Malayan Banking Bhd. · MYX:MAYBANK
Malayan Banking Bhd — H1 2014 Earnings Presentation
59 slides from Malayan Banking Bhd's earnings presentation, Aug 28, 2014
Slide 1: Investor Presentation: Financial Results 2Q FY2014 and 1H FY2014
Humanising Financial Services Investor Presentation Financial Results 2Q FY2014 and 1H FY2014 ended 30 June 2014 28 August 2014 www.maybank.com 0
Slide 2: Table of Contents
Table of Contents Executive Summary 2 Financial Performance 11 Prospects & Outlook 27 Appendix: Business Sector Review 1. Community Financial Services 31 2. Global Banking 36 3. Maybank Singapore 41 4. Bank Internasional Indonesia 44 5. Other segments 48 6. Affiliates 52 7. Quarterly Financial Summa
Slide 3: Overview (1/2)
Overview (1/2) Maybank delivers higher YoY 1H FY2014 profit led by higher net fund based income, improved cost management and lower impairment losses Net fund based income growth of 8.1% YoY, led by international (12.0%) Higher YoY 1H profit and CFS (3.5%) growth, and higher PPOP QoQ Lower YoY o
Slide 4: Overview (2/2)
Overview (2/2) Group achieves good loan growth traction in 2Q, and funding strategy strengthens deposit growth 2Q annualised deposit growth at 11.0% (1Q: 0%) spearheaded by Strategic deposit taking in International at 11.4% with robust growth in Singapore at 18.1% all key markets Improved focus
Slide 5: FY2014 Group Targets
FY2014 Group Targets Above peer growth in key markets and well above industry YoY in Singapore and Indonesia Annualised YoY Key Performance FY2014 1Q 2Q 1H Industry Industry Peer Maybank Indicators Targets FY2014* FY2014* FY2014* Average^ Average Average** Headline KPI Return on Equity* 15.0% 13.8%
Slide 6: Review of 5-Year Strategic Objectives (1/5)
Review of 5-Year Strategic Objectives (1/5) Leading funding franchise and stable financing position in domestic market Strategic Objective 1: Undisputed No. 1 Retail Financial Services provider in Malaysia by 2015 Q2’14 MBB Q4’11 Q4’12 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 vs Rank^ Q1’14 Deposits Total Depo
Slide 7: Review of 5-Year Strategic Objectives (2/5)
Review of 5-Year Strategic Objectives (2/5) Global Banking continues to roll-out regional business model across the region Strategic Objective 2: Leading ASEAN wholesale bank eventually expanding to Middle East, China & India Regional League Table – Regional Bonds NOTABLE DEALS COMPLETED FROM JAN –
Slide 8: Review of 5-Year Strategic Objectives (3/5)
Review of 5-Year Strategic Objectives (3/5) No.1 leader in General Insurance and Takaful in Malaysia, and expanding presence in Singapore Strategic Objective 3: Undisputed Insurance & Takaful Leader in Malaysia and Emerging Regional Player By Line of Business By Channel Life / Family (New Business)
Slide 9: Review of 5-Year Strategic Objectives (4/5)
Review of 5-Year Strategic Objectives (4/5) International PBT contribution at 30.2% for 1H FY14 Strategic Objective 4: Truly regional organisation with approx. 40% of pre-tax profit derived from international operations by 2015 Net Income Profit Before Tax Gross loans* 1H FY14 7.8% 7.3% 14.7% 12.5%
Slide 10: Review of 5-Year Strategic Objectives (5/5)
Review of 5-Year Strategic Objectives (5/5) Largest Malaysian Islamic bank gains market share in key segments Strategic Objective 5: Global leader in Islamic Finance Maybank Islamic Market Share (Malaysia) Global Position: 3rd Largest Islamic Bank by asset size 35.0% 2013* 30.6% 30.7% 31.1% Bank Tot
Slide 11: Table of Contents
