Malayan Banking Bhd. · MYX:MAYBANK

Malayan Banking Bhd — Q1 FY2019 Earnings Presentation

46 slides from Malayan Banking Bhd's earnings presentation, May 30, 2019

  1. Slide 1: Investor Presentation: Financial Results 1Q FY2019

    Humanising Financial Services Investor Presentation Financial Results First Quarter FY2019 ended 31 March 2019 30 May 2019 www.maybank.com 0

  2. Slide 2: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 4 Prospects & Outlook 16 Appendix: 1. Financial Performance 19 2. Community Financial Services 30 3. Global Banking 33 4. Maybank Singapore 36 5. Maybank Indonesia 39 6. Other Segments 42 1 Financial Results: 1Q FY2019 ended 31 March 2019

  3. Slide 3: Maybank Group 1Q FY2019 Overview

    Maybank Group 1Q FY2019 Overview Net operating income of RM5.86 billion supported by loans growth but offset by weaker net fee based income 1 • Net operating income grew marginally by 0.7% YoY as Group loans expanded 4.8% across our home markets. However, net fee based income was slightly lower on 1

  4. Slide 4: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 4 Prospects & Outlook 16 Appendix: 1. Financial Performance 19 2. Community Financial Services 30 3. Global Banking 33 4. Maybank Singapore 36 5. Maybank Indonesia 39 6. Other Segments 42 3 Financial Results: 1Q FY2019 ended 31 March 2019

  5. Slide 5: P&L Summary: 1Q FY2019

    P&L Summary: 1Q FY2019 YoY net fund based income growth supported by loans growth across home markets More 1Q 1Q 4Q details RM million YoY QoQ on FY2019 FY2018 FY2018 s.21 Net fund based income * 4,306.9 4,237.9 1.6% 4,474.6 (3.7)% s.7/21 Net fee based income * 1,553.2 1,578.6 (1.6)% 1,826.3 (15.0)%

  6. Slide 6: Net Fund Based Income: 1Q FY2019 YoY Trends

    Net Fund Based Income: 1Q FY2019 YoY Trends (1/2) Balanced loans and deposits growth focused on targeted segments Group Malaysia Singapore Indonesia Gross Loans (YoY) Community Financial Services Global Banking  +4.8%  +3.7%  +3.4%  +11.3% 299.5 SGD billion 140.5 IDR trillion 288.9 RM billion RM

  7. Slide 7: Net Fund Based Income: 1Q FY2019 NIM

    Net Fund Based Income: 1Q FY2019 NIM (2/2) Quarterly NIM compression due to higher funding costs, mainly from Singapore and Indonesia Net Interest Margin (%) QoQ Trend 2.39 2.38 2.30 2.30 2.27 1Q FY2018 2Q FY2018 3Q FY2018 4Q FY2018 1Q FY2019 6

  8. Slide 8: Net Fee Based Income

    Net Fee Based Income Slightly lower net fee based income mainly from MTM losses in financial liabilities 1Q 4Q 1Q RM million QoQ YoY FY2019 FY2018 FY2018 Commission, service charges and fees 773 782  (1.1)% 836  (7.5)% Investment & Trading Income 206 (335)  (>100)% 109  88.7% Unrealised gain/ (l

  9. Slide 9: Overheads: 1Q FY2019

    Overheads: 1Q FY2019 Mild YoY growth of 1.4% in overall expenses while quarterly expenses declined 8.5% 1Q 1Q 4Q RM million YoY QoQ FY2019 FY2018 FY2018 Personnel Costs 1,686.9 1,590.6 6.1% 1,751.0 (3.7)% Establishment Costs 441.4 457.2 (3.5)% 491.8 (10.3)% Marketing Expenses 140.7 142.8 (1.5)% 143.

