H1FY2016 Results, Investor Presentation. 19 November 2015

Transcription

1 H1FY2016 Results, Investor Presentation 19 November 2015

2 Our vision: As Malaysia s preferred diversified, internationally connected financial solutions group, we take pride in growing your future with us Our FY15-17 growth agenda: 1. Deliver on focused organic growth 2. Leverage strategic partnerships & deliver on acquisitions 3. Continue to optimize efficiency 4. Build sustainability 2

3 Retail Banking Enhance customer service rhythm, build sustainable growth Wholesale Banking Recognition by our customers as their preferred top tier Malaysian Bank General Insurance To be the most trusted insurer in Malaysia Islamic Banking To be known as the Islamic Bank which prospers with society Life & Family Takaful To be a leading customer centric and modern insurer in Malaysia

4 Delivering on FY15-17 strategic agenda highlights Deliver on focused organic growth Retail Targeted segment play Business specialists at branches nationwide Introduced TRUE customer proposition targeting young professionals Set up specialist - Deposit payroll team Wholesale Grow customer share of wallet Launched new CGC portfolio guarantee scheme and Biz Solutions package Cross-selling of high flow FX, trade finance and cash management business General insurance Grow share in non-motor Launched 3 new products year-to-date covering both individual PA and SME lines Continue to optimize efficiency Leverage strategic partnerships & deliver on acquisition General insurance (acquisition of Kurnia) Maintain top 3 general insurer Focus on growing non-motor insurance through cross-selling to existing motor customer base and Banca channels Life assurance and family takaful (MetLife) Prioritise on building up agency force and infrastructure to grow the business Merchant and cards issuance business (MBf Cards) Small Business Banking developed and expanded small business solutions (e.g. current account, lending facilities, merchant facilities) for merchants Build sustainability Better customer experience via process simplification for account opening at branches Launched Kurnia and AmA CLAIMS express management process including a first of its kind for Malaysia windscreen repair model and ongoing changes to its supply chain models Phase 2 of core banking system project (completion by end 2015) will enhance customer experience & simplify access to multiple channels Infrastructure modernisation programmes to improve security, reliability and efficiency of data centre Upgrading of collection, cash management and transaction banking systems to increase productivity and improve processing Build pricing and service differentiation capabilities in preparation for de-tariffication of general insurance business 4

5 Headline results RM mil H1FY16 YoY growth (Underlying) Better Q2 results over Q1 Income lower by NIM compression and cautious IB market Total income 1,898.7 (14.0%) Expenses (4.7%) Loan growth predominantly mortgage & corporate Sound asset quality, intensified collection effort Profit before allowances (22.2%) Allowances (71.5) (>100%) Balancing BAU expenses with growth enablers WB business remains subdued PATMI (6.9%) Modest economic outlook, with potential headwinds Divisions showing momentum to deliver FY16 KPIs 5

6 Performance indicators Q2FY16 H1FY16 FY16 Guidance PATMI - RM million - Growth (%) % 1 (6.9%) 2 Flat 2 ROE 10.2% 9.8% Circa ~ 10.5% CTI 53.4% 52.0% 52% Gross impaired loans ratio 1.95% 2% Proposed dividend 5.0 sen per share 40 45% payout Other details: Gross loan growth - Excluding Auto Finance 0.3% 3 2% 4.3% 3 5.5% CASA composition 21.1% 21% Capital ratios - CET 1 - Tier 1 - Total 10.5% % % 5 9.1% ± 1.0% 10.6% ± 1.0% 15.0% ± 1.0% Note: 1. QoQ growth 2. YoY growth against underlying 3. YoY growth 4. After deducting proposed dividend 6

7 Better Q2 performance PATMI (RM mil) & ROE Net lending (RM bil) 16.0% PATMI 12.7% ROE 11.8% 15.1% PATMI QoQ growth: 12.7% ROE QoQ growth: 0.9% 9.3% 10.2% Loans excluding AF Total QoQ growth: 1.4% YoY growth: 0.6% QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 Customer deposits 1 (RM bil) and LDR ratio 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 Reflects portfolio rebalancing & re-alignment of customer segment focus Cost-to-income ratio QoQ change: 2.9% Customer deposits Adjusted LDR ratio 90.0% 89.3% 85.9% 83.8% 84.3% 85.6% CTI % Expenses growth% % 44.0% 49.2% 47.9% 50.5% 53.4% 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 1. Customer deposits include stable funding sources 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 7

