Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors

AmBank Group Results

‐ Investors Presentation

AMMB Holdings Berhad

Note : Based on FY2009 Investors PresentationUpdated for 9MFY2010 financial results and other uptodate information

9M FY2010 Results 8 Feb 2010

Cheah Tek KuangGroup Managing Director

Contents

• Key Messages• Financial Fundamentals• What is Ahead• Summary

• Retail Banking

1. Executive Summary

2. Financials Update • 9M FY2010 Group Performance• Business Outlook

AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 1

g• Business Banking• Investment Banking • Corporate & Institutional Banking• Assurance• Operating Segments• Islamic Banking

• Share Price• Shareholding• ANZ • Channel & Distribution• Customer Service• Ratings & Research Coverage

3. Business Segment Performance

4. Economic Outlook & Banking System

5. Additional Information

AmBank Group snapshot

Proud banking heritage spanning over 30+ years

A top 20 listed company on the Bursa Saham Malaysia (market cap ~RM15.07 billion) & rank 188 (global 1,000 banks by market cap)


Top 4 largest listed banking group (market cap) in Malaysia with diversified business fundamentals

Well capitalized with Tier 1 CAR of 9.8% and total RWCA of 15.3%

ANZ, our strategic partner, one of only 11 AA rated banks in the world

AmBank Group, Gross Loans : RM’bil11.1%

On track to deliver revised improved FY2010 earnings guidance

Sound 9MFY2010 performanceHigher revenues Better‐than‐expected loans growth

Higher FY2010 PATMI guidance (≥ RM950 mil) Key focus : Medium Term Aspirations (MTA)

Staying Ahead

Business Segment Performance

Sound Divisional profitsInvestment Banking : capital market recoveriesAssurance : diversified portfolios in Life and GeneralBetter asset quality : higher LLC and lower NPL


Capital, Risk & Funding

Priorities for 2010

Profitable growth, diversification & rebalancing focusDynamic focus : volume vs price trade offs & asset quality Leverage market leading positions & capital markets recoveryMedium term : target cost efficiencies, continue investmentsLonger term plans : to disclose during FY2010 results

Well capitalized (Tier 1 : 9.8%, RWCA : 15.3%)Proactive risk managementImplement FTP, ALM disciplines, Basel II and FRS

Strong 9MFY2010 results, sets good foundations for FY2010Pe

rforman

ce Profit after Tax & MI

ROE

Net Lending / Financing

EPS(basic, annualised)

55,997 mil

33.2 sen

12.4%

681.0 mil

9MFY09

63,873 mil

35.4 sen

11.9%

766.9 mil

9MFY10

14.1%

6.6%

‐0.5%

12.6%

Change Q2FY10 Q3FY10

240.2 mil 268.5 mil

11.1% 11.6%

32.9 sen 35.3 sen

60,437 mil 63,873 mil

Underlying PATMI growth : 17.2%


Risk, Ca

pital &

Fund

ing Profile

RWCA

Tier 1

Net NPL / NPF Ratio

Growth

Customer Deposits

CASA

LD Ratio 94.1%

7.9%

13.0%

2.7%

6,727 mil

59,523 mil

95.6%

9.8%

15.3%

1.8%

8,228 mil

66,787 mil

+1.6%

1.9%

2.3%

‐0.9%

22.3%

12.2% 65,302 mil 66,787 mil

7,611 mil 8,228 mil

2.2% 1.8%

15.7% 15.3%

10.1% 9.8%

92.6% 95.6%

What is ahead …

Higher lending & RWA growth : government spend, private consumptionIndustry :

Malaysia : Cautious but optimistic

Increasing global optimism but risks lingerGradual Malaysian economic recoveryGDP : 2009 : ‐2.5% , 2010 +3.5%⁺ Fiscal spending (RM67 billion)⁺ Monetary policies, better‐than‐expected exportsProgressive interest rate hike commencing early 2010


Competition : strong and some irrational pricingUpside : Capital market recoveriesBIS/BASEL III discussion to intensify

Industry :What is Ahead

AMMB : Tailwinds emerging but risks linger

Strategic themes provided resilienceLeverage economic upturn in 2010Full MTA achievement delayed : BIS/BASEL III requirementsEnhanced risk, governance and systemsGood support from ANZ, our strategic partner

1. Top 5 Banking Group in Malaysia withdiversified business fundamentals, supportedby ANZ, our strategic partner and 1 of 11 AArated banks in the world

2. Good 9M result sets the foundation for us todeliver above our earlier FY 2010 marketguidance

3 Sound capital levels and executing to our

Summary

9M –


3. Sound capital levels and executing to ourstrategic themes will position AmBank Groupto leverage economic upturn in 2010

