1AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
AMMB Holdings Berhad
Ashok RamamurthyGroup Managing Director
Investors PresentationQ1 FY2013 Results, 14 August 2012
AmBank Group
2AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
1. Executive summary
2. Q1FY2013 Group Financial Performance
3. Outlook
4. Divisional Strategy & Performance
5. Supplementary Information
o Strategies in more detail
o Economic landscape
o Strategic partnerships
o Others
1. Executive summary
3AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Scale & Presence
1. AmG Insurance Berhad, a 51%-owned subsidiary of AMMB, has entered into a conditional sale and purchase agreement with Kurnia Asia Berhad for the proposed acquisition of a 100% equity interest in Kurnia Insurans (Malaysia) Berhad on 12 April 20122. .AMMB Holdings Bhd has on 10 July 2012 entered into a conditional share sale agreement for the proposed acquisition of MBF Cards (M’sia) Sdn Bhd
Reposition and Build
New Growth Options
Aggressively Invest, Optimise
& Leverage Connectivity
ImproveReturns
Grow retail assets
Lead in investment banking business
Leverage fixed income trading
3 Focus areas:
Strategic Business Transformation
High priority growth initiatives
Organisation and governance structures
Q1 FY2013
PATMI up 4.6%, ROE of 15.9%(MFRS 139 adopted)
Net loans growth up 7.2%, strong CASA growth of 34%, LDR healthy at 89%
Acquisitions of Kurnia1 and MBF Cards2 in progress
5th consecutive year of record performance
Consistent & broad based revenue growth
Improved balance sheet & funding mix
Dividend payout: 40.1%
Pursue niche acquisitions such as Kurnia1
3AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
FY2013 - 15
Accelerate growth and business mix changes
Strengthen customer centricity and connectivity
Increase productivity and efficiency
Acquire & integrate in-fill acquisitions & strategic tie-ups
“As Malaysia’s preferred diversified, internationally connected financial solutions group, we take pride
in growing your future with us”
AmBank Group’s Vision
4AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Q1FY2013 results in line with full year expectations
PATMI#
EPS (basic)
ROA
ROE
Performance
* Performances integrated to divisional outcomes1 CAGR computed based on FY2007 underlying profit of RM556.9 million.2 Not annualised3 Previously reported under transitional provisions
^ Restated with retrospective application of MFRS, where applicable# PATMI: profit after tax and non controlling interests
Transaction* Islamic*
+5.2% +23.1%Q1FY13 vs Q1FY12^ PATMI growth
Retail Banking: stable performance (highly competitive environment), focus on liabilities
Business and Corporate & Institutional Banking: strong income and lower impairments underpinned growth
Investment Banking & Markets: subdued performance despite similar volume compared to Q1FY12 which partly benefitted from exceptional large deals and large trading income
P
Divisional growth
Retail BusinessCorporate & Institutional
Investment Markets Life General
-3.5% +30.1% +31.2% -43.1% -53.5% +27.0% -4.6%
Q1FY2013 – sustainable profitability
Improved net-interest income despite more competitive pricing in selected segments
Credit quality improving with lower charge offs/allowancesP
YoY Change Q1FY12 Q1FY11 ∆% Q4FY11 FY11
CAGR(FY07-11)
448.6 mil 429.0 mil 4.6% 341.8 mil 1,510.8 mil 1,476.6 mil 21.51
15.9% 16.5% 0.6% 12.6% 14.1% 13.8% 3.9%
1.64% 1.63% 0.01% 1.30% 1.43% 1.39% 0.31%
15.02 sen 14.32 sen 0.7 sen 11.42 sen 50.5 sen 49.4 sen 13.41
Q1FY13Q1FY12^(restated)
∆%Q4FY12^(restated)
FY123
(previously reported)FY12^
(restated)
CAGR^(FY07-12)
5AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Gross impaired loans
Reported
LD Ratio3
CTI
Consistently strong deposits growth, funding and risk profiles
Net Lending1
CASA
Adjusted Customer Deposits2
Growth
Risk, Capital & Funding Profile
Loans growth targeting profitable & viable segments
Strong CASA growth via expanded product and service offerings
Implementing customer segmentation to enhance share of wallet and increase cross-sellingP
Proactive & consistent risk management
Capital levels positioned for BNM’s Basel 3 guidelines
Continued investments to build capacity for growthP
Q1FY13Q1FY12^(restated)
∆%FY12^
(restated)CAGR^
(FY07-12)
78.0 bil 72.8 bil 7.2% 75.6 bil 8.5%
14.3 bil 10.7 bil 33.9% 13.0 bil 19.6%
87.9 bil 83.6 bil 5.1% 84.4 bil 13.0%
Q1FY13Q1FY12^(restated)
∆%FY12^
(restated)
2.38% 2.96% 0.58% 2.45%
15.1% 13.7% 1.4% 15.7%
15.5%4 14.1%4 1.4% 15.7%
10.8% 9.7% 1.1% 11.3%
11.3%4 10.1%4 1.2% 11.3%
88.8% 87.0% 1.8% 89.5%
41.1% 39.2% 1.9% 40.6%
^ Restated with retrospective application of MFRS, where applicable1 Includes Islamic loans sold with recourse2 Adjusted customer deposits include term funding and loans sold with recourse
3 Based on net loans including loans sold with recourse over adjusted customer deposit4 Estimated capital ratios include Q1FY12/Q1FY13 unappropriated profits of AmBank (M) Bhd, AmIslamic Bank Bhd & AmInvestment Bank Group
includes unappropriated profits
RWCAR
Reported
includes unappropriated profits
Tier 1 CAR
6AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
• Execute program to strengthen brand positioning in affluent segments
• Develop core ‘customer centric’ capabilities across the Group
• Centralize functions to improve customer experience via reengineering and process automation
• Optimize operating and support segments to deliver productivity and efficiency gains, maintaining top tier CTI
• Continue building ‘outperformance culture’, retain and attract best talent
• Commence AmG-Kurnia and MBF Cards integration and delivering on synergies & benefits
• Domestic demand is expected to remain stable whilst anticipating slowdown in export performance in line with slower global growth
• Incentives & plans provided under the 2012 Budget are expected to spur private consumption
• Malaysia’s GDP 2012f to experience growth of circa 4.5%, not immune to external challenges (Euro debt crisis & lower exports), inflation to moderate to 2.0 – 2.5%
What is ahead…
Malaysia:
Remain resilient
• Rollout of ETP to support lending and capital market activities
• New Responsible Lending Guidelines will moderate consumer loans growth
• Ongoing competition for loans and deposits will continue to impact margins
• Tougher economic environment may put some pressure on improving asset quality trends
• OPR expected to remain at current 3% throughout 2012
Banking:
Some challenges
Accelerate Growth & Business Mix Changes
Strengthen Customer Centricity & Connectivity
Increase Productivity & Efficiency
Acquire & Integrate
AmBank Group:
Execute to Strategic Priorities
• Accelerate execution of Retail reshaping programme and grow main bank relationships
• Grow Transaction Banking and Markets businesses for non-interest income
• Enhance focus on AmLife transformation to deliver growth, complemented by AmTakaful
• Uplift ANZ International Connectivity via joint account planning / aligned pricing and propositions to customers
• Targeting increased investments in growth, productivity and infrastructure to support MTA
Update since FY2012 Investors Presentation highlighted in blue and italics
7AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Proposed acquisition of MBF Cards: strengthens acquiring and issuing business
Proposed Acquisition & Considerations Strategic Fit for AMMB
In line with AMMB’s Vision & strategic priorities
o Targeted growth from profitable segments
o Accelerate growth from recurring non-interest income
o Provides for CASA growth & cross-selling opportunities
Creates Top 3 merchant acquiring business and strengthens issuing business
o Increased and diversified customer base and reach
o Enlarged and complimentary merchant force
o Access to scale and synergistic benefits
Leverage on combined network and additional products & services
Funded by internal funds & borrowings; EPS accretive within 12 – 18 months from acquisition
P
P
P
Improved profitability, scale & growth opportunities
Attractive ROE business
Full control over Line Of Credit interest
Enlarged issuance business & merchant network
o Combined card receivables of RM2.3 bil, strengthen #6 market position
o Creates Top 3 (up from #11) merchant acquiring business with >45,000 merchant-in-force
Economies of scale
Enhanced customer base
o potential access to 7 mil Bonuslink cardholder base & 3 mil merchant pool
CASA growth
P Proposed acquisition of 100% equity of MBF
Cards (M’sia) Sdn Bhd, which includes:
