FINAL SLIDES FY 2015 RESULTS PRESENTATION TO ANALYSTS/FUND MANAGERS 7 MARCH 2016
Key Highlights Financial Performance Strategic Focus Updates on Affin Hwang Capital 2
Key Highlights Financial Performance Strategic Focus Updates on Affin Hwang Capital 3
Key Highlights Income Statement ( RM mil ) 2015 2014 Change ( % ) Profit Before Tax and Zakat 519.3 806.9 (35.6) Net Profit 382.2 598.5 (36.1) Earnings per share ( sen ) 19.01 34.52 (44.9) Balance Sheet ( RM bil ) Dec 2015 Dec 2014 Change ( % ) Total Assets 67.4 66.7 1.1 Gross Loans, advances & financing 43.9 41.1 6.8 Deposits from customers 50.5 50.6 (0.2) Key Financial Indicators Dec 2015 (%) Dec 2014 (%) Change (%) ROA after tax 0.6 0.9 (0.3) ROE after tax 4.6 8.3 (3.7) Cost-to-income ratio 60.2 54.8 5.4 Gross impaired loans ratio 1.9 1.8 0.1 Impaired Loan Loss Reserve 64.0 75.6 (11.6) Loan to deposits ratio 86.8 81.1 5.7 4
Key Highlights Dividend 2015 2014 Change (%) Total dividend per share ( sen ) 7.99 15.0 (46.7) Total dividend payout ( RM mil ) 155.2 291.4 (46.7) Dividend payout ratio *67.2% 58.4% 67.1 Note * : Based on total dividends paid and proposed for the financial year ended 31 December 2015 5
Key Highlights Capital Adequacy CET 1 / Tier 1 / CCR Dec 2015 Dec 2014 Industry ave. (Dec 2015) AFFIN Bank Berhad 11.93% 12.32% 13.08% AFFIN Islamic Bank Berhad 13.20% 12.46% 11.54% AFFIN Hwang Investment Bank Berhad 32.07% 30.72% 32.69% Total Capital Ratio Dec 2015 Dec 2014 Industry ave. (Dec 2015) AFFIN Bank Berhad 14.33% 13.56% 15.26% AFFIN Islamic Bank Berhad 14.41% 13.67% 12.20% AFFIN Hwang Investment Bank Berhad 32.07% 30.72% 33.06% 6
Key Highlights Financial Performance Strategic Focus Updates on Affin Hwang Capital 7
RM Million PBT/PAT over the past 5 years CAGR PBT -3.7% PAT -4.4% 1000 900 800 700 600 500 709 508 834 629 864 650 807 599 519 400 382 300 200 100 0 2011 2012 2013 2014 2015 PBT PAT 8
RM Million SEGMENTAL PROFITS BY SUBSIDIARIES PROFIT BEFORE TAX AND ZAKAT 720.1 461.2 2015 84.2 107.4 2.3 2.5 2014 AFFIN Bank Group AFFIN Bank Group AFFIN Hwang IB Group * COMMENTARY AFFIN Moneybrokers Higher impairment allowance and decrease in other operating income due to volatility in the market condition. AFFIN Hwang Investment Bank Group 2015 PBT is the first full-year result post-merger between AFFIN Hwang Investment Bank and HwangDBS Investment Bank * PBT is before adjustments totaling RM24.5 million (FY 2014: RM18.5 million) at AFFIN Group level mainly comprised of fair value adjustment on held-to-maturity securities and amortisation of identifiable intangible assets upon the completion of purchase price allocation in relation to the acquisition of HwangDBS Investment Bank Berhad in 2014. 9
RESULTS OF JOINT VENTURE COMPANY AXA AFFIN LIFE INSURANCE BERHAD PBT 8.9 RM Million 2015 2014 (35.8) COMMENTARY AXA AFFIN Life Insurance Berhad Business indicators continued to be encouraging in 2015. Gross Premiums grew 10%. Double digit growth in both first year and renewal year premiums. All distribution channels grew, contributed to overall 15% new business growth and outperformed the industry. New Business Value grew 21% with higher proportion of margin protection and health products. PBT impacted by measures taken to strengthen policyholders fund to support the future benefits of policyholders and lower gains on disposal of investment securities. 10
RESULTS OF ASSOCIATE AXA AFFIN GENERAL INSURANCE BERHAD 111.2 PBT 120.4 RM Million 2015 2014 COMMENTARY AXA AFFIN GENERAL INSURANCE BERHAD Achieved GWP of RM1.33 billion in 2015, a growth of 17.7%. Currently ranked 5 th and is the fastest growing insurer in the market. Main drivers in 2015:- - Group Health (growth of 29%) - Motor (growth of 21%) - Motorcycle (growth of 33%) PBT is lower in 2015 due to lower underwriting results and forex losses, offset by higher investment income. 11
RM Million Income composition 3,000 2,500 2,535 2,461 +3.0% 2,000 1,500 58.7 94.5 72.7 54.0 1,000 +3.5% 500 460 445-31.7% 156.4 159.6-1.6% - Interest Income Fees and brokerage Income 2015 2014 61 90 94 96 Income from financial instruments Other income 12
Margin Compression 3.20% Net Interest Margin 2.48% 2.40% 2.25% 2.17% 2.10% 2.02% 1.93% 1.60% 0.80% 2010 2011 2012 2013 2014 2015 13
