Ammb Holdings Bhd. · MYX:AMBANK
Ammb Holdings Bhd — 9MFY2020 Earnings Presentation
45 slides from Ammb Holdings Bhd's earnings presentation, Feb 27, 2020
Slide 1: 9MFY2020 Results Investor Presentation
9MFY2020 RESULTS INVESTOR PRESENTATION 27 February 2020
Slide 2: GCEO Presentation
GCEO PRESENTATION Dato’ Sulaiman Mohd Tahir 3 9MFY20 Financial snapshot 4 Outlook for 2020
Slide 3: 9MFY20 Financial snapshot
Financial Snapshot 9MFY20 Financial snapshot 9MFY20 Financials 9MFY20 Positive income momentum driving profit growth 3,238 Income 9% • Continued strong income growth in Q3 9MFY19: 2,968 1,607 Expenses 5% • Investing for growth while maintaining positive JAWS 9MFY19: 1,531 1,631 PBP 14% • Robus
Slide 4: Outlook for 2020
Market Outlook Outlook for 2020 Malaysia Banking Sector GDP growth: Loans growth: 4.2% 4.3% Inflation: Asset quality: 1.2% Stable Export growth: OPR: 1.0% - 2.0% 2.25% USD/MYR outlook: Resilient liquidity & 4.00 capital positions 4 9MFY2020 Results – Investor Presentation
Slide 5: GCFO Presentation
GCFO PRESENTATION Jamie Ling 6-19 Financial overview 20 Guidance & Expectations
Slide 6: Q3FY20 Financial overview
Financial Overview Q3FY20 Financial overview Q3FY20 Results (QoQ) ➢ Income up 3% to RM1,105mil (+RM36mil): - Steady NII growth, up 6% to RM721mil, NIM further expanded to 2.02% (+11bps) - NoII declined 2% mainly from General Insurance, partially offset by higher Investment Banking fee income ➢ Expen
Slide 7: 9MFY20 Performance summary – P&L
Financial Overview 9MFY20 Performance summary – P&L P&L Q3FY20 Q2FY20 QoQ Change 9MFY20 9MFY19 YoY Change (RM’ mil) Total Income 1,105 1,069 3% 3,238 2,968 9% Expenses 552 526 5% 1,607 1,531 5% PBP 552 543 2% 1,631 1,437 14% Net (Recovery) / 57 109 48% 134 (33) >100% Impairment PATMI
Slide 8: 9MFY20 Performance summary – balance sheet
Financial Overview 9MFY20 Performance summary – balance sheet Balance Sheet Q3FY20 Q2FY20 QoQ Change 9MFY20 FY19 YTD Change (RM’ bil) Gross Loans 104.5 102.0 3% 104.5 101.8 3% GIL 1.71% 1.77% 6bps 1.71% 1.59% 12bps LLC1 105.2% 105.8% 60bps 105.2% 114.0% 880bps Customer Deposits 105.7 102
Slide 9: Stepping up revenue growth
Income Stepping up revenue growth Business Segments Q3FY20 Q2FY20 QoQ Change 9MFY20 9MFY19 YoY Change (RM’ mil) Wholesale Banking 317 334 5% 953 794 20% Investment Banking 85 69 24% 224 180 24% Retail Banking 386 369 5% 1,112 1,109 ≈ Business Banking 94 90 4% 271 236 14% Group Fundin
Slide 10: Strong PBP growth, improving operating leverage
PBP & PATMI Strong PBP growth, improving operating leverage Business Segments Q3FY20 Q2FY20 QoQ Change 9MFY20 9MFY19 YoY Change (RM’ mil) Wholesale Banking 241 260 7% 733 586 25% Investment Banking 37 24 55% 86 50 70% Retail Banking 171 149 14% 472 489 3% Business Banking 57 52 9% 160
Slide 11: Net profit higher from stronger income growth and improved cost efficiency
Group P&L Net profit higher from stronger income growth and improved cost efficiency YoY Growth 6% 15% 9% 5% 14% >100% 2% 9% 5% 14% 5% 152 119 76 31 1,093 1,046 167 12 21% 26% Effective NIM: NoII%: CTI: GIL: Tax Rate: 1.93% 36.1% 49.6% 1.71% 20.6% 79% 74% Net Interest Non-Intere
Slide 12: NIM expanded QoQ, stable YoY
NIM NIM expanded QoQ, stable YoY Net Interest Margin (NIM) Movement Assets Funding + Deposits YTD NIM 11.4 9MFY19: 1.93% 9MFY18: 1.93% NIM movement: QoQ : 11bps 3.3 YoY : ≈ 1.3 0.7 6.7 0.3 0.9 2.0 202 1.1 191 Q2FY20 Wholesale Investment Retail Business Others Asset volume Interbank / Deposits Depo
