Ammb Holdings Bhd. · MYX:AMBANK

Ammb Holdings Bhd — FY2020 Earnings Presentation

55 slides from Ammb Holdings Bhd's earnings presentation, Jun 29, 2020

  1. Slide 1: FY2020 Results Investor Presentation

    FY2020 RESULTS INVESTOR PRESENTATION 29 JUNE 2020

  2. Slide 2: GCEO Presentation

    GCEO PRESENTATION Dato’ Sulaiman Mohd Tahir 3 FY20 Financial Snapshot 4-5 Top 4 Strategy 6-12 Managing Uncertainties (COVID-19) 13 Market Outlook 14 FY20 Financial agenda and scorecard 15 FY21 Outlook

  3. Slide 3: FY20 Financial snapshot

    Financial Snapshot FY20 Financial snapshot FY20 Financials Strong revenue and PBP out turn Macro provisions of RM167m taken in Q4FY20 4,227 Income  8% • Good income growth underpinned by NII and trading & fee income FY19: 3,922 2,108 Expenses  1% • Continue to optimise operational efficiency FY19:

  4. Slide 4: Closing Top 4 Strategy (FY17–FY20)

    Top 4 Strategy Closing Top 4 Strategy (FY17 – FY20): Setting up for sustainable growth Growth in targeted segments & Enhanced digital capabilities products RM’bil FY2016 FY2020 Growth Loans SME 11.9 20.6 1.7x MidCorp 11.8 16.0 1.4x Foreign e- Easy-to- Cheque Convenient Digital Card 1.6 2.6 1.6x Remi

  5. Slide 5: Strategic execution outcomes

    Strategy review Strategic execution outcomes Total Income (RM’ mil) PBP (RM’ mil) Gross Loans (RM’ bil) YoY YoY YoY CAGR FY17 – 20: CAGR FY17 – 20: CAGR FY17 – 20: Growth: Growth: Growth: AMMB:  4% AMMB: 10% AMMB:  6%  8%  18%  5% Peers1:  4% Peers1:  4% Peers1:  4% 3,979 3,922 3,766 874 22

  6. Slide 6: Managing through uncertainties (COVID-19)

    COVID-19: Initiatives & Approach Managing through uncertainties (COVID-19) Staff welfare our top priority • BCM plan activated • Staff currently under “split operations” and “work from home” arrangements Employees (58% WFH) • Enabled VPN and video conferencing capabilities Supporting our customers •

  7. Slide 7: Funding and liquidity approach

    COVID-19: Funding & Liquidity Funding and liquidity approach Impact of moratorium and mitigating actions • Circa RM72bil (67% of total loans RM107.2bil) qualified for moratorium. Net qualifying loans after opt out at circa RM65bil (61% of total loans) • Cash gap ~RM6bil over 6 months (LCR impact of

  8. Slide 8: Capital maintenance objectives

    COVID-19: Capital Capital maintenance objectives • FHC CET1 of 12.4% • Regulatory reserve at RM388mil (maintained 1% BNM minimum requirement) • Sufficient loss absorption capacity to maintain CET1 at 10.5% (stress tests performed) • Loss absorption capacity of RM6.3bil before breaching CET1 of 7%2 C

  9. Slide 9: Moratorium for SMEs and individuals

    COVID-19: Asset Quality Moratorium for SMEs and individuals • Total qualified loans of circa RM72bil, net qualified loans after opt-out at circa RM65bil (61% of total loans) • FY20 net credit costs of 30bps (Before macro provisions: 14bps, in line with guidance). RM167mil macro provisions taken in M

  10. Slide 10: Corporate credit: Early alert exposures

    COVID-19: Asset Quality Corporate credit: Early alert exposures Early Alert Exposures (WB, BB and Retail SME) • We have stress tested about RM13.7bil (including RM0.7bil of O&G bonds) exposures, of which: - Categories: Potential R&R (56%, RM7.7bil), O&G (34%, RM4.7bil) and COVID-19 vulnerable sector

  11. Slide 11: SME portfolio: Balanced risk profile

    COVID-19: Asset Quality SME portfolio: Balanced risk profile Retail SME (RM3.6bil gross loans) Impaired Strong ~ 3% Exceptionally Strong 9% Others1 17% Marginal~ Substandard 26% Internal CGC / Collaterisation Risk Grade SJPP (%) Guarantee (%) 43% Satisfactory~ Property Moderate Financing 62% 40% Bus

