Malayan Banking Bhd. · MYX:MAYBANK

Malayan Banking Bhd — Q1 FY2023 Earnings Presentation

46 slides from Malayan Banking Bhd's earnings presentation, May 24, 2023

  1. Slide 1: Investor Presentation: Financial Results 1Q FY2023

    Disclaimer: The contents of this document/information remain the intellectual property of Maybank and no part of this is to be reproduced or transmitted in any form or by any means, including electronically, photocopying, recording or in any information storage and retrieval system without the permi

  2. Slide 2: Table of Contents

    Table of Contents Executive Summary 2-7 1Q FY2023 Financial Performance 9-16 Appendix: 1. Group Performance 18-34 2. Business/Country Performance 36-44

  3. Slide 3: 1Q FY2023: Net Profit Rises 10.7% YoY to RM2.27 billion

    1Q FY2023: Net Profit Rises 10.7% YoY to RM2.27 billion Stable income supported by treasury and market gains despite NIM compression arising from sustained deposit competition; net profit rises by 10.7% on normalised tax rate 1QFY2023 vs 1QFY2022* Net Operating Net Interest Cost Cost-to- Net Credit

  4. Slide 4: 1Q FY2023: Good Loans Growth and Stable Liquidity; AQ Improves

    1Q FY2023: Good Loans Growth and Stable Liquidity; AQ Improves Good loans growth supported Healthy AQ position with high Stable liquidity and capital ratios LLC & low new impairments by moderate deposits growth 31 Mar 2023 vs 31 Mar 2022 As at 31 Mar 2023 As at 31 Mar 2023 Group Group Group Group CE

  5. Slide 5: 1Q FY2023: Commitment & Achievements On Track; Industry Partners for Sustainable Practices

    1Q FY2023: Commitment & Achievements On Track; Collaborating with Industry Partners to Lead Greater Corporate Adoption of Sustainable Practices Key Highlights for 1Q FY2023: An Early Adopter New FY2023 Sustainability Targets Sustainable Achieved: FY2025: Successfully secured Developed the Client Eng

  6. Slide 6: 1Q FY2023 M25+ Progress: Improving Customer Experience Through Digital Ecosystems

    1Q FY2023 M25+ Progress: Improving Customer Experience Through Digital Ecosystems and Agile Delivery; Widening SME Business Coverage Agile Delivery for Re-segmentation of Seamless and Improved Better Efficiency and SME Business for Consumer Experience Productivity Wider Coverage through Digital Ecos

  7. Slide 7: 1Q FY2023: Interest Rates Move to Pre-Pandemic Levels; Moderating Economic Outlook

    1Q FY2023: Interest Rates Move to Pre-Pandemic Levels; Moderating Economic Outlook Malaysia Singapore Indonesia 2022 2023 (f) 2022 2023 (f) 2022 2023 (f) GDP 8.7% 4.5% GDP 3.6% 0.8% GDP 5.3% 5.0% System loan 5.7% 4.8% System loan (2.1)%* 1.0%* System loan 11.0% 9.5% - 10.5% OPR 2.75% 3.00% 3M SORA 3

  8. Slide 8: 1Q FY2023: Focus on Revenue and AQ Management; Targeted Investments

    1Q FY2023: Focus on Revenue and AQ Management; Targeted Investments • Focus on growth opportunities across consumer and business segments within ASEAN franchise: o Double down on CFS franchise business i.e.: mortgage, RSME and SME+ across universal markets o Deepening account planning across segment

  9. Slide 9: Table of Contents

    Table of Contents Executive Summary 2-7 1Q FY2023 Financial Performance 9-16 Appendix: 1. Group Performance 18-34 2. Business/Country Performance 36-44

  10. Slide 10: Net Fund Based Income Impacted by NIM Compression Arising From Higher Funding Cost

    Net Fund Based Income Impacted by NIM Compression Arising From Higher Funding Cost NIM and Net Fund Based Income Key Drivers • Group loans grew 5.3% YoY led by: o 5.1% in MY: 6.9% in Mortgage, 9.4% in Auto, 18.2% in NIM 2.39% 2.35% Credit Cards, 8.8% in SME and 6.6% in BB 2.32% (12-mth o 7.2% in IDN