Table of Contents Executive Summary 2 Financial Performance 11 Prospects & Outlook 27 Appendix: Business Sector Review 1. Community Financial Services 31 2. Global Banking 36 3. Maybank Singapore 41 4. Bank Internasional Indonesia 44 5. Other segments 48 6. Affiliates 52 7. Quarterly Financial Summa
Slide 12: P&L Summary: 1H FY2014
P&L Summary: 1H FY2014 Net Profit increased 3.4% YoY, on higher fund-based income, lower overhead expenses and lower impairment losses RM million 1H FY14 1H FY13 YoY 2Q FY14 1Q FY14 QoQ 2Q FY13 YoY Net interest income 4,800.2 4,808.9 (0.2)% 2,407.4 2,392.8 0.6% 2,381.5 1.1% Net Fund based income (Is
Slide 13: Business Segment Performance: 1H FY2014 (1/2)
Business Segment Performance: 1H FY2014 (1/2) Net income and PPOP for 1H FY2014 was softer, due to higher fee income gains in last year’s corresponding period Net Income - 1.3% 1H FY2013 1H FY2014 9,031 8,915 Global Banking (GB) -10.2% 3.2% 2.7% -13.5% -24.6% 7.7% -4.0% (RM million) 3,532 3,646 2,59
Slide 14: Business Segment Performance: 1H FY2014 (2/2)
Business Segment Performance: 1H FY2014 (2/2) Net fund based income was up 8.1% led by International Banking and Community Financial Services Net Fund Based Income +8.1% 8.1% 1H FY2013 1H FY2014 6,259 -0.5% 5,791 Global Banking (GB) 3.5% -0.4% 3.4% -15.8% 12.0% 4.9% 2,706 2,800 (RM million) 1,809 2,
Slide 15: Fee based Income: 2Q FY2014 – QoQ (1/2)
Fee based Income: 2Q FY2014 – QoQ (1/2) Core fee income increased by 10.8% QoQ due to higher commission, service charges and fees 1Q FY14 2Q FY14 10.8% 1,365 1,232 14.9% -24.0% 189.0% -59.6% 98.6% -5822.3% 6.8% 902 785 RM million 279 212 228 92 73 77 82 -97 86 37 2 (102) Non-interest Commission, Inv
Slide 16: Fee based Income: 1H FY2014 – YoY (2/2)
Fee based Income: 1H FY2014 – YoY (2/2) Core fee income decreased by 15.4% YoY primarily due to slower capital market activity in the first half of the year 1H FY2013 1H FY2014 -15.4% 3,070 -3.8% -44.0% -27.2% 3.8% -21.4% 24.6% -47.6% 2,597 1,7541,687 RM million 875 491 (8) (11) 309 320 304 140 110
Slide 17: Group Loans Growth: June 2014
Group Loans Growth: 30 June 2014 Group loans growth picked up in 2Q, supported by robust international loans growth YTD 30 Jun 14 31 Dec 13 30 Jun 13 YoY Annualised Group Gross Loans * 375.3 361.8 7.5% 331.9 13.1% Malaysia (RM billion)** 226.4 223.6 2.5% 209.2 8.2% Community Financial Services 159.4
Slide 18: Malaysia Loans Growth: June 2014
Malaysia Loans Growth: 30 June 2014 Consumer loan growth was above system, while Global Banking saw slower loan growth due to offshore financing and repayments YTD RM billion 30 Jun 14 31 Dec 13 30 Jun 13 YoY Annualised Community Financial Services (Reported) 159.4 151.9 9.8% 143.1 11.4% Community F
Slide 19: Group Deposit Growth: June 2014
Group Deposit Growth: 30 June 2014 Deposit growth improved in 2Q FY2014, with current accounts and savings deposits expanding in Malaysia and Singapore YTD 30 Jun 14 31 Dec 13 30 Jun 13 YoY Annualised Group Gross Deposits 406.5 395.6 5.5% 372.5 9.1% Malaysia 265.1 259.1 4.6% 241.7 9.7% (RM billion)
Slide 20: LDR and CASA Ratio: June 2014
LDR and CASA Ratio: 30 June 2014 CASA ratio was stable in key markets while Group LDR improved Group Malaysia LDR CASA 87.5% 88.2% 89.9% 91.0% 90.6% 85.9% 86.6% 87.8% 87.9% 86.8% 38.8% 40.7% 39.9% 40.0% 39.9% 34.2% 36.1% 36.1% 35.8% 35.7% Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Jun-13 Sep-13 Dec-13 Mar-1
Slide 21: Key Operating Ratios
Key Operating Ratios Operating ratios improved overall in 2Q but ROE and fee income ratio were still behind guidance Variance Variance (%) 1H FY14 1H FY13 2Q FY14 1Q FY14 2Q FY13 YoY QoQ Return on Equity 13.5 14.4 (0.9)% 13.4 13.8 (0.4)% 14.7 Net Interest Margin 2.36 2.45 (9 bps) 2.35 2.37 (2bps) 2.
