Ammb Holdings Bhd. · MYX:AMBANK
Ammb Holdings Bhd — H1 2018 Earnings Presentation
51 slides from Ammb Holdings Bhd's earnings presentation, Nov 28, 2017
Slide 1: H1FY18 Results Investor Presentation
INVESTOR H1FY18 RESULTS PRESENTATION 28 NOV 2017 H1FY18 Results – Investor Presentation
Slide 2: GCEO Presentation
GCEO PRESENTATION 3 H1FY18 Performance Highlights 4 2017 Market Outlook 5 Top 4 Aspirations 6-9 H1FY18 Business Heartbeat H1FY18 Results – Investor Presentation
Slide 3: H1FY18 Performance Highlights Overview
Financial H1FY18 Performance Highlights Overview YoY YTD Total Gross Expenses PBP GIL LLC1 Income Loans 1,115.8m 833.3m 1.88% 101.4% 1,949.1m 93.0b 5.3% 1.4% 2bps 21.7% 2.3% 2.2% Balance Net P&L Customer Allowances PATMI Sheet Deposits CASA (48.0m) 659.7m 19.4b 93.7b 54.8% 2.4% 2.1
Slide 4: 2017 Market Outlook
2017 Market Outlook Outlook Malaysia’s Economic Outlook 5 4 Loans growth: 3 Ringgit: 5% - 6% Stronger 2 Export: Stronger 1 Inflation: growth 4.0% GDP growth: 5.9% 4 H1FY18 Results – Investor Presentation
Slide 5: Top 4 Aspirations: FY2017 - FY2020
5 Top 4 Aspirations: FY2017 - FY2020 Top 4 To be Top 4 in each To be Top 4 in each To sustain Top 4 in To be Top 4 of our 4 growth of our 4 focus each of our current segments products engines • Mass Affluent • Cards & Merchants • Corporate Loans • Best employer • Affluent • Transaction Banking • Deb
Slide 6: Wholesale Banking Heartbeat
Wholesale Banking Heartbeat Heartbeat LARGE / MID CORP Focusing on returns • Account Planning for FY18, focus on ROCE TRANSACTION BANKING Building up improvement momentum • Ongoing initiative (with LOBs) to improve cross- selling (YoY product holding cross-selling ratio • Investing in infrastructure
Slide 7: Business Banking Heartbeat
Business Banking Heartbeat Heartbeat Increasing Building the SME BRANDING market BUSINESS BANKING foundation INITIATIVES visibility • Expansion of Enterprise Business (EB) and Commercial Business (CB) Centers to reach out to • Sponsored The Star Outstanding Awards SME and Commercial segments – 15 EB
Slide 8: Retail Banking Heartbeat
Retail Banking Heartbeat Heartbeat Gaining MORTGAGE Sustaining CARDS & MERCHANTS market growth recognition • Strong net acceptance & disbursement, up 20% & • Launched AmBank Islamic – International 11% respectively (YoY), reflecting consistent Islamic University of Malaysia (IIUM) credit card busine
Slide 9: General Insurance Heartbeat
9 General Insurance Heartbeat Heartbeat BE THE NO.1 MOTOR INSURER GROW IN SELECT COMMERCIAL LINES • No. 2 with 15.0% market share1 • Strategic partnership with auto dealer supports • Strong growth momentum in Fire (+20.0%) and growth, including franchise portfolio Marine Cargo (+22.9%) • Motor produ
Slide 10: GCFO Presentation
GCFO Presentation 11-21 Financial Performance 22 Guidance & Expectations H1FY18 Results – Investor Presentation
Slide 11: Higher loan base and NIM driving Banking Income growth
Income Higher loan base and NIM driving Banking Income growth Business Segments (RM’ mil) H1FY17 H1FY18 YoY Change Retail Banking 675.6 741.2 10% Wholesale Banking 690.7 646.1 6% Income Banking Group Business Banking 102.4 123.6 21% Group Funding & Others 108.0 138.0 28% QoQ 1% 2% Total
