CIMB Group Holdings Bhd · MYX:CIMB

CIMB Group Holdings Bhd — Merger or Acquisition (May 2012)

35 slides from CIMB Group Holdings Bhd's merger presentation, May 8, 2012

  1. Slide 1: Acquisition of Bank of Commerce in the Philippines

    Acquisition of Bank of Commerce in the Philippines 8 May 2012

  2. Slide 2: Agenda

    Agenda 1. Summary 2. Philippines Economy and Banking Sector 3. Overview of BoC 4. Details of Acquisition 5. Effects of Acquisition 6. Business Plan 7. Timeline 8. Final Remarks

  3. Slide 3: Summary

    SUMMARY ba) CIMBGROUP

  4. Slide 4: Summary

    Summary  60% of Bank of Commerce (“BoC”) from the San Miguel Corporation (“SMC”) Group and others for PHP12.2 bil (RM881 mil), equivalent to 1.14x P/BV as at 31 Dec 2011. Post alignment with CIMB’s accounting and provisioning policies, P/BV could increase to about 1.30x  SMC Retirement Plan retain

  5. Slide 5: Philippines Economy and Banking Sector

    PHILIPPINES ECONOMY AND BANKING SECTOR

  6. Slide 6: 5th Largest Economy and 2nd Largest by Population in ASEAN

    5th Largest Economy and 2nd Largest by Population in ASEAN Indonesia Thailand Malaysia Singapore Philippines Vietnam Myanmar Brunei Cambodia Laos Population 240.5 64.3 28.7 5.3 95.8 89.3 62.4 0.4 14.4 6.6 (mil) 834.3 Nominal GDP 339.4 (USD ‘bil) 266.5 247.6 216.1 121.6 50.2 15.6 13.2 7.9 Indonesia T

  7. Slide 7: Growing Optimism

    Growing Optimism  The near-term outlook for the Philippines’ recent performance country is favourable, characterized indicates that the country’s economy by moderating but still rapid growth has already stabilized since the global  Praise the Aquino government for financial crisis, with more robus

  8. Slide 8: Increasing Trade and Remittance Volume with ASEAN

    Increasing Trade and Remittance Volume with ASEAN Philippines-ASEAN Trade 21.1% Within ASEAN, MIST are the largest trading partners of the Philippines 20.0% Others 6% Malaysia % of Total 22.8 16% Philippines Trade Thailand 23% Indonesia 21.2 12% Philippines- ASEAN Trade (USD ‘bil) Singapore 43% 2008

  9. Slide 9: Improved Corruption Perception and Overall Competitiveness

    Improved Corruption Perception and Overall Competitiveness  World Economic Forum ranked the Philippines as 75th in the world in its 2011-2012 Global Competitiveness Report  In the area of Macroeconomic Environment under the same report, Philippines improved 14 places to 54th in the world noting th

  10. Slide 10: However Unemployment Rates and FDIs Remain An Issue

    However Unemployment Rates and FDIs Remain An Issue Unemployment (%) FDI from 2007 to 2010 (USD ‘bil) 9.1 8.4 Singapore 99.5 7.9 7.5 7.4 7.5 7.3 7.2 7.4 6.6 Indonesia 34.4 7.1 6.3 4.6 4.7 4.6 4.4 Vietnam 31.8 4.1 4.1 3.7 3.2 3.3 3.3 3.2 3.0 Thailand 31.1 2.1 2.2 3.0 2.2 2.3 2.1 1.4 Malaysia 26.5 1.4

  11. Slide 11: Philippines Banking Sector Has Yet To Take-Off

    Philippines Banking Sector Has Yet To Take-Off Total Assets Net Loans1 Total Deposits PHP ‘bil PHP ‘bil PHP ‘bil CAGR 8.1% CAGR 6.9% CAGR 8.5% 6,918 7,038 5,125 5,036 6,192 3,201 4,672 5,676 2,908 4,195 2,698 2,560 2008 2009 2010 Sep-11 2008 2009 2010 Sep-11 2008 2009 2010 Sep-11 Consumer Loans Depo

  12. Slide 12: Overall Banking Penetration Is Still Low

    Overall Banking Penetration Is Still Low Loan penetration in 2010 Deposit penetration in 2010 Cambodia 11% Cambodia 14% Indonesia 28% Indonesia 37% Philippines 34% Philippines 55% Thailand 86% Thailand 75% Singapore 104% Singapore 140% China 137% China 197% Malaysia 149% Malaysia 187% Hong Kong 241%

  13. Slide 13: Overview of BoC

    OVERVIEW OF BOC ba) CIMBGROUP

  14. Slide 14: Overview of BoC

    Overview of BoC 122 branches 300 ATMs 1,662 employees ~350k customers  16th largest bank by total assets in Philippines  Core business: Traditional deposit products, corporate banking, consumer banking, treasury, asset management, trust services, trade, and credit card service  Owns 24.25% equity

  15. Slide 15: Comparative Analysis

    Comparative Analysis Total Assets, Total Deposits and Net Loans1 (PHP ‘bil) 1,200 Market Share: Total Assets 1.5%; Total Deposits: 1.6%, Net Loans: 1.5% 1,000 800 600 #16 400 200 0 BDO Metrobank BPI Land Dev Bank PNB RCBC Union Citibank CBC Security UCPB HSBC Allied Phil Trust BoC Bank Bank Bank Ban

  16. Slide 16: BoC Indicators (1)

    BoC Indicators (1) Profitability Deposits Gross Loans PHP ‘bil PHP ‘bil 13.6% 7.0% 3.9% 86.8 87.2 -56.0% ROE 77.9 71.8 Net 639.3 617.3 579.9 Profit 39.2 PHP ‘bil 36.4 31.5 32.6 2008 2009 2010 2011 2008 2009 2010 2011 2008 2009 2010 2011 (1,714.6) NIM Asset Quality Total CAR and Tier 1 CAR 180.1% 180

