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AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 1
AMMB Holdings Berhad
Ashok RamamurthyGroup Managing Director
VisionAs Malaysia’s preferred diversified, internationally connected financial solutions group, we take pride in growing your future with us
Investors PresentationFY2013 Results 16 May 2013
AmBank Group
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 2
EXECUTIVE SUMMARY Page 31
FY2013 GROUP FINANCIAL PERFORMANCE Page 112
OUTLOOK & STRATEGIC PRIORITIES Page 223
DIVISIONAL STRATEGY & PERFORMANCE Page 264
SUPPLEMENTARY INFORMATION – AMBANK GROUP Page 38
SUPPLEMENTARY INFORMATION – ECONOMY & INDUSTRY Page 526
5
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 3
FY2013 Key Highlights
Optimal diversification agenda
Strong CASA growth, with CASA composition now @ 20%
LDR at preferred levels (circa 90% 2%), with diversified funding base
Rebalancing loans portfolio via growing non-retail and in profitable retail segments
Banking entities capital optimally positioned for Basel 3
Acquisition synergies on track
Kurnia & MBF Cards: Stronger market position & progressively realising synergies
AmLife & AmTakaful: Exploring strategic partnerships
Consistent growth & returns
6th consecutive year of record performance, consistently met financial aspirations
FY2013 PATMI up 10.2% with positive momentum across most divisions
Improving returns (ROE: 14%)
Proposed dividend payout: 41%
Clear strategic priorities
Accelerate growth & business mix changes
Strengthen customer centricity & connectivity
Increase productivity & efficiency
2
4
1
3
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 4
1 CAGR computed based on FY2007 underlying profit of RM 556.9 million 2 Include term funding and loans sold with recourse 3 Based on net loans over adjusted customer deposits4 Before proposed dividend ^ Restated with retrospective application of MFRS and BNM guidelines, where applicable
Performance
Growth
Risk, Capital & Funding
Profile
1
2
3
Reposition, Build New Growth
Options
Improved returns
FY07 FY08 FY09 FY10 FY11 FY12^ FY13∆%^
FY13 vs FY12
CAGR^
FY07 - FY13
Pre ANZScale &
Presence
Aggressively Invest, Optimise & Leverage Connectivity
PATMI (mil) (282.5) 668.5 860.8 1,008.6 1,342.8 1,484.4 1,635.1 10.2% 19.7%1
ROE -5.8 % 11.5 % 11.7 % 11.5 % 13.6% 13.8% 14.0% 0.2% 3.3%
ROA -0.17 % 1.02% 1.04% 1.13% 1.39% 1.39% 1.40% 0.01% 0.26%
EPS (sen, basic)
-13.3 28.2 31.6 34.7 44.7 49.6 54.5 9.8% 13.0%
Net Lending(bil)
50.3 54.4 57.9 64.8 71.1 75.7 82.6 9.1% 8.6%
Customer Deposits2 (bil)
45.9 57.9 65.2 70.7 81.5 84.6 93.1 10.0% 12.5%
CASA (bil) 5.3 6.3 7.0 8.5 10.4 13.2 16.8 27.8% 21.2%
Net NPL / Gross Impaired Loans (FY10 onwards)
6.2% 3.7% 2.6%1.5% / 3.81%
3.33% 2.45% 1.98% 0.47%
RWCAR4 10.1% 14.1 % 15.2 % 15.8 % 14.4% 15.7% 14.8%
CET 14 5.8% 7.6% 7.7% 8.1% 8.0% 9.2% 9.3%
LD Ratio3
109.8%94.1% 88.7% 91.7% 87.3% 89.5% 88.7% 0.8%
CTI 38.8% 40.2% 43.3% 42.0% 39.9% 41.6% 46.9% 5.3%
Consistent growth in shareholders‟ returns
Basel III
Continuing to deliver an optimal mix of growth, returns, and risk profile
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 5
Commercial Banking1 Investment Banking2
Life Assurance & Family Takaful
283.0308.0
449.2
243.4
FY10 FY11 FY12 FY13
48.760.2
93.6
167.9
FY10 FY11 FY12 FY13
General Insurance
Commercial banking activities and recent acquisitions driving profit growth
PAT (RM‟mil)
PAT (RM‟mil) PAT (RM‟mil)
1 Commercial banking represents Retail, Business, Corporate & Institutional Banking activities2 Investment Banking represents Investment Banking and Markets activities
32.1
61.8
7.7
-63.9
FY10 FY11 FY12 FY13
^ Restated with retrospective application of MFRS and BNM guidelines, where applicable
867.3 930.7
982.3
1294.0
FY10 FY11 FY12 FY13
982.5
1,298.7PAT (RM‟mil)
930.7867.3
^ ^
^
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 6
64.8 71.1 75.7 82.6
70.781.5
84.693.1
91.7% 87.3%
89.5%88.7%
FY10 FY11 FY12 FY13
Net lending Customer deposits LDR
8.1%* 8.0%*9.2% 9.3%
10.3% 10.2%11.3% 11.0%
15.8%14.4%
15.7%14.8%
FY10 FY11 FY12 FY13
CET 1 Ratio Tier 1 CAR RWCAR/Total Capital Ratio
* include preference shares
8.5 10.4 13.2 16.8
59.964.0 63.6
67.9
0.40.4
0.50.1
1.86.7
7.38.2
FY10 FY11 FY12 FY13
CASA FD Negotiable Instruments Term funding
Steady progress made on diversification agenda and capital efficiency
RM’bil
LDR: Operating within preferred levels Rebalancing loans portfolio
Capital: Optimally positioned for Basel III Diversified funding base
Basel II Basel III
70.7 81.5 84.6 93.1RM’bil
^ Restated with retrospective application of MFRS and BNM guidelines, where applicable
^
^
---------------------- Before proposed dividend ---------------------------
8.1%* 8.0%*9.2% 9.3%
10.3% 10.2%11.3% 11.0%
15.8%14.4%
15.7%14.8%
FY10 FY11 FY12 FY13
CET 1 Ratio Tier 1 CAR RWCAR/Total Capital Ratio
* include preference shares
Conventional
73%
Islamic
27%
Fixed
rate
45%
Variable
rate
55%
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 7
Strategic Priorities Progress
New retail structure in place to drive reshaping program around customer solutions
Retail : non-retail loans mix portfolio improved to 58%:42% (FY12 – 59%:41%)
Good growth in Transaction banking (up 36.5%), increased collaboration with ANZ
Expanding international connectivity initiatives (ANZ, Travelex, Western Union)
Investing in IT and risk infrastructure to support medium term growth
Launched AmSignature, Visa Infinite & World Mastercard and 5 Priority Banking branches targeting affluent segments
Optimized footprint and increased self-service machines at strategic locations
Revamping of channels to refresh customer experience
Launched our new brand values “P2ACE” – Principled, Proactive, Appreciative, Connected & Evolving
CTI increased to 46.9% due to new acquisitions
Integrations and other efficiency initiatives underway will deliver efficiency gains in future years
Unveiled Group‟s new Vision, Mission, values and employees value proposition - „i Am Connected‟
Acquired Kurnia & MBF Cards - integrations on track to deliver synergies
Exploring potential strategic partnerships for AmLife and AmTakaful
FY2013: delivering on strategic priorities
Accelerate Growth & Business Mix Changes
1
Strengthen Customer Centricity & Connectivity
2
Increase Productivity & Efficiency
3
Acquire & Integrate
4
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 8
RM1.627 bil cash purchase price (valuation: P/B 1.95x based on Kurnia 30 Jun 2012 net assets)
Funded by internal cash resources & ~ RM500 mil senior debt for AMMB‟s portion
AmGeneral Insurance: Kurnia integration on track to deliver synergies
Synergistic benefits:
Business priorities & progress and next steps
Investment summary:
Acquisition of Kurnia
Integrated claims &
operations
Completion of
integration
26 Sept 12 1 Mar 13 Q4 13Q3 13
Vesting Day 1
Today
* Includes depreciation
Synergies
RM milSynergistic benefit cost
Cost CumulativeAcquisition
cost
FY13 (11.0)* 25.5 25.5 (20.5)
FY14 (7.3)* 24.9 50.4 -
FY15 (5.4)* 4.1 54.5 -
Integrated sales &
underwriting
Q2 14
Vesting day – 1 Mar 2013, AmG transferred its general insurance business to its wholly-owned subsidiary, KurniaInsurans (M) Bhd. Concurrently, Kurnia was renamed “AmGeneral Insurance Bhd”
Dual branding strategy – “AmAssurance” & “Kurnia”, first in the general industry for the Malaysian general insurance market
4 dual branded pilot branches launched, remainder of branch consolidation will be completed by end of 2013
# 1 position in motor & general insurance
• Branch network that has an extensive geographical coverage with combined dealers/agency force of over 7,600 (as at 31 Mar 2013)
• Achieved GWP of >RM1.7 bil, with approx. 12% market share and over 3.6 million policyholders.
• New management team appointed and agency and Bancassurance channels in place.