o 33.33% equity of Bonuskad Loyalty Sdn Bhd
o Name & logo of “MBF Cards”
o Customer & merchant base
Total cash consideration of RM623.4 mil (with goodwill of RM411.1 mil), subject to final adjustment
BNM and vendors1’ shareholders’ approval required, completion expected before end 2012
MBF Cards (M'sia) Sdn Bhd
Bonuskad Loyalty Sdn Bhd
AMMB Holdings Berhad
100%
33.33%
1. 51% directly owned by MBf Holdings Berhad and 49% through MBf Holdings Berhad’s wholly owned subsidiaries – Atox Cards Sdn Bhd (11.55%) and Jastura Sdn Bhd (37.45%)
8AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Proposed acquisition of Kurnia: Creates largest general & motor insurer in Malaysia
Proposed Acquisition & Considerations Strategic Fit for AMMB
In line with AMMB’s Medium Term Aspiration & strategic priorities
o Stronger income growth from profitable segments
o Accelerate recurring non-interest income growth rate
o Provide opportunities for cross-selling
Provides AmG with immediate access to scale benefits
o Number 1 position in General & Motor insurance
o Substantive cost-synergies & supply chain efficiencies
o Provide cross-selling opportunities across customer base of 4 million policyholders
Customers & business partners will gain access to AMMB’s distribution footprint, alternative channels and the Group’s full suite of financial products and services
Leveraging on Insurance Australia Group’s international expertise and regional support
P
P
P
Significant Benefits to AmG
Creates largest General & Motor Insurer in Malaysia
o Combined GWP > RM1.7B, with market share of 13% (up from 5%)
o Clear #1 Motor Insurer with market share of 22% (up from 8%)
Diversify & enlarge channels & footprint with a combined agency force of >7,000
Improve product development capabilities & operational efficiency
Leverage well-recognised, industry-leading brands
~4 million policyholders provides greater cross-sell opportunities
P
ScaleAdvantage
Product & ChannelDiversity
GrowthOpportunities
*As at 30 June 2011
Proposed acquisition of 100% equity of Kurnia Insurans (Malaysia) Berhad by AmGInsurance Berhad, which includes:
o Kurnia’s Malaysian insurance operations & distribution network
o “Kurnia” brand & customer base
o Net assets of RM757 million*
Total cash consideration of RM1.55 billion (AMMB will contribute 51% : ~RM790 mil)
Kurnia shareholder approval obtained, completion expected by 3Qtr CY2012
9AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
AMMB Holdings Berhad
Investors PresentationQ1 FY2013 Results, 14 August 2012
AmBank Group
Mandy SimpsonChief Financial Officer
10AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
1. Executive summary
2. FY2012 Group Financial Performance
3. Outlook
4. Divisional Strategy & Performance
5. Supplementary Information
o Strategies in more detail
o Economic landscape
o Strategic partnerships
o Others
2. Q1FY2013 Group Financial Performance
11AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
PATMI Q1FY12* Net interest incomeNon Interest Income Total income Expenses PBP Impairments PBT Taxation & zakat PAT Minority interests PATMI Q1FY13
PATMI FY11 Net interest incomeNon Interest Income Total income Expenses PBP Impairments PBT Taxation & zakat PAT Minority interests PATMI FY12
12.2% 93.0% 2.6% 28.2%
448.6 mil
4.6% 8.1% 2.1% 5.2% 5.9% 5.1%
429.0 mil
PATMI*Q1FY12
Net Interest Income
Non-Interest Income
Total income Expenses PBPProvisions/Allowances
PBT Tax & Zakat PAT MIPATMI*Q1FY13
Q1FY13 (RM’mil)
696.8 368.5 1,065.3 437.6 627.7 5.2 622.5 160.7 461.8 13.2
Q1FY12^(RM’mil)
668.8 419.8 1,088.6 426.4 662.2 74.3 587.9 148.6 439.3 10.3
4.2%
Q1 FY13 PATMIQ1 FY12 PATMI Positive growth in Q1 FY13 Contraction in Q1 FY13
* PATMI: profit after tax and non controlling interests ^ Restated with retrospective application of MFRS, where applicable
Higher net interest income and lower allowances underpinned Q1FY2013 results
Higher non interest income in Q1FY12 due to large trading income
Ongoing medium term investments in infrastructure but well within CTI targets
Bad debts recovered and lower allowances
12AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
PATMI Q1FY12 Retail banking Business banking Corporate &Institutional
InvestmentBanking
Markets Life Assurance General Insurance OperatingSegments
PATMI Q1FY13
Diversified divisional contributions via targeting more profitable segments
31.2% 53.5% 4.6%43.1% 4.6%27.0% 23.1%
* Performances reflected within divisional outcomes ̂Restated with retrospective applications of MFRS, where applicable
1. Life Assurance surplus is transferred into life policy shareholders’ fund in overall Group accounts
2. Includes expenses for recently set-up AmFamily Takaful business
84%
3.5% 30.1% >100.0% 5.2%
PATMI (by division)
PATMI*Q1 FY12
Retail BusinessCorporate & Institutional
Investment MarketsLife
Assurance1
General Insurance
Operating Segments
Transaction* Islamic*
PATMI*Q1 FY13
% of Composition
30% 25% 20% 5% 9% 1% 5% 5%
Q1 FY13 (RM’mil)
134.3 111.5 89.9 24.4 39.2 3.0 21.4 24.92 46.3 71.5
Q1 FY12^ (RM’mil)
139.2 85.7 68.5 42.9 84.3 2.3 22.4 -16.3 44.0 58.1
Conventional PATMI Islamic PATMI
* PATMI: profit after tax and non controlling interests
Positive growth in Q1 FY13 Contraction in Q1 FY13
# Restated with retrospective application of MFRS, where applicable
Income impacted by securities revaluation and large trading income in Q1FY12
429.0 mil
87%
13%
448.6 mil
84%84%
16%
13AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
o No change
o Probability of default
- Non retail: facility by facility basis
- Retail: A pool of homogeneous assets with more granular definitions
o Loss Given Default
Actual historical recoveries are used and incorporates discounting factor
o Model risk adjustments
Covers possible model risks within each component of the CP model
o Macro risk adjustment
Enhanced to cover impact from economic portfolio and procedural issues incurred but not reflected in the provisions yet
o Exposure at Default
Actual historical experience
o New basis of PD & LGD applies (as above)
o Only life insurance contract liabilities with discretionary participation features (DPF) are presented as a liability in the statement of financial position
o Non-DPF fund surplus and related Non-DPF reserves are classified as equity
o Individual significant loans are assessed using the discounted cashflowmethod for individual provisions
o Loans which are individually assessed but where no individual provisions required will be collectively assessed
o Probability of default (PD)
- Non retail: weighted portfolio
- Retail: flow rate methodology with PD computed based on MIA buckets
o Loss Given Default (LGD)
Combination of interest in suspense, specific provision, write-offs and recoveries as proxy for losses
o Model risk adjustment
Covers only PD models
o Macro risk adjustment
Based on impact of macro economic events incurred but not reflected in provisions yet
o Exposure at Default (EAD)
Basel 2 credit conversion factor (CCF)
o PD & LGD as above applies
o Life insurance contract liabilities are presented as a liability in the statement of financial position
Changes in Accounting Policy – Full Adoption of MFRS
Full Adoption of MFRS
PD: Probability of Default; LGD: Loss Given Default; CP: collective provisioning
Individual Allowance (FRS 139)
Collective Allowance (MFRS 139 full compliance)Collective Allowance (FRS 139 Transitional Provision)
Previous Guidelines of Life Insurance contract Liabilities
Provision for commitments & contingencies (Off B/S)
Revised BNM Guidelines on Financial Reporting (Insurers)
Individual Allowance (MFRS 139 full compliance)
Provision for commitments & contingencies (Off B/S)
Prior Applications of MFRS
14AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
3,816.2
3,664.3 4,105.8
37.0 90.9
0.5 73.3 48.8
448.6
7.0
Retained earnings @ FY12 (transitional
provision)
Collective allowance Provision for commitments &
contingencies (off balance sheet)
General insurance Life funds Tax & others Retained earnings @ FY12 (restated)
Profit for the period Executives' Share Scheme & profit
equalisation reserve
Retained earnings @ Q1FY13
2,011.8 2,048.8 2,071.6
37.0 -
161.6 138.8
Collective allowance @ FY12 (transitional provision)
Effect of change in accounting policy
Collective allowance @ FY12 (restated)
Allowance made during the period
Amount written off Collective allowance @ Q1FY13
Impact of full adoption of MFRS
Collective allowance (RM’mil)
Retained earnings (RM’mil)
