AMMB Holdings Bhd. · MYX:AMBANK
AMMB Holdings Bhd — 9M FY2009 Earnings Presentation
51 slides from AMMB Holdings Bhd's earnings presentation, Feb 13, 2009
Slide 1: AmBank Group FY2009 3Q-9M Results
AmBank Group FY2009 3Q-9M Results AMMB Holdings Berhad 13 February 2009 Cheah Tek Kuang Group Managing Director
Slide 2: Agenda
Agenda 1300 80 8888 (Domestic) (603) 2178 8888 (Overseas) Table of Contents Executive Summary Financials Update 3Q-9M FY09 Outlook Group Performance Additional Information : AMMB Group Financial Performance & Retail Banking Relationship Banking Initiatives (By Segments) Business Banking Insurance In
Slide 3: Record Profit but Challenges Ahead
Record Profit but Challenges Ahead • Another record profit performance for 9M FY2009 • On track to deliver record performance for PATMI FY2009 (as per earlier guidance) • Tough economic & less favourable market and credit conditions ahead, additional fiscal and monetary stimulus package may be requi
Slide 4: Delivered Another Record Profit Performance
Delivered Another Record Profit Performance 3Q-9M FY09 1 Change 2 Profit after Tax & MI RM 681.0 mil 51.0 % Profit before Tax RM 944.3 mil 6.6 % Return on Equity 12.4% 1.0 % EPS (fully diluted) 25.01 sen 30.1 % Net NPL Ratio 2.7 % 1.3 % Net Lending RM 55,997 mil 10.7 % Customer Deposits RM 50,668 mi
Slide 5: Developments
Targeted Loans Growth, Improved Asset Quality, Insurance Transformation • Loans growth of 10.7% • Deposits growth of 9.5% with CASA growth of 9.6% Financials • Asset Quality • Net provisions charge down to 0.5% from 1.2% (9MFY2008) • Net NPL ratio down to 2.7% from 4.0% (9MFY2008) • Insurance busine
Slide 6: Improved PATMI Underpinned by Retail & Business Banking
Improved PATMI Underpinned by Retail & Business Banking Profit after Tax & MI 9MFY09 vs RM’mil 9MFY08 9MFY09 9MFY08 Business Performance Retail Banking Division 388.0 487.4 +25.6% Investment banking performance reflecting weak equity and capital market Business Banking Division 65.3 89.7 +37.4% sent
Slide 7: Financials on Track to Deliver Record Performance for PATMI FY2009
Financials on Track to Deliver Record Performance for PATMI FY2009 Expected Financial Outcome Divisional Performances Produce superior revenue growth : Retail Banking 4 – 5% revenue growth for • On track to achieve PAT target driven by lower provisions business segments Negative growth for operating
Slide 8: 9MFY09 Group Performance
Q9MFYO9 Group Performance
Slide 9: Sound Profit, despite Income & Expense Pressures
Sound Profit, despite Income & Expense Pressures 9MFY09 vs REPORTED RM’mil 9MFY08 9MFY09 9MFY08 Business Performance Income Income : 2,525.4 2,418.2 -4.3% Investment Banking income adversely impacted by Expenses 1,123.1 1,208.5 +7.6% capital market conditions Retail and Business Banking performances
Slide 10: Balance Sheet Fundamentals Looking Good
Balance Sheet Fundamentals Looking Good REPORTED RM’mil 9MFY09 vs 9MFY08 Business Performance 9MFY08 9MFY09 Balance Sheet - Lending Gross loans 55,571.8 59,676.1 +7.4% Good net lending growth despite Net loans 50,582.2 55,997.3 +10.7% auto financing focus being only on profitable segments Balance Sh
Slide 11: Higher Returns and Earnings Ratios
Higher Returns and Earnings Ratios 9MFY09 vs REPORTED 9MFY08 Business Performance 9MFY08 9MFY09 Profitability Ratios (annualised) ROE FY 2008 = 11.2% ROE (post-tax) 11.4% 12.4% +1.0% ROA FY 2008 = 1.00% ROA (post-tax) 0.99% 1.09% +0.1% EPS FY 2008 = 28.2 EPS (fully-diluted, +30.1% 25.6 33.3 sen) 9MF
Slide 12: Improving Margins and Cost Pressures
Improving Margins (Focus on Profitable Segments) and Cost Pressures 9MFY09 vs REPORTED 9MFY08 9MFY09 9MFY08 Business Performance Efficiency Ratios & Others Cost-Income : Revenue growth impacted by tough Net Interest Margin 1 2.70% 2.99% +0.29% trading conditions CTI to stay at circa 45% for FY2009 d
Slide 13: Positive Trends since 2007 for NIM, Provisions and ROE
