ANALYST BRIEFING- 6 Months Ended 30 September 2011 -

Executive Summary

Financial Results for 1st Half FY2012

Contents

2

Questions & Answers3

1

1

CIR

ROE

Dividend

Policy

… move to industry average (45% - 48%) through:

• targeted revenue growth

• improved productivity

… achieve industry average (14% - 16%) through:

• focus on underlying earnings

• effective capital management

… pay “as much as we can afford, whenever we can”, subject to

maintaining strong capital ratios

In FY2012, we are setting a sound foundation to deliver on our medium term (3-5 years)

targets …

… to be better than industry average

… and increase non-interest income to 30% of total revenue2

Our Medium Term Targets

Asset

Quality

Investment

Bank

• Wealth Management

• Bancassurance

• Advisory

• Stockbroking

Revenue: Driving Fee Income through Cross-Selling

CONSUMER BANKING

• Mortgage Loans

• Credit Cards

• Personal Loans

• Hire Purchase

• Deposits

Existing

Opportunities

BUSINESS BANKING

• SME

• WHOLESALE

• Transaction Banking

Cash Management

Trade Finance

• Treasury Sales

• Investment Banking

Existing

Opportunities

New Growth

Opportunities

Consumer SME Wholesale Treasury Islamic

3

Line of Business

Major Products

Strategy

ROE; ROA; CIR

Our Business Model

FY2012 - 2015: By building sustainable growth in Consumer and SME Banking

Revenue (RM ’mil)

Top Line

PAT (RM ’mil)

Bottom Line

Gross Impaired Loans (%)

Credit Losses

LLC (%)

Coverage Strength

PBT (RM ’mil)

Bottom Line

ROE (%)

4

FY11

1,128.7

409.2

3.3

90.1

553.1

13.0

1H11

573.2

212.9

3.8

83.2

1H12

624.4

250.8

2.6

106.1

2Q11

297.0

102.4

3.8

83.2

2Q12

314.6

121.1

2.6

106.1

287.9 336.3 137.6 162.6

13.8 14.4 13.8 14.4

Profitability

Asset

Quality

YoY YoY 1H FY2012 major

achievements

Financial Summary

+16.8% Y-o-Y rise in

pre-tax profit, driven

by stronger net loans

growth at 8.1%.

+17.8% rise in profit

after tax.

ROE now at 14.4%.

Asset quality now

better than industry

average, with gross

impaired loans ratio

declining to 2.6%.

Loan loss coverage

raised to 106.1%.

CIR (%)

Cost Management

NIM (%)

Asset Yield

Core Capital (%)

RWCR (%)

LDR (%)

Liquidity

5

FY11 1H11 1H12 2Q11 2Q12

Salient

Ratios

Capital

Strength

YoY YoY 1H FY2012 major

achievements

CASA Ratio (%)

Funding Cost

48.3

78.8

2.7

34.1

12.0

16.1

45.6

82.8

2.7

35.4

11.9

16.1

46.0

77.3

2.6

34.8

11.9

15.8

45.9

82.8

2.8

35.4

11.9

16.1

45.5

77.3

2.6

34.8

11.9

15.8

Financial Summary

Cost to income ratio

at 46.0% - closing the

gap with industry.

CASA ratio

maintained at 34.8%.

Liquid balance sheet

with loans to deposits

ratio dropping further

to 77.3%, due to

accelerated growth in

deposits.

Strong capital ratios

with core capital at

11.9%, and overall

RWCR at 15.8%.

5

10

15

20

FY2009 FY2010 FY2011 1H12

4

9

14

19

24

FY2009 FY2010 FY2011 1H12

0.6

1.0

1.4

1.8

2.2

FY2009 FY2010 FY2011 1H12

0

20

40

60

FY2009 FY2010 FY2011 1H12

Investment

Ratios

EPS (sen)

ROE (%)

P / BV (times)

DPS (sen)

FY11 1H11 1H12 2Q11 2Q12

26.7 13.9 16.4 6.7 7.9

13.0 13.8 14.4 13.8 14.4

1.5 1.5 1.5 1.5 1.5

7.00 3.30 5.60 3.30 5.60

EPS# ROE* P / BV# DPS#

Note: * industry data based on 9-listed banks# based on respective financial year-end

14.9

19.7

26.7

8.6

10.5

13.0

0.9

1.5 1.5

6.25 6.40 7.00

6

sen % times sen

40.4

52.9 52.7

12.713.7

15.4

1.6

1.9

2.0

13.0

19.9

21.8

16.4

14.41.5

5.60

YoY YoY

Investment Ratios

Financial Results for 1st Half FY2012

Questions & Answers

Contents

Executive Summary

2

3

1

7

Profit and Loss (RM ’mil)