  11. Slide 11: Higher NOII from Gains on Derivatives, Foreign Exchange and Investment & Trading Income

    Higher NOII from Gains on Derivatives, Foreign Exchange and Investment & Trading Income Non-Interest Income Key Drivers  (3.7)%  +12.4% • Treasury & markets income growth of 35.4% YoY mainly driven by: 1Q’23 vs 4Q’22 1Q’23 vs 1Q’22* o realised & unrealised derivative gains of RM0.32 billion compar

  12. Slide 12: Cost Increases on Personnel, IT and Revenue-Related Expenses

    Cost Increases on Personnel, IT and Revenue-Related Expenses CIR and Costs Key Drivers 49.4% 48.3% 43.7%  (10.4)%  +11.8% 1Q’23 vs 4Q’22 1Q’23 vs 1Q’22* • Cost increase of 11.8% YoY mainly driven by: 3.41 o +9.9% increase in personnel costs, which includes collective 3.05 2.73 0.63 agreement adjus

  13. Slide 13: Healthy Liquidity Levels

    Healthy Liquidity Levels Liquidity Indicators Key Drivers • Healthy Group liquidity ratios with NSFR and LCR levels LCR LDR NSFR Liquidity Position above regulatory requirements 143.2% 145.4% 145.8% 118.5% 118.1% 118.1% • Group gross deposits grew 3.0% YoY supported by: 88.7% 91.6% 90.7% o 5.2% incr

  14. Slide 14: Malaysia's Loans Under Relief Reduces to 0.9% of Outstanding Balances

    Malaysia’s Loans Under Relief Reduces to 0.9% of Outstanding Balances; Continued Reduction in Other Home Markets With Minimal AQ Slippages % of Loans Under Repayment Assistance, Relief and R&R Programmes Against Respective Total Home Market Loans Malaysia Singapore Indonesia % of Outstanding Loan %

  15. Slide 15: Improving AQ; Maintaining MOA of RM1.7 billion

    Improving AQ; Maintaining MOA of RM1.7 billion Loan ECL, NCC, and LLC Gross Impaired Loans (GIL) P&L ECL Mar 2022 Dec 2022 Mar 2023 (RM billion)  +16.6%  (18.8)% 1Q’23 vs 4Q’22 1Q’23 vs 1Q’22 % RM billion % RM billion % RM billion Non Performing Loans 1.59% 8.95 1.22% 7.14 1.25% 7.39 (NPL) 0.44 0.

  16. Slide 16: Robust Capital Positions

    Robust Capital Positions Capital Ratios Key Drivers Post dividend • Capital ratios remain robust with Group CET1 capital ratio at 15.09% and Group total capital ratio at 18.48%, well above regulatory requirements 18.20% 18.48% • Credit RWA growth of 2.7% YoY remains below Group gross loans growth of

  17. Slide 17: Overall Business and Financial Impact from the Adoption of MFRS 17

    Overall Business and Financial Impact from the Adoption of MFRS 17 Maybank is in compliance with MFRS 17 requirements for Business Perspective 1QFY2023 reporting. As Etiqa has opted to use the various approaches to transition allowed under MFRS 17, the • Not expected to have a notable impact on pric

  18. Slide 18: Table of Contents

    Table of Contents Executive Summary 2-7 1Q FY2023 Financial Performance 9-16 Appendix: 1. Group Performance 18-34 2. Business/Country Performance 36-44

  19. Slide 19: P&L Summary: 1Q FY2023 (YoY)

    P&L Summary: 1Q FY2023 (YoY) 1Q 4Q 1Q RM million FY2022 YoY FY2022 QoQ FY2023 (Restated) (Not Restated) Net fund based income * 4,796.7 4,893.9 (2.0)% 5,311.5 (9.7)% Non-interest income * 1,527.6 1,358.8 12.4% 1,585.6 (3.7)% Net operating income 6,324.3 6,252.7 1.1% 6,897.1 (8.3)% Overhead expenses

  20. Slide 20: Segmental Performance of Businesses: 1Q FY2023 (1/2)

    Segmental Performance of Businesses: 1Q FY2023 (1/2) Net Operating Income Group Global Banking  (18.1)% 1Q FY2022 * 1Q FY2023  +1.1% 1Q FY2022: 2,574 1Q FY2023: 2,107 6,253 6,324  +9.0%  (18.9)%  (14.7)%  +6.0%  +48.4% 3,604 3,929 RM million 2,206 1,788 345 294 177 263 23 24 Total Group Commu

