1AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Cheah Tek KuangGroup Managing Director
AmBank GroupInvestors Presentation
9M FY2012 Results
14 February 2012
AMMB Holdings Berhad
2AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
1. Executive summary
2. 9M FY2012 Group Financial Performance
3. Outlook
4. Group Strategy
5. Divisional Performance
6. Supplementary Information
o Economic landscape
o Strategic partnerships
o Competitive positioning
3AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Pre ANZ Partnership Focus Scale & Presence
ANZ Partnership Focus (FY2008/2011) Reposition & Build
Medium Term Aspiration (MTA):
FY2012 – FY2014To Become Malaysia’s Preferred Banking Group with International Connectivity
PATMI up 14%, improving ROE
Strong CASA (+20%) and moderated loans growth to manage NIM (higher QoQ)
Capital base positioned for BNM1’s Basel 3 guidelines and target payouts
Credit ratings upgraded: BBB+/A-2/Stable by S&P2
Due diligence in progress to acquire a local general insurance company
9MFY2012 – continued profit growth momentum
FY2012 Improving Returns
9M FY2012 Highlights
1 Bank Negara Malaysia 2 AmBank (M) Bhd and AmInvestment Bank upgraded by Standard & Poor’s
4AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Transaction* Islamic*
+30.8% +9.8%
Disciplined strategy execution delivering results
PATMI
EPS 1
(basic)
ROA
ROE
9MFY12 vs 9MFY11 PATMI growth
9MFY2012 – continued growth momentum
Higher income, reflecting strong performance from non-interest income
Credit quality improving with lower charge offs/allowancesP
Higher contributions from most divisions
Life Assurance: Increasing focus on Bancassurance and better performing agencies P
Divisional growth
YoY Change
* Performances reflected within divisional outcomes1 Not annualised
9MFY12 9MFY11 ∆% Q3FY12 Q2FY12 Q1FY12 Q4FY11 Q3FY11
1,168.2 mil 1,026.5 mil +13.8% 357.2 mil 369.5 mil 441.5 mil 316.3 mil 325.3 mil
14.6% 13.9% +0.7% 13.2% 13.7% 17.0% 12.7% 13.0%
1.48% 1.43% +0.05% 1.39% 1.37% 1.69% 1.26% 1.32%
39.1 sen 34.2 sen +14.3% 12.0 sen 12.4 sen 14.8 sen 10.5 sen 10.8 sen
Retail BusinessCorporate & Institutional
Investment Markets Life General
+3.6% +17.8% +35.5% +29.0% +51.3% -18.2% +38.7%
Performance
5AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Net Lending1
CASA
Adjusted Customer Deposits2
Loans growth targeting profitable & viable segments
Strong deposit growth via expanded product and service offerings
Implementing customer segmentation to enhance share of wallet and increase cross-selling
Gross impaired loans
RWCAR
LD Ratio3
Tier 1 CAR
Proactive risk management
Implemented FRS disciplines under BNM transitional provisions and new FTP4
Capital levels positioned for BNM’s Basel 3 guidelines
1 Includes Islamic loans sold with recourse2 Adjusted customer deposits include term funding and loans sold with recourse
3 Based on net loans including loans sold with recourse over adjusted customer deposits4 Funds transfer pricing
5 Estimated capital ratios include Q3FY11/FY12 unappropriated profits of AmBank (M) Bhd Group & AmInvestment Bank Group
CTI
Growth
Risk, Capital & Funding Profile
P
P
Loans growth targeting profitable segments; strong CASA growth
YoY Change
CET-1
YoY Change
To be updated
9MFY12 9MFY11 ∆% FY11
74.1 bil 69.5 bil 6.6% 71.1 bil
82.2 bil 76.7 bil 7.2% 81.3 bil
12.0 bil 10.0 bil 20.0% 10.4 bil
9MFY12 9MFY11 ∆% FY11
2.64% 3.35% -0.71% 3.33%
14.7% 15.1%5 15.1% 15.2%5 -0.4% 14.4%
10.3% 10.6%5 9.4% 9.5%5 0.9% 10.2%
8.2% 8.5%5 7.3% 7.4%5 0.9% 8.0%
90.2% 90.7% 0.5% 87.4%
40.1% 39.5% 0.6% 39.9%
6AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Malaysia: Sustainable
growth
• Persistent global headwinds and Euro zone crisis to continue weakening external demand
• Despite downside risk from external sector, initiatives under ETP and 10th Malaysian plan as well as stable employment continue to provide some support for private investment and consumption
• Malaysia GDP : 2011f1 – circa 5%; 2012f1 – moderating to circa 4%
Industry: Strong
fundamentals, some challenges
• New macro-prudential measures being introduced by regulators on consumer loan products to curb financial imprudence risk in the household sector
• Anticipating interest rates to be maintained in the short term; whilst moderating loans demand and on-going competition for loans and deposits will continue to impact margins
• Tougher economic environment likely to put pressure on improving asset quality trends
• 10-year Financial Sector Blueprint provides for further liberalisation of financial services and framework for new products and services across all segments
AMMB: Execute to
strategic themes
• Stay focused on growing sustainable non-interest income, CASA/deposits and loans growth targeting profitable and viable segments
• Subdued conditions and sentiments but ETP/Budget 2012 provide future opportunities
• Continue investing in infrastructure whilst maintaining high standards of governance and risk disciplines
• Leveraging strategic partnerships and International Connectivity for growth
• Cautious on short term outlook with downside risks
What is ahead…
1 Inhouse research 2 Update since H1FY2012 Investors Presentation highlighted in blue and italics
7AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Ashok RamamurthyDeputy Group Managing Director &
Group Chief Financial Officer
AmBank GroupInvestors Presentation
9M FY2012 Results
14 February 2012
AMMB Holdings Berhad
8AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
1. Executive summary
2. 9M FY2012 Group Financial Performance
3. Outlook
4. Group Strategy
5. Divisional Performance
6. Supplementary Information
o Economic landscape
o Strategic partnerships
o Competitive positioning
9AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
PATMI 9MFY11Net interest incomeNon Interest IncomeTotal income Expenses PBP Impairments PBT Taxation & zakat PAT Minority interests PATMI 9MFY12
Higher non-interest income & lower allowances driving profit growth
26.5% 9.4% 10.0%
10.1% 1,168.2 mil
13.8%
3.6%
8.2% 7.1% 11.0% 13.7%
1,026.5 mil
Positive growth in 9MFY12PATMI Contraction in 9MFY12
PATMI9MFY11
Net Interest Income
Non-Interest Income
Total income Expenses PBPProvisions/Allowances
PBT Tax PAT MIPATMI
9MFY12
9MFY12 (RM’mil)
2,058.4 1,135.9 3,194.3 1,282.5 1,911.8 313.4 1,598.5 388.2 1,210.3 42.1
9MFY11(RM’mil)
2,053.7 897.7 2,951.4 1,165.9 1,785.5 345.9 1,439.6 374.8 1,064.7 38.3
Non interest income = ~36% of total income
Ongoing medium term investments in human capital and infrastructure but well within CTI targets
0.2%
10AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
PATMI H1FY11 Retail banking Business banking Corporate &Institutional
InvestmentBanking
Markets Life Assurance General Insurance OperatingSegments
PATMI H1FY12PATMI
9MFY11Retail Business
Corporate & Institutional
Investment MarketsLife
Assurance^General
InsuranceOperating Segments
Transaction* Islamic*
PATMI9MFY12
% of Composition
37% 14% 16% 10% 20% 4% 5% -6%
9MFY12 (RM’mil)
433.6 158.9 186.7 116.2 235.1 42.2 64.0 -68.61 110.0 181.4
9MFY11 (RM’mil)
418.6 134.9 137.8 90.1 155.4 51.6 46.2 -8.2 84.1 165.1
Diversified divisional contributions; targeting profitable segments
PATMI (by division)
Positive growth in 9MFY12
35.5%
51.3% 38.7%
1,026.5 mil
1,168.2 mil
29.0%
13.8%
Contraction in 9MFY12
18.2%9.8%
* Performances reflected within divisional outcomes ̂Life Assurance surplus is transferred into life policy shareholders’ fund in overall Group accounts
1 includes expenses for recently set-up AmFamily Takaful business
84%
84%
Conventional PATMI Islamic PATMI
16%
16%
Lower profit transferred in 9MFY12 pending business model refinements
3.6%17.8%
->100% 30.8%
11AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
3.44%
2.68%2.92%
3.13% 3.08% 3.13% 3.17%
3.04%
2.98% 2.94%
2.74% 2.65% 2.71%2.85%
FY09 FY10 FY11 9MFY12 Q1FY12 Q2FY12 Q3FY12
Cost of funds NIM
NIM
COF
Growing non-interest income; higher NIM QoQ
FY09 FY10 FY11 9MFY11 Fee IncomeTrading &
InvestmentInsuranceBusiness
Others 9MFY12
Fee Income Trading & Investment Insurance Business Others
As % of total income22% 29% 30% 30% 36%
