MBSB Bhd · MYX:MBSB
MBSB Bhd — Shareholder Meeting (2022)
38 slides from MBSB Bhd's shareholder meeting presentation, Aug 19, 2022
Slide 1: Presentation by Acting Chief Executive Officer
Presentation by DATUK NOR AZAM M. TAIB ACTING CHIEF EXECUTIVE OFFICER
Slide 2: Agenda
Agenda Page 1 2021 In Review: 3 Key Financial Highlights 2 Moving Forward 9 3 MSWG Q&A 14 4 Pre-AGM and Live Q&A 22 2
Slide 3: 2021 In Review: Key Financial Highlights
Outline: 2021 IN REVIEW: Profitability KEY FINANCIAL Asset Quality HIGHLIGHTS Capital Liquidity 3
Slide 4: 2021 In Review: Key Financial Highlights
2021 In Review: Key Financial Highlights PBT rose by 67% despite a reduction in revenue, mainly due to lower modification loss and provision made on loans, financing and advances Revenue (RM million) Profit Before Tax (RM million) Net Profit Margin (%) 3,146 897 3.3% 3,012 3.2% 714 2,625 428 2.9% 20
Slide 5: 2021 In Review: Key Financial Highlights
2021 In Review: Key Financial Highlights ROE was higher in line with improved profitability as we continue to invest in technology and people to improve our future capabilities to generate higher returns Cost-to-Income Ratio (%) Return on Equity (%) 33 8.8% 28 24 5.0% 3.1% 2019 2020 2021 2019 2020 2
Slide 6: 2021 In Review: Key Financial Highlights
2021 In Review: Key Financial Highlights Total assets grew by 4.8% mainly due to higher financial investments while financing grew moderately. Efforts are continuing to further improve asset quality. Total Assets (RM million) Financing Growth (%) Gross Impaired Ratio (%) 50,710 50,681 5.3% 2.0% 5.2%
Slide 7: 2021 In Review: Key Financial Highlights
2021 In Review: Key Financial Highlights Group CET 1 and total capital ratio remain strong at 21.5% and 26.0% respectively, well above minimum requirements, providing ample room for future growth CET 1/TIER 1 TOTAL CAPITAL 26.0% 21.5% 25.1% 20.8% 23.5% 19.2% 21.8% 16.1% 17.2% 20.6% 19.7% 15.2% 20.8%
Slide 8: 2021 In Review: Key Financial Highlights
2021 In Review: Key Financial Highlights The Group’s Liquidity Coverage Ratio stands at a healthy 234.7%, reflecting our ability to withstand possible stress scenarios Liquidity Coverage Ratio (LCR) Net Stable Funding Ratio (NSFR)* 295.9% 107.0% 103.1% 286.6% 234.7% 100.4% 203.1% 100.1% 230.7% 97.5%
Slide 9: Moving Forward
Outline: MOVING Journey 25 Roadmap FORWARD Strategic Roadmap 2022 - 2023 9
Slide 10: Journey 25 Roadmap
Journey 25 Roadmap We aspire to become a top progressive Islamic Bank by 2025 and achieve an ROE ≥ 10%, an external rating of AA and grow new businesses. We are on track to achieve these targets J25 Aspirations To become a Fully Matured Islamic Financial Institution by 2025 Return on Equity (ROE) Ac
Slide 11: Journey to Our Customers
Journey 25 to Our Customers MBSB Bank – a Bank that Cares J25 Fully Matured Islamic Financial Institution by 2025 A Bank that Cares, offering holistic solutions beyond banking and benefitting the society’s well-being based on the Muamalah principles of being inclusive, fair and transparent. 11 11
Slide 12: 2022 - 2023 Strategic Roadmap Objectives
2022 - 2023 Strategic Roadmap Objectives Our immediate objective is to create greater value for our stakeholders by establishing a strong financial position while achieving our sustainability objectives ❖ Grow the Bank’s business base by ≥10% annually, leveraging on the strong Establish a capital po
Slide 13: 2022 - 2023 Strategic Roadmap Core Strategies
2022 - 2023 Strategic Roadmap Core Strategies Two-pronged business strategy guided by 3 principles to ensure continuous growth Business Guiding Business Transformation Principles Enablers New Businesses Digital Generate new revenue streams to scale the business Differentiation Branches and penetrate
Slide 14: MSWG Q&A
MSWG Q&A 14
Slide 15: Q1. Acting CEO appointment and search for new CEO
Q1. Datuk Nor Azam M. Taib has been appointed as the Acting Chief Executive Officer (Acting CEO) since 16 August 2021, after the demise of Datuk Seri Ahmad Zaini Othman. • How is the progress of identifying a suitor to helm the position? • When will the Group finalize the appointment of a new CEO? 1
Slide 16: A1. CEO appointment process ongoing
A1. The process of appointing a new CEO is ongoing. The Board has undertaken a robust review and assessment process to identify a suitable candidate. 16
Slide 17: Q2. Journey 25 roadmap targets
Q2. MBSB’s Journey 25 (J25) Roadmap has outlined several key targets including (page 71 of Integrated AR 2021): - Higher ROE - Regional Player in trade finance with turnover between RM14 billion and RM16 billion - Frontier to Middle East and North African countries - New business streams: – Key Isla
Slide 18: A2. ROE target and key areas of focus
A2. a) As per the J25 Roadmap, MBSB aims to achieve a minimum ROE of 10% by 2025. b) There are 4 key areas of focus: i. Growing our consumer and commercial portfolio via ❖ Collaboration with several parties to enhance the product offering ii. Reducing costs of fund via: ❖ Recalibration of our deposi
Slide 19: A2 Cont. Middle East and North Africa expansion
A2. Cont. c) In our constant effort to expand the services globally, several initial engagements were made with potential parties as follows: ✓ Collaboration with International Trade Finance Corporation to bridge requirement and trade solutions amongst OIC countries. ✓ Explore partnership with Malay
Slide 20: Q3. Root causes of flattish financing growth
Q3. For FY2021, MBSB had recorded a flattish growth of 1.3% in gross financing compared to industry total loan growth of 4.5% during the year. Besides, MBSB also underperformed compared to most of the banking peers which registered strong financing/loan growth following the revival of economic activ
Slide 21: A3. Moratorium and MCO impact on financing growth
A3. • The root cause of the flattish financing growth can be attributable to the multiple moratorium provided by the authorities. • The Group’s personal financing comprises mainly from Government sector, hence moratorium has resulted in excess cash among the borrowers resulting in no requirement for
Slide 22: Q4. Deteriorating asset quality
Q4. In terms of asset quality, MBSB recorded a significantly higher gross impaired loan (GIL) ratio of 5.89% in Q1FY2022 as compared to 4.6% in the Q4FY2021. At the same time, most of the other banks have recorded a lower or moderate GIL ratio quarter-on- quarter. • What was the reason for MBSB’s ra
Slide 23: A4. Higher GIL ratio due to corporate portfolio
A4. • The higher GIL ratio in Q12022 is mainly due to an increase in impairment in the corporate portfolio. A few of these customers have undergone R&R hence the financing have been classified as impaired. Upon the 6 months observation period, these accounts will be reclassified back to performing.
