AmBank Group
Investors Presentation
AMMB Holdings Berhad
1AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
Cheah Tek KuangCheah Tek Kuang
Group Managing DirectorGroup Managing Director
Investors Presentation
Q1 FY2012 Results
15 August 2011
Contents
1. Executive summary
2. Q1FY2012 Group Financial Performance
3. Strategy & Outlook
2AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
3. Strategy & Outlook
4. Divisional Performance
5. Supplementary Information
Pre ANZ Partnership Focus Scale & Presence
ANZ Partnership Focus (FY2008/2011)
Reposition & Build
FY2012 Focus Improving Returns
Q1FY2012
Continued growth momentum
PATMI up 20%, improving ROE�
Profit growth underpinned by higher non-interest income & lower
allowances �
Good start to FY2012
3AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
Q1FY2012
Highlights
Medium Term Aspiration (MTA):
FY2012 – FY2014
To Become Malaysia’s Preferred Banking Group with International Connectivity
measured by customer satisfaction, sound financial performances, well diversified & sustainable growth
Strong deposits and targeted loans growth, but higher than expected
NIM compression�
Capital levels positioned for Basel 3 and target payouts�
Execute to strategic themes (MTA), strengthen market positions &
leverage on ANZ’s international connectivity�
Good start to FY2012
Pe
rfo
rma
nce PATMI
EPS (basic)
ROA
ROE
Strong Q1FY2012 performance
� Higher income, reflecting strong performance for non-interest income����
Continued strong performance
YoY Change
PBP
Q1FY12 Q1FY11 ∆% Q4FY11 FY11CAGR
(FY07-11)
681.1 mil 608.6 mil 11.9% 565.6 mil 2,351.1 mil 8.9%
441.5 mil 368.3 mil 19.9% 316.3 mil 1,342.8 mil 24.6%1
17.0% 15.4% 1.6% 12.7% 13.6% 4.9%
1.69% 1.58% 0.11% 1.26% 1.39% 0.4%
14.82 sen 12.22 sen 2.5 sen 10.52 sen 44.7 sen 14.4%1
4AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
Transaction* Islamic*
+45.7% -1.1%Q1FY12 vs Q1FY11 PATMI growth
� Higher income, reflecting strong performance for non-interest income
� Improvement in asset quality with lower charge offs/allowance
����
� Better asset quality underpinned Retail Banking’s profit growth
� Diversified portfolios yielding higher profits in Business Banking, Corporate & Institution Banking,
Investment Banking, Markets and General Insurance
� Life Assurance: increasing focus on Bancassurance and better performing agencies
Div
ers
ific
ati
on
����
Broad based earnings growth
* Performances integrated to divisional outcomes
1 CAGR computed based on FY2007 underlying profit of RM556.9 million.
2 Not annualised
Retail BusinessCorporate &
InstitutionalInvestment Markets Life General
+14.1% +47.5% +40.7% +68.1% +34.6% -29.5% +73.4%
Gro
wth
Gro
wth
Net Lending1
CASA
Adjusted Customer Deposits2
� Asset growth targeted at profitable and viable segments
� Strong deposit growth via expanded product and service offerings
� Implemented customer segmentation to enhance share of wallet
Sound loans and deposits growth
Improved risk &
����
Sound loans and deposits growth; improved risk & financial disciplines
YoY Change
YoY Change
To be updated
Q1FY12 Q1FY11 ∆% FY11CAGR
(FY07-11)
72.8 bil 66.2 bil 10.0% 71.1 bil 9.0%
83.6 bil 72.1 bil 16.0% 81.3 bil 15.4%
10.0 bil 8.4 bil 19.3% 9.9 bil 16.9%
5AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
Ris
k,
Ca
pit
al
&
Fu
nd
ing
Pro
file
Ris
k,
Ca
pit
al
&
Fu
nd
ing
Pro
file
Gross impaired loans
RWCAR
LD Ratio3
Tier 1 CAR
� Proactive risk management
� Implemented FRS disciplines under BNM transitional provisions and new FTP4
1 Includes Islamic loans sold with recourse
2 Adjusted customer deposits include term funding and loans sold with recourse
3 Based on net loans including loans sold with recourse over adjusted customer deposits
4 Funds transfer pricing
5 Estimated capital ratios include Q1FY12 unappropriated profits of AmBank (M) Bhd Group, AmIslamic
Bank & AmInvestment Bank Group
CTI
Improved risk & financial disciplines
����
YoY Change
CET-1
Q1FY12 Q1FY11 ∆% FY11
2.96% 3.60% 0.64% 3.33%
13.7% / 14.1%5 16.7% / 17.1%5 3.0% 14.4%
9.7% / 10.1% 5 10.0% / 10.5%5 0.3% 10.2%
7.6% / 8.0%5 7.8% / 8.4%5 0.2% 8.0%
87.1% 91.9% 4.8% 87.4%
38.5% 38.5% - 39.9%
Medium Term Aspiration: Strategic priorities & growth levers
To become Malaysia’s Preferred Banking Group with International Connectivity
To become Malaysia’s Preferred Banking Group with International Connectivity
Measured by:
• customer satisfaction
• sound financial performances
• well diversified and sustainable growth
Growth LeversStrategic Priorities
6AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
1. Leverage international connectivity
2. Invest to grow income
3. Enhance customer share of wallet
4. Capitalise on ETP
5. Upgrade capability and productivity
� Profitable growth and rebalancing
� Diversification and new business
development
� Non-interest income and deposit growth
� Customer centricity
AmBank Group
Investors Presentation
AMMB Holdings Berhad
7AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
Investors Presentation
Q1 FY2012 Results
15 August 2011
Ashok RamamurthyAshok Ramamurthy
Deputy Group Managing Director &Deputy Group Managing Director &
Group Chief Financial OfficerGroup Chief Financial Officer
1. Executive summary
2. Q1FY2012 Group Financial Performance
3. Strategy & Outlook
Contents
8AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
3. Strategy & Outlook
4. Divisional Performance
5. Supplementary Information
Strong profit underpinned by higher non-interest income & lower allowances
� 44.3% � 23.3%� 11.9%
� 8.2% 441.5 mil
� 19.9%� 14.6%� 11.9% � 11.9% � 18.2% � 19.5%
368.3 mil
Financial Performance
Income: up 11.9%
� Non interest income =
~40% of total income
Expenses: up 11.9%
� Salary & staffing
increases, ongoing
medium term
investments but
within CTI targets
Faster NIM compression
due to
� 2.5%
9AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
PATMI
Q1FY11
Net Interest
Income
Non-Interest
Income
Total
incomeExpenses PBP
Provisions/
AllowancesPBT Tax PAT MI
PATMI
Q1FY12
Q1FY12
(RM’mil)668.8 438.8 1,107.6 426.5 681.1 70.9 610.2 154.2 456.0 14.5
Q1FY11
(RM’mil)685.7 304.1 989.8 381.2 608.6 92.4 516.2 134.5 381.7 13.4
Variance -16.9 134.7 117.8 45.3 72.5 -21.5 94.0 19.7 74.3 1.1
due to
� Expected factors such
as term funding raised
in FY2011, competitive
pressures in retail and
mix effects of growing
non-retail
� Unexpected factors
such as rapid increase
in SRR, increase in
interbank placements
arising from a better
LDR, some retail asset
mix effects and falling
longer term yield
curves due to global
events Positive growth in Q1FY12PATMI Contraction in Q1FY12
Diversified divisional contributions
PATMI (by division)
� 14.1%
� 47.5%
�40.7%
� 34.6% � 73.4%
368.3 mil
441.5 mil�68.1%
� 19.9%PATMI contribution
� 29.5% �>100% �45.7%
87%
84%
13%
16%
Retail
34%
Operating, -7%Investment
CIB
16%
Business
19%
10AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