48%
37%
1%
14%
26.5%
638.2 1,040.3 1,170.3 897.7 1,135.9 5.9% 77.2% 16.7% 23.4%
Non-interest income movement
Note :1 Net Interest Margin includes Net Financing Income from Islamic Banking business 2 FY09-9MFY12 based on internal data computation
Cost of Fund NIM OPR SRR
3.44%
2.68%
2.92% 2.92% 2.86% 2.91% 2.90% 2.85%
2.92%
3.04%
2.98% 2.94% 2.94%3.05%
2.95% 2.90%3.01%
2.94%
FY09 FY10 FY11 Q1FY12 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12
Cost of funds NIM
3.44%
2.68%
2.92% 2.92% 2.86% 2.91% 2.90% 2.85%
2.92%
3.04%
2.98% 2.94% 2.94%3.05%
2.95% 2.90%3.01%
2.94%
FY09 FY10 FY11 Q1FY12 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12
Cost of funds NIM
NIM and Cost of Funds
2.50%2.75% 2.75% 2.75%
3.00%
3.00%
1.00% 1.00% 1.00% 1.00%
2.00%
3.00%
4.00%
Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12
OPR SRR
SRR
OPR
2.50%2.75% 2.75% 2.75%
3.00%
3.00%
1.00% 1.00% 1.00% 1.00%
2.00%
3.00%
4.00%
Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12
OPR SRR
SRR
OPR
FY09 FY10 FY11 9MFY12 Q1FY12 Q2FY12 Q3FY12
2.00%2.25%
2.75%
3.00%
1.00% 1.00% 1.00%
4.00%
FY09 FY10 FY11 9MFY12
OPR SRR
COF
NIM
SRR
OPR
RM’mil
NIM 14bps
COF 4bps
3.00% 3.00%3.00%3.00%
2.00%
4.00% 4.00%
Q1FY12 Q2FY12 Q3FY12
OPR SRR
SRR
OPR
12AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
3.18%
0.97% 0.60%0.88%
6.2%
3.7%
2.6%
1.5%
10.4%
6.3%
4.1%
2.8%
3.81%3.33%
2.64%
0.67% 0.53%
FY2007 FY2008 FY2009 FY2010 Day 1 FY2011 9MFY2012
Net Provisions Charge Net NPL Ratio Gross NPL Ratio Gross Impaired Loans Loan Loss Charge
3.182.02 1.50 1.01
5.53
3.602.43
1.87 2.54 2.45 2.01
56.6%67.3%
75.1%
99.5%89.1%
102.3% 107.5%
FY2007 FY2008 FY2009 FY2010 Day 1 FY2011 9MFY12
Net NPL Gross NPL Gross Impaired Loans Loan Loss Coverage Allowance Coverage
4.603.18 2.02 1.50
6.14
5.533.60
2.43 2.54% 2.54 2.45
56.6%67.3%
75.1%
99.5%
89.1%
102.3% 104.0%
FY2007 FY2008 FY2009 FY2010 Day 1 FY2011 Q1FY12
Net NPL Gross NPL Gross Impaired Loans Loan Loss Coverage Allowance Coverage
3.18%
0.97% 0.60%0.88%
6.20%
3.70%
2.60%
1.50%
10.40%
6.30%
4.10%
2.80%
3.80%3.30% 2.96%
0.67% 0.40%
FY2007 FY2008 FY2009 FY2010 Day 1 FY2011 Q1FY12
Net Provisions Charge Net NPL Ratio Gross NPL Ratio Gross Impaired Loans Loan Loss Charge
Asset quality continues to improve
Asset Quality Indicators
FRS
13
9GP
3
117bps
14bps
RM’bil
FRS
139G
P3
Allowance Coverage:
• Retail Bkg: 99.5%• Business Bkg: 55.9%
FY2007 FY2008 FY2009 FY2010 FY2011 9MFY2012
Gross Impaired Loans
• Retail Bkg: 2.67%• Business Bkg: 2.38%
Day 1[1 April 10]
13AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Note :
1 FY2004 and FY2005 financials based on gross before IIS
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
GP 3
FY2004 -FY2007 FY2008-FY2010 FY2011
FRS 139
0.00%
0.60%
1.20%
1.80%
Q1 Q2 Q3 Q4
% New Gross NPL / Gross Impaired Loans to Gross Loans
FY2004-FY2007 FY2008-FY2010
FY2011 Q1FY20129MFY2012
New gross impaired loans formation within expectations
0.00%
0.60%
1.20%
1.80%
Q1 Q2 Q3 Q4
% New Gross NPL / Gross Impaired Loans to Gross Loans
0.00%
0.40%
0.80%
1.20%
Q1 Q2 Q3 Q4
% Gross NPL / Impaired Loans Conversion to Gross Loans
0.00%
0.20%
0.40%
0.60%
Q1 Q2 Q3 Q4
% Recoveries to Avg Gross Loans
0.00%
0.50%
1.00%
1.50%
2.00%
Q1 Q2 Q3 Q4
% Write-Offs to Avg Gross Loans
Impairments caused by a previously restructured Business Banking loan
Prudently accelerated write-offs of partial provisions post system enhancements
14AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Gross Loans9MFY11
Auto Financing Mortgage Credit Cards Line of Credit Co-Op Asset Financing Business Banking(ex GLR)
Corporate &Institutional
Banking
Others Gross Loans9MFY12
Faster growth in non-retail loans
Positive growth in 9MFY12 Contraction in 9MFY12Non-RetailRetail
Gross Loan1 / Financing1 movement
Retail Non-Retail
1.6% 14.7%
71.9bil
7.0% 9.7% 15.3%
16.0%
9.3% 8.3%
>100.0% 76.3bil
38%
62%
6.2%
35%
65%
Gross Loan9MFY11
Auto Financing
Mortgage Credit Cards Line of Credit Co-OpAsset
FinancingBusiness
Corporate & Institutional
OthersGross Loan
9MFY12% of
Composition34.0% 19.6% 1.4% 1.0% 2.4% 3.7% 20.4% 18.0% -0.5%
9MFY12 (RM’bil)
25.9 14.9 1.1 0.75 1.9 2.8 15.6 13.8 -0.4
9MFY11 (RM’bil)
26.0 14.0 1.0 0.83 2.3 2.6 13.5 11.9 -0.2
Total Fixed interest rate Variable interest rateMar-08 Dec-11 Mar-08 Dec-11 Mar-08 Dec-11
Conventional 82% 78% 47% 30% 38% 48%Islamic 18% 22% 15% 15% 0.1% 6%
100% 100% 62% 45% 38% 55%
Loan portfolio trends:
0.3% 17.9%
1 Including Islamic financing sold to Cagamas
No
n-re
tailR
etail
15AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
14.0% 13.9% 15.0% 13.9% 14.6%
71.8% 77.0% 77.4% 74.4% 75.2%
2.0%0.7% 1.5% 6.9% 7.1%3.0% 1.0%
1.2% 0.6% 0.8%9.2%
7.4% 4.9%4.3% 2.2%
FY08 FY09 FY10 FY11 9MFY12
Improving funding composition
Shareholders' Equity & Debt Capital Deposits from CustomersTerm Funding &loans sold with recourse > 1 yr Term Funding & loans sold with recourse < 1 yrDeposits from Banks and FIs
5.1 2.5 3.08.0 10.5 [12.5%]
23.6 25.5 26.8
29.729.8
[36%]
20.2 26.329.6
27.4
32.5[39.5%]9.0
10.911.2
16.3
9.6[12%]
FY08 FY09 FY10 FY11 9MFY12
Diversify funding
Term funding Individuals Biz enterprises Government
RM'bil
Lengthening debt capital & term funding profile
1. Term funding includes Senior Notes, credit-linked notes, loans sold with recourse and other sources such as pension and retirement funds, non-profit organisations and similar* Based on AmIslamic Bank Bhd maturity profile
70.7
81.382.2
65.2
57.9
Funded assets financed by equity, customer deposits and longer-term debt:
• 9MFY12 = 97.0%
• FY11 = 95.2%
• FY10 = 93.9%
• FY09 = 91.6%
• FY08 = 87.8%*
Issued RM2.92 bil Senior Notes (RM7 bilprogram) and RM550 mil Senior Sukuk(RM3 bil program) since early 2010
Raised RM600 mil Subordinated Sukuk(RM2 bil program) in Sept 2011
Improved stable funding with well distributed debt maturities
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
FY06 FY08 FY09 FY10 FY11 FY12 YTD FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19+
RM'bil
Debt Capital Term Funding Loans sold to Cagamas
Issuance Maturity
95.2% 97%
16AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
28.2sen
31.6sen
34.7sen
44.7sen 39.1
sen*
6.0sen
6.6sen
6.0sen
8.0sen
10.5sen
12.0sen
18%20%
28%
40%
25%
Interim Dividend Total Dividend Dividend Payout Ratio
ROE ROA
EPS, BasicSen/Share
Dividend, GrossSen/Share
Delivering higher shareholders’ returns
FY08 FY09 FY10 FY11 9MFY12 FY08 FY09 FY10 FY11 9MFY12
* Not annualised, cumulative 9MFY2012
FY08 FY09 FY10 FY11 9MFY12 FY08 FY09 FY10 FY11 H1FY12
6.0sen
6.6sen
6.0sen
8.0sen
10.5sen
12.0sen
18% 19%
28%
40%
12%
Interim Dividend Total Dividend Dividend Payout Ratio
11.5% 11.7% 11.5%13.6% 14.6%
1.02% 1.04% 1.13%1.39% 1.48%
Interim (H1FY12)
17AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Estimated capital ratios^ (include Q3FY12
unappropriated profits)
Risk AppetiteFramework
Targets
RWCAR: 15.1% 14% ± 2%
Tier 1 CAR: 10.6% 10% ± 1.5%
CET 1 Ratio: 8.5% 8% ± 1%
by Legal Entities2
Pro-forma AmBank Group Banking Entities^
Tier 1 CAR RWCAR
AmBank (M) Berhad 10.1% 14.7%
AmInvestment Bank Berhad 23.2% 23.2%
AmIslamic Bank Berhad 8.0% 13.5%
Capital adequacy :
Capital adequacy
Capital levels positioned for BNM’s Basel III guidelines and target payouts
* Banking entities include AmBank (M) Berhad Group, AmInvestment Bank Group and AmIslamic Bank
^ Estimated capital ratios include Q3FY12 unappropriated profits of AmBank (M) Bhd Group & AmInvestment Bank Group
1: Double leverage ratio computed based on AMMB Holdings Bhd Company level
2. 9MFY12 (after deducting proposed dividend) 3. Internal Capital Adequacy Assessment Process
Capital management plan :
1. Optimise capital profile & buffer
2. Enhance scenario modeling
3. Streamline corporate structure
4. Develop dynamic dividend policy
5. Proactively manage Basel III requirements
6. ICAAP3: Risk Appetite & Strategy, Business & Strategy Planning, Risk Assessment, Capital Planning, Stress Testing, Capital Uses
Double leverage ratio1 0.98x
Balance Sheet leverage ratio (total equity net of deferred tax & intangible assets over total
assets net of deferred tax & intangible assets)
8.2%
Total leverage ratio (total equity net of
