Ammb Holdings Bhd. · MYX:AMBANK

Ammb Holdings Bhd — 9MFY18 Earnings Presentation

44 slides from Ammb Holdings Bhd's earnings presentation, Feb 28, 2018

  1. Slide 1: Investor Presentation 9MFY18 Results

    INVESTOR 9MFY18 RESULTS PRESENTATION 28 FEB 2018 9MFY18 Results – Investor Presentation

  2. Slide 2: GCEO Presentation

    GCEO PRESENTATION 3 9MFY18 Performance Highlights 4 2018 Market Outlook 5 Top 4 Aspirations 6 9MFY18 Business Heartbeat 9MFY18 Results – Investor Presentation

  3. Slide 3: 9MFY18 Performance Highlights Overview

    Financial 9MFY18 Performance Highlights Overview Note: All amounts in RM YoY YTD Total Gross Expenses PBP GIL LLC1 Income Loans 1,692.4m 1,215.9m 1.77% 101.6% 2,908.4m 94.7b  7.3%  3.0%  9bps  21.9%  5.4%  4.1% Net Customer Allowances PATMI Balance Deposits CASA 878.7m P&L 20.0b 32.9m  11.1%

  4. Slide 4: 2018 Market Outlook

    2018 Market Outlook Outlook GDP growth: Inflation: 5.5% 2.5% - 2.8% Export growth: 9.5% Ringgit outlook: Loans growth: Stronger Circa 5% 4 9MFY18 Results – Investor Presentation

  5. Slide 5: Top 4 Aspirations: FY2017 - FY2020

    Top 4 Aspirations: FY2017 - FY2020 Top 4 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 •

  6. Slide 6: 9MFY18 Business Heartbeat

    Heartbeat Heartbeat RETAIL BANKING WHOLESALE BANKING Deposits Investment Banking Deposits balances grew 17.7% YTD driven by Priority, Payroll and SME Sustained Top 3 position in Bloomberg League Table for Malaysia Bonds, segments Sukuk & MYR Loan in 2017 AmOnline Transaction Banking Launched the All

  7. Slide 7: GCFO Presentation

    GCFO Presentation 8-18 Financial Performance 19 Guidance & Expectations 9MFY18 Results – Investor Presentation

  8. Slide 8: Driving top line growth

    Income Driving top line growth Business Segments (RM’ mil) 9MFY17 9MFY18 YoY Change Retail Banking 1,019.0 1,094.5  7% Wholesale Banking 982.5 1,012.5  3% Income Banking Group Business Banking 160.4 190.5  19% Group Funding & Others 159.1 189.3  19% QoQ  1%  1% Total Income – Banking 2,321.0 2

  9. Slide 9: Moderate PBP growth

    Moderate PBP growth PBP & PATMI Business Segments (RM’ mil) 9MFY17 9MFY18 YoY Change Retail Banking 326.6 343.1  5% Wholesale Banking 607.8 628.4  3% PBP Business Banking 142.1 130.6  8% Banking Group Group Funding & Others (83.2) (49.6)  40% QoQ  2%  5% PBP – Banking 993.3 1,052.5  6% Genera

  10. Slide 10: Good NII growth with provisions normalising as expected

    Group P&L Good NII growth with provisions normalising as expected RM’ mil YoY Growth  9% ≈  5%  7%  3% >100%  13%  25%  10%  15%  11% 148.9 0.6 988.8 114.6 77.1 878.7 17% 9.7 212.4 21% Effective NIM: NoII%: CTI: GIL: 83% 1.98% 36.7 % 58.2% 1.77% Tax Rate: 19.4% 79% Net Interest Non-Interes

  11. Slide 11: Managing NIM through portfolio diversification and funding mix

    NIM Managing NIM through portfolio diversification and funding mix Continued focus on growing faster in higher margin products Net Interest Margin (NIM) Movement bps Asset repricing Deposits 0.4 Corp. loans, Labuan loans, 0.9 trade finance & loan rehab 6.9 8.6 Markets trading & (1.3) Broking 1.3  2

  12. Slide 12: Flat NoII, with one-off largely offsetting

    Flat NoII, with one-off largely offsetting and NoII progress made in driving wealth management Growth in strategic focus areas, negated by non repeat of a large transaction and adverse actuarial valuation in Life YoY Growth - -  4% ≈  42%  8%  8%  >100%  8% ≈ Composition 3% 4% 20% 13% 6% 7% 31

