AmBank Group Results 
                                                                               ‐ Investors Presentat...
Contents



                                                                          •   Key Messages
           1.   Exe...
AmBank Group snapshot



                                                   Proud banking heritage spanning 
             ...
On track to deliver revised improved FY2010 earnings guidance

                                       Sound 9MFY2010 perfo...
Strong 9MFY2010 results, sets good foundations for FY2010

                                               9MFY09       9MF...
What is ahead …

                                Increasing global optimism but risks linger
                             ...
Summary


                   1. Top 5 Banking Group in Malaysia with
                      diversified business fundamenta...
AmBank Group Results
                       ‐ Investors Presentation

AMMB Holdings Berhad   9M FY2010 Results 
          ...
Contents



                                                                          •   Key Messages
           1.   Exe...
Sound profit growth, with conservative provisioning

                                                                     ...
Improved PATMI

   PATMI : Growth contributed by all business divisions except CIB
                                       ...
Lower NIM but improved non‐interest income and CTI ratios


     REPORTED
                                                ...
Balance sheet fundamentals looking good, with strong CASA growth


   REPORTED                                            ...
Better asset quality & decreasing quantum of historical issues

                    Gross NPL / NPF by Segments
          ...
Improving trends on NPL / NPF ratios & loan loss coverage

               Asset Quality Indicators
      15 
             ...
Lower new gross NPL / NPF formation, recoveries, write‐offs and conversions


              % New Gross NPL / NPF to Gross...
Portfolio rebalancing : Focus on viable segments and diversification

     Gross Loan / Financing movement (before netting...
Good growth momentum for Insurance and Funds Management

             RM’mil
                                             ...
Sound income growth and conservative provisions

 Total Group Level ‐ Reported                                            ...
Diversified funding profiles

                  Customer Deposits                                                         ...
Balance sheet being progressively repositioned for rising interest rates

                              RM’bil            ...
Improved earnings and returns ratios for 9MFY2010

                        9MFY10 / FY09 change     0.2%              9MFY...
Strong capital base to meet ensuing challenges and support growth



       Capital adequacy : AMMB Holdings Berhad
      ...
Strategic focus : Maintain viable growth and rebalancing focus


                                        De‐risk          ...
Strategy & outlook for FY2010 refined for improving market conditions
                                                    ...
On track to deliver revised improved FY2010 earnings guidance



                                                         ...
Concluding remarks


1. Top 5 Banking Group in Malaysia with diversified
   business fundamentals, supported by ANZ, our
 ...
Contents



                                                                          •   Key Messages
           1.   Exe...
Summary of divisional performance

  Income                                                                               ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...
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Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors ...

