Ammb Holdings Bhd. · MYX:AMBANK

Ammb Holdings Bhd — 9MFY2019 Earnings Presentation

43 slides from Ammb Holdings Bhd's earnings presentation, Feb 21, 2019

  1. Slide 1: 9MFY2019 Results Investor Presentation

    9MFY2019 RESULTS INVESTOR PRESENTATION 21 FEBRUARY 2019 9MFY19 Results – Investor Presentation

  2. Slide 2: GCEO Presentation

    GCEO PRESENTATION Dato’ Sulaiman Mohd Tahir 3 9MFY19 Financial snapshot 4 Outlook for 2019

  3. Slide 3: 9MFY19 Financial snapshot

    Financial Snapshot 9MFY19 Financial snapshot 9MFY19 Financials (YoY) 9MFY19 Consistent earnings trend 2,968 • Income  2% Slower income momentum underpinned by higher NII 9MFY18: 2,908 1,531 Expenses  10% • Exerting cost discipline, CTI 51.6% 9MFY18: 1,692 1,437 PBP  18% • Improved operating lever

  4. Slide 4: Outlook for 2019 Malaysia Banking Sector

    Market Outlook Outlook for 2019 Malaysia Banking Sector GDP growth: 4.5% - 4.8% Loans growth: 4.9% Inflation: 1.5% Asset quality stable Export growth: 5.0% OPR stable at 3.25% USD/MYR outlook: Healthy liquidity & capital 4.04 – 4.06 by end 2019 positions 4 9MFY19 Results – Investor Presentation

  5. Slide 5: GCFO Presentation

    GCFO Presentation Jamie Ling 6-19 Financial overview 20 Guidance & Expectations

  6. Slide 6: Q3FY19 Financial overview

    Financial Overview Q3FY19 Financial overview 1 Q3FY19 Results (QoQ) • Income 6% lower at RM947 mil - NII grew 2% to RM661 mil, in line with loans growth - NoII decreased by 21% to RM286 mil, impacted by unfavourable market volatility and cautious sentiment • NIM broadly stable at 1.88% amid year-end

  7. Slide 7: 9MFY19 Performance summary – P&L

    Financial Overview 9MFY19 Performance summary – P&L P&L (RM’ mil) Q3FY19 Q2FY19 QoQ Change 9MFY19 9MFY18 YoY Change Total Income 947 1,007  6% 2,968 2,908  2% Expenses 513 506  1% 1,531 1,692  10% PBP 434 502  13% 1,437 1,216  18% Net (Recovery) / (51) 11  >100% (33) 33  >100% Impairment PAT

  8. Slide 8: 9MFY19 Performance summary – balance sheet

    Financial Overview 9MFY19 Performance summary – balance sheet Balance Sheet (RM’ bil) Q3FY19 Q2FY19 QoQ Change 9MFY19 FY18 YTD Change Gross Loans 100.4 99.9 ≈ 100.4 96.3  4% GIL 1.62% 1.72%  10bps 1.62% 1.70%  8bps LLC1 116.8% 111.3%  550bps 116.8% 100.5%  1,630bps Customer Deposits 106.8 100.8

  9. Slide 9: Q3 trading conditions more volatile

    Income Q3 trading conditions more volatile Business Segments Q3FY19 Q2FY19 QoQ Change 9MFY19 9MFY18 YoY Change (RM’ mil) Wholesale Banking 247 277  11% 772 753  3% Investment Banking 56 55 ≈ 180 243  26% Retail Banking 385 363  6% 1,112 1,120  1% Business Banking 83 78  6% 236 191  23% Group

  10. Slide 10: Improved operating leverage

    PBP & PATMI Improved operating leverage Business Segments Q3FY19 Q2FY19 QoQ Change 9MFY19 9MFY18 YoY Change (RM’ mil) Wholesale Banking 177 206  14% 567 535  6% Investment Banking 13 14  8% 50 95  47% Retail Banking 181 169  7% 492 375  31% Business Banking 54 48  13% 148 108  36% Group Fund

