Group Audited Financial Results for the Year Ended 31 December 2008

Transcription

1 Group Audited Financial Results for the Year Ended 31 December 2008 Analysts Briefing By Tan Sri Dato Sri Tay Ah Lek Managing Director 20 January 2009

2 22% Growth in Net Profit to RM2.58 billion RM million 3,500 3,379.2 Sen 80 3,000 3, ,500 2, , , ,000 1, , PBT PAT EPS 2

3 Quarterly Net Profit RM million Mar Jun Sep Dec ING Goodwill 3

4 Market Capitalisation Ranking Banks Market Capitalisation (RM bil) Share Price 31 Dec 08 1 PBB MBB CIMB RHB HLB AMMB

5 Financial Performance Net profit up 22% to RM2.58b 4Q08 RM mil 3Q08 RM mil % q-o-q 2008 RM mil 2007 RM mil % y-o-y Net Income 1, , , , Other Operating Income , , Other Operating Expenses , , Operating Profit , , Loan Loss Allowances of which General allowances (24) Pre-Tax Profit , , Net Profit , , EPS (sen)

6 Key Financial Ratios Net ROE 30.4% Q08 3Q08 Net Return on Equity* (%) Return on Assets (%) Cost Income Ratio (%) Overheads / Avg. Assets (%) Net Interest Margin on Yielding Assets** (%) * Based on average equity after deducting proposed dividend ** Excluding Negotiable Instrument of Deposits and Money Market Deposits which are on-lent to interbank. 6

7 Net Interest Margin 4 % Net Int Margin (Exclude funds from MMD and NIDS Issued) Net Int Margin Net interest income and financing income grew by RM570.8 m or 15% due to : steady loan growth (19% for the year) steady deposit growth (17 % for the year) continued improvement in asset quality Net interest margin will continue to be under pressure 7

8 Sustaining Growth of Net Interest and Financing Income RM million 1,150 1, , , % % % 1, % 1, % 1.6% 4.9% 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 8

9 Continued Improvement in Productivity & Efficiency Gross Loan per Employee (RM mil) Deposit per Employee (RM mil) PBT per Employee (RM 000) % RM ' Cost income ratio PBT per employee 9

10 PBT of Major Group Companies (excluding dividend from subsidiaries) Dec 2008 RM mil Dec 2007 RM mil Variance RM mil % Public Bank & Public Islamic Bank * 2, , Public Mutual Public Investment Bank (63.1) (65) Public Bank (L) (3.1) (11) Overseas Operations (130.5) (29) * The Islamic Banking business of PBB was vested to Public Islamic Bank on 1 Nov

11 PBT of Overseas Operations PBT of Overseas Operations decreased by RM130.5 million or 29% mainly due to: Additional provision made on impaired loans of the Group s Hong Kong operations, largely on loans granted prior to the acquisition of Public Bank (Hong Kong) Higher overhead expenses as a result of expansion of branch network and sales force, as well as active promotion of the PUBLIC BANK brand name in Hong Kong. RM73 million of non recurring income in respect of sales of investment and a corporate loan recovery was recognised in

12 Profit Contribution By Segments Variance RM mil % RM mil % Retail Operations 2, , Treasury & Capital Market Operations # Hire Purchase (16) Fund Management # Corporate Lending * (36) Investment Banking (55) Others 15.4 # 5.7 # >100 3, , General allowances (232.1) - (210.3) - Share of Results of Associates Head Office Expenses (18.2) - (58.2) - Profit Before Tax 3, , * Decrease in profit due to additional provision made on impaired loans of the Group s Hong Kong operations and SP made on certain corporate loan accounts secured by properties exceeding 7 years whereby full provision is made with zero value assigned to collateral. 12 # Less than 0.5% %

13 Fund Management Business RM billion % Gross New Sales Net Asset Value Market Share (%)

14 Wealth Management A) Bancassurance Product launched Type of Product Dec 08 Target 09 Single Premium 4 6 Regular Premium 4 8 Others 2 4 Total B) Structured Deposits & Other Deposits 3 Principal Protected Investment Products launched in 2008 Launched Gold Investment Account in C) Staff Strength Bancassurance Sales Executive Personal Financial Executive (PFEs)

15 Other Operating Income Dec 2008 Dec 2007 % 4Q08 3Q08 % RM mil RM mil y-o-y RM mil RM mil q-o-q Fee Income Unit Trust Income (18) (22) Of which Unit Trust Management Fee (16) Fee on Sale of Trust Units (68) (59) Stockbroking Income (32) (3) Investment Income * (50) Forex /Revaluation Gain (4) >100 Goodwill from ING > Others >100 Total 1, , * Included in the previous year ended 31 December 2007 were exceptional gain recognized on the sale of shares (including debt converted shares) amounting to RM85 million. 15

