AmBank Group. FY2009 3Q-9M Results. Cheah Tek Kuang Group Managing Director. AMMB Holdings Berhad 13 February 2009

Transcription

1 AmBank Group AMMB Holdings Berhad 13 February 2009 FY2009 3Q-9M Results Cheah Tek Kuang Group Managing Director

2 Agenda (Domestic) (603) (Overseas) Table of Contents Executive Summary Financials Update 3Q-9M FY09 Group Performance Outlook Additional Information : Financial Performance & Initiatives (By Segments) Market Comparison, ANZ, Channels, Service & Ratings Retail Banking Business Banking Investment Banking AMMB Group Relationship Banking Insurance Operating Segments 2

3 Record Profit but Challenges Ahead Another record profit performance for 9M FY2009 On track to deliver record performance for PATMI FY2009 (as per earlier guidance) Tough economic & less favourable market and credit conditions ahead, additional fiscal and monetary stimulus package may be required Malaysian banking system strong, with high loss absorption capacity and firm support from BNM AmBank Group.. FY2009 and beyond Restructuring completed and insurance partnership in place... getting stronger ANZ commitment to strategic partnership (1 of 11 globally AA-rated banks) At the insurance level, strategic partnership with IAG for General and Friends Provident for Life Strategies FY10-11: De-risk, Diversify and Differentiated Growth Well position to deliver medium term aspirations (3 5 years) but will take longer 3

4 Delivered Another Record Profit Performance 3Q-9M FY09 1 Change 2 Profit after Tax & MI RM mil 51.0 % Profit before Tax Return on Equity EPS (fully diluted) Net NPL Ratio RM mil 6.6 % 12.4% 1.0 % sen 30.1 % 2.7 % 1.3 % Net Lending RM 55,997 mil 10.7 % Customer Deposits RM 50,668 mil 9.5 % CASA RM 6,726 mil 9.6 % RWCA 14.3% 0.1 % Note : 1 9M FY09 9 months of financial year ending 31 March 2009, ie April 2008 December Change in comparison to 9 months of financial year ended 31 March 2008 (April 2007 December 2007) 4

5 Targeted Loans Growth, Improved Asset Quality, Insurance Transformation Loans growth of 10.7% Financials Deposits growth of 9.5% with CASA growth of 9.6% Asset Quality Net provisions charge down to 0.5% from 1.2% (9MFY2008) Net NPL ratio down to 2.7% from 4.0% (9MFY2008) Corporate Developments Insurance business transformation : Segregation of composite license between life and general Specialisation to streamline insurance operations Entry of new strategic partner into life insurance On-going acquisition of MAA s general insurance business & Takaful stake Established FX & derivatives unit in collaboration with ANZ 5

6 Improved PATMI Underpinned by Retail & Business Banking Profit after Tax & MI RM mil 9MFY09 9MFY09 vs Business Performance Retail Banking Division Business Banking Division Investment Banking Division Relationship & Regional Banking % +37.4% -72.0% -28.3% Investment banking performance reflecting weak equity and capital market sentiments (industry phenomenon) Assurance impacted by higher claims Operating segments : Assurance Operating Segments : Reported PATMI % % 9M FY08 9M FY09 9M 09 vs 08 Underlying % PAT One-Off s % MI % Net Lending Growth RM mil 9MFY09 9MFY09 vs Business Performance Retail Banking division : - Net Loans - Net Lending growth % 1 Business Banking division : - Net Loans - Net Lending growth % 1 40, % 6, % 42, % 9, % +3.1% -2.7% +40.7% +1.2% Retail focus on profitable segments Good growth in business, corporate & SME loans in targeted segments results Favourable growth in 9MFY09 Unfavourable growth in 9MFY09 Note : 1 Growth from December 2007 to December

7 Financials on Track to Deliver Record Performance for PATMI FY2009 Expected Financial Outcome Produce superior revenue growth : 4 5% revenue growth for business segments Negative growth for operating segments Improve asset quality and provisioning ratios : Net NPL ratio at circa 2.5% Provisions charge <0.8% Lower group funding costs : Reduce funding cost by 5 10 bps Improve efficiency and return to shareholders : ROE at 11.5% % Cost-income ratio circa 45% Divisional Performances Retail Banking On track to achieve PAT target driven by lower provisions Business Banking Good lending growth in target segments On track to achieve PAT target driven by income growth and lower provisions Investment Banking PAT impacted by weak equity and debt capital markets Reduce focus on origination business and diversify income streams Relationship & Regional Banking PAT impacted by lower contributions from international stockbroking business Sound lending growth to higher quality credits Assurance PAT impacted by higher claims Operating Segments Improved profits due to provision recoveries partly offset by trading losses Dividends at 7% - 8% Note 1 : Forecast PATMI for FY2009 is 10% above market consensus Source : Bloomberg, consensus statistics of Net Income dated 15 January

