Malayan Banking Berhad Hong Kong Branch Press...

Malayan Banking Berhad – Hong Kong Branch

Press release

Malayan Banking Berhad - Hong Kong Branch (Incorporated in Malaysia with limited liability)

Key Financial Information Disclosure Statement

Annual Results As at 31 December 2013

Notes:-

1. Public can obtain free copies of this Disclosure Statement at 18/F, CITIC Tower, 1 Tim Mei Avenue, Central, Hong Kong.

2. A copy of the Disclosure Statement has been lodged with the HKMA’s Public Registry for

public inspection.

Malayan Banking Berhad - Hong Kong Branch

Key Financial Information Disclosure Statement Annual Results

As at 31 December 2013

MALAYAN BANKING BERHAD

HONG KONG BRANCH

Key Financial Information Disclosure Statement for the year ended 31 December 2013

This Disclosure Statement is displayed in the banking hall of the Branch’s premises on 18/F, CITIC

Tower, 1 Tim Mei Avenue, Central, Hong Kong.

A copy of the Disclosure Statement has been lodged with the public registry of the Hong Kong

Monetary Authority for public inspection.

For any enquiries on the Disclosure Statement, please contact Datuk Cheong Kwee Heng or Mr. Edwin

Yap at 3518 8799.


HONG KONG BRANCH

Section A – Hong Kong Branch Information

Page 1

Key Financial Information Disclosure Statement for the year ended 31 December 2013 prepared in

accordance with the requirements of the Banking (Disclosure) Rules.

I. Profit and loss information

1 Jan to

31 Dec 2013

1 Jan to

31 Dec 2012

12-Months

Year Ended

12-Months

Year Ended

HK$’000 HK$’000

(i) Interest income 808,739 770,742

(ii) Interest expense (389,146) (396,412)

(iii) Other operating income

- Gains less losses arising from trading in foreign currencies 7,494 3,586

- Gains less losses on securities held for trading purposes 425 52

- Gains less losses arising from interest rate derivatives 44,200 40,134

- Gains less losses arising from other derivatives (130) 236

- Net Fees and commissions 146,909 141,286

- Income 146,917 141,286

- Expenses (8) -

- Others 5,274 132

(iv) Operating expenses

- Staff expenses (77,563) (55,306)

- Rental expenses (16,059) (14,323)

- Computerisation cost (3,699) (2,515)

- Rental/lease other equipment (2,813) (1,951)

- Fee & brokerage (6,822) (7,183)

- Other expenses (15,096) (9,526)

- Net charge for other provisions - 17,190

(v) Gains less losses from disposal of property, plant and equipment - -

(vi) Gains less losses from disposal of available-for-sale securities 12,487 11,949

(vii)

Write back/(provision) for Individual Assessment impairment

losses & allowances (173) (3)

(viii) Write back/(provision) for Collective Allowances 52,600 (921)

(ix) Profit before taxation 566,627 497,167

(x) Taxation (79,476) (36,765)

(xi) Profit after taxation 487,151 460,402


HONG KONG BRANCH


Page 2

II. Balance sheet information

31 Dec 2013 30 Jun 2013

HK$’000 HK$’000

ASSETS

(i) Cash and balance with banks

(except those included in amount due from overseas offices) 5,040,600 3,658,377

(ii) Placements with banks maturing between one and twelve months

(except those included in amount due from overseas offices) 3,109,986 4,426,052

(iii) Due from Exchange Fund 21,131 206,527

(iv) Amount due from overseas offices 4,576,490 4,174,078

(v) Trade bills 527,191 860,366

(vi) Certificate of deposit held 77,539 102,814

(vii) Securities held for trading purposes - -

(viii) Advances and other accounts

- Advances to customers 20,450,896 17,561,358

- Advances to banks and other financial institutions 529,094 622,623

- Accrued interest and other accounts 218,074 187,601

- Impairment allowances

- Collective impairment allowances

- Advances to customers (191,430) (252,348)