Retail
banking
Business
banking
Corporate &
Institutional
Investment
Banking
Markets Life
Assurance
General
Insurance
Operating
Segments
Transaction
Banking
Positive growth in Q1FY12
PATMI
Q1FY11Retail Business
Corporate &
InstitutionalInvestment Markets
Life
Assurance^
General
Insurance
Operating
SegmentsTransaction*
PATMI
Q1FY12
Q1FY12
(RM’mil)150.9 84.5 71.5 44.2 85.2 16.7 22.2 -33.7 42.1
Q1FY11
(RM’mil)132.2 57.3 50.8 26.3 63.3 23.7 12.8 1.9 28.9
Variance 18.7 27.2 20.7 17.9 21.9 -7.0 9.4 -35.6 13.2
Contraction in Q1FY12
*Performances integrated to divisional outcomes^ Life Assurance surplus is transferred into life policy shareholders’ fund in overall Group accounts
84%
Conventional PATMI Islamic PATMI
� Life Assurance: lower profits transferred
in Q1FY2012 pending business model
refinements
� Operating segments impacted by higher
funding cost & prudent acceleration of
provisions on specific accounts
General
5%Life
4%
Markets
19%
Investment
10%
511.2 610.3 674.3
159.0 193.8
6.6
288.1 302.4
89.4
34.8
98.1 1.9
187.5
121.3
123.7
172.0
52.0
53.9
18.2
21.6
3.7
3.5
64.0
Growing non-interest income; faster than expected NIM compression
FY09 FY10 FY11 Q1FY11 Fee IncomeTrading & Insurance
Others Q1FY12
Non-interest income movement
As % of total income
22% 29% 30% 31% 40%
RM' Mil
44%
43%
1%
12%
� 44.3%
(0.9)
638.2
1,040.3
1,170.3
304.1
438.8���� 21.9% ���� >100% ���� 3.7% � 5.4%
11AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
3.44%
2.68%
2.92%
3.08%
2.86% 2.91% 2.90%
3.01% 3.08%
3.04%
2.98% 2.94%
2.65%
3.05% 2.95% 2.90%
2.85% 2.65%
Note :1 Net Interest Margin includes Net Financing Income from Islamic Banking business2 FY09-Q1FY12 based on internal data computation
FY09 FY10 FY11 Q1FY11 Fee IncomeTrading &
Investment
Insurance
BusinessOthers Q1FY12
Fee Income Trading & Investment Insurance Business Others
NIM and Cost of Funds
Cost of Fund NIM OPR SRR
FY09 FY10 FY11 Q1FY12 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12
2.50%2.75% 2.75% 2.75%
3.00%
1.00% 1.00% 1.00% 1.00%
2.00%
3.00%2.00%
2.25%
2.75%3.00%
1.00% 1.00% 1.00%
3.00%
NIM /
COF
OPR /
SRR
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%
2.96%
0.67% 0.40%
Lower loan loss provisioning, in part from higher recoveries
Asset Quality Indicators
FR
S 1
39G
P3
�
85bps
27bps
�
Gross Impaired Loans
• Retail Bkg: 2.84%
• Business Bkg: 1.59%
12AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
Net NPL Gross NPL Gross Impaired Loans Loan Loss Coverage Allowance Coverage
Net Provisions Charge Net NPL Ratio Gross NPL Ratio Gross Impaired Loans Loan Loss Charge
3.182.02 1.50 1.01
5.53
3.602.43
1.87 2.54 2.45 2.23
56.6%
67.3%75.1%
99.5%
89.1%
102.3%
112.7%RM’bil
FR
S 1
39G
P3
Allowance Coverage:
• Retail Bkg: 102.4%
• Business Bkg: 121.8%
FY2007 FY2008 FY2009 FY2010 FY2011 Q1FY2012Day 1
[1 April 10]
0.00%
0.40%
0.80%
1.20%
Q1 Q2 Q3 Q4
% Gross NPL / Impaired Loans Conversion to Gross Loans
0.00%
0.60%
1.20%
1.80%
Q1 Q2 Q3 Q4
% New Gross NPL / Gross Impaired Loans to Gross Loans
New gross impaired loans formation, conversions, recoveries and write-offs; Within
expectations
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
13AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
Note :
1 FY2004 and FY2005 financials based on gross before IIS
GP 3
FY2004 -FY2007 FY2008-FY2010 FY2011
FRS 139
0.00%
0.20%
0.40%
0.60%
Q1 Q2 Q3 Q4
% Recoveries to Avg Gross Loans
0.00%
0.50%
1.00%
1.50%
2.00%
Q1 Q2 Q3 Q4
% Write-Offs to Avg Gross Loans
Q1FY2012
Loans portfolio rebalancing continues
Gross Loan / Financing (including Islamic financing sold to Cagamas) movement
Retail Non-Retail
� 2.9% � 24.5%
34%
66%
68.5 bil
� 0.2% � 7.2% � 10.9%� 28.3%
� 29.0%
� 9.4% � 13.3% � 5.4%
� >100.0% 75.4bil
38%
62%
� 10.0%
14AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
Positive growth in Q1FY12 Contraction in Q1FY12Non-RetailRetail
Total Fixed interest rate Variable interest rate
Mar-08 June-11 Mar-08 June-11 Mar-08 June-11
Conventional 82% 79% 47% 32% 38% 48%
Islamic 18% 21% 15% 14% 0.1% 5.5%
100% 100% 62% 46% 38% 54%
Gross loan portfolio trends:
Gross Loan
Q1FY11
Auto Financing Mortgage Credit Cards Line of Credit Co-Op Asset FinancingBusiness
Corporate &
Institutional
Others Gross Loan
Q1FY12
Q1FY12
(RM’bil)25.7 14.5 1.0 0.8 2.2 2.7 15.0 13.6 -0.1
Q1FY11
(RM’bil)25.8 13.6 0.9 0.9 1.9 2.5 11.7 10.5 0.7
% of
composition
66%
34% 19.3% 1.3% 1% 2.9% 3.5% 20% 18% 0%
�
14.0% 13.9% 15.0% 13.9% 13.9%
71.8% 77.0% 77.4%74.4% 74.6%
2.0%0.7% 1.5% 6.9% 6.6%3.0% 1.0%
1.2% 0.6% 0.7%9.2%7.4% 4.9%
4.3% 4.2%
FY08 FY09 FY10 FY11 Q1FY12
Improving funding composition
5.1 2.5 3.08.0 8.2 [10%]
23.6 25.5 26.8
29.730.2
[36%]
20.2 26.329.6
27.428.8
[34%]9.0
10.911.2
16.316.4
[20%]
FY08 FY09 FY10 FY11 Q1FY12
Rising individual & government depositsRM'bil
95.1%
70.7
81.383.6
65.2
57.9
More stable funding and well distributed debt maturities
15AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
FY08 FY09 FY10 FY11 Q1FY12
Shareholders' Equity & Debt Capital Deposits from CustomersTerm Funding &loans sold with recourse > 1 yr Term Funding & loans sold with recourse < 1 yrDeposits from Banks and FIs
FY08 FY09 FY10 FY11 Q1FY12
Term funding Individuals Biz enterprises Government
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
* Based on AmIslamic Bank Bhd maturity profile
� Funded assets financed by equity, customer deposits and longer-term debt:
• Q1FY12 = 95.1%
• FY11 = 95.2%
• FY10 = 93.9%
• FY09 = 91.6%
• FY08 = 87.8%*
� Issued RM2.92 bil Senior Notes (RM7 bil
program) and RM550 mil Senior Sukuk
(RM3 bil program) since early 2010
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19+
RM'bil
Debt Capital Term Funding Loans sold to Cagamas
Lengthening debt capital & term funding profile
Issuance Maturity
ROE ROA
Delivering higher shareholders’ returns
11.5% 11.7% 11.5%13.6%
17.0%1.02% 1.04% 1.13%
1.39%
1.69%
FY08 FY09 FY10 FY11 Q1FY12 FY08 FY09 FY10 FY11 Q1FY12
ROE expected to
normalise to
MTA guidance
16AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
EPS, Basic
Sen/Share
Dividend, Gross
Sen/Share
6.0
sen
8.0
sen
10.5
sen
18.0
sen
18% 19%
28%
40%
Total Dividend Dividend Payout Ratio
FY08 FY09 FY10 FY11 Q1FY12 FY08 FY09 FY10 FY11
28.2
sen
31.6
sen
34.7
sen
44.7
sen
14.8
sen
*
* Not annualised
7.7% 8.1% 8.0% 7.6%
9.7% 10.3% 10.2% 9.7%
15.2% 15.8%14.4%
13.7%
Pro-forma AmBank Group Banking Entities*Capital adequacy :
Capital levels positioned for Basel III and target payouts
Estimated capital ratios^
(include Q1FY12 unappropriated profits)
Risk Appetite
Framework Targets
RWCAR: 14.1% 14% ± 2%
Tier 1 CAR: 10.1% 10% ± 1.5%
CET 1 Ratio: 8.0 % 8% ± 1%
17AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
FY2009 FY2010 FY2011 Q1FY2012
by Legal Entities1
Tier 1 CAR RWCAR
AmBank (M) Berhad 8.8% 13.4%
AmInvestment Bank Berhad 25.2% 25.2%
AmIslamic Bank Berhad 8.0% 12.5%
* Banking entities include AmBank (M) Berhad Group, AmInvestment Bank Group and AmIslamic Bank