  13. Slide 13: Investments in new capabilities and compliance driving cost higher

    Investments in new capabilities and compliance infrastructure Expenses driving cost higher Business Segments (RM’ mil) 9MFY17 9MFY18 YoY Change Retail Banking 692.4 751.4  9% Expenses Wholesale Banking 374.6 384.1  3% Banking Group Business Banking 18.4 59.9  >100% QoQ  4%  2% Group Funding & O

  14. Slide 14: Asset Quality: Improved loan loss cover

    Asset Quality Improved loan loss cover Gross Impaired Loans (RM’ mil), GIL and LLC Ratios (%) GIL Ratio (%) QoQ Breakdown RM’ mil Gross Impaired Loans GIL Ratio Loan Loss Coverage 1 127.4% GIL Ratio Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 105.0% 101.6% 81.2% 79.7% Group 1.69% 1.64% 1.54% 1.

  15. Slide 15: Asset Quality: Credit cost normalising

    Asset Quality Credit cost normalising YTD net provisions of RM32.9mil [9MFY17: (RM179.5mil)], higher due to lower recoveries of RM124.6mil, incremental individual allowances of RM114.6mil offset by release of collective allowance of RM59.7mil Net Provisions / (Writebacks)1 Credit Costs vs. Peers2 RM

  16. Slide 16: Good loans growth in targeted segments

    Loans Good loans growth in targeted segments LD ROA: Ratio1: Gross Loans Movement (RM’ bil) 0.93% 84.4% YTD Growth  4%  20%  15%  6%  18%  76%  37%  4% Composition 37% 7% 31% 20% 2% 2% 1% 100% 0.3 3.8 0.6 0.3 1.1 94.7 1.2 91.0 Breakdown by rate sensitivity: Breakdown by concept: Breakdown by

  17. Slide 17: Continued growth in deposits, strengthening liquidity positions

    Deposits Continued growth in deposits, strengthening liquidity positions Deposits (RM’ bil) and CASA Composition (%) CASA Market Share (%) and Industry CASA Balance3 (RM’ bil) Retail FD Retail CASA Industry CASA AmBank Group CASA Market Share (%) Non-Retail FD Non-Retail CASA 4.3% 4.3% CASA Composit

  18. Slide 18: Capital levels adequate

    Capital Capital levels adequate RWA/Total Assets Capital Adequacy Ratios (after dividends) RM’ bil Total Assets RWA/Total Assets Peers CET 1 Tier 1 Total CAR 72.7% 72.8% 71.5% 71.2% 72.2% 70.7% 16.1% 16.3% 15.4% 15.8% 16.1% 14.8% 12.3% 12.5% 12.2% 62.4% 11.8% 60.8% 61.1% 59.6% 59.5% 59.2%1 11.0% 11.

  19. Slide 19: Guidance & Expectations

    Guidance Guidance & Expectations ROE CTI DIVIDEND FHC CET 1 9MFY18 : 7.2% 58.2% 23%1 payout 11.1% FY18 Guidance : Circa 7% ≤ 58% TBC 10.5% ± 1% 1.Interim dividend in H1FY18 19 9MFY18 Results – Investor Presentation

  20. Slide 20: Group Performance

    Group Performance 9MFY18 Results – Investor Presentation

  21. Slide 21: Yearly performance

    Yearly performance 9MFY18 Results PATMI (RM’ mil) & ROE (%) Total Income (RM’ mil) and Non-interest Income (%) PATMI: ROE: PATMI ROE (%) CAGR FY13-17:  4.9% CAGR FY13-17:  1.4% Total Income:  11.1% YoY Growth: Total income CAGR FY13-17:  3.7% YoY Growth:  1.3% Non-interest income % YoY Growth:

  22. Slide 22: Net interest margin trends

    NIM Net interest margin trends NIM YoY Trend vs. Industry Quarterly Net Interest Income (RM’ mil) & NIM Movement YTD 9MFY17 9MFY18 YoY Change 9MFY17 NIM : 1.96% 9MFY18 NIM : 1.98% Gross Yield 4.95% 4.89%  6 bps 2.06% 2.02% 2.02% COF 3.29% 3.22%  7 bps 1.97% 1.95% 1.94% 1.92% NIM 1.96% 1.98%  2 bp