16 Other Operating Expenses % 4Q08 3Q08 % RM mil RM mil y-o-y RM mil RM mil q-o-q Personnel Costs 1, Establishment Costs (9) Marketing Expenses (20) (33) Administration Expenses Total 1, ,

17 Loan Loss Allowances RM million % % 0.35% 0.34% 0.29% 0.21% Credit Charge Credit Charge off % 0.8% 0.6% 0.4% 0.2% 0.0% The higher loan loss allowance in the year 2008 is mainly due to additional provision made on impaired loans of the Group s Hong Kong operations and SP made on certain corporate loan accounts secured by properties exceeding 7 years with zero value assigned to collateral. 17

18 Loan Loss Allowances (cont.) Credit Charge Off Ratio Loan Loss Allowances Variance RM mil Group Of which: domestic (1) overseas (2) (1) (2) The increase in domestic loan loss allowance mainly due to full provision made on certain corporate loans secured by properties exceeding 7 years with zero value assigned to collateral and also the inclusion of certain major loan recoveries in previous year. The increase in overseas loan loss allowances mainly due to additional specific provision made on certain impaired corporate loans of the Group s Hong Kong operations which were granted prior to the acquisition of Public Bank (Hong Kong), as well as the inclusion of a major corporate recovery amounting to RM25 million in

19 Loan Loss Allowances (cont.) 2008 RM mil 2007 RM mil Variance RM mil Hire Purchase (6.0) Retail Operations Corporate Lending 43.1 (49.7) of which domestic 22.0 (22.0) 44.0 overseas 21.1 (27.7) 48.8 Investment Banking (0.5) (26.8) 26.3 Total

20 Summary of Balance Sheet Variance RM bil RM bil RM bil % Total Assets Gross Loans and Advances: - including Islamic Financing Sold to Cagamas excluding Islamic Financing Sold to Cagamas Domestic Gross Loans and Advances Deposits from Customers Shareholders Funds Net Assets per Share (RM) Net Loans to Deposits Ratio (%)

21 Loans Growth 2008 (%) PBB 19 Industry Average* 11 Market Share: Nov % % % * Industry year-on-year loan growth as at 30 Nov

22 Loans Approved RM billion Total Vehicle Housing Other Retail Corporate 'Dec 08 'Dec 07 Vehicle Financing Housing Loans Other Retail Corporate - RM1.3 billion or 14.3% increase - RM1.4 billion or 19.9% increase - RM0.6 billion or 3.0% increase - RM6.1 billion or 56.7% decrease 22

23 Loan by Purpose 2008 RM bil % of total loans 2007 RM bil % of total loans Growth (%) Purchase of Landed Properties Residential Non-residential Purchase of Transport Vehicles Working Capital Personal Use Others Islamic Financing Sold to Cagamas (0.4) (0.4)

24 Fixed Rate & Floating Rate Loans 63% RM3.0b 2% RM41.7b 35% RM76.0b Fixed Rate Floating Rate Initial fixed rate, thereafter floating rate Duration : Modified duration is 1.5 years. 24

25 Asset Quality 3-months classification Gross NPL (RM mil) 1,210 1,404 Gross NPL Ratio (%) Net NPL Ratio (%) New NPL Formation (%) GP Ratio (%) Loan Loss Coverage (%)

26 Consistently Improving Asset Quality % Net NPL Ratio Q08 2Q08 3Q08 4Q08 % Gross NPL ratio(%) Net NPL ratio (%) 26

27 NPL Ratio for Key Lending Sectors Dec 2008 Sep 2008 Dec 2007 Gross NPL Gross NPL Gross NPL RM mil % RM mil % RM mil % Housing Loans Hire Purchase SMEs

28 Deposit Growth 2008 (%) PBB Total Deposit Core Deposit Industry Average* Total Deposit Core Deposit Market Share: Total Deposit** Core Deposit Nov % 15.2% % 13.7% % 12.1% * Industry annualized deposit growth is based on position as at 30 Nov ** Market share is computed inclusive of repo. 28

29 Total Deposits Growth RM bil RM bil RM bil (%) Demand Deposits Savings Deposits Fixed Deposits Money Market Deposits NIDs Average Cost of Deposits 2.41% 2.41% Others Total (exclude Negotiable Instrument Deposits & Money Market Deposits Issued) 29