  12. Slide 12: Retail portfolio: Highly collateralised

    COVID-19: Asset Quality Retail portfolio: Highly collateralised Auto Finance (RM13.1bil gross loans) • Collateral coverage: 97.3% • National / Non-national cars: 43% / 57% ≤ RM 3K > RM 10K > 60% 12% 14% • Self-employed : 9% of portfolio 17% Debt-Service Income > 50% - Ratio > RM 3K - Level 60% RM 5K

  13. Slide 13: Outlook for 2020

    Market Outlook Outlook for 2020 Malaysia Banking Sector GDP growth: Loans growth: +0.4% to -2.0% 0.4% to -2.5% Inflation: Asset quality: +0.5% to -1.5% Weaker (COVID19 impact) Export growth: OPR: -3.0% to -9.2% 1.50% to 2.00% USD/MYR outlook: Resilient liquidity & 4.25 – 4.30 capital positions 13 FY

  14. Slide 14: FY20 Financial agenda and scorecard

    Financial agenda FY20 Financial agenda and scorecard Revenue growth “Accelerate digital partnerships” FY20 priorities Key Metrics FY20 Scorecard1 • Increasing penetration in targeted products & segments, grow • Revenue growth • NII growth =  8% P CASA • NIM • NoII growth =  8% P • Diversifying fun

  15. Slide 15: FY21 Outlook

    Guidance FY21 Outlook 01 Expectations • Outlook is uncertain due to COVID-19 and MCO • MFRS9 accounting impact from BNM’s loan moratorium • Weaker asset quality expected • Further OPR cuts and NIM compression • Positive on fixed income trading 02 FY21 Agenda • Exercise credit vigilance • Proactively

  16. Slide 16: GCFO Presentation

    GCFO PRESENTATION Jamie Ling 17 - 29 Financial Overview 30 FY20 Scorecard

  17. Slide 17: Q4FY20 Financial overview

    Financial Overview Q4FY20 Financial overview 1 Capital • Well capitalised • 30% dividend payout ratio • Adequate loss absorption capacity (based on credit stress test ranges) 2 Liquidity & Funding • Highly liquid (FHC LCR of 158.2%, LDR 94.9%) • NSFR for all banking entities above 100% 3 Q4FY20 Resu

  18. Slide 18: FY20 Performance summary – P&L

    Financial Overview FY20 Performance summary – P&L P&L Q4FY20 Q3FY20 QoQ Change FY20 FY19 YoY Change (RM’ mil) Total Income 989 1,105  10% 4,227 3,922  8% Expenses 501 552  9% 2,108 2,131  1% PBP 488 552  12% 2,119 1,792  18% Net (Recovery) / 203 57  >100% 336 (304)  >100% Impairment PATMI 24

  19. Slide 19: FY20 Performance summary – balance sheet

    Financial Overview FY20 Performance summary – balance sheet Balance Sheet Q4FY20 Q3FY20 QoQ Change FY20 FY19 YTD Change (RM’ bil) Gross Loans 107.2 104.5  3% 107.2 101.8  5% GIL 1.73% 1.71%  2bps 1.73% 1.59%  14bps LLC1 93.4% 105.2%  1180bps 93.4% 114.0%  2060bps Customer Deposits 113.0 105.7

  20. Slide 20: Unpacking the normalised items

    Underlying Unpacking the normalised items Normalised P&L (RM’ mil) FY18 FY19 YoY Change FY20 YoY Change Income - Reported 3,979 3,922  1% 4,227  8% Foreclosed properties disposal gain 45 22 - - - Investment share revaluation 42 - - - - Income - Underlying 3,892 3,900 ≈ 4,227  8% Expenses - Report

  21. Slide 21: Broad-based income growth

    Income Broad-based income growth Business Segments Q4FY20 Q3FY20 QoQ Change FY20 FY19 YoY Change (RM’ mil) Wholesale Banking 284 317  10% 1,237 1,076  15% Investment Banking 81 85  5% 305 242  26% Retail Banking 354 386  8% 1,466 1,449  1% Business Banking 96 94  2% 366 323  13% Group Fundin

  22. Slide 22: Improved operating leverage

    PBP & PATMI Improved operating leverage Business Segments Q4FY20 Q3FY20 QoQ Change FY20 FY19 YoY Change (RM’ mil) Wholesale Banking 202 241  16% 934 793  18% Investment Banking 33 37  12% 119 69  73% Retail Banking 129 171  24% 601 608  1% Business Banking 61 57  7% 221 196  13% Group Fundin

