. Global Banking 36 4. Maybank Singapore 40 5. Maybank Indonesia 43 6. Other segments 46 7. Affiliates 51 50Financial Results: 1Q FY2018 ended 31

  52. Slide 52: An Binh Bank: Performance Overview

    An Binh Bank: Performance Overview Key Highlights Revenue and PBT  Revenue increased by 41.5% YoY, mainly due to higher fee  +41.5 % YoY based income.  PBT increased by VND273.8 billion YoY, mainly contributed by 848.7 higher revenue. 599.9  Gross loans reduced by 50.0% YTD annualised mainly due

  53. Slide 53: MCB Bank: Performance Overview

    MCB Bank: Performance Overview Key Highlights Revenue and PBT  Revenue increased by 3.8% YoY, led by higher net interest  3.8% YoY income (NII).  PBT decreased by 22.0% YoY, mainly attributed to higher 15.1 15.7 overhead expenses.  (22.0)% YoY  Gross loans increased by 4.6% YTD annualised, main

  54. Slide 54: Malayan Banking Berhad Investor Relations Contact

    Humanising Financial Services MALAYAN BANKING BERHAD 14th Floor, Menara Maybank 100, Jalan Tun Perak 50050 Kuala Lumpur, Malaysia Tel : (6)03-2070 8833 www.maybank.com Investor Relations Contact Dato’ Amirul Feisal Wan Zahir Group Chief Financial Officer Contact: (6)03-2074 7703 Email: feisal.zahir@

Malayan Banking Berhad (Maybank) — Q1 2018 Earnings Presentation on 6ix