Greater consideration of accounting issues under MFRS for commitments & contingencies
Conservative provision via transitional method, offset by:1) More detailed assessment of allowance for model risk & scenario modeling adjustments2) conservative assessment of potential impacts from global economiy
Revision in BNM guidelines
Redesignationof securities portfolio
15AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
610.3 674.3 701.6
193.8 194.4
288.1 302.4
562.2
1.4 1.9 132.6
123.7 172.0
146.5
0.7 36.1
18.2 21.6
21.7
3.5 55.2 5.4
FY10 FY11 FY12 Q1FY12* Fee Income Trading & Investment Insurance Business Others Q1FY13
187.834.7
Non-interest income movement
Note :1 Net Interest Margin includes Net Financing Income from Islamic Banking business 2 FY10-Q1FY13 based on internal data computation
3.44%
2.68%
2.92% 2.92% 2.86% 2.91% 2.90% 2.85%
2.92%
3.04%
2.98% 2.94% 2.94%3.05%
2.95% 2.90%3.01%
2.94%
FY09 FY10 FY11 Q1FY12 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12
Cost of funds NIM
NIM and Cost of Funds
Cost of Fund NIM OPR SRR
3.44%
2.68%
2.92% 2.92% 2.86% 2.91% 2.90% 2.85%
2.92%
3.04%
2.98% 2.94% 2.94%3.05%
2.95% 2.90%3.01%
2.94%
FY09 FY10 FY11 Q1FY12 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12
Cost of funds NIM
3.44%
2.68%
2.92% 2.92% 2.86% 2.91% 2.90% 2.85%
2.92%
3.04%
2.98% 2.94% 2.94%3.05%
2.95% 2.90%3.01%
2.94%
FY09 FY10 FY11 Q1FY12 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12
Cost of funds NIM
2.50%2.75% 2.75% 2.75%
3.00%
3.00%
1.00% 1.00% 1.00% 1.00%
2.00%
3.00%
4.00%
Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12
OPR SRR
SRR
OPR
2.50%2.75% 2.75% 2.75%
3.00%
3.00%
1.00% 1.00% 1.00% 1.00%
2.00%
3.00%
4.00%
Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12
OPR SRR
SRR
OPR
Stable NIM within expectations
Higher trading & investment income in Q1FY12 due to one-off gains on disposal of securities portfolio
FY10 FY11 FY12^ Q1FY12^ Fee IncomeTrading &
InvestmentInsuranceBusiness
Others Q1FY13
As % of total income
29% 30% 34% 39% 35%
53%
36%
1%
10%
12.2%
1,432.01,040.3 1,170.2 368.5 0.3% 29.4% 3.9% 53.4%RM’mil
Fee Income Trading & Investment Insurance Business Others
419.8
^ Restated with retrospective application of MFRS, where applicable
FY10 FY11 FY12^ Q1FY13 Q1FY12^ Q2FY12^ Q3FY12^ Q4FY12^ Q1FY13
COF
NIM
SRR
OPR
NIM 2 bps
COF 6 bps
SRR
OPR3.00% 3.00% 3.00% 3.00% 3.00%
2.00%
4.00% 4.00% 4.00% 4.00%
Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13
OPR SRR
2.25%2.75% 3.00% 3.00%
1.00% 1.00%
4.00% 4.00%
FY10 FY11 FY12 Q1FY13
OPR SRR
2.68%
2.92%
3.15% 3.15% 3.15% 3.19% 3.20% 3.21% 3.15%2.98% 2.94%
2.73% 2.71% 2.66% 2.71%2.85%
2.73% 2.71%
FY10 FY11 FY12 Q1FY13 Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13
Cost of funds NIM
NIM
COF
2.68%
2.92%
3.18% 3.15% 3.15% 3.19% 3.20% 3.21% 3.15%2.98% 2.94%
2.73% 2.71% 2.66% 2.71%2.85%
2.73% 2.71%
FY10 FY11 FY12 Q1FY13 Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13
Cost of funds NIM
NIM
COF
Sales: 20%Trading: 34%Others: 46%
16AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
3.182.02 1.50 1.01
5.53
3.602.43
1.87 2.54 2.45 1.91 1.91
56.6%67.3%
75.1%
99.5%114.5%
116.3%
FY2007 FY2008 FY2009 FY2010 Day 1 FY2011 FY2012 Q1FY2013
Net NPL Gross NPL Gross Impaired Loans Loan Loss Coverage Allowance Coverage (MFRS 139)
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%
2.38%
0.51%0.08%
FY2007 FY2008 FY2009 FY2010 Day 1 FY2011 FY2012 Q1FY2013
Net Provisions Charge Net NPL Ratio Gross NPL Ratio Gross Impaired Loans Loan Loss Charge(MFRS139)
Superior asset quality ratios, adopted MFRS 139
Asset Quality Indicators
MFR
S 1
39
GP
3
143bps
43bps
RM’bil
MFR
S 13
9
GP
3
Allowance Coverage:• Retail Bkg: 82.3%• Business Bkg: 123.6%
Gross Impaired Loans• Retail Bkg: 2.69%• Business Bkg: 1.62%
3.182.02 1.50 1.01
5.53
3.602.43
1.87 2.54 2.45 1.91 1.91
56.6%67.3%
75.1%
99.5%114.5%
116.3%
FY2007 FY2008 FY2009 FY2010 Day 1 FY2011 FY2012 Q1FY2013
Net NPL Gross NPL Gross Impaired Loans Loan Loss Coverage Allowance Coverage (MFRS 139)
Loan Loss Charge FY12
Transitional provisions 0.56%
MFRS 139 0.51%
Allowance Coverage FY12
Transitional provisions 112.6%
MFRS 139 114.5%
FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 Q1FY13Day 1
[1 April 10]
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%
2.38%
0.51%0.08%
FY2007 FY2008 FY2009 FY2010 Day 1 FY2011 FY2012 Q1FY2013
Net Provisions Charge Net NPL Ratio Gross NPL Ratio Gross Impaired Loans Loan Loss Charge (MFRS139)
17AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
0.00%
0.50%
1.00%
1.50%
2.00%
Q1 Q2 Q3 Q4
% Write-Offs to Avg Gross Loans
0.00%
0.60%
1.20%
1.80%
Q1 Q2 Q3 Q4
% New Gross NPL / Gross Impaired Loans to Gross Loans
Note :
1 FY2004 and FY2005 financials based on gross before IIS
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
New gross impaired loans formation within expectations
Impairments caused by a previously restructured Business Banking loan
Prudently accelerated write-offs of partial provisions post system enhancements
0.00%
0.40%
0.80%
1.20%
Q1 Q2 Q3 Q4
% Gross NPL / Impaired Loans Conversion to Gross Loans
0.00%
0.20%
0.40%
0.60%
Q1 Q2 Q3 Q4
% Recoveries to Avg Gross Loans
0.00%
0.60%
1.20%
1.80%
Q1 Q2 Q3 Q4
% New Gross NPL / Gross Impaired Loans to Gross Loans
FY2004-FY2007 FY2008-FY2010 FY2011
FY2012 FY2013
GP 3
FY2004 -FY2007 FY2008-FY2010 FY 2011
MFRS 139
0.00%
0.60%
1.20%
1.80%
Q1 Q2 Q3 Q4
% New Gross NPL / Gross Impaired Loans to Gross Loans
FY2004-FY2007 FY2008-FY2010
FY2011 Q1FY2012FY2012
18AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Gross LoansQ1FY12
Auto Financing Mortgage Credit Cards Line of Credit Co-Op Asset Financing Business Banking(ex GLR)
Corporate &Institutional
Banking
Others Gross LoansQ1FY13
Maintaining faster loans growth in non-retail
Gross Loan1 / Financing1 movement
Retail Non-Retail
3.5% 10.9%
75.4bil
6.1% 6.8% 18.2%
7.0%
11.6% 5.9%
-26.7% 80.2bil
41%
59%
6.4%
40%
60%
Gross LoanQ1 FY12
Auto Financing
Mortgage Credit Cards Line of Credit Co-OpAsset
FinancingBusiness
Corporate & Institutional
OthersGross Loan
Q1 FY13% of
Composition31.4% 19.1% 1.3% 0.9% 2.4% 3.6% 21.1% 19.0% 1.2%
Q1 FY13 (RM’bil)
25.2 15.3 1.1 0.7 1.9 2.9 17.0 15.2 1.0
Q1 FY12 (RM’bil)
24.3 14.4 1.0 0.8 2.2 2.7 14.3 14.2 1.4
10.8%
No
n-re
tailR
etail
3.4%
Non-RetailRetail1 Including Islamic financing sold to Cagamas
Total Fixed interest rate Variable interest rateMar-08 Jun-12 Mar-08 Jun-12 Mar-08 Jun-12
Conventional 82% 76% 47% 28% 38% 48%Islamic 18% 24% 15% 15% 0.1% 9%
100% 100% 62% 43% 38% 57%
Loan portfolio trends:
Positive growth in Q1 FY13 Contraction in Q1 FY13
19AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
FY06 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19+
RM'bil
Debt Capital Term Funding Loans sold to Cagamas
Issuance Maturity
13.9% 15.0% 14.0% 14.6% 14.5%
77.0% 77.4% 74.3% 73.8% 74.6%
0.7% 1.5% 6.9% 6.9% 6.7%1.0% 1.2% 0.6% 0.8% 0.6%
7.4% 4.9% 4.3% 3.9% 3.5%
FY09 FY10 FY11 FY12 Q1FY13
Improving funding composition
Shareholders' Equity & Debt Capital Deposits from CustomersTerm Funding &loans sold with recourse > 1 yr Term Funding & loans sold with recourse < 1 yrDeposits from Banks and FIs
Lengthening debt capital & term funding profile
1. Term funding includes Senior Notes, credit-linked notes, loans sold with recourse and other sources such as pension and retirement funds, non-profit organisations and similar
81.384.4
87.9
70.765.2
Funded assets financed by equity, customer deposits and longer-term debt:
• Q1FY13 = 95.9%
• FY12 = 95.3%
• FY11 = 95.2%
• FY10 = 93.9%
• FY09 = 91.6%
Issued RM2.92 bil Senior Notes (RM7 bilprogram) and RM550 mil Senior Sukuk(RM3 bil program) since early 2010
Raised RM800 mil Subordinated Sukuk(RM2 bil program) since Sept 2011
Improved stable funding with well distributed debt maturities
95.3% 95.9%
2.5 3.0 8.0 9.0 8.8 [10.0%]
25.5 26.829.7 30.5
31.4[35.8%]
26.329.6
27.435.4
39.8[45.2%]
10.911.2
16.3
9.4
7.9[9.0%]
FY09 FY10 FY11 FY12 Q1FY13
Diversify funding
Term funding Individuals Biz enterprises Government
RM'bil
20AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
ROE ROA
EPS, BasicSen/Share
Dividend, GrossSen/Share
Delivering consistent growth in shareholders’ returns
^ Restated with retrospective application of MFRS, where applicable
* Not annualised
FY09 FY10 FY11 FY12 FY12^ Q1FY13 FY09 FY10 FY11 FY12 FY12^ Q1FY13 (restated) (restated)(Previously
reported)(Previously reported)
FY09 FY10 FY11 FY12 FY12^ Q1FY13 FY08 FY09 FY10 FY11 FY12 FY12^(restated) (restated)(Previously