8 9MFY09 Group Performance

9 Sound Profit, despite Income & Expense Pressures REPORTED Income Expenses PBP Provisions PBT PAT RM mil 2, , , , , , % +7.6% -13.7% -48.6% +6.6% +17.9% PATMI % UNDERLYING Income Expenses PBP Provisions PBT PAT RM mil 2, , , MFY09 9MFY09 2, , , MFY09 vs 9MFY09 vs -2.0% +8.7% -10.9% -44.7% +8.1% +8.6% PATMI % Business Performance Income : Investment Banking income adversely impacted by capital market conditions Retail and Business Banking performances meeting expectations Expenses Reflects salary adjustments, insurance claims and ongoing investments Cost lower in Q3FY09, -4% vs Q1 FY09 Provisions : Lower provisions contributor to profit growth Improved credit risk, asset quality, NPL collections and recoveries management One-off impacts : RM mil 9MFY09 Income Expenses Provisions PBT Tax PAT MI (AIGB privatisation) PATMI results Favourable growth in 9MFY09 Unfavourable growth in 9MFY09 9

10 Balance Sheet Fundamentals Looking Good REPORTED RM mil 9MFY09 9MFY09 vs Business Performance Balance Sheet - Lending Gross loans 55, , % Net loans 50, , % Balance Sheet - Deposits Customer Deposits 46, , % Low Cost Deposits 6, ,726.3 Low-Cost Proportion 13.3% 13.3% LD Ratio * (customer deposits only) 109.3% 110.5% LD Ratio * (+ deposits with non-bank FI s) 88.8% 89.5% Asset Quality Ratios Gross NPL Net NPL 7.6% 4.0% 5.2% 2.7% +9.6% 0.0% +1.2% +0.7% -2.4% -1.3% Loan Loss Coverage 68.9% 77.5% +8.6% Good net lending growth despite auto financing focus being only on profitable segments Normalised customer deposits growth ~12.7% but reported figures impacted by : single customer limits postvesting corporate deposits withdrawal of ~RM1.5b repayment of large more expensive corporate deposits following reduction in our HFT and AFS books Asset quality continues to improve. Net NPL s down and loan loss coverage up to industry average * LD ratio based on Net Loans (net specific and general allowance) results Favourable growth in 9MFY09 Unfavourable growth in 9MFY09 10

11 Higher Returns and Earnings Ratios REPORTED 9MFY09 9MFY09 vs Business Performance Profitability Ratios (annualised) ROE FY 2008 = 11.2% ROE (post-tax) 11.4% 12.4% +1.0% ROA FY 2008 = 1.00% ROA (post-tax) EPS (fully-diluted, sen) 0.99% % % +30.1% EPS FY 2008 = 28.2 UNDERLYING 9MFY09 9MFY09 vs Business Performance Profitability Ratios (annualised) ROE (post-tax) ROA (post-tax) EPS (fully-diluted, 15.5% 12.1% -3.4% 1.05% 1.05% 0.0% sen) % ROE FY 2008 = 12.2% ROA FY 2008 = 1.11% EPS FY 2008 = 30.7 results Favourable growth in 9MFY09 Unfavourable growth in 9MFY09 11

12 Improving Margins (Focus on Profitable Segments) and Cost Pressures REPORTED 9MFY09 9MFY09 vs Business Performance Efficiency Ratios & Others Cost-Income : Net Interest Margin % 2.99% +0.29% Revenue growth impacted by tough trading conditions Cost-Income % 43.5% +4.4% CTI to stay at circa 45% for FY2009 due to income growth being impacted by trading outcomes and higher insurance claims Fee Income / Total Income 16.0% 14.7% -1.3% (RM404.1mil) (RM355.0mil) Expense growth will be managed at lower levels in the final quarter of FY 2009 and moving forward UNDERLYING Efficiency Ratios & Others Net Interest Margin % 9MFY % 9MFY09 vs +0.36% Net Interest Margin : Higher NIM mainly due to re-pricing of loan yields, interest recoveries on NPL s and loan step-up rates; NIM outlook looking stable Cost-Income % 44.0% +4.0% Reduction in OPR in November 2008 & January 2009 benefitted the Group results Favourable growth in 9MFY09 Unfavourable growth in 9MFY09 Note : 1 Net Interest Margin includes Net Income from Islamic Banking business, as follows : Reported and Underlying : 0.56% 9MFY % 2 Cost-income excluding insurance claims 12

13 Positive Trends since 2007 for NIM, Provisions and ROE Total Group Level - Reported Total Group Level - Underlying 4,000 3,000 2,000 1,000 0 RM'mil 3,028 1, % -5.8% 3, % 620 2, % 1.00% 1.09% 265 FY2007 FY2008 9MFY % 4% -4% -12% 4,000 3,000 2,000 1,000 0 RM'mil 3, % 0.83% 940 Total income Provision ROE ROA 3, % 12.1% 1.11% 585 2, % 263 FY2007 FY2008 9MFY2009 (FY2007 and FY2008 as per previous market packs) 16% 8% 0% -8% Gross Loans & NIM % 6.3% 6.6% 8.5% 7.4% 2.5% 2.7% 3.0% 3.0% 3.0% Y-o-Y growth 8% 4% % to Total Income 41.0% 40.0% 36.2% 28.2% 20.0% 13.1% 15.9% 16.0% 16.8% 19.7% 34.0% 11.6% % -4% 0.0% 13.7% 8.0% -2.7% 9.2% 50 FY07 FY08 Q1FY09 H1FY09 9MFY09-8% -20.0% -12.8% RM'bil Y-o-Y growth NIM Non-Interest Inc Fee Inc Trading & Investment Inc Note : Trading & Investment Income includes forex gain / loss Non-Interest Income comprises Fee Income, Trading & Investment Income, Income from Insurance Business and Other Income Total Income includes Net Interest Income, Income from Islamic Banking and Non-Interest Income This slide was updated on 5 March