Slide 22: Overheads: 1H FY2014
Overheads: 1H FY2014 Group CIR improved to 47.4% from 48.0% a year ago Group overheads composition (RM million) 1H FY2014 1H FY2013 YoY 2Q FY2014 1Q FY2014 QoQ Personnel costs 2,380.1 2,501.0 (4.8)% 1,142.8 1,237.3 (7.6)% IT Expenses 260.3 296.9 (12.3)% 154.4 105.9 45.8% Marketing Expenses 327.9 317
Slide 23: Asset Quality: June 2014
Asset Quality: 30 June 2014 GIL and NIL improved both YoY and QoQ Allowance for losses on loans Group Impaired Loans Ratio Allowances for losses on loans Gross Impaired Loans Ratio (%) Net Impaired Loans Ratio (%) Loan loss coverage 107.5% 107.2% 107.7% 2.84 106.3% 103.5% 2.44 513.6 99.0% 2.00 1.90
Slide 24: Asset Quality by Market
Asset Quality by Market Stable asset quality for Malaysia and Singapore, while Indonesia continued to see elevated asset quality indicators Malaysia Singapore BII Group Gross Impaired Loans Ratio (%) Net Impaired Loans Ratio (%) 0.45 2.21 2.19 0.43 0.42 2.15 3.53 1.77 1.71 2.98 1.69 2.81 2.95 0.30 0
Slide 25: Group Capital Adequacy: Jun 2014
Group Capital Adequacy: 30 Jun 2014 Total capital ratio at 15.96% (assuming 85% dividend reinvestment rate) and CET1 at 11.44% After proposed After proposed After proposed Before dividend, assuming dividend, based on dividend, assuming proposed 85% reinvestment BNM’s Implementation 85% reinvestment
Slide 26: Dividend
Dividend Dividend payout ratio will remain high in 2014 above policy rate of 40% - 60% The Board has recommended a single-tier interim dividend of 24 sen consisting of 4 sen cash portion and 20 sen electable portion for the Dividend Reinvestment Plan. Gross Dividend (sen) and Payout Ratio (%) Divide
Slide 27: Table of Contents
Table of Contents Executive Summary 2 Financial Performance 11 Prospects & Outlook 27 Appendix: Business Sector Review 1. Community Financial Services 31 2. Global Banking 36 3. Maybank Singapore 41 4. Bank Internasional Indonesia 44 5. Other segments 48 6. Affiliates 52 7. Quarterly Financial Summa
Slide 28: Market Outlook
Market Outlook Key developments for 2H FY2014 Outlook Key Developments • Growth expected to taper in • BNM raised OPR by 25bps to 3.25% in July 2014 with another 25bps Malaysia 2H 2014 and 2015 as hike expected Government remains • Economic growth expected to taper in 2H 2014 and 2015 due to committ
Slide 29: Maybank Performance Outlook
Maybank Performance Outlook Pockets of loan growth opportunities for 2H in consumer, 1 SME and corporate segments, but maintain cautious view More robust deposit gathering in 2H, in light of improved interest rates in 2 Malaysia Fee income growth may gather pace in 2H but market activity is expected
Slide 30: Key Performance Targets 2014
Key Performance Targets 2014 ROE • Estimated at ~14.0% • Loans growth expected to be in line with target driven by Group Loans Growth International Malaysia Loans Growth • Range of 9%-10%, in line with system Singapore Loans Growth • Expected to be in line with target Indonesia Loans Growth • Range
Slide 31: Table of Contents
Table of Contents Executive Summary 2 Financial Performance 11 Prospects & Outlook 27 Appendix: Business Sector Review 1. Community Financial Services 31 2. Global Banking 36 3. Maybank Singapore 41 4. Bank Internasional Indonesia 44 5. Other segments 48 6. Affiliates 52 7. Quarterly Financial Summa