  10. Slide 10: Asset Quality

    Asset Quality Annualised net credit charge off of 47 bps on additional provisioning for existing impaired loans Allowances for losses on loans Group Gross Impaired Loans (GIL) Ratio Composition Loan loss coverage incl. Regulatory Reserve Mar Dec Sep Jun Mar Loan loss coverage GIL Ratio Components 20

  11. Slide 11: Asset Quality by Line of Business

    Asset Quality by Line of Business Group’s ongoing proactive asset quality management results in uptick of some business segments Consumer Mortgage Auto Finance Credit Cards 2.59% 2.61% 2.63% 2.73% 2.30% 1.42% 1.36% 1.34% 1.33% 1.84% 1.83% 1.84% 1.86% 1.97% 1.08% 1.79% 1.78% 1.53% 1.41% 0.83% 0.85% 0

  12. Slide 12: Exposure to Oil & Gas and Real Estate Sectors

    Exposure to Oil & Gas and Real Estate Sectors: 31 March 2019 Contained sectoral exposures within Group’s risk appetite, with close asset quality monitoring of these sectors Group Exposure to Direct & Indirect Oil & Gas Borrowers Real Estate Exposure to Non-Retail Malaysian Borrowers Maybank Group Ma

  13. Slide 13: Liquidity Management: 31 March 2019

    Liquidity Management: 31 March 2019 Maintained strong and stable Group liquidity risk indicators Funding Breakdown Borrowings and Liquidity Risk Indicators Capital Instruments by Currency LDR LTF LTFE LCR 153.3% 144.9% 130.5% 132.4% 134.2% FI Deposits, 6% JPY, Equity, 11% 7% IDR, HKD, SGD, 10% 10% 4

  14. Slide 14: Strong Capital Position: 31 March 2019

    Strong Capital Position: 31 March 2019 Total capital ratio of 19.00% and CET1 capital ratio of 14.55% (assuming 85% dividend reinvestment rate) Before proposed After proposed dividend dividend, assuming 85% reinvestment rate 19.02% 19.52% 19.00% Jan 2019 Regulatory Requirements Onwards Group 15.98%

  15. Slide 15: Financial Statements Impact Arising from MFRS 16 Adoption

    Financial Statements Impact Arising from MFRS 16 Adoption effective 1 Jan 2019 Day 1 impact analysis (Group-level)  MFRS 16 replaces accounting standard MFRS 117, eliminating the distinction between operating and finance leases for all lessees.  Under MFRS 16, a lessee represents on its balance sh

  16. Slide 16: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 4 Prospects & Outlook 16 Appendix: 1. Financial Performance 19 2. Community Financial Services 30 3. Global Banking 33 4. Maybank Singapore 36 5. Maybank Indonesia 39 6. Other Segments 42 15Financial Results: 1Q FY2019 ended 31 March 2019

  17. Slide 17: Market Outlook

    Market Outlook FY2019 Industry outlook for our home markets Key Indicators Industry Outlook • GDP: 4.7% (2019F) vs 4.7% (2018) • Stable economic growth driven by growth in • System loan: 5.1% (2019F) vs 5.6% (2018) mining and agriculture sectors, private • OPR: 3.00% (2019F) vs 3.25% (2018) investme

  18. Slide 18: Maybank Performance Outlook

    Maybank Performance Outlook Group guidance for FY2019 1 Income Growth  Expand revenue streams through cross business collaborations  Measured balance sheet expansion in line with economic growth of home markets and Group’s conservative risk posture  Group ROE guidance of ~11.0% 2 Better Productiv

  19. Slide 19: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 4 Prospects & Outlook 16 Appendix: 1. Financial Performance 19 2. Community Financial Services 30 3. Global Banking 33 4. Maybank Singapore 36 5. Maybank Indonesia 39 6. Other Segments 42 18Financial Results: 1Q FY2019 ended 31 March 2019

  20. Slide 20: International & Malaysia Portfolio Mix 1Q FY2019

    International & Malaysia Portfolio Mix 1Q FY2019 Net Operating Income Profit Before Tax¹ Gross loans* 1Q FY2019 (Jan 19 – Mar 19) Overseas: 7.1% Overseas: 16.8% Overseas: 8.1% 37.0% 11.9% 24.0% 41.6% 7.8% 7.2% RM5.86 RM2.45 RM516.9 18.0% billion billion billion 25.7% 58.4% 63.0% 76.0% Malaysia Singa

