22 August 2014 Q1FY2015 Results Investors Presentation · 1 Your Bank. Malaysia‟s Bank. AmBank....

1Your Bank. Malaysia‟s Bank. AmBank.

Q1FY2015 Results – Investors Presentation

22 August 2014

Q1FY2015 Results –Investors PresentationAshokRamamurthy, Group ManagingDirector

Your Bank. Malaysia‟s Bank. AmBank.


Q1FY2015 Results – Investors PresentationYour Bank. Malaysia‟s Bank. AmBank.

AGENDA Page

1. EXECUTIVE SUMMARY 3

2. Q1FY2015 GROUP FINANCIAL PERFORMANCE 13

3. OUTLOOK & STRATEGIC PRIORITIES 27

4. DIVISIONAL STRATEGY & PERFORMANCE 32

5. SUPPLEMENTARY INFORMATION 38

- AMBANK GROUP

- ECONOMY & INDUSTRY



As Malaysia’s preferred diversified, internationally connected financial solutions group, we take pride in

growing your future with us.

Record performances & increasing ROE

Consistent revenue growth

Improved balance sheet & funding mix

Increased dividend payout to 40%

Commenced pursuing niche acquisitions

3 Focus areas:

Strategic Business Transformation

High priority growth initiatives

Organisationand governance structures

Delivered consistent growth & returns

Strengthening customer centricity & connectivity

Expand international connectivity initiatives

In-fill acquisitions & new strategic tie-up

Grow retail assets

Lead in investment banking business

Leverage fixed income trading

1. PATMI up 16.2%1, ROE of 16.0%1

2. CASA grew 4.5% yoy, loans grew 1.5%

3. CTI at 42.7%1, disciplined cost management to support ongoing investment

4. Completed divestment of AmLife & AmFamily, net gain on sale of AmLife & AmFamily of RM208 mil

5. Issued USD400 mil under USD2 bil Euro MTN, >10x oversubscribed

Pre ANZ FY2008 – 10 FY2011 – 12 FY2013 – 14 Q1FY2015

Scale & Presence

Reposition, Build New Growth

OptionsImprove Returns

Aggressively Invest, Optimise &

Leverage Connectivity

Focused Growth

Leverage Investment

Optimise Enablers

Net profits up 16.2%

1. Includes one-off divestment gain of AmLife & AmFamily



34.7

44.7

49.654.0

59.3

15.417.9

FY10 FY11 FY12 FY13 FY14 Q1FY14 Q1FY15

42.0%39.9% 41.6%

47.9%45.7%

47.8%

42.7%


1,009

1,3431,484

1,6211,782

462537

11.5% 13.6% 13.8% 13.9% 14.1%15.1%

16.0%


PATMI (RM'mil)

ROE (%)

1.13%

1.39% 1.39% 1.37%1.45%

1.52%

1.78%


CTI

Q1FY15 results underpinned by divestment gain

CAGR FY10-14: 0.08%YoY growth: 0.26%

CAGR FY10-14: 14.3%YoY growth: 16.1% YoY change: -5.2%

ROECAGR FY10-14: 0.7%YoY growth: 0.9%

PATMICAGR FY10-14: 15.3%YoY growth: 16.2%

1. FY2013 has been restated to reflect adoption of new MFRS

RM (sen) (%)

(%)

PATMI & ROE ROA

CTIEPS (basic)



- - -

9.4% 9.7% 10.3%9.8% 9.8% 10.4%

11.1% 11.2%11.8%

15.3%14.0%

14.7% 14.8% 15.5%16.1%

FY10 FY11 FY12 FY13 FY14 Q1FY15*

ProformaCET-1 Tier-1 RWCAR/Total Capital

3.8%

3.3%

2.5%

1.98% 1.86% 1.88% 1.87%


64.871.1

75.7

82.687.2

84.2 85.6


8.5 10.4 13.2 16.8 18.7 18.0 18.8

70.781.5

84.693.1

98.3 95.4 95.1

12% 14%17%

20% 21% 21% 22%


Customer deposits (RM'bil)

CASA(RM'bil)

CASA Composition (%)

Net Lending

Sound risk and capital profiles, focusing growth in targeted segments

CAGR FY10-14: 7.7%Net lending YoY growth: 1.7%Gross lending YoY growth: 1.5%

Customer DepositsCAGR FY10-14 : 8.6%YoY growth: -0.3%

YoY change: -0.01%

(RM’bil)

(%)(%)

Customer Deposits2 & CASA

Net Lending

GIL ratio Capital ratio

1. FY2013 has been restated to reflect adoption of new MFRS2. Customer deposits includes stable funding sources* Proforma capital ratios include Q1FY15 unappropriated profits of AmBank (M) Bhd, AmIslamic & AmInvestment

LDR90.0%2

Basel II Basel III

CASACAGR FY10-14: 21.9%YoY growth: 4.5%



Successful issuance of USD400 mil senior notes jointly arranged by AmInvestment Bank and ANZ, oversubscribed by >10x

Highlights

AmBank (M) Berhad issued on 3 July 2014

USD400 mil Senior Unsecured Notes issued under the USD2.0 bil Euro Medium Term Note Programme

>10x oversubscribed with orders of over USD4.25 bil from 190 accounts

Tenure: 5 years, matures on 3 July 2019

Coupon: 3.125%, re-offer yield of 3.179% and a re-offer price of 99.752

Net Proceeds

General working capital purposes

Repayment of borrowings by AmBank (M) Berhad and borrowings of subsidiaries

Ratings

Joint lead managers & bookrunners

Baa1(Moody‟s)

BBB+(Standard & Poor‟s)



Softer quarter, key initiatives underway to drive growth

Retail Banking

Delivering new solutions to emerging affluent & small business

Greater emphasis on mortgage, End-to-End process review underway

Enabling and enhancing digital platform, increasing digital presence and social media via collaborationswith business partners

AmMetLife & AmGeneral collaboration to drive greater bancassurance penetration. New Bancassurancehead appointed

Continue to extract values from integration of MBF with specific focus to expand merchant solutions

Wholesale Banking

New wholesale banking operating model stabilising, new sector & segment coverage teams set up

Accelerating growth in Commercial segment, expanding footprints leveraging on Retail infrastructureand setting up Business Centres/Desk at key community areas

Senior head appointed to lead new MNC segment, to focus on leveraging ANZ cross border collaboration

Integrated Debt Markets with Markets Division to leverage on our key strength on fixed incomefranchise and develop a more diversified and sustainable revenue model from the flow business. Newheads appointed to jointly lead the enlarged Markets Division

Healthy deal pipelines in both DCM and CF for remaining quarters

Expecting drawdown of structured financial deals (including syndications) to pick up for large corporatein key sectors e.g. Oil & Gas, Infrastructure & Agriculture

General Insurance

Achieved synergy of RM66.7mil to-date (June 2014), target to complete integration by end CY2014

Roll out targeted and effective sales & marketing campaigns to drive sales & enhance our brand name

Develop and strengthen strategic alliances with key partners

Building pricing capability to lead the de-tariffed (2016) market



Strategic Priorities Ongoing key investments

Deliver on focused organic growth

Retail Application Scorecards Enhancement (RAS2)1

AmData Intelligence: data mart & centralised dashboard reporting system (Phase 2)