deferred tax & intangible assets over total assets net of deferred tax & intangible assets& Off BS )
6.1%
7.7%* 8.1%* 8.0%* 8.2%
9.7%10.3% 10.2% 10.3%
15.2%15.8%
14.4% 14.7%
FY2009 FY2010 FY2011 9MFY2012
CET 1 Ratio Tier 1 CAR RWCAR* include preference shares
18AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
1. Executive summary
2. 9M FY2012 Group Financial Performance
3. Outlook
4. Group Strategy
5. Divisional Performance
6. Supplementary Information
o Economic landscape
o Strategic partnerships
o Competitive positioning
19AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
• Accelerate CASA & deposit growth, profitable asset growth and lower credit cost over time• Diversify retail income, continue to invest for medium term outcomes• Forecasting flat profit contribution for FY2012
• Income growth arising from larger asset base and growth in non-interest income• Higher deposit growth and increase cross-selling • Forecasting increased profit contribution in FY2012
• Income growth from non-interest income and larger asset base• Focus on cross-sell and grow deposits, increase regional business via collaboration with ANZ• Anticipating increased in profit contribution in FY2012
• Leverage on upturn in capital market and new initiatives• Increase regional business through closer collaboration with ANZ• Anticipating better profits for FY2012
• Increase product offerings, higher contributions from FX and derivatives• Expecting strong profit growth in FY2012 but a slower second half
• Launch new products, improve efficiency and governance, and leverage strategic partnership with FL• Expecting lower profit contribution for FY2012
• Higher contributions from new products & increase in share of wallet from retail & biz customers• Expecting good growth in premium and profits for FY2012
Profit growth for FY2012 expected @ 10 – 12%
RETAIL*
BUSINESS*
CORPORATE & INSTITUTIONAL*
INVESTMENT*
LIFE ASSURANCE*
GENERAL INSURANCE
MARKETS*
FY2012 PRIORITIES
Profitable growth and rebalancing Diversification and new business development Non-interest income and deposit growth Customer centricity
* Conventional & Islamic
20AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
FY07 FY08 FY09 FY10 FY11 9M FY12FY12
Estimate
MTA
FY13 - FY14
PATMI*(RM’mil)
ROE (%)
CTI (%)
Net NPL ratio /Gross
impaired loans (%)
Dividend:Gross (sen)
Payout (%)
*
Medium Term Aspiration (MTA) and estimates
*PATMI: profit after tax and minority interests
- 282.5 668.5 860.8 1,008.6 1,342.8 1,168.2 10 – 12%10 – 14%
CAGR
- 5.8% 11.5% 11.7% 11.5% 13.6% 14.6% circa 14% 13 – 15%
38.8% 40.2% 43.3% 42.0% 39.9% 40.1% ≤ 42% ≤ 42%
6.2% 3.7% 2.6% 1.5% /
3.8% 3.3% 2.6% ≤ 2.75% 2 – 2.75%
5.0 sen / share
(loss year)
6.0 sen /
share
18.3%
8.0 sen / share
20.3%
10.5 sen / share
28.1%
18.0 sen / share
40.4%
(interim)
6.6 sen /
Share
24.5%
40 – 50%
Payout
40 – 50%
Payout
Actual
Investing for growth over
medium term
21AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Good 9MFY2012 results, maintaining profit growth momentum
Stay focused on growing sustainable non-interest income, CASA/deposits, and loans growth targeting profitable and viable segments
Subdued conditions and sentiments but ETP/Budget 2012 provide future opportunities
Continue investing in infrastructure whilst maintaining high standards of governance and risk disciplines
Leveraging strategic partnerships and International Connectivity for growth
Cautious on short term outlook with downside risks
Summary
1
2
4
3
5
6
22AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
1. Executive summary
2. 9M FY2012 Group Financial Performance
3. Outlook
4. Group Strategy
5. Divisional Performance
6. Supplementary Information
o Economic landscape
o Strategic partnerships
o Competitive positioning
23AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
RETAIL*
Develop a liability-led business, grow assets in
targeted segments & expand Wealth Management
BUSINESS*
Grow diversified & profitable assets, increase deposits, fee
based business & international trade finance leveraging on
ANZ
TRANSACTION*
Become Top 5 Banking Service Provider in Malaysia by FY2016
with 10% market share
CIB*
Deliver innovative and quality solutions, increase ‘share of
wallet’, target high-profile’ and high value clients and leverage
ANZ for x-border businesses
INVESTMENT*
Deliver comprehensive solutions, lead in capital
markets, funds management, stock broking and enhance
domestic and overseas distribution via ANZ
MARKETS*
Deliver substantive, integrated and client-led business with
full suite of FX, Rates, Commodities and FI offerings
with ANZ collaborations
LIFE ASSURANCE*
Become the top life insurer for service; an industry
benchmark for TCF, strong infrastructure, sufficient scale
to be relevant and credible whilst maintaining margins
and cash profile
GENERAL INSURANCE
Provide insurance solutions to our customers and business
partners that meet their insurance needs and exceed
their service expectations
Medium Term Aspiration (MTA)
“To become Malaysia’s Preferred Banking Group with International Connectivity”
DIV
ISIO
NA
L A
SPIR
ATI
ON
SOur Aspirations…
* Conventional & Islamic
24AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
GROWTH LEVERS
LEVERAGE INTERNATIONAL CONNECTIVITY
• Leverage ANZ’s international connectivity via biz development initiatives• Expand product and service offerings for cross-border opportunities• Broaden regional clientele base & widen distribution network
INVEST TO GROW INCOME
• Develop customer centric business models• Enhance wealth management business• Carve out ‘Transaction Banking’ as a division focusing on cash management &
international trade • Develop new family Takaful business with Friends Life• Introduce new products and enhance relationship teams
INCREASE CUSTOMER SHARE OF WALLET
• Develop products to fulfill customer segment & life cycle needs• Enhance distribution footprints for easier accessibility• Up ante in cross-selling efforts across Group• Enhance core banking systems
CAPITALISE ON ETP• Target ETP projects in NKEA sectors• Key focus areas – loans, bridging finance and advisory services for PDS issuances /
capital market activities and private pension industry
UPGRADE CAPABILITY & PRODUCTIVITY
• Invest in human capital development• Enhance account planning system for business growth• Consolidate operations to improve efficiencies
1
2
3
4
5
STRATEGIC INITIATIVES
Business transformation and growth plans
25AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Strategic Business Transformation: Good Progress
12 months
(FY 2008)
24 months
(FY 2009)
36 months
(FY 2010)
• Set Group’s Medium Term Aspirations (MTA)• Agreed Group’s transformation strategy, agenda and targets• Realigned auto financing business towards profitable growth• Improved asset quality
Strategic Business
Transformation
High Priority
Growth Initiatives
Governance &
Enablement
Functions
48/60 months
(FY 2011/12)
• Realigned growth towards profitable and viable segments• Realigned Markets Fixed Income business model• Reset Mortgage business strategy and action plans• Consolidated Group balance sheet activities within commercial bank• Split composite insurance license to General and Life
• Deposits as profit centres across Group• Realigned customer ownerships and focus• Proactively strengthened capital and liquidity management• Repositioned balance sheet for rising interest rates
• Completed structural realignment to improve target segment focus• Develop customer centric business model - part of AmHorizon• Implementing account plans for business customers to increase SOW• Expanding product offerings and build new capabilities• Initiated Group Rebranding programme
26AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
High Priority Growth Initiatives: Implemented To-Date
12 months
(FY 2008)
24 months
(FY 2009)
36 months
(FY 2010)
• Created new profit centre based retail branch distribution model• Setup ‘deposits’ as profit product across all divisions & grow CASA
48/60 months
(FY 2011/12)