- Trade bills and other accounts (23,970) (22,452)

- Individual impairment allowances

- Advances to customers (16,178) (16,095)

- Trade bills and other accounts - -

(ix) Available-for-sale securities 6,361,022 6,385,928

(x) Other investments - -

(xi) Property, plant and equipment 16,294 16,699

Total Assets 40,696,739 37,911,528

LIABILITIES

(i) Deposits and balances of banks and financial institutions

(except those included in amount due to overseas offices) 8,731,766 10,442,080

(ii) Deposits from customers

- Demand deposits and current accounts 260,081 343,770

- Saving deposits 174,978 78,299

- Time, call and notice deposits 16,000,649 13,955,739

(iii) Amount due to overseas offices 7,430,875 7,811,351

(iv) Certificates of deposit issued 4,539,441 3,296,990

(v) Issued debt securities 1,550,000 -

(vi) Other liabilities 398,187 668,455

(vii) Provision - -

Total Liabilities 39,085,977 36,596,684

(viii) Current period profits 487,151 224,079

(ix) Reserves

- Retained profits 964,307 964,307

- Change in fair value of available-for-sale assets 80,753 76,423

- Hedging reserve 78,551 50,035

Total Equities and Liabilities 40,696,739 37,911,528


HONG KONG BRANCH


Page 3

III. Additional balance sheet information

1. Gross advances to customers

31 Dec 2013 30 Jun 2013

Balance

covered

by collateral

Outstanding

Balance

Balance

covered

by collateral

Outstanding

Balance

Analysed by Industry HK$’000 HK$’000 HK$’000 HK$’000

Loans for use in Hong Kong

- Industrial, commercial and financial

- Property development - 349,524 - 209,048

- Property investment 153,047 153,047 151,658 151,658

- Financial concerns - 983,143 - 785,504

- Stockbrokers - 73,334 18,333 38,333

- Wholesale and retail trade 103,592 1,525,219 - 1,319,202

- Manufacturing - 23,870 10,572 23,599

- Transport and transport equipment - - - -

- Recreational activities - - - -

- Information technology - - - -

- Others 704,903 1,785,076 509,058 1,703,752

961,542 4,893,213 689,621 4,231,096

- Individuals

- Loans for the purchase of flats in the

Home Ownership Scheme, Private Sector

Participation Scheme or their respective

successor schemes - - - -

- Loans for the purchase of other

residential properties - - - -

- Credit card advances - - - -

- Others 93,047 93,047 740,000 740,094

Trade finance 23,144 1,312,391 2,398 910,408

Loans for use outside Hong Kong 2,790,535 14,152,245 3,242,401 11,679,760

Total advances to customers 3,868,268 20,450,896 4,674,420 17,561,358

Analysed by Countries HK$’000 HK$’000

Hong Kong 7,496,105 7,091,858

China 6,507,650 4,735,371

Malaysia 2,063,930 1,185,302

Others 4,383,211 4,548,827

Total advances to customers 20,450,896 17,561,358

The countries analysis of advances to customers is based on the physical location of the counterparty in which

not less than 10% of the Branch’s total amount of advances to customers is attributable after taking into

account any recognised transfer. In general, risk transfer is made when loans and advances are guaranteed by

a person in a country which is different from that of the customer.