Core banking system implementation (phase 2)

Digital (internet & mobile) banking platform upgrade

Murex implementation & upgrade

Continue to optimiseefficiency

Retail collection & recovery system replacement

Save to Invest Programme

Enterprise Process Platform (EPP) Programme

Build sustainability

New multi-channel switch

Infrastructure Facilities Modernisation1

Basel Advanced Internal Rating Based (AIRB) and related risk projects1

Disaster recovery capabilities1

GST (Goods & Services Tax) readiness1

Regulatory Reporting System & BNM ISS (Phase 3)1

De-tariff risk selection and pricing engine1

Anti Money Laundering Act compliance (Phase 3)1

Others (e.g. MEPS/MyClear compliance, IBG enhancement, MyMobile, eIBFT, TAC Registration Process enhancement, single counterparty exposure limit)

1

Leverage strategic partnerships & deliver on acquisitions

Kurnia & Cards: IT system within integration budget

AmMetLife & AmMetFamily: planning in progress

CAPEX: ~RM300 mil OPEX: ~RM100 mil

Ongoing investment over 12 – 18 months to deliver growth, optimiseefficiency & build sustainability

1. Regulatory and compliance related



Strategic Partnership: Transaction Highlights

30 Apr 2014: Share sale of AmLife and AmFamily to MetLife completed

Total cash consideration of RM812 million

MetLife1 to own 50% plus one share in AmLife2, remaining shares owned by AMAB3; AMAB3 to own 50% plus one share in AmFamily4, remaining shares owned by MetLife

20-year bancassurance and bancatakaful exclusive agreements for the distribution of life insurance and family takaful products through banking channels

1. MetLife: MetLife International Holdings Inc2. AmLife: AmLife Insurance Bhd

3. AMAB: AMAB Holdings Sdn Bhd4. AmFamily: AmFamily Takaful Bhd

AmLifeInsurance

Berhad

AmFamilyTakaful Berhad

MetLife Inc

100% 100%

~50%~50%

AMMB Holdings Berhad

MetLife International Holdings, Inc.

AMAB Holdings Sdn Bhd

Leveraging combined strengths

Strong domestic reputation &

brand

Domestic market insights

Integrated bancassurance

operating model

Nationwide network & multi customer touch

points

Financial strength & heritage

Global expertise and “IP” transfer

Leading innovative

product development

Multi channel expertise

Recap: Aligned vision with complimentary strengths



1 Apr 14 28 Apr 14 30 Apr 14

oObtainedregulatoryapprovals

oSignedshare sale &exclusiveagreements

oCompletion

oNew Boardof Directorsappointed

oCompletionofcollaborativeintegration

12 – 18 months6 May 14

oUnveilednew brandsAmMetLife &AmMetLifeTakaful

Indicative Timeline

Transaction Collaborative Integration

Working together towards creating a modern, innovative, customer centred insurer for Malaysians

Key focus and planned initiatives:

1. Enhance brand – rebranding of website, stationery, apps & contract, email and marketing campaigns

2. Strengthen distribution channel

o Agency enhancement

o Develop Insurance Specialist, a new distribution channel

o Direct marketing telemarketing (DMTM) outsourcing

o Improve mobility for agency

3. IT investment to strengthen foundation and support growth

4. Align policies and processes in human resources, risk management & compliance, actuarial & finance

5. Develop core organisational talents and strengthening leadership teams

Foundations being built forsustainable growth



22 August 2014

Q1FY2015 Results –Investors PresentationMandySimpson,ChiefFinancialOfficer




AGENDA Page






- AMBANK GROUP




Divestment gain and one-off non-recurring recoveries

Q1FY2015(Underlying)

Q1FY2015(Reported)

Income (yoy growth) (7.9%) 22.6%

Expenses (yoy growth) 2.1% (9.7%)

PBP (yoy growth) (13.0%) 34.3%

PAT (yoy growth) (7.0%) 17.4%

NIM (Q1FY15 vs FY14) (0.18%) (0.23%)

Non-interest income composition (%)

35.2% 52.5%

Note: Reflects (1) Q1FY2015 – divestment gain from AmLife and AmFamily Takaful, net of tax (2) Q1FY2014 – equity accounting of AmLife & AmFamily and one-off large recoveries of RM125 million



RM‟mil

Cash considerations 812

Less:50% NAV + goodwill + fair value adjustment of AmLife & AmFamily businesses

(335)

Completion cost, warranties and other direct expenses (87)

Restructuring & investment (101)

Provision for contingency & risk (81)

Divestment Gain 208

Divestment gain from AmLife & AmFamily Takaful



84.2

83.6

84.8

87.2

85.6

Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15

(RM’bil)

C. Deposits QoQ growth: -3.2%CASA QoQ growth: 0.4%

462 441 416464

537

15.1% 13.9% 13.1%14.6%

16.0%

Q1FY14 Q2FY14 Q3FY14 Q4Y14 Q1FY15

PATMI (RM'mil)ROE (%)

47.8% 47.8%

44.5%

42.5% 42.7%


PATMI QoQ growth: 15.8%ROE QoQ growth: 1.4%

QoQ growth: -1.8%YoY growth: 1.7%

QoQ performance

(%)

PATMI & ROE CTI

Net LendingCustomer Deposits1 & CASA

1. Customer deposits include stable funding sources

QoQ change: 0.2%

18.0 16.5 17.3 18.7 18.8

95.4 96.3 95.8 98.3 95.1

21%17% 18%

21% 22%


Customer deposits (RM'bil)CASA(RM'bil)CASA Composition (%)



87.0% >100.0% 9.7% 42.9%

536.9 mil

16.2% 22.6% 34.3% 13.9% 17.4%

462.0 mil

11.2%

Islamic PATMI Conventional PATMI Positive growth in Q1FY15 Contraction in Q1FY15

Divestment gain underpinned results

Growth 2.8%

PATMI: profit after tax and non controlling interests

9%

91%

18%

82%

PATMIQ1FY14

Net Interest Income

Non-Interest Income

Total income

Expenses PBPProvisions/Allowances

PBTTax & Zakat

PAT MIPATMIQ1FY15

Q1FY15 (RM‟mil) 695.2 767.3 1,462.5 623.6 838.9 113.1 725.8 158.0 567.8 30.9

Q1FY14(RM‟mil) 782.8 410.3 1,193.1 568.6 624.5 (12.8) 637.3 153.7 483.6 21.6

Exceptional items

Q1FY15 (RM‟mil)

- 390.0 390 89.8 300.2 60.2 240.0 32.4 207.6

Q1FY14(RM‟mil)

(21.8) (7.1) (28.8) (23.4) (5.5) (124.9) (130.3) (34.2) (96.1)



32 628 -64 13 16 12


49 6093 116

175

42 63


85%92%

87% 84% 86%

83%73%

15%8%

13% 16% 14%

17%27%


PAT (RM’mil)

PAT (RM’mil) PAT (RM’mil)

1 Wholesale banking represents Business, Corporate & Institutional Banking, Investment Banking, Markets & Loan Rehab activities2 FY2013 has been restated to reflect adoption of new MFRS

PAT (RM’mil)

