ed-CK / sa- BC
Not a pretty sight
• Weak Weak Weak Weak 2015 2015 2015 2015 earnings tractionearnings tractionearnings tractionearnings traction,,,, as eas eas eas expected xpected xpected xpected
• 2016 will be a challenging year2016 will be a challenging year2016 will be a challenging year2016 will be a challenging year
• Outstanding concerns remain on asset quality and capitalOutstanding concerns remain on asset quality and capitalOutstanding concerns remain on asset quality and capitalOutstanding concerns remain on asset quality and capital
• Only two banks on our Only two banks on our Only two banks on our Only two banks on our top top top top buy list buy list buy list buy list –––– PBK and HLBPBK and HLBPBK and HLBPBK and HLB
Weak FY15 as expected, except for PBK. 4Q15 earnings
traction was weak as expected, dented mainly by provisions. Expenses were also higher compared to a year ago, with one-offs
being booked by HLB (MSS) and AMMB (regulatory penalty). Revenues were sluggish q-o-q but largely aided by loan growth,
thanks to currency translation. NIM fell as expected. Overall earnings contracted by 1% q-o-q and were flat y-o-y. PBK’s
earnings stood out the most, defying the headwinds by reporting above average loan growth, improved delinquency trends and
best-in-class cost-to-income ratio. On a full-year basis, CY15 earnings contracted by 3.7% y-o-y. Excluding one-offs (wherever
identifiable), its core FY15 earnings were flat y-o-y.
No general improvement in trends after a hard year. Banks are all guiding for slower targets and softer growth in 2016,
which is not surprising. We had, in our 2016 outlook report dated 10 Dec 2015, stated that we do not expect general improvements
in industry trends despite seeing banks trading at trough valuations. Post-results, we have slashed our FY16 earnings
forecasts by 7% on sustained high credit costs (save for CIMB and RHBC for their kitchen sinking activities in 2015) and slower loan
growth. We expect 2016 loan growth at 6-7% (2015: 8%). NIM will remain under pressure, as deposit competition continues to be
stiff. Capital markets remain challenging. Costs should be lower in 2016 with one-off costs relating to staff rationalisation taken care
of. But we would not discount further cost control measures in a tough environment like this.
Outstanding concerns on asset quality and capital. Banks have largely accelerated provisions in 2015 but concerns still linger
on how asset quality will pan out this year. Exposure to the oil & gas sector is less than 5% of total loans, based on what the banks
have disclosed during the recent analyst briefings. We believe that if all these exposures turn sour, which is highly unlikely, only PBK,
HLB and AFG will be the least affected. Nevertheless, we remain cautious on asset quality. We expect credit costs to remain high at
35bps bps (2015: 34bps). Separately, CIMB and AMMB’s CET1 (fully loaded) ratios are still among the lowest. Recalibration of
risk-weighted assets seems to be the route taken to address this issue for now. But we believe the market, to some extent, is
pricing in capital-raising risks to its valuations.
Only two banks on our top BUY list: PBK and HLB. After laying down all our cards, there appears to only be two banks we
favour. We continue to like PBK for its resilience and ability to defy headwinds. We believe PBK will continue to do well in 2016. For
HLB, while its ROE will come off because of its rights issue and weakness from its associate, its strong liquidity and asset quality
position remain its key plus points.
KLCIKLCIKLCIKLCI :::: 1,654.751,654.751,654.751,654.75
Analyst LIM Sue Lin +65 8332 6843 Lynette CHENG +603 2604 3907 [email protected] [email protected]
STOCKS
Source: DBS Bank, AllianceDBS Research
Malaysian Banks: Summary of results F inanc ialF inanc ialF inanc ialF inanc ial EPSEPSEPSEPS v s ourv s ourv s ourv s our v s consensusv s consensusv s consensusv s consensus
BankBankBankBank quartersquartersquartersquarters ChangeChangeChangeChange est imatesest imatesest imatesest imates est imatesest imatesest imatesest imates
RMRMRMRM RMRMRMRM
Affin 4QFY15 ▼ Inline Below Yes (▼) ▼ 2.00 1.80
AFG 3QFY16 NANANANA NA Inline N/A ◄► NA NA
AMMB 3QFY16 ▼ Below Below Yes (▼) ▼ 4.80 4.60
CIMB 4QFY15 ▼ Inline Below Yes (▼) ▼ 4.80 4.60
HLB 2QFY16 ◄► Below Below Yes (▼) ▼ 14.80 14.70
MAY 4QFY15 ◄► Inline Inline Yes (▼) ▼ 9.00 8.90
PBK 4QFY15 ◄► Inline Above No ◄► 21.95 21.95
RHBC 4QFY15 ◄► Below Below Yes (▼) ▼ 7.10 7.00
HLFG 2QFY16 ◄► Inline Inline Yes (▼) ▼ 16.80 16.70
BIMB 4QFY15 ◄► Inline Inline No ◄► 3.85 3.85
TP T P T P T P
ChangeChangeChangeChange
Prev ious Prev ious Prev ious Prev ious
T PTPTPTP
Rev ised Rev ised Rev ised Rev ised
T PTPTPTP
Earnings Earnings Earnings Earnings
rev isionrev isionrev isionrev ision
Source: Companies, DBS Bank, AllianceDBS
Malaysian Banks: Sector valuation
Mean, 1.62
+1SD, 1.86
+2SD, 2.09
-1SD, 1.39
-2SD, 1.16
0.5
0.7
0.9
1.1
1.3
1.5
1.7
1.9
2.1
2.3
05 06 07 08 09 10 11 12 13 14 15 16
PBV (X)PBV (X)PBV (X)PBV (X)
Source: Companies, DBS Bank, AllianceDBS
DBS Group Research . Equity DBS Group Research . Equity DBS Group Research . Equity DBS Group Research . Equity
1 Mar 2016
Malaysia Industry Focus
Malaysian Banks
Refer to important disclosures at the end of this report
Price Price Price Price Mkt CapMkt CapMkt CapMkt Cap Target Target Target Target PricePricePricePrice
Performance (%)Performance (%)Performance (%)Performance (%)
RMRMRMRM US$mUS$mUS$mUS$m RMRMRMRM 3 mth3 mth3 mth3 mth 12 mth12 mth12 mth12 mth RatingRatingRatingRating
Affin Holdings Berhad 2.15 990 1.80 (11.2) (26.9) FULLY
VALUED Alliance Financial Group 3.65 1,319 NA 1.4 (24.5) NR AMMB Holdings 4.33 3,094 4.60 (3.0) (29.3) HOLD CIMB Group Holdings 4.52 9,136 4.60 (1.8) (24.2) HOLD Hong Leong Bank 13.14 6,392 14.70 (1.8) (4.9) BUY Maybank 8.51 19,691 8.90 1.1 (5.4) HOLD Public Bank 18.48 16,914 21.95 1.1 0.9 BUY RHB Capital 5.30 3,863 7.00 (3.8) (30.1) BUY BIMB Holdings Berhad 3.60 1,356 3.85 (11.1) (12.0) HOLD Hong Leong Financial Group 13.98 3,795 16.70 3.7 (14.4) BUY
Industry Focus
Malaysian Banks
Page 2
Malaysian Banks: Key changes post-4Q15 results BankBankBankBank F inancialF inancialF inancialF inancial EPSEPSEPSEPS v s ourv s ourv s ourv s our v s consensusv s consensusv s consensusv s consensus
quartersquartersquartersquarters ChangeChangeChangeChange est imatesest imatesest imatesest imates est imatesest imatesest imatesest imates
RMRMRMRM RMRMRMRM
Affin 4QFY15 ▼ Inline Below Yes (▼) FY16-17F earnings revised down on
higher credit cost assumption
◄► Fully ValuedFully Valued ▼ 2.00 1.80
AFG 3QFY16 NANANANA NA Inline N/A NANANANA NR NR NANANANA NA NA
AMMB 3QFY16 ▼ Below Below Yes (▼) FY16-18F earnings revised down mainly
on higher NIM compression and lower
loan growth
◄► Hold Hold ▼ 4.80 4.60
CIMB 4QFY15 ▼ Inline Below Yes (▼) FY16-17F earnings revised down on
higher credit cost assumption
◄► Hold Hold ▼ 4.80 4.60
HLB 2QFY16 ◄► Below Below Yes (▼) FY16-18F earnings revised down on
higher credit cost and associate income.
◄► Buy Buy ▼ 14.80 14.70
MAY 4QFY15 ◄► Inline Inline Yes (▼) FY16-17F earnings revised down on
higher credit cost assumption
◄► Hold Hold ▼ 9.00 8.90
PBK 4QFY15 ◄► Inline Above No ◄► Buy Buy ◄► 21.95 21.95
RHBC 4QFY15 ◄► Below Below Yes (▼) FY16-17F earnings revised down on
higher credit cost assumption
◄► Buy Buy ▼ 7.10 7.00
HLFG 2QFY16 ◄► Inline Inline Yes (▼) Earnings trimmed inline with HLB ◄► Buy Buy ▼ 16.80 16.70
BIMB 4QFY15 ◄► Inline Inline No ◄► Hold Hold ◄► 3.85 3.85
Rev ised Rev ised Rev ised Rev ised
T PT PTPTP
Call Call Call Call
ChangeChangeChangeChange
Prev ious Prev ious Prev ious Prev ious
CallCallCallCall
Rev ised Rev ised Rev ised Rev ised
CallCallCallCall
T P T P T P T P
ChangeChangeChangeChange
Prev ious Prev ious Prev ious Prev ious
TPTPTPTP
Reasons for earnings v ariat ion and Reasons for earnings v ariat ion and Reasons for earnings v ariat ion and Reasons for earnings v ariat ion and
comment on earnings rev isioncomment on earnings rev isioncomment on earnings rev isioncomment on earnings rev ision
Earnings Earnings Earnings Earnings
rev isionrev isionrev isionrev ision
Source: Companies, DBS Bank, AllianceDBS
Missing expectations
Only Only Only Only twotwotwotwo out of the out of the out of the out of the eighteighteighteight major banks reportmajor banks reportmajor banks reportmajor banks reported earnings ed earnings ed earnings ed earnings
within consensus expectations; within consensus expectations; within consensus expectations; within consensus expectations; PBK above expectation; PBK above expectation; PBK above expectation; PBK above expectation; the the the the
rest disappointed.rest disappointed.rest disappointed.rest disappointed. The key disappointment was the higher-
than-expected provisions. Sporadically, there were also
disappointments due to higher- than-expected NIM
compression (AMMB) and lower-than- expected non-interest
income (RHB). While MAY’s results were in line with
expectations, disappointing trends were noted as loan loss
coverage and dividend trended lower.
How will 2016 fair.How will 2016 fair.How will 2016 fair.How will 2016 fair. During the quarter, most banks revealed
their targets for 2016 which noticeably paint a softer year in
2016. Loan growth targets were lowered by 1-2% while ROE
was guided to be flat to -2%. The banks guided for higher to
similar credit costs from FY15 to FY16. Positively, NIM
compression was largely guided to be less severe. This is with
the exception of AMMB which continues to face intense NIM
squeeze, as a result of both its portfolio rebalancing initiatives
(shifting to better quality loans with lower yields) and deposit
competition (causing pressure on funding cost).
Earnings cut by 7% postEarnings cut by 7% postEarnings cut by 7% postEarnings cut by 7% post----results; will this be the last quarter results; will this be the last quarter results; will this be the last quarter results; will this be the last quarter
for downgrades?for downgrades?for downgrades?for downgrades? Our FY16F earnings were largely slashed to
account for higher credit costs and slower loan growth. With
our ROE forecasts largely in line or lower than guided (with
the exception of PBK), we are hopeful for an end to the
earnings downgrade cycle for the banks. Note that consensus
numbers were cut by 2-18% in the past six months and even
more so in the past year. Nevertheless, negative surprises on
asset quality could still pose downside risks to earnings. Our
2016 earnings growth is now at 8% (4% excluding one-offs)
vs 14% previously.
Malaysian Banks: Consensus earnings cut over the last six months
Pre vs Post resultsPre vs Post resultsPre vs Post resultsPre vs Post results 1Mth1Mth1Mth1Mth 2Mth2Mth2Mth2Mth 3Mth3Mth3Mth3Mth 6Mth6Mth6Mth6Mth
AMMB Holdings (3.57) (2.87) (2.89) (3.93) (9.09)
Affin Holdings (12.67) (10.98) (10.40) (10.40) (17.55)
Alliance Financial Group 0.09 (0.53) (0.45) (0.40) (3.25)
CIMB (2.53) (0.79) (0.30) (2.20) (10.51)
Hong Leong Bank (2.83) (2.67) (3.70) (3.91) (7.03)
Maybank 0.72 (1.52) (3.66) (4.07) (6.57)
Public Bank - (0.07) 0.50 0.33 (2.20)
RHB Capital (5.40) (2.80) (2.36) (2.69) (6.97)
Source: Bloomberg L.P Finance, DBS Bank, AllianceDBS
Industry Focus
Malaysian Banks
Page 3
Malaysian banks: Missing FY15 targets; 2016 targets are modest but some are challenging
LoLoLoLoan growthan growthan growthan growth NIMNIMNIMNIM CostCostCostCost----totototo----incomeincomeincomeincome Credit chargeCredit chargeCredit chargeCredit charge ROEROEROEROE
AffinAffinAffinAffin
FY15 (T)FY15 (T)FY15 (T)FY15 (T) N/A N/A N/A N/A 8%
FY15 (A)FY15 (A)FY15 (A)FY15 (A) N/A N/A N/A N/A 4.6%
FY16 (F)FY16 (F)FY16 (F)FY16 (F) N/A N/A N/A N/A 4.8%
AMMBAMMBAMMBAMMB
FY15 (T)FY15 (T)FY15 (T)FY15 (T) 3% -15bps ≤45% 15bps 14 %
FY15 (A)FY15 (A)FY15 (A)FY15 (A) -1.60% -34bps 45.7% -3bps 13.9%
FY16 (T)FY16 (T)FY16 (T)FY16 (T) 4-5% -15 to -20bps ≤46% 20bps 12-12.5%
FY16 (R)FY16 (R)FY16 (R)FY16 (R) -1% >37bps ≤58% N/A c.9%
FY16 (F)FY16 (F)FY16 (F)FY16 (F) -1% -40bps 56% -9bps 9%
CIMBCIMBCIMBCIMB
FY15 (T)FY15 (T)FY15 (T)FY15 (T) 10% Stable <55% 40-50bps 11%
FY15 (A)FY15 (A)FY15 (A)FY15 (A) 12.5% (6.6% ex currency effect)
-8bps 60.1% (55.6% BAU)
78bps 6.0% (8.6% BAU)
FY16 (T)FY16 (T)FY16 (T)FY16 (T) 10% -5 to -10bps <53% 60-70bps 10%
FY16 (F)FY16 (F)FY16 (F)FY16 (F) 10% -5bps 57% 71bps 8.6%
HLBHLBHLBHLB
FY15 (T)FY15 (T)FY15 (T)FY15 (T) 9% <2% <44% 25-35bps >14%
FY15 (A)FY15 (A)FY15 (A)FY15 (A) 8.9% -3bps 44.6% -5bps 14.3%
FY16 (T)FY16 (T)FY16 (T)FY16 (T) 8-9% -5bps 42-44% 25-35bps 11%
FY16 (F)FY16 (F)FY16 (F)FY16 (F) 7% -2bps 43.8% 13bps 11%
MAYMAYMAYMAY
FY15 (T)FY15 (T)FY15 (T)FY15 (T) 9-10% -8 to -10bps N/A 30bps 13-14%
FY15 (R)FY15 (R)FY15 (R)FY15 (R) 8-9% -8 to -10bps N/A 30bps 12-13%
FY15 (A)FY15 (A)FY15 (A)FY15 (A) 12% (5.7% ex currency effect)
+8bps 48.4% 44bps 11.9%
FY16 (T)FY16 (T)FY16 (T)FY16 (T) 8-9% Stable w downside risk
N/A 40-50bps 11-12%
FY16 (F)FY16 (F)FY16 (F)FY16 (F) 8% -6bps 48.4% 44bps 10.8%
PBKPBKPBKPBK
FY15 (T)FY15 (T)FY15 (T)FY15 (T) 9-10% -8 to 10bps <32% 20bps >16%
FY15 (A)FY15 (A)FY15 (A)FY15 (A) 11.6% -4bps 30.5% 5bps 17.1%
FY16 (T)FY16 (T)FY16 (T)FY16 (T) 8-9% -8bps <33% 20bps >15%
FY16 (F)FY16 (F)FY16 (F)FY16 (F) 9% -4bps 30.10% 6bps 16.5%
RHBCRHBCRHBCRHBC
FY15 (T)FY15 (T)FY15 (T)FY15 (T) 10% N/A <51% N/A >11.5%
FY15 (R)FY15 (R)FY15 (R)FY15 (R) 6-7% -5bps <51% N/A 10-11%
FY15 (A)FY15 (A)FY15 (A)FY15 (A) 6% -10bps 61.3% (56.3% without CTS)
22bps 7.2% (8.4% without CTS)
FY16 (T)FY16 (T)FY16 (T)FY16 (T) 8% <2% <53% 30-40bps 10%
FY16 (F)FY16 (F)FY16 (F)FY16 (F) 8% -1bps 54% 26bps 8.2%
Note: T: Target; R: Revised, F: DBS Forecast ^ AMMB’s refer to FY Mar; HLB’s refer to FY June
Source: Companies, DBS Bank, AllianceDBS
Industry Focus
Malaysian Banks
Page 4
2016 outlook - reiterated
Little excitement despite 8% earnings growth in 2016.Little excitement despite 8% earnings growth in 2016.Little excitement despite 8% earnings growth in 2016.Little excitement despite 8% earnings growth in 2016. No
fundamental improvements are expected to be seen for the
Malaysian banks in 2016. Earnings growth of 8% will largely
be driven by lower expenses (due to staff rationalisation
expenses in 2015). As a result of two consecutive years of
earnings contraction in the sector, 2016 is expected to grow
by a seemingly high 8%. On a normalised basis, earnings are
expected to grow by 4% in 2016F, mainly supported by lower
NIM compression y-o-y. Note that 2015 was a year where
there were several one-off items making a dent on earnings, in
particular, CIMB, RHBC and HLB’s staff rationalisation
expenses.
