Public Bank Bhd · MYX:PBBANK
Public Bank Bhd — FY2009 Earnings Presentation
37 slides from Public Bank Bhd's earnings presentation, Jan 20, 2010
Slide 1: Group Audited Financial Results for the Year Ended 31 December 2009
G Group Audited A dit d Financial Fi i l Results R lt for the Year Ended 31 December 2009 Analysts Briefing By Tan Sri Dato’ Sri Tay Ah Lek Managing Director 20 January 2010
Slide 2: Overview
Overview 2009 Results History of Growth • PBT RM3.32 bil, up 4.5%* PBT RM’mil RM mil Avg growth 12 5% 12.5% 3,600 • Net profit RM2.52 bil, up 3.3%* 3,200 3,379 3,321 • EPS 73.3 sen, up 1.0%* 3,179 2,800 3,004 • Above-target Above target ROE of 26.1% 26 1% 2,400 2,416 • Net interest & financing incom
Slide 3: Improved Pre-Tax Profit & EPS
Improved p Pre-Tax Profit & EPS RM million Sen 3,500 80 3,379 3,321 •Favourable 4.5% y-o-y 3,179 , growth in 2009 pre-tax 76.9 3,000 3,004 profit, exclude one-off ING 72.6^ 73.3 goodwill income of RM200m 2,581 2,517 received in 2008 2,500 2,436 70 •EPS stood at 73.3 sen in 2,124 2009 2,000 63.3 1,50
Slide 4: Financial Performance
Financial Performance Q4’09 Q3’09 % 2009 2008 % RM mil RM il q-o-q q oq RM mil RM mil y-o-y y oy Net Interest & Islamic Banking Income 1,281.8 1,194.9 7.3% 4,728.1 4,285.7 10.3% Other Operating Income * 363.9 371.6 -2.1% 1,396.9 1,253.5 11.4% Other Operating Expenses 561.8 535.1 5.0% 2,109.9 1,791.1
Slide 5: Rising Trend in Quarterly Net Profit
Rising g Trend in Quarterly Q y Net Profit RM million Qtr 2 vs Qtr 1 Qtr 3 vs Qtr 2 Qtr 4 vs Qtr 3 Qtr-o-Qtr Growth - 2009 3.6% 4.6% 6.1% Qtr-o-Qtr Growth - 2008 3.7% 3.8% 6.1% One-off goodwill payment from ING^, excluded in comparative quarter growth 5
Slide 6: Key Financial Ratios
Key y Financial Ratios 2009 2008 Q4’09 Q4 09 Q3’09 Q3 09 Net Return on Equity* (%) 26.1 28.4# 26.2 25.8 Return on Assets (%) 1.6 1.7 # 1.7 1.7 Cost Income Ratio (%) 34.4 32.3 # 34.1 34.2 Overheads / Avg. Assets (%) 1.0 1.0 1.1 1.0 Net Interest Margin g on Yielding g Assets** ((%)) 3.2 3.2 3.4 3.2 *
Slide 7: Profit Contribution By Major Group Companies
Profit Contribution By y Major j Group p Companies p Variance 2009 2008 RM mil % RM mil RM mil Public Bank & Public Islamic Bank 2,805.9* 2,600.7 * 205.2 7.9 Public Mutual 218.9 183.3 35.6 19.4 Public Investment Bank 40.4 33.3 7.1 21.3 Public Bank (L) 96.1 25.0 71.1 284.4 Overseas Operations 239.9 3
Slide 8: Profit Contribution By Major Group Companies
Profit Contribution By y Major j Group p Companies p Against the backdrop of declining interest environment, PBB Group’s overseas operations were challenged with margin squeeze and increased credit charge offs. Impact Analysis to PBB Group: • Overseas operations’ contribution to the Group remain rel
Slide 9: Profit Contribution By Major Group Companies
Profit Contribution By y Major j Group p Companies p • Increased loan provisioning for the Cambodian operations, partly due to new regulatory guidelines imposed by local authorities which required more prudent provisioning, resulted in credit charge off 2.18% 2 18% being recorded. • Spill over effec
Slide 10: Profit Contribution By Segments
