Ammb Holdings Bhd. · MYX:AMBANK
Ammb Holdings Bhd — FY2018 Earnings Presentation
52 slides from Ammb Holdings Bhd's earnings presentation, May 31, 2018
Slide 1: Investor Presentation FY2018 Results
INVESTOR FY2018 RESULTS PRESENTATION 31 MAY 2018 FY18 Results – Investor Presentation
Slide 2: GCEO Presentation
GCEO PRESENTATION Dato’ Sulaiman Mohd Tahir 3 FY18 Financial Snapshot 4 FY18 in Review 5 Outlook for 2018 22 Guidance & Expectations 23 FY19 Agenda FY18 Results – Investor Presentation
Slide 3: FY18 Financial Snapshot
Financial Snapshot Financial FY18 Financial Snapshot Overview FY18 Financials (YoY) Income 3,979 6% • Broad-based income growth FY17: 3,766 • Net interest income on growth trajectory 2,421 Expenses 12% • Retail and Business Banking income up 7% and FY17: 2,160 19%. Wealth Management fees grew 63
Slide 4: FY18 in Review
AmBank Group FY18 in Review Improving efficiency & productivity Good momentum from Top 4 focus products Project APEX Wealth Management • Simplified branch workflow and reduced turnaround • Total AUM up 61% time • 2nd largest ASNBV1 distributor in the market • 1.4m hours saved • ASNB fee income circa
Slide 5: Outlook for 2018
Market Outlook Outlook for 2018 Recap Outlook 2017 2018 GDP growth: 5.9% GDP growth: 5.5% Inflation: 3.8% Inflation: 2.5% - 2.8% Export growth: Export growth: 19.4% 9.0% Ringgit performance: Ringgit outlook: Stronger Appreciated 8.7% Loans growth: 4.1% Loans growth: Circa 5.0% 5 FY18 Results – Inves
Slide 6: GCFO Presentation
GCFO Presentation Jamie Ling 7-21 Financial Overview FY18 Results – Investor Presentation
Slide 7: Financial Overview Q4FY18 Results (QoQ)
Financial Overview Financial Overview 1 Q4FY18 Results (QoQ) • A strong Q4 income of RM1.1bil (+12%). Banking and Insurance income grew 4% and 62% respectively • Good NII growth (+4%) benefitting from OPR hike with NIM advancing 9bps to 2.04% • Strong NoII growth (+25%) contributed by pick up in tra
Slide 8: FY18 Performance highlights – P&L
Financial Overview FY18 Performance highlights – P&L P&L (RM’ mil) Q3FY18 Q4FY18 QoQ Change FY17 FY18 YoY Change Total Income 959 1,071 12% 3,766 3,979 6% Expenses 577 728 26% 2,160 2,421 12% PBP 383 342 10% 1,605 1,558 3% Net Allowances 81 (17) >100% (196) 16 >100% PATMI 219 253 1
Slide 9: FY18 Performance highlights – balance sheet
Financial Overview FY18 Performance highlights – balance sheet Balance Sheet (RM’ bil) Q3FY18 Q4FY18 QoQ Change FY17 FY18 YoY Change Gross Loans 94.7 96.3 2% 91.0 96.3 6% GIL 1.77% 1.70% 7bps 1.86% 1.70% 16bps LLC1 101.6% 100.5% >100bps 79.7% 100.5% >100bps Customer Deposits 99.9 95.8
Slide 10: Ramping up revenue growth momentum
Income Ramping up revenue growth momentum • Income growth largely broad based • Consistent build up in quarterly NII • Normalised income grew 8% YoY Business Segments Q3FY18 Q4FY18 QoQ Change FY17 FY18 YoY Change (RM’ mil) Retail Banking 354 360 2% 1,361 1,453 7% Wholesale Banking 366 384 5% 1
Slide 11: Restructuring and accelerated investments weighed on PBP