14 Improving Customer Deposit Profiles CUSTOMER DEPOSITS BY SOURCES CUSTOMER DEPOSITS BY TYPE Individuals Government Biz enterprises Others FD + NID Savings Current Others Others Biz enterprises Government CASA 12.6% 13.1% 13.3% composition Total 42.4b 47.8b 50.7b Others Current Savings Individuals FD + NID RM'bil Mar 07 Mar 08 Dec 08 Sticky deposits grew by 9% (comprises deposits from individuals and government) RM'bil Mar 07 Mar 08 Dec 08 Growth Dec 07 Dec 08 : Deposits from Customers = 9.5% CASA growth = 9.6% CUSTOMER DEPOSITS : INTEREST REPRICING PROFILE DEPOSITS of BANKS & FINANCIAL INSTITUTIONS 0-3 mths 3-12 mths 1-5 yrs Non-interest sensitive 9.5% 17.3% 19.6% 5.7% 4.2% 28.9% 27.3% 29.2% Non - sensitive 1 5 years 3 12 months Banks Merchant banks BNM Other FI's Total 17.4b 15.1b 17.2b Other FI s 61.6% 49.7% 47.0% 0 3 months BNM Merchant Banks Mar 07 Mar 08 Dec 08 RM'bil Mar 07 Mar 08 Dec 08 14

15 Loans Growth Focusing on Higher Profit Segments GROSS LOAN MOVEMENT (before netting Islamic financing sold to Cagamas) % Mar 08 Dec % Note : / - annualised growth from Mar08 to Dec RM bil Hire Purchase MOCL +24.3% Business Banking +1.2% Institutional Lending +8.6% AFSB -11.9% +44.4% -14.5% +16.0% % Group Loan Credit Cards LOC Co-Op + Rehab SMART Loans composition, % : Dec Mar Others Note : 1 AFSB Asset Financing & Small Business (includes equipment financing and financing for small-medium enterprises) 2 Coop Personal financing to government servants via cooperatives 3 SMART Share margin financing 4 Others include AMCB GROSS LOANS by CUSTOMER TYPE 2.8% 2.2% 2.4% 68.2% 66.7% 65.6% 9.5% 9.9% 11.1% 19.6% 21.1% 21.0% Mar 07 Mar 08 Dec 08 Others Individuals SME Business Enterprises Others Individuals SME Business GROSS LOANS by INTEREST RATE RM'bil Mar-08 Dec-08 Fixed rate 62% 63% Variable rate 38% 37% Note : Fixed Rate comprises mainly hire purchase receivables, and other fixed rate loans Variable Rate comprises BLR-plus, cost-plus and other variable rate loans Note : Business Enterprises comprises domestic business banking and SME comprises domestic small medium enterprises Others include other non-bank financial institutions, government & statutory bodies, other domestic and foreign entities 15

16 Trend on NPL & Provisions : Improving Asset Quality Indicators 100% % % % % % % 80% 60% 40% 20% % 13.8% 9.6% 6.2% 3.7% 2.7% 0% % 0 RM'bil FY2004 FY2005 FY2006 FY2007 FY2008 9MFY2009 Gross Loans Gross NPL Net NPL ratio Loan Loss Coverage -40% RM'bil FY2004 FY2005 FY2006 FY2007 FY2008 9MFY2009 Gross Loans Net Loans Gross NPL Net NPL Net Provisions Charge 2.24% 1.92% 1.73% 3.18% 0.98% 0.53% Gross NPL ratio 14.78% 17.43% 12.44% 10.35% 6.35% 5.24% Net NPL ratio 10.9% 13.8% 9.6% 6.2% 3.7% 2.7% Loan Loss Coverage 39.3% 32.2% 36.7% 56.6% 67.3% 77.5% Note : 9MFY2009 is based on annualised ratio of net provisions charge from 9MFY2009 (Dec 08 YTD) position 16

17 Trend on NPL Formations % New NPL to Gross Loans 8.00% % PL conversion to Gross Loans 5.00% 6.00% 4.00% 2.00% 4.00% 3.00% 2.00% 1.00% 0.00% FY2004 FY2005 FY2006 FY2007 FY2008 9MFY % FY2004 FY2005 FY2006 FY2007 FY2008 9MFY2009 % Recoveries to Gross Loans 3.00% % Write-off's to Gross Loans 5.00% 4.00% 2.00% 3.00% 1.00% 2.00% 1.00% 0.00% FY2004 FY2005 FY2006 FY2007 FY2008 9MFY % FY2004 FY2005 FY2006 FY2007 FY2008 9MFY2009 Note : 9MFY2009 is based on annualised ratios from 9MFY2009 (Dec 08 YTD) position 17

