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Malayan Banking Berhad (Maybank) AGM 2011 Presentation by President & CEO
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Malayan Banking Berhad (Maybank) AGM 2011 Presentation by President & CEO


Malayan Banking Berhad (Maybank) AGM 2011 Presentation by President & CEO

Malayan Banking Berhad (Maybank) AGM 2011 Presentation by President & CEO

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  • 1. Humanising Financial Services Across Asia 51st Annual General Meeting Dato’ Sri Abdul Wahid Omar President & CEO 29 September 2011
  • 2. Introduction Another record profit in FY2011 and exceeded our headline key performance indicators (KPIs) Group transformation initiatives achieved growth across all our key business areas Acquisition of Kim Eng is a testament of our success in expanding regional contribution The new House of Maybank delivered strong performance across all business segments
  • 3. Introduction Financial Performance Regional ExpansionStrategy and Achievements Prospects
  • 4. Exceeding our KPIs for FY2011 Headline KPIs Target FY11 achievements Return on Equity 14% 15.2% Loans and Debt Securities Growth 12% 22.6% Other targets Target FY11 achievements Loans Growth• Malaysia 12% 16.8%• Singapore 5% 25.8%• BII Net Interest Margin 24% Decrease 25.8% Normalised: 2.71% (-9 bps YoY)**Actual NIM is 2.59%, a decline of 21 bps YoY Note: Loans growth for Singapore and BII are in their local currencies
  • 5. FY2011 PATAMI rose 16.6% YoY to RM4.45 billionRecord net profit ofRM4.45 billion wasmainly due to: 8.9% growth in net income 14.2% growth in overhead expenses 59.0% lower allowance for losses on loans *net of insurance claims
  • 6. Broad based growth across key business segments Group Profit Before Tax (PBT) by business sector (RM million)
  • 7. Profit growth from home markets continues to be strong Profit Before Tax by Geographical Locations International: 24%
  • 8. Loans grew 21.7% YoY, highest since FY2001 Strong Loans growth in 3 home markets of Malaysia (16.8%), Singapore (25.8%) and Indonesia (25.8%) Loans YoY Growth
  • 9. Community Financial Services: Growth across all segmentsMortgage Loans grew 11.6% despite intense competition Hire purchase grew 14.3% in FY2011 Cards performance outperforming industry SME loans market share recovering YoY Maybank Industry* (based on Bank Negara definition) Cardbase -3.6% -8.7% Billings 19.0% 14.4% Receivables 15.6% 12.4% Merchant Sales 12.3% 12.6% • Industry figures for cards includes commercial banks and non-FI players
  • 10. Global Wholesale Banking: Loans growth improved to 25.6%
  • 11. Investment Banking: Strong fee based income growth Fee based Income rose 48.9% YoY Industry Position & Market Shares Improved Industry Rank Industry Rank Total Value Maybank IB (without Kim Eng) Deals/Issues Market Share FY2010 FY2011 (billion) M&A 5 3 USD 9.3 31 25.7%Source: Bloomberg Equity & Rights Offerings 3 2 USD 0.86 9 9.6% Debt Markets - Malaysia Domestic Bonds 4 2 RM 16.3 134 26.3% Debt Markets - Malaysian Ringgit Islamic 2 1 RM 16.0 121 35.4% Bonds Equity Brokerage 4 3 RM 63.5 n.a. 7.0%
  • 12. Within Group Islamic Banking business, Maybank Islamic recorded strong financinggrowth of 35.1% Maybank Islamic financing (35.1% growth)Group Islamic Banking Income and PBT** Total Gross Financing = RM46.8 billion as at Jun 11 Improving key ratios*Maybank Islamic**Islamic Banking (includes Maybank Islamic and the Group’s other Islamicoperations) Consumer: +30.7% Business: +47.6%