reported)(Previously reported)
1.04% 1.13%1.39% 1.43% 1.39%
1.64%
31.6sen
34.7sen
44.7sen
50.5sen
49.4sen
15.0sen*
6.0 sen
6.6sen
6.6sen
6.0sen
8.0sen
10.5sen
12.0sen
13.5sen
13.5sen
18% 20%
28%
40% 40% 41%
Interim Dividend Final Dividend Dividend Payout Ratio
11.7% 11.5%13.6% 14.1% 13.8%
15.9%
21AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
by Legal Entities2
Pro-forma AmBank Group Banking Entities^
Tier 1 CAR RWCAR
AmBank (M) Berhad 9.7% 14.0%
AmInvestment Bank Berhad 21.9% 21.9%
AmIslamic Bank Berhad 8.4% 14.1%
Capital adequacy :
Capital adequacy
Efficient capital levels & well positioned for BNM’s Basel III & targeted payouts
* Banking entities include AmBank (M) Berhad Group, AmInvestment Bank Group and AmIslamic Bank
1: Double leverage ratio computed based on AMMB Holdings Bhd Company level
2. Q1FY13 (after deducting proposed dividend)
3. Estimated capital ratios include Q1FY13 unappropriated profits of AmBank (M) Bhd, AmInvestment Bank and AmIslamic Bank
Double leverage ratio1 0.99x
Balance Sheet leverage ratio (total equity net of deferred tax & intangible assets over total
assets net of deferred tax & intangible assets)
8.7%
Total leverage ratio (total equity net of
deferred tax & intangible assets over total assets net of deferred tax & intangible assets& Off Balance Sheet )
6.7%
Estimated capital ratios3
(include Q1FY13 unappropriated profits)
Risk AppetiteFramework Targets
RWCAR: 15.5% 14.3% ± 1%
Tier 1 CAR: 11.3% 10.3% ± 1%
CET 1 Ratio: 9.3% 8.3% ± 1%
7.7%* 8.1%* 8.0%*9.2%
9.7%10.3% 10.2%
11.3%
15.2%15.8%
14.4%15.7%
FY2009 FY2010 FY2011 FY2012
CET 1 Ratio Tier 1 CAR RWCAR* include preference shares CET 1 ratio 1 Tier 1 CAR 1 RWCAR1
7.7%* 8.1%* 8.0%*9.2% 8.9%
9.7%10.3% 10.2%
11.3% 10.8%
15.2%15.8%
14.4%15.7%
15.1%
FY2009 FY2010 FY2011 FY2012 Q1FY2013
CET 1 Ratio Tier 1 CAR RWCAR* include preference shares
22AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
1. Executive summary
2. Q1FY2013 Group Financial Performance
3. Outlook
4. Divisional Strategy & Performance
5. Supplementary Information
o Strategies in more detail
o Economic landscape
o Strategic partnerships
o Others
3. Outlook
23AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
FY08 FY09 FY10 FY11FY12
(restated)^ Q1FY13MTA**
FY13 - FY15
PATMI*(RM’mil)
ROE (%)
CTI (%)
Net NPL ratio /Gross
impaired loans (%)
Dividend:Gross/single-
tier (sen)Payout (%)
MTA estimates
668.5 860.8 1,008.6 1,342.8 1,476.6 448.6
11.5% 11.7% 11.5% 13.6% 13.8% 15.9%
40.2% 43.3% 42.0% 39.9% 40.6% 41.1%
3.7% 2.6% 1.5%
3.81% 3.33% 2.45% 2.38%
6.0 sen /
share
18%
8.0 sen / share
20%
10.5 sen / share
28%
18.0 sen / share
40%
20.1 sen / share
41%
N/A
Actual
9 – 12% CAGR
14 – 15%
≤43%
≤2.50%
40-50%Payout
Estimates
Other FY2013 estimates
• NIM expected to contract 10 – 15bps
• Loan loss charge expected to be lower circa 40 – 45 bps
• Loans growth expected to grow @ 8 – 9%
• LD ratio expected to maintain at ~90%
• CASA composition at 16 – 18%
• Non-interest income as a percentage of total income at circa 35%
• Retail : non-retail loan portfolio at approximately 60 : 40
• Target CET 1 of 8.3% (±1%), Tier 1 of 10.3% (±1%), RWCAR of 14.3% (±1%)
*PATMI: profit after tax and non-controlling interests** Medium Term Aspiration (MTA)
23AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013 ^ Restated with retrospective application of MFRS, where applicable
24AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
1. Moderate Q1FY2013 results but on track to achieve full year estimates
2. Recent acquisitions (Kurnia & MBF Cards) to drive synergistic benefits progressively
3. Incentives under 2012 Budget and ETP expected to sustain domestic growth over the medium term
4. AmBank Group aims to aggressively invest, optimize and leverage connectivity to deliver growth over the next 3 to 5 years
5. We remain committed to our FY2013 – 2015 strategic priorities:
Accelerate growth and business mix changes
Strengthen customer centricity and connectivity
Increase productivity and efficiency
Acquire & integrate in-fill acquisitions and strategic tie-ups
Summary
24AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
25AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
1. Executive summary
2. Q1FY2013 Group Financial Performance
3. Outlook
4. Divisional Performance
5. Supplementary Information
o Strategies in more detail
o Economic landscape
o Strategic partnerships
o Others
4. Divisional Strategy & Performance
26AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Vision“As Malaysia’s preferred diversified, internationally connected financial
solutions group, we take pride in growing your future with us”
Our Vision and divisional aspirations…
* Conventional & Islamic
TRANSACTION*
Become Top 5 Banking Service
Providerin Malaysia by FY2015 with 8% market share
CIB*
Deliver innovative & quality solutions, increase ‘share of
wallet’, target high-profile
and high-value clients and
leverage ANZ for x-border businesses
ISLAMIC
To be the Islamic Bank of choice
INVESTMENT*
Deliver comprehensive solutions, lead in capital markets,
funds management, stock broking and enhance domestic
and overseasdistribution
via ANZ
MARKETS*
Deliver substantive,integrated and
client-led business with
full suite of FX, Rates,
Commodities and FI offerings
with ANZ collaborations
FAMILY TAKAFUL
To be the trusted Family Takaful
Operator of choice within
all of our selected markets
LIFE ASSURANCE
Trusted by our stakeholders
GENERAL INSURANCE
Leverage scale to lead the market in the
motoring segment, whilst building
a leadingpersonal lines
portfolio and niche commercial business
DIVISIONAL ASPIRATIONS
RETAIL*
Develop a liability-led business,
grow assets in targeted segments & expand
Wealth Management
BUSINESS*
Growing the business through decisive
execution
27AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
PATPBPExpensesIncome
Develop a liability-led business, grow assets in targeted segments and expand Wealth Management
Composition to Group 45.4% 40.9% 29.1%42.7%
Continued focus on targeted segments
Risk based pricing improving asset quality and lowering impairments
Steady growth in CASA up 16.3%
Increase focus in wealth management and recently introduced Signature Priority Banking
Q1FY12 results Positive growth in Q1FY13 Contraction in Q1FY13
* Restated with retrospective application of MFRS, where applicable
Retail Banking: Stable performance (highly competitive environment), focus on liabilities
Q1FY13 vs RM'mil Q1FY12* Q1FY13 Q1FY12
Income 462.8 455.3 -▼ -1.6%
Expenses 195.9 198.7 ▲ +1.4%
PBP 266.9 256.6 -▼ -3.9%
Impairments 81.4 77.5 -▼ -4.8%
PBT 185.6 179.1 -▼ -3.5%
PAT 139.2 134.3 -▼ -3.5%
Gross Loans / Financing 45,437.9 47,047.0 ▲ +3.5%
Gross Impaired Loans 2.69% 1,294.8 1,266.0 -▼ -2.2%
Customer Deposits 34,173.5 34,716.0 ▲ +1.6%
CASA Deposits 8,034.1 9,341.5 ▲ +16.3%
ROA 1.24% 1.16% -▼ -0.08%
CTI 42.3% 43.6% ▲ +1.3%
Allowance Coverage 83.0% 82.3% -▼ -0.7%
28AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Higher income underpinned by diversified growth in asset base and fee income growth
Strong CASA growth
Expenses PBP PATIncome
Composition to Group 14.1% 6.1% 19.6% 24.1%
Income mix for Q1FY13
Business Banking: Good income and lower impairments underpinned profit growth
Growing the business through decisive execution
Q1FY12 results Positive growth in Q1FY13 Contraction in Q1FY13
* Restated with retrospective application of MFRS, where applicable
Lending & deposits,
97.7%
Trade Services,
1.8%
Others,0.5%
RM'mil Q1FY12* Q1FY13
Income 135.6 149.9 ▲ +10.5%
Expenses 26.4 26.6 ▲ +0.8%
PBP 109.2 123.3 ▲ +12.9%
Impairments (4.8) (25.1) -▼ ->100.0%
PBT 114.0 148.4 ▲ +30.2%
PAT 85.7 111.5 ▲ +30.1%
Gross Loans / Financing 14,340.2 16,956.6 ▲ +18.2%
Gross Impaired Loans 1.62% 231.9 275.4 ▲ +18.8%
Customer Deposits 6,789.5 7,585.5 ▲ +11.7%
CASA Deposits 1,909.6 2,289.1 ▲ +19.9%
ROA 2.53% 2.79% ▲ +0.26%
CTI 19.5% 17.8% -▼ -1.7%
Allowance Coverage 199.2% 123.6% -▼ -75.6%
Q1FY13 vs
Q1FY12
29AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
RM'mil Q1FY12* Q1FY13 Q1FY12
Income 94.0 134.6 ▲ +43.2%
Expenses 19.0 20.4 ▲ +7.4%
PBP 75.0 114.3 ▲ +52.4%
Impairments (13.9) 0.9 ▲ +>100.0%
PBT 88.9 113.3 ▲ +27.4%
PAT 68.5 89.9 ▲ +31.2%
Gross Loans / Financing 14,220.2 15,210.4 ▲ +7.0%
Customer Deposits 35,826.5 38,274.3 ▲ +6.8%
ROA 1.93% 2.28% ▲ +0.35%
CTI 20.3% 15.1% -▼ -5.2%
Ave Assets Management 1,501.5 1,668.0 ▲ +11.1%
Q1FY13 vs
G
G
G
G
Income Expenses PBP PAT
Diversified loans portfolio leading to good income growth.
