19 November 2014 H1FY2015 Results Investors …...1 Your Bank. Malaysia’s Bank. AmBank. H1FY2015...

1 Your Bank. Malaysia’s Bank. AmBank.

H1FY2015 Results – Investors Presentation

19 November 2014

H1FY2015 Results – Investors Presentation Ashok Ramamurthy, Group Managing Director

Your Bank. Malaysia’s Bank. AmBank.


H1FY2015 Results – Investors Presentation Your Bank. Malaysia’s Bank. AmBank.

AGENDA Page

1. EXECUTIVE SUMMARY 2

2. H1FY2015 GROUP FINANCIAL PERFORMANCE 12

3. OUTLOOK & STRATEGIC PRIORITIES 28

4. DIVISIONAL STRATEGY & PERFORMANCE 34

5. SUPPLEMENTARY INFORMATION 40

- AMBANK GROUP

- ECONOMY & INDUSTRY



H1FY2015 performance highlights

PATMI up 8.9%1, ROE of 14.3%1 underpinned by divestment gains

Performance reflects ongoing transformation…

• Ongoing portfolio rebalancing, net loans up 1.4% with stronger growth in targeted segments, LDR at 89.3%

• Expense management to support ongoing investments, CTI at 43.3%1

• Managing capital levels in line with our expectations on future Holding Company Basel III requirements. Proposed interim dividend of 12.0 sen representing circa 50% of FY2015 expected payout

...and

• Cautious credit risk appetite in selected segments in Retail impacting loans growth

• Continued funding pressure with intensifying competition in deposits

• New consolidated WB model implemented and stabilising, gaining momentum in preferred sectors/segments, focusing on penetrating customers’ share of wallet

1. Includes one-off divestment gain of AmLife & AmFamily



Progressively delivering on our strategic agenda

Deliver on focused organic

growth

New small business solutions within Retail Banking rolled out nationwide, targeting niche SME segment

Wholesale banking consolidation completed, new product specialist and coverage teams set up

Commenced core banking system implementation (Phase 2), target to complete within 18 months

Leverage strategic

partnerships & deliver on

acquisitions

Tail end of system integration, target to complete by CY2014

• MBF: Achieved cost synergies of RM 13.8mil and revenue synergies of RM 2.9mil for H1FY15; merchant force stable at >55,000

• Kurnia: Achieved cost synergies of RM 70.4mil to-date

AmMetLife: new CEO/leadership team and board members appointed

Continue to optimise efficiency

Issued USD 400mil senior notes jointly arranged by AmInvestment & ANZ, provides ability to raised term funding at competitive rates regionally

Rationalising subsidiaries and non-core operations, releasing dormant capital

Streamlining internal organisation structure for greater efficiency

Build sustainability

Investing in significant governance & compliance projects

Material enhancements underway in digital (internet & mobile) banking platforms. Corporate website facelift to be launched in Nov 2014, mobile and tablet responsive to improve user’s experience

Building leadership and increase talent mobility, aligned and enhanced rewards/recognition (Total Target Remuneration Project)

1

2

3

4

Focused growth Leverage investments Optimise enablers



Tailored solutions and products to cater specifically to Small Business customers

Retail Banking: Small Business Banking Solutions - providing big support to Small Business Customers nationwide

Aspiration

Supporting Small

Businesses – TODAY!

Our Segment Customers with business turnover <RM25 million and Business-Group exposure

<RM3 million

To become the bank of choice for Small Business customers in Malaysia

70 dedicated Small Business Specialists covering all AmBank branches nationwide

Customer centric sales process, supported by SBB BizReview, a comprehensive profiling and needs assessment tool

Deliver market leading customer experience

o Dedicated SBB Customer Assist, a contact centre team providing servicing support to SBB customers expected to go live in Dec 2014



Value proposition

Created new industry, geography and segmentation focused teams

Relationship Management teams as single point of contact – enhance customer experience across sales, product solutions and servicing

Promote product neutrality to increase cross sell

Build centers of product expertise

Provide innovative, differentiated and competitive products and solutions to the wholesale client segment

Promote greater product bundling

Consolidation and centralisation of operations

Increase customer centricity

Achieve product excellence

Improve operational efficiency

Wholesale Banking’s journey towards customer centricity

Investment Banking

Corporate & Institutional

Banking

Markets

Transaction Banking

Business Banking

Wholesale Banking – Coverage

Wholesale Banking – Products

Previously Currently

5 Business divisions 2 Business divisions



Key Highlights

Completed Kurnia acquisition on 26 Sep 2012, combined entity renamed AmGeneral Insurance Berhad on 1 Mar 2013

• Leading motor insurer in Malaysia

• >3.6 million policy holders, ~10% market share for general insurance by GWP

• Achieved cost synergies of RM 70.4mil to-date, on track to complete Kurnia Motor integration by end CY2014

“AmAssurance” & “Kurnia” dual branding strategy, first in Malaysian general insurance market

New CEO appointed from IAG

Building pricing capability to lead the de-tariff market

Developing and strengthening alliances with key partners

Mr Derek Roberts, new CEO appointed from IAG

Strategic partnership with Insurance Australia Group (IAG)



Partnership with MetLife, aligned vision with complementary strength

AmLife & AmFamily Takaful businesses – new strategic partnership with MetLife International Holdings, Inc.

Leverage best practices and global standards, creating a modern, innovative, customer centred insurer

Launched new brand name, revamped website, “LIVE READY” campaigns

8 H1FY2015 Results – Investors Presentation

Key focus and planned initiatives:

1. Enhance brand - new corporate website launched together with a series of ‘Live Ready’ campaigns

2. Strengthen distribution channel

o Agency enhancement

o New distribution channel, setting up Insurance/Takaful Specialist teams at AmBank branches

o Direct marketing telemarketing (DMTM) outsourcing commenced in Sep 2014

3. IT investment to strengthen foundation and support growth

4. Align policies and processes in human resources, risk management & compliance, actuarial & finance

5. Develop core organisational talents and strengthening leadership teams



34.7

44.7

49.6 54.0

59.3

30.0 32.7

FY10 FY11 FY12 FY13 FY14 H1FY14 H1FY15

1,009

1,343 1,484

1,621 1,782

903 983

11.5% 13.6% 13.8% 13.9% 14.1% 14.4% 14.3%


PATMI (RM'mil)

ROE (%)

1.13%

1.39% 1.39% 1.37% 1.45% 1.47%

1.65%


H1FY15 results underpinned by stronger non-interest income

CAGR FY10-14: 0.08% YoY growth: 0.18%

CAGR FY10-14: 14.3% YoY growth: 8.8%

ROE CAGR FY10-14: 0.7% YoY growth: -0.1%

PATMI CAGR FY10-14: 15.3% YoY growth: 8.9%

1. FY2013 has been restated to reflect adoption of new MFRS

RM (sen)

(%)

PATMI & ROE ROA

EPS (basic)

42.0% 39.9% 41.6%

48.1% 45.9% 47.8%

43.3%


CTI YoY change: -4.5%

(%)

CTI



- - -

9.4% 9.7% 10.3% 9.8% 9.8% 10.4%

11.1% 11.2% 11.7%

15.3% 14.0%

14.7% 14.8% 15.5% 16.1%

FY10 FY11 FY12 FY13 FY14 H1FY15

CET-1 Tier-1 RWCAR/Total Capital

3.8%

3.3%

2.5%

1.98% 1.86% 1.95% 1.79%


64.8 71.1

75.7

82.6 87.2

83.6 84.7


8.5 10.4 13.2 16.8 18.7 16.5 17.1

70.7 81.5

84.6 93.1

98.3 96.3 94.8

12% 14% 17%

20% 21% 19% 20%


Customer deposits (RM'bil)

CASA(RM'bil)

CASA Composition (%)

Net Lending

Sound risk and capital profiles, focusing growth in targeted segments

CAGR FY10-14: 7.7% Net lending YoY growth: 1.4% Gross lending YoY growth: 0.9%

Customer Deposits CAGR FY10-14 : 8.6% YoY growth: -1.5%

YoY change: -0.16%

(RM’bil)

(%) (%)