18 Better Asset Quality Gross NPL by Segments Gross Loans and NPL ratio RM bil Retail Banking Business Banking Mar 2008 Sep Credit & Leasing 0.2 Investment Banking RM'bil % 5.2% Mar 08 Dec 08 12% 10% 8% 6% 4% 2% 0% Gross Loans net of IIS Gross NPLs net of IIS Gross NPLs / Gross Loans Ratio (before deducting Islamic loans sold to Cagamas) 5,000 4,000 3,000 2,000 1,000 - RM mil Non-Performing Loans Note : 1 Historical NPL s comprise legacy nonperforming loans from entities acquired by the Group prior to and during 2002, and Arab-Malaysian Credit Berhad NPL Ratios 3.3% 2.1% 38.8% 17.7% 1,836 1,156 1, Gross NPL Net NPL Gross NPL Net NPL Continuing Business Historical Business Net Loans and NPL ratio 70 7% % 50 5% % 4% % 3% 20 2% % - 0% RM'bil Mar 08 Dec 08 Net Loans Net NPLs Net NPLs / Net Loans Ratio (3 mths) Gross NPL net of IIS Net NPL 18

19 Stronger Capital Base, Capacity to Grow Capital base AMMB Holdings Capital ratio by legal entity Tier 1 Capital Less: Goodwill Deferred tax assets - net Total Tier 1 Capital Tier 2 Capital Less: Borrowing restriction Capital Base RWA Mar Mar Dec 08 RM'bil RM'bil RM'bil Dec 2008 AmInvestment Bank (Note 1) AmBank (M) + AMIL (Note 2) AmIslamic AmBank (M) Group Capital Base Risk-weighted Tier 1 Ratio RWCA Ratio Assets RM'bil RM'bil % % % 18.1% % 12.2% % 14.9% % 12.6% Note 1: Excludes AMIL in the current financial year as AMIL became a wholly-owned subsidiary of AmBank in April Note 2: Includes AMIL in the current financial year as AMIL became a wholly-owned subsidiary of AmBank in April Capital adequacy ratio AMMB Holdings Riskweighted capital ratio Tier 1 Cap Tier 2 Cap 12.6% 8.7% 3.9% 13.5% 8.2% 5.3% 14.3% 9.4% 4.9% Improved capital adequacy ratio BASEL II operational RWA impact of RM4.6bil AIGB privatisation net impact of RM1.4 bil outflow 31 Mar Mar Dec 08 Capital adequacy 9M FY09 computed under Basel II 19

20 Outlook

21 Economic and Market Conditions are Getting Tougher Real GDP forecast for 2009 is currently estimated at circa -1.3% Inflation may ease to circa 2.5% for 2009 Consumers adjust to higher costs of living Subject to falling commodity prices Lending growth projected to taper off to circa 3% in 2009 BNM OPR currently at 2%, further 50bps cut possible in 2 nd half of 2009 should Malaysia enter technical recession AmBank s BLR at 5.5% (with effect from 10 March 2009), further reduction expected SRR at 1.0% (announced 24 February 2009; previously 2.0%) Source : Internal economic research This slide was updated on 5 March

22 Our Focus for FY2010-FY2011 is: De-risk, Diversify and Differentiated Growth De-risk Diversify De-risk + Diversify Deposits Differentiated Growth High Low Moderate Auto Financing Mortgage Origination BIZ - SME Assurance Life Capital Markets Advisory Assurance General AFSB Cards FX & Derivatives Coop FUM & Broking BIZ- Transactional Trade FX 22

23 Achieving Medium-Term Aspirations (3 5 years) will take Longer FY 07 FY 08 FY 09 Medium Term (3 5 years) PATMI Reported : -RM282.5 mil Underlying : RM520.2 mil Reported : RM668.5 mil Underlying : RM836.2 mil Circa 30% growth Circa bil ROE Reported : -5.8% Underlying : 10.4% Reported : 11.2% Underlying : 13.8% 11.5% % 17% - 20% Circa 45% CTI 1 Reported : 37.4% Reported : 39.6% circa 40% Net NPL Ratio Reported : 6.2% Reported : 3.7% 2% - 3% 2.5% FY 2009 Focus Improve Retail asset quality and pricing for risk Targeted lending and income growth for Business Banking and Relationship Banking Reduce focus on origination and diversify income streams for Investment Banking Grow distribution footprints De-risk FY 2010 FY2012 Action Plans Lower trading volatilities Carefully originate Investment Banking transactions Enhance risk management governance and infrastructure Enhance NPL management Capital preservation Diversify Increase cross-sell Leverage Fx & derivatives Enhance CASA via transactional relationships Differentiated profit growth Targeted lending growth in higher quality segments, leading to reduced lending concentrations Leverage new business (eg Islamic insurance, Fx & derivatives) Note: The achievement of medium-term aspirations is barring negative economic impacts lasting longer and deeper Assumptions : System s lending growth of circa 5% and GDP of 0%-2.5% progressively over the next 4 years Underlying performance of PATMI and ROE for FY07 and FY08 adjusted for one-off impacts including restatement as if AmInvestment Group Berhad was a 100%-owned entity of AMMB 1 CTI excludes all insurance activities (different measurement) The original CTI guidance for FY09 as stated in the AmBank Group Q1FY09 market pack of circa 50% is reinstated to circa 45% 23

