Ammb Holdings Bhd. · MYX:AMBANK
Ammb Holdings Bhd — 9MFY2015 Earnings Presentation
51 slides from Ammb Holdings Bhd's earnings presentation, Feb 12, 2015
Slide 1: 9MFY2015 Results – Investor Presentation
12 February 2015 9MFY2015 Results – Investor Presentation Ashok Ramamurthy, Group Managing Director Your Bank. Malaysia’s Bank. AmBank.™ Your Bank. Malaysia’s Bank. AmBank. 9MFY2015 Results – Investor Presentation 1
Slide 2: Agenda
AGENDA 1. EXECUTIVE SUMMARY 2. FINANCIAL PERFORMANCE 3. ASSET QUALITY 4. FUNDING & CAPITAL 5. OUTLOOK & STRATEGIC PRIORITIES 6. DIVISIONAL PERFORMANCE 7. SUPPLEMENTARY INFORMATION - AMBANK GROUP - ECONOMY & INDUSTRY Your Bank. Malaysia’s Bank. AmBank. 9MFY2015 Results – Investor Presentation 2
Slide 3: 9MFY2015 performance highlights
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION 9MFY2015 performance highlights 9MFY2015 PATMI up 6.1% yoy, ROE of 13.5%, underpinned by divestment gains Excluding one-off gains, operating performance mod
Slide 4: Turbulent economic landscape impacting business environment
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Turbulent economic landscape impacting business environment Declining Revalidated risk appetite settings across all sectors commodity price In financial mar
Slide 5: Progressively delivering on our strategic agenda
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Progressively delivering on our strategic agenda Focused growth Leverage investments Optimise enablers Retail Banking: New segment initiatives progressing
Slide 6: Progressively delivering on our strategic agenda (contd.)
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Progressively delivering on our strategic agenda (contd.) Focused growth Leverage investments Optimise enablers Build scalable “customer service delivery c
Slide 7: 9MFY2015 Results – Financial Performance
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION 12 February 2015 9MFY2015 Results – Investor Presentation Mandy Simpson, Chief Financial Officer Your Bank. Malaysia’s Bank. AmBank.™ Your Bank. Malaysia’s Bank
Slide 8: Key themes of 9MFY2015 Results
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Key themes of 9MFY2015 Results Net profit was up largely due to divestment gains, underlying impacted by portfolio repositioning and challenging market enviro
Slide 9: Higher non-interest income, lower expenses and allowances underpinned results
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Higher non-interest income, lower expenses and allowances underpinned results Growth 9.9% 19.0% 0.3% 3.3% 3.5% 24.5% 4.5% 5.7% 7.9% 44.0%
Slide 10: QoQ balance sheet momentum picking up
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION QoQ balance sheet momentum picking up PATMI & ROE PATMI QoQ growth: -6.5% ROE QoQ growth: -0.8% CTI QoQ change: 5.1% Underlying PATMI PATMI (RM'mil) ROE 15.1% 1
Slide 11: Underlying reflects repositioning of portfolio and volatile trading activity
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Underlying reflects repositioning of portfolio and volatile trading activity 9MFY2015 9MFY2015 (Reported) (Underlying) Yoy Yoy Income 0.3% (7.8%) Expenses 3.
