Malayan Banking Bhd. · MYX:MAYBANK

Malayan Banking Bhd — FY2019 Earnings Presentation

55 slides from Malayan Banking Bhd's earnings presentation, Feb 27, 2020

  1. Slide 1: Investor Presentation: Financial Results 4Q FY2019 and FY2019

    Investor Presentation Financial Results 4Q FY2019 and FY2019 ended 31 December 2019 27 February 2020 www.maybank.com 0

  2. Slide 2: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 16 Appendix: 1. Financial Performance 22 2. Community Financial Services 35 3. Global Banking 38 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other Segments 47 7. Maybank’s Sustainability Strategy 51 1 Financial Resul

  3. Slide 3: FY2019 Overview on Macro-environment and Maybank's Performance

    FY2019 Overview on Macro-environment and Maybank’s Performance Macroeconomic Maybank’s Performance for FY2019 ended 31 December 2019 Environment Our Successes • PPOP grew 6.1% to new high of RM13.18 bil despite slow growth environment:  Global growth and key  As revenue grew 4.6% on selective bala

  4. Slide 4: Maybank2020: FY2019 Achievements in Key Strategic Objectives

    Maybank2020: FY2019 Achievements in Key Strategic Objectives 1 • Group Wealth Management recorded AUM growth of 9% YoY to RM230.6 billion The Top ASEAN • We launched a digital loan application channel via Maybank2u and Maybank2u Biz, Community Bank offering unsecured loans of up to RM250,000 to our

  5. Slide 5: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 16 Appendix: 1. Financial Performance 22 2. Community Financial Services 35 3. Global Banking 38 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other Segments 47 7. Maybank’s Sustainability Strategy 51 4 Financial Resul

  6. Slide 6: P&L Summary: FY2019

    P&L Summary: FY2019 In spite of a slow growth environment, Maybank’s PPOP grew 6.1% to achieve a new record high of RM13.18 billion More 4Q 3Q 4Q details RM million FY2019 FY2018 YoY QoQ YoY on FY2019 FY2019 FY2018 s.24 Net fund based income * 17,514.8 17,135.9 2.2% 4,518.9 4,522.2 (0.1)% 4,474.6 1.

  7. Slide 7: Net Fund Based Income: FY2019 (1/2)

    Net Fund Based Income: FY2019 (1/2) Selective Group balance sheet expansion in line with risk and liquidity management Group Malaysia Singapore Indonesia Gross Loans (YoY) Community Financial Services Global Banking  +1.2%  +4.9%  (3.9)%  (8.2)% 299.3 314.1 SGD billion IDR trillion 138.3 127.0 R

  8. Slide 8: Net Fund Based Income: FY2019 (2/2)

    Net Fund Based Income: FY2019 (2/2) In low rate environment, managed moderate NIM compression of 6 bps YoY, beating compression guidance of 7-9 bps Net Interest Margin (%) QoQ Trend 2.38 5 Year Trend 2.32 2.30 2.29 2.19 4Q '18 1Q '19 2Q '19 3Q '19 4Q '19 2.36 2.33 2.31 2.27 2.27 FY2015 FY2016 FY2017

  9. Slide 9: Net Fee Based Income: YoY

    Net Fee Based Income: YoY Growth of 10.7% YoY driven by net disposal gains in securities and MTM gains on lower bond yields RM million FY2018 FY2019 YoY Commission, service charges and fees 3,358 3,370  0.4% Investment & trading income (318) 1,685  (>100)% Unrealised gain/ (losses) on financial (2

  10. Slide 10: Net Fee Based Income: QoQ

    Net Fee Based Income: QoQ Stable QoQ net fee based income supported by higher commission, service charges and fees but lower MTM and realised gains on securities 1Q 2Q 3Q 4Q RM million QoQ FY2019 FY2019 FY2019 FY2019 Commission, service charges and fees 773 805 882 910  3.2% Investment & trading in

  11. Slide 11: Overheads: FY2019

    Overheads: FY2019 Cost discipline leads to low overheads growth of 2.8% YoY; CIR of 46.7% with positive JAWs YoY 4Q 3Q 4Q RM million FY2019 FY2018 YoY QoQ YoY FY2019 FY2019 FY2018 Personnel Costs 6,625.0 6,449.5 2.7% 1,601.5 1,680.0 (4.7)% 1,751.0 (8.5)% Establishment Costs 1,905.7 1,845.2 3.3% 534.

