Public Bank Bhd · MYX:PBBANK
Public Bank Bhd — Invest Malaysia 2016
36 slides from Public Bank Bhd's conference presentation, Apr 13, 2016
Slide 1: Investor Presentation - Invest Malaysia 2016
Investor Presentation Invest Malaysia 2016 Kuala Lumpur 12-13 April 2016 www.publicbankgroup.com
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’s prudent management with integrity over the years has placed the Group on a solid footing to ride through challenges. In 2016, the Group will sharpen its focus in the pursuit of stable and sustainable growth in the core banking a
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 RM’bil RM’bil 363.8 6.49 345.7 5.81 305.7 5.31 274.8 5.05 25
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 Public Bank Public Bank Public Bank Ban
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 2015 2014 2010 Malaysian Operations Public Bank - Domestic 257 257 249 - Overseas 7 7 4 Public Islamic Bank 2 2 1 Public Mutual 29 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 - Ch
Slide 10: Unbroken Profit Track Record
Unbroken Profit Track Record • 49 years of unbroken profitability • Healthy profit growth in past 5 years RM’mil y-o-y growth (%) 2010 2011~ 2012^ 2013 2014 2015 2011 2012 2013 2014 2015 Pre-tax profit 4,086 4,878 5,047 5,310 5,814 6,491 19.4 3.5 5.2 9.5 11.6 Net profit 3,048 3,684 3,827 4,065 4,519
Slide 11: Above-industry Return on Equity (ROE)
Above-industry Return on Equity (ROE) 33.8~ 30.4^ 28.1 24.7 22.1 17.4 17.5 15.6 15.2 12.4 2011 2012 2013 2014 2015 Pre-tax PBB ROE (%) Pre-tax Industry ROE (%) ~ Restated with retrospective application of MFRS 139 ^ Restated with retrospective application of MFRS 119 11 Investor Presentation
Slide 12: Key Highlights
Key Highlights Pre-tax profit Net profit Earnings per Total assets Net return on attributable to share equity shareholders RM 6,491m RM5,062m 131.1sen RM363.8b 17.8% 2014:RM5,814m 2014:RM4,519m 2014:123.7sen Dec2014:RM345.7b 2014:19.9% 11.6% 12.0% 6.0% 5.2% 2.1% Loan - Loan - Deposit - Deposit - Net
Slide 13: Key Highlights
Key Highlights Cost to income Gross impaired Loan loss ratio loans ratio coverage++ 30.5% 0.5% 120.8% Dec2014:30.0% Dec2014:0.6% Dec2014:122.4% Common equity Tier I capital Total capital Tier I capital ratioπ ratioπ ratioπ 10.9% 12.0% 15.5% Dec2014:10.8% Dec2014:12.2% Dec2014:15.8% 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 55.8% 8.3% 7.6% 6.6% 2015 3,621.7 541.2 491.8 425.7 2014 3,493.8 489.9 418.6 371.0 Change 3.7% 10.5% 17.5% 14.7% Hire purchase Overseas operations Investment banking
Slide 15: Net Interest Margin
Net Interest Margin 2.65 2.51 2.36 2.24 2.16 Net Interest and Finance Income Net Interest Margin (%) 7,154 RM’mil 6,719 6,372 6,063 5,812 2011 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 2,340.1 22.4% 1,911.7 763.5 32.6% Unit Trust income 713.5 29.7% Fee & commission income 694.9 15.2% Foreign exchange income 10.1% Investment income 579.6 355.6 4.0% Stockbroking income 268.9 8.4% Others 236.2 196.8 94.5
Slide 17: Efficient Operating Overheads
Efficient Operating Overheads RM’mil 2015 2014 Changes Operating Costs Composition Personnel costs 2,078.0 1,878.6 10.6% Establishment costs 528.1 472.8 11.7% Marketing Expenses 116.0 114.2 1.6% Administration Expenses 193.1 140.3 37.7% Total 2,915.2 2,605.9 11.9% Industry 2015 2014 Average Gross lo
Slide 18: Consistently Above-Industry Loan Growth
Consistently Above-Industry Loan Growth Loan Growth vs Industry Gross Loans and Domestic Loan Market Share 16.9% 17.1% 17.5% % 16.4% 16.7% 273.4 RM’bil 245.0 251.8 221.2 228.3 197.8 206.6 177.7 184.5 14.1% 12.5% 12.0% 10.8% 11.6% 164.1 13.6% 11.3% 11.8% 10.5% 10.3% 13.5% 10.4% 10.6% 9.3% 7.9% 2011 2
Slide 19: Gross Loan Composition by Segment
Gross Loan Composition by Segment Composition 61.8% 18.3% 11.8% 6.0% 1.5% 0.6% 10.2% 8.0% 14.5% 26.7% 37.5% 26.6% 273.4 RM’bil 245.0 2014 Retail Hire Corporate Hong Kong Cambodia Others 2015 Gross loans operations purchase lending Gross loans Dec-15 168.9 50.1 32.3 16.5 4.1 1.5 Dec-14 153.2 46.4 28.