8 First half results reflect subdued operating environment PATMI (RM mil) & ROE PATMI Reported PATMI Underlying ROE (%) PATMI CAGR FY11-15: 9.3% YoY growth: -26.5% 13.6% 13.8% 13.9% 14.1% 13.8% 14.3% 1,919 ROE CAGR FY11-15: 0.1% YoY growth: -4.5% 9.8% Total income (RM mil) and non-interest income (%) 30% Total income (underlying) Total income (reported) Non-interest income % 34% 31% 34% 41% 4,725 CAGR FY11-15: 4.7% YoY growth: -27% 45% 35% 1,343 1,484 1,621 1,782 1, ,926 4,306 4,379 4,743 4,263 2, ,207 1,899 FY11 FY12 FY13 FY14 FY15 H1FY15 H1FY16 ROA FY11 FY12 FY13 FY14 FY15 H1FY15 H1FY16 EPS (basic) (%) YoY growth: -0.47% RM (sen) 1.39% 1.39% 1.37% 1.45% 1.60% 1.65% 1.18% CAGR FY11-15: 9.3% YoY growth: -26.4% FY11 FY12 FY13 FY14 FY15 H1FY15 H1FY16 FY11 FY12 FY13 FY14 FY15 H1FY15 H1FY16 8

9 Modest top line growth, margin compression persists Total income (RM mil) Top line growth influenced by: - NIM compression, as competition remains intense given lower demand and focus on better quality assets - Flat lift in consumer spending - Volatile equity and debt markets - Subdued business sentiment NIM stable QoQ, as positive impact from asset repricing was offset by margin compression as higher-yield auto loans tapered off and increased contribution of wholesale loans YoY Growth 2,597.4 H1FY15 reported Divestment gain 2,207.4 H1FY15 underlying 13.2% Net interest 32.2% 12.5% 33.2% 6.4% 26.9% Credit card fees 14.0% Non-interest income: H1FY15* 35.6% H1FY % * Underlying Asset, wealth mgmt & brokerage 1, ,898.7 WB fee & Markets Insurance premium & others Q1 FY16 reported QoQ NIM Movement PATMI (RM mil) and divisional contribution (%) 2.45% 2.54% 2.38% 2.33% Underlying Reported 7% ( 27%) Insurance 14% Operating 5% ( 9%) Retail Banking 27% 2.12% 2.12% ( 40%) Mkts, IB & Fund Mgmt 8% Corp & Comm Banking 46% Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 H1FY15 H1FY16 ( 2%) 9

10 Targeted loans growth, driven by mortgage and wholesale Loans growth responding to greater sales focus and relationship management Focus in preferred customer segments lifted mortgage (+8.3%) and wholesale banking loans (+5.2%) A balanced portfolio composition with retail 53% and non-retail loans 47% Gross loans outstanding (RM bil) Retail 87.8 Non-retail 85.7 QoQ Growth: 1.3% Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Loan composition by type Loan growth driver (RM bil) Wholesale 47% Others 3% Cards 2% Auto 26% Mortgage 22% Breakdown by rate sensitivity: Fixed rate 35% Variable rate 65% Breakdown by concept: Islamic 32% Conventional 68% Total retail 53% YoY Growth % 8.3% 9.8% % 16.8% 0.3% Excluding Auto Finance 4.3% Portfolio rebalancing 0.3 Retail loan growth: YoY - 3.9% Excluding Auto Finance - 2.4% H1FY15 Wholesale banking Mortgage Auto finance Cards Others H1FY16 10

11 Sustaining focus on low cost deposits (CASA) Deposit and CASA balance (RM bil) CASA composition sustained through active relationship management and payroll acquisition programmes, despite outflow of term deposits as expected due to rate competition CASA balance and market share picked up QoQ whilst industry s CASA trending down since June 15 Customer deposits CASA CASA Composition (%) 20.1% 20.5% 20.3% 21.0% 21.1% 0.6% Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Deposits by type of customers (RM bil) CASA market share and industry CASA balance 1 (RM bil) 85.3 Biz Ent Individuals Govt & Others % 4.3% 4.3% 4.6% 4.6% 4.2% 4.4% 4.3% 4.3% 4.4% Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Industry - CASA AmBank Mkt Share 1. Source: BNM Monthly Statistics 11

12 Asset quality remains strong, allowances lower with higher recoveries Allowances (RM mil) Allowances lower with higher recoveries from intensifying collection efforts Credit costs trending below industry average since Q2FY GIL ratio at 1.95% as retail assets quality continues to improve whilst corporate loans require close vigilance under current operating environment (79.3) 57.9 (71.5) Adequate coverage based on current servicing assessment discounted with internal buffers on seasonal impacts H1FY15 Individual Allowance Collective Allowance Recoveries Others H1FY16 Gross impaired loans ratios Increase in Wholesale and Group GIL ratio in Q2FY16 due to a single corporate real-estate loan which was subsequently settled in November 2.43% 2.17% 2.01% 1.95% 2.00% 1.79% 1.88% 1.79% 1.80% 1.91% 1.95% 0.98% 1.53% 1.55% 1.63% Retail Wholesale Group Credit costs (annualised) vs. industry 1 AmBank Group 1.5% 0.5% FY12 FY13 FY14 FY15 H1FY15 H1FY16 Credit cost 0.50% 0.21% 0.08% -0.04% 0.20% -0.12% AmBank Industry Consists of loan loss allowances only. Sharp spike due to lower recoveries from WB Credit costs below industry since Q2FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar % 1. An average of eight peer domestic banks 12

