Ammb Holdings Bhd. · MYX:AMBANK

Ammb Holdings Bhd — Q1 FY2018 Earnings Presentation

47 slides from Ammb Holdings Bhd's earnings presentation, Aug 24, 2017

  1. Slide 1: Q1FY18 Results Investor Presentation

    INVESTOR Q1FY18 RESULTS PRESENTATION 24 AUG 2017 Q1FY18 Results – Investor Presentation

  2. Slide 2: GCEO Presentation

    GCEO PRESENTATION 3 Q1FY18 Performance Highlights 4 2017 Market Outlook 5 Q1FY18 Business Heartbeat Q1FY18 Results – Investor Presentation

  3. Slide 3: Q1FY18 Performance Highlights Overview

    Financial Q1FY18 Performance Highlights Overview Total Income Expenses PBP Net Allowances 982.2m 553.1m 429.1m (20.0m) Q1FY17: 951.2m Q1FY17: 535.5m Q1FY17: 415.7m Q1FY17: (63.7m) Change: 3.3% Change: 3.3% Change: 3.2% Change: 68.6% PATMI ROE CTI NIM 328.3m 8.1% 56.3% 2.02% Q1FY17: 323.0m Q1FY17

  4. Slide 4: 2017 Market Outlook

    2017 Market Outlook Outlook 1 GDP growth: 5.7% - 5.9% 2 Inflation: 4% Malaysia’s 3 Export: Stronger growth Economic Outlook 4 Ringgit: Stable 5 Loans growth: 5% - 6% 4 Q1FY18 Results – Investor Presentation

  5. Slide 5: Q1FY18 Business Heartbeat

    Q1FY18 Business Heartbeat Heartbeat WHOLESALE BANKING BUSINESS BANKING RETAIL BANKING GENERAL INSURANCE • Transaction Banking • Introduced new product • Recent Fixed Deposit • Expand online presence maintaining momentum offerings for working promotions reigned in with new portals & tools on JomPAY1

  6. Slide 6: GCFO Presentation

    GCFO Presentation 7 Performance Highlights 8-17 Financial Performance 18 Guidance & Expectations 6 Q1FY18 Results – Investor Presentation

  7. Slide 7: Q1FY18 Performance Highlights Summary

    Q1FY18 Performance Highlights Summary A reasonable start, income Margin and expenses within momentum sustained whilst expectations PATMI improved 2% YoY Loan impairment normalising, Moderate loans growth remain watchful on Corporate loans 7 Q1FY18 Results – Investor Presentation

  8. Slide 8: Building Income momentum

    Income Building Income momentum Business Segments (RM’ mil) Q1FY17 Q1FY18 YoY Change Retail Banking 343.8 351.9  2% Income Wholesale Banking 314.3 343.0  9% Banking Group Business Banking 51.3 60.0  17% Group Funding & Others 61.9 66.8  8% QoQ  7%  2% Total Income – Banking 771.3 821.7  7% Yo

  9. Slide 9: Resuming PBP growth

    Resuming PBP growth PBP & PATMI Business Segments (RM’ mil) Q1FY17 Q1FY18 YoY Change Retail Banking 110.6 112.6  2% Wholesale Banking 193.0 215.0  11% PBP Banking Group Business Banking 39.8 36.8  8% Group Funding & Others -24.4 -8.8  64% QoQ  10%  1% PBP – Banking 319.0 355.6  11% YoY  11%

  10. Slide 10: Profit underpinned by stronger NII and lower tax

    Profit underpinned by stronger NII and lower tax Group P&L Managed expenses whilst net provisions / releases normalising RM’ mil YoY Growth  8%  4%  3%  3%  3%  69%  6%  29%  1% ≈  2% 47.7 323.0 16.7 35.3 0.2 328.3 17.6 15% 16% 43.7 Lower taxes mainly from reversal of overprovision Effecti

  11. Slide 11: Net interest margin in line within expectations

    Net interest margin in line within expectations NIM & NoII Net Interest Margin (NIM) Movement NIM stable, with continuing pressures in Retail Asset repricing Deposits bps 4.8 1.2 4bps 1.9 0.8 6.2 4.1 206 202 194 Q4FY17 Portfolio Rebalancing Wholesale Retail General Deposits Rates Deposits Mix Q1FY1

