Ammb Holdings Bhd. · MYX:AMBANK
Ammb Holdings Bhd — Q1 FY2020 Earnings Presentation
45 slides from Ammb Holdings Bhd's earnings presentation, Aug 22, 2019
Slide 1: Q1FY2020 Results Investor Presentation
Q1FY2020 RESULTS INVESTOR PRESENTATION 22 AUGUST 2019
Slide 2: GCEO Presentation
GCEO PRESENTATION Dato’ Sulaiman Mohd Tahir 3 Q1FY20 Financial snapshot 4 Outlook for 2019
Slide 3: Q1FY20 Financial snapshot
Financial Snapshot Q1FY20 Financial snapshot Q1FY20 Financials Q1FY20 A reasonable start 1,065 • Consistent NII growth and stronger trading & investment Income 5% Q1FY19: 1,014 income 529 Expenses 3% • Continuing focus on expenses management and efficiency Q1FY19: 513 536 PBP 7% • Sustained po
Slide 4: Outlook for 2019
Market Outlook Outlook for 2019 Malaysia Banking Sector GDP growth: Loans growth: 4.5% - 4.7% 4.6% Inflation: Asset quality: 1.0% Stable Export growth: OPR: 2.0% 2.75% - 3.00% USD/MYR outlook: Resilient liquidity & 4.19 by end 2019 capital positions 4 Q1FY2020 Results – Investor Presentation
Slide 5: GCFO Presentation
GCFO PRESENTATION Jamie Ling 6-19 Financial overview 20 Guidance & Expectations
Slide 6: Q1FY20 Financial overview
Financial Overview Q1FY20 Financial overview Q1FY20 Results (QoQ) Income up 12% to RM1,065mil: - NII of RM669mil (+6%), NIM recovered to 1.87% (+9bps) - NoII increased 21% from higher fee income and better contribution from General Insurance Expenses lower by 12% at RM529mil. CTI of 49.7% Net
Slide 7: Q1FY20 Performance summary – P&L
Financial Overview Q1FY20 Performance summary – P&L P&L Q1FY20 Q4FY19 QoQ Change Q1FY19 YoY Change (RM’ mil) Total Income 1,065 955 12% 1,014 5% Expenses 529 600 12% 513 3% PBP 536 355 51% 501 7% Net (Recovery) / (32) (270) 88% 7 >100% Impairment PATMI 391 460 15% 348 13% Financi
Slide 8: Q1FY20 Performance summary – balance sheet
Financial Overview Q1FY20 Performance summary – balance sheet Balance Sheet Q1FY20 Q4FY19 QoQ/YTD Change Q1FY19 YoY Change (RM’ bil) Gross Loans 100.8 101.8 1% 98.4 2% GIL 1.66% 1.59% 7bps 1.77% 11bps LLC1 111.5% 114.0% 250bps 106.3% 520bps Customer Deposits 102.8 106.9 4% 98.6 4% CA
Slide 9: A reasonable start
Income A reasonable start Business Segments Q1FY20 Q4FY19 QoQ Change Q1FY19 YoY Change (RM’ mil) Wholesale Banking 302 281 8% 263 15% Investment Banking 70 62 12% 69 1% Retail Banking 358 342 5% 363 1% Business Banking 86 86 ≈ 75 16% Group Funding & Others 51 55 8% 62 18% Total Inc
Slide 10: Broad based improvement in operating leverage
PBP & PATMI Broad based improvement in operating leverage Business Segments Q1FY20 Q4FY19 QoQ Change Q1FY19 YoY Change (RM’ mil) Wholesale Banking 231 205 13% 196 18% Investment Banking 24 18 35% 24 2% Retail Banking 153 120 27% 142 8% Business Banking 53 53 ≈ 45 16% Group Funding & Ot
Slide 11: A steady start to the year
Group P&L A steady start to the year YoY Growth 4% 6% 5% 3% 7% >100% 15% 24% 13% 13% 13% 39 24 391 27 348 16 27 4 22% 21% Effective NIM: NoII%: CTI: GIL: Tax Rate: 1.87% 37.1% 49.7% 1.66% 24.0% 78% 79% Net Interest Non-Interest Total (Recovery) / RM’ mil Expenses PBP PBT Tax & Zak
Slide 12: Improved asset margins and lower liquidity
NIM Improved asset margins and lower liquidity Net Interest Margin (NIM) Movement Assets Deposits 0.9 4.9 0.2 0.3 NIM movement: QoQ : 9% 3.4 YoY : 15% 3.9 7.0 0.1 3.3 187 178 Q4FY19 Wholesale Investment Retail Business Others Asset volume Interbank / Deposits Deposits Q1FY20 Banking Banking Bank