Cost-to-income ratio Establishment 24% Promotion & Mktg 12% Personnel 55% 2015 RM mil 2014 RM mil Change (%) Personnel 595.7 540.8 10.2 Admin & General 101.5 116.9 (13.2) Promotion & Mktg 133.0 110.9 19.9 Establishment 255.5 229.0 11.6 Total * 1,085.7 997.6 8.83 Admin & General 9% 46.9% 47.7% 46.0% 47.0% 54.8% 60.2% 2015 2010 2011 2012 2013 2014 2015 * The increase in overhead expenses was mainly attributable to the full year s operation of Affin Hwang Investment Bank Berhad in 2015 vs. 9 months in 2014 14
Steady loans, advances & financing growth CAGR 12.3% 31.1 34.7 37.5 41.1 43.9 14.4% 2011 2012 2013 2014 2015 13.6% 11.7% 10.4% 10.6% 7.9% 9.6% 8.7% 7.9% 6.9% 2011 2012 2013 2014 2015 AFFIN Industry 15
Steady loans, advances & financing growth Loans, advances & financing by business segments Composition as at Dec 31, 2015 RM billion 15.9 18.2 19.6 22.1 23.8 Consumer 45.8% Corporate 54.2% 15.2 16.5 17.9 19.0 20.1 2011 2012 2013 2014 2015 Consumer Corporate 16
Loans, advances & financing consumer segments Composition as at Dec 31, 2015 Hire purchase loans (RM billion) CAGR 10.8% 8.9 9.6 10.5 11.0 12.0 Others 9.5% Mortgage 30.8% Hire Purchase 59.7% 2011 2012 2013 2014 2015 Mortgage loans (RM billion) CAGR 11.8% 4.5 5.2 5.5 5.8 6.2 2011 2012 2013 2014 2015 17
Loans, advances & financing Corporate Loans CAGR 14.5% (RM billion) 15.9 18.2 19.6 22.1 23.8 2011 2012 2013 2014 2015 Corporate 18
Improving asset quality Net Impaired Loan ratio (%) 1.32 1.13 0.92 0.84 0.95 FY2011 FY2012 FY2013 FY2014 FY2015 As at 31 December 2015, the Group s net impaired loan ratio is favourable as compared to the industry of 1.32% 19
Monitoring asset quality Gross NPL/Impaired Loans 883 790 741 748 834 RM Million 2011 2012 2013 2014 2015 Gross Impaired Loan Ratio-AFFIN vs. Industry (%) 2.84 2.70 % 2.28 2.00 1.98 1.85 1.82 1.90 1.66 1.60 2011 2012 2013 2014 2015 AFFIN Industry 20
Total deposits CAGR 10.4 % Composition as at Dec 31, 2015 39.4 6.6 22.3 42.9 7.0 25.2 50.6 47.4 8.1 9.3 27.2 28.6 50.5 9.0 31.8 Others 17.8% CASA 19.2 % 7.7 9.1 10.2 10.1 9.7 2011 2012 2013 2014 2015 CASA FD Others FD 63.0% 21
Deposits at AFFIN Bank s level Current Account (RM billion) CAGR 10.2% CASA Deposits (RM billion) 6.2 7.4 8.2 8.1 7.7 CAGR 9.8% 7.7 9.1 10.2 10.1 9.7 2011 2012 2013 2014 2015 Savings Account (RM billion ) CAGR 8.6% 2011 2012 2013 2014 2015 1.5 1.7 2.0 2.0 2.0 2011 2012 2013 2014 2015 22
Loans to deposits ratio 88.0 86.0 84.0 Gross Loan/Deposit from customers ratio AFFIN vs Industry % 82.0 80.0 78.0 76.0 74.0 72.0 2010 2011 2012 2013 2014 2015 AFFIN 81.7 77.3 79.6 79.1 82.6 86.8 Industry 81.4 80.9 82.1 84.6 86.2 86.5 23
Key Highlights Financial Performance Strategic Focus Updates on Affin Hwang Capital 24
AFFIN s Growth Strategy AFFIN s strategy; to optimise shareholder returns, to develop a rigorous financial services landscape and provide service excellence. Robust organic growth Service excellence Innovation Resource optimisation Achieved through overall business remodelling with emphasise on key business segments Critical customer interactions must be orchestrated to impart memorable positive experiences Precision and accuracy, scalable and reliable Adopt a performance based culture in human capital through streamlining manpower Attained through a needs-based development of a complete product suite Strong core products that are simple to understand, hasslefree, offer utility and value as customer progresses through life stages Solution oriented, segment relevance, value long term relationship, satisfy current needs and prepare for future aspirations Develop talent pool, hire best in class & promote key competencies 25
Transformation Program Objectives Affin Bank/Affin Islamic 1. Creating a discernible impact in the marketplace- change in scale and performance along key measures 2. Establishing a cohesive franchise across distribution channels, products and customer segments 3. Aligning assets and resources to deliver on planned goals 4. Fostering a culture and governance which will enable ownership and accountability for results 5. Increasing staff engagement to create a sense of ownership of the destiny and future of Affin Bank Group 6. Elevating leadership to drive changes required to achieve the transformation objectives 26
Transformation Program Holistic Change To create the necessary impact and outcomes which are sustainable over the long term, the Transformation Program aims for major and deep-seated changes which cover an end-to-end view of the business. Performance Comprehensive Competency Culture Coherent Technology Business Process Organization Cohesive 27
