Alliance Bank Malaysia Bhd. · MYX:ABMB
Alliance Bank Malaysia Bhd — 1Q FY2017 Earnings Presentation
24 slides from Alliance Bank Malaysia Bhd's earnings presentation, Aug 22, 2016
Slide 1: Analyst Briefing 1Q FY2017
ANALYST BRIEFING 1Q FY2017 22 August 2016
Slide 2: Contents
Contents 1 Executive Summary Growth: Revenue and Profitability Effective Risk Management Key Results 2 Going Forward FY17: Priorities and Targets 3 Appendix - Financial Results: 1Q FY2017
Slide 3: 1Q FY2017: Performance
1Q FY2017: Performance Continued progress despite challenging economy 1 Efficient loans growth with improved Risk Adjusted Returns (“RAR”) Revenue and Growing client based fee income Profitability Improved cost to income ratio 2 Better-than-industry asset quality, credit cost contained Effec
Slide 4: Growth: Efficient loans growth with focus on risk adjusted return
Growth: Revenue & Profitability Efficient loans growth with focus on risk adjusted return Loan Portfolio Yield a) Q-o-Q loan portfolio yields expanded 8 bps to 5.27% thanks to: Alliance Bank Industry % Improving loans mix Pricing for risk 5.19% 5.27% 5.06% 5.10% 5.13% b) Industry yield* contract
Slide 5: Efficient growth in better risk adjusted return loans
Growth: Revenue & Profitability Efficient growth in better risk adjusted return loans Loans Growth YTD (April – June 2016) a) Improved loan origination mix: 1Q FY2017 annualized loans growth: 1Q FY2016 1Q FY2017 1Q FY2017 Loans Loans Annualized Growth Growth Loans Growth Better risk adjusted retur
Slide 6: Growing client based fee income
Growth: Revenue & Profitability Growing client based fee income Client Based Fee Income Trend a) Q-o-Q: Client based fee income up 9.7%, with growth in: RM mil Insurance, Banca & Unit Trust Fees Brokerage & Share Trading Fees FX Sales Wealth Management fee: +20.6% Trade Fees Banking Services Fees
Slide 7: Improved cost to income ratio
Growth: Revenue & Profitability Improved cost to income ratio Operating Expenses Trend a) 1QFY17: Positive JAWS RM mil OPEX CIR 1Q FY17 Q-o-Q Y-o-Y Revenue Growth +3.1% +5.7% Expense Growth -6.4% +1.0% 51.2% 48.6% 48.4% Positive JAWS +9.5% +4.7% 45.4% 46.5% b) 1QFY17 cost to income ratio improved to
Slide 8: Funding mix optimisation
Effective Risk Management Funding mix optimisation Deposits Growth and CASA Ratio Optimising funding mix with focus on customer based funding: RM bil 34.5% 32.9% a) Maintaining CASA balances: 32.9% CASA ratio Others 43.9 44.9 Fixed Deposits (FD) c) Proportion of funding from customer deposits 8.3 8.
Slide 9: Deposits grew faster than industry, q-o-q NIM improved
Effective Risk Management Deposits grew faster than industry, q-o-q NIM improved a) +2.3% y-o-y customer deposits growth, faster than Jul 2015 - Jun 2016 AFG Group Banking System industry^ (-0.8%) Deposits Growth 2.31% (0.77%) b) Loans to deposits ratio at 85.7% (industry*: 88.5%) Loans Growth 3.02%
Slide 10: Better-than-industry asset quality
Effective Risk Management Better-than-industry asset quality Gross Impaired Loans a) Better-than-industry asset quality despite slow down in mortgages and hire purchase loans: RM mil Gross impaired loans Gross impaired loan ratio Gross impaired loans ratio at 1.2% (industry: 1.7%) Net impaired loa
Slide 11: Contained credit cost
Effective Risk Management Contained credit cost Overall Credit Cost (bps) a) 1QFY2017: Annualized net credit cost normalised to 18.8bps Credit cost (excluding recoveries) Basis Recoveries b) Continued reduction in recoveries: points Net credit cost (including recoveries) (bps) FY2016: RM37.8 milli
Slide 12: Sustainable capital ratios
Effective Risk Management Sustainable capital ratios Total Capital Ratio (%) a) After redemption of RM600 million Tier-2 Subordinated Notes on 8 April 2016, Total Capital Ratio stabilised to 16.3%. 17.4% 16.3% 14.6% b) Strong CET-1 ratio at 11.7%, after retained 13.7% 13.0% earnings and regulatory r
