Ammb Holdings Bhd. · MYX:AMBANK

Ammb Holdings Bhd — Q1 FY2016 Earnings Presentation

47 slides from Ammb Holdings Bhd's earnings presentation, Aug 19, 2015

1. Slide 1: Q1FY2016 Results – Investor Presentation

   19 Aug 2015 Q1FY2016 Results – Investor Presentation Your Bank. Malaysia’s Bank. AmBank.™ Datuk Mohamed Azmi Mahmood Acting Group Managing Director Your Bank. Malaysia’s Bank. AmBank. Q1FY2016 Results – Investor Presentation 1

2. Slide 2: Agenda

   AGENDA 1. EXECUTIVE SUMMARY & STRATEGIC PRIORITIES 2. FINANCIAL PERFORMANCE 3. ASSET QUALITY 4. FUNDING & CAPITAL 5. OUTLOOK 6. DIVISIONAL PERFORMANCE 7. SUPPLEMENTARY INFORMATION - AMBANK GROUP - ECONOMY & INDUSTRY Your Bank. Malaysia’s Bank. AmBank. Q1FY2016 Results – Investor Presentation 2

3. Slide 3: Q1FY2016 performance highlights

   EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Q1FY2016 performance highlights  Excluding one-off divestment gain, underlying PATMI increased by 3.1% YoY underpinned by lower provisions and expenses. Report

4. Slide 4: Our FY2015–2017 strategic agenda remains unchanged

   EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Our FY2015 – 2017 strategic agenda remain unchanged Vision: As Malaysia’s preferred diversified, internationally connected financial solutions group, we take pr

5. Slide 5: FY2016 Strategic Initiatives

   EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION FY2016 Strategic Initiatives Leverage Focused growth Optimise efficiency Build sustainability investments  Build business momentum and strengthen retail ba

6. Slide 6: Recent media reports on alleged high profile accounts

   EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Recent media reports on alleged “high profile” accounts  Media reports on alleged individual accounts and transactions “linked to” AmBank group started on 2 Ju

7. Slide 7: Q1FY2016 Results – Mandy Simpson, CFO

   EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Aug 2015 Q1FY2016 Results – Investor Presentation Your Bank. Malaysia’s Bank. AmBank.™ Mandy Simpson Chief Financial Officer Your Bank. Malaysia’s Bank. AmBank.

8. Slide 8: Key themes of Q1FY2016 results

   EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Key themes of Q1FY2016 results 1. Net profit was impacted by net interest margin compression, caused by lumpy corporate repayments and portfolio rebalancing, wh

9. Slide 9: Lower income reflecting NIM compression and subdued capital market

   EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Lower income reflecting NIM compression and subdued capital market 9% Growth  38.7%  11.4%  8.7  10.4%  9.3%  11.6%  >100%  0.7%  9.4%  2.3%  5.7 % 

10. Slide 10: Slow QoQ performance amid weak business sentiment and selective lending

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Slow QoQ performance amid weak business sentiment and selective lending PATMI & ROE PATMI QoQ growth: -65.4% ROE QoQ growth: 5.8% CTI QoQ change: 3.1% PATMI (RM

11. Slide 11: Mixed underlying performance YoY

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Mixed underlying performance YoY PATMI ROE CAGR FY11-15: 9.3% CAGR FY11-15: 0.1% CAGR FY11-15: 0.05% PATMI & ROE YoY growth: -36.8% YoY growth: -6.7% ROA YoY gr

12. Slide 12: Better asset quality and disciplined cost management driving underlying PATMI growth

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Better asset quality and disciplined cost management driving underlying PATMI growth vs. Q1FY2015 vs. Q1FY2015 vs. Q4FY2015 Q1FY2016 (Reported) (Reported) (Unde

13. Slide 13: Higher NIM compression driven by lumpy loan repayment and portfolio re-balancing

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Higher NIM compression driven by lumpy loan repayment and portfolio re-balancing NIM and COF (YOY) SRR 4.00% 4.00% 4.00% COF 4.00% MFRS 10 3.13% 3.10% 3.10% 3.0

