Ammb Holdings Bhd. · MYX:AMBANK

Ammb Holdings Bhd — Q1 2019 Earnings Presentation

45 slides from Ammb Holdings Bhd's earnings presentation, Aug 21, 2018

  1. Slide 1: Q1FY2019 Results Investor Presentation

    Q1FY2019 RESULTS INVESTOR PRESENTATION 21 AUGUST 2018

  2. Slide 2: GCEO Presentation

    GCEO PRESENTATION Dato’ Sulaiman Mohd Tahir 3 Q1FY19 Financial Snapshot 4 Outlook for 2018 5 Recap of FY19 financial agenda

  3. Slide 3: Q1FY19 Financial Snapshot

    Financial Snapshot Q1FY19 Financial Snapshot Q1FY19 Financials (YoY) A reasonable start to FY19 1,014 Income  3% • Broad based income growth Q1FY18: 982 513 Expenses  7% • Operating leverage improved, CTI of 50.6% Q1FY18: 553 501 PBP  17% • Strong pre-provision profit growth Profitability Q1FY18:

  4. Slide 4: Outlook for 2018 Malaysia Banking Sector

    Market Outlook Outlook for 2018 Malaysia Banking Sector GDP growth: 4.8% - 5.0% Loans growth circa 5% Inflation: Circa 1.5% Asset quality stable Export growth: 9.0% OPR stable at 3.25% USD/MYR outlook: Funding cost expected to 4.00 - 4.05 by end 2018 rise 4

  5. Slide 5: Recap of FY19 financial agenda

    Strategic Action Recap of FY19 financial agenda Targeted outcome FY19 priorities Key Metrics Revenue growth • Grow income in Top 4 products & segments • Revenue growth • Achieving better assets yields • NIM “Continue to build income momentum” • Grow CASA BET300 • Cost discipline • CTI “To achieve CT

  6. Slide 6: GCFO Presentation

    GCFO Presentation Jamie Ling 7-20 Financial Overview 21 Guidance & Expectations

  7. Slide 7: Financial Overview Q1FY19 Results (YoY)

    Financial Overview Financial Overview 1 Q1FY19 Results (YoY) • Broad based income growth (+3%). NII up 5%, NIM stable • Improved operating leverage, CTI of 50.6% • Net debt charge of RM7mil • PATMI of RM348mil (+6%) • ROE of 8.3%; RoTE circa 10% 2 Asset Quality • Negligible Q1 loan impairment • GIL

  8. Slide 8: Q1FY19 Performance summary – P&L

    Financial Overview Q1FY19 Performance summary – P&L P&L (RM’ mil) Q1FY19 Q4FY18 QoQ Change Q1FY18 YoY Change Total Income 1,014 1,071  5% 982  3% Expenses 513 728  30% 553  7% PBP 501 342  46% 429  17% Net Allowances 7 (17)  >100% (20)  >100% PATMI 348 253  37% 328  6% Financial Indicators

  9. Slide 9: Q1FY19 Performance summary – balance sheet

    Financial Overview Q1FY19 Performance summary – balance sheet Balance Sheet (RM’ bil) Q1FY19 Q4FY18 YTD Change Q1FY18 YoY Change Gross Loans 98.4 96.3  2% 92.8  6% GIL 1.77% 1.70%  7bps 1.88%  11bps LLC1 106.3% 100.5%  >100bps 79.8%  >100bps Customer Deposits 98.6 95.8  3% 92.9  6% CASA 20.8

  10. Slide 10: Q1FY19 – a reasonable start

    Income Q1FY19 – a reasonable start Business Segments Q1FY19 Q4FY18 QoQ Change Q1 FY18 YoY Change (RM’ mil) Retail Banking 363 367  1% 356  2% Wholesale Banking 318 377  16% 338  6% Business Banking 75 68  10% 60  24% Group Funding & Others 76 63  20% 67  13% Total Income – Banking 832 875 

  11. Slide 11: Double digit PBP growth, CTI 50.6%

    PBP & PATMI Double digit PBP growth, CTI 50.6% Business Segments Q1FY19 Q4FY18 QoQ Change Q1FY18 YoY Change (RM’ mil) Retail Banking 138 115  20% 117  18% Wholesale Banking 203 254  20% 204  1% Business Banking 54 45  19% 43  25% Group Funding & Others 5 (179)  >100% (9)  >100% PBP – Banking

