Alliance Bank Malaysia Bhd. · MYX:ABMB
Alliance Bank Malaysia Bhd — FY2023 Earnings Presentation
36 slides from Alliance Bank Malaysia Bhd's earnings presentation, May 30, 2023
Slide 1: Analyst Briefing FY2023
Analyst Briefing 30 May 2023 FY2023 30-May-23 FY2023 ABMB Analyst Briefing
Slide 2: Contents
Key Results Contents 1 FY23 Financial Performance Revenue & Profitability Assets & Liabilities Effective Risk Management 2 Going Forward FY23 Strategic Priorities Sustainability Group Strategy: ACCELER8 2027 Update 30-May-23 FY2023 ABMB Analyst Briefing 30-May-23 FY2023 ABMB Analyst Brie
Slide 3: Executive Summary: FY23 Performance Highlights
Executive Summary Key Results FY23 Performance Highlights 1 Revenue & Revenue grew 2.8% y-o-y to RM1.92 billion Profitability Net interest income grew 11.6% y-o-y Net interest margin improved to 2.64% Client-based fee income (excluding brokerage) grew 1.0% y-o-y Wealth management (+2.3% y-
Slide 4: NPAT grew 18.3% y-o-y to RM677.8 million
Revenue & Profitability NPAT grew 18.3% y-o-y to RM677.8 million FY22 FY23 Y-o-Y Change (Better / (Worse) Income Statement RM mil RM mil RM mil % Net Interest Income 1,480.2 1,652.7 172.4 11.6% Client-based fee income* 281.3 284.1 2.8 1.0% Non-client based fee income: Treasury & Investment Income 86
Slide 5: Net interest income grew 11.6% y-o-y
Revenue & Profitability Net interest income grew 11.6% y-o-y a) Net interest income grew 11.6% y-o-y, driven by Net Interest Income higher loans volume and OPR hike impact: RM mil Y-o-Y impact: +11.6% 4-year y-o-y CAGR: RM mil 1,652.7 +5.6% +76.9 +77.9 -15.6 +33.2 1,480.2 1,652.7 1,480.2 1,330.0 1,3
Slide 6: Growth in wealth management, FX sales & trade fees
Revenue & Profitability Growth in wealth management, FX sales & trade fees Client-based fee income (excluding brokerage): +1.0% y-o-y Wealth management (+2.3% y-o-y) FX sales/trade fees (+16.7% y-o-y) RM mil Client-based (excluding brokerage^): Non-client based: Stockbroking +RM2.8 mil/ 1.0% -
Slide 7: Cost to Income Ratio at 45.9%
Revenue & Profitability Cost to Income Ratio at 45.9% Operating Expenses (OPEX) a) Operating expenses up 7.1% y-o-y (or RM58.4 million): RM mil Increased sales force, risk & compliance headcount OPEX CIR IT expenses related to strategic initiatives Marketing expenses for Digital SME & Consumer
Slide 8: Net credit cost improved to 31.9 bps
Effective Risk Management Net credit cost improved to 31.9 bps Net Credit Cost a) Net credit cost at 31.9 bps [vs 48.1 bps last year] due to: recovery from one account (RM17.5 million) bps net release of management overlays (RM207.6 million) Management Overlays (RM mil) 9MFY23 4QFY23 FY23 -16.2b
Slide 9: Gross impaired loans (GIL) ratio at 2.51%
Effective Risk Management Gross impaired loans (GIL) ratio at 2.51% Gross Impaired Loans (GIL) Consumer RM mil GIL (RM mil) GIL ratio (%) 30+ dpd (%) ABG GIL ratio Total GIL 2.9% 3.2% 3.7% 3.5% 2.6% 2.51% 2.34% 2.4% 2.5% 2.5% 2.7% 3.0% 2.00% 1.85% 1.12% 647 724 543 578 593 1,233 1,032 Mar-22 Jun-22
