INVESTOR PRESENTATION 9 Months FY2013 Results     20 February 2013
Contents1   Executive Summary2   Financial Results for 9 Months FY2013    - Income Statement    - Balance Sheet           ...
FY2013:                                                                                              Business Model       ...
Progress:                                                                        Medium Term Targets We are making good pr...
Key Financial Ratios                Improving Financial Performance, with Key Metrics in the Right Direction              ...
Summarised                                                                                    Income Statement            ...
3QFY13:                                                                             Key Financial Ratios         Sustainab...
Contents1   Executive Summary2   Financial Results for 9 Months FY2013    - Income Statement                              ...
Net Income                                   Steady growth in net income driven by higher loans growth  RM mil            ...
Net Interest Margin                           Net Interest Margin Continue To Be Under Pressure                NIM and Cos...
Non-Interest Income                    Non-Interest Income Ratio at 27.2%, with growth in recurring fee income            ...
Non-Interest Income        8.3% Growth in Recurring Fee Income; and track record of sustainable Investment Income         ...
Operating Expenses                            Cost-to-income remains stable at 47.8%, similar level as FY2012             ...
Impairment Provisions              Net write back in provisions due to recoveries, despite double digit loans growth      ...
Profit           Consistent Growth in Profit – Net Profit After Tax up RM25.1 million or 4.9% Y-o-Y                       ...
Enhance                                                                                                 Shareholder ValueR...
Enhance                                                                                                         Shareholde...
Contents1   Executive Summary2   Financial Results for 9 Months FY2013    - Balance Sheet                                 ...
Balance Sheet                                                                                                             ...
Gross Loans                 Gross Loans Growth Accelerated to 12.3% Y-o-Y, Driven By Consumer Lending                Gross...
Asset Quality          Continued Improvement In Asset Quality – Net Impaired Loans Ratio Down to 1.2%RM mil       Gross Im...
Loans Growth:                                                                                                  Residential...
Loans Growth:                                                                                                   SME & Moto...
Composition                                                                                               of Loans Portfol...
Composition of                                                                                                      Custom...
Composition of                                                                                      Customer Deposits     ...
Customer Deposits                                   Loans to Deposits Ratio Raised to 86.7% (%)               Loans to Dep...
Capital                                                                                                 ManagementHealthy ...