24 APPENDIX

25 Business Segment Performance

26 Retail Banking Division RM mil 9MFY09 9MFY09 vs Income Expenses 1, , % +8.1% Good profit growth, benefiting from lower provisions and sustained revenue PBP % Provisions PBT PAT PATMI Gross loans 42,654.4 Net loans ROA (annualised PAT / average net loans) CTI -41.6% +24.0% +25.6% +25.6% 41, , % Gross NPL (net IIS) Ratio : 4.03% 2, , % Net NPL Retail Deposit Low Cost Deposit Ratio : 3.15% 40, , , , % 35.0% 42, , , , % 36.8% +3.1% -3.5% +11.4% +5.8% -0.1% +1.8% Asset quality improved via strong credit risk management, collections and recoveries management Retail Banking s Aspirations : To be recognised as leading financial services group in Malaysia, with top 3 market positions in key business segments Core Strategic Agenda : Reduce Cost of Funds, focusing on building CASA deposits (a 3-4 year journey) Sustainably manage asset quality via stringent credit scoring systems and top of class collections & recovery process Lift ROE on HP book to 12% by focusing on profitable segments Focus on mortgage (mid market segments) Profitably improve market position in select business segments Loan Loss Coverage* 67.0% 60.1% -6.9% (* decrease in specific provision balance) results Favourable growth in 9MFY09 Unfavourable growth in 9MFY09 26

27 Business Banking Division * RM mil 9MFY09 9MFY09 vs Income Expenses % +27.1% Significant income growth fuelled by SME loans and unbudgeted interest recoveries PBP Provisions PBT PAT PATMI % % +35.6% +37.4% +37.4% Gross loans 6, % Net loans Gross NPL (net IIS) Net NPL Biz Banking Deposits ROA (annualised PAT / average net loans) CTI Ratio : 1.26% Ratio : 0.18% 6, , % 30.3% 9, , , % 25.3% +40.7% +32.4% -75.6% +69.6% Low-Cost Deposits , % -0.1% -5.0% Business Banking s Aspirations : Entrench growth & businesses in high-growth industries (contract manufacturing government, oil & gas, domestic trade, agriculture) in national development corridors Grow fee income (FX, Remittance, Trade & Cash Management Services) Cash management business to grow noninterest income and deposits base Strategic agenda : Focus on repeat businesses Build affinity and business rapport Expand referrals from existing customers Increase utilization of facilities Enhance debt management strategies Improve operational efficiency, IT platform and MIS Loan Loss Coverage 135.2% 205.8% +70.6% * Excludes Group Loan Rehabilitation results Favourable growth in 9MFY09 Unfavourable growth in 9MFY09 27

28 Investment Banking Division* RM mil 9MFY09 9MFY09 vs Income Expenses % +8.4% Weak capital market and lower stock market turnovers have impacted adversely on income for 9MFY2009 PBP Provisions PBT PAT PATMI % % -72.0% -72.0% CTI 37.3% 70.5% +33.2% Assets Management (FUM) , , % -11.8% * Includes Debt Capital, Equity Capital, Structured Finance, Derivatives, Broking & Futures, Funds Management, Private Banking Excludes Trading & Treasury, Shareholders Funds, Corporate & Shared Services which are disclosed under Operating Segments Investment Banking s Aspirations : Equity & Debt Capital Markets introduce new products, meeting needs of large corporate clients Funds Management enhance private banking, wealth management & advisory services Strategic agenda: Undertake initiatives to strengthen franchise Optimize utilization of risk-return equation Improve fee based income Enhance products and services Build image through differentiated offering and adopting best-in-class practices Improve operational efficiency, IT platform and MIS systems results Favourable growth in 9MFY09 Unfavourable growth in 9MFY09 28

29 Relationship and Regional Banking Division* RM mil 9MFY09 9MFY09 vs Income % Lower income mainly in International Business Expenses % PBP % Relationship & Regional Banking s Aspirations : Provisions % Deepen and expand Corporate & Institutional Banking relationships PBT % Harness Group synergies PAT % Strategic agenda : PATMI % CTI 44.5% 57.4% +12.9% Enhance sales capabilities Increase contribution from niche International Businesses Seek out Islamic partners for Islamic financing Managing costs for higher efficiency * Includes Corporate & Institutional, International Businesses, Regional Branch Centre results Favourable growth in 9MFY09 Unfavourable growth in 9MFY09 29

30 Assurance Income RM mil M1FY MFY09 vs +12.6% Higher income mainly from general insurance premium Higher claims impacting profitability Expenses % Assurance s Aspirations : PBP Provisions % -53.4% Be the top insurer preferred for service Provide insurance service as simple and conveniently as possible PBT PAT PATMI % -15.5% -15.5% Increase shareholder value via business growth and improve productivity Strategic Agenda: Completed separation of composite life and general insurance licences Leverage on new life insurance business partner CTI 81.1% 86.2% Life business assets General business assets 1, , , % +16.6% +32.7% Due diligence ongoing to acquire general insurance business Increase penetration of bancassurance business and non-group business Expand marketing channels & branches Build motor database for pricing & market segmentation. Upgrade agency force results Favourable growth in 9MFY09 Improve operational efficiency, IT platform and MIS systems Unfavourable growth in 9MFY09 30

31 Group Operating Segments RM mil 9MFY09 9MFY09 vs Business Performance Income Expenses PBP Provisions PBT % -13.7% -59.6% -82.9% % Lower income mainly due to adjustment for unbudgeted hedge accounting profit and lower deposit insurance premium Treasury and Proprietary Trading (tough trading conditions) Loan Rehab units (recovery rate as scheduled) Shareholders fund, Corporate & Shared Services (higher income from equity) PAT PATMI % % One-off impacts are included in Operating Segments Includes : additional provisions, reduction in deferred tax assets, taxation impacts Refer appendix for more details Comprises : Treasury & Proprietary Trading, Group Loan Rehabilitation, Corporate & Shared Services results Favourable growth in 9MFY09 Unfavourable growth in 9MFY09 31