Customer Deposits2 & CASA

Net Lending

GIL ratio Capital ratio

1. FY2013 has been restated to reflect adoption of new MFRS 2. Customer deposits includes stable funding sources

LDR 89.3%2

Basel III

CASA CAGR FY10-14: 21.9% YoY growth: 3.6%

Basel II



19 November 2014

H1FY2015 Results – Investors Presentation Mandy Simpson, Chief Financial Officer




AGENDA Page






- AMBANK GROUP




41.6% >100.0% 1.1% 54.9%

982.8 mil

8.9% 9.2% 18.5% 8.8% 10.9%

902.8 mil

8.3%

Islamic PATMI Conventional PATMI Positive growth in H1FY15 Contraction in H1FY15

Non-interest income underpinned H1FY2015 results

Growth 2.1%

PATMI: profit after tax and non controlling interests

12%

88%

15%

85%

PATMI H1FY14

Net Interest Income

Non-Interest Income

Total income

Expenses PBP Provisions/ Allowances

PBT Tax & Zakat

PAT MI PATMI H1FY15

H1FY15 (RM’mil)

1,412.1 1,178.1 2,590.3 1,118.3 1,472.0 125.0 1,347.0 298.4 1,048.6 65.8

H1FY14 (RM’mil)

1,540.7 831.9 2,372.6 1,130.2 1,242.3 4.6 1,237.7 292.4 945.3 42.5



47.8% 47.8% 44.5% 42.5% 42.7% 44.2%

49.8%

Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15

CTI Underlying %

25.6 25.4 25.6 25.3 24.6 24.1

58.5 58.2 59.2 61.8 61.0 60.6


(RM’bil)

Auto Fin Loans excluding AF

C. Deposits QoQ growth: -0.3% CASA QoQ growth: -9.0%

PATMI QoQ growth: -17.0% ROE QoQ growth: -3.3%

QoQ growth: -1.0% YoY growth: 1.4%

Stronger QoQ performance

PATMI & ROE CTI

Net Lending Customer Deposits1 & CASA

1. Customer deposits include stable funding sources

QoQ change: 1.5%

18.0 16.5 17.3 18.7 18.8 17.1

95.4 96.3

95.8 98.3 95.1 94.8

21%

17% 18% 21% 22% 20%


Customer deposits (RM'bil) CASA(RM'bil)CASA Composition (%)

329.3

462 441 416.0 464.0

536.9

446.0

15.1% 13.9% 13.1% 14.6% 16.0% 12.7%


Underlying PATMI PATMI (RM'mil) ROE CTI %

Partly reflects portfolio rebalancing & re-alignment of

customer segment focus

84.2 83.6 84.8 87.2 85.6 84.7



Q2 vs. Q1FY2015 (Underlying)

qoq growth

H1FY2015 (Underlying)

yoy growth

H1FY2015 (Reported)

yoy growth

Income 5.2% (4.3%) 9.2%

Expenses 7.3% 4.6% 1.1%

PBP 17.5% (4.1%) 18.5%

PATMI 35.4% (3.5%) 8.9%

NIM 0.09%

(Q2FY15 vs. Q1FY15)

(0.14%) (H1FY15 vs. FY14)

(0.19%) (H1FY15 vs. FY14)

Non-interest income composition (%)

36.2% 35.8% 45.5%

Note: Reflects (1) H1FY2015 – divestment gain from AmLife and AmFamily Takaful, net of tax (2) H1FY2014 – equity accounting of AmLife & AmFamily and one-off large recoveries of RM125 million

Momentum picked up in Q2



Retail Banking: Targeted growth, continue to build customer franchise

Key financials: Performance highlights:

CASA (RM’bil)

Gross Loans (RM’bil)

Profit (RM’mil)

Customer deposits and CASA growth driven by initiatives surrounding segment play (small business, emerging affluent and payroll) to build main bank relationships

Loans growth reflects more cautious credit appetite and targeted growth

Lower profits on margin compression and higher provisions; offset by lower expenses from MBF cost synergies and productivity initiatives

16.7 17.9

26.0 24.6

5.8 5.3

H1FY14 H1FY15

Mortgage Auto Fin Others

48.8 47.7 1.4%

9.9 10.4

38.7 40.9

H1FY14 H1FY15

CASA Cust Deposits

Cus Dep 5.9% CASA 5.0%

Key focus & planned initiatives:

Focus on targeted segment play through small business banking solutions and young professionals

Greater emphasis on mortgage and continuous end-to-end process review to improve efficiency and customer experience

Remain focused on expanding fee based income via bancassurance and wealth management

Digital (internet & mobile) banking platforms upgrade in progress

85% 94%

15%

6%

H1FY14 H1FY15

31.8% 341 232

Conventional PAT Islamic PAT



Wholesale Banking: Re-prioritising coverage by segment & sector


Profits (RM’mil)

Gross Loans & Average AUM1

(RM’bil)

Market share


Pick up in loans performance through drawdown of loans in key sectors

Drive deposits and trade utlilisation through progressively rolling out new solutions including integrated propositions with Retail, and leveraging ANZs connectivity

Execute on the large deal pipelines for both DCM and CF for 2H2015

Build up markets trading activities and focus on larger FX and Derivatives sales

Conventional PAT Islamic PAT

85% 80%

15% 20%

H1FY14 H1FY15

17.1% 568 471

1. Average AUM represents AmInvest’s funds under management, Private Banking, Am Private Equity & AmARA REITs

2. As at 30 Sep 2014 3. Represents AmInvest’s funds under management as at 30 March 2014

37.4 39.0

42.2 46.1

H1FY14 H1FY15

Gross loans AUM

AUM 9.2% Loans 4.3%

Market Share (%)

Rank

IPO2 22.6% 2

DCM2 13.5% 3

M’sian Ringgit Islamic Bonds2

13.8% 3

FUM3 13.6% 3

New consolidated WB model implemented and stabilising

Performance underpinned by:

o Corporate banking which saw modest loans growth and normalised recoveries

o Underlying TB performance was steady with Cash being impacted by a few lumpy deposits

o Markets performance reflects strong FI trading performance, offset by slower FX sales revenue

o Funds Management continues to deliver good growth in AUM resulting in steady profit growth

o Improved contributions from Broking, Fixed Income and Private Banking



General Insurance: stronger investment income


Combined ratio (%)

Net earned premium (RM’mil)

Profits (RM’mil)

Higher profits underpinned by improved claims management and gain on disposal of investments

Achieved cumulative synergy of RM 70.4mil to-date (Sep 2014)

Capital adequacy ratio exceeds benchmark regulatory target

779 750

H1FY14 H1FY15

90.4% 90.2%

H1FY14 H1FY15

0.2%


Develop and strengthen alliances with key partners

Drive premium growth via focused action plans including new products & services, campaigns, agent engagements and exploring new markets

Building pricing capability to lead the de-tariff market

Improving supply chain management

On track to complete Kurnia Motor integration by end CY2014, continue to extract synergies

3.6%

84 132

H1FY14 H1FY15

57.8%



H1FY14 Fees on loans AUM IB businessOther fee incTotal Fee income Sales TradingOther trading incTotal Trading & InvestmentGeneral Life & TakafulTotal Insurance Other H1FY15H1FY14 Fees on loans AUM IB businessOther fee incTotal Fee income Sales TradingOther trading incTotal Trading & InvestmentGeneral Life & TakafulTotal Insurance Other H1FY15

Fees on

loans

AUM IB business Other fee inc Total Fee

income

Sales Trading Other

trading inc

Total

Trading &

Investment

General Life &

Takaful

Total

Insurance

Other

* IB business includes brokerage fees, underwriting fees and corporate advisory & guarantees

As % of total income 35% 45%

54.3% 19.4% Growth 4.1% 10.7% >100.0%

1,178.1 mil

>100.0% 39.3% >100.0% 25.2% 41.6% 8.0%

H1FY15 non interest income Positive growth in H1FY15 Contraction in H1FY15

Retail: -7mil Wholesale: -23mil

H1FY14 non interest income

831.9 mil

H1FY14 Fees on

lending & securities

AUM IB

business* Other fee income

Total Fee Income

Sales Trading Other

trading & investment

Trading & Investment

General Life &

Takaful Insurance Business

Others H1FY15

% of Composition

10% 7% 8% 5% 31% 4% 7% 29% 41% 22% 2% 24% 5%

H1FY15 (RM’mil)