  1. 1. AmBank Group Results  ‐ Investors Presentation AMMB Holdings Berhad 9M FY2010 Results  8 Feb 2010 Cheah Tek Kuang Group Managing Director Note : Based on FY2009 Investors Presentation Updated for 9MFY2010 financial results and other uptodate information
  2. 2. Contents • Key Messages 1. Executive Summary • Financial Fundamentals • What is Ahead • Summary 2. Financials Update • 9M FY2010 Group Performance • Business Outlook • Retail Banking g 3. Business Segment Performance • Business Banking • Investment Banking  • Corporate & Institutional Banking • Assurance • Operating Segments • Islamic Banking 4. Economic Outlook & Banking System • Share Price 5. Additional Information • Shareholding • ANZ  • Channel & Distribution • Customer Service • Ratings & Research Coverage AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 1
  3. 3. AmBank Group snapshot Proud banking heritage spanning  over 30+ years A top 20 listed company on the  Bursa Saham Malaysia (market cap  ~RM15.07 billion)  & rank 188  (global 1,000 banks by market cap) Top 4 largest listed banking group  AmBank  Group,  Gross Loans :  RM’bil 11.1% (market cap) in Malaysia with  diversified business fundamentals  Well capitalized with Tier 1 CAR of  9.8% and total RWCA of 15.3% ANZ, our strategic partner, one of  only 11 AA rated banks in the world AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 2
  4. 4. On track to deliver revised improved FY2010 earnings guidance Sound 9MFY2010 performance Higher revenues  Staying Ahead Better‐than‐expected loans growth Higher FY2010 PATMI guidance (≥ RM950 mil)  Key focus : Medium Term Aspirations (MTA) Sound Divisional profits Business Segment  Investment Banking : capital market recoveries Performance Assurance : diversified portfolios in Life and General Better asset quality : higher LLC and lower NPL Capital, Risk  Well capitalized (Tier 1 : 9.8%, RWCA : 15.3%) Proactive risk management & Funding Implement FTP, ALM disciplines, Basel II and FRS Profitable growth, diversification & rebalancing focus Dynamic focus : volume vs price trade offs & asset quality  Priorities  Leverage market leading positions & capital markets recovery for 2010 Medium term : target cost efficiencies, continue investments Longer term plans : to disclose during FY2010 results AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 3
  5. 5. Strong 9MFY2010 results, sets good foundations for FY2010 9MFY09 9MFY10 Change Q2FY10 Q3FY10 Underlying PATMI growth :  17.2% Profit after Tax & MI Performance 681.0 mil 766.9 mil 12.6% 240.2 mil 268.5 mil ROE 12.4% 11.9% ‐0.5% 11.1% 11.6% EPS 33.2 sen 35.4 sen 6.6% 32.9 sen 35.3 sen (basic, annualised) Net Lending / Financing 55,997 mil 63,873 mil 14.1% 60,437 mil 63,873 mil Growth Customer Deposits 59,523 mil 66,787 mil 12.2% 65,302 mil 66,787 mil CASA 6,727 mil 8,228 mil 22.3% 7,611 mil 8,228 mil Net NPL / NPF Ratio 2.7% 1.8% ‐0.9% 2.2% 1.8% Risk,  Capital &  Funding Profile RWCA 13.0% 15.3% 2.3% 15.7% 15.3% Tier 1 7.9% 9.8% 1.9% 10.1% 9.8% LD Ratio 94.1% 95.6% +1.6% 92.6% 95.6% AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 4
  6. 6. What is ahead … Increasing global optimism but risks linger Gradual Malaysian economic recovery Malaysia : Cautious but  GDP : 2009 : ‐2.5% , 2010 +3.5% optimistic ⁺ Fiscal spending (RM67 billion) ⁺ Monetary policies, better‐than‐expected exports Progressive interest rate hike commencing early 2010 Higher lending & RWA growth : government spend, private  consumption Industry : Industry : Competition : strong and some irrational pricing What is Ahead Upside : Capital market recoveries BIS/BASEL III discussion to intensify Strategic themes provided resilience Leverage economic upturn in 2010 AMMB : Tailwinds emerging  Full MTA achievement delayed : BIS/BASEL III requirements but risks linger Enhanced risk, governance and systems Good support from ANZ, our strategic partner AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 5