30 Overseas Operations 2008 mil 2007 mil Variance mil % Loans Growth Public Bank (HK) Ltd - (HKD) 20,124 15,464 4, Public Finance Ltd (HKD) 4,246 3, Cambodian Public Bank Ltd - (USD) Deposit Growth Public Bank (HK) Ltd (HKD) 21,671 20,438 1,233 6 Public Finance Ltd (HKD) 3,755 2,532 1, Cambodian Public Bank Ltd - (USD)

31 Overseas Operations (cont.) Expansion of Branch Network Number of Branches as at May 06* Dec 07 Dec 08 Target 09 Hong Kong/China: Public Finance - Hong Kong PB(HK) - Hong Kong China Cambodia Laos Vietnam Sri Lanka * Date of acquisition of Public Bank (Hong Kong) 31

32 Dividend Proposed: Cash dividend 25% less 25% tax Share dividend 1 for every 35 shares 32

33 Dividend (cont.) Cash Dividend: Gross (sen) 2008 Net (sen) Interim (paid in Aug 08) Proposed: Final Proposed: Share Dividends (1 for every 35 shares) ** 33.7 * 25.3 Total * ** The value of the share dividend is derived based on market value of PBB local shares of RM8.85 as at 31 December The 33.7 sen is the equivalent value of a gross cash dividend. 33

34 Dividend (cont.) Value Enhancement from Treasury Shares: Total treasury shares Average cost per treasury shares Average period of holding of treasury shares Value enhancement per treasury share (EPS less holding cost) Total value enhancement (approximately) million RM year RM1.20 RM 200 mil 34

35 Dividend (cont.) Share Dividend Distribution: Part of PBB Group s prudent capital management strategy to preserve more equity capital whilst maintaining high dividend payout Resulted in RM850 million of current year s earnings being retained to add to equity capital Translate to 0.8% increase in core capital ratio and riskweighted capital ratio Total of 95.9 million treasury shares out of the existing treasury shares of million to be distributed, leaving a balance of 80.4 million treasury shares. 35

36 Dividend (cont.) Inclusive of share dividend Gross Dividend* (sen) Net Dividend payout (RM million) Dividend payout ratio (%) Dividend yield (gross) (%) * Deemed value of share dividend is derived based on the market value of PBB share of RM8.85 as at 31 December

37 Capital Adequacy Ratio Before Proposed Dividend Variance RM mil RM mil RM mil % - Equity Capital 8, , Hybrid Capital 1, , Total Tier 1 Capital 9, , General Allowance 1, , Subordinated Notes 3, , , Hybrid Capital Securities (61.8) (12) Total Tier 2 Capital 6, , , Total Capital Base 15, , , Risk-Weighted Assets 115, , , Capital Adequacy Ratio Group Bank Before (%) After (%) Before (%) After (%) Risk-Weighted Capital Ratio Core Capital Ratio

38 Impact of Adoption of FRS 139 and Basel II-IRB After Proposed Dividend Adjusted Capital Adequacy Ratio* Group Risk-Weighted Capital Ratio Core Capital Ratio Bank Risk-Weighted Capital Ratio Core Capital Ratio * Adjusted with the following: Impact of FRS 139 & Basel II-IRB General allowances are reclassified from Tier-2 to Tier-1 (in line with international rating agencies basis) 38

39 Capital Management PBB Group is closely monitoring its capital position to ensure healthy capital at all times. The Group s overall capital and core capital are expected to be further enhanced with the following: (i) (ii) (iii) (iv) Further issuance of debt capital, particularly non innovative Tier-1 capital and subordinated debt Adoption of FRS 139 with effect from 1 January 2010 Adoption of Basel II-Internal Ratings Based Approach Treasury shares available for sale or distribution 39

40 Prospects for Year 2009 To maintain earnings growth momentum leveraging on: continued loans growth above industry growth; to further expand depositor base; sustainable low NPL leveraging on PBB s prudent lending policy and proactive initiatives on loan recoveries & loan restructuring/rescheduling. To build on existing strengths (strong brand, market positions, capital strength and asset quality). Loan growth will continue to focus on SME, mortgage loans and HP financing. To grow other operating income, particularly on fund management, bancassurance business with ING, various other wealth management products and remittances. Further improve the productivity and operational efficiency. Continued expansion of overseas business particularly in Hong Kong & Indo-China. Continue to remain prudent and uphold its strong corporate governance and risk management policies. Continue to maintain strong liquidity at the current level. Proactive capital management to ensure healthy level of capital whilst maintaining high return to shareholders. 40

41 Thank you