FY2013                                                                              Business Focus                        ...
What Is Ahead ……..       The Bank remains strong and well-                                                           Chall...
THANK YOUDisclaimer: This presentation has been prepared by Alliance Financial Group Berhad (the “Company”) for informatio...
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9 Month FY2013 Analyst Presentation

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This is the Analyst Presentation for the 9 Months Results as at 31 December 2012 for Alliance Financial Group Berhad (AFGB).

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9 Month FY2013 Analyst Presentation

  1. 1. INVESTOR PRESENTATION 9 Months FY2013 Results 20 February 2013
  2. 2. Contents1 Executive Summary2 Financial Results for 9 Months FY2013 - Income Statement - Balance Sheet 1
  3. 3. FY2013: Business Model “To Be The Best Customer Service Bank, Delivering Consistent and Sustainable Financial Performance”Line of Business Consumer Business Financial Investment Transaction & Alternate Islamic Banking Banking Markets Banking Banking BankingStrategy Revenue: Driving Fee Income through Cross-Selling ROE; CIR  Major Products CONSUMER BANKING BUSINESS BANKING • SME • Mortgage Loans • Wholesale • Wealth Management • Credit Cards • Transaction • Bancassurance • Personal Loans Banking • Advisory • Hire Purchase • Cash Management • Trade Finance • Stock broking • Deposits • Treasury Sales • Investment Banking New Growth Existing Opportunities Existing Opportunities Opportunities 2
  4. 4. Progress: Medium Term Targets We are making good progress against our 3-Year Medium Term Targets FY2012 – FY2015 FY2011* 9MFY2013 Asset Quality … gross impaired loans to be better than industry average 3.3% 2.1% Non-InterestIncome Ratio … to increase non-interest income to 30% of total revenue 20.8% 27.2% … move to industry average (45% - 48%) through:Cost to Income • targeted revenue growth 48.3% 47.8% Ratio • improved productivity … achieve industry average (14% - 16%) through: Return on Equity • focus on underlying earnings momentum 13.0% 13.6% • effective capital management Dividend … pay up to 50% of net profits after tax, subject to 7.00 16.60 Dividend Policy regulatory approvals and strong capital ratios Policy sen sen 3 Note: * Figures have not been restated for MFRS139
  5. 5. Key Financial Ratios Improving Financial Performance, with Key Metrics in the Right Direction Return on Equity Non-Interest Income Ratio15% 14.0% 28% 27.0% 27.2% 13.6% 13.0% 26% 10.5%10% 24% 8.6% 22.4% 22.4% 22% 20.8%5% 20% FY2009 FY2010 FY2011 FY2012 9MFY2013 FY2009 FY2010 FY2011 FY2012 9MFY2013 CASA Ratio Cost-to-Income Ratio 55%45% 53.0% 41.5% 52.1%40% 38.3% 50% 48.3% 34.0% 47.6% 47.8% 33.0% 33.7%35%30% 45% FY2009 FY2010 FY2011 FY2012 9MFY2013 FY2009 FY2010 FY2011 FY2012 9MFY2013 FY2012 restated for MFRS139 4
  6. 6. Summarised Income Statement We Continue to Maintain Steady Y-O-Y NPAT growth Change 9M FY13 9M FY12 RM  Sustained y-o-y gross loans RM mil RM mil % growth of 12.3% and mil expansion of businessNet Interest & Islamic activities driving net interest 727.9 698.7 29.2 +4.2%Banking Income and non-interest incomeNon-Interest Income 250.1 231.7 18.4 +7.9% growthNet Income 978.0 930.4 47.6 +5.1%  Interest margins remain underOperating Expenses 467.6 435.2 32.4 +7.4% pressureOperating Profit 510.4 495.2 15.2 +3.1%  Increase in overheadsWrite-back of loans and expenses mainly due to 29.2 16.7 12.5 +75.2% personnel cost, andimpairment provisions investments in human capitalPre-tax profit* 535.7 510.6 25.1 +4.9% and IT infrastructureNet Profit After Taxation 399.3 380.6 18.7 +4.9%  Lower loan impairmentNon-Interest Income Ratio 27.2% 26.3% +0.9% allowances despite doubleCost to Income Ratio 47.8% 46.8% +1.0% digit loans growth due to improvement in asset qualityReturn on Equity 13.6% 14.0% -0.4%Earnings per Share 26.2 sen 24.9 sen +5.2% * Include share of results of associate companies 5
