Malayan Banking Bhd. · MYX:MAYBANK
Malayan Banking Bhd — H1 FY2011 Earnings Presentation
45 slides from Malayan Banking Bhd's earnings presentation, Feb 21, 2011
Slide 1: Financial Results First Half FY2011 ended 31 Dec 2010
FINANCIAL RESULTS First Half FY2011 ended 31 Dec 2010 Analyst Briefing 21 February 2011
Slide 2: Executive Summary
Executive Summary Financial Performance Business Review Country Review i Transformation Programme Update Economics and Key Takeaways 1
Slide 3: Key Highlights
Key Highlights ■ Better Financial Performance ■ PATAMI for 2Q11 grew 9.4% QoQ and 13.3% YoY to RM1.13 billion. 1H11 PATAMI grew 14.8% YoY to RM2.15 billion. ■ Revenue for 1H11 grew 5.1% contributed by revenue growth from Community Financial Services (6.1%), Corporate Banking (11.8%), Singapore (8.3%
Slide 4: YTD Key Performance Indicators (KPI) for FY2011
YTD Key Performance Indicators (KPI) for FY2011 Headline KPIs Target 1H11 achievements Return on Equity 14% 15.0% (normalised) Loans and Debt Securities Growth 12% 12.4% annualised Other h targets Target 1H11 achievements h Loans Growth • Malaysia 12% 8.5% • Singapore 5% 17.8% • BII 24% 27.3% Net In
Slide 5: Financial Performance
Executive Summary Financial Performance Business Review Co ntr Review Country Re ie Transformation Programme Update Economics and Key Takeaways 4
Slide 6: 2Q11 PATAMI rose 13.3% YoY to RM1.13 billion
2Q11 PATAMI rose 13.3% YoY to RM1.13 billion Quarter Q RM million QoQ YoY 2Q11 1Q11 2Q10 Change Change Net interest income 1,813.2 1,774.5 2.2% 1,683.1 7.7% I Income ffrom IIslamic l i B Banking ki 392 9 392.9 338 2 338.2 16 2% 16.2% 355 9 355.9 10 4% 10.4% Net income from insurance business* 41.0 8
Slide 7: Half Year PATAMI rose 14.8% YoY to RM2.15 billion
Half Year PATAMI rose 14.8% YoY to RM2.15 billion Half Year RM million YoY 1H11 1H10 Change Net interest income 3,587.8 , 3,310.7 , 8.4% Income from Islamic Banking 731.1 737.5 ‐0.9% Net income from insurance business* 127.8 154.5 ‐17.3% Non‐interest income 1,989.2 1,922.6 3.5% Net income 6,435.8 6,
Slide 8: Normalised PBT for 1H11 grew 18.0% YoY
Normalised PBT for 1H11 grew 18.0% YoY RM Million 1H11 1H10 YoY Profit before tax (PBT) 2,966.4 2,556.2 16.0% Unrealised (Gains)/Losses on derivatives (237.7) (178.3) Forex MTM losses: Cross currency swap 147.4 64.5 Realised forex (gain): USD519m open position (37.8) (48.5) Amortisation on Core Depo
Slide 9: Gross loans grew 12.5% annualised, driven by International
Gross loans grew 12.5% annualised, driven by International QoQ Ann. YoY RM billion Dec 10 Sep 10 Jun 10 Dec 09 Growth Growth Growth Communityy Financial Services 106.1 105.7 101.0 98.0 0.4% 10.1% 8.3% Consumer 81.2 78.4 76.5 71.0 3.6% 12.3% 14.4% Total Mortgage 36.2 35.2 34.6 32.9 2.7% 9.4% 10.0% Au
Slide 10: Deposits grew 9.5% annualised
Deposits grew 9.5% annualised Malaysia Singapore BII Group Annualised J Annualised J Annualised J Annualised RM bil SGD bil Rupiah bil RMb Growth Growth u Growth Growth Savings Deposits 29.5 9.2% 2.7 12.1% 13.8 22.6% 41.2 12.6% Current Accounts 41.5 7.5% 2.4 29.0% 10.2 26.7% 51.3 10.4% Fixed Deposit
Slide 11: Non-Interest Income grew 8.3% YoY
Non‐Interest Income grew 8.3% YoY including Islamic operation, +8.3% Insurance Income and forex income from customers only 2,156.4 2,335.1 +3.5% As reported 2,335.1 +4.7% 2,156.4 1,230.2 1,174.7 +4.9% +86.5% ‐41.5% +71.6% ‐17.3% +11.6% 289.5 289.4 108.6 276.0 153.7 154.5 179.0 199.8 155.2 89.8 63.3