Net Income

Net Interest + Islamic Banking Income

Non-Interest Income (NII)

Operating Expenses

Operating Profit Before Provisions

(Allowance for)/Write-Back of Loss on

Loans and Others

Profit before Taxation & Zakat

Profit after Taxation & Zakat

Key Ratios

ROE (%)

ROA (%)

EPS (sen)

NII / Total Income (%)

Operating Expenses / Average Assets (%)8

FY11

1,128.7

903.0

225.7

582.3

(29.2)

409.2

1.2

26.7

20.8

1.6

1H11

573.2

457.6

115.6

312.0

(24.1)

212.9

1.3

13.9

20.9

1.5

1H12

624.4

472.1

152.3

336.4

(0.0)

250.8

1.4

16.4

25.5

1.6

-

2Q11

297.0

232.9

64.1

160.6

(22.9)

102.4

1.3

6.7

22.3

1.6

2Q12

314.6

241.5

73.1

171.4

(8.8)

121.1

1.4

7.9

24.6

1.6

(544.9) (261.2) (287.1) (136.4) (143.0)

13.0 13.8 14.4 13.8 14.4

YoY YoY

-

Net income rose 8.9% or

RM51.2mil driven by growth

in loans portfolio, and

recurring transactional fee

income.

Margins contracted 10bps

Y-o-Y and 20bps Q-o-Q.

Non-interest income ratio

rose to 25.5%, from 20.9%

in 1H FY2011.

Although there is negative

jaws due to 9.9% rise in

operating expenses from

personnel costs, and

investments in upgrading of

technology, this is

temporary, as Group is

building the solid

foundations for future

growth.

Provision for impaired loans

was RM8.8mil in 2Q

FY2012 due to loans

growth.

ROA at 1.4% is now in line

with industry average.

1H FY2012: Year-on-year

performance

553.1 287.9 336.3 137.6 162.6

Summarised Income Statement

Note: * based on 9-listed banks (1H12 refers to industry data up to June 2011)9

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

0

200

400

600

800

FY2009 FY2010 FY2011 1H12

Net Interest Income - lhs

AFG's NIM - rhs

Industry's NIM (computed)* - rhs

654.6 585.5 670.3

2.6%

2.7%

2.6%

2.8%

2.5%

2.7%

RM ’mil

344.7

2.6%

1.5%

2.0%

2.5%

3.0%

3.5%

FY2009 FY2010 FY2011 1H12

AFG

Industry (computed)*

Cost of Funds (COF)

2.9%

2.1%

2.3%

2.7%

1.9%

2.1%

2.4%

Rise in cost of funds due mainly to the 50bps rise in

OPR and 3% increase in statutory reserve ratio.

There was 25bps rise each in OPR on 8 July 2010

and 5 May 2011.

The Group registered 14.3% growth in interest income

due to the 8.1% expansion in the net loans, driven

mainly by the expansion in housing loans and SME

lending.

Net Interest Income

Sustainable interest income and margin

Interest Income

2.5%

2.5%

10

Non-Interest Income

0

40

80

120

160

1H11 1H12

RM ’mil

Commissions Fee Income Investment Income

Foreign Exchange Gain

115.6

18.5

57.8

23.9

7.2

Other Income

152.3

26.6

53.1

53.5

10.5

+44.3%

+124.3%

+3.6%

0%

5%

10%

15%

20%

25%

30%

0

100

200

300

FY2009 FY2010 FY2011 1H12

Non-Interest Income - lhs

NII / Total Income - rhs

235.0 233.2 225.7

22.4% 22.4%

20.8%

RM ’mil

152.3

25.5%

24.0%*

Non-interest income gaining momentum driven by combination of service charges, commissions from sale of wealth

management products, foreign exchange and treasury trading activities.

8.2

8.5

Note: * adjusted for one-off gains in 1Q FY2012

one-off gains

(RM12mil)

in 1Q FY2012

Non-interest income gaining momentum

Note: * based on 9-listed banks (1H12 refers to industry data up to June 2011) 11

Operating Expenses

40%

45%

50%

55%

60%

FY2009 FY2010 FY2011 1H12

AFG Industry (computed)*

53.0%

52.1%

48.3%

47.7%

46.3% 46.4%

Cost to Income Ratio (CIR)

46.0%

0 50 100 150 200 250 300 350

1H12 1H11RM ’mil

Total

Overhead

Expenses

Personnel

Costs

Establishment

Costs

Marketing

Expenses

Admin &

General

Expenses19.9

6.6

68.3

166.5

261.2

Overheads Breakdown

287.1

182.0

72.0

9.0

24.1

+9.9%

+9.3%

+5.5%

+35.9%

+21.3%

Despite the moderate rise of 9.9% in overhead expenses due to the expansion in business operations, the Group’s Cost to

Income ratio (CIR) improved further to 46.0%. The increase in staffing has been in the sales functions and wealth

management businesses.