Profit Contribution By y Segments g 2009 2008 Variance RM mil % RM mil % % Retail Operations 1,950.7 54 2,252.0 66 -13.4 Hire Purchase 656.6 18 219.3 7 199.4 Treasury & Capital Market Operations 250.7 7 276.6 8 -9.4 C Corporate t Lending L di 239 7 239.7 7 106 8 106.8 3 124 4 124.4 Fund Management 2
Slide 11: Sustainable YoY and QoQ Growth in Net Interest/Financing Income & Resilient NIM
Sustainable YoY and QoQ Growth in Net Interest/ Financing g Income & Resilient NIM 3.4 3.34 3.41 3.2 3.2 3.2 3.28 3.20 3.20 3.16 3.05 3.06 26 2.6 2.53 2.5 2.5 2.49 2.47 2.44 2.4 2.40 2.40 2.35 2.39 Despite the negative impact of OPR reduction on net interest margin, net interest income and financi
Slide 12: Continued High Productivity & Efficiency
Continued High g Productivity y & Efficiency y Industry 2006 2007 2008 2009 Average Gross loan per employee (RM mil) 63 6.3 71 7.1 75 7.5 80 8.0 64 6.4 Deposit per employee (RM mil) 7.4 8.8 9.4 10.0 8.6 PBT p per employee p y ((RM’000)) 180 210 197* 197 194 159 Cost Income Ratio (%) 32.7 33.1 32.3*
Slide 13: Non-Interest Business Contribution
Non-Interest Business Contribution Q4’09 Q3’09 % 2009 2008 % RM mil RM mil q-o-q RM mil RM mil y-o-y Fee Income 115.9 126.7 -8.5 493.5 508.8 -3.0 Unit Trust Income 129.5 126.3 2.5 442.7 396.5 11.7 Of which Unit Trust Management Fee 112.4 104.1 8.0 373.8 331.6 12.7 F on Sale Fee S l off Trust T t Uni
Slide 14: Growth in Fund Management Business
Growth in Fund Management g Business 42.5 •Public Mutual continue to 40.0 39.0 maintain its market leadership at 35.58 42.5% market share, up from 33.5 39% in 2008 28.39 8.77 •NAV NAV off th the 72 ffunds d under d 5.33 23.32 management stood at RM35.6 bil, up 53% 7.19 16.19 4.70 26.81 •Total number
Slide 15: Expansion of Wealth Management Business
Expansion p of Wealth Management g Business A) Bancassurance Products launched in 2009 Type of Product 2009 Target 2010 Single Premium 1 1 Regular Premium 3 2 Others 4 2 Total 8 5 B) Structured Deposits & Other Deposits in 2009 2009 T Target t 2010 Principal Protected Investment Products 3 4 O
Slide 16: Overview of Other Operating Expenses
Overview of Other Operating p g Expenses p 2009 2008 % RM mil RM mil y-o-y Personnel Costs 1,269.3 1,061.7 19.6 Establishment Costs 374.3 338.4 10.6 g Expenses Marketing p 257.4 223.9 15.0 Administration Expenses 208.9 167.1 25.0 Total 2,109.9 1,791.1 17.8 •Personnel costs remain the main operating
Slide 17: Overview of Other Operating Expenses
Overview of Other Operating p g Expenses p FY2008 to FY 2009 Operating Expense Bridge Incremental operating costs for the year were mainly due to: •Actuarial differences on 41 employee defined benefit plan 36 recognised 34 I t l RM155 milil iin •Incremental 155 personnel cost due to larger staff for
Slide 18: Loan Loss Allowances
Loan Loss Allowances RM million 400 397.4 1.0% 316.5 320 0.8% 261.4 240 221.3 0.6% 196.9 160 0.4% 0.35% 0.34% 80 0.29% 0.31% 0.2% 0.21% 0 0.0% 2005 2006 2007 2008 2009 Credit Charge Credit Charge off % The higher loan loss allowance in the year 2009 is mainly due to additional provisions made on imp
Slide 19: Loan Loss Allowances (cont.)