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

5. Staying focused on executing to our strategicagenda around profitable growth andportfolio rebalancing will help us achieve ourMedium Term Aspirations (MTA)

9M FY2010

AmBank Group Results

‐ Investors Presentation


AMMB Holdings Berhad 9M FY2010 Results

February 2010

Ashok RamamurthyGroup Chief Financial Officer &

Deputy Group Managing Director

Contents


• Retail Banking









Sound profit growth, with conservative provisioning

REPORTEDBusiness Performance

Income :

All Divisions recorded good growth in incomes

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

Expenses:

Reflects salary and staffing increases, additional bonus accrual, ongoing medium term investments and CPI, but within CTI targets

RM'mil 9MFY09 9MFY10

Net int income 1,707.5 1,837.5 +7.6%

Fee and comm 393.5 474.8 +20.7%

Inv and trading (28.9) 253.6 +>100%

Ins business 84.7 92.9 +9.7%

Others (0.7) 11.3 +>100%

Total Income 2,156.1 2,670.0 +23.8%

Expenses 943.9 1,089.9 +15.5%

9MFY10 vs 9MFY09


UNDERLYING 1

9MFY09 results

Favourable growth in 9MFY10

Unfavourable growth in 9MFY10

Provisions :

Higher GP – stronger loans growth

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

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

Note :1 9MFY2009 underlying is reinstated for one‐off’s as at 31 December 2009

PBP 1,212.2 1,580.0 +30.3%

Provisions 267.9 512.2 +91.2%

PBT 944.3 1,067.9 +13.1%

PAT 692.5 791.5 +14.3%

PATMI 681.0 766.9 +12.6%

PATMI 663.5 777.9 +17.2%


Retail Banking Division 489.5 520.1 +6.3%

Business Banking Division 93.2 100.3 +7.7%

Investment Banking Division 31.1 99.6 +220.6%

Corporate & Institutional Banking (CIB)

67.5 62.6 ‐7.2%

Assurance 33.8 56.7 +67.8%

Life Insurance 8.9 19.1 +114.6%

9MFY10 vs 9MFY09

Improved PATMI

Business Performance

Income growth in Retail Banking attributed to focus on profitable segments

Business Banking recorded lower provisions

Better investment banking performance from improving capital and equity market conditions

CIB impacted by higher general provisions on stronger lending performance

PATMI : Growth contributed by all business divisions except CIB

1 (61.9%)

(11.9%)

(11.9%)

(7.5%)

(6.8%)


General Insurance 24.8 37.6 +51.6%

Operating Segments : Reported PATMI

(34.0) (72.5) ‐113.2%

Retail Banking Division 41,621.1 42,784.5 +2.8%

Business Banking Division 9,619.9 10,936.9 +13.7%

Corporate & Institutional Banking 4,486.8 9,356.2 +108.5%

9MFY09 results



Life and General Insurance recorded higher incomes from larger fund base

Note :1 Bracket denotes composition of contribution to PATMI by business segment2 Net Assets : net lending & net financing (net of IIS, SP and GP)3 Life Insurance surplus is transferred into life policy shareholders’ fund in overall Group accounts

Net Assets 2 : Growth contributed by CIB and Business BankingRetail focus on preferred viable segments in a highly competitive environment

Business and SME growth focusing on more stable sectors

CIB’s growth focusing on project financing with government support, GLC’s and large MNC’s

Lower NIM but improved non‐interest income and CTI ratios

REPORTEDBusiness Performance

Lower NIM from :

Reduced interest recoveries

Change in asset mix towards lower margin but stable corporate loans

H1FY10 NIM = 2.82%

Improvements in cost‐income ratio from:

Higher revenue growth in


Net Interest Margin 3.06% 2.92% ‐0.14%

Cost‐Income 43.78% 40.82% ‐2.96%

9MFY10 vs 9MFY09

(NIM & NFR composite)

(CTI)


9MFY09 results



g gInvestment Banking, Corporate & Institutional Banking and Assurance

Other operating income :

Higher composition to total income due to the recovery in trading incomes

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

Reported and Underlying : 9MFY09 – 0.67% 9MFY10 – 0.73%2 CTI and CTA excluding insurance3 Other operating income includes net income from insurance business

Cost‐Asset 1.51% 1.58% +0.07%

Fee Income / Total Income

18.3% 17.8% ‐0.5%

Other Operating Income / Total Income

20.8% 31.2% 10.4%

(CTA)

