AmBank Group - Strategy and Progress Update (ANZ Asia Tour)

Transcription

1 AMMB Holdings Berhad AmBank Group - Strategy and Progress Update (ANZ Asia Tour) Jun 2010 Ashok Ramamurthy Deputy Group Managing Director & Group Chief Financial Officer

2 Executive Summary Strategy & Progress Update Pre FY 2007 Scale & Presence Grow retail assets Lead in investment banking business Leverage fixed income trading FY 2008 to FY 2010 *ANZ Partnership * Build & Reposition Good progress made in strategic business transformation Streamlined organization and governance to support better decision making Implemented a number of high priority growth initiatives Post FY 2010 Accelerate Growth To become Malaysia s Preferred Banking Group with International Connectivity via Universal banking group platform Customer centric business models Regional connectivity via ANZ and world class IP and skilled resources 2

3 Top 5 Malaysian banking group with diversified businesses Retail Banking # 4 Ranked # 2 auto financier Ranked # 6 in housing loans Ranked # 7 in credit cards Ranked # 3 in personal financing Ranked # 5 in no. of branches & # 2 in ATM network coverage Business Banking # 5 # 5 in lending across SME and Trade Nationwide network with 4 regional business & 12 commercial centres Investment Banking # 2 Top 3 in Malaysian Ringgit Bond league, Stock broking and Funds Management Corporate & Institutional Banking # 5 New Division focusing on GLC s and MNC s Niche international businesses : Singapore, Indonesia & Brunei Other businesses include REITs and private equity Insurance Islamic Banking # 6 General # 7 Life # 5 Ranked # 6 in general insurance premiums Ranked # 3 in motor insurance premiums Ranked # 7 in life assurance premiums Strategic partners : IAG in general and Friends Provident in life insurance Syariah based banking products and services # 2 in Islamic credit cards ` Recently set-up Islamic funds management and banking business in Brunei 3

4 Good progress made in strategic business transformation ) Agreed on vision and aspirations Set up transformation strategy, agenda and top down targets Fixed HP business Improved asset quality ) Realigned growth towards profitable and viable segments only Fixed 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 ) Created deposits as a profit centre Realigned customer ownerships and focus across all Divisions Proactively strengthened capital and liquidity management Repositioned balance sheet for rising interest rates 4

5 Streamlined organization and governance to support better decision making ) Privatised AmInvestment Bank Consolidated Group support into Centres of Excellence Consolidated / simplified governance committee structures across entities 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 incentives aligned to performance via MTA ) Delivered 3 rd generation retail scorecards and new market risk models Commenced PD, LGD & EAD models for retail and non-retail Implemented a new FTP system aligned to balance sheet strategies Developed leadership bench-strength and succession planning 5

6 Implemented a number of high priority growth initiatives ) Implemented new profit centre based retail branch distribution model Accelerated CASA growth via aligning profitability and incentives ) Created a separate Corporate and Institutional Banking Division (CIB) Developed a new FX business in collaboration with ANZ Enhanced cash management offering via Net Payroll system Brought in a new life business partner, Friends Provident Fund plc ) Accelerated growth from GLC, GLIC and MNC Acquiring an infill general insurance business (MAA) and build-scale Developed a new Rates business in collaboration with ANZ 6

7 Transformational changes have delivered results FY07 FY08 FY09 FY10 Change 09 vs FY10) CAGR 07 FY10) Performance PATMI ROE ROA EPS -0.3 bil 0.7 bil 0.9 bil 1.0 bil 17.2 % 21.9% % 11.5 % 11.7 % 11.5 % -0.2 % flat ACE Ratio 3 : 5.8% ACE Ratio 3 : 8.2% % 0.82% 1.04% 1.13% 0.09% 0.38 % sen 28.2 sen 31.6 sen 34.7 sen 9.8 % 10.0 % 1 Growth Net Lending Customer Deposits 2 CASA 47.6 bil 52.6 bil 56.9 bil 64.4 bil 13.1 % 10.6 % 42.4 bil 55.8 bil 64.1 bil 70.3 bil 2 9.6% 18.4 % 5.3 bil 6.3 bil 6.8 bil 8.4 bil 23.9 % 16.3 % Risk, Capital & Funding Profile Net NPL Ratio RWCR LD Ratio 6.2 % 3.7 % 2.6 % 1.5 % -1.1 % -1.2 % 10.1% 14.1 % 15.2 % 15.8 % 0.6 % 1.4 % % 94.3 % 88.8 % 91.7 % 2.9 % -5.2 % Note : 1 CAGR based on underlying PATMI of RM556.9 mil in FY07 and RM1,009.4 mil in FY10 2 Includes Senior Notes of RM1.42 bil issued as at FY Banking entities only 7

