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57 th Annual General Meeting Presentation to Shareholders by Datuk Abdul Farid Alias, Group President & CEO 6 April 2017
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57th Annual General Meeting Presentation to Shareholders
by Datuk Abdul Farid Alias, Group President & CEO
6 April 2017
1 1 1
“...which in turn, affected investor sentiment and global economic
growth.”
2016 was filled with political and financial market uncertainty…
Politics Financial Markets
2 2 2
Key Performance Indicators FY2016 Revised
Guidance FY2016 Achievement
Return on Equity 10.5% - 11.0% 10.6%
Group Loans Growth 2.0% - 3.0% 5.7%
Malaysia 4.0% - 5.0% 6.3%
Singapore 2.0% - 3.0% 4.5%
Indonesia 6.0% - 7.0% 8.7%
Group Deposits Growth 3.0% - 4.0% 5.2%
Against this backdrop, Maybank lowered its guidance for key
performance indicators in late 2016. Our FY2016
achievements are as follows:
3 3 3
In short, we managed the headwinds of 2016 by:
• Focusing on selective asset growth across our
portfolios and markets
• Proactively managing asset quality for specific
portfolios exhibiting weakness
• Driving income growth while reining in cost growth
• Managing our talent pool and improving productivity
4 4 4
And we continued focusing on Humanising Financial Services…
“…as we aim to be at the heart of the community by building and
supporting those around us, through good and tough times. This is
done by…”
Providing convenient
access to financing in both
physical and digital
environments.
Remaining committed to
offering fair terms and
pricing.
Advising our customers
based on their needs.
Prioritising customer
experience using next
generation digital
technologies.
1 2
3 4
5 5 5
Net fund based income was driven by an expansion in
gross loans of 5.7%…
… while net fee based income was supported by higher
investment and trading income and net earned insurance
premiums…
Cost growth was well contained at low single digit…
… however performance was affected by higher
provisioning cost, resulting in…
… slightly lower net profit of RM6.7 billion and ROE of
10.6%. Need for higher equity base due to Basel III requirements
and impending MFRS9 adoption, resulted in lower EPS
Net Fund Based Income
RM15.3b, +5.2%
Net Fee Based Income
RM7.0b, +4.0%
Net Income
RM22.3b, +4.8%
Overhead Expenses
RM10.6b, +2.8%
Net Impairment Losses
RM3.0b, +49.8%
Net Profit
RM6.7b, -1.4%
Earnings per Share (EPS)
67.8 sen, -5.8%
… resulting in a new high for full year net income.
PPOP
RM11.7b, +6.7% … contributing to a Pre-Provisioning Operating Profit
record of RM11.7 billion…
Our combined efforts supported our FY2016 performance
6 6 6
73.3 78.8
Dec 15 Dec 16
16.8 18.0
Dec 15 Dec 16
Revenue growth drivers include:
Malaysia
SG
D b
illion
Singapore
+7.2%
RM
billion
+7.5%
22.0 27.4
Dec 15 Dec 16
Indonesia
+24.6%
IDR t
rillio
n
Higher net fund based income, arising from strong loans growth in Global
Banking across all home markets and stable growth in Community
Financial Services
Global Banking
7 7 7
114.2 121.9
Dec 15 Dec 16
9.3 12.5
Dec 15 Dec 16
Malaysia
SG
D b
illion
Singapore
+34.4%
RM
billion
+6.7%
41.8 46.0
Dec 15 Dec 16
Indonesia
+10.0%
IDR t
rillio
n
33.7% 33.3% 33.4% 34.5%
35.7%
Dec 15 Mar 16 Jun 16 Sep 16 Dec 16
Group CASA Ratio
Strong net interest margin management with full year NIM at 2.27%,
achieved through disciplined loan pricing and strong CASA growth across
home markets
CASA
8 8 8
48.6
47.8
48.9
48.2
47.3
2012 2013 2014 2015 2016
Cost growth well-contained at low single-digit