Retail Banking Wholesale Banking1

General Insurance Life Assurance & Family Takaful

26.1% 26.5%

47.6% 25.6%

Stronger profit growth in general insurance

537 566 509 592 636 179 133

Conventional PATIslamic PAT

674 746 1,058 1,112 1,065 316 233

67%83% 85% 84% 85%

77% 91%

33%17%

15%16% 15%

23% 9%


Conventional PATIslamic PAT



Q1FY14 Fees on loans AUM IB business Other fee inc Total Fee income Sales Trading Other trading incTotal Trading & InvestmentGeneral Life & Takaful Total Insurance Other Q1FY15



* IB business includes brokerage fees, underwriting fees and corporate advisory & guarantees

As % of total income 34% 53%

35.4% 23.5%Growth 4.5% 10.0% 68.6%

767.3 mil

>100.0% 40.7% >100% 7.1% 87.0% 7.0%

Q1FY15 non interest income Positive growth in Q1FY15 Contraction in Q1FY15

Retail: -3milWholesale: -12mil

Q1FY14 non interest income

410.3 mil

Q1FY14Fees on

lending & securities

AUMIB

business*Other fee income

Total Fee Income

Sales TradingOther trading& investment

Trading & Investment

GeneralLife &

TakafulInsuranceBusiness

Others Q1FY15

% of Composition

8% 5% 6% 4% 23% 3% 4% 49% 56% 17% 2% 19% 2%

Q1FY15

(RM‟mil)60.4 41.3 49.9 28.6 180.2 21.3 28.1 372.9 422.3 134.0 16.8 150.8 14.0

Q1FY14(RM‟mil)

79.0 39.5 45.4 30.0 193.9 35.9 16.7 3.7 56.3 119.5 26.0 145.5 15.1

4.7%

Non-interest income movement

Stronger contributions from General Insurance whilst trading, fee income impacted by moderate loans growth

12.2% 3.7%

Includes gross divestment gain

Includes 2-mths equity accounting of AmLife & AmFamily




268.3

256.6 254.9

245.3

5.0

6.7

1.7

6.6

3.0

FY14 Life / Takaful FY14 one-offs Underlying FY14 Assets mix Rates Funding Q1 FY15

Margins remain a challenge

Note :1 NIM includes Net Financing Income from Islamic Banking business2 FY10-FY14 based on internal data computation3 FY2013 has been restated to reflect adoption of new MFRS

FY10 FY11 FY12 FY13FY13

[Restated]3 FY14 Q1FY15

NIM and COF (YOY)

MFR

S 1

0

2.68%

2.92%

3.13% 3.10% 3.10% 3.09%2.98% 2.94%

2.75%2.68% 2.72% 2.69%

2.25%

2.75%

3.00% 3.00%3.00% 3.00%

1.00% 1.00%

4.00% 4.00% 4.00% 4.00%

FY10 FY11 FY12 FY13 1 Apr 2013 FY14Cost of funds NIM OPR SRR

2.68%

2.92%

3.13% 3.10% 3.10% 3.09% 3.13%2.98% 2.94%

2.75% 2.68%2.72%

2.68%2.45%

2.25%

2.75%

3.00%3.00% 3.00%

3.00%3.00%

1.00% 1.00%

4.00% 4.00% 4.00% 4.00% 4.00%

FY10 FY11 FY12 FY13 1-Apr-13 FY14 Q1FY15

Cost of funds NIM OPR SRR

2.67% 2.63%

2.45%

1-Apr-13 FY14 Q1FY15

COF

NIM

SRR

OPR

2.67% 2.63%

2.45%

1-Apr-13 FY14 Q1FY15

NIM (without AmLife & AmFamily)

11.7ps

FY14AmLife &AmFamily

FY14 one-offsNormalised

FY14Assets mix Rates Funding Q1FY15

YTD NIM (bps) drivers

11.3ps



89.0% 89.4%

90.9%

93.3%

41.8% 40.2% 40.5%43.9% 43.1% 42.5%

Disciplined cost management to support ongoing investment

Q1FY14 Personnel EstablishmentMarketing &

CommAdmin & others

Acquisition & Biz efficiency expenses

Q1FY15

% of Composition 53% 22% 5% 8% 12%

Q1FY15 (RM‟mil) 331.6 134.8 34.1 50.2 72.8

Q1FY14 (RM‟mil) 340.5 134.5 44.2 49.3 -

2.6% 0.2% 22.8% 1.8%

47.7% 42.7%CTI

YoY Growth

RM‟mil

568.5

623.5

Expense growth drivers

Banking Group CTIAmGeneral Combined

Operating Ratio

FY12 FY13* FY14 Q1FY15FY10 FY11 FY12 FY13 FY14 Q1FY15

>100.0% 9.7%

* FY13 based on Kurnia 6 months performance



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% 1.86% 1.87%

0.50%0.21% 0.08% 0.38%

95.6% 99.6%104.7% 104.9%

114.6%

129.3% 127.4%120.5%

Industry AmBank Group

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% 1.97%0.50%

0.21% 0.01%

2.87% 2.64% 2.41%

Net Provisions Charge Net NPL Ratio Gross NPL Ratio Gross Impaired Loans Loan Loss Charge(MFRS139) Loan Loss Reserve

Loan Loss Coverage

Loan loss charge at expected level with normalised recoveries

195 bps

MFR

S 1

39

MFR

S 1

39

GP

3

FY2007 FY2008 FY2009 FY2010 1/4/10 FY2011 FY2012 FY2013 FY2014 Q1FY15

Asset quality indicators

FY2012 FY2013 FY2014 Q1FY2015

AmBank Group

Industry

127.4%120.5%

2.8%

1.4%11.2%

RM’mil

FY14 loan losscoverage

Collective allowance

Individual allowance

Impaired loans &

financing

Q1FY15 loan losscoverage

Q1FY14 Allowance for impairment

Individual allowance

Collective allowance

Impaired loans –recovered

Q1FY15 Allowance for impairment

Allowance for impairment on loans & financing (P&L) Movement in loan loss coverage

(20.4)

81.1

8.7 22.6

132.8



Moderating loans growth from large repayments and focusing on target segments

Retail Non retail

0.5% 4.0%

86.3bil

7.9% 9.2% 3.7% 36.1% 9.7% 1.5%

87.6bil

3.8%

No

n-re

tail

Reta

il

4.1%

Non-RetailRetail Positive growth in Q1FY15 Contraction in Q1FY15

Gross LoanQ1FY14

Auto Financing

Mortgage Cards Co-opAsset

FinancingWholesale Others

Gross Loan Q1FY15

% of Composition

28.6% 20.2% 2.3% 1.8% 2.1% 45.2% -0.2%

Q1FY15 (RM‟bil)

25.1 17.7 2.0 1.5 1.8 39.6 (0.2)

Q1FY14(RM‟bil)

26.2 16.4 2.2 1.6 2.0 38.2 (0.3)

Gross Loan / Financing movement

55%

45%

56%

44%

Conventional,

72%

Islamic,

28%

Fixed

rate, 43%Variable

rate, 57%



31.8 8.4 98.2 13.4 52.3 94.4

31.0 82.8 76.3

38.8

727.6

17.6

1,272.5

Jun-14

2.5% 0.7% 7.7% 1.1% 4.1% 7.4% 2.4% 6.5% 6.0% 3.0% 57.2% 1.4%

3.93.0 8.3 1.3

4.3 5.82.3 2.3 7.9 1.1

46.8

0.4

87.6

Jun-14

LoansComposition

4.4% 3.4% 9.5% 1.5% 4.9% 6.7% 2.6% 2.7% 9.0% 1.3% 53.5% 0.5%

Loans AmBank Group vis-à-vis Industry

Source : BNM, financial statementYour Bank. Malaysia‟s Bank. AmBank.

