AmBank Group Results - Investors Presentation IP i · PDF fileAmBank Group Results IP i ... - Investors Presentation H1 FY2010 Results 6 November 2009 ... SP and GP) Corporate & Institutional

AmBank Group Results

I P i

AMMB Holdings Berhad

- Investors Presentation

H1 FY2010 Results

6 November 2009

Cheah Tek KuangGroup Managing Director

Note : Based on FY2009 Investors PresentationUpdated for H1FY2010 financial results and other uptodate information

• Key Messages• Financial Fundamentals• Quarterly Trend

Contents :

1. Executive Summary• What is Ahead• Summary

2. Financials Update • H1 FY2010 Group Performance• Business Outlook

• Retail Banking• Business Banking• Investment Banking

Corporate & Instit tional Banking

3. Business Segment Performance

• Corporate & Institutional Banking• Assurance• Islamic Banking• Operating Segments

4. Economic Outlook & Banking System

• Share Price• Shareholding• ANZ • Channel & Distribution• Customer Service

5. Additional Information

2

• Customer Service• Rating & Research Coverage

On track to deliver revised improved FY2010 earnings guidance

Sound H1FY2010 performance sets the foundation to deliver PATMI of between RM920 mil to RM950 mil (above our original FY2010 guidance)Profit result underpinned by higher revenues Maintain execution focus on key strategies to deliver on our MTA (medium term aspirations)

Staying Ahead

Business S

Investment Banking is the major contributor to profit growth, with good recovery in capital market conditions and increased contribution from FX & DerivativesUnderlying profit contributions from Retail and Business Banking, and Markets (including Fx

Segment Performance

and Derivatives) were sound, despite lower recoveries and impairment lossesDiversified portfolio supported higher income and profits in Corporate & Institutional and Assurance businessesAsset quality improved with higher loss coverage and lower net NPL

Capital, Risk & Funding

Well capitalized with Tier 1 CAR of 10.1% and total RWCAR of 15.7%Proactive risk management via enhanced scorecards, sectoral analysis, watch list accounts & new toolsImplementing new FTP, ALM disciplines, Basel II and FRS requirements

Priorities for 2010

Profitable growth, diversification and rebalancing focusDynamic focus on volume versus price trade offs and asset quality

Implementing new FTP, ALM disciplines, Basel II and FRS requirements

3

2010 Leverage market leading positions and recovery in capital markets for business growthTarget operating cost efficiencies whilst investing for the medium term

Strong H1FY2010 results, sets good foundations for FY2010rm

ance ( )

Profit after Tax & MI(PATMI)

ROE 11.9%

433.0 mil

H1FY091

12.0%

498.4 mil

H1FY102

0.1%

15.1%

Change Q1FY103 Q2FY104

258.2 mil 240.2 mil

13.1% 11.1%

Perf

o

Net Lending / Financing 55 328 mil

31.7 sen

60 437 mil

35.4 sen

9 2%

11.7% 38.0 sen 32.9 sen

57 982 mil 60 437 mil

( )EPS(basic, annualised)

Gro

wth

gFinancing

Customer Deposits

CASA 6,494 mil

56,102 mil

55,328 mil

7,611 mil

65,302 mil

60,437 mil

17.2%

16.4%

9.2% 57,982 mil 60,437 mil

65,414 mil 65,302 mil

7,437 mil 7,611 mil

Cap

ital &

g

Prof

ile

RWCA

Net NPL / NPF Ratio

14.0%

3.0%

15.7%

2.2%

1.7%

-0.8% 2.4% 2.2%

14.7% 15.7%

Ris

k, C

Fund

ing

Tier 1

LD Ratio 98.6%

8.7%

92.6%

10.1%

-6.0%

1.4% 9.4% 10.1%

88.6% 92.6%

4

Note :1 H1 FY09 – 1st half of financial year ended 31 March 2009, ie April 2008 – September 20082 H1 FY10 – 1st half of financial year ending 31 March 2010, ie April 2009 – September 20093 Q1 FY10 – 1st quarter of financial year ending 31 March 2010, ie April 2009 – June 20094 Q2 FY10 – 2nd quarter of financial year ending 31 March 2010, ie July 2009 – September 2009

What is ahead …

Increasing global optimism for revival of the world economies but risks lingerIncreasing global optimism for revival of the world economies but risks lingerRecovery for Malaysia’s trade dependent economy expected to be gradualBanks shoring up their capital position although BNM commented that the banking system remains strongG th i l di & i k i ht d t ill b i il t FY2009 d t t

Industry :What is Ahead Growth in lending & risk weighted assets will be similar to FY2009 due to government

spend and global recovery prospectsContinued strong competition and irrational pricing in some segments Recovery in capital market activities to continue in the short term with pent up demand

Malaysia; Headroom to

consider additional

Economy expected to shrink in 2009 by circa -3% but bounce back to grow circa 3.0% in CY10 (internal research)Fiscal spending of RM 67 billion (CY09/10) providing shield to an otherwise sluggish economy in 2009additional

policy optionseconomy in 2009Potential exists for further loosening of the monetary policies and fiscal spending by policymakers

E ti t AHB’ t t i th ill id t ili

AMMB; Facing headwinds but

cautiously optimistic

Executing to AHB’s strategic themes will provide greater resilienceEnhanced risk and governance frameworks, and continued system upgradesTougher economic conditions, despite disciplined execution, will delay achievement of MTA

5

ANZ, our strategic partner, is 1 of 11 AA rated banks in the world and listed as 1 of the 20 safest banks globally by Globe Finance Magazine, February 2009

Summary

H1 -FY2010

1. Top 5 Banking Group in Malaysia with diversified business fundamentals, supported by ANZ, our strategic partner and 1 of 11 AA rated banks in the world

2. Good H1 result sets the foundation for us to deliver above our earlier FY 2010 market guidanceearlier FY 2010 market guidance

3. Sound capital positions to handle economic contractions, stay resilient and support business growth

4. Maintaining high vigilance on asset quality, risk disciplines, collections / restructuring activities & cost management

5. Staying focused on executing to our strategic agenda around profitable growth and portfolio rebalancing will help us achieve our medium term aspirations

6

AmBank Group Results

I P i

AMMB Holdings Berhad

- Investors Presentation

H1 FY2010 Results

6 November 2009

Ashok RamamurthyGroup Chief Financial Officer &

Deputy Group Managing Director


Contents :


2. Financials Update• H1 FY2010 Group Performance




• Business Outlook





8


Sound profit growth, with conservative provisioning

REPORTED RM’mil Business PerformanceH1FY10 vs

H1FY09H1FY09 H1FY10REPORTED

Net int income

RM mil Business Performance

+3.1%

+11.8%

+266 8%

1,171.91,136.3

310.1277.5

190 7(114 3)

H1FY09H1FY09

Income :

All Divisions recorded good growth in incomes except Retail & Business Banking which were impacted by lower recoveries

H1FY10

Fee and comm

Inv and trading +266.8%

+0.6%

+>100.0%

+28 2%

190.7(114.3)

53.853.5

7.5(0.0)

1 733 91 353 0

Recovery in capital and equity markets contributed to higher investment and trading incomes

Expenses:

R fl t l dj t t i di

Inv and trading

Ins business

Others

Total Income +28.2%1,733.91,353.0

+10.0%693.8631.0

+44.1%722.0

Reflects salary adjustments, ongoing medium term investments and CPI, but within CTI targets

Provisions :

Pro-active provisioning to account for potential lag effects of economic downturn

Total Income

Expenses

PBP

Provisions 122 6

1,040.1

349 0 +184 6% lag effects of economic downturn

Provisions include PER, impairment losses and provisions for commitments & contingencies

Provisions

PBT

PAT

PATMI

122.6

599.3

439.2

433 0

349.0

691.1

513.0

498 4

+184.6%

+15.3%

+16.8%

+15 1%

UNDERLYING 1

PATMI 519.2

433.0

460.7

498.4 +15.1%

+12.7%

9

H1FY09 resultsFavourable growth in H1FY10Unfavourable growth in H1FY10

Note :1 H1FY2009 underlying is reinstated for one-off’s as at 30 September 2009

PATMI : Growth contributed by Investment Banking, CIB and Assurance

Improved PATMI underpinned by Investment Banking, CIB, Assurance and Markets

Better investment banking performance as equity and

it l k t diti

Retail Banking Division -0.3%

Business PerformanceRM’milH1FY10 vs

H1FY09H1FY09 H1FY10

329.3330.4

y g,

1 (61.1%)

capital market conditions improvedRetail & Business Banking impacted by lower recoveries

