Ammb Holdings Bhd. · MYX:AMBANK

Ammb Holdings Bhd — H1 FY2020 Earnings Presentation

47 slides from Ammb Holdings Bhd's earnings presentation, Nov 29, 2019

  1. Slide 1: H1FY2020 Results Investor Presentation

    H1FY2020 RESULTS INVESTOR PRESENTATION 29 NOVEMBER 2019

  2. Slide 2: GCEO Presentation

    GCEO PRESENTATION Dato’ Sulaiman Mohd Tahir 3 H1FY20 Financial snapshot 4 H1FY20 Financial agenda and scorecard 5 Top 4 strategy review 6 Outlook for 2019

  3. Slide 3: H1FY20 Financial snapshot

    Financial Snapshot H1FY20 Financial snapshot H1FY20 Financials H1FY20 Resilient growth 2,133 Income  6% • Good income growth H1FY19: 2,021 1,055 Expenses  4% • Cost well managed with positive JAWS of 2% H1FY19: 1,018 1,079 PBP  8% • Positive operating leverage, CTI of 49.4% Profitability H1FY19:

  4. Slide 4: H1FY20 Financial agenda and scorecard

    Financial agenda H1FY20 Financial agenda and scorecard Revenue growth “Accelerate digital partnerships” FY20 priorities Key Metrics H1FY20 Scorecard1 ➢ NII growth = 5% ➢ Increasing penetration in targeted products & segments, grow CASA ➢ Revenue growth ➢ NoII growth = 7% ➢ Diversifying funding, ma

  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 – 19: CAGR FY17 – 19: CAGR FY17 – 19: Growth: Growth: Growth: AMMB:  2% AMMB:  6% AMMB:  6%  6%  8%  2% Peers2:  3% Peers2:  3% Peers2:  4% 3,696 3,766 3,979 3,922 1

  6. Slide 6: Outlook for 2019

    Market Outlook Outlook for 2019 Malaysia Banking Sector GDP growth: Loans growth: 4.5% 4.6% Inflation: Asset quality: 0.8% - 0.9% Stable Export growth: OPR: - 0.3% Stable at 3.00% USD/MYR outlook: Resilient liquidity & 4.10 – 4.15 capital positions 6 H1FY2020 Results – Investor Presentation

  7. Slide 7: GCFO Presentation

    GCFO PRESENTATION Jamie Ling 8-21 Financial overview 22 Guidance & Expectations

  8. Slide 8: Q2FY20 Financial overview

    Financial Overview Q2FY20 Financial overview Q2FY20 Results (QoQ) ➢ Income stable at RM1,069mil (+RM4 mil): - NII of RM680mil (+2%), NIM recovered to 1.91% (+4bps) - NoII declined slightly (-2%) as higher GTM trading income offset by lower insurance income ➢ Expenses lower at RM526mil (-RM3 mil). CT

  9. Slide 9: H1FY20 Performance summary – P&L

    Financial Overview H1FY20 Performance summary – P&L P&L Q2FY20 Q1FY20 QoQ Change H1FY20 H1FY19 YoY Change (RM’ mil) Total Income 1,069 1,065  ≈ 2,133 2,021  6% Expenses 526 529  ≈ 1,055 1,018  4% PBP 543 536  1% 1,079 1,003  8% Net (Recovery) / 109 (32)  >100% 77 18  >100% Impairment PATMI 3

  10. Slide 10: H1FY20 Performance summary – balance sheet

    Financial Overview H1FY20 Performance summary – balance sheet Balance Sheet Q2FY20 Q1FY20 QoQ Change H1FY20 FY19 YTD Change (RM’ bil) Gross Loans 102.0 100.8  1% 102.0 101.8  ≈ GIL 1.77% 1.66%  11bps 1.77% 1.59%  18bps LLC1 105.8% 111.5%  570bps 105.8% 114.0%  820bps Customer Deposits 102.7 10

  11. Slide 11: Good income growth

    Income Good income growth Business Segments Q2FY20 Q1FY20 QoQ Change H1FY20 H1FY19 YoY Change (RM’ mil) Wholesale Banking 334 303  10% 636 547  16% Investment Banking 69 70  2% 139 124  11% Retail Banking 369 358  3% 727 724  ≈ Business Banking 90 86  4% 177 153  15% Group Funding & Others 4

  12. Slide 12: Positive operating leverage

    PBP & PATMI Positive operating leverage Business Segments Q2FY20 Q1FY20 QoQ Change H1FY20 H1FY19 YoY Change (RM’ mil) Wholesale Banking 260 232  12% 492 410  20% Investment Banking 24 24  ≈ 48 38  28% Retail Banking 149 152  2% 301 309  2% Business Banking 52 51  1% 104 91  14% Group Funding