14. Slide 14: Expenses remain contained through continued emphasis on cost discipline

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Expenses remain contained through continued emphasis on cost discipline Expenses growth drivers Banking CTI AmGeneral COR* Q1FY16 42.3% 89.3% Q1FY15 44.8% 93.3%

15. Slide 15: Retail Banking: Focusing on segment play and main-bank deposit accounts

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Retail Banking: Focusing on segment play and main-bank deposit accounts Key financials: Performance summary: Cus Dep  5.4%  Deposits growth driven by solution

16. Slide 16: Wholesale Banking: To prioritise growth on higher flow business

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Wholesale Banking: To prioritise growth on higher flow business Key financials: Performance summary: AUM  3.9%  Loans growth was flat mainly due to weak Gross

17. Slide 17: General Insurance: Premium sustained despite GST impact

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION General Insurance: Premium sustained despite GST impact, steering towards de-tariffication readiness Key financials: Performance summary:  4.0%  Net earned pr

18. Slide 18: Prudent lending, robust risk and collection management

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Prudent lending, robust risk and collection management Stable asset quality QoQ Gross Impaired Loans ratio RB WB AmBank Group AmBank Group (LLCoverage) 10.4% #1

19. Slide 19: Loan movement reflects lumpy corporate repayment and auto finance repositioning

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Loan movement reflects lumpy corporate repayment and auto finance repositioning YTD Gross Loan / Financing movement YoY Growth  10.1%  6.7%  16.5%  9.1%  2

20. Slide 20: Target growth in preferred sectors

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Target growth in preferred sectors YoY AmBank Group Jun-15 Loans by purpose Jun’15 growth Composition Jun-15 Purchase of transport 23.2 -11.6% 27.1% Loans by Se

21. Slide 21: Auto Finance: Targeting preferred customer segments

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Auto Finance: Targeting preferred customer segments Declining trend in monthly auto finance balances  Monthly decline in auto finance RM’ bil slowing down RM'm

22. Slide 22: Stable deposit funding profile

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Stable deposit funding profile Customer deposits driven by individuals & term Stable LDR ratio funding YoY growth CAGR FY10-15: 7.8% 91.7% 87.3% 89.5% 88.7% 88.

23. Slide 23: Sound capital level in line with Group's operations and risk profile

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Sound capital level in line with Group’s operations and risk profile Capital adequacy ratio: Aggregated Banking Capital adequacy ratio (CAR): Legal Entities Ent

24. Slide 24: Outlook

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Outlook Malaysia Banking  GDP growth anticipated to slow from 6.0% in 2014  Monetary policy expected to remain prudent to to 4.7% in 2015, reflecting support

25. Slide 25: Key performance indicators

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Key performance indicators FY2015 Q1FY2016 FY2016 1,918.6 339.5 PATMI (Reported: 7.6% yoy; (Reported: 36.8% yoy 3 – 5% (Underlying) (RM’mil) Underlying: 2.9%

26. Slide 26: Divisional Performance

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION DIVISIONAL PERFORMANCE Your Bank. Malaysia’s Bank. AmBank. Q1FY2016 Results – Investor Presentation 26

27. Slide 27: Retail Banking

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Retail Banking Aspirations Restore customer service rhythm, build sustainable growth Focus on sustainable • PAT reflects portfolio re-balancing towards underwri

28. Slide 28: Wholesale Banking

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Wholesale Banking Coverage: Recognition by our customers as their preferred top tier Malaysian bank Aspirations Products: To be the preferred provider of innova

29. Slide 29: General Insurance

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION General Insurance Aspirations To be the most trusted insurer in Malaysia Sustainable • Net earned premium improved marginally yoy despite GST impact and de-risk

30. Slide 30: Islamic Banking

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Islamic Banking Aspirations To be known as the Islamic Bank which Prospers with Society • Strong double-digit financing and customer deposits growth, both drive