AmBank Group

Industry

AgricultureMining &

QuarryingManufacturing

Electricity, Gas & Water

ConstructionWholesale,

Retail, Restaurant

Transport, Storage &

Com

Finance, Insurance,

& Biz. Real Estate

Education & Health

Household OthersTotal Loans

1.5%YoYGrowth

2.5% 0.7% 7.7% 1.1% 4.1% 7.4% 2.4% 6.5% 6.0% 3.0% 57.2% 1.4%

11.4% 13.8% 1.7% 45.2% 42.1% 3.4% 5.9% 32.0% 1.5% 34.9% 1.0% 38.7%

Loans by purpose

June‟14YoY

growthLoans

composition

Purchase of securities

3.5 +42.6% 4.0%

Purchase of transport vehicles

26.3 -6.8% 30.0%

Purchase of resiproperty

15.0 +10.5% 17.1%

Purchase of non resi property

8.8 -0.8% 10.1%

Purchase of fixedassets

0.9 -21.0% 1.1%

Personal use 1.7 -19.3% 1.9%

Credit card 1.9 -4.5% 2.2%

Consumer durables

0.0 -100.0% 0.0%

Construction 3.5 +23.9% 4.0%

Working capital 20.4 +0.2% 23.3%

Other purposes 5.6 +17.3% 6.3%

87.6 +1.5% 100.0%

AgricultureMining &

QuarryingManufacturing

Electricity, Gas & Water

ConstructionWholesale,

Retail, Restaurant

Transport, Storage &

Com

Finance, Insurance,

& Biz. Real Estate

Education & Health

Household OthersTotal Loans

Loans by purpose

June‟14YoY

growth

Loans compositio

n

Purchase of securities

73.9 +16.8% 5.8%

Purchase of transport vehicles

164.9 +3.8% 13.0%

Purchase of resiproperty

366.7 +13.6% 28.8%

Purchase of non resi property

165.3 +15.5% 13.0%

Purchase of fixedassets

10.4 +11.0% 0.8%

Personal use 58.3 +4.1% 4.6%

Credit card 34.5 +4.9% 2.7%

Consumer durables

0.4 >100.0% 0.0%

Construction 35.8 +15.4% 2.8%

Working capital 294.6 +6.7% 23.2%

Other purposes 67.8 -4.1% 5.3%

1,272.5 +9.3% 100.0%

LoansComposition

YoYGrowth

Loans Growth by Sector

Loans Growth by Sector

0.3% 8.6% 1.0% 33.1% 11.2% 6.4% 12.0% 7.0% 17.7% 14.2% 11.5% 22.7% 9.3%



8.5 10.4

13.2

16.8 18.7 18.8

12% 14%17%

20% 21% 22%

FY2010 FY2011 FY2012 FY2013 FY2014 Q1FY2015

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

Diversify funding sources, stable CASA composition growth momentum

Set up a USD2 billion EMTN programme, issued USD400 million post Q1FY15, >10x oversubscribed

o Diversified our funding base

o Provides ability to raise term funding at competitive rates regionally

FY2010 FY2011 FY2012 FY2013 FY2014 Q1FY2015

CAGR FY10-14: 21.7%

8.5 10.4

13.2

16.8 18.0

12% 14%17%

20% 19%

FY2010 FY2011 FY2012 FY2013 H1FY2014

CASA CASA composition

Customer deposits driven by focus on CASA

Improving CASA composition

Improving funding composition

YoY Growth 5.6% 1.9% 4.5% -1.6% 0.9% -0.3%

Cust

Deposits

Q1FY14

Current Savings CASA

Term

Deposit

& NID

Term

Funding

Cust

Deposits

Q1FY15

Q1FY15 13.5 5.4 18.8 68.1 8.2 95.1

Q1FY14 12.7 5.3 18.0 69.3 8.1 95.4

95.4 95.1

FY07 FY10 FY13 FY14 Q1FY15

Equity & debt capital 10% 15% 14% 15% 16%

Customer deposits 60% 77% 75% 74% 74%

Term funding & loans with recourse >1year

4% 2% 7% 6% 6%

Term funding & loans

with recourse <1year1% 1% 1% 2% 2%

Deposits from banks & FIs

25% 5% 3% 3% 2%



9.4% 9.7% 10.3%9.8% 10.4%

11.1% 11.2% 11.8%14.0%

14.7% 14.8% 15.5%16.1%

Adopted Basel III at banking entity level:

• The aggregated banking entities of the Group remain well capitalised and operated within internal target capital levels for FY2015:

o CET1: 9.0% ± 1.0%

o T1: 10.5% ± 1.0%

o Total Capital: 15.0% ± 1.0%

Double leverage ratio1: 1.19x

Balance Sheet leverage ratio2: 9.4%

Total leverage ratio3: 7.3%

Capital at preferred level

1. 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 sheet4. Proforma capital ratios include Q1FY15 unappropriated profits of AmBank (M) Bhd, AmIslamic & AmInvestment

Capital: Aggregated banking entities

Basel II Basel III

------------------ After proposed dividend -----------------------

Capital: Legal entities

FY14 Q1FY15

CET 1 Tier 1Total

capitalCET 1 Tier 1

Total capital

AmBank 9.1% 11.1% 14.6% 9.6% 11.6% 15.2%

AmIslamic 9.2% 9.2% 15.2% 8.9% 8.9% 14.8%

AmInvestment 21.2% 21.2% 21.2% 18.2% 18.2% 18.2%

FY2011 FY2012 FY2013 FY2014Q1FY154

Proforma

CET 1Tier 1 RWCAR / Total Capital Ratio

Capital adequacy ratio



AGENDA Page






- AMBANK GROUP




Financial services outlook

MALAYSIA: 2014(f) GDP of 5.9%

Monetary policy will remain prudent to support the economic growth and address financial imbalances

Moderate loans growth in line with moderating consumption growth and measures to address household debt concerns

Asset quality may come under pressure more from rising inflation and borrowing cost as well as potential capital flow risk

Margins remain a challenge from the stiff price-based competition for loans and deposits

A 85% probability of another 25bps hike in OPR in 2H2014 from 3.25%

BANKING: Opportunities & challenges

Global growth to improve moderately

• US and Japan are to expand at a moderate pace, while growth in the euro-area is poised to be modest.