123.2 83.2 93.0 61.0 360.5 47.2 88.0 343.9 479.1 263.7 19.8 283.5 55.1

H1FY14 (RM’mil)

152.9 80.0 104.2 54.7 391.7 77.7 36.8 0.3 114.9 238.1 43.3 281.4 44.0

11.6%

Non-interest income movement

Stronger contributions from trading & general insurance whilst fee income impacted by moderate loans growth

10.8% 0.8%

Includes gross divestment gain

Includes 5-mths equity accounting of AmLife & AmFamily



268.3

256.6

249.0

5.1

4.5

5.0

6.7

12.2

5.0

FY14 AmLife & AmFamily FY14 one-offs Normalised FY14 Rates & mix HP asset quality Yields - Markets & Gen Deposits H1FY15

Margins remain a challenge, improved yields & recent rate hike lifted QoQ NIM

Note : 1 NIM includes Net Financing Income from Islamic Banking business 2 FY10-FY14 based on internal data computation 3 FY2013 has been restated to reflect adoption of new MFRS

FY10 FY11 FY12 FY13 FY13

[Restated]3 FY14 H1FY15

NIM and COF (YOY)

MFR

S 1

0

2.68%

2.92%

3.13% 3.10% 3.10% 3.09%2.98% 2.94%

2.75%2.68% 2.72% 2.69%

2.25%

2.75%

3.00% 3.00%3.00% 3.00%

1.00% 1.00%

4.00% 4.00% 4.00% 4.00%

FY10 FY11 FY12 FY13 1 Apr 2013 FY14Cost of funds NIM OPR SRR

COF

NIM

SRR

OPR

2.67% 2.63%

2.45%

1-Apr-13 FY14 Q1FY15

NIM (without AmLife & AmFamily)

11.7ps

FY14 AmLife & AmFamily

FY14 one-offs Normalised

FY14 Rates & mix AF asset quality

Yields – Markets & Gen Ins

Funding H1FY15

YTD NIM (bps) drivers

7.6ps

Q1FY2015 Q2FY2015

NIM 2.45% 2.54%

2.68%

2.92%

3.13% 3.10% 3.10% 3.09%

3.14%

2.98% 2.94%

2.75% 2.68%

2.72%

2.68%2.49%

2.25%

2.75%

3.00%3.00% 3.00%

3.00%

3.25%

1.00% 1.00%

4.00% 4.00% 4.00% 4.00% 4.00%

FY10 FY11 FY12 FY13 FY14 H1FY15

Cost of funds NIM OPR SRR

2.67% 2.63%

2.49%

FY14 H1FY15

NIM (without AmLife & AmFamily)



Disciplined cost management to support ongoing investment

H1FY14 Personnel Establishment Marketing &

Comm Admin & others

Acquisition & Biz efficiency expenses

H1FY15

% of Composition 55% 23% 6% 9% 7%

H1FY15 (RM’mil) 616.1 261.0 69.0 95.8 76.3

H1FY14 (RM’mil) 675.2 262.0 87.8 98.8 6.5

8.8% 0.4% 21.4% 3.0%

47.6% 43.3% CTI

YoY Growth

RM’mil 1,130.2 1,118.3

Expense growth drivers

>100.0% 1.1%

Productivity initiatives

Save to invest programme

Banking CTI AmGeneral COR*

H1FY15 43.2% 90.2%

H1FY14 47.7% 90.4%

Deliver on focused organic growth

Retail Application Scorecards Enhancement (RAS2)1 to

support AIRB accreditation programme

AmData Intelligence: data mart & centralised dashboard reporting system (Phase 2)

Core banking system implementation (phase 2)

Digital (internet & mobile) banking platform upgrade

Murex implementation & upgrade


Retail collection & recovery system replacement

Save to Invest Programme

Enterprise Process Platform (EPP) Programme


New multi-channel switch which consolidates multiple switches operating on various platforms

Infrastructure Facilities Modernisation1

Basel Advanced Internal Rating Based (AIRB) and related risk projects

1

Disaster recovery capabilities1

GST (Goods & Services Tax) readiness1

Regulatory Reporting System & BNM ISS (Phase 3) 1

De-tariff risk selection and pricing engine1

Anti Money Laundering Act compliance (Phase 3) 1

Others (e.g. MEPS/MyClear compliance, IBG enhancement, MyMobile, eIBFT, TAC Registration Process enhancement, single counterparty exposure limit)

1

Strategic Priorities Key investment over 12 – 18 months to deliver growth, optimise efficiency & build sustainability

1. Regulatory and compliance related

* Combined Operating Ratio



129.2%

117.6%

8.7%

18.4%

1.9%

95.6% 99.6% 104.5% 102.2%

114.6%

129.3% 127.4%117.6%

Industry AmBank Group

(31.0)

85.8

105.0

28.7

193.1

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%

2.45% 1.98% 1.86% 1.79%

0.50%0.21% 0.08% 0.20%

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%

2.45% 1.98% 1.97%0.50%

0.21% 0.01%

2.87% 2.64% 2.41%

Net Provisions Charge Net NPL Ratio Gross NPL Ratio Gross Impaired Loans Loan Loss Charge(MFRS139) Loan Loss Reserve

Loan Loss Coverage

Asset quality within expected level

202 bps

MFR

S 1

39

MFR

S 1

39

GP

3

FY2007 FY2008 FY2009 FY2010 1/4/10 FY2011 FY2012 FY2013 FY2014 H1FY15

Asset quality indicators

FY2012 FY2013 FY2014 H1FY2015

AmBank Group

Industry

RM’mil

H1FY14 loan loss coverage

Collective allowance

Individual allowance

Impaired loans &

financing

H1FY15 loan loss coverage

H1FY14 Allowance for impairment

Individual allowance

Collective allowance

Impaired loans –

recovered

H1FY15 Allowance for impairment

Allowance for impairment on loans & financing (P&L)

Movement in loan loss coverage

Normalised recoveries



Modest loans growth reflects realignment of portfolios and segments

85.8bil

7.2% 9.5% 4.3% >100.0% 11.3% 0.9%

86.6bil

4.6%

No

n-re

tail

Reta

il

5.4%

Non-Retail Retail Positive growth in H1FY15 Contraction in H1FY15

Gross Loan H1FY14

Auto Financing

Mortgage Cards Co-op Small Biz Wholesale Others Gross Loan

H1FY15

% of Composition

28.4% 20.7% 2.3% 1.8% 2.0% 45.0% -0.2%

H1FY15 (RM’bil)

24.6 17.9 2.0 1.5 1.8 39.0 (0.1)

H1FY14 (RM’bil)

26.0 16.7 2.2 1.6 2.0 37.4 (0.0)

Gross Loan / Financing

movement

55%

45%

56%

44%

Conventional,

72%

Islamic,

28%

Fixed

rate, 43%Variable

rate, 57%

Re-aligning customer segment focus

Re-prioritizing coverage by segment & sector



-10.0%

-5.0%

0.0%

5.0%

10.0%

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0 Loans growth (%)Industry purchase of

transport vehicles (RM'bil)

AF loans (

RM

'bil)

Industry - purchase of transport vehicles Industry purchase of transport vehicles loans YoY growth

AMMB - Auto Financing YoY growth

Auto Finance: increase proportion of business in preferred risk grades and reduce exposure to vulnerable group

Acquisition targeted at preferred loan tenures and margin of financing

Prudent guidelines on lending to “vulnerable income” groups

This quarter simplified steps to identify targeted segment, enhanced approval process

Continue to apply Risk-based pricing

70% 82% 83%

30% 18% 17%

FY13 FY14 H1FY15

Others Vulnerable

Household Income Group

% of New Business

54% 66% 73%

37% 32% 27%

9% 3% 0%

FY13 FY14 H1FY15

Most Preferred Preferred Least Preferred

Risk Grade

% of New Business

Auto Finance

Note: Vulnerable income group is defined as household income ≤RM3,000



Loans by purpose

Sep’14 YoY

growth Loans

composition

Purchase of resi property

378.3 +13.7% 29.1%

Working capital 300.1 +7.5% 23.1%

Purchase of non resi property

171.5 +15.5% 13.2%

Purchase of transport vehicles

165.6 +2.0% 12.8%

Purchase of securities

74.7 +15.5% 5.8%

Other purposes 64.9 -8.3% 5.0%

Personal use 59.5 +3.5% 4.6%

Construction 37.9 +16.6% 2.9%

Credit card 34.5 +2.1% 2.7%

Purchase of fixed assets

10.6 +13.9% 0.8%

Consumer durables

0.5 >100.0% 0.0%

1,298.1 +9.0% 100.0%

32.0 8.4 99.9 12.9 53.9 96.2

31.9 84.7 78.5

36.5

744.0

19.3

1,298.1

Sep-14

2.5% 0.6% 7.7% 1.0% 4.2% 7.4% 2.5% 6.5% 6.0% 2.8% 57.3% 1.5%

4.7% 3.5% 9.3% 1.3% 4.7% 6.5% 2.6% 2.8% 9.3% 1.4% 53.6% 0.4%

4.13.0 8.0 1.1

4.1 5.62.2 2.4 8.0 1.2

46.4

0.4

86.6

Sep-14

Loans Composition

Loans AmBank Group vis-à-vis Industry

Source : BNM, financial statement Your Bank. Malaysia’s Bank. AmBank.