Slide 13: Sustaining strong trading gains and higher IB fee and General Insurance income
NoII Sustaining strong trading gains and higher IB fee and General Insurance income YoY Growth 100% 5% >100% 35% 3% 11% 12% 9% 64% 28% 15% NoII Q1FY20: 395 Q2FY20: 389 32 Q3FY20: 383 51 7 7 7 2 14 120 1,168 22 6 1,016 Group Investment Group Foreclosed Corporate Wealth Business G
Slide 14: Cost well managed while continuing to invest
Expenses Cost well managed while continuing to invest Business Segments Q3FY20 Q2FY20 QoQ Change 9MFY20 9MFY19 YoY Change (RM’ mil) Wholesale Banking 76 74 3% 220 208 6% Investment Banking 48 45 7% 138 130 7% Retail Banking 215 220 2% 640 620 3% Business Banking 37 38 3% 110 93 19% G
Slide 15: Credit costs remained low whilst normalising
Asset Quality Credit costs remained low whilst normalising Net Impairment (RM’ mil) Gross Impaired Loans, GIL and LLC Ratios Q1FY20: (32.5) Q2FY20: 109.1 Retail Wholesale Loan Loss Coverage 2 Q3FY20: 56.9 Business GIL Ratio 176.4 116.8% 100.5% 114.0% 105.2% 16.9 81.2% 79.7% 133.5 1.94% 1.86% 1.70% 1
Slide 16: Watchful on credit quality
Asset Quality Watchful on credit quality Impaired Loans by Sector Loans to Oil & Gas (O&G) Sector by Internal Risk Grades Dec’19 Sector Composition YTD Growth QoQ Growth Marginal~ Impaired RM’ bil RM’ mil Substandard 2% Real Estate 316 18% 37% 4% 1% 9MFY20 2.0 Satisfactory~ Residential Propertie
Slide 17: Loans growth boosted by higher disbursements in Q3
Loans Loans growth boosted by higher disbursements in Q3 Gross Loans Movement (RM’ bil) Breakdown by rate sensitivity: Breakdown by concept: Breakdown by customers type: ROA1: RoTA1: Fixed rate – 24% Islamic – 29% Retail – 56% 1.02% 1.03% Variable rate –76% Conventional – 71% Non-retail – 44% Ex. Au
Slide 18: Driving CASA growth
Deposits Driving CASA growth Deposits (RM’ bil) CASA (RM’ bil) and CASA Composition (%) Customer deposits trend YTD Growth Industry CASA trend YTD Growth Industry 9MFY20 105.7 1% 2%1 9MFY20 24.8 ≈ 6%1 FY19 106.9 12% 5%2 FY19 24.9 22% 3%2 FY18 95.8 2% 5%2 FY18 20.4 3% 6%2 Reta
Slide 19: Adequate capital levels
Capital Adequate capital levels RWA/Total Assets Capital Adequacy Ratios3 RM’ bil CET 1 Tier 1 Total CAR Total Assets RWA/Total Assets Peers 1 2 72.2% 72.2% Aggregated basis4 FHC 71.2% 2 65.0% 2 66.9% 16.1% 16.3% 15.6% 15.4% 59.6% 59.5% 59.3% 58.4% 58.4% 12.3% 12.5% 13.6% 5 11.3% 11.6% 11.1% 5 11.9%
Slide 20: Guidance & Expectations
Guidance Guidance & Expectations Revised 9MFY20 Actual FY20 Guidance Reported ROE 8.1% ~ 8.0% - 8.5% CTI 49.6% ≤ 50.0% Dividend Payout N/A 45% - 50% FHC CET 1 12.2% 11.5% ± 1% 20 9MFY2020 Results – Investor Presentation
Slide 21: Thank You
Thank You
Slide 22: Group Performance
Group Performance
Slide 23: Yearly performance
9MFY2020 Results Yearly performance PATMI (RM’ mil) & ROE (%) Total Income (RM’ mil) and Non-interest Income (%) PATMI: ROE: Total Income PATMI ROE (%) CAGR FY16-FY19: 4.9% CAGR FY16-FY19: ≈ Total Income Non-interest Income % CAGR FY16-FY19: 2.0% YoY Growth 4.5% YoY Growth 0.1% YoY Growth
Slide 24: Net interest margin and gross loans