32 Islamic Banking RM mil 9MFY09 9MFY09 vs Income Expenses % +8.8% Performance reflective of commercial banking PBP % Provisions PBT PAT PATMI Net loans ROA (PAT / average net loans) CTI % +41.7% +75.9% +75.9% Gross NPL (net IIS) Ratio : 2.52% % Net NPL Customer Deposit Low Cost Deposit Ratio : 1.31% 7, , % , , % 42.9% , , % 39.7% -16.7% +37.3% +22.0% +0.6% -3.2% Islamic Banking s Aspirations : To become Islamic bank of choice and ensure high degree of value for customers and stakeholders Strategic Agenda : Establish international currency business unit, strengthen business in capital market and funds management Implement debt-equity program (musyarakah) Strengthen retail segment, focusing on personal financing, cards and housing loan Execute deposit business programs and expand deposit business with government and government linked companies Expand product tie-ups and alliances with third parties Loan Loss Coverage 93.0% 108.6% +15.6% * Results incorporated under respective business divisions results Favourable growth in 9MFY09 Unfavourable growth in 9MFY09 32

33 Overview of one-offs Impacts from changes in accounting and provisioning policies, prior period catch-ups, divestments, strategic investments and tax rate changes 9M FY M FY 2009 Hedge accounting impacts Non core and prior period operating incomes, eg deposit insurance premium, divestment of general insurance business Strategic investments & prior period expenses eg ANZ Partnership, AIGB Privatisation funding cost Provisioning policy changes and catch ups, eg 5 and 7 year rules Net Impact on Profit before Tax (RM mil) Write down of deferred tax assets & prior period tax catch ups, eg corporate tax rate reductions Tax impact on one off items above Impact of one offs on minority interests Net Impact on Profit after Tax (RM mil) (30.3) 22.0 Net Impact on Profit after Tax and MI (RM mil) (154.4)

34 Corporate Structure

35 Key Financial Statistics as at 31 December 2008 RM 000 FY2008 9M FY09 Share Capital 2,722,970 2,722,970 Reserves 4,446,623 4,717,123 Shareholders Equity 7,169,593 7,440,093 Less: Intangible Assets (1,801,985) (1,812,650) NTA 5,367,608 5,627,443 NTA Per Ordinary Share (RM) Net Asset Per Ordinary Share (RM) Profit Before Tax 1,194, ,280 Profit After Tax and MI 668, ,006 ROE Pre-tax (%), annualised ROE After tax & MI (%), annualised Market Price (RM) Price to Book [NTA / Net Asset] 1.75 / / 0.90 EPS (sen) basic, annualised Dividend (gross sen / share) Convertible Instruments Outstanding 31 Dec 2008 Exercise Price Expiry Date Held By Interest Rate Exchangeable Bonds 194,915,254 RM May 2017 ANZ Funds Pty Ltd 5% pa Year 1 to Year 5 5.5% pa Year 6 to Year 10 Paid-up capital as at 30 Dec 2008 = 2,722,969,590 Ordinary shares (after CPS conversion by ANZ) 35

36 Banking Sector Share Price Comparison Index 140.0% 120.0% Index Movement / index change at close of 08 Jan 09 vs 18 May % 100% base index PBB 9.1% RHB 11.1% 80.0% AMMB 32.3% (RM2.66) KLCI Index 32.9% 60.0% HLFG 33.5% BCHB 42.4% 40.0% M ay-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 M ar-08 Apr-08 M ay-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Date MBB 52.5% 18 May 07 MBB BCHB PBB RHB AMMB HLFG KLCI Index (strategic partnership with ANZ) 08 Jan 09 36

37 Shareholding Structure as at 31 December 2008 AmcorpGroup Bhd ANZ Funds Pty Ltd Employees Provident Fund Board Public 17.70% 19.17% 13.50% 49.63% AMMB Holdings Bhd 100% AMFB Holdings Bhd 100% AMAB Holdings Sdn Bhd 100% AmBank (M) Berhad 100% AmIslamic Bank Bhd AmInvestment Group Berhad 100% 70%* AmLife Insurance Berhad * Friends Provident Fund PLC 30% 51%^ AmG Insurance Berhad ^ Insurance Australia Group Ltd 49% Ranked No. 23 with market capitalization of RM6.73 billion on Bursa Saham Malaysia as of December ANZ s current shareholding is at 19.2%. ANZ has the right to exercise a further 5% via exchangeable bonds subject to BNM s approval. Foreign Shareholding excluding ANZ Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec % 41.10% 38.14% 36.95% 37.15% 34.39% 30.08% 37

