www.affin.com.my

ANALYSTS/FUND MANAGERS BRIEFINGFY2016 RESULTS

1 March 2017

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KEY HIGHLIGHTS & RATIOS

PROFIT BEFORE TAX BY SEGMENTS

STRATEGIC DIRECTION – AFFINITY PROGRAM

PROPOSED REORGANIZATION

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GROSS LOANS INCREASED TO

RM44.2 BILLION

0.62% YoY increase

TOTAL ASSETS INCREASED TO

RM68.9 BILLION

2.2% YoY increase

PROFIT BEFORE TAX & AFTER ZAKAT INCREASED TO

RM737.7 MILLION

43.4% YoY increase

TOTAL DEPOSIT INCREASED

MARGINALLY TO

RM55.4 BILLION

2.7% YoY increase

TOTAL EQUITY INCREASED TO

RM8.7 BILLION

4.9% YoY increase

TOTAL CAPITAL RATIO INCREASED TO

14.23%

2015:14.01%

GROSS IMPAIRED LOAN RATIO

DECREASED TO

1.67%

2015:1.90%

NET INTEREST MARGIN INCREASED

MARGINALLY TO

1.98%

2015:1.92%

Summary of Key Highlights

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Key Highlights

Income Statement ( RM’mil ) FY2015 FY2016 Change (%)

Profit Before Tax and After Zakat 514.4 737.7 43.4

Net Profit 382.2 579.8 51.7

Earnings per share ( sen ) 19.01 29.03 52.7

Balance Sheet ( RM’ mil) FY2015 FY2016 Change (%)

Total Assets 67,413.9 68,886.3 2.2

Gross Loans, advances & financing 43,879.4 44,153.1 0.6

Deposits from customers 50,548.7 51,505.6 1.9

Key Financial Indicators FY2015 FY2016 Change (%)

Cost-to-income ratio 60.23 59.04 (1.19)

Gross impaired loans ratio 1.90 1.67 (0.23)

Loan Loss Reserve(including regulatory reserve)

98.09 94.34 (3.75)

Loan to deposits ratio 86.81 85.72 (1.09)

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CET 1 / Tier 1 / CCRFY2015* FY2016

Industry average (4Q2016)

AFFIN Bank Berhad 11.93 12.59 12.92

AFFIN Islamic Bank Berhad 13.20 12.42 12.33

AFFIN Hwang Investment Bank Berhad

32.07 35.66 33.21

Total Capital RatioFY2015* FY2016

Industry average (4Q2016)

AFFIN Bank Berhad 14.33 16.20 16.17

AFFIN Islamic Bank Berhad 14.41 13.59 16.00

AFFIN Hwang Investment Bank Berhad

32.07 35.66 33.55

Key Highlights – Capital Adequacy (%)

* After Proposed Dividend

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AFFIN Bank places strong emphasis on the quality of its capital in order to support business growth and risksundertaken.

The Bank holds a significant amount of its capital in the form of common equity which is permanent and has thehighest loss absorption capability on a going concern basis.

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Steady Increase in Regulatory Capital (Affin Bank)

• Proforma After RM1bln Sub MTN’s Program• Before Proposed Dividend

11.3% 11.0%

12.3% 11.9%12.6% 12.2%

13.3%12.6%

13.6%14.3%

16.2%

18.3%

2012 2013 2014 2015 2016 Proforma*

CET1 Total Capital Ratio

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156.4 159.6

72.7 54.0

94.558.7

Total Income Composition

2,534.7

238.9

460.3

61.2 94.3

2,553.1

272.8

496.1

109.6 86.8

Gross Interestincome

Islamic Bankingincome

Fees & brokerageincome

Income fromfinancial

instruments

Other income

RM

Mil

lio

n

FY2015 FY2016

Total Income (RM million)

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Key Ratios

Net Interest Margin (%) Net Credit Cost (bps)*

Cost of funds (%)

44.4

4.2

2015 2016

1.92 1.98

2015 2016

Page 6

* Gross Credit Cost 15bps (FY16) vs 64bps (FY15)

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Operating Expenses

RM ‘000 FY2015 FY2016Percentage Growth (%)

Personnel cost 595,735 603,640 1.3

Promotion & marketing related expenses 132,951 157,019 18.1

Establishment-related expenses 255,827 270,493 5.7

General & administrative expenses 101,205 111,769 10.4

TOTAL 1,085,718 1,142,921 5.3

Cost to Income Ratio (%)