Business Banking Division -1.1%

Investment Banking Division +121.1%

54.855.4

75.634.2

+30 2%46 835 9Corporate & Institutional

(10.2%)

(14.0%)

(8 7%)

Assurance +59.3%

Operating Segments :

32.220.2

+6.4%-40.3-43.0Reported PATMI

+30.2%46.835.9Banking (CIB) (8.7%)

(6.0%)

Retail Banking Division

Business PerformanceNet Assets 2 : Growth contributed by CIB and Business Banking

Retail focus on preferred viable segments in a highly competitive +3.3%42,577.041,225.6

Business Banking Division

environmentBusiness and SME growth focusing on more stable sectorsCIB’s growth focusing on project financing with government

+8.6%9,718.9 10,554.0

Corporate & Institutional Banking +51.3%6,509.34,302.8

10

g gsupport, GLC’s and large MNC’s


Note :1 Bracket denotes composition of contribution to PATMI by business segment2 Net Assets : net lending & net financing (net of IIS, SP and GP)

Corporate & Institutional Banking 51.3%6,509.34,302.8

Lower NIM but improved non-interest income and CTI ratios

Business PerformanceREPORTED H1FY10 vs H1FY09H1FY09 H1FY10

Net Interest Margin 1

(NIM & NFR it )-0.28%

Business Performance

2.82%3.10%

REPORTED

Efficiency Ratios & Others

H1FY09

Lower NIM from :

Reduced interest recoveries

H1FY09 H1FY10

Cost-Income 2

(CTI)

(NIM & NFR composite)

-6.6%40.0%46.6%

Change in asset mix towards lower margin but stable corporate loans

Improvements in cost-income ratio from:Improvements in cost-income ratio from:

Higher revenue growth in Investment Banking, Corporate & Institutional Banking and Assurance

1.53%1.53%

2 6%%%

Cost-Asset 2(CTA)

Other operating income :

Higher composition to total income due to the recovery in trading

Fee Income / Total Income (RM310.1mil)

Other Operating Income 3 / Total

-2.6%17.9%20.5%(RM277.5mil)

32.4%16.0% 16.4%due to the recovery in trading incomes

(RM216.7mil)Income / Total Income (RM562.1mil)

11

Note :1 Net Interest Margin includes Net Income from Islamic Banking business, as follows :

Reported and Underlying : H1FY09 – 0.67% H1FY10 – 0.72%2 CTI and CTA excluding insurance3 Other operating income includes net income from insurance business


Balance sheet fundamentals looking good, with strong deposit growth

Business PerformanceREPORTED

Balance Sheet – Lending / Financing

H1FY10 vs H1FY09

G l /

H1FY09 H1FY10RM’mil

Net loans / financing +9.2%60,437.355,327.9

Balance Sheet - Deposits

Loans growth to focus on preferred and viable segments, and targeted industry sectors

Gross loans / financing

+5.9%62,834.859,347.1

Balance Sheet Deposits

CASA1 Deposits +17.2%7,611.36,493.8 More diversified deposit base

Customer Deposits +16.4%65,302.156,102.1

+0.1%CASA Proportion 2 11.7%11.6%

with initiatives in retail and business segments showing improved results

-6.0%LD Ratio 392.6%98.6%

Note :1 CASA : current accounts & savings accounts

12


1 CASA : current accounts & savings accounts2 CASA proportion : as composition of Deposits from Customers3 LD : customer deposits / net loans (net IIS, SP, GP)

Better overall asset quality and decreasing quantum of historical issues

Gross NPL / NPF by Segments

2.3

2.8

3.3

Stable NPL level

0.360.341.783.05 0.290.301.281.73 0.090.000.641.68 0.090.000.571.760.3

0.8

1.3

1.8Stable NPL level despite economic stresses from the recent global financial downturn0 360 383 05 0 90 3083 0 090 000 668 0 090 000 56

-0.2 Retail Business Credit & Leasing Investment / CorporateBankingRM'bil Mar 2007 Mar 2008 Mar 2009 Sept 2009

“Continuing Non-Performing Loans / Financing

Historical business

business” NPL’s better than system levels

1,800

2,400

3,000NPL ratio

3.0% 2.0% 26.9% 9.7%3.0% 2.1% 22.5% 12.1%3.5% 2.5% 42.5% 23.1%

Historical business NPL’s constitute circa 25% of the total portfolio1,859 1,314 1,743 7101,706 1,162 720 3431,809 1,175 614 181-

600

1,200

Gross NPL Net NPL Gross NPL Net NPL

1313

Note :1 “Historical” NPL’s comprise legacy non-performing loans from entities acquired by the Group prior to and during 2002, and Arab-Malaysian Credit Berhad

Gross NPL Net NPL Gross NPL Net NPL

Continuing Business Historical BusinessRM' milMar 08 Mar 09 Sept 09

% Gross NPL / NPF Conversion to Gross Loans / Financing

Stable new gross NPL / NPF formation but lower conversions and recoveries in H1FY2010

% New Gross NPL / NPF to Gross Loans / Financing1 80%

0.80%

1.20%

1.20%

1.80%

0.00%

0.40%

0.00%

0.60%

% Write-Offs to Avg Gross Loans / Financing2.00%

Q1 Q2 Q3 Q4

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Q1 Q2 Q3 Q4

% Recoveries to Avg Gross Loans / Financing

0 60%

1.00%

1.50%0.40%

0.60%

0.00%

0.50%

0.00%

0.20%

Q1 Q2 Q3 Q4

14

Note :1 FY2004 and FY2005 financials based on gross before IIS

Q1 Q2 Q3 Q4FY2004-FY2007 FY2008 FY2009 FY2010

Improving trends on NPL / NPF ratios & loan loss coverage

Asset Quality Indicators

83.1%

39.3%32.2% 36.7%

56.6%67.3%

75.1%

10

15

40%

80%

Loan Loss Coverage

H1FY10 / FY09 change :Loan loss coverage 8.0%

4.285.78

4.603 18

5-40%

0%6.06

7.60

6.145.53

3.602.43 2.42

20%

3.182.02 1.50 1.36

-RM'bil

-80%Gross NPL Loan Loss Coverage

FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 H1FY2010

10.9%

13.8%14.8%

17.4%

12.4%

10.4%

15%

20%H1FY10 / FY09 change :Gross NPL / NPF ratio 0.2%Net NPL / NPF ratio 0.4%Net Provisions charge 0.3%

2.2%3.9%

9.6%

6.2%

3.7%2.6%

6.3%

4.1%

2.2% 1.9% 1.7%3.2%

1.0% 0.6% 0 9%

5%

10%

Gross NPL ratio

Net NPL ratio0.6% 0.9%

0%

15

Proactive collections activitiesTightened risk assessment

Led by experienced teamPositioned for 2009 / 2010 credit and economic challenges

Net Provisions Charge

Loans / Financing growth focuses on viable segments and diversification

Gross Loan / Financing movement (before netting Islamic financing sold to Cagamas)

1.2%15.7%

2.3% Others

Retail (70%) Business / Corporate (29%) By TypeLoan Composition %

38.9% 20.8% 3.7% 1.4% 1.5% 3.2% 17.1% 9.8% 2.4%

64.4%

10.8

15.7% 24.4

10 6%

Individuals

10.7%

10.0 6.1

74.7%

33 5%

24.2

13.0

10.6%

SME

23.7%

Sept 09

4.5

1.8

1.5

BusinessBanking (ex

Corporate &Institutional

Loan Rehab

33.5%12.4

2.20.9 1.0 2.1

2.3 0.9 0.9

2.0

AutoFinancing

Mortgage AssetFinancing

Credit Cards LOC Co-Op

11.0%

7.2%1.1%

11.3% Business

1 2 3

Banking (exGLR)

