Alliance Bank Malaysia Bhd. · MYX:ABMB
Alliance Bank Malaysia Bhd — 9M FY2017 Earnings Presentation
27 slides from Alliance Bank Malaysia Bhd's earnings presentation, Feb 22, 2017
Slide 1: Analyst Briefing 9M FY2017
ANALYST BRIEFING 9M FY2017 22 February 2017
Slide 2: Contents
Contents 1 Executive Summary Revenue and Profitability Effective Risk Management Key Results 2 Going Forward New Value Propositions 3 Appendix - Financial Results: 3Q FY2017 9M FY2017
Slide 3: 3Q FY2017: Performance
3Q FY2017: Performance Continued progress despite challenging economy 1 Targeted loans growth with improved Risk Adjusted Returns (“RAR”) Revenue and Growing client based fee income Profitability Improved cost to income ratio with positive JAWS 2 Better-than-industry asset quality, credit co
Slide 4: Targeted loans growth with focus on risk adjusted return
Revenue & Profitability Targeted loans growth with focus on risk adjusted return Loan Portfolio Yield a) Loan portfolio yield : +59bps above industry * b) Industry yield* down 11bps to 4.48% after OPR cut % Alliance Bank Industry Alliance Bank (normalised) c) Continue to enhance loan portfolio yield
Slide 5: Targeted growth in better risk adjusted return loans
Revenue & Profitability Targeted growth in better risk adjusted return loans Loans Growth YTD (April – December 2016) a) Improved loan origination mix: 9M FY2017 annualized loans growth: 9M FY2016 9M FY2017 9M FY2017 Loans Loans Annualized Better risk adjusted return (“RAR”) loans: Growth Growth L
Slide 6: Growing client based fee income
Revenue & Profitability Growing client based fee income Client Based Fee Income Trend a) 9MFY17 client based fee income up 11.4% y-o-y, with growth in: RM mil Insurance, Banca & Unit Trust Fees Brokerage & Share Trading Fees Wealth Management - Insurance, Banca & FX Sales Trade Fees Unit Trust fee
Slide 7: Improved cost to income ratio with positive JAWS
Revenue & Profitability Improved cost to income ratio with positive JAWS Operating Expenses Trend a) 3QFY17: Positive JAWS RM mil OPEX CIR 3QFY17 Q-o-Q Y-o-Y Revenue Growth +5.3% +2.9% Expense Growth +4.2% +0.5% 51.2% 48.4% 47.4% 46.5% 46.5% 46.0% 46.3% JAWS +1.1% +2.4% b) 9MFY17 operating expenses
Slide 8: Maintaining optimal funding mix
Effective Risk Management Maintaining optimal funding mix Deposits Growth and CASA Ratio Optimising funding mix with focus on customer based funding: RM bil 35.0% 33.7% a) Growing customer deposits: +4.2% y-o-y Others 43.5 45.4 Fixed Deposits (FD) b) Maintaining CASA balances: +0.2% y-o-y (CASA 8.4
Slide 9: Deposits grew faster than industry, q-o-q NIM improved
Effective Risk Management Deposits grew faster than industry, q-o-q NIM improved a) +4.2% y-o-y customer deposits growth, faster than Jan 2016 – Dec 2016 AFG Group Banking System industry^ (2.0%*) Deposits Growth 4.17% 1.99% b) Loan to deposits ratio at 86.6% (industry*: 90.6%) Loans Growth 1.61% 5.
Slide 10: Better-than-industry asset quality
Effective Risk Management Better-than-industry asset quality a) Better-than-industry asset quality despite slow down Gross Impaired Loans in mortgages and hire purchase loans: RM mil Gross impaired loans Gross impaired loan ratio Gross impaired loans ratio at 1.0% (industry: 1.6%) Net impaired loa
Slide 11: Credit cost within management guidance
Effective Risk Management Credit cost within management guidance Overall Credit Cost (bps) a) 9MFY2017: Annualized net credit cost normalised to 22.9bps Basis FY2016 9MFY17 (Annualized) points b) Continued reduction in recoveries: (bps) FY2016: RM37.8 million 31.3 9MFY17: RM24.7 million (annuali
Slide 12: Sustainable capital levels
Effective Risk Management Sustainable capital levels Total Capital Ratio (%) a) After redemption of RM600 million Tier-2 Sub- Notes in April 2016, Total Capital Ratio remained strong at 16.6% 17.4% 16.3% 16.8% 16.6% 14.6% b) Strong CET-1 ratio at 12.0%, after retained 13.7% 13.0% earnings and regula
Slide 13: Competitive ROE with Better Risk Adjusted Return strategy
Key Results Competitive ROE with Better Risk Adjusted Return strategy Net Profit After Tax and Return on Equity a) Steady q-o-q performance despite challenging NPAT environment: YTD Return on Equity (AFG) YTD Return on Equity (Industry) NPAT : RM129.7 million RM mil YTD ROE : 10.8% 11.4% 11.2% 1
Slide 14: Summary: Focus on sustainable profitability