Loan Loss Allowances (cont.) ( ) Credit Charge Off Ratio Loan Loss Allowances (RM mil) Variance 2009 2008 2009 2008 RM mil Group 0.31 0.29 397.4 316.5 80.9 Of which: Domestic 0.11 0.16 132.8 162.5 -29.7(1) Overseas 2.02 1.37 264.6 154.0 110.6(2) (1) Domestic loans credit charge off improved with
Slide 20: Loan Loss Allowances (cont.)
Loan Loss Allowances (cont.) ( ) 2009 2008 Variance RM mil RM mil RM mil Hire Purchase 56.2 87.5 -31.3 Retail Operations 74.0 53.5 20.5 Corporate Lending 3.1 21.9 -18.8 Investment Banking (0.5) (0.4) -0.1 Overseas Operations 264 6 264.6 154 0 154.0 110 6 110.6 Total 397.4 316.5 80.9 •Overall O ll in
Slide 21: Summary of Balance Sheet
Summary y of Balance Sheet 2009 2008 Variance RM bil RM bil RM bil % Total Assets 217.1 196.2 20.9 10.7 Gross Loans and Advances: - including Islamic Financing Sold to Cagamas 137 6 137.6 120 7 120.7 16 9 16.9 14 0 14.0 - excluding Islamic Financing Sold to Cagamas 137.6 120.3 17.3 14.4 Domestic Gro
Slide 22: Loans by Purpose
Loans by y Purpose p 2009 % of 2008 % of total Growth total RM bil RM bil loans (%) loans Purchase of Landed Properties 64.9 48 56.0 46 15.8 - Residential 38.0 28 32.2 26 17.8 - Non-residential 26.9 20 23.8 20 13.1 Purchase of Transport Vehicles 31.6 23 29.3 24 8.1 Working Capital 21.1 15 18.8 16 11
Slide 23: Strong Loans Growth & Increasing Market Share
Strong g Loans Growth & Increasing g Market Share 20.0% 20.2% •Consistently above 19.1% 20.0% 18 0% 18.0% 17 5% 17.5% industry average loan 16.0% 14.0% 13.0% 14.4% 15.0% growth 12.0% •Increasing market share 10.0% 8.8% 10 0% 10.0% 8.0% 7.4% 6.4% 6.0% 5.0% 4.0% 2.0% 0.0% 0.0% 2006 2007 2008 2009 Mark
Slide 24: Analysis of Loans Approval
Analysis y of Loans Approval pp RM billion 50.0 47.5 39.0 40 0 40.0 30.0 20 0 20.0 17 3 17.3 15.1 11.3 10.9 11.6 10.0 8.3 7.3 4.7 - Total Vehicle Housing Corporate Other Retail 2009 2008 Vehicle financing RM11.3b 4.2% increase Housing loans RM11.6b 39.3% increase Corporate loans RM7.3b 56.3% increas
Slide 25: Loan Portfolio – Interest Type
Loan Portfolio – Interest Type yp RM1.9b Initial fixed •Majority of loans are floating rate, thereafter rate loans floating rate 1% RM44.9b •Interest rate risks monitored through interest rate Fixed Rate sensitivity gap analysis 33% Floating Rate 66% RM90.8b 25
Slide 26: Asset Quality - Gross NPL Ratio remained below 1%
Asset Quality y- Gross NPL Ratio remained below 1% 2009 2008 Gross NPL (RM mil) 1,320 1,210 Gross NPL Ratio (%) 0.96 1.00 Net NPL Ratio (%) 0.80 0.86 GP Ratio (%) 1.5 1.5 Loan Loss Coverage (%) 172.4 159.7 2.0 1.90 1.60 1.38 % 1.23 1.2 1.00 0.96 0 86 0.86 0.80 0.4 2006 2007 2008 2009 Gross NPL ratio
Slide 27: Improving NPL Ratios for Key Lending Sectors
Improving p g NPL Ratios for Key y Lending g Sectors Gross Gross Gross Key Lending Dec’09 Sep’09 Dec’08 S Sectors NPL NPL NPL RM mil RM mil RM mil % % % H Housing i L Loans 452 12 1.2 486 13 1.3 523 16 1.6 Hire Purchase 145 0.5 144 0.5 188 0.6 SME 176 08 0.8 201 09 0.9 222 11 1.1 27
Slide 28: Core Deposit Growth of 14.8%