Balance sheet fundamentals looking good, with strong CASA growth

REPORTED Business Performance

Loans growth to focus on

profitable segments and

targeted industry sectors

More diversified deposit base

with initiatives in retail and

business segments driving high

CASA growth

RM'mil 9MFY09 9M1FY10

Balance Sheet ‐ Lending/Financing

Gross loans/financing 59,676.1 66,311.7 +11.1%

Net loans/financing 55,997.3 63,873.4 +14.1%

Balanace Sheet ‐ Deposits

Customer Deposits 59,522.7 66,786.7 +12.2%

9MFY10 vs 9MFY09


9MFY09 results



LD ratio impacted by stronger

loans growth in the last two

quarters

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

p , ,

CASA Deposits 6,726.5 8,227.8 +22.3%

CASA Proportion 11.3% 12.3% +1.0%

LD Ratio 94.1% 95.6% +1.5%

Better asset quality & decreasing quantum of historical issues

Stable NPL level despite economic stresses from the recent global financial downturn

“Continuing business”

3.05 1.78 0.34 0.361.73 1.28 0.30 0.291.68 0.64 0.00 0.091.65 0.50 0.00 0.09

‐0.2

0.3

0.8

1.3

1.8

2.3

2.8

3.3

Retail Business Credit & Leasing Investment / Corporate BankingRM'bill

Gross NPL / NPF by Segments

Mar 2007 Mar 2008 Mar 2009 Dec 2009

Gross NPL / NPF by Segments


Continuing business NPL’s better than system levels

Historical business gross NPL’s constitute circa 23% of the total portfolio

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

1,859 1,314 1,743 710 1,706 1,162 720 343 1,728 1,100 506 50 ‐

600

1,200

1,800

2,400

3,000

Gross NPL Net NPL Gross NPL Net NPL

Continuing Business Historical BusinessRM' mil

Non‐Performing Loans / Financing

Mar 08 Mar 09 Dec 09

NPL ratio

2.7% 1.7% 23.2% 2.9%3.0% 2.1% 22.5% 12.1%3.5% 2.5% 42.5% 23.1%

Non‐Performing Loans / Financing

4.3 5.8

4.6 3.2 2.0 1.5 1.1

39.3% 32.2% 36.7%

56.6%67.3%

75.1%92.8%

‐80%

‐40%

0%

40%

80%

‐

5

10

15

RM'bil Gross NPL Net NPL Loan Loss Coverage

Improving trends on NPL / NPF ratios & loan loss coverage

Proactive collection activities

Tightened risk t

Asset Quality Indicators

6.06

7.606.14

5.53

3.602.43 2.23


10.9%

13.8%

9.6%

6.2%

3.7%2.6%

1.8%

14.8%

17.4%

12.4%

10.4%

6.3%

4.1%

3.4%2.2% 1.9% 1.7%3.2%

1.0% 0.6% 0.9%0%

5%

10%

15%

20%

assessment

Led by experienced team

FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 9MFY2010

9MFY10 / FY09 change :Gross NPL / NPF ratio 0.7%Net NPL / NPF ratio 0.8%Net Provisions charge 0.3%

Gross NPL ratioNet NPL ratioNet Provisions Charge

0.00%

0.60%

1.20%

1.80%

Q1 Q2 Q3 Q4

% New Gross NPL / NPF to Gross Loans / Financing

0.00%

0.40%

0.80%

1.20%

Q1 Q2 Q3 Q4

% Gross NPL / NPF Conversion to Gross Loans / Financing

Lower new gross NPL / NPF formation, recoveries, write‐offs and conversions

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4


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

0.00%

0.20%

0.40%

0.60%

% Recoveries to Avg Gross Loans / Financing

0.00%

0.50%

1.00%

1.50%

2.00%

Q1 Q2 Q3 Q4

% Write‐Offs to Avg Gross Loans / Financing

Q1 Q2 Q3 Q4FY2004‐FY2007 FY2008 FY2009 FY2010

10.0

11.2

9.2

115.7%

15.5%

23.3

12 4

24.0

13.3

9.4%

16 9%

4.3%

Retail : targeting profitable segments

Portfolio rebalancing : Focus on viable segments and diversification

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

Loan Composition %36.4% 20.1% 3.8% 1.4% 3.1%1.4% 16.9% 14.0% 1.8%

Retail (66%) Business / Corporate (33%)


4.9

1.3

1.2

Business Banking (ex GLR)

Corporate & Institutional Banking

Business & CIB Loan Rehab

13.8%12.4

2.2 0.9 1.0 2.1

2.50.9 0.9

2.0

Auto Financing Mortgage Asset Financing Credit Cards Line of Credit Personal Loans to civil servants