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 83.8 75.4 67.5 66.5 58.0 59.7 60.3 48.8 52.3 52.4 44.4 43.8 36.3 36.5 29.6 Residential properties Commercial properties SME 29.6% 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% 120.8% ++ 0.7% 113.8% ~ 118.5% RM’mil 0.6% 0.5% 527 505 445 2011 2012 2013 2014 2015 2013 2014 2015 Loan loss coverage Transport vehicle financing ~ Restated with retrospective application
Slide 23: Upholding Strong Asset Quality
Upholding Strong Asset Quality Loan Impairment Allowances (including collective allowances) 0.20%~ 0.15% 0.17% 0.11% 0.06% RM’mil 326.8~ 351.3 279.2 259.0 146.2 2011 2012 2013 2014 2015 Loan impairment allowances Credit cost ratio ~ Restated with retrospective application of MFRS 139 23 Investor Pre
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 % 16.6% 15.7% 15.9% 14.9% 15.2% 245.2 RM’bil 216.7 201.3 177.0 157.3 14.7% 13.0% 11.6% 10.2% 8.9% 59.7 47.8 49.5 55.9 14.3% 12.3% 11.5% 9.9% 7.5% 42.9 13.3% 8.4% 8.5% 7.6% 1.8% 2
Slide 25: Healthy Core Deposit Growth
Healthy Core Deposit Growth Domestic Current Deposit Source of Core Deposit 15.6% 17.0% 14.0% 245.2 7.3% RM’bil 13.2% 12.1% 12.8% 2.5% 216.7 4.7% 2.1% 43.0 201.3 2011 2012 2013 2014 2015 41.4 177.0 38.2 30.0 157.3 Domestic Savings Deposit 32.6 27.7 25.8 28.8 10.4% 23.7 8.2% 8.3% 21.9 4.3% 6.0% 10.2%
Slide 26: Unit Trust & Bancassurance
Unit Trust & Bancassurance Net Asset Value of Funds Under Management Bancassurance Business – Annualised New Premium 49.1% 48.8% 49.5% 49.5% 48.9% 63.0 64.8 RM’bil 62.5 RM’mil 54.6 12.1 14.9 18.3 44.7 189.3 18.1 177.5 11.5 13.3 143.2 17.2 124.9 116.2 29.8 3.8 52.7 20.1 44.2 48.1 160.3 177.8 36.5 31.
Slide 27: Strong Capital Position
Strong Capital Position Groupπ Bankπ RM’bil 2015 2014 2015 2014 Common Equity Tier I Capital 26.1 23.6 22.5 21.9 Tier I Capital 28.9 26.7 25.2 25.1 Total Capital 37.1 34.6 29.7 28.6 Risk-weighted Assets 239.7 218.7 194.4 182.4 Common Equity Tier I Capital Ratio 10.9% 10.8% 11.5% 12.0% Tier I Capital
Slide 28: Proactive Capital Management Initiative
Proactive Capital Management Initiative PBB Group Basel III transitional phase in 2015 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 COMMON EQUITY TIER I 10.9% 5.125% 5.75% 6.375% 7.0% CAPITAL 4.5% TIER I 12.0% CAPITAL 7.25% 7.875% 8.5% 6.0% 6.625% TOTAL 15.5% CAPITAL 10.5% 8.0% 8.625% 9.25% 9.875% Note: The B
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 2016 Targets Net Return on Equityᵝ >16% 17.8% >15% Total Capital Ratio >13% 15.5% >13% Gross Impaired Loan Ratio <1% 0.5% <1% Cost to Income Ratio
Slide 30: Share Price & Market Capitalisation
Share Price & Market Capitalisation Share Price & Market Capitalisation 19.40 18.78 18.30 16.28 Market Capitalisation 71.04 72.91 31 March 2016 (RM’bil) 13.38 68.67 PBB 72.9 RM’bil 57.52 MBB 88.1 47.07 CIMB 41.4 HLB 29.3 RHB 18.1 AMMB 13.9 2011 2012 2013 2014 Mar-16 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) 2100 1900 20.00 1700 1500 15.00 1300 1100 * 16 April 2014 900 10.00 700 500 5.00 300 100 -100 0.00 * PBB Foreign shares and PBB Local
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 2011 +77.3% +10.2% Long term - since 1967 +1,528.3% +19.1% lis
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 2015 Operating profit 5,200 5,329 5,655 6,067 6,631 Profitability Profit before tax 4,878 5,047 5,310 5,814 6,491 Net profit 3,684 3,827 4,065 4,519 5,062 Earnings per share (sen) 105.2 109.3 116.1 123.7 131.1 Shareholder Net assets per share (RM) 4.52 5.15 5.8
Slide 35: Appendix (cont'd)
Appendix (cont’d) % 2011~^ 2012^ 2013 2014 2015 Industry Net interest margin on yielding assets 2.65 2.51 2.36 2.24 2.16 N/A Profitability Net return on equity+ 26.8 24.1 22.4 19.9 17.8 N/A Ratios Pre-tax return on average assets 2.0 1.9 1.8 1.8 1.8 1.5 Cost to income ratio 29.8 31.2 30.7 30.0 30.5
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