AmBank Group

Industry

Agriculture Mining &

Quarrying Manufacturing

Electricity, Gas & Water

Construction Wholesale,

Retail, Restaurant

Transport, Storage &

Com

Finance, Insurance,

& Biz. Real Estate

Education & Health

Household Others Total Loans

0.9% YoY Growth

12.1% 16.5% 0.6% 38.8% 24.4% 1.7% 18.3% 12.5% 0.4% 36.6% 0.3% 31.6%

Loans by purpose

Sept’14 YoY

growth Loans

composition

Purchase of transport vehicles

25.6 -8.0% 29.6%

Working capital 19.6 +3.0% 22.6%

Purchase of resi property

15.1 +6.8% 17.5%

Purchase of non resi property

8.6 -5.0% 10.0%

Other purposes 5.3 +4.4% 6.1%

Construction 4.1 +28.3% 4.7%

Purchase of securities

3.6 +52.4% 4.2%

Personal Use 1.9 -7.0% 2.2%

Credit card 1.8 -8.1% 2.1%

Purchase of fixed assets

1.0 -21.3% 1.1%

Consumer durables

0.0 -100.0% 0.0%

86.6 +0.9% 100.0%

Agriculture Mining & Quarrying

Manufacturing Electricity,

Gas & Water Construction

Wholesale, Retail,

Restaurant

Transport, Storage &

Com

Finance, Insurance,

& Biz. Real Estate

Education & Health

Household Others Total Loans

YoY Growth

Loans Growth by Sector

Loans Growth by Sector

0.3% 6.8% 4.1% 32.9% 12.8% 7.3% 14.1% 6.5% 15.5% 18.9% 10.7% 19.3% 9.0%

Loans Composition 2.5% 0.6% 7.7% 1.0% 4.2% 7.4% 2.5% 6.5% 6.0% 2.8% 57.3% 1.5%

4.13.0 8.0 1.1

4.1 5.62.2 2.4 8.0 1.2

46.4

0.4

86.6

Sep-14

4.13.0 8.0 1.1

4.1 5.62.2 2.4 8.0 1.2

46.4

0.4

86.6

Sep-14



YoY Growth 4.5% 1.7% 3.6% -4.8% 18.4% -1.5%

Cust

Deposits

H1FY14

Current Savings CASA

Term

Deposit

& NID

Term

Funding

Cust

Deposits

H1FY15

H1FY15 11.9 5.2 17.1 68.2 9.5 94.8

H1FY14 11.4 5.1 16.5 71.7 8.0 96.3

96.3

94.8

8.5 10.4

13.2

16.8 18.7

17.1

12% 14%17%

20% 21% 20%

FY2010 FY2011 FY2012 FY2013 FY2014 H1FY2015

CASA CASA composition

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

Stable CASA composition, continue to reduce reliance on term deposits

Set up a USD2 billion EMTN programme, issued USD400 million post Q1FY15, >10x oversubscribed

o Diversified our funding base

o Provides ability to raise term funding at competitive rates regionally

FY2010 FY2011 FY2012 FY2013 FY2014 H1FY2015

CAGR FY10-14: 21.7%

8.5 10.4

13.2

16.8 18.0

12% 14%17%

20% 19%

FY2010 FY2011 FY2012 FY2013 H1FY2014

CASA CASA composition

Customer deposits driven by focus on CASA

Improving CASA composition

Improving funding composition

FY07 FY10 FY13 FY14 H1FY15

Equity & debt capital 10% 15% 14% 15% 16%

Customer deposits 60% 77% 75% 74% 73%

Term funding & loans with recourse >1year

4% 2% 7% 6% 6%

Term funding & loans

with recourse <1year 1% 1% 1% 2% 2%

Deposits from banks & FIs

25% 5% 3% 3% 3%

Stronger growth in Retail +8.4%



9.4% 9.7% 10.3%9.8% 10.4%

11.1% 11.2%11.7%14.0%

14.7% 14.8% 15.5%16.1%

Capital within internal targeted range

1. Double leverage ratio computed based on AMMB Holdings company level 2. Balance sheet leverage ratio: total equity net of deferred tax & intangible assets over total assets net of deferred tax assets & intangible assets 3. Total leverage ratio: total equity net of deferred tax & intangible assets over total assets net of deferred tax assets & intangible assets & off balance sheet 4. Based on recent BNM guidelines

Basel II Basel III

--------------------- After proposed dividend ---------------------

FY14 H1FY15

CET 1 Tier 1 Total

capital CET 1 Tier 1

Total capital

AmBank 9.1% 11.1% 14.6% 9.9% 12.0% 15.9%

AmIslamic 9.2% 9.2% 15.2% 9.2% 9.2% 14.9%

AmInvestment 21.2% 21.2% 21.2% 24.5% 24.5% 24.5%

FY2011 FY2012 FY2013 FY2014 H1FY15

CET 1 Tier 1 RWCAR / Total Capital Ratio

Capital adequacy ratio: Aggregated Banking Entities

Capital adequacy ratio: Legal Entities

Adopted Basel III at banking entity level

Internal target capital levels for FY2015:

o CET 1: 9.0% ± 1.0%

o Tier 1: 10.5% ± 1.0%

o Total Capital: 15.0% ± 1.0%

Double leverage ratio1: 1.13x

Balance Sheet leverage ratio2: 9.4%

Total leverage ratio3: 7.3%

Financial Holding Company (FHC) - no requirements until FY20204

Key measures to optimise capital structure & efficiency:

o Rationalising subsidiaries and non-core operations, releasing dormant capital

o Streamlining internal organisation structure for greater efficiency

o Building advanced internal rating based (AIRB) capabilities



AGENDA Page






- AMBANK GROUP




Financial services outlook

MALAYSIA: No change to our growth projection

Monetary policy will remain prudent to support the economic growth and address financial imbalances

Moderate loans growth in line with the economic outlook and monetary policy

Asset quality may come under pressure more from rising inflation and borrowing cost as well as potential capital flow risk

Margins remain a challenge from the stiff price-based competition for loans and deposits

BANKING: Opportunities & challenges

Malaysian economy: supported by domestic activities & exports

• Growth in 2014 will depend on private investment and exports, with softening private consumption

• Inflation will be a focal point in 2014 driven by on-going rationalisation of subsidy and pre-GST impact. The other one being public debt

• Authorities will continue to adopt prudent and pragmatic macroeconomic policies, reining in fiscal deficit and public debt

2013 2014f 2015f

RGDP y/y% 4.7 5.9 5.2

Inflation y/y% 2.1 3.2 3.8

OPR 3.00 3.25 3.50

Unemployment (%) 2.9 3.0 3.0

FB% GDP (FY) -3.9 -3.3 -2.8

CA% GDP 3.6 6.8 5.5

94.8

12.1%

6.7%

Jul-

12

Aug-1

2

Sep-1

2

Oct-

12

Nov-1

2

Dec-1

2

Jan-1

3

Feb-1

3

Mar-

13

Apr-

13

May-1

3

Jun-1

3

Jul-

13

Aug-1

3

Sep-1

3

Oct-

13

Nov-1

3

Dec-1

3

Jan-1

4

Feb-1

4

Mar-

14

Apr-

14

May-1

4

Jun-1

4

Jul-

14

Aug-1

4

Sep-1

4

RM'bil

Loans disbursed Loans approved Loans Applied



As Malaysia’s preferred diversified, internationally connected financial solutions group, we take pride in

growing your future with us.