  7. 7. Summary 1. Top 5 Banking Group in Malaysia with diversified business fundamentals, supported by ANZ, our strategic partner and 1 of 11 AA rated banks in the world 2. Good 9M result sets the foundation for us to deliver above our earlier FY 2010 market guidance 9M  9M – 3. 3 Sound capital levels and executing to our strategic themes will position AmBank Group FY2010 to leverage economic upturn in 2010 4. Maintaining high vigilance on asset quality, risk disciplines, collections / restructuring activities & cost management 5. Staying focused on executing to our strategic agenda around profitable growth and portfolio rebalancing will help us achieve our Medium Term Aspirations (MTA) AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 6
  8. 8. AmBank Group Results ‐ Investors Presentation AMMB Holdings Berhad 9M FY2010 Results  February 2010 Ashok Ramamurthy Group Chief Financial Officer &  Deputy Group Managing Director AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 7
  9. 9. Contents • Key Messages 1. Executive Summary • Financial Fundamentals • What is Ahead • Summary 2. Financials Update • 9M FY2010 Group Performance • Business Outlook • Retail Banking g 3. Business Segment Performance • Business Banking • Investment Banking  • Corporate & Institutional Banking • Assurance • Operating Segments • Islamic Banking 4. Economic Outlook & Banking System • Share Price 5. Additional Information • Shareholding • ANZ  • Channel & Distribution • Customer Service • Ratings & Research Coverage AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 8
  10. 10. Sound profit growth, with conservative provisioning  9MFY10 vs  REPORTED RM'mil 9MFY09 9MFY10  9MFY09  Business Performance Net int income 1,707.5 1,837.5 +7.6% Income : Fee and comm 393.5 474.8 +20.7% All Divisions recorded good growth in incomes Inv and trading (28.9) 253.6 +>100% Recovery in capital and equity markets contributed  Ins business 84.7 92.9 +9.7% to higher investment and trading incomes Others (0.7) 11.3 +>100% Expenses: Total Income 2,156.1 2,670.0 +23.8% Reflects salary and staffing increases, additional  bonus accrual, ongoing medium term investments  Expenses 943.9 1,089.9 +15.5% and CPI, but within CTI targets PBP 1,212.2 1,580.0 +30.3% Provisions : Provisions 267.9 512.2 +91.2% Higher GP – stronger loans growth  PBT 944.3 1,067.9 +13.1% Pro‐active provisioning to account for potential lag  effects of economic downturn PAT 692.5 791.5 +14.3% Provisions include PER, impairment losses and  PATMI 681.0 766.9 +12.6% provisions for commitments & contingencies UNDERLYING 1 PATMI 663.5 777.9 +17.2% 9MFY09 results Favourable growth in 9MFY10 Unfavourable growth in 9MFY10 Note : 1 9MFY2009 underlying is reinstated for one‐off’s as at 31 December 2009 AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 9
  11. 11. Improved PATMI PATMI : Growth contributed by all business divisions except CIB  9MFY10 vs  RM'mil 9MFY09 9MFY10  9MFY09  Business Performance 1 (61.9%)  Retail Banking Division  489.5 520.1 +6.3% Income growth in Retail Banking  attributed to focus on profitable   Business Banking Division  (11.9%) 93.2 100.3 +7.7% segments Business Banking recorded lower   Investment Banking Division  (11.9%) 31.1 99.6 +220.6% provisions  Corporate & Institutional  Better investment banking  (7.5%) 67.5 62.6 ‐7.2% performance from improving capital   Banking (CIB)  and equity market conditions Assurance (6.8%) 33.8 56.7 +67.8% CIB impacted by higher general  provisions on stronger lending  Life Insurance  8.9 19.1 +114.6% performance General Insurance 24.8 37.6 +51.6% Life and General Insurance recorded  higher incomes from larger fund base  Operating Segments :  (34.0) (72.5) ‐113.2%  Reported PATMI  Retail focus on preferred viable  Net Assets  : Growth contributed by CIB and Business Banking 2 segments in a highly competitive  environment Business and SME growth focusing on   Retail Banking Division  41,621.1 42,784.5 +2.8% more stable sectors  Business Banking Division  9,619.9 10,936.9 +13.7% CIB’s growth focusing on project  financing with government support,  Corporate & Institutional Banking 4,486.8 9,356.2 +108.5% GLC’s and large MNC’s 9MFY09 results Favourable growth in 9MFY10 Unfavourable growth in 9MFY10 Note : 1 Bracket denotes composition of contribution to PATMI by business segment 2 Net Assets : net lending & net financing (net of IIS, SP and GP) 3 Life Insurance surplus is transferred into life policy shareholders’ fund in overall Group accounts AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 10