Malaysian Banks: Inflated earnings growth in 2016
17.0 17.0 17.0 17.0
8.2 8.2 8.2 8.2
(1.6)(1.6)(1.6)(1.6) (3.7)(3.7)(3.7)(3.7)
8.3 8.3 8.3 8.3
-40
-30
-20
-10
0
10
20
30
40
CY12 CY13 CY14 CY15 CY16F
%%%%
AMMB AFFIN CIMB HLB MAY
PBK RHBC AFG Sector
* No forecasts for AFG
Source: Companies, DBS Bank, AllianceDBS
Malaysian Banks: Normalised earnings growth
17%17%17%17%
8%8%8%8%
----2%2%2%2% 0%0%0%0%
4%4%4%4%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
CY12 CY13 CY14 CY15 CY16F
AMMB AFFIN CIMB HLB MAY
PBK RHBC AFG Sector
* CY15 exceptional items include CIMB (RM652m costs), RHBC (RM309m costs), AMMB (RM216m net gain); No forecasts for AFG
Source: Companies, DBS Bank, AllianceDBS
Diving into 2016 P/L indicDiving into 2016 P/L indicDiving into 2016 P/L indicDiving into 2016 P/L indicates revenues will be weak.ates revenues will be weak.ates revenues will be weak.ates revenues will be weak. Revenue
in 2016F is expected to grow by 6%, slightly lower than 2015.
We expect PBK to record strong revenue growth, supported by
its solid portfolio which focuses on mass-market loan growth
and non-market related income. Meanwhile, AMMB’s revenue
contraction is attributable to weak net interest income traction,
as the bank continues to rebalance its loan portfolio to focus
on better quality loans.
Malaysian Banks: Revenue growth trends
14.514.514.514.5
8.48.48.48.4
2.02.02.02.0
7.77.77.77.75.65.65.65.6
(15)
(10)
(5)
-
5
10
15
20
25
30
CY12 CY13 CY14 CY15 CY16F
%%%%
AMMB AFFIN CIMB HLB MAY
PBK RHBC AFG Sector
* No forecasts for AFG
Source: Companies, DBS Bank, AllianceDBS
NIM compression will remain a feature.NIM compression will remain a feature.NIM compression will remain a feature.NIM compression will remain a feature. We expect NIM
compression to be less severe in 2016F (-6bps vs -9bps in
2015). Higher funding costs are expected to pressure NIM
more so than loan yields. Competition for loans has largely
stayed muted. Loan-yield compression across banks are a
function of several factors including replacement of lower-
yielding mortgages and portfolio shift to better quality loans
which tend to attract lower pricing.
Malaysian Banks: Net interest margins
2.46% 2.38%2.25%
2.16% 2.10%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
CY12 CY13 CY14 CY15 CY16F
AMMB AFFIN CIMB HLB MAY
PBK RHBC AFG Sector
* No forecasts for AFG
Source: Companies, DBS Bank, AllianceDBS
Industry Focus
Malaysian Banks
Page 5
Deposit competition still plaguing funding cost.Deposit competition still plaguing funding cost.Deposit competition still plaguing funding cost.Deposit competition still plaguing funding cost. Competition
remains rife for a shrinking pool of core deposits, as core
deposits continue to contract y-o-y. The proportion of CASA to
total deposits now hovers around 26%. Notably, “other
deposits” have been largely driven by foreign currency deposits
amid the weak RM.
Malaysian Banks: Deposit growth
-20%
-10%
0%
10%
20%
30%
40%
Jan-08
May-08
Sep-0
8
Jan-09
May-09
Sep-0
9
Jan-10
May-10
Sep-1
0
Jan-11
May-11
Sep-1
1
Jan-12
May-12
Sep-1
2
Jan-13
May-13
Sep-1
3
Jan-14
May-14
Sep-1
4
Jan-15
May-15
Sep-1
5
CASA Fixed deposits Others Total (ex-others) Total
y-o-y growth (%) Dec-15Total deposit growth = 1.8% y-o-yCore deposit growth = -6.4% y-o-yCASA growth = 1.6% y-o-yOther dep growth = 16.5% y-o-y
Source: BNM, DBS Bank, AllianceDBS
Malaysian Banks: CASA to total deposits
23.0%
23.5%
24.0%
24.5%
25.0%
25.5%
26.0%
26.5%
27.0%
-
200.0
400.0
600.0
800.0
1,000.0
1,200.0
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Fixed deposits Demand deposits
Saving deposits CASA to total deposits
CASA to total deposits (%)Deposits (RM bn)
Source: BNM, DBS Bank, AllianceDBS
Business loan approvals have moderated; spelling a bleaker Business loan approvals have moderated; spelling a bleaker Business loan approvals have moderated; spelling a bleaker Business loan approvals have moderated; spelling a bleaker
outlook outlook outlook outlook forforforfor loan growth in 2016.loan growth in 2016.loan growth in 2016.loan growth in 2016. Business loans growth has
supported system loan growth since overtaking retail loan
growth in May 2015. Leading indicators are insufficiently
compelling to warrant continued growth in business loans, as
approval trends have been volatile. Retail loan growth remains
a drag but PBK and HLB may still see strong mortgage growth
from their pipelines built up in the previous quarters. We
expect 2016 system loan growth to range between 6% and
7%.
Malaysian Banks: Loan growth breakdown
-8%
-4%
0%
4%
8%
12%
16%
20%
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Total loan growth Retail loan growth Business loan growth
Dec-15:Total loan growth: 7.9% y-o-yRetail loan growth: 7.4% y-o-yBusiness loan growth: 8.5% y-o-y
Source: BNM, DBS Bank, AllianceDBS
Malaysian Banks: Loan approval trends
-30%
-20%
-10%
0%
10%
20%
30%
40%
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Retail loan 6 mth M.A Business loan 6 mth M.A Total loan 6 mth M.A
Source: BNM, DBS Bank, AllianceDBS
Malaysian Banks: Loan growth
5.37%
3.86%
4.59%
4.77%
8.50%
8.56%
6.25%
8.56%
12.86%
7.82%
12.79%
13.57%
10.41%
10.62%
9.31%
7.87%
6.50%
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015F
2016F
Gross loans (RM bn) Loan growth yoy
Source: BNM, DBS Bank, AllianceDBS
Industry Focus
Malaysian Banks
Page 6
Lower costs in 2016. Lower costs in 2016. Lower costs in 2016. Lower costs in 2016. Lower expenses is one of the key drivers to
earnings growth for the banks in 2016. This stems from large
one-off costs related to its business and staff rationalisation
exercises, particularly for CIMB, RHBC and HLB. Stripping out
these along with AMMB and MAY’s one-off gains in 1QCY15
and 3QCY15, respectively, the cost-to-income ratio in 2015
would be at a normalised level of 49.7%, which otherwise would
have risen to 50.9%. We expect the 2016F cost-to-income ratio
to be flattish relative to 2015, barring other one-off costs.
Malaysian Banks: Cost-to-income ratio trend
44.9%44.9%44.9%44.9%45.6%45.6%45.6%45.6%
46.6%46.6%46.6%46.6%47.2%47.2%47.2%47.2%
48.5%48.5%48.5%48.5%
50.9%50.9%50.9%50.9%
49.6%49.6%49.6%49.6%
49.7%49.7%49.7%49.7%
40%
42%
44%
46%
48%
50%
52%
54%
CY10 CY11 CY12 CY13 CY14 CY15 CY16F
*cost-to-income ratio at 49.7% after stripping off CY15 exceptional items; i.e. CIMB (RM684m costs), RHBC (RM309m costs), AMMB (RM216m net gain), MAY (RM197m gain), HLB (RM172m costs)
Source: Companies, DBS Bank, AllianceDBS
Credit costs to remain high.Credit costs to remain high.Credit costs to remain high.Credit costs to remain high. We believe that the days of high
recoveries are at its tail-end, which explains our elevated credit
cost assumption in 2016 compared to the years prior to 2015.
Although credit costs at CIMB’s Indonesian operations is likely
to ease in 2016 (with expectation of a better 2H16), we have
conservatively assumed credit cost to remain high at CIMB
(71bps vs FY15 78bps).
Malaysian Banks: Credit cost trends
1.16%
1.02%
1.08%
1.12%
0.80%
0.68%
0.71%
0.49%
0.28%
0.16%
0.20%
0.18% 0.34%
0.35%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
CY03
CY04
CY05
CY06
CY07
CY08
CY09
CY10
CY11
CY12
CY13
CY14
CY15
CY16F
Source: Companies, DBS Bank, AllianceDBS
Difficult to ascertain a significant turn in the asset quality cycle Difficult to ascertain a significant turn in the asset quality cycle Difficult to ascertain a significant turn in the asset quality cycle Difficult to ascertain a significant turn in the asset quality cycle
when no signs are imminent.when no signs are imminent.when no signs are imminent.when no signs are imminent. Banks are undoubtedly cautious
despite no apparent deterioration being noted yet. We
understand that vulnerable sectors such as those with
exposure to steel, oil and gas as well as commodities are being
closely monitored to contain risk. Banks shown as principal
bankers of companies in challenging sectors are not necessarily
at risk, as this is not a direct indication of credit exposure.
Exposure to oil and gas is less than 5% of total loans, based on
what the banks have disclosed during the recent analyst
briefings. CIMB and MAY have additionally disclosed that
exposure to commodities in general stands at 10.5% and
7.16%. We believe that if all these exposures turn sour, which
is highly unlikely, only PBK, HLB and AFG will be the least
affected. Regardless, the further deterioration of
macroeconomic conditions could pose risks to NPL formation.
We currently still expect NPLs to remain fairly stable in 2016.
Malaysian Banks: Oil & gas exposure
BanksBanksBanksBanks Oil & gas exposure to total loansOil & gas exposure to total loansOil & gas exposure to total loansOil & gas exposure to total loans
AFGAFGAFGAFG <1%
AMMBAMMBAMMBAMMB <5%
CIMBCIMBCIMBCIMB 3%
HLBHLBHLBHLB <0.5%
MAYMAYMAYMAY 2.76%
PBKPBKPBKPBK n.m
RHBCRHBCRHBCRHBC 3%
*MAY’s exposure refers to exposure to energy in general
Source: Companies, DBS Bank, AllianceDBS
Malaysian Banks: NPL ratios
2.4%2.4%2.4%2.4%2.0%2.0%2.0%2.0%
1.8%1.8%1.8%1.8% 1.8%1.8%1.8%1.8% 1.8%1.8%1.8%1.8%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
CY12 CY13 CY14 CY15 CY16F
AMMB AFFIN CIMB
HLB MAY PBK
RHBC AFG Sector ex PBK
* No forecasts for AFG
Source: Companies, DBS Bank, AllianceDBS
Industry Focus
Malaysian Banks
Page 7
CapitalCapitalCapitalCapital----raising spree since 2014.raising spree since 2014.raising spree since 2014.raising spree since 2014. Malaysian banks started to
address capital concerns over the past few years and have
aggressively speeded this up since 2014. So far, Affin, PBK,
RHBC, HLB and HLFG have resorted to a rights issue, while
MAY and CIMB undertook a private placement back in 2012
and early 2014 respectively. With this, we believe the
Malaysian banks have largely addressed their capital concerns,
with only CIMB and AMMB yet to do so. Recalibration of risk-
weighted assets seems to be the route taken to address this
issue for now. But we believe the market, to some extent, is
pricing in capital-raising risks to its valuation.
Malaysian Banks: Fully-loaded CET-1 (estimated) (2015)
16.4%
14.3%
17.1%
15.2%16.2%
17.7%
15.5%16.1%
12.3%
11.9% 11.3%
11.7%
14.4% 14.5%
12.0%
12.3%
9.3% 11.7% 11.3% 10.1% 11.6% 12.0% 10.2% 12.0%0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
AMMB Affin AFG CIMB HLB MAY PBK RHBC
Total CAR Tier 1 CET1 Fully loaded (est)
Source: Companies, DBS Bank, AllianceDBS
Malaysian banks: Capital-raising activities
BankBankBankBank Capital Capital Capital Capital raisingraisingraisingraising
Date Date Date Date announcedannouncedannouncedannounced
Date Date Date Date CompletedCompletedCompletedCompleted
Amount Amount Amount Amount (RMbn)(RMbn)(RMbn)(RMbn)
Purpose of equity raisingPurpose of equity raisingPurpose of equity raisingPurpose of equity raising Rights Rights Rights Rights price price price price (RM)(RM)(RM)(RM)
Disc %Disc %Disc %Disc % from from from from TERPTERPTERPTERP
New New New New shares shares shares shares issued issued issued issued (m)(m)(m)(m)
% of % of % of % of share share share share capcapcapcap
HLFG Rights Issue 12-Aug-2015 Dec-15 1.1 Fund HLB's rights issue as well as strengthen capital
11.60 20% 95 9%
HLB Rights Issue 12-Aug-2015 Dec-15 3.0 Strengthen capital for growth and Basel III
10.40 23% 288 16%
RHBC Rights Issue 13-Apr-2015 Dec-15 2.5 Strengthen capital for growth and Basel III
4.82 20% 518 20%
PBK Rights Issue 30-Apr-2014 Aug-14 5.0 Strengthen capital for growth and Basel III
13.80 29% 350 10%
AFFIN Rights Issue 10-Mar-2014 Jul-14 1.3 Acquisition of HwangDBS businesses
2.87 25% 448 30%
CIMB Private Placement
13-Jan-2014 Jan-14 3.6 Strengthen capital for Basel III 7.10 na 500 6%
MAY Private Placement
12-Oct-2012 Oct-12 3.7 Strengthen capital for growth and Basel III
8.88 na 412 5%
HLB
Rights Issue 11-Mar-2011 Sep-11 2.6 Acquisition of EON Capital 8.65 30% 300 19%
Source: Companies, DBS Bank, AllianceDBS
Industry Focus
Malaysian Banks
Page 8
Valuation and recommendation
Valuations remain at allValuations remain at allValuations remain at allValuations remain at all----time lows.time lows.time lows.time lows. Malaysian banks are
currently trading at -2SD of its 10-year mean, the lowest since
2009. At current valuations, we believe most of the negatives
are priced in, except for a significant upset in asset quality
indicators, which in our view, should remain manageable.
However, we find it challenging to be bullish on the sector as
there is still no general improvement in key trends. Almost all
banks are currently trading at or just slightly above -2SD.
Malaysian Banks: Forward rolling PBV band
Mean, 1.62
+1SD, 1.86
+2SD, 2.09
-1SD, 1.39
-2SD, 1.16
0.5
0.7
0.9
1.1
1.3
1.5
1.7
1.9
2.1
2.3
05 06 07 08 09 10 11 12 13 14 15 16
PBV (X)PBV (X)PBV (X)PBV (X)
Source: Bloomberg Finance L.P., DBS Bank, AllianceDBS
NewNewNewNew----normal ROEs post normal ROEs post normal ROEs post normal ROEs post capitalcapitalcapitalcapital----raising are raising are raising are raising are down down down down a notch.a notch.a notch.a notch. The
average ROE level in 2016 after accounting for capital-raising is
11%. Technically, this would warrant a lower P/BV multiple for
the banks’ valuation. All banks, except AMMB and AFG, have
raised CET1 capital over the past 2-3 years. CIMB and AMMB
are the only two that may see capital-raising risks. Assuming
that they do carry out a rights issue to push its fully loaded CET1
ratio to 11%, sector ROE would shift down further to c. 9%.
Malaysian Banks: ROE
15.5%15.5%15.5%15.5% 14.6%14.6%14.6%14.6%12.8%12.8%12.8%12.8%
10.3%10.3%10.3%10.3% 10.0%10.0%10.0%10.0%
0%
5%
10%
15%
20%
25%
CY12 CY13 CY14 CY15 CY16F
AMMB AFFIN CIMB HLB MAY
PBK RHBC AFG Sector
Source: Companies, DBS Bank, AllianceDBS
Valuations may stagnate until a visible improvement is seen in Valuations may stagnate until a visible improvement is seen in Valuations may stagnate until a visible improvement is seen in Valuations may stagnate until a visible improvement is seen in
the sector. the sector. the sector. the sector. We do not expect a general improvement in the
fundamentals of the Malaysian banking sector. NIM
compression remains a feature, and coupled with slower loan
growth, net interest income or top line growth will remain
muted. Capital markets are still expected to stay sluggish.
Although we understand that pipelines are strong, companies
have held back plans for corporate activities in an uncertain
macro environment. With this, revenue growth would be weak
in 2016. It would not be appropriate to track the pre-provision
profit for 2016, as it will be distorted by lower expenses with
banks seeing higher costs booked for staff rationalisation
exercises in 2015. Pre-provision profit would be artificially
boosted in 2016. Similarly, provisions would be lower y-o-y after
accounting for kitchen sinking activities, especially for CIMB.
These would all distort 2016 earnings growth. Hence, while
earnings growth is forecast at 8% (4% excluding one-off items),
it is nevertheless just cosmetic and should not warrant too much
excitement.
Segregating the banks. Segregating the banks. Segregating the banks. Segregating the banks. We classify Malaysian banks into three
groups to distinguish our preferences: (1) resilient banks with no
capital-raising or asset quality issues and strong business drivers
– PBK and HLB, which are our top picks, (2) banks which have
raised capital, with moderate asset quality indicators and
looking to re-energise business growth – RHBC; with MAY and
CIMB at the borderline, and (3) banks which may face capital-
raising risks, have asset quality problems or struggle to find a
business direction – Affin and AMMB. BIMB remains a niche
play while HLFG should ride on a potential restructuring theme.
Stay safe; PBK and HLB reStay safe; PBK and HLB reStay safe; PBK and HLB reStay safe; PBK and HLB remain our top picks.main our top picks.main our top picks.main our top picks. As we comb
through the Malaysian banks under our coverage, we conclude
that the only two banks to overweight in a Malaysian portfolio
would be PBK and HLB. Both have strong asset quality attributes
and both are expected to see loan growth driven by mortgages
from strong pipelines built up in the past few quarters.