• Underwriting model to be harmonized by Q4 2013
• Centralisation of policy processing and HR benefits alignment – target to complete by Q2 2014; roll-out of Motor (phase 1) – Q4 2014
Full integration by Q2 2014
* Includes depreciation, excludes funding cost
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 9
RM641.4 mil cash purchase price (valuation: P/B 2.9x based on NAV @ 30 Nov 2012)
Funded by internal cash resources & ~ RM500 mil senior debt
RM milSynergistic
benefit cost
Synergies AcquisitioncostRevenue Cost Total Cumulative
FY13 (10.5) 0.1 2.4 2.5 2.5 (3.5)
FY14 (32.8)* 5.7 13.4 19.1 21.6 -
FY15 (1.5)* 17.1 25.7 42.8 64.4 -
Acquisition of MBF
Vesting Day 1
System & operational functions fully
integrated
10 Jul 12 3 Dec 12 1Q142Q – 3Q13
Legal Day 1
Today
Synergistic benefits:
Business priorities & progress and next steps
As at 31 Mar 2013, cards in circulation increased to >500,000, market position by receivables strengthened to #6
Enlarged merchant forces: on a combined basis, over 3,000 new merchants acquired since Dec 2012, combined merchants greater than 50,000 to-date
Integration updates:
• 100th day integration completed
• Select Synergies Initiatives kick started
• Office relocation to Menara MBf– completed on 7 Apr 2013
• Integrating IT system into one system – target to complete by 1Qtr 2014
• Commenced merchant pool review and integration, target to complete by 1Qtr CY2014 (System Day 1)
• Branding to be progressively re-aligned to AmBank Group
Pending vesting – target 2Qtr – 3Qtr 2013, business as usual for both AmBank Cards & MBF Cards
MBF Cards: Completed detailed plans and commenced integration activities
Investment summary:
* Includes depreciation, excludes funding cost
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 10
AMMB Holdings Berhad
Mandy SimpsonChief Financial Officer
VisionAs Malaysia’s preferred diversified, internationally connected financial solutions group, we take pride in growing your future with us
Investors PresentationFY2013 Results 16 May 2013
AmBank Group
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 11
EXECUTIVE SUMMARY Page 31
FY2013 GROUP FINANCIAL PERFORMANCE Page 112
OUTLOOK & STRATEGIC PRIORITIES Page 223
DIVISIONAL STRATEGY & PERFORMANCE Page 264
SUPPLEMENTARY INFORMATION – AMBANK GROUP Page 38
SUPPLEMENTARY INFORMATION – ECONOMY & INDUSTRY Page 526
5
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 12
PATMI FY12* Net interest incomeNon Interest Income Total income Expenses PBP Impairments PBT Taxation & zakat PAT Minority interests PATMI FY13PATMI FY12* Net interest incomeNon Interest Income Total income Expenses PBP Impairments PBT Taxation & zakat PAT Minority interests PATMI FY13
PATMI FY12* Net interest incomeNon Interest Income Total income Expenses PBP Impairments PBT Taxation & zakat PAT Minority interests PATMI FY13
3.8% 69.9% 14.5% 19.8%
1,635.1 mil
10.2% 1.7% 7.5% 7.2% 10.5%
1,484.4 mil
PATMI*FY12^
Net Interest Income
Non-Interest Income
Total income
Expenses PBPProvisions/Allowances
PBTTax & Zakat
PAT MIReportedPATMI*
FY13One-off #
UnderlyingPATMI*
FY13
FY13 (RM’mil)
2,981.8 1,392.5 4,374.3 2,051.4 2,322.9 143.3 2,179.6 486.4 1,693.2 58.1 1,635.1
FY12^(RM’mil)
2,854.0 1,447.0 4,301.0 1,791.1 2,509.9 476.3 2,033.6 500.7 1,532.9 48.5 1,484.4
4.5%
FY13 PATMIFY12 PATMI Positive growth in FY13 Contraction in FY13
* PATMI: profit after tax and non controlling interests
Net interest income and lower allowances underpinned FY2013 results
Growth
1,661.1 mil
11.9%
# one-off acquisitions related expenses
26.0 mil
Reflects (1) acquisition & operating costs to deliver synergies, and (2) ongoing medium term investments
PATMI FY12*Net interest incomeNon Interest IncomeTotal income Expenses PBP Impairments PBT Taxation & zakat PAT Minority interests PATMI FY13
Gross Loans FY12* Auto Financing Mortgage Credit Cards Line of Credit Co-Op Asset Financing Business Banking (ex GLR)
Corporate & Institutional
Banking
Others Gross Loans FY13
2.9%
^ Restated with retrospective application of MFRS and BNM guidelines, where applicable
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 13
62.4% 41.0% 79.5%55.2% 10.2%>100.0% 11.4%
* Performances reflected within divisional outcomes1. Life Assurance surplus is transferred into life policy shareholders‟ fund in overall Group accounts2. Includes expenses for recently set-up AmFamily Takaful business
83%
16.0% 37.4% >100.0% 36.5%
PATMI*FY12^
Retail BusinessCorporate & Institutional
Investment MarketsGeneral
InsuranceLife
Assurance1
Operating Segments
MI
Transaction* Islamic*
PATMI*FY13
% of Composition
36% 20% 23% 4% 11% 10% -3% 2% -4%
FY13(RM’mil)
591.1 332.3 375.3 68.5 174.9 167.9 -54.8 37.92 -58.1 168.0 270.3
FY12^ (RM’mil)
509.5 241.9 231.1 153.0 296.2 93.6 18.7 -11.22 -48.5 123.1 242.6
Conventional PATMIIslamic PATMI Positive growth in FY13 Contraction in FY13
1,484.4 mil
84%
16%
1,635.1 mil
17%
Growth
Note: Includes Kurnia’s 6-months & MBF’s 4-month performance
19.8%
PATMI FY12 Retail banking Business banking Corporate &Institutional
InvestmentBanking
Markets GeneralInsurance
Life Assurance OperatingSegments
Minority Interest PATMI FY13
PATMI by division
^ Restated with retrospective application of MFRS and BNM guidelines, where applicable
Profit growth driven by lending activities and general insurance
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 14
Total income FY12 Retail banking Business banking Corporate & Institutional Investment Banking Markets General Insurance Life Assurance total operating total income FY13
36.7% 23.2% 1.7%5.3% 11.4%
IncomeFY12^
Retail BusinessCorporate & Institutional
Investment MarketsGeneral
InsuranceLife
AssuranceOperating Segments
IncomeFY13
% of Composition
43% 14% 12% 8% 7% 9% 1% 6%
FY13(RM’mil)
1,883.3 619.3 526.0 346.3 295.1 396.4 50.1 257.72
FY12^ (RM’mil)
1,787.8 555.7 384.9 450.7 463.3 209.5 149.0 299.92
4,301.0 mil
4,374.3 mil
Growth
Income by division
36.3% 89.2% 66.4% 14.1%
28.7
66.8
16.2
74%
41.0
100.2
-6.4
-161.8
7.4
179.5
5.6
-104.5
47.4
10.0
-114.5
-65.0
22.8
Total non interest income
Total interest income Positive interest income growth in FY13
Contraction interest income in FY13
Positive non interest income growth in FY13
Contraction non interest income in FY13
34%
66%
32%
68%
^ Restated with retrospective application of MFRS and BNM guidelines, where applicable
Income growth driven by commercial banking divisions and general insurance
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 15
NII FY 12 Fee on loan AUM Investment Banking Banc Others Total Fee income Sales Trading Others Total Trading & InvestmentGeneral Life Total Insurance Other NII FY 13
* IB business includes brokerage fees, underwriting fees and corporate advisory & guarantees
FY12^Fees on
lending &
securitiesAUM
IBbusiness*
BancaOther fee income
Total Fee
incomeSales Trading
Othertrading &
invtmt
Trading & Investment
GeneralLife &
TakafulInsuranceBusiness
Others FY13
% of Composition 19% 11% 12% 3% 9% 54% 8% 13% 8% 29% 20% -5% 15% 2%
FY13(RM’mil)
265.2 155.8 172.1 42.1 119.2 754.5 115.3 172.5 108.8 396.6 285.3 -76.0 209.4 32.1
FY12^(RM’mil)
228.5 125.6 183.7 31.5 132.2 701.5 136.2 371.5 106.6 614.3 144.7 -27.7 117.0 14.2
As % of total income 34% 32%
>100.0% 16.0% 79.0%Growth 24.1% 6.3% 9.8% 53.6% 97.2%
1,392.5 mil
2.1%
Non-interest income movement
33.5% 15.4% 35.4% >100.0% 3.8% 7.5%
Non-interest income impacted by lower capital market and trading incomes
FY13 non interest income
Positive growth in FY13 Contraction in FY13
NII FY12 Fee on loan AUM InvestmentBanking
Banc Others Total Feeincome
Sales Trading Others Total Trading& Investment
General Life TotalInsurance
Other NII FY13
Retail: +41milBB & CIB: +27milIB & Markets: -32mil
FY12 non interest income
NII FY12 Fee on loan AUM InvestmentBanking
Banc Others Total Feeincome
Sales Trading Others Total Trading& Investment
General Life TotalInsurance
Other NII FY13NII FY12 Fee on loan AUM InvestmentBanking
Banc Others Total Feeincome
Sales Trading Others Total Trading& Investment
General Life TotalInsurance
Other NII FY13
^ Restated with retrospective application of MFRS and BNM guidelines, where applicable
1,447.0 mil
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 16
NIM in line with guidance
FY10 FY11 FY12^ FY13
Cost of Fund NIM OPR SRR
Note :1 Net Interest Margin includes Net Financing Income from Islamic
Banking business2 FY10-H1FY13 based on internal data computation
Q1FY12^ Q2FY12^ Q3FY12^ Q4FY12^ Q1FY13 Q2FY13 Q3FY13 Q4FY13
COF
NIMF
SRRF
OPRF
COF
NIMF
SRRF
OPRF
3.44%
2.68%
2.92% 2.92% 2.86% 2.91% 2.90% 2.85%
2.92%
3.04%
2.98% 2.94% 2.94%3.05%
2.95% 2.90%3.01%
2.94%
FY09 FY10 FY11 Q1FY12 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12
Cost of funds NIM
3.44%
2.68%
2.92% 2.92% 2.86% 2.91% 2.90% 2.85%
2.92%
3.04%
2.98% 2.94% 2.94%3.05%
2.95% 2.90%3.01%
2.94%
FY09 FY10 FY11 Q1FY12 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12