46.0 47.0

54.860.2 59.0

2012 2013 2014 2015 2016

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Gross Loans Advances & Financing Growth

Gross Loans by Customer Type (FY16)Total Gross Loans (RM bil)*

Loan Loss Reserve (%) Loans by Business Segment (RM bil)

4%

52%

3%

39%

0% 2%Domestic non-banking institution

Domestic business enterprise

Government & statutory bodies

Individuals

Other domestic entities

Foreign entities

* Inclusive of Regulatory Reserves

69.72 76.27

100.70 98.10 94.34

2012 2013 2014 2015 2016

17.4 18.3

13.4 13.3

13.0 12.6

2015 2016Consumer Corporate SMEs

44.243.8

28.5%429.7%

* Rebalancing of Loan Portfolio in FY16

30.6%

39.7%

30.1%

41.4%

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Deposits from Customers

Type of Deposits (FY16)Deposits from Customers (RM Bil)

Gross Loans/Deposit Ratio (%)

16%

4%

61%

1%

3%

14%

Demand deposits

Savings deposits

Fixed deposits

Commodity Murabahah

Money market deposits

Negotiable instruments ofdeposits ("NID")

80.9 79.1 81.1

86.8 85.7

82.1 84.6

86.2 86.5

89.8

2012 2013 2014 2015 2016

AFFIN Industry

Deposits ( RM Bil)

12.9 13.6

37.6 37.9

2015 2016

Consumer Corporate & SMEs

50.5

25.6% 26.5%

51.5

74.4% 73.5%

42.9 47.4

50.6 50.5 51.5

2012 2013 2014 2015 2016

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Timely Monitoring Impaired Loans

Gross Impaired Loan by Purpose (FY16) Gross Impaired Loan (RM Mil)

Net Impaired Loan Ratio (%)Gross Impaired Loan Ratio (%)

11%

23%

3%3%

13%

44%

3%

Purchase of transportvehiclesPurchase of ResidentialpropertyPurchase of Non-residential propertyPersonal use

Construction

Working capital

Others

*

1.13

0.92 0.84

1.02 1.08

1.40 1.30

1.20 1.20 1.20

2012 2013 2014 2015 2016

Net Impaired Loan ratio (%)

Net Impaired Loan ratio (industry)

790.4 741.0 747.8

834.2

737.3

2012 2013 2014 2015 2016

Gross NPL/Impaired Loans

2.28 1.98

1.82 1.90 1.67

2.00 1.85

1.66 1.60 1.61

2012 2013 2014 2015 2016

Gross Impaired Loan ratio (%)

Gross Impaired Loan ratio - industry (%)

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Allowance for Impairment Losses on Loans, Advances and Financing

FY 2015RM’000

FY2016RM’000

Collective impairment- made/(written-back) during the financial year

17,646 43,732

Individual impairment- Made during the financial year- Written-back during the financial year

258,762(7,361)

83,130(60,297)

Bad debts- Recovered- Written-off

(84,515)3,603

(51,358)2,840

Additional allowance for impairment losses- Other debtors 243 373

Net Charge 188,378 18,420

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KEY HIGHLIGHTS & RATIOS

PROFIT BEFORE TAX BY SEGMENTS

STRATEGIC DIRECTION – AFFINITY PROGRAM

PROPOSED REORGANIZATION

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AFFIN Bank Group (ABG)

Net Income (RM million) PBT after zakat (RM million)

ABG’s PBT after zakat increase 31.1% to RM599.9 million, compared to 457.5 million recorded in 2015compounded by higher income from Islamic banking business by 14.2%, higher income from otheroperating income by 18.9% and lower allowances for loan impairment.

ROE (after tax) improved from 6.74% to 8.45% and improvement in Gross Impaired Loan Ratio from1.80% to 1.60%. Total Assets continued to grow by 0.5% to RM 60.2 billion. Gross Loans, advances andfinancing stood at RM 43.1 billion whilst Deposits from customers at RM 47.6 billion.

The Bank has launched its Priority Islamic Policy (“PIP”) which is the Bank’s strategic move to enhanceits Islamic financing portfolio to 40% in 2020. It has shown progress as the Bank’s Islamic portfolio hasincreased to 27.8% (as at December 2016) of the Bank’s total banking assets.

The Bank has also won the JomPay Award being the highest biller acquired within Group B consisting oflocal and foreign banks.

