company review 2016 - fullerton financial holdings · (danamon simpan pinjam) was also created,...

Company Review 2016

OVERVIEWIntroduction 02Our Network 10Corporate Milestones 12Chairman & CEO’s Statement 14Board of Directors 18Senior Management 22

BUSINESS & CAPABILITIESOur Business Framework & Distinct Capabilities 26> Targeted Business Models 28> Technological & Digital Innovation 30> Risk Management 32> Partnerships 34> Human Capital 36

DEMONSTRATING OUR CAPABILITIESFeature Stories 39

OUR PEOPLE & VALUES 46

SUSTAINABLE DEVELOPMENT: BUILDING COMMUNITIES 49

FINANCIALFinancial Highlights 54

Contents

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is built on our mission of: Enabling Success and Enriching Lives. We enable success by building differentiated franchises that empower our people and entities to accomplish their goals. We enrich lives by ensuring that all our actions add value to our customers, partners, shareholders, and the communities in which our portfolio companies serve. VISION

To be the leading Asian strategic and operating investor in financial and related services for the Mass Market and SMEs

MISSIONEnabling Success and Enriching Lives Be the catalyst in enabling success and enriching lives of the customers and communities

the portfolio companies serve

Create and deliver sustainable long-term shareholder value

Build, institutionalise and leverage proprietary knowledge and innovate to stay ahead

Lead in chosen markets by capitalising on growing opportunities through greenfields, partnerships, mergers and acquisitions

WHO WE ARE Long-term strategic and operating investor in financial and

related services in Emerging Markets

Committed to building differentiated business models focused on the Mass Market and SME segments

Enabler of digital innovation for our portfolio companies

A wholly owned portfolio company of Temasek Holdings (Private) Limited, an investment company based in Singapore

Company Review 2016FULLERTON FINANCIAL HOLDINGS

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OVERVIEW

From Products& ServicesTo Intelligent & Intuitive Solutions

FINANCING SMALL BUSINESSES BASED ON

CASHFLOW, COLLATERAL AND CUSTOMER PROFILE

DELIVERING FINANCIAL SERVICES

TO UNDERSERVED CUSTOMERS AT

THEIR DOORSTEP

We take a customer-centric approach in creating tailored solutions that empower our customers to thrive in their local environment.

0504 0504


From Customer TransactionsTo Rewarding Relationships

BEING THE CATALYST TO OUR CUSTOMERS’

SUCCESS

SUPPORTING OUR CUSTOMERS THROUGH

EACH OF THEIR LIFE STAGES

We deepen our relationship with customers by anticipating and responding to their financial needs as they grow.


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From Providing TechnologyTo Championing Convenience

SERVING CUSTOMERS USING

MOBILE BASED APPLICATIONS

DIGITALISING OUR BUSINESSES

TO SHORTEN RESPONSE TIME

We weave technology into our customer experience and digitalise our businesses to provide convenient access and seamless delivery.


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Our Portfolio Companies across Eight Countries

dunia,United Arab EmiratesAssets

S$879mNetwork

19 branches & financial centres

Cambodia Post Bank (CP Bank), CambodiaAssets

S$603mNetwork

37 branches

Fullerton Credit, ChinaAssets

S$631mNetwork

31 financial centres

Alliance Financial Group, MalaysiaAssets

S$17.3bNetwork

88 branches

Bank Danamon (Danamon), IndonesiaAssets

S$18.7bNetwork

1,859 branches & outlets

Bank of China Fullerton (BOCF),ChinaAssets

S$5.6bNetwork

82 community banks

NIB Bank,PakistanAssets

S$3.4bNetwork

171 branches

Fullerton India,IndiaAssets

S$3.2bNetwork

528 branches

Fullerton Myanmar,MyanmarAssets

S$25mNetwork

12 branches

Our Network

OVER

2,800Branches & OutletsWITH MORE THAN

70,000StaffSERVING

10.6mCustomers

China

Indonesia

Myanmar

MalaysiaU.A.E IndiaPakistan

Cambodia

OF THE WORLD’S POPULATIONresides in the eight countries in which

we operate

44%OF ASIA PACIFIC’S

POPULATIONdoes not have formal savings or loans with a financial institution

>60% 4bMOBILE

SUBSCRIPTIONS IN ASIA PACIFIC,

equivalent to 100% of the population


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OVERVIEW

Our Network

Corporate Milestones

2003INCORPORATION & FIRST INVESTMENTSIn January, Asia Financial Holdings (AFH) Pte Ltd was incorporated in Singapore, wholly owned by Temasek Holdings Pte Ltd.

IndonesiaAFH acquired PT Bank Danamon Tbk (Danamon) and PT Bank Internasional Indonesia Tbk (BII) from the Indonesian Bank Restructuring Agency. It also acquired over 5% stake in ICICI Bank Limited, an exception granted by the Reserve Bank of India.

2004CREATION AND EXPANSION OF MASS MARKET MODEL AFH entered into motorcycle and white goods financing through the acquisition of PT Adira Dinamika Multi Finance Tbk by Danamon. The first mass market model (Danamon Simpan Pinjam) was also created, primarily serving stall holders in Indonesia’s wet markets.

Pakistan,Malaysia and China

2005ENTRY INTO PAKISTAN, MALAYSIA AND CHINAAFH invested in NIB Bank Limited to provide financial services to Pakistan, the world’s sixth most populous country and in Alliance Bank Malaysia Berhad, to benefit from and contribute to the economic growth and development of Malaysia.

AFH was selected as strategic investor into China to invest up to 5% stake in both China Construction Bank (CCB) and Bank of China (BOC) prior to its international IPO.

India

20061st

GREENFIELD INVESTMENTFullerton India Credit Company Ltd (Fullerton India) was established to serve the demands of a growing middle class.

2007NEW NAME – FULLERTON FINANCIAL HOLDINGS PTE LTD (FFH)AFH was renamed Fullerton Financial Holdings Pte Ltd (FFH), after Robert Fullerton, the first Governor of the Straits Settlements, reflecting the pioneering nature of FFH’s work.

Middle East

2008ENTRY INTO MIDDLE EAST AND EXPANSION IN CHINAFFH invested in Dunia Finance LLC (dunia), its first investment in the Middle East, to serve SME and mass market salaried consumers.

In September, Fullerton Investment and Credit Guarantee Company (FICGC) opened its first branch as China’s first nationwide SME credit guarantee business.

FFH divested BII.

Fullerton India launched Gramshakti (Rural) Business, a multi-product rural finance operation which by December 2016 had grown to 301 branches across 11 states in India, covering more than 51,000 villages.

2009CONTINUED ROLL OUT OF FFH’S BUSINESS MODELSFullerton Credit Ltd (Fullerton Credit) opened in Chengdu, China, as a microfinance business focused on lending to mass market individuals and smaller SMEs.

Vietnam

2010ENTRY INTO VIETNAMFFH invested in Mekong Development Bank (MDB) and signed a Technical Services Agreement with MDB to provide strategic support in technology and risk management.

2011ESTABLISHMENT OF COMMUNITY BANKS IN CHINABank of China and FFH launched a joint venture, BOC Fullerton Community Bank (BOCF); with 18 village banks built throughout the year.

2012EXPANSION OF SERVICES IN MIDDLE EASTDunia Services LLC was established by FFH and other shareholders of dunia to offer consultancy services to financial institutions seeking to leverage dunia’s and FFH’s expertise in mass market lending.

Cambodia

2013ENTRY INTO CAMBODIAFFH and its joint venture partners launched Cambodia Post Bank (CP Bank) after receiving a new commercial bank license. The bank serves SME and micro businesses in Cambodia.

Myanmar

2014ENTRY INTO MYANMARFullerton Finance Myanmar Co Ltd (Fullerton Myanmar) was established. Within four months of obtaining its microfinance license, Fullerton Myanmar began operations with six branches.

FFH divested FICGC.

2015NETWORK EXPANSION FFH expanded its network through addition of licenses and branches in Fullerton Credit, BOCF, Fullerton India, CP Bank and Fullerton Myanmar.

Fullerton India launched a Housing Finance subsidiary, under the branding of GRIHASHAKTI across 20 cities.

FFH divested MDB.

2016HIGHLIGHTS – EXPANDING FFH’S FOOTPRINTBOCF embarked on inorganic opportunities to acquire stakes in 15 community banks from China Development Bank.

In Cambodia, FFH expanded its reach by acquiring Funan Microfinance Plc through CP Bank.

FFH expanded its digital footprint by partnering portfolio and fintech companies to lead digital innovations. At Fullerton India, the “Smart” Lending model was developed and an e-Loans Portal and Instaloan Apps on mobile were launched. Fullerton Credit (China) established online acquisition channels via WeChat, launched online e-KYC and e-contract, to create a seamless smartphone engagement model.

FFH invested in InstaRem, a fintech company focused on remittances.

Fullerton Myanmar embarked on expanding its branch network into 48 new townships.

FFH joined as a partner of World Bank/IFC-led Universal Financial Access, which is committed to enabling 1 billion people gain access to transaction accounts through targeted interventions by 2020.