Cost of funds NIM
3.44%
2.68%
2.92% 2.92% 2.86% 2.91% 2.90% 2.85%
2.92%
3.04%
2.98% 2.94% 2.94%3.05%
2.95% 2.90%3.01%
2.94%
FY09 FY10 FY11 Q1FY12 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12
Cost of funds NIM
2.50%2.75% 2.75% 2.75%
3.00%
3.00%
1.00% 1.00% 1.00% 1.00%
2.00%
3.00%
4.00%
Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12
OPR SRR
SRR
OPR
2.50%2.75% 2.75% 2.75%
3.00%
3.00%
1.00% 1.00% 1.00% 1.00%
2.00%
3.00%
4.00%
Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12
OPR SRR
SRR
OPR
NIM and COF (YoY)
NIM and COF (QoQ)
Acquisition funding cost (RM1.0 bil): 1bps;Term funding raised (RM0.9 bil): 0.3bps
3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%
2.00%
3.00%
3.50%
4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%
Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13
OPR SRR
2.25%2.75% 3.00% 3.00%
1.00% 1.00%
4.00% 4.00%
FY10 FY11 FY12 9MFY13
OPR SRR
^ Restated with retrospective application of MFRS and BNM guidelines, where applicable
Impact of tax exempted bonds on NIM : 2bps
2.68%
2.92%
3.13% 3.10%2.98% 2.94%
2.75% 2.68%
FY10 FY11 FY12 FY13
Cost of funds NIM
NIM
COF
3.08% 3.12% 3.13% 3.19% 3.09% 3.06%3.12% 3.12%
2.72% 2.73% 2.82% 2.75% 2.72% 2.69%
2.60%2.70%
Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13
Cost of funds NIM
NIM
COF
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 17
21%20%
FY12 FY13
89% 89%
FY12 FY13
41.8%40.2% 40.5%
43.3%
FY10 FY11 FY12 FY13
PATMI FY12* Net interest incomeNon Interest Income Total income Expenses PBP Impairments PBT Taxation & zakat PAT Minority interests PATMI FY13
NII FY12 Fee on loan AUM InvestmentBanking
Banc Others Total Feeincome
Sales Trading Others Total Trading& Investment
General Life TotalInsurance
Other NII FY13
CTI reflects acquisitions and strategic investments for growth
FY12^ Personnel Establishment Marketing & Comm Admin & others Synergisticbenefit cost
Acquisitions cost FY13
% of Composition 59% 23% 8% 8% 1% 1%
FY13 (RM’mil) 1,218 463 165 160 21 24
FY12^ (RM’mil) 1,095 383 145 169 - -
Expense growth drivers
11.3% 20.8% 13.8% 5.0% >100.0% >100.0% 14.5%Growth
1,791.1 mil
1,094.6 1,218.3
383.2
462.8
FY12 Personnel Establishment Mkt & Comm Admin Integration Acquisition FY13
RM' Mil
2,051.4 mil
FY12 total expenses FY13 total expensesContraction in FY13 Increase expenses in FY13
^ FY2012: Restated with retrospective application of MFRS and BNM guidelines, where applicable
Banking Group CTIAmGeneral Combined
Operating RatioAmLife Management
Expense Ratio
AmG AmG+Kurnia
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 18
381.9
173.3
35.9
114.6
0.1
57.9 114.6%
129.3%
-3.3% 2.7%
15.3%
FY12 loan loss coverage
Collective allowance
Individual allowance
Impaired loans/financing
FY13 loan loss coverage
3.18%
0.97%0.60%
0.88%
6.2%
3.7%
2.6%
1.5%
10.4%
6.3%
4.1%
2.8%
3.81%
3.33%
2.45%
1.98%
0.50%0.21%
Net Provisions Charge Net NPL Ratio Gross NPL Ratio Gross Impaired Loans Loan Loss Charge(MFRS139)
114.6%129.3%
Allowance Coverage:• Retail Bkg: 87.7%• Business Bkg: 146.1%
Asset quality continues to improve
FY12 Allowance for impairment
Individual allowance
Collective allowance
Recovery from loans
sold to Danaharta
Impaired loans – recovered &
written-off
FY13 Allowance for impairment
FY2011 FY2012^ FY2013Day 1
[1 April 10]
29bps
Gross Impaired Loans• Retail Bkg: 2.55%• Business Bkg: 1.13%
FY2012^ FY2013
Industry*
Loan Loss Coverage
183bps
Asset quality indicators
3.18%
0.97% 0.60%0.88%
6.2%
3.7%
2.6%
1.5%
10.4%
6.3%
4.1%
2.8%
3.81%3.33%
2.45%
2.38%
0.51%0.08%
FY2007 FY2008 FY2009 FY2010 Day 1 FY2011 FY2012 Q1FY2013
Net Provisions Charge Net NPL Ratio Gross NPL Ratio Gross Impaired Loans Loan Loss Charge (MFRS139)
MFR
S 1
39
MFR
S 1
39
Allowance for impairment on loans & financing (P&L)
* Mar 12 Vs Mar 13
^ Restated with retrospective application of MFRS and BNM guidelines, where applicable
FY12 loan loss
coverage
Collective allowance
Individual allowance
Impaired loans &
financing
FY13 loan loss
coverage
Movement in loan loss coverageRM‟mil
95.6%99.2%
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 19
Loans growth: non-retail outpacing industry, retail targeting viable segments
Retail Biz & Corporate
5.9% 13.2%
77.9bil
6.6% 27.1% 11.1% 17.0% 2.2% 5.0%
84.8bil
42%
58%
8.9%
41%
59%
Gross LoanFY12
Auto Financing
Mortgage Cards Co-OpAsset
FinancingBusiness
Corporate & Institutional
OthersGross Loan
FY13
% of Composition
30.9% 19.0% 2.7% 2.0% 3.3% 20.7% 20.2% 1.3%
FY13 (RM’bil)
26.2 16.1 2.3 1.7 2.8 17.5 17.1 1.1
FY12 (RM’bil)
24.7 15.1 1.8 1.9 2.9 15.8 14.6 1.2
10.1%
No
n-re
tail
Reta
il
6.0%
Non-RetailRetail Positive growth in FY13 Contraction in FY13
Gross Loan / Financing movement
AmBank Cards : RM1.1bil
LOC: RM0.7bilMBF Cards: RM 0.5bil
Gross Loans FY12* Auto Financing Mortgage Cards Co-Op Asset Financing Business Banking (ex GLR)
Corporate & Institutional Banking
Others Gross Loans FY13
Conventional
73%
Islamic
27%
Fixed
rate
45%
Variable
rate
55%
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 20
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
FY06 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19+
RM'bil
Debt Capital Term Funding Loans sold to Cagamas
Issuance Maturity
15.0% 13.9% 14.5% 14.3%
77.4%74.5% 74.0% 74.5%
1.5% 6.9% 6.9% 6.9%1.2% 0.6% 0.8% 1.5%4.9% 4.2% 3.7% 2.8%
FY10 FY11 FY12 FY13
Improving funding composition
Equity & Debt Capital Deposits from Customers
Term Funding & loans sold with recourse > 1 yr Term Funding & loans sold with recourse < 1 yr
Deposits from Banks & FIs
Term funding, 10.7%
Individuals, 36.5%Biz
enterprises, 42.3%
Government, 10.6%
7.0 8.5
10.4
13.2
16.8
11% 12% 14%17%
20%
FY09 FY10 FY11 FY12 FY13
CASA CASA composition
1. Term funding includes Senior Notes, credit-linked notes, loans sold with recourse and other sources such as pension and retirement funds, non-profit organisations and similar
Continue to diversify funding
95.7%
RM’mil
CASA composition
Improving CASA composition Improving funding composition
Diversifying funding Lengthening debt capital & term funding profile
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 21
6.0 6.6 7.06.08.0
10.5
12.013.5
15.018.3% 19.0%
28.1%
40.4%40.1%
40.6%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
0
5
10
15
20
25
FY2008 FY2009 FY2010 FY2011 FY2012 FY2013
AMMB Holdings Berhad- Dividend trend
Dividend rate - interim (sen / share) Dividend rate - final (sen / share)
Dividend payout
Under a Basel III accord:
• The banking entities of the Group remain well capitalised and operated within internal target capital levels for FY2013:
o CET1: 8.33% ± 1.0%
o T1: 10.33% ± 1.0%
o Total Capital: 14.33% ± 1.0%
The Group is well positioned for its targeted dividend payout ratio, in line with the Medium Term Aspirations of 40-50% payout
Double leverage ratio1: 1.17x
Balance Sheet Leverage ratio2: 7.9%
Total leverage ratio3: 6.1%
Adopted Basel III at banking entity level, well positioned for targeted dividend payout ratio
9.3% 9.0% 8.9%
11.2% 10.7% 10.6%
15.9%14.6% 14.3%
31.12.12 1.1.2013 FY13
CET 1 Ratio Tier 1 CAR RWCAR/Total Capital Ratio
Basel II Basel III
Reduction reflects regulatory adjustments
Capital: Aggregated banking entities Higher dividend payout
* FY2012 dividend payout based on PATMI as originally reported1. Double leverage ratio computed based on AMMB Holdings company level2. Balance sheet leverage ratio: total equity net of deferred tax & intangible assets over total assets net of deferred tax assets & intangible assets 3. Total leverage ratio: total equity net of deferred tax & intangible assets over total assets net of deferred tax assets & intangible assets & off balance sheet
---------------------- After proposed dividend ----------------------------
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 22
EXECUTIVE SUMMARY Page 31
FY2013 GROUP FINANCIAL PERFORMANCE Page 112
OUTLOOK & STRATEGIC PRIORITIES Page 223
DIVISIONAL STRATEGY & PERFORMANCE Page 264
SUPPLEMENTARY INFORMATION – AMBANK GROUP Page 38
SUPPLEMENTARY INFORMATION – ECONOMY & INDUSTRY Page 526
5
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 23
FY2014 outlook
2013e GDP growth of 5.3%
Ongoing ETP initiatives expected to continue support lending & capital market activities
New Responsible Lending Guidelines and regulatory reforms moderating consumer loans growth
Moderating economy and price-based competitions for loans and deposits are ongoing challenges to maintain margins
Tougher economic environment may put some pressure on improving asset quality trends
OPR expected to remain at 3% for 2013 given the relatively low inflationary risk and current economic outlook
NIMs remain under pressure but lending rates are expected to stabilize
Opportunities & challenges
Source: BNM and PEMANDU websites
4.8%
-1.5%
7.2%
5.1%5.6% 5.3%
CY2008 CY2009 CY2010 CY2011 CY2012 CY2013e
%GDP (%)
GDP (%)