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PBT after zakat (RM million) Net Income Contribution (RM million)

PBT after zakat improved by 91% from RM68.0m to RM129.8m

Net Income grew 7.9% from RM509.1m to RM549.1m, driven by 8.3% growth in Fee Income

Operating Expenses also improved by RM7.7m. Personnel costs were lowered by 10.9%following completion of rationalization

No. 1 Bursa ranking for Value & Volume traded, for three years running

No. 3 Unit Trust industry ranking with RM23.7 billion in AUM

Assets Under Administration grew to RM36.3 billion

Key Highlights

AFFIN HWANG Investment Bank Group

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AXA AFFIN Life Insurance Berhad

Gross Premium (RM Million) Loss Before Tax (RM Million)

2016 pre-tax loss lower due to higher investment income and lower expenses.

Protection and health gross premium growth accelerated +15% vs. 2015.

Value of new business +18% vs. 2015 on comparable basis.

Key highlights

Single Premium Single Premium

First Year Premium

First Year Premium

Renewal Premium

Renewal Premium

2015 2016

Gross Premium grew 7% to RM386m

+12%

-28.4

-20.2

2015 2016

Lower Pre-tax loss

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Gross Written Premium (RM million) Profit Before Tax (RM million)

FY2016 PBT of RM181.2 million is significantly higher than FY2015 of RM114.9 million

Growth in health and motor insurance businesses

Improvement in net underwriting results and higher investment income

GWP increased by RM130.9 million (9.8%) in FY2016 vs FY2015

NWP increased by RM125.9 million (11.5%) in FY2016 vs FY2015

Key highlights

114.9

181.2

FY2015 FY2016

1,334.9

1,465.8

FY2015 FY2016

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AXA AFFIN General Insurance Berhad

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KEY HIGHLIGHTS & RATIOS

PROFIT BEFORE TAX BY SEGMENTS

STRATEGIC DIRECTION – AFFINITY PROGRAM

PROPOSED RE-ORGANIZATION

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Pillar 6 People & Organization

Pillar 5 Technology

Pillar 2

Distribution

Channels

Pillar 3

Products &

Solutions

Pillar 4

Operations

Pillar 7

Performance

Management

Pillar 1

Target

Customer

Segments

Business

Scope

Components:

Addresses

strategic

questions on

who are our

customers,

what do they

need and how

do we reach

them

Operations Enablers: Links and supports the

execution and delivery capability with the business

model goals around Operations, Technology and

People

Performance

Management

Components:

Ensures

goals and

model

discipline

through a

comprehensi

ve set of

metrics

Affinity Transformation Pillars

• 32 New Transformation Projects under 8 Pillars

targeted full completion in 2019

Pillar 8

Risk & Compliance Governance

Page 16

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BENEFIT

IMPACT

PILLARI

Target Customer

Segments

II

Delivery Channels

III

Products &

Solutions

IV

Operations

V

Technology

VI

People &

Organization

VII

Performance

Management

Direct

Financial

Impact:

• Revenue

Growth

• Cost

Savings

Strategic

Foundation

Building

Operational

Foundation

Building

BAU

Projects

P2.2

New RM Model

P2.5

Call Center for Sales

P2.6

Intensify Selling

@ Branches

P2.7

Manage

Cost-to-Serve

P2.9

Launch e-Wallet

P3.1

Complete Core

Products

P3.2

Relaunch Credit

Card Biz

P3.5

R&D Solutions

P5.1

Tech Refresh Review

P5.4

BI & CRM

Infrastructure

P3.6

Iconic Segment

“Brand”

P1.1

CE Organization

P1.2

Segments Detailing

P1.3

CE Model &

Framework

P2.1

RIB/MIB

Implementation

P2.4

Digital Banking

Strategy

P3.3

Product Economics

FRW

P3.4

Product Dev

Organization

P6.1

WF Transformation:

