Ammb Holdings Bhd. · MYX:AMBANK
Ammb Holdings Bhd — FY2017 Earnings Presentation
62 slides from Ammb Holdings Bhd's earnings presentation, May 31, 2017
Slide 1: FY2017 Results Investor Presentation
FY2017 Results Investor Presentation 31 May 2017 5/31/2017 9:36 AM FY2017 Results – Investor Presentation 5/31/2017 9:36 AM
Slide 2: Table of Contents
Table of Contents Financial Overview 1 2 3 4 5 FY2017 Business Financial FY2018-2020 Supplementary Financial Update Performance Strategy Information Overview • Key • Wholesale • Performance • Business Strategy • Group Performance Banking Highlights Performance Indicators Heartbeat • Guidance & • Div
Slide 3: GCEO Presentation
GCEO Presentation 3 FY2017 Results – Investor Presentation
Slide 4: FY2017 Key Performance Indicators
FY2017 Key Performance Indicators Financial Overview Return on Equity (ROE) PBP PATMI 13.8% 2,566.8 YOY ∆ : YOY ∆ : +5.5% 1,918.6 +1.7% 8.5% to ~5% 8.8% 9.0% Growth 8.5% 1,605.1 p.a. 1,521.5 1,302.2 1,324.6 FY15 FY16 FY17 FY17 FY15 FY16 FY17 FY15 FY16 FY17 FY17 Guidance Guidance Cost-to-income (CTI)
Slide 5: Top 4 Aspirations: FY2017 - FY2020
Top 4 Aspirations: FY2017 - FY2020 Strategy To be Top 4 in each To be Top 4 in each To sustain Top 4 in To be Top 4 of our 4 growth of our 4 focus each of our current segments products engines • Mass Affluent • Cards & Merchants • Corporate Loans • Best employer • Affluent • Transaction Banking • De
Slide 6: FY2017 Key Milestones
FY2017 Key Milestones Strategy • Portfolio Guarantee Scheme • Appointment of MD – Retail • Appointment of GCOO, MD with Credit Guarantee Banking – Business Banking and MD Corporation (CGC) • Embarked on initiatives to – Wholesale Banking & CEO • New distributor for AHB Fund improve retail processes
Slide 7: Wholesale Banking Heartbeat
Wholesale Banking Heartbeat Wholesale Banking • Enhanced coverage model to enable Relationship Managers to focus on • No.1 in Bloomberg League Table for sales and service to increase share Overall MYR Bond and Sukuk as at Large / of wallet Debt Mar’17 Mid • Activated 141 targeted accounts for Capita
Slide 8: Retail Banking Heartbeat
Retail Banking Heartbeat Retail Banking Mortgage Cards & Merchants • Strong net acceptance & • Launched AmBank BonusLink co-brand Visa Card disbursement, up 17% & 44% • Strong growth in new card issuances respectively • Cards spending increased (up 13%) via enhanced • Increased acceptance mix for va
Slide 9: General Insurance Heartbeat
General Insurance Heartbeat General Insurance Be the No. 1 Motor Grow in Select Insurer Commercial Lines • No. 1 with 16.5% market share1 • Strong growth momentum in Fire (+10.5%) • Strategic partnership with auto and Marine Cargo (+24.5%) dealer supports growth, including • Development of flexible
Slide 10: CFO Presentation
CFO Presentation 10 FY2017 Results – Investor Presentation
Slide 11: FY2017 Short Term Task
FY2017 Short Term Task…. Strategy 11 FY2017 Results – Investor Presentation
Slide 12: FY2017 Performance Highlights
FY2017 Performance Highlights Financial Overview Total income Expenses PBP Net Allowances 3,765.6m 2,160.5m 1,605.1m -196.1m FY16: 3,695.8m FY16: 2,174.3m FY16: 1,521.5m FY16: -209.5m Change: 1.9% Change: 0.6% Change: 5.5% Change: 6.4% PATMI ROE CTI NIM 1,324.6m 8.5% 57.4% 1.98% FY16: 1,302.2m F
Slide 13: Quarterly Performance
Quarterly Performance Q4FY17 Results PATMI (RM’ mil) & ROE (%) Net Lending (RM’ bil) YoY growth: 4.0% PATMI QoQ growth: 7.2% YoY growth (excl.AF): 8.0% PATMI PBP ROE ROE QoQ growth: 0.4% Loans excluding Auto Finance QoQ growth: 0.5% Auto Finance QoQ growth (excl.AF): 1.0% 9.3% 10.2% 8.5%
Slide 14: PBP grew 5.5% YoY, PATMI up 1.7%
PBP grew 5.5% YoY, PATMI up 1.7% Financial Group Overview P&L Profit underpinned by stronger NoII, improved asset quality and recoveries while expenses were well contained YoY growth 4% 12% 2% 1% 5.5% 6% 4% 18% 1% 13% 1.7% 13.8 156.4 13.4 13.1 1,324.6 1,302.2 60.9 20% 19% GIL:
Slide 15: Income well diversified with improved Profit Before Provisioning
Income well diversified with improved Profit Before Provisioning Financial Income Overview Profit Before Provision (RM’mil) Divisional Income Contribution (YoY) Reported Underlying YoY growth: 5.5% 27% YoY growth: 1.9% 2,5671 Others 5% 15% Insurance 15% 2,351 2,511 2,580 2,282 2,195 Wholesale
Slide 16: Stronger non-interest income, offset by H2FY16 margin compression
Stronger non-interest income, offset by H2FY16 margin compression Financial Income Overview Non-interest Income Drivers Strong YoY growth with encouraging momentum last few quarters in sustainable fees (eg Wealth & Banca), reflecting momentum on strategic agenda RM’mil YoY growth 18% 28% 6%
Slide 17: Improving margins QoQ, reflecting loans mix and COF management
Improving margins QoQ, reflecting loans mix, disciplined pricing and COF management Financial NIM Overview • COF down 7bps YoY from active management of funding mix and deposit costs • H2FY17 NIM higher at 2.04%, up 11bps as compared to H1FY17’s 1.93% NIM YoY Trend vs. Industry Quarterly Net Interes
Slide 18: Expense growth contained through cost saving initiatives
Expense growth contained through cost saving initiatives Expenses Financial Overview Planned projects & As we move into FY18/19, focus will intensify on productivity and efficiency investments spend in FY17 Growth Compliance 6% Efficiency Indicators YoY Change 16% Productivity Total income per emplo
Slide 19: Net allowance writebacks underpinned by strong recoveries
Net allowance writebacks underpinned by strong recoveries and improvement in Retail asset quality Financial Asset Overview Quality Allowances (RM’ mil) Credit Costs vs. Peers¹ FY16 Individual Collective Recoveries Others FY17 AmBank Group FY13 FY14 FY15 FY16 FY17 Allowance Allowance Credit cost 0.21
Slide 20: Retail asset quality continues to improve, Wholesale impacted
Retail asset quality continues to improve, whilst Wholesale impacted by impairments in Q4 Financial Asset Overview Quality • With focus on preferred segments, Retail GIL ratio continues to improve with active collection and preemptive efforts • Loans exposure to Oil & Gas and Commercial Real Estate
Slide 21: Loans growth reflecting focus on targeted segments
Loans growth reflecting focus on “new” targeted segments Financial Loans Overview YoY increase of 3.5% supported by good momentum in Retail and Wholesale SME LD ROA: Ratio: 1.09% 85.7% Gross Loans Movement Represented by Business (RM’bil) YoY growth 6% 2% 10% 21% 8% 8% 12% 8% 3.5%
Slide 22: Deposits growth outpaced system
Deposits growth outpaced system Financial Deposits Overview CASA growth was underpinned by Retail SME and payroll accounts whilst deposits base grew mainly from Wholesale Fixed Deposits Deposits and CASA Balance (RM’ bil) Deposits YoY growth: 4.1% CASA Market Share and Industry CASA Balance¹ (RM’
Slide 23: Capital levels positioned for growth with headroom for efficiency
Capital levels positioned for growth with headroom for efficiency Financial Capital Overview • Group capital ratios remain adequate, whilst we are progressively Basel III optimising capital structure and RWA efficiency for Basel III FHC @ FHC Double FY2020 leverage Leverage indicative ratio: 10.4% r
Slide 24: In Summary: Progress and To Do
In Summary Strategy Sustaining NIMs and improving deposit mix Good Accelerate top line growth with continued emphasis Progress…. on efficiency & productivity More Close monitoring of asset quality To Do…. Progressively improve capital efficiency and return on equity 24 FY2017 Results – Investor Pres
Slide 25: Guidance & Expectations for FY2018/FY2019
Guidance & Expectations for FY2018/FY2019 FY2018 Targets PROFIT PEOPLE ROE Circa 10% Accelerating Investing in an ecosystem penetration in targeted providing employees with segments & expanding an environment to work into key GDP sectors effectively and innovatively CTI ≤ 55% RETURNS DIGITAL Balanci
Slide 26: FY2018-2020 Strategy