  12. 12. Lower NIM but improved non‐interest income and CTI ratios REPORTED Business Performance 9MFY10 vs  RM'mil 9MFY09 9MFY10  9MFY09  Lower NIM from : Reduced interest recoveries Change in asset mix towards lower   Net Interest Margin  3.06% 2.92% ‐0.14% margin but stable corporate loans (NIM & NFR composite) H1FY10 NIM = 2.82% Cost‐Income 43.78% 40.82% ‐2.96% (CTI) Improvements in cost‐income ratio from: Higher revenue growth in  g g Investment Banking, Corporate &  Cost‐Asset 1.51% 1.58% +0.07% Institutional Banking and Assurance (CTA)  Fee Income / Other operating income : 18.3% 17.8% ‐0.5%  Total Income  Higher composition to total income  due to the recovery in trading   Other Operating incomes  Income  / Total 20.8% 31.2% 10.4%  Income  9MFY09 results Favourable growth in 9MFY10 Unfavourable growth in 9MFY10 Note : 1 Net Interest Margin includes Net Financing Income from Islamic Banking business, as follows : Reported and Underlying :  9MFY09 – 0.67% 9MFY10 – 0.73% 2 CTI and CTA  excluding insurance 3 Other operating income includes net income from insurance business AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 11
  13. 13. Balance sheet fundamentals looking good, with strong CASA growth REPORTED 9MFY10 vs  RM'mil 9MFY09 9M1FY10  9MFY09  Business Performance Balance Sheet ‐ Lending/Financing Gross loans/financing 59,676.1 66,311.7 +11.1% Loans growth to focus on  profitable segments and  targeted industry sectors Net loans/financing 55,997.3 63,873.4 +14.1% More diversified deposit base  Balanace Sheet ‐ Deposits with initiatives in retail and  business segments driving high   Customer Deposits  p 59,522.7 , 66,786.7 +12.2% , CASA growth LD ratio impacted by stronger   CASA Deposits  6,726.5 8,227.8 +22.3% loans growth in the last two  quarters  CASA Proportion  11.3% 12.3% +1.0%  LD Ratio  94.1% 95.6% +1.5% 9MFY09 results Favourable growth in 9MFY10 Unfavourable growth in 9MFY10 Note : 1 CASA : current accounts & savings accounts 2 CASA proportion : as composition of Deposits from Customers 3 LD : customer deposits / net loans (net IIS, SP, GP) AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 12
  14. 14. Better asset quality & decreasing quantum of historical issues Gross NPL / NPF by Segments Gross NPL / NPF by Segments 3.3 2.8 2.3 1.8 1.3 Stable NPL level despite  0.8 economic stresses from  0.3 3.05 1.73 1.68 1.65 1.78 1.28 0.64 0.50 0.34 0.30 0.00 0.00 0.36 0.29 0.09 0.09 the recent global  ‐0.2 financial downturn Retail Business Credit & Leasing Investment / Corporate  RM'bill Banking Mar 2007 Mar 2008 Mar 2009 Dec 2009 “Continuing business”  Continuing business NPL’s better than system  Non‐Performing Loans / Financing Non‐Performing Loans / Financing levels NPL ratio 3,000  2,400  Historical business gross  3.5% 3.0% 2.7% 2.5% 2.1% 1.7% 42.5% 22.5% 23.2% 23.1% 12.1% 2.9% 1,800  NPL’s constitute circa 23%  1,200  of the total portfolio 600  1,859  1,706  1,728  1,314  1,162  1,100  1,743  720  506  710  343  50  ‐ Gross NPL Net NPL Gross NPL Net NPL RM' mil Continuing Business Historical Business Mar 08 Mar 09 Dec 09 Note : 1 “Historical” NPL’s comprise legacy non‐performing loans from entities acquired by the Group prior to and during 2002, and Arab‐Malaysian Credit Berhad AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 13