  7. 7. 3QFY13: Key Financial Ratios Sustainable Net Loans Growth at 12.9%, with continued improvement in Asset Quality  12.9% y-o-y above 9M FY13 9M FY12 Change industry net loans (Restated) growth – targeting profitable consumerBalance Sheet & Asset Quality and SME segmentsNet Loans Growth (y-o-y) 12.9% 12.5% +0.4%  1.2% net impaired loans ratio, withGross Impaired Loans Ratio 2.1% 2.6% -0.5% proactive & disciplinedNet Impaired Loans Ratio 1.2% 1.4% -0.2% credit risk management  Improvement in CASALoan Loss Coverage Ratio 83.8% 88.8% -5.0% ratio as GroupCustomer Deposits Growth (y-o-y) 2.2% 9.1% -6.9% continued to focus on transaction bankingLiquidity & Capital Ratio  86.7% loans toCASA Ratio 38.3% 35.6% +2.7% deposits ratio, raised to industry average, forLoan to Deposit Ratio 86.7% 78.9% +7.8% efficient balance sheet managementRisk Weighted Capital Ratio 14.88% 15.18% - 0.30%  14.88% Risk WeightedCore Capital Ratio 11.88% 11.36% + 0.52% Capital Ratio – well capitalised to support future balance sheetNote: Restated for MFRS, where applicable expansion 6
  8. 8. Contents1 Executive Summary2 Financial Results for 9 Months FY2013 - Income Statement 7
  9. 9. Net Income Steady growth in net income driven by higher loans growth RM mil Net Income Net Income Trend +RM47.6 m or 5.1%1400 RM mil 1000.0 978.01300 1,244.3 930.41200 900.0 858.2 1,128.71100 1,064.5 800.01000 978.0 700.0 930.4 900 600.0 800 500.0 700 400.0 9MFY11 9MFY12 9MFY13 600 500  Net income growth of RM47.6 million or 5.1% 400 driven by: 300  +RM74.4 million growth in interest income primarily from loans growth; 200 FY2010 FY2011 FY2012* 9MFY2012 9MFY2013 but offset by  +RM36.1 million rise in interest expense from expansion in deposits Note: * Restated for MFRS 8
  10. 10. Net Interest Margin Net Interest Margin Continue To Be Under Pressure NIM and Cost of Funds Trend  Continuing margin compression due to: NIM COF  New mortgage loans at lower yield3.0%  Run-off of high yielding Co-op loans – 2.8% down from RM1,023 million at March 2.7% 2.7%2.7% 2011 to RM554 million at end-December 2012 2.5% 2.5% 2.5% 2.5%  Intensified competition for loans and2.4% 2.5% deposits  Margin pressure partially offset by rise in 2.3% 2.3% 2.3% 2.3% loans to deposits ratio from 77.7% at March2.1% 2012 to 86.7% in December 2012 2.1%1.8% 1.9% Effective OPR SRR June 2010 2.50% 1%1.5% July 2010 2.75% 1% FY2009 FY2010 FY2011 FY2012 1QFY2013 2QFY2013 3QFY2013 April 2011 2.75% 2% May 2011 3.00% 3% July 2011 3.00% 4% 9
  11. 11. Non-Interest Income Non-Interest Income Ratio at 27.2%, with growth in recurring fee income Non-Interest Income Trend RM mil Non-Interest Income NII/ Total Income  Continue to build recurring non-interest 27.2% 30% income from transaction banking, treasury 27.0%400 sales, wealth management and trade finance 25% 22.4% 22.4% 20.8% 320.2  YTD non-interest income includes non-300 20% recurring RM5.8 million gain on sale of 250.1 building in 2Q FY2013 235.0 233.2 225.7 15%200 10%100 5% 0 0% FY2009 FY2010 FY2011 FY2012 9MFY2013 Note :* Restated for MFRS 10