Slide 12: Asset Quality: Continues to improve
Asset Quality: Continues to improve Pre‐FRS 139 Post‐FRS 139 113.2% 124.5% 125.6% 131.8% 117.8% 120.5% 87.6% 84.1% 112.9% 84.6% Loan loss coverage 4.63% 4.70% 4.20% Gross Impaired Loan Ratio 3.46% 3.50% Net Impaired Loan 3.27% 3.07% Ratio 2.89% 2.79% 2.47% 2.83% 2.99% 2.74% 1.64% 1.60% 1.43% 1.36% 1
Slide 13: Overheads grew 7.8% YoY
Overheads grew 7.8% YoY +7 8% YoY +7.8% 2Q11 1H11 Overhead Expenses YoY QoQ YoY Personnel Costs * 10.8% 0.7% 16.6% +9.8% YoY 1,020.9 IT Expenses ‐9.1% 10.0% ‐9.6% 980.0 Marketing Expenses 6.8% 41.6% ‐11.0% +8.8% QoQ Admin, general expenses 14.1% 16.8% 4.2% 210.9 & fees & brokerage 237.0 233.4 Total
Slide 14: Maybank Group: Key Ratios
Maybank Group: Key Ratios 1H11 1H10 2Q11 1Q11 4Q10 3Q10 2Q10 1Q10 Net Interest Margin 2.75% 2.78% 2.70% 2.69% 2.88% 2.76% 2.77% 2.82% Return on Equity (normalised) 15.0% 13.7% 13.9% 14.8% 14.5% 13.8% 14.3% 13.4% Fee to Income Ratio 34.6% 32.4% 33.5% 31.7% 35.2% 37.5% 38.4% 35.6% Cost to Income# 48.7
Slide 15: Maintained High Dividend Payout Ratio and expect similar reinvestment rate
Maintained High Dividend Payout Ratio and expect similar reinvestment rate ■ Interim dividend payout of 28 sen (21 sen net) subject to Dividend Reinvestment Plan ■ Net dividend of 21 sen = 3 sen cash portion + 18 sen electable portion ■ Dividend Payout Ratio of 71.4% exceeds policy of 40‐60% Dividen
Slide 16: Capital Adequacy remains robust
Capital Adequacy remains robust Group 14.21% 14.04% 13.66% 11.37% 11.29% 11.85% 30 Sep p 10 31 Dec 10 31 Dec 10 89% electable portion reinvested Assume no reinvestment of DRP Assume full reinvestment of DRP Risk‐weighted capital ratio Core capital ratio Bank 13.82% 12 98% 12.98% 13.68% 30 Sep 10 31
Slide 17: Business Review
Executive Summary Financial Performance Business Review Co ntr Review Country Re ie Transformation Programme Update Economics and Key Takeaways 16
Slide 18: Revenue and PBT by business segment
Strong performance in CFS and GWB’s corporate and international banking 5.1% Global Wholesale Banking (GWB) 6125.2 6435.8 1H10 1H11 Revenue ((RM million) 6.1% 2,984.9 11.8% 2.3% 4.3% 13.8% ‐7.5% 2 813 4 2,813.4 2,139.4 1,879.9 594.3 812.0 794.0 531.6 144.4 319.0 295.0 138.5 Total Community Corporate
Slide 19: Community Financial Services: Mortgage Loans and Hire Purchase
Community Financial Services: Mortgage Loans and Hire Purchase Growth in mortgage g g loans surpassed p RM900 million in 2Q11 Q Mortgage Loans: Improving Asset Quality 966.3 7.4% 855.3 888.2 6.9% 783.2 6.3% 665.8 5.4% 5.0% 556.8 4.6% RM million 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 1Q10 2Q10 3Q10 4Q10 1Q11
Slide 20: Community Financial Services: Cards continues to gain market share
Community Financial Services: Cards continues to gain market share Cards Market Share Cards performance against industry Dec 10 Dec 09 YoY Maybank Industry* Cardbase 16.3% 15.5% Cardbase ‐16.8% ‐21.2% Billings 22.0% 21.6% Billings 17.5% 13.6% Receivables 14.0% 14.1% Receivables 13.3% 15.1% Merchant
Slide 21: Business Banking and SME