InstitutionalBanking

Financing Financing

RM'bil M ar' 09 Sept' 09

Retail: targeting profitable segmentsby Interest Rate RM'bil Mar-08 Mar-09 Sep-09

16

Business & Corporate: harness synergies via deepening customer relationships

Note :1 LOC : line of credit financing2 Co-Op : personal loans to government staff3 Loan rehab : loan rehabilitation units of Business Banking and CIB4 Other loans of legal entities not part of Retail, Business or CIB constituted 1% of total loans portfolio (RM0.8 bil)

Fixed rate 62% 60% 58%Variable rate 38% 40% 42%

Good growth momentum for Insurance and Funds Management businesses

General Insurance Life Insurance

390.4 438.2 476.3 545.6 585.8313.5

1,000

1,500

Fund Assets

0

800

Gross Premium

319.9449.0

352.2382.6340.9312.1

4,000

Fund Assets

0

600

Gross PremiumGeneral Insurance Life Insurance

14.7%3.7%

539.9 601.8 696.3811.3

922.7 956.9500 -800 2,333.12,034.8

1,700.91,430.11,164.8941.4

2,000

-600

- -1600General Fund Assets* Gross Premium

- -1200Life Fund Assets Gross Premium

FY2005 FY2006 FY2007 FY2008 FY2009 H1FY2010 FY2005 FY2006 FY2007 FY2008 FY2009 H1FY2010

RM’mil RM’mil

* Prior to December 2008, based on general funds per BNM DGI returnsPost December 2008 based on BNM DGI returns with total asset (general funds + shareholders’ funds)

29 834 446.1

78.2 68.015,000

AUM

80

Management Fee

19.020.111 99 8 8 0

15,000

AUM

25

50

Management Fee

Institutional Funds Unit Trust Funds

8,099.8 9,069.57,904.0

9,211.3

29.821.5

34.4

5,000

10,000

-40

0

40

8,488.08,048.29,221.86 358 4

11.97.69.8 8.0

5,000

10,000

50

-25

05.5%16.5%

3,663.45,324.1

- -80Asset Under Management Management Fee

6,358.44,894.8

3,262.5

- -75

-50

Asset Under Management ("AUM") Management Fee

17

RM’mil RM’mil

Total Group Level Reported 1

Sound income growth and conservative provisions in H1FY2010

Total Group Level - Underlying 1 Total Group Level - Reported 1

757838 818

867

600

800

1,000Total Group Level - Underlying

765814 802

872

600

800

1,000

439

155 110 1750

200

400

FY2007 FY2008 FY2009 H1FY2010RM'mil

235146 110 175

0

200

400

FY2007 FY2008 FY2009 H1FY2010RM'mil

Non Interest / Financing IncomeComposition % 32.4%35 0%

Gross Loans / Financing & NIM / NFM

Total Income Provisions

Average per quarter Average per quarterFY2007 FY2008 FY2009 H1FY2010 FY2007 FY2008 FY2009 H1FY2010

FY2007 FY2008 FY2009 H1FY2010

Composition %

11.0%16.0%

3 %

20.5%17.9%

5.0%

15.0%

25.0%

35.0%

59.67

62.83

8.4%6.4%

4.9% 5.9%

2.7% 2.9% 3.0% 2.8%

60

65

70

-2%

4%

10%

-8.5%-15.0%

-5.0% H1FY2009 H1FY2010

Non-Interest Inc Fee Inc Trading & Investment Inc

56.8653.46

50

55

FY07 FY08 FY09 H1FY10RM'bil-14%

-8%

RM'bil Y-o-Y growth NIM

18

Income : performance reflecting improved contributions from Investment BankingProvisions : to institute more proactive collections managementNIM : lower recoveries (-0.1%) and changes in lending mix towards lower margin but stable corporate loans

C t D it b S

Funding profiles continue to improveCASA grew by 12.7% in H1FY2010Government funds grew by 7.4% in H1FY2010

Customer Deposits by Sources

27.5

20.2

26.31.9

3.0

1.41.2

Customer Deposits by Type

3 73.9

12.5

3.22.9

12.65.3

12.6% 11.2% 10.5%

Biz enterprises

OthersTotal 42.4b 55.8b 64.1b

CASAcomposition

Others 3

Current

65.3b

11.7%

24.9

11.7

23.0 23.6 25.5

4.99.0

10.912.5

RM'bil

45.2

3.7

44.844.236.0

3.63.3

3.2

9

2.21.1

RM'bil

Individuals

Government

Savings

FD + NID

Mar 07 Mar 08 Mar 09 Sept 09RM bil

Individuals Government Biz enterprises Others

Mar 07 Mar 08 Mar 09 Sept 09RM'bil

FD + NID Savings Current Others

Customer Deposits by TypeCustomer Deposits by Sources

Short-term funding duration is a function of the Malaysian market liquidity

Reduce dependency on inter-banking funding

26.9%27.8% 27.8% 25.4%

9.2%4.5% 3.9%5.1% 6.2%

6.0%0.1%

11.0%1.0% 5.2%

1 3

10.9

17.4b 7.1b 6.1bTotaly q y

5.6b

3 – 12 months

1 – 5 years

Non - sensitive

> 5 yearsIslamic

51.9%60.9% 62.6% 64.4%


0.7

4.82.1 1.6

0.5

1.4 0.7 0.4

1.3

1.40.9 0.9

2.12.9 3.6


BanksMerchantBNM

Other FI’s0 – 3 months

0-3 mths 3-12 mths 1-5 yrs > 5 years Islamic Non-interest sensitive Banks Merchant banks BNM Other FI's

19

Deposits of Banks & Other Financial InstitutionsCustomer Deposits : Interest / Profit Rate Pricing Profile Note :1 FY2007 as per the previous financial statements2 In line with September 2009 disclosures, FY2009 and FY2008 financial statement figures were restated to reflect certain deposits previously

classified under Deposits and Placement of Banks and Other Financial Institutions3 “Others” comprises short-term treasury deposits, cash management system (CMS) placements and structured deposits

Interest / Profit Rate Risk : 0 12 months Interest / Profit Rate Risk : 1 5 years

Balance sheet being progressively repositioned for rising interest rates

RM’bil

34 9 43 2 44 7

Interest / Profit Rate Risk : 0 - 12 months Interest / Profit Rate Risk : 1 - 5 yearsAssets Liabilities Equity Off balance sheet gap / derivatives

34.9 43.2 44.7

-58.8 -64.3 -65.010.0 11.2 12.2

-4.9 -5.1 -4.6

-4.0 -2.98 8

I t t / P fit R t Ri k N I t t S iti

3.2 2.28.5

I / P fi R Ri k

-8.8

Net mismatch -20.6 -19.0 -11.8 Net mismatch 1.1 3.2 -1.2

FY2008 FY2009 H1FY2010 FY2008 FY2009 H1FY2010

10.1 8.7 9.0

Interest / Profit Rate Risk : Non-Interest SensitiveInterest / Profit Rate Risk : > 5 years

-8.5 -8.4 -10.3

-7.3 -7.9-9.3

21.5 25.5 24.0

3 4 -3 5 -2 9 -0.4 -0.6-0.4

-3.4 -3.5 -2.9

0.8 0.80.3

20

Net mismatch 18.9 22.7 21.4 Net mismatch -6.1 -8.2 -11.0

Note : Net mismatch comprises on-balance sheet and off-balance sheet interest rate gap sensitivity

EPS b i

Improved earnings and returns ratios for H1FY2010

EPS, basicsen/share

ROA, % ROE, %

EPO

RTE

D

H1FY10 / FY09 change 0.3%FY 09 / 08 change 0.2%

H1FY10 / FY09 change 0.09%FY 09 / 08 change 0.02% H1FY10 / FY09 change 12.0%

FY 09 / 08 change 12.1%

35.4

(13.3)