We recorded a positive JAWs position of 2.0% in FY2016, as income
growth was ahead of cost growth
Our disciplined cost management throughout the year resulted in our
Cost to Income Ratio improving to 47.3%, the lowest it has been in
recent years
Group Cost to Income Ratio (%)
9 9 9
RM
billion
Record high pre-provisioning operating profit (PPOP) achieved
The Group’s strong revenue growth, coupled with disciplined cost
management resulted in us recording our highest ever PPOP of RM11.7
billion
8.54 9.61 9.42
10.95 11.69
2012 2013 2014 2015 2016
10 10 10
Group GIL Ratio Composition
2060
955
1H FY2016 2H FY2016
… as we provided
70% of the net
impairment losses in
1H FY2016…
RM
million
However, our net impairment losses increased to RM3.0 billion
from RM2.0 billion a year ago…
… due to our decision to proactively manage
asset quality concerns for borrowers
experiencing weakening cashflows given the
tougher operating environment
Net Impairment Losses
GIL Ratio Components Dec
2015
Mar
2016
Jun
2016
Sep
2016
Dec
2016
Non Performing Loans (NPL) 1.15% 1.39% 1.32% 1.35% 1.64%
Restructured & Rescheduled
(R&R) 0.23% 0.33% 0.67% 0.52% 0.39%
Performing Loans Impaired
Due to Judgmental/ Obligatory
Triggers (IPL)
0.48% 0.39% 0.35% 0.35% 0.25%
GIL Ratio 1.86% 2.11% 2.34% 2.22% 2.28%
11 11 11
Retail SME Business Banking Corporate Banking
1.96 1.96 1.92
2.08 2.00
1.47 1.75 2.53 2.47
1.85 10.00 9.59 11.25 10.60 11.92
1.16 1.31 1.43 1.45 1.70
0.64 1.74 1.69
2.34 2.42
0.41
2.03 2.24 1.21
1.89
Malaysia
Singapore
1.65 1.50
1.66 1.74 1.57
Dec15
Mar16
Jun16
Sep16
Dec16
1.23 1.23 1.40 1.52 1.77
Dec15
Mar16
Jun16
Sep16
Dec16
14.94 14.54 13.67 14.20 10.51
Dec15
Mar16
Jun16
Sep16
Dec16
Indonesia
Asset quality weakness was mainly from Business and Corporate Banking…
12 12 12
Mortgage Auto Finance Credit Cards
Malaysia
Singapore
Indonesia
0.55 0.58 0.60 0.61
0.57 0.49
0.52 0.53 0.55 0.51
0.79 0.85 0.80 0.79 0.72
0.47 0.47
0.42 0.44 0.45 0.33 0.34 0.29
0.38 0.32 2.66 2.45 2.32 2.13 2.26
0.63 0.90 0.95 1.27 1.51
Dec15
Mar16
Jun16
Sep16
Dec16
0.99 1.10 1.02 0.95 0.76
Dec15
Mar16
Jun16
Sep16
Dec16
2.46 2.28
2.56 2.41 2.35
Dec15
Mar16
Jun16
Sep16
Dec16
…while asset quality for consumer segments remained stable
13 13 13
459.4 485.7
Dec 15 Dec 16
327.2 329.5
Dec 15 Dec 16
Retained robust capital
positions in view of
impending full Basel III and
MFRS9 adoptions
We maintained discipline on capital utilisation
12.78% 13.99%
14.47% 15.66%
17.74% 19.29%
Dec 15 Dec 16
Total Capital Ratio
Tier 1 Capital Ratio
CET 1 Capital Ratio
Group credit risk weighted assets
(RWA) growth of 0.7% was minimal vs
Group gross loan growth of 5.7%
Group Gross Loans
RM
billion
Group Credit RWA
+0.7%
RM
billion
+5.7%
14 14 14
We continued delivering value to shareholders…
…by creating economic profit for shareholders, as our return on equity
of 10.6% was above the average cost of equity for Malaysian banks
7.9% 7.5%
9.6% 9.4% 9.5%
6.8%
9.4%
8.1%
Maybank Public CIMB RHB AMMB Hong Leong Alliance Affin
Cost of Equity for Malaysian Banks
Source: Bloomberg
15 15 15
However, our earnings per share and ROE growths have been affected by
higher capital requirements ahead of full Basel III implementation and
impending MFRS 9 adoption
12.4 15.9
13.6
2014 2015 2016
-2.16 -2.86
-5.82
2.50 1.78
-1.36
4.76 4.77
4.74
YoY Growth (%)
Earnings Growth
Earnings Per Share
Growth
Average No of Ordinary
Shares Growth
Average Shareholders’
Equity Growth
16 16 16
Other key 2016 highlights include our digital solution rollouts…
“Digital Bank of
Choice”
MaybankPay
Malaysia’s first
mobile wallet
payment platform.
