Public Bank Bhd · MYX:PBBANK
Public Bank Bhd — dbAccess Asia Conference 2015
36 slides from Public Bank Bhd's conference presentation, May 22, 2015
Slide 1: Investor Presentation – dbAccess Asia Conference 2015
Investor Presentation dbAccess Asia Conference 2015 Singapore 18-22 May 2015 www.publicbank.com.my/corporate
Slide 2: Disclaimer
Disclaimer The materials and information in the presentations and other documents are a summary only, do not purport to contain all of the material information regarding Public Bank and are qualified in their entirety by reference to our public disclosure. You may not rely on these materials as prov
Slide 3: Quick Facts
Quick Facts Top-tier bank in Malaysia Most award-winning bank in Malaysia* Highly experienced management Unbroken profit track record since incorporation in 1966 Strong financial ratings & corporate governance Valuable PB Brand & retail franchise * Certified by the Malaysia Book of Recor
Slide 4: Quick Facts: Sustainable Organic Growth Momentum
Quick Facts Sustainable Organic Growth Momentum “The Public Bank Group will continue its organic growth strategies of growing its core business of consumer financing. Based on the steady expansion of the economy, stable employment prospect and ongoing demand for residential properties, the Group is
Slide 5: Contents
Contents Introduction to Share Price and Public Bank Market Appendix Group Capitalisation slide # 6 10 30 33 34 Group Summary Performance 5 Investor Presentation
Slide 6: Introduction to Public Bank Group
Introduction to Public Bank Group • Commenced operations in 1966 with one branch • Listed in April 1967 on Bursa Malaysia Securities Berhad (then known as Kuala Lumpur Stock Exchange) • Geographical Contribution Total Assets Pre-tax Profit 92% 93% 93% 93% 92% 94% 94% 93% 93% 91% 8% 7% 7% 7% 8% 6% 6%
Slide 7: Overview of PBB Group
Overview of PBB Group PBB Group is a full financial services group providing a wide range of services in Malaysia and in five countries/locations Hong Kong Cambodia Vietnam Laos & China Malaysia Sri Lanka Public Bank (Hldg Co) Public Bank (HK) Cambodian Public VID Public Bank Public Bank Public Bank
Slide 8: PBB's Business Growth Strategies
PBB’s Business Growth Strategies Continue in Achieving Organic Growth While Sustaining Our Premier Status in the Local Banking Industry • Consumer lending to focus on purchases of properties and passenger vehicles Lending • Penetrate mid-market SMEs & micro enterprises in encouraged sectors Business
Slide 9: Expansion in Business Delivery Channel
Expansion in Business Delivery Channel Mar-15 2014 2010 Malaysian Operations Public Bank - Domestic 257 257 249 - Overseas 7 7 4 Public Islamic Bank 2 2 1 Public Mutual 28 28 26 Public Investment Bank 1 1 1 Hong Kong & China Operations Public Finance 42 42 42 Public Bank (HK) - Hong Kong 32 32 30 -
Slide 10: Unbroken Profit Track Record
Unbroken Profit Track Record • 47 years of unbroken profitability • Healthy profit growth in past 5 years RM’mil y-o-y growth (%) 2010 2011~ 2012^ 2013 2014 1Q 2015 2011 2012 2013 2014 1Q 2015** Pre-tax profit 4,086 4,878 5,047 5,310 5,814 1,489 19.4 3.5 5.2 9.5 12.2 Net profit 3,048 3,684 3,827 4,0
Slide 11: Above-industry Return on Equity (ROE)
Above-industry Return on Equity (ROE) 33.8~ 30.4^ 28.1 24.7 21.0 17.4 17.5 15.6 15.2 15.2 2011 2012 2013 2014 Q1 2015 Pre-tax PBB ROE Pre-tax Industry ROE ~ Restated with retrospective application of MFRS 139 ^ Restated with retrospective application of MFRS 119 Investor Presentation 11
Slide 12: Key Highlights
Key Highlights Pre-tax profit Net profit Earnings per Total assets Net return on attributable to share equity shareholders RM 1,489m RM1,172m 30.3sen RM 353.4b 17.1% Q12014:RM1,327m Q12014:RM1,017m Q12014:29.0sen Dec2014:RM345.7b Dec2014:19.9% 12.2% 15.2% 4.5% 8.9%* 2.8% Loan - Loan - Deposit - Depo
Slide 13: Key Highlights