  12. Slide 12: Asset Quality: FY2019

    Asset Quality: FY2019 Full year FY2019 net credit charge off rate of 44 bps, within Group guidance of 40-45 bps Allowances for losses on loans Group Gross Impaired Loans (GIL) Ratio Composition Loan loss coverage incl. Regulatory Reserve Dec Sep Jun Mar Dec Loan loss coverage GIL Ratio Components 20

  13. Slide 13: Asset Quality by Line of Business in Home Markets

    Asset Quality by Line of Business in Home Markets Steady quarterly consumer trends across home markets; some uptick in overseas business lines Consumer Mortgage Auto Finance Credit Cards 2.73% 2.88% 2.90% 2.97% 2.63% 1.34% 1.33% 1.27% 1.86% 1.97% 1.71% 1.77% 1.66% 1.05% 0.88% 1.41% 0.92% 0.93% 0.90%

  14. Slide 14: Strong Liquidity & Capital Positions: 31 December 2019

    Strong Liquidity & Capital Positions: 31 December 2019 Total capital ratio of 18.23% and CET 1 capital ratio of 14.58%, after proposed all cash final dividend Liquidity Risk Indicators Before proposed After proposed dividend full cash dividend 19.02% 19.39% LDR LTF LTFE LCR 18.23% Group 15.98% 16.49

  15. Slide 15: Dividend: FY2019

    Dividend: FY2019 Full year all cash dividend of 64 sen per share, with an effective cash payout of 88% from net profit Dividend (sen), Payout Ratio (%) and Cash Component (%) 79.9% 87.8% Dividend 76.5% 74.9% 74.7% 71.9% 78.5% 76.3% 78.1% 78.5% 77.3% Payout Ratio 100% 67% 53% Cash Component 27% 13% 1

  16. Slide 16: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 16 Appendix: 1. Financial Performance 22 2. Community Financial Services 35 3. Global Banking 38 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other Segments 47 7. Maybank’s Sustainability Strategy 51 15Financial Resul

  17. Slide 17: Market Outlook

    Market Outlook 2020 industry outlook for our home markets Key Indicators Outlook • Monetary policy easing, and potentially higher • GDP: 4.0% (2020F) vs 4.3% (2019) Government development expenditure and • System loan: 4.3% (2020F) vs 3.9% (2019) procurement spending as well as progress in major • O

  18. Slide 18: Maybank Performance Outlook

    Maybank Performance Outlook Group guidance for FY2020 Operating Environment Group’s Key Priorities and Guidance • Leverage on our diversified franchise to drive revenue growth  Prolonged COVID-19 Income while maintaining discipline in the pricing of assets and liabilities outbreak would weigh on Gr

  19. Slide 19: Maybank's Approach to Sustainability (1/2)

    Maybank’s Approach to Sustainability (1/2) The Ongoing Journey on Sustainability • 2010: Published our first Sustainability Report • 2014: Maybank Group’s 20/20 Sustainability Plan approved by BOD - highlights three major pillars that contribute to the Group’s long-term value: Community and Citizens

  20. Slide 20: Maybank's Approach to Sustainability (2/2)

    Maybank’s Approach to Sustainability (2/2) Established Group Sustainability Council in 2H FY2019 • The Council comprises all Group Business and Country CEOs/Heads as well as key support Sector Heads for a holistic sustainability approach Group President & CEO reports to Group Sustainability Council

  21. Slide 21: Maybank's Key FY2019 Digital Achievements

    Maybank’s Key FY2019 Digital Achievements Products & Services MAE Tap2Phone Smile App Etiqa API Portal SWIFT gpi The first lifestyle e- First bank in SEA to Etiqa’s all-in-one app Enables third party First local bank in wallet with banking launch this payment that enables customers software develope

  22. Slide 22: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 16 Appendix: 1. Financial Performance 22 2. Community Financial Services 35 3. Global Banking 38 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other Segments 47 7. Maybank’s Sustainability Strategy 51 21Financial Resul

  23. Slide 23: International & Malaysia Portfolio Mix FY2019

    International & Malaysia Portfolio Mix FY2019 Net Operating Income Profit Before Tax Gross loans* FY2019 (Jan 19 – Dec 19) Overseas: 7.4% Overseas: 6.0% 6.9% Overseas: 8.0% 38.2% 12.1% 13.6% 0.7% 39.5% 7.1% RM24.74 RM11.01 RM523.5 billion billion 24.4% billion 18.7% 60.5% 61.8% 86.4% Malaysia Singap

