Malayan Banking Bhd. · MYX:MAYBANK

Malayan Banking Bhd — FY2018 Earnings Presentation

51 slides from Malayan Banking Bhd's earnings presentation, Feb 26, 2019

  1. Slide 1: Investor Presentation: Financial Results 4Q FY2018 and FY2018

    Humanising Financial Services Investor Presentation Financial Results 4Q FY2018 and Full Year FY2018 ended 31 December 2018 26 February 2019 www.maybank.com 0

  2. Slide 2: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 20 Appendix: 1. Financial Performance 23 2. Community Financial Services 34 3. Global Banking 37 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other segments 47 1 Financial Results: 4Q FY2018 and Full Year FY2018 ended

  3. Slide 3: Maybank Group FY2018 Overview

    Maybank Group FY2018 Overview New record net profit of RM8.11 billion on the back of strong net operating income of RM23.63 billion 1 • New net operating income high of RM 23.63 billion supported by net fund based income growth of 3.1% YoY, as Group loans expanded 4.8% Record Net Profit • Overhead e

  4. Slide 4: Maybank2020: Strategic Objectives

    Maybank2020: Strategic Objectives Key Achievements in FY2018 1 • Group Wealth Management grew 11% YoY to RM24.6 billion in investment AUM as our The Top ASEAN customer base expanded 18% to over 780,000 Community Bank • The local incorporation of Maybank Singapore Limited was completed with the trans

  5. Slide 5: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 20 Appendix: 1. Financial Performance 23 2. Community Financial Services 34 3. Global Banking 37 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other segments 47 4 Financial Results: 4Q FY2018 and Full Year FY2018 ended

  6. Slide 6: P&L Summary: FY2018

    P&L Summary: FY2018 Record high PPOP at RM12.42 billion, up 4.2% YoY More 4Q 3Q 4Q details RM million FY2018 FY2017 YoY QoQ YoY on FY2018 FY2018 FY2017 s.25 Net fund based income * 17,135.9 16,627.7 3.1% 4,474.6 4,268.2 4.8% 4,161.3 7.5% s.9/10 /25 Net fee based income * 6,493.8 6,610.5 (1.8)% 1,826

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

    Net Fund Based Income: FY2018 (1/3) Loans growth across home markets and segments supported by selective deposit growth Group Malaysia Singapore Indonesia Gross Loans (YoY) Community Financial Services Global Banking  +4.8% (Reported)  +4.8%  +4.5%  +7.0%  +5.0% (Normalised) SGD billion IDR tri

  8. Slide 8: Net Fund Based Income: FY2018 (2/3)

    Net Fund Based Income: FY2018 (2/3) Marginal NIM compression of 3 bps due to Group’s liquidity drive in 1H FY2018 Net Interest Margin (%) QoQ Trend 2.39 2.38 5 Year Trend 2.30 2.30 2.27 4Q '17 1Q '18 2Q '18 3Q '18 4Q '18 2.36 2.33 2.31 2.31 2.27 FY2014 FY2015 FY2016 FY2017 FY2018 7

  9. Slide 9: Net Fund Based Income: FY2018 (3/3)

    Net Fund Based Income: FY2018 (3/3) Continued credit RWA optimisation on the back of selective loan growth Group Gross Loans Total Group RWA  +4.8%  +1.7% 517.3  +1.7%  (1.2)%  +5.7%  (0.1)% 493.8 485.7 379.6 373.3 375.1 374.6 459.4   +7.7%  +6.6% +4.3% 37.2 34.9 40.1 41.8 Operational RWA 

  10. Slide 10: Net Fee Based Income: YoY

    Net Fee Based Income: YoY Lower net fee based income as a result of weaker equity market RM million FY2017 FY2018 YoY Commission, service charges and fees 3,564 3,358  (5.8)% Investment & Trading Income 1,057 (318)  (>100)% Unrealised gain/(losses) on financial assets and investments 143 (228)  (

