Ammb Holdings Bhd. · MYX:AMBANK

Ammb Holdings Bhd — H1 FY2019 Earnings Presentation

47 slides from Ammb Holdings Bhd's earnings presentation, Nov 22, 2018

  1. Slide 1: H1FY2019 Results Investor Presentation

    H1FY2019 RESULTS INVESTOR PRESENTATION 22 NOVEMBER 2018

  2. Slide 2: GCEO Presentation

    GCEO PRESENTATION Dato’ Sulaiman Mohd Tahir 3 H1FY19 Financial snapshot 4-5 First half business review & Franchise 6 Outlook for 2018

  3. Slide 3: H1FY19 Financial snapshot

    Financial Snapshot H1FY19 Financial snapshot H1FY19 Financials (YoY) H1FY19 Improving trends 2,021 Income  4% • Resilient growth H1FY18: 1,949 1,018 Expenses  9% • CTI 50.4% H1FY18: 1,116 1,003 PBP  20% • Improved operating leverage Profitability H1FY18: 833 (RM’ mil) 18 Impairment  >100% • Negl

  4. Slide 4: First half business review

    Business Review First half business review Growing topline 2 3 4 • Broad-based loans growth; gaining market share Digital initiatives • Wholesale Banking – deepen cash management solutions and improve ROCE • Retail Banking – driving deposits and wealth management growth through AmBank Signature Prio

  5. Slide 5: Reinvigorating Franchise

    Franchise Reinvigorating Franchise BET300 H1FY19 Investments Key Achievements Savings e-AmBiz customers’ daily Corporate & avg. CASA balance: Productivity Business Transactional RM9,877 mil  11% 1 Value • Branch optimization Virtual Account Balance: • Cost rationalisation RM323 mil  >100%1 Product

  6. Slide 6: Outlook for 2018 Malaysia Banking Sector

    Market Outlook Outlook for 2018 Malaysia Banking Sector GDP growth: 4.6% Loans growth circa 5.5% Inflation: Circa 1.1% Asset quality stable Export growth: OPR stable at 3.25% 6.5% - 7.5% USD/MYR outlook: Healthy liquidity & capital 4.18 - 4.20 by end 2018 positioning 6 H1FY19 Results – Investor Pres

  7. Slide 7: GCFO Presentation

    GCFO Presentation Jamie Ling 8-21 Financial overview 22 H1FY19 Financial agenda 23 Guidance & Expectations

  8. Slide 8: Q2FY19 Financial overview

    Financial Overview Q2FY19 Financial overview 1 Q2FY19 Results (QoQ) • Income broadly stable at RM1,007 mil • NII grew 1% to RM648 mil, in line with loans growth • NoII down 3% to RM359 mil, impacted by weaker market sentiment • NIM of 1.91%, down 11bps from higher funding cost • Improved operating l

  9. Slide 9: H1FY19 Performance summary – P&L

    Financial Overview H1FY19 Performance summary – P&L P&L (RM’ mil) Q2FY19 Q1FY19 QoQ Change H1FY19 H1FY18 YoY Change Total Income 1,007 1,014  1% 2,021 1,949  4% Expenses 506 513  1% 1,018 1,116  9% PBP 502 501 ≈ 1,003 833  20% Net Impairment 11 7  57% 18 (48)  >100% PATMI 348 348 ≈ 696 660 

  10. Slide 10: H1FY19 Performance summary – balance sheet

    Financial Overview H1FY19 Performance summary – balance sheet Balance Sheet (RM’ bil) Q2FY19 Q1FY19 QoQ Change H1FY19 FY18 YTD Change Gross Loans 99.9 98.4  2% 99.9 96.3  4% GIL 1.72% 1.77%  5bps 1.72% 1.70%  2bps LLC1 111.3% 106.3%  >100bps 111.3% 100.5%  >100bps Customer Deposits 100.8 98.6

  11. Slide 11: Consistent growth

    Income Consistent growth Business Segments Q2FY19 Q1FY191 QoQ Change H1FY19 H1FY18 YoY Change (RM’ mil) Wholesale Banking 277 249  11% 526 477  10% Investment Banking 55 69  20% 124 160  22% Retail Banking 363 363 ≈ 726 757  4% Business Banking 78 75  5% 153 124  23% Group Funding & Others 65

  12. Slide 12: Improved operating leverage

    PBP & PATMI Improved operating leverage Business Segments Q2FY19 Q1FY191 QoQ Change H1FY19 H1FY18 YoY Change (RM’ mil) Wholesale Banking 206 184  12% 390 329  19% Investment Banking 14 24  42% 38 57  34% Retail Banking 169 142  20% 311 267  16% Business Banking 48 45  6% 94 73  29% Group Fun