28.2 31.61.13%-0.17%

1.02% 1.04%12.0%

-5.8%

11.5% 11.7%

RE

EPS, basicsen/share

ROA, % ROE, %

G

FY2007 FY2008 FY2009 H1FY2010 FY2007 FY2008 FY2009 H1FY2010 FY2007 FY2008 FY2009 H1FY2010

H1FY10 / FY09 change 1.1%FY 09 / 08 change 1 3%

H1FY10 / FY09 change 0.15%FY 09 / 08 change 0.06%

H1FY10 / FY09 change 19.4%FY 09 / 08 change 3.4%sen/share

UN

DER

LYIN

G FY 09 / 08 change 1.3% g FY 09 / 08 change 3.4%

36.926.1 32.0 30.91.17%0.76% 1.08% 1.02%12.5%10.2% 12.7% 11.4%

• Maintaining profitability despite economic disruptions

21

g p y p p• Better utilization of asset resources

Strong capital base to meet ensuing challenges and support growth

C it l d AMMB H ldi B h d• Innovative Tier 1 Capital Securities

issued (AmBank (M) Berhad) :

• Approved program = RM500 mil

FY2007 FY2008 FY2009 H1FY2010

Core equity 7 6% 7 7% 7 8% 8 0%

Capital adequacy : AMMB Holdings Berhad

• Q1FY10 issuance = RM300 mil

• Q2FY10 issuance = RM185 mil

Core equity 7.6% 7.7% 7.8% 8.0%

Tier 1 8.7% 8.5% 9.7% 10.1%

RWCA 12 6% 14 1% 15 2% 15 7%• Capital management plan :

• Continue to strengthen capital profile including capital buffer

RWCA 12.6% 14.1% 15.2% 15.7%

Capital adequacy : by legal entity, H1FY2010• Increased modelling of different

economic scenarios on capital ratios

• Focus on risk / rewards within Basel II environment

Tier 1 RWCA

AmBank (M) Berhad 10.7% 15.1%Basel II environment

• Focus on improvements in overall capital diversification

• Development of a more dynamic di id d li d

AmBank (M) Berhad, Group 9.7% 15.2%

AmInvestment Bank Berhad, Group 21.9% 26.7%

22Note :1 FY2007 capital adequacy ratios as per the published financial statements of AHB for FY2008

dividend policy underwayAmIslamic Bank Berhad 11.9% 17.0%


Contents :


2. Financials Update• H1 FY2010 Group Performance




• Business Outlook





23


Strategic focus : Maintain viable growth and rebalancing focus

De-risk De-risk + DiversifyDiversifyow

th Hig

h

ed G

rora

te

rent

iate

Mod

er

Diff

erLo

w

24

(ISLAMIC AND CONVENTIONAL BANKING)

Strategy & outlook for FY2010 refined to incorporate improving market conditions

OverallMaintain profitable growth and rebalancing focus via executing on our strategic agendaIncome diversification, cost management, deposit growth and enhanced risk disciplines are key priorities for FY 2010Position business for potential economic recovery towards mid FY2011

Retail Banking

Maintain asset growth focus on profitable segments whilst growing depositsExpect higher income growth from historical fixed income assets (under FTP)Expect increased delinquencies & credit costs, though lower than previously anticipatedBanking anticipated Enhanced focus on risk management and collectionsExpect minimal profit growth for FY2010

B iFocus on building a sustainable asset base targeted towards stronger industry segments and with greater diversificationBusiness

Bankingsegments and with greater diversificationProactively manage existing accounts to mitigate higher risk of defaultEnhance focus on deposits & transaction based fees Expect rapid FY2009 profit growth to moderate in FY2010

Investment Banking

Uncertain economic environment but equity and debt market activities have improvedFocus on core expertise in advisory and capital market activitiesExpect rising profit performance over FY2009

25

Note :Modifications made to previous strategy and outlook are in “italics”

Include conventional and Islamic business

Strategy & outlook for FY2010 refined to incorporate improving market conditions

Corporate & Institutional Banking

Focus on project financing with government support, GLC’s and large MNC’sDeepen customer relationships to generate fee incomes and advisory mandatesEnhance focus on capital efficient business growth and loan pricing to reflect economic risksE t i d fit f FY2009

General Stable profits, and MAA business acquisition if proceeded with, will bring in

gExpect an improved profit performance over FY2009

Assurance

synergies laterLife Expect good growth via revenue increase and efficiency improvements over

FY2009

Markets Biz

Focus on reducing volatile exposures & diversifying revenuesMarket disruption not expected to recur leading to improved fixed income profit performanceExpect Markets FX and Derivative businesses to contribute to income growth

Risk & Financial Governance

Implement new retail tools including 3G scorecards, PD & LGD models Implement new non-retail PD, EAD and LGD models, financial spreading tool and security indicators (collateral management)Implement new FTP and ALM disciplines, Basel II and FRS requirements

26

Note :Modifications made to previous strategy and outlook are in “italics”

Include conventional and Islamic business

On track to deliver revised improved FY2010 earnings guidance

FY 07 FY 08 FY 09 H1FY 10 FY 2010Medium Term Aspirations

(MTA)

PATMI

Reported : -RM282.5 mil

Reported : RM668.5 mil



RM920 950 mil ~ 12% - 15%

Previously RM800 –900mil

PATMIUnderlying : RM556.9 mil

Underlying : RM837.4 mil



RM920-950 mil CAGR

ROEReported :

-5.8%Underlying :

Reported : 11.5%

Underlying :

Reported : 11.7%

Underlying :

Reported : 12.0%

Underlying :circa 11.5%

FY2012 :circa 15%

Previously 11%

Underlying : 10.2%

Underlying : 12.7%

Underlying : 11.4%

Underlying : 12.5% MTA : 17–20%

CTI 1 Reported : 37.1%

Reported : 39.6%

Reported : 43.0%

Reported : 40.0% 42% - 43% circa 40%

Previously 45%

Previously 4%

Net NPL Ratio

Reported : 6.2%

Reported : 3.7%

Reported : 2.6%

Reported : 2.2% circa 3%

FY2012 : 2 - 3%MTA : below

system

4%

Dividendgross / payout

5.0 sen / share(loss year)

6.0 sen / share18.3%

8.0 sen / share19.0%

N/A ≥ 10.0 sen / share Payout % ≥ system average

Note: 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)2 Dividend payout ratio is based on current capital management plan

27

Note: 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)

Concluding remarks

1. Top 5 Banking Group in Malaysia with diversified business fundamentals, supported by ANZ, our strategic partner and 1 of 11 AA rated banks in the worldpp y , g p

2. Good H1 result sets the foundation for us to deliver above our earlier FY 2010 market guidancemarket guidance

3. Sound capital positions to handle economic contractions, stay resilient and support business growthsupport business growth

4. Maintaining high vigilance on asset quality, risk disciplines, collections / restructuring activities & cost managementrestructuring activities & cost management

5. Staying focused on executing to our strategic agenda around profitable growth and portfolio rebalancing will help achieve our medium term aspirations

28

and portfolio rebalancing will help achieve our medium term aspirations


Contents :










29


ExpensesIncome

Summary of divisional performance

30%

40%

50%

H1FY09 H1FY10

40%

50%

60%

6.4 18.650.6 12.36.2 5.9 22.85.65.36.249.3 10.90%

10%

20%

7.0 2.364.7 9.112.0 4.9 15.64.36.88.854.3 10.20%

10%

20%

30%

RetailBanking

BusinessBanking

InvestmentBanking


Banking

Assurance GroupOperatingSegments

0%Retail

BankingBusinessBanking

InvestmentBanking


Banking

Assurance GroupOperatingSegments

PBP PAT

45%

65%

50%

70%

7.5 -12.077.0 6.317.1 3.9 10.83.57.810.557.6 9.85%

25%

Retail Business Investment Corporate & Assurance Group

8.2 -8.475.2 7.812.6 4.6 -5.06.39.110.764.2 14.7

-10%

10%

30%

Retail Business Investment Corporate & Assurance Group

30

Investment Banking, CIB and Assurance have contributed higher profits in the current half vis-à-vis last corresponding period

-15% Banking Banking Banking InstitutionalBanking

OperatingSegments

10% Banking Banking Banking InstitutionalBanking

OperatingSegments

Retail Banking Division

RM’ il I th d i d b fH1FY10 vs

H1FY091 09 H1FY10

Income

Expenses

PBP +7.7%

RM’mil

+7.2%

+7.6%875.0 941.1

319.2 342.2

555.9 598.9

Income growth underpinned by focus on profitable segments and risk pricing

Expenses reflecting growing footprints and upgrade in risk tools, people cost and IT systems