  24. Slide 24: Segmental Performance of Businesses: FY2019 (1/2)

    Segmental Performance of Businesses: FY2019 (1/2) Net Operating Income FY2018 Group Global Banking  +4.4% FY2019  +4.6% FY2018: 9,336 FY2019: 9,746 23,662 24,741  +2.0%  +5.1%  (6.5)%  +81.4%  +19.5% 13,542 13,818 RM million 8,016 8,428 1,224 1,144 96 174 1,610 1,923 Total Group Community Gro

  25. Slide 25: Segmental Performance of Businesses: FY2019 (2/2)

    Segmental Performance of Businesses: FY2019 (2/2) Net Fund Based Income FY2018 Group Global Banking  (1.3)% FY2019  +2.2% FY2018: 5,606 FY2019: 5,532 17,136 17,515  +0.9%  (0.4)%  (16.7)%  (9.5)%  +10.6% 10,320 10,408 RM million 5,282 5,261 312 11 1,163 1,287 260 12 Total Group Community Grou

  26. Slide 26: P&L Summary: QoQ

    P&L Summary: QoQ 4Q 3Q 2Q 1Q RM million FY2019 FY2019 FY2019 FY2019 Net fund based income 4,518.9 4,522.2 4,166.8 4,306.9 Net fee based income 1,974.0 1,976.0 1,722.9 1,553.1 Net operating income 6,492.9 6,498.2 5,889.7 5,860.0 Overhead expenses (2,969.1) (2,963.6) (2,821.7) (2,807.6) Personnel Cost

  27. Slide 27: Income Statement for Insurance and Takaful Business

    Income Statement for Insurance and Takaful Business 4Q 3Q 2Q 1Q RM million FY2019 FY2018 YoY QoQ FY2019 FY2019 FY2019 FY2019 Net interest income 1,286.2 1,163.0 10.6% 324.4 327.4 322.0 312.3 (0.9)% Net earned premiums 6,760.6 5,933.6 13.9% 1,761.2 1,749.1 1,623.8 1,626.5 0.7% Other operating income

  28. Slide 28: Exposure to Oil & Gas and Real Estate Sectors: 31 December 2019

    Exposure to Oil & Gas and Real Estate Sectors: 31 December 2019 Group Exposure to Direct & Indirect Oil & Gas Borrowers Real Estate Exposure to Non-Retail Malaysian Borrowers Maybank Group Malaysia Singapore Indonesia Others Others, 32.1% High Rise 2.79% 1.77% 0.73% 0.08% 0.21% Residential, 30.7% No

  29. Slide 29: Group Gross Loans Growth: 31 December 2019

    Group Gross Loans Growth: 31 December 2019 % of 31 Dec 30 Sep 30 Jun 31 Mar 31 Dec QoQ YoY Portfolio 2019 2019 2019 2019 2018 Group Gross Loans 523.5 525.0  (0.3)% 525.6 516.9 517.3  1.2% Malaysia (RM billion) 60% 314.1 308.0  2.0% 302.9 299.4 299.3  4.9% Community Financial Services (reported)

  30. Slide 30: Malaysia Loans Growth: 31 December 2019

    Malaysia Loans Growth: 31 December 2019 % of 31 Dec 30 Sep 30 Jun 31 Mar 31 Dec RM billion QoQ YoY Portfolio 2019 2019 2019 2019 2018 Community Financial Services (reported) 74% 231.6 226.4  2.3% 222.5 218.3 216.0  7.2% Community Financial Services (rebased)¹ 74% 231.6 226.4  2.3% 222.5 218.3 215

  31. Slide 31: Group Deposits Growth: 31 December 2019

    Group Deposits Growth: 31 December 2019 % of 31 Dec 30 Sep 30 Jun 31 Mar 31 Dec QoQ YoY Portfolio 2019 2019 2019 2019 2018 Group Gross Deposits 565.3 566.2  (0.2)% 560.9 557.6 556.3  1.6% Malaysia (RM billion) 62% 351.5 356.1  (1.3)% 351.2 343.9 343.8  2.2% Savings Deposits 13% 45.0 44.5  1.2%

  32. Slide 32: LDR and CASA Ratio

    LDR and CASA Ratio Group LDR CASA CASA (without IA) Malaysia 92.7% 92.4% 93.4% 92.5% 92.4% 90.0% 87.6% 87.6% 86.9% 87.1% 35.9% 34.9% 35.5% 34.5% 34.6% 38.7% 37.5% 37.5% 37.5% 38.7% 33.6% 32.4% 32.6% 32.5% 33.2% 34.9% 34.0% 33.8% 34.0% 34.9% Dec 18 Mar 19 Jun 19 Sep 19 Dec 19 Dec 18 Mar 19 Jun 19 Sep