  11. Slide 11: Steady NII growth and assertive cost actions

    Group P&L Steady NII growth and assertive cost actions YoY Growth  6%  5%  2%  10%  18% >100%  24% 48%  18%  12%  19% 66 161 1,046 111 111 9 879 21% 51 21% Effective NIM: NoII%: CTI: GIL: Tax Rate: 1.93% 34.2% 51.6% 1.62% 23.2% 79% 79% Net Interest Non-Interest Total (Recovery) / RM’ mil

  12. Slide 12: Slight margin compression

    NIM Slight margin compression Net Interest Margin (NIM) Movement bps Assets Deposits 2.4 YTD NIM 9MFY19: 1.93% 9MFY18: 1.98% 0.4 1.8 1.6 191 5.0 0.1 1.2 188 Q2FY19 Portfolio Wholesale Investment Retail Others Deposits rates Deposits mix Q3FY19 rebalancing Banking Banking Banking Positive growth in Q

  13. Slide 13: Underlying NoII flat in a cautious environment

    NoII Underlying NoII flat in a cautious environment YoY Growth  14%  36%  32%  7%  6%  26%  8%  >100%  >100%  5% Normalised items  51 15 26 42 9 32 24 28 1,067 12 4 1,016 68 9 Investment Group Investment Group Foreclosed Corporate Wealth Business General Life RM’ mil Share Properties Bank

  14. Slide 14: Costs well contained, pacing investing

    Expenses Costs well contained, pacing investing Business Segments Q3FY19 Q2FY19 QoQ Change 9MFY19 9MFY18 YoY Change (RM’ mil) Wholesale Banking 70 70 ≈ 205 218  6% Investment Banking 43 42  3% 130 148  12% Retail Banking 204 194  5% 620 744  17% Business Banking 29 30  4% 88 83  6% Group Fund

  15. Slide 15: Higher recoveries, watchful as credit environment less benign

    Asset Quality Higher recoveries, watchful as credit environment less benign Net Impairment (RM’ mil) Gross Impaired Loans, GIL & LLC Ratios and Credit Cost Retail Wholesale Loan Loss Coverage 1 80.5 Q1FY19: 7.0 Business GIL Ratio 116.8% Q2FY19: 10.9 105.0% 79.7% 100.5% 101.6% Q3FY19: (51.3) 81.2% 56

  16. Slide 16: Credit quality stable

    Asset Quality Credit quality stable Impaired Loans by Sector Loans to Oil & Gas (O&G) Sector by Internal Risk Grades Dec’18 Impaired Sector YTD Growth Composition RM’ bil RM’ mil 4% Real Estate 547  9% 34% 9MFY19 2.1 Residential Properties 376  13% 23% FY18 1.8 Transport Vehicles 167  20% 10% Str

  17. Slide 17: Broad based loans growth

    Loans Broad based loans growth Breakdown by rate sensitivity: Breakdown by concept: Breakdown by customers type: ROA1: RoTA1: LTAF2: Fixed rate – 26% Islamic – 29% Retail – 56% 0.95% 0.97% 80.5% Gross Loans Movement (RM’ bil) Variable rate –74% Conventional – 71% Non-retail – 44% YTD Growth  4% ≈ 

  18. Slide 18: Strong deposits growth

    Deposits Strong deposits growth Deposits (RM’ bil) CASA (RM’ bil) and CASA Composition (%) Customer deposits trend CASA trend YTD Growth Industry1 YTD Growth Industry1 9MFY19 106.8  11%  4% 9MFY19 22.1  9%  2% FY18 95.8  2%  5% FY18 20.4  3%  6% FY17 93.9  4%  3% FY17 19.9  6%  8% Non-Re