Slide 12: Stronger contributions from divestment gains
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Stronger contributions from divestment gains Non-interest income movement As % of total income 35% 42% Growth 18.4% 4.2% 7.0% 6.9% 7.1% 35.9% 15.8
Slide 13: Margins remained under pressure from portfolio rebalancing
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Margins remained under pressure from portfolio rebalancing NIM and COF (YOY) SRR MFRS 10 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 3.13% 4.00% 4.00% 3.10% 2.98% 2.94%
Slide 14: Expenses well contained despite continued investments for future growth
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Expenses well contained despite continued investments for future growth Banking CTI AmGeneral COR* Expense growth drivers 9MFY15 44.8% 90.8% 9MFY14 45.2% 90.2%
Slide 15: Retail Banking: Targeted growth, continue to build customer franchise
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Retail Banking: Targeted growth, continue to build customer franchise Key financials: Performance highlights: Cus Dep 5.5% Customer deposits growth driven b
Slide 16: Wholesale Banking: Re-prioritising coverage by segment & sector
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Wholesale Banking: Re-prioritising coverage by segment & sector Key financials: Performance highlights: AUM 9.3% Loans & deposits growth momentum picked up
Slide 17: General Insurance: stronger investment income
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION General Insurance: stronger investment income Key financials: Performance highlights: 0.6% Higher profits underpinned by improved claims 90.2% 90.8% managem
Slide 18: Group's asset quality stabilising, Retail improving
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Group’s asset quality stabilising, Retail improving Asset quality indicators QoQ Gross Impaired Loans ratio AmBank Group (LLCoverage) AmBank Gp RB WB 129.3% # 1
Slide 19: Modest loans growth reflects realignment of portfolios and segments
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Modest loans growth reflects realignment of portfolios and segments Gross Loan / Financing movement 8.9% 7.0% 15.6% 5.0% 17.6% 7.1% >100.0% 0.7%
Slide 20: Targeted loans growth
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Dec-14 Targeted loans growth YoY AmBank Group Loans by purpose Dec’14 growth Composition Purchase of transport 24.8 -8.5% 28.3% Loans by Sector vehicles Loans W
Slide 21: Auto Finance: clear focus on de-risking balance sheet
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Auto Finance: clear focus on de-risking balance sheet Risk Grade Household Income group Risk Grade % of New Business Household Income Group % of New Business %
Slide 22: Stable CASA composition, diversified funding profile
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Stable CASA composition, diversified funding profile Customer deposits driven by focus on CASA Improving CASA composition YoY growth CAGR FY10-14: 21.7% 20% 17%
Slide 23: Capital within internal targeted range
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Capital within internal targeted range Capital adequacy ratio: --------------------- Aggregated After proposed Banking dividend Entities ---------------------
Slide 24: Outlook
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Outlook Malaysia Banking 2015F GDP growth: Slower 4.7% - 5.0% reflecting Monetary policy will remain prudent to support the economic growth and address fina
Slide 25: Key performance indicators
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Key performance indicators FY2014 9MFY2015 FY2015 FY2016 – 17 PATMI 1,782.4 1,399.4 Circa 8% 6 – 10% (RM’mil) (10.0% yoy) (6.1% yoy) ROE (%) 14.1% 13.5% Circa
Slide 26: Summary
Summary Increasingly challenging business and economic environment, focus on 1 managing cost, credit quality and liquidity 2 Loans growth expected to remain modest, stronger growth in targeted segments 3 Capital market activities likely to remain subdued due to market 3 volatility Cost discipline to
Slide 27: Retail Banking
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Retail Banking Aspirations Re-orient to higher value segments, extract value from core mass • Deposits growth underpinned by initiatives focusing on small busin
Slide 28: Wholesale Banking
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Wholesale Banking Coverage: Maximising franchise value through holistic coverage & cross sell – full understanding of customer Aspirations needs, distinguishing
Slide 29: General Insurance
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION General Insurance Aspirations Dominate in auto insurance and diversify into non-motor segment • Higher profits underpinned by gain on disposal of investments, l
Slide 30: Islamic Banking
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Islamic Banking Aspirations To be the Islamic Bank of Choice • Income reflects continued margin compression and realignment of Retails’ financing portfolio Stro
Slide 31: Group Operating Segments
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Group Operating Segments • Income includes one-off divestment gain of AmLife and AmFamily businesses • Higher expenses reflect continued investment (centrally a
Slide 32: Supplementary Information: AmBank Group
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION SUPPLEMENTARY INFORMATION AMBANK GROUP Your Bank. Malaysia’s Bank. AmBank. 9MFY2015 Results – Investor Presentation 32