  11. Slide 11: Net Fee Based Income: QoQ

    Net Fee Based Income: QoQ Higher QoQ net fee based income due to lower contractual liabilities for insurance business 1Q 2Q 3Q 4Q RM million QoQ FY2018 FY2018 FY2018 FY2018 Commission, service charges and fees 836 857 883 782  (11.4)% Investment & Trading Income 109 (24) (68) (335)  >100% Unrealis

  12. Slide 12: Overheads: FY2018

    Overheads: FY2018 Group CIR of 47.4% within Group’s guidance of ~48%, on disciplined cost management 4Q 3Q 4Q RM million FY2018 FY2017 YoY QoQ YoY FY2018 FY2018 FY2017 Personnel Costs 6,449.5 6,128.0 5.2% 1,751.0 1,557.2 12.4% 1,556.5 12.5% Establishment Costs 1,813.1 1,980.9 (8.5)% 491.8 447.9 9.8%

  13. Slide 13: Asset Quality

    Asset Quality Moderating Group GIL ratio of 2.41% QoQ due to better asset quality trends across home markets 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 2018

  14. Slide 14: Asset Quality by Line of Business

    Asset Quality by Line of Business Improved quarterly trends across business segments, while consumer lines relatively stable Consumer Mortgage Auto Finance Credit Cards 2.59% 2.61% 2.63% 2.14% 2.30% 1.42% 1.36% 1.34% 1.75% 1.84% 1.83% 1.84% 1.86% 1.08% 0.98% 1.73% 1.79% 1.78% 1.53% 0.85% 0.90% 0.92%

  15. Slide 15: Exposure to Oil & Gas and Real Estate Sectors: 31 December 2018

    Exposure to Oil & Gas and Real Estate Sectors: 31 December 2018 Group Exposure to Direct & Indirect Oil & Gas Borrowers Real Estate Exposure to Non-Retail Malaysian Borrowers Maybank Group Malaysia Singapore Indonesia Others Others, 31.1% High Rise 3.57% 2.04% 1.21% 0.11% 0.21% Residential, 30.6% No

  16. Slide 16: Liquidity Management: 31 December 2018

    Liquidity Management: 31 December 2018 Maintained strong Group liquidity risk indicators Funding Breakdown Borrowings and Liquidity Risk Indicators Capital Instruments by Currency LDR LTF LTFE LCR 153.3% 144.9% 133.1% 130.5% 132.4% FI Deposits, 6% HKD, Equity, 11% JPY, 8% IDR, SGD, 10% 3% 10% 94.4%

  17. Slide 17: Strong Capital Position: 31 December 2018

    Strong Capital Position: 31 December 2018 Total capital ratio of 18.51% and CET1 capital ratio of 14.51% (assuming 85% dividend reinvestment rate) Before proposed After proposed Regulatory Requirements dividend dividend, Jan 2019 2018 assuming 85% Onwards reinvestment rate Minimum Common Equity Tier

  18. Slide 18: Dividend: FY2018

    Dividend: FY2018 Single-tier final dividend of 32 sen consisting of 15 sen cash portion and 17 sen electable portion Dividend (sen), Payout Ratio (%) and Cash Component (%) 79.9% 78.5% 78.1% 78.5% 77.3% 76.5% 74.9% 74.7% 76.3% Dividend 71.9% Payout Ratio 67% 53% Cash 27% 20% 25% 27% 13% 11% 12% 19%

  19. Slide 19: Financial Statements Impact Arising from MFRS 16 Adoption

    Financial Statements Impact Arising from MFRS 16 Adoption Preliminary impact of implementation for Maybank Group MFRS 16 Adoption (effective 1 January 2019)  MFRS 16 replaces existing accounting standard MFRS 117  MFRS 16 eliminates the distinction between operating and finance leases for all less

  20. Slide 20: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 20 Appendix: 1. Financial Performance 23 2. Community Financial Services 34 3. Global Banking 37 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other segments 47 19Financial Results: 4Q FY2018 and Full Year FY2018 ended

  21. Slide 21: Market Outlook

    Market Outlook FY2019 Industry outlook for our home markets Key Indicators Industry Outlook • GDP: 4.9% (2019F) vs 4.7% (2018) • Stable economic growth driven by growth in • System loan: 5.1% (2019F) vs 5.6% (2018) mining and agriculture sectors, private • OPR: 3.25% (2019F) vs 3.25% (2018) investme