Slide 13: Improved trading and insurance income
NoII Improved trading and insurance income YoY Growth 100% 11% >100% 1% 8% 18% 9% 16% 22% 93% 6% 5 21 3 27 ≈ 2 2 9 4 395 22 372 Group Investment Group Foreclosed Corporate Wealth Business General Life RM’ mil Treasury Banking & Other Retail Funding & NoII Properties Banking Mgmt
Slide 14: Managing cost while continuing to invest
Expenses Managing cost while continuing to invest Business Segments Q1FY20 Q4FY19 QoQ Change Q1FY19 YoY Change (RM’ mil) Wholesale Banking 71 76 6% 67 7% Investment Banking 45 44 3% 45 1% Retail Banking 206 221 7% 222 7% Business Banking 34 33 2% 29 16% Group Funding & Others 88 135
Slide 15: Higher net write-backs on corporate loans
Asset Quality Higher net write-backs on corporate loans Net Impairment (RM’ mil) Gross Impaired Loans, GIL and LLC Ratios Retail Wholesale Loan Loss Coverage 2 Business GIL Ratio 7.0 114.0% 100.5% 111.5% 81.2% 79.7% 27.2 (32.4) 1.94% 1.86% 2.4 1.70% 1.66% 24.1 RM’ mil 1.59% 1,701 1,689 1,638 1,673 1
Slide 16: Watchful on asset quality
Asset Quality Watchful on asset quality Impaired Loans by Sector Loans to Oil & Gas (O&G) Sector by Internal Risk Grades Jun’19 Sector YTD Growth Composition Marginal~ Impaired RM’ bil RM’ mil Substandard 3% Real Estate 317 37% 19% 1% Q1FY20 1.6 Residential Properties 410 9% 24% FY19 1.6 Transpo
Slide 17: Muted loans growth
Loans Muted loans growth Gross Loans Movement (RM’ bil) Breakdown by rate sensitivity: Breakdown by concept: Breakdown by customers type: ROA1: RoTA1: LTAF2: Fixed rate – 25% Islamic – 29% Retail – 55% 1.11% 1.13% 86.5% Variable rate –75% Conventional – 71% Non-retail – 45% YTD Growth 1% 6% 4%
Slide 18: Reducing excess liquidity buffers
Deposits Reducing excess liquidity buffers Deposits (RM’ bil) CASA (RM’ bil) and CASA Composition (%) Customer deposits trend YTD Growth Industry CASA trend YTD Growth Industry Q1FY20 102.8 4% 1%1 Q1FY20 23.1 7% 1%1 FY19 106.9 12% 5%2 FY19 24.9 22% 3%2 FY18 95.8 2% 5%2 FY18 20.4
Slide 19: Capitalisation adequate
Capital Capitalisation adequate RWA/Total Assets Capital Adequacy Ratios3 RM’ bil CET 1 Tier 1 Total CAR Total Assets RWA/Total Assets Peers 1 72.2% 72.2% 2 Aggregated basis4 FHC 71.2% 2 2 65.0% 66.0% 16.1% 16.3% 15.4% 15.4% 59.6% 59.5% 59.3% 58.5% 58.4% 12.3% 12.5% 13.6% 11.3% 11.6% 11.1% 5 11.9% 5
Slide 20: Guidance & Expectations
Guidance Guidance & Expectations Q1FY20 Actual FY20 Guidance Reported ROE 8.8% ~ 9% CTI 49.7% ≤ 52.5% Dividend Payout N/A 40% - 45% FHC CET 1 11.9% 11.5% ± 1% 20 Q1FY2020 Results – Investor Presentation
Slide 21: Thank You
Thank You
Slide 22: Group Performance
Group Performance
Slide 23: Yearly performance
Q1FY2020 Results Yearly performance PATMI (RM’ mil) & ROE (%) Total Income (RM’ mil) and Non-interest Income (%) PATMI: ROE: Total Income PATMI ROE (%) CAGR FY16-FY19: 4.9% CAGR FY16-FY19: ≈ Total Income Non-interest Income % CAGR FY16-FY19: 2.0% YoY Growth 12.6% YoY Growth 0.5% YoY Growth
Slide 24: Net interest margin and gross loans
NIM & Gross Loans Net interest margin and gross loans NIM Trend 1 Gross Yield COF NIM Net Spread 5.08% 5.07% 5.03% 4.92% 4.93% 4.96% 5.02% 4.94% 3.39% 3.47% 3.46% 3.45% 3.37% 3.45% 3.27% 3.26% 2.02% 1.91% 1.88% 1.98% 2.00% 1.78% 1.87% 1.89% 1.69% 1.60% 1.57% 1.56% 1.69% 1.68% 1.57% 1.47% Q1FY19 Q2FY