  23. Slide 23: Non-interest income mix

    Non-interest income mix Non-Int Income Non-interest Income (RM’ mil) Non-interest Income by Lines of Business (YoY) QoQ Growth:  4% YoY Growth: ≈  47% Fee Trading & Investment Insurance Others  22% 405.3 407.3 Others 1% Investment Bank 385.6 12% 37.5 368.9 13.8 355.7 19.8 342.0 111.3 0.2  5% Ins

  24. Slide 24: Quarterly loans and deposit trends

    Quarterly loans and deposit trends 9MFY18 Results Net Lending (RM’ bil) Customer Deposits (RM’ bil) and LDR (%) QoQ Growth:  1.9% YTD Growth:  4.2% QoQ Growth:  7.0% YTD Growth:  5.9% QoQ Growth (excl.AF):  3.1% YTD Growth (excl.AF):  7.0% Loans excluding Auto Finance Auto Finance Customer Dep

  25. Slide 25: Asset Quality

    Asset Quality Asset Quality Impaired Loans – Key Segments Gross Impaired Loans (RM’ mil) FY16 FY17 9MFY18 2.5% 2.4% 2.2% 1.8% 1.7% 1.5% 1.86% Group 1.3% 1.3% 1.3%1.3% 1.88% 1.88% 1.2% 1.69% 1.77% 1.0% 1.65% 1.61% 1.66% 1.64% 1.63% 1.64% 1.67% 1.54% Industry 1.53% Auto Finance Mortgage Retail Wholesa

  26. Slide 26: Asset Quality: Allowances

    Asset Quality Asset Quality Collective Allowance Balance (RM’ mil) Allowances (RM’ mil) 9MFY18 Total: RM 768mil 9MFY17 Individual Collective Recoveries/ Others 9MFY18 FY17 Total: RM 862mil Allowance Allowance Releases FY16 FY17 9MFY18 FY16 Total: RM1,062mil 438 32.9 32.9 418 416 124.6 254 (179.5) (5

  27. Slide 27: Loans by sector & by purpose vs. industry

    Loans Loans by sector & by purpose vs. industry Loans by Sector AmBank Group (RM’ bil) Loans Composition 3.6% 2.2% 9.8% 1.1% 3.9% 5.9% 2.8% 4.7% 8.9% 1.7% 55.3% 0.1% 100% YTD Growth  10.3% 1.8% 0.3%  >100%  4.2%  5.1%  7.1%  3.3%  0.3%  14.7%  7.3%  23.2%  4.1% 94.7 Dec 17 52.3 3.5 2.1

  28. Slide 28: Diversified and consistent funding structure, conservative liquidity management

    Diversified and consistent funding structure, conservative liquidity management Funding Funding Composition vs. Peers • Sufficient holding of liquid assets with LCRs in FY13 FY15 FY16 FY17 9MFY18 Peers1 excess of 100%. Equity & debt 14% 15% 16% 16% 15% 16% capital • Healthy customer deposit composit

  29. Slide 29: Divisional Performance and Economic & Banking Data

    Divisional Performance and Economic & Banking Data 9MFY18 Results – Investor Presentation

  30. Slide 30: Retail Banking

    Retail Retail Banking Total Income (YoY Movement) and Loans by Line of Business QoQ PAT (RM’ mil) QoQ Growth:  40.5% YoY Growth:  7.2% Total Income RM1,094.5mil 9MFY18: 9MFY17: RM247.2mil RM229.5mil  >100%  53% 103.1 Others Retail SME 5%  5% 97.1 96.1  38% 3% Auto Wealth 19% 6% Auto 76.0 76.2

  31. Slide 31: Retail Banking

    Retail Retail Banking Wealth Sales (RM’ mil) Merchant Volume QoQ Growth:  14.6% Merchant volume (RM'mil) Merchant in force: YoY Growth:  22.1% Merchants in force ('000) QoQ Growth:  1.0% YoY Growth:  6.1% 826 53.6 54.2 769 51.1 52.3 52.7 736 736 50.0 50.6 672 565 2,799 2,890 2,726 2,803 2,595 2,

  32. Slide 32: Retail Banking

    Retail Retail Banking Income Statement (RM’ mil) YoY Growth  2.2%  32.0%  7.4%  8.5%  5.1%  >100%  6.9%  6.1%  7.2% Net Interest Non-Interest RM' mil Total Income Expenses PBP Provisions PBT Tax PAT Income Income 9MFY18 861.5 233.0 1,094.5 751.4 343.1 41.6 301.5 72.0 229.5 9MFY17 842.5 176.