1 Based on AmResearch inhouse-view
Malaysia Banking
Source: ETP Annual Report 2012
2011 2012Progress to-date
Initiatives 110 39 149
Investment (RM’bil)
179.2 32.1 211.3
GNI (RM’bil) 129.5 6.6 136.1
Jobs 313,741 94,702 408,443
ETP execution gaining momentum
GDP growth resilient
• Ongoing ETP initiatives
• Accommodative macro policies
• Healthy labour market
• Low inflation, albeit trending up
Risks from household indebtedness appears contained
• Improving impaired loans ratio for household loans
• Prudent lending standards
• Greater regulatory intervention and oversight
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 24
1. Integrate acquisitions and deliver synergies
2. Simplify business model and streamline processes
3. Accelerate organic growth with focus on cross-sell, flow business, small business, and emerging affluent customers
4. Build scale in specialist businesses with partners
5. Optimise capital and holding company structures
Strategic Agenda for
AmBank Group over the next
3 years
Strategic Priorities
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 25
FY2012(restated)^
FY2013 FY2014 FY2015 – FY2016
1,484.4 1,635.1 10 – 12% 12 – 14%
13.8% 14.0% 14.0 – 14.5% 14.5 – 15.5%
41.6% 46.9%
≤46%;≤44%
(Banking Group)
≤45%;≤43%
(Banking Group)
2.45% 1.98% ≤2.0% ≤2.0%
20.1 sen / share
41%
22.0 sen / share
41%
40-50%Payout
40-50%Payout
PATMI*(RM’mil)
ROE (%)
CTI (%)
Gross impaired loans
(%)
Dividend:Single-tier
(sen)Payout (%)
Key performance indicators
Actual
NIM expected to contract ≤10 bps
Loan loss charge expected to be < 30 bps
Loans expected to grow circa 10%
LD ratio expected to maintain at ~90%, ±2%
CASA composition > 20%
Non-interest income composition at circa 35%
Target CET 1 of 8.5% (±1%), Tier 1 of 10.5% (±1%), RWCAR of 14.5% (±1%)
Other FY2014 underlying estimates
Underlying Estimates
1
2
3
4
5
^ Restated with retrospective application of MFRS and BNM guidelines, where applicable
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 26
EXECUTIVE SUMMARY Page 31
FY2013 GROUP FINANCIAL PERFORMANCE Page 112
OUTLOOK & STRATEGIC PRIORITIES Page 223
DIVISIONAL STRATEGY & PERFORMANCE Page 264
SUPPLEMENTARY INFORMATION – AMBANK GROUP Page 38
SUPPLEMENTARY INFORMATION – ECONOMY & INDUSTRY Page 526
5
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 27
Vision“As Malaysia‟s preferred diversified, internationally connected financial
solutions group, we take pride in growing your future with us”
Our Vision and divisional aspirations
* Conventional & Islamic
TRANSACTION*
Become Top 5 Transaction
Banking Service Provider
in Malaysia by FY2015 with 8% market
share
CIB*
Deliver innovative & quality solutions, increase „share of
wallet‟, target high-profile
and high-value clients and
leverage ANZ for x-border businesses
ISLAMIC
To be the Islamic Bank of choice
INVESTMENT*
Deliver comprehensive
solutions, lead in capital markets,
funds management, stock broking and enhance domestic
and overseasdistribution
via ANZ
MARKETS*
Deliver substantive,integrated and
client-led business with
full suite of FX, Rates,
Commodities and FI offerings
with ANZ collaborations
FAMILY TAKAFUL
To be the trusted Family Takaful
Operator of choice within
all of our selected markets
LIFE ASSURANCE
Trusted by our stakeholders
GENERAL INSURANCE
Leverage scale to lead the market in
the motoring segment,
whilst building a leading
personal lines portfolio and niche
commercial business
DIVISIONAL ASPIRATIONS
RETAIL*
Develop a liability-led business,
grow assets in targeted segments & expand Wealth
Management
BUSINESS*
Growing the business through decisive
execution
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 28
• Faster loans growth compared to previous quarters, continue targeting profitable segments
• Expanded fee based income via banca & other wealth propositions (aided by new products, campaigns & launched of priority banking channel) as well as stronger loans & deposits growth
• Improved deposit mix and grew CASA faster than industry leveraging on existing and new channels and alliances
• Brand refresh in progress targeting mass affluent segment
• MBF Cards integration in progress (incorporated results from Dec‟12 onwards), targeted to complete by year end
Retail Banking
Develop a liability-led business, grow assets in targeted segments and expand Wealth ManagementAspirations
Higher profits from improved asset quality and stronger loans growth
FY13 PATFY12 PAT Positive growth in FY13 Contraction in FY13
5.3%Growth 2.3% 9.5% 23.9% 15.7% 14.7% 16.0%
FY13
vs RM'mil FY12* FY13 FY12
PAT
FY12Income Expenses PBP Allowances PBT Tax
PAT
FY13
FY13
(RM'mil)1,883.3 831.4 1,051.9 265.9 786.0 194.9 591.1
FY12
(RM'mil)1,787.8 759.2 1,028.7 349.2 679.4 169.9 509.5
• Higher profit contribution via growing core business areas through improved marketing, services and distribution network
Outlook
PAT
Gross Loans /
Financing 46,319.7 49,040.7 ▲ +5.9%
Gross Impaired Loans 2.55% 1,221.6 1,250.7 ▲ +2.4%
Customer Deposits 33,804.8 37,229.8 ▲ +10.1%
CASA Deposits 9,150.6 10,284.6 ▲ +12.4%
* ROA 1.12% 1.24% ▲ +0.12%
CTI 42.5% 44.1% ▲ +1.7%
Allowance Coverage 84.4% 87.7% ▲ +3.3%
*
* Restated with retrospective application of MFRS and BNM guidelines, where applicable
*
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 29
Aspirations
Lending
&
deposits,
71%
Trade
Services
, 28%
Others,
1%19.6%
FY13 Income mix
• Higher income underpinned by improved fee income and asset growth
• Expanding customer base and value of business in preferred sectors (construction, manufacturing, oil & gas)
• Seized growth opportunities from beneficiaries of Economic Transformation Programme (ETP)
• Regional coverage teams provided diversified geographic loans and deposits growth
Business Banking
Growing the business through decisive execution
Higher income and strong loans and deposits growth
11.4%Growth 12.8% 5.2% 46.1% 37.5% 37.9% 37.4%
PAT
FY12 Income Expenses PBP Allowances PBT Tax
PAT
FY13
FY13
(RM'mil) 619.3 105.6 513.7 72.6 441.1 108.8 332.3
FY12
(RM'mil) 555.7 100.4 455.3 134.6 320.8 78.9 241.9
Gross Loans / Financing 15,758.8 17,511.2 ▲ +11.1% +11.1%
Gross Impaired Loans 1.13% 275.3 197.6 -▼ -28.2% -28.2%
Customer Deposits 7,023.1 8,406.6 ▲ +19.7% +19.7%
CASA Deposits 2,019.5 2,763.7 ▲ +36.9% +36.9%
ROA 1.66% 1.98% ▲ +0.32% +0.3%
CTI 18.1% 17.1% -▼ -1.0% -1.0%
Allowance Coverage 129.6% 146.1% ▲ +16.4% +16.4%
FY13 PAT(composition to Group)
FY13
vs RM'mil FY12* FY13 FY12
Outlook • Expecting higher profit growth for FY2014
PAT
FY13 PATFY12 PAT Positive growth in FY13 Contraction in FY13* Restated with retrospective application of MFRS and BNM guidelines, where applicable
*
*
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 30
Gross Loans / Financing 14,625.5 17,104.8 ▲ +17.0%
Total Deposits 37,353.0 40,714.6 ▲ +9.0%
ROA 1.62% 2.26% ▲ +0.64%
CTI 20.2% 17.4% -▼ -2.8%
Ave Assets Management 1,561.5 1,710.8 ▲ +9.6%
G
G
G
G
• Higher income growth underpinned by strong growth in lending, deposits and transaction banking
• Focused on growing share of wallet in key economic sectors and ETP projects
• Secured new structured trade mandates and loans & financing resulting in higher fee income and net interest income
• Increased diversification of deposit mix and penetration of cash management solutions
• Continued cross sell in key products/solutions under wholesale banking platform
Corporate & Institutional Banking
Target high-profile and high-value clients, increase ‘share of wallet’, deliver innovative and quality solutions and leverage ANZ for x-border businesses
Aspirations
Continued strong income and lending/ deposits growth
36.7%Growth 41.4% 17.8% 100.0% 63.7% 68.6% 62.4%
FY13 PATFY12 PAT Positive growth in FY13 Contraction in FY13
PAT
FY12Income Expenses PBP Allowances PBT Tax
PAT
FY13
FY13
(RM'mil)526.0 91.4 434.6 -47.8 482.4 107.1 375.3
FY12
(RM'mil)384.9 77.6 307.3 12.7 294.6 63.5 231.1
* Restated with retrospective application of MFRS and BNM guidelines, where applicable
22.2%
FY13
vs RM'mil FY12* FY13 FY12
PAT
Lending &
deposits, 64%
Offshore
Banking, 7%
Asset Mgmt,
8%
Trade
Services & Cash Mgmt, 20%
FY13 Income mix FY13 PAT(composition to Group)
Services include : large corporate lending& deposits, financial institutions group, offshore banking, transaction banking, private equity, REITs and trustee services
Outlook • Anticipating good profit growth for FY2014
*
*
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 31
4.0%
• Improved contributions from funds management and private banking providing strong recurring income, partly offset by lower income from DCM and CF due to smaller deals size
• Decline in stock broking and equity derivatives contribution with lower trading volumes impacted by weaker market sentiments/global headwinds, and lower yields from increased competition. Notwithstanding this, broking market share has improved from 6.1% to 6.9%.