  21. Slide 21: Segmental Performance of Businesses: 1Q FY2023 (2/2)

    Segmental Performance of Businesses: 1Q FY2023 (2/2) Net Fund Based Income Group Global Banking  (15.4)% 1Q FY2022 1Q FY2023  (2.0)% 1Q FY2022: 1,557 1Q FY2023: 1,317 4,894 4,797  +9.5%  (15.8)%  (9.8)%  +>100%  +17.8% 2,799 3,065 RM million 1,472 1,239 85 77 1 1 349 411 Total Group Community

  22. Slide 22: Non-Interest Income: 1Q FY2023

    Non-Interest Income: 1Q FY2023 1Q 4Q 1Q NOII (RM million) FY2022 YoY FY2022 QoQ FY2023 (Restated) (Not Restated) Commission, service charges and fees 926 931  (0.5)% 911  1.6% Commission 341 329  3.6% 343  (0.8)% Service charges and fees 432 418  3.3% 439  (1.4)% Underwriting fees 26 9  >100%

  23. Slide 23: International & Malaysia Portfolio Mix 1Q FY2023

    International & Malaysia Portfolio Mix 1Q FY2023 Net Operating Income Profit Before Tax Gross Loans * 1Q FY2023 5.4% 7.2% 7.4% (Jan 23 – Mar 23) 10.6% 5.5% 19.3% Overseas: 17.2% RM6.32 Overseas: RM3.06 Overseas: RM591.7 33.2% 26.5% 38.4% 25.5% billion billion# billion 61.6% 66.8% 73.5% Malaysia Sing

  24. Slide 24: Group Gross Loans Growth: 31 March 2023

    Group Gross Loans Growth: 31 March 2023 31 Dec 31 Mar % of 31 Mar YTD 2022 QoQ 2022 YoY Portfolio 2023 Annualised (Restated) (Not Restated) Group Gross Loans 591.7 586.9  0.8%  3.3% 562.0  5.3% Malaysia (RM billion) 61% 363.7 362.9  0.2%  0.8% 345.9  5.1% Community Financial Services 77% 279.7

  25. Slide 25: Malaysia Loans Growth: 31 March 2023

    Malaysia Loans Growth: 31 March 2023 RM billion % of Portfolio 31 Mar 2023 31 Dec 2022 QoQ YTD Annualised 31 Mar 2022 YoY Community Financial Services (reported) 77% 279.7 278.4  0.5%  1.9% 263.0  6.4% Community Financial Services (rebased)¹ 77% 279.7 278.2  0.5%  2.1% 263.0  6.4% Consumer 61%

  26. Slide 26: Singapore Loans Growth: 31 March 2023

    Singapore Loans Growth: 31 March 2023 SGD billion % of Portfolio 31 Mar 2023 31 Dec 2022 QoQ 31 Mar 2022 YoY Community Financial Services 56% 24.3 24.6  (1.2)% 25.0  (2.7)% Consumer 40% 17.6 17.9  (1.4)% 18.6  (5.1)% Housing Loan 28% 12.4 12.6  (1.5)% 13.0  (5.1)% Auto Loan 5% 2.3 2.3  2.9% 2

  27. Slide 27: Indonesia Loans Growth: 31 March 2023

    Indonesia Loans Growth: 31 March 2023 (Based on MBI’s reporting) % of IDR trillion 31 Mar 2023 31 Dec 2022 QoQ 31 Mar 2022 YoY Portfolio Community Financial Services 63.4% 67.9 67.2  1.1% 64.3  5.7% CFS Retail 37.4% 40.1 39.0  2.9% 35.0  14.6% Auto Loan 19.2% 20.5 19.5  5.6% 16.3  26.1% Mortga

  28. Slide 28: Group Deposits Growth: 31 March 2023

    Group Deposits Growth: 31 March 2023 % of Portfolio 31 Mar 2023 31 Dec 2022 QoQ YTD Annualised 31 Mar 2022 YoY Group Gross Deposits 651.3 639.4  1.9%  7.4% 632.5  3.0% Total CASA 254.5 261.7  (2.7)%  (10.9)% 292.1  (12.9)% Malaysia (RM billion) 64% 418.2 413.2  1.2%  4.9% 397.7  5.2% Total