  23. Slide 23: P&L walk

    Group P&L P&L walk YoY Growth  8%  8%  8%  1%  18% >100%  15%  33%  9%  15%  11% 111 23 194 1,505 162 1,341 22% 14 26% 640 Effective NIM: NoII%: CTI: GIL: Tax Rate: 1.94% 34.4% 49.9% 1.73% 18.3% 78% 74% Net Interest Non-Interest Total (Recovery) / RM’ mil Expenses PBP PBT Tax & Zakat PAT

  24. Slide 24: NIM improved YoY despite OPR reductions

    NIM NIM improved YoY despite OPR reductions Net Interest Margin (NIM) Movement Assets Funding + Deposits NIM movement: QoQ :  7bps 3.7 YoY :  5bps 3.9 0.2 7.1 0.1 0.4 0.4 1.4 8.0 194 189 FY19 Wholesale Investment Retail Business Others Asset volume Interbank / Group Deposits Deposits FY20 Banking

  25. Slide 25: Diversified loans growth

    Loans Diversified loans growth Gross Loans Movement (RM’ bil) Breakdown by rate sensitivity: Breakdown by concept: Breakdown by customers type: ROA1: RoTA1: Fixed rate – 24% Islamic – 30% Retail – 55% 0.93% 0.94% Variable rate –76% Conventional – 70% Non-retail – 45% Ex. Auto : YTD Growth  9%  4%

  26. Slide 26: Credit costs normalised and macro provisions

    Asset Quality Credit costs normalised and macro provisions Net Impairment (RM’ mil) Gross Impaired Loans, GIL and LLC Ratios Retail Wholesale Loan Loss Coverage 1 167.3 Business GIL Ratio 114.0% 493.6 100.5% 93.4% 81.2% 79.7% 336.1 31.1 168.8 1.94% 1.86% 1.70% 1.73% RM’ mil 1.59% (303.8) Q1FY20: (32

  27. Slide 27: Credit quality

    Asset Quality Credit quality Impaired Loans by Sector Loans by Internal Risk Grade Strong ~ Very Strong Satisfactory ~ Moderate Marginal ~ Substandard Impaired Mar’20 Mar’19 Sector Composition YTD Growth QoQ Growth 1% 2% RM’ mil RM’mil Agriculture 85 5% 1  >100%  >100% RM’ bil 15% FY20 2.3 Mining

  28. Slide 28: Highly liquid

    Deposits Highly liquid Deposits (RM’ bil) CASA (RM’ bil) and CASA Composition (%) Customer deposits trend YTD Growth Industry CASA trend YTD Growth Industry FY20 113.0  6%  2%1 FY20 28.8  16%  10%1 FY19 106.9  12%  5%2 FY19 24.9  22%  3%2 FY18 95.8  2%  5%2 FY18 20.4  3%  6%2 Retail FD R

  29. Slide 29: Adequate capital levels

    Capital Adequate capital levels RWA/Total Assets Capital Adequacy Ratios3 RM’ bil Total Assets RWA/Total Assets Peers 1 CET 1 Tier 1 Total CAR 71.2% 72.2% 72.2% 2 Aggregated basis4 FHC 2 2 65.0% 64.4% 16.1% 16.3% 15.8% 15.4% 59.6% 59.5% 59.3% 58.4% 58.5% 13.6% 12.3% 12.5% 169.2 11.6% 11.9% 5 12.4% 5

  30. Slide 30: FY20 Scorecard: Guidance vs Actual

    Guidance FY20 Scorecard FY20 Guidance FY20 Actual ROE ~ 8.0% - 8.5% Reported: 7.4% O Underlying: 8.1% P CTI ≤ 50.0% 49.9% P Dividend Payout 45% - 50% 30% O FHC CET 1 11.5% ± 1% 12.4% P 30 FY2020 Results – Investor Presentation

  31. Slide 31: Thank You

    Thank You

  32. Slide 32: Group Performance

    Group Performance

  33. Slide 33: NoII growth underpinned by strong trading gains and higher IB fee income

    NoII NoII growth underpinned by strong trading gains and higher IB fee income YoY Growth 100%  1%  75%  36%  5%  12%  13%  2%  >100%  52%  8% NoII Q1FY20: 395 70 5 7 Q2FY20: 389 10 Q3FY20: 383 Q4FY20: 285 20 22 98 16 2 1,453 22 1,342 Group Investment Group Foreclosed Corporate Wealth Busi