HONG KONG BRANCH


Page 4

III. Additional balance sheet information (Cont’d)

2. Gross advances to banks

31 Dec 2013 30 Jun 2013

HK$’000 HK$’000

Gross advances to banks 529,094 622,623

Analysed by Countries

India 477 38,784

Hong Kong 139,570 364,570

China 361,753 219,269

Vietnam 27,294 -

529,094 622,623

3. Cross border claims

Banks and

other

financial

institutions

Public

sector

entities Others Total

HK$ million HK$ million HK$ million HK$ million

As at 31 Dec 2013

Total excluding Hong Kong 11,031 1,523 14,223 26,777

Of which - Malaysia 694 888 2,496 4,078

- China 5,415 359 6,681 12,455

- Taiwan 2,761 - 22 2,783

- Others 2,161 276 5,024 7,461

As at 30 Jun 2013

Total excluding Hong Kong 10,988 557 12,047 23,592

Of which - Malaysia 775 345 2,168 3,288

- China 4,789 61 4,697 9,547

- Taiwan 2,459 - 17 2,476

- Others 2,965 151 5,165 8,281

The above analysis of cross border claims is based on the physical location of the counterparty in which not less than 10% of total cross-border claims are attributable after taking into account the transfer of risks. In general, risk transfer is made when claims are guaranteed by a party in a country which is different from that of the counterparty or when the claims are on an overseas branch of a bank whose Head Office is located in another country.


HONG KONG BRANCH


Page 5

III. Additional balance sheet information (Cont’d) 4. Impairment allowances

31 Dec 2013 30 Jun 2013

HK$’000 HK$’000

Collective impairment allowances

- Loans – Loans and advances 191,430 252,348

- Trade – Trade bills 23,970 22,452

Individual impairment allowances

- Loans – Loans and advances 16,178 16,095

- Trade – Trade bills - -

231,578 290,895

Individual impairment allowances are made against loans and advances or other exposures as and when they are considered necessary by the management.

The collective impairment allowances are made by the Branch based on an assessment of the degree of

credit risk inherent in the Branch’s overall portfolio of loans and advances and other exposures.

As at 31 December 2013, no additional individual impairment allowances and collective assessment are

made by Head Office in respect of the loans and advances of the Branch (30 Jun 2013: nil).

5. Impaired loans

Impaired loans are those advances where full repayments of principal and/or interest are considered

unlikely. Loans are impaired if there is objective evidence of impairment.

Balance

covered

by collateral

31 Dec 2013

Balance

31 Dec 2013

Balance

covered

by collateral

30 Jun 2013

Balance

30 Jun 2013

HK$’000 HK$’000 HK$’000 HK$’000

- Impaired advance to customers - 40,446 - 40,239

(as a percentage of total advances to customers) - (0.20%) - (0.23%)

- Individual impairment allowances - 16,178 - 16,095

Analysis of impaired loans by countries

Hong Kong & China - - - -

United Arab Emirates - 40,446 - 40,239

Total impaired loans - 40,446 - 40,239

The above analysis of impaired loans is based on the physical location of the counterparty in which not less than 10% of total impaired loans are attributable after taking into account the transfer of risks. In general, risk transfer is made when impaired loans are guaranteed by a party in a country which is different from that of the customer.


HONG KONG BRANCH


Page 6


6. Overdue advances to customers

Balance

covered

by collateral

31 Dec 2013

Balance

31 Dec 2013

Balance

covered

by collateral

30 Jun 2013

Balance

30 Jun 2013

HK$’000 HK$’000 HK$’000 HK$’000

Three months or less - - - -

Six months or less but over three months - - - -

(as a percentage of total advances to customers) (0.00%) (0.00%)

One year or less but over six months - - - -


Over one year - - - -


Total overdue loans - - - -

Total individual impairment allowances

-

-

Analysis of gross amount by countries

Hong Kong & China - -

Total overdue loans - -

The amount of rescheduled advances to customers, net of those which have been overdue for over three months and have been reported above, as at 31 December 2013 was nil (30 Jun 2013: nil).

7. Other advances

As at 31 December 2013, there were no advances to banks and other financial institutions that were

overdue, rescheduled or impaired (30 Jun 2013: nil).

As at 31 December 2013, there were no overdue trade bills (30 Jun 2013: nil).

As at 31 December 2013, there were no overdue debt securities (30 Jun 2013: nil).

8. Repossessed assets

There was no repossessed asset held at 31 December 2013 (30 Jun 2013: nil).