Slide 10: Loans under relief reducing to 2.50%
Effective Risk Management Loans under relief reducing to 2.50% Loans under relief Loan Loss Coverage RM bil RM mil Provisions for Expected Credit Losses Peak Loan Loss Coverage (excl. Regulatory Reserve) Loan Loss Coverage (incl. Regulatory Reserve) 14.91 11.31 142.9% 141.5% 9.01 8.08 135.9% 123.7%
Slide 11: Funding and loans grew year-on-year
Assets & Liabilities Funding and loans grew year-on-year Gross Loans Customer Based Funding RM bil RM bil +6.2% 47.0% 48.9% y-o-y Y-o-Y 41.9% 49.1 +6.8% 46.2 37.4% y-o-y 42.7 43.7 44.1 5.5 -7.7% 35.5% 5.6 6.0 CASA ratio 52.5 Corporate 5.7 5.8 6.5 +14.8% 48.9 48.7 49.1 5.1 5.7 46.0 4.0 3.5 4.3 6.0 Co
Slide 12: Liquidity and capital position remain strong
Effective Risk Management Liquidity and capital position remain strong Liquidity: LCR, LFR Capital Position % % CET 1 Tier 1 Total Capital Liquidity 19.8% Coverage 162.9% 164.4% 161.9% 18.7% 155.1% 154.2% Ratio (LCR) 15.5% Earnings 14.6% Net Stable retention: Funding 120.1% 120.6% 119.2% 117.6% 115.
Slide 13: NPAT grew 18.3% y-o-y; ROE at 10.5%
Key Results NPAT grew 18.3% y-o-y ; ROE at 10.5% Net profit After Tax & ROE NPAT (RM mil) ROE (%) a) Net profit after tax: +18.3% y-o-y to RM677.8 million b) ROE improved to 10.5% 9.9% 10.5% 9.2% 7.3% 5.9% 677.8 572.8 537.6 424.3 30-May-23 FY2023 ABMB Analyst Briefing 30-May-23 FY2023 ABMB Analyst B
Slide 14: FY23 dividend payout at 50%
Key Results FY23 dividend payout at 50% Dividend and Payout Ratio Net Assets per Share RM RM mil Total Dividend Paid Dividend Payout Ratio 4-year CAGR: +4.2% growth Capital conservation 48% due to Covid-19 50% 50% 4.14 4.36 22% 25% 3.87 4.04 340.6 3.70 286.4 258.5 92.9 89.6 FY19 FY20 FY21 FY22 FY23
Slide 15: Contents
Key Results Contents 1 FY23 Financial Performance Revenue & Profitability Assets & Liabilities Effective Risk Management 2 Going Forward FY23 Strategic Priorities Sustainability Group Strategy: ACCELER8 2027 Update 30-May-23 FY2023 ABMB Analyst Briefing 30-May-23 FY2023 ABMB Analyst Brie
Slide 16: FY23 Strategic Priorities: FY23 Achievements
FY23 Strategic FY23 Strategic Priorities Priorities FY23 Achievements 1 Acquire more 2 Deepen customer 3 Gain customers engagement efficiencies Number of New-to-Bank customers Number of new dual-relationship Customer digital adoption business owners (#) Account Transactions by Channel (Average/Month
Slide 17: Significant progress towards Sustainability Topline Goals
Sustainability Sustainability Significant progress made towards realizing Sustainability Topline Goals FY2025 FY2023 What’s Next for Topline Goals Achievements FY2024 1 • Achieved RM6.7 billion in new sustainable business (cumulative RM8.1 billion) • Target RM3.65 billion in new Grow RM10.0 • Ongoin
Slide 18: ACCELER8 2027: FY24 Key Success Metrics (1/2)
Group Strategy: ACCELER8 2027: FY24 Key Success Metrics (1/2) Acceler8 2027 1 3 Continue velocity on SME expansion Broaden consumer business, targeting strategy attractive segments SME* Loan Growth Consumer Loan Growth % Surpass Maintain previous year’s double digit growth growth 11% 5% 10% -1% FY22
