Public Bank Bhd · MYX:PBBANK
Public Bank Bhd — CLSA Investors' Forum 2017
32 slides from Public Bank Bhd's conference presentation, Sep 11, 2017
Slide 1: Investor Presentation – CLSA Investors' Forum
Investor Presentation CLSA Investors’ Forum Hong Kong 11-15 September 2017 www.publicbankgroup.com
Slide 2: Disclaimer
Disclaimer The materials and information in the presentations and other documents are a summary only, do not purport to contain all of the material information regarding Public Bank and are qualified in their entirety by reference to our public disclosure. You may not rely on these materials as prov
Slide 3: Quick Facts
Quick Facts Top-tier bank in Malaysia Most award-winning bank in Malaysia* Highly experienced management Unbroken profit track record since incorporation in 1966 Strong financial ratings & corporate governance Valuable PB Brand & retail franchise * Certified by the Malaysia Book of Recor
Slide 4: Quick Facts
Quick Facts Sustainable Organic Growth Momentum Public Bank was founded 50 years ago in 1966. The Group’s corporate mission – “To sustain the position of being the most efficient, profitable and respected premier financial institution in Malaysia”, has been deeply embedded in the corporate culture o
Slide 5: Contents
Contents Introduction to Group Share Price & #6 Public Bank #10 #26 Market Performance Group Capitalisation #29 Summary #30 Appendix 5 Investor Presentation
Slide 6: Introduction to Public Bank Group
Introduction to Public Bank Group • Commenced operations in 1966 with one branch • Listed in April 1967 on Bursa Malaysia Securities Berhad (then known as Kuala Lumpur Stock Exchange) • A retail bank with domestic operations contributing over 90% of the Group’s assets and profits Total Assets Pre-ta
Slide 7: Overview of PBB Group
Overview of PBB Group PBB Group is a full financial services group providing a wide range of services in Malaysia and in five countries/locations Hong Kong Cambodia Vietnam Laos & China Malaysia Sri Lanka Public Bank (Hldg Co) Public Bank (HK) Cambodian Public Public Bank Public Bank Public Bank Ban
Slide 8: PBB's Business Growth Strategies
PBB’s Business Growth Strategies Strategic Focus: Organic growth in focus areas Core Focus Increased Contribution Complementary Deposit-Taking Corporate Treasury Lending Business Non-Interest Income Overseas Operations Business Banking Operations Consumer lending to Secure higher Expand existing
Slide 9: Expansion in Business Delivery Channel
Expansion in Business Delivery Channel Jun-17 2016 2010 Malaysian Operations Public Bank - Domestic 257 257 249 - Overseas 7 7 4 Public Islamic Bank 2 2 1 Public Mutual 29 29 26 Public Investment Bank 1 1 1 Hong Kong & China Operations Public Finance 42 42 42 Public Bank (HK) - Hong Kong 32 32 30 -
Slide 10: Unbroken Profit Track Record
Unbroken Profit Track Record • 50 years of unbroken profitability RM’mil y-o-y growth (%) 2012^ 2013 2014 2015 2016 1H2017 2013 2014 2015 2016 1H2017** Pre-tax profit 5,047 5,310 5,814 6,491 6,554 3,367 5.2 9.5 11.6 1.0 5.1 Net profit 3,827 4,065 4,519 5,062 5,207 2,580 6.2 11.2 12.0 2.9 3.8 ^ Resta
Slide 11: Above-industry Return on Equity (ROE)
Above-industry Return on Equity (ROE) 28.1 24.7 22.1 20.1 19.3 15.6 15.2 12.4 12.5 12.7 2013 2014 2015 2016 Jun-17 Pre-tax PBB ROE (%) Pre-tax Industry ROE (%) 11 Investor Presentation
Slide 12: 1H 2017 Highlights