  13. Slide 13: Good income growth driving PBP and PATMI higher

    Group P&L Good income growth driving PBP and PATMI higher YoY Growth  5%  7%  6%  4%  8% >100%  2%  2%  3%  12%  2% 54 59 37 6 711 696 59 8 20% 25% Effective NIM: NoII%: CTI: GIL: Tax Rate: 1.89% 36.8% 49.4% 1.77% 21.5% 80% 75% Net Interest Non-Interest Total (Recovery) / RM’ mil Expenses

  14. Slide 14: Improved net interest margin

    NIM Improved net interest margin Net Interest Margin (NIM) Movement Assets Deposits YTD NIM H1FY20: 1.89% H1FY19: 1.97% NIM movement: QoQ :  4bps YoY :  8bps 1.3 0.1 2.6 0.5 2.3 0.2 2.6 0.3 0.3 191 187 Q1FY20 Wholesale Investment Retail Business Others Asset volume Interbank / Deposits Deposits Q2

  15. Slide 15: Strong trading gains recorded

    NoII Strong trading gains recorded YoY Growth 100%  7%  >100%  15%  3%  9%  10%  9%  97% ≈  7% NoII 24 Q1FY20: 395 ≈ Q2FY20: 390 15 1 4 17 63 8 785 22 6 731 Group Investment Group Foreclosed Corporate Wealth Business General Life RM’ mil Treasury Banking & Other Retail Funding & NoII Prope

  16. Slide 16: Cost well contained while continuing to invest

    Expenses Cost well contained while continuing to invest Business Segments Q2FY20 Q1FY20 QoQ Change H1FY20 H1FY19 YoY Change (RM’ mil) Wholesale Banking 74 70  5% 144 137  5% Investment Banking 45 45  ≈ 90 87  4% Retail Banking 220 206  7% 425 416  2% Business Banking 38 35  9% 73 62  17% Gro

  17. Slide 17: Credit costs normalising

    Asset Quality Credit costs normalising Net Impairment (RM’ mil) Gross Impaired Loans, GIL and LLC Ratios Q1FY20: (32.5) Retail Wholesale Loan Loss Coverage 2 37.9 Q2FY20: 109.1 Business GIL Ratio 114.0% 111.3% 105.8% 81.2% 79.7% 100.5% 10.9 52.6 1.94% 1.86% 76.6 1.70% 1.72% 1.77% 64.9 RM’ mil 1.59%

  18. Slide 18: Vigilant on asset quality

    Asset Quality Vigilant on asset quality Impaired Loans by Sector Loans to Oil & Gas (O&G) Sector by Internal Risk Grades Sep’19 Sector YTD Growth Composition Marginal~ Impaired RM’ bil RM’ mil Substandard 3% Real Estate 303  40% 17% 1% H1FY20 1.8 Residential Properties 451  20% 25% FY19 1.6 Transp

  19. Slide 19: Loans growth in targeted segments

    Loans Loans growth in targeted segments Gross Loans Movement (RM’ bil) Breakdown by rate sensitivity: Breakdown by concept: Breakdown by customers type: ROA1: RoTA1: Fixed rate – 25% Islamic – 29% Retail – 56% 1.01% 1.03% Variable rate –75% Conventional – 71% Non-retail – 44% Ex. Auto : YTD Growth 

  20. Slide 20: Managing liquidity positions

    Deposits Managing liquidity positions Deposits (RM’ bil) CASA (RM’ bil) and CASA Composition (%) Customer deposits trend YTD Growth Industry CASA trend YTD Growth Industry H1FY20 102.7  4%  1%1 H1FY20 23.4  6%  3%1 FY19 106.9  12%  5%2 FY19 24.9  22%  3%2 FY18 95.8  2%  5%2 FY18 20.4  3%

  21. Slide 21: Improved capital levels

    Capital Improved capital levels RWA/Total Assets Capital Adequacy Ratios3 RM’ bil CET 1 Tier 1 Total CAR Total Assets RWA/Total Assets Peers 1 2 72.2% 72.2% Aggregated basis4 FHC 71.2% 2 65.0% 2 66.9% 16.1% 16.3% 16.1% 15.4% 59.6% 59.5% 59.3% 58.4% 58.2% 12.3% 12.5% 13.6% 11.6% 5 11.9%5 12.6%5 158.8

  22. Slide 22: Guidance & Expectations

    Guidance Guidance & Expectations Revised H1FY20 Actual FY20 Guidance Reported ROE 7.9% ~ 8.0% - 8.5% CTI 49.4% ≤ 50.0% Dividend Payout 6.0sen 45% - 50% FHC CET 1 12.6% 11.5% ± 1% 22 H1FY2020 Results – Investor Presentation