  22. Slide 22: Maybank Performance Outlook

    Maybank Performance Outlook Group guidance for FY2019 1 Income Growth  Expand revenue streams through cross business collaborations  Measured balance sheet expansion in line with economic growth of home markets and Group’s conservative risk posture  Group ROE guidance of ~11.0% 2 Better Productiv

  23. Slide 23: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 20 Appendix: 1. Financial Performance 23 2. Community Financial Services 34 3. Global Banking 37 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other segments 47 22Financial Results: 4Q FY2018 and Full Year FY2018 ended

  24. Slide 24: International & Malaysia Portfolio Mix FY2018

    International & Malaysia Portfolio Mix FY2018 Net Operating Income Profit Before Tax Gross loans* FY2018 (Jan 18 – Dec 18) Overseas: 7.4% Overseas: 10.8% Overseas: 8.5% 37.5% 12.1% 29.9% 6.9% 41.7% 7.6% RM23.63 12.2% RM10.90 RM517.3 18.0% billion billion billion 25.6% 58.3% 62.5% 70.1% Malaysia Sing

  25. Slide 25: Segmental Performance of Businesses: FY2018 (1/2)

    Segmental Performance of Businesses: FY2018 (1/2) Net Operating Income FY2017  +1.7% Group Global Banking  +1.0% FY2018 23,238 23,630 FY2017: 9,242 FY2018: 9,336  +0.3%  +4.7%  (8.5)%  (61.3)%  (15.2)% 13,497 13,542 RM million 7,658 8,016 1,337 1,224 1,861 1,578 247 96 Total Group Community G

  26. Slide 26: Segmental Performance of Businesses: FY2018 (2/2)

    Segmental Performance of Businesses: FY2018 (2/2) Net Fund Based Income FY2017  +3.1% Group Global Banking  +4.6% FY2018 FY2017: 5,359 FY2018: 5,606 16,628 17,136  +0.3%  +4.4%  +3.3%  (>100)%  +6.3% 10,292 10,320 RM million 5,058 5,282 302 312 (1) 12 1,094 1,163 Total Group Community Group C

  27. Slide 27: P&L Summary: QoQ

    P&L Summary: QoQ 1Q 2Q 3Q 4Q 4Q RM million QoQ YoY FY2018 FY2018 FY2018 FY2018 FY2017 Net fund based income 4,237.9 4,155.2 4,268.2 4,474.6 4.8% 4,161.3 7.5% Net fee based income 1,578.6 1,663.2 1,425.6 1,826.3 28.1% 1,885.6 (3.1)% Net operating income 5,816.5 5,818.4 5,693.8 6,300.9 10.7% 6,046.9 4

  28. Slide 28: Income Statement for Insurance and Takaful Business

    Income Statement for Insurance and Takaful Business 1Q 2Q 3Q 4Q RM million FY2018 FY2017 YoY QoQ FY2018 FY2018 FY2018 FY2018 Net interest income 1,163.0 1,086.9 7.0% 278.2 280.8 294.8 309.2 4.9% Net earned premiums 5,933.6 5,250.9 13.0% 1,511.4 1,490.0 1,430.0 1,502.2 5.0% Other operating income (36

  29. Slide 29: Group Gross Loans Growth: 31 December 2018

    Group Gross Loans Growth: 31 December 2018 % of 31 Mar 30 Jun 30 Sep 31 Dec 31 Dec QoQ YoY Portfolio 2018 2018 2018 2018 2017 Group Gross Loans 493.4 502.4 507.7 517.3  1.9% 493.8  4.8% Malaysia (RM billion) 58% 288.9 290.5 292.5 299.2  2.3% 285.5  4.8% Community Financial Services (reported) 72

  30. Slide 30: Malaysia Loans Growth: 31 December 2018

    Malaysia Loans Growth: 31 December 2018 % of 31 Mar 30 Jun 30 Sep 31 Dec 31 Dec RM billion QoQ YoY Portfolio 2018 2018 2018 2018 2017 Community Financial Services (reported) 72% 205.7 209.0 212.4 216.0  1.7% 203.7  6.0% Community Financial Services (rebased)¹ 72% 205.7 209.0 212.4 216.0  1.7% 203