  12. Slide 12: Tight cost control with CTI improving to 56.3%

    Tight cost control with CTI improving to 56.3% Expenses Business Segments (RM’ mil) Q1FY17 Q1FY18 YoY Change Retail Banking 233.2 239.3  3% Expenses Wholesale Banking 121.3 127.9  5% Banking Group Business Banking 11.5 23.3  >100% QoQ  6% 5% Group Funding & Others 86.4 75.6  13% Expenses – Ban

  13. Slide 13: Remain watchful on Corporate loans impairment

    Remain watchful on Corporate loans impairment Asset Quality Gross Impaired Loans (RM’ mil) and GIL Ratios (%) GIL Ratio QoQ Breakdown RM’ mil Gross Impaired Loans GIL Ratio GIL Ratio Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 1.86% 1.94% 1.86% 1.88% 1.79% 1,700.9 1,689.3 1,743.3 Group 1.69% 1.64% 1.54% 1.86

  14. Slide 14: Credit costs normalising with lower writebacks

    Credit costs normalising with lower writebacks Asset Quality Net Provisions / (Writebacks)1 Credit Costs vs. Peers1 RM’ mil Total provisions by category Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 AmBank Group FY14 FY15 FY16 FY17 Q1FY172 Q1FY182 Performing Loans (16.9) 14.6 (36.3) (178.7) (41.5) Credit cost

  15. Slide 15: Moderate loans growth in targeted segments

    Moderate loans growth in targeted segments Loans LD ROA: Ratio1: Gross Loans Movement (RM’ bil) 1.08% 88.9% YTD Growth  1%  5%  4%  1%  1%  22%  45%  2% Composition 40% 7% 28% 21% 2% 1% 1% 1.1 0.2 0.0 0.1 0.2 0.3 0.5 92.8 91.0 Breakdown by rate sensitivity: Breakdown by concept: Breakdown by

  16. Slide 16: Diversifying funding, managing cost of funds

    Diversifying funding, managing cost of funds Deposits Deposits and CASA Balance (RM’ bil) CASA Market Share and Industry CASA Balance 3 (RM’ bil) Retail FD Retail CASA Deposits YTD Growth:  1.1% Industry CASA AmBank Group Market Share Non-Retail FD Non-Retail CASA CASA YTD Growth:  2.2% CASA Compo

  17. Slide 17: Capital levels adequate

    Capital levels adequate Capital RWA/Total Assets Capital Adequacy Ratios (after dividends) RM’ bil 1 Total Assets RWA/Total Assets Peers 72.7% 72.8% 71.5% 71.2% 72.2% CET 1 Tier 1 Total CAR 72.1% 60.8% 62.4% 61.1% 59.6% 59.5% 59.5% 127.6 132.7 133.8 133.8 134.8 136.1 16.4% 16.1% 16.3% 16.4% 15.4% 15

  18. Slide 18: Guidance & Expectations for FY2018 / FY2019

    Guidance & Expectations for FY2018 / FY2019 Guidance ROE CTI DIVIDEND FHC CET 1 1 Q1FY18 : 8.1% 56.3% - 11.0% 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 assets, deposit o

  19. Slide 19: Group Performance

    Group Performance 19 Q1FY18 Results – Investor Presentation

  20. Slide 20: Yearly performance

    Yearly performance Q1FY18 Results PATMI (RM’ mil) & ROE (%) Total Income (RM’ mil) and Non-interest Income (%) PATMI (Reported) PATMI: ROE: CAGR FY13-17: 4.9% CAGR FY13-17: 1.4% Total Income: PATMI (Underlying) Total income (Reported) YoY Growth: 1.6% YoY Growth:  0.4% Total income (Underlying)

  21. Slide 21: 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% 2.12% 2.11% 2.06% 2.02% 2.02% 5.01% Gross Yield 4.95% 5.00% 1.93% 1.92% 1.94% 1.92% 4.92% 4.88% Industry Avg. 4.59% 4.59% 4.56% Lending Rate 4.51% 4.48%

  22. Slide 22: 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:  9% YoY Growth:  4% Fee Trading & Investment Insurance Others  84% 405.3 407.3  6% Others 385.6 1% Investment Bank 37.5 368.9 13% 13.8 19.8 111.3 84.2  15%  35% Insur

