Malayan Banking Bhd. · MYX:MAYBANK
Malayan Banking Bhd — Maybank Group — H1 FY2008 Earnings Presentation
24 slides from Malayan Banking Bhd's earnings presentation, Feb 20, 2008
Slide 1: Maybank Group Financial Results First Half FY08
Maybank Group Financial Results First Half FY08 Analyst and Media Briefing 20 February 2008 V26 1
Slide 2: Agenda
Agenda Operating Environment 3 Segment Reporting 15 Earnings Highlights 4 Consumer Banking 16 Performance Highlights 5 Corporate, Business, Net Interest Income and Margin 6 Treasury and Islamic Banking 8 Investment Banking 17 Non-Interest Income 9 Insurance 18 Customer Franchis
Slide 3: Operating Environment
Operating Environment International Conditions The operating environment was challenging. • Commodity prices recorded significant gains with oil prices reaching an all-time high • Worsening sub-prime crisis in the United States leading to slower economic growth. • Tighter global credit conditions •
Slide 4: Earnings Highlights
Earnings Highlights 1Q FY08 2Q FY08 1H FY07 1H FY08 30-Sep 31-Dec 31-Dec 31-Dec RM million 2007 2007 QoQ 2006 2007 YoY Net interest income 1,312 1,415 7.9% 2,541 2,726 7.3% Islamic Banking income 210 214 2.2% 473 424 -10.4% Non-interest income 610 636 4.3% 1,314 1,247 -5.2% Net income 2,131 2,265 6.
Slide 5: Performance Highlights
Performance Highlights • Core commercial banking franchise is intact, showing strong growth • Loans growth improving, especially in the consumer segment. • Increase in stable non-interest income due to improvement in customer acquisition through expansion of our distribution network, product offerin
Slide 6: Net Interest Income and Margins
Net Interest Income and Margins RM Billion Net Interest Income • Net interest income growth kept its momentum. 3.0 2.726 2.541 • 2Q FY08 net interest income increased to 13.1% to RM1.415 billion. 2.0 1.415 1.251 • 1H FY08 net interest income increased to +7.3% RM2.73 billion or 7.3% higher than prev
Slide 7: Net Interest Income and Margins (continued)
Net Interest Income and Margins (continued) Breakdown of Customer Deposits • Ability to contain the margin erosion due to the Demand composition of deposits base i.e. by capturing 20% Money Market Deposits sizeable low-cost deposits. Savings 16% 9% • Low-cost deposits: Market share in saving deposit
Slide 8: Islamic Banking
Islamic Banking RM million Islamic Banking Income 14.0% 435.0 • Gross Islamic banking Income 450 381.6 continued to increase 11.4% qoq and 350 11.4 % 14% yoy, reaching RM435 million. • Gross operating income growth was 250 212.6 190.9 offset by higher transfer to profit 150 91.2 equalisation reserve
Slide 9: Non-Interest Income
Non-Interest Income 2Q FY07 2Q FY08 % 1H FY07 1H FY08 % Dec 06 Dec 07 Change Dec 06 Dec 07 Change Non Interest Income (Transactional – Customer Franchise) Commissions 168,411 179,666 6.7% 318,257 358,452 12.6% Service charges and fees 143,224 196,055 36.9% 286,886 349,184 21.7% Guarantee fees 23,400
Slide 10: Customer Franchise
Customer Franchise • Maybank’s customer franchise expanded with growth Ann. in customer base, internet banking registered users, Jun 07 Dec 07 Addition change ATM installed base and branch network. Customers (mill.) 7.93 8.09 0.16 4.0% • Total retail customers grew by 4% annualised rate M2u customer
Slide 11: Overhead Expenses
Overhead Expenses Overhead Expenses • Total overhead expenses grew 10.8% yoy (excluding Insurance claims) (excluding insurance claims) • The increase in overheads was mainly due 43.9% to: 40.3% – Marketing cost: +33.1% RM1,930.8 m – Transactional fee expenses: +37.5% RM1,743.2 m 10.8% – Establishmen
Slide 12: Balance Sheet Highlights
Balance Sheet Highlights % • Total assets increased by 2.9% (RM billion) Jun 07 Dec 07 or 5.8% on annualised basis. Change Cash and short-term funds 37.6 35.8 -4.8% • Improved assets mix to higher Deposits and placements with FI 17.3 15.6 -10.4% yielding loans portfolio. Securities purchased under R