• Remains a challenging year for Developing Asia to maintain financial stability and sustain economic growth

Malaysian economy: supported by trade & investment

• Growth in 2014 will depend on private investment and exports, with softening private consumption

• Inflation will be a focal point in 2014 driven by on-going rationalisation of subsidy and pre-GST impact. The other one being public debt

• Authorities will continue to adopt prudent and pragmatic macroeconomic policies, reining in fiscal deficit and public debt

2013 2014f 2015f

RGDP y/y% 4.7 5.9 5.2

Inflation y/y% 2.1 3.0 3.6

Unemployment (%) 2.9 3.0 3.0

FB% GDP (FY) -3.9 -3.3 -2.8

CA% GDP 3.6 6.8 5.5

87.0

-5.5%

4.3%Ju

l-12

Aug-1

2

Sep-1

2

Oct-

12

Nov-1

2

Dec-1

2

Jan-1

3

Feb-1

3

Mar-

13

Apr-

13

May-1

3

Jun-1

3

Jul-

13

Aug-1

3

Sep-1

3

Oct-

13

Nov-1

3

Dec-1

3

Jan-1

4

Feb-1

4

Mar-

14

Apr-

14

May-1

4

Jun-1

4

RM'bil

Loans disbursed Loans approved Loans Applied



Focused growth Leverage investments Optimise enablers

Strategic Priorities FY2015 – 17

Retail: build new value segments in emerging affluent & small business, leverageexisting value strength to grow in mass market

Wholesale: grow franchise value by targeting value segments, customercentricity, and deeper relationships to increase SOW, focus on CASA, cross selling& lead in innovation to accelerate non-interest income growth

General Insurance: maintain #1 in motor, diversify into non-motor

Islamic: grow CASA, rebalance portfolio mix, increase fee based income

Complete Kurnia & MBF Cards integrations and deliver synergies. Shift focus totop line growth

Life: grow Banca and synergise with Metlife

Family Takaful: grow sales of credit related term Takaful products & extractsynergies from Metlife

Build scalable “customer service delivery center”

Simplify business and operating models

Optimise holding company

Build AIRB capabilities

Strengthen governance

Enhance employee engagement & talent management

Superior customer experience – technology & branding

Deliver on focused organic growth

Leverage strategic partnerships &

deliver on acquisitions

Continue to optimise efficiency

Build sustainability

1

2

3

4



FY2014 Q1FY2015 FY2015 FY2016 – 17

PATMI

(RM‟mil)

1,782.4

(10.0% yoy)

536.9

(16.2% yoy)Circa 10% 9 – 11%

ROE (%) 14.1% 16.0% 14.2% - 14.5% 14.5% - 15.5%

CTI (%)

45.7%

43.1%

(Banking Group)

42.7%

42.5%

(Banking Group)

≤45%;≤43%

(Banking Group)

≤44%;≤42%

(Banking Group)

Gross impaired loans (%)

1.86% 1.87% ≤1.9% ≤1.9%

Dividend:

Single-tier (sen)

Payout (%)

Interim: 7.2 sen / share

Proposed final:

16.9 sen / share

41%

N/A40 - 50%Payout

40 - 50%Payout

Key performance indicators

FY2015 underlying estimates:

NIM expected to contract ~15 bps Loan loss charge expected to be circa 30 bps Loans expected to grow ~7% LD ratio expected to maintain at ~90%, ±2%

CASA composition ≥21% Non-interest income composition at circa 38% Target CET 1 of 9.0% (±1%), Tier 1 of 10.5% (±1%),

total capital of 15.0% (±1%)



3

Summary

Q1FY2015 underpinned by divestment gains and lower recoveries, whilst operating performance was softer

Increasingly challenging business environment with consolidations, intensifying competition and rising compliance requirements

Discipline execution to our four strategic priorities and key initiatives critical for success

Strategic partnerships our key competitive advantage

1

2

3

4



AGENDA Page






- AMBANK GROUP




Retail Banking

Re-orient to higher value segments, extract value from core massAspirations

9.1%Growth 15.1% 2.1% 71.7% 26.0% 25.7% 26.1%

• Retail Banking’s growth agenda will focus on simplification, digital enablement including modernisation of its digital platforms, building a service-oriented culture and people capability. Key segments include emerging affluent and small business whilst continue to expand and innovate wealth management offerings

Outlook

PAT

Q1FY15 PATQ1FY14 PAT Positive growth in Q1FY15 Contraction in Q1FY15

• Income impacted by margins compression and loans growth remained under pressured in the short term reflecting tightening of credit policies

• Loans growth was targeted in profitable segments, good mortgage loans growth of 8%

• Customer deposits growth underpinned by on-going marketing campaigns and leveraging distribution channels

Targeted growth

Q1FY15 PAT

(composition to Group)

Q1FY15

vs

RM'mil Q1FY14 Q1FY15 Q1FY14

PATFY13

TotalIncome

Expenses PBP Allowances PBT TaxPATFY14

Q1FY15 (RM‟mil)

448.2 220.2 228.0 51.5 176.5 43.8 132.7

Q1FY14(RM‟mil)

493.3 224.9 268.4 30.0 238.4 58.9 179.5

22.8%

Gross Loans /

Financing 48,422.6 48,192.0 -▼ -0.5%

Gross Impaired Loans 2.52% 1,266.8 1,212.0 -▼ -4.3%

Customer Deposits 37,746.5 40,003.6 ▲ +6.0%

CASA Deposits 10,271.6 10,702.0 ▲ +4.2%

ROA 1.49% 1.10% -▼ -0.39%

CTI 45.7% 49.3% ▲ +3.6%

Allowance Coverage 82.9% 75.9% -▼ -7.0%



Loan Rehab, 8%

Wholesale Banking

9.9%Growth 12.6% 3.2% 73.6% 26.1% 24.8% 26.5%


PATQ1FY14

TotalIncome

Expenses PBP Allowances PBT TaxPAT

Q1FY15

Q1FY15 (RM‟mil)

413.0 130.4 282.6 (24.1) 306.7 74.1 232.6

Q1FY14(RM‟mil)

458.3 134.9 323.4 (91.5) 414.9 98.5 316.4

PAT

Coverage: Maximising franchise value through holistic coverage & cross sell – full understanding of customer needs, distinguishing service by complexity, allocating specialists intelligently to grow sustainable profitability

Products: To offer innovative, quality products and services and deliver comprehensive differentiated solutions

Aspirations

Outlook • Higher profit growth with strong deals pipeline particularly from debt and loans markets and recovery of fixed income

business. Expecting margin pressure and volatility in the market.

• Strong Corporate Finance performance (advisory and underwriting fees) and cost management initiatives across Wholesale Banking, partially offset by margin compression, lower broking volumes and lower foreign exchange and derivative performance

• Moderate loans growth partly reflects large repayments, good growth in low cost deposits and assets under management

• Continued cross sell in key products / solutions under new wholesale banking platform

Diversified contribution across businesses

Q1FY15 PAT(composition to Group)

Q1FY15 Income Breakdown

Markets, 7%

Corporate Bkg, 53%

Transaction Bkg, 21%

Q1FY15

vs


40.0%

• Assets managements include FMD, private banking, AmAra Reits and AmPrivate Equity

Gross Loans / Financing 38,171.6 39,582.1 ▲ +3.7%

Gross Impaired Loans 1.10% 359.4 437.3 ▲ +21.7%

Customer Deposits 51,648.8 49,438.8 -▼ -4.3%

CASA Deposits 7,993.3 8,656.1 ▲ +8.3%

ROA 2.69% 1.78% -▼ -0.91%

CTI 29.4% 31.6% ▲ +2.2%


Ave Assets Management 41,571.2 44,557.1 ▲ +7.2%

IB, 13%

Others, -2%



78.5% 0.7%

General Insurance

Dominate in auto insurance and diversify into non-motor segment Aspirations

2.1%Growth 9.5% 7.8% 14.2% >100.0% 47.6%

Outlook

PAT Q1FY15 PAT(composition to Group)