1: Q1FY2012 (after deducting proposed dividend)
Capital adequacy
� Capital management plan :
1. Optimise capital profile & buffer
2. Increase scenario modeling
3. Streamline corporate structure
(e.g. AmIslamic)
4. Develop dynamic dividend policy
5. Proactively manage Basel III
requirements
CET 1 Ratio Tier 1 CAR RWCARFee Income
^Estimated capital ratios include Q1FY12 unappropriated profits of AmBank (M) Bhd Group, AmIslamic Bank & AmInvestment Bank Group
1. Executive summary
2. Q1FY2012 Group Financial Performance
3. Strategy & Outlook
Contents
18AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
3. Strategy & Outlook
4. Divisional Performance
5. Supplementary Information
RETAIL*
Develop a liability-led
business, grow assets in
BUSINESS*
Grow diversified & profitable
assets, increase deposits, fee
TRANSACTION*
Become Top 5 Banking Service
Provider in Malaysia by FY2016
CIB*
Deliver innovative and quality
solutions, increase ‘share of
Medium Term Aspiration
(MTA)“To become Malaysia’s Preferred Banking Group with International Connectivity”
As measured by Customer Satisfaction Sound Financial PerformanceWell diversified & Sustainable
Growth
Our Aspirations…
19AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
business, grow assets in
targeted segments & expand
Wealth Management
assets, increase deposits, fee
based business & international
trade finance leveraging on
ANZ
Provider in Malaysia by FY2016
with 10% market share
solutions, increase ‘share of
wallet’, target high-profile’ and
high value clients and leverage
ANZ for x-border businesses
INVESTMENT*
Deliver comprehensive
solutions, lead in capital
markets, funds management,
stock broking and enhance
domestic and overseas
distribution via ANZ
MARKETS*
Deliver substantive, integrated
and client-led business with
full suite of FX, Rates,
Commodities and FI offerings
with ANZ collaborations
LIFE ASSURANCE*
Become the top life insurer for
service; an industry
benchmark for TCF, strong
infrastructure, sufficient scale
to be relevant and credible
whilst maintaining margins
and cash profile
GENERAL INSURANCE
Provide insurance solutions to
our customers and business
partners that meet their
insurance needs and exceed
their service expectations
DIV
ISIO
NA
L A
SP
IRA
TIO
NS
* Conventional & Islamic
GROWTH LEVERS
LEVERAGE INTERNATIONAL
CONNECTIVITY
• Leverage ANZ’s international connectivity via biz development initiatives• Expand product and service offerings for cross-border opportunities• Broaden regional clientele base & widen distribution network
INVEST TO GROW INCOME
• Develop customer centric business models• Enhance wealth management business• Carve out ‘Transaction Banking’ as a division focusing on cash management &
international trade • Develop new family Takaful business with FL• Introduce new products and enhance relationship teams
1
2
STRATEGIC INITIATIVES
Business transformation and growth plans
20AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
• Introduce new products and enhance relationship teams
INCREASE CUSTOMER
SHARE OF WALLET
• Develop products to fulfill customer segment & life cycle needs• Enhance distribution footprints for easier accessibility• Up ante in cross-selling efforts across Group• Enhance core banking systems
CAPITALISE ON ETP
• Target ETP projects in NKEA sectors• Key focus areas – loans, bridging finance and advisory services for PDS issuances /
capital market activities and private pension industry
UPGRADE CAPABILITY &
PRODUCTIVITY
• Invest in human capital development• Enhance account planning system for business growth• Consolidate operations to improve efficiencies
3
4
5
• Accelerate CASA & deposit growth, profitable asset growth and lower credit cost over time
• Diversify retail income, continue to invest for medium term outcomes
• Forecasting increase profit contribution for FY2012 due to lower impairments
• Income growth arising from larger asset base and growth in non-interest income
• Higher deposit growth and increase cross-selling
• Forecasting increase profit contribution in FY2012 underpinned by rising incomes
• Income growth from non-interest income and larger asset base
• Focus on cross-sell and grow deposits, increase regional business via collaboration with ANZ
Maintaining profit targets for FY2012
RETAIL*
BUSINESS*
CORPORATE &
FY2012 PRIORITIES
� Profitable growth and rebalancing
� Diversification and new business development
� Non-interest income and deposit growth
� Customer centricity
21AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
• Focus on cross-sell and grow deposits, increase regional business via collaboration with ANZ
• Anticipating increase in profit contribution in FY2012 underpinned by rising incomes
• Leverage on upturn in capital market and new initiatives
• Increase regional business through closer collaboration with ANZ
• Anticipating better profits for FY2012 driven by higher fee & capital market activities
• Increase product offerings, higher contributions from FX and derivatives
• Expecting strong profit growth in FY2012 underpinned by capital market and trading activities
• Launch new products, improve efficiency and governance, and leverage strategic partnership with FL
• Expecting flat profit contribution for FY2012 post restructuring of business operating model
• Higher contributions from new products & increase in share of wallet from retail & biz customers
• Expecting good growth in premium and profits for FY2012
CORPORATE & INSTITUTIONAL*
INVESTMENT*
LIFE ASSURANCE*
GENERAL INSURANCE
MARKETS*
* Conventional & Islamic
FY07 FY08 FY09 FY10 FY11 Q1 FY12MTA
FY2012 - FY2014
PATMI*
ROE
Medium Term Aspiration (MTA) and estimates
Investing for
growth over
- RM 282.5
mil
RM 668.5
mil
RM 860.8
mil
RM 1,008.6
mil
RM 1,342.8
mil
RM 441.5
mil
14 – 16%
CAGR
- 5.8% 11.5% 11.7% 11.5% 13.6% 17.0% 14 – 16%
Actual
22AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
CTI
Net NPL ratio /Gross
impaired loans
Dividend:Gross
Payout
*
*PATMI: profit after tax and minority interests
growth over
medium term
38.8% 40.2% 43.3% 42.0% 39.9% 38.5% ≤ 42%
6.2% 3.7% 2.6% 1.5% /
3.8% 3.3% 2.96% 2 – 2.75%
5.0 sen /
share
(loss year)
6.0 sen /
share
18.3%
8.0 sen /
share
19.0%
10.5 sen /
share
28.1%
18.0 sen /
share
40%
- 40 – 50%
Payout
Outlook & Priorities
OUTLOOK
• Strength in private investment & private consumption and
prospective ETP gains to sustain Malaysia’s economic growth (GDP
CY2011e: circa 5%1 )
• Domestic economy not immune to external headwinds with
continued weaker global outlook
• Monetary policy remains accommodative, OPR @ 3% & SRR @ 4%
today, with potential for further tightening
• Banking sector set to benefit from ETP & CMP 2 over time, more
lending & debt market activities, private sector involvement & robust
domestic consumption etc.
23AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
1. In-house view
domestic consumption etc.