Record performances & increasing ROE

Consistent revenue growth

Improved balance sheet & funding mix

Increased dividend payout to 40%

Commenced pursuing niche acquisitions

3 Focus areas:

Strategic Business Transformation

High priority growth initiatives

Organisation and governance structures

Delivered consistent growth & returns

Strengthening customer centricity & connectivity

Expand international connectivity initiatives

In-fill acquisitions & new strategic tie-up

Grow retail assets

Lead in investment banking business

Leverage fixed income trading

AmBanking on a new journey

1. Deliver on focused organic growth

2. Leverage strategic partnerships & deliver on acquisitions

3. Continue to optimise efficiency

4. Build sustainability

Pre ANZ FY2008 – 10 FY2011 – 12 FY2013 – 14 FY2015 – 17

Scale & Presence

Reposition, Build New Growth

Options Improve Returns

Aggressively Invest,

Optimise & Leverage Connectivity

Focused Growth

Leverage Investment

Optimise Enablers



Focused growth Leverage investments Optimise enablers

Strategic Priorities FY2015 – 17

Retail: build new value segments in emerging affluent & small business, leverage existing value strength to grow in mass market

Wholesale: grow franchise value by targeting value segments, customer centricity, and deeper relationships to increase SOW, focus on CASA, cross selling & lead in innovation to accelerate non-interest income growth

General Insurance: maintain leading position in motor, diversify into non-motor

Islamic: grow CASA, rebalance portfolio mix, increase fee based income

Complete Kurnia & MBF Cards integrations and deliver synergies. Shift focus to top line growth

Life: grow Banca and synergise with Metlife

Family Takaful: grow sales of credit related term Takaful products & extract synergies from Metlife

Build scalable “customer service delivery center”

Simplify business and operating models

Optimise holding company

Build AIRB capabilities

Strengthen governance

Enhance employee engagement & talent management

Superior customer experience – technology & branding

Deliver on focused organic

growth

Leverage strategic

partnerships & deliver on

acquisitions



1

2

3

4



FY2014 H1FY2015 FY2015 FY2016 – 17

PATMI

(RM’mil)

1,782.4

(10.0% yoy)

982.8

(8.9% yoy) Circa 8% 6 – 10%

ROE (%) 14.1% 14.3% Circa 14% Circa 14%

CTI (%)

45.7%

43.1%

(Banking Group)

43.3%

43.2%

(Banking Group)

≤45%; ≤43%

(Banking Group)

≤44%; ≤42%

(Banking Group)

Gross impaired loans (%)

1.86% 1.79% ≤1.9% ≤1.9%

Dividend:

Single-tier (sen)

Payout (%)

Interim: 7.2 sen / share

Final: 16.9 sen / share

41%

Interim: 12.0 sen / share

40 - 50% Payout

40 - 50% Payout

Key performance indicators

FY2015 underlying estimates: NIM expected to contract ~15 bps (underlying) Loan loss charge expected to be circa 15 bps Loans expected to grow ~3% LD ratio expected to maintain at ~90%, ±2%

CASA composition ≥21% Non-interest income composition at circa 38% Target CET 1 of 9.0% (±1%), Tier 1 of 10.5% (±1%),

total capital of 15.0% (±1%)



3

H1FY2015 underpinned by divestment gains, operating performance moderated

Loans growth likely to remain modest, stronger growth in targeted segments

Cost discipline to continue, further productivity benefits to flow though partially offset by ongoing planned investments

Increasingly challenging business and economic environment, while compliance requirements continue to rise

Key priorities:

- Committed to our FY2015 – 17 strategic agenda - Focus is on achieving FY2015 key performance indicators - Ongoing investment to improve capabilities & customer experience - Remain dynamic & responsive to drive growth

1

2

3

4

5

Summary



AGENDA Page






- AMBANK GROUP




22.2%

Retail Banking

Re-orient to higher value segments, extract value from core mass Aspirations

8.8% Growth 14.4% 2.8% 127.7% 31.7% 31.3% 31.8%

• Retail Banking’s growth agenda will focus on simplification, digital enablement including modernisation of its digital platforms, building a service-oriented culture and people capability. Key segments include small business and young professionals whilst continue to expand and innovate wealth management offerings

Outlook

PAT

H1FY15 PAT H1FY14 PAT Positive growth in H1FY15 Contraction in H1FY15

• Deposit grew stronger underpinned by continuous marketing campaigns and leverage distribution channel

• Targeted loans growth reflects conservative risk appetite and improved quality assets.

• Lower profits on continued margin compression and targeted loans growth; offset by lower expenses from MBF cost synergies and productivity initiatives

Targeted growth

H1FY15 PAT

(composition to Group)

H1FY15

vs

RM'mil H1FY14 H1FY15 H1FY14

PAT H1FY14

Total Income

Expenses PBP Allowances PBT Tax PAT

H1FY15

H1FY15 (RM’mil)

890.6 455.9 434.6 125.4 309.2 76.8 232.3

H1FY14 (RM’mil)

976.7 468.9 507.8 55.1 452.7 111.8 340.9

Gross Loans /

Financing 48,422.6 47,738.2 -▼ -1.4%

Gross Impaired Loans 2.44% 1,287.5 1,165.7 -▼ -9.5%

Customer Deposits 38,680.2 40,943.4 ▲ +5.9%

CASA Deposits 9,938.8 10,431.1 ▲ +5.0%

ROA 1.40% 0.96% -▼ -0.44%

CTI 48.1% 51.3% ▲ +3.2%

Allowance Coverage 78.5% 70.8% -▼ -7.7%



Gross Loans / Financing 37,356.8 38,961.1 ▲ +4.3%

Gross Impaired Loans 1.00% 389.9 387.9 -▼ -0.5%

Customer Deposits 52,106.6 47,358.2 -▼ -9.1%

CASA Deposits 7,588.3 7,446.1 -▼ -1.9%

ROA 2.38% 1.95% -▼ -0.43%

CTI 33.5% 35.9% ▲ +2.4%


Ave Assets Management 42,233.4 46,107.6 ▲ +9.2%

Loan Rehab, 2%

Wholesale Banking

8.6% Growth 11.9% 2.2% 44.7% 17.0% 16.8% 17.1%


PAT H1FY14

Total Income


H1FY15

H1FY15 (RM’mil)

856.5 307.4 549.1 (64.3) 613.3 142.7 470.6

H1FY14 (RM’mil)

937.2 314.2 623.1 (116.2) 739.3 171.0 568.2

PAT

Coverage: Maximising franchise value through holistic coverage & cross sell – full understanding of customer needs, distinguishing service by complexity, allocating specialists intelligently to grow sustainable profitability

Products: To offer innovative, quality products and services and deliver comprehensive differentiated solutions

Aspirations

Outlook • Higher profit growth with strong deals pipeline particularly from debt and loans markets and recovery of fixed

income business. Expecting margin pressure and volatility in the market.