Business Banking and SME Loans grew 3.2% annualised Deposits grew 22.1% annualised +22.1% ann. +3 2% ann. +3.2% ann +3.1% QoQ +9.8% QoQ 64.72 24.93 24.53 24.17 58.93 58.27 RM million RM million Jun 10 Sep 10 Dec 10 Jun 10 Sep 10 Dec 10 Market share recovering NPL declining 11.4% 15.8% 15.6% 7.5% 6.5
Slide 22: Global Wholesale Banking: Loans growth improved to 4.8% annualised
Global Wholesale Banking: Loans growth improved to 4.8% annualised Total GWB loans (RM billion) Recovery in Trade Finance Market Share 27% 7,523 D 10 Dec Trade Finance +6.4% 7,288 Jun 10 26% 25% Trade Finance Market Share Short Term 13,379 24% +8.9% Revolving Credit 23.4% 12,811 22.9% 22.8% 23% 22.5
Slide 23: Global Markets growth supported mainly by trading activities
Global Markets growth supported mainly by trading activities Growth in Revenue Credit Rating for Private Debt Securities in Malaysia +2 3% +2.3% +28.5% 794.0 812.0 631.8 357 3 357.3 A and below, below AAA 37.2% AAA, 37 2% 475.0 34.4% 454.3 436.7 337.0 177.5 ‐AA to AA, 1H10 2H10 1H11 28.4% Net intere
Slide 24: Brokerage activities contributed majority of IB income
Brokerage activities contributed majority of IB income Fee based Income 1H11 Fee based Income Segmentation g 1HFY11 145.4 Corporate advisory fees FY10 196.2 8% FY09 107 7 107.7 Arrangers' FY08 198.3 fees Brokerage Miscellaneous 20% 42% FY07 97.9 fee income 2% Underwriting/ FY06 54.0 Placement Agency
Slide 25: Maybank Islamic maintains strong financing growth of 23.5% annualised
Maybank Islamic maintains strong financing growth of 23.5% annualised Income and PBT Maybank y Islamic financingg (23.5% ( annualised ggrowth)) Total Gross Financing = RM38.7 billion as at Dec 10 +20.6% million 101.5 RM m 65 5 65.5 13 7 13.7 429.9 12.4 586.5 377.2 220.3 239.6 11.6 11 7 11.7 +9.9% +4
Slide 26: Insurance: Etiqa maintains No. 2 Overall Position
Insurance: Etiqa maintains No. 2 Overall Position Combined Gross Premium Overall Loss Ratio Lower Than Industry Industry Combined Gross Premium +9.7% 51.3% ((Maybank)) vs 60.8% ((Industry)) 60.8% Regular Premium +2.7% 9.5% Fire 17.4% 25.6% 14.3% 16.1% Credit Premium +23.5% 11.1% 75.8% 78.0% Single P
Slide 27: Country Review
Executive Summary Financial Performance Business Review Co ntr Review Country Re ie Transformation Programme Update Economics and Key Takeaways 26
Slide 28: Revenue and PBT by geography
Revenue and PBT by geography Gross Revenue (RM million) International: International: 1H10 251.9 , 1H11 358.7 , 703.4 , 30% 33% 4% 731.4 , 6% 12% 11% 924.6 , 1,049.3 , 15% 16% 4,296.4 67% 4,285.3 , 69% Malaysia Indonesia Singapore Others Profit Before Tax (RM million) 1H10 1H11 99.8 , 304.3 , Intern
Slide 29: Singapore: PBT improved 15.7% on higher fee income and lower provision
Singapore: PBT improved 15.7% on higher fee income and lower provision Revenue and PBT rose 8.3%% and 15.7% YoY respectively Diversified Loan Portfolio +12 1% Y‐o‐Y +12.1% YoY 8.3% 15.7% 19.01 +17.8% annualised 330.4 17.53 305.0 17.03 Others 65.2 104.2 197.5 5.7 SGD milllion 170.7 4.2 4.4 Car loans
Slide 30: Bank Internasional Indonesia: Income Statement
Bank Internasional Indonesia I Income St Statement t t Jul 10-Dec 10 Jul 09-Dec 09 YoY Rp Billion Contribution Contribution % Change Interest income 3,476 2,993 16.1% Interest expense (1,548) (1,402) 10.4% Net interest income 1,928 1,591 21.2% Non interest income Non-interest 1 031 1,031 960 7 4% 7.