  23. Slide 23: Thank You

    Thank You

  24. Slide 24: Group Performance

    Group Performance

  25. Slide 25: Yearly performance

    H1FY2020 Results Yearly performance PATMI (RM’ mil) & ROE (%) Total Income (RM’ mil) and Non-interest Income (%) PATMI: ROE: Total Income PATMI ROE (%) CAGR FY16-FY19:  4.9% CAGR FY16-FY19: ≈ Total Income (Underlying) Non-interest Income % CAGR FY16-FY19:  2.0% YoY Growth  2.2% YoY Growth  0.3%

  26. Slide 26: Net interest margin and gross loans

    NIM & Gross Loans Net interest margin and gross loans NIM Trend Gross Yield COF NIM Net Spread 1 5.08% 5.07% 5.03% 4.96% 5.02% 4.92% 4.93% 4.83% 4.94% 4.88% 3.39% 3.47% 3.46% 3.45% 3.37% 3.45% 3.22% 3.27% 3.26% 3.29% 2.02% 1.91% 1.88% 1.91% 1.98% 2.00% 1.89% 1.89% 1.78% 1.87% 1.69% 1.61% 1.69% 1.68%

  27. Slide 27: 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) ≈ Others  25% 2%  12% Corporate Banking 11%  10%  17% Group Funding & Insurance Others Retail Banking Group  >100% 1 11% -5% 22% Treasury  30% Wholesale & Market Busin

  28. Slide 28: Impairments

    Asset Quality Impairments Net Impairment / (Writebacks) and GIL Ratio Total impairments by category (RM’ mil) Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 QoQ Change H1FY19 H1FY20 YoY Change ECL Stage 1 & 2 / CP – Non defaulted1 (71) (9) 50 (14) (128) (38)  70% (80) (166)  >100% ECL Stage 3 / CP – De

  29. Slide 29: Loans by sector vs. industry

    Loans Loans by sector vs. industry AmBank Group (RM’ bil) Loans Composition 3% 2% 12% ≈ 4% 7% 3% 5% 7% 2% 55% ≈ 100% YTD Growth  1%  13%  5%  20%  1%  1%  1%  3%  11% 31% ≈  7% ≈ Sep-19 102.0 55.6 3.2 4.5 6.9 2.8 4.7 1.9 12.3 0.4 7.4 2.1 0.3 Wholesale, Finance, Mining & Electricity, Trans

  30. Slide 30: Funding profile

    Funding Funding profile Funding Composition vs. Peers Funding Maturity Profiles Term Funding and Debt Capital FY16 FY17 FY18 FY19 H1FY20 Peers1 Equity & debt capital 16% 16% 16% 15% 16% 16% 32% Customer deposits 73% 74% 74% 74% 73% 74% H1FY20: Term funding & loans sold RM5.8 bil 10% 9% 7% 6% 5% 5% w

  31. Slide 31: Divisional Performance

    Divisional Performance

  32. Slide 32: Wholesale Banking

    Wholesale Banking Wholesale Banking Total Income (YoY Movement) and Total Assets by Line of Business QoQ PAT (RM’ mil) QoQ Growth:  36% YoY Growth:  19% Total Income RM636 mil H1FY19: 355 H1FY20: 423 259 244 182 173 184 165 Transaction Banking  5% 23% Wholesale Banking Coverage 37% Q1FY19 Q2FY19

  33. Slide 33: Wholesale Banking

    Wholesale Banking Wholesale Banking Income Statement YoY Growth  14%  21%  16%  5%  20%  16%  20%  20%  19% Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income H1FY20 440 197 636 144 492 (59) 551 127 423 H1FY19 385 162 547 137 410 (50) 461 106 35

  34. Slide 34: Investment Banking

    Investment Banking Investment Banking League Table Market Share of Value and Volume Traded on Bursa (KLSE)1 Trading Value Trading Volume Market Share1 As At Rank2 3.9% 30 Sep 2019 (%) 3.8% 3.6% 3.6% DCM (Overall MYR Bonds) 10.1% 3 3.4% 5.7% 5.5% Islamic Sukuk 9.4% 4 5.0% 4.9% 4.9% Unit Trust 8.5%

  35. Slide 35: Investment Banking

    Investment Banking Investment Banking Income Statement YoY Growth  4%  15%  11%  4%  28%  >100%  12%  14%  13% Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income H1FY20 23 116 139 90 48 0 48 10 38 H1FY19 24 100 124 87 38 (5) 43 9 34 H1FY20 PAT H