Slide 32: Community Financial Services (1/4)
Community Financial Services (1/4) Growth in HNW and Affluent customer segments sustained with continued refinement of segment-led business model and tactical campaigns HNW & Affluent Customer TFA grew 12.1% (Ann.) Continued refinement of segment-led business model and with higher product cross sell
Slide 33: Community Financial Services (2/4)
Community Financial Services (2/4) Loans expanded by 10.5% (annualised) despite intense market competition Overall loans growth for CFS grew 10.5% (Ann.) to Consumer loans grew 10.2% (Ann.) to RM128.4 billion RM159.4 billion 128.4 159.4 130 124.9 17.3 154.5 121.9 151.9 117.8 122.2* 146.8 151.4* 120
Slide 34: Community Financial Services (3/4)
Community Financial Services (3/4) Amidst stiff rate competition to attract depositors, CFS deposit grew by 9.6% (annualised) CFS Deposits grew 9.6% (Ann.) mainly driven by Consumer Deposit saw strong growth of 9.7% (Ann.) consumer deposit growth 120.0 22.0 174.2 111.0 112.4 172.9 21.0 169.6 110.0 1
Slide 35: Community Financial Services (4/4)
Community Financial Services (4/4) Stronger credit asset quality with continued decline in GIL CFS GIL improved to 1.8% with YoY reduction from 2.3% Consumer GIL rate declined YoY to 0.5% from 0.6%, the lowest in the industry 2.5 3,257.9 3,281.9 2,837.5 2,872.4 2,812.7 0.7 715.1 800.0 3,000.0 685.3
Slide 36: Table of Contents
Table of Contents Executive Summary 2 Financial Performance 11 Prospects & Outlook 27 Appendix: Business Sector Review 1. Community Financial Services 31 2. Global Banking 36 3. Maybank Singapore 41 4. Bank Internasional Indonesia 44 5. Other segments 48 6. Affiliates 52 7. Quarterly Financial Summa
Slide 37: Global Banking (1/4)
Global Banking (1/4) Corporate banking loans lower by 13.1% (annualised) as at end June 2014 Total GB loans lower by 13.1% (ann.) to RM67.0 billion but Trade Finance market share ¹ grew 1.3% YoY 27.1% RM billion 26.0% 25.6% 25.5% 35.5 24.8% Term Loan 34.9 +9.4% YoY 32.5 Jun'13 Sep'13 Dec'13 Mar'14 J
Slide 38: Global Banking (2/4)
Global Banking (2/4) Global Markets’ business regionally saw PBT growth of 5.8% YoY for 1H FY2014 PBT and Revenue grew by 5.8% and 1.8% YoY respectively Group Securities Portfolio grew 7.6% YoY Net interest income +7.6% YoY Non-interest income 5.8% 102.3 101.0 1.8% 93.9 95.5 96.4 1,254 10.6 8.7 1,23
Slide 39: Global Banking (3/4)
Global Banking (3/4) Maybank Kim Eng’s 1H FY2014 total income registered at RM591.2mil 1H FY2014 Total Income (RM’Mil) Total Income for Maybank Kim Eng declined 24.6% YoY Hong Kong, RM27.5 (5%) Others, Philippines, RM26.0 (4%) - 24.6% YoY RM26.8 (5%) 783.7 RM Million Indonesia, RM9.0 (2%) Malaysia,
Slide 40: Global Banking (4/4)
Global Banking (4/4) Maybank Kim Eng achieved the Top 3 position in ASEAN Investment Banking & Advisory League Table ASEAN IB&A League Tables – As at June 2014 Market Share - IB&A Volume (USD'Mil) Market Share - M&A Volume (USD'Mil) Credit Suisse 12.7% 13,814 Credit Suisse 41.4% 12,174 DBS 6.99% 10,
Slide 41: Table of Contents