Slide 24: Q5. Cost to income ratio increase
Q5. MBSB’s cost to income ratio (CIR) had increased by 8.3% to 32.8% from 24.5% in FY2020 due to significant increase in operating expenses arising from investments in technology infrastructure. Year- on-year, MBSB’s operating expenses was 23.88% higher at RM542.42 million compared to RM437.86 milli
Slide 25: A5. Technology investments and expense increases
A5. a) Investments in technology were mainly to:- • Improve capabilities for future revenue generation • Improve operational efficiencies • Comply with regulatory requirements b) Reasons for increase: i. Establishment expenses: • Higher depreciation and amortisation in line with increase in tangible
Slide 26: Q6. Discussions with PNB on MIDF acquisition
Q6. MBSB had entered discussions with Permodalan Nasional Berhad (PNB) to explore the possibility of undertaking an acquisition of the 100% shareholding in Malaysian Industrial Development Finance Berhad (MIDF) which is held by PNB. • How is the discussion going on? 26
Slide 27: A6. Ongoing negotiations on proposed MIDF acquisition
A6. • MBSB is currently in ongoing discussions and negotiations with Permodalan Nasional Berhad (PNB) in relation to the proposed acquisition of Malaysian Industrial Development Finance Berhad (MIDF). • MBSB will make the necessary announcements as and when there is material development in relation
Slide 28: Q7. Green financing
Q7. As of 31 December 2021, MBSB had cumulatively approved RM525.18 million of green financing. a) What are the types of green projects that MBSB usually finances? b) Following the objective of expanding green financing portfolio beyond solar projects, what are the potential areas that MBSB seeks to
Slide 29: A7. Green projects financed and disbursement target
A7. a) The types of green projects that MBSB usually finance are Solar farm, Biomas and Biogas. i. Solar – financed the development of large scale solar (LSS) to produce/sell solar photovoltaic energy to TNB under PPA of 21 years (at various capacities; 1-5Mw; 6-9.99mw and 10-30Mw). ii. BTM Biomas –
Slide 30: Pre-AGM and Live Q&A
PRE-AGM AND LIVE Q&A 30
Slide 31: Shareholder questions 1-3
No. Question 1. Is the company giving any door gift to shareholders attending this AGM Dear BOD - Kindly give us some e-vouchers, food vouchers or e-wallet (no discount 2. vouchers please) for being loyal shareholders and attending this meeting. Times are bad now. Please be considerate to us shareho
Slide 32: Shareholder questions 4-5
No. Question i. What efforts are undertaken by MBSB to encourage more corporate maintains main operating current account with MBSB? ii. Totally dismayed to know that no door gift distribution. Life is unpredictable. Do kindly 4. review the decision which highly anticipated/demand by minor shareholde
Slide 33: Shareholder question 6
No. Question Will MBSB debit card support Apple Pay? Will MBSB expanding the business by launching 6. credit card to increase bank revenue, thus increase shareholders dividends? 33
Slide 34: Shareholder question 7
No. Question i. It's good to see improvement of MBSB effort to promote the MBSB through deposit saving prizes. so, what's the market positioning of MBSB and the coming marketing actions to promote the MBSB. It's still unable to attract more customers to apply loan 7. from MBSB. Why ii. What's the be
Slide 35: Shareholder question 7 (continued)
No. Question iii. The share price is still underperformed several years. What MBSB can do to benefit 7. shareholders 35
Slide 36: Shareholder question 8 on ESG compliance
No. Question How far up the scale is MBSB in respect of ESG Compliance and what are the action 8. plans to fulfill this requirement within the set timeline? 36
Slide 37: Shareholder questions 9-11
No. Question Will MBSB up its ante in terms of its shareholders value as it progresses with the 9. restructuring exercise and what is the expected timeline for completion? 10. Would there be any F&B voucher or eWallet fund be given? Good morning, Mr. Chairman, may I know how is the potential or curr
Slide 38: Thank You
THANK YOU 38
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