• Performance reflects stabilisation of new Wholesale Banking operating model and normalised recoveries

• Improved contributions from Broking, Fixed Income, Funds Management and Private Banking were partially offset by margin compression, as well as lower foreign exchange and derivative performance

• Reduced expenses through cost management initiatives

• Good growth in assets under management. Customer deposits reflects management of depositors concentration

Diversified contribution across business

H1FY15 PAT (composition to Group)

H1FY15 Income Breakdown

Markets, 11%

Corporate Bkg, 45%

Transaction Bkg, 20%

H1FY15

vs


• Assets managements include FMD, private banking, AmAra Reits and AmPrivate Equity

IB, 21%

Others, 4.9%

44.9%



Claim ratio 63.1% 62.0% -▼ -1.1%

Expenses ratio 18.9% 17.8% -▼ -1.1%

Combined ratio 90.4% 90.2% -▼ -0.2%

62.9% 5.1%

General Insurance

Dominate in auto insurance and diversify into non-motor segment Aspirations

3.6% Growth 0.4% 9.2% 25.3% >100.0% 57.8%

Outlook

PAT H1FY15 PAT (composition to Group)

• Higher profits underpinned by gain on disposal of investments and improved claims management

• Achieved cumulative synergy of RM 70.4mil to-date (Sep 2014), target to complete integration by end CY2014

• Positive capital adequacy ratio exceeds benchmark regulatory target

Stronger investment income

• Expecting higher profit level in FY2015, initiatives underway to strengthen strategic alliances with key partners and brand enhancement

PAT H1FY14

Net Earned

Premium

Claims &

Comm

UW Profit

Mgmt Expenses

Net UW Profit

Investment Income

Provision Tax PAT

H1FY15

H1FY15

(RM’mil) 750.4 545.7 204.7 133.5 71.2 98.5 (6.3) 43.5 132.5

H1FY14 (RM’mil)

778.6 574.8 203.9 147.0 56.8 60.5 2.1 31.2 84.0


H1FY15

vs


39.6% 12.6%

Expenses ratio reflects insurance business only (exclude PPA amortisation)



Auto

Financing,44%

3.0%


• Profits impacted by lower income and higher provision, partially offset by lower expenses from continued cost management initiatives

• Income reflects realignment of loans portfolio and continued margin compression

• Wholesale banking delivered double-digit strong financing growth; Retail Banking remain focus on targeted loans growth

Islamic Banking

To be the Islamic Bank of choice Aspirations

Strong financing & CASA growth

4.4% Growth 5.3% 11.3% 12.9% 15.7%

12.1%

Outlook • Increase penetration of solutions and cross-selling to support AmBank Group as “main bank” initiatives

PAT

PAT H1FY14

Total Income


H1FY15

H1FY15

(RM’mil) 422.6 175.4 247.1 91.4 155.8 35.2 120.6

H1FY14

(RM’mil) 441.8 180.8 261.0 82.1 178.9 41.8 137.1


H1FY15

vs


Gross Financing 22,321.8 24,297.6 ▲ +8.9%

Gross Impaired Loans 1.50% 341.5 365.6 ▲ +7.0%

Customer Deposits 23,476.1 25,377.6 ▲ +8.1%

CASA Deposits 5,638.5 5,254.0 -▼ -6.8%

ROA 0.81% 0.70% -▼ -0.11%

CTI 40.9% 41.5% ▲ +0.6%


11.5%

H1FY15 Gross Financing



• Income includes one-off divestment gain of AmLife and AmFamily businesses

• Higher expenses reflect continued investment (centrally accrued)

• MI represents non-controlling interests within the Group

Group Operating Segments


>100.0% Growth >100.0% 54.1% 7.6% >100.0% >100.0% >100.0%

PAT

>100.0%


PAT H1FY14

Total Income

Expenses PBP Allowances PBT Tax PAT MI PATMI H1FY15

H1FY15 (RM’mil)

511.1 212.3 298.8 68.4 230.5 33.1 197.3 65.8 131.5

H1FY14 (RM’mil)

91.8 137.8 (46.0) 63.6 (109.6) (38.8) (70.7) 42.5 (113.2)

54.9%

18.8%



AGENDA Page






- AMBANK GROUP




134.3 273.0

407.3

657.4

1,064.7

Sep'14

1.0% 7.0% 5.0% 0.7% 1.2%

5.2 11.9

17.1

68.2

85.3

Sep'14

RM’bil

Deposits profile

Source : BNM, internal reports

RM’bil

Savings Current Account CASA Fixed Deposits Core Deposits

Savings Current Account CASA Fixed Deposits Core Deposits

AmBank Group Deposits Growth by Type

Industry Deposits Growth by Type

1.7% 4.5% 3.6% 4.8% 3.3%

6.1%

13.9%

79.9%

AmBank Group Core Deposits Composition

Savings Current Account Fixed Deposits

12.6%

25.6%

61.7%

Industry Core Deposits Composition

Savings Current Account Fixed Deposits



Diversifying funding sources and maturity profile

LDR1 of 89.3%

AmIslamic Bank Bhd

1. RM2b Subordinated Musyarakah Sukuk

2. RM3b senior sukuk musyarakah programme

3. RM3b Basel III-compliant Subordinated Sukuk Murabahah Programme via Tawarruq arrangement

AMMB Holdings Bhd

1. RM2b Medium Term Notes (Senior & Subordinated)

Funding diversity underpinned by

CASA: RM17.1 billion (yoy growth = 3.6%)

Fixed deposits: RM68.2 billion (strong retention)

Supplemented by term funding & debt capital

AmBank (M) Bhd

1. RM500m Innovative Tier 1 Capital Securities Programme

2. RM500m Non-innovative Tier 1 Capital Securities Programme

3. USD200m USD Subordinated Term Loan

4. RM2b Medium Term Notes

5. RM4b Tier 2 Subordinated Notes

6. RM7b Senior Notes2

7. USD300m Term Loan Facility

8. USD2b Euro Medium Term Notes

1. Includes stable funding sources 2. 1st senior notes issuance by a financial institution in Malaysia

AmBank (M) Bhd AmIslamic Bank

Bhd

Loans with Recourse

Recourse obligations on loans sold to Cagamas - maturing in 2017

Islamic financing

sold to Cagamas – maturing in 2016

• Statutory reserve and liquidity requirement savings

• Reduced exposure to interest rate risks

Funding characteristics

• 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



ANZ diversified footprints in Asia

Value proposition

• Seconding ANZ staff into key roles

• Providing technical expertise

• Support new product development

• Two-way customer referrals

• Joint account planning

• Access to regional network & connectivity

Board representation

• Shayne Elliot – Director (Chief Financial Officer, ANZ)

• Mark Whelan – Director (Managing Director, Corporate & Commercial, ANZ)

Management representation

• Mandy Simpson – Chief Financial Officer

• Nigel Denby – Chief Risk Officer

• Paul Lewis – Managing Director, Retail Banking

• Tan Chin Aun - Transaction Banking

• Oscar Demirtas - Senior Programme Manager, Small Business Banking

Partnership with ANZ

Source: Trade Finance Magazine 2013

CHINA

HONG KONG

PHILIPPINES

VIETNAM

NEW ZEALAND

SOUTH KOREA

JAPAN

TAIWAN

INDONESIA

AUSTRALIAPACIFIC ISLANDS

SINGAPORE

LAOS

THAILAND

CAMBODIAMALAYSIA

PAPUA NEW GUINEA

FIJI

INDIA

ANZ & AmBank Partnership

15 Asian markets, 98 branches and 5 Partnerships



IAG diversified footprints in Asia

Value proposition

• Involved in the management of AmGeneral Insurance, offering skills transfer, partnership and relationship models of IAG

• Adding value through claims re-engineering savings, increased revenue via product development, underwriting and pricing

Board representation

• Duncan Brain – Director (CEO, IAG Asia)

• Aidan Pallister – Director (Deputy CEO / COO of IAG Asia)

Management representation

• Derek Roberts – CEO, AmGeneral Insurance Berhad

• Arron Mann – General Manager, Claims

• Chris Tandy – General Manager, Personal and Commercial Pricing

Partnership with IAG

GENERAL INSURANCE

AmGeneral: Leveraging strategic partnership with global insurance partner

2 subsidiaries in Thailand & Vietnam Investment in associates in Malaysia, China & India

Source: IAG annual report 2014

https://www.kurnia.com/malaysia



Branches ATM Regional Business Centres

Perlis 1 4

Kedah 5 29

Pulau Pinang 14 49 1

Perak 19 51

Selangor 34 260

Kuala Lumpur 30 142 1

Putrajaya 1 4

Negeri Sembilan 6 43

Melaka 5 38

Johor 21 97 1

Pahang 9 35 1

Terengganu 5 20

Kelantan 2 22

Sabah 9 36 1

Labuan 1 2

Sarawak 15 49 1

177 881 6

Multiple distribution channels aligned to demographics

Population Density: <100 persons per km2 101-500 persons per km

501-1,000 persons per km2 1,001--1,500 persons per km2

> 1,501 persons per km2

Perlis

Kedah

Pulau Pinang

Perak

Sarawak Kuala Lumpur

Putrajaya

Negeri Sembilan

Melaka Johor

Pahang

Singapore

Indonesia

Selangor

Labuan

Sabah Terengganu

Kelantan

AmIslamic branches

Weekend Banking Branches

ATMs @ 7-Eleven

Electronic Banking Centres

Internet & Mobile

Banking AmGeneral AmMetlife AmInvestment MBF

3 76 402 170 AmOnline AmGenie

32 (include 28

dual branded branches)