Investment Banking
Deliver comprehensive solutions, lead in capital markets, funds management, stock broking and enhance domestic & overseas distribution via ANZ
Aspirations
Subdued performance with stable outlook
* Restated with retrospective application of MFRS and BNM guidelines, where applicable
Growth 2.6% 23.2% 53.5% 6.0% 54.3% 51.5% 55.2%
PAT 153.0 68.5 -▼ -55.2%
CTI 54.0% 72.2% ▲ +18.1%
* Ave Assets Management 31,484.4 36,673.3 ▲ +16.5%
Ave Volume / Contract Traded (RM'mil/month)
* IB Broking 4,373.0 4,515.0 ▲ +3.2%
* AmFuture - FKLI 56.9 27.2 -▼ -52.2%
Market Share as at:
* IB Broking 6.1% 6.9% ▲ +0.8%
* AmFuture -FKLI 13.2% 7.5% -▼ -5.7%
1
DCM,
7%
CF,9%
Equity,
3%
Fund
Mgmt,
39%
Private
Bkg,
9%
Int
Biz,
11%
Broking
&Future,
23%
FY13
vs RM'mil FY12* FY13 FY12
FY13 Income mix FY13 PAT(composition to Group)
Outlook • FY2014 profit contribution to normalise
PAT
PAT
FY12Income Expenses PBP Allowances PBT Tax
PAT
FY13
FY13
(RM'mil)346.3 249.9 96.4 3.0 93.4 24.7 68.5
FY12
(RM'mil)450.7 243.6 207.1 2.9 204.3 51.3 153.0
FY13 PATFY12 PAT Positive growth in FY13 Contraction in FY13
*
*
1. Includes AmInvestment Management, AmInvestement Services, AmIslamic Funds Management & Private Banking
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 32
10.3%
FY13
vs RM'mil FY12* FY13 FY12
• Delayed in sales pipelines due to the announcement of GE13 on the domestic front
• Lower bond income from lack of significant primary issuance
• Risk aversion in trading arising from global and local uncertainties
Markets
Deliver substantive, integrated and client-led business with full-suite of FX, Rates, Commodities and FI offerings with ANZ collaborations
Aspirations
Performance impacted by continued volatility in market
Growth 5.0% 43.5% 41.1% 36.3% 42.4% 41.0% 41.0%
* Restated with retrospective application of MFRS and BNM guidelines, where applicable
PAT
FY12Income Expenses PBP Allowances PBT Tax
PAT
FY13
FY13
(RM'mil)295.1 71.3 223.8 -9.1 232.9 58.0 174.9
FY12
(RM'mil)463.3 75.0 388.3 -6.3 394.6 98.4 296.2
Outlook
• Higher FY2014 profit outlook supported by :
a) Intensifying cross sell initiatives by tapping into the Group‟s regional presence in FX and Derivatives business
b) Expansion of regional distribution and trading capabilities
PAT
FY13 Income mix FY13 PAT(composition to Group)
Fixed
Income, 52%
CTI 16.2% 24.2% ▲ +8.0%+8.0%
PAT : FX and Derivatives 62.7 71.4 ▲ +13.9%+13.9%
Financial assets HFT 10,182.7 5,174.0 -▼ -49.2% -49.2%
Financial investments
AFS 2,168.5 2,268.1 ▲ +4.6%
+4.6%
Total Group:
Financial assets HFT 10,942.4 7,022.0 -▼ -35.8%-35.8%
Financial investments
AFS 6,641.2 7,208.6 ▲ +8.5%
+8.5%
Financial investments
HTM 1,429.8 6,219.8 ▲ +>100.0%
+335.0%
FY13 PATFY12 PAT Positive growth in FY13 Contraction in FY13
*
*
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 33
FY12
Claim ratio 64.2% 60.5% -▼ -3.7%
Expenses ratio 14.9% 17.3% ▲ 2.4%
Combined ratio 89.4% 89.4% -
FY13
vs RM'mil FY12* FY13 FY12
• Higher net profits on higher premium growth, improved underwriting profits and one-off gains. One-off gains attributable to more favourable claims experience and closure/release of treaty commutation due to more favourable experience
• Lower claims from enhanced claims management processes, improved claims experience and more stringent underwriting controls
• Integration of Kurnia on track to deliver synergies (incorporated 6 months of Kurnia PBT results of RM 91.6 mil), synergies to-date of RM25.5 mil
• Positive capital adequacy ratio exceeds benchmark supervisory target
General Insurance
Leverage scale to lead the market in the motoring segment, whilst building a leading personal lines portfolio and niche commercial business
Aspirations
Improved performance, commence Kurniaintegration
89.2%Growth 68.0% >100.0% >100.0% 69.6% 38.6% 79.5%
* Restated with retrospective application of MFRS and BNM guidelines, where applicableFY2012 reflects AmG standalone results only; FY2013 reflects AmG and 6-months of Kurnia integrated results
Outlook • Expecting higher premiums growth and profit for FY2014
PAT
9.9%
FY13 PAT(composition to Group)
PAT
FY13Income Expenses PBP Allowances PBT Tax
PAT
FY12
FY13
(RM'mil)396.4 189.3 207.1 -2.1 209.3 41.3 167.9
FY12
(RM'mil)209.5 86.3 123.3 -0.1 123.4 29.8 93.6
PAT
FY12Income Expenses PBP Allowances PBT Tax
PAT
FY13
FY13 PATFY12 PAT Positive growth in FY13 Contraction in FY13
*
*
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 34
• Profits from life business reflected the revisions in reporting requirements, from change in classification of Non-Par fund and reserves from liability to equity
• Exploring new strategic partnership to become a leading insurance player
• Increased productivity of bancassurance leveraging Group‟s platforms
• Accelerated recruitment and training of quality agency force
• Rationalized product portfolio and distribution cost structure to deliver margin expansion
Life Assurance
To be leading Life Insurer in customer service, productivity and productsAspirations
Results reflecting revisions to reporting requirements
Growth 11.8% 78.9% 66.4% >100.0% >100.0% >100.0% >100.0%
FY13 PATFY12 PAT Positive growth in FY13 Contraction in FY13
* Restated with retrospective application of MFRS and BNM guidelines, where applicable
Outlook • FY2014 profit contribution to normalise
PAT
FY13
vs RM'mil FY12* FY13 FY12
-3.2%
FY13 PAT(composition to Group)
PAT
FY12Income Expenses PBP Allowances PBT Tax
PAT
FY13
FY13
(RM'mil)50.1 106.9 -56.8 4.6 -61.4 -6.6 -54.8
FY12
(RM'mil)149.0 95.6 53.4 21.8 31.6 12.9 18.7
*
*
Total assets 2,992.9 3,139.6 ▲ +4.9%
CAR ratio 224.6% 228.9% ▲ +4.3%
Net earned premium 389.0 395.6 ▲ +1.7%
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 35
9.9%
• Higher income from focused effort in working with Relationship Managers to offer specific customised solutions and improved customer experience
• Core business competencies of full suite Cash Management and Trade & Supply Chain Services yielding impressive growth in CASA and higher customer utilisation in Trade
• Invested in enhanced technology platforms and streamlined documentation for seamless customer experience
• Higher transaction flows (up 46% yoy) from collaboration with ANZ
Transaction Banking
To become top 5 Transaction Banking Service Provider in Malaysia by FY2015 with 8% market shareAspirations
Higher profits and CASA growth from growing share of wallet
* Restated with retrospective application of MFRS and BNM guidelines, where applicable
22.0%Growth 22.3% 19.8% 33.3% 36.5% 36.5% 36.5%
PAT
FY12Income Expenses PBP Allowances PBT Tax
PAT
FY13
FY13
(RM'mil)293.8 42.0 251.8 27.8 224.0 56.0 168.0
FY12
(RM'mil)240.9 35.1 205.8 41.7 164.1 41.0 123.1
FY13
vs RM'mil FY12* FY13 FY12
Cash
Mgmt,
52%
Trade
Services,
48%
FY13 Income mix FY13 PAT
(composition to Group)
Outlook • Anticipate good profit growth for FY2014
PAT
Gross Loans / Financing 4,691.0 5,099.0 ▲ +8.7%
Trade Finance 4,616.1 4,986.2 ▲ +8.0%
Cash Management 16,960.9 19,658.7 ▲ +15.9%
CASA Deposits 4,481.5 7,199.6 ▲ +60.7%
ROA 2.79% 3.40% ▲ +0.6%
CTI 14.6% 14.3% -▼ -0.3%
FY13 PATFY12 PAT Positive growth in FY13 Contraction in FY13
*
*
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 36
FY13 PAT(composition to Group)
• Higher income backed by stronger asset growth as a result of increased focus to feature Islamic banking products & services
• Strong financing growth in both retail (driven by auto financing) and non-retail. Greater emphasis was placed to grow GLC and GLIC business while capitalising on ETP related projects.
• Strong deposits & CASA growth, resulting from a continued focus on sticky funds and improving funding mix
Islamic Banking
To be the Islamic Bank of choiceAspirations
Lower provisions despite strong loan growth
* Restated with retrospective application of MFRS and BNM guidelines, where applicable
6.6%Growth 0.7% 16.1% 8.5% 5.2% 11.9% 11.4%
Outlook • Increase penetration of solutions and cross-selling to support AmBank Group as “main bank”
PAT16.0%
FY13
vs RM'mil FY12* FY13 FY12
PAT
FY12Income Expenses PBP Allowances PBT Tax
PAT
FY13
FY13
(RM'mil)847.8 353.4 494.4 146.2 348.2 77.8 270.3
FY12
(RM'mil)795.0 304.3 490.7 159.8 330.9 88.4 242.6
FY13 PATFY12 PAT Positive growth in FY13 Contraction in FY13
*
*
Gross Financing 18,968.2 22,492.2 ▲ +18.6%
Gross Impaired
Financing 1.19% 237.7 268.4 ▲ +12.9%
Customer Deposits 18,263.1 23,176.5 ▲ +26.9%
CASA Deposits 4,441.6 6,639.9 ▲ +49.5%
ROA 1.02% 0.93% -▼ -0.09%
CTI 38.3% 41.7% ▲ +3.4%
Allowance
Coverage 200.5% 188.1% -▼ -12.5%
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 37
* Restated with retrospective application of MFRS and BNM guidelines, where applicable
• Includes funding cost to support recent acquisitions
• Includes AmFamily Takaful 1st year results
• MI represents non-controlling interests of the Group
Group Operating Segments
FY13 PAT(composition to Group)
3.0%
2.2%
14.1%Growth >100.0% 14.7% >100.0% 73.6% >100.0 >100.0%
PAT
19.8% > 66.2%
FY13 PATMIFY12 PATMI Positive growth in FY13 Contraction in FY13
PATMI
FY12Income Expenses PBP Allowances PBT Tax
PAT
FY12MI
PATMI
FY13
FY13
(RM'mil)257.7 405.5 -147.8 -143.8 -4.0 -41.9 37.9 58.1 -20.1
FY12
(RM'mil)299.9 353.5 -53.5 -38.5 -15.0 -3.9 -11.2 48.5 -59.6
*
*
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 38
EXECUTIVE SUMMARY Page 31
FY2013 GROUP FINANCIAL PERFORMANCE Page 112
OUTLOOK & STRATEGIC PRIORITIES Page 223
DIVISIONAL STRATEGY & PERFORMANCE Page 264
SUPPLEMENTARY INFORMATION – AMBANK GROUP Page 38
SUPPLEMENTARY INFORMATION – ECONOMY & INDUSTRY Page 526
5
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 39
Strategic Business Transformation: Good Progress
Set Group‟s MTA, transformation strategy, agenda and targets Enhanced focus on asset quality and risk reward trade offs Realigned business model towards profitable segments in HP, mortgage & fixed
income Consolidated Group balance sheet activities within commercial bank Split composite insurance license to General and Life
Strategic Business
Transformation
High Priority Growth
Initiatives
Governance & Enablement Functions
Created deposit businesses as profit centres across Group Commenced realigning non-retail customer segmentation and divisional focus Proactively strengthened capital and liquidity management Repositioned balance sheet for rising interest rates
Completed realignments in non-retail customer centric business models Continued expanding product offerings and new capabilities in Markets division Balance sheet funding strengthened via long term fund raisings