PBK to remain a champion of growth and asset qualityPBK to remain a champion of growth and asset qualityPBK to remain a champion of growth and asset qualityPBK to remain a champion of growth and asset quality .Little
need to be said about PBK’s solid attributes, as its earnings
deliveries speak for itself. We expect PBK to consistently defy
headwinds and grow above the industry average. Its cost-to-
income ratio, which ranks way below the industry average, is
admirable. Its premium valuation over peers is justifiable, in our
view. PBK is a BUY with RM21.95 TP.
HLB, waiting for HLB, waiting for HLB, waiting for HLB, waiting for the next leap.the next leap.the next leap.the next leap. HLB should start to re-rate now
that capital-raising issues are a thing of the past. The key risk to
HLB’s earnings would be its contribution from its associate Bank
of Chengdu. Bank of Chengdu has contributed 14% of pre-tax
Industry Focus
Malaysian Banks
Page 9
profit in the past but this is likely to wane in this financial year
due to weakness in the operating environment in China. HLB’s
other strong attribute is its strong liquidity position, with the
lowest loan-to-deposit ratio among peers. While many would
argue that its liquidity coverage ratio should be in focus, we
believe the analyst fraternity will still fall back on a quantifiable
metric such as the loan-to-deposit ratio to form a judgement.
HLB is also a BUY with RM14.70 TP.
HLFG, hopes of corporate streamlining remHLFG, hopes of corporate streamlining remHLFG, hopes of corporate streamlining remHLFG, hopes of corporate streamlining remains.ains.ains.ains. HLFG, the
parent company of HLB, is expected to deliver earnings growth
that is similar to HLB, as its earnings still mainly hinges on HLB
(c.90%). Its insurance business has seen strong growth in the
past, but that is expected to moderate as the focus will be on
housekeeping and tightened criteria for new policies in the near
term. A rising interest rate environment would be positive for
HLA. Its investment banking business is expected to stay small
and niche. Although small (c.3%), its investment banking unit
has been gradually expanding market share in equity and debt
issues, as well as in stockbroking. We have a BUY
recommendation and RM16.70 TP, based on sum-of-parts
metric. We believe a corporate streamlining within the group
would be imminent as the exercise would eliminate
administrative overlaps and reduce regulatory compliance costs.
The potential corporate streamlining will allow investors to focus
on only two listed operating entities – the banking arm, HLB,
and ideally, its insurance arm, HLA – to unlock value within
HLFG.
RHBC to start on a cleaner slate in 2016.RHBC to start on a cleaner slate in 2016.RHBC to start on a cleaner slate in 2016.RHBC to start on a cleaner slate in 2016. Our BUY rating on
RHBC is based on a cleaner start to 2016 but a significant re-
rating would only be possible once its business growth starts to
show a sustainable trend. By 2Q15, RHBC should be ready to
unveil its new corporate structure with improved capital levels
and having cleaned up its debt. Our RM7.00 TP for RHBC
reflects its new corporate structure.
MAY is a HOLD, MAY is a HOLD, MAY is a HOLD, MAY is a HOLD, trends are not looking greattrends are not looking greattrends are not looking greattrends are not looking great.... MAY’s
revenues have been volatile, skewed largely by forex and
insurance. We expect such trends to persist. Stripping off
these volatilities, MAY’s revenues may not be as exciting. In
FY15, MAY’s astounding loan growth soared to low-teens but
this is due to forex translation from its regional operations,
especially Singapore and Indonesia amid the weak RM. On a
constant-currency basis, loan growth was at 6%. Provisions
doubled in FY15 and we are unsure if this trend would
persist. MAY has guided for higher credit costs in 2016.
MAY’s Indonesian operations turned around well towards the
end of 2015 and hopes of stable growth could moderate
earnings erosion. Disappointing trends were noted as loan
loss coverage and dividends headed lower. Our TP for MAY is
RM8.90.
CIMB’s valuations havCIMB’s valuations havCIMB’s valuations havCIMB’s valuations have bottomed but there is no catalyst for e bottomed but there is no catalyst for e bottomed but there is no catalyst for e bottomed but there is no catalyst for
a rea rea rea re----rating yet.rating yet.rating yet.rating yet. We also struggle to identify an inflection point
for CIMB. While we are inclined to believe that the worst of
provisions would be over in 2015, its Indonesian operations
could drag earnings by another two quarters before
recovering. With restructuring costs largely booked in 2015, it
may imply lower levels in 2016. Stripping these out, CIMB’s
revenue growth has limited traction to excite. NIM
compression may be steeper than its peers, due to a
combination of deposit competition in Malaysia and the
change in its business mix in Indonesia. Similar to MAY, CIMB
would also book high loan growth in 2015 due to forex
translation differences. At sub-10% ROE, we find it difficult to
justify a valuation multiple above 1x P/BV. Potential capital-
raising, though denied by management, could pose further
downside risk to valuations. We have a HOLD rating with
RM4.60 TP for CIMB.
AMMB continues to deliver subAMMB continues to deliver subAMMB continues to deliver subAMMB continues to deliver sub----par growth.par growth.par growth.par growth. AMMB is
another Malaysian bank which saw its share price plummet
spectacularly in 2015. Plagued by persistent NIM compression
and below-industry loan growth on account of portfolio
rebalancing which has been ongoing for the past five years,
we see limited upside to share price performance from here.
Adding to its woes is the unprecedented penalty imposed by
BNM for non-compliance arising from weaknesses in its
reporting systems and processes. Furthermore, a new CEO
has just been appointed and we believe that he will have a
daunting task to rebuild the bank’s business. There has been
ongoing chatter on a possible sell-out by ANZ and Tan Sri
Azman Hashim, each holding 23.8% and 13.7% of AMMB.
Such newsflow could precipitate possible M&A actions. We
advise investors to watch this space. We currently have a
HOLD recommendation and RM4.60 TP.
Affin stays an underdog, our only FULLY VALUED call.Affin stays an underdog, our only FULLY VALUED call.Affin stays an underdog, our only FULLY VALUED call.Affin stays an underdog, our only FULLY VALUED call. Affin’s
earnings disappointed in 2015 and failed to meet all its KPIs
set for the year. While the acquisition of HwangDBS’
businesses in 2014 lifted Affin’s non-interest income
contribution to total income, its earnings traction has failed to
pick up because of soft capital markets. Provisions and
sluggish loan growth have dented its commercial banking
business and we see no light at the end of the tunnel for a re-
rating. Any further asset quality deterioration could pose
downside risks to earnings. We see no catalysts to re-rate its
share price in the near term, as loan growth is expected to
remain sluggish, recoveries to moderate and NIM pressure to
Industry Focus
Malaysian Banks
Page 10
persist. Our TP for Affin is RM1.80 and we believe the stock
would likely continue to trade below its BV.
BIMB’s niche position holds potential but weak consumer BIMB’s niche position holds potential but weak consumer BIMB’s niche position holds potential but weak consumer BIMB’s niche position holds potential but weak consumer
sentiment to dampen upside.sentiment to dampen upside.sentiment to dampen upside.sentiment to dampen upside. We see value in BIMB’s niche
position as the only listed Shariah-compliant bank on Bursa
but the persistently weak consumer sentiment could weigh on
BIMB’s prospects. Consumer loans make up just over 60% of
BIMB’s loan portfolio, with the bulk being personal and
housing loans. BIMB’s loan growth has shown slower growth
in FY15 since recording more than 20% loan growth in the
past three years. Positively, asset quality has been relatively
stable. We have a HOLD rating on BIMB with a RM3.85 TP.
Malaysian Banks: Sector valuation Banking GroupBanking GroupBanking GroupBanking Group Market Market Market Market
capcapcapcap PricePricePricePrice Target Target Target Target
PricePricePricePrice RatingRatingRatingRating PE PE PE PE (x)(x)(x)(x) CAGRCAGRCAGRCAGR PBV (x)PBV (x)PBV (x)PBV (x) ROE (%)ROE (%)ROE (%)ROE (%) Net div Net div Net div Net div
(%)(%)(%)(%) (US$bn)(US$bn)(US$bn)(US$bn) (RM/s)(RM/s)(RM/s)(RM/s) (RM/s)(RM/s)(RM/s)(RM/s) CY14ACY14ACY14ACY14A CY15FCY15FCY15FCY15F CY16FCY16FCY16FCY16F ^ (%)^ (%)^ (%)^ (%) CY14ACY14ACY14ACY14A CY15FCY15FCY15FCY15F CY16FCY16FCY16FCY16F CY15FCY15FCY15FCY15F CY15FCY15FCY15FCY15F
Affin HoldingsAffin HoldingsAffin HoldingsAffin Holdings 990 2.15 1.80
FULLY VALUED 7.0x 11.3x 10.4x -17.8 0.5x 0.5x 0.5x 4.8% 3.8%
Alliance*Alliance*Alliance*Alliance* 1,319 3.65 NA NA 10.5x 10.9x 10.7x -0.9 1.3x 1.2x 1.2x 11.2% 4.1% AMMBAMMBAMMBAMMB 3,094 4.33 4.60 HOLD 6.9x 8.6x 9.0x -12.4 0.9x 0.9x 0.8x 9.0% 4.6% CIMB GroupCIMB GroupCIMB GroupCIMB Group 9,136 4.52 4.60 HOLD 12.1x 13.4x 10.8x 5.8 1.0x 0.9x 0.9x 8.6% 4.2% Hong LeongHong LeongHong LeongHong Leong 6,392 13.14 14.70 BUY 11.4x 11.8x 12.1x -3.0 1.6x 1.4x 1.3x 11.0% 2.5% MaybankMaybankMaybankMaybank 19,691 8.51 8.90 HOLD 11.5x 11.9x 11.9x -1.5 1.5x 1.3x 1.2x 10.8% 6.3% Public BankPublic BankPublic BankPublic Bank 16,914 18.48 21.95 BUY 15.9x 14.2x 13.3x 9.4 2.6x 2.3x 2.1x 16.5% 3.1% RHB CapitalRHB CapitalRHB CapitalRHB Capital 3,863 5.30 7.00 BUY 6.9x 9.9x 8.5x -9.8 0.8x 0.7x 0.7x 8.2% 3.5%
Weighted averageWeighted averageWeighted averageWeighted average 12.2x12.2x12.2x12.2x 12.4x12.4x12.4x12.4x 11.7x11.7x11.7x11.7x 1.11.11.11.1 1.6x1.6x1.6x1.6x 1.5x1.5x1.5x1.5x 1.4x1.4x1.4x1.4x 11.7%11.7%11.7%11.7% 4.4%4.4%4.4%4.4% Weighted average (exWeighted average (exWeighted average (exWeighted average (ex----Public Bank)Public Bank)Public Bank)Public Bank) 10.8x10.8x10.8x10.8x 11.7x11.7x11.7x11.7x 11.1x11.1x11.1x11.1x ----2.02.02.02.0 1.3x1.3x1.3x1.3x 1.2x1.2x1.2x1.2x 1.1x1.1x1.1x1.1x 9.9%9.9%9.9%9.9% 4.8%4.8%4.8%4.8% Simple averageSimple averageSimple averageSimple average 10.3x10.3x10.3x10.3x 11.5x11.5x11.5x11.5x 10.8x10.8x10.8x10.8x ----3.83.83.83.8 1.3x1.3x1.3x1.3x 1.2x1.2x1.2x1.2x 1.1x1.1x1.1x1.1x 10.210.210.210.2%%%% 4.1%4.1%4.1%4.1% Simple average (exSimple average (exSimple average (exSimple average (ex----Public Bank)Public Bank)Public Bank)Public Bank) 9.5x9.5x9.5x9.5x 11.1x11.1x11.1x11.1x 10.5x10.5x10.5x10.5x ----5.75.75.75.7 1.1x1.1x1.1x1.1x 1.0x1.0x1.0x1.0x 0.9x0.9x0.9x0.9x 9.5%9.5%9.5%9.5% 4.2%4.2%4.2%4.2%
BIMBBIMBBIMBBIMB 1,356 3.60 3.85 HOLD 10.1x 10.0x 10.1x 41.9 1.8x 1.6x 1.5x 15.4% 3.2% Hong Leong Financial Hong Leong Financial Hong Leong Financial Hong Leong Financial GroupGroupGroupGroup 3,795 13.98 16.70 BUY 8.8x 9.3x 9.1x -0.4 1.2x 1.1x 1.0x 11.3% 2.4%
* Based on Bloomberg consensus
^ Refers to a 2-year EPS CAGR for CY14-16F
Source: Companies, Bloomberg Finance L.P., DBS Bank, AllianceDBS
Industry Focus
Malaysian Banks
Page 11
AppendixAppendixAppendixAppendix
Industry Focus
Malaysian Banks
Page 12
PBK: Loan and NPL trend
FYEFYEFYEFYE DECDECDECDEC DECDECDECDEC DECDECDECDEC DECDECDECDEC DECDECDECDEC Dec-14Dec-14Dec-14Dec-14 Mar-15Mar-15Mar-15Mar-15 Jun-15Jun-15Jun-15Jun-15 Sep-15Sep-15Sep-15Sep-15 Dec-15Dec-15Dec-15Dec-15
Gros s loansGros s loansGros s loansGros s loans FY11FY11FY11FY11 FY12FY12FY12FY12 FY13FY13FY13FY13 FY14FY14FY14FY14 FY15FY15FY15FY15 4QCY144QCY144QCY144QCY14 1QCY151QCY151QCY151QCY15 2QCY152QCY152QCY152QCY15 3QCY153QCY153QCY153QCY15 4QCY154QCY154QCY154QCY15
Purchase of Securities 1,855.9 4,127.0 4,023.5 2,735.3 2,492.9 2,735.3 2,461.6 2,568.1 2,412.3 2,492.9
Purchase of Transport Vehicles 38,947.1 42,238.6 45,158.5 48,537.2 52,423.6 48,537.2 49,779.7 50,274.1 51,600.8 52,423.6
Broad Property Sector 91,177.9 108,286.2 126,004.3 141,982.7 159,650.2 141,982.7 147,239.1 151,294.7 156,139.0 159,650.2
- Residential (include Cagamas) 52,207.2 61,130.7 70,928.3 79,378.9 89,521.8 79,378.9 81,722.2 84,046.0 87,103.9 89,521.8
- Non Residential 38,970.8 47,155.5 55,076.0 62,603.8 70,128.4 62,603.8 65,517.0 67,248.7 69,035.1 70,128.4
Non-Land Fixed Assets 270.0 298.6 242.1 245.1 209.7 245.1 252.7 261.2 215.4 209.7
Personal Use 9,721.8 9,318.1 9,090.5 9,401.6 10,577.0 9,401.6 9,591.2 9,776.5 10,405.7 10,577.0
Credit Cards 1,522.3 1,604.2 1,623.3 1,664.1 1,781.2 1,664.1 1,686.9 1,641.7 1,675.1 1,781.2
Consumption Cr/Consumer Durables 16.8 16.7 16.9 2.4 2.1 2.4 2.6 2.2 2.1 2.1