1H 2017 Highlights Income Statement Financial Indicators (%) 1H 2017 1H 2016 Change Jun 2017 Dec 2016 Pre-tax profit RM3,367 mil RM3,203 mil 5.1% Net return on equity 15.3 16.5 Net profit RM2,580 mil RM2,486 mil 3.8% Cost to income ratio 33.8 32.3 attributable to Gross impaired loans ratio 0.5 0.5 s
Slide 13: Segmental Profit – Retail Centric
Segmental Profit – Retail Centric 1H 2017 vs 1H 2016 PBT (RM’mil) Profit Contribution Retail Operations 1,768.3 (Individuals + SMEs) 1,687.1 1%4% 7% 342.8 Overseas Operations 301.4 8% Retail Operations 311.6 (Individuals + SMEs) Fund Management 9% 268.2 Overseas Operations 52% 289.0 Fund Management
Slide 14: Net Interest Margin
Net Interest Margin 2.28 2.20 2.29 2.20 2.15 2.11 2.16 2.19 2.20 2.17 2.17 2.22 2.31 2.26 Net Interest and Finance Income Net Interest Margin (%) 2,075 1,911 RM’mil 1,750 1,618 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 2016 2017 14 Investor Presentation
Slide 15: Non-Interest Income
Non-Interest Income RM’mil Non-Interest Income Contribution 1,083.8 1,076.1 378.0 5% 436.3 5% 2% 15% 40% 345.4 354.0 192.9 157.0 59.1 26.0 33% 40.8 52.9 67.6 49.9 1H 2016 1H 2017 Based on financial results as at 30 June 2017 Unit Trust income Fee & commission income Foreign exchange income Investmen
Slide 16: Efficient Operating Overheads & Lowest CIR
Efficient Operating Overheads & Lowest CIR Operating Overheads Market leader Cost-Income Ratio among peers 33.8% 32.3% 2,200 31.1% 1,769 RM’mil 1,700 1,591 57.9% 1,425 534 52.6% 50.3% 472 48.9% 43.9% 1,200 397 700 33.8% 1,119 1,235 1,028 200 1H 2015 1H 2016 1H 2017 (300) Other expenses Personnel cos
Slide 17: Above Industry Loan Growth
Above Industry Loan Growth Loan Growth vs Industry (%) Gross Loans and Domestic Loan Market Share 17.4% 17.7% 17.8% 16.9% 17.1% 12.0 11.6 294.0 298.5 11.8 10.8 RM’bil 273.4 10.5 245.0 275.7 10.6 10.3 269.9 7.5 221.2 251.8 9.3 7.9 7.2 228.3 4.3 * 206.6 5.3 3.5 * 3.1* 2013 2014 2015 2016 Jun-17 2013 2
Slide 18: Healthy Gross Loan Growth
Healthy Gross Loan Growth Gross Loan Composition by Segment Composition 63% 16% 13% 5% 2% 1% 3.1% 1.3% 2.1% 5.7% 5.7% 1.2% RM’bil 182.4 188.0 49.6 49.0 37.5 38.2 16.9 15.9 4.5 4.3 3.1 3.1 Retail operations Hire purchase Corporate lending Hong Kong Cambodia Others Dec-16 Jun-17 Gross Loan in Domestic
Slide 19: Sustaining Strong Asset Quality
Sustaining Strong Asset Quality • Focus on lower risk customer segments − Traditional urban/ suburban mortgages − Passenger vehicle hire purchase − Middle market business enterprises • Sound credit appraisal and approval process • Strong credit risk culture • Proactive loan restructuring and resched
Slide 20: Upholding Strong Asset Quality
Upholding Strong Asset Quality Gross impaired loans ratio Loan Impairment Allowances (including CA) 1.9% 1.7% 118.5% 122.4% 120.8% 1.6% 1.6% 1.6% 102.7% 98.1% 0.17% 0.11% 0.06% 0.07% 0.06% 0.7% RM’mil 0.6% 0.5% 0.5% 0.5% 351.3 259.0 192.7 146.2 93.6 2013 2014 2015 2016 1H 2017 2013 2014 2015 2016 1H
Slide 21: Healthy Deposit Growth in Support of Liquidity
Healthy Deposit Growth in Support of Liquidity Deposit Growth vs Industry (%) Deposits – Outstanding Balance and Market Share 16.6% 16.9% 16.9% 15.7% 15.9% 11.6 10.2 258.2 264.7 RM’bil 245.2 11.5 8.9 216.7 9.9 201.3 8.5 7.6 7.5 5.3* 4.7* 2.9 3.8* 49.5 59.7 55.9 51.7 52.5 1.8 1.8 1.5 2013 2014 2015 2
Slide 22: Healthy Core Deposit Growth
Healthy Core Deposit Growth Source of Core Deposit Core Deposit Contribution 258.2 264.7 245.2 RM’bil 46.8 216.7 45.5 201.3 43.0 18% 41.4 32.5 34.5 38.2 30.0 27.7 25.8 13% 172.2 180.2 183.4 69% 137.3 147.6 2013 2014 2015 2016 Jun-17 Fixed deposit Savings deposit Demand deposit Core Deposit Growth in