Building a Strong Brand Franchise & Scale Brand positioning Research & advisory Network expansion Technology & innovation Market positioning Human capital Market segmentation Product differentiation 28
Key Highlights Financial Performance Strategic Focus Updates on Affin Hwang Capital 29
We aim to remain a Top 3 equity brokerage house in Malaysia We maintained our position as the top equity brokerage house in our domestic market despite strong competition and a challenging market environment We retained our #1 position for total value and volume traded in the domestic market in 2015 Bursa Malaysia Broker Awards 2014 Best Equities (Investment Bank) 2015 Bursa Malaysia Broker Awards 2014 Best Institutional Equities (Investment Bank) 2015 Volume Traded Value Traded (Volume in % Market Share) AHC RHB Kenanga CIMB Maybank TA Hong AM Public CS 4.78% 4.05% 2.65% 1.26% 2014 2015 2014 2015 7.07% 8.97% 7.71% 13.66% 12.22% 16.83 % (Volume in % Market Share) (Value in % Market Share) AHC CIMB RHB Maybank Kenanga CS AM Hong Leong TA UBS 4.25% 4.10% 3.04% 6.07% 5.38% 9.52% 9.23% 9.06% 12.10 % 10.98% (Value in % Market Share) Source: Bursa Malaysia as of December 2015 30
We embark on partnerships to expand our regional foothold We have taken steps to broaden our equity trading coverage through alliances with our key strategic partners Daiwa Securities (Japan, Hong Kong, Singapore) and Thanachart Securities (Thailand) Thanachart Securities Plc. ("Thanachart"), a wholly-owned securities subsidiary of Thanachart Bank in Thailand, operates securities businesses including securities brokerage, securities analysis service, proprietary trading, securities borrowing and lending and investment advisory service. Through Our Partnership: Equity Trading Capabilities on the Stock Exchange of Thailand ( SET ) for our institutional investors Sole Distributor of Thanachart s Research of SET-listed companies to our institutional investors (on a co-branded basis). Corporate Access by Thanachart & Affin Hwang Capital to Malaysian & Thai investors bases Daiwa Securities Group ( Daiwa ) is one of the leading, comprehensive financial service firms in Japan and across Asia. Daiwa operates core businesses such as Retail, Global Markets, Global Investment Banking, Asset Management, and Investment. Through Our Partnership: Equity Trading Capabilities on all exchanges of which Daiwa has a presence for our institutional investors Sole Distributor of Daiwa s Global Research to our institutional investors (on a co-branded basis). Corporate Access by Daiwa & Affin Hwang Capital to Malaysian & global investors bases 31
We continue to strive for consistent AUM growth and performance Our Asset Management business has continued to perform well: AUM growth is resilient despite market conditions, and continues to win accolades for performance and excellence Affin Hwang AM & AIIMAN are recognised as one of the top fund houses in Malaysia for 2015 and 2016 Euromoney Private Banking Survey Best Asset Manager In Malaysia 2016 AsianInvestor Asset Management Awards Fund House of the Year (Malaysia) 2015 IFN Islamic Investor Awards Best Islamic Asset Management Company in Asia 2015 Affin Hwang AM and AIIMAN have a strong track record of AUM growth CAGR: 43.4% 32
Building a strategic relationship with Daiwa A submission has been made to BNM on 29 February 2016 on the proposed acquisition of a minority stake in Affin Hwang Investment Bank Berhad by Daiwa Securities Group Inc. or one of its wholly-owned subsidiaries Potential Value Add to Shareholder Solidify Existing Working Relationships Expand Our Capabilities & Network Enable Us to Expand within ASEAN Transfer of Market Best Practices Daiwa s presence in over 20 countries across Asia Pacific, Europe and North America can potentially enable AHC to benefit from Daiwa s global business and operational expertise Daiwa strongly anchors its performance on robust risk management by establishing rules to govern all activities within the Daiwa group Develop Global Perspective Development of Global Perspectives Transfer Market Leading Best Practices AHC can potentially benefit from Daiwa s global perspective in crafting business strategies in line with the evolving Malaysian financial market and regional growth plans. 33
THANK YOU 34