Developed retail focus customer centric business models Implemented basic account plans for business customers to increase SOW Initiated Group Rebranding program Initiated revamping of branches to refresh customer experience Realigned account management teams for more effective account planning
FY2012 & FY2013
60 & 72 months
FY2011
48 months
FY2010
36 months
FY2008 & FY2009
12 & 24 months
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 40
High Priority Growth Initiatives: Implemented To-Date
Created new profit centre based retail branch distribution model Created a separate Corporate and Institutional Banking (CIB) DivisionDeveloped new FX business in collaboration with ANZ Enhanced cash management offering via Gross Payroll system Friends Life brought in as new life strategic business partner
Accelerated building of scale in non-retail customer businesses Increased focus on GLC, GLIC and MNC businessesDeveloped new Rates business in collaboration with ANZ Expanded distribution footprint (particular focus on 7-11 ATM‟s) & alternative
channels
Commenced activities to leverage ANZ International connectivityDeveloped new wealth management business strategies Created a new Transaction Banking business focusing on trade and cash
management
Inked business principle agreements with ANZ to leverage international connectivity
Commenced a new family Takaful business with Friends Life Commenced Priority Banking expansion initiatives Completed Kurnia & MBF Cards acquisitions and commence integration Repurchased remaining shareholding in AmLife and AmTakaful Secured approval as Private Retirement Scheme (PRS) provider Established partnership with Travelex for money changing services
Strategic Business
Transformation
High Priority Growth
Initiatives
Governance & Enablement Functions
FY2012 & FY2013
60 & 72 months
FY2011
48 months
FY2010
36 months
FY2008 & FY2009
12 & 24 months
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 41
Governance and Enablement Functions Streamlined:Supports Better Decision Making
Privatised AmInvestment Bank as part of migration to universal banking platform Consolidated / simplified governance committee structures and strengthen risk disciplines Created a Group PMO to prioritise and manage key strategic initiatives Established Advance Risk Recognition Program (ARRP) Separated ALCO, capital and balance sheet management from Markets Delivered Peer Bank relative performance benchmarks Implemented short and long term performance incentives
Delivered 8 new generation retail scorecards & new market risk models Commenced PD, LGD & EAD models for retail and non-retail, non-retail security indicators Developed leadership bench-strength and succession planning Implemented Operational Risk Incident Reporting system and Basel II capital calculator
Implemented FTP system aligned to balance sheet strategies Consolidated some Group Support into Centres of Excellence Initiated new retail and non retail PD / LGD models, Security Indicators, Collateral
management, and Market risk system (VIPER) Initiated core banking system replacement programme
Implemented a new ALM system and divisional capital allocations under Basel II Integrate new Basel III frameworks into planning processes Finalised vendor selection and commenced core banking system replacement Developed AmFamily Takaful system to support commencement of Takaful business Implemented Model Execution Platform (MEP) provisioning methodology for better risk
assessment and pricing capabilities Transitioned to full MFRS 139 compliance on collective provisioning for credit risk Developing new behavioral scoring models for Retail and SME portfolio
Strategic Business
Transformation
High Priority Growth
Initiatives
Governance & Enablement Functions
FY2012 & FY2013
60 & 72 months
FY2011
48 months
FY2010
36 months
FY2008 & FY2009
12 & 24 months
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 42
Funding strategy, improving diversity
RM10 bil senior notes programme
1st senior notes issuance by a financial institution in Malaysia
AmBank has outstanding RM2.72bil senior notes (RM7bil over 30 year programme) as at FY2013
AmIslamic has outstanding RM550m senior sukuk (RM3bil musyarakah programme) as at FY2013
Both rated AA3 (RAM)
Subordinated Sukuk
RM2bil subordinated sukuk musyarakah programme (issued RM600mil in Sep‟11,RM200mil in Jan‟12 & RM200mil in Dec‟12)
Medium Term Notes
RM2bil medium term note (outstanding RM1.97bil as at Dec‟12)
RM2bil medium term note (issued RM1.0bil in Aug‟12 & RM0.3bil in Nov‟12)
Improve funding stability, maturity gap & liquidity ratios
Reduce dependence on short-dated deposits to fund long-dated fixed rate loan assets which incur liquidity risk and interest rate risk
Diversifies investor base
No obligation for buy back since we are not exposed to withdrawal risks and the notes are traded in the open market
Enable depositors to invest in long and medium dated papers
Supplemented by:
Customer deposits
Enhance domestic distribution through branches/channels aligned to demographics
Adjusted LDR1 of 88.7%
CASA: RM16.8bil (growth = 27.8%), FD: ~RM67.9bil (strong retention)
Funding diversity underpinned by:
Benefits to funding strength
Statutory reserve and liquidity requirement savings
Reduced exposure to interest rate risks
Loans with Recourse
Recourse obligations on loans sold to Cagamas (maturing 2017)
Islamic financing sold to Cagamas (maturing 2016)
1 Based on net loans including loans sold with recourse over adjusted customer deposits (adjusted customer deposits include term funding and loans sold with recourse)
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 43
117.3 215.6
332.9
574.7
907.6
129.0
240.6
369.6
642.5
1,012.1
Savings Current Account CASA Fixed Deposits Core Deposits
Mar'12 Mar'13
10.0% 11.6% 11.0% 11.8% 11.5%
4.8 8.4 13.2
63.6
76.8
5.1
16.8
Savings Current Account CASA Fixed Deposits Core Deposits
Mar'12 Mar'13
6.6% 39.7% 27.8% 6.8% 10.4%
67.9
84.8
11.8
Savings Current Account
CASA Fixed Deposits Core Deposits
Industry Deposits Growth by Type
RM’bil
Deposits by Type : AmBank Group vis-à-vis Industry
Source : BNM, internal reports
RM’bil
AmBank Group Deposits Growth by Type
6.0%
13.9%
81.3%
AmBank Group Core Deposits
Composition
Savings
Current Account
Fixed Deposits
Savings Current Account CASA Fixed Deposits Core Deposits
12.7%
23.8%63.5%
Industry Core Deposits
Composition
Savings
Current Account
Fixed Deposits
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 44
28.0
13.6 2.1 2.1
8.4
2.5 1.2 0.001 2.8 20.0
4.1
45.8 39.0
84.8
Purchase ofTransportVehicles
Purchase ofRes Properties
Credit Cards Personal Use Purchase ofNon-Res
Properties
Purchase ofSecurities
Fixed Assets ConsumerDurables
Construction WorkingCapital
Other purpose Retail Loans Business &Corporate
Loans
Total loans
Mar-13
5.4% 6.7% 24.8% 0.5% 31.5% 45.0% 8.7% 25.2% 30.3% 8.0% 12.8%
6.2% 12.1%
8.9%
156.9 312.9
32.2 55.8 137.2 60.4
9.0 0.1 30.7 266.9 69.3
557.7 573.6
1,131.3
Purchase of
TransportVehicles
Purchase of
Res Properties
Credit Cards Personal Use Purchase of
Non-ResProperties
Purchase of
Securities
Fixed Assets Consumer
Durables
Construction Working
Capital
Other purpose Retail Loans Business &
CorporateLoans
Total Loans
Mar-13
10.1% 11.0%
10.6%
8.1% 12.4% 1.2% 9.1% 18.2% 29.3% 1.3% 20.7% 13.1% 3.2% 17.5%
Loans by Economic Purpose: AmBank Group vis-à-vis Industry
composition : 33.0% 16.1% 2.4% 2.5% 9.9% 2.9% 1.4% 0.0% 3.3% 23.6% 4.8% 54.0% 46.0%
RM’bil
Source : BNM, internal reports
RM’bil
AmBank Group Loans Growth by Economic Purpose*
Industry Loans Growth by Economic Purpose
composition : 13.9% 27.7% 2.8% 4.9% 12.1% 5.3% 0.8% 0.0% 2.7% 23.6% 6.1% 49.3% 50.7%
* Based on BNM classification
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 45
Retail customer centricity transformation journey
Previously
Product silo approach
• Products specific sales approach
• Pricing based on individual product profitability
• Customers not recognised for their total portfolio with the group
Basic segmentation –differentiate customers based on demographics
Life stage focus: Family, Youths, Seniors
Product based strategy Developing bank-wide
segment strategy
Integrate marketing programs
Channel optimisation
Building segment capabilities
Maximise customer‟s relationship
Elevate & evolve segment focus
Entrench segment focus
Upgrade research & analytics
Increase sophistication in segment marketing
FY2013 – 2014Segment Expansion
FY2015 & beyondSegmentation focus
Building “Customer Centricity” model
“Main bank” for our selected customer segments
Segment focused organization culture
Higher share of wallet, top-of-mind awareness
Building in progressOutcome
Customer Centric organisation
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 46
ANZ & AmBank Group Partnership
ANZ diversified footprint in Asia
16 Asian markets, 98 branches and 5 Partnerships
Source: Trade Finance Magazine 2013
ANZ role and value add
ANZ’s representation on Board and within management
• Mark Whelan – Director• Gilles Planté- Director • Alistair Bulloch – Alternate DirectorB
OA
RD
MA
NA
GEM
EN
T
Senior Management• Mandy Simpson – Chief Financial Officer • Nigel Denby – Chief Risk Officer• Ross Foden – Chief Operations Officer• Paul Lewis – Managing Director, Retail
Banking
Management• Senior GM, Transaction Banking• Head, Wealth Management
• Seconding ANZ staff into key roles
• Providing technical expertise
• Support new product development
• Two-way customer referrals
• Joint account planning
• Access to regional network & connectivity
CHINA
HONG KONG
PHILIPPINES
VIETNAM
NEW ZEALAND
SOUTH KOREA
JAPAN
TAIWAN
INDONESIA
AUSTRALIAPACIFIC ISLANDS
SINGAPORE
LAOS
THAILAND
CAMBODIAMALAYSIA
PAPUA NEW GUINEA
FIJI
INDIA
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 47
AmGeneral Insurance Berhad – No 1 position in Motor
• Justin Breheny (IAG Asia CEO) - Director
• Duncan Brain - Director
SENIOR MANAGEMENT
• Duncan Brain – Advisor
• Travis Atkinson – CEO AmGeneral Insurance Berhad
• Stephen Beatty – General Manager, Claims
OPERATIONAL & PROJECT SUPPORT / CONSULTANTS
• Around 7 operational and project support / consultants
Bo
ard
Man
ag
em
en
t
Involved in the management of AmGeneralInsurance, offering skills transfer, partnership and relationship models of IAG
Adding value through claims re-engineering savings, increased revenue via product development, underwriting and pricing
GENERAL INSURANCE
Valu
e P
ro
po
sit
ion
AmG completed the Kurnia acquisition on 26 September 2012. The combined entity was renamed AmGeneral Insurance Berhad on 1 March 2013.