PBP & PATMI Restructuring and accelerated investments weighed on PBP Business Segments Q3FY18 Q4FY18 QoQ Change FY17 FY18 YoY Change (RM’ mil) Retail Banking 97 109 12% 436 450 3% Wholesale Banking 244 260 7% 921 890 3% Business Banking 44 45 3% 186 176 5% Group Funding & Others (40) (17
Slide 12: Good NII growth while provisions normalised
Group P&L Good NII growth while provisions normalised YoY Growth 8% 1% 6% 12% 3% >100% 14% 26% 11% 45% 15% RM’ mil 21 192 1461 1,325 20% 260 104 1,132 38 212 24% Effective NIM: NoII%: CTI: GIL: Tax Rate: 2.00% 37.6% 60.8% 1.70% 18.6% 80% 76% Net Interest Non-Interest Total RM’ m
Slide 13: Optimising funding mix and asset portfolio
NIM Optimising funding mix and asset portfolio Actively managing our COF to offset retail asset yield compression Net Interest Margin (NIM) Movement bps Asset repricing Deposits 1.6 8.6 0.4 2 bps 1.8 9.0 0.9 0.8 200 198 FY17 Portfolio Wholesale Retail Business General Deposits rates Deposits mix F
Slide 14: Robust growth from Wealth, Markets and General Insurance
NoII Robust growth from Wealth, Markets and General Insurance Growth in strategic focus products, negated by normalised items YoY Growth 5% 29% 1% 63% 2% 26% >100% 84% 1% RM’ mil Normalised items 81 100 36 38 43 47 3 42 14 3 60 63 1,474 1,495 Investment Investment Fixed Income Fo
Slide 15: Creating a leaner bank whilst building capabilities
Expenses Creating a leaner bank whilst building capabilities Business Segment Q3FY18 Q4FY18 QoQ Change FY17 FY18 YoY Change (RM’ mil) Retail Banking 256 251 2% 925 1,003 8% Wholesale Banking 122 123 1% 507 507 ≈ Business Banking 24 23 2% 32 83 >100% Group Funding & Others 91 242 >100% 358
Slide 16: Resilient asset quality
Asset Quality Resilient asset quality Gross Impaired Loans (RM’ mil), GIL and LLC Ratios (%) GIL Ratio (%) QoQ Breakdown Retail Wholesale2 GIL Ratio Loan Loss Coverage 1 FY17 FY18 RM’ mil 127.4% AmBank Group 105.0% 81.2% 79.7% 100.5% GIL Ratio Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1.86% 1.79% 1.94% 1.86% 1.70% Gr
Slide 17: Tapering recoveries
Asset Quality Tapering recoveries Allowance (RM’ mil) Credit Costs FY17 Individual Collective Recoveries Others FY18 AmBank Group FY14 FY15 FY16 FY17 FY18 Allowance Allowance 230 40 16 Credit cost 0.08% -0.04% -0.19% -0.19% 0.00% Credit cost (196) (excluding 0.94% 0.69% 0.47% 0.57% 0.47% recoveries)
Slide 18: Unpacking the normalised items
Underlying Unpacking the normalised items Normalised P&L (RM’ mil) FY16 FY17 YoY Change FY18 YoY Change Income - Reported 3,696 3,766 2% 3,979 6% Gain on disposal of foreclosed properties - 108 - 45 - Investment share revaluation - - - 42 - Fixed income trading gain - 60 - - - Income - Underlyin
Slide 19: Continue to drive growth in targeted segments
Loans Continue to drive growth in targeted segments Breakdown by rate sensitivity: Breakdown by concept: Breakdown by customers type: LD ROA: Fixed rate – 28% Islamic – 29% Retail – 57% Ratio1: Gross Loans Movement (RM’ bil) Variable rate –72% Conventional – 71% Non-retail – 43% 0.83% 89.9% YTD Grow
Slide 20: Strengthening funding resiliency
Deposits Strengthening funding resiliency • Improving retail mix • CASA balance continues to grow Deposits (RM’ bil) CASA Composition and CASA Balance (RM’ bil) Customer deposits trend YoY Growth Industry3 CASA trend YoY Growth Industry3 FY18 95.8 2% 5% FY18 20.4 3% 6% FY17 93.9 4% 3% FY