  12. 12. Non-Interest Income 8.3% Growth in Recurring Fee Income; and track record of sustainable Investment Income Composition of Non- Y-o-Y Growth RM mil Interest Income RM mil Fee Income Investment Income Other Income 300.0 Fee Income Investment Income Other Income +RM18.4 m or 7.9%100.0 250.1 86.9 250.0 231.7 82.4 80.8 21.1 80.0 10.1 14.8 6.9 4.1 200.0 173.5 +2.1% 98.7 60.0 33.2 35.2 30.3 10.0 96.7 150.0 +94.7% 49.7 40.0 100.0 51.3% 47.9% 57.4% +5.7% +8.3% 46.4 120.2 130.3 20.0 42.3 41.6 50.0 113.8 0.0 0.0 1QFY13 2QFY13 3QFY13 9MFY11 9MFY12 9MFY13  Steady growth in fee income, especially commissions from transaction banking and foreign exchange  In FY2013, despite flatter yield curve, sustained investment income from trading in securitiesNote: Investment income is inclusive of realised and unrealised gain/loss reflected under other income, as this relates to treasury activities 11
  13. 13. Operating Expenses Cost-to-income remains stable at 47.8%, similar level as FY2012 Operating expenses trend RM mil Operating expenses CIR %900 60 53.0% 52.1% OPEX 3Q FY13 3Q FY12 Variance800 48.3% RM mil RM mil 47.6% 47.8% 50 RM mil %700 Personnel costs 305.9 277.5 28.4 10.2% 591.8600 559.4 554.6 544.9 40 Establishment 110.4 107.3 3.1 2.9%500 467.6 costs 30400 Marketing 13.9 13.5 0.4 3.3%300 20 expenses Administration 37.4 36.9 0.5 1.3%200 10 expenses100 Total 467.6 435.2 32.4 7.4% 0 0 FY2009 FY2010 FY2011 FY2012* 9MFY2013 Operating Cost 3Q FY13 3Q FY12  Increase in operating expenses mainly from Contribution business expansion, as Group continues to invest Personnel 65.4% 63.7% in human capital and IT infrastructure Establishment 23.6% 24.7% Marketing 3.0% 3.1% Administration 8.0% 8.5% Note :* Restated for MFRS 12
  14. 14. Impairment Provisions Net write back in provisions due to recoveries, despite double digit loans growth Net Write-back/ (Allowance) of Loan Loss Coverage RM mil Impairment Provision 87.7%40.0 86.6% 86.4% +RM12.5 m; 75.2% 29.2 83.8%30.020.0 16.7 FY2012 1QFY13 2QFY13 3QFY1310.0  Net write back of impairment provisions during quarter due to recoveries, despite setting aside 0.0 9MFY11 9MFY12 9MFY13 additional collective provisions for loans growth  Drop in coverage due to recoveries-10.0 RM’000 1Q FY13 2QFY13 3QFY13 Individual assessment (3,624) 13,121 3,200-20.0 -20.8 Collective assessment (239) 398 3,354 Bad debts recovered (10,914) (28,983) (25,610) Note: CLO recoveries amounted to RM0.5 million Bad debts written off 4,504 7,099 4,916 as at 9MFY13. Net other allowances 1,487 1,315 1,239 Total charge / (write back) (8,786) (7,050) (12,901) 13
  15. 15. Profit Consistent Growth in Profit – Net Profit After Tax up RM25.1 million or 4.9% Y-o-Y Profit Before Tax Net Profit After TaxRM mil 600 450 535.7 399.3 550 510.6 400 380.6 500 350 324.2 450 438.8 300 400 250 350 300 200 250 150 200 100 150 50 100 50 0 9MFY11 9MFY12* 9MFY13 9MFY11 9MFY12* 9MFY13 9MFY13 vs 9MFY12 9MFY13 vs 9MFY12 + RM25.1mil + RM18.7 mil + 4.9% + 4.9% 14 Note * : Restated for MFRS
  16. 16. Enhance Shareholder ValueReturn on Equity stood at 13.6%, with Earnings per Share registering consistent y-o-y growth % Return on Equity (Net Profit After Tax) sen Earnings per share16.0 40 33.0 14.014.0 13.6 13.0 30 26.7 26.212.0 19.7 20 10.5 14.910.0 8.6 10 8.0 6.0 0 FY2009 FY2010 FY2011 FY2012* 9MFY13 FY2009 FY2010 FY2011 FY2012* 9MFY13 Note :* Restated for MFRS 139 15