13 H1FY15 reported Restructuring H1FY15 underlying Efficiencies & headcount Life business IB restructuring H1FY16 preinvestment Regulatory & compliance Infrastructure H1FY16 reported Continued emphasis on cost discipline Expense growth driver (RM mil) Expense well controlled, balancing between BAU expenses and investments to deliver on our growth agenda 1, , % 4.7% Despite consistent cost discipline, low income growth caused CTI ratio to trend towards industry average CTI ratio: H1FY15* 46.9% H1FY % * Underlying Key capital expenditure planned for FY16/FY17 Business growth: AmHorizon/Core banking system Phase 2 Infrastructure Facilities Modernization (IFM) Cash Management System enhancement (Transaction Banking) Collection & Recovery system replacement Digital Banking (for Retail Banking) Multichannel Switch Regulatory and compliance: Malaysian Chip Card Specification (MCCS) ATM BNM Malware Attack Risk Management MFRS9 Basel AIRB Cost-to-income ratio vs. industry % 50.0% 45.0% 40.0% 35.0% Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar An average of eight peer domestic banks Industry AmBank Group 13

14 Funding and capital, sound & conservative positioning Funding composition vs. industry Prudent liquidity management with LCRs >100% for all banking entities Higher composition of stable medium term funding vis-à-vis industry, which weighs on cost of funds Whilst capital ratios remain adequate, the Group is reviewing long term capital plans and structure (Basel III FY2020) Basel III FHC indicative ratios as at 30 September 2015 (no requirements until FY2020) CET 1: 9.1%; Tier 1:10.2%; Total capital: 13.8% Double leverage ratio: 1.14x; Balance sheet leverage ratio: 9.5%; Total leverage ratio: 7.7% Equity & debt capital Customer deposits Term funding & loans with recourse >1year Term funding & loans with recourse <1year Deposits from banks & FIs FY07 FY10 FY13 FY15 H1FY16 Industry Ave 10% 15% 14% 15% 16% 14% 60% 77% 75% 74% 73% 73% 4% 2% 7% 8% 8% 1% 1% 1% 1% 1% 6% 25% 5% 3% 2% 2% 7% Funding maturity profiles Term funding & Debt capital Deposits from customers and Banks & FIs Capital adequacy ratios CET 1 Ratio Tier 1 CAR RWCAR/Total Capital Ratio 7% 16% 4% 1% 14.0% 14.7% 14.8% 15.4% 11.0% 11.1% 15.8% 15.6% 11.8% 11.8% 79% 9.8% 10.4% 9.3% 9.7% 10.5% 10.5% 93% < 1 yr > 1 yr < 6 mth 6-12 mth 1-3 yr 3-5 yr FY11 FY12 FY13 FY14 FY15 H1FY16 14

15 Wholesale Banking, subdued outlook but stronger loans momentum and grew CASA QoQ profit increased whilst loan growth picking up in Q2 as lumpy repayments stabilising and introduction of new financing/business solutions YoY PAT down reflecting NIM compression, cautious business sentiment and weaker fixed income trading, offset by FX sales and higher recoveries Priorities in Q3: Corporate - Improve turnaround time for SME segment TB & Markets enhanced collaboration, processes, systems and joint marketing efforts to drive FX & trade finance flows Deposits/CASA leverage on repositioning opportunities to deliver optimum return QoQ PAT (RM mil) 22% Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 League table Market Share As At 30 Sept 15 (%) Rank DCM 16.5% 4 Net loan disbursement (RM) movement picked up in Q2 Disbursement Net movement M&A League 13.1% 3 M sian Ringgit Islamic Bonds 14.9% 4 FUM % 4 1. FUM data consists of unit trust funds only Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 1. Net movement equals to disbursement less repayment 15

16 Retail Banking, focus on main bank relationships QoQ PAT (RM mil) Performance impacted by margin compression, run-offs in cards and auto finance, though partially mitigated by lower allowances from improved asset quality Stronger momentum in Q2 from mortgage growth, higher average auto finance disbursements and card spending 28% Key focus in Q3: Growth in preferred customer segments Small Business Banking solutions Continue to focus on collection and recovery efforts to maintain asset quality Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 QoQ deposit balance (RM bil) Mortgage and auto finance disbursement QoQ (RM) Total deposits CASA % Mortgage Auto Finance 34.2% 33.1% 33.6% 33.9% 34.2% Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 16