18 branches 52 agencies

14 26

Note(s):

Brunei: AmCapital (B) Sdn Bhd

Indonesia: PT.AmCapital Indonesia, PT.AMCI Manajemen Investasi Indonedia

Singapore: AmFraser Securities Pte Ltd

Brunei Darussalam

Nationwide Branch Network

Other Customer Touch Points



Solid shareholding structure & franchise value

AMMB Holdings Berhad

23.8%1 AmCorp 13.3% EPF 14.2% Others 48.7%

100% AmBank (M) Berhad

100% AmInvestment Group Berhad

100% AmInvestment Bank Berhad

FY2010 FY2011 FY2012 FY2013 FY2014 H1FY2015

27% 27% 26% 29% 31% 32%

1.ANZ: ANZ Funds Pty Ltd,a wholly owned subsidiary of Australia and New Zealand Banking Group Limited 2.Formerly known as AmG Insurance Berhad 3.Formerly know as Kurnia Insurans (Malaysia) Berhad 4.MetLife owns 50% plus one share in AmMetLife Insurance Berhad, with the remaining shares held by AmBank Group, and AmBank Group owns 50% plus one share in AmMetLife Takaful Berhad, with the

remaining shares owned by MetLife

Foreign shareholding excluding ANZ

100% AmIslamic Bank Berhad

100% MBF Cards (M’sia) Sdn Bhd

33.33% Bonuskad Loyalty Sdn Bhd

100% AMAB Holdings Sdn Bhd

51% AmGeneral Holdings Berhad2

~50% AmMetLife Takaful Berhad4

~50% AmMetLife Insurance Berhad4

100% AmGeneral Insurance Berhad3

49%

~50%

~50%

As at 30 Sept 2014

Retail Banking Wholesale Banking

Islamic Banking General

Insurance Life Assurance &

Takaful



Buy/Outperform/Overweight/Add P/EPS : EPS for FY2014, P/BV : BV as at 30 June 2014

Banking sector share price movement / target price and recommendations

10.9%

18.2%

36.1%

75.5%

87.1%

99.2%

158.8%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% 160.0% 180.0%

(Note: 18 May 2007 vs. 30 Sept 2014)

Ratings FY2007 H1FY2015

AmBank (M) RAM A2/P1/Stable AA2/P1/Stable

Fitch BBB-/F3/Stable BBB/F3/Stable

S&P BBB-/A-3/Stable BBB+/A-2/Negative

Moody’s Baa2/P-3/Stable/D- Baa1/P-2/Stable/D+1

AmInvestment RAM AA3/P1/Stable AA2/P1/Stable

Fitch BB+/B/Stable BBB/F3/Stable

AmIslamic RAM A2/P1/Stable AA2/P1/Stable

AMMB RAM NA AA3/P1/Stable

TP: target price

Sell/Underperform/Fully valued/Reduce/Underweight

Hold/Neutral/Market perform Source : Bloomberg as at 14 Nov 2014

1 BFSR - Banking Financial Strength Rating

+3

+1

+2

+2

+3

+1 Notches of ratings upgrades

+1

AMMB HOLDINGS BERHAD P/EPS : 9.13 P/BV : 1.42

Market Price : RM6.52

Banking Sector Share Price Movement Upgraded ratings

Target Price and Recommendations

+3

Average TP : RM7.37 Buy : 5 (20%) Sell : 6 (24%) Hold : 14 (56%) Average TP / Average CP : 1.14x

25

Au

g 1

4

25

Au

g 1

4



Strategic Business Transformation: Continued Progress

Set Group’s MTA, transformation strategy, agenda and targets Enhanced focus on asset quality and risk reward trade offs Realigned business model towards profitable segments in HP, mortgage & fixed income Consolidated Group balance sheet activities within commercial bank Split composite insurance license to General and Life

High Priority Growth

Initiatives

Governance & Enablement Functions

Created deposit businesses as profit centres across Group Commenced realigning non-retail customer segmentation and divisional focus Proactively strengthened capital and liquidity management Repositioned balance sheet for rising interest rates Completed realignments in non-retail customer centric business models Continued expanding product offerings and new capabilities in Markets division Balance sheet funding strengthened via long term fund raisings

Developed retail focus customer centric business models Implemented basic account plans for business customers to increase SOW Initiated Group Rebranding programme Initiated revamping of branches to refresh customer experience Realigned account management teams for more effective account planning

Launched a new brand re-positioning, “Your Bank. Malaysia’s Bank. AmBank.”, a new chapter for our brand to deliver a unique AmBank Group experience to our customers

Launched new corporate website (www.ambankgroup.com) enhancing mobile and tablet responsiveness

New consolidated Wholesale Banking model implemented to improve client centricity, efficiency and productivity

Rolled out new Small Business Banking model targeting non-individual customers in Retail banking

FY2015 & FY2014

FY2012 & FY2013

FY2010 & FY2011

FY2008 & FY2009

Strategic Business

Transformation



High Priority Growth Initiatives: Implemented To-Date

Created new profit centre based retail branch distribution model Created a separate Corporate and Institutional Banking (CIB) Division Developed 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 building of scale in non-retail customer businesses Increased focus on GLC, GLIC and MNC businesses Developed new Rates business in collaboration with ANZ Expanded distribution footprint (particular focus on 7-11 ATM’s) & alternative channels Commenced activities to leverage ANZ International connectivity Developed new wealth management business strategies Created a new Transaction Banking business focusing on trade and cash management

Inked business principle agreements with ANZ to leverage international connectivity Commenced a new family Takaful business with Friends Life Commenced Priority Banking expansion initiatives Completed Kurnia & MBF Cards acquisitions and commence integration Repurchased remaining shareholding in AmLife and AmTakaful Secured approval as Private Retirement Scheme (PRS) provider Established partnership with Travelex for money changing services

Sealed strategic partnership with MetLife in Life Assurance and Family Takaful Channels re-organisation to improve customer connectivity and experience (e.g. branch re-

design and rationalisation; reposition digital banking) Pursuing “Save to Invest” programme to achieve cost synergies across the Group Undertaking segmentation activities to enhance cross-selling to grow Main Bank relationships Initiated account joint-planning within non-retail divisions to increase trade utilisation &

business deals

Strategic Business

Transformation


FY2015 & FY2014

FY2012 & FY2013

FY2010 & FY2011

FY2008 & FY2009


Initiatives



Rebuilding AmBank’s “Core Banking System” via AmHorizon, creating a scalable and robust platform for growth with enhanced customer experience, Phase 1 went live in end 2013. Commenced Phase 2 of Core Banking System and its supporting applications

Implementing Multichannel payment switch solutions to consolidate multiple switches on different platforms for efficiency and faster time to market

Financial Holding Company structure being progressed for full compliance with FSA & IFSA Streamlining of subsidiaries and releasing of dormant entities’ capital Reviewing Internal Rating Based approach to optimise capital management Building AIRB capabilities

to improve risk management and increase capital efficiency Enterprise Process Platform (EPP) going live to support lending operations Completed risk management recalibration (simplified AF & WB risk processes, non-retail pricing tool)

Governance and Enablement Functions Streamlined: Supports Better Decision Making

Privatised AmInvestment Bank as part of migration to universal banking platform Consolidated / simplified governance committee structures and strengthen risk disciplines Created a Group PMO to prioritise and manage key strategic initiatives Established Advance Risk Recognition Program (ARRP) 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 Initiated new retail and non retail PD / LGD models, Security Indicators, Collateral management, and

Market risk system (VIPER) Initiated core banking system replacement programme

Strategic Business

Transformation


Initiatives

Implemented a new ALM system and divisional capital allocations under Basel II Integrate new Basel III frameworks into planning processes Finalised vendor selection and commenced core banking system replacement Developed AmFamily Takaful system to support commencement of Takaful business Implemented Model Execution Platform (MEP) provisioning methodology for better risk assessment

and pricing capabilities Transitioned to full MFRS 139 compliance on collective provisioning for credit risk Developing new behavioral scoring models for Retail and SME portfolio