Maybank Visa Payband
A smart wrist band that
enables contactless payments
at locations across Malaysia.
MaybankHeart
A first-of-its-kind social
fundraising platform for NGOs
or charitable organisations.
Maybank Hackathon
An event for the tech
community to develop digital
and data analytic solutions in
a competitive forum.
E-Money
A digital option
for presenting
cash gifts during
the respective
seasonal
celebrations.
17 17 17
DATO’ MOHAMED RAFIQUE MERICAN
MOHD WAHIDUDDIN MERICAN
Group Head, Islamic Banking
CEO, Maybank Islamic Berhad
DATO’ MUZAFFAR HISHAM
Group Head, Global Banking
DATO’ AMIRUL FEISAL WAN ZAHIR
Group Chief Financial Officer
“As part of the organisation’s succession planning and ongoing efforts
to create a diversely skilled C-suite, we undertook a rotation of three
Group EXCO members effective 1 July 2016…”
…and the strengthening of our leadership bench
18 18 18
Our focus in 2017 will be:
Our targets for 2017:
6%-7%
10%-11% Return on Equity
Group Loans Growth
6%-7% Group Deposits Growth
Drive income growth
Improve productivity
Proactively managing asset
quality
• Maintain positive JAWs across business
segments
• Expand fee income stream
• Drive Group wide cross selling initiatives
• Sharpen margin & segment focus
• Manage NIM compression
• Proactively monitor asset quality
19 19 19
Special Thanks
We extend our deepest gratitude and
appreciation to Tan Sri Dato’ Megat
Zaharuddin, who has stepped down as
Chairman and member of the Board of
Directors of the Maybank Group on 31
March 2017…
…He was a significant influence in shaping our success to date
through his direction, wise counsel and guidance over the years.
We are indeed indebted for his service.
20 20 20
THANK YOU
Humanising Financial Services
21
Dato’ Amirul Feisal Wan Zahir
Group Chief Financial Officer
Contact: (6)03-2074 7703
Email: [email protected]
MALAYAN BANKING BERHAD
14th Floor, Menara Maybank
100, Jalan Tun Perak
50050 Kuala Lumpur, Malaysia
Tel : (6)03-2070 8833
www.maybank.com
Jeeva Arulampalam
Head, Group Investor Relations
Contact: (6)03-2074 8346
Email: [email protected]
Disclaimer. This presentation has been prepared by Malayan Banking Berhad (the “Company”) for information purposes only and does not purport to contain all the
information that may be required to evaluate the Company or its financial position. No representation or warranty, express or implied, is given by or on behalf of the
Company as to the accuracy or completeness of the information or opinions contained in this presentation.
The presentation does not constitute or form part of an offer, solicitation or invitation of any offer, to buy or subscribe for any securities, nor should it or any part of
it form the basis of, or be relied in any connection with, any contract, investment decision or commitment whatsoever.
The Company does not accept any liability whatsoever for any loss howsoever arising from any use of this presentation or their contents or otherwise arising in
connection therewith.
Investor Relations Contact
Humanising Financial Services