• Created a separate Corporate and Institutional Banking (CIB) Division• New FX business in collaboration with ANZ• Enhanced cash management offering via Gross Payroll system• Friends Life brought in as new life strategic business partner
• Accelerated growth from GLC, GLIC and MNC• Build scale• New Rates business in collaboration with ANZ• Distribution footprint expansion (particular focus on 7-11 ATM’s) &
alternative channels
• Commenced leveraging ANZ for International connectivity• Strengthen wealth management biz and develop new strategies• Enhancing international trade and cash management business• Develop new family Takaful business with Friends Life• Commence Priority Banking expansion initiatives
Strategic Business
Transformation
High Priority Growth
Initiatives
Governance &
Enablement
Functions
27AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Governance and Enablement Functions Streamlined:Supports Better Decision Making
12 months
(FY 2008)
24 months
(FY 2009)
36 months
(FY 2010)
• Privatised AmInvestment Bank as part of migration to universal banking platform for greater synergies
• Consolidated / simplified governance committee structures• Delivered line of business budgets and performance reporting• Created a Group PMO to prioritise and manage key strategic initiatives
48/60 months
(FY 2011/12)
• Established Advance Risk Recognition Program (ARRP)• Strengthened risk disciplines via Group Risk Appetite Frameworks• Separated ALCO, capital and balance sheet management from Markets• Delivered Peer Bank relative performance benchmarks• Implemented short and long term performance incentives
• Delivered 8 new generation retail scorecards & new market risk models • Commenced PD, LGD & EAD models for retail and non-retail, non-retail
security indicators• Developed leadership bench-strength and succession planning• Implemented Operational Risk Incident Reporting system and Basel II capital
calculator
• Implemented FTP system aligned to balance sheet strategies• Consolidated some Group Support into Centres of Excellence• Implementing Basel III, capital allocations and new ALM system• Finalised vendor and commence core banking system replacement• New AmFamily Takaful system to support commencement of Takaful business
Strategic Business
Transformation
High Priority
Growth Initiatives
Governance and
Enablement Functions
28AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Funding strategy, improving diversity
RM10 bil senior notes programme
1st senior notes issuance by a financial institution in Malaysia
AmBank issued RM2.92bil senior notes (RM7bil over 30 year programme)
AmIslamic issued RM550m senior sukuk (RM3bil musyarakahprogramme)
Both rated AA3 (RAM)
Subordinated Sukuk
RM2bil subordinated sukuk musyarakah programme (issued RM600mil Sep’11)
Medium Term Notes
RM2bil medium term note (issued RM1.6bil Mar’08)
Improve funding stability, maturity gap & liquidity ratios
Reduce dependence on short-dated deposits to fund long-dated fixed rate loan assets which incur liquidity risk and interest rate risk
Diversifies investor base
No obligation for buy back since we are not exposed to withdrawal risks and the notes are traded in the open market
Enable depositors to invest in long and medium dated papers
Supplemented by:
Customer deposits
Enhance domestic distribution through branches/channels aligned to demographics
Adjusted LDR1 of 90.2%
Stable deposits represent >80% of our current balance;
CASA: RM12bil (growth =20%), FD: >RM62bil (strong retention)
Funding diversity underpinned by:
Benefits to funding strength
Statutory reserve and liquidity requirement savings
Reduced exposure to interest rate risks
Loans with Recourse
Recourse obligations on loans sold to Cagamas (maturing 2017)
Islamic financing sold to Cagamas (maturing 2016)
1 Based on net loans including loans sold with recourse over adjusted customer deposits (adjusted customer deposits include term funding and loans sold with recourse)
29AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
ADVANCED RISK RECOGNITION PROGRAM INITIATIVESKEY AREAS
GOVERNANCE• A restructured independent Group Risk Management Department, headed by the Chief Risk Officer.• Executive Management and Board sub-committees were streamlined and charters modified to enhance overall
governance.• Established a model validation team to regularly review all material risk models within the Group.
UPGRADING RISK INFRASTRUCTURE
• Credit Risk Management: Implemented new PD scorecards for retail (3rd generation) and corporate. EAD and LGD models for both retail &
corporate. New behavioural scorecards being developed for retail customers. New financial spreadsheet tool enabling detailed financial projections and industry benchmarking. Enhanced pricing models taking into account risk factors (risk based pricing). New Security Indicator models developed for corporate customers. New model execution platform to enable automated provisioning and stress testing of Retail and Corporate
exposures.• Market Risk Management:
Implemented FX and derivatives front end system and new markets (FX, interest rates and equity) rates/price validation system.
FX & derivative limit monitoring and management system and VaR (FX, derivatives, equities) to be rolled out. new Funds Transfer Pricing Model used to allocate funding costs. new Asset and Liability Management system to enhance duration risk mismatches.
• Operational Risk Management: new incident reporting system for collecting, analyzing and estimating capital requirements.
ASSET QUALITY AND PORTFOLIO
DIVERSIFICATION
• Material improvement in net NPL / gross impaired assets, provisioning charges and loan loss coverage ratio over the past four years.
• Further diversification in the loan portfolio.• Portfolio diversification strategy to grow certain selected portfolios quicker than others (eg: well rated counterparties in
CIB and Business Banking).
FUNDING & LIQUIDITY RISK MANAGEMENT
• Established a dedicated unit i.e. “Balance Sheet & Capital Management” reports to the Group Chief Financial Officer and advises the Group Asset & Liability Committee with regards to Funding, Liquidity and Capital strategy options.
• Strong improvements in: retail deposits growth; liability structure incorporating raising term wholesale funding and asset and liability duration mismatches.
RISK APPETITE STRATEGY, EXECUTION & MONITORING FRAMEWORK
• Fine tune of risk appetite settings, clearly articulating risk / reward appetite. • Risk /reward supported by comprehensive asset writing & business strategies for each business unit. • Risk elements include - country, industry and customer single names limits, general loan underwriting standards, capital
allocation to business units and targeted returns.
Risk Management: enhancing risk recognition skills and asset quality
30AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Medium Term Aspiration: Strategic priorities & growth levers
1. Leverage international connectivity
2. Invest to grow income
3. Enhance customer share of wallet
4. Capitalise on ETP
5. Upgrade capability and productivity
To become Malaysia’s Preferred Banking Group with International Connectivity
Growth LeversStrategic Priorities
Profitable growth and rebalancing
Diversification and new business development
Non-interest income and deposit growth
Customer centricity
31AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
1. Executive summary
2. 9M FY2012 Group Financial Performance
3. Outlook
4. Group Strategy
5. Divisional Performance
6. Supplementary Information
o Economic landscape
o Strategic partnerships
o Competitive positioning
32AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
PATPBPExpensesIncomeDevelop a liability-led business, grow assets in targeted segments and expand Wealth Management
9MFY11 results Positive growth in 9MFY12 Contraction in 9MFY12
Composition to Group 44.2% 40.6% 35.8%42.0%
9MFY12 vs RM'mil 9MFY11 9MFY12 9MFY11
Income 1,358.2 1,342.7 -▼ -1.1%
Expenses 527.7 567.0 ▲ +7.4%
PBP 830.5 775.7 -▼ -6.6%
Impairments 272.4 197.5 -▼ -27.5%
PBT 558.1 578.2 ▲ +3.6%
PAT 418.6 433.6 ▲ +3.6%
Gross Loans / Financing 45,054.8 45,924.1 ▲ +1.9%