38 Corporate Developments December 2008 : completed restructuring of insurance business : Split composite business of AmLife Insurance Bhd (AmLife, formerly AmAssurance Bhd) via transfer of general insurance business to AmG Insurance Bhd (AmG) Before Restructuring Post Restructuring AMMB Holdings Bhd AMMB Holdings Bhd 100% AMAB Holdings Sdn Bhd 70%~ AmAssurance Berhad ~ Insurance Australia Group Ltd 30% 70%* AmLife Insurance Berhad * Friends Provident Fund PLC 30% 51%^ AmG Insurance Berhad ^ Insurance Australia Group Ltd 49% Shareholding of AmG and AmLife restructured via : Increase of equity interest by 19% of Insurance Australia Group (IAG) in AmG Insurance, total 49% Sale of previous 30% equity interest of IAG in AmLife to AMMB On-sale of 30% equity interest in AmLife held by AMMB to Friends Provident Fund plc AMMB in progress of acquiring : General insurance business of Malaysian Assurance Alliance Bhd 4.9% stake in MAA Takaful Bhd (Islamic insurance business) 38

39 Corporate Developments January 2009 : announcement of proposal for Bumiputra issue of 96,300,000 new ordinary shares of RM1.00 Proforma share capital information upon Special Issue shares tabulated as follows : No. of Shares Issued and fully paid-up ordinary shares : 31 Dec 08 2,722,969,590 Add : Special issue shares (N1) 96,300,000 Enlarged share capital of AMMB Holdings Berhad 2,819,269,590 N1 : The Special Issue Shares proposal has received approval from Bank Negara Malaysia, currently in process of submitting proposal for approval from the Securities Commission Proforma substantial shareholders information upon Special Issue shares, and upon conversion of exchangeable bonds by ANZ : Substantial shareholders Existing Proforma 1 Proforma 2 As at After special shares issue After conversion of exchangeable bonds (N2) Direct ( 000) % Direct ( 000) % Direct ( 000) % Total 2,722, ,819, ,014, ANZ Funds 521, , , AmcorpGroup 482, ,854 (N3) ,854 (N4) EPF 367, , , N2 : Exchangeable bonds expiring on 18 May 2017 with exercise price aof RM2.95, currently held by ANZ N3 : Assuming Amcorp subscribes for 81.9 million special issue shares such that its shareholding in AHB does not exceed 20% N4 : Assuming exchangeable bonds exchanged for 194,915,254 new shares in AHB subject to BNM s approval 39

40 Group Details and Additional Segment Information ANZ ANZ Distribution Channels Customer Service Ratings

41 Key Group Information Highlight : ANZ Strategic Partnership ANZ is the only Australian bank to have been in the Asian region for 40 years, with strategic banking partnerships across 7 countries AmBank is ANZ s single largest investment in Asia, with a total investment of US$696 million This is equivalent to 51% of total investments to date China Laos + Vietnam Cambodia Philippines Malaysia ANZ has provided key resources and support to AmBank Indonesia Board Director Dr. Robert John Edgar Director Alex Thursby Director Mark Whelan Senior Management Management Group CFO & Deputy Group MD Ashok Ramamurthy Head of Capital & Balance Sheet Management Neville Mallard Chief Risk Officer Andrew Kerr Head of Retail Distribution & Deposits Brad Gravell Chief Operating Officer Head of FX & Derivatives Steve Kelly TBC Head of Market Risk Jonathan Manifold Credit Risk/ Portfolio Mgt Glenn Saunders Head of Systems Accounting Ignatius Lim Project Director Mark Lockhart Head of Risk Infrastructure Chung Fui Ken Program Director Retail CoF Christopher Shields ANZ is committed to AmBank s long-term success and aspirations 41

42 Key Group Information Highlight : Delivery Channels Key Objectives Expand Footprint Improve Sales Productivity Improve Operations Efficiency Stabilize and Improve Service Level 24 branches 20 branches 15 branches 24 branches 18 branches 12 branches Business Units Key Strategic Initiatives Branch Banking 10 New Branches + 4 Sales Kiosks Increase Sales by +30% ( 200+ Branches by 2011) 23 branches 28 branches 22 branches Number of Branches Distribution Operations E-Channel & Contact Centre 7 Eleven Strategic Partnership EBC and Traditional Offsite Growth of Additional SSM Functionality 7 Eleven Strategic Partnership (400 ATMs) EBC and Traditional Offsite Growth of Expand Outbound competency Implement 3.2 Platform Upgrade Maybank CIMB Public AmBank RHB HLB EON Affin Alliance Number of ATMs Wealth Management Implement new sales platform Increase sales productivity 2,765 1,618 Distribution Intelligence Sales Operating Model Branch Operating Model Effective & efficient sales methodology Enhanced MIS Source: Company websites of peer banks / MEPS information Note: Peer group as at 31 December 2008; AmBank as at latest practicable date Number of ATM s for EON Bank Berhad as at 30 Nov Maybank CIMB AmBank RHB PBB HLB EON* Alliance Affin 42

43 The AmBank Brand AmBank is seen as a dynamic bank from retail banking customers perspective * Based on survey by external consultants engaged by AmBank, conducted in 2007 on commercial banks MBB 34% 17% CIMB PBB 27% 20% 7% 8% AmBank HLB RHB 22% 12% 15% 10% 2% 3% Citibank HSBC 12% 11% 2% 2% EON StanChart OCBC Al-Rajhi Affin UOB Alliance Bank 8% 1% 5% 2% 5% 1% 6% 5% 3% 1% 4% Declining A lot Declining slightly Maintained Improving slightly Improving a lot Dynamic bank rating 43