Slide 21: Capital levels adequate
Capital Capital levels adequate RWA/Total Assets Capital Adequacy Ratios (after dividends) RM’ bil CET 1 Tier 1 Total CAR Total Assets RWA/Total Assets Peers 72.7% 72.8% 71.5% 71.2% 72.2% 73.0% 15.8% 16.1% 16.3% 16.6% 14.8% 15.4% 12.3% 12.5% 12.0% 11.8% 60.8% 62.4% 61.1% 59.6% 59.5% 59.4% 1 11.0% 11
Slide 22: Guidance & Expectations
Guidance Guidance & Expectations FY18 Guidance FY18 Actual FY19 Guidance Reported: 7.0% ROE Circa 7% Underlying: 7.3% ≥ 8.5% Reported: 60.8% CTI ≤ 58% Underlying: 57.2% ≤ 55% Dividend Circa 40% 40% Circa 40% FHC CET 1 10.5% ± 1% 11.1% 10.5% ± 1% 22 FY18 Results – Investor Presentation
Slide 23: FY19 Agenda
Strategic actions FY19 Agenda Targeted outcome FY19 priorities Key Metrics Revenue growth • Grow income in Top 4 products & segments • Revenue growth • Achieving better assets yields • NIM “Continue to build income momentum” • Grow CASA BET300 • Cost discipline • CTI “To achieve CTI of 55% • Pacing
Slide 24: Thank You
Thank You FY18 Results – Investor Presentation
Slide 25: Top 4 Strategy
Top 4 Strategy FY18 Results – Investor Presentation
Slide 26: Top 4 Aspirations: FY2017 - FY2020
Top 4 Top 4 Aspirations: FY2017 - FY2020 To TIMEbe LINE Top 401 in To be Top 4 in To sustain Top To be Top 4 each of our Lorem ipsum 4 dolor each of our 4 4 in each of our growth sit amet, focus products current engines consectetuer segments adipiscing elit, • Mass Affluent • Cards & • Corporate •
Slide 27: Strategic business initiatives towards FY2020
AmBank Group Strategic business initiatives towards FY2020 Wholesale Banking Retail Banking Business Banking Focus Focus Focus Diversifying source of revenue focusing Growth in mass affluent, affluent and retail Aspire to be the preferred SME Bank in capital light businesses: SME segments, while str
Slide 28: Strategic business initiatives towards FY2020
AmBank Group Strategic business initiatives towards FY2020 Insurance Islamic Banking People & Culture Focus Focus Focus General Preferred Islamic Bank based on Value- Top 4 Employer of Choice in Banking • To be the No.1 Motor Insurer Based Intermediation (VBI) through Industry Life Assurance & Takaf
Slide 29: Group Performance
Group Performance FY18 Results – Investor Presentation
Slide 30: Yearly performance
FY18 Results Yearly performance PATMI (RM’ mil) & ROE (%) Total Income (RM’ mil) and Non-interest Income (%) PATMI: ROE: PATMI ROE (%) CAGR FY13-18: 6.9% CAGR FY13-18: 1.4% Total Income: 14.5% YoY Growth: Total income CAGR FY13-17: 1.9% YoY Growth: 1.5% Non-interest income % YoY Growth:
Slide 31: Net interest margin trends
NIM Net interest margin trends NIM Trend vs. Industry 5.01% 4.95% 5.00% 5.05% 5.11% 4.96% 4.94% 4.92% 4.86% 4.92% 4.90% Gross Yield 4.76% Industry Avg. 4.59% 4.59% 4.61% 4.61% 4.62% 4.65% Lending Rate 4.49% 4.50% 4.54% 4.54% 3.36% 3.33% 3.34% 3.27% 3.31% 3.26% 3.27% 3.25% 3.22% 3.24% 3.14% COF 3.29%
Slide 32: 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) 84% 13% Others 1% Investment Bank >100% 11% Operating Segment -17% Retail Banking 13% 15% Insurance Markets 21% 27% 32% 13% Insurance & Others 19% Insurance 33