  12. Slide 12: Steady NII growth from consistent loans growth

    Group P&L Steady NII growth from consistent loans growth YoY Growth  5%  1%  3%  7%  17% >100%  10% 31%  5%  2%  6% 40 29 3 27 348 328 25 21% 15% Effective NIM: NoII%: CTI: GIL: Tax Rate: 2.02% 36.6% 50.6% 1.77% 22.3% 85% 79% Net Interest Non-Interest Total Provisions / RM’ mil Expenses P

  13. Slide 13: Stable net interest margin

    NIM Stable net interest margin Net Interest Margin (NIM) Movement bps Assets Deposits 7.0 7.4 3.7 14.7 1.5 202 202 1.2 0.4 Q1FY18 Portfolio Retail Wholesale Business General Deposits rates Deposits mix Q1FY19 rebalancing Banking Banking Banking Insurance Positive growth in Q1FY19 Contraction in Q1FY

  14. Slide 14: NoII affected by weaker market sentiments

    NoII NoII affected by weaker market sentiments YoY Growth  25%  94%  10%  35%  26%  14%  2%  >100%  >100%  1% 22 9 19 20 3 6 3 4 8 369 372 37 Foreclosed Investment Banking Corp & Comm Business General Life RM’ mil Properties & Fund Mgmt Markets Banking Wealth Mgmt Banking Other Retail Insu

  15. Slide 15: Leaner cost base

    Expenses Leaner cost base Business Segments Q1FY19 Q4FY18 QoQ Change Q1FY18 YoY Change (RM’ mil) Retail Banking 225 252  11% 239  6% Wholesale Banking 115 123  6% 134  14% Business Banking 21 23  9% 17  23% Group Funding & Others 71 242  71% 76  6% Expenses – Banking 432 640  32% 466  7% I

  16. Slide 16: Negligible credit cost in Q1

    Asset Quality Negligible credit cost in Q1 Allowance (RM’ mil) Gross Impaired Loans, GIL, LLC Ratios and Credit Costs Retail Wholesale Loan Loss Coverage 1 26.7 Business GIL Ratio 7.0 105.0% 100.5% 106.3% (20.0) 81.2% 79.7% 79.8% 3.0 35.4 1.94% 1.86% 1.88% 1.77% 1.79% 1.70% RM’ mil 1,743 1,741 1,701

  17. Slide 17: Asset quality resilient

    Asset Quality Asset quality resilient Impaired Loans by Sector GIL Ratio (%) QoQ Breakdown Jun’18 Sector YTD Growth Composition GIL Ratio Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 RM’ mil Real Estate 590  2% 34% Retail 1.42% 1.32% 1.27% 1.25% 1.26% Residential Properties 340  3% 20% Banking Transport Veh

  18. Slide 18: Growth in targeted segments

    Loans Growth in targeted segments Breakdown by rate sensitivity: Breakdown by concept: Breakdown by customers type: ROA1: LTAF2: Fixed rate – 27% Islamic – 29% Retail – 57% 0.99% 84.3% Gross Loans Movement (RM’ bil) Variable rate –73% Conventional – 71% Non-retail – 43% YTD Growth  3%  1%  4%  4

  19. Slide 19: Improving funding resiliency

    Deposits Improving funding resiliency • Increasing retail deposit mix • Steady CASA growth Deposits (RM’ bil) CASA Balance (RM’ bil) and CASA Composition (%) Customer deposits trend CASA trend YTD Growth Industry YTD Growth Industry Q1FY19 98.6  3% ≈ Q1FY19 20.8  2%  1% FY18 95.8  2%  5% FY18 2

  20. Slide 20: Capital levels adequate

    Capital Capital levels adequate RWA/Total Assets Capital Adequacy Ratios (after dividends) RM’ bil CET 1 Tier 1 Total CAR Total Assets RWA/Total Assets Peers 71.5% 71.2% 72.2% 73.0% 70.0% 16.1% 16.3% 16.6% 16.7% 15.8% 12.3% 12.5% 12.6% 61.1% 59.5% 59.4% 59.3%1 11.8% 12.0% 59.6% 10.5% 11.3% 11.6% 11.