Construction 1,899.3 2,493.6 2,903.4 3,930.6 5,345.6 3,930.6 4,311.6 4,468.7 4,933.4 5,345.6
Working Capital 27,685.5 25,325.7 28,219.6 32,695.3 36,786.3 32,695.3 33,922.8 34,372.9 36,177.8 36,786.3
Others 4,597.4 4,074.5 3,893.9 3,849.7 4,178.4 3,849.7 3,803.8 4,146.5 4,487.0 4,178.4
Gros s loansGros s loansGros s loansGros s loans 177,694.0177,694.0177,694.0177,694.0 197,783.2197,783.2197,783.2197,783.2 221,175.8221,175.8221,175.8221,175.8 245,044.1245,044.1245,044.1245,044.1 273,447.1273,447.1273,447.1273,447.1 245,044.1245,044.1245,044.1245,044.1 253,051.8253,051.8253,051.8253,051.8 258,806.6258,806.6258,806.6258,806.6 268,048.5268,048.5268,048.5268,048.5 273,447.1273,447.1273,447.1273,447.1
Impaired loansImpaired loansImpaired loansImpaired loans
Purchase of Securities 5.9 5.9 3.5 3.4 4.0 3.4 3.4 3.4 3.4 4.0
Purchase of Transport Vehicles 267.8 263.3 357.5 412.8 358.3 412.8 386.7 384.7 382.7 358.3
Broad Property Sector 660.0 591.8 676.1 669.0 599.8 669.0 646.8 626.2 614.3 599.8
- Residential (include Cagamas) 466.2 420.3 526.9 504.8 445.4 504.8 489.2 459.2 449.4 445.4
- Non Residential 193.8 171.5 149.1 164.2 154.4 164.2 157.6 167.1 164.9 154.4
Non-Land Fixed Assets 6.2 6.2 6.0 0.2 0.5 0.2 0.0 0.1 0.1 0.5
Personal Use 176.8 165.2 169.3 146.5 138.8 146.5 147.5 138.5 147.9 138.8
Credit Cards 22.3 23.4 23.2 25.4 23.7 25.4 24.8 20.8 21.1 23.7
Consumption Cr/Consumer Durables 0.0 0.4 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.1
Construction 33.7 14.1 11.5 12.8 13.4 12.8 13.6 13.3 13.9 13.4
Working Capital 329.5 283.9 223.2 202.8 198.0 202.8 184.5 189.5 218.5 198.0
Others 27.4 20.0 14.6 15.7 15.1 15.7 12.2 16.9 16.0 15.1
Gros s impa ired loansGros s impa ired loansGros s impa ired loansGros s impa ired loans 1,529.71,529.71,529.71,529.7 1,374.11,374.11,374.11,374.1 1,484.81,484.81,484.81,484.8 1,488.71,488.71,488.71,488.7 1,351.81,351.81,351.81,351.8 1,488.71,488.71,488.71,488.7 1,419.71,419.71,419.71,419.7 1,393.41,393.41,393.41,393.4 1,417.81,417.81,417.81,417.8 1,351.81,351.81,351.81,351.8
NPL (%)NPL (%)NPL (%)NPL (%)
Purchase of Securities 0.32% 0.14% 0.09% 0.13% 0.16% 0.13% 0.14% 0.13% 0.14% 0.16%
Purchase of Transport Vehicles 0.69% 0.62% 0.79% 0.85% 0.68% 0.85% 0.78% 0.77% 0.74% 0.68%
Broad Property Sector 0.72% 0.55% 0.54% 0.47% 0.38% 0.47% 0.44% 0.41% 0.39% 0.38%
- Residential (include Cagamas) 0.9% 0.7% 0.7% 0.6% 0.5% 0.6% 0.6% 0.5% 0.5% 0.5%
- Non Residential 0.5% 0.4% 0.3% 0.3% 0.2% 0.3% 0.2% 0.2% 0.2% 0.2%
Non-Land Fixed Assets 2.29% 2.07% 2.48% 0.07% 0.25% 0.07% 0.01% 0.02% 0.03% 0.25%
Personal Use 1.82% 1.77% 1.86% 1.56% 1.31% 1.56% 1.54% 1.42% 1.42% 1.31%
Credit Cards 1.46% 1.46% 1.43% 1.53% 1.33% 1.53% 1.47% 1.27% 1.26% 1.33%
Consumption Cr/Consumer Durables 0.08% 2.25% 0.49% 3.08% 2.74% 3.08% 3.07% 0.05% 0.47% 2.74%
Construction 1.77% 0.57% 0.40% 0.33% 0.25% 0.33% 0.32% 0.30% 0.28% 0.25%
Working Capital 1.19% 1.12% 0.79% 0.62% 0.54% 0.62% 0.54% 0.55% 0.60% 0.54%
Others 0.60% 0.49% 0.37% 0.41% 0.36% 0.41% 0.32% 0.41% 0.36% 0.36%
Gros s loansGros s loansGros s loansGros s loans 0.86%0.86%0.86%0.86% 0.69%0.69%0.69%0.69% 0.67%0.67%0.67%0.67% 0.61%0.61%0.61%0.61% 0.49%0.49%0.49%0.49% 0.61%0.61%0.61%0.61% 0.56%0.56%0.56%0.56% 0.54%0.54%0.54%0.54% 0.53%0.53%0.53%0.53% 0.49%0.49%0.49%0.49%
Loan los s coverage (%)Loan los s coverage (%)Loan los s coverage (%)Loan los s coverage (%) 189%189%189%189% 126%126%126%126% 119%119%119%119% 122%122%122%122% 121%121%121%121% 122%122%122%122% 128%128%128%128% 129%129%129%129% 131%131%131%131% 121%121%121%121%
Source: Companies, DBS Bank, AllianceDBS
Industry Focus
Malaysian Banks
Page 13
MAY: Loan and NPL trend
FYEFYEFYEFYE DECDECDECDEC DECDECDECDEC DECDECDECDEC DECDECDECDEC DECDECDECDEC Dec-14Dec-14Dec-14Dec-14 Mar-15Mar-15Mar-15Mar-15 Jun-15Jun-15Jun-15Jun-15 Sep-15Sep-15Sep-15Sep-15 Dec-15Dec-15Dec-15Dec-15
Gros s loansGros s loansGros s loansGros s loans FY11FY11FY11FY11 FY12FY12FY12FY12 FY13FY13FY13FY13 FY14FY14FY14FY14 FY15FY15FY15FY15 4QCY144QCY144QCY144QCY14 1QCY151QCY151QCY151QCY15 2QCY152QCY152QCY152QCY15 3QCY153QCY153QCY153QCY15 4QCY154QCY154QCY154QCY15
Purchase of Securities 21,804.1 25,836.1 31,545.5 35,535.0 36,511.4 35,535.0 37,228.5 36,188.0 35,948.0 36,511.4
Purchase of Transport Vehicles 40,012.0 44,535.0 47,901.1 50,806.1 54,806.0 50,806.1 52,236.8 53,111.1 55,102.2 54,806.0
Broad Property Sector 68,920.0 81,819.9 95,045.0 109,453.0 132,798.1 109,453.0 112,700.3 120,733.2 130,787.8 132,798.1
- Residential (include Cagamas) 51,419.3 57,852.9 65,773.5 75,963.8 92,675.8 75,963.8 77,995.7 83,482.2 90,765.2 92,675.8
- Non Residential 17,500.7 23,967.1 29,271.5 33,489.2 40,122.3 33,489.2 34,704.6 37,251.0 40,022.6 40,122.3
Non-Land Fixed Assets 4,005.4 4,348.9 4,692.2 4,874.6 6,958.4 4,874.6 5,387.5 5,699.3 6,681.4 6,958.4
Personal Use 7,182.9 7,802.4 8,137.9 9,065.1 9,879.5 9,065.1 9,184.9 9,458.2 9,756.3 9,879.5
Credit Cards 6,261.5 6,434.3 6,717.2 7,180.7 8,099.6 7,180.7 7,375.4 7,412.4 7,636.5 8,099.6
Consumption Cr/Consumer Durables 286.3 316.3 452.6 136.9 90.0 136.9 132.3 117.1 108.7 90.0
Construction 13,626.5 14,089.3 13,206.4 15,764.9 18,051.9 15,764.9 15,448.3 16,593.7 17,870.3 18,051.9
Working Capital 104,214.8 111,403.5 126,731.3 142,597.8 153,301.4 142,597.8 144,944.1 145,695.2 158,785.2 153,301.4
Others 15,099.7 21,212.5 26,951.0 34,057.7 39,155.4 34,057.7 33,369.4 37,650.0 41,906.7 39,155.4
Gros s loansGros s loansGros s loansGros s loans 281,413.0281,413.0281,413.0281,413.0 317,798.3317,798.3317,798.3317,798.3 361,380.2361,380.2361,380.2361,380.2 409,471.7409,471.7409,471.7409,471.7 459,651.6459,651.6459,651.6459,651.6 409,471.7409,471.7409,471.7409,471.7 418,007.4418,007.4418,007.4418,007.4 432,658.1432,658.1432,658.1432,658.1 464,583.1464,583.1464,583.1464,583.1 459,651.6459,651.6459,651.6459,651.6
Impa ired loansImpa ired loansImpa ired loansImpa ired loans
Purchase of Securities 106.6 70.0 66.4 90.4 244.6 90.4 210.6 301.1 248.4 244.6
Purchase of Transport Vehicles 367.5 228.9 227.8 269.4 461.9 269.4 277.5 290.4 475.8 461.9
Broad Property Sector 1,437.9 705.4 573.9 515.5 755.1 515.5 573.4 596.4 671.7 755.1
- Residential (include Cagamas) 1,227.7 566.4 454.9 392.3 518.7 392.3 433.2 447.8 498.1 518.7
- Non Residential 210.2 139.0 119.0 123.2 236.4 123.2 140.2 148.6 173.6 236.4
Personal Use 135.7 121.8 120.7 141.8 143.8 141.8 113.4 129.9 146.3 143.8
Credit Cards 98.4 77.5 76.0 73.3 98.1 73.3 87.2 90.9 102.1 98.1
Consumption Cr/Consumer Durables 1.5 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Construction 528.6 227.5 197.1 1,119.1 1,250.3 1,119.1 1,343.1 1,364.7 1,372.4 1,250.3
Working Capital 5,565.8 3,504.6 3,542.0 3,499.9 4,960.9 3,499.9 3,291.1 3,540.5 3,712.9 4,960.9
Others 614.1 718.4 556.6 524.7 640.3 524.7 368.9 450.5 437.1 640.3
Gros s impa ired loansGros s impa ired loansGros s impa ired loansGros s impa ired loans 8,856.18,856.18,856.18,856.1 5,654.45,654.45,654.45,654.4 5,360.65,360.65,360.65,360.6 6,234.26,234.26,234.26,234.2 8,555.08,555.08,555.08,555.0 6,234.26,234.26,234.26,234.2 6,265.26,265.26,265.26,265.2 6,764.36,764.36,764.36,764.3 7,166.77,166.77,166.77,166.7 8,555.08,555.08,555.08,555.0
NPL (%)NPL (%)NPL (%)NPL (%)
Purchase of Securities 0.49% 0.27% 0.21% 0.25% 0.67% 0.25% 0.57% 0.83% 0.69% 0.67%
Purchase of Transport Vehicles 0.92% 0.51% 0.48% 0.53% 0.84% 0.53% 0.53% 0.55% 0.86% 0.84%
Broad Property Sector 2.09% 0.86% 0.60% 0.47% 0.57% 0.47% 0.51% 0.49% 0.51% 0.57%
- Residential (include Cagamas) 2.4% 1.0% 0.7% 0.5% 0.6% 0.5% 0.6% 0.5% 0.5% 0.6%
- Non Residential 1.2% 0.6% 0.4% 0.4% 0.6% 0.4% 0.4% 0.4% 0.4% 0.6%
Personal Use 1.89% 1.56% 1.48% 1.56% 1.46% 1.56% 1.23% 1.37% 1.50% 1.46%
Credit Cards 1.57% 1.20% 1.13% 1.02% 1.21% 1.02% 1.18% 1.23% 1.34% 1.21%
Consumption Cr/Consumer Durables 0.52% 0.07% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%
Construction 3.88% 1.61% 1.49% 7.10% 6.93% 7.10% 8.69% 8.22% 7.68% 6.93%
Working Capital 5.34% 3.15% 2.79% 2.45% 3.24% 2.45% 2.27% 2.43% 2.34% 3.24%
Others 4.07% 3.39% 2.07% 1.54% 1.64% 1.54% 1.11% 1.20% 1.04% 1.64%
Gros s loansGros s loansGros s loansGros s loans 3.15%3.15%3.15%3.15% 1.78%1.78%1.78%1.78% 1.48%1.48%1.48%1.48% 1.52%1.52%1.52%1.52% 1.86%1.86%1.86%1.86% 1.52%1.52%1.52%1.52% 1.50%1.50%1.50%1.50% 1.56%1.56%1.56%1.56% 1.54%1.54%1.54%1.54% 1.86%1.86%1.86%1.86%
Loan los s coverage (%)Loan los s coverage (%)Loan los s coverage (%)Loan los s coverage (%) 87%87%87%87% 106%106%106%106% 108%108%108%108% 96%96%96%96% 72%72%72%72% 96%96%96%96% 93%93%93%93% 83%83%83%83% 85%85%85%85% 72%72%72%72%
Source: Companies, DBS Bank, AllianceDBS
Industry Focus
Malaysian Banks
Page 14
CIMB: Loan and NPL trend
FYEFYEFYEFYE DECDECDECDEC DECDECDECDEC DECDECDECDEC DECDECDECDEC DECDECDECDEC Dec-14Dec-14Dec-14Dec-14 Mar-15Mar-15Mar-15Mar-15 Jun-15Jun-15Jun-15Jun-15 Sep-15Sep-15Sep-15Sep-15 Dec-15Dec-15Dec-15Dec-15
Gros s LoansGros s LoansGros s LoansGros s Loans FY11FY11FY11FY11 FY12FY12FY12FY12 FY13FY13FY13FY13 FY14FY14FY14FY14 FY15FY15FY15FY15 4QCY144QCY144QCY144QCY14 1QCY151QCY151QCY151QCY15 2QCY152QCY152QCY152QCY15 3QCY153QCY153QCY153QCY15 4QCY154QCY154QCY154QCY15
Purchase of Securities 9,103.9 12,214.6 15,139.8 19,708.1 27,168.1 19,708.1 20,641.5 22,589.1 25,215.6 27,168.1
Purchase of Transport Vehicles 16,281.2 18,720.9 19,742.0 21,338.1 23,296.6 21,338.1 21,666.7 22,015.6 22,808.2 23,296.6
Broad Property Sector 61,567.5 68,455.5 75,257.2 86,884.5 100,665.6 86,884.5 89,848.6 93,413.0 98,822.9 100,665.6
- Residential (include Cagamas) 48,808.9 52,491.8 57,390.5 66,248.0 75,495.0 66,248.0 68,245.2 70,487.2 73,787.7 75,495.0
- Non Residential 12,758.6 15,963.7 17,866.8 20,636.5 25,170.5 20,636.5 21,603.4 22,925.8 25,035.2 25,170.5
Non-Land Fixed Assets 16,528.2 14,901.6 14,251.7 15,761.2 15,919.9 15,761.2 16,081.6 16,075.3 17,664.5 15,919.9
Personal Use 6,781.9 7,242.6 8,441.1 8,748.1 10,608.4 8,748.1 8,903.2 9,691.3 10,329.7 10,608.4
Credit Cards 5,604.2 5,690.7 6,440.9 7,575.6 8,843.0 7,575.6 7,749.0 7,934.8 8,367.0 8,843.0
Consumption Cr/Consumer Durables 1.0 25.3 170.6 594.9 109.3 594.9 691.5 111.1 110.5 109.3
Construction 5,217.2 7,276.3 8,023.1 8,199.5 9,580.4 8,199.5 8,529.1 8,589.3 9,165.8 9,580.4
Working Capital 46,078.5 53,855.5 65,766.7 74,273.3 79,417.6 74,273.3 73,509.7 76,193.9 80,552.7 79,417.6
Others 24,229.6 19,960.0 21,464.8 21,560.7 22,213.0 21,560.7 22,534.0 22,991.0 24,737.8 22,213.0
Gros s loansGros s loansGros s loansGros s loans 191,393.2191,393.2191,393.2191,393.2 208,343.0208,343.0208,343.0208,343.0 234,698.0234,698.0234,698.0234,698.0 264,644.1264,644.1264,644.1264,644.1 297,821.9297,821.9297,821.9297,821.9 264,644.1264,644.1264,644.1264,644.1 270,154.9270,154.9270,154.9270,154.9 279,604.4279,604.4279,604.4279,604.4 297,774.7297,774.7297,774.7297,774.7 297,821.9297,821.9297,821.9297,821.9
Impa ired loansImpa ired loansImpa ired loansImpa ired loans
Purchase of Securities 123.9 193.6 186.4 175.3 186.9 175.3 207.4 160.1 199.2 186.9
Purchase of Transport Vehicles 424.2 338.7 314.5 422.1 393.8 422.1 409.0 394.7 444.8 393.8
Broad Property Sector 2,188.5 1,984.0 1,799.1 1,694.2 1,651.1 1,694.2 1,776.3 1,832.3 1,923.3 1,651.1
- Residential (include Cagamas) 1,781.7 1,645.2 1,540.3 1,479.5 1,436.2 1,479.5 1,553.3 1,600.3 1,656.8 1,436.2
- Non Residential 406.8 338.9 258.8 214.7 215.0 214.7 223.1 232.0 266.5 215.0
Non-Land Fixed Assets 556.6 416.3 438.9 876.4 911.1 876.4 992.3 980.3 1,327.0 911.1
Personal Use 355.2 244.8 252.9 312.5 265.7 312.5 313.8 325.7 317.8 265.7
Credit Cards 127.6 39.7 94.8 114.5 168.7 114.5 120.1 135.0 158.3 168.7
Consumption Cr/Consumer Durables 0.6 0.2 0.3 5.7 0.2 5.7 8.9 0.1 0.2 0.2
Construction 1,343.3 1,226.7 1,180.3 1,222.1 1,335.1 1,222.1 1,342.4 1,375.1 1,382.5 1,335.1
Working Capital 3,566.0 2,679.0 2,373.2 2,565.7 3,450.2 2,565.7 2,578.0 3,214.3 3,563.3 3,450.2
Others 1,118.8 805.0 752.9 794.2 718.8 794.2 834.0 833.2 855.4 718.8
Gros s impa ired loansGros s impa ired loansGros s impa ired loansGros s impa ired loans 9,804.79,804.79,804.79,804.7 7,927.87,927.87,927.87,927.8 7,393.37,393.37,393.37,393.3 8,182.78,182.78,182.78,182.7 9,081.89,081.89,081.89,081.8 8,182.78,182.78,182.78,182.7 8,582.28,582.28,582.28,582.2 9,250.99,250.99,250.99,250.9 10,172.010,172.010,172.010,172.0 9,081.89,081.89,081.89,081.8
NPL (%)NPL (%)NPL (%)NPL (%)
Purchase of Securities 1.36% 1.58% 1.23% 0.89% 0.69% 0.89% 1.00% 0.71% 0.79% 0.69%
Purchase of Transport Vehicles 2.61% 1.81% 1.59% 1.98% 1.69% 1.98% 1.89% 1.79% 1.95% 1.69%
Broad Property Sector 3.55% 2.90% 2.39% 1.95% 1.64% 1.95% 1.98% 1.96% 1.95% 1.64%
- Residential (include Cagamas) 3.7% 3.1% 2.7% 2.2% 1.9% 2.2% 2.3% 2.3% 2.2% 1.9%
- Non Residential 3.2% 2.1% 1.4% 1.0% 0.9% 1.0% 1.0% 1.0% 1.1% 0.9%