Slide 33: 9MFY15 results underpinned by stronger non-interest income
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION 9MFY15 results underpinned by stronger non-interest income PATMI ROE CAGR FY10-14: 15.3% CAGR FY10-14: 0.7% CAGR FY10-14: 0.08% PATMI & ROE YoY growth: 6.1% YoY
Slide 34: Sound risk and capital profiles, focusing growth in targeted segments
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Sound risk and capital profiles, focusing growth in targeted segments Customer Deposits CASA CAGR FY10-14: 7.7% Customer Deposits2 CAGR FY10-14 : 8.6% CAGR FY10
Slide 35: Diversifying funding sources and maturity profile
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Diversifying funding sources and maturity profile Funding diversity underpinned by CASA: RM18.5 billion Fixed deposits: RM71.5 billion LDR1 of 85.9% (yoy growth
Slide 36: ANZ & AmBank Partnership
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION ANZ & AmBank Partnership Partnership with ANZ ANZ diversified footprints in Asia Value proposition • Seconding ANZ staff into key roles • Providing technical ex
Slide 37: AmGeneral: Leveraging strategic partnership with global insurance partner
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION AmGeneral: Leveraging strategic partnership with global insurance partner Partnership with IAG IAG diversified footprints in Asia Value proposition • Involved i
Slide 38: Multiple distribution channels aligned to demographics
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Multiple distribution channels aligned to demographics Nationwide Branch Network Branches ATM RBC Perlis 1 4 Perlis Kedah 5 29 Kedah Pulau Pinang 14 49 1 Kelant
Slide 39: Solid shareholding structure & franchise value
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Solid shareholding structure & franchise value As at 31 Dec 2014 23.8%1 AmCorp 13.0% EPF 14.4% Others 48.8% AMMB Holdings Berhad Life Assurance & Retail Banking
Slide 40: Banking sector share price movement / target price and recommendations
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Banking sector share price movement / target price and recommendations Banking Sector Share Price Movement Upgraded ratings Ratings FY2007 9MFY2015 AmBank (M) R
Slide 41: Strategic Business Transformation: Continued Progress
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Strategic Business Transformation: Strategic Business High Priority Growth Governance & Enablement Continued Progress Transformation Initiatives Functions Lau
Slide 42: High Priority Growth Initiatives: Implemented To-Date
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION High Priority Growth Initiatives: Strategic Business High Priority Growth Governance & Enablement Implemented To-Date Transformation Initiatives Functions Sea
Slide 43: Governance & Enablement Functions Streamlined
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Governance & Enablement Functions Strategic Business High Priority Growth Governance & Enablement Streamlined: Supports Better Decision Making Transformation In
Slide 44: Supplementary Information: Economy & Industry
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION SUPPLEMENTARY INFORMATION ECONOMY & INDUSTRY Your Bank. Malaysia’s Bank. AmBank. 9MFY2015 Results – Investor Presentation 44
Slide 45: Malaysian economy is on a steady growth trajectory
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Malaysian economy is on a steady growth trajectory Upward pressure on inflation remains, Moderating growth unemployment rates stable 5% 30% 25% 4% 20% 3% 2.8% 1
Slide 46: Well-contained risks despite increase in household indebtedness
EXECUTIVE FINANCIAL FUNDING & 18% OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY 400.0 PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION 300.0 Well-contained 200.0 risks despite increase in household 44% indebtedness 100.0 Higher household debt, but retail impaired loans Household - deb
Slide 47: Capital remains sound in the banking sector, loans growth moderating
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Capital remains sound in the banking sector, loans growth moderating Capital levels above BNM’s Basel 3 guidelines Capital activities supported by debt issuance
Slide 48: ETP: Propelling Malaysia towards becoming a high-income nation by 2020
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION ETP: Propelling Malaysia towards becoming a high-income, developed nation by 2020 ETP Overview Achievement of 12 NKEAs in 2012 and 2013 2020 Target KPI Scoring*
Slide 49: Malaysia remains an attractive investment destination
EXECUTIVE FINANCIAL FUNDING & OUTLOOK & DIVISIONAL SUPPLEMENTARY ASSET QUALITY SUMMARY PERFORMANCE CAPITAL STRATEGY PERFORMANCE INFORMATION Malaysia remains an attractive investment destination GDP per capita, 2014 (USD) Real GDP growth Unemployment (%) Inflation (%) 2013 2014F Philippines 6.9% Indo
Slide 50: Glossary / Disclaimer of warranty and limitation of liability
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 One Offs One offs comprise those impacts on financial performance that arise from ch
Slide 51: Disclaimer and contact details
Glossary / Disclaimer of warranty and limitation of liability The material in this presentation is general background information about AmBank Group’s activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended t
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