  13. Slide 13: Steady NII growth and assertive cost actions

    Group P&L Steady NII growth and assertive cost actions YoY Growth  5%  1%  4%  9%  20% >100%  12% 40%  6%  7%  5% 98 66 6 66 696 660 64 4 Effective NIM: NoII%: CTI: GIL: Tax Rate: 1.97% 36.2% 50.4% 1.72% 22.5% Net Interest Non-Interest Total RM’ mil Expenses PBP Impairment PBT Tax & Zakat

  14. Slide 14: Increasing term structure for resiliency

    NIM Increasing term structure for resiliency Net Interest Margin (NIM) Movement bps Assets Deposits 0.2 YTD NIM 1.1 H1FY19: 1.97% H1FY18: 1.99% 1.1 2.2 9.6 0.5 202 0.2 2.7 191 Q1FY19 Portfolio Wholesale Investment Retail Business General Deposits rates Deposits mix Q2FY19 rebalancing Banking Banking

  15. Slide 15: Modest growth on cautious market sentiment

    NoII Modest growth on cautious market sentiment YoY Growth  21%  33%  28%  13%  10%  30%  7%  >100%  >100%  1% Normalised items  20 13 16 36 22 20 16 42 5 9 731 725 39 10 Investment Grp Investment Foreclosed Corporate Wealth Business General Life RM’ mil Share Properties Banking Treasury

  16. Slide 16: Assertive cost actions

    Expenses Assertive cost actions Business Segments Q2FY19 Q1FY191 QoQ Change H1FY19 H1FY18 YoY Change (RM’ mil) Wholesale Banking 70 65  8% 135 148  8% Investment Banking 42 45  8% 87 102  15% Retail Banking 194 222  13% 416 490  15% Business Banking 30 29  3% 59 52  15% Group Funding & Other

  17. Slide 17: Credit cost negligible, improved loss cover

    Asset Quality Credit cost negligible, improved loss cover Net Impairment (RM’ mil) Gross Impaired Loans, GIL & LLC Ratios and Credit Costs Retail Wholesale Loan Loss Coverage 1 14.5 Business GIL Ratio 65.4 3.7 105.0% 101.4% 111.3% 4.6 81.2% 79.7% 100.5% 17.9 1.79% 1.94% 1.86% 1.88% Q1FY19: 7.0 1.70%

  18. Slide 18: Asset quality in check

    Asset Quality Asset quality in check Impaired Loans by Sector Loans to Oil & Gas (O&G) Sector by Internal Risk Grades Sep’18 Sector YTD Growth Composition Impaired RM’ bil RM’ mil 4% H1FY19 2.0 Real Estate 550  8% 32% Residential Properties 355  7% 21% FY18 1.8 Transport Vehicles 216  4% 13% FY17

  19. Slide 19: Sustained growth momentum in targeted segments

    Loans Sustained growth momentum in targeted segments Breakdown by rate sensitivity: Breakdown by concept: Breakdown by customers type: ROA1: RoTA1: LTAF2: Fixed rate – 26% Islamic – 29% Retail – 56% 0.97% 0.99% 84.2% Gross Loans Movement (RM’ bil) Variable rate –74% Conventional – 71% Non-retail – 4

  20. Slide 20: Steady build of deposit base

    Deposits Steady build of deposit base Deposits (RM’ bil) CASA (RM’ bil) and CASA Composition (%) Customer deposits trend CASA trend YTD Growth Industry2 YTD Growth Industry2 H1FY19 100.8  5%  3% H1FY19 22.0  8%  1% FY18 95.8  2%  5% FY18 20.4  3%  6% FY17 1 93.9 FY17 19.9  4%  3%  6%  8%

  21. Slide 21: Capital levels adequate

    Capital Capital levels adequate RWA/Total Assets Capital Adequacy Ratios2 RM’ bil Total Assets RWA/Total Assets Peers CET 1 Tier 1 Total CAR 71.5% 71.2% 72.2% 73.0% 68.9% 15.8% 16.1% 16.3% 16.6% 16.2% 12.3% 12.5% 12.0% 12.2% 61.1% 59.5% 59.4% 1 11.8% 59.6% 57.4% 10.5% 11.3% 11.6% 11.3% 11.5% 133.8 1

  22. Slide 22: H1FY19 Financial agenda

    Strategic Action H1FY19 Financial agenda Targeted outcome FY19 priorities Key Metrics Scorecard Revenue growth • Grow income in Top 4 products • RM1 bil+ income for 3rd & segments • Revenue growth consecutive quarter “Continue to build • Achieving better assets yields • Strong PBP growth of 20% inco