One of Malaysia’s leading general insurers and the number one motor insurer
Insures around one in five cars in Malaysia (~21% market share) and ~12% market share for general insurance by GWP
GWP over RM1.7 billion
4 million policy holders and a diversified distribution base – 7,000 plus agents, supported by a national network of branches and over 180 AmBank branches across the country
Cost synergies and operational efficiencies to achieve value accretion over the next 2 years
IAG provided substantial leadership and input into the acquisition process and integration planning
Resources from IAG Group have been mobilised to Malaysia to assist with integration
Am
Gen
eral
In
su
ran
ce
Leveraging strategic partnership with global insurance partner
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 48
1.Peer banks as at Dec 2012, AmBank as at latest practical date 2. AmLife & AmG branches and agency office
Multiple distribution channels aligned to demographics
Kuala LumpurBranches 29ATMs 149
TerengganuBranches 4ATMs 20
JohorBranches 23ATMs 97
MelakaBranches 5ATMs 37
Negeri SembilanBranches 8ATMs 44
PahangBranches 8ATMs 36 Sarawak
Branches 17ATMs 47
SabahBranches 9ATMs 35
Pulau PinangBranches 16ATMs 52
PerlisBranches 1ATMs 4
KelantanBranches 2ATMs 22
PerakBranches 19ATMs 49
KedahBranches 5ATMs 29
PutrajayaBranches 1ATMs 4
SelangorBranches 39ATMs 261
LabuanBranches 1ATMs 2
Population Density:
< 100 persons per km2
101-500 persons per km2
501-1,000 persons per km2
1,001-1,500 persons per km2
> 1,501 persons per km2
Commercial banking branches:
o 187 branches nationwide
- #61 in no. of branches
- 3 AmIslamic branches
o 888 ATMs- 404 ATMs (#1 provider of ATMs) at 7-Eleven
o 163 Electronic Banking Centreso 34 AmGeneral branches (include 4 dual branded
branches)o 18 AmLife office, 14 Agency officeo 14 AmInvestment officeso 26 MBF brancheso 4 Regional Business Centres (Penang, Johor,
Kuching, Kota Kinabalu)
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 49
AmInvestmentGroup Berhad
AmCorp Group Bhd,
16.4%
ANZ Funds Pty Ltd 1,
23.8%
EPF, 12.7%
Other shareholders,
47.1%
Foreign shareholding excluding ANZ
FY2010 FY2011 FY2012 FY2013
27% 27% 26% 29%
Solid shareholding structure & franchise value
As at 31 March 2013
AmLifeInsurance
Berhad
AMMB Holdings Berhad
Capital Markets
100%
100%
100%Asset Management
100%
100%
100%
51%
Banking
Insurance
AmGeneralHoldingsBerhad2
AmFamilyTakaful Berhad
AmBank (M) Berhad
AmIslamic Bank Berhad
AmInvestmentBank Berhad
AMAB Holdings Sdn Bhd
100% MBF Cards (M’sia) Sdn Bhd
BonuskadLoyalty Sdn
Bhd
33.33%
100%
AmGeneralInsurance Berhad3
100%
1. ANZ: ANZ Funds Pty Ltd,a wholly owned subsidiary of Australia and New Zealand Banking Group Limited2. Formerly known as AmG Insurance Berhad3. Formerly know as Kurnia Insurans (Malaysia) Berhad
49%
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 50
Banking sector share price movement / target price and recommendations
Banking Sector Share Price Movement
132.9%
85.6%
82.7%
75.0%
44.2%
12.2%
30.6%
0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0%
HLFG
RHB Cap
AMMB
PBB
CIMB
MBB
KLCI(Note: 18 May 2007 vs. 10 May 2013) Ratings FY2007 FY2013
AmBank (M) RAM A2/P1/Stable AA3/P1/Positive
Fitch BBB-/F3/Stable BBB/F3/Stable
S&P BBB-/A-3/Stable BBB+/A-2/Stable
Moody‟s Baa2/P-3/Stable/D- Baa1/P-2/Stable/D+1
AmInvestment RAM AA3/P1/Stable AA3/P1/Positive
Fitch BB+/B/Stable BBB/F3/Stable
S&P BB+/B/Stable BBB+/A-2/Stable
AmIslamic
RAM A2/P1/Stable AA3/P1/Positive
AMMB RAM NA A1/P1/Positive
Upgraded ratings
Target Price and Recommendations
TP: target price
Sell/Underperform/Fully valued/Reduce/UnderweightHold / Neutral / Market performBuy/Outperform/Overweight/Add
P/EPS : EPS annualized Apr 12 – Dec 12 P/BV : BV as at 31 Dec 12Source : Bloomberg as at 10 May 2013
1 BFSR - Banking Financial Strength Rating
KAF UBS NOMURA MBB RHB ALLIANCE TA BofAML KEN DEUT HLIB PIVB MACQ JP GOLDMAN S. MIDF DBS BNP SC CLSA CIMB AFFIN UOB HSBC CITI
+2
+1
+2
+2
+3
+2
+1 Notches of ratings upgrades
+1
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 51
Major investment banking deals clinched
Secondary Offerings IPO
Debt Capital Market
M&A
Sentoria Group Berhad
Market Capitalisation:RM 348.0 million
Principal Adviser, Managing Underwriter, Underwriter and
Placement Agent
February 2012
Eita Resources Berhad
Market Capitalisation:RM 98.8 million
Principal Adviser, Managing Underwriter, Underwriter and
Placement Agent
April 2012
China Automobile Holdings Parts Ltd
Market Capitalisation:RM 408 million
Principal Adviser, Lead Placement Agent and Managing Underwriter
January 2013
Dijaya Corporation Berhad
RM319.12 million
Rights Issue
Adviser
March 2013
Protasco Berhad
RM22.92 million
Private Placement
Sole Placement Agent
February 2013
Oldtown Berhad
RM64.35 million
Private Placement
Sole Placement Agent
December 2012
AmFirst REIT
RM213.60 million
Rights Issue
Adviser, Managing Underwriter and Sole
Underwriter
August 2012
Unconditional Take-Over Offer in Bonia
Corporation Bhd
October 2012
RM204.91 million
Freeway Team Sdn. Bhd.
FREEWAY TEAM SDN. BHD.
RM5.980 billion
Merger of Businesses of Kencana Petroleum and Sapuracrest Petroleum
May 2012
KencanaPetroleum
Berhad
Conditional Take-Over Offer in Pontian United
Plantations Berhad
September 2012
RM624.82 million
TSH Resources Berhad
RM 575 million
DRB-HicomBerhad
Disposal of Entire Business of Hicom
Power Sdn Bhd
December 2012
Unconditional Take-over Offer on Dunham Bush Holding Berhad
November 2012
RM2.10 million
Yantai Moon Group (Hong Kong)
LimitedStarhill Real Estate Investment Trust
RM1.31 billion
Acquisition of Marriott Hotels
comprising Sydney Harbour Marriott,
Marriott Melbourne and Marriott
BrisbaneNovember 2012
Khazanah Nasional Berhad
Joint Lead Manager
March 2013
RM740 Million
Government-GuaranteedSukuk under the RM20.0BilSukuk Programme
RM1,195 Million
Government-Guaranteed Sukuk Murabahah under the RM5,311 Million Sukuk Programme
Joint Lead Manager
Feb 2013
RM615 Million
Sukuk Musyarakahunder the MYR10.0 Billion
Sukuk Programme
Aman Sukuk Berhad
Joint Lead Manager
March 2013
Putrajaya Holdings Berhad
RM800 Million
RM3.0 Billion SukukProgramme
Joint Lead Manager
Feb 2013
DanaInfra Nasional Berhad
MYR8.0 billion Islamic
Commercial Paper / Islamic
Medium Term Note
Programme
Joint Lead Manager
Dec 12
RM1.5 Billion
Weststar Capital Sdn Bhd
RM900 Million
MYR900.0 MillionSukuk MudharabahProgramme
Principal Adviser, Lead Arranger and Lead Manager
Nov 12
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 52
EXECUTIVE SUMMARY Page 31
FY2013 GROUP FINANCIAL PERFORMANCE Page 112
OUTLOOK & STRATEGIC PRIORITIES Page 223
DIVISIONAL STRATEGY & PERFORMANCE Page 264
SUPPLEMENTARY INFORMATION – AMBANK GROUP Page 38
SUPPLEMENTARY INFORMATION – ECONOMY & INDUSTRY Page 526
5
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 53
94.1
0
20
40
60
80
100
120
140
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009 2010 2011 2012
BCI
27.5
41.6 43.3
30.8 29.6 27.0 28.2
33.1
39.0
23.4 22.1
25.5
31.8
27.4 30.1 31.1 29.8
21.3
17.2
26.6
3.7
15.8
0.3
4.2 2.7
0.8 3.6
(2.0)
5.6 6.5 6.5
10.7 11.1 10.2
5.2 6.5 7.5
6.1
9.6
5.9
-10
0
10
20
30
40
50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009 2010 2011 2012
Trade Balance FDI
RM' bil
6.4%
15.0%
0%
5%
10%
15%
20%
25%
30%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2010 2011 2012
GDP Consumption Investment
3.0%
1.6%
0%
5%
10%
Mar
Jun
Sept
Dec
Mar
Jun
Sept
Dec
Mar
Jun
Sept
Dec
Mar
2010 2011 2012 2013
Unemployment Rate CPI
Moderating growth CPI & unemployment rates remain low
FDIs remain robust
Sources : Bloomberg & BNM
GDP
Domestic consumption and investment continues to drive Malaysian economy
Slight deterioration in near term expectations
Business Conditions Index
4.8%
Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar
Feb‟13
27.5
41.6 43.3
30.8 29.6 27.0 28.2
33.1
39.0
23.4 22.1
25.5
31.8
27.4 30.1 31.1 29.8
21.3
17.2
26.6
3.7
15.8
0.3
4.2 2.7
0.8 3.6
(2.0)
5.6 6.5 6.5
10.7 11.1 10.2
5.2 6.5 7.5
6.1
9.6
5.9
-10
0
10
20
30
40
50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009 2010 2011 2012
Trade Balance FDI
RM' bil
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 54
10.1%
11.0%10.6%
5%
10%
15%
Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar
2010 2011 2012 2013
Retail growth YoY Non-retail growth YoY Total loans growth YoY
Domestic economy expected to be resilient
Interest rates expected to remain in the short term
4.70%
3.00%
6.53%
0%
5%
10%
15%
2006 2007 2008 2009 2010 2011 2012 2013
Average lending rate (commercial banks) Average OPR Average BLR
RM’mil
Stable household debt / GDP with sustainable loan application
Stable loans applications, softening loans approvalsLoans growth remains resilient
Source: BNM
To be updated for the his
-10.3%
-13.0%
-40%
-20%
0%
20%
40%
60%
Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar
2010 2011 2012
Loans application growth YoY Loans approved growth YoY
257.7 307.6 342.1 350.4
263.7 333.7
400.1 415.8
33.4% 34.2% 34.6% 31.9%