  33. Slide 33: 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 38 219 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

  34. Slide 34: Wholesale Banking (including Business Banking)

    Wholesale Wholesale Banking (including Business Banking) Total Income by products (YoY Movement) and Total Assets by Line of Business QoQ PAT (RM’ mil) QoQ Growth:  3.2% YoY Growth:  22.6% Total Income 9MFY17: 9MFY18: RM1,203.1 mil RM671.4 mil RM519.8 mil  14%  8% 243.3 242.2 Others Funds 4% Man

  35. Slide 35: 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 December 2017 (%) 5.5% 5.7% 5.3% 5.2% DCM (Overall MYR Bonds) 15.2% 3 5.0% Islamic Sukuk 14.1% 3 Unit Trust 7.3% 5 Stockbroking 5.0% 6 1. Calendar Year

  36. Slide 36: Wholesale Banking (including Business Banking)

    Wholesale Wholesale Banking (including Business Banking) Income Statement (RM’ mil) YoY Growth  7.8%  2.0%  5.3%  13.0%  1.2%  >100%  21.6%  18.5%  22.6% Net Interest Non-Interest RM' mil Total Income Expenses PBP Provisions PBT Tax PAT Income Income 9MFY18 699.1 504.0 1,203.1 444.1 759.0 7

  37. Slide 37: Islamic Banking

    Islamic Islamic Banking Income Statement (RM’ mil) YoY Growth  13.0%  5.2%  23.2%  100.0%  12.8%  9.0%  13.8% 9MFY18 PATZ (composition of Group) 20% RM' mil Total Income Expenses PBP Provisions PBT Tax & Zakat PATZ 9MFY18 616.5 325.0 291.5 56.4 235.1 48.9 186.2 9MFY17 545.6 309.0 236.6 28.2 2

  38. Slide 38: General Insurance

    General Insurance General Insurance Loss Ratio and Combined Ratio YoY PAT (RM’ mil) Loss Ratio Combined Ratio PAT PBT YoY PAT Growth:  15.1% YoY PBT Growth:  7.7% 94.8% 96.4% 96.9% 94.6% 95.0% 91.2% 314.4 63.0% 62.8% 64.0% 62.9% 61.2% 60.9% 224.2 FY14 FY15 FY16 FY17 9MFY17 9MFY18 194.01 192.1 173.

  39. Slide 39: Insurance and Group Funding & Others

    Insurance & Others Insurance and Group Funding & Others Income Statement – Insurance (General, Life & Takaful) (RM’mil) YoY Growth  3.7%  3.2%  12.9%  >100.0%  15.0%  20.2%  13.8% 9MFY18 PAT (composition of Group) 14% Provisions/ RM'mil Total Income Expenses PBP PBT Tax PAT Allowances 9MFY18

  40. Slide 40: Funding sources and maturity profile

    Funding Funding sources and maturity profile Funding diversity underpinned by LDR1 of 84.4% CASA: RM20.0 billion Fixed deposits: RM79.9 billion Supplemented by term funding & debt capital AMMB Holdings Berhad AmBank (M) Berhad AmBank Islamic Berhad AmBank (M) Berhad & AmBank Islamic Berhad 1. RM2b M

  41. Slide 41: Shareholding structure AMMB Holdings Berhad

    Corporate Structure Shareholding structure 23.8%1 AmCorp 13.0% EPF 9.6% Others 53.6% As at 29 Dec 2017 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

  42. Slide 42: Credit ratings, target price and recommendations

    Ratings & TP Credit ratings, target price and recommendations Credit Ratings Ratings FY2007 FY2017 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:

  43. Slide 43: Glossary/Disclaimer of warranty and limitation of liability

    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 Q3FY18 vs Q2FY18 YoY growth refers to 9MFY18 vs

  44. Slide 44: Glossary/Disclaimer of warranty and limitation of liability

    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. It is not intended to

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