  29. Slide 29: LDR and CASA Ratio

    LDR and CASA Ratio Malaysia Group LDR CASA CASA (without IA) NSFR LCR 143.2% 144.2% 145.4% 145.8% 136.9% 118.5% 120.6% 117.0% 118.1% 118.1% 87.7% 86.6% 86.6% 88.5% 87.6% 90.2% 91.6% 91.6% 90.7% 88.7% 48.3% 50.2% 46.7% 45.1% 44.1% 46.2% 46.7% 43.8% 40.9% 39.1% 42.5% 44.3% 41.7% 42.5% 43.0% 40.5% 37.8

  30. Slide 30: RWA Optimisation and Funding Management

    RWA Optimisation and Funding Management Group Gross Loans & Group RWA Funding Breakdown Operational RWA Market RWA Credit RWA Gross Loans Borrowings and Capital Instruments by Currency 586.9 591.7 FI Deposits, 6% 562.0 SGD, HKD, JPY, 6% Equity, 10% IDR, 9% 8% 406.6 408.6 412.3 CNH, 4% 9% 47.2 THB, 4

  31. Slide 31: Asset Quality

    Asset Quality Allowances for losses on loans GIL Ratio Composition P&L ECL Mar Jun Sep Dec Mar 1Q FY2022 2Q FY2022 3Q FY2022 4Q FY2022 1Q FY2023 (RM million) 2022 2022 2022 2022 2023 Stage 1, net (166) (52) 329 (205) (87) Non Performing Loans 1.59% 1.41% 1.27% 1.22% 1.25% (NPL) Stage 2, net 27 (57)

  32. Slide 32: Asset Quality by Line of Business in Home Markets

    Asset Quality by Line of Business in Home Markets Consumer GIL Ratios Mortgage Auto Finance Credit Cards 5.30% 5.25% 5.58% 0.88% 5.18% 5.17% 0.69% 0.73% 0.69% 0.67% 1.85% 1.66% 1.52% 1.61% 1.49% 1.76% 1.46% 1.34% 0.35% 0.31% 0.34% 0.32% 0.36% 1.21% 1.29% 0.58% 0.58% 0.58% 0.51% 0.51% 0.47% 0.58% 0.6

  33. Slide 33: Specific Asset Exposures as at 31 March 2023

    Specific Asset Exposures as at 31 March 2023 Oil & Gas Loan and Fixed Income Securities Exposures Real Estate Loan Exposure to Non-Retail Borrowers to Non-Retail Malaysian Borrowers Country Exposure Borrowers’ Status 22.4% High Rise Residential RM28.4 billion 17.7% Landed Residential Malaysia 2.26%

  34. Slide 34: Income Statement for Insurance and Takaful Business

    Income Statement for Insurance and Takaful Business 1Q FY2022 4Q FY2022 RM million 1Q FY2023 YoY QoQ (Restated) (Not Restated) Net interest income 410.7 348.7 17.8% 409.8 0.2% Insurance/takaful service result (69.4) (101.6) (31.7)% - - Net earned premiums - - - 2,094.1 - Other operating income 328.7

  35. Slide 35: Key Operating Ratios

    Key Operating Ratios 1Q FY2022 4Q FY2022 % 1Q FY2023 YoY QoQ (Restated) (Not Restated) 4 Return on Equity 10.7 9.4 1.3% 10.5 0.2% 4 Net Interest Margin (bps) 2.19 2.34 (15) bps 2.39 (20) bps Fee to Income Ratio 24.2 21.7 2.5% 23.0 1.2% Loans-to-Deposit Ratio 1 90.7 88.7 2.0% 91.6 (0.9)% 2 Cost to In

  36. Slide 36: Table of Contents

    Table of Contents Executive Summary 2-7 1Q FY2023 Financial Performance 9-16 Appendix: 1. Group Performance 18-34 2. Business/Country Performance 36-44

  37. Slide 37: Market Share Overview for Community Financial Services Malaysia

    Market Share Overview for Community Financial Services Malaysia Market share Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Loans Total consumer 18.6% 18.6% 18.6% 18.7% 18.7% 18.7% Auto (Retail Hire Purchase) 30.2% 30.3% 30.3% 30.4% 30.4% 30.2% Total mortgage * 14.7% 14.7% 14.7% 14.7% 14.8% 14.8% Credit