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OVERVIEW

Corporate Milestones

CONFIGURED FOR PROGRESS

Operating in Challenging TimesThe last financial year has been a challenging one, with many regional economies experiencing slower growth, against a backdrop of heightened global geopolitical tensions in North Asia, South China Sea; and in the complex relationships among the four major countries – USA, China, Russia and Japan.

Markets were volatile, with central banks moving away from record low interest rate levels, and the world being rocked by momentous events such as Brexit and the divisive US Presidential election.

On the economic front, inward looking policies, such as populism, nationalism and trade protectionism are threatening the world economy and the established order of globalisation and free trade. Low oil prices have suppressed economic growth in many resource rich countries, whilst the war on terrorism and the related refugee problems added to economic uncertainties. In China, the new policy reforms are only expected to yield benefits over the longer term. There are also political and economic uncertainties ahead, with potential Party Congress changes in China and elections due in Germany; and closer to home, in Malaysia, Cambodia and Thailand too.

Going forward, the complexity of the situation makes potential economic outcomes that much harder to predict and plan for. Such events and macroeconomic outlook directly affect the financial services sector since governmental and regulatory rules and policies could change, impacting products and business segments in the countries we operate in. Meanwhile new growth trends such as the sharing economy, big data, analytics, digitalisation, machine learning, and artificial intelligence continue to disrupt business models in many sectors. Notwithstanding this, Fullerton Financial Holdings (“FFH”) is equipping itself to surmount the challenges.

Capitalising on Our Core CompetenciesFFH has weathered these headwinds by harnessing our key competencies and knowledge which are embedded in our core businesses. We have continued to build robust corporate governance frameworks through strong independent boards and management teams within our operating companies.

At the core of our mission is the provision of financial and related services for the Mass Market and SME customer segments. We have developed unique business models that target these segments, as seen in our most recent greenfield operations in Cambodia and Myanmar, and the award winning SME business

in Alliance Bank in Malaysia. Rather than resting on our laurels, we actively drive our operating companies to challenge themselves, and improve our products and services to our customers. We play an active role in the operations of our companies, allowing us to remain attuned to the market and business cycles, and continually adapting our business plans to strike an appropriate balance between risk and reward.

The business restructuring of Bank Danamon is a prime example, where the implementation of a new strategy to transform lending mix, drive cross-sells and manage funding costs has added enterprise value - demonstrated by improved operating and financial performance and higher share prices. At Fullerton India, the rapid adaptation to the banknote de-monetisation event in November through alternative payment channel has allowed us to ride through the transition.

A customer-centric approach, adapted to the markets we operate in applied across our branch networks and alternative channels, remains a key focus of our strategy. This is supported by robust operating processes and systems, risk management policies and procedures. As we grow our companies through the business cycles, we are constantly looking for innovative solutions to improve channel effectiveness and operational efficiency. At the same time, we will source for new investment opportunities to bolster our existing portfolio. In this respect, we will seek partners who are leaders in products and services, or technology and innovation, in the countries that they operate in.

Creating Impact through Transformative TechnologyWe believe the ideal way to achieve this while countering the current economic headwinds is through transformative technology. There has been a global rise in popularity of non-traditional payment and lending models that are conveniently enabled via smartphones, but there are still many rural regions in many countries, that do not have access to these services. We have been able to increase our customer reach by expanding our range of digital services and providing access in such rural and developing regions.

Our business in China, Fullerton Credit is amongst the first in the country to adopt and apply the social media and wallet platform WeChat, enabling our customers and staff to better engage with the company. Operating in such an intimate and connected ecosystem created great convenience for customers to apply for loans, enquire about their

Chairman & CEO’s Statement

We diversified and grew our businesses yet remained focused on building our core competencies to capture new growth opportunities with the view to enhancing shareholder value. Our people are at the heart of this transformation.

Ernest WongChairman

Gan Chee YenCEO


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Group loan borrowers undergo training to learn the basics of loans, the meaning of social guarantee, and the importance of timely repayments. The credit education program underpins Fullerton Myanmar’s ability to grow its business sustainably, as demonstrated by its healthy loan repayment rate of 99.98% since inception.

Our Competitive Advantage: Human CapitalIn FFH, we believe that our people are the most essential asset to our business. We ensure that our team is diverse, comprising seasoned professionals who have in-depth expertise encompassing all functional areas of banking, business transformation, risk management, finance and operations.

To ensure that our people remain experts in their own field, we proactively provide continuous learning opportunities for our core teams through Experience, Exposure and Education. This year, we deployed our employees to Fullerton Myanmar on short-term assignments, to work with the local team as they faced the challenges of a rapidly changing environment, to conceptualise and implement new innovative products, as well as train and impart know-how to them. Career development opportunities are made available to employees through inter-entity “cross-pollination” assignments; for example, an employee from India has been posted as Chief Risk Officer in Cambodia.

Our HR team has played a proactive role in partnering our portfolio companies, to drive and implement strategic change management. For instance, they recently collaborated with Fullerton Credit’s leadership team, to review their manpower planning which resulted in the realignment and redeployment of their resources to support the growth of current and new lines of businesses. Together with the business process re-engineering, this allowed Fullerton Credit to deliver higher productivity.

Our strategic interventions for our portfolio companies can at times be the turning point for an entity at the crossroads. It is thus crucial that our employees make judgments and decisions that exhibit our core values: Ownership, Integrity, Passion, Collaboration and Innovative. We aim to build a culture of people who have these values ingrained as their shared DNA. This is paramount for the building of our franchise to ensure it is a sustainable business that has enduring success in impacting the lives of our customers in the region.

Looking AheadWe are cautiously optimistic about the outlook for the medium and long term. Over the last

credit facilities, and repay their loans. Additionally, our use of big data analytics, merging customer and available third party data sources allowed us to understand our customers better, and hence better manage our risk exposure through the customer life cycle with world class capabilities. Today, Fullerton Credit is both a brick and mortar, as well as a digital lender, reflecting the changing lending landscape filled with new opportunities and revenue pools from new customer segments, not accessible in the past.

Fullerton India upgraded to the latest version of the rural loan management system (BR.net) to manage its expanding portfolio. This system provides end-to-end digitalisation of the rural business processes, including the issuance of eReceipts for collections through the “emcollec” app. To shorten response time for urban loan applications, a ‘smart’ lending model through the e-loans Portal and Instaloan application now enables automated forms and instant online credit approval.

Digitalisation has also been extended to frontier markets such as Myanmar, where Fullerton Myanmar pioneered the use of tablets and biometric devices with thumbprint recognition, and cloud computing. This enables the capturing of customer information quickly, without the need for form-filling. In the UAE, to enable customers to conduct financial transactions 24/7 anywhere, dunia launched QwikCash smartphone app for seamless funds transfer, bill payment and remittances.

In addition to leveraging technology at our portfolio entities, we are also investing resources into building a financial technology franchise within FFH. Through strategic partnerships, direct investments or joint ventures, we seek to develop FFH’s knowledge and capabilities in the core financial technology areas of digital lending, analytics, e-wallets, payments and remittances. We believe that this focus on transformative technology will add value to FFH and our portfolio entities.

Increasing our FootprintFFH continued to steadily expand our footprint and reach in emerging and new frontier markets to provide greater financial access to the underbanked and underserved customer segments.

In China, Bank of China Fullerton is now the largest community banking group with close to 100 community banks and 80 sub-branches across 12 provinces. Reaching over one million customers, it continues to extend its reach in rural China through both organic growth and inorganic acquisitions. In India, Fullerton India continued its expansion of

Chairman & CEO’s Statementcont’d

branches in urban and rural areas, and set up a new Housing Finance subsidiary to support the country’s objective of providing affordable housing to the masses. In terms of frontier markets, Fullerton Myanmar has grown to become the country’s fifth largest microfinance institution. Since its launch in 2014, Fullerton Myanmar has gained a foothold in 12 townships, reaching over 60,000 customers in the rural communities – with plans to expand into 80 new townships within the next five years.

Similarly, Cambodia Post Bank has rapidly climbed the ranks to become the fifth largest banking network in Cambodia, and was recently awarded ‘The Outstanding Bank Growth Award’ by the International Data Group ASEAN. In just four years since launch, Cambodia Post Bank has managed to expand to 18 out of 25 provinces and enabled 60,000 businesses within the country. Recently, it is further broadening its customer base for micro-lending through the acquisition of Funan Microfinance.

Our ability to achieve accelerated growth has also been boosted through strategic partnerships with local banks and businesses, enabling us to provide faster, flexible, relevant and innovative solutions. FFH’s capability and experience, coupled with our partners’ local knowledge and network, have proven to be a successful formula in expanding and strengthening our franchise.

Embracing Sustainable DevelopmentAs we grow and transform, we are committed to ensuring that all our businesses are developed to ensure their long-term sustainability, keeping in view the Sustainable Development Goals adopted by the United Nations in 2015. In particular, to address the goal of no poverty, we continue to focus on addressing the credit needs of the underserved customer segments, and greater financial inclusion, often the first step on the ladder out of poverty. For instance, in India, the primary services of Fullerton India include loans for rural livelihood advancement, rural home finance and financing of various rural micro enterprises. Not only does Fullerton India serve customers who are underbanked, over the years, it has created over 16,000 jobs in rural India. This has, in turn, had a remarkable impact on improving family income and enhanced living standards of over an estimated 48,000 family members. In Myanmar, a country transitioning from decades of military rule to civilian democracy, Fullerton Myanmar imparts credit and financial education to its customers.