BR

P6.2

Leadership Agenda

P5.2

Re-invigorate IT-Biz

P2.3

Branch-Hub Mgmt

FRW

P4.1

Credit Management

Model

P4.2

Group Operations

Model

P5.3

Solution Architecture

P7.3

Data Mgnt FRW

& Governance

P7.1

Performance Mgmt

FRW

P7.2

Biz Performance

FRW

Ethics, Risk &

Compliance

Culture

Awareness

9 Cards Projects

3 Credit/SIBS

Projects

1 Payments

Project3 Disaster

Recovery

Projects3 BNM/ITIS

Projects

5 NSRS Projects

2 Risk Projects

IT Sourcing

InsiteMy OCS

Batch Scheduler

Business

Productivity

Monitor

CIB Trade

Finance Module

P2.8

SME Sales

Organization

Setup

P4.3

SME Credit

Scorecard

P4.4

SME Credit

Process

Risk &

Compliance

Governance

Direct Financial

Impact

Strategic

Foundation

Building

Operational

Foundation

Building

Legend

BAU Projects

32 New Transformation Projects

1 MFRS 9 Project

Affinity Transformation Projects

Page 17

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Financial 2016 2020

ROE 8.45% 14-15%

Ops

Profit630m 1120m

CIR* 50+ 40+

Fee :

Total

Income

18-

20%25-30%

Targeted Customers

1.Tertiary Students

2.Families

• Newly Weds

• With Growing Children

• With College-going Children

3.SMEs

Products & Solutions

1.Core Banking Products

2.Utility Solutions

3.Life-Stage Financing

4.Wealth Solutions

Delivery Channels

1. Consistent and Unique

Customer Experience

2. Sales and Service Focus

3. Brick & Mortar AND Digital

4. Productivity Driven

Competitive Differentiation

Core Competencies

Operating PrinciplesOrganization Principles

GO

-TO

-

MA

RK

ET

PE

RF

OR

MA

NC

E

GO

AL

S

• Possesses a unique

customer experience that

drives customer loyalty and

deepens relationships

• Leverages its size

advantage to be nimble and

responsive to the market

place

• Ability to identify and

understand unique

customer insights that

shape relevant financial

services solutions

• Ability to use & apply new

or emerging technologies

• Increasing digitalization of

the business to create

greater straight –through

processing

• Tight coupling of front and

back office for seamless

customer experience

• Leadership driven

organization with clear

accountability

• Enabled by a robust

performance management

framework to encourage the

right behaviors* Based on estimation for Bank only

Page 18

Affinity Transformation Target

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KEY HIGHLIGHTS & RATIOS

PROFIT BEFORE TAX BY SEGMENTS

STRATEGIC DIRECTION – AFFINITY PROGRAM

PROPOSED REORGANIZATION

www.affin.com.my

16 February 2017

20 February 2017

AFFIN announced that it will be undertaking a

series of corporate exercises that will essentially

entail a reorganisation of the AFFIN Group

AFFIN’s listing status will ultimately be transferred

to AFFIN Bank

AFFIN and AFFIN Bank submitted the relevant

applications to BNM

Proposed Reorganization

Page 19

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Our current group structure

1. AFFIN Hwang IB

2. AFFIN Hwang

Asset

Management

(70%)

3. AIIMAN (100%)

1. AXA AFFIN

General

Insurance

(37.07%)

2. AXA AFFIN

Life

Insurance

(51%)

100%

100%

100%

Step 1

Material

companies

will be

transferred

to AFFIN

Bank

Step 2

AFFIN will

distribute its

AFFIN Bank

shares to its

shareholders

Step 3

AFFIN’s

listing status

will be

transferred to

AFFIN Bank

Step 4

AFFIN Bank will

be the Bank

Holding Company

of the Group

100%

Page 20

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Introducing the new AFFIN Banking Group

1. AFFIN Hwang IB

2. AFFIN Hwang Asset

Management (70%)

3. AIIMAN (100%)

1. AXA AFFIN

General

Insurance

(37.07%)

2. AXA AFFIN

Life Insurance

(51%)

100% 100%

1. Positioned to spearhead the Group’s future

growth

2. Will have direct access to capital

3. Enlarged capital base and CAR ratio

improves resilience

4. Profile will improve due to its listing status

100%

Page 21

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Announcement

Submission of the

application to

BNM/MOF/SC

6 months* 9 months

10 months

Subject to Receipt of

BNM/MOF/SC’s approval

Submit Circular to Bursa

Securities

Subject to Receipt of

confirmation from High

Court

Delisting of AFFIN Holdings

Entitlement date for the

share swap

Listing of AFFIN Bank

on the Main Market of

Bursa Securities

EGM

Submit application to High

Court

8 months

Note:

* Subject to BNM approval obtained within 6 months from the submission of AHB and ABB’s application on the Proposed

Reorganisation

Q1 2017 Q3 2017 Q4 2017Q2 2017

Expected Timeline

Page 22

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THANK YOU