Slide 12: PBP for Banking Businesses remained resilient, more challenged for Life
PBP & PATMI PBP for Banking Businesses remained resilient, more challenged for Life Business Segments (RM’ mil) H1FY17 H1FY18 YoY Change Retail Banking 212.3 246.3 16% Wholesale Banking 444.1 397.3 11% PBP Business Banking 78.4 74.3 5% Banking Group Group Funding & Others (47.8) (10.1) 79% Q
Slide 13: Mixed results with good NII, offset by lower recoveries and one-offs
Mixed results with good NII, Group P&L offset by lower recoveries and higher one-off expenses RM’ mil YoY Growth 10% 8% 2% 5% 1% 55% 7% 26% 2% 5% 2% 109.9 675.6 57.3 66.3 659.7 17% 55.8 2.9 19% 58.1 Effective NIM: NoII%: CTI: GIL: Tax Rate: 1.99% 37.2% 57.2% 1.88% 18.0% 83% 81%
Slide 14: Net interest margin within expectations
NIM Net interest margin within expectations Managing NIM by growing faster in higher margin products and active funding management Net Interest Margin (NIM) Movement bps Asset repricing Deposits 2.0 Corp. loans, Labuan loans, 2.9 2.7 0.8 3.2 trade finance & 6 bps loan rehab 0.5 11.1 Mortgage (1.4)
Slide 15: Lower NoII reflecting non repeat of large transaction last year
Lower NoII reflecting non repeat of large transaction last year NoII Growth in strategic focus areas, negated by non repeat of a large transaction and adverse actuarial valuation in Life YoY Growth 24% 20% 7% 9% 10% 1% >100% 20% 8% Composition 19% 11% 13% 5% 8% 34% -3% 13% 100% RM’
Slide 16: Investments in Business Banking, compliance and one-off write off in Retail
Investments in Business Banking, compliance and Expenses one-off write off in Retail Business Segments (RM’ mil) H1FY17 H1FY18 YoY Change Retail Banking 463.4 494.9 7% Expenses Wholesale Banking 246.5 248.8 1% Banking Group Business Banking 23.9 49.3 >100% QoQ 2% 2% Group Funding & Others
Slide 17: Within expectations but remain watchful on Corporate loans impairment
Within expectations but remain watchful on Corporate loans Asset Quality impairment Gross Impaired Loans (RM’ mil) and GIL Ratios (%) GIL Ratio QoQ Breakdown RM’ mil Gross Impaired Loans GIL Ratio Loan Loss Coverage GIL Ratio Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 127.4% 105.0% 101.4% 81.2% 79.7%
Slide 18: Recoveries tapering but remains in a net writeback position
Recoveries tapering but remains in a net writeback position Asset Quality Net Provisions / (Writebacks)1 Credit Costs vs. Peers1 RM’ mil Total provisions by AmBank Group FY14 FY15 FY16 FY17 H1FY172 H1FY182 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 category Performing Loans Credit cost 0.08% -0.04% -
Slide 19: Good loans growth achieved in the focus segments
Good loans growth achieved in the focus segments Loans LD ROA: Ratio1: Gross Loans Movement (RM’ bil) 1.06% 88.6% YTD Growth 3% 14% 9% 3% 7% 50% 9% 2% Composition 38% 7% 30% 21% 2% 1% 1% 100% 2.3 0.1 0.4 0.1 0.6 0.8 93.0 1.1 91.0 FY2017 Wholesale Business Mortgage Auto Fin Cards Reta
Slide 20: Growing deposits in preferred sectors amidst intense rate competition
Growing deposits in preferred sectors amidst intense rate Deposits competition Deposits and CASA Balance (RM’ bil) CASA Market Share and Industry CASA Balance 3 (RM’ bil) Industry CASA AmBank Group Market Share Retail FD Retail CASA Non-Retail FD Non-Retail CASA CASA Composition (%) 4.3% 4.3% 4.3% 2