12 years, we have planted and secured a niche in the SME and mass markets segments in the emerging economies of Asia. We will capitalise on our combined competencies and learnings from such markets to evaluate investment opportunities for long term growth.

In order to build our franchise further, we remain focused on network expansion, product offerings and operational excellence to grow our businesses. Concurrently, we will forge new strategic partnerships to achieve scale or access transformative technologies, products and markets. These would include investment in, and collaboration with, digital innovators for cutting-edge technologies to create new marketing channels and improve operational efficiencies.

To this end, we are grateful to have the immense support of our board, shareholder, partners and regulators, and would like to acknowledge them all for their encouragement and dedication. We would also like to thank the management, staff and all our entities for their dedication and hard work, as well as our customers for their loyalty, trust and support of our businesses.

Ernest WongChairman

Gan Chee YenCEO


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Mr Gan Chee Yen is the CEO of FFH. Prior to this appointment, he was the Co-Chief Investment Officer and Senior Managing Director at Temasek International.

He has been a Board member of FFH and a Board Commissioner of Bank Danamon since 2003. He currently sits on the Board of several Temasek portfolio companies such as Clifford Capital Pte Ltd, Surbana Jurong Private Limited, ACR Capital Holdings, CEI Limited and ST Asset Management.

Prior to his appointment at FFH, Mr Gan served in various investment roles as a member of the senior management team at Temasek. After managing the Financial Industry and Transportation and Logistics portfolios successfully, he took on the role of Co-Chief Investment Officer, an opportunity that saw him anchor several successful investments. During his time at Temasek, he also held the roles of Head of China and Chief Financial Officer.

Mr Gan is a member of the Institute of Singapore Chartered Accountants. He received his Bachelor of Accountancy from the National University of Singapore. He also participated in the Harvard Program for Management Development in 2001.

Gan Chee YenCEO

Board of Directors

Mr Ernest Wong is Chairman of Fullerton Financial Holdings (FFH) since March 2011, and chairs its Executive Committee and Nominating & Remuneration Committee.

Currently he also serves as Chairman of Mediacorp; Chairman of A. Menarini Asia–Pacific Holdings; Board Trustee & Chairman, Investment /Endowment Fund Committee of Nanyang Technological University; Board Member of Pavilion Capital Holdings; and Commissioner of Bank Danamon Indonesia TBK.

He started his career in 1967 with the Economic Development Board and later with the Ministry of Finance. In 1972 Mr Wong joined the United Overseas Bank (UOB) Group in Singapore. During his 30 years with the UOB Group, Mr Wong held several key appointments, including 10 years as Group President and as a Member of the UOB Board & its Executive Committee before leaving UOB in 2000 to join Mediacorp as its Group CEO. While in Mediacorp he remained as a Board Member (non-executive) of the UOB Group, and Chairman of its Audit Committee.

Over the course of his career, he was also a Member of the Temasek Advisory Panel for 10 years and served as Board Member of the Economic Development Board (EDB) and President-Commissioner of Bank Internasional Indonesia TBK.

Mr Wong graduated with a First Class Honours degree in Chemical Engineering from the University of Surrey under a Singapore Government scholarship.

Mr Ng Kee Choe is the non-executive Chairman of CapitaLand Ltd. He currently serves as President Commissioner of PT Bank Danamon Indonesia TBK and Chairman of Tanah Merah Country Club. He is also a Trustee of Temasek Trust and member of the International Advisory Council of China Development Bank.

From 2005 to 2013, Mr Ng served as the Chairman of NTUC Income. For his valuable contributions, he was awarded the Distinguished Service Award by NTUC. He served as Chairman of Singapore Power Ltd from 2000 to 2012 and as Vice-Chairman of DBS Group Holdings, before retiring from his executive position in 2003 after 33 years of service. He was also Director of Singapore Exchange Limited until 2014 and Chairman of AusNet Services Ltd until 2016.

Mr Ng was awarded the Public Service Star in 2001 for his contributions to public service, and he received the Meritorious Service Medal in 2012. He graduated from the University of Singapore with a Bachelor of Science (Honours) in 1966.

Ernest WongChairman

Ng Kee ChoeDirector

Peter SeahDeputy Chairman

Mr Peter Seah is the Deputy Chairman of FFH. He currently serves as Chairman of DBS Group Holdings Ltd and DBS Bank Ltd, Chairman of Singapore Health Services Pte Ltd, Chairman of LaSalle College of the Arts Limited and Chairman of the National Wages Council. He was also recently appointed Chairman of Singapore Airlines Limited in January 2017.

Additionally, Mr Seah also holds the position of Director at StarHub Ltd, Government of Singapore Investment Corporation Private Limited, Asia Mobile Holdings Pte Ltd and STT Communications Ltd.

Mr Seah’s previous roles include Chairman and President & CEO of Singapore Technologies Pte Ltd. From 1977, he worked at Overseas Union Bank (OUB), holding several senior positions before becoming President & CEO in 1991. He retired as Vice-Chairman & CEO of OUB in September 2001.

Mr Seah graduated from the University of Singapore with an Honours Degree in Business Administration in 1968.


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Board of Directors

Board of Directorscont’d

Mr Dilhan Pillay Sandrasegara is the President; Joint Head, Enterprise Development Group; Joint Head, Investment Group; Joint Head, Singapore; and Head, Americas of Temasek.

Mr Sandrasegara currently serves on the boards of the Singapore Management University, Singapore Institute of Legal Education, Changi Airport Group, National Research Foundation, Singapore Innovate and certain subsidiaries of Temasek Holdings. He is also a member of the Future Economy Council and the Financial Centre Advisory Panel of the Monetary Authority of Singapore.

Prior to joining Temasek in September 2010, he was Managing Partner of the Singapore law firm WongPartnership LLP.

Mr Sandrasegara graduated from the National University of Singapore with a Bachelor of Laws and obtained a Master of Law from the University of Cambridge.

Dilhan Pillay SandrasegaraDirector

Alan Raymond ThompsonAlternate Director to Mr Dilhan Pillay Sandrasegara

Mr Alan Thompson is currently Managing Director, Private Equity Fund Investments and Managing Director, Enterprise Development Group at Temasek. Past roles include Managing Director, Portfolio Management and Managing Director, Telecommunications & Media. He previously took on the position of Managing Director in Sao Paulo to establish Temasek’s offices in Latin America.

Before joining Temasek in 2004, Mr Thompson was a Partner at Stern Stewart & Co, where he led numerous client engagements and managed shareholder value across a wide range of industries in Southeast Asia, Australia and South Africa. He has additional experience working in the private equity fund of a large banking group in South Africa as well as 10 years of operational experience in the country’s high-tech sector, spanning software engineering, systems engineering and executive management roles.

Mr Thompson holds an MBA and Bachelor of Science in Engineering (Electrical), both from the University of the Witwatersrand in Johannesburg, South Africa.

Rohit SipahimalaniDirector

Mr Rohit Sipahimalani is currently Joint Head, Portfolio Strategy & Risk Group and Head of India at Temasek. He first joined Temasek as Head of the Telecom Media and Technology Group in 2008, before assuming responsibility for India in 2011. He subsequently became Co-Head, Investment Group in 2012, before taking on his current role in May 2016.

Before joining Temasek, Mr Sipahimalani spent 11 years working in senior positions at Morgan Stanley, including as Managing Director and Co-Head of Asia Pacific M&A business, based in Hong Kong and as Head of South East Asia Investment Banking in Singapore. His early career included roles at Citibank and McKinsey & Co in India.

Mr Sipahimalani graduated with a degree in Economics from St Stephens College, Delhi and received an MBA from the Indian Institute of Management, Ahmedabad.

Mr Tow Heng Tan is the CEO of Pavilion Capital, a North Asia-focused investment firm that is indirectly wholly-owned by Temasek Holdings.

He serves as Director on the Board of Keppel Corporation and as Director of the NUS Centre for Asset Management Research & Investments. He is also a Finance Committee member at the National Council for Social Services.

Before joining Pavilion Capital, Mr Tow held senior roles at Temasek as well as at Schroders Singapore, and has served as Managing Director of Lum Chang Securities. He started his career with Coopers & Lybrand (now PwC).

Mr Tow is a Fellow of the Association of Chartered Certified Accountants (UK), a Fellow of the Chartered Institute of Management Accountants (UK) and a member of the Institute of Singapore Chartered Accountants.

Tow Heng TanDirector


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Board of Directors

Senior Management

1. Gan Chee YenCEOSee his complete profile on page 19.

2. Yeo Hong PingChief Investment OfficerMr Yeo comes with more than 20 years of work experience in financial services. As Chief Investment Officer, Mr Yeo oversees the building of the FFH franchise and is responsible for developing growth through strategic investments and partnerships. Before joining FFH, Mr Yeo was Managing Director of J.P. Morgan and was responsible for the overall investment banking business in Singapore. Mr Yeo also served as Senior Management Committee member for J.P. Morgan Singapore, and Board Member for J.P. Morgan (SEA). He previously held other senior appointments including Head of Real Estate Investment Banking and Head of Corporate Finance in Southeast Asia.