Gross Impaired Loans 2.67% 1,384.1 1,225.9 -▼ -11.4%
Customer Deposits 32,469.9 34,227.3 ▲ +5.4%
CASA Deposits 7,329.7 8,591.3 ▲ +17.2%
ROA 1.26% 1.28% ▲ +0.02%
CTI 38.9% 42.2% ▲ +3.4%
Allowance Coverage 92.2% 99.5% ▲ +7.4%
Retail Banking: Improved asset quality main contributor to higher profits
Stable income & lower margins; continue focus on profitable & viable segments and pricing for risk
Lower impairments driving higher profits
Cost increases reflect medium term investments
Continued faster than system CASA growth
33AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Expenses PBP PATIncomeGrow diversified & profitable assets, increase deposits, fee based business & international trade finance leveraging on ANZ
Composition to Group 13.4% 6.3% 18.1% 13.1%
9MFY11 results Positive growth in 9MFY12 Contraction in 9MFY12
Income mix for 9MFY12
RM'mil 9MFY11 9MFY12
Income 354.0 426.7 ▲ +20.5%
Expenses 76.4 80.8 ▲ +5.8%
PBP 277.6 345.9 ▲ +24.6%
Impairments 98.0 134.7 ▲ +37.4%
PBT 179.6 211.2 ▲ +17.6%
PAT 134.9 158.9 ▲ +17.8%
Gross Loans / Financing 13,537.8 15,605.1 ▲ +15.3%
Gross Impaired Loans 2.38% 222.6 371.1 ▲ +66.7%
Customer Deposits 6,252.0 7,420.4 ▲ +18.7%
CASA Deposits 2,421.4 2,355.0 -▼ -2.7%
ROA 1.48% 1.42% -▼ -0.06%
CTI 21.6% 18.9% -▼ -2.6%
Allowance Coverage 102.5% 55.9% -▼ -46.6%
9MFY12 vs
9MFY11
Business Banking: Good profit growth despite higher impairments
Higher income underpinned by diversified growth in asset base/strong fee income growth
Higher impairments caused by a previously restructured loan
Lending & deposits,
85.3%
Trade Services,
13.4%
Cash Management
& others, 1.3%
34AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Income Expenses PBP PAT
Diversified loans portfolio leading to good income growth
Higher income contributions from lending and Asset Management
Impairments benefitted from higher write back due to loans sell downs/refinancing via capital market and better loans profile
Good CASA growth (>100%)
* Services include : large corporate lending& deposits,
financial institutions group, offshore banking, international business, private equity, REITs and loan syndication
Corporate & Institutional Banking: PAT up from good income & lower impairments
Deliver innovative and quality solutions, increase ‘share of wallet’, target high-profile and high-value clients and leverage ANZ for x-border businesses
Composition to Group 5.7% 11.7% 15.4%9.3%
9MFY11 results Positive growth in 9MFY12 Contraction in 9MFY12
Income mix for 9MFY12
Lending & deposits,
78%
Int. Biz, 17%
Asset Mgmt, 5%
RM'mil 9MFY11 9MFY12 9MFY11
Income 262.3 297.1 ▲ +13.3%
Expenses 70.4 73.7 ▲ +4.7%
PBP 191.9 223.4 ▲ +16.4%
Impairments 13.3 (18.4) -▼ ->100.0%
PBT 178.6 241.8 ▲ +35.4%
PAT 137.8 186.7 ▲ +35.5%
Gross Loans / Financing 11,859.0 13,753.9 ▲ +16.0%
Customer Deposits 31,966.9 33,518.3 ▲ +4.9%
ROA 1.55% 1.78% ▲ +0.23%
CTI 26.8% 24.8% -▼ -2.0%
Ave Assets Management 1,436.2 1,535.4 ▲ +6.9%
9MFY12 vs
G
G
G
G
35AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Income Expenses PBP PAT
• Diversified income underpinned by good contributions from DCM, equity derivatives, funds management and private banking
• Higher staff cost & incentives linked to better financial performance
Investment Banking: PAT up from strong capital & equity market activities
1 Including AmInvestment Management, AmInvestment Services, AmIslamic Funds Management & private banking
Source : Malaysia Association of Asset Management & Lipper Hindsight
Deliver comprehensive solutions, lead in capital markets, funds management, stock broking and enhance domestic & overseas distribution via ANZ
Composition to Group 9.3% 8.1% 9.6%11.2%
9MFY11 results Positive growth in 9MFY12 Contraction in 9MFY12
Income mix for 9MFY12
Debt Cap Mrkt, 17%
Corporate Finance,
11%
Equity, 17%
Broking & Futures,
23%
Fund Mgmt,
26%
Private Banking,
6%
RM'mil 9MFY11 9MFY12
Income 256.3 298.2 ▲ +16.3%
Expenses 134.2 144.2 ▲ +7.5%
PBP 122.1 154.0 ▲ +26.1%
Impairments 1.1 (1.5) -▼ ->100.0%
PBT 121.0 155.5 ▲ +28.5%
PAT 90.1 116.2 ▲ +29.0%
CTI 52.4% 48.4% -▼ -4.0%
* Ave Assets Management 24,823.8 30,673.5 ▲ +23.6%
Ave Volume / Contract Traded (RM'mil/month)
Bursa M'sia 67,280.2 69,742.5 ▲ +3.7%
Future KL index (FKLI) 347.1 419.3 ▲ +20.8%
* IB Broking 5,290.4 4,268.4 -▼ -19.3%
* AmFuture - FKLI 79.7 66.9 -▼ -16.1%
Market Share as at:
* IB Broking 7.8% 6.1% -▼ -1.7%
* AmFuture -FKLI 23.1% 14.9% -▼ -8.2%
9MFY12 vs 9MFY11
1
36AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Income Expenses PBP PAT
Significant higher contributions from fixed income trading
Expenses reflect continuous investment in FX, rates, derivatives & commodities establishment
Markets: PAT up from FI trading, improved FX & derivatives contributions
Deliver substantive, integrated and client-led business with full-suite of FX, Rates, Commodities and FI offerings with ANZ collaborations
Composition to Group 4.1% 15.9% 19.4%11.2%
9MFY11 results Positive growth in 9MFY12 Contraction in 9MFY12
Income mix for 9MFY12
Fixed Income, 68%
Foreign exchange,
20%
Derivatives, 8%
Others, 4%
RM'mil 9MFY11 9MFY12
Income 260.8 357.0 ▲ +36.9%
Expenses 49.3 52.9 ▲ +7.3%
PBP 211.5 304.1 ▲ +43.8%
Impairments 4.7 (9.2) -▼ ->100.0%
PBT 206.8 313.3 ▲ +51.5%
PAT 155.4 235.1 ▲ +51.3%
CTI 18.9% 14.8% -▼ -4.1%
PAT : Fx and Derivatives 37.5 50.6 ▲ +34.9%
Total Group:
Financial assets HFT 7,100.2 9,150.1 ▲ +28.9%
Financial investments
AFS 7,123.2 4,902.6 -▼ -31.2%
Financial investments
HTM 183.7 140.3 -▼ -23.6%
9MFY12 vs
9MFY11
37AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Income PAT
Life Assurance: Increasing support to Bancassurance and better performing agencies
To be the top life insurer preferred for service; an industry benchmark for TCF, strong infrastructure, sufficient scale to be relevant and credible but whilst maintaining margins and cash profile
* Life assurance shareholders’ fund accounts
Lower profits transferred in 9MFY2012 pending stabilisation of business model refinements to focus on
Business growth initiatives centered on Bancassurance
Providing enhanced support to better performing agency force
Improving compliance and infrastructure platforms
Composition to Group 3.5%1.8%
9MFY11 results Positive growth in 9MFY12 Contraction in 9MFY12
RM'mil 9MFY11 9MFY12
Income 61.9 57.1 -▼ -7.8%
PAT 51.6 42.2 -▼ -18.2%
Life Assurance
fund assets 2,321.8 2,705.5 ▲ +16.5%
CAR ratio 241.2% 200.1% -▼ -41.1%
Gross written premium 495.0 307.6 -▼ -37.9%
9MFY12 vs
9MFY11
38AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Income Expenses PBP PAT
General Insurance: Higher income and lower claims
To provide insurance solutions to our customers and business partners that meet their insurance needs and exceed their service expectations
Higher profits - better underwriting profits and lower claim expenses
Composition to Group 4.9% 4.4% 5.3%4.6%
9MFY11 results Positive growth in 9MFY12 Contraction in 9MFY12
RM'mil 9MFY11 9MFY12
Income 128.1 147.5 ▲ +15.1%
Expenses 63.1 62.9 -▼ -0.3%
PBP 65.0 84.6 ▲ +30.2%
Impairments (1.4) - ▲ +>100.0%
PBT 66.4 84.6 ▲ +27.4%
PAT 46.2 64.0 ▲ +38.7%
CTI 49.3% 42.6% -▼ -6.6%
General Insurance fund
assets1,141.0 1,257.4 ▲ +10.2%
Claim ratio 69.2% 64.9% -▼ -4.3%
Management expense
/ earned premium 14.0% 14.6% ▲ 0.6%
9MFY12 vs
9MFY11
GGG
G
GGGG
GGG
GGG
39AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Income Expenses PBP PAT
Group Operating Segments – PAT impacted mainly by higher expenses
Enablement functions governing and supporting delivery of improving divisional performances
Higher expenses include recently set-up AmFamily Takaful business & AmHorizon
Provisions impacted by lower recoveries
Composition to GroupComposition to Group 23.3% -1.6% -2.2%8.4%
9MFY11 results Positive growth in 9MFY12 Contraction in 9MFY12
RM'mil 9MFY11 9MFY12
Income 269.8 268.1 -▼ -0.6%
Expenses 243.6 299.3 ▲ +22.9%
PBP 26.2 (31.2) -▼ ->100.0%
Allowances (42.2) 10.3 ▲ +>100.0%
PBT 68.4 (41.5) -▼ ->100.0%
PAT 30.1 (26.4) -▼ ->100.0%
PATMI (8.2) (68.6) -▼ ->100.0%
9MFY12 vs
9MFY11
G
G
G
G
40AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
* Performances reflected within divisional outcomes.