Key Highlights Cost to income Gross impaired Loan loss ratio loans ratio coverage++ 31.0% 0.6% 128.1% Dec2014:30.0% Dec2014:0.6% Dec2014:122.4% Common equity Tier I capital Total capital ratio Tier I capital ratio ratio 10.5% 11.7% 15.2% Dec2014:10.8%π Dec2014:12.2%π Dec2014:15.8%π π After deducting
Slide 14: Segmental Profit – Retail Centric
Segmental Profit – Retail Centric Retail operations Fund management Treasury operations Corporate lending (Individuals + SMEs) RM’mil 54.9% 9.1% 8.7% 6.8% Q1 2015 817.8 135.6 130.0 101.7 Q1 2014 779.6 112.8 99.3 95.6 Change 4.9% 20.3% 30.9% 6.4% Hire purchase Overseas operations Investment banking O
Slide 15: Net Interest Margin
Net Interest Margin 2.55 2.53 2.52 2.43 2.36 2.36 2.37 2.32 2.28 2.20 2.29 2.20 2.15 Net Interest and Finance Income Net Interest Margin (%) 1,728 RM’mil 1,599 1,548 1,472 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2013 2014 2015 15 Investor Presentation
Slide 16: Non-Interest Income Composition & Growth
Non-Interest Income Composition & Growth Non-interest Income Contribution RM’mil 526.6 15.7% 455.0 187.8 35.7% Unit Trust income 172.5 30.9% Fee & commission income 15.7% Foreign exchange income 162.5 11.0% Investment income 131.6 3.7% Stockbroking income 82.5 60.7 3.0% Others 53.9 57.9 18.6 19.7 17
Slide 17: Efficient Operating Overheads
Efficient Operating Overheads RM’mil Q1 2015 Q1 2014 Changes Operating Costs Composition Personnel costs 512.2 464.3 10.3% Establishment costs 125.9 120.9 4.1% Marketing Expenses 26.1 30.1 13.2% Administration Expenses 38.6 40.6 4.9% Total 702.8 655.9 7.2% Industry Q1 2015 2014 Average Gross loan pe
Slide 18: Consistently Above-Industry Loan Growth
Consistently Above-Industry Loan Growth Loan Growth vs Industry Gross Loans and Domestic Loan Market Share % 17.3% 16.7% 16.9% 17.1% 16.4% 253.1 RM’bil 245.0 221.2 228.3 235.2 197.8 206.6 177.7 184.5 14.1% 12.5% 12.0% 10.8% 13.1%* 164.1 13.6% 11.3% 11.8% 10.5% 12.1%* 13.5% 10.4% 10.6% 9.3% 6.6%* 201
Slide 19: Gross Loan Composition by Segment
Gross Loan Composition by Segment Composition 62.3% 18.8% 11.7% 5.5% 1.2% 0.5% 2.9% 2.5% 4.3% 7.4% 2.7% 5.7% 253.1 RM’bil 245.0 Dec-14 Retail Hire Corporate Hong Kong Cambodia Others Mar-15 Gross loans operations purchase lending Gross loans Mar-15 157.7 47.6 29.4 14.0 3.1 1.3 Dec-14 153.2 46.4 28.2
Slide 20: Gross Loan & Financing in Domestic Operations
Gross Loan & Financing in Domestic Operations 19.6% 19.3% 19.2% 33.7% 33.7% 33.5% 33.8% 18.1% 19.1% 32.9% Of which, financing to Domestic SMEs RM’bil 75.4 77.4 67.5 58.0 59.7 62.4 52.3 52.4 55.2 48.8 44.4 43.8 36.3 36.5 29.6 Residential properties Commercial properties SME 28.5% 26.5% 28.0% 25.9% 26
Slide 21: Sustaining Strong Asset Quality
Sustaining Strong Asset Quality • Focus on lower risk customer segments − Traditional urban/ suburban mortgages − Passenger vehicle hire purchase − Middle market business enterprises • Sound credit appraisal and approval process • Strong credit risk culture • Proactive loan restructuring and resched
Slide 22: Upholding Strong Asset Quality
Upholding Strong Asset Quality High loan loss coverage Of which: Residential properties financing 126.0% 122.4% 128.1% ++ 113.8% ~ 118.5% 0.7% RM’mil 0.6% 0.6% 527 505 489 2011 2012 2013 2014 Q1 2015 2013 2014 Q1 2015 Loan loss coverage Passenger vehicle financing ~ Restated with retrospective appli
Slide 23: Upholding Strong Asset Quality
Upholding Strong Asset Quality Quarterly Loan Impairment Allowances (including collective allowances) 0.15% 0.11% 0.10% 0.12% 0.08% RM’mil 84.8 75.7 33.8 64.7 62.9 27.2 13.7 46.6 29.0 6.3 51.0 51.0 48.5 40.3 33.9 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Domestic Overseas Credit cost ratio 23 Investor
Slide 24: Healthy Deposit Growth in Support of Liquidity
Healthy Deposit Growth in Support of Liquidity Deposit Growth vs Industry Deposits – Outstanding Balance and Market Share % 15.7% 15.9% 15.9% 14.9% 15.2% 216.7 224.3 RM’bil 201.3 177.0 157.3 14.7% 13.0% 11.6% 10.2% 12.8%* 59.7 61.0 42.9 47.8 49.5 14.3% 12.3% 11.5% 9.9% 12.1%* 13.3% 8.4% 8.5% 7.6% 10
Slide 25: Strong Core Deposit Growth