  21. Slide 21: Segmental Performance of Businesses: 1Q FY2019 (1/2)

    Segmental Performance of Businesses: 1Q FY2019 (1/2) Net Operating Income 1Q FY2018  +0.7% Group Global Banking  +0.2% 1Q FY2019 1Q FY2018: 2,298 1Q FY2019: 2,302 5,816 5,860  +1.6%  +5.1%  (37.5)%  +>100%  +58.9% 3,322 3,375 RM million 1,878 1,974 416 260 301 478 4 69 Total Group Community G

  22. Slide 22: Segmental Performance of Businesses: 1Q FY2019 (2/2)

    Segmental Performance of Businesses: 1Q FY2019 (2/2) Net Fund Based Income 1Q FY2018  +1.6% Group Global Banking  (0.3)% 1Q FY2019 1Q FY2018: 1,333 1Q FY2019: 1,329 4,238 4,307  +1.5%  +2.7  (37.3)%  +67.9  +12.3% 2,541 2,581 RM million 1,227 1,260 104 65 4 278 312 2 Total Group Community Gro

  23. Slide 23: Unaudited Income Statement for Insurance and Takaful Business

    Unaudited Income Statement for Insurance and Takaful Business RM million 1Q FY2019 1Q FY2018 YoY 4Q FY2018 QoQ Net interest income 312.3 278.2 12.3% 309.2 1.0% Net earned premiums 1,626.5 1,511.4 7.6% 1,502.2 8.3% Other operating income 501.4 (62.1) (>100)% (250.5) (>100)% Total operating income 2,4

  24. Slide 24: Group Gross Loans Growth: 31 March 2019

    Group Gross Loans Growth: 31 March 2019 % of 31 Mar 31 Dec YTD 31 Mar QoQ YoY Portfolio 2019 2018 Annualised 2018 Group Gross Loans 516.9 517.3  (0.1)%  (0.3)% 493.4  4.8% Malaysia (RM billion) 58% 299.5 299.2  0.1%  0.4% 288.9  3.7% Community Financial Services (reported) 73% 218.3 216.0  1.

  25. Slide 25: Malaysia Loans Growth: 31 March 2019

    Malaysia Loans Growth: 31 March 2019 % of 31 Mar 31 Dec YTD 31 Mar RM billion QoQ YoY Portfolio 2019 2018 Annualised 2018 Community Financial Services (reported) 73% 218.3 216.0  1.1%  4.4% 205.7  6.1% Community Financial Services (rebased)¹ 73% 218.3 215.9  1.1%  4.5% 205.7  6.1% Consumer 59%

  26. Slide 26: Group Deposits Growth: 31 March 2019

    Group Deposits Growth: 31 March 2019 % of 31 Mar 31 Dec YTD 31 Mar QoQ YoY Portfolio 2019 2018 Annualised 2018 Group Gross Deposits 557.6 556.3  0.2%  0.9% 532.1  4.8% Malaysia (RM billion) 62% 343.9 343.8  0.0%  0.1% 336.4  2.2% Savings Deposits 13% 43.9 42.8  2.6%  10.6% 42.5  3.4% Curren

  27. Slide 27: Continued RWA Optimisation

    Continued RWA Optimisation Group Gross Loans Total Group RWA  +4.8% YoY  1.1% YoY  (0.1)% QoQ 517.3 516.9  0.0% QoQ 493.4 370.5 374.6 374.5  +0.0% 40.6 41.8 41.8 17.5  +2.6% 17.9 Operational RWA RM billion RM billion 16.7  (0.2)% Market RWA 313.2 315.3 314.7 Credit RWA Mar 18 Dec 18 Mar 19 Ma

  28. Slide 28: LDR and CASA Ratio

    LDR and CASA Ratio Group LDR CASA CASA (without IA) Malaysia 92.5% 92.8% 94.4% 92.7% 92.4% 87.0% 87.8% 89.5% 87.9% 88.0% 35.3% 35.1% 35.1% 35.9% 34.5% 37.3% 37.3% 37.9% 38.7% 37.5% 33.5% 33.2% 33.2% 33.6% 32.4% 34.5% 34.3% 34.9% 34.9% 34.0% Mar 18 Jun 18 Sep 18 Dec 18 Mar 19 Mar 18 Jun 18 Sep 18 Dec