To become top 5 Banking Service Provider in Malaysia by FY2016 with 10% market share
Higher income reflecting increased focus as a product business
Intense focus on relationship management yielding results in trade finance, cash management and CASA deposits
Impairments benefitted from bad debts recovered and lower collective impairment
PATPBPExpensesIncome
Expenses
PBP
PAT
Composition to Group 5.5% 1.9% 7.8% 9.1%
H1FY11 results Positive growth in H1FY12 Contraction in H1FY12
Income mix for 9MFY12
Trade Services,
56%
Cash Mgmt, 44%
Transaction Banking*: PAT up from improved deposits & revenues
9MFY12 vs
RM'mil 9MFY11 9MFY12 9MFY11
Income 152.5 174.6 ▲ +14.5%
Expenses 19.6 24.8 ▲ +26.5%
PBP 132.9 149.8 ▲ +12.7%
Impairments 20.7 3.3 -▼ -84.1%
PBT 112.2 146.5 ▲ +30.6%
PAT 84.1 110.0 ▲ +30.8%
Gross Loans / Financing 3,791.8 4,618.7 ▲ +21.8%
Trade Finance 3,731.0 4,550.6 ▲ +22.0%
Cash Management 11,314.5 14,481.0 ▲ +28.0%
CASA Deposits 2,386.3 3,984.7 ▲ +67.0%
ROA 3.17% 3.36% ▲ +0.19%
CTI 12.9% 14.2% ▲ +1.4%
41AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
PATPBPExpensesIncome
Islamic Banking*: higher profits despite higher impairments
To become the Islamic Bank of choice and ensure a high degree of value for our customers, employees & stakeholders
Composition to Group
Higher impairment since mid-FY2011 due to structural changes associated with COOP lending industry resulting in increased provisioning under FRS 139 methodology
17.1% 19.7% 15.0%18.7%
* Performances reflected within divisional outcomes.
9MFY11 results Positive growth in 9MFY12 Contraction in 9MFY12
RM'mil 9MFY11 9MFY12
Income 561.7 596.0 ▲ +6.1%
Expenses 212.9 218.8 ▲ +2.8%
PBP 348.9 377.1 ▲ +8.1%
Impairments 124.9 136.0 ▲ +8.9%
PBT 224.0 241.2 ▲ +7.7%
PAT 165.1 181.4 ▲ +9.8%
Net Financing 12,683.1 15,345.3 ▲ +21.0%
Gross Impaired Financing 279.6 225.7 -▼ -19.3%
Customer Deposits 12,924.1 17,014.6 ▲ +31.7%
CASA Deposits 2,327.2 3,346.9 ▲ +43.8%
ROA 0.95% 0.90% -▼ -0.05%
CTI 37.9% 36.7% -▼ -1.2%
Allowance Coverage 151.5% 209.1% ▲ +57.6%
9MFY12 vs
9MFY11
1.31%
42AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
1. Executive summary
2. 9M FY2012 Group Financial Performance
3. Outlook
4. Group Strategy
5. Divisional Performance
6. Supplementary Information
o Economic landscape
o Strategic partnerships
o Competitive positioning
43AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
132.2 237.8
30.1 42.3 90.7
37.9 8.9 0.1 21.7 226.8 54.8 442.4 440.8
883.3
143.7
269.2
32.7 50.8 110.0 45.0 25.1
253.2
64.7
496.4 507.1
1,003.5
Purchase of Transport Vehicles
Purchase of Res Properties
Credit Cards Personal Use Purchase of Non-Res
Properties
Purchase of Securities
Fixed Assets Consumer Durables
Construction Working Capital
Other purpose Retail Loans Business & Corporate
Loans
Total Loans
Dec-10 Dec-11
8.7% 13.2% 8.4% 20.2% 21.2% 18.8% 2.5% 14.1% 15.7% 11.6% 18.1%
9.1 0.1
12.2% 15.0%
13.6%
64.7
26.3 12.7 1.7 2.1 5.9 1.6 1.3 0.002 2.1
18.7 3.9
42.8 33.5
76.3
Purchase of Transport Vehicles
Purchase of Res Properties
Credit Cards Personal Use Purchase of Non-Res
Properties
Purchase of Securities
Fixed Assets Consumer Durables
Construction Working Capital
Other purpose Retail Loans Business & Corporate
Loans
Total loans
Dec-11
2.8% 5.4% 0.3% 5.1% 31.4% 27.7% 11.2% 27.6% 18.0% 29.1% 36.4%
3.0% 10.5%
6.2%
Loans by Economic Purpose: AmBank Group vis-à-vis Industry
composition : 34.6% 16.9% 2.3% 3.3% 7.2% 2.3% 1.6% 0.0% 1.5% 23.9% 6.7% 57.0% 43.0%
RM’bil
Source : BNM, internal reports
RM’bil
AmBank Group Loans Growth (including Islamic financing sold to Cagamas) by Economic Purpose*
Industry Loans Growth by Economic Purpose
composition : 14.3% 26.8% 3.3% 5.1% 11.0% 4.5% 0.9% 0.0% 2.5% 25.2% 6.4% 49.5% 50.5%
* Based on BNM classification
44AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Savings Current Account CASA Fixed Deposits Core Deposits4.1 5.9 10.0
60.4 70.4
4.57.5
12.0
Savings Current Account CASA Fixed Deposits Core Deposits
Dec '10 Dec'11
9.0% 27.7% 20.0% 3.7% 6.7%
62.6
74.6
Savings Current Account CASA Fixed Deposits Core Deposits
Industry Deposits Growth by Type
RM’bil
Deposits by Type : AmBank Group vis-à-vis Industry
Source : BNM, internal reports
RM’bil
AmBank Group Deposits Growth by Type
6.0%10.0%
84.0%
AmBank Group Deposits Composition
SavingsCurrent AccountFixed Deposits
104.9 184.6
289.6
502.6
792.2
115.7
213.5
329.1
560.2
889.4
Savings Current Account CASA Fixed Deposits Core Deposits
Dec '10 Dec '11
10.2% 15.6% 13.7% 11.5% 12.3%13.0%
24.0%
63.0%
Industry Deposits Composition
SavingsCurrent AccountFixed Deposits
45AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
3.1%
3.0%
-5%
0%
5%
10%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009 2010 2011
Unemployment Rate CPI
27.5
41.6 43.3
30.8 29.6 27.0 28.2
33.1
39.0
23.4 22.1 25.5
31.8
27.4 30.1
3.7
15.8
0.3 4.2 2.7
0.8 3.6
(2.0)
5.6 6.5 6.5
10.7 11.1 10.2
5.2
-10
0
10
20
30
40
50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2008 2009 2010 2011
Trade Balance FDI
RM' bil
Moderating growth CPI & unemployment rates remain low
Trade balance stable, FDIs remain robust
27.5
41.6 43.3
30.8 29.6 27.0 28.2
33.1
39.0
23.4 22.1 25.5
31.8
27.4
3.7
15.8
0.3 4.2 2.7
0.8 3.6
(2.0)
5.6 6.5 6.5
10.7 11.1 10.2
-10
0
10
20
30
40
50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2008 2009 2010 2011
Trade Balance FDI
RM' bil
Sources : Bloomberg & BNM
GDP5.8%
9.9%
6.1%
-15%
-10%
-5%
0%
5%
10%
15%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2008 2009 2010 2011
GDP Consumption Investment
5.8%
Domestic consumption and investment continues to drive Malaysian economy
96.6
0
20
40
60
80
100
120
140
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009 2010 2011
BCI
Private sector remains positive on economic prospects
Business Conditions Index
Q4
*
* November 2011 position
46AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
12.1%
15.1%
13.6%
5%
10%
15%
20%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009 2010 2011
Retail growth YoY Non-retail growth YoY Total loans growth YoY
Source : BNM
Domestic economy expected to be resilient
System loan demand remains stable
Interest rates expected to remain in the short term
12.13%
5.08% 5.02% 5.06%
8.46%
2.12% 2.45%2.88%
11.63%
5.62%6.02%
6.45%
0%
5%
10%
15%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Average lending rate (commercial banks) Average OPR Average BLR
Loans growth remains resilient
RM’mil
Stable household debt / GDP with sustainable loan application
Q4
130.1 184.5 213.8 257.7 307.6 342.1 170.7 273.0 260.9 263.7
333.7 400.1
37.0% 37.5% 36.8%31.0% 33.1%
68.8% 66.9% 63.7%
76.0% 75.9%
-100
100
300
500
700
900
1,100
1,300
1,500
2006 2007 2008 2009 2010 2011Retail loans application Non-retail loans application
Gross national savings Household debt/GDP
11%
11%
-40%
-20%
0%
20%
40%
60%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009 2010 2011
Loans application growth YoY Loans approved growth YoY
11.2%
10.7%
47AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
99.6%
2.7%
-2.0%
2.0%
6.0%
10.0%
14.0%
18.0%
0%
20%
40%
60%
80%
100%
120%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009 2010 2011
Loan Loss Coverage Gross Impaired Loans
Source: BNM
Strong fundamentals in the banking sector
RM’bil
Capital activities supported by debt issuance Sustained deposits growth provides liquidityRM’mil
Asset quality remains intactCapital levels above BNM’s Basel 3 guidelinesLoan loss coverage Gross impaired loans
Improving gross impaired loans
14.9%
12.9%
0%
5%
10%
15%
20%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009 2010 2011
RWCA CORE CAPITAL
Q4
0
5
10
15
20
25
30
35
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009 2010 2011
New issues of equity New issues of debt
80.9%
0
200
400
600
800
1,000
1,200
1,400
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009 2010 2011
Customer Deposits LD Ratio
48AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Alternative delivery channels (e.g. e-payments) for efficiency
Empowering consumerso Promote mutual responsibility cultureo Strengthen infrastructure
Talent development
Intermediation for a value added & high income economyo Increase supply of private risk capital funding
o Develop private pension industry
o Enhance capacity & capability of insurance & Takaful
o Enhance provision of wealth management
Develop dynamic financial marketso Deepen liquidity in government debt securities, Sukuk,
forex & money market
o Support use of foreign currencies
o Promote efficiency for Forex trading
Financial inclusion o Expand products & services
Strengthen regional & international financial integrationo Liberalise foreign participation
o Establish infrastructure for cross border financial intermediation
o Enhance Labuan IBFC as a regional operational hub
Internationalisation of Islamic Finances o Position Malaysia as Islamic reference Centre & International