• Higher profits underpinned by gain on disposal of investments

• Achieved cumulative synergy of RM66.7mil to-date (June 2014), target to complete integration by end CY2014

• Positive capital adequacy ratio exceeds benchmark regulatory target

Stronger investment income

• Expecting higher profit level in FY2015, initiatives underway to strengthen strategic alliances with key partners and brand enhancement

PATQ1FY14

Net Earned

Premium

Claims & Comm

UW ProfitMgmt

ExpensesNet UW Profit

Investment Income

Provision TaxPAT

Q1FY15

Q1FY15 (RM‟mil)

374.2 281.5 92.7 68.7 24.0 55.9 (3.7) 21.1 62.6

Q1FY14(RM‟mil)

382.1 279.6 102.5 74.5 28.0 31.3 2.1 14.9 42.4


Q1FY15

vs


41.7% 10.8%



1.8%


• Profits impacted by lower income from margin compression higher allowances

• Strong financing growth partly impacted by margin compression mainly from the auto financing business and lower trading and Investment income from Markets fixed income related activities

• Decent customer deposits growth

Islamic Banking

To be the Islamic Bank of choiceAspirations

Strong financing & CASA growth

10.6%Growth 16.5% >100.0% 43.1% 44.3% 42.7%

Outlook • Increase penetration of solutions and cross-selling to support AmBank Group as “main bank” initiatives

PAT

PATQ1FY14

TotalIncome

Expenses PBP Allowances PBT TaxPAT

Q1FY15

Q1FY15 (RM‟mil)

201.6 89.1 112.5 49.6 62.9 14.3 48.5

Q1FY14(RM‟mil)

225.5 90.7 134.8 24.3 110.5 25.7 84.8


Q1FY15

vs


3.2%

Gross Financing 22,200.1 24,760.1 ▲ +11.5%

Gross Impaired Loans 1.39% 318.3 343.7 ▲ +8.0%

Customer Deposits 22,421.5 25,155.6 ▲ +12.2%

CASA Deposits 6,940.0 6,108.6 -▼ -12.0%

ROA 1.17% 0.60% -▼ -0.57%

CTI 40.2% 44.2% ▲ +4.0%




• Income includes one-off divestment gain of AmLife and AmFamily businesses

• Higher expenses reflect continued investment

• MI represents non-controlling interests within the Group

Group Operating Segments


>100.0%Growth >100% 93.1% 90.1% >100.0% >100.0% >100.0%

PAT

>100.0%


PATQ1FY14

TotalIncome

Expenses PBP Allowances PBT Tax PAT MIPATMIQ1FY15

Q1FY15 (RM‟mil)

427.7 194.9 232.8 87.7 145.0 16.7 128.3 30.9 97.4

Q1FY14(RM‟mil)

52.8 101.0 (48.2) 46.1 (94.3) (23.9) (70.5) 21.6 (92.1)

>100%

23.2%



AGENDA Page






- AMBANK GROUP




136.1 272.3

408.4

669.9

1,078.4

June'14

4.6% 11.1% 8.8% 1.6% 4.2%

5.4 13.5

18.8

68.1

86.9

June'14

RM’bil

Deposits profile

Source : BNM, internal reports

RM’bil

Savings Current Account CASA Fixed Deposits Core Deposits

Savings Current Account CASA Fixed Deposits Core Deposits

AmBank Group Deposits Growth by Type

Industry Deposits Growth by Type

1.9% 5.6% 4.5% 1.6% 0.3%

6.2%

15.5%

78.3%

AmBank Group Core Deposits Composition

Savings Current Account Fixed Deposits

12.6%

25.3%

62.1%

Industry Core Deposits Composition

Savings Current Account Fixed Deposits



Diversifying funding sources and maturity profile

LDR1 of 90.0%

AmIslamic Bank Bhd

1. RM2b Subordinated Musyarakah Sukuk

2. RM3b senior sukukmusyarakah programme

3. RM3b Basel III-compliant Subordinated SukukMurabahah Programme via Tawarruq arrangement

AMMB Holdings Bhd

1. RM2b Medium Term Notes (Senior & Subordinated)

Funding diversity underpinned by

CASA: RM18.8 billion (yoy growth = 4.5%)

Fixed deposits: RM68.1 billion (strong retention)

Supplemented by term funding & debt capital

AmBank (M) Bhd

1. RM500m Innovative Tier 1 Capital Securities Programme

2. RM500m Non-innovative Tier 1 Capital Securities Programme

3. USD200m USD Subordinated Term Loan

4. RM2b Medium Term Notes

5. RM4b Tier 2 Subordinated Notes

6. RM7b Senior Notes2

7. USD300m Term Loan Facility

8. USD2b Euro Medium Term Notes

1. Includes stable funding sources 2. 1st senior notes issuance by a financial institution in Malaysia

AmBank (M) BhdAmIslamic Bank

Bhd

Loans with Recourse

Recourse obligations on loans sold to Cagamas -maturing in 2017

Islamic financing sold to Cagamas –maturing in 2016

• Statutory reserve and liquidity requirement savings

• Reduced exposure to interest rate risks

Funding characteristics

• 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



ANZ diversified footprints in Asia

Value proposition

• 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

Board representation

• Shayne Elliot – Director (Chief Financial Officer, ANZ)

• Gilles Planté– Director (Deputy CEO, Institutional & International Banking, Head of Business Performance Management, ANZ)

• Mark Whelan – Director (Managing Director, Corporate & Commercial, ANZ)

Management representation

• Mandy Simpson – Chief Financial Officer

• Nigel Denby – Chief Risk Officer

• Ross Foden – Chief Operations Officer

• Paul Lewis – Managing Director, Retail Banking

• Tan Chin Aun - Transaction Banking

• Oscar Demirtas - Senior Programme Manager, Small Business Banking

Partnership with ANZ

Source: Trade Finance Magazine 2013

CHINA

HONG KONG

PHILIPPINES

VIETNAM

NEW ZEALAND

SOUTH KOREA

JAPAN

TAIWAN

INDONESIA

AUSTRALIAPACIFIC ISLANDS

SINGAPORE

LAOS

THAILAND

CAMBODIAMALAYSIA

PAPUA NEW GUINEA

FIJI

INDIA

ANZ & AmBank Partnership

15 Asian markets, 98 branches and 5 Partnerships



General Insurance Credentials

• AmG completed the Kurnia acquisition on 26 Sept 2012 – combined entity renamed AmGeneralInsurance Berhad on 1 Mar 2013

• One of Malaysia’s leading general insurers and the No. 1 motor insurer

• Insures around one in five cars in Malaysia and ~10% market share for general insurance by GWP

• GWP over MYR 1.7 billion

• Over 3.6 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

Value proposition

• Involved in the management of AmGeneral Insurance, offering skills transfer, partnership and relationship models of IAG

• Adding value through claims re-engineering savings, increased revenue via product development, underwriting and pricing

Board representation

• Duncan Brain – Director (CEO, IAG Asia)

• Aidan Pallister – Director (Deputy CEO / COO of IAG Asia)