31. Slide 31: Group Operating Segments

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Group Operating Segments • PAT in Q1FY2015 included one-off divestment gain of AmLife and AmFamily businesses and related acquisition costs • MI represents non-

32. Slide 32: Supplementary Information: AmBank Group

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION SUPPLEMENTARY INFORMATION AMBANK GROUP Your Bank. Malaysia’s Bank. AmBank. Q1FY2016 Results – Investor Presentation 32

33. Slide 33: Subdued investment banking and lending activities, pipeline remains healthy

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Subdued investment banking and lending / activities, pipeline remains healthy Non-interest income movement As % of total income 53% 36% Growth  24.0%  4.3% 

34. Slide 34: Diversifying funding sources and maturity profile

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Diversifying funding sources and maturity profile Funding diversity underpinned by Fixed deposits: RM71.1 billion LDR1 of 84.0% CASA: RM18.8 billion (strong ret

35. Slide 35: ANZ & AmBank Group Partnership

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION ANZ & AmBank Group Partnership Partnership with ANZ since 2007 ANZ diversified footprints in Asia Value proposition • Seconding ANZ staff into key roles • Provi

36. Slide 36: AmGeneral: Leveraging strategic partnership with global insurance partner

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION AmGeneral: Leveraging strategic partnership with global insurance partner Partnership with IAG IAG diversified footprints in Asia Value proposition • Involved i

37. Slide 37: Multiple distribution channels aligned to demographics

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Multiple distribution channels aligned to demographics Nationwide Branch Network Branches ATM RBC Perlis 1 4 Perlis Kedah 5 28 Kedah Pulau Pinang 14 48 1 Kelant

38. Slide 38: Solid shareholding structure & franchise value

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Solid shareholding structure & franchise value As at 30 June 2015 23.8%1 AmCorp 13.0% EPF 16.2% Others 47.0% AMMB Holdings Berhad Life Assurance & Retail Bankin

39. Slide 39: Banking sector share price movement / target price and recommendations

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Banking sector share price movement / target price and recommendations Banking Sector Share Price Movement Upgraded ratings HLBK Ratings FY2007 FY2015 97.1% +3

40. Slide 40: Supplementary Information: Economy & Industry

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION SUPPLEMENTARY INFORMATION ECONOMY & INDUSTRY Your Bank. Malaysia’s Bank. AmBank. Q1FY2016 Results – Investor Presentation 40

41. Slide 41: Malaysian economy is on a steady growth trajectory

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Malaysian economy is on a steady growth trajectory Upward pressure on inflation remains, Moderating growth unemployment rates stable 5% 30% 25% 4% 3.1% 20% 3% 1

42. Slide 42: Well-contained risks despite increase in household indebtedness

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Well-contained risks despite increase in household indebtedness Higher household debt, but retail impaired loans Gradual slowdown in the household debt growth r

43. Slide 43: Capital remains sound in the banking sector, loans growth moderating

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Capital remains sound in the banking sector, loans growth moderating Capital levels above BNM’s Basel 3 guidelines Capital activities supported by debt issuance

44. Slide 44: ETP: Propelling Malaysia towards becoming a high-income nation by 2020

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION ETP: Propelling Malaysia towards becoming a high-income, developed nation by 2020 ETP Overview Achievement of 12 NKEAs in 2013 and 2014 2020 Target KPI Scoring*

45. Slide 45: Malaysia remains an attractive investment destination

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Malaysia remains an attractive investment destination GDP per capita, 2014 (USD) Real GDP growth Unemployment (%) Inflation (%) 2014 2015F Philippines 7.1% Indo

46. Slide 46: Glossary / Disclaimer of warranty and limitation of liability

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY Glossary / Disclaimer of warranty and limitation of liability SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Reported Performance Reported performance refers to the financial performance as reported in the a

47. Slide 47: Glossary / Disclaimer of warranty and limitation of liability

    EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY Glossary / Disclaimer of warranty and limitation of liability SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION The material in this presentation is general background information about AmBank Group’s activitie

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