Retakaful Centre
o Wider range of products & services
o Support growth of Islamic Fund, wealth management, Forex, capital markets, Sukuk
Enhance regional & international financial linkages
Key enablers
Dynamic financial system for economic growth
Safeguard stability of the financial system
Regulatory & supervisory regimeo Basel III implementationo FI ownership structures – review regulations
Raise standards of governance & risk management
Greater regional & international integrationo Collaborate with other central banks to safeguard stability
Financial Sector Blueprint 2011–2020: driving sustainable growth in financial services
49AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Competitive positioning continues to strengthen
Well diversified universal bank
# 5 retail bank, # 5 business and CIB lending, # 6 in Islamic Banking
# 2 in equity & equity-linked, # 3 in debt league, # 2 in funds under management, # 3 in Malaysia RM Islamic Bonds
Partnerships with ANZ (global strategic partner), IAG in General Insurance and Friends Life in Life Assurance
value adds: leadership & management, product development, technical expertise and two way customer flows
Sound size and market position in key business segments
Strategic partnership with global partners
Strong key shareholders, common aspirations
Improvement in stock valuation & upgrades in credit ratings
Solid corporate structure & franchise value
Experienced management team with key ANZ senior appointments and from other strategic partners
Industry experts, international and domestic best practices
Performance based culture, all levels
Experienced engagement team
Strong customer-focus, lead in customer satisfaction
Large retail and corporate client base provides high cross-selling potential
Award-winning products and services
Recognized brand name & customer franchise
190 branches, #5 largest ATM network (834), 403 ATMs @ 7/11 and 146 EBC’s
eChannels: internet banking, mobile banking and 24 hour call centre
Pioneer in weekend banking concept and extended banking hours
Wide market reach and multiple distribution channels
50AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Malaysia provides attractive investment opportunities in ASEAN region
National Savings Rate(% of GDP)
Inflation (%)
GDP per capita (USD)
Malaysia Thailand Singapore Indonesia Philippines Vietnam
Source: Bloomberg, IMF, internal research house and various central banks data
2011f 2012f 2011f 2012f 2010e 2012f 2011f 2012f 2011f 2012f 2011f 2012f
5.2 5.0 3.5 4.8 5.3 4.3 6.4 6.3 4.7 4.9 5.8 6.3
6,609 6,824 5,281 5,865 50,714 53,072 3,469 3,848 2,255 2,376 1,362 1,521
3.2 3.3 1.2 1.2 2.3 2.3 6.8 6.6 7.2 7.2 5.0 5.0
33.1 32.6 30.4 28.7 45.8 46.0 33.1 34.1 22.3 22.0 30.7 30.9
3.2 2.5–3.0 4.0 4.1 3.7 2.9 5.7 6.5 4.5 4.1 18.8 12.1
11.7 10.7 4.8 2.5 19.8 18.5 0.2 -0.4 1.7 1.3 -4.7 -3.8
-5.4 -4.7 -2.3 -2.9 +1.9 +2.3 -1.7 -1.3 N/A N/A N/A N/A
28.7 29.2 64.3 64.6 5.3 5.3 240.5 243.4 95.8 97.7 89.3 90.4
Unemployment (%)
Real GDP Growth, % YoY
ASEAN growth to moderate but remain robust
Malaysia’s growth to be driven by private investment (through ETP) as well as domestic consumption (supported by low inflation and unemployment)
Current account balance (% of GDP)
Fiscal deficit (% of GDP)
Population (mil)
51AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Value adding through strategic partnership with our global partner, ANZ
( ) – ANZ number of branches & representative offices @ Jun 2011 demonstrating interconnectivity across the ANZ network
• Alexander Vincent Thursby - Director
• Dr Robert John Edgar - Director
• Mark David Whelan - DirectorBO
AR
DM
AN
AG
EMEN
TSENIOR MANAGEMENT
• Ashok Ramamurthy – Deputy Group MD & CFO
• Andrew Kerr – Chief Risk Officer
• Ross Neil Foden – Chief Operations Officer
MANAGEMENT
• Chief GM, Transformation, Channels & Sales (Retail Banking)
• Head, Market Risk
• Head, Governance & Provisioning
• Head, Systems Accounting
• Senior GM, Transaction Banking
Leveraging on ANZ leadership
Regional Aspirations: Leading Super Regional Banko APEA sourced revenue to drive 25 – 30% of Group profit
ANZ expanding footprint in Asia Pacific
Retail Banking across Asia Pacific:
• 20% of new-to-bank customers• Biggest Australian bank in Asia
Pacific• Customers referrals• Offshore account openings
Commercial Banking across Asia Pacific:
• > $200b in trade flows between Aust/NZ & Asia
• Stakeholder relationships across the region
Value Propositions to AmBank Group
Leadership & management
2-way customer referrals
Joint business solutions
Products development
Technical expertise
Access to regional network & connectivity
Franchise – BranchesNetwork – Representative Offices
Regional HubsPartnerships
52AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
International connectivity achievements
• Set up AMMB-ANZ Joint International Connectivity Steering Committee – quarterly progress meetings
• Launched AmBank – ANZ Get Set solutions First of its kind in Malaysia pre-opening account services for ANZ bank accounts at any AmBank branches Provide added benefits e.g. preferential AUD FX rates, lower remittance charges and AmBonus points for education
fees and air tickets purchase via AmBank Cards Good progress since launch with active utilisation and good remittance flows
• Targeting to launch Signature Priority Banking with ANZ by end March 2012 AmBank’s affluent retail customers to have access to Signature Priority Banking preferential treatment wherever ANZ
has presence
• Signed Business Principles Agreement with ANZ Access to available resources and opportunities with ANZ in various areas of businesses across 27 countries Leverage on synergies of ANZ’s regional distribution platform Allows AmBank Group to provide innovative and enhanced products & services
• Enhance foreign currency account facilities – initially implemented in 30 branches now available in 56 branches in 10 majorforeign currencies!
• Partnership with International Money Transfer operator, Western Union – available at 185 branches! Allows remittance of money doorstep to doorstep within minutes of transaction Provides inroad to customer segments unchartered for the banks (domestic helpers, foreign workers and holiday
makers) without the need for account opening
• Set up international connectivity initiatives through Transaction and Correspondent Banking Increase transaction flows Grow AmBank’s market share for MNCs business Deliver seamless cross border solutions for customers Create operating synergy - cross border banking operations efficiency Value of transaction is circa RM135 million to-date
• And many more initiatives being planned
53AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
– Committed to providing resource support & technical capability
• Justin Breheny - Director
• Duncan Brain - Director
SENIOR MANAGEMENT
• Duncan Brain - CEO
• Stephen Beatty - General Manager, Claims
OPERATIONAL & PROJECT SUPPORT / CONSULTANTS
• Jon Delalande - Manager, Operational Development
• Reuben Ng - Manager, Office of the CEO / TMO
• Peter Stone - Risk Management Specialist, IAG Asia
• Kerry White – Bancassurance Specialist
Bo
ard
Man
age
me
nt
1 - Consultants
Leveraging strategic partnerships with global Insurance partners
Leadership and strategy
Technical expertise - Claims, Risk Management, Underwriting & Pricing, IT, Product Development
Strategic Planning
Sales and Business Development
GENERAL INSURANCEV
alu
e P
rop
osi
tio
n
AmG is operating at a comfortable margin above internal target capital adequacy ratio
Key projects in the pipeline:
• Technology & system enhancement initiatives
• Data and information management
• Strengthening of underwriting / pricing capabilities
Key strategic initiatives:
• To increase its market share in the domestic market through acquisitions. The proposed acquisition of Kurnia (currently
pending regulatory approval) is expected to deliver synergies and economies of scale
• Leverage on AmBank Group’s customer base
54AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
• Richard Duxbury - Director
SENIOR MANAGEMENT / CONSULTANTS
• Adrian John Nurse - Deputy CEO
• Evelyn Gutteridge1 - Strategic Development Manager, International, Friends Life
• Steve Rosling1 - TCF Champion, Friends Life
• John O’Rourke1 - Independent Consultant, Distribution Expert
Friends Life – capability & talent transfer
BO
AR
DM
AN
AG
EMEN
T
1 - Consultants
Leveraging strategic partnerships with global Insurance partners
Strategy & Management Development
Technical expertise & risk management
Distribution & product development
VA
LUE
PR
OP
OSI
TIO
N
LIFE ASSURANCE
55AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
1.Peer banks as at September 2011, AmBank as at latest practical date 2. AmLife & AmG branches and agency office
Multiple distribution channels aligned to demographics
Kuala LumpurBranches 24ATMs 148