Slide 25: Non-interest income and PATMI mix
NoII & PATMI Non-interest income and PATMI mix Non-interest Income by Lines of Business (YoY) PATMI by Lines of Business (YoY) 93% 27% Others 2% Corporate Banking >100% 12% 6% Group Funding & Retail Group Others 3% Banking Treasury >100% -10% 18% & Market Insurance Wholesale 1 10% 13% Ba
Slide 26: Impairments
Asset Quality Impairments Net Impairment / (Writebacks) and GIL Ratio MFRS 9 Total impairments by category (RM’ mil) Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 QoQ Change YoY Change ECL Stage 1 & 2 / CP – Non defaulted1 (71) (9) 50 (14) (128) >100% 80% ECL Stage 3 / CP – Defaulted 136 144 138 131 163
Slide 27: Loans by sector vs. industry
Loans Loans by sector vs. industry AmBank Group (RM’ bil) Loans Composition 3% 2% 12% ≈ 4% 7% 3% 5% 8% 1% 55% ≈ 100% YTD Growth 1% ≈ 1% 24% 1% 1% 4% 4% 5% 20% 1% 2% 1% Jun-19 100.8 55.4 3.3 4.4 6.7 2.6 4.7 1.7 11.7 0.3 7.9 1.9 0.2 Wholesale, Finance, Mining & Electricity, Tran
Slide 28: Funding profile
Funding Funding profile Funding Composition vs. Peers Funding Maturity Profiles Term Funding and Debt Capital FY16 FY17 FY18 FY19 Q1FY20 Peers1 Equity & debt capital 16% 16% 16% 15% 16% 16% 35% Customer deposits 73% 74% 74% 74% 72% 75% Q1FY20: Term funding & loans sold RM7.8 bil 10% 9% 7% 6% 6% 5% w
Slide 29: Divisional Performance
Divisional Performance
Slide 30: Wholesale Banking
Wholesale Banking Wholesale Banking Total Income (YoY Movement) and Total Assets by Line of Business QoQ PAT (RM’ mil) QoQ Growth: 41% YoY Growth: 43% Total Income 258 RM302 mil 243 181 182 171 Transaction ≈ Banking 25% Wholesale Banking Coverage 36% Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Transactio
Slide 31: Wholesale Banking
Wholesale Banking Wholesale Banking Income Statement YoY Growth 15% 14% 15% 7% 18% >100% 43% 46% 43% Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income Q1FY20 218 84 302 71 231 (106) 337 79 258 Q1FY19 190 73 263 67 196 (39) 235 54 181 Q
Slide 32: Investment Banking
Investment Banking Investment Banking League Table Market Share of Value and Volume Traded on Bursa (KLSE)1 Trading Value Trading Volume Market Share1 As At Rank2 3.9% 30 Jun 2019 (%) 3.8% 3.6% 3.6% DCM (Overall MYR Bonds) 7.9% 4 3.4% 5.7% 5.5% Islamic Sukuk 7.3% 5 5.0% 4.9% 4.8% Unit Trust 8.3% 5
Slide 33: Investment Banking
Investment Banking Investment Banking Income Statement YoY Growth 2% 1% 1% 1% 2% 95% 16% 14% 16% Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income Q1FY20 12 58 70 45 25 (0) 25 5 20 Q1FY19 12 57 69 45 24 (5) 29 6 23 Q1FY20 PAT Q1FY19 PA
Slide 34: Retail Banking
Retail Banking Retail Banking Total Income (YoY Movement) and Loans by Line of Business PAT Trend (RM’ mil) QoQ Growth: 75% Total Income YoY Growth: 6% RM358 mil 16% 19% Others 1% Retail SME 19% 11% 8% Auto 13% Wealth 282 5% Auto 26% Others Mortgage 4% 14% Retail SME 5% ≈ Total loans Car
Slide 35: Cards in circulation
Retail Banking Retail Banking Wealth Sales (RM’ mil) Merchant Volume QoQ Growth: 18% Merchant volume (RM'mil) QoQ Growth: 3% YoY Growth: 5% YoY Growth: 19% Merchants in force ('000) QoQ Growth: 2% YoY Growth: 30% 53 51 44 38 37 866 800 675 702 677 2,764 2,688 2,629 2,625 2,553 Q1FY19 Q2F