• Irrational pricing in selected segments, a concern
PRIORITIES
• Profitable growth and rebalancing
• Diversification and new business development
• Non-interest income and deposit growth
• Customer centricity
1. Executive summary
2. Q1FY2012 Group Financial Performance
3. Strategy & Outlook
Contents
24AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
3. Strategy & Outlook
4. Divisional Performance
5. Supplementary Information
Retail Banking: Improved asset quality main contributor to higher profits
� Income – focus on profitable & viable
segments and pricing for risk
� Irrational pricing impeding loans growth
� Expenses – expanding customer touch-
Develop a liability-led
business, grow assets in
targeted segments and
expand Wealth Management
PATPBPExpensesIncome
Composition to Group 45.6% 37.1% 33.1%40.3%
RM'mil Q1FY11 Q1FY12
Income 448.8 446.9 -0.4%
Expenses 174.6 194.4 +11.3%
PBP 274.2 252.5 -7.9%
Impairments 98.0 51.2 -47.8%
Q1FY12 vs
Q1FY11
25AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
Expenses – expanding customer touch-
points, investing in technology & human
capital
� Lower impairments driving higher profits
� Continued strong CASA growth
Q1FY11 results Positive growth in Q1FY12 Contraction in Q1FY12
Impairments 98.0 51.2 -47.8%
PBT 176.2 201.2 +14.2%
PAT 132.2 150.9 +14.1%
Gross Loans / Financing 44,423.5 45,337.1 +2.1%
Net Loans / Financing 43,151.4 44,018.7 +2.0%
Gross Impaired Loans 1,358.6 1,287.9 -5.2%
Customer Deposits 31,486.3 34,690.9 +10.2%
CASA Deposits 6,792.5 8,025.6 +18.2%
ROA 1.21% 1.36% +0.15%
CTI 38.9% 43.5% +4.6%
Allowance Coverage 93.6% 102.4% +8.8%
2.84%
Business Banking: Strong income growth
� Higher profits backed by strong net
interest and fee income growth, and
better recoveries
� Expenses – mainly from increase in staff
Grow diversified & profitable
assets, increase deposits, fee
based business &
international trade finance
leveraging on ANZ
PATPBPExpensesIncome
Composition to Group 13.1% 6.6% 17.2% 18.5%
RM'mil Q1FY11 Q1FY12
Income 109.9 145.0 +31.9%
Expenses 24.8 28.0 +12.9%
PBP 85.1 117.0 +37.5%
Impairments 8.7 4.5 -48.3%
PBT 76.4 112.5 +47.3%
Q1FY12 vs
Q1FY11
26AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
� Expenses – mainly from increase in staff
cost
� Good deposits and CASA growth,
leveraging on better relationship building
Income contribution
PBT 76.4 112.5 +47.3%
PAT 57.3 84.5 +47.5%
Gross Loans / Financing 11,714.7 15,030.2 +28.3%
Net Loans / Financing 11,547.8 14,739.4 +27.6%
Gross Impaired Loans 123.6 238.8 +93.2%
Customer Deposits 6,008.3 6,614.5 +10.1%
CASA Deposits 1,292.8 1,417.2 +9.6%
ROA 2.03% 2.34% +0.31%
CTI 22.6% 19.3% -3.3%
Allowance Coverage 135.1% 121.8% -13.3%
1.59%
Lending &
deposits, 74%
Trade
Services, 25% Cash
Management
& others, 2%
Q1FY11 results Positive growth in Q1FY12 Contraction in Q1FY12
� Diversified loans portfolio – good support
for income growth
� Higher income contributions from lending,
International Business & Asset
Management
� Impairments benefitted from lower
collective impairment
Corporate & Institutional Banking: Good income & deposits growth
Deliver innovative and quality
solutions, increase ‘share of
wallet’, target high-profile and
high-value clients and leverage
ANZ for x-border businesses
PATPBPExpensesIncome
Composition to Group 7.0% 10.3% 15.7%9.0%
RM'mil Q1FY11 Q1FY12
Income 82.4 100.1 +21.5%
Expenses 25.0 29.7 +18.8%
PBP 57.5 70.4 +22.4%
Impairments (9.2) (22.5) +>100.0%
Q1FY12 vs
Q1FY11
27AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
collective impairment
Income contribution
* Services include : large corporate lending& deposits,
financial institutions group, offshore banking, international
business, private equity, REITs and loan syndication
Lending &
deposits,
75%
Int. Biz,
19%Asset
Mgmt,
6%
Q1FY11 results Positive growth in Q1FY12 Contraction in Q1FY12
PBT 66.6 93.0 +39.6%
PAT 50.8 71.5 +40.7%
Gross Loans / Financing 10,535.4 13,588.4 +29.0%
Net Loans / Financing 10,456.3 13,511.0 +29.2%
Customer Deposits 30,697.3 35,484.1 +15.6%
ROA 1.89% 2.04% +0.2%
CTI 30.3% 29.6% -0.7%
Ave Assets Management 1,403.5 1,501.5 +7.0%
• Better performance leveraging from pick-
ups in capital and equity market
conditions
• Good and diversified contributions from all
divisions
• Expenses – higher staff cost & incentives
linked to better financial performance
Investment Banking: Strong profit growth leveraging on capital & equity markets
Deliver comprehensive
solutions, lead in capital
markets, funds management,
stock broking and enhance
domestic & overseas
distribution via ANZ
PATPBPExpensesIncome
Composition to Group 9.9% 8.6% 9.7%11.8%
RM'mil Q1FY11 Q1FY12
Income 75.1 109.1 +45.3%
Expenses 39.3 50.5 +28.5%
PBP 35.8 58.6 +63.7%
Impairments 0.4 (0.5) ->100.0%
PBT 35.4 59.1 +66.9%
Q1FY12 vs
Q1FY11
28AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
linked to better financial performance
Income contribution
1 Including AmInvestment Management, AmInvestment Services, AmIslamic Funds Management & private banking
Source : Malaysia Association of Asset Management & Lipper Hindsight
PBT 35.4 59.1 +66.9%
PAT 26.3 44.2 +68.1%
CTI 52.4% 46.3% -6.1%
Ave Assets Management 23,529.3 29,933.9 +27.2%
Ave Volume / Contract Traded (RM'mil/month)
Bursa M'sia 59,429.3 72,791.5 +22.5%
Future KL index 367.3 384.9 +4.8%
IB Broking 4,707.1 4,464.5 -5.2%
AmFuture 75.5 90.0 +19.2%
Market Share as at:
IB Broking 7.8% 6.1% -1.7%
AmFuture 20.3% 22.6% +2.3%
1
Debt Cap
Mrkt,
17%
Corporate
Finance,
10%
Equity,
22%
Broking &
Futures,
22%
Fund
Mgmt,
22%
Private
Banking,
6%
Q1FY11 results Positive growth in Q1FY12 Contraction in Q1FY12
� Higher contributions from fixed income
and FX
� Expenses reflect continuous investment in
FX, rates, derivatives & commodities
establishment
Markets: Well diversified income growth
Deliver substantive, integrated
and client-led business with
full-suite of FX, Rates,
Commodities and FI offerings
with ANZ collaborations
PATPBPExpensesIncome
Composition to Group 4.1% 16.6% 18.7%11.8%
RM'mil Q1FY11 Q1FY12
Income 89.9 130.7 +45.4%
Expenses 13.1 17.4 +32.8%
PBP 76.8 113.3 +47.5%
Impairments (7.3) (0.2) -97.3%
Q1FY12 vs
Q1FY11
29AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
Income contribution
Fixed Income,
71%
Foreign
exchange,
18%
Derivatives,
7%
Others, 4%
Q1FY11 results Positive growth in Q1FY12 Contraction in Q1FY12
Impairments (7.3) (0.2) -97.3%
PBT 84.1 113.5 +35.0%
PAT 63.3 85.2 +34.6%
CTI 14.6% 13.3% -1.3%
ROA 3.18% 5.87% +2.7%
PAT : Fx and Derivatives 7.4 17.4 +>100%
Total Group:
Financial assets HFT 2,737.9 6,554.5 +>100%
Financial investments
AFS 7,593.7 4,423.0 -41.8%
Financial investments
HTM 199.5 153.4 -23.1%
Life Assurance: Increasing support to Bancassurance and better performing agencies
To be the top life insurer preferred
for service; an industry benchmark
for TCF, strong infrastructure,
sufficient scale to be relevant and
credible but whilst maintaining
margins and cash profile
� Strategic focus on
Composition to Group
PATIncome
3.7%2.0%
RM'mil Q1FY11 Q1FY12
Income 23.8 22.0 -7.6%
Q1FY12 vs
Q1FY11
30AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
* Life assurance shareholders’ fund accounts
� Strategic focus on
� Business growth initiatives centered
on Bancassurance
� Providing enhanced support to better
performing agency force
� Improving compliance and
infrastructure platforms
Q1FY11 results Positive growth in Q1FY12 Contraction in Q1FY12
PAT 23.7 16.7 -29.5%
Life Assurance
fund assets 2,226.1 2,584.7 +16.1%
CAR ratio 232.7% 214.7% -18.0%
Gross written premium 129.0 133.9 +3.8%
RM'mil Q1FY11 Q1FY12
Income 42.6 52.0 +22.1%
Expenses 20.7 23.1 +11.6%
PBP 21.9 28.9 +32.0%
Q1FY12 vs
Q1FY11