Slide 13: Loans Growth
Loans Growth Jun 07 Dec 07 Ann. • Gross loans grew at an (RM billion) % chg % chg annualised 10.6% for 1H Domestic Operations 108.9 112.4 3.2% 6.4% FY08 of which: Consumer 53.3 55.7 4.5% 9.0% • Consumer segment led Securities 9.3 9.9 5.6% 11.2% domestic loans growth with Vehicles 13.9 14.8 6.6% 13.2
Slide 14: Customer Deposits Growth
Customer Deposits Growth 200 Customer Deposits Annualised Growth • Customer Deposits grew 11.7% during the RM 182.9 b % 1H FY2008 or 23.4% on annualised basis. +23.4 RM 163.7 b RM36.1 • Savings deposits and current account Demand - Growth grew by 11.7% and 33.6% on annualised RM 5.3 b (+33.6 %) 150
Slide 15: Segment Reporting
Segment Reporting % of % of % 1H FY07 1H FY08 Income Income Change Consumer 1,712 40% 1,987 45% 16% Corporate, Business & Investment Banking 1,730 40% 1,575 36% -9% International 632 15% 710 16% 12% Insurance 351 8% 333 8% -5% Management 1 0% -31 -1% nm Unrealised loss on Derivatives Revaluation -98
Slide 16: Consumer Banking
Consumer Banking RM million Net Income • Net Income grew 16% YoY, 45% of 2,400 16% 1,987 Group’s income. 2,000 1,712 1,600 • Consumer demand continued to be strong. 1,200 800 • Overall total consumer lending grew 400 by 9.8 % on annualised basis. Auto Finance grew 13.2%, credit card - receivables gr
Slide 17: Corporate, Business, Treasury and Investment Banking
Corporate, Business, Treasury and Investment Banking RM million Net Income • Net Income of RM1.575 billion, -9% growth due to lower investment trading gains. 2,000 1,730 -9% 1,575 • Core businesses namely financing, cash management, 1,600 fees and commissions, trade finance and FX businesses expande
Slide 18: Insurance
Insurance 5% 2,000 -23% • Second largest insurer by total premiums, on target to capture no 1 position by 2009. 1H FY07 1,500 • Gross premium declined to RM1.3 billion or 23% due to 1H FY08 increasing competition as player consolidating and 1,000 offering new products and delay in launching single 2
Slide 19: International
International RM million Net Income Annualised 800 RM million Jun-07 Dec-07 Change change (%) 12% 710 Singapore 28,042 32,108 4,066 29.0% 632 Labuan Offshore 3,814 3,456 (358) -18.8% Hong Kong 2,175 2,475 300 27.6% US 1,218 1,119 (100) -16.4% UK 866 1,105 239 55.1% 400 Philippines 682 775 93 27.1% C
Slide 20: Asset Quality
Asset Quality Gross and Net NPL 6.70% 6.64% 6.52% • Continued improvement in asset quality. Gross NPL 5.55% 5.31% 5.12% • Loan loss provision for 1H FY08 of RM285.6 3.75% 3.67% million was reduced by 36.9% yoy. 3.56% Net NPL 3.03% 2.84% 2.69% • Gross NPL declined to 5.12% from 5.55% in June 2007 whi
Slide 21: Dividend and Capital
Dividend and Capital Dividends Payout ratio 100 • Proposed second quarter interim dividend 82% of 15 sen net of 26% income tax. 80 40 sen 35 sen • Dividend payout ratio at 72% for half year 60 (Final) (Final) 70% 72% compared to 70% for full year FY07. 40 50 sen 40 sen 15.0 sen (2Q) 20 (Interim) (In
Slide 22: Outlook for 2008
Outlook for 2008 • Expected slowing down in global economies. However, Malaysia’s economy expected to be resilient. • Domestic growth from higher consumer, business and government spending. • Maybank to : – sustain a steady growth in interest income and non interest income, – profiting from the lowe
Slide 23: Key Take Aways
Key Take Aways • Core Commercial Banking Franchise is intact with strong growth. • Moderate profit growth of 7.7% due lower income from investment and market losses due to volatile market conditions. • Stronger Loans growth at 10.6%. • Consumer and International business segments showed higher growt
Slide 24: Q & A Session
Q & A Session www.maybank2u.com 24