Management representation

• Travis Atkinson – CEO AmGeneral Insurance Berhad

• Arron Mann – General Manager, Claims

• Chris Tandy – General Manager, Personal and Commercial Pricing

Partnership with IAG

GENERAL INSURANCE

AmGeneral: Leveraging strategic partnership with global insurance partner

https://www.kurnia.com/malaysia



Branches ATMRegional Business Centres

Perlis 1 4

Kedah 6 29

Pulau Pinang 14 50 1

Perak 19 51

Selangor 39 258

Kuala Lumpur 25 143

Putrajaya 1 4

Negeri Sembilan 7 44

Melaka 6 37

Johor 21 98 1

Pahang 9 35

Terengganu 4 20

Kelantan 2 22

Sabah 9 36 1

Labuan 1 2

Sarawak 15 49 1

179 882 4

Multiple distribution channels aligned to demographics

Population Density: <100 persons per km2 101-500 persons per km

501-1,000 persons per km2 1,001--1,500 persons per km2

> 1,501 persons per km2

Perlis

Kedah

PulauPinang

Perak

SarawakKuala Lumpur

Putrajaya

NegeriSembilan

Melaka Johor

Pahang

Singapore

Indonesia

Selangor

Labuan

SabahTerengganu

Kelantan

AmIslamicbranches

Weekend Banking Branches

ATMs @ 7-Eleven

ElectronicBanking Centres

Internet & Mobile

BankingAmGeneral AmLife AmInvestment MBF

3 78 401 169AmOnlineAmGenie

32(include 28

dual branded branches)

18 offices14 agencies

14 26

Note(s):

Brunei: AmCapital (B) Sdn Bhd

Indonesia: PT.AmCapital Indonesia, PT.AMCI Manajemen Investasi Indonedia

Singapore: AmFraser Securities Pte Ltd

Brunei Darussalam

Nationwide Branch Network

Other Customer Touch Points



Solid shareholding structure & franchise value

AMMB Holdings Berhad

23.8%1 AmCorp 14.0% EPF 14.1% Others 48.1%

100% AmBank (M) Berhad

100% AmInvestment Group Berhad

100% AmInvestment Bank Berhad

FY2010 FY2011 FY2012 FY2013 FY2014 Q1FY2015

27% 27% 26% 29% 31% 33%

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) Berhad4.MetLife owns 50% plus one share in AmLife Insurance Berhad, with the remaining shares held by AmBank Group, and AmBank Group owns 50% plus one share in AmFamily Takaful Berhad, with the

remaining shares owned by MetLife

Foreign shareholding excluding ANZ

100% AmIslamic Bank Berhad

100% MBF Cards (M‟sia) Sdn Bhd

33.33% Bonuskad Loyalty Sdn Bhd

100% AMAB Holdings Sdn Bhd

51% AmGeneralHoldings Berhad2

~50% AmFamilyTakaful Berhad4

~50% AmLifeInsurance Berhad4

100% AmGeneral Insurance Berhad3

49%

~50%

~50%

As at 30 June 2014

Retail BankingWholesale Banking

Islamic BankingGeneral

InsuranceLife Assurance & Family Takaful



Buy/Outperform/Overweight/AddP/EPS : EPS for FY2014, P/BV : BV as at 31 Mar 2014

Banking sector share price movement / target price and recommendations

9.5%

23.0%

38.8%

81.1%

81.9%

106.4%

137.4%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% 160.0%

MBB

CIMB

KLCI

RHB Cap

AMMB

PBB

HLFG

(Note: 18 May 2007 vs. 30 June 2014)

Ratings FY2007 Q1FY2015

AmBank (M) RAM A2/P1/Stable AA2/P1/Stable

Fitch BBB-/F3/Stable BBB/F3/Stable

S&P BBB-/A-3/Stable BBB+/A-2/Negative

Moody’s Baa2/P-3/Stable/D- Baa1/P-2/Stable/D+1

AmInvestment RAM AA3/P1/Stable AA2/P1/Stable

Fitch BB+/B/Stable BBB/F3/Stable

AmIslamic RAM A2/P1/Stable AA2/P1/Stable

AMMB RAM NA AA3/P1/Stable

TP: target price

Sell/Underperform/Fully valued/Reduce/Underweight

Hold/Neutral/Market perform Source : Bloomberg as at 15 August 2014

1 BFSR - Banking Financial Strength Rating

+3

+1

+2

+2

+3

+1 Notches of ratings upgrades

+1

AMMB HOLDINGS BERHAD P/EPS : 12.06P/BV : 1.64

Market Price : RM7.15

Banking Sector Share Price Movement Upgraded ratings

Target Price and Recommendations

+3

Average TP : RM7.91Buy : 7 (28%)Sell : 3 (12%)Hold : 15 (60%)Average TP / Average CP : 1.11x

17

Feb

1

4

20

May 1

4



Strategic Business Transformation: Continued 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

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 programme Initiated revamping of branches to refresh customer experience Realigned account management teams for more effective account planning

Launched a new brand re-positioning, “Your Bank. Malaysia’s Bank. AmBank.”, a new chapter for our brand to deliver a unique AmBank Group experience to our customers

Restructure non-retail business divisions to Wholesale Banking to improve client centricity, efficiency and productivity

Developing Small Business Banking model targeting non-individual customers in Retail banking

FY2014

FY2012 & FY2013

FY2010 & FY2011

FY2008 & FY2009

Strategic Business

Transformation



High Priority Growth Initiatives: Implemented To-Date

Created new profit centre based retail branch distribution model Created a separate Corporate and Institutional Banking (CIB) Division Developed 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 businesses Developed 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 connectivity Developed 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

Channels re-organisation to improve customer connectivity and experience (e.g. branch re-design and rationalisation; reposition digital banking)

Pursuing “Save to Invest” programme for growth Undertaking segmentation activities to enhance cross-selling to grow Main Bank relationships Initiated account joint-planning within non-retail divisions to increase trade utilisation &

business deals

Strategic Business

Transformation


FY2014

FY2012 & FY2013

FY2010 & FY2011

FY2008 & FY2009


Initiatives



Rebuilding AmBank’s “Core Banking System” via AmHorizon, creating a scalable and robust platform for growth with enhanced customer experience, Phase 1 went live in end 2013

Financial Holding Company structure being progressed for full compliance with FSA & IFSA Streamlining of subsidiaries and releasing of dormant entities’ capital Reviewing Internal Rating Based approach to optimise capital management Enterprise Process Platform (EPP) going live to support lending operations

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

Strategic Business

Transformation


Initiatives

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

FY2014

FY2012 & FY2013

FY2010 & FY2011

FY2008 & FY2009




AGENDA Page






- AMBANK GROUP




113.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2008 2009 2010 2011 2012 2013 2014

BCI

Malaysian economy is on a steady growth trajectory

Business Conditions Index

Moderating growth

Business confidence is improving

Upward pressure on inflation remains, unemployment rates stable

FDIs remain robust

points

Source: BNM & Bloomberg

4.2% 4.5% 5.0% 5.1% 6.2%

7.8%6.3%

0%

5%

10%

15%

20%

25%

30%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2010 2011 2012 2013 2014

GDP Consumption Investment

3.3%

2.9%

0%

1%

2%

3%

4%

5%

Mar

June

Sept

Dec

Mar

June

Sept

Dec

Mar

June

Sept

Dec

Mar

June

Sept

Dec

Mar

June

2010 2011 2012 2013 2014

CPI Unemployment (May)