HONG KONG BRANCH


Page 7


9. Foreign currency risk exposure

The net position in a particular foreign currency is disclosed below if the net position (in absolute terms)

constitutes 10% or more of the total net position in all foreign currencies.

31 Dec 2013 USD EUR CNY CHF AUD Others Total

HK$

million

HK$ million

HK$

million

HK$ million

HK$

million

HK$ million

HK$

million

Spot assets 26,885 264 4,506 - 85 655 32,395

Spot liabilities (23,004) (1,139) (2,068) (62) (867) (1,084) (28,224)

Forward purchases 3,178 940 557 - 823 447 5,945

Forward sales (6,752) - (2,932) - (41) - (9,725)

Structural and net option position

- - - - - - -

Net long/(short) position 307 65 63 (62) - 18 391

30 Jun 2013 USD EUR CNY CHF AUD Others Total

HK$

million

HK$ million

HK$

million

HK$ million

HK$

million

HK$ million

HK$

million

Spot assets 27,153 243 3,348 1 78 985 31,808

Spot liabilities (20,336) (1,408) (1,129) (31) (2,962) (2,525) (28,391)

Forward purchases 2,560 1,174 224 - 3,003 1,560 8,521

Forward sales (9,068) (10) (2,388) - (50) (24) (11,540)

Structural and net option position

- - - - - - -

Net long/(short) position 309 (1) 55 (30) 69 (4) 398


HONG KONG BRANCH


Page 8


10. Non-bank Mainland exposures

31 Dec 2013

Types of Counterparties

On-balance

sheet

exposure

HK$ million

Off-balance

sheet

exposure

HK$ million

Total

HK$ million

Individual

impairment

allowance

HK$ million

Mainland entities 8,050 612 8,662 -

Companies and individuals outside Mainland where the credit is granted for use in Mainland

5,561 275 5,836 -

Other counterparties the exposures to whom are considered to be non-bank Mainland exposures

- - - -

Total 13,611 887 14,498 -

30 Jun 2013

Types of Counterparties

On-balance

sheet

exposure

HK$ million

Off-balance

sheet

exposure

HK$ million

Total

HK$ million

Individual

impairment

allowance

HK$ million

Mainland entities 5,813 439 6,252 -

Companies and individuals outside Mainland where the credit is granted for use in Mainland

4,452 510 4,962 -

Other counterparties the exposures to whom are considered to be non-bank Mainland exposures

- - - -

Total 10,265 949 11,214 -


HONG KONG BRANCH


Page 9

IV. Off-balance sheet information

31 Dec 2013 30 Jun 2013 HK$’000 HK$’000 Contingent liabilities and commitments (i) Notional amounts Direct credit substitutes 508,571 703,511 Transaction-related contingencies - - Trade-related contingencies 430,031 403,268 Note issuance and revolving underwriting facilities - - Other commitments 3,208,497 3,921,385 Others 1,938,475 387,840

6,085,574 5,416,004

(ii) Credit risk weighted amounts

Credit Conversion

Factor Direct credit substitutes 100% 508,571 703,511 Transaction-related contingencies 50% - - Trade-related contingencies 20% 86,006 80,654 Note issuance and revolving underwriting facilities - - - Other commitments 50%/0% 860,452 1,026,188 Others 20% 387,695 77,568

1,842,724 1,887,921

Derivatives (i) Notional principal Exchange rate contracts 9,929,192 11,430,651 Interest rate contracts 8,557,335 4,125,069 Others - -

18,486,527 15,555,720

(ii) Credit equivalent (risk weighted) Exchange rate contracts 139,208 179,151 Interest rate contracts 216,456 65,225 Others - -

355,664 244,376

The total fair value of the above reported exchange rate contracts and interest rate contracts was negative

HK$153 million as at 31 December 2013 (30 Jun 2013: negative HK$430 million). The Branch did not enter into

any bilateral netting arrangement for these contracts.