Slide 21: Capital levels adequate
Capital levels adequate Capital RWA/Total Assets Capital Adequacy Ratios (after dividends) RM’ bil Total Assets RWA/Total Assets Peers CET 1 Tier 1 Total CAR 72.7% 72.8% 71.5% 71.2% 72.2% 72.6% 16.1% 16.3% 16.4% 14.8% 15.4% 15.8% 12.3% 12.5% 12.4% 11.8% 62.4% 1 11.0% 11.1% 60.8% 61.1% 59.6% 59.5% 59
Slide 22: Guidance & Expectations for FY2018 / FY2019
Guidance & Expectations for FY2018 / FY2019 (over 2 years) Guidance ROE CTI DIVIDEND FHC CET 1 H1FY18 : 8.1% 57.2% NA 11.3% FY Guidance : Circa 10% ≤ 55% Circa 40% payout 10.5% ± 1% PROFIT RETURNS CTI Accelerating penetration CAPITAL Balancing growth of Focusing on in targeted segments & quality ass
Slide 23: Group Performance
Group Performance H1FY18 Results – Investor Presentation
Slide 24: Yearly performance
Yearly performance H1FY18 Results PATMI (RM’ mil) & ROE (%) Total Income (RM’ mil) and Non-interest Income (%) PATMI: ROE: PATMI ROE (%) CAGR FY13-17: 4.9% CAGR FY13-17: 1.4% Total Income: 2.4% Total income CAGR FY13-17: 3.7% YoY Growth: YoY Growth: 0.6% Non-interest income % YoY Growth:
Slide 25: Net interest margin trends
Net interest margin trends NIM NIM YoY Trend vs. Industry Quarterly Net Interest Income (RM’ mil) & NIM Movement FY16 NIM : 2.02% FY17 NIM : 1.98% H1FY18 NIM : 1.99% 5.01% 5.00% 2.12% 4.92% 4.95% 4.92% 2.11% 4.86% 2.06% Gross Yield 2.02% 2.02% 1.94% 1.97% 1.93% 1.92% 1.92% Industry Avg. 4.61% 4.61%
Slide 26: Non-interest income mix
Non-interest income mix Non-Int Income Non-interest Income (RM’ mil) Non-interest Income by Lines of Business (YoY) QoQ Growth: 4% YoY Growth: 8% Fee Trading & Investment Insurance Others 68% 35% 405.3 407.3 Others 385.6 2% Investment Bank 37.5 368.9 11% 13.8 355.7 19.8 111.3 0.2 84.2 Market
Slide 27: Quarterly loans and deposit trends
Quarterly loans and deposit trends H1FY18 Results Net Lending (RM’ bil) QoQ Growth: 0.3% YTD Growth: 2.3% QoQ Growth (excl.AF): 0.8% YTD Growth (excl.AF): 3.7% Loans excluding Auto Finance Auto Finance 89.5 89.9 91.6 91.9 84.1 85.3 85.4 86.5 85.8 86.1 19.9 19.6 19.4 19.1 21.8 21.6 21.4 20.8
Slide 28: Asset Quality
Asset Quality Asset Quality Impaired Loans – Key Segments Gross Impaired Loans (RM’ mil) FY16 FY17 H1FY18 2.6% 2.5% 2.2% 1.8% 1.7% 1.5%1.4% 1.3% 1.3%1.3% 1.86% 1.2% 1.88% Group 1.0% 1.69% 1.88% 1.65% 1.61% 1.63% 1.64% Industry 1.66% 1.64% 1.67% 1.54% Auto Finance Mortgage Retail Wholesale Banking Q1
Slide 29: Asset Quality
Asset Quality Asset Quality Collective Allowance Balance (RM’ mil) Allowances (RM’ mil) FY16 FY17 H1FY18 H1FY18 Total: RM 775 mil H1FY17 Individual Collective Recoveries/ Others H1FY18 FY17 Total: RM 862 mil Allowance Allowance Releases FY16 Total: RM 1,062 mil 438 418 412 (48.0) (91.1) (106.1) 254
Slide 30: Loans by sector & by purpose vs. industry
Loans by sector & by purpose vs. industry Loans Loans by Sector Loans by Purpose Sept-17 YTD Composition RM’ bil growth AmBank Group (RM’ bil) Purchase of transport 19.6 -2.5% 21.1% vehicles Loans Composition 3.8% 2.1% 10.0% 1.3% 3.9% 6.0% 3.3% 4.5% 9.0% 1.4% 54.6% 0.1% 100% Working capital 28.6 -1.