Focused on growing share of wallet in key segments driving income growth
Good loans and deposits growth
Services include : large corporate lending& deposits, financial institutions group, offshore banking, international business, private equity, REITs, trustee services and loan syndication
Corporate & Institutional Banking: Strong income underpinned performance
Composition to Group 4.7% 18.2% 19.7%12.7%
Income mix for Q1FY13
Deliver innovative and quality solutions, increase ‘share of wallet’, target high-profile and high-value clients and leverage ANZ for x-border businesses
Q1FY12 results Positive growth in Q1FY13 Contraction in Q1FY13
Lending & deposits,
82%
Int. Biz, 7%Asset Mgmt,
12%
* Restated with retrospective application of MFRS, where applicable
30AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Debt Cap Mrkt,
8%
Corporate Finance,
15%
Equity, 2%
Broking & Futures,
23%
Fund Mgmt,
34%
Private Banking,
7%
Int Biz, 10%
Income Expenses PBP PAT
Investment Banking: Subdued performance compared to Q1FY12, expected to pick up in 2HFY13
1 Including AmInvestment Management, AmInvestment Services, AmIslamic Funds Management & private bankingSource : Malaysia Association of Asset Management & Lipper Hindsight
Composition to Group 8.4% 5.1% 5.3%13.1%
Income mix for Q1FY13
Deliver comprehensive solutions, lead in capital markets, funds management, stock broking and enhance domestic & overseas distribution via ANZ
Q1FY12 results Positive growth in Q1FY13 Contraction in Q1FY13
• Strong income contribution from funds management and CF, partly offset by lower income from DCM due to several larger debt issuances last year
• Decline in stock broking contributions due to uncertain sentiments affecting the equity market
* Restated with retrospective application of MFRS, where applicable
RM'mil Q1FY12* Q1FY13
Income 119.7 89.7 -▼ -25.1%
Expenses 62.8 57.5 -▼ -8.4%
PBP 56.9 32.2 -▼ -43.4%
Impairments (0.8) (1.1) -▼ -37.5%
PBT 57.7 33.3 -▼ -42.3%
PAT 42.9 24.4 -▼ -43.1%
CTI 52.5% 64.1% ▲ +11.6%
* Ave Assets Management 29,933.9 34,875.1 ▲ +16.5%
Ave Volume / Contract Traded (RM'mil/month)
Bursa M'sia 72,791.5 67,722.7 -▼ -7.0%
Future KL index (FKLI) 384.9 404.6 ▲ +5.1%
* IB Broking 4,464.5 4,341.2 -▼ -2.8%
* AmFuture - FKLI 71.7 34.5 -▼ -51.9%
Market Share as at:
* IB Broking 6.1% 6.4% ▲ +0.3%
* AmFuture -FKLI 16.0% 8.9% -▼ -7.1%
Q1FY13 vs Q1FY12
1
31AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Income Expenses PBP PAT
Overall strategies for trading and build up of portfolio remain positioned to capitalise on rates movements
Q1FY13 customers’ flows remain healthy although operating environment was challenging amidst global uncertainties and flat yield curve has limited fixed income trading opportunity
Continue to invest in infrastructure & capabilities (expand product range & customized solutions) for growth
Markets: Better FX and derivatives contributions, offset by lower market-related income
Composition to Group 5.0% 8.2% 8.5%6.9%
Income mix for Q1FY13
Deliver substantive, integrated and client-led business with full-suite of FX, Rates, Commodities and FI offerings with ANZ collaborations
Q1FY12 results Positive growth in Q1FY13 Contraction in Q1FY13
Fixed Income, 25%
Foreign exchange,
32%
Derivatives, 43%
* Restated with retrospective application of MFRS, where applicable
RM'mil Q1FY12* Q1FY13
Income 130.0 73.3 -▼ -43.6%
Expenses 17.9 21.8 ▲ +21.8%
PBP 112.1 51.5 -▼ -54.1%
Impairments (0.2) (0.6) -▼ ->100.0%
PBT 112.3 52.1 -▼ -53.6%
PAT 84.3 39.2 -▼ -53.5%
CTI 13.7% 29.7% ▲ +16.0%
PAT : Fx and Derivatives 17.6 32.0 ▲ +81.8%
Total Group:
Financial assets HFT 6,590.2 7,125.9 ▲ +8.1%
Financial investments
AFS 4,397.3 6,277.8 ▲ +42.8%
Financial investments
HTM 143.4 1,122.5 ▲ +>100.0%
Q1FY13 vs
Q1FY12
32AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Income Expenses PBP PAT
General Insurance: Performance within expectations
Stable income growth, focus on motor & niche non-motor segments
Enhanced claims management process and control (e.g. restructuring and centralisation of claims operations)
Capital adequacy ratio exceeds benchmark supervisory target
Composition to Group5.1% 4.6% 4.6%4.8%
Leverage scale to lead the market in the motoring segment, whilst building a leading personal lines portfolio and niche commercial business
Q1FY12 results Positive growth in Q1FY13 Contraction in Q1FY13
* Restated with retrospective application of MFRS, where applicable
RM'mil Q1FY12* Q1FY13
Income 52.3 51.6 -▼ -1.3%
Expenses 23.1 22.5 -▼ -2.6%
PBP 29.2 29.1 -▼ -0.3%
Impairments 0.5 0.5 = +0.0%
PBT 28.7 28.6 -▼ -0.3%
PAT 22.4 21.4 -▼ -4.6%
CTI 44.2% 43.6% -▼ -0.6%
General Insurance fund
assets1,177.0 1,278.2 ▲ +8.6%
Claim ratio 63.6% 65.1% ▲ +1.5%
Management expense
/ earned premium 16.3% 16.0% -▼ -0.3%
Q1FY13 vs
Q1FY12
GGGGGGG
GGG
GGG
33AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
RM'mil Q1FY12* Q1FY13
Income 2.8 3.9 ▲ +39.0%
PAT 2.3 3.0 ▲ +27.0%
Life Assurance
fund assets 2,731.6 2,785.6 ▲ +2.0%
CAR ratio 214.7% 200.3% -▼ -14.4%
Gross written premium 112.7 116.0 ▲ +2.9%
Q1FY13 vs
Q1FY12
Income PAT
Life Assurance: Increasing support to Bancassurance and distribution channels
New CEO appointed in June 2012
Transfer from life business impacted by the revisions in BNM Guidelines on Financial Reporting for Insurers, from change in classification of Non-Par fund and reserves from liability to equity
Composition to Group0.6%0.4%Trusted by our stakeholders
Q1FY12 results Positive growth in Q1FY13 Contraction in Q1FY13
* Restated with retrospective application of MFRS, where applicable** Life assurance shareholders’ fund accounts
34AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Higher income from focused effort in working with Relationship Managers to offer customer specific customized solutions
Core business competencies of full suite Cash Management and Trade Finance yielding impressive growth in CASA
Higher expenses reflecting investment in new capabilities – implemented Foreign Currency capability on e-AmBiz (CIB portal) and rollout new Internet Trade transaction portal, AmTrade
PATPBPExpensesIncome
Expenses
PBP
PAT
Composition to Group 6.2% 2.3% 8.9% 10.0%
Income mix for Q1FY13
Transaction Banking^: PAT up from improved revenues and higher volumes
To become top 5 Banking Service Provider in Malaysia by FY2015 with 8% market share
Q1FY12 results Positive growth in Q1FY13 Contraction in Q1FY13
Trade Services,
48%Cash Mgmt,
52%
^ Performances reflected within divisional outcomes* Restated with retrospective application of MFRS, where applicable
Q1FY13 vs
RM'mil Q1FY12* Q1FY13 Q1FY12
Income 61.3 65.9 ▲ +7.5%
Expenses 7.6 10.1 ▲ +32.9%
PBP 53.7 55.8 ▲ +3.9%
Impairments (5.0) (6.0) -▼ -20.0%
PBT 58.6 61.7 ▲ +5.3%
PAT 44.0 46.3 ▲ +5.2%
Gross Loans / Financing 4,246.4 4,919.2 ▲ +15.8%
Trade Finance 4,168.2 4,850.1 ▲ +16.4%
Cash Management 15,075.7 17,957.4 ▲ +19.1%
CASA Deposits 3,067.6 5,517.2 ▲ +79.9%
ROA 4.27% 3.92% -▼ -0.4%
CTI 12.4% 15.3% ▲ +2.9%
35AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
PATIncome Expenses PBP
Group Operating Segments: Benefitted from higher recoveries
Higher income due to higher gain from securities redemption and forex gain
Higher expenses include recently set-up AmFamily Takaful business & core banking platform replacement
Composition to GroupComposition to Group 20.6% 2.7% 8.3%10.0%
Enablement functions governing and supporting delivery of improving divisional performances
Q1FY12 results Positive growth in Q1FY13 Contraction in Q1FY13
* Restated with retrospective application of MFRS, where applicable
36AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
PATPBPExpensesIncome
Islamic Banking^: Higher income and lower provisions
Composition to Group
Higher income on the back on of strong asset growth and higher fee income
Strong deposits & CASA growth
19.3% 20.4% 15.5%20.0%
^ Performances reflected within divisional outcomes.