Non-Land Fixed Assets 3.37% 2.79% 3.08% 5.56% 5.72% 5.56% 6.17% 6.10% 7.51% 5.72%
Personal Use 5.24% 3.38% 3.00% 3.57% 2.50% 3.57% 3.52% 3.36% 3.08% 2.50%
Credit Cards 2.28% 0.70% 1.47% 1.51% 1.91% 1.51% 1.55% 1.70% 1.89% 1.91%
Consumption Cr/Consumer Durables 59.75% 0.80% 0.17% 0.95% 0.21% 0.95% 1.29% 0.11% 0.19% 0.21%
Construction 25.75% 16.86% 14.71% 14.90% 13.94% 14.90% 15.74% 16.01% 15.08% 13.94%
Working Capital 7.74% 4.97% 3.61% 3.45% 4.34% 3.45% 3.51% 4.22% 4.42% 4.34%
Others 4.62% 4.03% 3.51% 3.68% 3.24% 3.68% 3.70% 3.62% 3.46% 3.24%
Gros s loansGros s loansGros s loansGros s loans 5.12%5.12%5.12%5.12% 3.81%3.81%3.81%3.81% 3.15%3.15%3.15%3.15% 3.09%3.09%3.09%3.09% 3.05%3.05%3.05%3.05% 3.09%3.09%3.09%3.09% 3.18%3.18%3.18%3.18% 3.31%3.31%3.31%3.31% 3.42%3.42%3.42%3.42% 3.05%3.05%3.05%3.05%
Loan los s coverage (%)Loan los s coverage (%)Loan los s coverage (%)Loan los s coverage (%) 81%81%81%81% 83%83%83%83% 85%85%85%85% 83%83%83%83% 85%85%85%85% 83%83%83%83% 84%84%84%84% 78%78%78%78% 77%77%77%77% 85%85%85%85%
Source: Companies, DBS Bank, AllianceDBS
Industry Focus
Malaysian Banks
Page 15
RHBC: Loan and NPL trend
FYEFYEFYEFYE DECDECDECDEC DECDECDECDEC DECDECDECDEC DECDECDECDEC DECDECDECDEC Dec-14Dec-14Dec-14Dec-14 Mar-15Mar-15Mar-15Mar-15 Jun-15Jun-15Jun-15Jun-15 Sep-15Sep-15Sep-15Sep-15 Dec-15Dec-15Dec-15Dec-15
Gros s LoansGros s LoansGros s LoansGros s Loans FY11FY11FY11FY11 FY12FY12FY12FY12 FY13FY13FY13FY13 FY14FY14FY14FY14 FY14FY14FY14FY14 4QCY144QCY144QCY144QCY14 1QCY151QCY151QCY151QCY15 2QCY152QCY152QCY152QCY15 3QCY153QCY153QCY153QCY15 4QCY154QCY154QCY154QCY15
Purchase of Securities 6,981.6 10,250.5 13,070.6 15,606.6 14,440.7 15,606.6 16,011.1 15,251.8 14,726.7 14,440.7
Purchase of Transport Vehicles 11,736.5 11,448.1 11,863.4 12,222.8 10,853.8 12,222.8 11,797.5 11,456.5 11,157.1 10,853.8
Broad Property Sector 25,795.6 27,884.7 32,967.7 42,103.4 50,715.7 42,103.4 44,444.8 46,673.8 48,676.8 50,715.7
- Residential (include Cagamas) 20,518.4 22,154.5 25,518.9 31,469.4 37,866.1 31,469.4 33,039.3 34,915.5 36,591.9 37,866.1
- Non Residential 5,277.2 5,730.1 7,448.7 10,634.0 12,849.6 10,634.0 11,405.5 11,758.3 12,084.9 12,849.6
Non-Land Fixed Assets 3,237.8 3,249.7 3,350.1 3,675.8 3,951.9 3,675.8 3,722.6 3,782.6 3,919.4 3,951.9
Personal Use 4,951.6 5,758.1 7,193.8 7,650.3 8,331.7 7,650.3 7,700.5 7,902.0 8,551.2 8,331.7
Credit Cards 1,780.1 1,926.6 2,004.2 1,994.7 1,979.0 1,994.7 1,976.9 1,952.1 1,935.5 1,979.0
Consumption Cr/Consumer Durables 43.5 37.3 31.5 28.9 37.8 28.9 28.1 33.4 34.2 37.8
Construction 3,024.2 3,653.7 3,121.2 4,929.2 5,803.8 4,929.2 5,354.5 5,745.3 6,071.4 5,803.8
Working Capital 20,317.6 26,520.3 29,096.5 35,060.9 37,775.8 35,060.9 36,168.4 35,412.6 37,480.3 37,775.8
Others 19,426.6 20,745.0 19,054.1 19,213.6 17,496.4 19,213.6 16,343.1 16,471.3 16,999.1 17,496.4
Gros s loansGros s loansGros s loansGros s loans 97,295.197,295.197,295.197,295.1 111,474.1111,474.1111,474.1111,474.1 121,752.9121,752.9121,752.9121,752.9 142,486.2142,486.2142,486.2142,486.2 151,386.4151,386.4151,386.4151,386.4 142,486.2142,486.2142,486.2142,486.2 143,547.4143,547.4143,547.4143,547.4 144,681.5144,681.5144,681.5144,681.5 149,551.6149,551.6149,551.6149,551.6 151,386.4151,386.4151,386.4151,386.4
Impa ired loansImpa ired loansImpa ired loansImpa ired loans
Purchase of Securities 86.7 335.3 162.0 218.3 122.5 218.3 202.0 98.5 90.7 122.5
Purchase of Transport Vehicles 262.9 260.4 218.4 180.1 135.5 180.1 169.6 164.8 144.8 135.5
Broad Property Sector 1,234.5 1,123.2 975.8 965.5 969.6 965.5 956.2 978.0 994.2 969.6
- Residential (include Cagamas) 1,037.4 965.1 876.2 783.9 788.0 783.9 752.6 753.4 761.3 788.0
- Non Residential 197.1 158.1 99.6 181.6 181.6 181.6 203.6 224.6 233.0 181.6
Non-Land Fixed Assets 142.4 67.0 45.2 38.8 48.2 38.8 39.1 51.2 53.1 48.2
Personal Use 72.9 137.2 150.4 154.4 164.9 154.4 144.5 156.1 165.4 164.9
Credit Cards 89.0 39.4 41.3 36.9 37.2 36.9 33.0 44.3 42.9 37.2
Consumption Cr/Consumer Durables 2.0 2.1 1.7 1.4 0.9 1.4 1.7 1.5 1.2 0.9
Construction 235.0 160.3 125.1 115.7 105.5 115.7 124.5 124.3 119.6 105.5
Working Capital 1,200.7 1,126.1 1,536.5 1,139.9 1,178.1 1,139.9 1,182.7 1,275.3 1,237.3 1,178.1
Others 25.0 86.8 170.2 42.3 75.7 42.3 54.8 65.7 57.7 75.7
Gros s impa ired loansGros s impa ired loansGros s impa ired loansGros s impa ired loans 3,351.13,351.13,351.13,351.1 3,337.63,337.63,337.63,337.6 3,426.63,426.63,426.63,426.6 2,893.42,893.42,893.42,893.4 2,838.22,838.22,838.22,838.2 2,893.42,893.42,893.42,893.4 2,908.22,908.22,908.22,908.2 2,959.82,959.82,959.82,959.8 2,906.82,906.82,906.82,906.8 2,838.22,838.22,838.22,838.2
NPL (%)NPL (%)NPL (%)NPL (%)
Purchase of Securities 1.24% 3.27% 1.24% 1.40% 0.85% 1.40% 1.26% 0.65% 0.62% 0.85%
Purchase of Transport Vehicles 2.24% 2.27% 1.84% 1.47% 1.25% 1.47% 1.44% 1.44% 1.30% 1.25%
Broad Property Sector 4.79% 4.03% 2.96% 2.29% 1.91% 2.29% 2.15% 2.10% 2.04% 1.91%
- Residential (include Cagamas) 5.06% 4.36% 3.43% 2.49% 2.08% 2.49% 2.28% 2.16% 2.08% 2.08%
- Non Residential 3.74% 2.76% 1.34% 1.71% 1.41% 1.71% 1.79% 1.91% 1.93% 1.41%
Non-Land Fixed Assets 4.40% 2.06% 1.35% 1.06% 1.22% 1.06% 1.05% 1.35% 1.35% 1.22%
Personal Use 1.47% 2.38% 2.09% 2.02% 1.98% 2.02% 1.88% 1.98% 1.93% 1.98%
Credit Cards 5.00% 2.04% 2.06% 1.85% 1.88% 1.85% 1.67% 2.27% 2.22% 1.88%
Consumption Cr/Consumer Durables 4.57% 5.52% 5.47% 4.93% 2.30% 4.93% 6.13% 4.55% 3.62% 2.30%
Construction 7.77% 4.39% 4.01% 2.35% 1.82% 2.35% 2.32% 2.16% 1.97% 1.82%
Working Capital 5.91% 4.25% 5.28% 3.25% 3.12% 3.25% 3.27% 3.60% 3.30% 3.12%
Others 0.13% 0.42% 0.89% 0.22% 0.43% 0.22% 0.34% 0.40% 0.34% 0.43%
Gros s loansGros s loansGros s loansGros s loans 3.44%3.44%3.44%3.44% 2.99%2.99%2.99%2.99% 2.81%2.81%2.81%2.81% 2.03%2.03%2.03%2.03% 1.87%1.87%1.87%1.87% 2.03%2.03%2.03%2.03% 2.03%2.03%2.03%2.03% 2.05%2.05%2.05%2.05% 1.94%1.94%1.94%1.94% 1.87%1.87%1.87%1.87%
Loan los s coverage (%)Loan los s coverage (%)Loan los s coverage (%)Loan los s coverage (%) 74%74%74%74% 66%66%66%66% 64%64%64%64% 61%61%61%61% 63%63%63%63% 61%61%61%61% 61%61%61%61% 56%56%56%56% 57%57%57%57% 63%63%63%63%
Source: Companies, DBS Bank, AllianceDBS
Industry Focus
Malaysian Banks
Page 16
HLB: Loan and NPL trend
FYEFYEFYEFYE JUNJUNJUNJUN JUNJUNJUNJUN JUNJUNJUNJUN JUNJUNJUNJUN JUNJUNJUNJUN Dec-14Dec-14Dec-14Dec-14 Mar-15Mar-15Mar-15Mar-15 Jun-15Jun-15Jun-15Jun-15 Sep-15Sep-15Sep-15Sep-15 Dec-15Dec-15Dec-15Dec-15
Gros s LoansGros s LoansGros s LoansGros s Loans FY11FY11FY11FY11 FY12FY12FY12FY12 FY13FY13FY13FY13 FY14FY14FY14FY14 FY15FY15FY15FY15 4QCY144QCY144QCY144QCY14 1QCY151QCY151QCY151QCY15 2QCY152QCY152QCY152QCY15 3QCY153QCY153QCY153QCY15 4QCY154QCY154QCY154QCY15
Purchase of Securities 1,151.0 1,030.1 981.3 762.7 704.8 701.6 727.7 704.8 643.0 663.0
Purchase of Transport Vehicles 17,373.4 17,251.7 17,345.6 17,292.2 18,020.5 17,638.7 17,958.8 18,020.5 18,202.9 18,443.4
Broad Property Sector 36,749.7 40,674.4 45,075.0 51,370.5 59,538.3 55,380.4 57,547.3 59,538.3 61,594.4 63,417.7
- Residential (include Cagamas) 27,698.8 30,689.1 34,216.3 39,000.3 45,306.6 41,976.8 43,544.7 45,306.6 47,044.0 48,663.2
- Non Residential 9,050.9 9,985.3 10,858.6 12,370.1 14,231.7 13,403.7 14,002.5 14,231.7 14,550.4 14,754.5
Personal Use 3,572.5 3,576.5 3,502.2 3,370.7 3,523.6 3,430.2 3,513.5 3,523.6 3,714.7 3,734.6
Credit Cards 4,262.9 4,233.4 4,088.1 4,192.2 3,889.3 4,168.2 4,051.4 3,889.3 3,816.4 3,899.2
Consumption Cr/Consumer Durables 0.2 0.1 0.5 0.4 0.4 0.4 0.4 0.4 0.4 0.4
Construction 835.6 924.7 1,163.9 1,163.0 1,257.9 1,306.6 1,239.5 1,257.9 1,276.1 1,422.8
Working Capital 17,831.5 19,907.5 21,770.2 22,573.4 23,433.0 21,342.2 22,252.1 23,433.0 24,011.3 23,434.2
Others 2,415.5 2,972.7 3,282.3 3,443.6 3,050.6 3,052.3 3,297.7 3,050.6 2,819.4 2,869.1
Gros s loansGros s loansGros s loansGros s loans 84,192.284,192.284,192.284,192.2 90,571.190,571.190,571.190,571.1 97,209.097,209.097,209.097,209.0 104,168.6104,168.6104,168.6104,168.6 113,418.3113,418.3113,418.3113,418.3 107,020.6107,020.6107,020.6107,020.6 110,588.3110,588.3110,588.3110,588.3 113,418.3113,418.3113,418.3113,418.3 116,078.6116,078.6116,078.6116,078.6 117,884.4117,884.4117,884.4117,884.4
Impaired loansImpaired loansImpaired loansImpaired loans
Purchase of Securities 8.8 9.9 6.9 0.8 0.2 0.7 0.6 0.2 0.2 0.2
Purchase of Transport Vehicles 185.0 216.1 220.1 225.7 184.1 233.8 214.1 184.1 183.5 170.1
Broad Property Sector 537.6 416.0 305.5 261.3 253.4 246.5 266.3 253.4 295.6 301.7
- Residential (include Cagamas) 458.2 342.6 245.9 213.6 207.2 205.5 229.7 207.2 242.1 250.2
- Non Residential 79.4 73.4 59.6 47.7 46.2 40.9 36.6 46.2 53.6 51.5
Personal Use 93.7 86.7 72.2 34.9 34.7 32.3 32.7 34.7 35.9 40.9
Credit Cards 58.1 66.9 60.7 53.1 42.9 45.6 41.7 42.9 46.2 55.2
Consumption Cr/Consumer Durables 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Construction 31.1 26.4 9.3 4.4 4.1 19.7 5.5 4.1 4.0 6.8
Working Capital 916.3 649.2 635.3 572.0 365.4 404.1 359.8 365.4 345.9 386.6
Others 52.2 60.7 49.5 79.6 63.1 68.9 67.1 63.1 55.7 51.9
Gros s impa ired loansGros s impa ired loansGros s impa ired loansGros s impa ired loans 1,882.91,882.91,882.91,882.9 1,532.01,532.01,532.01,532.0 1,359.41,359.41,359.41,359.4 1,231.71,231.71,231.71,231.7 948.0948.0948.0948.0 1,051.61,051.61,051.61,051.6 987.7987.7987.7987.7 948.0948.0948.0948.0 967.1967.1967.1967.1 1,013.41,013.41,013.41,013.4
NPL (%)NPL (%)NPL (%)NPL (%)
Purchase of Securities 0.77% 0.97% 0.70% 0.10% 0.03% 0.10% 0.08% 0.03% 0.03% 0.03%
Purchase of Transport Vehicles 1.06% 1.25% 1.27% 1.31% 1.02% 1.33% 1.19% 1.02% 1.01% 0.92%
Broad Property Sector 1.46% 1.02% 0.68% 0.51% 0.43% 0.45% 0.46% 0.43% 0.48% 0.48%
- Residential (include Cagamas) 1.7% 1.1% 0.7% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5%
- Non Residential 0.9% 0.7% 0.5% 0.4% 0.3% 0.3% 0.3% 0.3% 0.4% 0.3%
Personal Use 2.62% 2.42% 2.06% 1.04% 0.99% 0.94% 0.93% 0.99% 0.97% 1.10%
Credit Cards 1.36% 1.58% 1.48% 1.27% 1.10% 1.09% 1.03% 1.10% 1.21% 1.42%
Consumption Cr/Consumer Durables 8.54% 6.80% 0.85% 0.90% 0.96% 0.93% 0.94% 0.96% 0.00% 0.00%
Construction 3.72% 2.85% 0.80% 0.38% 0.33% 1.51% 0.45% 0.33% 0.32% 0.48%
Working Capital 5.14% 3.26% 2.92% 2.53% 1.56% 1.89% 1.62% 1.56% 1.44% 1.65%
Others 2.16% 2.04% 1.51% 2.31% 2.07% 2.26% 2.03% 2.07% 1.98% 1.81%
Gros s loansGros s loansGros s loansGros s loans 2.24%2.24%2.24%2.24% 1.69%1.69%1.69%1.69% 1.40%1.40%1.40%1.40% 1.18%1.18%1.18%1.18% 0.84%0.84%0.84%0.84% 0.98%0.98%0.98%0.98% 0.89%0.89%0.89%0.89% 0.84%0.84%0.84%0.84% 0.83%0.83%0.83%0.83% 0.86%0.86%0.86%0.86%
Loan los s coverage (%)Loan los s coverage (%)Loan los s coverage (%)Loan los s coverage (%) 119%119%119%119% 158%158%158%158% 131%131%131%131% 129%129%129%129% 136%136%136%136% 130%130%130%130% 128%128%128%128% 136%136%136%136% 131%131%131%131% 126%126%126%126%
Source: Companies, DBS Bank, AllianceDBS
Industry Focus
Malaysian Banks
Page 17
AHB: Loan and NPL trend
FYEFYEFYEFYE DECDECDECDEC DECDECDECDEC DECDECDECDEC DECDECDECDEC DECDECDECDEC Dec-14Dec-14Dec-14Dec-14 Mar-15Mar-15Mar-15Mar-15 Jun-15Jun-15Jun-15Jun-15 Sep-15Sep-15Sep-15Sep-15 Dec-15Dec-15Dec-15Dec-15
Gros s loansGros s loansGros s loansGros s loans FY11FY11FY11FY11 FY12FY12FY12FY12 FY13FY13FY13FY13 FY14FY14FY14FY14 FY14FY14FY14FY14 4QCY144QCY144QCY144QCY14 1QCY151QCY151QCY151QCY15 2QCY152QCY152QCY152QCY15 3QCY153QCY153QCY153QCY15 4QCY154QCY154QCY154QCY15
Purchase of Securities 176.3 137.3 433.2 664.5 881.5 664.5 696.2 764.6 742.6 881.5
Purchase of Transport Vehicles 9,112.9 10,032.8 11,232.5 11,494.8 12,490.4 11,494.8 11,713.9 11,842.9 12,207.7 12,490.4
Broad Property Sector 8,445.8 9,940.8 10,995.0 11,551.5 12,336.8 11,551.5 11,711.4 11,987.3 12,215.7 12,336.8
- Residential (include Cagamas) 4,654.5 5,202.6 5,985.9 5,737.8 6,427.6 5,737.8 6,467.7 6,250.6 6,345.2 6,427.6
- Non Residential 3,791.4 4,738.3 5,009.1 5,813.7 5,909.2 5,813.7 5,243.7 5,736.7 5,870.6 5,909.2
Non-Land Fixed Assets 326.5 330.4 238.1 326.2 240.6 326.2 379.7 264.6 248.4 240.6
Personal Use 827.1 964.4 941.0 887.1 745.6 887.1 888.6 766.6 764.4 745.6
Credit Cards 93.1 85.3 82.1 81.9 83.8 81.9 83.6 82.1 82.1 83.8
Consumption Cr/Consumer Durables 1.0 0.9 0.9 0.8 0.9 0.8 0.9 0.8 0.8 0.9
Construction 1,634.9 2,119.6 2,082.7 3,146.8 3,185.6 3,146.8 3,037.3 2,932.9 2,974.8 3,185.6
Working Capital 9,901.8 9,859.2 10,230.3 11,689.4 13,127.8 11,689.4 11,055.8 12,478.9 12,329.0 13,127.8
Others 560.3 1,253.9 1,224.7 1,214.5 786.5 1,214.5 1,020.7 1,058.8 824.8 786.5
Gros s loansGros s loansGros s loansGros s loans 31,079.731,079.731,079.731,079.7 34,724.634,724.634,724.634,724.6 37,460.537,460.537,460.537,460.5 41,057.341,057.341,057.341,057.3 43,879.443,879.443,879.443,879.4 41,057.341,057.341,057.341,057.3 40,588.340,588.340,588.340,588.3 42,179.642,179.642,179.642,179.6 42,390.442,390.442,390.442,390.4 43,879.443,879.443,879.443,879.4