Positive Trends since 2007 for NIM, Provisions and ROE Total Group Level - Reported Total Group Level - Underlying 4,000 16% 4,000 3,367 12% 3,305 12.4% 3,137 3,028 11.2% 12.2% 12.1% 3,000 3,000 2,418 8.9% 2,377 8% 1,756 4% 2,000 2,000 1.00% 1.11% 1.09% 0.83% 1.05% -0.17% 0% -4% 1,000 1,000 940 620
Slide 14: Improving Customer Deposit Profiles
Improving Customer Deposit Profiles CUSTOMER DEPOSITS BY SOURCES CUSTOMER DEPOSITS BY TYPE Individuals Government Biz enterprises Others FD + NID Savings Current Others CASA 12.6% 13.1% 13.3% Others composition 0.8 2.1 Others 1.9 Biz enterprises Total 42.4b 47.8b 50.7b 18.1 6.8 Current 15.6 4.2 12.5
Slide 15: Loans Growth Focusing on Higher Profit Segments
Loans Growth Focusing on Higher Profit Segments GROSS LOAN MOVEMENT (before netting Islamic financing sold to Cagamas) 30.0 +2.2% Mar 08 Dec 08 Note : 25.0 - annualised growth / from Mar08 to Dec08 20.0 +2.9% 15.0 +24.3% Note : 1 AFSB – Asset Financing & Small Business (includes equipment financing
Slide 16: Trend on NPL & Provisions: Improving
Trend on NPL & Provisions : Improving Asset Quality Indicators 100% 59.7 60 56.8 80% 53.5 77.5% 49.3 67.3% 60% 43.6 41.0 56.6% 40 40% 39.3% 36.7% 32.2% 20% 10.9% 13.8% 20 9.6% 6.2% 0% 3.7% 2.7% 6.1 7.6 6.1 5.5 3.6 -20% 3.1 0 -40% FY2004 FY2005 FY2006 FY2007 FY2008 9MFY2009 RM'bil Gross Loans Gross N
Slide 17: Trend on NPL Formations
Trend on NPL Formations % New NPL to Gross Loans % PL conversion to Gross Loans 8.00% 5.00% 4.00% 6.00% 3.00% 4.00% 2.00% 2.00% 1.00% 0.00% 0.00% FY2004 FY2005 FY2006 FY2007 FY2008 9MFY2009 FY2004 FY2005 FY2006 FY2007 FY2008 9MFY2009 % Recoveries to Gross Loans % Write-off's to Gross Loans 3.00% 5.0
Slide 18: Better Asset Quality
Better Asset Quality Gross NPL by Segments Gross Loans and NPL ratio 2.0 1.7 1.7 Mar 2008 Sep 2008 70 12% 59.7 60 56.8 10% 1.5 1.3 1.1 50 8% 1.0 40 6.3% 6% 30 5.2% 0.5 0.3 0.3 4% 0.1 0.2 20 10 2% 0.0 3.6 3.1 Retail Banking Business Credit & Leasing Investment - 0% RM’bil Banking Banking Mar 08 Dec 0
Slide 19: Stronger Capital Base, Capacity to Grow
Stronger Capital Base, Capacity to Grow Capital base – AMMB Holdings Capital ratio by legal entity 31 Mar 07 31 Mar 08 31 Dec 08 Capital Base Risk-weighted Tier 1 Ratio RWCA Ratio RM'bil RM'bil RM'bil Dec 2008 Assets RM'bil RM'bil % % Tier 1 Capital 6.71 7.88 8.66 Less: AmInvestment 0.42 2.35 17.6%
Slide 20: Outlook
Outlook
Slide 21: Economic and Market Conditions are Getting Tougher
Economic and Market Conditions are Getting Tougher Real GDP forecast for 2009 is currently estimated at circa -1.3% Inflation may ease to circa 2.5% for 2009 Consumers adjust to higher costs of living Subject to falling commodity prices Lending growth projected to taper off to circa 3% in 2009 BNM O
Slide 22: Differentiated Growth
Our Focus for FY2010-FY2011 is: De-risk, Diversify and Differentiated Growth De-risk + De-risk Diversify Diversify Deposits BIZ- High Transactional Trade Coop FX Differentiated Growth FX & BIZ - Derivatives SME Mortgage FUM & Moderate Broking Assurance Assurance Cards Life General Auto Financing Cap
Slide 23: Achieving Medium-Term Aspirations will take Longer
Achieving Medium-Term Aspirations (3 – 5 years) will take Longer Medium Term FY 07 FY 08 FY 09 (3 – 5 years) Reported : -RM282.5 mil Reported : RM668.5 mil Circa 30% PATMI growth Circa 1.2 – 1.4 bil Underlying : RM520.2 mil Underlying : RM836.2 mil Reported : -5.8% Reported : 11.2% 11.5% - ROE 12.5%
Slide 24: Appendix
APPENDIX
Slide 25: Business Segment Performance
Business Segment Performance
Slide 26: Retail Banking Division
Retail Banking Division 9MFY09 vs RM’mil 9MFY08 9MFY09 9MFY08 Income 1,271.6 1,307.5 +2.8% Good profit growth, benefiting from lower Expenses 445.3 481.3 +8.1% provisions and sustained revenue PBP 826.3 826.3 0.0% Asset quality improved via strong credit risk management, collections and recoveries P