  • 13. Etiqa: No.1 Position in Life/Family (new business) and General BusinessEtiqa maintains top position No. 1 in Life/Family (new business) with market share of 18.3%. No. 1 in General with market share of 11.5% Source: ISM Statistics (Apr10-Mar 11).Combined Gross Premium -6.8% Overall Loss Ratio Lower Than Industry 55.3% (Etiqa) vs. 59.5% (Industry) -13.9% -2.1% +1.8% -76.6% -20.5% +4.5% +29.6% +29.6% -2.2% +19.5% Source : Rolling 12 months (Jun10-Jun11) Note: Industry Loss Ratio is for conventional business only
  • 14. Introduction Financial Performance Regional ExpansionStrategy and Achievements Prospects
  • 15. Maybank Group’s Regional Network 2,100 Offices in 17 countries Acquisition of Kim Eng accelerates the Group’s objective of being a regional investment bank. Kim Eng added 65 offices to the Group. Worldwide Presence In 8 ASEAN countries China: 1 branch • Philippines: 1 rep office 50 branches London: Hong Kong: Thailand 1 branch 1 branch • Kim Eng: 2 branches Kim Eng: 44 branches Kim Eng: Kim Eng: 1 branch Uzbekistan** 1 branch • An Binh Bank: • Cambodia: 122 branches 10 branches•New York: • Vietnam: 2 branches Bahrain: 1 branch • Kim Eng: 7 branches 1 branch•Kim Eng: 1 branch India ASEAN •Malaysia: Kim Eng: 386 branches Brunei: 1 branch 3 branches Saudi Arabia* Singapore: 22 branches Pakistan Kim Eng: MCB: 1,134 Papua New 3 branches branches Guinea: 2 branches Indonesia BII: 344 branches * 1 office via Anfaal Capital Kim Eng: ** 1 office via 35% owned Uzbek Leasing International 5 branches
  • 16. Regional Investment Banking/Equities Capabilities Strengthened with Acquisition of Kim Eng Maybank’s Expanded Presence with Kim Eng Maybank Kim Eng also maintains ASEAN Stockbroking Champion Commercial Banking Brokerage / Investment Banking distribution presence in Retail Banking key financial markets Ranking M. Share Ranking M. Share Other Services including Hong Kong, London and New York #3 7% #1 12% Kim Eng #5 7% #2 9% Brokerage / Investment Banking Other Services #5 5% #9 3% Harnessing Synergies Cross-selling Improved Investment Banking and Underwriting Capability Mutual product offerings Leveraging Maybank‘s strong Tapping into Kim Eng’s client base balance sheet and client of 200,000 relationships Other Kim Eng’s Business and Footprint Expansion Cash management support for Maybank’s strong capital base cash balances held in trust can support Kim Eng’s growth Support for foreign exchange Enhanced Infrastructure initiatives (e.g. margin lending) flows and hedging Access to Thailand and Thai Improved funding cost Maybank’s branch network to support market intelligence stockbroking expansion Operational best practices in risk management and IT delivery platform
  • 17. Kim Eng is now wholly-owned subsidiary of Maybank1 Maybank Completed compulsory acquisition and delisted Kim Eng in Shareholding August 2011 in Kim Eng Maybank now owns 100% of Kim Eng Holdings Thailand: After the tender offer, Maybank now owns an aggregate2 83.74% in Kim Eng Securities Thailand Downstream offer Philippines: After acquisition, the aggregate holding in KimEng Financial Corporation (“ATRKE”) is 74.64%. As such, Kim Eng triggered a mandatory tender offer for the remaining ATRKE shares New leadership has been defined: Tengku Dato’ Zafrul as the CEO of3 the investment banking business and Ronald Ooi as his Advisor. Integration and Post-Merger Integration exercise is led by a Steering Committee, which Strategy of Kim Eng is co-chaired by Tengku Dato’ Zafrul and Ronald Ooi. Investment banking business realigned into 5 Business ‘Pillars’: Investment Banking and Advisory, Retail Equities, Institutional Equities, Equity and Commodity Solutions, and Asset Management. Overall total outlay for the entire acquisition is RM4.692 billion.