17 General insurance, reflecting lower car sales QoQ PAT (RM mil) Gross written premium lower QoQ primarily due to motor insurance, corresponding to challenging car sales data PAT was lower YoY impacted by lower premium and investment income. Key initiatives for Q3: Motor Renewal New customer friendly renewal notices Gamification renewal monitoring tool Call-centre outbound and SMS renewal reminder initiatives % 51.5 Non-Motor New product launches Sales kit for Banca and branch agents Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Loss ratio and combined ratio QoQ premium growth (RM mil) 85.3% Loss Ratio Combined Ratio 93.9% 92.5% 89.3% 93.2% Motor Non-Motor 2% % 65.4% 63.8% 63.0% 62.3% Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 17

18 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Outlook Malaysia GDP growth anticipated to slow from 6.0% in 2014 to 4.7% in 2015, reflecting Weak commodity prices, dampened exports, lower government spending and slower business expansion Moderate domestic consumption, weighed down by high household debt levels amidst rising cost of living Inflation expected to stay around 2.1% reflecting GST impact and weak Ringgit, partially offset by lower global commodity prices and softer demand US dollar rise, interest gap and the Yuan outlook will weigh on Ringgit Authorities expected to continue with prudent and pragmatic policies while reigning in fiscal deficit and public/household debt (2016F: - 3.1%), as per recent National Budget 2016 Banking Monetary policy expected to remain prudent to support slower economic growth Loans growth to moderate in tandem with slower GDP expansion and high LD ratio Margins remain a challenge from the persistence of intense rate-based competition for deposits Asset quality may come under pressure from rising inflation, subsidy reductions and GST impact and a more challenging business environment OPR to remain steady at 3.25% in Industry loan indicators Disbursed (RM' bil) Approved (y/y%) Applied (y/y%) 18

19 AmBank Group Second Half FY16 Considerations and Expectations Divisions to show moderate growth momentum, given current economic outlook Disciplined lending in all targeted sectors to continue Sound asset quality, recoveries likely to level off leading to normalised credit cost Pricing competition to continue stressing NIM Conservative funding profiles and efficient capital positioning BAU Expense controlled to offset investments for growth Governance and compliance remain a key focus Clear strategies and aligned teams to deliver 19

20 Appendix

21 Appendix Income Statement 9% Growth 13.2% 43.5% 26.9% 12.3% 38.1% >100% 27.0% 30.7% 25.9% 17.0% 26.5% mil 12% mil 17% 88% 83% 85% (RM mil) PATMI H1FY15 Net Interest Income Non- Interest Income Total income Expenses PBP Provisions/ Allowances PBT Tax & Zakat PAT MI PATMI H1FY16 H1FY16 1, , (71.5) H1FY16 H1FY15 H1FY16 H1FY15 1, , , , , , , Conventional PATMI Islamic PATMI Positive growth in H1FY16 Contraction in H1FY16 21

22 MFRS 10 Appendix Net interest margin NIM and COF (YoY) 2.98% 2.94% 2.98% 2.94% 2.92% 2.92% 2.75% 2.68% 8% 2.75% 2.25% 2.25% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 3.28% 4.00% 3.13% 3.10% 4.00% 4.00% 3.17% 3.10% 3.09% 4.00% 3.13% 3.25% 3.25% 3.00% 3.00% 3.10% 3.00% 3.10% 3.00% 3.09% 2.75% 3.00% 3.00% 2.68% 2.43% 2.72% 3.00% 2.68% 3.00% 2.75% 2.12% 2.68% 2.72% 2.69% SRR COF OPR NIM 1.00% 1.00% 1.00% 1.00% FY10 FY13 Restated FY13 FY14 FY15 H1FY16 FY10 FY11 FY12 FY13 [Restated] 3 FY14 FY15 H1FY16 FY10 FY11 FY12 FY13 1 Apr 2013 FY14 Cost of funds NIM OPR SRR YTD NIM (bps) drivers Note: 1 NIM includes Net Financing Income from Islamic Banking business 2 FY10-FY14 based on internal data computation 3 FY2013 has been restated to reflect adoption of new MFRS 2.54% Breakdown of NIM Driver (bps): 2.45% 2.38% 2.33% NIM Driver Q1FY16 vs. Q4FY15 Q2FY16 vs. Q1FY16 Portfolio rebalancing -3-5 Asset re-pricing % 2.12% Deposits -2 - Underlying movement -7 - One-offs QoQ NIM movement Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 22