  23. Slide 23: Quarterly loans and deposit trends

    Quarterly loans and deposit trends Q1FY18 Results Net Lending (RM’ bil) QoQ Growth:  2.0% QoQ Growth (excl.AF):  2.9% Loans excluding Auto Finance Auto Finance 89.5 90.0 91.6 84.1 85.3 85.4 86.5 85.8 86.1 19.9 19.6 19.4 21.8 21.6 21.4 20.8 20.4 22.2 61.9 63.5 63.8 65.2 65.0 65.7 69.7 70.4 72.2 Q1F

  24. Slide 24: Asset Quality

    Asset Quality Asset Quality Impaired Loans – Key Segments Gross Impaired Loans (RM’ mil) FY16 FY17 Q1FY18 2.4%2.4% 2.2% 1.86% 1.8% Group 1.88% 1.7% 1.5%1.5% 1.4% 1.69% 1.3% 1.3% 1.65% 1.61% 1.2% Industry 1.64% 1.0% 1.66% 1.64% 1.63% 1.54% Auto Finance Mortgage Retail Wholesale Banking Q1FY17 Q2FY17

  25. Slide 25: Asset Quality

    Asset Quality Asset Quality Collective Allowance Balance (RM’ mil) Allowances (RM’ mil) FY16 FY17 Q1FY18 Q1FY18 Total: RM 853 mil Q1FY17 Individual Collective Recoveries/ Others Q1FY18 FY17 Total: RM 862 mil Allowance Allowance Releases FY16 Total: RM 1,062 mil 438 Lower release of 418 427 provision

  26. Slide 26: Loans by sector & by purpose vs. industry

    Loans by sector & by purpose vs. industry Loans Loans by Sector Loans by Purpose Jun-17 YTD Composition RM’ bil growth AmBank Group (RM’ bil) Purchase of transport 19.9 -1.1% 21.4% vehicles Loans Composition 4.0% 2.3% 10.0% 0.6% 4.3% 5.9% 3.4% 5.3% 8.9% 1.5% 53.5% 0.1% Working capital 30.0 +3.5% 32.

  27. Slide 27: Diversified and consistent funding structure, conservative liquidity management

    Diversified and consistent funding structure, Funding conservative liquidity management Funding Composition vs. Peers • Prudent approach to liquidity management with FY13 FY15 FY16 FY17 Q1FY18 Peers1 LCRs above regulatory requirement for all banking Equity & debt 14% 15% 16% 16% 16% 16% capital enti

  28. Slide 28: Divisional Performance and Economic & Banking Data

    Divisional Performance and Economic & Banking Data 28 Q1FY18 Results – Investor Presentation

  29. Slide 29: Retail Banking

    Retail Banking Retail Total Income (YoY Movement) and Loans by Line of Business QoQ PAT (RM’ mil) QoQ Growth:  29.3% YoY Growth:  0.1% Total Income RM351.9mil FY16: RM467.2 mil FY17: RM356.6 mil 129.5 129.3  42% 68% 120.9  4% Retail SME Wealth 3%  6% 107.6 Others 4% 101.8 1% Auto 20% 87.5 Auto

  30. Slide 30: Retail Banking

    Retail Banking Retail Wealth Sales (RM’ mil) Merchant Volume QoQ Growth:  10.5% QoQ Growth:  5.7% Merchant volume (RM'mil) YoY Growth:  53.3% YoY Growth:  5.1% Merchants in force ('000) 51.1 52.3 52.7 826 49.3 50.2 50.0 50.6 770 48.1 47.4 739 2,799 2,890 599 2,690 2,595 2,619 2,727 2,541 2,577 5

  31. Slide 31: Retail Banking

    Retail Banking Retail Income Statement (RM’ mil) YoY Growth  1.5%  5.9%  2.4%  2.6%  1.8%  12.0%  0.7%  2.5%  0.1% Net Interest Non-Interest RM' mil Total Income Expenses PBP Provisions PBT Tax PAT Income Income Q1FY18 283.7 68.2 351.9 239.3 112.6 12.8 99.8 23.7 76.1 Q1FY17 279.4 64.4 343.8

  32. Slide 32: 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 38 221 2 Kuala Lumpur 23 105 3 Putrajaya 1 3 Negeri Sembilan 7 38 Melaka 6 34 1 Johor 21 81 1 Pahang 9 29 1 Terengganu 4 16 Population Density Kelantan 2 16 < 100 persons pe

  33. Slide 33: 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:  22.3% YoY Growth:  22.3% Total Income RM403.0 mil FY16: RM821.3 mil FY17: RM826.4 mil 243.4 234.3 236.1  37%  17% 203.9 Others 192.6 190.5 192.