H1FY09H1FY09 H1FY10

PBP %

Provisions

PBT

PAT

+37.6%

-0.1%

-0.3%

115.4 158.7

440.5 440.1

330.4 329.3

Strong CASA growth

More vigilant measures to improve asset quality via enhancement to credit risk management, collections and recoveries management

Net loans / financing

Gross NPL / NPF +7.5%1,636.2 1,758.4

management

Ratio : 4.03%

Gross loans / financing 43,686.242,281.4 +3.3%

+3.3%42,577.041,225.6Retail Banking’s Aspirations :

Establish retail business models in key areas of profitability for coming year and

di t l bl th h d

Customer Deposits +6.9%

Net NPL / NPF

Low Cost Deposits

+7.3%

+18.2%

1,310.31,220.9

36,403.734,049.0

6,532.05,525.1

Ratio : 3.03%readiness to engage scalable growth ahead

Strategic Agenda :Focus target market and portfolio base by product

CTI

ROA (annualised)

-0.1%

-0.06%

-1.4%Loan Loss Coverage 64.5% 63.1%

36.4%36.5%

1.55%1.61%Streamline distribution channels for productivity and efficiency

Strengthen risk and sustain portfolio health

Enhance service levels - TAT, SSM and customer services

31

g


customer services

Continue to build operational infrastructure for efficiency and capacity

Business Banking Division

RM’mil Income growth impacted by lower interestH1FY10 vs

H1FY09H1FY09 H1FY10

-6.7%

+9.4%

-11.8%

Income

Expenses

PBP

RM mil

151.9162.9

42.839.1

109.1123.8

Income growth impacted by lower interest recoveries

Cost increase largely reflecting expansion in relationship team

More vigilant measures in asset quality via

H1FY09H1FY09 H1FY10

-1.1%

-27.7%

-1.1%

Provisions

PBT

PAT

36.149.9

73.073.8

54.855.4

More vigilant measures in asset quality via enhancement to credit risk management

Business Banking’s Aspirations :

Entrench business in stable industries in d t t ti l

-0.8%110.7Ratio : 1.02%

9,966.6 +8.0%

+8.6%9,718.9

10,766.7

10,554.0

109.8

accordance to government stimulus packages, grow fee income / non interest income and deposit base

Strategic agenda :

O ll 3C h C C t lGross NPL / NPF

Gross loans / financing Net loans / financing

Customer Deposits

+333.3%14.1

+64.9%2,848.91,727.9

Low-Cost Deposits +14.1%1,108.1971.0

Ratio : 0.57% 61.1Overall 3C approach : Conserve, Control, Caution

Conserve - Maintain good relationship with existing customers through excellent service and managing expectations

Net NPL / NPF

CTI

ROA (annualised)

Loan Loss Coverage 193.7%223.7% -30.0%

+4.1%28.2%24.0%

-0.30%1.06%1.36% Control - Greater emphasis on monitoring customers’ conduct of account

Caution - In respect of new application for facilities, to target customers with good track record feasible business plans and operating

32

record, feasible business plans and operating in chosen sectors


Investment Banking Division

RM’milH1FY10 vs

H1FY09H1FY09 H1FY10

Income

Expenses

PBP

RM mil

+43.4%

+122.6%

-3.2%

177.2123.5

75.377.8

101.945.8

H1FY09H1FY09 H1FY10

Improvement in performance from pick-ups in capital market and stock market

Continue to strengthen business relationships and core expertise

Provisions

PBT

PAT

+116.4%

+155.4%

+121.1%

0.6(1.0)

101.346.8

75.634.2

p

Investment Banking’s Aspirations :Staying relevant & protect market share in current operating environmentP i lit f b l h t t bCTI -20.5%42.5%63.0%

Assets Management 1 +9.4%21,576.119,731.0

Preserving quality of balance sheet assets by managing credit, interest rate and operational risks whist remaining profitableBalance between nurturing human resource capital to prepare for eventual upturn in global

hil t i ti tAve Volume / Contract Traded (RM’mil / month)

economy whilst managing operating costs

Strategic agenda:Concentrate on core businesses, and priority customersW th fi i l i i t b i

Bursa M’sia

Future KL index

IB Broking

AmFuture

49,865.3

480.9

4,103.1

57,604.8

378.8

4,508.2

+15.5%

-21.2%

85 2 75 2

+9.9%

11 7% Weather financial crisis storm by managing costsBuild scale through aggressive relationship building and capabilitiesPosition (resources and prime morale) for

AmFuture 85.2 75.2 -11.7%

Market Share as at :IB Broking

AmFuture

8.3%

16.3%

7.8%

20.3%

-0.5%

+4.1%

33

eventual upturn in operating environment


Note :1 Including AmInvestment Management,

AmInvestment Services, private banking & AmARA

Corporate & Institutional Banking Division *

H1FY10 vs

Income

Expenses

PBP

RM’mil

+24.2%

+49.1%

-9.3%

117.894.8

36.640.4

81.254.4

H1FY09H1FY09 H1FY10

Diversified loans portfolio provided good support for income growth

International Business has contributed higher i

Provisions

PBT

PAT

+28.7%

+169.1%

+30.2%

21.37.9

59.946.5

46.835.9

income

Corporate & Institutional Banking’s Aspirations:

Deepen and expand Corporate & InstitutionalCTI -11.5%31.1%42.6%

Deepen and expand Corporate & Institutional Banking relationships and harness Group synergies

Derisk, Diversify, Differentiate, Consolidate, Grow, Build

+51.3%6,509.34,302.8

Assets Management

836.8 994.4 +18.8%

Net loans / financing

Strategic agenda :

Business diversification of income sources : advisory, retainer fees, fund-of-funds model, Islamic banking license (international biz)

Ave Volume / Contract Traded (RM’mil / month)

S’pore SE 1 156,859.4 170,040.0 +8.4%

Jakarta SE 2 70,186.3 66,671.4 -5.0%

AmFIPL 3 1,037.3 2,082.0 +100.7%Implement cost savings measures for higher efficiency and productivity

Close monitor of watchlist

Focus on project financing with government support GLC’s large MNC’s

, ,

PTAMCI 4 677.8 582.7 -14.0%

Market Share as at :AmFIPL 3 0.6% 1.3% +0.7%

4

34


support, GLC s, large MNC sPTAMCI 4 0.9% 0.9% 0%

Note : 1 Singapore Stock Exchange2 Jakarta Stock Exchange3 AmFraser International Pte Ltd4 PT AmCapital Indonesia

* Services include : large corporate lending, large corporate deposits, financial institution group, offshore banking, international business, private equity, REITs and loan syndication

Assurance

H1FY10

+14.7%

+4.1%

Income

Expenses

RM’mil

75.465.8

38.837.3

H1FY10 vs H1FY09H1FY09 H1FY10

Higher income from enhanced agency network and focus on product bundling and cross selling

B tt l i i d t+28.5%

+35.4%

-133.7%

59 3%

PBP

Provisions

PBT

36.628.5

(0.4)1.2

37.027.3

32 220 2

Better claims experience compared to H1FY2009

Assurance’s Aspirations :

To be the top 3 insurer in terms of premiums+59.3%PAT 32.220.2

-5.2%CTI 51.4%56.7%

Life Insurance fund assets +26.4%2,333.11,846.0

p p

Strategic Agenda:Life :

Improve capital efficiency via better ALM practices

General Insurance fund assets +13.0%956.9846.5

pImprove sales & operating efficiency via enhanced core system and distribution channel management

General :Enhance customer segmentation analytics for

Post-tax ROE

General business

15.7% 15.6% -0.1%

71 1% 72 7% 1 6% Enhance customer segmentation analytics for motor businessDevelop alternative channels for non-motor businessRationalise branch operating model &

t li k

claim71.1% 72.7% +1.6%

35


centralise work processes

Group Operating Segments

Higher income from :

Treasury and Markets(improved trading conditions)