23 Appendix Loans by sector vs. Industry Loans Composition YoY Growth RM bil AmBank Group Loans by Sector 5.0% 4.2% 10.0% 0.6% 4.0% 5.2% 3.2% 3.5% 9.8% 1.9% 52.2% 0.5% 7.1% 20.7% 7.9% 52.6% 15.9% 18.6% 24.5% 24.5% 5.8% 37.3% 2.4% 21.5% 0.3% Sep-15 Sep Loans by purpose Purchase of transport vehicles Sep 15 YoY growth Composition % 26.2% Working capital % 27.8% Purchase of resi property Purchase of non-resi property % 19.4% % 8.9% Other purpose % 5.6% Purchase of securities % 3.5% Construction % 3.6% Personal use % 1.9% Credit card % 1.6% Purchase of fixed assets % 1.5% 4.3 Agriculture Mining & Wholesale, Transport, Finance, 3.7 Electricity, Manufacturing Quarrying Gas & Water Construction 2.8 Retail, Storage & Insurance, Real 8.5 Estate Education 1.6 & Health Restaurant Com & Biz. Household Others 0.4 Total Loans Consumer durables % % 100.0% Loans 2.5% 0.9% 7.3% 0.8% 4.2% 7.4% 2.5% 6.9% 6.4% 2.9% 57.0% 1.4% Composition 2.6% 0.9% 7.2% 0.8% 4.2% 7.4% 2.5% 6.6% 6.7% 2.9% 56.5% 1.6% YoY Growth RM bil Industry Loans by Sector Sep-15 Sep % 58.8% 3.4% 9.6% 10.4% 10.3% 12.9% 11.3% 21.4% 11.8% 8.1% 15.7% 9.7% 1,424.1 Loans by purpose Purchase of transport vehicles Sep 15 YoY growth Composition % 11.9% Working capital % 24.2% Purchase of resi property Purchase of non-resi property % 29.8% % 13.7% Other purpose % 4.6% Purchase of securities % 5.3% Construction % 2.9% Agriculture Mining & 3.7 Wholesale, Transport, Finance, 8.6 Electricity, Manufacturing Quarrying Gas & Water Construction 3.5 Retail, Storage & Insurance, Real Estate Education 1.6 & Health Restaurant Com & Biz Household Others Total Loans Personal use % 4.4% Credit card % 2.4% Purchase of fixed assets % 0.8% Consumer durables % 0.0% 1, % 100.0% Source : BNM, financial statement 23

24 Appendix Deposits by sector vs. Industry AmBank Group YoY Growth RM bil Sep'15 0.1% 14.3% 10.0% 3.3% 4.6% Core Deposits Composition (AmBank Group) Savings 6% Current Account 15% Fixed Deposits 79% Savings Current Account CASA Fixed Deposits Core Deposits Industry Sep'15 YoY Growth 1.7% 7.5% 5.6% 10.9% 4.5% Core Deposits Composition (Industry) RM bil Savings 14% ,009.2 Fixed Deposits 57% Current Account 29% Savings Current Account CASA Fixed Deposits Core Deposits Source : BNM, financial statement 24

25 Appendix - Auto Finance Auto Finance loans vs industry vehicle sales Auto Finance monthly balance vs. net outflows Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 AMMB disbursement (RM) Industry vehicle sales (No.) Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Balance O/S Net outflows Risk Grades (% of loans outstanding) Household Income Group (% of loans outstanding) 21% 2% 55% 15% 10% 1% 1% 58% 61% 33% 30% 28% 23% 26% 28% 67% 70% 72% FY14 FY15 H1FY16 Most preferred Preferred Least Prefered Gen 1 scorecards FY14 FY15 H1FY16 Other Income brackets ( >RM3K ) Vulnerable Income bracket ( <=RM3K ) 25

26 Appendix Retail Banking Income Statement (RM mil) Growth 13.0% 2.5% 24.1% 56.4% 9.9% 13.9% 8.6% H1FY16 PAT (composition to Group) 27% PAT H1FY15 Total Income Expenses PBP Allowances PBT Tax PAT H1FY16 H1FY H1FY Balance Sheet (RM mil/%) Gross Loans / Financing H1FY16 vs H1FY15 H1FY16 H1FY15 47, , % Gross Impaired Loans 1.91% 1, % Customer Deposits 40, , % CASA Deposits 10, , % ROA 0.90% 0.94% +0.04% CTI 51.6% 57.8% +6.2% Allowance Coverage 70.8% 70.1% % H1FY15 PAT H1FY16 PAT Positive growth in H1FY16 Contraction in H1FY16 26

27 Appendix Wholesale Banking Income Statement (RM mil) Growth 16.9% 19.3% 15.5% 17.7% 11.7% 13.9% 11.0% H1FY16 PAT (composition to Group) 54.7% 55% PAT H1FY15 Total Income Expenses PBP Allowances PBT Tax PAT H1FY16 H1FY (83.2) H1FY (70.7) Balance Sheet (RM mil/%) H1FY16 vs H1FY15 H1FY16 H1FY15 Gross Loans / Financing 39, , % Gross Impaired Loans 2.00% >100.0% Customer Deposits 47, , % CASA Deposits 7, , % H1FY16 Income (composition by sub-segments) IB 15% Funds Mgmt 10% ROA 1.97% 1.62% % CTI 35.8% 34.7% % Markets 7% Corp&Com m Bkg 68% Allowance Coverage 122.5% 60.1% % Ave Assets Management 46, , % H1FY15 PAT H1FY16 PAT Positive growth in H1FY16 Contraction in H1FY16 27