  15. 15. Improving trends on NPL / NPF ratios & loan loss coverage Asset Quality Indicators 15  92.8% 75.1% 80% 67.3% 56.6% 10  39.3% 32.2% 36.7% 40% 7.60 6.06 6.14 0% 5.53 5  3.60 2.43 2.23 ‐40% 5.8  4.6  Proactive collection  4.3  3.2  activities 2.0  1.5  1.1  ‐ ‐80% RM'bil Gross NPL Net NPL Loan Loss Coverage Tightened risk  assessmentt FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 9MFY2010 Led by experienced  20% team 9MFY10 / FY09 change : 17.4% Gross NPL / NPF ratio 0.7% Net NPL / NPF ratio 0.8% 14.8% 15% Net Provisions charge 0.3% 13.8% 12.4% 10.9% 10.4% 10% 9.6% 6.2% 6.3% 5% 4.1% 3.2% 3.7% 2.2% 1.9% 1.7% 2.6% 3.4% Gross NPL ratio 1.0% 1.8% Net NPL ratio 0.6% 0.9% Net Provisions Charge 0% AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 14
  16. 16. Lower new gross NPL / NPF formation, recoveries, write‐offs and conversions % New Gross NPL / NPF to Gross Loans  / Financing % Gross NPL / NPF Conversion  to Gross Loans  / Financing 1.80% 1.20% 1.20% 0.80% 0.60% 0.40% 0.00% 0.00% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 % Recoveries to  Avg Gross Loans / Financing % Write‐Offs to Avg Gross Loans / Financing 0.60% 2.00% 1.50% 0.40% 1.00% 0.20% 0.50% 0.00% 0.00% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY2004‐FY2007 FY2008 FY2009 FY2010 Note : 1 FY2004 and FY2005 financials based on gross before IIS AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 15
  17. 17. Portfolio rebalancing : Focus on viable segments and diversification Gross Loan / Financing movement (before netting Islamic financing sold to Cagamas) Retail (66%) Business / Corporate (33%) Loan Composition % 36.4% 20.1% 3.8% 1.4% 1.4% 3.1% 16.9% 14.0% 1.8% 15.5% 4.3% 24.0 11.2  115.7% Retail : targeting  9.4% 9.2 profitable  13.3 segments 23.3  10.0  12.4  12 4 16.9% 16 9% 4.9  13.8% 5.8% 1.5% 1.2 Business &  2.5 10.4% 0.9  0.9 2.0  Corporate :  2.2  2.1  1.3  0.9  1.0  harness synergies  Auto Financing Mortgage Asset Financing Credit Cards Line of Credit Personal Loans  Business Banking  Corporate &  Business & CIB  via deepening  to civil servants (ex GLR) Institutional  Loan Rehab Banking customer  RM'bil Dec' 09 Mar' 09 relationships 1.4% Others 62.1% Individuals by Customer Type by Interest Rate Type RM'bil Mar‐08 Mar‐09 Dec‐09 10.5% SME Fixed rate 62% 60% 57% 26.0% Business Variable rate 38% 40% 43% Dec 09 AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 16
  18. 18. Good growth momentum for Insurance and Funds Management RM’mil General Insurance Gross  Life Insurance Gross  Fund Assets Fund Assets Premium Premium 1,500  800 3,000  800 476.3  545.6  585.8  461.8  441.5  390.4  438.2  340.9  382.6  352.2  449.0  312.1  13.0% 6.4% 1,000  0 2,000  0 2,300.3  982.2  2,034.8  500  922.7  ‐800 1,000  1,700.9  ‐800 811.3  1,430.1  601.8  696.3  539.9  1,164.8  941.4  ‐ ‐1600 ‐ ‐1600 General Fund Assets* Gross Premium Life Fund Assets Gross Premium FY2005 FY2006 FY2007 FY2008 FY2009 9MFY2010 FY2005 FY2006 FY2007 FY2008 FY2009 9MFY2010 Institutional Funds Management  Unit Trust Funds Management  AUM AUM Fee Fee 15,000  50 15,000  78.2  68.0  80 46.1  48.8  20.1  19.0  9.8  11.9  12.9  25 34.4  27.5% 40 7.6  20.7% 21.5  10,000  10,000  0 0 9,714.0  ‐25 10,074.2  ‐40 5,000  9,221.8  5,000  9,069.5  8,048.2  8,099.8  7,904.0  6,358.4  ‐50 5,324.1  ‐80 4,894.8  3,262.5  3,663.4  ‐ ‐75 ‐ ‐120 Asset Under Management ("AUM") Management Fee Asset Under Management Management Fee * Prior to December 2008, based on general funds per BNM DGI returns December 2008 & post December 2008 based on BNM DGI returns with total asset (general funds +  shareholders’ funds) AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 17