RM'bil Dec' 09 Mar' 09

16.9%5.8% 1.5%

10.4%

26.0%

10.5%

62.1%

1.4%

Dec 09

Business & Corporate : harness synergies via deepening customer relationships

by Interest Rate Typeby Customer Type

RM'bil Mar‐08 Mar‐09 Dec‐09Fixed rate 62% 60% 57%Variable rate 38% 40% 43%Business

SME

Individuals

Others

941.4 1,164.8

1,430.1 1,700.9

2,034.8 2,300.3

312.1 340.9 382.6 352.2 449.0 441.5

‐1600

‐800

0

800

‐

1,000

2,000

3,000

Gross PremiumFund Assets

Life Fund Assets Gross Premium

539.9 601.8 696.3 811.3

922.7 982.2

390.4 438.2 476.3 545.6 585.8 461.8

‐1600

‐800

0

800

‐

500

1,000

1,500

Gross PremiumFund Assets

General Fund Assets* Gross Premium

Good growth momentum for Insurance and Funds Management

General Insurance Life Insurance

6.4%13.0%

RM’mil


3,663.4 5,324.1

8,099.8 9,069.5 7,904.0

10,074.2

21.5 34.4

46.1

78.2 68.0 48.8

‐120

‐80

‐40

0

40

80

‐

5,000

10,000

15,000

Management Fee

AUM

Asset Under Management Management Fee

3,262.5 4,894.8

6,358.4

9,221.8 8,048.2

9,714.0

9.8 7.6 11.9 20.1 19.0

12.9

‐75

‐50

‐25

0

25

50

‐

5,000

10,000

15,000

Management Fee

AUM

Asset Under Management ("AUM") Management Fee

FY2005 FY2006 FY2007 FY2008 FY2009 9MFY2010 FY2005 FY2006 FY2007 FY2008 FY2009 9MFY2010

Institutional Funds Unit Trust Funds

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

27.5%20.7%

765814 802

891

235146 110 171

0

200

400

600

800

1,000

FY2007 FY2008 FY2009 9MFY2010RM'mil

Total Group Level ‐ Underlying

757838 818

890

439

155 110 171

0

200

400

600

800

1,000

FY2007 FY2008 FY2009 9MFY2010RM'mil

Total Group Level ‐ Reported

Sound income growth and conservative provisions

Income : performance reflecting improved contributions across Divisions

Provisions : to institute more

Total Income Provisions

8.8% 11.2%

Total Group Level ‐ Reported Total Group Level ‐ Underlying


FY2007 FY2008 FY2009 9MFY2010 FY2007 FY2008 FY2009 9MFY2010proactive collections management

NIM : lower recoveries and changes in lending mix towards lower margin but stable corporate loans

53.4656.86

59.67

66.31

8.4%6.4%

4.9%

11.1%

2.7% 2.9% 3.0% 2.9%

‐14%

‐8%

‐2%

4%

10%

50

55

60

65

70

FY07 FY08 FY09 9MFY10RM'bil

Gross Loans / Financing & NIM / NFM

RM'bil Y‐o‐Y growth NIM

20.8%

31.2%

18.3%17.8%

‐1.3%

9.5%

‐5.0%

5.0%

15.0%

25.0%

9MFY2009 9MFY2010

Non Interest / Financing IncomeComposition %

Non‐Interest Inc Fee Inc Trading & Investment Inc

Average / quarter Average / quarter

Gross Loans / Financing & NIM/NFM Non Interest / Financing Income Composition %

36.044.2 44.8 45.4

5.3

6.3 6.8 8.21.1

5.3

12.6 13.1

Mar 07 Mar 08 Mar 09 Dec 09RM'bil

Others CASA FD + NID

23.0 23.6 25.5 25.5

4.99.0

10.9 11.512.5

20.2

26.3 28.11.9

3.0

1.41.7


Others Biz enterprises Government Individuals

CASA grew by 21.8% in 9MFY2010

Government funds grew by 5.5% in 9MFY2010

Diversified funding profiles

Customer Deposits by Type

Customer Deposits by Sources

Individuals

Government

Biz enterprises

Others2

Others

CASA

FD + NID

3

12.6% 11.2% 10.5%

Total 42.4b 55.8b 64.1b

CASAcomposition

66.8b

12.3%


4.82.1 1.6 0.6

0.5

1.4 0.7 0.5

1.3

1.40.9 0.9

10.9

2.12.9 4.1


Other FI's BNM Merchant banks Banks

51.9%60.9% 62.6% 66.5%

26.9%

27.8% 27.8% 21.9%9.2%

6.0% 4.5% 4.7%0.1%

11.0%

1.0% 5.2%5.1% 6.9%


Non‐interest sensitive Islamic> 5 years 1‐5 yrs

Longer term funding – an ongoing issue

Reduce dependency on inter‐banking funding

Note :1 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 Institutions2 “Others” by source comprises pension and retirement funds, non‐profit organisations and similar3 “Others” by type comprises short‐term treasury deposits, cash management system (CMS) placements and structured deposits