  17. 17. Enhance Shareholder Value Dividend Yield of 3.9% with Payment of 16.6 sen Interim Dividend in FY13 Dividend Yield Dividend Per Share% sen 3.89 1st interim 2nd interim4 3.70 20 3.42 16.603 15 13.30 2.22 2.21 10.002 10 7.00 7.70 6.25 6.401 5 3.70 3.75 5.10 5.60 6.60 2.50 3.300 0 1.30 FY2009 FY2010 FY2011 FY2012 FY2013 FY2009 FY2010 FY2011 FY2012* FY2013 % Dividend Payout Ratio RM million Dividends Paid60 300 50.0 252.550 250 41.9 40.4 203.240 32.5 200 26.230 150 96.1 97.9 107.120 10010 50 0 0 FY2009 FY2010 FY2011 FY2012* FY2013 FY2009 FY2010 FY2011 FY2012 FY2013Note :* Restated for MFRS 139 16
  18. 18. Contents1 Executive Summary2 Financial Results for 9 Months FY2013 - Balance Sheet 17
  19. 19. Balance Sheet Management Effective Utilisation of Balance Sheet: Net loans constitute 65.9% of total assets Total Assets Trend Composition of Total Assets Net Loans Treasury Assets Other Assets RM bil 9M FY2013 9M FY2012*45.0 40.6 Other 39.7 38.7 Assets,40.0 3.3 8.00% Other 36.1 3.7 Assets,35.0 2.0 6.5 16.8% 31.8 31.7 Treasury 10.6 Assets, Net Treasury Net30.0 11.5 26.1% 6.3 4.8 Assets, 12.3 8.6 Loans, Loans, 65.9% 22.1% 61.1%25.0 6.2 6.820.015.0 26.7 24.5 23.6 21.910.0 18.7 20.7  Total assets expanded by RM1.9 billion or 4.9% Y-o-Y. 5.0  65.9% in net loans 0.0  26.1% in treasury assets FY2009 FY2010 FY2011 FY2012 9MFY2012* 9MFY2013 Note :* Restated for MFRS 139 18
  20. 20. Gross Loans Gross Loans Growth Accelerated to 12.3% Y-o-Y, Driven By Consumer Lending Gross loans, Advances and Financing Trend Loans Composition by Business SegmentsRM bil30 50.0% Consumer SME Wholesale 100% 18.4% 9.3% 11.5% 23.0% 22.5% 23.7% 24.2% 23.2% 4.8% 27.2 80%25 0.0% 25.0 21.4% 20.7% 21.3% 21.9% 21.7% 24.2 60% 22.420 21.4 -50.0% 40% 19.6 55.6% 56.8% 55.0% 53.9% 55.1% 20%15 -100.0% 0% FY2009 FY2010 FY2011 FY2012 9MFY2012 9MFY2013 FY2009 FY2010 FY2011 FY2012 9MFY13  Composition of gross loans: 9MFY13 vs 9MFY12 9MFY12 vs 9MFY11  55.1% – Consumer + RM 3.0 bil + RM2.5 bil + 12.3% y-o-y + 11.5% y-o-y  21.7% – SME  23.2% – Wholesale  Minimal exposure to fixed rate lending – 10% 19 of total portfolio
  21. 21. Asset Quality Continued Improvement In Asset Quality – Net Impaired Loans Ratio Down to 1.2%RM mil Gross Impaired Loans (%) Net Impaired Loans 875.1 1.8 806.3 741.3 1.5 1.4 1.4 1.3 629.2 1.2 1.2 572.7 FY2009 FY2010 FY2011 FY2012 9MFY2013 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 Gross Impaired Loans Ratio Net Impaired Loans Ratio FY2009 FY2010 FY2011 FY2012 9MFY2013 FY2009 FY2010 FY2011 FY2012 9MFY2013 4.5% 3.8% 3.3% 2.5% 2.1% 1.8% 1.8% 1.9% 1.4% 1.2% Despite challenging external environment, further improvement in asset quality with disciplined approach in credit risk management and collection processes 20
  22. 22. Loans Growth: Residential & Commercial Residential Properties expanded 18.1% Y-o-Y, above industry loans growth Loans Growth for Residential Property Loans Growth for Commercial Property RM bil RM bil14 32.9% 40.0% 5 +RM0.4 b; +12.5% 40.00% +RM1.7 b; +18.1% 12.6% 20.0% 5 18.0%12 8.8% 12.2% 20.00% 3.1% 4 5.9% -2.3% 11.1 0.0% 4 0.00%10 3.6 9.8 -20.0% 3 3.4 3.2 -20.00% 9.4 8 3 8.4 8.7 2.7 2.7 2.8 -40.0% -40.00% 7.7 2 6 -60.0% 2 -60.00% 4 1 -80.0% -80.00% 1 2 -100.0% 0 -100.00% FY2009 FY2010 FY2011 FY2012 9MFY2012 9MFY2013 FY2009 FY2010 FY2011 FY2012 9MFY2012 9MFY2013  Residential properties: + RM 1.7 billion or 18.1% y-o-y growth  Commercial properties: + RM 0.4 billion or 12.5% y-o-y growth  Focus on high growth areas i.e. Klang Valley, Penang and Johor  Attractive loan packages for the right customer – first time house buyer, upgrader, refinancer and investor  Strong sales force and marketing network 21