Impaired loansImpaired loansImpaired loansImpaired loans
Purchase of Securities 3.0 13.8 46.3 10.4 0.8 10.4 9.5 1.8 2.1 0.8
Purchase of Transport Vehicles 106.6 54.8 75.4 86.4 82.0 86.4 93.5 98.6 73.4 82.0
Broad Property Sector 417.2 355.9 295.8 262.3 222.3 262.3 264.3 258.1 294.6 222.3
- Residential (include Cagamas) 382.8 329.4 272.1 231.0 180.1 231.0 237.7 230.7 237.0 180.1
- Non Residential 34.4 26.6 23.7 31.3 42.2 31.3 26.5 27.3 57.6 42.2
Non-Land Fixed Assets 17.8 5.1 0.3 0.3 0.2 0.3 0.3 0.3 0.4 0.2
Personal Use 12.7 6.7 7.9 7.8 20.5 7.8 5.7 14.3 14.8 20.5
Credit Cards 0.5 0.5 0.5 0.3 0.4 0.3 0.4 0.5 0.3 0.4
Consumption Cr/Consumer Durables 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Construction 63.5 61.4 65.8 77.1 102.6 77.1 86.3 85.3 118.3 102.6
Working Capital 260.1 281.0 234.9 286.7 372.0 286.7 314.6 384.6 404.1 372.0
Others 1.5 11.2 14.1 16.4 33.3 16.4 20.0 18.3 29.5 33.3
Gros s impaired loansGros s impaired loansGros s impaired loansGros s impaired loans 883.0883.0883.0883.0 790.4790.4790.4790.4 740.9740.9740.9740.9 747.8747.8747.8747.8 834.2834.2834.2834.2 747.8747.8747.8747.8 794.7794.7794.7794.7 861.8861.8861.8861.8 937.5937.5937.5937.5 834.2834.2834.2834.2
NPL (%)NPL (%)NPL (%)NPL (%)
Purchase of Securities 1.70% 10.05% 10.69% 1.57% 0.09% 1.57% 1.37% 0.24% 0.28% 0.09%
Purchase of Transport Vehicles 1.17% 0.55% 0.67% 0.75% 0.66% 0.75% 0.80% 0.83% 0.60% 0.66%
Broad Property Sector 4.94% 3.58% 2.69% 2.27% 1.80% 2.27% 2.26% 2.15% 2.41% 1.80%
- Residential (include Cagamas) 8.2% 6.3% 4.55% 4.03% 2.8% 4.03% 3.68% 3.69% 3.73% 2.8%
- Non Residential 0.9% 0.6% 0.47% 0.54% 0.7% 0.54% 0.51% 0.48% 0.98% 0.7%
Non-Land Fixed Assets 5.44% 1.53% 0.12% 0.09% 0.07% 0.09% 0.09% 0.12% 0.17% 0.07%
Personal Use 1.54% 0.70% 0.84% 0.88% 2.75% 0.88% 0.64% 1.87% 1.93% 2.75%
Credit Cards 0.54% 0.60% 0.58% 0.40% 0.46% 0.40% 0.51% 0.56% 0.42% 0.46%
Consumption Cr/Consumer Durables 3.44% 3.37% 0.16% 1.62% 1.88% 1.62% 1.48% 2.06% 2.15% 1.88%
Construction 3.89% 2.90% 3.16% 2.45% 3.22% 2.45% 2.84% 2.91% 3.98% 3.22%
Working Capital 2.63% 2.85% 2.30% 2.45% 2.83% 2.45% 2.85% 3.08% 3.28% 2.83%
Others 0.27% 0.89% 1.15% 1.35% 4.24% 1.35% 1.96% 1.73% 3.58% 4.24%
Gros s loansGros s loansGros s loansGros s loans 2.84%2.84%2.84%2.84% 2.28%2.28%2.28%2.28% 1.98%1.98%1.98%1.98% 1.82%1.82%1.82%1.82% 1.90%1.90%1.90%1.90% 1.82%1.82%1.82%1.82% 1.96%1.96%1.96%1.96% 2.04%2.04%2.04%2.04% 2.21%2.21%2.21%2.21% 1.90%1.90%1.90%1.90%
Loan los s cove rage (%)Loan los s cove rage (%)Loan los s cove rage (%)Loan los s cove rage (%) 73%73%73%73% 71%71%71%71% 74%74%74%74% 76%76%76%76% 64%64%64%64% 76%76%76%76% 68%68%68%68% 64%64%64%64% 61%61%61%61% 64%64%64%64%
Source: Companies, DBS Bank, AllianceDBS
Industry Focus
Malaysian Banks
Page 18
AFG: Loan and NPL trend
FYEFYEFYEFYE MARMARMARMAR MARMARMARMAR MARMARMARMAR MARMARMARMAR MARMARMARMAR Dec-14Dec-14Dec-14Dec-14 Mar-15Mar-15Mar-15Mar-15 Jun-15Jun-15Jun-15Jun-15 Sep-15Sep-15Sep-15Sep-15 Dec-15Dec-15Dec-15Dec-15
Gros s loansGros s loansGros s loansGros s loans FY11FY11FY11FY11 FY12FY12FY12FY12 FY13FY13FY13FY13 FY14FY14FY14FY14 FY15FY15FY15FY15 4QCY144QCY144QCY144QCY14 1QCY151QCY151QCY151QCY15 2QCY152QCY152QCY152QCY15 3QCY153QCY153QCY153QCY15 4QCY154QCY154QCY154QCY15
Purchase of Securities 342.1 394.4 823.3 1,607.3 1,597.2 1,571.9 1,597.2 1,518.2 1,435.4 1,492.2
Purchase of Transport Vehicles 746.7 590.5 661.8 1,117.8 1,427.0 1,381.2 1,427.0 1,369.7 1,305.9 1,252.1
Broad Property Sector 11,411.7 12,626.3 14,669.3 18,098.2 21,587.9 20,728.9 21,587.9 21,981.0 22,159.8 22,457.5
- Residential (include Cagamas) 8,622.6 9,397.1 11,081.9 13,337.6 15,137.5 14,748.6 15,137.5 15,413.0 15,544.9 15,731.7
- Non Residential 2,789.1 3,229.2 3,587.4 4,760.6 6,450.5 5,980.3 6,450.5 6,568.0 6,614.9 6,725.8
Non-Land Fixed Assets 97.4 112.1 114.4 155.4 209.6 195.0 209.6 207.6 198.1 201.3
Personal Use 2,141.9 2,155.8 1,981.7 2,047.3 2,276.1 2,219.7 2,276.1 2,371.2 2,465.2 2,518.0
Credit Cards 679.8 635.8 617.5 601.3 653.1 672.8 653.1 655.0 663.1 680.1
Construction 222.2 193.9 312.2 436.3 564.1 544.0 564.1 502.0 604.2 661.3
Working Capital 5,413.8 5,934.9 6,093.7 6,379.8 6,623.1 6,383.3 6,623.1 6,531.0 6,773.5 6,911.7
Others 606.7 1,518.0 1,892.7 1,756.0 1,985.1 1,940.4 1,985.1 2,211.1 2,361.3 2,475.8
Gros s loansGros s loansGros s loansGros s loans 21,662.321,662.321,662.321,662.3 24,161.624,161.624,161.624,161.6 27,166.727,166.727,166.727,166.7 32,199.432,199.432,199.432,199.4 33,197.233,197.233,197.233,197.2 35,637.135,637.135,637.135,637.1 36,923.136,923.136,923.136,923.1 37,346.937,346.937,346.937,346.9 37,966.437,966.437,966.437,966.4 38,649.938,649.938,649.938,649.9
Impaired loansImpaired loansImpaired loansImpaired loans
Purchase of Securities 10.3 5.4 5.1 5.2 0.5 0.7 0.5 0.0 0.1 -
Purchase of Transport Vehicles 9.0 5.7 5.6 9.8 8.3 8.6 8.3 8.6 10.0 12.8
Broad Property Sector 283.4 266.7 282.4 254.2 255.9 276.3 255.9 244.0 281.9 267.3
- Residential (include Cagamas) 209.1 191.4 213.7 222.8 233.9 256.4 233.9 227.0 233.5 220.9
- Non Residential 74.4 75.3 68.7 31.4 22.0 19.9 22.0 17.0 48.4 46.4
Non-Land Fixed Assets 0.2 0.2 0.2 0.1 0.5 - 0.5 0.9 1.2 1.0
Personal Use 37.2 31.1 32.1 30.3 27.2 33.2 27.2 30.9 34.2 37.3
Credit Cards 12.7 9.9 9.1 7.8 7.6 8.5 7.6 8.7 8.7 8.8
Construction 12.8 11.9 11.3 7.2 4.0 5.1 4.0 3.5 3.6 3.8
Working Capital 316.0 256.9 197.3 92.8 58.2 53.9 58.2 60.7 77.4 72.4
Others 59.9 41.4 36.1 35.4 18.5 19.3 18.5 18.8 9.7 14.8
Gros s impa ired loansGros s impa ired loansGros s impa ired loansGros s impa ired loans 741.3741.3741.3741.3 629.2629.2629.2629.2 579.2579.2579.2579.2 442.8442.8442.8442.8 380.7380.7380.7380.7 405.6405.6405.6405.6 380.7380.7380.7380.7 376.1376.1376.1376.1 426.7426.7426.7426.7 418.3418.3418.3418.3
NPL (%)NPL (%)NPL (%)NPL (%)
Purchase of Securities 3.00% 1.38% 0.62% 0.32% 0.03% 0.05% 0.03% 0.00% 0.00% 0.00%
Purchase of Transport Vehicles 1.20% 0.97% 0.85% 0.87% 0.58% 0.62% 0.58% 0.63% 0.77% 1.03%
Broad Property Sector 2.48% 2.11% 1.92% 1.40% 1.19% 1.33% 1.19% 1.11% 1.27% 1.19%
- Residential (include Cagamas) 2.42% 2.04% 1.93% 1.67% 1.55% 1.74% 1.55% 1.47% 1.50% 1.40%
- Non Residential 2.67% 2.33% 1.91% 0.66% 0.34% 0.33% 0.34% 0.26% 0.73% 0.69%
Non-Land Fixed Assets 0.19% 0.17% 0.18% 0.06% 0.26% 0.00% 0.26% 0.44% 0.60% 0.48%
Personal Use 1.73% 1.44% 1.62% 1.48% 1.19% 1.49% 1.19% 1.30% 1.39% 1.48%
Credit Cards 1.87% 1.56% 1.47% 1.31% 1.17% 1.26% 1.17% 1.33% 1.32% 1.29%
Construction 5.75% 6.12% 3.63% 1.66% 0.71% 0.94% 0.71% 0.71% 0.59% 0.58%
Working Capital 5.84% 4.33% 3.24% 1.46% 0.88% 0.84% 0.88% 0.93% 1.14% 1.05%
Others 9.87% 2.73% 1.91% 2.01% 0.93% 1.00% 0.93% 0.85% 0.41% 0.60%
Gros s loansGros s loansGros s loansGros s loans 3.42%3.42%3.42%3.42% 2.60%2.60%2.60%2.60% 2.13%2.13%2.13%2.13% 1.38%1.38%1.38%1.38% 1.15%1.15%1.15%1.15% 1.14%1.14%1.14%1.14% 1.03%1.03%1.03%1.03% 1.01%1.01%1.01%1.01% 1.12%1.12%1.12%1.12% 1.08%1.08%1.08%1.08%
Loan los s coverage (%)Loan los s coverage (%)Loan los s coverage (%)Loan los s coverage (%) 90%90%90%90% 88%88%88%88% 82%82%82%82% 93%93%93%93% 103%103%103%103% 94%94%94%94% 103%103%103%103% 105%105%105%105% 85%85%85%85% 93%93%93%93%
Source: Companies, DBS Bank, AllianceDBS
Industry Focus
Malaysian Banks
Page 19
Ind: Loan and NPL trend
Gros s loansGros s loansGros s loansGros s loans CY11CY11CY11CY11 CY12CY12CY12CY12 CY13CY13CY13CY13 CY14CY14CY14CY14 CY14CY14CY14CY14 4QCY144QCY144QCY144QCY14 1QCY151QCY151QCY151QCY15 2QCY152QCY152QCY152QCY15 3QCY153QCY153QCY153QCY15 4QCY154QCY154QCY154QCY15
Purchase of Securities 45,005.1 56,670.7 68,868.9 76,654.6 75,185.1 76,654.6 77,310.8 75,602.9 74,502.3 75,185.1
Purchase of Transport Vehicles 143,656.5 153,824.3 163,455.8 165,986.4 169,810.5 165,986.4 167,742.6 168,234.5 169,456.2 169,810.5
Broad Property Sector 379,209.4 435,294.1 499,453.5 568,468.8 634,026.1 568,468.8 587,828.2 604,506.2 619,362.5 634,026.1
- Residential (include Cagamas) 269,170.8 303,919.1 344,833.7 390,418.6 437,035.4 390,418.6 402,889.3 414,568.0 424,797.0 437,035.4
- Non Residential 110,038.6 131,375.0 154,619.8 178,050.3 196,990.7 178,050.3 184,938.8 189,938.2 194,565.5 196,990.7
Non-Land Fixed Assets 9,130.5 8,997.6 9,674.2 10,507.5 10,060.0 10,507.5 10,719.3 10,379.1 10,900.2 10,060.0
Personal Use 50,770.5 55,292.3 57,945.2 60,169.1 63,701.9 60,169.1 59,769.6 61,319.5 62,461.5 63,701.9
Credit Cards 32,684.7 33,261.2 35,058.9 35,604.3 36,043.9 35,604.3 35,588.5 34,723.0 34,746.6 36,043.9
Consumption Cr/Consumer Durables 78.9 87.8 571.5 635.8 144.2 635.8 730.1 148.8 145.0 144.2
Construction 25,322.9 30,705.1 33,693.4 39,625.0 42,656.1 39,625.0 39,444.9 39,754.0 41,276.1 42,656.1
Working Capital 252,891.3 263,978.5 288,444.1 316,157.4 349,173.1 316,157.4 320,898.3 328,437.1 345,234.2 349,173.1
Others 64,754.5 69,872.0 68,490.8 65,909.2 64,338.3 65,909.2 61,875.7 64,589.5 65,975.6 64,338.3
Gros s loansGros s loansGros s loansGros s loans 1,003,504.31,003,504.31,003,504.31,003,504.3 1,107,983.51,107,983.51,107,983.51,107,983.5 1,225,656.21,225,656.21,225,656.21,225,656.2 1,339,718.01,339,718.01,339,718.01,339,718.0 1,445,139.31,445,139.31,445,139.31,445,139.3 1,339,718.01,339,718.01,339,718.01,339,718.0 1,361,908.01,361,908.01,361,908.01,361,908.0 1,387,694.61,387,694.61,387,694.61,387,694.6 1,424,060.21,424,060.21,424,060.21,424,060.2 1,445,139.31,445,139.31,445,139.31,445,139.3
Impa ired loansImpa ired loansImpa ired loansImpa ired loans
Purchase of Securities 467.8 448.6 220.4 317.7 372.9 317.7 462.0 376.0 341.0 372.9
Purchase of Transport Vehicles 1,747.1 1,802.9 2,096.1 2,074.2 1,616.6 2,074.2 1,902.0 1,787.1 1,751.1 1,616.6
Broad Property Sector 7,832.9 6,942.2 6,465.2 6,358.8 6,816.6 6,358.8 6,613.6 6,681.4 7,036.5 6,816.6
- Residential (include Cagamas) 6,434.4 5,660.9 5,269.5 5,017.6 5,030.2 5,017.6 5,059.4 5,056.2 5,159.6 5,030.2
- Non Residential 1,398.5 1,281.2 1,195.7 1,341.2 1,786.5 1,341.2 1,554.2 1,625.2 1,877.0 1,786.5
Non-Land Fixed Assets 471.8 224.5 237.1 181.1 174.7 181.1 180.6 162.3 166.8 174.7
Personal Use 974.0 1,010.0 997.0 1,023.2 1,191.7 1,023.2 1,028.3 1,000.6 1,041.5 1,191.7
Credit Cards 572.9 437.5 452.0 431.2 479.8 431.2 442.0 447.5 469.1 479.8
Consumption Cr/Consumer Durables 4.2 3.3 6.6 7.4 1.4 7.4 11.0 2.1 2.0 1.4
Construction 2,132.9 1,697.8 1,678.1 2,755.4 2,494.4 2,755.4 2,266.5 2,434.0 2,482.4 2,494.4
Working Capital 10,825.3 8,696.5 9,154.1 7,889.3 8,432.0 7,889.3 8,165.8 8,182.6 8,327.3 8,432.0
Others 1,790.6 1,257.1 1,161.2 1,090.7 1,522.3 1,090.7 1,148.6 1,401.7 1,402.7 1,522.3
Gros s impa ired loansGros s impa ired loansGros s impa ired loansGros s impa ired loans 26,819.626,819.626,819.626,819.6 22,520.422,520.422,520.422,520.4 22,467.722,467.722,467.722,467.7 22,128.922,128.922,128.922,128.9 23,102.523,102.523,102.523,102.5 22,128.922,128.922,128.922,128.9 22,220.322,220.322,220.322,220.3 22,475.322,475.322,475.322,475.3 23,020.523,020.523,020.523,020.5 23,102.523,102.523,102.523,102.5
NPL (%)NPL (%)NPL (%)NPL (%)
Purchase of Securities 1.04% 0.79% 0.32% 0.41% 0.50% 0.41% 0.60% 0.50% 0.46% 0.50%
Purchase of Transport Vehicles 1.22% 1.17% 1.28% 1.25% 0.95% 1.25% 1.13% 1.06% 1.03% 0.95%
Broad Property Sector 2.07% 1.59% 1.29% 1.12% 1.08% 1.12% 1.13% 1.11% 1.14% 1.08%
- Residential (include Cagamas) 2.39% 1.86% 1.53% 1.29% 1.15% 1.29% 1.26% 1.22% 1.21% 1.15%
- Non Residential 1.27% 0.98% 0.77% 0.75% 0.91% 0.75% 0.84% 0.86% 0.96% 0.91%
Non-Land Fixed Assets 5.17% 2.50% 2.45% 1.72% 1.74% 1.72% 1.68% 1.56% 1.53% 1.74%
Personal Use 1.92% 1.83% 1.72% 1.70% 1.87% 1.70% 1.72% 1.63% 1.67% 1.87%
Credit Cards 1.75% 1.32% 1.29% 1.21% 1.33% 1.21% 1.24% 1.29% 1.35% 1.33%
Consumption Cr/Consumer Durables 5.36% 3.75% 1.15% 1.16% 1.00% 1.16% 1.50% 1.39% 1.37% 1.00%
Construction 8.42% 5.53% 4.98% 6.95% 5.85% 6.95% 5.75% 6.12% 6.01% 5.85%
Working Capital 4.28% 3.29% 3.17% 2.50% 2.41% 2.50% 2.54% 2.49% 2.41% 2.41%
Others 2.77% 1.80% 1.70% 1.65% 2.37% 1.65% 1.86% 2.17% 2.13% 2.37%
Gros s loansGros s loansGros s loansGros s loans 2.67%2.67%2.67%2.67% 2.03%2.03%2.03%2.03% 1.83%1.83%1.83%1.83% 1.65%1.65%1.65%1.65% 1.60%1.60%1.60%1.60% 1.65%1.65%1.65%1.65% 1.63%1.63%1.63%1.63% 1.62%1.62%1.62%1.62% 1.62%1.62%1.62%1.62% 1.60%1.60%1.60%1.60%
Source: Companies, DBS Bank, AllianceDBS
AppendixAppendixAppendixAppendix AppeAppeAppeAppendixndixndixndix
Industry Focus
Malaysian Banks
Page 20
Net profitNet profitNet profitNet profit
500
1,000
1,500
2,000
2,500
AMMB Affin AFG CIMB HLB MAY PBK RHBC
Net profit (RM m)
4Q14 1Q15 2Q15 3Q15 4Q15
4Q15 sector net profit contracted by 1% q-o-q, drragged mainly by high provisions.