Deposits of Banks & Other Financial Institutions

Customer Deposits : Interest / Profit Rate Pricing Profile

0 – 3 months

3 – 12 months

1 – 5 years

Non ‐ sensitive

> 5 yearsIslamic

BanksMerchantBNM

Other FI’s

17.4b 7.1b 6.1bTotal 6.1b

34.9 43.2 45.5

‐58.8 ‐64.3 ‐65.9

3.2 2.28.5

Interest / Profit Rate Risk : 0 ‐ 12 months

Balance sheet being progressively repositioned for rising interest rates

FY2008 FY2009 9MFY2010 FY2008 FY2009 9MFY2010

RM’bil

Net mismatch ‐20.6 ‐19.0 ‐11.9

10.0 11.2 13.2

‐4.9 ‐5.1 ‐5.3

‐4.0 ‐2.9‐8.6

Interest / Profit Rate Risk : 1 ‐ 5 years

Net mismatch 1.1 3.2 ‐0.6


10.1 8.7 8.4

‐8.5 ‐8.4 ‐10.9

‐7.3 ‐7.9‐9.5

‐0.4 ‐0.6

‐0.4

Interest / Profit Rate Risk : Non‐Interest Sensitive

21.5 25.5 25.7

‐3.4 ‐3.5 ‐2.9

0.8 0.8 0.1

Interest / Profit Rate Risk : > 5 years

FY2008 FY2009 9MFY2010 FY2008 FY2009 9MFY2010

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

Net mismatch 18.9 22.7 23.0 Net mismatch ‐6.1 ‐8.2 ‐12.4

Assets Liabilities Equity Off balance sheet gap / derivatives

(13.3)

28.2 31.6 35.4

EPS, basicsen/share

‐0.17%

1.02% 1.04% 1.15%

ROA, %

‐5.8%

11.5% 11.7% 11.9%

ROE, %

Improved earnings and returns ratios for 9MFY2010

FY07 FY08 FY09 9MFY10 FY07 FY08 FY09 9MFY10 FY07 FY08 FY09 9MFY10

9MFY10 / FY09 change 0.2%FY 09 / 08 change 0.2%



REPO

RTED

Maintaining profitability despite


26.1 32.0 30.9 35.9

EPS, basicsen/share

0.76% 1.08% 1.02% 1.16%

ROA, %

10.2% 12.7% 11.4% 12.0%

ROE, %

FY07 FY08 FY09 9MFY10 FY07 FY08 FY09 9MFY10 FY07 FY08 FY09 9MFY10




UNDER

LYING

peconomic disruptions

Strong capital base to meet ensuing challenges and support growth

Innovative Tier 1 Capital Securities issued (AmBank (M) Berhad) :

Approved program = RM500 mil

Q1FY10 issuance = RM300 mil

Q2FY10 issuance = RM185 mil

CAR excludes Q3FY2010 profits; if included :

Core equity : 0.3% (proforma 8.1%)

Tier 1 : 0 4% (proforma 10 2%)

FY2007 FY2008 FY2009 9MFY2010 *

Core equity 7.6% 7.7% 7.8% 7.8%

Tier 1 8.7% 8.5% 9.7% 9.8%

RWCA 12.6% 14.1% 15.2% 15.3%

Capital adequacy : AMMB Holdings Berhad

*


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

Tier 1 : 0.4% (proforma 10.2%)

RWCA : 0.4% (proforma 15.7%)

Capital management plan :

Strengthen capital profile & buffer

Increased modelling of economic scenarios

Risk / rewards focus within Basel II

Improvements in capital diversification

Development of dynamic dividend policy

Review of BIS / Basel III framework

Tier 1 * RWCA *

AmBank (M) Berhad 10.3% 14.7%

AmBank (M) Berhad, Group 9.4% 14.9%

AmInvestment Bank Berhad, Group 22.7% 27.8%

AmIslamic Bank Berhad 11.0% 15.8%

Capital adequacy : by legal entity, 9MFY2010

* Excludes Q3 FY2010 profits (except for AmIslamic)

Strategic focus : Maintain viable growth and rebalancing focus

De‐riskrowth

High

De‐risk + DiversifyDiversify


Differen

tiated

G

Low

Mod

erate

(ISLAMIC AND CONVENTIONAL BANKING)