24.0

5.8

-10

0

10

20

30

40

50

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2

2008 2009 2010 2011 2012 2013 2014

TD FDI (Q1)

RM' bil



1.8%

80.0%

85.0%

90.0%

95.0%

100.0%

105.0%

110.0%

0%

1%

1%

2%

2%

3%

3%

4%

4%

Mar JuneSept Dec Mar JuneSept Dec Mar JuneSept Dec Mar JuneSept Dec Mar June

2010 2011 2012 2013 2014

Gross impaired loans Loan loss coverage

594.2

674.2

765.0

44%

18%

17%

6%

8%4%4%

-

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

2010 2011 2012 2013

HH debt Residential property Hire purchasePersonal financing Securities Non-residentialCredit card Others

4.53%

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

Well-contained risks despite increase in household indebtedness

To be updated for the his

Household debt by compositions

Interest rates expected to remain in the short term

Improving asset quality

Source: BNM

RM’bil% of composition

594.2

674.2

765.0

44%

18%

17%

6%

8%4%4%

-

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

2010 2011 2012 2013

HH debt Residential property Hire purchase Personal financing Securities Non-residential Credit card Others

Loan loss coverageGross impaired loans

OthersCredit card

Non-residential

Securities

Personal financing

Hire purchase

Residential property

* Retail comprise purchase of transport vehicle, purchase of residential property, personal use and credit card

50

34.2% 34.6% 31.9% 30.1%

74.5% 76.2%81.3%

86.8%

25.0%19.7%

16.3% 14.6%0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

2010 2011 2012 2013

Gross national savings Household debt/GDP

Retail impaired loans ratio*

Higher household debt, but retail impaired loans ratio trending down



5.2

18.5

0

5

10

15

20

25

30

35

40

45

50

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2010 2011 2012 2013 2014

New issues of equity New issues of debt

14.8%

13.0%

12.2%

0%

5%

10%

15%

20%

Mar

June

Sept

Dec

Mar

Jun

Sep

Dec

Mar

Jun

Sep

Dec

Mar

Jun

Sep

Dec

Mar

June

2010 2011 2012 2013 2014

RWCAR Tier 1 CET 1

9.4%

9.2%

9.3%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Mar June Sept Dec Mar June Sept Dec Mar June Sept Dec Mar June Sept Dec Mar June

2010 2011 2012 2013 2014

Retail yoy growth Non Retail yoy growth Total loans yoy growth

Source: BNM

Capital remains sound in the banking sector, loans growth moderating

RM’mil

Capital levels above BNM‟s Basel 3 guidelines

Capital activities supported by debt issuance

Sustained deposits growth provides liquidity

Beginning January 2013, capital components are reported based on Basel III Capital Adequacy Framework

RM’bil

Basel II Basel III

Moderating loans growth

81.4%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2011 2012 2013 2014

Total deposits LD ratio



ETP: Propelling Malaysia towards becoming a high-income, developed nation by 2020

• 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

ETP Overview Achievement of 12 NKEAs in 2012 and 2013

2020Target

2011 2012 2013 To-date % of Target

EPPs 110 39 47 196

Investment (RM‟bil) 794.5 179.2 32.1 8.0 219.3 27.6%

GNI (RM‟bil) 961.0 129.5 6.6 7.4 143.5 14.9%

Job Creation 3.3 mil 313,741 94,702 29,373 437,816 13.3%

Note:• Scoring is calculated by a simple comparison against set 2013 and 2012 targets respectively. (*) The overall NKEA composite scoring is the average of all scores.• 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

ETP : Economic Transformation Programme Source ETP Annual Report 2012 & 2013, Maybank Resaerch Report

Tracking of EPPs

NKEAs

2020 Target KPI Scoring*

GNI(RM‟bil)

New Jobs 2013 2012

Greater KL/ Klang Valley 190 320,000 98% 108%

Oil, Gas & Energy 131.4 52,300 97% 119%

Financial Services 180.2 275,400 117% 111%

Wholesale & Retail 55.4 454,190 124% 153%

Palm Oil & Rubber 230.9 41,600 78% 101%

Tourism 66.7 497,000 115% 117%

Electrical & Electronics 53.4 157,000 105% 95%

Business Services 78.7 245,000 102% 114%

Communications Content & Infrastructure

57.7 43,162 101% 153%

Education 33.6 535,000 102% 121%

Agriculture 28.9 109,335 98% 130%

Healthcare 35.3 181,000 103% 105%



2,073

2,935

3,417

5,450

11,387

55,568

Vietnam

Phillippines

Indonesia

Thailand

Malaysia

Singapore

0.0

5.7

-0.6

-2.3

-2.6

-3.5

Vietnam

Singapore

Thailand

Philippines

Indonesia

Malaysia

Malaysia remains an attractive investment destination

GDP per capita, 2014 (USD)

4.1 3.6

4.7 5.2

2.9 2.5

5.8 5.4

7.2 6.5

5.4 5.6 0.7%

2.0%

3.0%

4.4%

6.1%

6.9%

Thailand

Singapore

Malaysia

Vietnam

Indonesia

Philippines

2.3%

2.3%

3.3%

4.0%

6.3%

5.5%

Singapore

Thailand

Malaysia

Philippines

Vietnam

Indonesia

Unemployment (%) Inflation (%)

5.5

30.1

68.6

90.6

99.4

251.5

Singapore

Malaysia

Thailand

Vietnam

Philippines

Indonesia

23.0

29.6

28.1

31.2

30.4

44.8

Philippines

Vietnam

Thailand

Malaysia

Indonesia

Singapore

Population (mil) Savings rate (% of GDP)

-3.0

0.2

3.2

4.1

4.3

18.5

Indonesia

Thailand

Philippines

Malaysia

Vietnam

Singapore

Current Account Balance(% of GDP)

Government structuralBalance (% of GDP)

Real GDP growth 2013 2014F

Source: World Economic Outlook Database April 2014



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 Divisions

Business 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 securities. 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 regard 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 persons.

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



Glossary / Disclaimer of warranty and limitation of liability

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 securities. 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 regard 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 persons.

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


The material in this presentation is general background information about AmBank Group’sactivities current at the date of the presentation. It is information given in summary form anddoes not purport to be complete. It is not intended to be relied upon as advice to investors orpotential investors and does not take into account the investment objectives, financialsituation or needs of any particular investor. These should be considered, with or withoutprofessional advice when deciding if an investment is appropriate.

For further information, visit www.ambankgroup.com;

or contact

Ganesh Kumar Nadarajah

EVP, Strategic Planning & Investor Relations

Karen Chuah

VP, Strategic Planning & Investor Relations

Tel: +603 2036 1435 or +6019 2093 955

Fax: +603 2031 7384

e-mail: [email protected];

[email protected];

[email protected]

http://www.ambankgroup.com/

mailto:[email protected]









Date post:	15-Jul-2020
Category:	Documents
Upload:	others
View:	0 times
Download:	0 times

22 August 2014 Q1FY2015 Results Investors Presentation · 1 Your Bank. Malaysia‟s Bank. AmBank....

Documents