V. Liquidity

The average liquidity ratio for the 12 months ended 31 December 2013 was 52.73% (12 months ended 31 Dec

2012: 53.85%). The average liquidity ratio is calculated as the arithmetic mean of each calendar month’s

average liquidity ratio as reported in the return relating to the liquidity position submitted by the institution to

the Hong Kong Monetary Authority pursuant to section 63 of the Banking Ordinance in respect of the reporting

period.


HONG KONG BRANCH Section B – Malayan Banking Berhad Group Information1 (Consolidated Basis)

1 Information is extracted from Malayan Banking Berhad group condensed financial statement for the financial year ended 31 Dec 2013. For more details, please refer to our web site: http://www.maybank.com/

Page 10

Amounts reported are expressed in Malaysian Ringgit (The exchange rate applied - 31Dec2013: HK$1/RM0.4235; 30 Jun 2013: HK$1/RM0.4075; 31 Dec 2012: HK$1/RM0.3946)

I. Capital and capital adequacy

31 Dec 2013 30 Jun 2013

RM’000 RM’000

(Audited) (Unaudited)

(i) Capital and reserves

- Issued and paid-up capital 8,862,079 8,697,261

- Total shareholders’ equity 47,742,599 46,360,887

(ii) Based on Credit, Market and operational Risk:

CET1 capital ratio 11.253% 10.321%

Tier 1 capital ratio 13.059% 12.152%

Total capital ratio 15.664% 14.763%

Net assets per share attributable to

Equity holders of the Bank RM5.19 RM5.12

For more information of the Capital Adequacy Framework and Capital Components of the Group and Bank, please refer to our Group’s

Condensed Financial Statements for the financial year ended 31 Dec 2013.


HONG KONG BRANCH Section B – Malayan Banking Berhad Group Information1 (Consolidated Basis)

1 Information is extracted from Malayan Banking Berhad group condensed financial statement for the financial year ended 31 Dec 2013. For more details, please refer to our web site: http://www.maybank.com/

Page 11

II. Other financial information

31 Dec 2013 30 Jun 2013

RM’000 RM’000

(Audited) (Unaudited)

(i) Total assets 560,443,226 536,267,025

(ii) Total liabilities 512,700,627 489,906,138

(iii) Loans, advances and financing 355,617,527 325,963,082

(iv) Deposits from customers 395,610,810 372,510,144

1 Jan to

31 Dec 2013

1 Jan to

31 Dec 2012

12-Months

Year Ended

12-Months

Year Ended

(Restated)

RM’000 RM$’000

(Audited) (Audited)

(v) Pre-tax profits 8,869,594 7,896,302


HONG KONG BRANCH

Section C – Liquidity Risk Management Disclosure

Page 12

Pursuant to section 13 of the HKMA Supervisory Policy Manual LM-2 Sound Systems and Controls for Liquidity Risk Management issued by the Hong Kong Monetary Authority (“HKMA”), the following disclosures are made:

I. Liquidity Risk Management Framework The Malayan Banking Berhad Group (“the Group”) has taken Bank Negara Malaysia’s Liquidity Framework and leading practices as a foundation to manage and measure its liquidity risk exposure. The Group also uses a range of tools to monitor and control liquidity risk exposure such as liquidity gap, early warning signals, liquidity indicators and stress testing. The liquidity positions of the Group are monitored regularly against the established policies, procedures and limits. Liquidity policies and frameworks are reviewed annually and endorsed by Asset Liability Management Committee (“ALCO”) and approved by Risk Management Committee (“RMC”) prior to implementation. The Group’s liquidity risk position is actively discussed and managed at the ALCO and RMC on a monthly basis in line with the approved guidelines and policies. For more information of the Group’s liquidity risk management framework, please refer to our Group’s Annual Report 2013 page 152 to 160. For the operations of the Branch, there is a Liquidity Policy Statement (“LPS”) which encompasses information on aspects of the local liquidity risk management framework and management process. The ALCO team of the Branch is responsible to ensure compliance with the guidelines or policies set by the Hong Kong Monetary Authority and Head Office. Liquidity is managed on a daily basis by the Branch’s treasury functions. To manage liquidity risk, the Branch adopts the following key measures:

Implementation of liquidity controls is based on three levels: (1) Regulatory Compliance; (2) Internal Liquidity Measures; and (3) Trigger Level/Early Warning Signal.