Strategy & outlook for FY2010 refined for improving market conditions

OverallMaintain profitable growth & rebalancing focus via executing to our strategic agendaIncome diversification, cost management, deposit growth & enhanced risk disciplines key priorities for FY2010Position business for potential economic recovery towards beginning 1Q2010Currently evaluating medium to long term strategic plans and options

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 anticipated Enhanced focus on risk management and collectionsExpect minimal profit growth for FY2010

Business BankingFocus on building a sustainable asset base targeted towards stronger industry segments & 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 FY2010More stable economic environment with equity & debt market activities improving


Investment Bankingq y p g

Focus on core expertise in advisory & capital market activitiesExpect rising profit performance over FY2009

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

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 & LGD models, financial spreading tool & security indicators (collateral management)Implement new FTP and ALM disciplines, Basel II, FRS requirements and review adoption of the proposed BIS/Basel III capital & liquidity framework (2012)


Focus on project financing with government support, GLC’s & large MNC’sDeepen customer relationships to generate fee incomes & advisory mandatesEnhance focus on capital efficient business growth & loan pricing to reflect economic risksExpect an improved profit performance over FY2009

Life

Assurance

Expect good growth via revenue increase & efficiency improvements over FY2009

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

Reported :

‐RM282.5mil

Underlying : RM556.9mil

Reported :

RM668.5 mil

Underlying :

RM837.4 mil

Reported :

RM860.8 mil

Underlying :

RM840.7 mil

Reported :

RM766.9 mil

Underlying :

RM777.9 mil

≥ RM950 mil~ 12% ‐ 15%

CAGR

Reported :

‐5.8%

Underlying : 10.2%

Reported : 11.5%

Underlying : 12.7%

Reported : 11.7%

Underlying : 11.4%

Reported : 11.9%

Underlying : 12.0%

circa 11.5%

FY2012 :

circa 15%

MTA : 17–20%

On track to deliver revised improved FY2010 earnings guidance

Previously RM800 – 900mil

Previously 11%

PATMI

ROE

FY 07 FY 08 FY 09 9M FY10 FY 2010Medium Term

Aspirations (MTA)


Reported : 37.1% Reported : 39.6% Reported : 43.0% Reported : 40.8% 42% ‐ 43% circa 40%

Reported : 6.2% Reported : 3.7% Reported : 2.6% Reported : 1.8% 2.0% ‐ 2.5%FY2012 : 2 ‐ 3%

MTA : below system

5.0 sen / share

(loss year)

6.0 sen / share

18.3%

8.0 sen / share

19.0%

N/A≥ 10.0 sen /

sharePayout % ≥

system average

Previously 45%

Previously 4%

CTI

Net NPL Ratio

Dividend

gross / payout

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 AMMBMTA : excludes adoption of new proposed capital framework (BIS /Basel III – Dec 2009) in 2012

1. Top 5 Banking Group in Malaysia with diversifiedbusiness fundamentals, supported by ANZ, ourstrategic partner and 1 of 11 AA rated banks inthe world

2. Good 9M result sets the foundation for us todeliver above our earlier FY 2010 marketguidance

3 Sound capital levels and executing to our

Concluding remarks


3. Sound capital levels and executing to ourstrategic themes will position AmBank Group toleverage economic upturn in 2010

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

5. Staying focused on executing to our strategicagenda around profitable growth and portfoliorebalancing will help us achieve our mediumterm aspirations (MTA)

Contents


• Retail Banking









50.9 6.3 12.1 6.2 5.8 18.848.9 6.1 10.7 5.3 5.4 23.60%

10%

20%

30%

40%

50%

Retail Banking

Business Banking

Investment Banking


Assurance Group Operating Segments

Expenses

60.7 11.2 7.2 6.5 4.9 9.554.0 9.1 9.5 7.1 4.8 15.50%

10%

20%

30%

40%

50%

60%

Retail Banking

Business Banking

Investment Banking



Income

Summary of divisional performance

Investment Banking and Assurance Businesses have


70.7 13.5 4.5 9.7 4.9 ‐3.265.7 12.7 12.6 7.9 7.2 ‐6.0

‐10%

10%

30%

50%

70%

Retail Banking

Business Banking

Investment Banking



PAT

68.4 15.0 3.4 6.8 4.2 2.357.6 11.1 8.7 8.3 4.4 9.9

‐15%

5%

25%

45%

65%

Retail Banking

Business Banking

Investment Banking



PBPcontributed higher profit in the current 9‐month vis‐à‐vis last corresponding period

9MFY09 9MFY10

Retail Banking Division

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

Strong CASA growth

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

Retail Banking’s Aspirations :