Slide 33: Quarterly loans and deposit trends
Loans & Deposits Quarterly loans and deposit trends Net Lending (RM’ bil) QoQ Growth: 1.8% YTD Growth: 6.1% QoQ Growth (excl.AF): 2.9% YTD Growth (excl.AF): 10.1% Loans excluding Auto Finance Auto Finance 93.7 95.4 89.5 89.9 91.6 91.9 84.1 85.3 85.4 86.5 85.8 86.1 18.5 18.1 19.9 19.6 19.4 19
Slide 34: Asset Quality
Asset Quality Asset Quality Impaired Loans – Key Segments Gross Impaired Loans Ratio FY16 FY17 FY18 2.5% 2.3% 1.86% 1.88% 1.88% 2.2% 1.77% 1.8% 1.69% AmBank 1.7% 1.65% Group 1.5% 1.61% 1.70% 1.3% 1.3% 1.3% 1.2% 1.66% 1.64% 1.63% 1.64% 1.67% 1.2% Industry 2 1.0% 1.54% 1.57% 1.53% Auto Finance Mortgag
Slide 35: Credit cost normalising
Asset Quality Credit cost normalising Net Provisions / (Writebacks) RM’ mil Total provisions by QoQ YoY Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 FY16 FY17 FY18 category Change Change Performing Loans (11) 14 (36) (179) (41) (47) (2) (28) >100% (276) (212) (118) 44% Non Performing L
Slide 36: Loans by sector vs. industry
Loans Loans by sector vs. industry Loans by Sector AmBank Group (RM’ bil) Loans Composition 3% 2% 10% 1% 4% 6% 2% 5% 9% 2% 56% ≈ 100% YTD Growth 15% 7% 6% >100% 2% 12% 28% 3% 1% 27% 10% 13% 6% Mar-18 96.3 53.7 6.0 4.4 3.3 1.9 9.8 1.2 3.7 2.1 1.8 0.1 8.3 Finance, Electricity
Slide 37: Diversified and consistent funding structure, conservative liquidity management
Diversified and consistent funding structure, Funding conservative liquidity management Funding Composition vs. Peers • Sufficient holding of liquid assets with LCRs in FY13 FY15 FY16 FY17 FY18 Peers1 excess of 100% Equity & debt 14% 15% 16% 16% 16% 16% capital • Active liquidity management and refi
Slide 38: Divisional Performance
Divisional Performance FY18 Results – Investor Presentation
Slide 39: Retail Banking
Retail Retail Banking Total Income (YoY Movement) and Loans by Line of Business PAT Trend (RM’ mil) Total Income FY18 Growth: 13% RM1,453 mil FY17 Growth: 25% >100% 467 59% Retail SME 7% 56% 3% Others 4% Auto Wealth 19% 6% 349 Auto 103 34% 304 97 96 Others 3% Retail SME 76 76 75 74 3% To
Slide 40: Cards in circulation
Retail Retail Banking Wealth Sales (RM’ mil) Merchant Volume QoQ Growth: 12% Merchant volume (RM'mil) QoQ Growth: 3% YoY Growth: ≈ YoY Growth: 18% Merchants in force ('000) QoQ Growth: ≈ YoY Growth: 4% 53 54 54 54 826 51 52 769 50 51 736 736 672 675 2,799 2,890 2,803 2,883 565 2,595 2,619 2,
Slide 41: Retail Banking
Retail Retail Banking Income Statement (RM’ mil) YoY Growth 1% 34% 7% 8% 3% >100% 13% 12% 13% Net Interest Non-Interest Provisions / RM' mil Total Income Expenses PBP PBT Tax PAT Income Income Allowances FY18 1,154 299 1,453 1,003 450 51 399 95.4 304 FY17 1,138 223 1,361 925 436 (2
Slide 42: Distribution Channels
Retail Distribution Channels Branches ATM Regional Offices Perlis 1 3 Kedah 6 24 1 Pulau Pinang 14 51 1 Perak 18 45 1 Selangor 37 217 2 Kuala Lumpur 23 106 3 Putrajaya 1 3 Negeri Sembilan 7 38 Melaka 6 34 1 Johor 21 82 1 Pahang 9 29 1 Terengganu 4 16 Population Density Kelantan 2 16 < 100 persons pe