  • 18. Maybank/Kim Eng investment banking business reorganised into 5 pillarsThe 5 regional business pillars Maybank’s Investment Banking Business Pillar 1 Pillar 2 Pillar 3 Pillar 4 Pillar 5 Investment Banking and Equity and Equities – Retail Equities – Institutional Asset Management Advisory Commodity Solutions • Corporate Finance, • Retail stock • Institutional stock • Structured products • Fund management • Strategic Advisory, broking broking business and derivatives products and • Equity Capital Markets business services, services Debt Markets • Futures broking Enablers (Support services)The 3-year roadmap FY 2015 FY 2012 FY 2014 “Regional Financial Powerhouse” FY 2013 Stabilise Work towards • Number 1 Malaysian investment bank Build home operations, regional markets, capture • Top 5 position amongst regional leaders execute Quick leadership synergies • Top 3 broker in Malaysia, Indonesia, Thailand, Wins position Singapore and the Philippines
  • 19. Singapore: PBT improved 11.0% on higher fee income and lower provision Diversified Loan PortfolioRevenue and PBT rose 8% and 11% YoY respectively Consumer SGD billion Corporate Asset Quality continued to improve Maybank Singapore loans growth outpaced industry‘s
  • 20. BII: Revenue grew 20.4% on the back of 25.8% consolidated loans growth Branches and ATM Net Interest Margin Jun’10 : before adoption SFAS No.50/55; Jun’11 after Adoption SFAS No.50/55 GrowthLoan composition (Rp trillion) (YoY) 25% 20.% 27% 77% -20%
  • 21. Introduction Financial Performance Regional ExpansionStrategy and Achievements Prospects
  • 22. Transformation Programme spurring strong financial performance By 2015 Our Vision To be a Regional Financial Services Leader Our Mission Humanising Financial Services Across Asia Strategic Objectives 1. Undisputed No. 1 Retail Financial Services provider in Malaysia 2. Leading ASEAN wholesale bank eventually expanding to Middle East, China & India 3. Sustainable Champion for Insurance & Takaful 4. Truly regional organisation, with ~40% of pre-tax profit derived from international operations 5. Leading Islamic bank in ASEAN
  • 23. New “House of Maybank” Organisation Structure to support aspirations since July 2010 l S ncia ervic Fina es Acr ing oss anis Asi Hum Maybank a Group CEO + Support (CFO, CRO,GHC, Legal, Compliance, Communications Community Global Wholesale Insurance & EISLAMIC FINANCE Financial Banking Takaful N INSPIRED Services A Regaining Being the B Leveraging domestic National L shared leadership and Insurance E distribution, aggressively Champion and M Customer pursuing ASEAN Living the INTERNATIONAL E EXPANSION Segment driven, market expansion ETIQA way N Community Bank by humanising T client interaction Enterprise Transformation Services
  • 24. Expanded Group Executive Committee to reflect regional focus and drive businessgrowthKey management changes: Muzaffar Hisham (CEO of Maybank Islamic Berhad and Head of GroupIslamic Banking), Hans de Cuyper (Head, Etiqa Insurance & Takaful and CEO of Mayban Ageas HoldingsBerhad) and Dr. John Lee Hin Hock (Group Chief Risk Officer)
  • 25. New House of Maybank has accelerated the pace for growth and regional reach All branches converted to one-stop-shops, providing Community comprehensive range of financial services including serving Financial Business Banking and SME customers. Services Extended network via Pos Malaysia offices. Improved domestic loans and deposits growth. Introduced Client Coverage Model to provide single touch point to Global fulfill all the financial needs of corporate customers. Wholesale Restructured trade finance. Introduced TradeConnex. Banking Maybank IB secured major M&A deals and IPOs. Regional investment banking/brokerage capability strengthened with acquisition of Kim Eng. Regionalisation of products e.g. trade finance, cards, global markets. International BII added 70 branches increasing the total to 344. Philippines expanded branch network to 50 with 5 new branches. Cambodia opened 1 new branch in Kg Cham to reach 10 branches.
  • 26. New House of Maybank has accelerated the pace for growth and regional reach (cont.) Expanded agency business. Insurance Actively promoted single-premium investment-linked products and Takaful through Bancassurance. Completed key IT infrastructure rollout. New Head of Islamic Banking joined in April 2011 Islamic Banking Enhanced collaboration with CFS and GWB Converted Maybank Indocorp into Maybank Syariah Indonesia Embarked on IT transformation programme to deliver: Consistent products and services across all sales channels Enterprise Convenience to meet customer needs Transformation Customisation of product development and delivery Services Service Quality transformation introduced. Service Quality Department set up to centralise all quality service units, maximising the strengths of service teams across the Bank.