Summary Focus on sustainable profitability 1 Targeted loans growth with improved Risk Adjusted Returns (“RAR”) Revenue and Growing client based fee income Profitability Improved cost to income ratio with positive JAWS 2 Better-than-industry asset quality, credit cost within management guidan
Slide 15: Contents
Contents 1 Executive Summary Revenue and Profitability Effective Risk Management Key Results 2 Going Forward New Value Propositions 3 Appendix - Financial Results: 3Q FY2017 9M FY2017
Slide 16: New Value Propositions
New Value Propositions Bank A Bank B Bank C 10% p.a. 11% p.a. 11% p.a. Building the Future Bank A Bank B Bank C Offerings Description of Offerings Value Propositions 10% p.a. 11% p.a. 11% p.a. Loan Bank ABank A Bank B Bank C Consolidate your loans into one account Consolidation 14% p.a. for conven
Slide 17: Contents
Contents 1 Executive Summary Revenue and Profitability Effective Risk Management Key Results 2 Going Forward New Value Propositions 3 Appendix - Financial Results: 3Q FY2017 9M FY2017
Slide 18: Key Highlights Q-o-Q: Financial Performance
Key Highlights Q-o-Q: Financial Performance Net profit after tax: RM129.7 million Non Interest Income & Net Interest Income & Revenue NOII Ratio Islamic Banking Income Client Based Non Client Based NOII Ratio RM mil RM mil RM mil 23.8% 24.2% 23.7% 22.6% 352.7 363.8 359.7 378.6 84.4 85.4 80.3 77.0 27
Slide 19: 3Q FY2017: Income Statement
3Q FY2017: Income Statement Q-o-Q Change Net income increased by 5.3% q-o-q, due to: 2QFY17 3QFY17 Better / (Worse) Income Statement +3.7% increase in net interest income⁺ (mainly RM mil RM mil contributed by higher RAR loan growth) RM mil % +10.6% rise in non-interest income⁺ Net Interest Inc
Slide 20: Key Highlights Y-o-Y: Financial Performance
Key Highlights Y-o-Y : Financial Performance 9MFY17 net profit after tax improve 0.6% y-o-y Non Interest Income & Net Interest Income & Revenue NOII Ratio Islamic Banking Income RM mil Client Based Non Client Based NOII Ratio RM mil RM mil 1,071.4 1,102.2 23.8% 23.7% 24.4% 23.5% 819.5 855.4 251.9 24
Slide 21: 3Q FY2017: Income Statement
3Q FY2017: Income Statement Y-o-Y Change Net income increased by 4.8% y-o-y, due to: 3QFY16 3QFY17 Better / (Worse) Income Statement +5.0% rise in net interest income⁺ (mainly RM mil RM mil contributed by higher RAR loan growth ) RM mil % +4.2% increase in non-interest income⁺ Net Interest Inc
Slide 22: 9M FY2017: Income Statement
9M FY2017: Income Statement Y-o-Y Change Net income grew by 2.9% y-o-y, driven by: 9MFY16 9MFY17 Better / (Worse) Income Statement +4.1% rise in net interest income⁺ (mainly RM mil RM mil contributed by higher RAR loan growth) RM mil % -0.9% drop in non-interest income⁺ Net Interest Income 636
Slide 23: Q-o-Q Summarised Balance Sheet
Q-o-Q Summarised Balance Sheet Change Q-o-Q 0.4% q-o-q net loans growth, with focus Sep 16 Dec 16 Balance Sheet on better risk adjusted return loans RM bil RM bil RM bil % namely SME, commercial and consumer unsecured lending Total Assets 54.8 53.8 (1.0) (1.8%) Better risk adjusted return loans
Slide 24: YTD Summarised Balance Sheet
YTD Summarised Balance Sheet Change YTD 1.3% year-to-date (YTD) net loans Mar 16 Dec 16 Balance Sheet growth, with focus on better risk adjusted RM bil RM bil RM bil % return loans namely SME, commercial and consumer unsecured lending Total Assets 55.6 53.8 (1.8) (3.2%) Better risk adjusted retu
Slide 25: Y-o-Y Summarised Balance Sheet
Y-o-Y Summarised Balance Sheet Change Y-o-Y 1.6% y-o-y net loans growth, with focus Dec 15 Dec 16 Balance Sheet on better risk adjusted return loans namely RM bil RM bil RM bil % SME, commercial and consumer unsecured lending Total Assets 54.4 53.8 (0.6) (1.1%) Better risk adjusted return loans
Slide 26: Key Financial Ratios
Key Financial Ratios Financial Ratios 3QFY16 2QFY17 3QFY17 9MFY16 9MFY17 Return on Equity 11.6% 10.7% 10.4% 11.4% 10.8% Shareholder Value Earnings per Share 8.9sen 8.7sen 8.5sen 25.7sen 25.9sen Net Assets per Share RM3.02 RM3.27 RM3.22 RM3.02 RM3.22 Net Interest Margin 2.15% 2.22% 2.31% 2.17% 2.25%
Slide 27: Thank You
THANK YOU Disclaimer: This presentation has been prepared by Alliance Financial Group (the “Company”) for information purposes only and does not purport to contain all the information that may be required to evaluate the Company or its financial position. No representation or warranty, expressed or
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