  38. Slide 38: We Continue to Hold Leadership Position in Mobile & Internet Banking

    We Continue to Hold Leadership Position in Mobile & Internet Banking As at Mar’ 23 As at end-Mar’ 23 in Malaysia SME Digital Financing approved loans since RM3.16 bil its launch in Sep’20 Mobile Banking Internet Banking 3-month Active Users SME Digital Accounts Market Share 46.6% of Malaysia’s digit

  39. Slide 39: Overview: Group Wealth Management & Group Securities Portfolios

    Overview: Group Wealth Management & Group Securities Portfolios Group Wealth Management Group Securities Portfolio Total Financial Assets grew 6.6% YoY to RM431.7 billion contributed by investments growth of 8.1% and loan growth of 6.9% Group Securities Portfolio¹ grew 2.5% YoY  +6.6% YoY  +2.5% Y

  40. Slide 40: Overview of Group Investment Banking Portfolio

    Overview of Group Investment Banking Portfolio 1Q FY2023 Total Income Breakdown by Country 1Q FY2023 Non-Interest Income for Malaysia Underwriting & Hong Kong Others 7% Placement Fees 4% 41% Phillipines 1% Indonesia 5% Malaysia Arrangers' Fees 42% Advisory Fees 3% 5% Thailand Agency/ Guarantee 21% R

  41. Slide 41: Islamic Banking: Performance Overview

    Islamic Banking: Performance Overview Group Islamic Banking Financial Performance Maybank Islamic: Total Gross Financing1 grew to RM245.9 billion +11% Mar 22 76.0 Mar 23 RM million 1Q FY2023 1Q FY2022 YoY 68.6 +5% +13% Total Income 1,795.3 1,740.1 3.2% 51.6 52.8 50.4 (1)% 45.9 Profit Before Tax 9

  42. Slide 42: Islamic Banking: Market Share

    Islamic Banking: Market Share Maybank Islamic Market Share Market Share by Key Products (Malaysia) 30.4% 29.9% 29.8% 29.6% 29.5% 48.1% 25.8% 26.6% Automobile Term Financing Home Financing 27.8% 28.0% 27.8% 27.5% Mar 23 Mar 23 Mar 23 27.1% Mar 22 Jun 22 Sep 22 Dec 22 Mar 23 Mar 22: 48.3% Mar 22: 25.9

  43. Slide 43: Insurance and Takaful: Performance Overview

    Insurance and Takaful: Performance Overview Net Adjusted Premium/Contribution Life & Family (New Business) Market Share (Malaysia) Single Premium  (82.9)% 19.1% 19.4% 20.0% 18.5% Regular Premium  0.1% Credit Premium  (0.7)% 16.7% 10.9% 18.3% 15.5% 12.2% 17.6% No. 3 11.0% 12.5% in Life/Family Grou

  44. Slide 44: Maybank Singapore: P&L Summary

    Maybank Singapore: P&L Summary SGD million 1Q FY2023 1Q FY2022 YoY 4Q FY2022 QoQ Net fund based income 204.35 173.82 17.6% 225.51 (9.4)% Non-interest income 69.83 82.16 (15.0)% 76.59 (8.8)% Net income 274.18 255.98 7.1% 302.11 (9.2)% Overhead expenses (125.16) (117.12) 6.9% (138.52) (9.6)% Operating

  45. Slide 45: Maybank Indonesia: P&L Summary and Financial Ratios

    Maybank Indonesia: P&L Summary and Financial Ratios IDR billion 1Q FY2023 1Q FY2022* YoY 4Q FY2022 QoQ Key Operating Ratios Mar 23 Dec 22 Mar 22** YoY Net Fund Based income 1,807 1,693 6.7% 1,888 (4.3)% Profitability &Efficiency Non-Interest income 574 475 20.7% 439 30.6% ROA 1.86% 1.25% 1.41% 0.45%

  46. Slide 46: Malayan Banking Berhad

    MALAYAN BANKING BERHAD 14th Floor, Menara Maybank 100, Jalan Tun Perak 50050 Kuala Lumpur, Malaysia Tel : (6)03-2070 8833 www.maybank.com Disclaimer. This presentation has been prepared by Malayan Banking Berhad (the “Company”) for information purposes only and does not purport to contain all the in

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