FY2018-2020 Strategy 26 FY2017 Results – Investor Presentation
Slide 27: Aspirations: Wholesale Banking
Wholesale Banking – To be the Top 4 bank with multi-product penetration Strategy Transactional Debt Capital Corporate Fund Private Global Markets Equity Markets Mid Corporate Banking Market Finance Management Banking Aspirations •10% market •Top 4 PD •Top 3 for •Top 4 IPO •Top 3 in Unit •Top 2 in •T
Slide 28: Aspirations: Business Banking
Business Banking – To be the Top 4 SME bank Strategy Revenue Loans Growth Deposit Growth Fee Income Asset Quality • Revenue driven KPI • Working Capital focus • Dedicated Deposit • FX – Customer • Dedicated from Relationship via Enterprise Lending Hunting team segmentation for Collection/Early Aspir
Slide 29: Aspirations: Retail Banking
Retail Banking – To be Top 4 in: Mass Affluent & Affluent, SME & Cards and Strategy Wealth Management Firing up new growth Attain market leadership in Setting up for success Optimise current engines engines key segments & products Aspirations • Win in fast growing, • Develop an integrated cards • Di
Slide 30: Aspirations: Islamic Banking
Islamic Banking – To be the Top 4 Islamic bank Strategy Revenue Financing Margin Liquidity/deposits Aspirations • Drive revenue increase via • Grow financing base in • Improve net financing • Diversify depositor base focused areas selected segments (e.g. margin via cost of funds • Grow low cost depo
Slide 31: Aspirations: Digital Banking and Group Operations
Digital Banking and Group Operations Strategy Digital Banking: Materialising digital transformation initiatives for unrivalled customer experience, enhanced distribution capabilities and overall efficiency Aspirations Customer engagement Sales tools Analytics & Innovation • Digital Acquisition • Mob
Slide 32: Aspirations: General Insurance
General Insurance – To be the Most Trusted Insurer in Malaysia Aspirations Strategy Build a Customer Create a High Be the No. 1 Motor Lead in Select Grow in Select Oriented Performance Insurer Personal Lines Commercial Lines Organisation Culture • Private Car • Personal Accident • Fire • Customer Ad
Slide 33: Aspirations: Life Assurance and Takaful
Life Assurance and Takaful Strategy Life Assurance: Focusing on customer-centricity, AmMetLife wants to be the preferred life insurer of choice for all Malaysians Deliver the right Drive operational Strengthen distribution Aspirations Optimise value and risk solutions for the right excellence advant
Slide 34: Aspirations: People and Culture
People and Culture – To be the Top 4 Employer of Choice Strategy Elevating the way we Leadership & Inculcating performance Managing Change work Team Building driven culture Aspirations • Technology Enabled • Leadership Bonding • Scheduled • Culture Alignment - What workforce • Strategic Business Uni
Slide 35: Group Performance
Group Performance 35 FY2017 Results – Investor Presentation
Slide 36: Yearly Performance
Yearly Performance FY17 Results PATMI (RM’ mil) & ROE (%) Cost to Income Ratio and Expenses Growth (%) PATMI (Reported) PATMI: ROE: PATMI (Underlying) CAGR FY13-17: 4.9% CAGR FY13-17: 1.4% CTI: Expenses: YoY Growth: 1.7% YoY Growth: 0.3% CTI% Expenses Growth% CAGR FY13-17:2.4% CAGR FY13-17: 4
Slide 37: Stronger non-interest income, reflecting progress of Top 4 strategy
Stronger non-interest income, reflecting progress of Top 4 strategy Non-Int Income Non-interest Income (RM’mil) Non-interest Income by Lines of Business (YoY) QoQ growth: 48.0% YoY growth: 11.9% 54% Fee Trading & Investment Insurance Others 35% 405.3 407.3 Others 4% Investment Bank 385.6 13%
Slide 38: Sustaining Asset Quality in a challenging environment
Sustaining Asset Quality in a challenging environment Asset Quality Impaired Loans (RM’ mil) Wholesale 2.46% • GIL improved 8 bps YoY driven by Retail while 2.22% Wholesale was impacted by impairment of 2.00% large corporate accounts in Q4FY17 1.95% 1.96% 1.86% 1.94% 1.81% 1.90% 1.81% 1.76% Group 1.