  34. Slide 34: 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 June 2017 (%) 5.5% 5.7% 5.3% 5.2% DCM (Overall MYR Bonds) 20.9% 2 5.1% Islamic Sukuk 19.7% 3 Unit Trust 9.2% 5 Stockbroking 5.0% 7 1. Calendar Year data

  35. Slide 35: Wholesale Banking (including Business Banking)

    Wholesale Banking (including Business Banking) Wholesale Income Statement (RM’ mil) YoY Growth  7.9%  13.5%  10.2%  13.9%  8.1%  >100%  23.4%  27.1%  22.3% Net Interest Non-Interest RM' mil Total Income Expenses PBP Provisions PBT Tax PAT Income Income Q1FY18 230.6 172.4 403.0 151.2 251.8 9

  36. Slide 36: Islamic Banking

    Islamic Banking Islamic Income Statement (RM’ mil) YoY Growth  10.9%  5.1%  19.0%  >100.0%  14.7%  22.7%  12.3% Q1FY18 PATZ (composition of Group) 13% RM' mil Total Income Expenses PBP Provisions PBT Tax & Zakat PATZ Q1FY18 203.0 111.8 91.2 30.4 60.8 12.7 48.1 Q1FY17 183.1 106.4 76.7 5.4 71.3

  37. Slide 37: General Insurance

    General Insurance General Insurance Loss Ratio and Combined Ratio YoY PAT (RM’ mil) Loss Ratio Combined Ratio YoY PAT Growth:  2.5% PAT PBT YoY PBT Growth:  17.0% 94.8% 96.4% 96.9% 91.2% 89.9% 83.2% 314.4 63.0% 62.8% 64.0% 62.9% 49.7% 56.3% 224.2 194.0 1 192.1 FY14 FY15 FY16 FY17 Q1FY17 Q1FY18 Gro

  38. Slide 38: Insurance and Group Funding & Others

    Insurance and Group Funding & Others Insurance & Others Income Statement – Insurance (General, Life & Takaful) (RM’mil) YoY Growth  10.8%  4.7%  24.0%  >100.0%  24.3%  69.9 %  12.1% Q1FY18 PAT (composition of Group) 18% RM‘ mil Total Income Expenses PBP Provisions PBT Tax PAT Q1FY18 160.5 87.

  39. Slide 39: Funding sources and maturity profile

    Funding sources and maturity profile Funding Funding diversity underpinned by LDR1 of 88.9% CASA: RM20.3 billion Fixed deposits: RM72.6 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

  40. Slide 40: Shareholding structure AMMB Holdings Berhad

    Shareholding structure Corporate Structure 23.8%1 AmCorp 13.0% EPF 9.5% Others 53.7% As at 30 June 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

  41. Slide 41: 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:

  42. Slide 42: 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 4.31-4.33 7.5 3.91 India 3.15 3.27 7.6 3.06 3.09 6.9 Philippines 7.0 PR China 6.7 6.2 5.7% 5.0 5.1% 5.6% 4.7% 6.0% 5.0% 4.2% Indonesia to 5.3 5.9%

  43. Slide 43: 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 114.1 Business Loans (RM' bil)1 SME Loans Growth Rate Business Loans Growth Rate GDP Growth 80.7 4.0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q

  44. Slide 44: Key economy indicators

    Key economy indicators Insights GDP, Consumption and Investment Growth Consumer Indices GDP Consumption Investment MIER: Auto Industry Index (AII) MIER: Residential Property Index (RPI) MIER: Retail Trade Index (RTI) AII 104.7 RPI 98.7 RTI 71.6 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 1Q 2

  45. Slide 45: 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 RM1,725.2b 89.8% 6.6% 5.7% 5.0% Dec Dec Dec Dec Sep Sep Sep Sep Mar Mar Mar Mar Mar Jun Jun Jun Jun Jun 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

  46. Slide 46: 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

  47. Slide 47: 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

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