3. Victor LeeHead of SME & Commercial BankingMr Lee comes with more than 20 years of experience in retail and commercial banking. He currently heads the SME & Commercial Banking team, and oversees all business related operations and strategic interventions across the portfolio companies.

Prior to FFH, Mr Lee was Managing Director, Group Head of Group Business Banking in United Overseas Bank, where he was responsible for the Small Business Segment across Southeast Asia. Prior to this, he was with Standard Chartered Bank (SCB) – initially as Global Head, SME Deposits & Treasury, and subsequently as Managing Director for SME Banking in Singapore and Taiwan. He left SCB as Managing Director, Consumer Banking, Distribution as well as Preferred Consumer Banking segment in China. Prior to SCB, Mr Lee was from Citibank, as Director of Citibusiness, Global Consumer Banking in Singapore, and also spent considerable time in corporate banking.

4. Anindo MukherjeeHead of Integrated Risk ManagementMr Mukherjee has more than 25 years of experience in risk management for Retail and SME segments in the banking industry. He currently heads the Integrated Risk Management function, and oversees portfolio-wide performance and risk assessment.

Prior to joining FFH, Mr Mukherjee was responsible for the Risk Management, Legal and Compliance functions in Fullerton India. Before Fullerton India, he was in SCB for six years, where he was the Regional Credit Officer for the Consumer Business in India & South Asia.

Mr Mukherjee has had exposure across a variety of private and international banks, including Bank of America, ABN AMRO Bank and HDFC Bank. He has also served on the Board of the Credit Information Bureau (India) Limited.

5. Cynthia LeeHead of Human ResourcesMs Lee is a seasoned HR professional with more than 25 years of experience. She currently oversees the full spectrum of Human Resources Management and works closely with various key business leaders and stakeholders to ensure quality delivery of people plans, interventions and strategy across portfolio companies. In addition, Ms Lee is actively involved in the selection and orientation of Board Members, Executive Compensation and succession planning for FFH entities.

Prior to joining FFH, Ms Lee was the Head of HR & Business Partnering for Global Transaction Services Group in Royal Bank of Scotland, and was responsible for the implementation of end-to-end organisation and people agenda for Asia Pacific. She also previously held senior leadership roles in Temasek Holdings, GE, Motorola and Cisco Systems.

6. Loh Niap JuanHead of FinanceMr Loh has more than 25 years of working experience in large multinationals and fast growing companies. As the current Head of Finance, he oversees all portfolio finance related activities and is involved in strategic operational management. Mr Loh also serves on the board of various FFH’s portfolio entities.

Before joining FFH, Mr Loh was Corporate Controller of RGE Group, and was responsible for the overall portfolio management of the Group’s investments in China. He also spent six years with International SOS, first as Chief Financial Officer (Asia) and later as their Chief Operating Officer (Global Shared Services).

1. 4.2.

5.6. 3.


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Senior Management

BUSINESS & CAPABILITIES





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Our Business Framework

Our Distinct Capabilities

Our Business Framework & Distinct Capabilities

We aim to generate strong, sustainable returns by adding strategic value to our portfolio companies and committing to their long-term growth. Our distinct capabilities, along with our network and brand, serve as the underlying means to achieving this.

We are an investor and operator of financial institutions in Emerging Asia focused on building differentiated franchises that can strengthen through market cycles and stay ahead by harnessing technologies that make a difference.

WHAT WE DO

We keep a strong commitment to our vision, consistently investing in the future and having a transformational impact on the communities we serve.

MAKING A DIFFERENCE

Financial inclusion

Social empowerment

Sustainable growth

Supporting communities

We create, partner with or acquire franchises that are well positioned to tap into the long-term growth trends of the region and particular market.

Our investment framework is anchored on the following:

OUR APPROACH

Financial institutions in Emerging Asia, particularly in large, consumption-driven markets with a need for further financial inclusion

Potential to establish differentiated positioning in the Mass Market and SME segments

Ability to add strategic value through governance, strategic focus and superior execution

Opportunities to embrace and leverage innovation, especially in digitalisation

We bring to bear our wealth of experience in operating financial institutions across the region and our distinct capabilities to help our portfolio companies navigate through the complexities and challenges of each market.

We help our entities achieve enduring success by deploying the following:

HOW WE DO IT

Capital

Best-in-class corporate governance

Proven customer-centric business models

Comprehensive risk management framework

Operational, HR, IT and Financial best practices

Human Capital

Technological & Digital

Innovation

Targeted Business Models

Partnerships Risk Management

BRAND

Our brand helps anchor a reputation of reliability and strength in the market. By aligning our entities with the FFH brand culture, we help ensure buy-in from all parties including

regulators, stakeholders, partners and, most importantly, our customers.

NETWORK

Our network allows our entities to plug into our Center of Excellence and share best-in-class talent, unique operational know-how, proven processes and innovative technology solutions.

Our network also provides an ideal environment for cross-pollination of new ideas and solutions.

For more details on Our Distinct Capabilities,go to: pages 28–37


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Our Business Framework & Distinct Capabilities

Self-Employed Mass Market

Commercial

SMEs

Corporate

Mass Salaried

Mass Affluent

Affluent

BUSINESS CONSUMER

Specialised business models require consistent execution excellence to be successful. We establish and abide by a blueprint of end-to-end processes for every business activity while also adopting a continuous process improvement philosophy, recognising that no environment remains static. This allows our entities to deliver high quality service to our

customers and rigorously manage operational risks across the various types of catchment models employed. In addition, FFH helps to instill a culture of disciplined execution across our organisations underpinned by robust systems, vigilant oversight and strict accountability.

Excellence in Operational Execution

OUR BUSINESS FRAMEWORK & DISTINCT CAPABILITIES

Despite macroeconomic weakness and industry challenges, Emerging Asia broadly remains on a long-term secular growth track that will bring vast new wealth in these markets. FFH’s mission is to ensure this growth is balanced and shared across the customer landscape, with a specialisation in providing financial access to the underserved and

SME segments. We have built and managed businesses with a Mass Market niche in Indonesia, Malaysia, India, China, Cambodia, Myanmar, UAE and Pakistan. This has allowed us to understand that each market is unique and requires business models that are tailored to meet and serve the eclectic needs of local customers.

See diagram on next page.

TargetedBusinessModels

Our extensive experience in managing financial institutions across the region with a focus on serving Mass Market consumers, micro-entrepreneurs and SMEs is the cornerstone of our core competency. We have built and refined customer-centric business models that help us to understand, anticipate and satisfy the needs of our customers in a sustainable and value-enhancing way.

Customised Products and SolutionsWe ensure that our portfolio companies meet the distinctive needs of our different customer segments through bespoke product design, including appropriate price, tenor, amount, and collateral requirements. At Fullerton India, the loans offered to the Group Lending customers – typically groups of women in rural areas with financing needs for livelihood purposes – will generally be smaller in ticket size and shorter in tenor, compared to loans offered to urban consumers. We adopt systematic in-market tests using a “test and learn” approach on products and refine them accordingly to meet the changing demands of customers.

To enable successful delivery of our value proposition and smooth customer engagement, our entities adopt distribution models and technologies that bring us closer to customers. At Fullerton Credit in China, we adopt a “hub and spoke” model, creating satellite outlets around our larger branches. By optimising our catchment, we reach more small entrepreneurs who otherwise, may not have access to financing essential to the growth of their businesses. This also brings our Relationship Officers closer to the communities they serve, allowing them to develop deeper relationships with their customers and to keep their ears to the ground.

Focus on Underserved Mass Market Segments and SMEs

Human Capital


Innovation




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Fullerton Myanmar FFH pioneered the use of tablets and biometric devices in Myanmar to capture customer information and fingerprints for identification purposes. This digitalised approach has led to greater convenience and security for customers and provides a cost efficient and scalable process for Fullerton Myanmar.

Fullerton CreditConsidering WeChat’s prominence in the China market, FFH has deployed customer facing and employee tools on the social media platform to benefit Fullerton Credit. Fullerton Credit is able to accept customer loan applications via the platform. Additionally, various employees, such as loan officers, credit approvers and collectors are able to perform work flow functions, get training and receive corporate communications via WeChat.

Fullerton India (Chatbot ASHA)Asha is an artificial intelligence driven chatbot deployed at our India entity to address queries of potential borrowers through social media and mobile interface. Through smart design, Asha directs borrowers to our online lending platform and creates a seamless customer experience.

InstaRem FFH invested in InstaRem, a digital cross border payment platform. Through InstaRem, we aim to connect our portfolio entities to a proprietary network which not only lowers cost of money transfers but also drives financial inclusion by serving SMEs and migrant workers digitally.

Fullerton India (Finnovatica)FFH works closely with our entities to spearhead innovation in local markets. Fullerton India launched Finnovatica, an incubator programme for aspiring student entrepreneurs to design and develop innovative ideas in the field of finance and commerce.

FFH Digital ApproachAs the pace of change and disruption accelerates in the financial sector, FFH helps its entities to stay ahead and effectively leverage technology. In addition, we actively connect our entities with companies pioneering new technologies and applications in various fields including data analytics, ecosystems, digital lending, value-added services and process automation.