To be the Islamic Bank of choice
Q1FY12 results Positive growth in Q1FY13 Contraction in Q1FY13
* Restated with retrospective application of MFRS, where applicable
RM'mil Q1FY12* Q1FY13
Income 190.0 212.6 ▲ +11.9%
Expenses 71.7 84.5 ▲ +17.7%
PBP 118.2 128.1 ▲ +8.4%
Impairments 39.1 31.2 -▼ -20.1%
PBT 79.1 96.9 ▲ +22.4%
PAT 58.1 71.5 ▲ +23.1%
Gross Financing 18,968.2 20,257.0 ▲ +6.8%
Gross Impaired Financing 1.28% 289.4 258.5 -▼ -10.7%
Customer Deposits 15,757.8 19,456.2 ▲ +23.5%
CASA Deposits 2,802.7 4,874.0 ▲ +73.9%
ROA 1.18% 1.21% ▲ +0.02%
CTI 37.8% 39.7% ▲ +2.0%
Allowance Coverage 176.1% 186.4% ▲ +10.3%
Q1FY13 vs Q1FY12
37AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
1. Executive summary
2. Q1FY2013 Group Financial Performance
3. Outlook
4. Divisional Strategy & Performance
5. Supplementary Information
o Strategies in more detail
o Economic landscape
o Strategic partnerships
o Others
5. Supplementary Information
38AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Strategic Business Transformation: Good 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
Strategic Business
Transformation
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 program• Initiated revamping of branches to refresh customer experience• Realigned account management teams for more effective account planning
12 & 24 months
FY 2008 and FY2009
36 months
FY 2010
48 months
FY 2011
60 & 72 months
FY 2012 and FY2013
39AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
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• Complete Kurnia acquisition and commence integration • Commenced MBF cards acquisition• Secured approval as Private Retirement Scheme (PRS) provider• Established partnership with Travelex for money changing services
Strategic Business
Transformation
High Priority Growth
Initiatives
Governance &
Enablement
Functions
12 & 24 months
36 months
FY 2010
48 months
FY 2011
60 & 72 months
FY 2012 and FY2013
FY 2008 and FY2009
40AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
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
• 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
Strategic Business
Transformation
High Priority
Growth Initiatives
Governance and
Enablement Functions
12 & 24 months
36 months
FY 2010
48 months
FY 2011
60 & 72 months
FY 2012 and FY2013
FY 2008 and FY2009
41AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Funding strategy, improving diversity
RM10 bil senior notes programme
1st senior notes issuance by a financial institution in Malaysia
AmBank issued RM2.92bil senior notes (RM7bil over 30 year programme)
AmIslamic issued RM550m senior sukuk (RM3bil musyarakahprogramme)
Both rated AA3 (RAM)
Subordinated Sukuk
RM2bil subordinated sukuk musyarakah programme (issued RM600mil in Sep’11 and RM200mil in Jan’12)
Medium Term Notes
RM2bil medium term note (issued RM1.6bil Mar’08)
RM2bil medium term note (issued RM1.0bil Aug’12)
Improve funding stability, maturity gap & liquidity ratios
Reduce dependence on short-dated deposits to fund long-dated fixed rate loan assets which incur liquidity risk and interest rate risk
Diversifies investor base
No obligation for buy back since we are not exposed to withdrawal risks and the notes are traded in the open market
Enable depositors to invest in long and medium dated papers
Supplemented by:
Customer deposits
Enhance domestic distribution through branches/channels aligned to demographics
Adjusted LDR1 of 88.8%
CASA: RM14.3bil (growth = 33.9%), FD: ~RM66.0bil (strong retention)
Funding diversity underpinned by:
Benefits to funding strength
Statutory reserve and liquidity requirement savings
Reduced exposure to interest rate risks
Loans with Recourse
Recourse obligations on loans sold to Cagamas (maturing 2017)
Islamic financing sold to Cagamas (maturing 2016)
1 Based on net loans including loans sold with recourse over adjusted customer deposits (adjusted customer deposits include term funding and loans sold with recourse)
42AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
109.6 197.4
307.0
530.2
837.2
121.8
216.7
338.5
584.2
922.7
Savings Current Account CASA Fixed Deposits Core Deposits
June'11 June'12
11.2% 9.8% 10.3% 10.2% 10.2%
4.4 6.3 10.7
65.6 76.3
5.0 9.3
14.3
Savings Current Account CASA Fixed Deposits Core Deposits
Jun'11 Jun'12
13.2% 48.3% 33.9% 0.6% 5.2%
66.0
80.3
Savings Current Account CASA Fixed Deposits Core Deposits
Savings Current Account CASA Fixed Deposits Core Deposits
Industry Deposits Growth by Type
RM’bil
Deposits by Type : AmBank Group vis-à-vis Industry
Source : BNM, internal reports
RM’bil
AmBank Group Deposits Growth by Type
6.2%
11.6%
82.2%
AmBank Group Deposits Composition
SavingsCurrent AccountFixed Deposits
13.2%
23.5%63.3%
Industry Deposits Composition
SavingsCurrent AccountFixed Deposits
43AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
26.9 13.0 1.6 2.1
6.8 2.3 1.2 0.002 2.0 18.9
5.2
43.7 36.6
80.2
Purchase ofTransportVehicles
Purchase ofRes Properties
Credit Cards Personal Use Purchase ofNon-Res
Properties
Purchase ofSecurities
Fixed Assets ConsumerDurables
Construction WorkingCapital
Other purpose Retail Loans Business &Corporate
Loans
Total loans
Jun-12
5.8% 4.8% 3.3% 13.5% 35.7% 9.3% 8.1% 25.1% 3.5% 9.7% 8.9%
4.0% 9.5%
6.4%
148.0 286.1
32.2 52.4 122.1 50.5 8.2 0.1 27.3 267.4 73.1
518.7 548.6
1,067.3
Purchase ofTransportVehicles
Purchase ofRes Properties
Credit Cards Personal Use Purchase ofNon-Res
Properties
Purchase ofSecurities
Fixed Assets ConsumerDurables
Construction Working Capital Other purpose Retail Loans Business &Corporate
Loans
Total Loans
Jun-12
11.0% 14.2%
12.6%
6.9% 13.6% 4.6% 13.4% 22.6% 16.9% 8.9% 18.6% 16.1% 8.9% 22.6%
Loans by Economic Purpose: AmBank Group vis-à-vis Industry
composition : 33.6% 16.2% 2.0% 2.6% 8.5% 2.9% 1.5% 0.0% 2.5% 23.6% 6.6% 54.4% 45.6%
RM’bil
Source : BNM, internal reports
RM’bil
AmBank Group Loans Growth (including Islamic financing sold to Cagamas) by Economic Purpose*
Industry Loans Growth by Economic Purpose
composition : 13.9% 26.8% 3.0% 4.9% 11.4% 4.7% 0.8% 0.0% 2.6% 25.1% 6.8% 48.6% 51.4%
* Based on BNM classification
44AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
111.5
0
20
40
60
80
100
120
140
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2008 2009 2010 2011 2012
BCI
27.5
41.6 43.3
30.8 29.6 27.0 28.2
33.1
39.0
23.4 22.1 25.5
31.8
27.4 30.1 31.1 29.8
3.7
15.8
0.3 4.2 2.7
0.8 3.6
(2.0)
5.6 6.5 6.5
10.7 11.1 10.2
5.2 6.5 7.5
-10
0
10
20
30
40
50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2008 2009 2010 2011 2012
Trade Balance FDI
RM' bil
7.1%
16.1%
-15%
-10%
-5%
0%
5%
10%
15%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2008 2009 2010 2011 2012
GDP Consumption Investment
Moderating growth CPI & unemployment rates remain low
Trade balance stable, FDIs remain robust
27.5
41.6 43.3
30.8 29.6 27.0 28.2
33.1
39.0
23.4 22.1 25.5
31.8
27.4
3.7
15.8
0.3 4.2 2.7
0.8 3.6
(2.0)
5.6 6.5 6.5
10.7 11.1 10.2
-10
0
10
20
30
40
50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2008 2009 2010 2011
Trade Balance FDI
RM' bil
Sources : Bloomberg & BNM
GDP4.7%
Domestic consumption and investment continues to drive Malaysian economy
Private sector remains positive on economic prospects
Business Conditions Index
*
* May 2012 position
45AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
11.0%
14.2%
12.6%
5%
10%
15%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2008 2009 2010 2011 2012
Retail growth YoY Non-retail growth YoY Total loans growth YoY
Domestic economy expected to be resilient
Interest rates expected to remain in the short term
12.13%
5.08% 5.02% 5.06% 4.85%
8.46%
2.12% 2.45%2.88%
3.00%
11.63%
5.62%6.02% 6.45% 6.53%
0%
5%
10%
15%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 June 12
Average lending rate (commercial banks) Average OPR Average BLR
RM’mil
Stable household debt / GDP with sustainable loan application
Stable loans applications, softening loans approvalsLoans growth remains resilient
Source: BNM
To be updated for the his
1.1%
10.5%
-40%
-20%
0%
20%
40%
60%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2008 2009 2010 2011 2012
Loans application growth YoY Loans approved growth YoY
184.5 213.8 257.7 307.6 342.1
273.0 260.9 263.7 333.7
400.1
37.5% 37.0%30.9% 32.9% 33.1%
65.9% 62.7%
75.1% 75.8% 76.6%
-100
100
300
500
700
900
1,100
1,300
1,500
2007 2008 2009 2010 2011
Retail loans application Non-retail loans application
Gross national savings Household debt/GDP
46AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
98.9%
2.2%
-2.0%
2.0%
6.0%
10.0%
14.0%
18.0%
0%
20%
40%
60%
80%
100%