28 Appendix Insurance and Group Funding & Others Income Statement - Insurance (RM mil) Growth 21.4% 0.6% 37.8% >100% 40.6% 83.6% 27.3% H1FY16 PAT (composition to Group) 14% PAT H1FY15 Total Income Expenses PBP Allowances PBT Tax PAT H1FY16 H1FY H1FY (4.6) Income Statement Group Funding & (RM mil) Growth 70.2% 29.7% >100.0% 100.0% 79.1% 68.9% 80.9% 17.1% >100.0% H1FY16 PAT (composition to Group) 4% PAT H1FY15 Total Income Expenses PBP Allowances PBT Tax PAT MI PAT H1FY16 H1FY (0.2) (16.8) H1FY (68.4) H1FY15 PAT H1FY16 PAT Positive growth in H1FY16 Contraction in H1FY16 28

29 Appendix Islamic Banking Income Statement (RM mil) Growth 5.2% 10.0% 18.4% 51.9% 1.2% 4.3% 2.8% H1FY16 PAT (composition to Group) 16% PATZ H1FY15 Total Income Expenses PBP Allowances PBT Tax & zakat PATZ H1FY16 H1FY H1FY Balance Sheet (RM mil/%) H1FY15 H1FY16 PATZ: profit after tax and zakat H1FY16 vs H1FY15 Gross Financing 24, , % H1FY16 Gross Financing (composition to Group) Gross Impaired Financing 2.31% % Customer Deposits 25, , % 32% CASA Deposits 5, , % ROA 0.349% 0.315% % CTI % % +7.4% Allowance Coverage % % % H1FY15 PAT H1FY16 PAT Positive growth in H1FY16 Contraction in H1FY16 29

30 Appendix Funding sources and maturity profile Funding diversity underpinned by LDR 1 of 85.6% CASA: RM18.8 billion Fixed deposits: RM70.5billion (strong retention) Supplemented by term funding & debt capital AMMB Holdings Berhad 1. RM2b Medium Term Notes (Senior & Subordinated) AmBank (M) Berhad 1. RM500m Innovative Tier 1 Capital Securities Programme AmBank Islamic Berhad 1. RM2b Subordinated Musyarakah Sukuk AmBank (M) Berhad AmBank Islamic Berhad 2. RM500m Non-innovative Tier 1 Capital Securities Programme 3. USD200m USD Subordinated Term Loan 4. RM2b Medium Term Notes 5. RM4b Tier 2 Subordinated Notes 2. RM3b senior sukuk musyarakah programme 3. RM3b Basel III-compliant Subordinated Sukuk Murabahah Programme via Tawarruq arrangement Loans with Recourse Recourse obligations on loans sold to Cagamas - maturing in RM7b Senior Notes 2 7. USD2b Euro Medium Term Notes Islamic financing sold to Cagamas maturing in 2016 Funding characteristics Improve funding stability, maturity gap and liquidity ratios Reduce dependence on short-dated deposits to fund long-dated fixed rate loan assets which incur liquidity risk and interest rate risk Diversifies investor base No obligation for buy back since we are not exposed to withdrawal risks and the notes are traded in the open market Enable depositors to invest in long and medium dated papers 1. Includes stable funding sources 2. 1 st senior notes issuance by a financial institution in Malaysia Statutory reserve and liquidity requirement savings Reduced exposure to interest rate risks 30

31 Appendix ANZ & AmBank Group Partnership Partnership with ANZ since 2007 ANZ diversified footprints in Asia Value proposition Seconding ANZ staff into key roles Providing technical expertise Support new product development Two-way customer referrals Joint account planning Access to regional network & connectivity Board representation AMMB Holdings Berhad Mark Whelan Director (CEO Australia) Suzette Corr Director (General Manager HR Australia and Group General Manager Talent & Culture, ANZ) Shayne Elliott, ANZ s CFO (resigned on 15 October 2015 as he will be assuming the role as ANZ s CEO starting 1 January 2016) Board representation AmBank (M) Berhad, AmBank Islamic Berhad & AmInvestment Bank Berhad Graham Hodges Director (Deputy Chief Executive Officer, ANZ) Management representation Mandy Simpson Chief Financial Officer Nigel Denby Chief Risk Officer Tan Chin Aun - Transaction Banking Oscar Demirtas - Senior Programme Manager, Small Business Banking Source: ANZ website 29 Asian markets, 5 Partnerships 31

32 Appendix AmGeneral Partnership Partnership with IAG IAG diversified footprints in Asia Value proposition Involved in the management of AmGeneral Insurance, offering skills transfer, partnership and relationship models of IAG Adding value through claims re-engineering savings, increased revenue via product development, underwriting and pricing Board representation Duncan Brain Director (CEO, IAG Asia) Aidan Pallister Director (Deputy CEO / COO of IAG Asia) Management representation Derek Roberts CEO, AmGeneral Insurance Berhad Arron Mann General Manager, Claims Chris Tandy General Manager, Personal and Commercial Pricing Source: IAG annual report subsidiaries in Thailand & Vietnam Investment in associates in Malaysia, China & India 32