General Insurance: Higher income
To provide insurance solutions
to our customers and business
partners that meet their
insurance needs and exceed
their service expectations
PATPBPExpensesIncome
Composition to Group 5.4% 4.2% 4.9%4.7%
31AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
PBP 21.9 28.9 +32.0%
Impairments - 0.5 +>100.0%
PBT 21.9 28.4 +29.7%
PAT 12.8 22.2 +73.4%
CTI 48.6% 44.4% -4.2%
General Insurance fund
assets1,041.5 1,177.3 +13.0%
Claim ratio 67.5% 66.3% -1.2%
Management expense
/ earned premium 15.2% 15.4% +0.2%
� Higher income - better underwriting
profits and lower claim expenses
� Higher expenses – higher staff cost and
continue investment in technology &
operations to improve efficiency & service
delivery
Q1FY11 results Positive growth in Q1FY12 Contraction in Q1FY12
Group Operating Segments
Enablement functions
governing and supporting
delivery of improving
divisional performances
� Income growth impacted by higher
funding cost (e.g. SRR), partly offset by
higher recoveries
Composition to Group
PATPBPExpensesIncome
Composition to Group 19.5% 2.8% -4.2%9.2%
RM'mil Q1FY11 Q1FY12
Income 117.3 101.7 -13.3%
Expenses 83.4 83.0 -0.5%
Q1FY12 vs
Q1FY11
32AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
higher recoveries
� Prudently accelerating provisions on
specific accounts
Q1FY11 results Positive growth in Q1FY12 Contraction in Q1FY12
PBP 33.9 18.7 -44.8%
Allowances 1.8 37.9 +>100.0%
PBT 32.1 (19.2) ->100.0%
PAT 15.3 (19.3) ->100.0%
PATMI 1.9 (33.7) ->100.0%
Transaction Banking*: Strong profits & deposits growth
To become top 5 Banking
Service Provider in Malaysia
by FY2016 with 10% market
share
� Income – focus on trade finance services &
cash management
� Impairments benefitted from bad debts
recovered and lower collective impairment
PATPBPExpensesIncome
Composition to Group 5.3% 1.8% 7.5% 9.2%
RM'mil Q1FY11 Q1FY12
Income 47.4 58.8 +24.1%
Expenses 7.4 7.6 +2.7%
PBP 40.0 51.2 +28.0%
Q1FY12 vs
Q1FY11
33AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
* Performances integrated to divisional outcomes.
Income contribution
Trade
Services,
62%
Cash Mgmt,
38%
Q1FY11 results Positive growth in Q1FY12 Contraction in Q1FY12
Impairments 1.5 (5.0) ->100.0%
PBT 38.6 56.2 +45.6%
PAT 28.9 42.1 +45.7%
Gross Loans / Financing 3,578.5 4,246.4 +18.7%
Trade Finance 3,528.5 4,168.2 +18.1%
Cash Management 10,993.6 14,319.8 +30.3%
CASA Deposits 1,733.9 2,225.4 +28.3%
ROA 3.44% 4.09% +0.65%
CTI 15.5% 13.0% -2.5%
PATPBPExpensesIncome
Islamic Banking*: Good financing and deposits growth
To become the Islamic Bank of
choice and ensure a high
degree of value for our
customers, employees &
stakeholders
Composition to Group
� Higher impairment since mid-FY2011
due to structural changes associated
with COOP lending industry resulting in
16.8% 17.4% 12.9%17.2%
RM'mil Q1FY11 Q1FY12
Income 194.2 190.0 -2.2%
Expenses 76.5 71.7 -6.2%
PBP 117.7 118.2 +0.4%
Impairments 37.3 38.3 +2.5%
Q1FY12 vs
Q1FY11
34AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
with COOP lending industry resulting in
increased provisioning under FRS 139
methodology
* Performances integrated to divisional outcomes.
Q1FY11 results Positive growth in Q1FY12 Contraction in Q1FY12
PBT 80.4 80.0 -0.5%
PAT 59.3 58.7 -1.1%
Net Financing 12,785.7 13,975.3 +9.3%
Gross Impaired Financing 191.6 289.4 +51.1%
Customer Deposits 13,287.3 15,757.8 +18.6%
CASA Deposits 2,047.1 2,601.1 +27.1%
ROA 1.34% 1.20% -0.14%
CTI 39.4% 37.8% -1.6%
Allowance Coverage 159.4% 178.7% +19.3%
1.80%
1. Executive summary
2. Q1FY2012 Group Financial Performance
3. Strategy & Outlook
Contents
35AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
3. Strategy & Outlook
4. Divisional Performance
5. Supplementary Information
Strategic Business Transformation: Good Progress
12 months
(FY 2008)
24 months
(FY 2009)
• Set Group’s Medium Term Aspirations (MTA)
• Agreed Group’s transformation strategy, agenda and targets
• Realigned auto financing business towards profitable growth
• Improved asset quality
Strategic Business
Transformation
High Priority
Growth Initiatives
Governance &
Enablement
Functions
• Realigned growth towards profitable and viable segments
• Realigned Markets Fixed Income business model
• Reset Mortgage business strategy and action plans
• Consolidated Group balance sheet activities within commercial bank
Split composite insurance license to General and Life
36AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
36 months
(FY 2010)
48 months
(FY 2011)
• Split composite insurance license to General and Life
• Deposits as profit centres across Group
• Realigned customer ownerships and focus
• Proactively strengthened capital and liquidity management
• Repositioned balance sheet for rising interest rates
• Completed structural realignment to improve target segment focus
• Develop customer centric retail business model - part of AmHorizon
• Implementing account plans for business customers to increase SOW
• Expanding product offerings and build new capabilities (e.g. Markets)
High Priority Growth Initiatives: Implemented To-Date
12 months
(FY 2008)
24 months
(FY 2009)
• Created new profit centre based retail branch distribution model
• Setup ‘deposits’ as profit product across all divisions & grow CASA
• Created a separate Corporate and Institutional Banking (CIB) Division
• New FX business in collaboration with ANZ
• Enhanced cash management offering via Gross Payroll system
• FL brought in as new life strategic business partner
Strategic Business
Transformation
High Priority Growth
Initiatives
Governance &
Enablement
Functions
37AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
36 months
(FY 2010)
48 months
(FY 2011)
• FL brought in as new life strategic business partner
• Accelerated growth from GLC, GLIC and MNC
• Build scale
• New Rates business in collaboration with ANZ
• Distribution footprint expansion (particular focus on 7-11 ATM’s) &
alternative channels
• Commenced leveraging ANZ for International connectivity
• Strengthen wealth management biz and develop new strategies
• Enhancing international trade and cash management business
• Develop new family Takaful business with FL
Governance and Enablement Functions Streamlined:
Supports Better Decision Making
12 months
(FY 2008)
24 months
(FY 2009)
• Privatised AmInvestment Bank as part of migration to universal banking
platform for greater synergies
• Consolidated / simplified governance committee structures
• Delivered line of business budgets and performance reporting
• Created a Group PMO to prioritise and manage key strategic initiatives
• Established Advance Risk Recognition Program (ARRP)
• Strengthened risk disciplines via Group Risk Appetite Frameworks
• Separated ALCO, capital and balance sheet management from Markets
• Delivered Peer Bank relative performance benchmarks
Implemented short and long term performance incentives
Strategic Business
Transformation
High Priority
Growth Initiatives
Governance and
Enablement Functions
38AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
36 months
(FY 2010)
48 months
(FY 2011)
• 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
• Implemented FTP system aligned to balance sheet strategies
• Developed leadership bench-strength and succession planning
• Implemented Operational Risk Incident Reporting system and Basel II capital
calculator
• Consolidating some Group Support into Centres of Excellence
• Implementing Basel III, capital allocations and new ALM system
• Finalize vendor and commence core banking system replacement
ADVANCED RISK RECOGNITION PROGRAM INITIATIVESKEY AREAS
GOVERNANCE• A restructured independent Group Risk Management Department, headed by the Chief Risk Officer.