  36. Slide 36: Retail Banking

    Retail Banking Retail Banking Total Income (YoY Movement) and Loans by Line of Business PAT Trend (RM’ mil) QoQ Growth:  21% Total Income YoY Growth:  17% RM727 mil  45%  18% H1FY19: 189 H1FY20: 156 Others Retail SME  16% 2% Auto  2% 8% 13% Wealth 281 6% Auto 24% Others Mortgage 5% 14%  1% Re

  37. Slide 37: Cards in circulation

    Retail Banking Retail Banking Wealth Sales (RM’ mil) Merchant Volume QoQ Growth:  3% QoQ Growth:  2% YoY Growth:  6% YoY Growth:  18% Merchant volume (RM'mil) QoQ Growth:  3% YoY Growth:  29% Merchants in force ('000) 53 51 H1FY19: 1,377 H1FY19: 1,622 44 38 37 36 866 800 822 675 702 677 H1FY19

  38. Slide 38: Retail Banking

    Retail Banking Retail Banking Income Statement YoY Growth  2%  5% ≈  2%  2%  56%  17%  17%  17% Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income H1FY20 601 125 727 425 301 96 206 49 156 H1FY19 592 132 724 416 309 61 248 59 189 H1FY20 PAT H1FY19

  39. Slide 39: Distribution Channels

    Retail Banking Distribution Channels Branches ATM Regional Offices Perlis 1 3 Kedah 6 24 Pulau Pinang 14 51 2 Perak 18 45 1 Selangor 36 217 3 Kuala Lumpur 23 100 3 Putrajaya 1 3 Negeri Sembilan 7 39 Melaka 6 34 1 Johor 21 82 1 Pahang 8 28 1 Terengganu 2 14 Population Density Kelantan 2 17 < 100 pers

  40. Slide 40: Business Banking

    Business Banking Business Banking Gross Loans (RM’ mil) QoQ PAT (RM’ mil) QoQ Growth:  33% YTD Growth:  5% YoY Growth:  30% Non-trade Trade 10,425 9,964 10,069 9,055 8,583 2,527 7,994 2,441 2,462 H1FY19: 69 H1FY19: 48 2,222 2,219 2,060 7,523 7,607 7,898 6,364 6,833 5,934 Q1FY19 Q2FY19 Q3FY19 Q4FY

  41. Slide 41: Business Banking

    Business Banking Business Banking Income Statement YoY Growth  17%  10%  15%  17%  14%  >100%  28%  22%  30% Net Interest Non-Interest RM' mil Total Income Expenses PBP Impairment PBT Tax PAT Income Income H1FY20 134 42 177 73 104 41 63 15 48 H1FY19 115 38 153 62 91 3 88 19 69 H1FY20 PAT H1

  42. Slide 42: Islamic Banking

    Islamic Banking Islamic Banking Income Statement YoY Growth  8%  3%  11%  34%  32%  31%  32% RM' mil Total Income Expenses PBP Impairment PBT Tax & Zakat PATZ H1FY20 435 150 285 52 232 51 181 H1FY19 411 155 256 80 176 39 137 H1FY20 PATZ H1FY19 PATZ Positive growth in H1FY20 Contraction in H1F

  43. Slide 43: General Insurance

    General Insurance General Insurance Loss Ratio and Combined Ratio YoY PBT and PAT (RM’ mil) Loss Ratio Combined Ratio 96% 97% 92% 92% 91% 86% YoY PBT Growth:  14% PBT PAT YoY PAT Growth:  12% 282 64% 63% 57% 58% 53% 57% 242 FY16 FY17 FY18 FY19 H1FY19 H1FY20 194 1 192 187 Gross Premium Mix and Grow

  44. Slide 44: Insurance and Group Funding & Others

    Insurance & Others Insurance and Group Funding & Others Income Statement – Insurance (General, Life & Takaful) YoY Growth  2%  1%  3%  58%  3%  24%  1% RM'mil Total Income Expenses PBP Impairment PBT Tax PAT H1FY20 359 171 188 0 188 37 151 H1FY19 351 169 182 1 182 30 152 Income Statement – Gr

  45. Slide 45: Shareholding structure AMMB Holdings Berhad

    Corporate Structure Shareholding structure 23.8%1 AmCorp 13.0% PNB 9.0%2 EPF 8.0% Others 46.2% As at 30 September 2019 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 Hold

  46. Slide 46: Credit ratings, target price and recommendations

    Ratings & Target Price Credit ratings, target price and recommendations Credit Ratings H1FY20 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

  47. Slide 47: Glossary & Disclaimer

    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 Q2FY20 vs Q1FY20 YoY gr

AMMB Holdings Berhad — H1 FY2020 Earnings Presentation on 6ix