75.1% 75.8% 76.6%80.5%
-100
100
300
500
700
900
1,100
1,300
1,500
Retail loans application Non-retail loans application
Gross national savings Household debt/GDP
2009 2010 2011 2012
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 55
99.2%
1.3%
-2.0%
2.0%
6.0%
10.0%
14.0%
18.0%
80%
85%
90%
95%
100%
105%
Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar
2010 2011 2012 2013
Loan Loss Coverage Gross Impaired Loans
Source: BNM
Strong fundamentals in the banking sector
RM’bilCapital activities supported by debt issuance Sustained deposits growth provides liquidity
RM’mil
Asset quality remains intactCapital levels above BNM’s Basel 3 guidelines
Loan loss coverage Gross impaired loans
Improving gross impaired loans
78.3%
0
200
400
600
800
1,000
1,200
1,400
1,600
Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar
2010 2011 2012 2013
Total Deposits LD Ratio
0
5
10
15
20
25
30
35
40
45
50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2010 2011 2012 2013
New issues of equity New issues of debt
14.5%
13.1%
0%
5%
10%
15%
20%
Mar
Jun
Sept
Dec
Mar
Jun
Sept
Dec
Mar
Jun
Sept
Dec
Mar
2010 2011 2012 2013
RWCA CORE CAPITAL
Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 56
ETP: Propelling Malaysia towards becoming a high-income, developed nation by 2020
ETP OverviewFour Pillars of Malaysia’s National Transformation
ETP execution gaining momentum
• RM48k (USD15k) GNI per capita
• RM1.7 trillion GNI
• 6% annual GDP growth
GROSS NATIONAL INCOME
JOBS
• 31.6m population
• 3.3m additional jobs
TRANSFORMATIONAL ACTIONS
INVESTMENT
Focus Drivers:
• 12 NKEAs, 131 EPPs
• 60 Biz Opportunities
• Private-sector led
Competitiveness ‘Enablers’
• 6 SRIs & 51 Policy Measures
• RM1.4 trillion investment
• 92% private investment
• 8% public investment
• 73% DDI, 27% FDI
ECONOMIC TRANSFORMATION
PROGRAMME
Vision 2020
Preserving and enhancement of unity in diversity
Note: Data was correct as on ETP announcement date, the ETP is an evolving programme, in the past 2 years, some EPPs have been dropped, some new ones were added* Based on ETP update on 16 Nov 2012, the discrepancies with the sums of NKEAs was due to some undisclosed investment values and rounding errors
Round 10(13 Sep 2012)
ROUND 1(25 Oct 2010)
ROUND 2(30 Nov 2010)
ROUND 3(11 Jan 2011)
ROUND 4(8 Mar 2011)
ROUND 5(19 Apr 2011)
ROUND 6(13 Jun 2011)
ROUND 7(8 Sep 2011)
Initiatives
Investment (RM’bil)
GNI Impact (RM’bil)
Job creation(‘000)
TO-DATE*
TARGET (2020)
% OF TARGET
ROUND 8(10 Nov 2011)
9 9 19 23 12 15 10 13 21 7 11 149 - -
5.3 8.3 66.8 14.7 11.4 63.4 1.4 8.0 20.5 5.6 6.7 212.0 1, 400 15.0
0.1 84.5 32.5 20.1 16.6 66.3 8.4 6.7 4.6 2.4 1.1 137.6 1,700 14.8
13 70.5 52.4 88.3 74.4 63.5 10 16.9 39.9 18 40 411 3.3 mil 12.5
Round 9(28 May
2012)
Round 11(16 Nov 2012)
Effective delivery of government services
New Economic Model – high income, inclusive & sustainable nation
Smooth implementation of government’s development programme
1 Malaysia
People First, Performance Now
Government Transformation Programme
6 National Key Result Areas (NKRAs)
Economic Transformation Programme (ETP)
12 National Key Economic Areas (NKEAs)
10th Malaysia Plan
Macroeconomic growth targets & expenditure allocation
ETP : Economic Transformation ProgrammeSource : Pemandu
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 57
Malaysia remains an attractive investment destination
National Savings Rate(% of GDP)
Inflation (%)
GDP per capita (USD)
Malaysia Thailand Singapore Indonesia Philippines Vietnam
Source: World Economic Outlook Database April 2013
2012 2013f 2012 2013f 2012 2013f 2012 2013f 2012 2013f 2012f 2013f
5.6 5.1 6.4 5.9 1.3 2.0 6.2 6.3 6.6 6.0 5.0 5.2
10,304 10,946 5,679 6,572 51,162 52,179 3,592 3,817 2,614 2,918 1,528 1,705
3.0 3.0 0.5 0.7 2.0 2.0 6.2 6.1 7.0 7.0 4.5 4.5
31.9 32.4 30.6 30.9 45.6 44.6 32.6 32.3 22.3 22.5 30.7 30.7
1.6 2.2 3.0 3.0 4.6 4.0 4.3 5.6 3.1 3.1 9.1 8.8
6.4 6.0 0.7 1.0 18.6 16.9 -2.8 -3.3 2.9 2.4 7.4 7.9
-4.2 -4.0 -1.5 -2.9 5.5 5.1 -1.4 -2.8 -2.4 -2.1 N/A N/A
29.5 30.0 64.4 64.7 5.4 5.5 244.5 248.0 95.8 97.5 90.4 91.5
Unemployment (%)
Real GDP Growth, % YoY
ASEAN growth to remain robust but not immune to global economy challenges
Malaysia‟s growth to be driven by private investment (through ETP) as well as domestic consumption (supported by low inflation and unemployment)
Current account balance (% of GDP)
Government structuralbalance (% of GDP)
Population (mil)
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 58
Glossary / Disclaimer of warranty and limitation of liability
Reported PerformanceReported performance refers to the financial performance as reported in the audited financial statements and disclosed to the market
One OffsOne offs comprise those impacts on financial performance that arise from changes to :
• accounting and provisioning policies (eg 5 and 7 year rules)• differences between economic and accounting hedges• prior period catch ups (eg backdated salary costs)• strategic investments and divestments (eg ANZ partnership), and • tax and regulatory regimes (eg deferred tax asset write off due to reduction in corporate tax rates)
Underlying PerformanceUnderlying performance refers to the financial performance adjusted for one off impacts as above
Business DivisionsBusiness divisions
• comprise AmBank Group’s core operating businesses that generate profits from direct customer transactions and interactions• have relatively more stable income streams, incur the bulk of the costs and typically have a lower risk profile• in most instances have market shares and growth metrics that can be measured and benchmarked externally
Operating SegmentsOperating segments
• have more volatile and lumpy income streams, with the former a direct function of risk appetite • include
• income and expenses associated with shareholder funds, loan rehabilitation and legacy businesses, plus• costs associated with corporate, shared services and governance functions currently not charged back to the business units
The information provided is believed to be correct at the time of presentation. AMMB Holdings Berhad or AMMB Holdings or “AMMB” or its affiliates do not make any representation or warranty, express or implied, as to the adequacy, accuracy, completeness or fairness of any such information and opinion contained and shall not be liable for any consequences of any reliance thereon. Neither AMMB Holdings nor its affiliates are acting as your financial advisor or agent. The individual is responsible to make your own independent assessment of the information herein and should not treat such content as advice relating to legal, accounting, and taxation or investment matters and should consult your own advisers.
Forward looking statements are based upon the current beliefs and expectations of the AMMB Holdings and are subject to signif icant risks and uncertainties. Actual results may differ from those set forth in the forward looking statements. AMMB Holdings does not undertake to update the forward looking statements to reflect impact of circumstances or events that may arise after the date of this presentation.
The information in the presentation is not and should not be construed as an offer or recommendation to buy or sell securitie s. Neither does this presentation purport to contain all the information that a prospective investor may require. Because it is not possible for AMMB Holdings or its affiliates to have r egard to the investment objectives, financial situation and particular needs of each individual who reads the information contained thus the information presented may not be appropriate for all pe rsons.
The information contained is not allowed to be reproduced, redistributed, transmitted or passed on, directly or indirectly, to any other person or published electronically or via print, in whole or in part, for any purpose.
The term "AMMB Holdings" and “AmBank Group” denotes all Group companies within the AMMB Holdings Group and this Disclaimer of Warranty and Limitation of Liability policy applies to the financial institutions under AMMB Holdings.
Disclaimer of Warranty and Limitation of Liability
AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING 59
The material in this presentation is general background information about AmBank Group’s activities current at the date ofthe presentation. It is information given in summary form and does not purport to be complete. It is not intended to be reliedupon as advice to investors or potential investors and does not take into account the investment objectives, financialsituation or needs of any particular investor. These should be considered, with or without professional advice when decidingif an investment is appropriate.
For further information, visit :
www.ambankgroup.com
Ganesh Kumar Nadarajah
Group General Manager, Group Investor Relations and Planning
Karen Chuah
Manager, Group Investor Relations and Planning
Tel : +603 2036 1435 Fax : +603 2031 7384 e-mail : [email protected] or
+6019 2093955 [email protected] or