Cost to Income Ratio now in line with industry average

46.5%

FY11

36.1

12.1

32.7

28.3

3.4

1H11

35.8

11.0

32.5

26.4

3.2

1H12

37.7

11.2

34.1

30.4

3.6

1Q12

37.9

13.2

34.4

28.3

3.5

2Q12

37.7

11.2

34.1

30.4

3.6

21.8 21.2 22.9 22.0 22.9

Balance Sheet (RM ’bil)

Total Assets

Investment and Dealing Securities

Loans, Advances and Financing

Total Liabilities

Deposits from Customers

Subordinated Bonds

Long Term Borrowings

Capital and Reserves

0.6 0.6 0.6 0.6 0.6

0.6 0.6 0.4 0.6 0.4

12

YoY YoY*

Total assets grew 5.4% from RM35.8bil in 1H FY2011 to RM37.7bil in 1H FY2012.

Net loans growth has accelerated to 8.1% Y-o-Y, driven by business lending. Strong pipeline built for undrawn loan

commitments.

Customers deposits rose 15.3% from RM26.4bil in 1H FY2011 to RM30.4bil in 1H FY2012.

Asset quality improved with gross impaired loans dropping to 2.6%, and net impaired loans to 1.4%.

1H FY2012 major achievements

YoY%

Summarised Balance Sheet

5.4%

1.8%

4.9%

15.3%

10.7%

8.1%

1.9%

-33.3%

Note: * comparison made between 2Q FY2012 against 2Q FY2011

0

1

2

3

4

5

500

600

700

800

900

1,000

FY2009 FY2010 FY2011 1H12

Gross Impaired Loans - lhs

AFG's Gross Impaired Loans Ratio - rhs

AFG's Net Impaired Loans Ratio - rhs

Industry's Ratio (computed)* - rhs

10

30

50

70

90

110

0

50

100

150

FY2009 FY2010 FY2011 1H12

Provision - lhs

AFG's LLC - rhs

Industry's LLC (computed)* - LLC - rhs

Note: * based on 9-listed banks (1H12 refers to industry data up to June 2011)

RM ’mil %

(115.1) 31.9 (33.3)

99.7%

94.4%

90.1%

4.5%

3.8%

3.3%

13

(1.1)

106.1%

2.6%

875.1 806.3 741.3 601.3

RM ’mil %

Asset Quality

Loan loss coverage at 106.1% due to the 1.5% collective provisions for the loans growth.

Net impaired loans down to 1.4% is below the industry average.

1.8% 1.8% 1.8%

1.4%

10

11

12

13

FY2009 FY2010 FY2011 1H12

Loans Breakdown

by Businesses(RM ’bil)

Consumer

SME

Wholesale

Group Special

Assets

Total

Consumer Banking

SME Banking

Wholesale Banking

%

share*

53.4%

24.3%

21.7%

0.6%

100.0%

FY11 1H11 1H12 1Q12 2Q12

12.3

5.4

4.6

0.1

22.4

12.3

5.0

4.3

0.2

21.8

12.5

5.7

5.1

0.1

23.5

12.3

5.5

4.6

0.1

22.5

12.5

5.7

5.1

0.1

23.5

14

Loans

3

4

5

6

FY2009 FY2010 FY2011 1H12

3

4

5

6

FY2009 FY2010 FY2011 1H12

YoY YoY#

Note: * as at 2QFY12# comparison made between 2Q FY2012 against 2Q FY2011

Gross loans growth of +7.6% YoY in 1H FY2012 compared to +6.2% YoY in 1H

FY2011.

Gross loans growth was primarily driven by business banking.

• SME Banking loans rose 13.2%.

• Wholesale Banking loans grew 18.6%.

Loans growth has accelerated for the 3 major Lines of Business.

RM ’bil

RM ’bil

RM ’bil

18

20

22

24

FY2009 FY2010 FY2011 1H12

0%

25%

50%

75%

100%

FY2009 FY2010 FY2011 1H12

Consumer Business

0%

25%

50%

75%

100%

FY2009 FY2010 FY2011 1H12

Variable Rate Fixed Rate

Loans Breakdown by

Economic Purposes (RM ’bil)