Technological & Digital Innovation

We lead our portfolio companies in digital innovation, weaving technology into all aspects of the way we do business, and seek more effective ways to reach underserved customers. Through our group network, our entities share successful digital models and cross-pollinate technology-driven ideas and solutions, with FFH serving as an enabler for successful adaptation and execution.

Human Capital




Innovation


Enhancing Productivity and EfficiencyFFH entities actively deploy technology across end-to-end processes from onboarding to disbursement and collection. This not only enhances operating efficiency and productivity but also enables our businesses to serve our customers’ needs more effectively.

APPROACH 1

APPROACH 2

Building Intelligent PlatformsOur customers are at the heart of our business. By building intelligent platforms for lending, customer service and communication over new channels such as social media and mobile interface, we are extending our customer reach digitally and ensuring our customers are conveniently met wherever they are.

APPROACH 3

Investing in the Future We are adopting a multi-pronged approach of internal development and external tie-ups to deepen our differentiated technology capabilities. We are actively engaging and collaborating with new fintech partners and investing into innovation programmes to tap new ideas and embrace the future.


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Technological & Digital Innovation

HOW WE MANAGE RISKS

Fullerton India has a core team of risk analysts, using information management tools including credit bureau and internal scores to track the behavior, performance and credit appetite of customers with financial institutions. Through the analyses of such information, Fullerton India is able to determine the risk profile of existing customers and take proactive measures. These include management of credit limit, prioritising collections, loan restructuring and/or security enhancement to abate credit losses.

Volatility, brought about by changes in the external operating environment of the markets we operate in, can have unexpected repercussions on our businesses. Proactive portfolio management is critical to anticipate and protect against such challenges.

dunia was able to accelerate the de-risking of its business by upgrading its contact centre infrastructure as well as enterprise data storage systems. Furthermore, to enhance its cybersecurity capabilities, dunia implemented its dedicated app server for apps hosting and upgraded its Bluecoat proxy to reinforce security in and out of the dunia network.

Continuous investmentin technology is required to ensure the scalability and integrity of our systems, which in turn ensures the sound structural support of our risk management activities. We achieve consistency of infrastructure and reporting across our entities by setting technology standards centrally.

RISK FRAMEWORK

We bring a best-in-class corporate governance framework that aims to safeguard the interests of all stakeholders at each of our entities, oftentimes in less mature and transparent markets. This starts from a sound and balanced board composition to robust and independent oversight committees as well as ethical and responsible management. Clear accountability, transparency, accurate and timely disclosures are prerequisites for each entity.

A strong risk culture starting from the board to senior management and down to all staff ensures that everyone does what is right and there is clear accountability and ownership of specific risk areas within all FFH entities.

All entities of FFH adopt a robust risk architecture to ensure independence of risk management, compliance and audit functions. Each FFH entity conducts quarterly country risk assessments to evaluate prevailing and forward looking operating conditions. The three lines of defense – front line, compliance/assurance and internal audit – are strongly embedded in each entity to minimise operational losses.

To manage risks, all FFH entities are guided by comprehensive risk standards - Governance, Risk Management and Control (GRMC) standards – which sets out global best practices. We also work with our entities to set market risk limits, internal liquidity limits and establish liquidity contingency plans.

Having a common framework for corporate governance and risk management ensures that all FFH entities are well equipped to deal with business challenges and adopt the industry’s best practices. A strong risk and compliance culture within each entity allows us to maintain the highest standards of compliance with laws, regulations and established internal policies.

Robust Risk Architecture

Strong Risk Culture

Best-in-classCorporate Governance

Comprehensive Risk Standards

Common Framework

Risk Management

Robust corporate governance and a culture of vigilance are deeply embedded into each of our entities’ DNA and serve as the core foundations for enduring success.

Human Capital




Innovation



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Risk Management

Global Advisory Bodies

Strategic Investors

LocalPartners

Critical to the success of our entities is our rapid integration into the local landscape,

which entails gaining acceptance from the industry, our customers as well as staff.

FFH collaborates with reputable domestic partners and capitalises on their infrastructure, market know-how and brand strength to gain speed-to-market and consumer confidence.

In Myanmar, we partnered with one of the largest local conglomerates to gain footing and valuable industry knowledge which otherwise may have taken years of trial-and-error to acquire. Through strategic partnerships, we have built commercially-successful and locally-engaged enterprises across

the region.

Distribution Networks

Digital Platforms

As our portfolio companies focus on building and deepening relationships with their customers, we do the same with our partners across the region. Through the collaborations with our partners, FFH has empowered its entities to achieve impressive speed, scale and market acceptance.

Partnerships

We have a track-record of building enduring partnerships that have helped our entities successfully navigate the local markets and expand and deepen our positioning.

Human Capital



G2GPolicy

Influencers Regulators

The impact of the regulatory environment on our ability to do business cannot be overstated, and is often a “make or break”. This is why FFH establishes and cultivates relationships with local policy makers and industry movers in countries where we operate.

FFH nurtures ties with governing bodies at national, regional and local levels, and where possible, we leverage our Singapore heritage and experience in other markets to offer appropriate advice. In addition, some countries may prioritise certain growth agendas, oftentimes through G2G initiatives – FFH actively participates in these projects, where appropriate, to enhance our positioning.

CreditAnalytics

DataSources


Innovation


In China, Fullerton Credit has partnered with digital lending platforms to enable the

growth of our retail loan portfolio while allowing us to “test and learn” to refine our risk scorecard. This is an example of FFH collaborating with disruptors to improve and expand its entities’ operations and rapidly bring to life new customer propositions.

Now, more than ever, financial institutions must have the ability to harness the power of data and technology, integrate value-added solutions and be part of the customer’s lifestyle. FFH works with best-in-class fintech platforms across a range of different fields – data analytics, digital solutions, distribution enablers and others – to play an active role within our customer ecosystems.


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Partnerships

With new realities impacting the finance sector arising from regulatory reform, capital requirements, fintech disruption, alongside economic uncertainty and evolving customer

requirements – the operating models of our portfolio companies require constant adaptation and change. We add value by working alongside our portfolio companies through a broad spectrum of

Human Resources initiatives:

HR SERVICES AND OFFERINGS

Compensation Strategy

Our focus on compensation

design, especially for executive

compensation, focuses on the

relationship between

incentives for the executive team and the strategy and priorities of the organisation, balancing short and long-term

goals while factoring in risk

assessment, competitive pay analysis and incentive

benchmarking.

Talent Management

Beyond workforce

optimisation and analytics, we

regularly engage the Boards and

leadership teams of our entities in the areas

of leadership selection,

assessment, development,

and succession planning.

Human Resources Operations

We deep dive and perform

diagnostics on the organisational operating model of our portfolio

companies, and work with them where required on workforce planning and

redesign.

Strategic Change

Management and Human Resources

Transformation

We play an active role in leadership

selection and alignment, as well as developing

change management strategies that are inevitably required for

business transformation.

Deal Related Activities

Strong focus on managing

people aspects of deal activities

from pre-bid due diligence to post acquisition

integration.

We are a diverse team with vast, in-depth experience in the financial services industry. Our portfolio companies are guided and strategically led by our senior team consisting of seasoned professionals with extensive regional experience in business transformation and operational management. Our investment specialists, together with the operational team, identify and evaluate investment opportunities where FFH can best add value and create transformative impact.

It is essential that our people are kept relevant in the business, and continue to be adaptable to changing times. Our talents and leaders in our organization must not only remain experts in their own field, but extend their knowledge to other domain areas. In FFH, we take a proactive approach to learning and development, where learning occurs continuously. When our people are able to openly leverage and contribute to the collective knowledge resource of the FFH Group, it allows them to keep abreast of the broader market developments as well as entity-specific matters – resulting in a symbiotic relationship between our entities and us.

As part of our partnership and cross-pollination approach among our entities, we actively encourage and facilitate the deployment of talent across the various entities and also between FFH and the entities themselves. Whether it be inter-entity learning sessions, short-term projects or secondment assignments, this allows our talent to be equipped with broader and deeper experience which crystalises synergies across our network.

Human Capital

Our competitive advantage stems from the key competencies our diverse pool of seasoned professionals bring, and our ability to effectively deploy them in the FFH ecosystem. Our people are consistently equipped through continuous learning and development efforts, with open channels of knowledge-sharing between entities, to stay relevant in the regions we operate in. When partnering with key business leaders and stakeholders, we place emphasis on the deployment and the building of capabilities within and across each entity, ensuring quality delivery of the full spectrum of HR services – to support the respective business strategies.

Human Capital



OUR PEOPLE

3 Es – EXPERIENCE, EXPOSURE AND EDUCATION

TALENT DEPLOYMENT

ExperienceHands-on experience in new areas of work through on-the-job training and special

assignments Multiple cross-entity

projects and “bubble assignments”

ExposureExposure between

functions and entities to build up new

competencies and experiences

Talents in the FFH ecosystem interact and have audience with senior leaders and the board

EducationInternal and external

formal learning opportunities to

strengthen and learn new skillsets

Expert knowledge-sharing from entity leaders and external leadership programs


Innovation



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Human Capital

Feature Stories

DEMONSTRATINGOUR CAPABILITIES

Bank Danamon:Deploying Customer-centric Business ModelsAt Danamon, every process starts with an understanding of the customers’ needs and ends with their satisfaction in mind. By utilising behavioural research and leveraging technology, we create unique solutions, simplify processes and improve customer experience, thereby providing value not normally offered by other financial institutions.