Slide 13: Competitive ROE with Better Risk Adjusted Return strategy
Key Results Competitive ROE with Better Risk Adjusted Return strategy Net Profit After Tax and Return on Equity a) Steady q-o-q performance despite challenging environment with Risk Adjusted Return strategy: NPAT Return on Equity (AFG) NPAT : +2.0% to RM132.5 million Return on Equity (Industry) RM
Slide 14: Summary: Focus on sustainable profitability
Summary Focus on sustainable profitability 1 Efficient loans growth with improved Risk Adjusted Returns (“RAR”) Revenue and Growing client based fee income Profitability Improved cost to income ratio 2 Better-than-industry asset quality, credit cost contained Effective Risk Funding mix opt
Slide 15: Contents
Contents 1 Executive Summary Growth: Revenue and Profitability Effective Risk Management Key Results 2 Going Forward FY17: Priorities and Targets 3 Appendix - Financial Results: 1Q FY2017
Slide 16: FY17: Priorities and Targets
Going Forward FY17: Priorities and Targets FY17 Priorities FY17 Management Guidance 1 Optimization and Streamlining Mid-to-high single digit loans growth Efficient asset growth: focus on better Risk Adjusted Return loans Deposits growth faster than loans Maintain NIM Continue to strengthen ris
Slide 17: Contents
Contents 1 Executive Summary Growth: Revenue and Profitability Effective Risk Management Key Results 2 Going Forward FY17: Priorities and Targets 3 Appendix - Financial Results: 1Q FY2017
Slide 18: Key Highlights: Financial Performance
Key Highlights: Financial Performance Net profit after tax: RM132.5 million Net Interest Income & Revenue Non Interest Income & NII Ratio Islamic Banking Income Client Based Non Client Based NOII Ratio RM mil RM mil RM mil 25.9% 24.2% 23.4% 23.8% 23.8% 344.4 365.9 361.2 352.7 363.8 91.7 82.1 80.3 84
Slide 19: 1Q FY2017: Income Statement (Q-o-Q)
1Q FY2017: Income Statement Q-o-Q Change Net income grew by 3.1% q-o-q, driven by: 4QFY16 1QFY17 Better / (Worse) +0.5% net interest income growth from higher Income Statement RM mil RM mil RAR loans and better pricing discipline RM mil % +5.1% non-interest income growth Net Interest Income 21
Slide 20: 1Q FY2017: Income Statement (Y-o-Y)
1Q FY2017: Income Statement Y-o-Y Change Net income grew by 5.7% y-o-y, driven by: 1QFY16 1QFY17 Better / (Worse) +2.1% net interest income growth from higher Income Statement RM mil RM mil RAR loans and better pricing discipline RM mil % +8.1% non-interest income growth Net Interest Income 20
Slide 21: Summarised Balance Sheet (Q-o-Q)
Summarised Balance Sheet Mar 16 Jun 16 Change Q-o-Q Better risk adjusted return loans grew at a Balance Sheet 5.6% annualized rate, compared to a RM bil RM bil RM bil % contraction of -3.6% of lower risk adjusted return loans. This resulted in a net loans Total Assets 55.6 54.5 (1.1) (2.1%) contra
Slide 22: Summarised Balance Sheet (Y-o-Y)
Summarised Balance Sheet Jun 15 Jun 16 Change Y-o-Y 3.1% y-o-y net loans growth, with focus on Balance Sheet better risk adjusted return loans namely SME, RM bil RM bil RM bil % commercial and consumer unsecured lending Total Assets 52.3 54.5 2.2 4.1% Better risk adjusted return loans grew at a
Slide 23: Key Financial Ratios
Key Financial Ratios Financial Ratios 1QFY16 4QFY16 1QFY17 Return on Equity 10.9% 11.0% 11.0% Shareholder Value Earnings per Share 8.0sen 8.5sen 8.7sen Net Assets per Share RM2.92 RM3.13 RM3.16 Net Interest Margin 2.16% 2.12% 2.22% Efficiency Non-Interest Income Ratio 23.4% 23.8% 24.2% Cost to Incom
Slide 24: Thank You
THANK YOU Disclaimer: This presentation has been prepared by Alliance Financial Group (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, expressed or
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