44 The AmBank Brand - Service AmBank has several competitive perceived strengths, good service among the highest mentioned % mentioning AmBank CIMB MBB PBB The bank offers good service 29% 20% 17% 42% The bank has an increasing branch network 13% 26% 28% 9% The bank has good product offerings 13% 3% 5% 5% The bank offers better bank charges 12% 9% 6% 4% The bank has simple / easy processes 10% 4% 7% 6% The bank is an efficient bank 7% 8% 10% 18% The bank has good promotions 6% 8% 13% 3% The bank is a famous / popular bank 6% 2% 2% 1% The bank has extensive ATM access 3% 4% 14% 7% 44

45 Government s Expansionary Policy to Stimulate Economy Boost Consumer Spending 3% optional reduction in employees EPF deduction Foreign purchase of commercial real estate (>RM500K) without FIC approval Civil servants : Housing loans extended to 30 years; higher car loan amount RM10,000 Extension of operating hours for hypermarkets & shopping malls GLC s to launch Graduate Employability Management Scheme Ignite Business Growth RM1.5b : grants, loans, equity to attract investors RM0.4b : high speed broadband project RM0.3b : skills training for development corridors RM0.2b : funds for microenterprises RM0.1b : increase business premises, beautify towns Abolish 5% import duty : fertilisers, cement, iron & steel products Liberalise service sector under AFTA : up to 70% equity in 2015 Spur Large/Social Projects RM1.4b : low-cost housing, abandoned projects RM0.5b : repair schools, hospitals, roads RM0.5b : upgrade police / army stations / quarters RM0.5b : improve public transport in main cities RM0.4b : education sector aid RM0.1b : youth programs RM1.1m : rural amenities RM0.3b : human capital training programs RM 7 bil Economic Stimulus Package (4 Nov 08) Source : Various Malaysian newspaper publications 45

46 Ratings AmBank (M) Berhad Rating Agency Long-Term Short-Term Date RAM A1 P1 Jan 09 Instrument : - RM500mil non-cumulative perpetual capital securities A3 Jan 09 - RM1.0bil negotiable instruments of deposits A1 Jan 09 - RM575mil exchangeable bonds A2 Jan 09 - RM2.0bil MTN programme A2 Jan 09 Moody s Baa2 P-3 Jan 09 Instrument : USD200mil non-cumulative non-convertible guaranteed preference share Ba2 Jan 09 Fitch BBB- F3 Feb 09 Instrument : USD200mil non-cumulative non-convertible guaranteed preference share BB Feb 09 S&P BBB- A-3 Jan 09 Instrument : SGD denominated stapled securities BB Jan 09 Capital Intelligence BBB- A3 Nov 08 This slide was updated on 5 March

47 Ratings AmInvestment Bank Berhad Rating Agency Long-Term Short-Term Date RAM AA3 P1 Mar 08 Instrument : - Up to RM1.0bil long-term NID s AA3 Mar 08 - Up to RM460mil redeemable unsecured subordinated bonds A1 Mar 08 - RM200mil subordinated tier-2 bonds A1 Mar 08 MARC AA- MARC-1 May 08 S&P BB+ B Jan 09 Fitch BBB- F3 Feb 09 AmIslamic Bank Berhad Rating Agency Long-Term Short-Term Date RAM A1 P1 Jan 09 Instrument : - RM400mil subordinated sukuk musyarakah (2006 / 2016) A2 Jan 09 47

48 AMMB Holdings Berhad Research Coverage No Research House Analyst 1 Macquarie Capital Securities (Malaysia) Sdn Bhd Tay Chin Seng 2 Banc of America Securities Merrill Lynch Kar Weng Loo / Melvyn Boey 3 Hwang DBS Vickers Research Sdn Bhd Lim Sue Lin 4 Citi Investment Research Julian Chua 5 ECM Libra Research Ching Weng Jin 6 Nomura Malaysia Sdn Bhd Marcus Chan 7 Rashid Hussain Sec. Sdn Bhd Low Yee Huap 8 KAF - Seagroatt & Campbell Securities Chehan Perera 9 Affin Securities Rachel Huang 10 Alliance Research Sdn Bhd Soh Meng Hui 11 Kim Eng Research Yew Chee Yoon 12 Kenanga Research Chan Chee Kin 13 J.P. Morgan Securities Chris Oh 14 Aseambankers Malaysia Sdn Bhd Vincent Khoo / Wong Chew Hann 15 UOB Kay Hian (M) Holdings Sdn Bhd Huey Chuen 16 CLSA Securities Malaysia Sdn Bhd Loong Chee Wei 17 TA Securities Holdings Berhad Wong Li Shia 18 UBS Research Khairul Rifae 19 BNP Paribas Securities (Asia) Ng Wee Siang 20 CIMB - GK Winson Ng 21 Cazenove Tan See Ping 22 Deutsche Bank Malaysia Irene Chin 48

49 Glossary 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 Segments Business Segments 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 Includes Income and expenses associated with proprietary and treasury trading, shareholder funds, loan rehabilitation and legacy businesses, plus Costs associated corporate, shared services and governance functions currently not be charged back to the business units 49

50 Disclaimer of Warranty and Limitation of Liability The information provided is believed to be correct at the time of presentation. AMMB Holdings Berhad or AHB 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. 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 " 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. 50

51 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 : or contact Ganesh Kumar Nadarajah Head Group Investor Relations Tel : (603) Fax : (603) ganesh-kumar@ambg.com.my or ir@ambg.com.my