  19. Slide 19: 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% 66.6% 16.3% 17.6% 15.8% 16.1% 16.6% 61.1% 59.6% 1 12.3% 12.5% 12.0% 12.5% 59.5% 59.3% 59.5% 11.8% 154.2 10.5% 11.3% 11.6% 11.3% 11.8% 1

  20. Slide 20: Guidance & Expectations

    Guidance Guidance & Expectations 9MFY19 Actual FY19 Guidance ROE 8.2% ≥ 8.5% CTI 51.6% ≤ 55.0% Dividend N/A Circa 40% payout FHC CET1 12.0% 10.5% ± 1% 20 9MFY19 Results – Investor Presentation

  21. Slide 21: Thank You

    Thank You

  22. Slide 22: Group Performance

    Group Performance

  23. Slide 23: Yearly performance

    9MFY19 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  19% YoY Growth  1.0% YoY Growth 

  24. Slide 24: 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 4.92% 4.92% 4.90% 5.05% 5.08% 5.07% 5.03% 5.01% 4.95% 5.00% 4.86% 4.97% 4.99% 4.99% 4.76% 4.59% 4.59% 4.61% 4.61% 4.62% 4.49% 4.50% 3.64% 3.63% 3.68% 3.66% 3.65

  25. Slide 25: 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 4%  4%  >100% Corporate Banking 15%  57% Group Funding &Others Insurance -6%  13% Group  36% Retail Treasury & 9%1 Banking Wholesale Market  82% 28% Ban

  26. Slide 26: 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 Q3FY19 QoQ Change 9MFY18 9MFY19 YoY Change ECL Stage 1 & 2 / CP – Non defaulted1 (33) (47) (6) (32) (71) (9) 50  >100% (87) (30) 

  27. Slide 27: Loans by sector vs. industry

    Loans Loans by sector vs. industry AmBank Group (RM’ bil) Loans Composition 3% 2% 11% 1% 4% 6% 2% 5% 8% 2% 56% ≈ 100% YTD Growth  1%  14%  9%  35%  11%  4%  9%  6%  1%  5%  4%  >100%  4% Dec-18 100.4 55.8 3.3 4.2 6.2 2.3 4.7 2.2 10.7 0.8 8.2 1.7 0.4 Wholesale, Finance, Mining & Electric

  28. Slide 28: Funding profile

    Funding Funding profile Funding Composition vs. Peers Funding Maturity Profiles Term Funding and Debt Capital FY15 FY16 FY17 FY18 9MFY19 Peers1 Equity & debt capital 15% 16% 16% 16% 16% 16% 25% Customer deposits 74% 73% 74% 74% 74% 74% 9MFY19: Term funding & loans 9% 10% 9% 7% 6% 4% RM9.3 bil with r

  29. Slide 29: Divisional Performance

    Divisional Performance

  30. Slide 30: Wholesale Banking

    Wholesale Wholesale Banking Total Income (YoY Movement) and Total Assets by Line of QoQ PAT (RM’ mil) QoQ Growth:  41% Business YoY Growth:  56% Total Income 9MFY18: 370 9MFY19: 579 RM772 mil 240 205 170 169 135 123 112  11% Transaction Banking 30% Wholesale Banking Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1

  31. Slide 31: Wholesale Banking (Excluding Investment Banking)

    Wholesale Wholesale Banking (Excluding Investment Banking) Income Statement YoY Growth  9%  11%  3%  6%  6%  >100%  55%  50%  56% Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income 9MFY19 569 204 772 205 567 (193) 760 181 579 9MFY18 524 229 753

  32. Slide 32: Investment Banking

    Investment Investment Banking League Table Market Share of Value and Volume Traded on Bursa (KLSE)1 Market Share1 As At Trading Value Trading Volume Rank2 31 Dec 2018 (%) 3.9% 3.8% 3.6% DCM (Overall MYR Bonds) 19.0% 3 3.4% 5.7% 5.5% Islamic Sukuk 17.2% 4 5.0% 4.9% Unit Trust 7.9% 5 Stockbroking 4