+774.0%

+34 8%

Income

Expenses

RM’mil Business Performance

270.631.0

158 1117 3

H1FY10 vs H1FY09H1FY09 H1FY10

(improved trading conditions)

Loan Rehab units (recovery rate as scheduled)

Shareholders fund, Corporate & Shared Services

+34.8%

+230.2%

+361.7%

Expenses

PBP

Provisions

158.1117.3

112.4(86.4)

132.7(50.7)

(consolidation adjustments)

One-off impacts are included in Operating Segments

Includes : one off revenue and

+43.2%

+30.3%

+6.4%

PBT

PAT

PATMI

(20.3)(35.7)

(25.7)(36.8)

(40.3)(43.0)Includes : one-off revenue and expenses, additional provisions, reduction in deferred tax assets, taxation impacts

Refer overview of one-offs for more details

Securities HFT +119.5%2,592.21,180.9

S iti AFS 5 2%6 738 86 408 3

Total Group :

detailsSecurities AFS

Securities HTM

+5.2%6,738.86,408.3

-26.2%676.7916.7

36


Islamic Banking

RM’milH1FY10 vs

H1FY09H1FY09 H1FY10

Income

Expenses

PBP

Strong results improvement attributed to business expansion in line with Malaysia’s drive on Islamic banking growth

Underlying branding position remains strong and expected to provide growth +28.7%

RM mil

+11.9%

+22.0%267.3 326.1

107.1 119.8

160.3 206.3

H1FY09H1FY09 H1FY10

Provisions

PBT

PAT

st o g a d e pected to p o de g o tsupport

Islamic Banking’s Aspirations :To become Islamic bank of choice and ensure high degree of value for customers

28.7%

-35.7%

+64.8%

+64.2%

57.6 37.0

102.7 169.3

75.7 124.2

Net financing

Gross NPF

Net NPF

ensure high degree of value for customers and stakeholders

Strategic Agenda :Strengthen International Currency Business (ICBU); focus on capital market and funds

-12.7%

+8.1%

10,762.79,151.9 +17.6%

274.9 240.0

136.1125.9Ratio : 1 20%

Ratio : 2.10%

Customer Deposit

Net NPF

Low Cost Deposit

management via AmInvestment banking arm

Implement debt-equity program (musyarakah)

Strengthen retail segment focusing on

+36.4%

+8.1%

+35.0%

136.1125.9

12,371.89,069.2

2,005.41,485.2

Ratio : 1.20%

CTI

ROA (annualised)

Loan Loss Coverage

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

-3.4%

+0.64%

+0.7%114.6% 115.3%

36.7%40.1%

2.45%1.81%

37


* Results incorporated under respective business divisions Expand product tie-ups and alliances with third parties

Overview of one-offs

Impacts from changes in accounting and provisioning policies prior period catch upsImpacts from changes in accounting and provisioning policies, prior period catch-ups, divestments, strategic investments and tax rate changes

H1FY 2009

H1FY 2010

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, funding cost, MSS, LTI

Provisioning policy changes and catch ups, eg 5 and 7 year rules

Net Impact on Profit before Tax (RM’mil) (35.4) (27.0)Net Impact on Profit before Tax (RM mil) (35.4) (27.0)

Write down of deferred tax assets & prior period tax catch ups, eg corporate tax rate reductions

Tax impact on one off items above

Net Impact on Profit after Tax (RM’mil) (30.4) (18.4)

Impact of one offs on minority interest

38

Net Impact on Profit after Tax and MI (RM’mil) (27.6) (20.8)


Contents :










39


Slowdown in 2009 with slow recovery thereafter

Real GDP : Consumption 2

% YoY

Private Consumption (%YoY) Government Consumption (%YoY) Real GDP (% YoY)

Extraordinary global challenges in 2008 / 2009

9.0

12.0

in 2008 / 2009

Despite some resilience, consensus amongst economists is that domestic economy would3.0

6.0

is that domestic economy would contract in 2009 with a slow recovery expected in 2010

3 0

0.02005 2006 2007 2008 2009F 2010E 2011E 2012E

-3.0

40

Source :In-house internal research

Lower interest rates forecast for 2009 but rising thereafter

8.00

%

OPR, BLR OPR (%) BLR (%)

%

Deposit Rates Retail Deposit Rate (%)Corporate Deposit Rate (%)

2.00

4.00

6.00

2.0

3.0

0.002008 2009F 2010E 2011E 2012E

1.02008 2009F 2010E 2011E 2012E

Low policy rates regime to support economyFinancial sector stable and financially healthier, hence can afford to “pass on” official interest rate cutsConvergence of price competition and narrower viable sectors

41

Source : In-house internal research

Vigilant and responsive BNM

Stronger banking system asset quality to withstand rising delinquencies in 2009 / 2010

NPL d li i t dNPL on a declining trend

Loan loss coverage risingsteadily with exception ofMarch 2009 due to some

NPL Ratios in Banking System & Loan Loss Coverage Ratio

RM’bil / % %

asset quality pressure fromfinancial crisis

Overall, banking systemasset quality remains intact

87.9

56 3 57 5 58.962.8 65.1

70.7 73.576.5

80.284.7 87.1 86.3 87.8

70.0

80.0

90.0

15.0

20.0

asset quality remains intactduring the recent economicdownturn

Interest rate environment

45.9 49.7 51.7 52.6 54.9 56.3 57.5

9.8 9.2 8.6 8.4 8.2 8 0 7 77 330 0

40.0

50.0

60.0

10.0

more conducive and BNM ismore vigilant and pre-emptive

Banks have tightened

3.8

8.0 7.7 7.4 7.2 6.6 6.0 5.6 5.3 4.7 4.3 4.1 4.0 3.9

2.1

7.36.7

6.1 5.8 5.7 5.4 5.1 4.8 4.4 4.13.5 3.2 3.0 2.6 2.4 2.2 2.2 2.2

-

10.0

20.0

30.0

0.0

5.0

Banks have tightenedlending policy andstrengthened riskassessment, startingfundamentals are strong

Mar-05

Jun-05

Sep-05

Dec-05

Mar-06

Jun-06

Sep-06

Dec-06

Mar-07

Jun-07

Sep-07

Dec-07

Mar-08

Jun-08

Sep-08

Dec-08

Mar-09

Jun-09

Sep-09

Gross NPL (RM 'bil) - LHS Loan Loss Coverage (%) - LHSGross NPL - (%) - RHS Net NPL (%) - RHS

42

Still, banking systempreparing proactively forrisky delinquenciesSource : BNM monthly statistical bulletin


Contents :










43


Banking Sector Share Price MovementIndex Movement

(M 07 100)

140.0%

Index

AMMB 16.2% (RM4.55)RHBC 15.3% (RM5.44)PBB 10 3% (RM10 62)

(May 07 = 100)/ index change at close of 15 Oct

09 vs 18 May 07

100.0%

120.0% PBB 10.3% (RM10.62)CIMB 2.4% (RM12.18)100% base indexKLCI Index -8.1% (1246.86)HLFG -11.8% (RM6.00)

60.0%

80.0%

MBB -22.7% (RM6.94)

RM’mil H1FY2010

Share Capital 3,014.2

Reserves 6,047.0

40.0%

60 0%

Shareholders’ Equity 9,061.1

Less: Intangible Assets (1,807.9)

NTA 7,253.2

NTA Per Ordinary Share (RM)

2.41

20.0%May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09

Date

MBB PBB CIMB RHBC AMMB HLFG KLCI Index

15 October 0918 M 07

(RM)

Net Asset Per Ordinary Share (RM)

3.01

Market Price (RM) 4.26

Price to Book [NTA / Net Asset]

1.77 / 1.42

18 May 07

Source : Bloomberg

(strategic partnership with ANZ)

44

Asset]

EPS (sen) – basic, annualised

35.40

Dividend (gross sen / share) -

Target Price and Recommendations – AMMB Holdings Berhad26 October 2009

5.60 5.56 5.55

5.25 5.20 5.20 5.20 5.10 5.10 5.00 5.00 4.93 4.90 4.89 4 80 4 80

AMMB HOL DINGS BE RHAD Average TP : RM 4.84Buy : 22 (92%) Hold : 1 (4%) Sell : 1 (4%)