  29. Slide 29: Key Operating Ratios

    Key Operating Ratios % 1Q FY2019 1Q FY2018 YoY 4Q FY2018 QoQ Return on Equity 9.7 10.5 (0.8)% 13.0 (3.3)% Net Interest Margin 2.30 2.39 (9) bps 2.38 (8) bps Fee to Income Ratio 26.5 27.1 (0.6)% 29.0 (2.5)% Loans-to-Deposit Ratio 1 92.4 92.5 (0.1)% 92.7 (0.3)% Cost to Income Ratio 2 47.9 47.5 0.4% 48

  30. Slide 30: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 4 Prospects & Outlook 16 Appendix: 1. Financial Performance 19 2. Community Financial Services 30 3. Global Banking 33 4. Maybank Singapore 36 5. Maybank Indonesia 39 6. Other Segments 42 29Financial Results: 1Q FY2019 ended 31 March 2019

  31. Slide 31: Community Financial Services: Overview of Market Share for Malaysia

    Community Financial Services: Overview of Market Share for Malaysia Dec-18 Market Market share Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 vs position Mar-19 Loans Total consumer (Household) 17.6% 17.6% 17.7% 17.7% 17.8% 2 Auto (Purchase of transport vehicles) 26.7% 27.1% 27.3% 27.7% 28.0% 2 Total mortgage *

  32. Slide 32: Community Financial Services: Overview of Malaysia Portfolio

    Community Financial Services: Overview of Malaysia Portfolio Total CFS loans on an upward trend of 6.1% YoY and 1.1% Total CFS deposits decreased by 4.3% YoY, due to reduction QoQ in high cost deposits, mitigated by CASA growth of 1.5%  (4.3)% YoY  +6.1% YoY  (1.6)% QoQ  +1.1% QoQ 205.7 216.0 21

  33. Slide 33: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 4 Prospects & Outlook 16 Appendix: 1. Financial Performance 19 2. Community Financial Services 30 3. Global Banking 33 4. Maybank Singapore 36 5. Maybank Indonesia 39 6. Other Segments 42 32Financial Results: 1Q FY2019 ended 31 March 2019

  34. Slide 34: Global Banking: Malaysia Corporate Banking and Securities Portfolio

    Global Banking: Overview of Malaysia Corporate Banking and Group Securities Portfolio Total Corporate Banking loans in Malaysia decreased 2.4% Group Securities Portfolio¹ grew 20.6% YoY YoY to RM81.2 billion RM billion  +20.6% 44.6 Term Loan 186.5 45.1  +7.3% YoY 179.0 178.0 172.3 6.6 41.5 6.9 6.6

  35. Slide 35: Global Banking: Overview of Group Investment Banking Portfolio

    Global Banking: Overview of Group Investment Banking Portfolio 1Q FY2019 Total Income Breakdown by Country 1Q FY2019 Fee-based Income for Malaysia Hong Kong Others Arranger Fees Underwriting & Philippines 3% 4% 28.0% Placement Fees 4% 9.8% Indonesia 4% Malaysia Advisory Fees RM260.0 43% 8.1% Thailan

  36. Slide 36: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 4 Prospects & Outlook 16 Appendix: 1. Financial Performance 19 2. Community Financial Services 30 3. Global Banking 33 4. Maybank Singapore 36 5. Maybank Indonesia 39 6. Other Segments 42 35Financial Results: 1Q FY2019 ended 31 March 2019

  37. Slide 37: Maybank Singapore: P&L Summary

    Maybank Singapore: P&L Summary SGD million 1Q FY2019 1Q FY2018 YoY 4Q FY2018 QoQ Net fund based income 192.88 186.16 3.6% 197.27 (2.2)% Net fee based income 83.04 104.64 (20.6)% 68.04 22.0% Net income 275.92 290.80 (5.1)% 265.31 4.0% Overhead expenses (112.63) (104.76) 7.5% (116.75) (3.5)% Operating