NIM & Gross Loans Net interest margin and gross loans NIM Trend Gross Yield COF NIM Net Spread 1 5.08% 5.07% 5.03% 4.96% 5.02% 4.92% 4.93% 4.83% 4.84% 4.94% 4.87% 3.39% 3.47% 3.46% 3.45% 3.37% 3.45% 3.22% 3.27% 3.26% 3.23% 3.11% 2.02% 1.91% 1.88% 1.91% 2.02% 1.98% 2.00% 1.89% 1.93% 1.78% 1.87% 1.69%
Slide 25: Non-interest income and PATMI mix
NoII & PATMI Non-interest income and PATMI mix Non-interest Income by Lines of Business (YoY) PATMI by Lines of Business (YoY) 28% 19% Others 79% 1% Corporate Banking 6% 10% Group Funding 13% 1 23% Insurance & Others 9% -2% Retail Banking Business Group 23% Banking Wholesale Treasury &
Slide 26: Impairments
Asset Quality Impairments Net Impairment / (Writebacks) and GIL Ratio Total impairments by category (RM’ mil) Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 QoQ Change 9MFY19 9MFY20 YoY Change ECL Stage 1 & 2 / CP – Non defaulted1 (71) (9) 50 (14) (128) (38) (29) 24% (30) (195) >100% ECL Stage
Slide 27: Loans by sector vs. industry
Loans Loans by sector vs. industry AmBank Group (RM’ bil) Loans Composition 3% 2% 13% 1% 4% 7% 3% 5% 7% 2% 53% ≈ 100% YTD Growth 8% 17% 19% 33% 3% 8% 7% ≈ 9% 26% ≈ 77% 3% Dec-19 104.5 55.9 3.0 4.3 7.3 2.9 4.9 2.0 14.0 0.6 7.5 2.0 0.1 Wholesale, Finance, Mining & Electricity, Tr
Slide 28: Funding profile
Funding Funding profile Funding Composition vs. Peers Funding Maturity Profiles Term Funding and Debt Capital FY16 FY17 FY18 FY19 9MFY20 Peers1 Equity & debt capital 16% 16% 16% 15% 15% 16% 14% Customer deposits 73% 74% 74% 74% 73% 74% 9MFY20: Term funding & loans sold RM6.1 bil 10% 9% 7% 6% 5% 5% w
Slide 29: Divisional Performance
Divisional Performance
Slide 30: Wholesale Banking
Wholesale Banking Wholesale Banking Total Income (YoY Movement) and Total Assets by Line of Business QoQ PAT (RM’ mil) QoQ Growth: 14% YoY Growth: 2% Total Income RM953 mil 9MFY19: 599 9MFY20: 611 259 244 182 184 188 173 165 Transaction Banking 6% 23% Wholesale Banking Coverage 37% Q1FY19 Q2FY
Slide 31: Wholesale Banking
Wholesale Banking Wholesale Banking Income Statement YoY Growth 11% 43% 20% 6% 25% 70% 1% ≈ 2% Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income 9MFY20 645 308 953 220 733 (58) 790 179 611 9MFY19 579 215 794 208 586 (193) 779 180 599 9MF
Slide 32: Investment Banking
Investment Banking Investment Banking League Table Market Share of Value and Volume Traded on Bursa (KLSE)1 Market Share1 As At Trading Value Trading Volume Rank2 31 Dec 2019 (%) 3.9% 3.8% DCM (Overall MYR Bonds) 10.9% 3 3.6% 3.6% 3.4% 5.7% Islamic Sukuk 10.7% 4 5.5% 5.0% Unit Trust 8.2% 5 4.9% 4
Slide 33: Investment Banking
Investment Banking Investment Banking Income Statement YoY Growth 19% 35% 24% 7% 70% 26% 65% 93% 59% Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income 9MFY20 29 195 224 138 86 (7) 93 20 74 9MFY19 37 144 180 130 50 (6) 56 10 46 9MFY20 P
Slide 34: Retail Banking
Retail Banking Retail Banking Total Income (YoY Movement) and Loans by Line of Business PAT Trend (RM’ mil) QoQ Growth: 8% Total Income YoY Growth: 13% RM1,112 mil 35% 22% 9MFY19: 287 9MFY20: 249 Retail SME 16% 3% 8% Others Auto 3% 13% Wealth 281 6% Auto 23% Others Mortgage 4% 15% 9% R
Slide 35: Retail Banking – cards, wealth and merchant
Retail Banking Retail Banking Wealth Sales (RM’ mil) Merchant Volume QoQ Growth: 1% Merchant volume (RM'mil) QoQ Growth: 5% YoY Growth: 6% YoY Growth: 9% Merchants in force ('000) QoQ Growth: 1% YoY Growth: 19% 53 51 9MFY19: 2,243 9MFY20: 2,453 44 866 38 37 36 822 831 36 800 675 702 677