P/ EPS = 14.99P/ BV = 1.66

Market Price: RM 4.74 3.78%4.93 4.90 4.89 4.80 4.80 4.80 4.76 4.70 4.60

4.50 4.50

3.17 3.11

ct 0

9

Sept

09

Aug

09

Sept

09

Aug

09

Sept

09

Aug

09

Oct

09

Aug

09

Aug

09

May

09

ct 0

9

Aug

09

Aug

09

Aug

09

ct 0

9

ct 0

9

ept 0

9

Aug

09

ept 0

9

Aug

09

ct 0

9

Oct

09

Aug

09

CIMB

RHB

DEUT JPBofA

ML

DBS

BNP

KAF

UOB

CLSA TA

NOMURA

KEN

MACQ

UBS

OSKALL

IANCE

ECM

MBBKIM

ENGIN

TERPAC

AFFIN

CAZE

CITI

1 O

11 S

27 A

14 S

12 A

24 S

11 A

2 O

12 A

12 A

29 M

1 O

c

12 A

20 A

12 A

2 O

c

1 O

4 S e

12 A

7 Se

18 A

1 O

1 O

12 A

Hold / Neutral

Buy / Outperform / Overweight / Add

Sell / Underperform / Fully Valued / Reduce / Underweight

Source: Bloomberg and Analyst Report

P/ EPS: EPS from Apr 08 – March 09

Index change market price close of 26 Oct 09 vs. 12 Oct 09

P/ BV : BV as at 31 March 09

Shareholding structure

As at 30 September 2009As at 30 September 2009

16.72% 13.74% 40.07%

Employees Provident Fund Board

AMMB

AmcorpGroup Bhd PublicANZ Funds

Pty Ltd #

23.78%

Ranked No. 17 (Malaysia – market

Prudential Plc

5.69%

AMMB Holdings Bhd

AMFB Holdings Bhd

100%AMAB Holdings

Sdn Bhd

100%

capitalisation) & 204 (global – 1000 banks by market capitalisation) :

with market capitalization of RM13.14 billion on Bursa Saham Malaysia (N1)

and market capitalization of

100% 70%*100%

100%

AmInvestmentGroup Berhad

AmBank (M) Berhad

^ Insurance Australia G Ltd 49%

g

51%^

AmG Insurance Berhad

AmLife Insurance Berhad

* Friends Provident F nd PLC 30%

and market capitalization of US$3.70 billion on Bloomberg (N2)

AHB in progress of due diligence to acquire :

general insurance business of a

Foreign shareholding excluding ANZ :

AmIslamic Bank Bhd

Group Ltd – 49%

Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09 Jun 09 Sep 09

Fund PLC – 30% general insurance business of a local insurance company

stake in Takaful insurance business

Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09

41.10% 38.14% 36.95% 37.15% 34.39% 30.08% 28.38% 29.58% 28.53%

# ANZ Funds Pty Ltd : a wholly owned subsidiary of Australia and New Zealand Banking Group Limited (“ANZ”)

46

Source :N1 Starbiz (Top 100 Companies By Market Capitalization as at 2 October 2009)N2 Bloomberg (Global 1000 banks By Market Capitalization as at 1 October 2009)

• ANZ is the only Australian bank to have been in the Asian region of over 40 years, with strategic banking hi d 14 i

ANZ strategic partnership

partnerships and presence across 14 countries• ANZ’s investment in AmBank totalled US$696 million• In August 2009, ANZ acquired selected RBS businesses in Asia for US$550 million, thus reinforcing its strategic

intent of a super regional objective

+China

Vietnam

Laos

Cambodia

Malaysia

Philippines

IndonesiaANZ has provided key resources and support to AmBank

IndonesiaDirector

Dr. Robert John EdgarBoard

DirectorAlex Thursby

Senior Management

Group CFO & Deputy Group MD

Ashok Ramamurthy

Chief Risk OfficerAndrew Kerr

Chief Operating OfficerRoss Neil Foden

DirectorMark Whelan

ManagementHead of Retail Distribution &

DepositsBrad Gravell

ManagementHead of FX & Derivatives Steve Kelly

Credit Risk/ Portfolio Mgt

Head of Market Risk Jonathan Manifold

Head of Systems A ti

Head of Sales, FX & D i i

47

ANZ is committed to AmBank’s long-term success and aspirations

Portfolio Mgt Glenn Saunders

AccountingIgnatius Lim

Derivatives Peter Trumper

Significant positions in major business

InvestmentRetail Business IslamicCorporate & Investment Banking

Retail Banking

Business Banking Assurance Islamic

Banking

Stay relevant & protect market

Leverage on existing

Focus on profitability and To be the top 3 To become

# 3# 4 # 5 # 7 # 10 # 5[General] [Life]

pInstitutional

Banking

Derisk, Diversify, Differentiate,

# 5

Dominant auto Leverage on # 3 in motor► Awards : Best Full range of

protect market share, and

preserve balance sheet quality

existing customers, build

sustainable assets & deposit bases

profitability and build foundations

for growth

To be the top 3 insurer in terms

of premiums

To become Islamic bank of

choice

► Build niche in

Differentiate, Consolidate, Grow, Build

Dominant auto financier : 20.6% mkt-share; Best Auto Financier# 6 (incl. foreign banks) in housing loans (5.8%)# 7 (incl foreign

Leverage on nationwide network : 4 regional business centres & 12 commercial centres; and t

# 3 in motor insurance premiums (8.2%) and # 7 in general insurance premiums (4.8%)

► Awards : Best Bond, Best Bond Group, Best Portfolio Manager, Best Deal, Best League Manager

► Ranked Top 4 in

Full range of banking products and services according to SyariahprinciplesLatest venture :

► Build niche in corporate lending, focusing on GLC’s and MNC’s

► Cross-sell commercial# 7 (incl. foreign

banks) in credit cards (7.3%)# 3 in personal financing (7.4%)5.7 million customers, >1.4

d t

strong relationship managers forceLeader in cash management (full suite) and SME financing

# 10 in life insurance premiums (3.2%)Leverage IAG’s market and operational

► Ranked Top 4 in :M&A leagueMalaysian Ringgit Bond leagueEquity & equity-linked league

Latest venture : set-up of Islamic funds management division # 2 in Islamic credit cards

commercial banking products

► International businesses : Singapore, Indonesia & Brunei

products per customer# 4 in no. of branches & # 3 in no. of ATM’sPioneer in

Expanding trade and remittance leveraging on ANZ’s regional network

leadership in general insuranceNew strategic partner, Friends Provident, in life insurance

linked leagueFunds Under ManagementParticipating organisations’ Bursa trading summary

Diversify Islamic banking business in Brunei

► Diversify businesses in REITs and private equity

Pioneer in weekend and extended banking hours

48

Key group information highlight : customer service - delivery channels

N b f B hASPIRATION

386 355242 187 186 185 139 102 89

Number of Branches#4

Increased customer satisfaction via integrated & seamless channels model Expand branch network and SSM footprintFurther build and improve sales & service capabilities

Business Units Key Strategic Initiatives

Number of ATMs

2,813

1 890

Maybank CIMB Public AmBank RHB HLB EON Alliance Affin

#3

Branch Banking

E Ch l

10 new branches (200+ by early 2011)Increase in customer facing / sales staff by ~ 300

Expand ATM footprint via on site (branches)

Business Units Key Strategic Initiatives

1,890

697 575 452 313 217 174 145

Maybank CIMB AmBank RHB PBB HLB EON Alliance Aff in

E- Channels & Contact

Centre (incl. Internet &

Mobile Banking)

p p ( )and off site (convenience shops, hypermarkets, hubs) installation, 7 Eleven strategic partnershipImprove revenue stream and profitability via usage of ATM, outbound sales productivity at contact centre

Total no 30 September 2009

ATM at 7 Eleven 300

Electronic Banking Center (EBC) 121

Continuous enhancement to internet banking platform and building additional product capability to increase current IB penetrationLaunched new mobile platform

Increase deposit size through innovative products, campaign, marketing activities,