PrePrePrePre----provision profitprovision profitprovision profitprovision profit
500
1,000
1,500
2,000
2,500
3,000
3,500
AMMB Affin AFG CIMB HLB MAY PBK RHBC
Pre-provision profit (RM m)
4Q14 1Q15 2Q15 3Q15 4Q15
Pre-provision profits grew by a marginal 1% q-o-q across the sector as revenue growth was negated by higher expenses.
NonNonNonNon----interest income interest income interest income interest income
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
AMMB Affin AFG CIMB HLB MAY PBK RHBC
Non-interest income (RM m)
4Q14 1Q15 2Q15 3Q15 4Q15
MAY and HLB reported strong non-interest income on forex gains. RHBC’s non-interest income grew on the back of strong asset management fee and underwriting fee growth.
NonNonNonNon----interest income to total reveneueinterest income to total reveneueinterest income to total reveneueinterest income to total reveneue 31% 34%
22%
27%
20%
36%
22%
40%
38%
38%
20%
30%
23%
29%
23%
34%
35%
35%
23%
30%
27%
25%
24%
33%
32%
32%
25% 27%
24%
31%
26% 3
0%33%
34%
23%
29%
26%
31%
26%
34%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
AMMB Affin AFG CIMB HLB MAY PBK RHBC
Non-int income to total revenue
4Q14 1Q15 2Q15 3Q15 4Q15
Correspondingly, HLB and RHBC reported higher non-interest income to total income ratio.
NIMNIMNIMNIM
2.42%
2.09%
2.23%
2.82%
1.95%
2.17%
2.18%
2.03%
2.24%
2.35%
1.83%
1.96%
2.61%
1.80%
2.36%
2.08%
1.96%
2.12%
2.12%
1.94%
2.12%
2.64%
1.78%
2.39%
2.07%
1.94%
2.12%
2.15%
2.10%
2.19%
2.68%
1.78%
2.54%
2.13%
2.07%
2.20%
2.02%
2.04%
2.18%
2.70%
1.81%
2.41%
2.16%
2.12%
2.18%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
AMMB Affin AFG CIMB HLB MAY PBK RHBC Industry(est)
NIM (incl Islamic banking income)
4Q14 1Q15 2Q15 3Q15 4Q15
NIM compression were mixed across the sector, with CIMB, HLB, PBK and RHBC experiencing a lift in NIM while the rest experienced a squeeze. Source: Companies, DBS Bank, AllianceDBS
CostCostCostCost----totototo----income ratioincome ratioincome ratioincome ratio
49%
51%
45%
62%
45% 51%
28%
59%
49%
47%
60%
54%
64%
46% 50%
31%
54%
51%
51% 5
8%
49%
64%
45% 49%
31%
57%
50%54% 60%
45%
59%
45%
45%
30%
77%
52%
63%
60%
48% 55% 61%
49%
30%
57%
53%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
AMMB Affin AFG CIMB HLB MAY PBK RHBC Industry(est)
Cost-to-income
4Q14 1Q15 2Q15 3Q15 4Q15
HLB’s cost to income ratio surged due to the MSS cost incurred. Although AMMB’s incurred a one-off regulatory penalty as well, the surge in cost-to-income ratio is also due to a lower base. PBK’s ratio remains the best in class.
Industry Focus
Malaysian Banks
Page 21
Loan growth (qLoan growth (qLoan growth (qLoan growth (q----oooo----q)q)q)q)
1%
4%
3%
6%
3%
6%
3%
5%
5%
0%
-1%
4%
2%
3%
2%
3%
1%
2%
-2%
4%
1%
3%
3%
4%
2%
1%
2%
1%
0%
2%
6%
2%
7%
4%
3%
5%
0%
4%
2%
0%
2%
-1%
2%
1%
0%
-4%
-2%
0%
2%
4%
6%
8%
AMMB Affin AFG CIMB HLB MAY PBK RHBC Industry(est)
Loan growth (q-o-q)
4Q14 1Q15 2Q15 3Q15 4Q15
Sector loans were flat in 4Q15. MAY registered a contraction in loans. AHB’s strong loan growth was driven by working capital loans.
Deposit growth (qDeposit growth (qDeposit growth (qDeposit growth (q----oooo----q)q)q)q)
5%
3%
2%
7%
2%
5%
3%
6%
5%
2%
-4%
8%
5%
3%
2%
3%
1%
3%
-2%
2%
-2% -1
%
3%
1%
3%
-1%
1%
-1%
-7%
0%
5%
2%
5%
0% 1%
3%
2%
9%
-1%
2%
1%
0%
2%
-1%
1%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
AMMB Affin AFG CIMB HLB MAY PBK RHBC Industry(est)
Deposit growth (q-o-q)
4Q14 1Q15 2Q15 3Q15 4Q15
Sector deposit grew 1% in 4Q15. Deposit competition expected to remain intense.
Loan growth (yLoan growth (yLoan growth (yLoan growth (y----oooo----y)y)y)y)
1%
10%
16%
13%
6%
13%
11%
17%
12%
-2%
6%
15%
12%
9%
14%
12% 14%
11%
-2%
10% 13%
16%
9%
16%
11%
9%
12%
0%
7%
10%
19%
11%
20%
13%
10%
15%
-1%
7% 8
%
13%
10% 12%
12%
6%
10%
-5%
0%
5%
10%
15%
20%
25%
AMMB Affin AFG CIMB HLB MAY PBK RHBC Industry(est)
Loan growth (y-o-y)
4Q14 1Q15 2Q15 3Q15 4Q15
Source: Companies, DBS Bank, AllianceDBS
Deposit growth (yDeposit growth (yDeposit growth (yDeposit growth (y----oooo----y)y)y)y) 3%
7%
13%
7%
5%
11%
10%
14%
9%
3%
5%
14%
13%
7%
13%
10%
11%
11%
3% 5
%
11%
10%
8%
12%
12%
5%
9%
5%
-6%
8%
18%
11%
14%
10%
7%
11%
1%
0%
5%
13%
10%
9% 9%
1%
8%
-10%
-5%
0%
5%
10%
15%
20%
AMMB Affin AFG CIMB HLB MAY PBK RHBC Industry(est)
Deposit growth (y-o-y)
4Q14 1Q15 2Q15 3Q15 4Q15
Loan to deposit ratio (LDR)Loan to deposit ratio (LDR)Loan to deposit ratio (LDR)Loan to deposit ratio (LDR)
95%
80% 85% 91%
80%
92%
88%
90%
88%94%
82%
82% 89%
80%
92%
88%
89%
87%94%
84%
84% 92%
80%
94%
87% 91%
88%95%
90%
85% 93%
80%
96%
90%
93%
90%
94%
86%
88%
91%
81%
95%
90% 95%
90%
0%
20%
40%
60%
80%
100%
120%
AMMB Affin AFG CIMB HLB MAY PBK RHBC Industry(est)
LDR
4Q14 1Q15 2Q15 3Q15 4Q15
Industry loan-to-deposit ratio stood at 90%. Source: Companies, DBS Bank, AllianceDBS
CASA to total depositsCASA to total depositsCASA to total depositsCASA to total deposits
20.5%
20.0%
34.8%
35.1%
25.7%
35.2%
25.0%
21.7%
20.3%
19.8%
33.6%
34.4%
25.8%
35.4%
25.0%
22.3%
20.9%
19.5%
34.6%
35.4%
25.6%
35.0%
24.1%
23.4%
21.1%
21.1%
33.6%
34.4%
24.9%
35.0%
24.7%
23.3%
20.4%
19.2%
35.0%
34.4%
25.5%
33.7%
24.2%
24.0%
0%
5%
10%
15%
20%
25%
30%
35%
40%
AMMB Affin AFG CIMB HLB MAY PBK RHBC
CASA to total deposit
4Q14 1Q15 2Q15 3Q15 4Q15
Banks continue to focus on shoring up low cost deposits (CASA) to fight NIM compression.
Industry Focus
Malaysian Banks
Page 22
Credit costsCredit costsCredit costsCredit costs
-0.07%
-0.13%
0.07%
0.40%
-0.05%
0.03%
0.03%
0.03%
-0.07%
0.31%
0.04%
0.20%
-0.01%
0.07%
0.03%
0.03%
0.01%
0.03%
0.04%
0.19%
0.02% 0.09%
0.02%
-0.03%
-0.07%
0.07%
0.05%
0.18%
0.02%
0.17%
0.04%
0.03%
-0.08%
0.05%
0.01%
0.24%
0.05% 0.11%
-0.04%
0.16%
-0.20%
-0.10%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
AMMB Affin AFG CIMB HLB MAY PBK RHBC
Credit cost
4Q14 1Q15 2Q15 3Q15 4Q15
Provisions have started to normalize at most banks, with the exception of AMMB. CIMB’s credit cost remains high due to its Indonesian operations.
Gross NPL ratioGross NPL ratioGross NPL ratioGross NPL ratio
1.9%
1.8%
1.1%
3.1%
1.0%
1.5%
0.6%
2.0%
1.8%
1.8%
2.0%
1.0%
3.2%
0.9%
1.5%
0.6%
2.0%
1.8%
1.8% 2.0%
1.0%
3.3%
0.8%
1.6%
0.5%
2.0%
1.8%
2.0% 2.2%
1.2%
3.4%
0.8%
1.5%
0.5%
1.9%
1.9%
1.8%
1.9%
1.1%
3.0%
0.9%
1.9%
0.5%
1.9%
1.8%
0%
1%
1%
2%
2%
3%
3%
4%
4%
AMMB Affin AFG CIMB HLB MAY PBK RHBC Industry(ex PBK)
Gross NPL ratio
4Q14 1Q15 2Q15 3Q15 4Q15
MAY reported an uptick in NPL ratio attributable to specific accoounts in Labuan, Greater China and HK.
CET1, TierCET1, TierCET1, TierCET1, Tier----1 C1 C1 C1 CAR and total CAR (as at Dec 2015AR and total CAR (as at Dec 2015AR and total CAR (as at Dec 2015AR and total CAR (as at Dec 2015) ) ) )
16.2%
14.3% 1
7.1%
15.8%
16.2%
17.7%
15.5%
15.4%
12.1%
11.9%
11.3%
12.7%
14.4%
14.5%
12.0%
12.0%
10.8%
11.9%
11.3%
11.5%
13.3%
12.8%
10.9%
11.6%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
AMMB Affin AFG CIMB HLB MAY PBK RHBC
Total CAR Tier 1 CAR CET1 CAR
Total CAR Total CAR Total CAR Total CAR –––– remains strongremains strongremains strongremains strong 15.7%
13.6%
12.9%
14.5%
14.7%
16.2%
15.8%
14.5%
14.8%
15.8%
13.6%
13.0% 14.9%
13.6% 15.3%
15.2%
14.1%
14.4%
16.1%
13.4%
13.0%
13.4%
14.3%
15.8%
15.4%
15.9%
14.6%
15.6%
13.5%
13.6%
13.4%
13.7%
15.0%
14.8%
15.7%
14.4%16.2%
14.3%
17.1%
15.8%
16.2%
17.7%
15.5%
15.4%
16.0%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
AMMB Affin AFG CIMB HLB MAY PBK RHBC Industry(est)
RWCAR
4Q14 1Q15 2Q15 3Q15 4Q15
Source: Companies, DBS Bank, AllianceDBS
Industry Focus
Malaysian Banks
Page 23
Malaysian Banks: 4QCY15 results (qMalaysian Banks: 4QCY15 results (qMalaysian Banks: 4QCY15 results (qMalaysian Banks: 4QCY15 results (q----oooo----q and yq and yq and yq and y----oooo----y comparison) y comparison) y comparison) y comparison)
Alliance Financial GroupAlliance Financial GroupAlliance Financial GroupAlliance Financial Group AMMBAMMBAMMBAMMB CIMBCIMBCIMBCIMB RMmRMmRMmRMm 3QFY163QFY163QFY163QFY16 3QFY153QFY153QFY153QFY15 2QFY162QFY162QFY162QFY16 yyyy----oooo----y y y y qqqq----oooo----q q q q 3QFY163QFY163QFY163QFY16 3QFY153QFY153QFY153QFY15 2QFY162QFY162QFY162QFY16 yyyy----oooo----y y y y qqqq----oooo----q q q q 4QFY154QFY154QFY154QFY15 4QFY144QFY144QFY144QFY14 3QFY153QFY153QFY153QFY15 yyyy----oooo----y y y y qqqq----oooo----q q q q Net interest income 216 214 213 1% 1% 395 487 432 -19% -9% 2,461 2,242 2,416 10% 2% Islamic banking income 63 58 61 8% 4% 208 207 200 1% 4% 417 377 386 10% 8% Non-interest income 82 78 92 5% -10% 295 312 299 -5% -1% 1,167 976 1,038 20% 12% Operating incomeOperating incomeOperating incomeOperating income 361361361361 350350350350 366366366366 3%3%3%3% ----1%1%1%1% 898898898898 1,0061,0061,0061,006 931931931931 ----11%11%11%11% ----4%4%4%4% 4,0454,0454,0454,045 3,5953,5953,5953,595 3,8403,8403,8403,840 13%13%13%13% 5%5%5%5% Operating expenses (175) (156) (166) 12% 5% (567) (496) (500) 14% 13% (2,211) (2,239) (2,261) -1% -2% PrePrePrePre----provision profitprovision profitprovision profitprovision profit 186186186186 193193193193 200200200200 ----4%4%4%4% ----7%7%7%7% 331331331331 510510510510 432432432432 ----35%35%35%35% ----23%23%23%23% 1,8331,8331,8331,833 1,3561,3561,3561,356 1,5801,5801,5801,580 35%35%35%35% 16%16%16%16% Provisions & Impairments (5) (25) (19) -76% 81 83 66 nm nm (717) (1,067) (529) nm 36% Associates nm nm (5) 5 4 -199% -241% 19 19 24 0% nm Pre-tax profit 182 168 181 8% 1% 406 589 501 -31% -19% 1,132 385 1,075 194% 5% Net profitNet profitNet profitNet profit 136136136136 126126126126 135135135135 7%7%7%7% 1%1%1%1% 300300300300 417417417417 383383383383 ----28%28%28%28% ----22%22%22%22% 826826826826 200200200200 804804804804 312%312%312%312% 3%3%3%3% NIM (%) 2.18 2.23 2.19 (0.05) (0.01) 2.02 2.42 2.15 (0.40) (0.13) 2.70 2.82 2.68 (0.12) 0.02 Cost-to-income (%) 48.4 44.7 45.4 3.7 3.1 63.1 49.3 53.7 13.8 9.5 54.7 62.3 58.86 (7.6) (4.2) ROE (%) 11.7 11.6 11.8 0.0 (0.1) 8.1 12.0 10.3 (3.9) (2.2) 8.18 2.16 8.2 6.0 (0.0) ROA (%) 1.0 1.0 1.0 0.0 (0.0) 0.9 1.3 1.2 (0.4) (0.3) 0.7 0.2 0.7 0.5 0.0 Gross NPL ratio (%) 1.1 1.1 1.2 (0.1) (0.1) 1.8 1.9 2.0 (0.1) (0.2) 3.0 3.1 3.4 (0.0) (0.4) Loan loss coverage (%) 93.0 94.2 85.5 (1.2) 7.5 94.8 106.0 92.6 (11.2) 2.2 84.7 82.7 76.6 2.0 8.1 LD ratio (%) 88.0 85.1 85.4 2.8 2.6 94.0 95.3 95.5 (1.3) (1.5) 91.5 91.5 93.3 (0.0) (1.9) CET-1(%) 11.3 10.9 11.7 0.4 (0.4) 10.8 10.0 10.6 0.8 0.2 11.5 10.1 9.3 1.4 2.2 Tier-1 CAR (%) 11.3 10.9 11.7 0.4 (0.4) 12.1 11.5 11.8 0.6 0.3 12.7 11.3 10.6 1.4 2.1 RWCAR (%) 17.1 12.9 13.6 4.2 3.5 16.2 15.7 15.6 0.5 0.6 15.8 14.5 13.4 1.3 2.4 Net loans 38,297 35,289 37,607 9% 2% 85,393 85,732 85,270 0% 0% 290,296 258,015 290,109 13% 0% Deposits 43,540 41,453 44,055 5% -1% 90,882 89,993 89,280 1% 2% 317,424 282,069 310,810 13% 2% Gross NPLs/Impaired Loans 418 406 463 3% -10% 1,563 1,649 1,697 -5% -8% 9,082 8,183 10,172 11% -11% PositivesPositivesPositivesPositives NA Growth in deposit. Improvement in NPL ratio. Higher capital
ratios Lower NPL ratio. Improvement in capital ratios. Decent non-interest income growth.