Danamon’s SME BankingIn Indonesia, the SME segment represents the largest proportion of businesses and is often touted as the backbone of the economy. SMEs come in a large variety, each with unique financial requirements to grow its business.

Danamon SME Banking offers focused financial products tailored to suit the customers’ specific needs. For instance, Danamon offers specially-designed loans for shop house expansion and warehouse purchase with tenors of up to 20 years, providing optimal terms of payment. These products are also bundled with Danamon’s current and savings accounts as well as e-channel products for increased customer convenience. Danamon also offers Financial Supply Chain service, where SME customers are able to grow alongside their distributors and vendors.

In 2016, Danamon implemented a new Sales & Distribution strategy, which takes a more holistic approach to serving its SME customers. This new framework provides for a ‘single captain’ at branches and is supported by realigned front and back office functions. SME customers thus can

have access to Danamon’s integrated products and services in a focused manner while also benefiting from a faster process and more consistent service quality. This strategy has helped improve customer satisfaction and loyalty.

Adira FinanceThough Adira Finance, Danamon provides financing facilities for the purchase of two- and four-wheeled motor vehicles, new and used, targeting customers in the mid and mid-to-low income levels, such as micro and SME business owners and salaried professionals, who need motor vehicles primarily for productive purposes.

To cater to this targeted customer segment, Adira offers fast, convenient and competitive value-for-money financing solutions. Adira boasts a fast approval process that is well-suited for the busy mass market customers. This efficient approval is possible through streamlined processes backed by robust systems and by leveraging the latest technologies. Installment payments are also convenient, with customers having the option to make payments through more than 500 outlets as well as post offices, banks, ATMs,

and retail shops such as Alfamart and Indomaret. Furthermore, in 2016, Adira launched the Xtrim Car Finance, specifically aimed at addressing the growing low-cost car segment, offering affordable rates with a tenor of up to six years.

Adira continues to increase operational efficiency by reorganising business systems and upgrading IT and other operating systems. One example is the AKSES application which allows customers to easily access credit-related information including their outstanding balances through their mobile phones. Adira also recently developed the Mobile Collection System, which improves efficiency in the collection process by enabling field officers to access customer records online and input findings from visits without having to return to the office.

Lastly, we believe it is critical to foster strong ties with and build trust within the local communities we serve. Adira runs the Keday Adira program, which provides an opportunity for community members to be an agent of Adira Finance, thereby helping members to serve their community while enhancing credibility with our customers.

Rapid 2W credit approval for vehicle-dependent customers

Danamon SME Banking offers focused financial products tailored to suit the customers’ specific needs.


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DEMONSTRATING OUR CAPABILITIES

Demonstrating Our Capabilities38

Feature Storiescont’d

Fullerton India:Ahead of the Curve in DigitalisationAt Fullerton India, digitalisation is a fundamental pillar of how we do business and is interwoven into all aspects of the customer experience – from the way we approach and access each customer to providing bespoke solutions and helping customers achieve their aspirations. Fullerton India has been ahead of the curve in investing in our digital journey and has successfully deployed digital capabilities in an effective, meaningful and value-enhancing way.

Cambodia Post Bank: Igniting the Entrepreneurial SpiritFrom online stores to food stalls to factories, Cambodians will give it a shot. In a society where most people, young or old, want to be the owner of their business, everyone needs a trusted partner. In 2013, Cambodia Post Bank was born to provide financial access to micro and small enterprises, fueling entrepreneurship and giving business-owners a chance to succeed.

TRANSFORMATIONAL IMPACT:Cambodia Post Bank is serving customers in 18 out of 25 provinces.

Over

65,000CUSTOMERS

Disbursed over

US$470mWORTH OF LOANS TO-DATE

Going Far, Reaching WideDespite the abundance of banks and microfinance institutions in the country, CP Bank found its “sweet spot”. Our research revealed that there were a significant number of enterprises that were too small for banks to serve but too big for microfinance lending. Recognising this opportunity, we swiftly rolled-out our nationwide branch network to reach entrepreneurs, not just in major cities, but also in the provinces.

Today, CP Bank operates the fifth largest banking network in the country. At least 40% of our 37 branches are located in rural areas to serve those who may not have access to formal financial services. Our rapid growth has not gone unrecognised, and in 2016, we were awarded “The Outstanding Bank Growth Award” by the International Data Group ASEAN.

Recently, CP Bank launched ATM and Mobile Banking services, keeping to our commitment to be within reach of our customers. With these digital touchpoints, our customers can now perform simple transactions anytime, anywhere.

A Full-Service Banking PartnerCP Bank aims to provide, not only loans, but a comprehensive range of financial products and services to small business owners. Apart from current and savings accounts and term deposits, we also offer recurring savings and step-up accounts for more savvy depositors who want the best returns for their families.

In 2016, CP Bank signed a partnership with one of the country’s foremost insurance companies and started providing life insurance protection to our borrowers. A full suite of life and non-life insurance products are well on their way to the banking halls, and our customers can look forward to resolving all their financial needs with just one trusted partner.

Alternative data to replace physical verification and documentation

Targeting the sweet spot of small business owners

CP Bank aims to provide, not only loans, but a comprehensive range of financial products and services to small business owners.

Fullerton India is the first Non-Banking Financial Company (NBFC) in India to introduce iris-based tabs for customer authentication and a self-learning chatbot, ASHA, to assist with personal loan applications over Facebook messenger. We are also one of the few NBFCs in India to enable rural field employees to use Android-based tablets to record transactions and issue receipts on a real-time basis, improving customer experience.

Fullerton India hosts various online platforms to facilitate ease of operations and quicker turn-around-time.

Introducing Simple, Flexible and Seamless Platforms Loan application and structuring

available across desktop, mobile and tablets allow customers to define their preferred loan structure and complete an application, without paperwork (other than repayment mandates), whenever and wherever the need occurs. This platform also allows prospective customers to find out their loan eligibility online in a matter of minutes

Electronic Know-Your-Customer (KYC) facility eliminates lengthy, paper driven KYC documentation and reduces the chances of fraud

Assisted sourcing via digitally-equipped sales representatives ensures on-the-spot loan offers for prospective customers

Leveraging Alternate and Non-Intrusive Data Social data, credit bureau and

other data replace and reduce the need for any physical verification, or verification that requires active customer participation

Alternate source-based information reduces and, where possible, eliminates the need for customers to submit their income documentation

Increasing Efficiency and Accessibility A digitalised customer service

platform allows the customer to access nearly all enquiries and requests, with most standard solutions fulfilled instantaneously. Customers can access their loan details across the spectrum of digital channels including IVR, web and mobile apps, thereby enhancing Fullerton India’s perception as a highly customer-centric organisation

The use of smart phones for receipt management and customer account management has transformed manual, conventional and time consuming activities to a paperless, online and automated collections management process

Building a Culture of Innovation ‘Digital First’ is a fundamental

philosophy for Fullerton India and we continue investing for the future in talent, capability and in emerging technologies with the aim of providing easy and intuitive financial solutions to our customers. Fullerton India stimulates innovation from both within and outside the organisation

Fullerton India launched Finnovatica, a platform that seeks to nurture innovative ideas from talented young minds. Through this program, we aim to provide a platform for aspiring student entrepreneurs from premier engineering institutes to design and develop innovative solutions in areas related to customer origination and management, financial literacy, big data and machine learning, among others


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40 Demonstrating Our Capabilities


dunia:Success through Investment in Human CapitalAt dunia, we believe that our people shape our future. Our talent pool comprises the best and the brightest from leading schools and organisations. With diverse talent from varying backgrounds and experiences, our people understand customers better and deliver superior service by going the extra mile. At dunia, one of our biggest assets is our human capital, which helps us deliver the ‘dunia Difference’.

Human Capital, A Key Differentiator in dunia In line with our strategic vision of building a diverse talent pool, we place special efforts in hiring UAE nationals, women and young Management Associates. At dunia, we recognize the importance of women for social and economic progress, and embrace the fresh outlook, balance and execution excellence women bring to our business. Women handle critical leadership positions and drive key initiatives. Supporting the UAE’s strategic priority of developing national talent, we hire the best UAE nationals, nurture and empower them to help shape the future of the UAE.

To remain a nimble company with fresh ideas, we invest in hiring young leaders from top-tier business schools as part of the dunia Management Associate Program. This rigorous program develops the leadership potential

in young talent and enables them to contribute to the success of the business through innovation.

Nurturing Talent through Continuous Learning and Development The dunia Training Academy is a centre of continuous learning and knowledge sharing and supports the growth of every member of our team. Each employee receives a personalised training program according to carefully assessed needs which includes functional skills training, leadership training and certification programs to equip them in their roles as well as assist in their career development. High performing staff are sent on a regular basis to development and learning programs at top tier institutions across the world.

For our front line heroes, we have launched a unique development

program called ‘Development Opportunity for Operations, Risk and Sales’ (DOORS), which recognizes the latent potential in high performing staff and gives them an accelerated opportunity to expand their career and growth horizons. In addition, staff also benefit from multi-tiered development programs such as mentorship programs, where every staff can choose their mentors to guide them through their careers; job rotation programs for holistic skills development across functions; and team challenges that encourage cross-functional collaboration and learning.