Slide 43: Wholesale Banking (including Business Banking)
Wholesale Wholesale Banking (including Business Banking) Total Income (YoY Movement) and Total Assets by Line of Business QoQ PAT (RM’ mil) Total Income YoY Growth: 5.4% RM1,656 mil 821 827 8% 10% 782 Funds Others Management 3% 7% 14% Capital & 261 Equity 244 242 Markets Wholesale 9% Others
Slide 44: Wholesale Banking (including Business Banking)
Wholesale Wholesale Banking (including Business Banking) League Table Market Share of Value Traded on Bursa (KLSE) Market Share1 As At Rank2 31 March 2018 (%) 5.5% 5.7% 5.3% 5.2% 5.1% DCM (Overall MYR Bonds) 13.3% 4 Islamic Sukuk 10.5% 4 Unit Trust 7.1% 5 Stockbroking 5.1% 6 1. Calendar Year dat
Slide 45: Wholesale Banking (including Business Banking)
Wholesale Wholesale Banking (including Business Banking) Income Statement (RM’ mil) YoY Growth 9% 9% 1% 9% 4% 54% 6% 6% 5% Net Interest Non-Interest Provisions / RM' mil Total Income Expenses PBP PBT Tax PAT Income Income Allowances FY18 950 706 1,656 590 1,066 53 1,013 231 782 FY1
Slide 46: Islamic Banking
Islamic Islamic Banking Income Statement (RM’ mil) YoY Growth 13% 1% 28% >100.0% 1% 4% 1% FY18 PATZ (composition of Group) Islamic 22% Others Provisions / RM' mil Total Income Expenses PBP PBT Tax & Zakat PATZ Allowances FY18 830 424 406 61 345 74 271 FY17 735 419 316 (24) 340 71 269 P
Slide 47: General Insurance
General Insurance General Insurance Loss Ratio and Combined Ratio YoY PAT (RM’ mil) Loss Ratio Combined Ratio YoY PAT Growth: 45% YoY PBT Growth: 47% 95% 96% 97% 91% 92% PAT PBT 314 282 63% 63% 64% 63% 57% 224 FY14 FY15 FY16 FY17 FY18 194 1 192 Gross Premium Mix and Growth (RM’ mil) YoY GWP Grow
Slide 48: Insurance and Group Funding & Others
Insurance & Others Insurance and Group Funding & Others Income Statement – Insurance (General, Life & Takaful) (RM’mil) YoY Growth 11% 2% 24% ≈ 23% 58% 19% FY18 PAT (composition of Group) Insurance 19% Others Provisions/ RM'mil Total Income Expenses PBP PBT Tax PAT Allowances FY18 618 34
Slide 49: Shareholding structure AMMB Holdings Berhad
Corporate Structure Shareholding structure 23.8%1 AmCorp 13.0% EPF 9.4% Others 53.8% As at 30 Mar 2018 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 49% 100% MB
Slide 50: Credit ratings, target price and recommendations
Ratings & TP Credit ratings, target price and recommendations Credit Ratings Ratings FY2007 FY2018 AmBank (M) LT: A2, ST: P1 LT: AA2, ST: P1 RAM Outlook: Stable Outlook: Stable +3 S&P LT: BBB-, ST: A-3 Outlook: LT: BBB+, ST: A-2 Stable Outlook: Stable +2 LT: Baa1, ST: P-2 LT: Baa2, ST: P-3 Outlook:
Slide 51: Glossary/Disclaimer of warranty and limitation of liability
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 growth refers to Q4FY18 vs Q3FY18 YoY / YT
Slide 52: Glossary/Disclaimer of warranty and limitation of liability
Glossary / Disclaimer Glossary/Disclaimer of warranty and limitation of liability The material in this presentation is general background information about AmBank Group’s activities current at the date of the presentation. It is information given in summary form and does not purport to be complete.