  23. Slide 23: Guidance & Expectations

    Guidance Guidance & Expectations H1FY19 Actual FY19 Guidance ROE 8.2% ≥ 8.5% CTI 50.4% ≤ 55.0% Dividend 5.0sen Circa 40% payout FHC CET1 11.7% 10.5% ± 1% 23 H1FY19 Results – Investor Presentation

  24. Slide 24: Thank You

    Thank You

  25. Slide 25: Group Performance

    Group Performance

  26. Slide 26: Yearly performance

    H1FY19 Results Yearly performance PATMI (RM’ mil) & ROE (%) Total Income (RM’ mil) and Non-interest Income (%) PATMI: ROE: Total Income PATMI ROE CAGR FY15-FY18:  12% CAGR FY15-FY18:  2.3% Total Income Non-interest Income % CAGR FY15-FY18:  5.6% YoY Growth  6% YoY Growth  0.1% YoY Growth  3.7%

  27. Slide 27: Net interest margin and gross loans

    NIM & Gross Loans Net interest margin and gross loans NIM Trend vs. Industry Gross Yield COF NIM Average lending rate 1 Average 3M KLIBOR 1 5.01% 4.95% 5.00% 4.92% 5.05% 5.08% 5.07% 4.92% 4.86% 4.90% 4.97% 4.99% 4.76% 4.59% 4.59% 4.61% 4.61% 4.62% 4.49% 4.50% 3.63% 3.68% 3.66% 3.64% 3.40% 3.41% 3.35

  28. Slide 28: Non-interest income and PATMI mix

    NoII & PATMI Non-interest income and PATMI mix Non-interest Income by Lines of Business (YoY) PATMI by Lines of Business (YoY)  >100% Others  >100% 3% Corporate Banking  51% 15% Group Funding & Others  43% -3% ≈ Retail Group Insurance Banking Treasury &  33% 20% 25% Wholesale Market Banking 5%

  29. Slide 29: Impairments

    Asset Quality Impairments Net Impairment / (Writebacks) and GIL Ratio MFRS 139 MFRS 9 Total impairments by category (RM’ mil) Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 QoQ Change H1FY18 H1FY19 YoY Change ECL Stage 1 & 2 / CP – Non defaulted (41) (47) (2) (28) (75) (11)  86% (88) (86)  3% ECL Stage

  30. Slide 30: Loans by sector vs. industry

    Loans Loans by sector vs. industry AmBank Group (RM’ bil) Loans Composition 3% 2% 10% 1% 4% 6% 2% 5% 8% 2% 56% 1% 100% YTD Growth  2%  7%  4%  2%  8%  3%  6%  10%  2%  2%  4%  >100%  4% Sep-18 99.9 55.8 3.2 4.0 6.2 2.2 4.9 2.0 10.2 1.2 8.1 1.7 0.4 Wholesale, Finance, Mining & Electricit

  31. Slide 31: Funding profile

    Funding Funding profile Funding Composition vs. Peers Funding Maturity Profiles Term Funding and Debt Capital FY15 FY16 FY17 FY18 H1FY19 Peers1 Equity & debt capital 15% 16% 16% 16% 16% 16% 26% Customer deposits 74% 73% 74% 74% 72% 73% H1FY19: Term funding & loans 9% 10% 9% 7% 7% 5% RM8.8 bil with r

  32. Slide 32: Divisional Performance

    Divisional Performance

  33. Slide 33: Wholesale Banking

    Wholesale Wholesale Banking Total Income (YoY Movement) and Total Assets by Line of QoQ PAT (RM’ mil) QoQ Growth: ≈ Business YoY Growth:  31% Total Income H1FY18: 258 H1FY19: 339 RM526 mil 205 170 169 135 123 112  13% Transaction Banking 29% Wholesale Banking Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2F

  34. Slide 34: Wholesale Banking

    Wholesale Wholesale Banking Income Statement YoY Growth  9%  13%  10%  8%  19%  >100%  32%  36%  31% Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income H1FY19 376 150 526 136 390 (53) 443 104 339 H1FY18 344 133 477 148 329 (6) 335 77 258 H1FY19

  35. Slide 35: Investment Banking

    Investment Investment Banking League Table Market Share of Value and Volume Traded on Bursa (KLSE)1 3.9% 3.8% Market Share1 As At Rank2 3.6% 30 Sep 2018 (%) 3.4% DCM (Overall MYR Bonds) 18.6% 3 5.7% 5.5% Islamic Sukuk 16.9% 4 5.0% 5.0% Unit Trust 7.2% 5 Stockbroking 5.0% 7 M&A 15.2% 4 2015 2016