The ‘dunia Difference’ It is through our focus on raising potential and improving performance that we build true Human Capital to create value for our customers. By continuously empowering people and enabling their success, we enrich their lives. This is the ‘dunia Difference’.

Personalised training programs according to carefully assessed needs

Bank of China Fullerton:Championing China’s Rural Reform Programme Even as China’s economy grows, 600 million people or 44% of the population remain part of the underserved rural segment. In 2011, Bank of China, with its brand and capital, and Fullerton Financial Holdings, which has a strong track record in deploying Mass Market and SME business models, joined hands to build community banks to serve this target segment in rural China.

Today, BOCF contributes to the development and modernisation of the financial system in the rural regions and improves financial inclusion for the small, medium and micro enterprises and individuals in counties and villages. Through this work, BOCF also helps strengthen the agricultural sector, a vital and strategically important economic sector in China.

Targeted Segments and Customised Products and Services BOCF applies the ‘small and dispersed’ lending model to best serve small, medium and micro rural enterprises and farmers. With appropriate financing, the borrowers are able to improve their market competitiveness, allowing their livelihoods to prosper. We have developed up to 53 different agricultural loan product types, tailored to the specific economic characteristics of various counties and across a range of industries such as poultry, livestock breeding, aquaculture, rice planting and greenhouse vegetable planting.

Risk Management and Control Practices BOCF’s credit risk model factors in the regional characteristics of each county’s economy. Credit evaluation through the use of scorecard models helps to manage credit quality at the approval stage. Emphasis is also placed on active loan monitoring and collections to control credit losses. Investments are also made in credit management system, data collection and big data analytics to enable more insightful and effective end-to-end

credit processes across the network. BOCF’s non-performing loan rate is markedly below industry peers and is a testament to the effective application of our unique credit risk framework, processes and models.

Technology InnovationTo cater to the geographically dispersed customer base and modernise rural financing, BOCF offers a full suite of online and offline services that make banking simple and efficient. These include a 24-hour call center, e-Banking and mobile banking. In addition, the mobile on-site debit card issuance service allows cards to be issued at customers’ premises, and the SIM card banking service enables customers to access mobile services without WIFI or data network – which may not be available in rural China.

Strong Mission to Support Rural FinancingTo support China’s objective of alleviating poverty through the provision of financial services, BOCF assists households through sustainable programs for credit education, job creation and innovation. As at end 2016, BOCF operates in counties with 3.7 million poor households and new branches are continuously being set up in central and western China where up to 78% of the population is poor. Through BOCF, over 3,600 enterprises have provided jobs to people in poverty, and over 2,300 industry-supported poverty alleviation programs in agriculture, forestry, husbandry and fishery have been launched.

‘Small and dispersed’ lending model to best serve rural enterprises

TRANSFORMATIONAL IMPACT:BOCF is the largest network of community banks covering 12 provinces across China and still growing.

Network of:

82BANKS

More than

1,000,000CUSTOMERS

78SUB-BRANCHES

Demonstrating Our Capabilities


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Gaining Local Insights and International SupportSince the Company’s inception, we have partnered with Capital Diamond Star Group (CDSG), a leading agriculture and food distributor, which has enabled us to gain insights on the behavior of our customers to help us craft the right products and solutions. CDSG is also a key shareholder of Capital Life Insurance which provides life insurance to Fullerton Myanmar’s borrowers, giving them security alongside the means to prosper.

In 2015, the International Finance Corporation (IFC) became an investor in Fullerton Myanmar, joining our journey towards ‘Enabling Success, Enriching Lives’. In fact, IFC had provided its support at inception by way of a financial grant to assist in the set-up of the business. IFC has contributed invaluably to our success, not only by way of funding, but more importantly, by providing advice and assistance in navigating Myanmar’s regulatory and business landscape.

Sourcing Suitable SolutionsCommercial partnerships are also integral to our strategy and how we make an impact on our communities.

Fullerton Myanmar:Building Partnerships for SuccessAs Myanmar emerges from decades of isolation, financial services have remained elusive to over 90% of the population. At least six million people, especially those in rural villages, rely on informal money lenders, and around 37 million more are unserved. Within two years from launch, Fullerton Myanmar has provided loans to 60,000 borrowers to improve their enterprises and uplift their lives. The rapid growth of Fullerton Myanmar is made possible by the strong support of its local and global partners. Green solutions to

rural customers

TRANSFORMATIONAL IMPACT:Fullerton Myanmar is one of the country’s top five largest microfinance institutions. Since its launch in 2014, it now covers 12 townships in three regions.

Over

60,000CUSTOMERS

Disbursed over

US$30mWORTH OF LOANS TO-DATE

In 2016, we partnered with TOTAL of France to make solar lamps available to our rural customers through a small loan. In doing this, Fullerton Myanmar enabled a conducive environment for students to learn and for families to spend leisure time together. Recently, Fullerton Myanmar engaged a distributor of motorcycles from India, to offer Two-wheeler financing. In the coming years, our stakeholders can expect to see more partnership programmes that enhance the health, safety and livelihood of our customers.

Keeping Dialogue with the CommunityAs the needs and lifestyle of its people evolve, Myanmar’s financial regulations and policies are also undergoing change. Fullerton Myanmar’s constant dialogue with supervisory officials and regulatory bodies has helped us understand how best to comply with these changes, with minimal disruption to our operations. More importantly, these relationships have allowed us to share our vision for microfinance, and gain recognition by the authorities as a serious partner in improving financial inclusion in Myanmar.


Alliance Bank:A Practical Approach to Risk ManagementBanking today is becoming increasingly complex, characterised by the accelerating pace of regulatory change and rising dependency on technology. Beyond maintaining near-perfect end-to-end banking solutions, banks need to safeguard against cyber-crimes, fraud and regulatory breaches as these can result in costly consequences. At Alliance Bank, we take a practical approach to managing operational risk. We believe that in addition to the risk frameworks in place, the ability to effectively respond to adverse situations is critical.

Alliance adopts various approaches to ensure that the wide array of operational risk concerns posed to banks today are effectively managed.

Cultivating a Strong Risk Culture We believe our people are our most important resource and therefore the linchpin to robust risk management. Our starting point is to inculcate staff with the right values and ethics, being mindful that banking scandals often feature smart people lacking the right moral compass. Forming well-balanced teams with varied skillsets coupled with rewards for the right behaviors help to foster a team-driven operational approach, smooth communication and appropriate escalation of issues. We also put strong emphasis in holistic staff training so that they are equipped not only with technical and product knowledge, but also the proper soft tools needed for judicious problem-solving, especially as they work up the ranks.

Testing and Simplifying Processes to Minimise RiskBad processes can lead to poor service, operational losses and customer complaints. At Alliance, we take the approach of conducting regular process reviews to challenge existing processes, testing new processes thoroughly to assess

BCP activation enabled uninterrupted services to customers

People are our most important resource and therefore the linchpin to robust risk management.

their feasibility and address potential weaknesses. In addition, we seek to simplify and streamline processes and leverage technology wherever possible not only to improve efficiency, but also to reduce points of vulnerability and minimise the risk of human error.

Having a Sound Business Continuity Process (BCP) in PlaceAlliance formulates its BCP plans to cover a wide range of events and runs drills periodically to familiarise staff on how to handle adverse situations. The plans place emphasis on smooth internal communication, swift recovery of backed-up data, minimising service disruption to customers and maintaining proper supervision at all times. Timely and effective communication with stakeholders and customers also secures confidence in Alliance’s ability to safeguard their assets.

Successfully Responding to a Live Contingency The execution of a well-prepared BCP was demonstrated in a recent incident when a fire at a nearby electrical sub-station disrupted the power supply to our Head Office building and flagship branch. Once the Bank was notified of the incident, our Crisis Management Team (CMT) immediately activated the BCP. As a result, staff at an alternate

site were able to quickly access our systems and backed-up data, which allowed uninterrupted branch banking and online services for customers at other branches and ATMs.

Prompt and seamless communication with all relevant parties was a critical part of our BCP execution. We used social media applications to communicate with CMT and BCP coordinators relay BCP activation alerts to staff so as to redirect them to designated critical functions and alternate sites. We also guided customers to the nearest branch and ATMs via notices and closely monitored social media and phone lines to ensure prompt response to customer enquiries and complaints. Key stakeholders including our Board Members and the Central Bank were notified and kept informed of key developments.

Through this incident, our flagship branch remained open for business.We reinitiated partial operations at our Head Office the day after the incident and resumed full operations within two days. While the cause of the fire was beyond our control, no major loss was suffered nor were there any service disruptions to customers, which was a testament to how well our BCP plan had worked. This incident showcased our ability to manage operational risk effectively in practice.

Alliance Bank is a wholly-owned susbsidiary of Alliance Financial Group.


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45Demonstrating Our Capabilities

Build relationships with colleagues and show care for others Value diversity of ideas, based on the belief that success is the sum of our

collective talent Inculcate and adopt a culture of openness, trust and transparency Respect and support colleagues towards success and celebrate our shared

accomplishments

CollaborationWe believe the best results stem from integrating a diverse mix of perspectives, talents, and experience.