8 AmBank: What is ahead Malaysia : Increasing optimism 1. Increasing global optimism but potential for continuing volatility 2. Acceleration in Malaysian economic recovery 3. GDP : Circa 8%, New Economic Model, monetary policies & better-thanexpected exports 4. OPR increase of 25 bps each in March and May 2010; further 25 to 50 bps hike expected in next 12 Industry : Expanding 1. Higher lending & increased capital market activity 2. Competitive with some irrational pricing 3. Stronger regional recoveries and NEM impact 4. Expecting Basel III pronouncements AMMB : Leverage tailwinds 1. Leverage strategic themes & improving economy 2. Better positioned for rising interest rates but Basel III could slow down achievement of ROE targets 3. Enhanced risk, governance and systems 4. Leverage regional ANZ connectivity for new businesses Notes : 1 Based on external reports 8

9 MTA 1 : Malaysia s Preferred Banking Group with International Connectivity Retail Banking* Develop a liability-led business, grow assets in targeted segments and expand wealth management Business Banking* Grow diversified & profitable assets, increase liabilities, fee base business & international trade finance leveraging on ANZ Corporate & Institutional Banking Deliver innovative and quality solutions, increase share of wallet, target high-impact and high-value clients and leverage ANZ for x-border businesses Investment Banking Deliver comprehensive solutions, lead in capital markets, funds management, stock broking and enhance domestic & overseas distribution via ANZ Markets & Treasury* Deliver substantive, integrated and client-led business with full suite of FX, Rates, Commodities and FI offerings with ANZ collaborations Life Assurance Leverage Friends Provident to deliver premium product & customer propositions & improve efficiencies General Insurance Leverage Insurance Australia Group to become a scale specialist in motor and niche specialist in commercial and non-motor lines * - Conventional + Islamic 1 - Medium Term Aspirations FY 2010 FY

10 AmBank Group well set to deliver accelerated growth 1. Favorable Malaysian economy 2. Foundations built for growth 3. Clear strategies and plans (MTA) 4. Regional connectivity with ANZ 5. Disciplined execution 10

11 APPENDICES 11

12 2010 Financials strong income growth and conservative provisions RM mil FY07 FY08 FY09 FY10 FY09 vs FY10 REPORTED Net interest income 1, , , , % Fee and comm % Inv & trading >100% Ins business % Others (0.9) >100% Total income 2, , , , % Expenses 1, , , , % PBP 1, , , , % Provisions 1, % PATMI (282.5) , % UNDERLYING 1 PATMI , % Note : 1 FY2009 underlying is reinstated for one-offs as at 31 March

13 Diversified and sustainable contributions from all divisions PATMI : Growth contributed by all business divisions RM'mil FY09 FY10 FY10 vs FY09 Retail Banking Division % Business Banking Division % Investment Banking Division % Corporate & Institutional Banking (CIB) % Assurance % Life Assurance % General Insurance % Operating Segments : Reported PATMI (51.6) (80.0) -55.0% Note : 1 Net Assets : net lending & net financing (net of IIS, SP and GP) 2 Life Assurance surplus is transferred into life policy shareholders fund in overall Group accounts FY09 results Favourable growth in FY10 Unfavourable growth in FY10 13

14 Asset quality now superior to industry average Asset Quality Indicators Gross and Net NPL, Loss Coverage and Charge to P&L % 75.1% 67.3% 56.6% % 60% 20% RM'bil Gross NPL Net NPL Loan Loss Coverage -20% -60% FY 2007 FY 2008 FY 2009 FY % 15% 10% 10.4% Net NPL ratio Gross NPL ratio FY10 / FY09 change : Gross NPL / NPF ratio Net NPL / NPF ratio Net Provisions charge % 1.3% 1.1% % 6.3% 5% Net provisions 3.19% charge 4.1% 3.7% 2.8% 2.6% 0.97% 1.5% 0.60% 0.88% 0% 14

15 Medium Term Aspirations key financials FY 07 FY 08 FY 09 FY 10 Actual FY 2011 Medium Term Aspirations (MTA) PATMI -RM282.5 mil RM668.5 mil RM860.8 mil RM1,008.6 mil % % CAGR ^ ROE -5.8% 11.5% 11.7% 11.5% 12-13% * FY13 onwards : 15 18%* CTI 37.1% 39.6% 43.3% 42.0% 42-43% 40-42% Net NPL Ratio 6.2% 3.7% 2.6% 1.5% circa 1.5% 1-1.5% Dividend gross / payout 5.0 sen / share (loss year) 6.0 sen / share 18.3% 8.0 sen / share 19.0% * 10.5 sen/ share 28.1% 35 40% payout * * 40% payout * * Adjusted for possible Basel III impacts on ACE ^ Previously 12-15% sustainable profit growth 15