  36. Slide 36: Retail Banking

    Retail Retail Banking Total Income (YoY Movement) and Loans by Line of Business PAT Trend1 (RM’ mil) QoQ Growth:  52% Total Income YoY Growth: ≈ RM726 mil  59% H1FY18: 190 H1FY19: 190  54%  9% Retail Others  16% SME 2% Auto 4% 16% 114 Wealth 6% 106 Auto 30% 84 83 Others 4% 76 Retail Mortgage 

  37. Slide 37: Cards in circulation

    Retail Retail Banking Wealth Sales (RM’ mil) Merchant Volume QoQ Growth:  3% Merchant volume (RM'mil) QoQ Growth:  3% YoY Growth: ≈ YoY Growth:  4% Merchants in force ('000) QoQ Growth:  4% YoY Growth:  6% H1FY18: 1,408 H1FY19: 1,349 54 54 54 53 53 51 769 H1FY18: 5,444 H1FY19: 5,452 736 2,726 2

  38. Slide 38: Retail Banking

    Retail Retail Banking Income Statement YoY Growth  3%  26%  4%  15%  16%  >100%  1%  4% ≈ Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income H1FY19 594 132 726 415 311 61 250 60 190 H1FY18 577 180 757 490 267 19 248 58 190 H1FY19 PAT H1FY18 PAT P

  39. Slide 39: Distribution Channels

    Retail Distribution Channels Branches ATM Regional Offices Perlis 1 3 Kedah 6 24 Pulau Pinang 14 51 1 Perak 18 45 1 Selangor 36 218 2 Kuala Lumpur 24 105 2 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 per

  40. Slide 40: Business Banking

    Business Business Banking Gross Loans (RM’ mil) QoQ PAT (RM’ mil) Non-trade Trade YTD Growth:  11% QoQ Growth:  9% 8,583 YoY Growth:  78% 7,994 7,703 7,092 2,219 6,717 6,191 1,951 2,060 H1FY18: 40 H1FY19: 71 1,769 1,743 1,582 5,934 6,364 5,323 5,752 4,609 4,974 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19

  41. Slide 41: Islamic Banking

    Islamic Islamic Banking Income Statement YoY Growth  1%  30%  40%  >100%  10%  18%  8% RM' mil Total Income Expenses PBP Impairment PBT Tax & Zakat PATZ H1FY19 411 155 256 80 176 39 137 H1FY18 406 223 183 23 160 33 127 H1FY19 PATZ H1FY18 PATZ Positive growth in H1FY19 Contraction in H1FY19 Ba

  42. Slide 42: General Insurance

    General Insurance General Insurance Loss Ratio and Combined Ratio YoY PBT and PAT (RM’ mil) Loss Ratio Combined Ratio 96% 97% YoY PBT Growth:  14% 91% 92% 92% 86% YoY PAT Growth:  7% PAT PBT 314 282 63% 64% 63% 57% 58% 53% FY15 FY16 FY17 FY18 H1FY18 H1FY19 Gross Premium Mix and Growth (RM’ mil) 19

  43. Slide 43: Insurance and Group Funding & Others

    Insurance & Others Insurance and Group Funding & Others Income Statement – Insurance (General, Life & Takaful) YoY Growth  17%  3%  45%  >100%  44%  54%  43% RM'mil Total Income Expenses PBP Impairment PBT Tax PAT H1FY19 351 169 182 1 182 30 152 H1FY18 300 175 125 - 126 20 106 Income Statemen

  44. Slide 44: Shareholding structure AMMB Holdings Berhad

    Corporate Structure Shareholding structure 23.8%1 AmCorp 13.0% PNB 9.9% EPF 8.3% Others 45.0% As at 30 September 2018 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 Holdi

  45. Slide 45: Credit ratings, target price and recommendations

    Ratings & TP Credit ratings, target price and recommendations Credit Ratings Ratings FY2018 LT: AA3, ST: P1 AMMB RAM Outlook: Stable AmBank (M) LT: AA2, ST: P1 RAM Outlook: Stable S&P LT: BBB+, ST: A-2 Outlook: Stable LT: Baa1, ST: P-2 Outlook: Stable Moody’s *BCA: baa3 *Adj BCA: baa3 LT: AA2, ST: P

  46. Slide 46: Glossary & Disclaimer

    Glossary & Disclaimer 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 Q2FY19 vs Q1FY19 YoY gr

  47. Slide 47: Glossary & Disclaimer

    Glossary & Disclaimer 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

AMMB Holdings Berhad — H1 FY2019 Earnings Presentation on 6ix