Strong Core Deposit Growth Domestic Current Deposit Source of Core Deposit 15.6% 17.0% 14.0% 15.3%* 7.3% RM’bil 13.2% 12.1% 12.8% 12.5%* 4.7% 2011 2012 2013 2014 Mar-15 42.7 41.4 38.2 28.5 Domestic Savings Deposit 32.6 27.7 25.8 28.8 10.4% 23.7 8.2% 8.3% 11.0%* 21.9 4.3% 8.1%* 10.2% 7.0% 6.5% 2.4% 2
Slide 26: Unit Trust & Bancassurance
Unit Trust & Bancassurance Net Asset Value of Funds under management Bancassurance Business – Annualised New Premium 44.3% 40.8% 41.2% 39.4% 39.1%** 65.8 RM’bil 62.5 63.0 RM’mil 54.6 14.7 14.9 177.5 18.3 44.7 17.2 18.1 143.2 124.9 13.3 116.2 29.8 3.8 20.1 48.1 51.1 44.2 160.3 36.5 113.4 121.1 45.3 3
Slide 27: Strong Capital Position
Strong Capital Position Group Bank RM’bil Mar-15 Dec-14π Mar-15 Dec-14π Common Equity Tier I Capital 23.5 23.6 21.1 21.9 Tier I Capital 26.3 26.7 23.8 25.1 Total Capital 34.3 34.6 28.2 28.6 Risk-weighted Assets 224.8 218.7 185.8 182.4 Common Equity Tier I Capital Ratio 10.5% 10.8% 11.4% 12.0% Tier I
Slide 28: Proactive Capital Management Initiative
Proactive Capital Management Initiative PBB Group Basel III transitional phase in Mar-15 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 COMMON EQUITY TIER I 10.5% 5.125% 5.75% 6.375% 7.0% CAPITAL 4.5% TIER I 11.7% CAPITAL 7.25% 7.875% 8.5% 6.0% 6.625% TOTAL 15.2% CAPITAL 10.5% 8.0% 8.625% 9.25% 9.875% Note: The
Slide 29: Targets & Achievements
Targets & Achievements The Public Bank Group’s achievement vs key performance targets are as follows: Key Performance Benchmarks 2015 Targets Achievement Net Return on Equityᵝ >16% 17.1% Total Capital Ratio >13% 15.2% Gross Impaired Loan Ratio <1% 0.6% Cost to Income Ratio <32% 31.0% Loan Growth – D
Slide 30: Share Price & Market Capitalisation
Share Price & Market Capitalisation Share Price & Market Capitalisation 19.40 19.48 18.30 16.28 Market Capitalisation 75.62 13.38 71.04 30 April 2015 (RM’bil) 68.67 PBB 75.6 RM’bil 57.52 MBB 85.9 47.07 CIMB 50.1 HLB 26.5 RHB 20.4 AMMB 19.6 2011 2012 2013 2014 Apr-15 Market Capitalisation (RM'bil) Sh
Slide 31: Share Price & Market Capitalisation
Share Price & Market Capitalisation Resilient share price performance Kuala Lumpur Composite Index Public Bank (Local) Public Bank (Foreign) FBM KLCI Share price (RM) 2000 20.00 1800 1600 1400 15.00 1200 1000 * 16 April 2014 10.00 800 600 5.00 400 200 0 0.00 * PBB Foreign shares and PBB Local shares
Slide 32: Share Price & Market Capitalisation
Share Price & Market Capitalisation • Superior investment returns Illustration on investment returns Total returns Shares acquired (capital appreciation^ + Compounded annual since dividends) rate of return Medium term - 5 years 1 January 2010 +104.9% +14.0% Long term - since listing 1967 +1,479.0% +
Slide 33: Summary
Summary Profitable retail franchise Domestic and Indo-China markets Growing market share Affluent and quality retail customer base for lending and wealth management business Unbroken profit track record and sustained strong asset quality Strong brand Proactive capital management Larg
Slide 34: Appendix
Appendix RM’mil 2011~^ 2012^ 2013 2014 Q1 2015 Operating profit 5,200 5,329 5,655 6,067 1,562 Profitability Profit before tax 4,878 5,047 5,310 5,814 1,489 Net profit 3,684 3,827 4,065 4,519 1,172 Earnings per share (sen) 105.2 109.3 116.1 123.7 30.3 Shareholder Net assets per share (RM) 4.52 5.15 5
Slide 35: Appendix (cont'd)
Appendix (cont’d) % 2011~^ 2012^ 2013 2014 Q1 2015 Industry Net interest margin on yielding assets 2.65 2.51 2.36 2.24 2.15 N/A Profitability Net return on equity+ 26.8 24.1 22.4 19.9 17.1 N/A Ratios Pre-tax return on average assets 2.0 1.9 1.8 1.8 1.7 1.5 Cost to income ratio 29.8 31.2 30.7 30.0 31
Slide 36: Investor Relations Contact
Investor Relations Contact Ms Chang Siew Yen Chief Operating Officer +(603) 2176 7460 changsiewyen@publicbank.com.my Ms Yik Sook Ling Chief Financial Officer +(603) 2177 3310 yiksookling@publicbank.com.my Mr Ng Seiw Kuan Director, Corporate Planning and Strategy +(603) 2177 3170 ngseiwkuan@publicban