Table of Contents Executive Summary 2 Financial Performance 11 Prospects & Outlook 27 Appendix: Business Sector Review 1. Community Financial Services 31 2. Global Banking 36 3. Maybank Singapore 41 4. Bank Internasional Indonesia 44 5. Other segments 48 6. Affiliates 52 7. Quarterly Financial Summa
Slide 42: Maybank Singapore (1/2)
Maybank Singapore (1/2) Loans increased by 14.6% (annualised) as at June, spurred by stronger lending growth of 17.1% to businesses Diversified Loan Portfolio Loans portfolio expanded by 14.6% (annualised) to 14.6% annualised reach S$33.2 billion as of June 2014. 28.0 31.0 33.2 Other (Consumer)
Slide 43: Maybank Singapore (2/2)
Maybank Singapore (2/2) PBT rose 5.6% YoY to S$209 million, led by gains in fee based income of 20.4% and fund based income of 17.5% (SGD mil) 1H FY2014 1H FY2013 YoY Net Fund Based income 244.62 208.12 +17.5% Net Fee Based income 150.77 125.27 +20.4% Net income 395.39 333.39 +18.6% Overhead expense
Slide 44: Table of Contents
Table of Contents Executive Summary 2 Financial Performance 11 Prospects & Outlook 27 Appendix: Business Sector Review 1. Community Financial Services 31 2. Global Banking 36 3. Maybank Singapore 41 4. Bank Internasional Indonesia 44 5. Other segments 48 6. Affiliates 52 7. Quarterly Financial Summa
Slide 45: Bank Internasional Indonesia (1/3)
Bank Internasional Indonesia (1/3) 1H FY2014 net profit Impacted by NIM compression and increased provisioning (IDR bil) 1H FY2014 1H FY2013 YoY 2Q FY2014 1Q FY2014 QoQ Net Fund Based income 2,953 2,810 5% 1,506 1,447 4% Net Fee Based income 1,076 992 8% 572 504 13% Net income 4,029 3,803 6% 2,078 1
Slide 46: Bank Internasional Indonesia (2/3)
Bank Internasional Indonesia (2/3) Loans expanded by 7.7% (annualised) as at end June 2014 Loans composition (Consolidated) Net Interest Margin (Consolidated) 24.5% YoY IDR trillion 7.7% (Ann.) 106.0 102.1 80.9 85.2 35.8 38.3 5.73% 31.1 5.34% 5.20% 28.3 4.75% 35.3 38.3 27.1 30.2 25.5 23.9 31.0 29.4
Slide 47: Bank Internasional Indonesia (3/3)
Bank Internasional Indonesia (3/3) Higher profits in WOMF due to improving operational efficiency despite tighter regulations Revenue and PBT (IDR billion) Unit Financing (’000 unit) (Stand Alone) (Consolidated) +18.7% 278 753 769 +20% 234 201 168 +5.7% +15.6% 66 77 33 35 1H FY2013 1H FY2014 New Use
Slide 48: Table of Contents
Table of Contents Executive Summary 2 Financial Performance 11 Prospects & Outlook 27 Appendix: Business Sector Review 1. Community Financial Services 31 2. Global Banking 36 3. Maybank Singapore 41 4. Bank Internasional Indonesia 44 5. Other segments 48 6. Affiliates 52 7. Quarterly Financial Summa
Slide 49: Islamic Banking
Islamic Banking Total income grew YoY by 25.8% driven by higher fund based income Group Islamic Banking Income Maybank Islamic: Total Gross Financing grew by 18.2% (annualised) to RM94.8 bil YoY RM million 1H FY2014 1H FY2013 Growth Fund based income 1,458.7 981.9 48.5% +24% +14% ** Dec-13 Jun-14
Slide 50: Insurance and Takaful
Insurance and Takaful Market leadership retained for General Insurance and Takaful Gross Premium Insurance & Takaful – Market Share * Market ranking in the bracket. ** Market Share & ranking data is for period Jan – Dec, except for 2013 (which is based on rolling 12 months ending Mar’14). (Source: L