  33. Slide 33: RWA Optimisation and Funding Management

    RWA Optimisation and Funding Management Group Gross Loans & Group RWA Funding Breakdown Borrowings and Capital Instruments Operational RWA Market RWA by Currency Credit RWA Gross Loans 525.0 523.5 517.3 384.5 FI Deposits, 6% 380.4 374.6 Equity, 11% JPY, HKD, 8% 42.7 42.9 IDR, 9% 9% 41.8 CNY, 3% SGD,

  34. Slide 34: Key Operating Ratios

    Key Operating Ratios 4Q 3Q 2Q 1Q 4Q % FY2019 FY2018 YoY QoQ YoY FY2019 FY2019 FY2019 FY2019 FY2018 Return on Equity 4 10.9 11.4 (0.5)% 13.0 10.5 2.5% 10.2 9.7 13.0 0.0% Net Interest Margin 4 (bps) 2.27 2.33 (6) bps 2.29 2.32 (3) bps 2.19 2.30 2.38 (9) bps Fee to Income Ratio 29.2 27.6 1.6% 30.4 30.4

  35. Slide 35: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 16 Appendix: 1. Financial Performance 22 2. Community Financial Services 35 3. Global Banking 38 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other Segments 47 7. Maybank’s Sustainability Strategy 51 34Financial Resul

  36. Slide 36: Community Financial Services: Overview of Market Share for Malaysia

    Community Financial Services: Overview of Market Share for Malaysia Market share Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Loans Total consumer (Household) 17.7% 17.8% 17.5% 17.6% 17.7% Auto (Hire Purchase + Block Discounting + Floor Stocking) 28.4% 28.7% 28.9% 29.3% 29.6% Total mortgage * 13.5% 13.6% 13.6

  37. Slide 37: Community Financial Services: Overview of Malaysia Portfolio

    Community Financial Services: Overview of Malaysia Portfolio Total CFS loans on an upward trend of 7.2% YoY and 2.3% Total CFS deposits increased by 1.8% YoY driven by CASA QoQ. growth of 4.0%  +1.8% YoY  +7.2% YoY  +2.2% QoQ  +2.3% QoQ 216.0 226.4 231.6 200.6 200.0 204.3 41.5 43.3 44.5 RM billi

  38. Slide 38: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 16 Appendix: 1. Financial Performance 22 2. Community Financial Services 35 3. Global Banking 38 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other Segments 47 7. Maybank’s Sustainability Strategy 51 37Financial Resul

  39. Slide 39: Global Banking: Malaysia Corporate Banking and Securities Portfolio

    Global Banking: Overview of Malaysia Corporate Banking and Group Securities Portfolio Total Corporate Banking loans in Malaysia decreased 0.7% Group Securities Portfolio¹ grew 8.4% YoY YoY to RM82.7 billion RM billion  +8.4% YoY 46.6 Term Loan 45.1  +3.3% YoY 45.1 202.4 192.8 186.5 194.9 178.0 7.9

  40. Slide 40: Global Banking: Overview of Group Investment Banking Portfolio

    Global Banking: Overview of Group Investment Banking Portfolio FY2019 Total Income Breakdown by Country FY2019 Fee-based Income for Malaysia Hong Kong Others Arranger Fees 30% Underwriting & 5% 5% Placement Fees Philippines 7% 2% Malaysia Indonesia Advisory Fees 34% 4% 9% Thailand RM1,144.4 14% Agen

  41. Slide 41: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 16 Appendix: 1. Financial Performance 22 2. Community Financial Services 35 3. Global Banking 38 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other Segments 47 7. Maybank’s Sustainability Strategy 51 40Financial Resul

  42. Slide 42: Maybank Singapore: P&L Summary

    Maybank Singapore: P&L Summary SGD million FY2019 FY2018 YoY Net fund based income 761.13 752.81 1.1% Net fee based income 376.49 355.78 5.8% Net income 1,137.62 1,108.59 2.6% Overhead expenses (454.93) (439.13) 3.6% Operating profit 682.69 669.46 2.0% (Loss)/ Profit before taxation 8.34 415.55 (98.