Core Deposit p Growth of 14.8% 30.0% 20.0% 16 8% 16.8% •Consistently Consistently above 25.0% 14.8% industry average core 15.0% 20.0% deposit growth 15.0% 10 0% 10.0% •Increasing g market share 6.9% 10.0% 4.7% 5.0% 5.0% 0.0% 0.0% 2008 2009 Market Share Core Deposit Growth Industry Average* Core Depo
Slide 29: Total Deposits
Total Deposits p 2009 2008 Variance RM bil RM bil RM bil (%) D Demand dDDeposits it 18 9 18.9 15 8 15.8 31 3.1 20 5 20.5 Savings Deposits 22.9 19.0 3.9 20.1 Fixed Deposits 85.8 76.4 9.4 12.3 Core Deposits 127 6 127.6 111 2 111.2 16 4 16.4 14 8 14.8 Wholesale Deposits 42.1 38.7 3.4 8.7 Others 1.2 1.3
Slide 30: Dividend – Balanced & Above-Average Payout
Dividend – “Balanced” & Above-Average g Payout y First Interim cash dividend of 30 sen, less 25% tax, paid on 13 August 2009 Second interim: Cash dividend of 25 sen less 25% tax Share dividend of one (1) share for every sixty eight (68) shares held. 2009 Gross (sen) Net (sen) Cash Dividend: 1s
Slide 31: Dividend (Contd)
Dividend (Contd) ( ) Dividend 100 100.0% Dividend per per share share (incl share 90 (sen) dividend) 80 90.0% Dividend payout 89.6% 70 87.4% ratio (incl share 84.5% 84.8% * dividend) 60 80.0% 50 79.3% 87 * 40 75 77 70.0% 30 55 60 20 60.0% 10 0 50.0% 2005 2006 2007 2008 2009 * Adjusted to equivalent
Slide 32: Dividend (cont.)
Dividend (cont.) ( ) Share dividend rationale: Preserve more equity q y capital p whilst maintaining g high g dividend p payout y RM574 million of current year’s earnings retained as equity capital 50.7 million treasury shares to be distributed out of 80.4 million existing shares, leaving 29.7
Slide 33: Capital Adequacy Ratio
Capital p Adequacy q y Ratio 2009 2008 Variance Before 2nd Interim/Final Dividend RM mil RM mil RM mil % - Equity E it Capital C it l 9 161 3 9,161.3 8 157 2 8,157.2 1 004 1 1,004.1 12 3 12.3 - Non-innovative Tier 1 2,080.9 - 2,080.9 N/A - Innovative Tier 1 1,883.2 1,439.5 443.7 30.8 Total Tier 1 Ca
Slide 34: Our Commitment to Improve Capital Position
Our Commitment to Improve p Capital p Position Risk Weighted Core Capital Capital Ratio Ratio Gro p’s position as at 1 January Group’s Jan ar 2009 13 1 13.1 77 7.7 Effects from net profits, movement in capital components and risk 1.1 1.6 weighted assets Effects of 2009 dividends: -Cash dividend -1.2
Slide 35: Achievements of Medium Term Plans
Achievements of Medium Term Plans In 2006, PBB set out its 3-year medium term plans as part of the Group’s mission to achieve longer term business expansion. The Group has achieved and exceeded all except for one of the medium term targets: Medium term targets g Our targets g Position as of Dec’09 N
Slide 36: Prospects for 2010
Prospects p for 2010 Maintain earning growth Build on Existing Strength momentum o e tu •Strong Strong brand and market position • Continued quality loans growth at above •Healthy capital and asset quality industry growth rate; •Sustainable low NPL leveraging on PBB’s • Further expand depositor base
Slide 37: Thank You
pramig tf eee! 37