Slide 27: Business Banking Division
Business Banking Division * 9MFY09 vs RM’mil 9MFY08 9MFY09 9MFY08 Income 154.8 236.3 +52.7% Significant income growth fuelled by SME Expenses 47.0 59.7 +27.1% loans and unbudgeted interest recoveries PBP 107.8 176.6 +63.8% Business Banking’s Aspirations : Provisions 19.5 57.0 +191.5% Entrench growth
Slide 28: Investment Banking Division
Investment Banking Division* 9MFY09 vs RM’mil 9MFY08 9MFY09 9MFY08 Income 279.7 160.3 -42.7% Weak capital market and lower stock market turnovers have impacted adversely on income Expenses 104.3 113.0 +8.4% for 9MFY2009 PBP 175.4 47.3 -73.1% Investment Banking’s Aspirations : Provisions 1.7 -1.4 -17
Slide 29: Relationship and Regional Banking Division
Relationship and Regional Banking Division* 9MFY09 vs RM’mil 9MFY08 9MFY09 9MFY08 Income 105.8 92.2 -12.9% Lower income mainly in International Business Expenses 47.1 52.9 +12.2% Relationship & Regional PBP 58.7 39.3 -33.1% Banking’s Aspirations : 1.5 -0.7 Deepen and expand Corporate & Institutional
Slide 30: Assurance
Assurance 9MFY09 vs RM’mil 9MFY08 9M1FY09 9MFY08 Higher income mainly from general insurance premium Income 325.3 366.1 +12.6% Higher claims impacting profitability Expenses 263.7 315.5 +19.6% Assurance’s Aspirations : PBP 61.5 50.6 -17.7% Be the top insurer preferred for service Provide insurance s
Slide 31: Group Operating Segments
Group Operating Segments 9MFY09 vs RM’mil 9MFY08 9MFY09 9MFY08 Business Performance Lower income mainly due to Income 388.2 255.8 -34.1% adjustment for unbudgeted hedge accounting profit and lower deposit insurance premium Expenses 215.7 186.1 -13.7% Treasury and Proprietary Trading (tough trading c
Slide 32: Islamic Banking
Islamic Banking 9MFY09 vs RM’mil 9MFY08 9MFY09 9MFY08 Income 348.3 409.7 +17.6% Performance reflective of commercial Expenses 149.3 162.5 +8.8% banking PBP 199.0 247.2 +24.2% Islamic Banking’s Aspirations : Provisions 83.5 83.4 -0.1% To become Islamic bank of choice and PBT 115.5 163.7 +41.7% ensure
Slide 33: Overview of one-offs
Overview of one-offs Impacts from changes in accounting and provisioning policies, prior period catch-ups, divestments, strategic investments and tax rate changes 9M FY 9M FY 2008 2009 Hedge accounting impacts Non core and prior period operating incomes, eg deposit insurance premium, divestment of g
Slide 34: Corporate Structure
Corporate Structure
Slide 35: Key Financial Statistics
Key Financial Statistics as at 31 December 2008 RM’000 FY2008 9M FY09 Share Capital 2,722,970 2,722,970 Reserves 4,446,623 4,717,123 Shareholders’ Equity 7,169,593 7,440,093 Less: Intangible Assets (1,801,985) (1,812,650) NTA 5,367,608 5,627,443 NTA Per Ordinary Share (RM) 1.97 2.07 Net Asset Per Or
Slide 36: Banking Sector Share Price Comparison
Banking Sector Share Price Comparison Index 140.0% 120.0% Index Movement / index change at close of 08 Jan 09 vs 18 May 07 100% base index 100.0% PBB – 9.1% RHB – 11.1% 80.0% AMMB – 32.3% (RM2.66) KLCI Index – 32.9% 60.0% HLFG – 33.5% BCHB – 42.4% MBB – 52.5% 40.0% M ay-07 Jun-07 Jul-07 A ug-07 Sep-
Slide 37: Shareholding Structure
Shareholding Structure as at 31 December 2008 AmcorpGroup ANZ Funds Employees Provident Public Bhd Pty Ltd Fund Board 17.70% 19.17% 13.50% 49.63% AMMB Holdings Bhd 100% 100% AMFB AMAB Holdings Holdings Bhd Sdn Bhd 100% 100% 70%* 51%^ AmBank (M) AmInvestment AmLife Insurance AmG Insurance Berhad Grou
Slide 38: Corporate Developments
Corporate Developments December 2008 : completed restructuring of insurance business : • Split composite business of AmLife Insurance Bhd (AmLife, formerly AmAssurance Bhd) via transfer of general insurance business to AmG Insurance Bhd (AmG) Before Restructuring Post Restructuring AMMB Holdings AMM
Slide 39: Corporate Developments