Purchase of Securities

Purchase of Transport

Vehicles

Purchase of Landed

Property

Purchase of Fixed

Assets

Personal Use

Credit Cards

Construction

M&A

Working Capital

Others

Total

Variable / Fixed

Consumer / Business

Total Loans

%

share*

1.5%

50.6%

8.8%

0.8%

100.0%

2.6%

0.5%

2.6%

26.8%

4.9%

85.3% 83.9% 86.2%

14.7% 16.1% 13.8%

55.3% 59.8% 55.0%

43.0% 39.0% 44.4%

19.6 21.4 22.4

FY11 1H11 1H12 1Q12 2Q12

0.4

11.5

2.1

0.3

22.4

0.7

0.1

0.7

6.1

0.6

0.3

11.3

2.1

0.2

21.8

0.8

0.1

0.7

5.7

0.6

0.4

11.9

2.1

0.2

23.5

0.6

0.1

0.6

6.3

1.2

0.4

11.6

2.1

0.3

22.5

0.7

0.1

0.6

6.1

0.6

0.4

11.9

2.1

0.2

23.5

0.6

0.1

0.6

6.3

1.2

15

0.9% 0.0 - 0.2 - 0.2

87.9%

12.1%

53.4%

46.0%

23.5

-

YoY YoY#

-

Balanced loans portfolio with 53.4% in Consumer; and 46.0% in Business Banking.

RM ’bil

Note: * as at 2QFY12# comparison made between 2Q FY2012 against 2Q FY2011

Loans

0%

1%

2%

3%

0%

10%

20%

30%

40%

50%

FY2009 FY2010 FY2011 1H12

Industry's CASA (computed)* - lhs

AFG's COF - rhs

Industry's COF (computed)* - rhs

1.2%

1.6%

2.0%

2.4%

2.8%

3.2%

0

10

20

30

40

FY2009 FY2010 FY2011 1H12

Market Share (computed)* - rhs

Note: * based on 9-listed banks (1H12 refers to industry data up to June 2011)

26.6% 34.4% 28.3%6.8 8.1 8.0

14.112.2

14.6

25.6

23.6

28.3

RM ’bil

16

1.61.7 1.6

CASA

6.4%

7.1%

5.8%

(2.7%)

(1.9%)

(2.1%)

8.9

14.3

30.4

1.7

(2.4%)

29.3%

5.5%

Demand Deposits

Savings Deposits

Fixed Deposits

Money Market Deposits

Others

Demand Deposits - lhs

Savings Deposits - lhs

Healthy deposit base supported by continued strong growth in CASA deposits

Deposits

• Core capital remained healthy at 11.9% in

1H FY2012.

• Risk-weighted capital ratio (RWCR) of

15.8% is higher than industry average of

14.6% in 1H FY2012.

• Total capital base of RM3.9bil, increased by

9.6% YoY. Tier 1 capital represents 76% of

total capital, improved further to RM3.0bil.

• Healthy capital structure enables us to meet

most of BASEL III requirements.

0%

5%

10%

15%

20%

0

1

2

3

4

5

FY2009 FY2010 FY2011 1H12

Tier 1 - lhs Tier 2 - lhs

Core Capital Ratio - rhs RWCR - rhs

RM ’bil

2.2 2.4 2.8

0.9

0.9

0.9

(10.3%)

(11.1%)

(12.0%)

(14.7%)

(15.4%)(16.1%)

17

3.0

0.9

(15.8%)

(11.9%)

Capital position remains strong

Capital

• Performed well in 1H FY2012 despite competitive and challenging economic environment.

• Strong and healthy balance sheet.

• Clear niche position in Consumer and Business Banking segments.

• Focus on revenue growth.

• Leverage on all our business franchises.

• Ensure growth is value-creating.

18

In Conclusion

The Bank remains strong and well-positioned.

Achieving continued growth.

Clear strategy and the right team to deliver it.

• Improving customer service remains a major priority.

• Strong full senior management team now in place.

Financial Results for 1st Half FY2012

Questions & Answers

Contents

Executive Summary

2

3

1

19

Alliance Financial Group

31st Floor, Menara Multi-Purpose

Capital Square

No. 8, Jalan Munshi Abdullah

50100 Kuala Lumpur, Malaysia

Tel: (6)03-2070 1322

www.alliancebank.com.my/investorrelations.html

THANK YOU

20

Eric Lee

Group Chief Financial Officer

Contact: (6)03-2730 2388

Email: ericlee@alliancefg.com

Disclaimer: This presentation has been prepared by Alliance Financial Group (the “Company”) for information purposes only and does not purport to contain all the

information that may be required to evaluate the Company or its financial position. No representation or warranty, expressed or implied, is given by or on behalf of the

Company as to the accuracy or completeness of the information or opinions contained in this presentation.

This presentation does not constitute or form part of an offer, solicitation or invitation of any offer, to buy or subscribe for any securities, nor should it or any part of it

form the basis of, or be relied in any connection with, any contract, investment decision or commitment whatsoever.

The Company does not accept any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in

connection therewith.

For further information, please contact: Amarjeet Kaur

Group Corporate Strategy &

Development

Contact: (6)03-2034 4386

Email: amarjeet@alliancefg.com