  34. Slide 34: Remain disciplined in managing costs

    Expenses Remain disciplined in managing costs Business Segments Q4FY20 Q3FY20 QoQ Change FY20 FY19 YoY Change (RM’ mil) Wholesale Banking 83 76  9% 303 283  7% Investment Banking 49 48  1% 187 174  7% Retail Banking 225 215  4% 865 841  3% Business Banking 35 37  6% 145 127  14% Group Fundin

  35. Slide 35: Yearly performance

    FY2020 Results Yearly performance PATMI (RM’ mil) & ROE (%) Total Income (RM’ mil) and Non-interest Income (%) PATMI: ROE: Total Income Total Income Non-interest Income % PATMI ROE (%) CAGR FY16-FY20:  0.7% CAGR FY16-FY20:  0.4% CAGR FY16-FY20:  3.4% YoY Growth  10.9% YoY Growth  1.4% YoY Growt

  36. Slide 36: Non-interest income and PATMI mix

    NoII & PATMI Non-interest income and PATMI mix Non-interest Income by Lines of Business (YoY) PATMI by Lines of Business (YoY)  52%  11% Others 1%  48% Corporate Banking 11%  6% Group Funding  45% & Insurance 1 Others Retail ≈ 8% -6% Banking 24% Insurance Group Business Wholesale  75%  3% 31%

  37. Slide 37: Impairments

    Asset Quality Impairments Net Impairment / (Writebacks) and GIL Ratio Total impairments by category (RM’ mil) Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 QoQ Change FY19 FY20 YoY Change ECL Stage 1 & 2 / CP – Non defaulted1 (71) (9) 50 (14) (128) (38) (29) 116  >100% (44) (79)  79% ECL

  38. Slide 38: Loans by sector vs. industry

    Loans Loans by sector vs. industry AmBank Group (RM’ bil) Loans Composition 3% 2% 13% 1% 4% 7% 3% 5% 7% 2% 53% ≈ 100% YTD Growth 12%  47%  17%  52%  6%  14%  2%  22%  7%  38%  1%  76%  5% 107.2 Mar-20 56.3 4.7 7.8 6.0 2.9 2.5 13.7 0.7 2.7 7.7 2.2 0.1 Wholesale, Finance, Mining & Electri

  39. Slide 39: Divisional Performance

    Divisional Performance

  40. Slide 40: Wholesale Banking

    Wholesale Banking Wholesale Banking Total Income (YoY Movement) and Total Assets by Line of Business PAT Trend (RM’ mil) QoQ Growth:  14% YoY Growth:  1% Total Income RM1,237 mil FY19: 783 FY20: 772 259 244 182 184 188 173 165 161 Transaction Banking  8% 23% Wholesale Banking Coverage 34% Q1FY19

  41. Slide 41: Wholesale Banking

    Wholesale Banking Wholesale Banking Income Statement YoY Growth  11%  25%  15%  7%  18%  73%  2%  5%  1% Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income FY20 850 387 1,237 303 934 (60) 994 222 772 FY19 767 309 1,076 283 793 (224) 1,018 235 78

  42. Slide 42: Investment Banking

    Investment Banking Investment Banking League Table Market Share of Value and Volume Traded on Bursa (KLSE)1 Market Share1 As At Trading Value Trading Volume Rank2 31 Mar 2020(%) 3.8% 3.8% DCM (Overall MYR Bonds) 13.3% 2 3.6% 3.6% 3.4% Islamic Sukuk 17.9% 2 5.5% 5.3% 5.0% Unit Trust 8.2% 5 4.9% 4.

  43. Slide 43: Investment Banking

    Investment Banking Investment Banking Income Statement YoY Growth  16%  36%  26%  7%  73%  17%  65%  80%  61% Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income FY20 40 265 305 187 119 (6) 124 26 98 FY19 48 195 242 174 69 (7) 75 15 61 FY20 PAT F

  44. Slide 44: Retail Banking

    Retail Banking Retail Banking Total Income (YoY Movement) and Loans by Line of Business PAT Trend (RM’ mil) QoQ Growth:  28% Total Income YoY Growth:  45% RM1,466 mil  15%  22% Others FY19: 568 FY20: 315 1% Retail SME  7%  6% 9% Auto 13% 281 Wealth 6% Auto 22% Others Mortgage 5% 15%  8% Retai