120%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2008 2009 2010 2011 2012
Loan Loss Coverage Gross Impaired Loans
Source: BNM
Strong fundamentals in the banking sector
RM’bil
Capital activities supported by debt issuance Sustained deposits growth provides liquidityRM’mil
Asset quality remains intactCapital levels above BNM’s Basel 3 guidelines
Loan loss coverage Gross impaired loans
Improving gross impaired loans
78.5%
0
200
400
600
800
1,000
1,200
1,400
1,600
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2008 2009 2010 2011 2012
Total Deposits LD Ratio
0
10
20
30
40
50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2008 2009 2010 2011 2012
New issues of equity New issues of debt
14.7%
12.9%
0%
5%
10%
15%
20%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2008 2009 2010 2011 2012
RWCA CORE CAPITAL
47AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
ETP: Propelling Malaysia towards becoming a high-income, developed nation by 2020RM199.7 bil worth of initiatives unveiled since Oct 2010ETP overview
ETP execution gaining momentum
• RM 48k GNI per capita• RM 1.7 trillion GNI• 6% annual GDP growth
GROSS NATIONAL INCOME
JOBS
• 31.6m population• 3.3m additional jobs
TRANSFORMATIONAL ACTIONS
INVESTMENT
• 12 NKEAs, 131 EPPs• 60 BOs• Transformational approach• Private-sector led
• RM 1.4 trillion investment• 92% private investment• 8% public investment• 73% DDI, 27% FDI
ECONOMIC TRANSFORMATION
PROGRAMME
National Key Economic Area(RM bil)
To-dateTarget(2020)
% of Target
1. Wholesale and retail 255 10 3.9%
2.Communications content and infrastructure
51 1.5 2.9%
3. Greater Kuala Lumpur / Klang Valley 172 53.2 30.9%
4. Education 20 4.3 21.4%
5. Business services 41 3.6 8.9%
6. Oil, gas and energy 218 90.8 41.6%
7. Agriculture 22 1.2 5.3%
8. Tourism 204 15.5 7.6%
9. Electrical and electronics 78 9.1 11.6%
10. Palm oil and rubber 124 1.9 1.6%
11. Healthcare 23 3.0 13.0%
12. Financial services 211 - -
Overall composite scoring 1419* 199.7 14.1%
2020
*ETP discrepancies with sums of NKEAs due to rounding errors ETP : Economic Transformation Programme Source: Pemandu
Initiatives
Investment (RM’bil)
GNI Impact (RM’bil)
Job creation
Round 125 Oct 2010
Round 230 Nov 2010
Round 311 Jan 2011
Round 48 Mar 2011
Round 519 Apr 2011
Round 613 Jun 2011
Round 78 Sep 2011
Round 810 Nov 2011
Round 928 May 2012
To-date Target(2020)
% of Target
9 9 19 23 12 15 10 13 21 131 - -
5.3 8.3 67.0 14.8 11.2 63.4 1.4 5.85 20.5 199.7 1, 400 14.3
0.1 84.5 32.5 20.1 16.6 66.3 8.4 6.7 4.6 239.8 1,700 14.1
13,100 70,500 52,400 88,354 74,457 63,531 9,965 16,902 39,918 0.427 mil 3.3 mil 11.8
48AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Malaysia provides attractive investment opportunities in ASEAN region
National Savings Rate(% of GDP)
Inflation (%)
GDP per capita (USD)
Malaysia Thailand Singapore Indonesia Philippines Vietnam
Source: Bloomberg, IMF, internal research house and various central banks data
2011 2012f 2011f 2012f 2010e 2012f 2011f 2012f 2011f 2012f 2011f 2012f
5.1 4.5 0.1 4.8 4.9 4.3 6.5 6.3 3.7 4.9 5.8 6.3
7,792 8,053 5,281 5,865 50,714 53,072 3,469 3,848 2,255 2,376 1,362 1,521
3.1 3.0 1.2 1.2 2.3 2.3 6.8 6.6 7.2 7.2 5.0 5.0
33.1 32.6 30.4 28.7 45.8 46.0 33.1 34.1 22.3 22.0 30.7 30.9
3.2 2.0-2.5 3.8 4.1 5.2 2.9 5.4 6.5 4.4 4.1 18.8 12.1
11.4 10.5 3.4 2.5 19.8 18.5 0.3 -0.4 3.1 1.3 -4.7 -3.8
-5.0 -4.7 -2.6 -2.9 +3.2 +3.6 -1.8 -1.3 -2.9 -2.5 N/A N/A
28.7 29.2 64.3 64.6 5.3 5.3 240.5 243.4 95.8 97.7 89.3 90.4
Unemployment (%)
Real GDP Growth, % YoY
ASEAN growth to moderate but remain robust
Malaysia’s growth to be driven by private investment (through ETP) as well as domestic consumption (supported by low inflation and unemployment)
Current account balance (% of GDP)
Fiscal deficit (% of GDP)
Population (mil)
49AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Strategic partnership provides mutual value add to ANZ and AmBank Group
ANZ expanding footprint in Asia Pacific
Greater Mekong
(31)
Greater China
(33)
Pacific (60)Singapore (6)
Indonesia (28)
Malaysia
India (1)
Aus/NZ-
E&A
Trade:
US$101b
Intra-
Asia
Trade:
US$1.6trn
Asia-
Europe
Trade:
US$1.0trn
Aus/NZ-
Asia
Trade:
US$235b
America (1)
Europe
(2)
Asia-US
Trade:
US$0.8trn
( ) - Number of branches and representative offices in each country
Franchise
Network
Entry
• Korea
• Japan
• Philippines
Franchise Markets
Institutional Network Markets
• Australia
• New Zealand
• Greater China
• Greater Mekong1
• India
• Indonesia
• Malaysia
• Singapore
• Pacific
• UAE
• Europe
• America
Network Entry Markets
• Thailand • Myanmar
1. Focus on VietnamSource: WTO
Relationship with AmBank Group ANZ’s representation on Board and within management
• Alexander Thursby – Director• Mark Whelan – Director• To be determinedB
OA
RD
MA
NA
GEM
ENT
Senior Management• Mandy Simpson – Chief Financial Officer • Andrew Kerr – Chief Risk Officer• Ross Foden – Chief Operations Officer
Management• Head, Market Risk• Head, Governance & Provisioning• Senior GM, Transaction Banking
Leadership & management
Customer referrals
Joint account planning
Assistance with products development
Provision of technical expertise
Access to regional network & connectivity
50AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Good progress in international connectivity initiatives
• Set up AMMB-ANZ Joint International Connectivity Steering Committee – quarterly progressmeetings
• Launched AmBank – ANZ Get Set solutions, first of its kind in Malaysia pre-opening account servicesfor ANZ bank accounts at any AmBank branches
• Soft launched AmSignature Priority Banking in April 2012, part of an extensive network of ANZSignature Priority Banking centres across Asia Pacific, including Singapore, Hong Kong, Indonesia,Taiwan and China
• Signed Business Principles Agreement with ANZ, access to resources and opportunities with ANZ invarious areas of businesses across 27 countries
• Renewed Technical Services Agreement in relation to provision of technical services by ANZ in retail,business and other banking and financial services consisting primarily of project based services,provision of staff (other than senior management), as well as training and knowledge transfer services
• Enhance foreign currency account facilities – initially implemented in 30 branches now available in109 branches in 10 major foreign currencies!
• Partnership with International Money Transfer operator, Western Union – available at 185 branches!
• Partnership with foreign currency exchange specialist, Travelex which operates in 25 countries –available in 42 currencies
• Set up international connectivity initiatives through Transaction and Correspondent Banking
• And many more initiatives being planned
51AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
AmG Insurance – a high performing business
• Justin Breheny (IAG Asia CEO) - Director
• Duncan Brain (AmG CEO) - Director
SENIOR MANAGEMENT
• Duncan Brain - CEO
• Stephen Beatty - General Manager, Claims
OPERATIONAL & PROJECT SUPPORT / CONSULTANTS
• Around 7 operational and project support/consultants
Bo
ard
Man
age
me
nt
Leveraging strategic partnerships with global Insurance partners
Involved in the management of AmG, offering skills transfer, partnership and relationship models of IAG
Adding value through claims re-engineering savings, increased revenue via product development, underwriting and pricing
GENERAL INSURANCEV
alu
e P
rop
osi
tio
n
Annual GWP of RM650m, predominantly motor (80% GWP)
Strong double digit insurance margin and ROE
Industry-leading expense management ratio
Around 1 million policy holders and a diversified distribution base – 3,000 agents, AmBank bancassurance channel
Kurnia Insurans (Malaysia) Berhad (“Kurnia”) transaction will deliver market leading positions
• Kurnia shareholders met on 11 July 2012 and approved AmG’s acquisition of Kurnia and sale completion is expected in the second half of calendar 2012. The enlarged business will have around 4 million customers and be the leading motor insurer
• Beyond 2013 – Kurnia integration synergies delivered, maintain #1 position in motor
52AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Capability & Talent Transfer
• John Van Der Wielen – Director
Bo
ard
Man
age
me
nt
Leveraging strategic partnerships with global Insurance partners
Strategy & Management Development
Technical expertise & risk management
Distribution & product development
LIFE ASSURANCEV
alu
e P
rop
osi
tio
n
New CEO appointed since June 2012
Key strategic initiatives for FY2013 include:
• New product launches for agency and bancassurance distribution channels to increase market penetration.