Responsive to changing market conditions Dare to take calculated risk to pursue new ideas and challenge existing norms Build on our success and learn from our failures Forward thinking and nimble

InnovativeWe embrace change and make a difference.

Own the outcome and do our personal best to achieve it Take the initiative to do what is right and identify what needs to be done Actively promote and protect our reputation Empowered to seek involvement in and execution of company-wide decisions

OwnershipWe treat the company as our own and act with the company’s long term success in mind.

United in our conviction about our mission Driven by strong belief in our cause despite challenges and difficulties Energise and influence others towards the common direction Take pride in our work and always strive for excellence in all we do

PassionWe take pride in our vision.

Our words are our bond and we stand behind our promises Treat our colleagues and partners with fairness and honesty Consistently aligned to the company’s interests and personal ethics even in

times of adversity and stress Intellectually honest in the face of disagreements and pressure

IntegrityWe are personally accountable to uphold the highest standards of business ethics and moral conduct.

Values and Their Supporting Behaviours

Our core values define how we work, what we strive for and the way we interact with others and therefore serve as the foundation for

sound and sustainable growth in a dynamic environment. We ensure that our values are deeply rooted in all aspects of our organisation

and that our employees cultivate and nourish these principles as we endeavour to achieve our mission.

OUR PEOPLE& VALUES


4746 Our People & Values46

SUSTAINABLE DEVELOPMENT: BUILDING COMMUNITIES

We pursue the sustainable development of our communities by assessing and managing the social impact of our operations and by supporting initiatives that create effective and long term benefits. Going beyond corporate philanthropy that is just a one-time contribution, we support and encourage long term community investment that leaves an enduring social and economic impact on the community. We are active in sharing practices and providing solutions that enable the community to develop skills, enhance livelihood and improve living conditions. Across our entities, we have impacted more than 10 million lives to date and by proactively establishing local community partnerships and encouraging our employees to participate in these initiatives – we continue to pave the way to sustainable growth.

Building Communities

Equipping Villagers and Increasing Sustainability through New Skills

Set up of a Production CentreIn July 2015, Fullerton India helped set up a production centre with five sewing machines in Tili Village, Sagar District. Since receiving training from Fullerton India, nine women currently work at the centre to stitch and prepare 12 pieces of clothing each per day. All these women used to either sell beedi (Indian local variation of a cigarette) at their homes or sat idle, but now the team can prepare up to 330 pieces of shirts per month. They meet clients, twice a week, and receive payments by cash weekly.

In parts of rural India, many women are kept away from education and deprived of livelihood skills, with their families preferring to marry them off. However, empowered with new skillsets with the help of Fullerton India, the women have been able to run their production centre and pay for rental and utility bills. With the motorised sewing machines, the women can sell their product in the market and receive income, in turn fueling their desire to work and earn money they can call their own.

Turning Farmers into Honey-Making EntrepreneursBhuvaneswari is a farmer from the Palayam village of Erode District in Tamil Nadu. Due to poor ground water availability and inadequate rainfall, income from farming had gradually decreased over the years forcing her to search for an alternate source of income.

She came to know about the bee keeping training jointly organised by Fullerton India and its partner. She participated in the three-day skill building training on the latest practices of honey bee rearing, honey extraction and honey value adding. Fullerton India also provided a start-up kit, with the equipment for honey bee rearing and a colony of honey bees.

Following her training, she started maintaining her honey bee colonies and was able to extract 650 grams of honey with her first harvest. As a result, she was able to create a new stream of income for her family.

Empowered with new skillsets with the help of Fullerton India, the women have been able to run their production centre and pay for rental and utility bills.

Fullerton India

Sustainable Development: Building Communities


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48

Building Communitiescont’d

Helping to Revitalise Traditional Markets

Over the years, Danamon has focused on revitalising Indonesia’s traditional markets, which have faced decline due to the rise of shopping malls and convenience stores. The PASAR SEJAHTERA program, which is in its 6th year, has spearheaded efforts to improve the cleanliness, accessibility, facilities, infrastructure, and management of traditional markets across the country. Partnership with multiple public and private stakeholders such as the local government, market authorities, and communities has helped ensure that the program is sustainable and continues to keep markets revitalised once they are handed over to the local authorities.

In 2015 and 2016, Danamon Peduli initiated a nationwide campaign called the People’s Market Festival through a series of events held in selected traditional markets. The events featured cultural showcases of local arts and culinary delicacies to build the perception that traditional markets are clean, safe, and fun places for families. In total, 14 such festivals were held across Indonesia over the last two years. Danamon invited community figures as well as local and national media to participate in the festivals to help highlight the contribution of traditional markets to Indonesia’s economy, heritage and culture.

Danamon’s ongoing campaign to promote traditional markets has earned numerous accolades from various institutions. In 2016, Danamon was invited by the United Nations to speak at the Habitat III Conference in Quito, Ecuador.

Bank Danamon

Integral Member and Contributor to the Betterment of the CommunityBlood Donation Drive

To foster awareness of the importance of blood donation, CP Bank collaborated with the National Blood Transfusion Center to organise a program called ‘Giving Blood to Save Lives’ which was held in September 2016 in Phnom Penh, Cambodia. The blood donation drive, a first for CP Bank, was highly successful with more than 70 employees from the Bank participating in this event.

Improving Community Parks

In February and June 2016, the Oddar Meanchey Branch of CP Bank sponsored and brought a total of 50 benches to the Samrong municipality. The benches were installed at the public garden to improve the aesthetics of the park and provide more seating for locals to enjoy.

Cambodia Post Bank

Standing By Our Communities

In August 2016, Pathein City in Myanmar experienced one of the worst floods in years, severely affecting the lives of the local communities, with many losing their homes to the floods. Fullerton Myanmar’s Pathein branch and its customers were not spared.

Fullerton Myanmar responded to the situation and executed its Flood Relief Programme, an activity the company has been continuing since August 2015. A total of 2,344 relief packages containing rice, cooking oil and beans were handed out to Fullerton Myanmar’s affected customers who were also allowed to delay repayment during this exceptional situation.

Fullerton Myanmar’s actions were highly appreciated by our customers and we were commended by the regulator, Financial Regulatory Department (FRD), for the effort and consideration.

Fullerton Myanmar

Responding in the Face of Disaster

In June 2016, Huangmei County suffered a series of heavy rainfalls, causing one of the most serious floods in recent memory. The county resembled a vast ocean, with their storehouses, homes, roads, farmland, and fish ponds fully immersed under water. By end July, the floods affected the county’s 16 townships, 510 villages and over 750,000 people, resulting in cumulative economic losses of an estimated 2.1 billion yuan.

As a local bank that strongly supports the agricultural segment, BOCF Huangmei Community Bank was the first to respond to the affected villages. Some employees visited affected farmers in severely damaged areas, to provide encouragement and assurance of help.

Our Bank’s client managers actively coordinated with the town government, agricultural bureau, aquatic bureau, husbandry and other agencies to provide support for post-disaster reconstruction.

With at least 27 disaster-affected customers, BOCF Huangmei reviewed possible concessions within the existing credit policies, and introduced changes around interest rate, tenor and credit limit to help alleviate the farmers’ difficulties. For severely affected customers, BOCF provided a six-month deferment of interest payments. By August, the bank had issued disaster reconstruction funds totaling 3.8 million yuan.

Additionally, BOCF Huangmei employees volunteered in donation drive efforts, and raised 13,500 yuan of donations.

Bank of China Fullerton

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FINANCIAL



FINANCIAL Company Review 2016FULLERTON FINANCIAL HOLDINGS

5352

Financial Highlights

In 2016, FFH realised gains on its financial assets and returned the realised profits to its shareholder with declared dividends of S$12.8b.

Net profit for the financial year was S$9.2b, up 3.7 times from 2015.

Profit after Tax(S$B) +267%

2016

2015

2014

2013

2012

9.2

2.5

1.1

1.4

2.8

Revenue(S$B) +146%

2016

2015

2014

2013

2012

11.3

4.6

3.2

3.5

5.1

Revenue

S$11.3bIncrease by 146% from S$4.6b.

Net Profit

S$9.2bIncrease by 267% from S$2.5b.

Shareholders’ Equity

S$7.6bDecrease by 58% due to payment of dividends totaling S$12.8b.

S$9.2bNet Profit

Not to scale

Loans(S$B) +1.2%

2016

2015

2014

2013

2012

17.3

17.1

17.9

16.4

16.6

Deposits(S$B) -6.0%

2016

2015

2014

2013

2012

12.4

13.2

13.7

12.5

12.5

Operating Expenses(S$B)

Shareholders’ Equity(S$B) -58.2%

2016

2015

2014

2013

2012

1.3

1.3

1.6

1.5

1.4

2016

2015

2014

2013

2012

7.6*

18.1

21.3

21.5

21.1

* Dividends of S$12.8b was declared and paid in 2016.

Financial Highlights


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FINANCIAL

Printed on environmentally friendly paper

Fullerton Financial Holdings Pte Ltd

Registered Office:60B Orchard Road, #06-18 Tower 2, The Atrium@Orchard Singapore 238891

Office Address:5 Shenton Way#18-06 UIC BuildingSingapore 068808

[email protected]

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