  • 27. Humanising Financial Services Across Asia Providing the people with access to financing Most extensive retail (386) and self- Financial services service terminal (4611) network in accessibility in rural areas Malaysia via mobile bus banking and the only bank in 18 rural locations Largest virtual banking presence (55% market share) Fair terms and pricing via Maybank2u Islamic financing as a driver Advise customers based on their Promoting Islamic first needs Being at the heart of community User friendly facilities for physically Maybank Global CSR Day (20 Nov 2010) where challenged customers Maybankers participated in group-wide volunteerism Ramps to ease access Automated sliding doors
  • 28. Introduction Financial Performance Regional ExpansionStrategy and Achievements Prospects
  • 29. Malaysia: Sustained growth for 2011 -2012Growth to be sustained at 4.5% - 5% in 2011 & 3.5% - 4.5% in 2012 Inflation expected to rise to 3.4% in 2011 (2010: 1.7%)(2010: 7.2%) Q2 GDP: Quarterly GDP and annual growth rate +4% YoY CPI and components (% YoY) Aug CPI: +3.3% YoY Transport (RHS) Food & Non-Alcoholic Beverages Utilities, Housing & Other FuelsRinggit/USD: RM3.15 by end 2011 and RM3.05 by end 2012 OPR and SRR to remain unchanged at 3% and 4% respectively until end of 1H2012 RM3.18 per USD as at 26 Sep 25bp hikes in OPR in Ringgit Malaysia per USD Mar, May, July 10 and May 11
  • 30. Malaysia’s Banking Sector: Loans expected to moderate to 10% growth in 2012 Total Loans grew 12.9% YoY for July 2011 Total Deposits grew 11.3% YoY for July 2011 RM billionRM billion Capital Adequacy remains strong Gross NPL RM27.4b, Net NPL ratio: 1.99% 14.3% 12.5% % RM billion
  • 31. Beneficiary of government economic development initiatives Domestic business activity is supported the government’s 10-year Top 10 Projects Announced Economic Transformation Programme (ETP) under which the Entry Point Projects are gaining momentum. 1.Mass Rapid Transit (RM36.6 b) 55.7% of the 131 projects have been announced since October 2010, of 2.KL International Financial District (KLIFD) which 57% have commenced implementation (RM26 b) 3.Exxon Mobil & Petronas Carigali’s Tapis In terms of investment value, 21.7% of the targetted RM794.5 billion have Field & Telok gas development project been committed. Tapis Field (RM10 b) 4.Petronas’ Refinery and Petrochemical Integrated Development (RAPID) (RM 60 b) Entry Point Projects (EPPs) Investment Value of EPPs 5.Karambunai Integrated Resort City (KIRC) (RM 9.6 b) 57% of the 73 projects announced 21.7% or RM171.2b of investment 6.Independent Deepwater Petroleum have commenced value has been committed since Oct Terminal project in Pengerang 2010 (RM5 b) Operational, 7.Tanjung Agas Oil & Gas and Logistic 26% Industrial Park (RM 3 b) 21.7% 8.Berantais Marginal Oil & Gas Fields development (RM 2.6 b) Target: 73 131 Announced Target: 9.AUO Sun Powers solar cell fabrication Commenced, RM794.5 b facility (RM 2.2 b) Projects (55.7%) 57% 10.University Malaya Health Metropolis (RM 1.3 b) Work-in Progress, 16%
  • 32. Priorities for the next 12 months 1. Grow loans and deposits with pricing discipline. 2. Reinforce community banking focus for distribution channels. Address fundamentals for SME to gear-up for growth. 3. Intensify client coverage collaboration with product partners, with regional responsibility. 4. Realise investment banking synergies between Maybank IB and Kim Eng. 5. Continue asset and network expansion in BII, fix WOM and grow syariah banking business in Indonesia. 6. Grow insurance assets under management and build agency force. 7. Enhance service quality, customer experience and satisfaction. 8. Implement the Group IT Transformation. 9. Complete infrastructure and framework across multiple products and countries. 10. Gear-up for Basel III requirement. 11. Brand Refresh for the Group.
  • 33. Refreshing the Maybank brand
  • 34. ProspectsGroup’s business momentum expected to remain robust despite challenging globaleconomic conditions and stiffer competition.Economic growth supportive of loans growth in 3 home markets. Loans growth inMalaysia expected to be 12%, led by corporate segment. Moderate pace expectedfor retail segment, amid intense competition and the expectation of furtherintroduction of measures to reign in household debt levelsLoans growth in Indonesia expected to be strongest in the Group at 24%,Singapore remains broad based but with moderate growth at 8%.Interest margin pressure anticipated due to competition and benign interest rateoutlook.Fee based income, particularly from Global Wholesale Banking business and theregional investment banking platform of Maybank IB/Kim Eng.Credit costs expected to rise with loans growth and stabilisation of FRS 139.Healthy capital levels to be maintained by DRP and raising of capital instrumentswhilst monitoring development and impact of Basel III.Given global volatility, we will adopt a cautious approach and grow responsibly.
  • 35. Key Performance Indicators (KPIs) for financial period ending 31 Dec 2011 Note: Loans growth for Singapore and BII are in local currency
  • 36. Thank you for your trust in us51 Total Assets RM412 billion Profit After Tax Years Of Growth RM4.45 billion Human Capital 42,000 Maybankers Worldwide Global Network 2,100 Offices in 17 Countries Customers > 21 million Customers Public Ownership > 10.5 million Unit Holders
  • 37. Thank You