33 Appendix Distribution channels Nationwide Branch Network Branches ATM RBC Perlis 1 4 Perlis Kedah 6 28 Kedah Pulau Pinang Perak Selangor Kuala Lumpur Putrajaya Kelantan Melaka Pahang Terengganu Negeri Sembilan Johor Sarawak Labuan Brunei Darussalam Sabah Pulau Pinang Perak Selangor Kuala Lumpur Putrajaya 1 3 Negeri Sembilan 7 38 Melaka 6 37 Johor Pahang Population Density: <100 persons per km persons per km Note(s): Brunei: AmCapital (B) Sdn Bhd 501-1,000 persons per km 2 1,001--1,500 persons per km 2 > 1,501 persons per km 2 Other Customer Touch Points Terengganu 4 20 Kelantan 2 22 Sabah Labuan 1 2 Sarawak AmBank Islamic branches Weekend Banking Branches 7-Eleven Electronic Banking Centres Internet & Mobile Banking AmGeneral AmMetlife AmInvestment MBF AmOnline AmGenie 32 (include 28 dual branded branches) 18 branches 52 agencies RBC: Regional Business Centres 33

34 Appendix Shareholding structure & franchise value 23.8% 1 AmCorp 13.0% EPF 16.7% Others 46.5% AMMB Holdings Berhad As at 30 September 2015 Retail Banking Wholesale Banking Islamic Banking General Insurance Life Assurance & Takaful 100% AmBank (M) Berhad 100% MBF Cards (M sia) Sdn Bhd 100% AMAB Holdings Sdn Bhd 51% AmGeneral Holdings Berhad 2 49% 33.33% Bonuskad Loyalty Sdn Bhd 100% AmBank Islamic Berhad 100% AmInvestment Bank Berhad 100% AmGeneral Insurance Berhad 3 ~50% AmMetLife Insurance Berhad 4 ~50% 100% AmInvestment Group Berhad Foreign shareholding excluding ANZ ~50% AmMetLife Takaful Berhad 4 ~50% FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 H1FY % 27% 26% 29% 31% 29% 26% 1.ANZ: ANZ Funds Pty Ltd,a wholly owned subsidiary of Australia and New Zealand Banking Group Limited 2.Formerly known as AmG Insurance Berhad 3.Formerly know as Kurnia Insurans (Malaysia) Berhad 4.MetLife owns 50% plus one share in AmMetLife Insurance Berhad, with the remaining shares held by AmBank Group, and AmBank Group owns 50% plus one share in AmMetLife Takaful Berhad, with the remaining shares owned by MetLife 34

35 Appendix Banking sector share price movement / target price and recommendations Banking Sector Share Price Movement Upgraded ratings HLBK PBB 92.9% 84.7% AmBank (M) Ratings FY2007 FY2015 RAM LT: A2, ST: P1 Outlook: Stable LT: AA2, ST: P1 Outlook: Stable +3 RHB Cap 26.1% KLCI 19.5% AMMB 16.5% MBB -4.7% CIMB -25.0% (Note: 18 May 2007 vs. 30 Sep 2015) -35.0% -15.0% 5.0% 25.0% 45.0% 65.0% 85.0% 105.0% Target Price and Recommendations AmInvestment AmBank Islamic S&P Moody s RAM RAM AMMB RAM NA * Upgrade from ba1 on 16 Jun 15 LT: BBB-, ST: A- 3 Outlook: Stable LT: Baa2, ST: P- 3 Outlook: Stable BFSR: D- LT: AA3, ST: P1 Outlook: Stable LT: A2, ST: P1 Outlook: Stable LT: BBB+, ST: A-2 Outlook: Negative LT: Baa1, ST: P-2 Outlook: Stable *BCA: Baa3 *Adj BCA: Baa3 LT: AA2, ST: P1 Outlook: Stable LT: AA2, ST: P1 Outlook: Stable LT: AA3, ST: P1 Outlook: Stable Notches of ratings upgrades since 2007 AMMB HOLDINGS BERHAD P/EPS : 9.73 P/BV : 0.96 Market Price : RM4.68 Average TP : RM5.24 Buy : 4 (17%) Sell : 6 (25%) Hold : 14 (58%) Average TP / Average CP : 1.12x Buy/Outperform/Overweight/Add P/EPS & P/BV as at 30 September 2015 Source : Bloomberg as at 17 Nov2015 Hold/Neutral/Market perform Sell/Underperform/Fully valued/reduce/underweight TP: target price 35

36 Mar June Sept Dec Mar June Sept Dec Mar June Sept Dec Mar June Sept Dec Mar June Sept Dec Mar June Sept Appendix Key economy indicators GDP, consumption and investment growth CPI and unemployment rate 3.2% 3.0% 6.5% 4.9% 0.5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q GDP Consumption Investment CPI Unemployment Business confidence index FDI flow points Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q BCI Business Conditions Index TD FDI Source: BNM & Bloomberg 36