Slide 31: Diversified and consistent funding structure, conservative liquidity management
Diversified and consistent funding structure, Funding conservative liquidity management Funding Composition vs. Peers • Sufficient holding of liquid assets with LCRs in FY13 FY15 FY16 FY17 H1FY18 Peers1 excess of 100%. Equity & debt 14% 15% 16% 16% 16% 16% capital • Healthy customer deposit composit
Slide 32: Divisional Performance and Economic & Banking Data
Divisional Performance and Economic & Banking Data 32 H1FY18 Results – Investor Presentation
Slide 33: Retail Banking
Retail Banking Retail Total Income (YoY Movement) and Loans by Line of Business QoQ PAT (RM’ mil) QoQ Growth: 26.1% YoY Growth: 0.4% Total Income RM741.2mil H1FY18: FY16: RM462.3 mil FY17: RM351.5 mil RM172.9 mil >100% 136.1 51% Others 6% 9% Retail SME 5% 119.7 119.4 3% Auto 19% Wealth 5
Slide 34: Retail Banking
Retail Banking Retail Wealth Sales (RM’ mil) Merchant Volume QoQ Growth: 8.8% Merchant volume (RM'mil) QoQ Growth: 1.8% YoY Growth: 15.6% Merchants in force ('000) YoY Growth: 6.0% 52.7 53.6 50.2 50.0 50.6 51.1 52.3 826 48.1 49.3 47.4 736 736 672 2,799 2,890 2,690 2,595 2,619 2,726 2,718 565
Slide 35: Retail Banking
Retail Banking Retail Income Statement (RM’ mil) YoY Growth 2.9% 41.8% 9.7% 6.8% 16.0% >100% 0.1% 0.9% 0.4% Net Interest Non-Interest RM' mil Total Income Expenses PBP Provisions PBT Tax PAT Income Income H1FY18 572.6 168.6 741.2 494.9 246.3 19.1 227.2 54.3 172.9 H1FY17 556.7 118.9
Slide 36: Distribution Channels
Distribution Channels Retail Branches ATM Regional Offices Perlis 1 3 Kedah 6 24 1 Pulau Pinang 14 51 1 Perak 18 45 1 Selangor 38 220 2 Kuala Lumpur 23 105 3 Putrajaya 1 3 Negeri Sembilan 7 38 Melaka 6 34 1 Johor 21 82 1 Pahang 9 29 1 Terengganu 4 16 Population Density Kelantan 2 16 < 100 persons pe
Slide 37: Wholesale Banking (including Business Banking)
Wholesale Banking (including Business Banking) Wholesale Total Income (YoY Movement) and Total Assets by Line of Business QoQ PAT (RM’ mil) QoQ Growth: 11.1% YoY Growth: 26.5% Total Income H1FY18: RM769.7 mil FY16: RM821.3 mil FY17: RM826.4 mil RM356.5 mil 243.0 241.9 15% 234.3 4% Others 203
Slide 38: Wholesale Banking (including Business Banking)
Wholesale Banking (including Business Banking) Wholesale League Table Market Share of Value Traded on Bursa (KLSE) Market Share1 As At Rank2 30 September 2017 (%) 5.5% 5.7% 5.3% 5.2% 5.2% DCM (Overall MYR Bonds) 16.4% 3 Islamic Sukuk 15.5% 3 Unit Trust 7.5% 5 Stockbroking 5.0% 6 1. Calendar Year
Slide 39: Wholesale Banking (including Business Banking)
Wholesale Banking (including Business Banking) Wholesale Income Statement (RM’ mil) YoY Growth 8.4% 15.8% 2.9% 10.2% 9.7% >100% 26.9% 28.4% 26.5% Net Interest Non-Interest RM' mil Total Income Expenses PBP Provisions PBT Tax PAT Income Income H1FY18 457.3 312.4 769.7 298.1 471.6 9.