Slide 19: ACCELER8 2027: FY24 Key Success Metrics (2/2)
Group Strategy: ACCELER8 2027: FY24 Key Success Metrics (2/2) Acceler8 2027 5 7 Become regional champion for selected Accelerate Islamic business, leveraging economic corridors unique propositions Regional Loans AIS Financing (Sarawak and Penang) Surpass FY22 Surpass FY22 and FY23 and FY23 growth gr
Slide 20: Key Takeaways for FY23
Summary Key Takeaways for FY23 Business growth: Loans growth momentum (6.2% y-oy) mainly driven by FY23 FY23 SME and Commercial, with also strong pick up in Guidance Actual Consumer. Profitability: Gross Loans 4% - 5% 6.2% NPAT grew 18.3% y-oy to RM677.8 million, with a ROE of 10.5%. Net Int
Slide 21: Key Outlook for the Year
Summary Key Outlook for the Year Economic outlook: FY23 FY24 GDP expected to moderate between 4% to Actual Guidance 5%. Monetary policy stance remains supportive Gross Loans 6.2% 8% - 10% of economic growth. Business growth: Net Interest between 2.64% Loans growth opportunity is expected t
Slide 22: Contents
Key Results Contents 1 FY23 Financial Performance Revenue & Profitability Assets & Liabilities Effective Risk Management 2 Going Forward FY23 Strategic Priorities Sustainability Group Strategy: ACCELER8 2027 Update 30-May-23 FY2023 ABMB Analyst Briefing 30-May-23 FY2023 ABMB Analyst Brie
Slide 23: Key Highlights: Financial Performance
Key Highlights: Financial Performance 4QFY23 NPAT grew 26.3% y-o-y to RM130.2 million Net Interest Income & Non Interest Income & Revenue Islamic Net Financing Income NOII Ratio RM mil RM mil RM mil Client Based Non Client Based NOII Ratio 480.6 496.5 474.1 468.6 451.5 420.9 438.5 392.1 401.2 367.1
Slide 24: 4Q FY2023: Q-o-Q Income Statement
4Q FY2023: Q-o-Q Income Statement Q-o-Q Change Revenue reduced by 5.6% q-o-q: 3QFY23 4QFY23 Better / (Worse) Income Statement RM mil RM mil Net interest income: -RM37.3mil or -8.5% RM mil % q-o-q mainly due to higher funding cost from customer deposits. Net Interest Income 327.8 302.7 Non-inte
Slide 25: Key Highlights Y-o-Y: Financial Performance
Key Highlights Y-o-Y: Financial Performance FY23 NPAT grew 18.3% y-o-y to RM677.8 million Net Interest Income & Non Interest Income & Revenue Islamic Net Financing Income NOII Ratio RM mil RM mil Client Based Non Client Based RM mil NOII Ratio 1,867.7 1,919.8 1,652.7 1,480.2 20.7% 18.7% 14.4% 13.9%
Slide 26: 4Q FY2023: Y-o-Y Income Statement
4Q FY2023: Y-o-Y Income Statement Y-o-Y Change Revenue grew by 3.8% y-o-y: 4QFY22 4QFY23 Better / (Worse) Income Statement Net interest income: +RM34.1mil or 9.3%, RM mil RM mil RM mil % driven by higher loans volume and OPR hikes. Net Interest Income 276.1 302.7 Non-interest income: -RM17.0mi
Slide 27: FY2023: Y-o-Y Income Statement
FY2023: Y-o-Y Income Statement Y-o-Y Change Revenue grew by 2.8% y-o-y: FY22 FY23 Better / (Worse) Income Statement Net interest income: +RM172.4mil or RM mil RM mil RM mil % 11.6%, driven by higher loans volume and OPR hikes. Net Interest Income 1,121.6 1,230.1 Non-interest income: -RM120.3mi