  19. 19. Sound income growth and conservative provisions Total Group Level ‐ Reported Total Group Level ‐ Underlying Total Group Level ‐ Underlying  Total Group Level ‐ Reported  1,000  1,000  8.8% 11.2% 800  890 800  891 838 818 814 765 802 757 600  600  Income :  400  400  439 performance  200  200  reflecting improved  235 155 110 171 146 110 171 contributions  0  0  RM'mil across Divisions RM'mil FY2007 FY2008 FY2009 9MFY2010 FY2007 FY2008 FY2009 9MFY2010 Total Income Provisions Provisions : to  institute more  Average / quarter Average / quarter proactive  FY2007 FY2008 FY2009 9MFY2010 FY2007 FY2008 FY2009 9MFY2010 collections  management Non Interest / Financing Income  NIM : lower  Gross Loans / Financing & NIM/NFM Gross Loans / Financing & NIM / NFM Non Interest / Financing  Income Composition % Composition %  31.2% recoveries and  70 11.1% changes in lending  8.4% 6.4% 10% 25.0% 20.8% mix towards lower  65 4.9% 66.31 17.8% margin but stable  4% 18.3% 60 2.7% 2.9% 3.0% 2.9% 15.0% corporate loans ‐2% 59.67 9.5% 55 56.86 ‐8% 5.0% ‐1.3% 53.46 50 ‐14% RM'bil ‐5.0% 9MFY2009 9MFY2010 FY07 FY08 FY09 9MFY10 RM'bil Y‐o‐Y growth NIM Non‐Interest Inc Fee Inc Trading & Investment Inc AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 18
  20. 20. Diversified funding profiles Customer Deposits  Customer Deposits  by Sources by Type CASA 1.7 1.4 Others 2 composition 12.6% 11.2% 10.5% 12.3% Total 42.4b 55.8b 64.1b 66.8b 3.0 3 28.1 Biz enterprises Government  13.1 Others 26.3 12.6 CASA grew  1.9 funds grew by  20.2 5.5% in  5.3 by 21.8% in  8.2 CASA 9MFY2010 6.3 6.8 9MFY2010 12.5 Government 1.1 10.9 11.5 9.0 5.3 4.9 FD + NID 44.2 44.8 45.4 25.5 25.5 Individuals 36.0 23.0 23.6 RM'bil RM'bil Mar 07 Mar 08 Mar 09 Dec 09 Mar 07 Mar 08 Mar 09 Dec 09 Others CASA FD + NID Others Biz enterprises Government Individuals Customer Deposits : Interest /  Deposits of Banks & Other  Profit Rate Pricing Profile  Financial Institutions 1.0% 5.2% Non ‐ sensitive 0.1% 5.1% 6.9% Islamic Total 17.4b 7.1b 6.1b 6.1b 11.0% 6.0% 4.5% 4.7% > 5 years 1 – 5 years 9.2% 27.8% 21.9% 10.9 27.8% 3 – 12 months Reduce  Longer term  26.9% dependency  funding – an  on inter‐ ongoing issue 1.3 banking  66.5% 0 – 3 months 0.5 2.1 Other FI’s funding 60.9% 62.6% 2.9 4.1 51.9% 1.4 BNM 4.8 1.4 0.9 0.9 Merchant 0.7 0.5 2.1 1.6 Banks 0.6 RM'bil RM'bil Mar 07 Mar 08 Mar 09 Dec 09 Mar 07 Mar 08 Mar 09 Dec 09 Non‐interest sensitive Islamic Other FI's BNM Merchant banks Banks > 5 years 1‐5 yrs Note : 1 In line with September 2009 disclosures, FY2009 and FY2008 financial statement figures were restated to reflect certain deposits  previously classified under Deposits and Placement of Banks and Other Financial Institutions 2 “Others” by source comprises pension and retirement funds, non‐profit organisations and similar 3 “Others” by type comprises short‐term treasury deposits, cash management system (CMS) placements and structured deposits AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 19
  21. 21. Balance sheet being progressively repositioned for rising interest rates RM’bil Interest / Profit Rate Risk : 0 ‐ 12 months Interest / Profit Rate Risk : 1 ‐ 5 years 34.9 43.2 45.5 13.2 10.0 11.2 ‐58.8 ‐64.3 ‐65.9 ‐4.9 ‐5.1 ‐5.3 ‐4.0 ‐2.9 3.2 2.2 ‐8.6 8.5 Net mismatch ‐20.6 ‐19.0 ‐11.9 Net mismatch 1.1 3.2 ‐0.6 FY2008 FY2009 9MFY2010 FY2008 FY2009 9MFY2010  9MFY2010 Interest / Profit Rate Risk : > 5 years Interest / Profit Rate Risk : Non‐Interest Sensitive 10.1 8.7 8.4 ‐8.5 ‐8.4 ‐10.9 25.7 ‐7.3 ‐7.9 21.5 25.5 ‐3.4 ‐3.5 ‐2.9 ‐9.5 ‐0.4 ‐0.6 0.8 0.1 0.8 ‐0.4 Net mismatch 18.9 22.7 23.0 Net mismatch ‐6.1 ‐8.2 ‐12.4 Assets Liabilities Equity Off balance sheet gap / derivatives Note : Net mismatch comprises on‐balance sheet and off‐balance sheet interest rate gap sensitivity AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 20
  22. 22. Improved earnings and returns ratios for 9MFY2010 9MFY10 / FY09 change  0.2% 9MFY10 / FY09 change 0.11% 9MFY10 / FY09 change 12.0% FY 09 / 08 change 0.2% FY 09 / 08 change 0.02% FY 09 / 08 change 12.1% ROE, %   ROA, %  EPS, basic sen/share REPORTED 11.5% 11.7% 11.9% 1.02% 1.04% 1.15% 28.2  31.6  35.4  ‐5.8% ‐0.17% (13.3) Maintaining  profitability  FY07 FY08 FY09 9MFY10 FY07 FY08 FY09 9MFY10 FY07 FY08 FY09 9MFY10  despite  p economic  disruptions  9MFY10 / FY09 change  0.6% 9MFY10 / FY09 change  0.14% 9MFY10 / FY09 change  16.2% FY 09 / 08 change 1.3% FY 09 / 08 change 0.06% FY 09 / 08 change 3.4% ROE, %   ROA, %  EPS, basic UNDERLYING sen/share 10.2% 12.7% 11.4% 12.0% 0.76% 1.08% 1.02% 1.16% 26.1  32.0  30.9  35.9  AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 21