Slide 36: Retail Banking
Retail Banking Retail Banking Income Statement YoY Growth 2% 15% 1% 7% 8% 39% 6% 6% 6% Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income Q1FY20 299 60 359 206 153 59 94 23 71 Q1FY19 293 71 364 222 142 43 99 24 75 Q1FY20 PAT Q1FY19 PAT
Slide 37: Distribution Channels
Retail Banking Distribution Channels Branches ATM Regional Offices Perlis 1 3 Kedah 6 24 Pulau Pinang 14 50 2 Perak 18 45 1 Selangor 36 218 2 Kuala Lumpur 23 100 4 Putrajaya 1 3 Negeri Sembilan 7 39 Melaka 6 34 1 Johor 21 82 1 Pahang 8 28 1 Terengganu 2 14 Population Density Kelantan 2 17 < 100 pers
Slide 38: Business Banking
Business Banking Business Banking Gross Loans (RM’ mil) QoQ Growth: 1% QoQ PAT (RM’ mil) QoQ Growth: 5% YoY Growth: 26% YoY Growth: 12% Non-trade Trade 9,964 10,069 9,055 8,583 7,994 2,441 2,462 37 2,222 2,219 2,060 34 30 30 7,523 7,607 6,364 6,833 29 5,934 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20
Slide 39: Business Banking
Business Banking Business Banking Income Statement YoY Growth 18% 9% 16% 16% 16% >100% 11% 8% 12% Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income Q1FY20 66 20 86 34 53 14 39 9 30 Q1FY19 56 19 75 29 46 2 44 10 34 Q1FY20 PAT Q1FY19 PAT
Slide 40: Islamic Banking
Islamic Banking Islamic Banking Income Statement YoY Growth 4% 13% 17% 18% 17% 19% 16% RM' mil Total Income Expenses PBP Impairment PBT Tax & Zakat PATZ Q1FY20 216 76 140 31 109 24 85 Q1FY19 207 87 120 26 94 21 73 Q1FY20 PATZ Q1FY19 PATZ Positive growth in Q1FY20 Contraction in Q1FY20
Slide 41: General Insurance
General Insurance General Insurance Loss Ratio and Combined Ratio YoY PBT and PAT (RM’ mil) Loss Ratio Combined Ratio 96% 97% 92% 92% 91% YoY PBT Growth: 17% PBT PAT YoY PAT Growth: 13% 78% 282 64% 63% 57% 58% 47% 56% 242 FY16 FY17 FY18 FY19 Q1FY19 Q1FY20 194 1 192 Gross Premium Mix and Growth (
Slide 42: Insurance and Group Funding & Others
Insurance & Others Insurance and Group Funding & Others Income Statement – Insurance (General, Life & Takaful) YoY Growth 9% 5% 12% 18% 11% 39% 7% RM'mil Total Income Expenses PBP Impairment PBT Tax PAT Q1FY20 198 85 113 2 111 19 92 Q1FY19 182 81 101 2 99 13 86 Income Statement – Group
Slide 43: Shareholding structure
Corporate Structure Shareholding structure 23.8%1 AmCorp 13.0% PNB 8.9%2 EPF 7.6% Others 46.7% As at 28 June 2019 AMMB Holdings Berhad Retail Banking Wholesale Banking Islamic Banking General Insurance Life Assurance & Takaful 100% AMAB Holdings Sdn Bhd 100% AmBank (M) Berhad 51% AmGeneral Holdings
Slide 44: Credit ratings, target price and recommendations
Ratings & Target Price Credit ratings, target price and recommendations Credit Ratings Q1FY20 AMMB AmBank (M) AmBank Islamic AmInvestment Ratings RAM LT: AA2*, ST: P1 LT: AA2, ST: P1 LT: AA2, ST: P1 LT: AA2, ST: P1 Outlook: Stable Outlook: Stable Outlook: Stable Outlook: Stable *upgraded on 19 Dec 2
Slide 45: Glossary & Disclaimer
Glossary & Disclaimer Glossary & Disclaimer of warranty and limitation of liability Reported Performance Reported performance refers to the financial performance as reported in the audited financial statements and disclosed to the market Growth Definition QoQ/YTD growth refers to Q1FY20 vs Q4FY19 Yo
AMMB Holdings Berhad — Q1 FY2020 Earnings Presentation on 6ix