  17. Slide 17: BoC Indicators (2)

    BoC Indicators (2) LD Ratio CI Ratio 68.0% 68.4% 63.9% 66.5% 62.6% 62.8% 62.0% 50.0% 60.0% 61.7% 45.4% 61.5% 41.9% 36.1% 2008 2009 2010 2011 2009 2010 2011 BoC Industry BoC Industry  Low LDR ~ 45% as BoC has not pursued  Higher CI Ratio for Philippines banks relative to aggressive loan growth othe

  18. Slide 18: Details of Acquisition

    DETAILS OF ACQUISITION ba) CIMBGROUP

  19. Slide 19: Acquisition Structure

    Acquisition Structure Current Shareholding Structure Entities related to SMC Group (Total = 80.37%) San Miguel SMC Retirement Caritas Health Q-Tech Alliance Others Properties Plan Shield * 1.08% 39.35% 39.94% 9.77% 9.86% BoC Post Acquisition San Miguel SMC Retirement Caritas Health CIMB Bank Others

  20. Slide 20: Purchase Consideration and Valuations

    Purchase Consideration and Valuations RM ’mil  We will be acquiring:  A ready banking platform in the Philippines Purchase Consideration 881  Low LD ratio and high capital for growth  Collaboration with one of the largest 59.98% book value 770 conglomerates in Philippines P/BV 1.14x  RM111 mil

  21. Slide 21: Overview of SMC Group

    Overview of SMC Group  Philippines’ most diversified conglomerate and one of the largest publicly listed companies  Total revenue in 2011 is PHP536 bil (RM38.8 bil) contributed about 5% to the country’s GDP  Subsidiaries and affiliates have very strong industry- leading positions in key sectors o

  22. Slide 22: Overview of the Collaboration Agreement with SMC

    Overview of the Collaboration Agreement with SMC CIMB to be the preferred banking services provider for the SMC ecosystem 1) Channeling/referral of wholesale and retail banking opportunities 2) SMC companies shall provide relevant information necessary to undertake credit Scope review of the vendors

  23. Slide 23: Effects of Acquisition

    EFFECTS OF ACQUISITION ba) CIMBGROUP

  24. Slide 24: Proforma Financial Effects

    Proforma Financial Effects 31 Dec-11 BoC Proforma (RM ’mil) Contribution Balance Sheet Total assets 300,203 6,928 307,131 2.31% Gross loans 191,393 2,361 193,754 1.23% Customer deposits 221,933 5,204 227,137 2.34% Income Statement Total Income 12,122 353 12,475 2.91% Net interest income * 7,947 234

  25. Slide 25: Proforma Key Ratios

    Proforma Key Ratios Increase / 31 Dec-11 (%) Proforma (Decrease) NIM 3.12 3.60 3.13 +0.01 Non-interest income / total 34.4 33.8 34.4 - income Cost / Income 54.7 61.7 54.9 +0.20 Allowance coverage 81.1 81.9 81.1 - Net impaired loans ratio 1.0 2.9 1.0 - Loans to deposit ratio 86.2 45.4 85.3 -0.90 CASA

  26. Slide 26: Proforma Financial Impact

    Proforma Financial Impact Impact to Balance Sheet,  Minimal impact to CIMB Group financials & key ratios P&L & Key Ratios Estimated Capital Impact  CIMB Bank’s capital position remains strong post- transaction, well above the proposed internal targets and the minimum regulatory ratios for Basel 2

  27. Slide 27: Business Plan

    BUSINESS PLAN ba) CIMBGROUP

  28. Slide 28: Initial Thoughts

    Initial Thoughts  To be among the top 10 banks in the Philippines in terms of assets  To be No.1 ASEAN universal bank of choice in the Philippines for local and regional customers  Key focus areas : Wholesale, Mass Affluent Retail and Remittance Supported by CIMB Group’s UB platform People Brandi

  29. Slide 29: Overview of Business Strategy for Philippines

    Overview of Business Strategy for Philippines  Tap into ready pool of corporates to offer integrated/ regional corporate banking products and IB services  Strengthen transaction banking capabilities to enhance deposit-taking, especially CASA  Systematically target the mid corporate/ SME especiall

  30. Slide 30: Timeline

    TIMELINE ba) CIMBGROUP

  31. Slide 31: Indicative Timeline

    Indicative Timeline Details Indicative Timing Signing of Definitive Agreements / Bursa Announcement 8 May 2012 Submission / application to regulatory authorities and any other relevant Late May 2012 parties Regulatory approvals obtained (assume 3 months) # Late Aug 2012 Completion Late Aug 2012 Regi

  32. Slide 32: Final Remarks

    FINAL REMARKS ba) CIMBGROUP

  33. Slide 33: In Summary

    In Summary High Growth Potential Widen Platform Strong Partnership  Banking market still  Increasing CIMB Group’s  Leverage on SMC companies’ underpenetrated presence in ASEAN to cover retail footprint to strengthen  5th largest economy in ASEAN 99% of ASEAN population and BoC’s distribution cap

  34. Slide 34: Final Remarks

    Final Remarks  Recent acquisitions of BOC and RBS IB for a total of RM1,730 mil cash  No equity dilution, small goodwill addition and EPS neutral in 2012 and positive in 2013  Enhanced CIMB Group’s intrinsic franchise value  Effectively full coverage of ASEAN  Largest retail branch network in A

  35. Slide 35: Thank You

    THANK YOU 35

CIMB Group Holdings Berhad — Merger or Acquisition (May 2012) on 6ix