• Rationalising and re-focusing on product portfolio to ensure marketing-led sales propositions
CONSULTANTS
• Evelyn Gutteridge - Strategic Development Manager, International, Friends Life
• John O’Rorke - Independent Consultant, Distribution Expert
53AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Strategy & Management Development
Technical Expertise & Risk Management
Distribution & Product Development
AmTakaful commenced business operations on 9 January 2012 via the bancatakaful channel and thereafter via the agency channel on 1 June 2012
Key strategic initiatives for FY2013 are as follows:
• To offer new and unique family takaful solutions through multi-distribution channels in order to achieve critical mass in its first year of operations
• To focus on developing quality distribution channels with emphasis on productivity
• To bring about operational improvements by building IT capabilities and strengthening technical operations
Bo
ard
Man
age
me
nt
Val
ue
Pro
po
siti
on
Leveraging strategic partnerships with global partners
FAMILY TAKAFUL
Capability & Talent Transfer
• John Van Der Wielen – Director
MANAGEMENT / CONSULTANTS
• Evelyn Gutteridge, Strategic Development Manager, International, Friends Life
• John O’Rorke, Independent Consultant, Distribution Expert
54AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
1.Peer banks as at June 2012, AmBank as at latest practical date 2. AmLife & AmG branches and agency office
Multiple distribution channels aligned to demographics
Kuala LumpurBranches 28ATMs 153
TerengganuBranches 5ATMs 20
JohorBranches 23ATMs 95
MelakaBranches 5ATMs 35
Negeri SembilanBranches 8ATMs 38
PahangBranches 9ATMs 35 Sarawak
Branches 17ATMs 44
SabahBranches 11ATMs 36
Pulau PinangBranches 16ATMs 50
PerlisBranches 2ATMs 4
KelantanBranches 2ATMs 22
PerakBranches 19ATMs 45
KedahBranches 5ATMs 27
PutrajayaBranches 1ATMs 4
SelangorBranches 38ATMs 247
LabuanBranches 1ATMs 1
Population Density:
< 100 persons per km2
101-500 persons per km2
501-1,000 persons per km2
1,001-1,500 persons per km2
> 1,501 persons per km2
Commercial banking branches:
o 190 branches nationwide
- #51 in no. of branches
- 3 AmIslamic branches
o 856 ATMs- 403 ATMs (#1 provider of ATMs) at 7-Eleven
o 151 Electronic Banking Centreso 42 assurance/insurance offices2 (as at Mar 2012)o 14 AmInvestment officeso 4 Regional Business Centres (Penang, Johor,
Kuching, Kota Kinabalu)
55AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Banking sector share price movement / target price and recommendations
Banking Sector Share Price Movement
80.0%
60.7%
56.8%
45.1%
31.7%
-3.1%
17.9%
-10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%
HLFG
AMMB
RHB Cap
PBB
CIMB
MBB
KLCI
-3.1%
(Note: 18 May 2007 vs. 30 June 2012)Ratings FY2007 Q1FY2013
Am
Ban
k (M
)
RAM A2/P1/Stable AA3/P1/Stable
Fitch BBB-/F3/Stable BBB/F3/Stable
S&P BBB-/A-3/Stable BBB+/A-2/Stable
Moody’s Baa2/P-3/Stable/D- Baa2/P-3/Positive(BFSR)1/D
Capital Intelligence BBB-/A3/Stable BBB/A3/Stable
Am
Inve
stm
en
t RAM AA3/P1/Stable AA3/P1/Stable
Fitch BB+/B/Stable BBB/F3/Stable
S&P BB+/B/Stable BBB+/A-2/Stable
MARC AA-/MARC-1/Stable AA-/MARC-1/Positive1
Am
Isla
mic
RAM A2/P1/Stable AA3/P1/Stable
Upgraded ratings
Target Price and Recommendations
TP: target price
Sell/Underperform/Fully valued/Reduce/UnderweightHold / Neutral / Market performBuy/Outperform/Overweight/Add
P/EPS : EPS annualized Apr 12 – Jun 12 P/BV : BV as at 30 June 12Source : Bloomberg as at 30 June 2012
1 BFSR - Banking Financial Strength Rating
KAF BofAML NOMURA ALLIANCE HSBC OSK TA DEUT RHB MACQ BNP KEN HLIB MIDF GOLDMAN S. UBS MBB JP AFFIN CIMB SC CITI DBS ECM UOB CLSA
P/EPS : 10.50 Market Price: 6.29 Average TP : RM 6.61 ▲ 0.01% P/BV : 1.65 Daily Beta: Buy : 10 (38%)
Hold : 11 (42%)Sell : 5 (19%)Ave. TP/Ave. CP : 1.05x -▼ 0.24%
AMMB HOLDINGS BERHAD0.75
RM
8.007.70 7.50 7.40 7.15 7.07 7.00 7.00 6.98 6.77 6.77 6.70 6.62 6.60 6.50 6.50 6.30 6.30 6.21 6.18 6.11 5.88 5.80 5.70 5.70
5.30
17
Ma
y 1
2
17
Ma
y 1
2
30
Ma
y 1
2
18
Ma
y 1
2
18
Ma
y 1
2
18
Ma
y 1
2
18
Ma
y 1
2
17
Ma
y 1
2
29
Ju
n 1
2
17
Ma
y 1
2
17
Ma
y 1
2
18
Ma
y 1
2
18
Ma
y 1
2
8 J
un
12
18
Ma
y 1
2
17
Ma
y 1
2
18
Ma
y 1
2
14
Fe
b 1
2
18
Ma
y 1
2
18
Ma
y 1
2
21
Ju
n 1
1
17
Ma
y 1
2
18
Ma
y 1
2
18
Ma
y 1
2
18
Ma
y 1
2
18
Ma
y 1
2
56AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Solid shareholding structure & franchise value
AMAB Holdings Sdn Bhd
AmG Insurance Berhad
AmLife Insurance Berhad
AmFamily Takaful Berhad
100% 100%100% 100% 100%
100%
70%3
51%2
70%3
1. ANZ Funds Pty Ltd : a wholly owned subsidiary of Australia and New Zealand Banking Group Limited 2. Insurance Australia Group Ltd – 49% 3. Friends Life Limited – 30%
As at 30 June 2012
AmInvestmentGroup Berhad
AmInvestmentBank Berhad
Foreign shareholding excluding ANZ
FY2010 FY2011 FY2012 Q1 FY2013
27.1% 27.1% 26.2% 26.2%
Banking Capital Markets Insurance
Amcorp Group Berhad(16.8%)
ANZ Funds Pty Ltd1
(23.8%)Employees Provident Fund Board
(12.6%)Other Shareholders
(46.8%)
Asset Management
AmIslamic Bank Berhad
AMMB Holdings Berhad
AmBank (M) Berhad
AMFB Holdings Berhad
57AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
19,263 24,357
32,370 30,191
12% 13%18% 18%
Asset Under Management Market Share
1,019
1,175 1,269 1,278
624 652 638
154
General Fund Assets Gross Premium
2,388
2,634 2,762 2,786
678 673
431
116
Life Fund Assets Gross Premium
General Insurance
RM’mil
Life Assurance
Institutional & Unit Trust AUM Brokerage
Unit trust : Institutional funds at ratio 59% : 41%
RM’mil
Highlights in key investment banking and insurance portfolios
CY09 CY10 CY11 H1CY12
FY10 FY11 FY12 Q1FY13 FY10 FY11 FY12 Q1FY13
6.7%
0.7%
Rank # 8
Rank # 2
Rank # 5
^ Ranking for General & Life are based on March 2012 position
Rank # 10
0.9%
FY10 FY11 FY12 Q1FY13
46,596 60,497 53,879
26,472
8% 8%
6% 6%
Trading Value Market Share
58AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
Glossary / Disclaimer of warranty and limitation of liability
Reported PerformanceReported performance refers to the financial performance as reported in the audited financial statements and disclosed to the market
One OffsOne offs comprise those impacts on financial performance that arise from changes to :
• accounting and provisioning policies (eg 5 and 7 year rules)• differences between economic and accounting hedges• prior period catch ups (eg backdated salary costs)• strategic investments and divestments (eg ANZ partnership), and • tax and regulatory regimes (eg deferred tax asset write off due to reduction in corporate tax rates)
Underlying PerformanceUnderlying performance refers to the financial performance adjusted for one off impacts as above
Business DivisionsBusiness divisions
• comprise AmBank Group’s core operating businesses that generate profits from direct customer transactions and interactions• have relatively more stable income streams, incur the bulk of the costs and typically have a lower risk profile• in most instances have market shares and growth metrics that can be measured and benchmarked externally
Operating SegmentsOperating segments
• have more volatile and lumpy income streams, with the former a direct function of risk appetite • include
• income and expenses associated with shareholder funds, loan rehabilitation and legacy businesses, plus• costs associated with corporate, shared services and governance functions currently not charged back to the business units
The information provided is believed to be correct at the time of presentation. AMMB Holdings Berhad or AMMB Holdings or “AMMB” or its affiliates do not make any representation or warranty, express or implied, as to the adequacy, accuracy, completeness or fairness of any such information and opinion contained and shall not be liable for any consequences of any reliance thereon. Neither AMMB Holdings nor its affiliates are acting as your financial advisor or agent. The individual is responsible to make your own independent assessment of the information herein and should not treat such content as advice relating to legal, accounting, and taxation or investment matters and should consult your own advisers.
Forward looking statements are based upon the current beliefs and expectations of the AMMB Holdings and are subject to signif icant risks and uncertainties. Actual results may differ from those set forth in the forward looking statements. AMMB Holdings does not undertake to update the forward looking statements to reflect impact of circumstances or events that may arise after the date of this presentation.
The information in the presentation is not and should not be construed as an offer or recommendation to buy or sell securitie s. Neither does this presentation purport to contain all the information that a prospective investor may require. Because it is not possible for AMMB Holdings or its affiliates to have r egard to the investment objectives, financial situation and particular needs of each individual who reads the information contained thus the information presented may not be appropriate for all pe rsons.
The information contained is not allowed to be reproduced, redistributed, transmitted or passed on, directly or indirectly, to any other person or published electronically or via print, in whole or in part, for any purpose.
The term "AMMB Holdings" and “AmBank Group” denotes all Group companies within the AMMB Holdings Group and this Disclaimer of Warranty and Limitation of Liability policy applies to the financial institutions under AMMB Holdings.
Disclaimer of Warranty and Limitation of Liability
59AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2013
The material in this presentation is general background information about AmBank Group’s activities current at the date ofthe presentation. It is information given in summary form and does not purport to be complete. It is not intended to be reliedupon as advice to investors or potential investors and does not take into account the investment objectives, financialsituation or needs of any particular investor. These should be considered, with or without professional advice when decidingif an investment is appropriate.
For further information, visit :
www.ambankgroup.com
Ganesh Kumar Nadarajah
Group General Manager, Group Investor Relations and Planning
Karen Chuah
Manager, Group Investor Relations and Planning
Tel : +603 2036 1435 Fax : +603 2031 7384 e-mail : [email protected] or
+6012 2974799 [email protected] or
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