  31. Slide 31: Group Deposits Growth: 31 December 2018

    Group Deposits Growth: 31 December 2018 % of 31 Mar 30 Jun 30 Sep 31 Dec 31 Dec QoQ YoY Portfolio 2018 2018 2018 2018 2017 Group Gross Deposits 532.1 539.8 536.6 556.3  3.7% 526.6  5.6% Malaysia (RM billion) 62% 336.4 335.8 331.3 343.8  3.8% 317.8  8.2% Savings Deposits 12% 42.5 42.8 42.1 42.8 

  32. Slide 32: LDR and CASA Ratio

    LDR and CASA Ratio Group LDR CASA CASA (without IA) Malaysia 93.4% 92.5% 92.8% 94.4% 92.7% 91.2% 87.0% 87.8% 89.5% 87.9% 37.3% 35.3% 35.1% 35.1% 35.9% 40.2% 37.3% 37.3% 37.9% 38.7% 35.4% 33.5% 33.2% 33.2% 33.6% 37.1% 34.5% 34.3% 34.9% 34.9% Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Dec 17 Mar 18 Jun 18 Sep

  33. Slide 33: Key Operating Ratios

    Key Operating Ratios 1Q 2Q 3Q 4Q 4Q % FY2018 FY2017 YoY QoQ YoY FY2018 FY2018 FY2018 FY2018 FY2017 Return on Equity 11.4 10.9 0.5% 10.5 11.1 11.0 13.0 2.0% 12.4 0.6% Net Interest Margin 2.33 2.36 (3) bps 2.39 2.27 2.30 2.38 8 bps 2.30 8 bps Fee to Income Ratio 27.5 28.4 (0.9)% 27.1 28.6 25.0 29.0 4.

  34. Slide 34: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 20 Appendix: 1. Financial Performance 23 2. Community Financial Services 34 3. Global Banking 37 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other segments 47 33Financial Results: 4Q FY2018 and Full Year FY2018 ended

  35. Slide 35: Community Financial Services: Overview of Market Share for Malaysia

    Community Financial Services: Overview of Market Share for Malaysia Sep-18 Market Market share Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 vs position Dec-18 Loans Total consumer (Household) 17.6% 17.6% 17.6% 17.7% 17.7% 2 Auto (Purchase of transport vehicles) 26.5% 26.7% 27.1% 27.3% 27.7% 2 Total mortgage *

  36. Slide 36: Community Financial Services: Overview of Malaysia Portfolio

    Community Financial Services: Overview of Malaysia Portfolio Total CFS loans on an upward trend of 6.0% YoY and 1.7% Individual customer TFA grew 3.9% YoY to RM313.7 billion QoQ driven by HNW & Affluent Banking customer TFA  +6.0% YoY  +3.9% YoY  +1.7% QoQ  +0.7% QoQ 302.1 311.5 313.7 203.7 212.

  37. Slide 37: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 20 Appendix: 1. Financial Performance 23 2. Community Financial Services 34 3. Global Banking 37 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other segments 47 36Financial Results: 4Q FY2018 and Full Year FY2018 ended

  38. Slide 38: Global Banking: Overview of Malaysia Corporate Banking Portfolio

    Global Banking: Overview of Malaysia Corporate Banking Portfolio Total GB loans increased 1.7% YoY to RM83.3 billion Trade Finance market share RM billion 24.4% 23.5% 45.1 22.8% 22.4% 22.2%  +7.5% YoY Term Loan 44.7 42.0 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Short Term 26.9 Note: Market share of total

  39. Slide 39: Global Banking: Overview of Group Securities and Global Markets Portfolio

    Global Banking: Overview of Group Securities and Global Markets Portfolio Group Securities Portfolio¹ grew 15.5% YoY Group Securities Portfolio¹: 35.5% Foreign Securities as at FY2018 FY2018 Others  +15.5% (NIDs, BA, etc) PDS – 3.9% Government 179.0 178.3 Foreign Securities 172.3 12.7% - Domestic 6