Slide 31: Bank Internasional Indonesia: Revenue, PBT, Loans
Bank Internasional Indonesia Revenue and PBT (Rp billion) for full FY10 (as reported in BII) Net Interest Margin + 17% 5,773 4,934 5,634 Revenue 6.10% 5.89% PBT 5.55% + 2.093% 860 790 Without PSAK 39 790 50/55 CY08 CY09 CY10 YTDDec09 YTDDec10* * Full implementation of PSAK 50/55 (eqv to IFRS 139) CY
Slide 32: Bank Internasional Indonesia: Branches and Asset Quality
Bank Internasional Indonesia Branches and ATM Asset Q Qualityy 4.70% 893 952 Branches 806 844 787 ATM + CDM 3.50% 3.52% 740 745 743 748 3.20% 3.46% 2.79% 2.88% 2.42% 3.09% 2.79% 1.85% 1.87% 295 327 249 252 255 255 255 260 274 2.00% 1.92% 1.87% 1.97% 1.74% 1.58% Dec‐ Mar‐ Jun‐ Sep‐ Dec‐ Mar‐ Jun‐ Sep
Slide 33: Bank Internasional Indonesia: WOM Finance
Bank Internasional Indonesia: WOM Finance Revenue and PBT Unit U it Financing Fi i +10.07% (In Unit) 700 1,492 622 1,356 600 500 486 on Rupiah Billio 400 390 Total Revenue 300 263 Profit Before Tax 200 +111.09% 126 136 100 195 0 93 New Used Total YTD Dec 09 YTD Dec 10 YTD Dec 09 YTD Dec 10 A Asset Q
Slide 34: MCB Bank: Financial Highlights
MCB Bank: Financial Highlights Revenue and PBT Loans and Deposits +15.9% +17.3% 431.3 39.6 367.6 34 2 34.2 +13 5% +13.5% +0.5% 26.5 253.2 254.6 PKR Billion PKR Billion 23.3 Loans Revenue Deposits PBT FY09 FY10 FY09 FY10 Key Ratios FY09 FY10 ROA 4.6% 4.6% Cost to Income Ratio 32 4% 32.4% 33 8% 33.8%
Slide 35: Transformation Programme Update
Executive Summary Financial Performance Business Review Co ntr Review Country Re ie Transformation Programme Update Economics and Key Takeaways 34
Slide 36: Progress of Transformation Programme
Progress of Transformation Programme Communityy Financial Services ■ Branch transformation extending One Stop shop concept to all branches and strengthen Sales and Service Capability. ■ Improve Customer Service, Service TAT & Processing Time Time. ■ SME & Business Banking origination at all branches
Slide 37: Progress of Kim Eng acquisition
Progress of Kim Eng acquisition ((Target) g ) Current status ■ Submitted regulatory approvals to Bank Negara ■ Engagement with regulators on downstream Malaysia and Monetary Authority of Singapore acquisition still ongoing. ■ In the process of closing upon meeting ■ Group pro forma capital ratios re
Slide 38: Progress of Transformation Programme
Progress of Transformation Programme Insurance (Etiqa) ■ Completed the General IT System consolidation and currently consolidating the Life IT system ■ Keeping track with industry growth whilst maintaining healthy portfolio mix, mix having better combined ratio compared to market. ■ .Growing and str
Slide 39: Economics and Key Takeaways
Executive Summary Financial Performance Business Review Country Review Transformation Programme Update Economics and Key Takeaways 38
Slide 40: Malaysia: Sustained growth for 2011
Malaysia: Sustained growth for 2011 Growth to be sustained at 5.5% in 2011 (2010: 7.2%) Inflation rose 1.7% in 2010 (2011: 2.5%) 150 12 CPI and components (% YoY) Quarterly GDP and annual growth rate 14 25 140 9 20 12 Transport (RHS) 15 6 10 130 10 3 8 5 120 0 0 6 Food & Non‐Alcoholic Beverages (5)
Slide 41: Malaysia: Banking Sector
Malaysia: Banking Sector Total Loans grew 12.8% YoY for Dec 2010 Total Deposits grew 7.3% YoY for Dec 2010 18% 910 1200 Total Deposits Total Deposits YoY Growth 25% 16% 1150 860 14% 1100 20% billion billion 810 12% 1050 15% 760 1000 RM b RM b 10% 710 8% 950 Total Loans 10% Total Loans YoY Growth 900
Slide 42: Key Takeaways
Key Takeaways ■ Financials continue to improve ■ Sustained growth in revenue and profit. ■ Costs at manageable levels. ■ Stable NIMs despite competition. ■ Lower loan loss allowances and improving asset quality. ■ Delivering shareholders value as reflected in better total shareholders return. ■ Expe
Slide 43: Thank You
Thank You Disclaimer. This presentation has been prepared by Malayan Banking Berhad (the “Company”) for information purposes only and does not purport to contain all the information that may be required to evaluate the Company or its financial position. No representation or warranty, express or impl
Slide 44: Appendix
Appendix 43
Slide 45: Balance Sheet: Total Asset grew 12.4% annualised
Balance Sheet: Total Asset grew 12.4% annualised QoQ Ann. RM billion Dec 10 Sep 10 Jun 10 Growth Growth Cash and short‐term funds 24.6 27.1 28.7 ‐9.2% ‐28.6% Deposits with FI 12.4 15.7 8.9 ‐21.2% 21.2% 77.5% Securities Portfolio 61.9 58.7 54.2 5.4% 28.5% Loans and advances 219.4 206.8 205.6 6.1% 13.
Malayan Banking Berhad (Maybank) — H1 FY2011 Earnings Presentation on 6ix