Maintaining liquidity and liquidity cushion in the form of holdings of unencumbered and high quality liquid assets that can be easily and quickly converted to cash, or to use as collateral for repo transactions to meet financial obligations. Internal liquidity ratio and Loan-To-Deposit ratio are set to manage and monitor the Branch liquidity position.

Net stable funding requirement projection is performed on a regular basis.

Have secure, stable and medium/long term funds through our Certificates of Deposit Programme.

Proper mix of funding is essential to avoid potential concentration in a particular funding source and tenor that may increase liquidity risk. Internal wholesale borrowing limits are also set to control and monitor, among other things, the Branch’s interbank and intragroup funding exposure.

Conduct liquidity stress testing under different scenarios and cashflow projection as part of prudent liquidity control. Shortfall calculated from the worst stress test scenario is covered by liquidity cushion.

Managing short and long-term cash flow via maturity mismatch report.

Maintaining a contingency funding plan that included a standby line from Head Office.


HONG KONG BRANCH

Section C – Liquidity Risk Management Disclosure

Page 13

II. Liquidity Risk Exposures

a) Liquidity Ratio

The average liquidity ratio for the 12 months ended 31 December 2013 was 52.73% (12 months ended 31

Dec 2012: 53.85%). The average liquidity ratio is calculated as the arithmetic mean of each calendar

month’s average liquidity ratio as reported in the return relating to the liquidity position submitted by the

institution to the Hong Kong Monetary Authority pursuant to section 63 of the Banking Ordinance in respect

of the reporting period.

b) Loan-To-Deposit Ratio (“LDR”)

The LDR for the Branch at 31 Dec 2013 was 90.79% (30 Jun 2013: 99.36%) and is calculated based on

adjusted basis. The calculation is advance to customers over deposits, which included customer deposits

and certificates of deposit issued.

c) Maturity Profile and Liquidity Gaps The analyses of the assets and liabilities of the Group and the Bank in the releveant maturity tenures and

the resultant liquidity gaps are outlined in the relevant sections of our Group’s Annual Report 2013.


HONG KONG BRANCH

Section D - Remuneration Disclosure

Page 14

(1) Remuneration Policies and Pay Review Mechanism

Remuneration policy is established and approved at the group level. For all international operations of

Maybank Group, Group Staff Committee (“GSC”) approves the remuneration policies at headquarters. GSC

is chaired by the Group President & CEO (“Group PCEO”).

a) Composition and Terms of Reference of GSC are detailed below:

Chairman : Datuk Abdul Farid Alias (Group President & Chief Executive Officer)

(Acting Head, Global Banking)

Members : Datuk Lim Hong Tat (Regional Head, Community Financial Services)

: Nora Abd Manaf (Group Chief Human Capital Officer)

:

:

Geoffrey Stecyk

Kamaludin Ahmad

(Group Chief Technology Officer)

(Group Head Insurance & Takaful)

Permanent

Invitees

:

:

Pollie Sim

Mohd Nazlan Mohd Ghazali

(CEO, International)

(Group General Counsel)

Secretary : Lim Beng Choo

Eleven meetings were held for the period from Jan to Dec 2013. The members comprise of EXCO of

the Maybank Group, hence no remuneration paid to them for attending the meetings.

Term of Reference

1. Human Resources (“HR”) Framework & Policies

Recommends to the Nomination & Remuneration Committee (“NRC”) Strategic Group HR framework and broad Group HR policies in relation to Leadership Development, Talent Management, Succession Planning, Compensation and Benefits, Performance Management, Learning & Development. If deemed necessary, escalate recommendations to Group Executive Committee (“Group EXCO”) for deliberation.