  21. Slide 21: Guidance & Expectations

    Guidance Guidance & Expectations Q1FY19 Actual FY19 Guidance ROE 8.3% ≥ 8.5% CTI 50.6% ≤ 55% Dividend n/a Circa 40% FHC CET1 11.3% 10.5% ± 1% 21 Q1FY19 Results – Investor Presentation

  22. Slide 22: Thank You

    Thank You

  23. Slide 23: Group Performance

    Group Performance

  24. Slide 24: Yearly performance

    Q1FY19 Results Yearly performance PATMI (RM’ mil) & ROE (%) Total Income (RM’ mil) and Non-interest Income (%) PATMI: ROE: Total Income PATMI ROE (%) CAGR FY15-FY18:  12% CAGR FY15-FY18:  2.3% CAGR FY15-FY18:  2.3% YoY Growth  6% YoY Growth  0.2% Total Income Non-interest Income % YoY Growth 

  25. Slide 25: Net interest margin and gross loans

    NIM & Gross Loans Net interest margin and gross loans NIM Trend vs. Industry Gross Yield COF NIM Average lending rate 1 Average 3M KLIBOR 1 5.01% 4.95% 5.00% 4.92% 5.05% 5.08% 4.92% 4.86% 4.90% 4.97% 4.76% 4.59% 4.59% 4.61% 4.61% 4.62% 4.49% 4.50% 3.63% 3.68% 3.64% 3.40% 3.41% 3.35% 3.36% 3.32% 3.37

  26. Slide 26: 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)  >100%  28% Others  94%  >100% Investment Bank 3% 9% Markets 1% Group  8%  19% Funding & Fund Retail Management Others Banking 7% -12% 21% Wholesale Banking  28% Insu

  27. Slide 27: Provisions

    Asset Quality Provisions Net Provisions / (Writebacks) RM’ mil MFRS 139 MFRS 9 Total provisions by category Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 QoQ Change YoY Change ECL Stage 1 & 2 / CP – Non defaulted (41) (47) (2) (28) (75)  >100%  81% ECL Stage 3 / CP – Defaulted 132 83 123 126 136  8%  3% In

  28. Slide 28: Loans by sector vs. industry

    Loans Loans by sector vs. industry AmBank Group (RM’ bil) Loans Composition 4% 2% 10% 1% 4% 6% 2% 5% 8% 2% 56% ≈ 100% YTD Growth  2%  6%  4%  2%  4% ≈  1%  3%  3%  5%  3%  6%  2% Jun-18 98.4 55.2 3.2 3.9 6.0 2.1 4.6 2.0 10.2 1.2 8.0 1.8 0.1 Wholesale, Finance, Mining & Electricity, Gas T

  29. Slide 29: Funding profile

    Funding Funding profile Funding Composition vs. Peers Funding Maturity Profiles Term Funding and Debt Capital FY15 FY16 FY17 FY18 Q1FY19 Peers1 7% Equity & debt capital 15% 16% 16% 16% 16% 16% Customer deposits 74% 73% 74% 74% 72% 74% Q1FY19: Term funding & loans 9% 10% 9% 7% 6% 5% RM8.8 bil with re

  30. Slide 30: Divisional Performance

    Divisional Performance

  31. Slide 31: Retail Banking

    Retail Retail Banking Total Income (YoY Movement) and Loans by Line of PAT Trend (RM’ mil) Business QoQ Growth:  9% YoY Growth:  8% Total Income RM363 mil  68%  63% Others  32% Retail SME 3%  15% 4% Auto 17% Wealth 6% 103 Auto 100 97 32% Others 4% 79 81 76 74 Retail SME Mortgage  22% 73 3% To

  32. Slide 32: Retail Banking

    Retail Retail Banking Wealth Sales (RM’ mil) Merchant Volume QoQ Growth:  1% Merchant volume (RM'mil) QoQ Growth:  7% YoY Growth:  1% YoY Growth:  9% Merchants in force ('000) QoQ Growth:  2% YoY Growth: ≈ 53 54 54 54 53 826 51 52 769 50 51 736 736 672 675 671 2,799 2,890 2,803 2,883 565 2,595

  33. Slide 33: Retail Banking

    Retail Retail Banking Income Statement (RM’ mil) YoY Growth  3%  3%  2%  6%  18%  >100%  8%  7%  8% Net Interest Non-Interest Provisions / RM' mil Total Income Expenses PBP PBT Tax PAT Income Income (Allowances) Q1FY19 293 70 363 225 138 42 96 23 73 Q1FY18 283 73 356 239 117 13 104 25 79 Q1

  34. Slide 34: Distribution Channels

    Retail Distribution Channels Branches ATM Regional Offices Perlis 1 3 Kedah 6 24 Pulau Pinang 14 51 1 Perak 18 45 1 Selangor 36 216 2 Kuala Lumpur 24 106 2 Putrajaya 1 3 Negeri Sembilan 7 38 Melaka 6 34 1 Johor 21 82 1 Pahang 9 29 1 Terengganu 4 16 Population Density Kelantan 2 16 < 100 persons per