Deposit & Customer

Retail banking customer base 5,691 K

FUM no. of accounts 51 K

Life insurance policy holders 393 KWealth

products, campaign, marketing activities, banking solutions and competitive rates on CASA & FDMaintain or improve market position (at 5th or 6th assuming unchanged number of anchor banks)

Customer Solutions

Establishing new line of business i e

49

Source: Company websites of peer banks / MEPS informationNote: Peer groups as at 30 September 2009; AmBank as at latest practicable date

Life insurance policy holders 393 K

General insurance policies in force ~1,100 K

Wealth Mgmt

Establishing new line of business i.e. premier banking to cater to affluent segmentIncrease cross selling via AmUtopia; average active users : 60WM system – BITPC approval stage

The AmBank brand : top-of-mind brand awareness & service performance

41%45%44%40

45

50

s

AmB Bank ABank C Bank B

Top-of-Mind Brand Awareness(2004vs2007vs 2008 vsAssets)

Bank A 233

Assets(in RM ’bil)

Bank D Bank ETrustworthy bank

Bank with extensive electronic channels

Bank with extensive branch network

Easy/simpletobankwith

Trustworthy bank

Bank with extensive electronic channels

Bank with extensive branch network

Easy/simpletobankwith

AmBank 1

-1

-2

3

Competitor A

-2

14

13

1

3

-1

-3

1

1

8

3

2

0

-6

-8

-3

0

-7

-3

-3

Competitor B Competitor C Foreign A Foreign B

4th best TOM brand recall

20

25

30

35

f-M

ind

Ad

Aw

aren

ess Easy/simple to bank with

Good range/quality of products/services

Financially strong bank

Professional/knowledgeable staff

Efficient/effective customer service

Responsive towards customers’needs

L t l ti hi bi l

Easy/simple to bank with

Good range/quality of products/services

Financially strong bank

Professional/knowledgeable staff

Efficient/effective customer service

Responsive towards customers’needs

L t l ti hi bi l

3

1

-3

2

-1

2

0

-1

-1

-1

-7

-5

-4

2

1

1

3

2

3

1

1

2

0

-4

4

-1

-1

1

-3

0

3

0

0

2

2

-3

-1

5

2

-2

0

3

7%5%

17%

10%11%11%

8%7%5%5%

4% 3%3%5

10

15To

p-o

f

Bank D 8569

AmB 65

147

176BankB

Bank C

Bank E

Long term relationship brings value

Friendly bankConveniently located ATMs outside banks

Competitive interest rates

One-stop financial provider

Progressing/moving forward bank

Extendedbankinghours

Long term relationship brings value

Friendly bankConveniently located ATMs outside banks

Competitive interest rates

One-stop financial provider

Progressing/moving forward bank

Extendedbankinghours

-2

3

-1

-1

-30

3

-2-6

14

-1

3

-1

11

-6

0

0

1

-10

5

-4

-2

-3

21

-4

2

1

2

2

3-1

-5

0

2

1

3

• AmBank was the 6th largest local bank in terms

1%3%

3%3%0

2004 2007 2008

69Bank E

• Positively positioned against the larger banks

Extended banking hours

Prestigious/proud to be a customer

Innovative bank

Extended banking hours

Prestigious/proud to be a customer

Innovative bank

3

-1

0

-8

0

-6

-6

-1

1

-2

-3

-3

2

4

4

3

3

2

gof assets; with the 4th best TOM brand recall

• Continuous improvement initiatives on brand awareness campaigns

Eff t ill ti t t th b d

y p g g

• AmBank’s strengths are “ease of use” & “good range of products”

• Efforts ongoing to improve & increase performance matrixes

50

• Efforts will continue to strengthen brand positioning

Notes :Based on survey by external consultants engaged by AmBank, conducted in 2008 / 2009 on commercial banks

performance matrixes

RatingsAmBank (M) Berhad

Rating Agenc Long Term Short Term DateRating Agency Long-Term Short-Term DateRAM AA3 P1 Nov 09Instrument :- RM500mil non-cumulative perpetual capital securities A2 Nov 09- RM1.0bil negotiable instruments of deposits AA3 Nov 09- RM2.0bil MTN programme A1 Nov 09- RM500mil Tier-1 capital securities programme A2 Nov 09

Moody’s Baa2 P-3 Jul 09Instrument :USD200mil non-cumulative non-convertible guaranteed preference share Ba2 Jul 09Fitch BBB- F3 Feb 09I t tInstrument :USD200mil non-cumulative non-convertible guaranteed preference share BB Feb 09S&P BBB- A-3 Jan 09Instrument :USD200mil non-cumulative non-convertible guaranteed preference share BB Jan 09Capital Intelligence BBB- A3 Nov 08Capital Intelligence BBB A3 Nov 08

AmInvestment Bank BerhadRating Agency Long-Term Short-Term DateRAM AA3 P1 Nov 09Instrument :- RM200mil subordinated tier-2 bonds A1 Nov 09

MARC AA- MARC-1 Mar 09S&P BB+ B Jan 09Fitch BBB- F3 Feb 09

AmIslamic Bank Berhad

51

AmIslamic Bank BerhadRating Agency Long-Term Short-Term DateRAM AA3 P1 Nov 09Instrument :- RM400mil subordinated sukuk musyarakah (2006 / 2016) A1 Nov 09

Research Coverage

No Research House AnalystNo Research House Analyst

1 Affin Investment Bank Rachel Huang

2 Alliance Research Sdn Bhd Soh Meng Hui

3 Bank of America – Merrill Lynch Research Kar Weng Loo / Melvyn Boey

4 BNP Paribas Securities (Singapore) Pte Ltd Ng Wee Siang

5 Cazenove Asia Ltd Tan See Ping

6 CIMB Investment Bank Berhad Winson Ng

7 Citi Investment Research Fiona Leong

8 CLSA Securities Malaysia Sdn Bhd Loong Chee Wei

9 Deutsche Bank Malaysia Andrew Hill

10 ECM Libra Investment Research Ching Weng Jin

11 HwangDBS Vickers Research Sdn Bhd Lim Sue Lin

12 Inter-Pacific Research Sdn Bhd Anthony Das

13 J P M Ch i Oh13 J.P. Morgan Chris Oh

14 KAF - Seagroatt & Campbell Securities Sdn Bhd Chehan Perera

15 Kenanga Investment Bank Berhad Chan Chee Kin

16 Kim Eng Research Sdn Bhd Yew Chee Yoon

17 Macquarie Capital Securities (Singapore) Pte Ltd Tay Chin Seng17 Macquarie Capital Securities (Singapore) Pte Ltd Tay Chin Seng

18 Maybank Investment Bank Berhad Wong Chew Hann

19 Nomura Malaysia Sdn Bhd Julian Chua

20 OSK Research Sdn Bhd Keith Wee

21 RHB Research Institute Sdn Bhd Low Yee Huap

52

p

22 TA Securities Holdings Berhad Wong Li Shia

23 UBS Securities Malaysia Sdn Bhd Khairul Rifaie

24 UOB Kay Hian Research Pte Ltd Vincent Khoo / Leow Huey Chuen

Glossary

Reported PerformanceReported performance refers to the financial performance as reported in the audited financial statements and disclosed to the market

One OffsOne 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)• tax and regulatory regimes (eg deferred tax asset write off due to reduction in corporate tax rates).

Underlying PerformanceUnderlying performance refers to the financial performance adjusted for one off impacts as above

Business SegmentsgBusiness 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 SegmentsOperating segments

• have more volatile and lumpy income streams, with the former a direct function of risk appetite • include

• income and expenses associated with proprietary and treasury trading shareholder funds loan

53

• income and expenses associated with proprietary and treasury trading, 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 “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.

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 lookingsubject 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,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.

54

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 :

www.ambankgroup.com

or contactor contactGanesh Kumar Nadarajah

Head Group Investor Relations

Tel : (603) 2036 1435 Fax : (603) 2031 7384 e-mail : [email protected] orir@ambankgroup [email protected]

Documents

AmBank Group Results - Investors Presentation IP i · PDF fileAmBank Group Results IP i ... - Investors Presentation H1 FY2010 Results 6 November 2009 ... SP and GP) Corporate & Institutional