Corporate Developments January 2009 : announcement of proposal for Bumiputra issue of 96,300,000 new ordinary shares of RM1.00 • Proforma share capital information upon Special Issue shares tabulated as follows : No. of Shares Issued and fully paid-up ordinary shares : 31 Dec 08 2,722,969,590 Add :
Slide 40: Group Details and Additional Segment Information
Group Details and Additional Segment Information • ANZ • Distribution Channels • Customer Service • Ratings
Slide 41: Key Group Information Highlight: ANZ Strategic Partnership
Key Group Information Highlight : ANZ Strategic Partnership • ANZ is the only Australian bank to have been in the Asian region for 40 years, with strategic banking partnerships across 7 countries • AmBank is ANZ’s single largest investment in Asia, with a total investment of US$696 million • This is
Slide 42: Key Group Information Highlight: Delivery Channels
Key Group Information Highlight : Delivery Channels Key Objectives 12 branches Expand Footprint 24 branches Improve Sales Productivity Improve Operations Efficiency 15 branches Stabilize and Improve Service Level 20 branches 18 branches 24 branches Business Units Key Strategic Initiatives 23 branche
Slide 43: The AmBank Brand
The AmBank Brand AmBank is seen as a dynamic bank from retail banking customers’ perspective * Based on survey by external consultants engaged by AmBank, conducted in 2007 on commercial banks MBB 34% 17% CIMB 27% 7% PBB 20% 8% AmBank 22% 2% HLB 12% 10% RHB 15% 3% Citibank 12% 2% HSBC 11% 2% EON 8% 1
Slide 44: The AmBank Brand - Service
The AmBank Brand - Service AmBank has several competitive perceived strengths, good service among the highest % mentioning… mentioned AmBank CIMB MBB PBB The bank offers good service 29% 20% 17% 42% The bank has an increasing branch network 13% 26% 28% 9% The bank has good product offerings 13% 3% 5
Slide 45: Government's Expansionary Policy to Stimulate Economy
Government’s Expansionary Policy to Stimulate Economy Boost Ignite Spur Consumer Spending Business Growth Large/Social Projects 3% optional reduction in RM1.5b : grants, loans, RM1.4b : low-cost employees’ EPF equity to attract investors housing, abandoned deduction projects RM0.4b : high speed Fore
Slide 46: Ratings
Ratings AmBank (M) Berhad Rating Agency Long-Term Short-Term Date RAM A1 P1 Jan 09 Instrument : - RM500mil non-cumulative perpetual capital securities A3 Jan 09 - RM1.0bil negotiable instruments of deposits A1 Jan 09 - RM575mil exchangeable bonds A2 Jan 09 - RM2.0bil MTN programme A2 Jan 09 Moody’s
Slide 47: Ratings
Ratings AmInvestment Bank Berhad Rating Agency Long-Term Short-Term Date RAM AA3 P1 Mar 08 Instrument : - Up to RM1.0bil long-term NID’s AA3 Mar 08 - Up to RM460mil redeemable unsecured A1 Mar 08 subordinated bonds - RM200mil subordinated tier-2 bonds A1 Mar 08 MARC AA- MARC-1 May 08 S&P BB+ B Jan 0
Slide 48: AMMB Holdings Berhad Research Coverage
AMMB Holdings Berhad Research Coverage No Research House Analyst 1 Macquarie Capital Securities (Malaysia) Sdn Bhd Tay Chin Seng 2 Banc of America Securities – Merrill Lynch Kar Weng Loo / Melvyn Boey 3 Hwang DBS Vickers Research Sdn Bhd Lim Sue Lin 4 Citi Investment Research Julian Chua 5 ECM Libra
Slide 49: Glossary
Glossary 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 changes to; • Accounting and provisioning policies (eg
Slide 50: Disclaimer of Warranty and Limitation of Liability
Disclaimer of Warranty and Limitation of Liability The information provided is believed to be correct at the time of presentation. AMMB Holdings Berhad or “AHB” or its affiliates do not make any representation or warranty, express or implied, as to the adequacy, accuracy, completeness or fairness of
Slide 51: The material in this presentation is general background information about AmBank Group’s activities current
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 be relied upon as advice to investors or potential investors
AMMB Holdings Berhad — 9M FY2009 Earnings Presentation on 6ix