  38. Slide 38: Maybank Singapore: Overview of Loans and Deposits Portfolio

    Maybank Singapore: Overview of Loans and Deposits Portfolio Diversified Loan Portfolio Consumer deposits’ composition rose to 52% of total deposits % of 31 Mar 31 Dec 31 Mar SGD Billion Portfolio 2019 2018 QoQ 2018 YoY  +6.6% YoY 43.8 46.2 46.7 CFS 54% 22.9 22.6 1.2% 22.8 0.6% Consumer - Time Depos

  39. Slide 39: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 4 Prospects & Outlook 16 Appendix: 1. Financial Performance 19 2. Community Financial Services 30 3. Global Banking 33 4. Maybank Singapore 36 5. Maybank Indonesia 39 6. Other Segments 42 38Financial Results: 1Q FY2019 ended 31 March 2019

  40. Slide 40: Maybank Indonesia: P&L Summary

    Maybank Indonesia: P&L Summary 1Q 1Q 4Q IDR billion YoY QoQ FY2019 FY2018 FY2018 Net Fund Based income 2,037 1,890 7.7% 2,060 (1.1)% Net Fee Based income 515 528 (2.4)% 756 (31.9)% Net income 2,552 2,418 5.5% 2,816 (9.4)% Overhead expenses (1,585) (1,508) 5.1% (1,541) 2.9% Personnel (633) (648) (2.2

  41. Slide 41: Maybank Indonesia: Financial Ratios and Loans Portfolio Breakdown

    Maybank Indonesia: Financial Ratios and Loans Portfolio Breakdown Key Operating Ratios Loans Portfolio Breakdown Key Operating Ratio Mar 19 Dec 18 Mar 18 YoY % of 31 Mar 31 Dec 31 Mar IDR Trillion QoQ YoY Portfolio 2019 2018 2018 Profitability & Efficiency CFS 74% 100.0 102.3 (2.3)% 94.9 5.4% Return

  42. Slide 42: Table of Contents

    Table of Contents Executive Summary 2 Results Overview 4 Prospects & Outlook 16 Appendix: 1. Financial Performance 19 2. Community Financial Services 30 3. Global Banking 33 4. Maybank Singapore 36 5. Maybank Indonesia 39 6. Other Segments 42 41Financial Results: 1Q FY2019 ended 31 March 2019

  43. Slide 43: Islamic Banking: Performance Overview

    Islamic Banking: Performance Overview Group Islamic Banking Financial Performance Maybank Islamic: Total Gross Financing grew to RM180.0 billion Mar-18 RM million 1Q FY2019 1Q FY2018 YoY Mar-19 12% Total Income 1,331.0 1,217.5 9.3% 48.9 12% 5% 43.8 Profit Before Tax 896.6 455.3 96.9% 40.0 15% 36

  44. Slide 44: Islamic Banking: Market Share

    Islamic Banking: Market Share Maybank Islamic Market Share Market Share by Product (Malaysia) 33.6% 33.2% 32.6% 32.7% 32.8% Key Products Mar 19 Mar 18 31.2% Automobile Financing 46.4% 45.0% 30.4% 30.4% 29.9% Home 27.0% 27.5% 29.3% Term financing 31.7% 31.3% Mar 18 Jun 18 Sep 18 Dec 18 Mar 19 Financi

  45. Slide 45: Insurance and Takaful: Performance Overview

    Insurance and Takaful: Performance Overview Gross Premium Life / Family (New Business) Market Share Single Premium  (46.5)% Regular Premium  5.8% 19.9% 21.6% 21.5% 20.3% No. 4 in Credit Premium  20.0% 1Q FY2019 15.4% 15.2% 14.4% 14.2% Life/Family (New Business) Group Premium  35.3% 1Q FY2018 14.

  46. Slide 46: Malayan Banking Berhad Contact and Disclaimer

    Humanising Financial Services MALAYAN BANKING BERHAD 14th Floor, Menara Maybank 100, Jalan Tun Perak 50050 Kuala Lumpur, Malaysia Tel : (6)03-2070 8833 www.maybank.com Disclaimer. This presentation has been prepared by Malayan Banking Berhad (the “Company”) for information purposes only and does not

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