  23. 23. Loans Growth: SME & Motor Vehicles Lending for SMEs expanded 12.9% Y-o-Y; Revived Hire Purchase Business Loans Growth for SME Loans Growth for Transport Vehicles RM bil RM bil 7 +RM0.7b; +12.9% 20.0% 1 14.4% +RM0.1 b; +12.1% 6 8.0% 10.0% 1 5.9% 1.9% 5.9 1.2 5 5.5 1 5.2 0.0% 4 4.8 4.4 1 0.9 4.2 -10.0% 3 1 0.7 0.7 -20.0% 0.6 0.6 2 0 -30.0% 1 0 0 -40.0% 0 FY2009 FY2010 FY2011 FY2012 9MFY2012 9MFY2013 FY2009 FY2010 FY2011 FY2012 9MFY2012 9MFY2013 SME Lending: + RM 0.7 billion or 12.9% y-o-y loans growth  Re-commenced hire purchase financing in Complete suite of lending and trade finance products that April 2012 addresses the transactional banking needs of business  Focus on new cars and non-national cars customers, providing convenience and efficiency  Lending for Transport Vehicles: +RM0.1 Program lending approach to enable quick credit turn around billion or 12.1% y-o-y loans growth time Proactive risk monitoring to maintain low loss rates 22
  24. 24. Composition of Loans Portfolio Well Diversified & Secured Loans Portfolio Loans Composition by Economic Purposes 9MFY2013 9MFY2012 Purchase of Purchase of residential Others residential Others property property 8.6% 7.6% 40.8% 38.9% Purchase of Purchase of transport transport Working Working capital vehicles vehicles Personal 2.4% Personal capital 2.4% use 22.4% 24.6% Purchase of use 7.3% Purchase of 8.9%Purchase of Purchase of securities non- non- securities 1.6% Credit card residential 2.6% residential 3.0% Credit card property property 2.3% 13.2% 13.4% Risk Management – well diversified and collateralised loan book  40.8% of loans portfolio is for residential properties, up from 38.9% as at December 2012  13.2% for non-residential properties  22.4% for working capital 23
  25. 25. Composition of Customer Deposits Steady growth in CASA deposits to RM12.0 billion, accounts for 38.3% of total deposits CASA trendRM bil DD SA FD NID, MMD, SD 35 32.2 31.3 30  Total customer deposits of 28.3 5.7 3.7 RM31.3 billion as at 25.6 4.1 December 2012. 25 23.6 3.0 1.6  CASA deposits expanded 20 by RM1.2 billion in the 9 15.6 15.6 months FY2013. 14.6 12.2 15 14.1  38.3% of funding from CASA 1.7 10 1.7  Reduced high cost money 1.7 1.6 1.6 12.0 market deposits 9.8 9.6 10.8 8.4 5 9.1 10.3 6.8 8.1 8.0 0 FY2009 FY2010 FY2011 FY2012 9MFY2013 24
  26. 26. Composition of Customer Deposits Strong Consumer Franchise – Individuals account for 51.1% of Total Deposits Composition by Type of Deposits Composition by Customers 3QFY2013 3QFY2013 Negotiable Domestic instruments of financial Others deposits Structured Institutions 6.3% 3.6% deposits 3.6% 0.4% Govt. & Money market statutory deposits bodies 7.9% 4.8% Demand deposits 32.9% Business enterprises Individuals 34.1% 51.1% Fixed/ investment deposits Saving deposits 49.8% 5.4% 51.1% of total deposits from individuals, reflecting the strong consumer franchise 34.1% of total deposits from business enterprises Fixed/Investment deposits stood at 49.8% as at December 2012 Lower money market deposits is in line with the Treasury’s strategy in managing overall Funding cost and liquidity 25
  27. 27. Customer Deposits Loans to Deposits Ratio Raised to 86.7% (%) Loans to Deposit Ratio Trend95 90.690 86.7  FY2013 strategy to raise85 82.8 loans to deposits ratio: 81.8  for more efficient balance80 78.8 sheet management; and 77.775  to be in line with industry70  Raised Loans to Deposit Ratio to 86.7% as at65 December 2012605550 FY2010 FY2011 FY2012 1QFY13 2QFY13 3QFY13 26