Slide 40: Islamic Banking
Islamic Banking Islamic Income Statement (RM’ mil) YoY Growth 9.9% 6.2% 14.9% >100.0% 7.7% 0.7% 9.7% H1FY18 PATZ (composition of Group) 18% RM' mil Total Income Expenses PBP Provisions PBT Tax & Zakat PATZ H1FY18 406.1 223.1 183.0 23.0 160.0 32.9 127.1 H1FY17 369.4 210.2 159.2 10.7 148
Slide 41: General Insurance
General Insurance General Insurance Loss Ratio and Combined Ratio YoY PAT (RM’ mil) PAT PBT Loss Ratio Combined Ratio YoY PAT Growth: 4.6% YoY PBT Growth: 2.0% 94.8% 96.4% 96.9% 91.2% 92.3% 92.3% 314.4 63.0% 62.8% 64.0% 62.9% 58.4% 58.4% 224.2 FY14 FY15 FY16 FY17 H1FY17 H1FY18 194.01 192.1 Gross
Slide 42: Insurance and Group Funding & Others
Insurance and Group Funding & Others Insurance & Others Income Statement – Insurance (General, Life & Takaful) (RM’mil) YoY Growth 8.7% 2.5% 20.8% >100.0% 20.3% 30.4% 18.1% H1FY18 PAT (composition of Group) 15% Provisions/ RM'mil Total Income Expenses PBP PBT Tax PAT Allowances H1FY18
Slide 43: Funding sources and maturity profile
Funding sources and maturity profile Funding Funding diversity underpinned by LDR1 of 88.6% CASA: RM19.4 billion Fixed deposits: RM74.2 billion Supplemented by term funding & debt capital AMMB Holdings Berhad AmBank (M) Berhad AmBank Islamic Berhad AmBank (M) Berhad & AmBank Islamic Berhad 1. RM2b M
Slide 44: Shareholding structure AMMB Holdings Berhad
Shareholding structure Corporate Structure 23.8%1 AmCorp 13.0% EPF 9.7% Others 53.5% As at 29 Sept 2017 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 Holdings 49% 100% M
Slide 45: Credit ratings, target price and recommendations
Credit ratings, target price and recommendations Ratings & TP Credit Ratings Ratings FY2007 FY2017 AmBank (M) LT: A2, ST: P1 LT: AA2, ST: P1 RAM Outlook: Stable Outlook: Stable +3 S&P LT: BBB-, ST: A-3 Outlook: LT: BBB+, ST: A-2 Stable Outlook: Stable +2 LT: Baa1, ST: P-2 LT: Baa2, ST: P-3 Outlook:
Slide 46: Opportunities and outlook
Opportunities and outlook Insights Malaysia’s GDP Growth Global GDP Growth Forecast (RM’bil) Real GDP Growth Avg USDMYR 2016 GDP 2017 GDP Forecast % 4.13 4.31 7.5 3.91 India 7.2 3.06 3.09 3.15 3.27 6.9 Philippines 6.5 PR China 6.7 6.7 5.0 Indonesia 6.0% 5.9% 5.1 5.1% 5.6% 4.7% 5.0% 4.2% Malaysia 4.2
Slide 47: Opportunities and outlook
Opportunities and outlook Insights System SME loans Growth Outpaced GDP Growth Business and Consumer Confidence Recovering CPI Business Conditions Index Consumer Sentiment Index Business Loans (RM' bil)1 SME Loans Growth Rate 103.1 Business Loans Growth Rate GDP Growth 77.1 14.6% 4.3% 14.0% 12.8% 1Q
Slide 48: Key economy indicators
Key economy indicators Insights GDP, Consumption and Investment Growth Consumer Indices MIER: Auto Industry Index (AII) GDP Consumption Investment MIER: Residential Property Index (RPI) MIER: Retail Trade Index (RTI) Consumption 6.4% Investment RTI 116.9 4.1% 6.2% RPI 107.8 AII 106.5 1Q 2Q 3Q 4Q 1Q
Slide 49: Banking system data
Banking system data Insights Deposits Growth Loans Growth Total deposits LD ratio Retail yoy growth Non Retail yoy growth Total loans yoy growth 1,736.7 89.9% 5.4% 5.2% 5.0% Dec Dec Dec Dec Sep Sep Sep Sep Sep Mar Jun Mar Jun Mar Jun Mar Jun Mar Jun 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
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 chan
Slide 51: Glossary/Disclaimer of warranty and limitation of liability
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 to