Income 1,309.4 1,442.9 +10.2%

Expenses 480.5 533.0 +10.9%

PBP 829.0 910.0 +9.8%

Provisions 176.3 215.9 +22.5%

PBT 652.6 694.1 +6.4%

PAT 489.5 520.1 +6.3%

Gross Loans / Financing 42,654.4 43,976.4 +3.1%

9MFY10 vs 9MFY09


9MFY09 results



Establish retail business models in key areas of profitability for coming year and readiness to engage scalable growth ahead

Strategic Agenda :

Focus target market and portfolio base by product

Streamline distribution channels for productivity and efficiency

Strengthen risk and sustain portfolio health

Enhance service levels ‐ TAT, SSM and customer services

Continue to build operational infrastructure for efficiency and capacity

Ratio : 3.75%

Ratio : 2.58%

Gross oans / Financing 4 ,654.4 43,976.4 3. %

Net Loans / Financing 41,621.1 42,784.5 +2.8%

Gross NPL / NPF 1,719.6 1,649.4 ‐4.1%

Net NPL / NPF 1,333.0 1,122.3 ‐15.8%


Low Cost Deposits 5,694.7 6,876.0 +20.7%

ROA (annualised) 1.57% 1.62% +0.05%

CTI 36.7% 36.9% +0.2%

Loan Loss Coverage 60.1% 72.3% +12.2%

Business Banking Division

Income growth impacted by lower interest recoveries

Cost increase largely reflecting expansion in relationship team

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

Business Banking’s Aspirations :

h b i i bl i d i i d


Income 240.9 241.7 +0.3%

Expenses 59.7 66.2 +10.9%

PBP 181.2 175.5 ‐3.2%

Provisions 57.0 41.5 ‐27.1%

PBT 124.2 133.9 +7.8%

PAT 93.2 100.3 +7.7%


9MFY10 vs 9MFY09


9MFY09 results



Entrench business in stable industries in accordance to government stimulus packages, grow fee income / non interest income and deposit base

Strategic agenda :

Overall 3C approach : Conserve, Control, Caution

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

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 in chosen sectors

Ratio : 1.02%

Ratio : 0.61%



Gross NPL / NPF 124.3 113.8 ‐8.4%

Net NPL / NPF 17.9 68.2 +281.0%



ROA (annualised) 1.49% 1.28% ‐0.21%

CTI 24.8% 27.4% +2.6%

Loan Loss Coverage 205.9% 189.4% ‐16.5%

Investment Banking Division

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

Continue to strengthen business relationships and core expertise

Investment Banking’s Aspirations :

Staying relevant & protect market share in current operating environment

Preserving quality of balance sheet assets by managing credit interest rate and operational risks


Income 154.6 253.9 +64.2%

Expenses 113.9 116.4 +2.2%

PBP 40.7 137.5 +238.1%

Provisions (1.4) 4.1 +>100%

PBT 42.1 133.4 +217.1%

PAT 31.1 99.6 +220.6%

CTI 73.7% 45.8% ‐27.9%

9MFY10 vs 9MFY09

1


9MFY09 results



managing credit, interest rate and operational risks whist remaining profitable

Balance between nurturing human resource capital to prepare for eventual upturn in global economy whilst managing operating costs

Strategic agenda:

Concentrate on core businesses and priority customers

Weather financial crisis storm by managing costs

Build scale through aggressive relationship building and capabilities

Position (resources and prime morale) for eventual upturn in operating environment

Note :1 Including AmInvestment Management, AmInvestment Services, private banking & AmARA

Assets Management 18,995.4 23,878.3 +25.7%

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

Bursa M'sia 45,793.9 55,572.6 +21.4%

Future KL index 469.9 335.8 ‐28.6%

IB Broking 3,730.4 4,254.6 +14.1%

AmFuture 80.4 66.2 ‐17.7%

Market Share as at:

IB Broking 8.2% 7.7% ‐0.5%

AmFuture 16.0% 20.1% +4.0%

1

Corporate & Institutional Banking Division

Diversified loans portfolio provided good support for income growth

Higher general provisions from larger loans base impacted profits

Corporate & Institutional Banking’s Aspirations:

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


Income 140.9 189.1 +34.2%

Expenses 58.1 58.1 +0.0%

PBP 82.9 131.0 +58.1%

Provisions (0.6) 51.1 +>100%

PBT 83.5 79.9 ‐4.3%

PAT 67.5 62.6 ‐7.2%

CTI 41.2% 30.7% ‐10.5%


9MFY10 vs 9MFY09


9MFY09 results



Derisk, Diversify, Differentiate, Consolidate, Grow, Build

Strategic agenda :