Slide 36: Retail Banking
Retail Banking Retail Banking Income Statement YoY Growth 2% 8% ≈ 3% 3% 30% 13% 13% 13% Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income 9MFY20 926 186 1,112 640 472 145 327 78 249 9MFY19 906 203 1,109 620 489 112 377 90 287 9MFY20 PAT
Slide 37: Distribution Channels
Retail Banking Distribution Channels Branches ATM Regional Offices Perlis 1 3 Kedah 6 24 Pulau Pinang 14 50 2 Perak 18 45 1 Selangor 36 212 3 Kuala Lumpur 23 97 3 Putrajaya 1 3 Negeri Sembilan 7 39 Melaka 6 32 1 Johor 21 82 1 Pahang 8 28 1 Terengganu 2 14 Population Density Kelantan 2 17 < 100 perso
Slide 38: Business Banking
Business Banking Business Banking Gross Loans (RM’ mil) QoQ PAT (RM’ mil) QoQ Growth: 42% YTD Growth: 9% YoY Growth: 23% Non-trade Trade 10,850 10,425 9,964 10,069 9,055 2,585 8,583 2,527 9MFY19: 99 9MFY20: 76 7,994 2,441 2,462 2,222 2,219 2,060 7,607 7,898 8,264 7,523 6,364 6,833 5,934 Q1FY19
Slide 39: Business Banking
Business Banking Business Banking Income Statement YoY Growth 15% 12% 14% 19% 11% >100% 24% 26% 23% Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income 9MFY20 206 65 271 110 160 62 98 22 76 9MFY19 179 58 236 93 144 15 129 30 99 9MFY20 PA
Slide 40: Islamic Banking
Islamic Banking Islamic Banking Income Statement YoY Growth 7% 2% 12% 36% 30% 26% 31% RM' mil Total Income Expenses PBP Impairment PBT Tax & Zakat PATZ 9MFY20 664 227 436 71 365 81 285 9MFY19 623 231 391 110 281 64 217 9MFY20 PATZ 9MFY19 PATZ Positive growth in 9MFY20 Contraction in 9M
Slide 41: General Insurance
General Insurance General Insurance Loss Ratio and Combined Ratio YoY PBT and PAT (RM’ mil) Loss Ratio Combined Ratio 96% 97% 92% 92% 92% 89% YoY PBT Growth: 16% PBT PAT YoY PAT Growth: 15% 282 64% 63% 57% 58% 55% 59% 242 237 FY16 FY17 FY18 FY19 9MFY19 9MFY20 2 204 194 192 Gross Premium Mix and
Slide 42: Insurance and Group Funding & Others
Insurance & Others Insurance and Group Funding & Others Income Statement – Insurance (General, Life & Takaful) YoY Growth 5% 1% 12% 19% 12% 20% 10% RM'mil Total Income Expenses PBP Impairment PBT Tax PAT 9MFY20 496 257 239 (2) 241 47 194 9MFY19 472 258 214 (2) 216 39 177 Income Stateme
Slide 43: Shareholding structure
Corporate Structure Shareholding structure 23.8%1 AmCorp 13.0% PNB 9.0%2 EPF 7.9% Others 46.3% As at 31 December 2019 AMMB Holdings Berhad Retail Banking Wholesale Banking Islamic Banking General Insurance Life Assurance & Takaful 100% AMAB Holdings Sdn Bhd 100% AmBank (M) Berhad 51% AmGeneral Holdi
Slide 44: Credit ratings, target price and recommendations
Ratings & Target Price Credit ratings, target price and recommendations Credit Ratings 9MFY20 AMMB AmBank (M) AmBank Islamic AmInvestment Ratings RAM LT: AA2, ST: P1 LT: AA2, ST: P1 LT: AA2, ST: P1 LT: AA2, ST: P1 Outlook: Stable Outlook: Stable Outlook: Stable Outlook: Stable S&P LT: BBB+, ST: A-2
Slide 45: Glossary & Disclaimer
Glossary & Disclaimer Glossary & Disclaimer of warranty and limitation of liability Reported Performance Reported performance refers to the financial performance as reported in the audited financial statements and disclosed to the market Growth Definition QoQ growth refers to Q3FY20 vs Q2FY20 YoY gr
AMMB Holdings Berhad — 9MFY2020 Earnings Presentation on 6ix