  28. 28. Capital ManagementHealthy RWCR at 14.88%, with Core Capital Ratio at 11.88%, well above Basel II requirements Risk Weighted Capital Ratio Capital Adequacy by Legal Entities 16.09% Legal Entities Tier One Capital RWCR 15.40% 15.13% 14.88% ABMB 13.23% 13.23% 14.65% AIS 12.72% 13.57% AIBB 80.44% 80.67% FY2009 FY2010 FY2011 FY2012* 9MFY2013 Core Capital Ratio Enhancement to capital ratios to be achieved by:  Strong profit generation by maintaining stable asset 11.95% 11.88% 11.88% quality from Consumer & Business Banking 11.13% activities10.30%  Focus on less capital intensive fee based and non- interest income activities FY2009 FY2010 FY2011 FY2012* 9MFY2013 Note :* Restated for MFRS 139 27
  29. 29. FY2013 Business Focus FY2013 Business Plans focus on: Our Aspirations How? Implemented in FY2013 Generate recurring revenue  Re-organised Business Banking for To Build from existing/new business, accelerated SME growth “Consistent & within our risk appetite  Re-commenced hire purchase businessSustainable Financial Performance” Enhancing cost efficiency &  Centralise functions and improve productivity processes via process re-engineering Building infrastructure to  Upgraded internet banking platform support operational & execution  Implemented new integrated MIS and To Deliver capabilities finance infrastructure“Superior CustomerService Experience”  Formulating branch distribution strategy Delivering excellent customer to provide seamless customer service service and experience across all customer touch points Reinforcing governance and  Enhancing risk management framework compliance oversight for ICAAP complianceTo Develop “Engaged  Launched new vision, mission and coreEmployees with Right Reinforcing the right values & values Values” inculcating a performance  Continue to build a strong performance culture culture, to retain and attract best talent 28
  30. 30. What Is Ahead …….. The Bank remains strong and well- Challenges Ahead ………………. positioned Systematic execution of strategy • NIMs to remain under pressure Build on existing strengths and niche position • Challenging external economic environment in Consumer and Business Banking • Moderating economic growth Drive growth of non-interest income • Regulatory guidelines may impact consumer • Transaction Banking loans growth • Treasury Sales • Bancassurance • Wealth Management …… We will continue to exercise caution Enhance capabilities in risk management and vigilant risk management in face of Ensure impactful investments in IT and challenges …………………… infrastructure Enhance productivity and efficiency 29
  31. 31. THANK YOUDisclaimer: This presentation has been prepared by Alliance Financial Group Berhad (the “Company”) for information purposes only and does not purport to containall 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 onbehalf 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 itform 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 inconnection therewith.For further information, please contact:Alliance Financial Group Berhad Amarjeet Kaur Sew Yin Yin7th Floor, Menara Multi-Purpose Group Corporate Strategy & Development Group Corporate Strategy & DevelopmentCapital Square Contact: (6)03-2604 3386 Contact: (6)03-2604 3385No. 8, Jalan Munshi Abdullah Email: amarjeet@alliancefg.com Email: sewyinyin@alliancefg.com50100 Kuala Lumpur, MalaysiaTel: (6)03-2604 3333www.alliancefg.com/Investor-Relations 30

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