• Executive Management and Board sub-committees were streamlined and charters modified to enhance overall
governance.
• Established a model validation team to regularly review all material risk models within the Group.
UPGRADING RISK INFRASTRUCTURE
• Credit Risk Management:� Implemented new PD scorecards for retail (3rd generation) and corporate. EAD and LGD models for both retail &
corporate. New behavioural scorecards being developed for retail customers.� New financial spreadsheet tool enabling detailed financial projections and industry benchmarking.� Enhanced pricing models taking into account risk factors (risk based pricing).� New Security Indicator models developed for corporate customers.� New model execution platform to enable automated provisioning and stress testing of Retail and Corporate
exposures.• Market Risk Management:
� Implemented FX and derivatives front end system and new markets (FX, interest rates and equity) rates/price validation system.
Risk Management: enhancing risk recognition skills and asset quality
39AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
validation system.� FX & derivative limit monitoring and management system and VaR (FX, derivatives, equities) to be rolled out.� new Funds Transfer Pricing Model used to allocate funding costs.� new Asset and Liability Management system to enhance duration risk mismatches.
• Operational Risk Management:� new incident reporting system for collecting, analyzing and estimating capital requirements.
ASSET QUALITY AND PORTFOLIO
DIVERSIFICATION
• Material improvement in net NPL / gross impaired assets, provisioning charges and loan loss coverage ratio over the past four years.
• Further diversification in the loan portfolio.• Portfolio diversification strategy to grow certain selected portfolios quicker than others (eg: well rated counterparties in
CIB and Business Banking).
FUNDING & LIQUIDITY RISK MANAGEMENT
• Established a dedicated unit i.e. “Balance Sheet & Capital Management” reports to the Group Chief Financial Officer and advises the Group Asset & Liability Committee with regards to Funding, Liquidity and Capital strategy options.
• Strong improvements in: retail deposits growth; liability structure incorporating raising term wholesale funding and asset and liability duration mismatches.
RISK APPETITE STRATEGY, EXECUTION
& MONITORING FRAMEWORK
• Fine tune of risk appetite settings, clearly articulating risk / reward appetite. • Risk /reward supported by comprehensive asset writing & business strategies for each business unit. • Risk elements include - country, industry and customer single names limits, general loan underwriting standards, capital
allocation to business units and targeted returns.
25.8
11.7 1.7 3.4 4.0 2.0 1.4 0.003 1.7 13.5 3.3
42.6
25.9
68.5
12.4 5.0 2.1
17.3
5.8
33.4
75.4
Purchase of Transport Vehicles
Purchase of Res Properties
Credit Cards Personal Use Purchase of Non-Res
Properties
Purchase of Securities
Fixed Assets Consumer Durables
Construction Working Capital
Other purpose Retail Loans Business & Corporate
Loans
Total loans
25.4
2.41.7 2.1 1.1 0.002
42.0 � 1.4% � 5.7% � 0.9% � 28.0% � 25.0% � 3.1% � 16.2% � 25.8% � 24.2% � 28.2% � 73.1%
� 1.5% � 28.9%
� 10.0%
Loans by Economic Purpose: AmBank Group vis-à-vis Industry
composition : 33.8% 16.4% 2.2% 3.2% 6.7% 2.8% 1.5% 0.0% 2.8% 22.9% 7.6% 55.7% 44.3%
RM’bil
AmBank Group Loans Growth (including Islamic financing sold to Cagamas) by Economic Purpose*
Jun-10 Jun-11
40AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
127.7 222.5
27.7 40.5 81.7
36.3 9.0 0.1 19.4 221.8 48.3
418.3 416.6
834.9
138.4
251.8
30.8 46.2 99.6 43.2 23.5
245.5
59.7
467.2 480.5
947.7
Purchase of Transport Vehicles
Purchase of Res Properties
Credit Cards Personal Use Purchase of Non-Res
Properties
Purchase of Securities
Fixed Assets Consumer Durables
Construction Working Capital
Other purpose Retail Loans Business & Corporate
Loans
Total Loans
Jun-10 Jun-11
� 8.4% � 13.1% � 11.2% � 14.2% � 21.9% � 19.1% � 0.4% � 14.2% � 21.3% �10.7% � 23.5%
9.0 0.1
� 11.7% � 15.3%
� 13.5%
Vehicles Properties Loans
Source : BNM, internal reports
RM’bil
Industry Loans Growth by Economic Purpose
composition : 14.6% 26.6% 3.2% 4.9% 10.5% 4.6% 1.0% 0.0% 2.5% 25.9% 6.3% 49.3% 50.7%
* Based on BNM classification
0.08
0.10
4.0 4.5 8.4
59.0 67.4
4.4 5.7 10.0
65.6 75.7
Jun'10 Jun'11
� 10.8% � 26.8% � 19.3% � 11.2% � 12.2
Savings Current Account CASA Fixed Deposits Core Deposits
RM’bil
AmBank Group Deposits Growth by Type
Deposits by Type : AmBank Group vis-à-vis Industry
5.8%7.5%
86.7%
AmBank Group Deposits
Composition
Savings
Current Account
Fixed Deposits
41AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
99.2 172.5
271.7
478.6
750.3
109.6
197.4
307.0
530.2
837.2
Jun '10 Jun '11
� 10.5% � 14.5% � 13.0% � 10.8% � 11.6%
Savings Current Account CASA Fixed Deposits Core Deposits
Savings Current Account CASA Fixed Deposits Core Deposits
Industry Deposits Growth by Type
RM’bil
13.1%
23.6%
63.3%
Industry Deposits Composition
Savings
Current Account
Fixed Deposits
Source : BNM, internal reports
Malaysia average lending rate vs OPR & BLRMalaysia’s GDP growth vs. ASEAN countries
8.2
6.2
5.3 6.85.5
6
4.5 6.1
6.2
5.84.7
-1.7
7.2
5.05.33.7
1.1
7.3
5
8.7
1.5
-0.8
14.5
5.2
5.12.5
-2.3
7.8
4
-3.0
-1.0
1.0
3.0
5.0
7.0
9.0
11.0
13.0
15.0
2006 2007 2008 2009 2010e 2011f
Vietnam Indonesia Malaysia Philippines Singapore Thailand
%
Malaysia’s GDP growth driven by ETP and steady domestic demand
Malaysia
12.13%
5.08%5.02% 5.07%
8.46%
2.12% 2.45%2.96%
11.63%
5.62%6.02%
6.54%
0%
5%
10%
15%
Average lending rate (commercial banks) Average OPR Average BLR
42AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
Malaysia : Key statistics 2010 2011e
GDP 7.2% 5.0%
Inflation 1.7% 3.0 – 3.5%
OPR 2.75% 3.00%
Fiscal deficit 5.6% 5.6%
Exchange rate (RM vs USD) 3.09 2.97
Unemployment rate 3.2% 3.2%
SRR 1.0% 4.0%
Sources : Bloomberg, BNM, in-house economic research
Vietnam Indonesia Malaysia Philippines Singapore Thailand
RM’bil
Malaysia household debt / GDP vs. household loans approved & impaired loans
2006 2007 2008 2009 2010 June-11
Average lending rate (commercial banks) Average OPR Average BLR
Household Impaired Loans Household Loan Approved
Gross National Savings Household Debt/GDP
23.6 19.1 16.3 13.3 11.2 10.2
92.0 117.1
143.1 159.2 184.1
103.0
37.0% 37.5% 36.8%31.0% 33.1%
68.8% 66.9% 63.7%
76.0% 75.9%
Malaysia still poses attractive investment opportunities in ASEAN region
National Savings
Rate,
as % of GDP
Real GDP Growth,
% YoY
Malaysia Thailand Singapore Indonesia Philippines Vietnam
2010e 2011f 2010e 2011f 2010e 2011f 2010e 2011f 2010e 2011f 2010e 2011f
33.10 33.23 30.65 30.62 46.04 46.35 33.38 34.34 20.11 18.66 34.29 32.36
7.15 5.00 7.80 3.96 14.47 5.16 6.11 6.20 7.33 4.95 6.78 6.26
43AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
Inflation
Industrial
Production Index,
% YoY
Source: World bank, IMF and various central banks data
CPI
Central Bank Rate
7.46 - 15.39 - 27.98 - 4.30 - - - - -
1.70 2.80 3.27 4.02 2.82 3.30 5.13 7.15 3.80 4.91 9.21 13.46
2.75 3.00 2.00 3.50 0.44 0.51 6.50 7.00 4.00 5.00 9.00 -
113.96 117.16 107.96 112.30 102.80 106.19 120.97 129.61 166.06 174.21 209.50 237.70
Oil, Gas & Energy
Palm Oil
Financial
Services
Communications
Content &
Infrastructure
Agriculture
Greater KL
Economic Transformation Programme : Financial Services as 1 of 12 NKEAs
Vision • Evolve to serve needs of biz &
consumers in high-income
economy
• Increase depth, regional &
global market shares in selected
niches
Aspirations • Strengthen core
• Serve needs of high-income
population
• Develop new growth sectors
• Go on the offensive
Targets • GNI contribution RM180bil
(additional 121b, 3x growth)
• New 275K jobs
(56% >RM4K income per
Financial services sector EPP
1 Revitalise equity market
2 Deepen & broaden bond markets
3 Transform development financial institutions
4 Create integrated payment eco-system
5 Service high-income population
44AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
Tourism
Business
Services
Improving
Electronics
& Electrical
Wholesale
& Retail
Education
Healthcare
(56% >RM4K income per
month)
Challenges • Lack of scale
• Lack of liquidity & diversity in
capital markets
• Low levels of financial literacy
• Competition from regional
financial centres
Enablers • RM211bil cumulative funding in
next 10 years
(4% public sector contribution)
• Attractive biz environment for
international & long-term
capital
• Talent
• Seamless regulatory
• Tax competitiveness
• Reputation
5 Service high-income population
6 Accelerate development of private pensions
7 Spur growth of wealth management
8 Kick-start & sustain asset management industry
9 Create regional champions
10 Create global Islamic finance hub
GNI = gross national income
NKEA = National Key Economic Activities
EPP = Entry Point Projects
Source : www.pemandu.gov.my
Contents
ETP roadmap
National Key Economic
Activities (NKEA)
RM661b
RM442b
RM359b
RM275b RM
1.7tril
USD188bil
USD523bil
USD138b
USD112b
USD86b
2009 GNI Entry Point (BO) Biz Other sector 2020
RM23.7K GNI
(USD6.7K)
per capita
>RM48K GNI
(USD15K) per capita
131 EPPsECONOMIC TRANSFORMATION
PROGRAMME
• RM 48k GNI per capita
• RM 1.7 trillion GNI
• 6% annual GDP growth
GROSS NATIONAL
INCOMEJOBS
• 31.6m population
• 3.3m additional jobs
• 12 NKEAs, 131 EPPs
• 60 BOs
• Transformational approach
• Private-sector led
• RM 1.4 trillion investment
• 92% private investment
• 8% public investment
• 73% DDI
• 27% FDI
ETP: overview
ETP : Propelling Malaysia towards becoming a high-income, developed nation by 2020
45AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
ROUND 1(25 Oct 2010)
ROUND 2(30 Nov 2010)
ROUND 3(11 Jan 2011)
ROUND 4(8 Mar 2011)
ROUND 5(19 Apr 2011)
ROUND 6(13 Jun 2011)
TO-DATE
2009 GNI Entry Point
Projects (EPP)
(BO) Biz
opportunities
Other sector
growth
2020
GNI targetTRANSFORMATIONAL
ACTIONSINVESTMENT
• 27% FDI
ETP execution gaining momentum
ETP : Economic Transformation Programme
Source : Pemandu
Initiatives
Investment
(RM’bil)
GNI Impact
(RM’bil)
Jobs Creation
TARGET
(2020)
% OF
TARGET
9 9 19 23 12 1587
(65 EPPs)131 EPPs 49.6
5.3 8.3 67.0 14.8 11.2 63.4 169.8 1, 400 12.1
0.1 84.5 32.5 20.1 16.6 66.3 220.2 1, 700 13.0
13, 100 70, 500 52, 400 88, 354 74, 457 63, 531 0.362 mil 3.3 mil 11.0
EDUCATION
ProjectJob
Creation
GNI Impact
(RM’bil)
Investment
(RM’bil)
AGRICULTUTRE
WHOLESALE &
RETAIL
OIL, GAS & ENERGY
• UCSI Group Integrated premium health education
cluster
0.85 1.30 2,000
• Segi Education Group Upgrade ECCE standards, training &
workforce
0.70 0.90 30,000
• JEFI Aquatech Establish JEFI Aquatech Centre & Farm,
plus Agro-Entrepreneur Programme
0.38 9.50 2,800
• Yanming Resources Increase edible bird’s nest production 0.005 0.09 103
• Unified Malaysia Sale Organise three main annual sale events - 1.78 -
• SAVE To improve energy efficiency in Malaysia 0.05 5.10 -
• RAPID Petronas crude oil refinery with capacity of 60.00 45.00 24, 000
EPP Round 6
46AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
OIL, GAS & ENERGY
BUSINESS SERVICES
HEALTHCARE
CCI
• RAPID Petronas crude oil refinery with capacity of
300,000 barrels per day
60.00 45.00 24, 000
• Strategic Acquisition Bureau Veritas acquired Scientige Sdn Bhd,
company specialized in asset integrity
management, risk & safety
0.02 0.11 550
• AMD Global Services New global services centre 0.50 - 616
• Sime Darby Sime Darby Medical Centre Ara Damansara
& Parkcity
0.28 - 1,539
• Biocon BioXcell, a custom-built biotechnology park
& ecosystem
0.50 1.97 450
• Telepresence
Exchange
Managed TelePresence Service to the
public & private sectors
0.01 - 153
• Extending Regional
Network
To lower the wholesale cost of
international & domestic bandwith
0.006 - 1,220
• Swiflet Nest Tracking Develop, test & implement new system &
standard for tracking swiftlet nests delivery
0.05 0.56 100
TOTAL RM63.35 bil RM66.31 bil 63, 531 jobsSource : Pemandu
Shareholding Structure
Amcorp Group Berhad
(16.8%)
ANZ Funds Pty Ltd*
(23.8%)
Employees Provident Fund Board
(13.3%)
Other Shareholders
(46.1%)
AMMB Holdings Berhad
AMFB Holdings
Berhad
AMAB Holdings
Sdn Bhd
100% 100%100% 100% 100%
As at 30 June 2011
AmIslamic Bank
Berhad
AmInvestment
Group Berhad
AmInvestment
Bank Berhad
47AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
AmBank (M) Berhad
AmLife Assurance
Berhad
AmG Insurance Berhad
AmFamily Takaful
Berhad
100%
(Insurance Australia Group Ltd – 49%)51%
(Friends Life Limited – 30%)
(Friends Life Limited – 30%)
70%
70%
* ANZ Funds Pty Ltd : a wholly owned subsidiary of Australia and New Zealand Banking Group Limited (“ANZ”)* ANZ Funds Pty Ltd : a wholly owned subsidiary of Australia and New Zealand Banking Group Limited (“ANZ”)
Foreign shareholding excluding ANZ
Mar 09 Mar 10 Mar 11 June 11
28.4% 27.1% 27.1% 26.6%
Strategic partnership with global partner, ANZ
Regional Aspirations :
Leading Super Regional Bank
Value Propositions to AmBank Group::
� Leadership & management
� 2-way customer referrals
� Joint business solutions
� Products development
� Technical expertise
� Access to regional network &
connectivity
48AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
� Capturing value:
o to Asia,
o within Asia
o from Asia
� APEA sourced
revenue to drive 25
– 30% of Group
profit
connectivity
ANZ has provided key resources and support to AmBank Group
Director
Dr. Robert John EdgarBoard
Director
Alex Thursby
Senior
Management
Deputy Group MD & Group CFO
Ashok Ramamurthy
Chief Risk OfficerAndrew Kerr
Management
Chief Operations OfficerRoss Neil Foden
Director
Mark Whelan
Outperform & Transform