2. Establishment of new including revisions and reviews of compensation and benefits

policies/plans and the terms of conditions of service

Recommends to the PCEO the establishment of new including revisions and reviews of compensation and benefits policies/plans and the terms and conditions of service for non-unionised executives in Band C and below Group-wide.

3. Remuneration

Approves country bonus, increment & salary adjustment proposals.

4. Employee Discipline

a. Approve group-wide collective agreements negotiation mandate b. Approve all cases of Demotion and Dismissal involving Band E and below (and equivalent).


HONG KONG BRANCH


Page 15

b) Most important design characteristics of the remuneration system:

Employees within the risk control functions do not have financial performance KPI.

Total rewards policy is based on a holistic approach in recognizing staff through both monetary

and non-monetary rewards. It is reviewed in totality once a year.

Base Pay is benchmarked to the market for competitive position.

Pay differentiation i.e. Base Pay policy is generally standardized across the Maybank Group.

‘Premium’ is introduced to maintain competitiveness with the market, e.g. for scarce skills,

specialised skills. ‘Premium’ may be removed when no longer justifies or when incumbent is no

longer in the position/job.

Reward plans address business specific needs i.e. differentiated incentive plans for different lines

of business.

Performance related remuneration i.e. payout based on group, sector and individual performance.

Engagement of external consultant is at Head Office level wherein consultant is commissioned for the

initiatives developed for Maybank Group at Head Office level.

c) Criteria used for performance measurement:

Balance Scorecard approach which measures 4 quadrants i.e. Financial, Business Process,

Customer and Talent Management. In addition, there is also an assessment on Core Values which

form part of an individual assessment.

Below are description of the Balance Scorecard’s 4 quadrants:

a) Financial perspective (20%-40%) including assessments on KPIs like operating profits/revenue,

cost income ratio, deposit growth, asset quality etc.

b) Business productivity (10%-35%) including assessments on KPIs like audit shortcoming, audit

rating from BNM, internal & regulatory authorities & manual development.

c) Customer perspective (15%) including assessment on customer satisfactory index.

d) Talent engagement/personal development (5%) including assessment on personal

development, talent resignation, retention & succession.

e) Group scorecard (5%) including assessment on overall branch annual performance.

f) Core values/other contributions including assessment on personal’s corporate culture

attachment & development & individual contribution.

The KPIs set and performance assessment incorporates various elements of risk in its measurement

criteria:-

a) Risk-Adjusted Performance Measurement amongst business sectors by considering the level of

risks undertaken / capital consumption in the generation of returns.

b) Risk Adjusted Returns on Risk Weighted Assets (RRWAs) and Returns on Capital Employed

(ROCE) are core elements in the Balanced Scorecards at various levels of decision-making

including risk taking decisions.

c) Asset Quality Targets and Measures such as Gross Impairment ratio and Stale Ratings targets

have been set as part of the Balanced Scorecard process.

d) Risk taking boundaries are set by the Board in formal Risk Appetite Statements to ensure the

long term sustainability of the bank.

The payout budget is subject to the overseas branch performance achievement and market

practice.


HONG KONG BRANCH


Page 16

d) Deferral Policy & Vesting Criteria

With effect from 1 July 2010, the Maybank Group implemented deferment for variable bonus

payments that are in excess of 12 months of the Base Pay will be deferred and paid in tranches of

maximum 6 months base pay every subsequent 6 months.

Deferred remuneration in the form of share-linked units will vest immediately or at the end of 3 years

from the grant date depending on which of the Group Employees’ Share Scheme that the deferred

remuneration is awarded under.

From Dec 2013, the Maybank Group approved the exceeded portion of variable bonus to be deferred

bonus in below schedule for Maybank Hong Kong.