  35. Slide 35: Wholesale Banking

    Wholesale Wholesale Banking Total Income (YoY Movement) and Total Assets by Line of QoQ PAT (RM’ mil) Business Total Income YoY Growth:  18% RM318 mil  36%  19% Others Funds 5% Management 8%  10% Capital & 221 Equity Markets Wholesale 211 9% Others 208 Banking 2% Coverage 189 49% Wholesale Capit

  36. Slide 36: Wholesale Banking

    Wholesale Wholesale Banking League Table Market Share of Value and Volume Traded on Bursa (KLSE) Value Volume 13.1% 10.0% 9.8% 11.1% Market Share1 As At 7.6% Rank2 30 June 2018 (%) 5.7% 5.3% 5.2% 5.4% 5.1% DCM (Overall MYR Bonds) 17.0% 4 Islamic Sukuk 14.9% 4 Unit Trust 7.4% 5 Stockbroking 5.2% 7

  37. Slide 37: Wholesale Banking

    Wholesale Wholesale Banking Income Statement (RM’ mil) YoY Growth  5%  19%  6%  14%  1%  >100%  20%  29%  18% Net Interest Non-Interest Provisions / RM' mil Total Income Expenses PBP PBT Tax PAT Income Income (Allowances) Q1FY19 195 123 318 115 203 (43) 246 57 189 Q1FY18 185 153 338 134 204

  38. Slide 38: Business Banking

    Business Business Banking Total Gross Loans (RM’ mil) QoQ PAT (RM’ mil) Non-trade Trade YTD Growth:  4% QoQ Growth:  16% YoY Growth:  56% 7,994 7,703 7,092 6,717 6,191 1,951 2,060 1,769 1,743 1,582 5,752 5,934 4,974 5,323 4,609 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Customer Deposits (RM’ mil) CASA F

  39. Slide 39: Islamic Banking

    Islamic Islamic Banking Income Statement (RM’ mil) YoY Growth  2%  23%  32%  13%  54%  61%  52% Provisions / RM' mil Total Income Expenses PBP PBT Tax & Zakat PATZ (Allowances) Q1FY19 207 87 120 26 94 21 73 Q1FY18 203 112 91 30 61 13 48 Q1FY19 PATZ Q1FY18 PATZ Positive growth in Q1FY19 Contra

  40. Slide 40: General Insurance

    General Insurance General Insurance Loss Ratio and Combined Ratio YoY PBT and PAT (RM’ mil) Loss Ratio Combined Ratio 96% 97% 91% 92% 90% YoY PBT Growth:  9% YoY PAT Growth: ≈ 78% PAT PBT 314 282 63% 64% 63% 57% 56% 47% FY15 FY16 FY17 FY18 Q1FY18 Q1FY19 Gross Premium Mix and Growth (RM’ mil) 194 1

  41. Slide 41: Insurance and Group Funding & Others

    Insurance & Others Insurance and Group Funding & Others Income Statement – Insurance (General, Life & Takaful) (RM’mil) YoY Growth  13%  7%  38%  >100%  35%  >100%  28% Provisions/ RM'mil Total Income Expenses PBP PBT Tax PAT (Allowances) Q1FY19 182 81 101 2 99 13 86 Q1FY18 161 87 74 - 73 6 6

  42. Slide 42: Shareholding structure AMMB Holdings Berhad

    Corporate Structure Shareholding structure 23.8%1 AmCorp 13.0% PNB 9.6% EPF 8.8% Others 44.8% As at 30 June 2018 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 4

  43. Slide 43: Credit ratings, target price and recommendations

    Ratings & TP Credit ratings, target price and recommendations Credit Ratings Ratings FY2018 LT: AA3, ST: P1 AMMB RAM Outlook: Stable AmBank (M) LT: AA2, ST: P1 RAM Outlook: Stable S&P LT: BBB+, ST: A-2 Outlook: Stable LT: Baa1, ST: P-2 Outlook: Stable Moody’s *BCA: baa3 *Adj BCA: baa3 LT: AA2, ST: P

  44. Slide 44: 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 / YTD growth refers to Q1FY19 vs Q4FY18

  45. Slide 45: Glossary & Disclaimer

    Glossary & Disclaimer 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

AMMB Holdings Berhad — Q1 2019 Earnings Presentation on 6ix