Slide 28: Q-o-Q Summarised Balance Sheet
Q-o-Q Summarised Balance Sheet Q-o-Q Change Net loans grew by 3.6% q-o-q: Dec 22 Mar 23 Balance Sheet SME loans: +5.9% q-o-q mainly from RM bil RM bil RM bil % Term Loans Total Assets 65.1 66.3 1.2 1.9% Commercial loans: +5.4% q-o-q Consumer loans: +1.7% q-o-q mainly Treasury Assets* 11.8 12
Slide 29: Y-o-Y Summarised Balance Sheet
Y-o-Y Summarised Balance Sheet Y-o-Y Change Net loans grew by 6.2% y-o-y: Mar 22 Mar 23 Balance Sheet RM bil RM bil SME loans: +13.1% y-o-y mainly from RM bil % Term Loans Total Assets 61.8 66.3 4.5 7.2% Commercial loans: +14.8 % y-o-y due to higher drawdown from several Treasury Assets* 11.9
Slide 30: Key Financial Ratios
Key Financial Ratios Financial Ratios 4QFY22 3QFY23 4QFY23 FY22 FY23 Return on Equity 6.7% 11.0% 8.2% 9.2% 10.5% Shareholder Earnings per Share 6.7sen 11.4sen 8.4sen 37.0sen 43.8sen Value Net Assets per Share RM4.14 RM4.23 RM4.36 RM4.14 RM4.36 Net Interest Margin 2.50% 2.75% 2.52% 2.53% 2.64% Effici
Slide 31: Thank You.
Thank You. Disclaimer: This presentation has been prepared by Alliance Bank Malaysia Berhad (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, express
Slide 32: ACCELER8 2027: Key updates (1/4)
APPENDIX 1A: ACCELER8 2027: Key updates (1/4) Group Strategy: Acceler8 2027 3 Alliance Bank Virtual Credit Card Virtual Card Application Video Broaden consumer business, Launched Malaysia’s first in-app dynamic virtual card which aims at providing greater targeting control and security for online
Slide 33: ACCELER8 2027: Key updates (2/4)
APPENDIX 1B: ACCELER8 2027: Key updates (2/4) Group Strategy: Acceler8 2027 3 Upgrading Loan Origination System with advance Credit capabilities Broaden consumer business, targeting attractive Credit Transformation project which involves digital innovation and automation to 30-May-23 FY2023 ABMB A
Slide 34: ACCELER8 2027: Key updates (3/4)
APPENDIX 1C: ACCELER8 2027: Key updates (3/4) Group Strategy: Acceler8 2027 4 Collaboration between Bursa, Mah Sing and Alliance Bank Targeting resilient Alliance Bank and Mah Sing onboarded as early adopters of Bursa’s Centralised ecosystems Sustainability Intelligence Platform that aims to exped
Slide 35: ACCELER8 2027: Key updates (4/4)
APPENDIX 1D: ACCELER8 2027: Key updates (4/4) Group Strategy: Acceler8 2027 Key Enablers Launch of Alliance Bank inaugural ESG Survey Report Build an ESG Insights from ESG Insights from ESG-focused Malaysian SMEs Report Malaysian SMEs Video organization 30-May-23 FY2023 ABMB Analyst Briefing 30-May-
Slide 36: Gross Impaired Loans (By Segments)
APPENDIX 2: GROSS IMPAIRED LOANS (BY SEGMENTS) Classic Mortgage SME GIL (RM mil) GIL ratio (%) 30+ dpd (%) GIL (RM mil) GIL ratio (%) 30+ dpd (%) 1.9% 1.9% 1.9% 2.2% 2.1% 1.2% 1.3% 1.5% 1.9% 1.8% 1.5% 1.5% 1.4% 1.4% 1.6% 1.7% 1.1% 1.1% 1.1% 1.1% 197 202 200 232 185 219 128 125 123 132 Mar-22 Jun-22
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