Senior Management - Exceeding 12 months of the base pay

1st Deferment Payout - 50% of the total deferred bonus paid by the 12th month from the actual

bonus payout date.

2nd Deferment Payout - 25% of the total deferred bonus paid by the 24th month from the actual

bonus payout date.

3rd Deferment Payout – 25% of the total deferred bonus paid by the 36th month from the actual

bonus payout date.

All other employees - Exceeding 12 months of the base pay

1st Deferment Payout - 50% of the total deferred bonus paid by the 12th month.

2nd Deferment Payout - 50% of the total deferred bonus paid by the 24th month.

Clawback elements are applicable subject to staff fulfilling certain criteria for deferred remuneration:

Potential adjustments by the Board based on any risk management issues, financial

misstatement, fraud and gross negligence or wilful misconduct.

e) Parameters used for allocating cash versus other forms of remuneration:

Pay Mix: Fixed vs Variable vs Long Term Incentive Plan ranging from 50:30:20 (senior management) to

82:15:03 (non-executive).


HONG KONG BRANCH


Page 17

(2) Remuneration of Senior Management and Key Personnel of Hong Kong Branch

There were 4 employees and 6 employees being classified as Senior Management and Key Personnel (Note

1) respectively during the year 2013.

i) No Senior Management or Key Personnel has been awarded or paid guaranteed bonus, new sign-on or

severance payment during the year 2013.

ii) Aggregate amount of remuneration of the Senior Management and Key Personnel during the year, split

into fixed and variable remuneration, is set out below:

Remuneration for 1 Jan 2013 - 31 Dec 2013 HK$'000 No. of beneficiaries

(a) Fixed Remuneration 11,226 10

(b) Variable Remuneration

- Cash 8,094 10

- Shares and share-linked instruments - -

(c) Deferred Remuneration awarded:

- Cash and shares - -

- Vested (Share-linked instruments) 3,831 9

- Unvested (Share-linked instruments) (Note 2) 2

(d) Deferred Remuneration paid or reduced:


- Vested (Share-linked instruments) 457 2

- Unvested (Share-linked instruments) - -

(e) Deferred Remuneration outstanding:


- Vested (Share-linked instruments) 1,914 6

- Unvested (Share-linked instruments) (Note 3) 2

Note 1: As defined in “Guideline on a Sound Remuneration System” (CG-5) issued by the HKMA, senior management

are those who are responsible for oversight of the Bank’s firm-wide strategy or activities or those of the Bank’s

material business lines. Key Personnel are individual employees whose duties or activities in the course of their

employment involve the assumption of material risk or taking on of material exposures on behalf of the Bank.

Note 2:

Total # of awarded & unvested shares: 37,500

Note 3:

Total # of awarded & unvested shares: 56,250


HONG KONG BRANCH


Page 18

Remuneration for 1 Jan 2012 - 31 Dec 2012 HK$'000 No. of beneficiaries

(a) Fixed Remuneration 14,167 17

(b) Variable Remuneration

- Cash 5,712 17

- Shares and share-linked instruments - -

(c) Deferred Remuneration awarded:



- Unvested (Share-linked instruments) 84 6

(d) Deferred Remuneration paid or reduced:


- Vested (Share-linked instruments) - -

- Unvested (Share-linked instruments) - -

(e) Deferred Remuneration outstanding:



- Unvested (Share-linked instruments) 130 6


HONG KONG BRANCH

Page 19

Malayan Banking Berhad Hong Kong Branch Chief Executive’s Declaration of Compliance

I, Tam Man Kit, being Alternate Chief Executive of Malayan Banking Berhad, Hong Kong Branch, declare that

the information disclosed in this unaudited financial disclosure statement for the year ended 31 December

2013 complies with the disclosure requirements under the Banking (Disclosure) Rules and is not false or

misleading.

Signature: _______________________

Malayan Banking Berhad

Alternate Chief Executive

Date: 31 March 2014

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