  45. Slide 45: Cards in circulation

    Retail Banking Retail Banking Wealth Sales (RM’ mil) Merchant Volume QoQ Growth:  8% Merchant volume (RM'mil) QoQ Growth:  6% YoY Growth:  7% YoY Growth:  18% Merchants in force ('000) QoQ Growth:  1% YoY Growth:  6% 53 51 FY19: 2,919 FY20: 3,453 44 38 37 36 954 36 35 866 882 799 818 FY19: 10,

  46. Slide 46: Retail Banking

    Retail Banking Retail Banking Income Statement YoY Growth  3%  6%  1%  3%  1%  >100%  45%  45%  45% Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income FY20 1,223 243 1,466 865 601 187 414 99 315 FY19 1,190 259 1,449 841 608 (139) 747 179 568 FY2

  47. Slide 47: Distribution Channels

    Retail Banking Distribution Channels Regional Branches ATM CRM2 Offices Perlis 1 3 1 Kedah 6 19 6 Pulau Pinang 14 44 15 2 Perak 18 40 21 1 Selangor 36 179 41 3 Kuala Lumpur 23 79 25 3 Putrajaya 1 3 2 Negeri Sembilan 7 37 8 Melaka 6 26 8 1 Johor 21 69 30 1 Pahang 8 21 11 1 Population Density Terengga

  48. Slide 48: Business Banking

    Business Banking Business Banking Gross Loans (RM’ mil) PAT Trend (RM’ mil) QoQ Growth:  81% YoY Growth:  13% YoY Growth: ≈ Non-trade Trade 11,248 10,850 10,069 10,425 9,964 9,055 2,640 FY19: 126 FY20: 126 8,583 2,585 7,994 2,462 2,527 2,441 2,222 2,219 2,060 7,898 8,264 8,607 7,523 7,607 6,364 6,

  49. Slide 49: Business Banking

    Business Banking Business Banking Income Statement YoY Growth  14%  13%  13%  14%  13%  86%  1%  2% ≈ Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income FY20 277 89 366 145 221 57 164 38 126 FY19 244 79 323 127 196 31 165 39 126 FY20 PAT FY19 PAT

  50. Slide 50: Islamic Banking

    Islamic Banking Islamic Banking Income Statement YoY Growth  8%  3%  16%  60%  5%  5%  8% RM' mil Total Income Expenses PBP Impairment PBT Tax & Zakat PATZ FY20 909 309 600 155 445 93 352 FY19 838 319 519 97 422 98 324 FY20 PATZ FY19 PATZ Positive growth in FY20 Contraction in FY20 Balance Sh

  51. Slide 51: General Insurance

    General Insurance General Insurance Loss Ratio and Combined Ratio PBT and PAT (RM’ mil) Loss Ratio Combined Ratio 96% 97% 92% 92% 93% YoY PBT Growth:  8% PBT PAT YoY PAT Growth:  15% 282 64% 63% 57% 58% 60% 260 242 FY16 FY17 FY18 FY19 FY20 2 194 192 Gross Premium Mix and Growth (RM’ mil) YoY GWP G

  52. Slide 52: Insurance and Group Funding & Others

    Insurance & Others Insurance and Group Funding & Others Income Statement – Insurance (General, Life & Takaful) YoY Growth  3%  3%  3%  >100%  2%  27%  4% RM'mil Total Income Expenses PBP Impairment PBT Tax PAT FY20 584 338 246 (4) 250 32 218 FY19 602 349 253 (1) 254 44 210 Income Statement –

  53. Slide 53: Shareholding structure AMMB Holdings Berhad

    Corporate Structure Shareholding structure 23.8%1 AmCorp 13.0% EPF 10.0% PNB 9.1%2 Others 44.1% As at 31 March 2020 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 Holding

  54. Slide 54: Credit ratings, target price and recommendations

    Ratings & Target Price Credit ratings, target price and recommendations Credit Ratings FY20 AMMB AmBank (M) AmBank Islamic AmInvestment Ratings RAM LT: AA2, ST: P1 LT: AA2, ST: P1 LT: AA2, ST: P1 LT: AA2, ST: P1 Outlook: Stable Outlook: Stable Outlook: Stable Outlook: Stable S&P LT: BBB+, ST: A-2 Ou

  55. Slide 55: Glossary & Disclaimer of warranty and limitation of liability

    Glossary & Disclaimer 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 Growth Definition QoQ growth refers to Q4FY20 vs Q3FY20 YoY /

AMMB Holdings Berhad — FY2020 Earnings Presentation on 6ix