FY2015 & FY2014

FY2012 & FY2013

FY2010 & FY2011

FY2008 & FY2009




AGENDA Page






- AMBANK GROUP




3.0%

2.7%

0%

1%

2%

3%

4%

5%

Mar

June

Sept

Dec

Mar

June

Sept

Dec

Mar

June

Sept

Dec

Mar

June

Sept

Dec

Mar

June

Sept

2010 2011 2012 2013 2014

CPI Unemployment (May)

6.4%

5.0%

7.2%

0%

5%

10%

15%

20%

25%

30%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2010 2011 2012 2013 2014

GDP Consumption Investment

113.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2008 2009 2010 2011 2012 2013 2014

BCI

Malaysian economy is on a steady growth trajectory

Business Conditions Index

Moderating growth

Business confidence is improving

Upward pressure on inflation remains, unemployment rates stable

FDIs remain robust

points

Source: BNM & Bloomberg

18.5

12.2

-10

0

10

20

30

40

50

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2

2008 2009 2010 2011 2012 2013 2014

TD FDI (Q1)

RM' bil



594.2

674.2

765.0

44%

18%

17%

6%

8%4%4%

-

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

2010 2011 2012 2013

HH debt Residential property Hire purchasePersonal financing Securities Non-residentialCredit card Others

4.53%

3.00%

6.53%

0%

5%

10%

15%

2006 2007 2008 2009 2010 2011 2012 2013

Average lending rate (commercial banks) Average OPR Average BLR

Well-contained risks despite increase in household indebtedness

To be updated for the his

Household debt by compositions

Interest rates expected to remain in the short term

Improving asset quality

Source: BNM

RM’bil % of composition

594.2

674.2

765.0

44%

18%

17%

6%

8%4%4%

-

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

2010 2011 2012 2013

HH debt Residential property Hire purchase Personal financing Securities Non-residential Credit card Others

Loan loss coverage Gross impaired loans

Others Credit card

Non-residential

Securities

Personal financing

Hire purchase

Residential property

* Retail comprise purchase of transport vehicle, purchase of residential property, personal use and credit card

53

34.2% 34.6% 31.9% 30.1%

74.5% 76.2%81.3%

86.8%

25.0%19.7%

16.3% 14.6%0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

2010 2011 2012 2013

Gross national savings Household debt/GDP

Retail impaired loans ratio*

Higher household debt, but retail impaired loans ratio trending down

1.7%

80.0%

85.0%

90.0%

95.0%

100.0%

105.0%

110.0%

0%

1%

1%

2%

2%

3%

3%

4%

4%

Mar

June

Sept

Dec

Mar

June

Sept

Dec

Mar

June

Sept

Dec

Mar

June

Sept

Dec

Mar

June

Sept

2010 2011 2012 2013 2014

Gross impaired loans Loan loss coverage



8.8

24.9

0

5

10

15

20

25

30

35

40

45

50

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2010 2011 2012 2013 2014

New issues of equity New issues of debt

82.1%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2011 2012 2013 2014

Total deposits LD ratio

8.8%

9.1%

9.0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Mar June Sept Dec Mar June Sept Dec Mar June Sept Dec Mar June Sept Dec Mar June Sept

2010 2011 2012 2013 2014

Retail yoy growth Non Retail yoy growth Total loans yoy growth

15.5%

13.5%

12.8%

0%

5%

10%

15%

20%

Mar

June

Sept

Dec

Mar

Jun

Sep

Dec

Mar

Jun

Sep

Dec

Mar

Jun

Sep

Dec

Mar

June

Sept

2010 2011 2012 2013 2014

RWCAR Tier 1 CET 1

Source: BNM

Capital remains sound in the banking sector, loans growth moderating

RM’mil

Capital levels above BNM’s Basel 3 guidelines

Capital activities supported by debt issuance

Sustained deposits growth provides liquidity

Beginning January 2013, capital components are reported based on Basel III Capital Adequacy Framework

RM’bil

Basel II Basel III

Moderating loans growth



ETP: Propelling Malaysia towards becoming a high-income, developed nation by 2020

• RM48k (USD15k)

GNI per capita

• RM1.7 trillion GNI

• 6% annual GDP

growth

GROSS NATIONAL INCOME

JOBS

• 31.6m population

• 3.3m additional jobs

TRANSFORMATIONAL ACTIONS

INVESTMENT

Focus Drivers:

• 12 NKEAs, 131 EPPs

• 60 Biz Opportunities

• Private-sector led

Competitiveness ‘Enablers’

• 6 SRIs & 51 Policy Measures

• RM1.4 trillion investment

• 92% private investment

• 8% public investment

• 73% DDI, 27% FDI

ECONOMIC TRANSFORMATION

PROGRAMME

ETP Overview Achievement of 12 NKEAs in 2012 and 2013

2020 Target

2011 2012 2013 To-date % of Target

EPPs 110 39 47 196

Investment (RM’bil) 794.5 179.2 32.1 8.0 219.3 27.6%

GNI (RM’bil) 961.0 129.5 6.6 7.4 143.5 14.9%

Job Creation 3.3 mil 313,741 94,702 29,373 437,816 13.3%

Note: • Scoring is calculated by a simple comparison against set 2013 and 2012 targets respectively. (*) The overall NKEA composite scoring is the average of all scores. • Data was correct as on ETP announcement date, the ETP is an evolving programme, in the past 2 years, some EPPs have been dropped, some new ones were added ETP : Economic Transformation Programme Source ETP Annual Report 2012 & 2013, Maybank Resaerch Report

Tracking of EPPs

NKEAs

2020 Target KPI Scoring*

GNI (RM’bil)

New Jobs 2013 2012

Greater KL/ Klang Valley 190 320,000 98% 108%

Oil, Gas & Energy 131.4 52,300 97% 119%

Financial Services 180.2 275,400 117% 111%

Wholesale & Retail 55.4 454,190 124% 153%

Palm Oil & Rubber 230.9 41,600 78% 101%

Tourism 66.7 497,000 115% 117%

Electrical & Electronics 53.4 157,000 105% 95%

Business Services 78.7 245,000 102% 114%

Communications Content & Infrastructure

57.7 43,162 101% 153%

Education 33.6 535,000 102% 121%

Agriculture 28.9 109,335 98% 130%

Healthcare 35.3 181,000 103% 105%



2,073

2,935

3,417

5,450

11,387

55,568

Vietnam

Phillippines

Indonesia

Thailand

Malaysia

Singapore

0.0

5.7

-0.6

-2.3

-2.6

-3.5

Vietnam

Singapore

Thailand

Philippines

Indonesia

Malaysia

Malaysia remains an attractive investment destination

GDP per capita, 2014 (USD)

4.1 3.6

4.7 5.2

2.9 2.5

5.8 5.4

7.2 6.5

5.4 5.6 0.7%

2.0%

3.0%

4.4%

6.1%

6.9%

Thailand

Singapore

Malaysia

Vietnam

Indonesia

Philippines

2.3%

2.3%

3.3%

4.0%

6.3%

5.5%

Singapore

Thailand

Malaysia

Philippines

Vietnam

Indonesia

Unemployment (%) Inflation (%)

5.5

30.1

68.6

90.6

99.4

251.5

Singapore

Malaysia

Thailand

Vietnam

Philippines

Indonesia

23.0

29.6

28.1

31.2

30.4

44.8

Philippines

Vietnam

Thailand

Malaysia

Indonesia

Singapore

Population (mil) Savings rate (% of GDP)

-3.0

0.2

3.2

4.1

4.3

18.5

Indonesia

Thailand

Philippines

Malaysia

Vietnam

Singapore

Current Account Balance (% of GDP)

Government structural Balance (% of GDP)

Real GDP growth 2013 2014F

Source: World Economic Outlook Database April 2014



Glossary / Disclaimer of warranty and limitation of liability

Reported Performance Reported performance refers to the financial performance as reported in the audited financial statements and disclosed to the market

One Offs One 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 Performance Underlying performance refers to the financial performance adjusted for one off impacts as above Business Divisions

Business 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 Segments Operating 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 securities. 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 regard 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 persons. 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



Glossary / Disclaimer of warranty and limitation of liability

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 securities. 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 regard 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 persons.

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


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;

or contact [email protected]

http://www.ambankgroup.com/

mailto:[email protected]

19 November 2014 H1FY2015 Results Investors …...1 Your Bank. Malaysia’s Bank. AmBank. H1FY2015...

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