( ) – number of branches & representative offices in each country as at Jan 2011
* Support role
Chief General Manager,
Transformation,
Channels & Sales
Head, Governance & Provisioning
Head, Market Risk
Head, Systems Accounting* Head, FX & Derivatives Senior General Manager,
Transaction Banking
Competitive positioning continues to strengthen
Sound size and market
position in key business
segments
Recognized brand name
& customer franchise
Wide market reach and
multiple distribution
channels
• Well diversified universal bank & # 5 largest banking group (market capitalization)
• # 4 retail bank, # 5 business and CIB lending, # 5 in Islamic Banking
• # 2 in equity & equity-linked, # 3 in debt league, # 4 in funds under management, # 3 in Malaysia
RM Islamic Bonds
• Strong customer-focus, lead in customer satisfaction
• Large retail and corporate client base provides high cross-selling potential
• Award-winning products and services
• 190 branches, #4 largest ATM network (828), 403 ATMs @ 7/11 and 146 EBC’s
• eChannels: internet banking, mobile banking and 24 hour call centre
49AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
channels
Strategic partnership with
global partner, ANZ
Solid corporate structure
& franchise value
• Pioneer in weekend banking concept and extended banking hours
• ANZ value adds through leadership & management, product development, technical expertise and
two way customer flows
• Experienced management team with key ANZ senior appointments and from other strategic
partner
• Industry experts, international and domestic best practices
• Performance based culture, all levels
• Strong key shareholders, common aspirations
• Improvement in stock valuation & upgrades in credit ratings
Experienced engagement
team
Number of commercial banking
branches
� # 4 in no. of branches
� 4 new branches in progress
� 3 AmIslamic branches
Wide market reach and multiple distribution channels
� Increased customer satisfaction via integrated & seamless channels model
� Expand branch network & self service machines footprint
� Further build & improve sales & service capabilities
Aspirations
Branch BankingE-Channels &
Contact Centre
Multiple channels
� Expand Electronic Banking Centre
at 90% of branches
� Maintain #1 provider of ATMs at 7
Eleven stores
� Best in class contact centre
� Innovative mobile & internet
banking services
385 324 251 190 187 186 141 91 90
50AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
� Tapping affluent segment ;
priority banking setup (2 Centres)
� Multi campaigns / product
launches for different segments
� Developing Wealth system to
enhance sales efficiency
� Grow sales force via additional
Wealth Specialists
Source : Company websites of peer banks / MEPS information * AmLife & AmG branches and agency offices
Note : Peer groups as at June 2011; AmBank Group as at latest practicable date
Products & Services
Wealth Management
Total #
ATMs (# 4 in no. of ATMs)
� ATMs at 7 Eleven
828
403
Electronic Banking Centers 146
Assurance/Insurance offices* 50
AmInvestment offices 14
banking services
� Comprehensive suite of retail
banking products & services
� Segment based solutions
� Accelerate payroll acquisition via
AmBank@Work
2,836 2,1181,183 828 498 358 295 205 172
MBB CIMB RHB AMMB PBB HLG EON AFFIN AFG
MBB CIMB PBB AMMB HLB RHB EON AFFIN AFG MBB CIMB PBB AMMB HLB RHB Cap EON Affin
Banking sector share price movement / target price and recommendations
Banking Sector Share Price Movement
94.1%
93.8%
66.3%
55.3%
40.2%
-0.5%
16.4%
-20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
RHB
HLFG
AMMB
CIMB
PBB
MBB
KLCI(Note: 18 May 2007 vs. 30 Jun 2011)
Ratings FY2007 FY2011
Am
Ba
nk
(M
)
RAM A2/P1/Stable AA3/P1/Stable
Fitch BBB-/F3/Stable BBB/F3/Stable
S&P BBB-/A-3/Stable BBB/A-2/Stable
Moody’s Baa2/P-3/Stable/D- Baa2/P-3/Stable/D
Capital Intelligence BBB-/A3/Stable BBB/A3/Stable
Am
Inv
est
me
nt RAM AA3/P1/Stable AA3/P1/Stable
Fitch BB+/B/Stable BBB/F3/Stable
S&P BB+/B/Stable BBB/A-2/Stable
MARC AA-/MARC-1/Stable AA-/MARC-1/Positive
Am
Isla
mic
RAM A2/P1/Stable AA3/P1/Stable
Upgraded ratings
Target Price and Recommendations
51AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
Target Price and Recommendations
15.09AMMB HOLDINGS BERHAD
TP: target price
TP & recommendations by MIMB & INTERPAC are based on previous Bloomberg information as there is no subsequent updateSell/Underperform/Fully valued/Reduce/Underweight
Hold / Neutral / Market performBuy/Outperform/Overweight/Add
P/EPS : EPS annualized Jan 11 – June 11 P/BV : BV as at 30 June 11Source : Bloomberg as at 1 July 2011
1.84
10.99P/ EPS =
P/BV = 1.84
10.99P/ EPS =
P/BV = 6.52Market Price: RM 6.52Market Price: RM
7.10
9
RM
(32%)
160Average TP :
Buy :
Hold :
Sell : 3
(57%)
(11%)
Average TP/Average CP: 1.09
7.10
9
RM
(32%)
16Average TP :
Buy :
Hold :
Sell : 3
(57%)
(11%)
8.30 7.90 7.90 7.80 7.71 7.60 7.50 7.50 7.50 7.45 7.40 7.35 7.30 7.30 7.30 7.15 7.00 6.90 6.90 6.90
6.70 6.60 6.40 6.38 6.31 6.11 6.06
5.55
19
Ma
y 1
1
1 J
ul 1
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1 J
ul 1
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20
Fe
b 1
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UBS CIMB TA RHB HLIB KIMENG CLSA MBB JP BNP KAF DEUT MACQ NOMURA MIDF BofAML CITI OSK UOB DBS ALLIANCE KEN MIMB AFFIN INTERPAC S.CHART ECM GOLDMAN
Glossary / Disclaimer of warranty and limitation of liability
Reported Performance
Reported performance refers to the financial performance as reported in the audited financial statements and disclosed to the market
One Offs
One 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 Performance
Underlying 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 Segments
Operating segments
• have more volatile and lumpy income streams, with the former a direct function of risk appetite
52AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
Operating 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 significant 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’s activities
current at the date of the presentation. It is information given in summary form and does not purport to
be complete. It is not intended to be relied upon as advice to investors or potential investors and does
not take into account the investment objectives, financial situation or needs of any particular investor.
These should be considered, with or without professional advice when deciding if an investment is
appropriate.
For further information, visit :
www.ambankgroup.com
53AMBANK GROUP – GROUP INVESTOR RELATIONS & PLANNING – INVESTORS PRESENTATION Q1FY2012
www.ambankgroup.com
Ganesh Kumar Nadarajah
Group General Manager, Group Investor Relations and Planning
Tel : +603 2036 1435 Fax : +603 2031 7384 e-mail : [email protected] or
+6012 2974799 [email protected]