Slide 39: Asset Quality
Asset Quality Asset Quality Impaired Loans – Key Segments Provision Charges/(Writebacks)1 (RM’ mil) FY14 FY15 FY16 FY17 3.1% Performing Loans Non-Performing Loans Recoveries Others 2.8% 2.4% 2.5% 2.2% 2.2% 2.0% 143.3 132.2 -37.5 -209.5 -196.1 1.8% 1.7% 1.7% 1.6% 1.5% 83.3 1.3% 1.3% 30.4 1.0% 30.0 0.
Slide 40: Loans by sector & by purpose vs. industry
Loans by sector & by purpose vs. industry Loans vs Industry Loans by Sector Loans by Purpose Mar-17 YoY Composition RM’ bil growth AmBank Group (RM’ bil) Purchase of transport 20.1 -8.8% 22.1% vehicles Loans Composition 4.2% 2.3% 10.2% 0.5% 4.2% 5.9% 3.2% 5.0% 9.2% 1.5% 53.6% 0.2% Working capital 28
Slide 41: Deposits movement
Deposits movement Deposits AmBank Group (RM’ bil) Mar-17 Deposits Composition (AmBank Group) YoY 7.8% 0.1% 63.0% 4.1% growth FCY 7% Current Account & Savings Account 20% 94.1 69.1 Term Deposits 73% 18.8 6.2 CASA CASA Term Deposits Term Deposits FCY & FCY & Others¹ Others Total Total Deposits
Slide 42: Diversified funding sources, prudent liquidity management
Diversified funding sources, prudent liquidity management Funding Funding Composition vs. Peers Industry • Conservative approach to liquidity management, FY10 FY13 FY15 FY16 FY17 Ave1 LCRs for all banking entities above regulatory Equity & debt 15% 14% 15% 16% 16% 15% capital requirement Customer 77
Slide 43: Divisional Performance & Economic and Banking Data
Divisional Performance & Economic and Banking Data FY2017 Results – Investor Presentation
Slide 44: Wholesale Banking's income in key segments higher
Wholesale Banking’s income in key segments higher Wholesale Total Income (YoY Movement) and Total Assets by Line of Business QoQ PAT (RM’ mil) QoQ growth: 16.6% YoY growth: 0.6% Total Income RM1,645.4mil FY16: RM821 mil FY17: RM826 mil 32% 7% RM12.2mil RM8.8mil Others 3% Funds Management 233
Slide 45: Wholesale Banking overview
Wholesale Banking overview Wholesale League Table Market Share of Value Traded on Bursa (KLSE) Market Share1 As At 6.9% Rank2 31 Mar 2017 (%) 5.5% 5.7% 5.3% 5.2% DCM (Overall MYR Bonds) 29.5% 1 Islamic Sukuk 27.5% 1 Unit Trust 8.6% 5 Stockbroking 4.8% 7 FY13 FY14 FY15 FY16 FY17 1. Calendar Year
Slide 46: Wholesale Banking (Including Business Banking)
Wholesale Banking (Including Business Banking) Wholesale Income Statement (RM’mil) YoY growth 0.5% 30.9% 12.9% 4.3% 17.6% >100% 0.8% 1.3% 0.6% Net Interest Non-Interest RM' mil Total Income Expenses PBP Allowances PBT Tax PAT Income Income FY17 868.5 776.9 1,645.4 539.3 1,106.1 34.
Slide 47: Retail Banking focusing on loans growth in preferred segments
Retail Banking focusing on loans growth in preferred segments and higher non-interest income to mitigate margin compression Retail Total Income (YoY Movement) and Loans by Line of Business QoQ PAT (RM’ mil) QoQ growth: 42.1% YoY growth: 23.7% Total Income RM1,364.9mil FY16: RM467.2 mil FY17: RM3
Slide 48: Retail Banking Overview
Retail Banking Overview Retail QoQ growth: 41.4% Wealth Sales (RM’ mil) YoY growth: 150.2% Merchant Volume QoQ growth: 3.2% YoY growth: 6.7% Merchant volume (RM'mil) 847 Merchants in force ('000) 770 50.2 50.0 50.6 51.1 52.3 48.1 49.3 47.4 599 538 2,799 2,890 2,577 2,690 2,595 2,619 482 2,41
Slide 49: Retail Banking
Retail Banking Retail Income Statement (RM’mil) YoY growth 6.8% 12.8% 7.9% 2.2% 17.7% 70.0% 23.9% 24.5% 23.7% Net Interest Non-Interest RM' mil Total Income Expenses PBP Allowances PBT Tax PAT Income Income FY17 1,139.7 225.2 1,364.9 919.2 445.6 (21.9) 467.6 111.0 356.6 FY16 1,223.