  33. Slide 33: Retail Banking

    Retail Retail Banking Total Income (YoY Movement) and Loans by Line of Business PAT Trend (RM’ mil) QoQ Growth:  13% Total Income YoY Growth:  13% RM1,112 mil  58% 9MFY18: 256 9MFY19: 289  62% Others  7% Retail 3%  16% SME Auto 5% 16% Wealth 114 6% 106 Auto 99 28% Others 84 83 4% 76 Mortgage R

  34. Slide 34: Cards in circulation

    Retail Retail Banking Wealth Sales (RM’ mil) Merchant Volume QoQ Growth:  23% Merchant volume (RM'mil) QoQ Growth:  5% YoY Growth:  2% YoY Growth:  1% Merchants in force ('000) QoQ Growth:  13% YoY Growth:  19% 53 54 54 54 53 9MFY18: 2,177 9MFY19: 2,195 51 846 44 736 769 9MFY18: 8,247 9MFY19:

  35. Slide 35: Retail Banking

    Retail Retail Banking Income Statement YoY Growth  4%  19%  1%  17%  31%  >100%  14%  18%  13% Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income 9MFY19 909 203 1,112 620 492 112 380 91 289 9MFY18 870 250 1,120 744 376 42 334 77 257 9MFY19 PAT 9

  36. Slide 36: 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 36 217 2 Kuala Lumpur 24 106 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

  37. Slide 37: Business Banking

    Business Business Banking Gross Loans (RM’ mil) QoQ PAT (RM’ mil) Non-trade Trade YTD Growth:  18% QoQ Growth:  19% YoY Growth:  82% 9,055 8,583 7,703 7,994 2,222 9MFY18: 56 9MFY19: 101 7,092 2,219 6,717 6,191 1,951 2,060 1,769 1,743 1,582 6,364 6,833 5,323 5,752 5,934 4,609 4,974 Q1FY18 Q2FY18 Q

  38. Slide 38: Islamic Banking

    Islamic Islamic Banking Income Statement YoY Growth  1%  29%  34%  96%  19%  31%  16% RM' mil Total Income Expenses PBP Impairment PBT Tax & Zakat PATZ 9MFY19 623 232 391 110 281 64 217 9MFY18 616 325 291 56 235 49 186 9MFY19 PATZ 9MFY18 PATZ Positive growth in 9MFY19 Contraction in 9MFY19 Ba

  39. Slide 39: General Insurance

    General Insurance General Insurance Loss Ratio and Combined Ratio YoY PBT and PAT (RM’ mil) Loss Ratio Combined Ratio 96% 97% 95% 91% 92% 89% YoY PBT Growth:  18% YoY PAT Growth:  13% PAT PBT 314 282 63% 64% 63% 57% 61% 55% FY15 FY16 FY17 FY18 9MFY18 9MFY19 204 Gross Premium Mix and Growth (RM’ mi

  40. Slide 40: Insurance and Group Funding & Others

    Insurance & Others Insurance and Group Funding & Others Income Statement – Insurance (General, Life & Takaful) YoY Growth  12% ≈  31%  >100%  34%  46%  32% RM'mil Total Income Expenses PBP Impairment PBT Tax PAT 9MFY19 472 258 214 (2) 216 39 177 9MFY18 422 258 164 3 161 27 134 Income Statement

  41. Slide 41: Shareholding structure AMMB Holdings Berhad

    Corporate Structure Shareholding structure 23.8%1 AmCorp 13.0% PNB 9.3% EPF 7.5% Others 46.4% As at 31 December 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 Holdin

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

    Ratings & TP Credit ratings, target price and recommendations Credit Ratings Ratings 9MFY2019 LT: AA2*, 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

  43. Slide 43: 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 Q3FY19 vs Q2FY19 YoY gr

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