  43. Slide 43: Maybank Singapore: Overview of Loans and Deposits Portfolio

    Maybank Singapore: Overview of Loans and Deposits Portfolio Diversified Loan Portfolio Consumer deposits’ composition rose to 56% of total deposits % of 31 Dec 30 Sep 31 Dec  +4.6% YoY SGD Billion QoQ YoY Portfolio 2019 2019 2018 46.2 47.6 48.3 Consumer - CFS 54% 22.1 22.7 (2.5)% 22.6 (1.9)% Time D

  44. Slide 44: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 16 Appendix: 1. Financial Performance 22 2. Community Financial Services 35 3. Global Banking 38 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other Segments 47 7. Maybank’s Sustainability Strategy 51 43Financial Resul

  45. Slide 45: Maybank Indonesia: P&L Summary

    Maybank Indonesia: P&L Summary 4Q 3Q IDR billion FY2019 FY2018 YoY QoQ FY2019 FY2019 Net Fund Based income 8,168 8,100 0.8% 2,043 2,101 (2.8)% Net Fee Based income 2,587 2,267 14.1% 725 695 4.3% Net income 10,755 10,367 3.7% 2,768 2,797 (1.0)% Overhead expenses (6,397) (6,023) 6.2% (1,541) (1,673) (

  46. Slide 46: Maybank Indonesia: Financial Ratios and Loans Portfolio Breakdown

    Maybank Indonesia: Financial Ratios and Loans Portfolio Breakdown Key Operating Ratios Loans Portfolio Breakdown % of 31 Dec 30 Sep 31 Dec Key Operating Ratio Dec-19 Sep-19 Dec-18 YoY IDR Trillion QoQ YoY Portfolio 2019 2019 2018 Profitability & Efficiency CFS 74% 90.5 94.4 (4.2)% 102.3 (11.6)% Retu

  47. Slide 47: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 16 Appendix: 1. Financial Performance 22 2. Community Financial Services 35 3. Global Banking 38 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other Segments 47 7. Maybank’s Sustainability Strategy 51 46Financial Resul

  48. Slide 48: Islamic Banking: Performance Overview

    Islamic Banking: Performance Overview Group Islamic Banking Financial Performance Maybank Islamic: Total Gross Financing grew to RM192.0 billion RM million FY2019 FY2018 YoY Dec-18 14% Dec-19 Total Income 4,976.6 5,118.1 (2.8)% 54.2 8% 9% 47.5 Profit Before Tax 3,692.4 3,033.7 21.7% 42.2 39.1 6%

  49. Slide 49: Islamic Banking: Market Share

    Islamic Banking: Market Share Maybank Islamic Market Share Market Share by Product (Malaysia) 31.0% 31.0% 31.2% 31.1% 30.9% Key Products Dec 19 Dec 18 Automobile Financing 47.7% 44.9% 28.4% 28.7% 28.3% Home 26.5% 26.4% 27.8% 27.8% Term financing 28.5% 28.4% Dec 18 Mar 19 Jun 19 Sep-19 Dec-19 Financi

  50. Slide 50: Insurance and Takaful: Performance Overview

    Insurance and Takaful: Performance Overview Net Adjusted Premium/Contribution Life & Family (New Business) Market Share (Malaysia) Single Premium  36.4% 21.5% 21.5% 20.7% 19.3% Regular Premium  7.9% No. 4 in 13.4% 13.6% Life/Family Credit Premium  4.8% 12M FY19 FY2019 15.0% 14.5% 16.9% (New Busin

  51. Slide 51: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 16 Appendix: 1. Financial Performance 22 2. Community Financial Services 35 3. Global Banking 38 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other Segments 47 7. Maybank’s Sustainability Strategy 51 50Financial Resul

  52. Slide 52: Maybank's Sustainability Strategy (1/3)

    Maybank’s Sustainability Strategy (1/3) 20/20 Sustainability Plan  Our sustainability strategy is anchored on our mission of Humanising Financial Services. We report our sustainability performance against our 20/20 Sustainability Plan, a five-year sustainability strategy approved in 2014 by the May

  53. Slide 53: Maybank's Sustainability Strategy (2/3)

    Maybank’s Sustainability Strategy (2/3) Maybank has been recognised over the years for its progressive advancements in the area of sustainability. We are a key component of an increasing number of indices which track companies adopting good environmental, social and governance (ESG) practices. Among

  54. Slide 54: Maybank's Sustainability Strategy (3/3)

    Maybank’s Sustainability Strategy (3/3) Maybank Group’s Environmental, Social and Governance (ESG) Policy  A Responsible Lending Guideline was initially established in 2015 to manage ESG risks.  This was expanded into an ESG Risk Management Framework and then endorsed as an ESG Policy in 2018, fol

  55. Slide 55: Malayan Banking Berhad contact details and disclaimer

    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 Disclaimer. This presentation has been prepared by Malayan Banking Berhad (the “Company”) for information purposes only and does not

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