DisappointmentsDisappointmentsDisappointmentsDisappointments NA Higher expenses (regulatory penalty). Steep NIM compression. Low loan growth.
Provisions remain elevated. Negligible growth in loans.
ProspectsProspectsProspectsProspects NA NIM may still face compression in the coming quarter on ongoing portfolio rebalancing. NPL ratio should stay below 2%. Its cost-to-income ratio is targeted at below 58%, while ROE could slide to 9% (FY15: 14%).
NIM is still expected to compress largely from deposit cost pressures across the region except Singapore ad Thailand. Loans are expected to grow at 10, credit costs are expected to stay high and would largely arise from its Malaysian portfolio. CIMB expects its Indonesian credit cost to moderate in FY16.
Source: Company announcements, DBS Bank, AllianceDBS
Industry Focus
Malaysian Banks
Page 24
MalaysMalaysMalaysMalaysian Banks: 4QCY15 results (qian Banks: 4QCY15 results (qian Banks: 4QCY15 results (qian Banks: 4QCY15 results (q----oooo----q and yq and yq and yq and y----oooo----y comparison) (cont’d)y comparison) (cont’d)y comparison) (cont’d)y comparison) (cont’d)
Hong Leong BankHong Leong BankHong Leong BankHong Leong Bank MaybankMaybankMaybankMaybank Public BankPublic BankPublic BankPublic Bank RMmRMmRMmRMm 2QFY162QFY162QFY162QFY16 2QFY152QFY152QFY152QFY15 1QFY161QFY161QFY161QFY16 yyyy----oooo----yyyy qqqq----oooo----qqqq 4QFY154QFY154QFY154QFY15 4QFY144QFY144QFY144QFY14 3QFY153QFY153QFY153QFY15 yyyy----oooo----yyyy qqqq----oooo----qqqq 4QFY154QFY154QFY154QFY15 4QFY144QFY144QFY144QFY14 3QFY153QFY153QFY153QFY15 yyyy----oooo----yyyy qqqq----oooo----qqqq Net interest income 678 711 660 -5% 3% 2,932 2,442 2,897 20% 1% 1,654 1,555 1,629 6% 2% Islamic banking income 118 106 115 11% 3% 954 806 1,085 18% -12% 204 206 211 -1% -3% Non-interest income 278 206 249 35% 12% 1,728 1,831 1,766 -6% -2% 638 502 631 27% 1% Operating incomeOperating incomeOperating incomeOperating income 1,0741,0741,0741,074 1,0231,0231,0231,023 1,0231,0231,0231,023 5%5%5%5% 5%5%5%5% 5,65,65,65,615151515 5,0795,0795,0795,079 5,7475,7475,7475,747 11%11%11%11% ----2%2%2%2% 2,4972,4972,4972,497 2,2632,2632,2632,263 2,4712,4712,4712,471 10%10%10%10% 1%1%1%1% Operating expenses (658) (463) (463) 42% 42% (2,776) (2,573) (2,601) 8% 7% (749) (635) (741) 18% 1% PrePrePrePre----provision profitprovision profitprovision profitprovision profit 415415415415 560560560560 560560560560 ----26%26%26%26% ----26%26%26%26% 2,8392,8392,8392,839 2,5062,5062,5062,506 3,1463,1463,1463,146 13%13%13%13% ----10%10%10%10% 1,7481,7481,7481,748 1,6271,6271,6271,627 1,7301,7301,7301,730 7%7%7%7% 1%1%1%1% Provisions (58) 56 (21) -204% nm (522) (119) (797) nm -35% 106 (63) (117) -269% -191% Associates 68 91 85 -25% -20% 59 45 34 nm 72% 4 3 1 nm nm Pre-tax profit 426 707 625 -40% -32% 2,376 2,431 2,383 -2% 0% 1,858 1,567 1,614 19% 15% Net profitNet profitNet profitNet profit 344344344344 552552552552 503503503503 ----38%38%38%38% ----32%32%32%32% 1,6521,6521,6521,652 1,9311,9311,9311,931 1,8991,8991,8991,899 ----14%14%14%14% ----13%13%13%13% 1,4921,4921,4921,492 1,2541,2541,2541,254 1,2011,2011,2011,201 19%19%19%19% 24%24%24%24% NIM (%) 1.81 1.95 1.78 (0.13) 0.03 2.41 2.17 2.54 0.24 (0.14) 2.16 2.18 2.13 (0.02) 0.03 Cost-to-income (%) 61.3 45.3 45.2 16.0 16.1 49.4 50.7 45.3 (1.2) 4.2 30.0 28.1 30.0 1.9 0.0 ROE (%) 7.2 14.5 11.6 (7.3) (4.4) 10.9 15.0 13.1 (4.1) (2.2) 19.6 18.3 16.3 1.3 3.3 ROA (%) 0.7 1.2 1.1 (0.5) (0.3) 0.9 1.2 1.1 (0.3) (0.2) 1.6 1.5 1.3 0.2 0.3 Gross NPL ratio (%) 0.9 1.0 0.8 (0.1) 0.0 1.9 1.5 1.5 0.3 0.3 0.5 0.6 0.5 (0.1) (0.0) Loan loss coverage (%) 125.5 129.7 131.0 (4.2) (5.5) 72.0 95.6 85.4 (23.6) (13.4) 120.8 122.4 130.8 (1.6) (10.0) LD ratio (%) 80.6 80.3 80.1 0.4 0.5 94.8 91.8 96.0 3.0 (1.2) 90.3 88.0 89.8 2.3 0.4 CET-1 (%) 13.3 10.8 10.5 2.5 2.8 12.8 11.7 11.2 1.0 1.6 10.9 10.8 10.2 0.1 0.7 Tier-1 CAR (%) 14.4 12.2 11.6 2.2 2.8 14.5 13.5 12.8 0.9 1.7 12.0 12.2 11.4 (0.2) 0.7 RWCAR (%) 16.2 14.7 13.7 1.5 2.5 17.7 16.2 15.0 1.5 2.7 15.5 15.8 14.8 (0.4) 0.7 Net loans 116,611 105,942 115,063 10% 1% 453,493 403,513 458,464 12% -1% 271,814 243,222 266,194 12% 2% Deposits 144,607 132,008 143,566 10% 1% 478,151 439,569 477,493 9% 0% 301,157 276,540 296,339 9% 2% Gross NPLs/Impaired Loans 1,013 1,052 967 -4% 5% 8,555 6,234 7,167 37% 19% 1,352 1,489 1,418 -9% -5% PositivesPositivesPositivesPositives Strong loan growth. Slight NIM uptick. Stronger capital
ratios. Strong non-interest income growth. Lower provisions, saved by writebacks. Above industry loan and deposit growth. Resilient asset
quality trends. Cost-to-income ratio remained best in class.
DisappointmentsDisappointmentsDisappointmentsDisappointments Higher provisions. Weaker associate contributions. Increase in NPL due to specific accounts in Labuan, Greater China and Hong Kong. Loan loss coverage at a new low. Lower dividends.
Lower Islamic banking income
PPPProspectsrospectsrospectsrospects FY16F loan growth is still targeted at 8-9%, with loan-to-deposit ratio at 80-82%. NIMs should fall within 1.9-2.0% while non-interest income is targeted at >23% of total income. Cost-to-income ratio is guided at 42-44%. Credit costs are guided at 25-35bps. FY16F ROE target is guided at c.11%.
Slower loan growth of 8-9% (Malaysia 6-7%, Singapore 3-4%, Indonesia 11-13%), and slower deposit growth of 10-11%. ROE is also guided to be lower at 11-12%. NIM would likely edge lower on stiff deposit competition while credit costs are likely to remain elevated at current levels.
8-9% loan growth, 7-8% deposit growth, NIM to still remain under pressure and expecting up to 8bps contraction, cost-to-income to stay below 33%, credit cost of 15-20bps, >15% ROE and >13% Total CAR. Dividends are expected to remain stable and payout ratios should be close to that declared in FY15.
Source: Company announcements, DBS Bank, AllianceDBS
Industry Focus
Malaysian Banks
Page 25
Malaysian Banks: 4QCY15 results (qMalaysian Banks: 4QCY15 results (qMalaysian Banks: 4QCY15 results (qMalaysian Banks: 4QCY15 results (q----oooo----q and yq and yq and yq and y----oooo----y comparison) (cont’d)y comparison) (cont’d)y comparison) (cont’d)y comparison) (cont’d)
RHB CapiRHB CapiRHB CapiRHB Capitaltaltaltal Affin HoldingsAffin HoldingsAffin HoldingsAffin Holdings Banks under coverage Banks under coverage Banks under coverage Banks under coverage ---- CumulativeCumulativeCumulativeCumulative RMmRMmRMmRMm 4QFY154QFY154QFY154QFY15 4QFY144QFY144QFY144QFY14 3QFY153QFY153QFY153QFY15 yyyy----oooo----yyyy qqqq----oooo----qqqq 4QFY154QFY154QFY154QFY15 4QFY144QFY144QFY144QFY14 3QFY153QFY153QFY153QFY15 yyyy----oooo----yyyy qqqq----oooo----qqqq 4QCY154QCY154QCY154QCY15 4QCY144QCY144QCY144QCY14 3QCY153QCY153QCY153QCY15 yyyy----oooo----yyyy qqqq----oooo----qqqq Net interest income 872 806 844 8% 3% 241 247 248 -2% -3% 9,450 8,704 9,338 9% 1% Islamic banking income 237 201 223 18% 6% 65 68 63 -5% 3% 2,266 2,028 2,343 12% -3% Non-interest income 573 671 448 -14% 28% 159 162 149 -2% 7% 4,920 4,737 4,671 4% 5% Operating incomeOperating incomeOperating incomeOperating income 1,6821,6821,6821,682 1,6771,6771,6771,677 1,5141,5141,5141,514 0%0%0%0% 11%11%11%11% 465465465465 477477477477 460460460460 ----3%3%3%3% 1%1%1%1% 16,63616,63616,63616,636 15,46915,46915,46915,469 16,35216,35216,35216,352 8%8%8%8% 2%2%2%2% Operating expenses (962) (987) (1,169) -3% -18% (280) (244) (275) 15% 2% (8,378) (7,794) (8,175) 7% 2% PrePrePrePre----provision profitprovision profitprovision profitprovision profit 720720720720 690690690690 345345345345 4%4%4%4% 109%109%109%109% 184184184184 233233233233 185185185185 ----21%21%21%21% 0%0%0%0% 8,2588,2588,2588,258 7,6757,6757,6757,675 8,1778,1778,1778,177 8%8%8%8% 1%1%1%1% Provisions (245) (46) (51) 429% nm (21) 51 (30) nm nm (1,381) (1,131) (1,498) 22% -8% Associates 0 0 0 nm nm (10) 14 4 -176% nm 135 177 152 -24% -11% Pre-tax profit 475 644 294 -26% 61% 143 288 149 -50% -4% 6,998 6,779 6,821 3% 3% Net profitNet profitNet profitNet profit 316316316316 486486486486 194194194194 ----35%35%35%35% 63%63%63%63% 97979797 209209209209 102102102102 ----53%53%53%53% ----5%5%5%5% 5,1645,1645,1645,164 5,1755,1755,1755,175 5,2215,2215,2215,221 0%0%0%0% ----1%1%1%1% NIM (%) 2.12 2.03 2.07 0.09 0.1 2.04 2.09 2.10 (0.05) (0.07) 2.18 2.24 2.20 (0.06) (0.03) Cost-to-income (%) 57.2 58.9 77.2 (1.7) (20.1) 60.3 51.1 59.7 9.2 0.6 53.1 48.8 51.9 4.3 1.1 ROE (%) 5.8 10.5 3.8 (4.7) 2.0 4.8 10.4 5.1 (5.7) (0.3) 9.5 11.8 10.0 (2.3) (0.5) ROA (%) 0.6 0.9 0.3 (0.4) 0.2 0.6 1.3 0.6 (0.7) (0.0) 0.9 1.1 0.9 (0.2) (0.0) Gross NPL ratio (%) 1.9 2.0 1.9 (0.2) (0.1) 1.9 1.8 2.2 0.1 (0.3) 1.6 1.6 1.7 (0.0) (0.1) Loan loss coverage (%) 62.8 61.1 56.5 1.7 6.3 64.0 75.6 61.2 (11.5) 2.8 89.7 95.9 89.9 (6.2) (0.2) LD ratio (%) 94.6 89.5 93.0 5.1 1.6 85.7 80.0 90.2 5.7 (4.4) 89.9 87.7 90.4 2.3 (0.5) CET-1(%) 11.6 11.1 11.9 0.5 (0.3) 11.9 12.3 12.2 (0.4) (0.3) 11.8 11.0 11.0 0.8 0.8 Tier-1 CAR (%) 12.0 11.6 12.3 0.4 (0.3) 11.9 12.3 12.2 (0.4) (0.3) 12.6 11.9 11.8 0.7 0.8 RWCAR (%) 15.4 14.5 15.7 0.8 (0.3) 14.3 13.6 13.5 0.8 0.8 16.0 14.8 14.4 1.3 1.6 Net loans 149,591 140,693 147,879 6% 1% 43,345 40,492 41,817 7% 4% 1,448,839 1,312,897 1,442,402 10% 0% Deposits 158,151 157,134 158,968 1% -1% 50,549 50,604 46,362 0% 9% 1,584,460 1,469,371 1,566,872 8% 1% Gross NPLs/Impaired Loans 2,841 2,892 2,907 -2% -2% 834 748 937 12% -11% 25,659 22,652 25,727 13% 0% PositivesPositivesPositivesPositives NIM uptick. Lower operating expenses ex MSS cost. Strong loan and deposit growth. Lower NPL ratio.
DisappointmentsDisappointmentsDisappointmentsDisappointments Slight contraction in deposit. Full year non-interest income disappointed. Higher provisions
Weak contribution from joint venture (dipped to losses). Lower NIM.
ProspectsProspectsProspectsProspects Loan growth is expected at 8%. NIM will still be a little pressured. Credit cost should inch closer to 40bps but NPL ratio should stay below 2%.Cost-to-income ratio is targeted at below 53%. ROE is targeted at 10%. Lastly, overseas profit contribution is targeted at 10%.
Affin missed all its FY15 KPIs which include ROE, ROA, gross NPL ratio and EPS of 8%/0.9%/1.64%/33sen vs actual results of 4.6%/0.6%/1.90%/19sen. Despite a washout year in FY15, we expect earnings momentum to remain subdued as provisions are expected to remain high.
Source: Company announcements, DBS Bank, AllianceDBS
Industry Focus
Malaysian Banks
Page 26
DBS Bank recommendations are based an Absolute Total Return* Rating system, defined as follows:
STRONG BUYSTRONG BUYSTRONG BUYSTRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY BUY BUY BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLDHOLDHOLDHOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps)
FULLY VALUEDFULLY VALUEDFULLY VALUEDFULLY VALUED (negative total return i.e. > -10% over the next 12 months)
SELL SELL SELL SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)
Share price appreciation + dividends
GENERAL DISCLOSURE/DISCLAIMER GENERAL DISCLOSURE/DISCLAIMER GENERAL DISCLOSURE/DISCLAIMER GENERAL DISCLOSURE/DISCLAIMER This report is preparedThis report is preparedThis report is preparedThis report is prepared by by by by DBS Bank LtdDBS Bank LtdDBS Bank LtdDBS Bank Ltd This report is solely intended for the clients of DBS Bank Ltd and DBS Vickers Securities (Singapore) Pte Ltd, its respective connected and associated corporations and affiliates (collectively, the “DBS Vickers Group”) only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBS Bank Ltd. The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS Bank Ltd., its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively, the “DBS Group”)) do not make any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies. Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the company (or companies) referred to in this report. The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that: (a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and (b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk
assessments stated therein. Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report. DBS Vickers Securities (USA) Inc ("DBSVUSA")"), a U.S.-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in market-making. ANAANAANAANALYST CERTIFICATIONLYST CERTIFICATIONLYST CERTIFICATIONLYST CERTIFICATION The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of 1 Mar 2016, the analyst(s) and his/her spouse and/or relatives who are financially dependent on the analyst(s), do not hold interests in the securities recommended in this report (“interest” includes direct or indirect ownership of securities). COMPANYCOMPANYCOMPANYCOMPANY----SPECIFIC / REGULATORY DISCLOSURES SPECIFIC / REGULATORY DISCLOSURES SPECIFIC / REGULATORY DISCLOSURES SPECIFIC / REGULATORY DISCLOSURES 1.1.1.1. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates do not have a proprietary
position in the securities recommended in this report as of 31 Jan 2016
2.2.2.2. DBS Bank Ltd does not market make in equity securities of the issuer(s) or company(ies) mentioned in this Research Report.
3.3.3.3. Compensation for investment banking services: Compensation for investment banking services: Compensation for investment banking services: Compensation for investment banking services:
DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.
Industry Focus
Malaysian Banks
Page 27
RESTRICTIONS ON DISTRIBUTION RESTRICTIONS ON DISTRIBUTION RESTRICTIONS ON DISTRIBUTION RESTRICTIONS ON DISTRIBUTION
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DBS Bank LtdDBS Bank LtdDBS Bank LtdDBS Bank Ltd
12 Marina Boulevard, Marina Bay Financial Centre Tower 3
Singapore 018982
Tel. 65-6878 8888
Company Regn. No. 196800306E
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