37 Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Appendix Banking system data Household debt, national savings and retail impaired loan ratio 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% 74.5% 76.2% To be updated 86.7% for the his 87.9% 81.3% 34.2% 34.6% 33.0% 31.2% 30.9% 24.9% * Retail comprise purchase of transport vehicle, purchase of residential property, personal use and credit card Key interest rates 19.7% 16.3% 14.7% 13.3% Gross national savings Retail impaired loans ratio* Household debt/gdp Household debt movement Annual Change (%) Asset quality Residential property Hire purchase Personal use Others* Annual Change (%) Avg lending rate (commercial banks) Average BLR Average OPR Base rate 6.79% 98.1% 4.49% 3.85% 3.25% Loan loss coverage 1.2% Gross impaired loans * Effective 2 January 2015, the Base Rate would replace the Base Lending Rate as the main reference rate for new retail floating rate loans Source: BNM & Bloomberg

38 RM mil Mar Jun Sept Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sept Dec Mar Jun Sept Appendix Banking system data Capital ratios Capital activities Basel II Basel III RM bil 14.8% 12.8% 12.1% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q RWCAR Tier 1 CET 1 Beginning January 2013, capital components are reported based on Basel III Capital Adequacy Framework New issues of equity New issues of debt Loan growth Deposit growth 85.4% 11.1% 9.7% 8.3% 1,666.8 Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Retail yoy growth Total loans yoy growth Non Retail yoy growth Total deposits LD ratio Source: BNM & Bloomberg 38

39 Appendix National statistics (ASEAN) GDP per capita, 2015 (USD) Real GDP Growth F Unemployment (%) Inflation (%) Singapore 53, Philippines 6.3% Indonesia 6.8% Malaysia 10, Indonesia 5.8% Malaysia 2.4% Thailand 5, Malaysia 3.0% Vietnam 2.2% Indonesia 3, Vietnam 2.5% Philippines 1.9% Philippines 2, Singapore 2.0% Singapore 0.0% Vietnam 2, Thailand 0.8% Thailand -0.9% Population (mil) Savings rate (% of GDP) CA Balance (% of GDP) Gov Structural Bal (% of GDP) Indonesia Singapore 47.4 Singapore 19.1 Malaysia -3.3 Philippines Indonesia 31.7 Vietnam 5.4 Indonesia 1.3 Vietnam 91.6 Thailand 30.9 Malaysia 4.6 Philippines 0.4 Thailand 68.8 Malaysia 28.8 Philippines 4.4 Thailand 0.7 Malaysia 31.1 Philippines 25.7 Thailand 3.8 Singapore 1.3 Singapore 5.5 Vietnam 24.6 Indonesia -3.0 Vietnam 0.0 Source: World Economic Outlook Database October

40 Appendix Economic Transformation Programme ETP Overview Achievement of 12 NKEAs in 2013 and 2014 GROSS NATIONAL INCOME RM48k (USD15k) GNI per capita RM1.7 trillion GNI 6% annual GDP growth JOBS 31.6m population 3.3m additional jobs NKEAs 2020 Target KPI Scoring* GNI (RM bil) New Jobs Greater KL/ Klang Valley , % 98% Oil, Gas & Energy , % 97% Financial Services , % 117% Focus Drivers: 12 NKEAs, 131 EPPs 60 Biz Opportunities Private-sector led Competitiveness Enablers 6 SRIs & 51 Policy Measures TRANSFORMATIONAL ACTIONS ECONOMIC TRANSFORMATION PROGRAMME RM1.4 trillion investment 92% private investment 8% public investment 73% DDI, 27% FDI INVESTMENT Wholesale & Retail , % 124% Palm Oil & Rubber , % 78% Tourism , % 115% Electrical & Electronics , % 105% Business Services ,000 96% 102% Communications Content & Infrastructure , % 101% Education , % 102% Agriculture , % 98% Healthcare , % 103% 2020 Target Tracking of EPPs To-date % of Target Investment (USD bil) % GNI per capita (USD per capita) 15,000 9, , % Job Creation (mil) % Note: Scoring is calculated by a simple comparison against set 2013 and 2012 targets respectively. (*) The overall NKEA composite scoring is the average of all scores. Data was correct as on ETP announcement date, the ETP is an evolving programme, in the past 2 years, some EPPs have been dropped, some new ones were added ETP : Economic Transformation Programme Source ETP Annual Report 2013 & 2014, Resaerch House Report 40

41 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 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 Disclaimer of Warranty and Limitation of Liability 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.

42 Glossary / 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 or contact Ganesh Kumar Nadarajah Executive Vice President, Group Finance Business Performance & Investor Relations Tel: Fax: ganesh-kumar@ambankgroup.com / ir@ambankgroup.com