TerengganuBranches 5ATMs 22
JohorBranches 23ATMs 96
MelakaBranches 5ATMs 35
Negeri SembilanBranches 8ATMs 38
PahangBranches 9ATMs 34 Sarawak
Branches 18ATMs 41
SabahBranches 11ATMs 34
Pulau PinangBranches 16ATMs 51
PerlisBranches 2ATMs 4
KelantanBranches 2ATMs 22
PerakBranches 19ATMs 45
KedahBranches 5ATMs 27
PutrajayaBranches 1ATMs 4
SelangorBranches 41ATMs 246
LabuanBranches 1ATMs 1
Population Density:
< 100 persons per km2
101-500 persons per km2
501-1,000 persons per km2
1,001-1,500 persons per km2
> 1,501 persons per km2
Commercial banking branches:
o 190 branches nationwide
- #51 in no. of branches
- 3 AmIslamic branches
o 848 ATMs (#51 in no. of ATMs)- 403 ATMs (#1 provider of ATMs) at 7-Eleven
o 146 Electronic Banking Centreso 50 assurance/insurance offices2
o 14 AmInvestment offices
56AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Banking sector share price movement / target price and recommendations
Banking Sector Share Price Movement
71.5%
58.5%
52.0%
41.0%
29.4%
-4.5%
12.8%
-10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%
HLFG
RHB Cap
AMMB
PBB
CIMB
MBB
KLCI(Note: 18 May 2007 vs. 30 Dec 2011)
Ratings FY2007 9MFY2012
Am
Ban
k (M
)
RAM A2/P1/Stable AA3/P1/Stable
Fitch BBB-/F3/Stable BBB/F3/Stable
S&P BBB-/A-3/Stable BBB+/A-2/Stable
Moody’s Baa2/P-3/Stable/D- Baa2/P-3/Positive(BFSR)1/D
Capital Intelligence BBB-/A3/Stable BBB/A3/Stable
Am
Inve
stm
en
t RAM AA3/P1/Stable AA3/P1/Stable
Fitch BB+/B/Stable BBB/F3/Stable
S&P BB+/B/Stable BBB+/A-2/Stable
MARC AA-/MARC-1/Stable AA-/MARC-1/Positive1
Am
Isla
mic
RAM A2/P1/Stable AA3/P1/Stable
Upgraded ratings
Target Price and Recommendations
TP: target priceTP & recommendations by MIMB & INTERPAC are based on previous Bloomberg information as there is no subsequent update
Sell/Underperform/Fully valued/Reduce/UnderweightHold / Neutral / Market performBuy/Outperform/Overweight/Add
P/EPS : EPS annualized Dec 10 – Sept 11 P/BV : BV as at 30 Sept 11Source : Bloomberg as at 30 December 2011
KAF KIM ENG ALLIANCE MIDF DEUT BofAML TA HSBC MACQ KEN JP UBS MBB BNP CIMB OSK SC AFFIN HLIB DBS ECM UOB CITI NOMURA G.S CLSA RHB
1 BFSR - Banking Financial Strength Rating
P/EPS : 12.28 Market Price: RM 5.95 Average TP : RM 6.28 P/BV : 1.69 Buy : 11 (41%)
Hold : 9 (33%)Sell : 7 (26%)Ave. TP/Ave. CP : 1.05x
AMMB HOLDINGS BERHAD
7.907.60 7.40 7.30 7.20 7.14 6.90 6.90 6.80 6.70
6.30 6.30 6.30 6.30 6.26 6.20 6.11 6.05 6.02 5.80 5.70 5.705.35
5.05 5.00 4.804.40
18
Ma
y 1
1
19
Ma
y 1
1
14
De
c 1
1
19
Ma
y 1
1
28
Oct
11
13
Oct
11
16
No
v 1
1
19
Ju
l 11
16
No
v 1
1
23
De
c 1
1
25
No
v 1
1
16
No
v 1
1
17
No
v 1
1
16
No
v 1
1
17
No
v 1
1
17
No
v 1
1
25
Ja
n 1
1
20
De
c 1
1
6 O
ct 1
1
21
De
c 1
1
17
No
v 1
1
17
No
v 1
1
29
Se
p 1
1
25
No
v 1
1
13
De
c 1
1
30
De
c 1
1
17
No
v 1
1
57AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Solid shareholding structure & franchise value
AMAB Holdings Sdn Bhd
AmG Insurance Berhad
AmLife Insurance Berhad
AmFamily Takaful Berhad
100% 100%100% 100% 100%
100%
70%3
51%2
70%3
1. ANZ Funds Pty Ltd : a wholly owned subsidiary of Australia and New Zealand Banking Group Limited 2. Insurance Australia Group Ltd – 49% 3. Friends Life Limited – 30%
As at 30 Dec 2011
AmInvestmentGroup Berhad
AmInvestmentBank Berhad
Foreign shareholding excluding ANZ
FY2009 FY2010 FY2011 9MFY2012
28.4% 27.1% 27.1% 26.2%
Banking Capital Markets Insurance
Amcorp Group Berhad(16.8%)
ANZ Funds Pty Ltd1
(23.8%)Employees Provident Fund Board
(14.8%)Other Shareholders
(44.6%)
Asset Management
AmIslamic Bank Berhad
AMMB Holdings Berhad
AmBank (M) Berhad
AMFB Holdings Berhad
58AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
1,703
2,007
2,383
2,635 2,706
419 546
678 673
308
Life Fund Assets Gross Premium
811 902
1,017
1,177 1,257
546 586 624 652
473
General Fund Assets* Gross Premium
92,845
49,908
46,596
60,497 53,879
8% 8% 8% 8%
6%
Trading Value Market Share
18,537 15,954
19,263 24,357
26,946
16%
12% 12%13%
15%
Asset Under Management Market Share
General Insurance
* Prior to December 2008, based on general funds per BNM DGI returns. December 2008 & post December 2008 based on BNM DGI returns with total asset (general funds + shareholders’ funds)
RM’mil
Life Assurance
Institutional & Unit Trust AUM Brokerage
Unit trust : Institutional funds at ratio 55% : 45%
RM’mil
Highlights in key investment banking and insurance portfolios
CY07 CY08 CY09 CY10 CY11
FY08 FY09 FY10 FY11 9MFY12 FY08 FY09 FY10 FY11 9MFY12
10.6%
6.8%
Rank # 8
Rank # 2
Rank # 6
^ Ranking for General, Life & funds management are based on Sept 2011 position
Rank # 10
14.4%
59AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
Glossary / Disclaimer of warranty and limitation of liability
Reported PerformanceReported performance refers to the financial performance as reported in the audited financial statements and disclosed to the market
One OffsOne offs comprise those impacts on financial performance that arise from changes to :
• accounting and provisioning policies (eg 5 and 7 year rules)• differences between economic and accounting hedges• prior period catch ups (eg backdated salary costs)• strategic investments and divestments (eg ANZ partnership), and • tax and regulatory regimes (eg deferred tax asset write off due to reduction in corporate tax rates)
Underlying PerformanceUnderlying performance refers to the financial performance adjusted for one off impacts as above
Business DivisionsBusiness divisions
• comprise AmBank Group’s core operating businesses that generate profits from direct customer transactions and interactions• have relatively more stable income streams, incur the bulk of the costs and typically have a lower risk profile• in most instances have market shares and growth metrics that can be measured and benchmarked externally
Operating SegmentsOperating segments
• have more volatile and lumpy income streams, with the former a direct function of risk appetite • include
• income and expenses associated with shareholder funds, loan rehabilitation and legacy businesses, plus• costs associated with corporate, shared services and governance functions currently not charged back to the business units
The information provided is believed to be correct at the time of presentation. AMMB Holdings Berhad or AMMB Holdings or “AMMB” or its affiliates do not make any representation or warranty, express or implied, as to the adequacy, accuracy, completeness or fairness of any such information and opinion contained and shall not be liable for any consequences of any reliance thereon. Neither AMMB Holdings nor its affiliates are acting as your financial advisor or agent. The individual is responsible to make your own independent assessment of the information herein and should not treat such content as advice relating to legal, accounting, and taxation or investment matters and should consult your own advisers.
Forward looking statements are based upon the current beliefs and expectations of the AMMB Holdings and are subject to signif icant risks and uncertainties. Actual results may differ from those set forth in the forward looking statements. AMMB Holdings does not undertake to update the forward looking statements to reflect impact of circumstances or events that may arise after the date of this presentation.
The information in the presentation is not and should not be construed as an offer or recommendation to buy or sell securitie s. Neither does this presentation purport to contain all the information that a prospective investor may require. Because it is not possible for AMMB Holdings or its affiliates to have r egard to the investment objectives, financial situation and particular needs of each individual who reads the information contained thus the information presented may not be appropriate for all pe rsons.
The information contained is not allowed to be reproduced, redistributed, transmitted or passed on, directly or indirectly, to any other person or published electronically or via print, in whole or in part, for any purpose.
The term "AMMB Holdings" and “AmBank Group” denotes all Group companies within the AMMB Holdings Group and this Disclaimer of Warranty and Limitation of Liability policy applies to the financial institutions under AMMB Holdings.
Disclaimer of Warranty and Limitation of Liability
60AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION 9MFY2012
The material in this presentation is general background information about AmBank Group’s activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor.
These should be considered, with or without professional advice when deciding if an investment is appropriate.
For further information, visit :
www.ambankgroup.com
Ganesh Kumar Nadarajah
Group General Manager, Group Investor Relations and Planning
Tel : +603 2036 1435 Fax : +603 2031 7384 e-mail : [email protected] or
+6012 2974799 [email protected] or