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

    Global Banking: Overview of Group Investment Banking Portfolio FY2018 Total Income Breakdown by Country Total Income for Maybank Kim Eng1 Hong Kong Others (8.5)% YoY Philippines 3% 4% 3% 1,337.3 Indonesia 1,224.1 4% Malaysia RM1,224.1 38% RM million Thailand million 18% Singapore FY2017 FY2018 30% F

  41. Slide 41: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 20 Appendix: 1. Financial Performance 23 2. Community Financial Services 34 3. Global Banking 37 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other segments 47 40Financial Results: 4Q FY2018 and Full Year FY2018 ended

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

    Maybank Singapore: P&L Summary SGD million FY2018 FY2017 YoY Net fund based income 752.08 686.02 9.6% Net fee based income 358.16 326.49 9.7% Net income 1,110.25 1,012.51 9.7% Overhead expenses (434.97) (387.86) 12.1% Operating profit 675.28 624.65 8.1% Profit before taxation 421.37 315.50 33.6%  N

  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 at 51% of total deposits  +4.5% YoY 0.0% YoY 40.6 41.9 42.4 Other 46.2 44.9 46.2 3.1 3.1 (Consumer) Consumer - 3.5 2.1 2.4 2.4 Car Loan Time Deposits Consumer 15.8 16.3 15.9 Consume

  44. Slide 44: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 20 Appendix: 1. Financial Performance 23 2. Community Financial Services 34 3. Global Banking 37 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other segments 47 43Financial Results: 4Q FY2018 and Full Year FY2018 ended

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

    Maybank Indonesia: P&L Summary 4Q 3Q IDR billion FY2018 FY2017 YoY QoQ FY2018 FY2018 Net Fund Based income 8,100 7,702 5.2% 2,060 2,108 (2.3)% Net Fee Based income 2,267 2,729 (17.0)% 756 489 54.7% Net income 10,367 10,431 (0.6)% 2,816 2,597 8.4% Overhead expenses (6,023) (5,793) 4.0% (1,541) (1,494

  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 31 Dec 30 Sep 31 Dec Key Operating Ratios Dec18 Sep 18 Dec 17 YoY IDR Trillion QoQ YoY 2018 2018 2017 Profitability & Efficiency CFS 102.3 100.1 2.2% 95.3 7.4% Return On Assets 1.74% 1.59

  47. Slide 47: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 5 Prospects & Outlook 20 Appendix: 1. Financial Performance 23 2. Community Financial Services 34 3. Global Banking 37 4. Maybank Singapore 41 5. Maybank Indonesia 44 6. Other segments 47 46Financial Results: 4Q FY2018 and Full Year FY2018 ended

  48. Slide 48: Islamic Banking: Performance Overview

    Islamic Banking: Performance Overview Group Islamic Banking Financial Performance Maybank Islamic: Total Gross Financing grew to RM176.8 billion RM million FY2018 FY2017 YoY Dec-17 Dec-18 12% Total Income 5,118.1 4,600.4 11.3% 11% 47.5 3% Profit Before Tax 3,033.7 2,751.8 10.2% 42.6 39.1 17% 35.

  49. Slide 49: Islamic Banking: Market Share

    Islamic Banking: Market Share Maybank Islamic Market Share Market Share by Product (Malaysia) 33.8% 33.6% 33.2% 32.6% 32.7% Key Products Dec 18 Dec 17 Automobile Financing 45.5% 45.0% 31.2% 30.4% 30.4% 30.4% Home 27.1% 27.7% 29.9% Term financing 31.7% 31.6% Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Financi

  50. Slide 50: Insurance and Takaful: Performance Overview

    Insurance and Takaful: Performance Overview Gross Premium Life / Family (New Business) Market Share Single Premium  71.7% Regular Premium  4.4% AIA Ins. & Tak. 20.7% Credit Premium  33.7% GE Ins. & Tak. 13.8% FY2018 No. 4 in Life/Family Group Premium  14.5% (New Business) FY2017 Prudential Ins.

  51. Slide 51: 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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