  23. 23. Strong capital base to meet ensuing challenges and support growth Capital adequacy : AMMB Holdings Berhad Innovative Tier 1 Capital Securities  issued (AmBank (M) Berhad) : FY2007 FY2008 FY2009 9MFY2010 * Approved program = RM500 mil Core equity 7.6% 7.7% 7.8% 7.8% Q1FY10 issuance = RM300 mil Q2FY10 issuance = RM185 mil Tier 1 8.7% 8.5% 9.7% 9.8% * CAR excludes Q3FY2010 profits; if  RWCA 12.6% 14.1% 15.2% 15.3% included : Core equity : 0.3% (proforma 8.1%) Tier 1 : 0.4% (proforma 10.2%) Tier 1 : 0 4% (proforma 10 2%) RWCA : 0.4% (proforma 15.7%) Capital adequacy : by legal entity, 9MFY2010 Capital management plan : Tier 1 * RWCA * Strengthen capital profile & buffer AmBank (M) Berhad 10.3% 14.7% Increased modelling of economic  scenarios AmBank (M) Berhad, Group 9.4% 14.9% Risk / rewards focus within Basel II AmInvestment Bank Berhad, Group 22.7% 27.8% Improvements in capital  diversification AmIslamic Bank Berhad 11.0% 15.8% Development of dynamic dividend  policy * Excludes Q3 FY2010 profits (except for AmIslamic) Review of BIS / Basel III framework Note : 1 FY2007 capital adequacy ratios as per the published financial statements of AHB for FY2008 AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 22
  24. 24. Strategic focus : Maintain viable growth and rebalancing focus De‐risk Diversify De‐risk + Diversify High Differentiated Growth Moderate Low (ISLAMIC AND  CONVENTIONAL BANKING) AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 23
  25. 25. Strategy & outlook for FY2010 refined for improving market conditions Maintain profitable growth & rebalancing focus via executing to our strategic agenda Overall Income diversification, cost management, deposit growth & enhanced risk disciplines key priorities for FY2010 Position business for potential economic recovery towards beginning 1Q2010 Currently evaluating medium to long term strategic plans and options Maintain asset growth focus on profitable segments whilst growing deposits Expect higher income growth from historical fixed income assets (under FTP) Retail Banking Expect increased delinquencies & credit costs, though lower than previously anticipated  Enhanced focus on risk management and collections Expect minimal profit growth for FY2010 Focus on building a sustainable asset base targeted towards stronger industry segments & with  Business Banking greater diversification Proactively manage existing accounts to mitigate higher risk of default Enhance focus on deposits & transaction based fees   Expect rapid FY2009 profit growth to moderate in FY2010 q y p More stable economic environment with equity & debt market activities improving g Investment Banking Focus on core expertise in advisory & capital market activities Expect rising profit performance over FY2009 Focus on project financing with government support, GLC’s & large MNC’s Corporate &  Deepen customer relationships to generate fee incomes & advisory mandates Institutional Banking Enhance focus on capital efficient business growth & loan pricing to reflect economic risks Expect an improved profit performance over FY2009 Assurance General Stable profits, and MAA business acquisition if proceeded with, will bring in synergies later Life Expect good growth via revenue increase & efficiency improvements over FY2009 Focus on reducing volatile exposures & diversifying revenues Markets  Market disruption not expected to recur leading to improved fixed income profit performance Biz Expect Markets FX and Derivative businesses to contribute to income growth Implement new retail tools including 3G scorecards, PD & LGD models  Risk & Financial   Implement new non‐retail PD, EAD & LGD models, financial spreading tool & security indicators  Governance (collateral management) Implement new FTP and ALM disciplines, Basel II, FRS requirements and review adoption of the  proposed BIS/Basel III capital & liquidity framework (2012) Note : Modifications made to previous strategy and outlook are in “italics” AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 24