Slide 51: Maybank Philippines
Maybank Philippines Despite higher net interest income, PBT declined on lower non interest income and higher overheads Key Highlights Revenue and PBT • PBT decreased by 4.9% YoY for the 1H FY2014 mainly due +14.8% YoY to lower non interest income (NOII) and higher overheads. 1,882.3 1,639.7 • NOII w
Slide 52: Table of Contents
Table of Contents Executive Summary 2 Financial Performance 11 Prospects & Outlook 27 Appendix: Business Sector Review 1. Community Financial Services 31 2. Global Banking 36 3. Maybank Singapore 41 4. Bank Internasional Indonesia 44 5. Other segments 48 6. Affiliates 52 7. Quarterly Financial Summa
Slide 53: An Binh Bank
An Binh Bank Revenue rose 6.0% backed by higher interest income from loans Key Highlights Revenue and PBT • Although operating profit grew by VND50.5 billion YoY, PBT for +6.0% YoY 1H FY2014 declined by 20.5% due to higher loan loss provisioning. 739.8 784.4 Revenue • Net interest income grew by VND
Slide 54: MCB Bank
MCB Bank Revenue growth of 9.1% YoY owing to higher net interest income Key Highlights Revenue and PBT • Revenue grew by 9.1% or PKR2.2 billion YoY on the +9.1% YoY back of higher net interest income due to a policy 27.1 -0.6% YoY rate hike, resulting in NIMs improvement of 37bps. 24.9 • However, PB
Slide 55: Table of Contents
Table of Contents Executive Summary 2 Financial Performance 11 Prospects & Outlook 27 Appendix: Business Sector Review 1. Community Financial Services 31 2. Global Banking 36 3. Maybank Singapore 41 4. Bank Internasional Indonesia 44 5. Other segments 48 6. Affiliates 52 7. Quarterly Financial Summa
Slide 56: Group Gross Loans by quarter
Group Gross Loans by quarter Q1 Q2 31 Dec 13 31 Mar 14 30 Jun 14 % Portfolio Annualised Annualised Group Gross Loans * 361.8 366.6 5.3% 375.3 9.5% Malaysia (RM billion)** 223.6 223.2 (0.7)% 226.4 5.8% 60% Community Financial Services 151.9 154.5 6.9% 159.4 12.5% 70% Global Banking 71.7 68.6 (17.1)%
Slide 57: Malaysia Gross Loans by quarter
Malaysia Gross Loans by quarter Q1 Q2 RM billion 31 Dec 13 31 Mar 14 30 Jun 14 % Portfolio Annualised Annualised Community Financial Services 151.9 154.5 6.9% 159.4 12.5% 70% (Reported) Community Financial Services 151.4 154.5 8.2% 159.4 12.5% (Re-based*) Consumer (Reported) 121.9 124.9 9.6% 128.4 1
Slide 58: Group Deposits by quarter
Group Deposits by quarter 1Q 2Q 31 Dec 13 31 Mar 14 30 Jun 14 % Portfolio Annualised Annualised Group Gross Deposits 395.6 395.7 0.0% 406.5 11.0% Malaysia 259.1 258.2 (1.5)% 265.1 10.7% 65% (RM billion) Savings Deposits 37.6 39.1 16.1% 38.7 (3.5)% 15% Current Accounts 65.8 64.0 (10.9)% 67.1 19.4% 25
Slide 59: Malayan Banking Berhad contact and investor relations
Humanising Financial Services MALAYAN BANKING BERHAD 14th Floor, Menara Maybank 100, Jalan Tun Perak 50050 Kuala Lumpur, Malaysia Tel : (6)03-2070 8833 www.maybank.com Investor Relations Contact Mohamed Rafique Merican Group Chief Financial Officer Contact: (6)03-2074 7878 Email: rafique@maybank.com
Malayan Banking Berhad (Maybank) — H1 2014 Earnings Presentation on 6ix