Slide 23: Unit Trust & Bancassurance
Unit Trust & Bancassurance Net Asset Value of Funds Under Management Bancassurance Business – Annualised New Premium 239.2 RM’bil RM’mil 76.9 14.6 70.3 189.3 64.8 15.6 15.1 11.5 12.1 133.7 8.4 224.6 177.8 55.2 61.3 52.7 125.3 2015 2016 Jun-17 2015 2016 1H 2017 NAV - Equity Funds NAV - Other Funds Do
Slide 24: Healthy Capital Position
Healthy Capital Position PBB Group Basel III transitional phase in Dec-16 Jun-17 Jan-17 Jan-18 Jan-19 COMMON EQUITY 11.4% 11.8% TIER I 5.75% 6.375% 7.0% CAPITAL 12.2% 12.6% TIER I 7.25% 7.875% 8.5% CAPITAL Note: The Basel III capital ratio requirements are inclusive of the 15.5% 16.4% 2.5% capital c
Slide 25: Targets & Achievements
Targets & Achievements The Public Bank Group’s achievement vs key performance targets are as follows: Key Performance Benchmarks 2017 Jun-17 Targets Achievement Net Return on Equity 14% to 15% 15.3% Total Capital Ratio >13% 16.4% Gross Impaired Loan Ratio <1% 0.5% Cost to Income Ratio 33% to 34% 33.
Slide 26: Share Price & Market Capitalisation
Share Price & Market Capitalisation Share Price & Market Capitalisation 19.72 20.58 19.40 18.30 18.52 Market Capitalisation RM’bil 79.89 25 August 2017 (RM’bil) 76.56 71.04 71.90 68.67 PBB 79.9 MBB 101.1 CIMB 60.8 HLB 33.5 RHB 20.4 AMMB 13.4 2013 2014 2015 2016 Aug-17 Market Capitalisation (RM'bil)
Slide 27: Share Price & Market Capitalisation
Share Price & Market Capitalisation Resilient share price performance Kuala Lumpur Composite Index Public Bank (Local) Public Bank (Foreign) FBM KLCI Share price (RM) 2000 1800 20.00 1600 1400 15.00 1200 1000 * 16 April 2014 10.00 800 600 5.00 400 200 0 0.00 * PBB Foreign shares and PBB Local shares
Slide 28: Share Price & Market Capitalisation
Share Price & Market Capitalisation • Superior investment returns Illustration on investment returns Shares acquired Total returns Compounded annual since (capital appreciation^ + dividends) rate of return Medium term - 5 years 1 January 2012 +83.6% +11.1% Long term - since 1967 +1,640.8% +19.0% lis
Slide 29: Summary
Summary Profitable retail franchise Domestic and Indo-China markets Growing market share Affluent and quality retail customer base for lending and wealth management business Unbroken profit track record and sustained strong asset quality Strong brand Proactive capital management Larg
Slide 30: Appendix
Appendix RM’mil 2013 2014 2015 2016 Jun-17 Operating profit 5,655 6,067 6,631 6,745 3,468 Profitability Profit before tax 5,310 5,814 6,491 6,554 3,367 Net profit 4,065 4,519 5,062 5,207 2,580 Earnings per share (sen) 116.1 123.7 131.1 134.8 66.8 Shareholder Net assets per share (RM) 5.83 7.26 8.09
Slide 31: Appendix (cont'd)
Appendix (cont’d) % 2013 2014 2015 2016 Jun-17 Industry Net interest margin on yielding assets 2.36 2.24 2.16 2.20 2.29 N/A Net return on equity+ 22.4 19.9 17.8 16.5 15.3 N/A Profitability Pre-tax return on average assets 1.8 1.8 1.8 1.8 1.7 1.3 Ratios Cost to income ratio 30.7 30.0 30.5 32.3 33.8 4
Slide 32: Investor Relations Contact
Investor Relations Contact Ms Chang Siew Yen Head Office Chief Operating Officer Menara Public Bank +(603) 2176 7460 146, Jalan Ampang changsiewyen@publicbank.com.my 50450 Kuala Lumpur Malaysia Ms Yik Sook Ling Tel: 603-2176 6000 Chief Financial Officer Website: www.publicbankgroup.com +(603) 2177 3