  26. 26. On track to deliver revised improved FY2010 earnings guidance Medium Term  FY 07 FY 08 FY 09 9M FY10 FY 2010 Aspirations (MTA) Reported :  Reported :  Reported :  Reported :  PATMI ‐RM282.5 mil RM668.5 mil RM860.8 mil RM766.9 mil ~ 12% ‐ 15%  ≥ RM950 mil Underlying :  Underlying :  Underlying :  Underlying :  CAGR RM556.9 mil RM837.4 mil RM840.7 mil RM777.9 mil Previously RM800 – 900mil Reported :  Reported : 11.5% Reported : 11.7% Reported : 11.9% FY2012 : ‐5.8% ROE Underlying :  Underlying :  Underlying :  circa 11.5% circa 15% Underlying :  12.7% 11.4% 12.0% 10.2% Previously 11% MTA : 17–20% CTI Reported : 37.1% Reported : 39.6% Reported : 43.0% Reported : 40.8% 42% ‐ 43% circa 40% Previously 45% FY2012 : 2 ‐ 3% Net NPL  Reported : 6.2% Reported : 3.7% Reported : 2.6% Reported : 1.8% 2.0% ‐ 2.5% MTA : below  Ratio system Previously 4% Dividend ≥ 10.0 sen /  Payout % ≥  gross /  5.0 sen / share 6.0 sen / share 8.0 sen / share N/A (loss year) 18.3% 19.0% share system average payout  Note : Underlying performance of PATMI and ROE for FY07 and FY08 adjusted for one‐off impacts including restatement as if AmInvestment Group Berhad was a 100%‐owned entity of AMMB MTA : excludes adoption of new proposed capital framework (BIS /Basel III – Dec 2009) in 2012 AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 25
  27. 27. Concluding remarks 1. Top 5 Banking Group in Malaysia with diversified business fundamentals, supported by ANZ, our strategic partner and 1 of 11 AA rated banks in the world 2. Good 9M result sets the foundation for us to deliver above our earlier FY 2010 market guidance 3. 3 Sound capital levels and executing to our strategic themes will position AmBank Group to leverage economic upturn in 2010 4. Maintaining high vigilance on asset quality, risk disciplines, collections / restructuring activities & cost management 5. Staying focused on executing to our strategic agenda around profitable growth and portfolio rebalancing will help us achieve our medium term aspirations (MTA) AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 26
  28. 28. Contents • Key Messages 1. Executive Summary • Financial Fundamentals • What is Ahead • Summary 2. Financials Update • 9M FY2010 Group Performance • Business Outlook • Retail Banking g 3. Business Segment Performance • Business Banking • Investment Banking  • Corporate & Institutional Banking • Assurance • Operating Segments • Islamic Banking 4. Economic Outlook & Banking System • Share Price 5. Additional Information • Shareholding • ANZ  • Channel & Distribution • Customer Service • Ratings & Research Coverage AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 27
  29. 29. Summary of divisional performance Income Expenses 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 60.754.0 11.2 9.1 7.2 9.5 6.5 7.1 4.9 4.8 9.5 15.5 50.948.9 6.3 6.1 12.110.7 6.2 5.3 5.8 5.4 18.823.6 0% 0% Investment Banking  Retail  Business  Investment  Corporate &  Assurance Group  Retail  Business  Investment  Corporate &  Assurance Group  and Assurance  Banking Banking Banking Institutional  Operating  Banking Banking Banking Institutional  Operating  Banking Segments Banking Segments Businesses have  contributed higher  PBP PAT profit in the current  9‐month vis‐à‐vis  70% last corresponding  65% period 50% 45% 30% 25% 10% 4.2 4.4 5% 68.457.6 15.011.1 3.4 8.7 6.8 8.3 2.3 9.9 70.765.7 13.512.7 4.5 12.6 9.7 7.9 4.9 7.2 ‐3.2 ‐6.0 Retail  Business  Investment  Corporate &  Assurance Group  Retail  Business  Investment  Corporate &  Assurance Group  ‐10% Banking Banking Banking Institutional  Operating  Banking Banking Banking Institutional  Operating  ‐15% Banking Segments Banking Segments 9MFY09 9MFY10 AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 28
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