Slide 50: Retail Banking – Distribution channels
Retail Banking – Distribution channels Retail Branches ATM Regional Offices Perlis 1 3 Perlis Kedah 6 24 1 Kedah Pulau Pinang 14 51 1 Kelantan Pulau Pinang Perak 18 45 1 Terengganu Sabah Labuan Selangor 38 221 2 Perak Brunei Darussalam Kuala Lumpur 23 105 3 Pahang Selangor Putrajaya 1 3 Kuala Lumpur
Slide 51: Islamic Banking
Islamic Banking Islamic Income Statement (RM’mil) YoY growth 1.2% 1.4% 4.5% >100.0% 0.8% 15.8% 6.4% FY17 PAT (composition of Group) 19% RM' mil Total Income Expenses PBP Allowances PBT Tax PATZ FY17 734.5 418.7 315.8 (24.4) 340.2 71.3 268.9 FY16 743.7 413.0 330.7 (6.6) 337.3 84.6 252.7
Slide 52: General insurance sustained Gross Premium and improved claims experience
General insurance sustained Gross Premium and improved historical claims experience Insurance YoY PAT (RM’ mil) • PBT increased 6.7% YoY from improved historical PAT PBT YoY PAT growth: 12.6% YoY PBT growth: 6.7% claims experience and gain on disposal of 314.4 properties, partially offset by hig
Slide 53: Insurance and Group Funding & Others
Insurance and Group Funding & Others Insurance & Group Funding Income Statement – Insurance (General & Life/Takaful) (RM’mil) YoY growth 15.0% 5.8% 32.9% >100.0% 36.4% >100.0 % 12.5% FY17 PAT (composition of Group) 14% RM' mil Total Income Expenses PBP Allowances PBT Tax PAT FY17 556.7
Slide 54: Funding sources and maturity profile
Funding sources and maturity profile Insights Funding diversity underpinned by LDR1 of 85.7% CASA: RM19.9 billion Fixed deposits: RM74.2 billion Supplemented by term funding & debt capital AMMB Holdings Berhad AmBank (M) Berhad AmBank Islamic Berhad AmBank (M) Berhad & AmBank Islamic Berhad 1. RM2b
Slide 55: Shareholding structure
Shareholding structure Insights 23.8%1 AmCorp 13.0% EPF 10.9% Others 52.3% As at 31 March 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% MBF Cards
Slide 56: Share price, ratings and recommendations
Banking sector share price movement/target price and recommendations Insights Upgraded 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,
Slide 57: Opportunities and outlook
Opportunities and outlook Insights 2016 GDP 2017 GDP Forecast Real GDP Growth Avg USDMYR 4.31-4.33 % Malaysia’s GDP Growth 3.91 4.13 India 7.5 3.06 3.09 3.15 3.27 6.9 7.6 • GDP grew 4.2% for CY16 supported by private Philippines 7.0 consumption. Private investment moderated to 4.7% led PR China 6.7
Slide 58: Opportunities and outlook
Opportunities and outlook Insights CPI Business Conditions Index Consumer Sentiment Index Business and Consumer Confidence Recovering BCI 112.7 • Inflation is projected to be higher at 3.8% - 4.0% (CY16: CPI 4.3% CSI 76.6 2.1%) reflecting the impact of persistent weakness of the ringgit and higher c
Slide 59: Key economy indicators
Key economy indicators Insights GDP, Consumption and Investment Growth Consumer Indices MIER: Auto Industry Index (AII) GDP Consumption Investment MIER: Residential Property Index (RPI) MIER: Retail Trade Index (RTI) Consumption 3.6% AII 104.7 Investment 2.4% RPI 98.7 GDP 5.6% RTI 71.6 1Q 2Q 3Q 4Q 1
Slide 60: 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 RM1,722.8b 89.1% 6.9% 6.0% 5.2% Mar Sep Mar Sep Mar Sep Mar Sep Mar Dec Dec Dec Dec Jun Jun Jun Jun 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2013
Slide 61: 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
Slide 62: 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