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

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

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

Assets Management 837.7 997.8 +19.1%

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

S'pore SE 142,219.5 162,394.7 +14.2%

Jakarta SE 58,457.8 64,089.2 +9.6%

AmFIPL 1,022.4 1,994.6 +95.1%

PTAMCI 531.2 564.5 +6.3%

Market Share as at:

AmFIPL 0.7% 1.3% +0.5%

PTAMCI 0.9% 0.9% +0.0%

Assurance Businesses

Higher income from larger fund assets, attributed to enhanced agency network and focus on product bundling and cross selling

Assurance’s Aspirations :

To be the top 3 insurer in terms of premiums


Income 105.3 128.9 +22.5%

Expenses 54.6 59.1 +8.3%

PBP 50.6 69.8 +37.8%

Provisions 2.3 (0.2) ‐>100%

PBT 48.3 70.0 +45.0%

9MFY10 vs 9MFY09


9MFY09 results



Strategic Agenda:

Life :

Improve capital efficiency via better ALM practices

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

General :

Enhance customer segmentation analytics for motor business

Develop alternative channels for non‐motor business

Rationalise branch operating model & centralise work processes

PAT 33.8 56.7 +68.0%

CTI 51.9% 45.9% ‐6.0%

Life Insurance Fund Assets

1,932.0 2,300.3 +19.1%

General Insurance Fund Assets

877.7 982.2 +11.9%

Post‐tax ROE 14.0% 17.7% +3.8%

General Business Claim

70.5% 71.2% +0.7%

Group Operating Segments

Higher income from :

Treasury and Markets(improved trading conditions)

Loan Rehab units (recovery rate as scheduled)

Shareholders fund, Corporate & Shared Services ( lid ti dj t t )


Income 205.1 413.5 +101.7%

Expenses 177.2 257.2 +45.1%

PBP 27.9 156.3 +461.2%

Provisions 34.3 199.7 +482.4%

PBT (6.4) (43.4) ‐574.1%

9MFY10 vs 9MFY09


9MFY09 results



(consolidation adjustments)( ) ( )

PAT (22.5) (47.9) ‐113.1%

PATMI (34.0) (72.5) ‐113.2%

Total Group:

Securities HFT 1,431.0 2,048.8 +43.2%

Securities AFS 7,067.6 7,792.6 +10.3%

Securities HTM 812.0 574.8 ‐29.2%

Islamic Banking

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 support

Islamic Banking’s Aspirations :

To become Islamic bank of choice and ensure high degree of value for customers and stakeholders


Income 409.7 502.1 +22.6%

Expenses 162.5 183.5 +12.9%

PBP 247.2 318.6 +28.9%

Provisions 83.4 58.6 ‐29.7%

PBT 163.7 260.0 +58.8%

PAT 120.5 189.3 +57.1%

Net Financing 9 476 1 11 991 7 +26 5%

9MFY10 vs 9MFY09


9MFY09 results



Strategic Agenda :

Strengthen International Currency Business (ICBU); focus on capital market and funds management via AmInvestment banking arm

Implement debt‐equity program (musyarakah)

Strengthen retail segment, focusing on personal financing, cards and housing loan

Execute deposit business programs and expand deposit business with government and government linked companies

Expand product tie‐ups and alliances with third parties

* Results incorporated under respective business divisions

Net Financing 9,476.1 11,991.7 +26.5%

Gross NPF 277.6 225.9 ‐18.6%

Net NPF 142.7 125.1 ‐12.3%



ROA (annualised) 1.40% 1.68% +0.3%

CTI 39.7% 36.5% ‐3.2%

Financing Loss Coverage 108.6% 124.8% +16.2%

Ratio : 1.79%

Ratio : 1.00%

Overview of one‐offs

Impacts from changes in accounting & provisioning policies, prior period catch‐ups, divestments, strategic investments & tax rate changes

9MFY 2009

9MFY 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) 27.0 (13.4)

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) 13.8 (8.6)

Impact of one offs on minority interest

Net Impact on Profit after Tax and MI (RM’mil) 17.2 (11.0)

Contents


• Retail Banking









+3.5% GDP forecast for 2010 /Lower interest rates forecast from 2009 to mid‐2010 but rising thereafter

Extraordinary global challenges in 2008 / 2009

Despite some resilience, consensus amongst economists is that domestic economy would contract in 2009 with a gradual recovery expected in 2010

2010 GDP forecast : +3 5%

‐3.0

0.0

3.0

6.0

9.0

12.0

2007 2008 2009F 2010E 2011E 2012E

% YoYReal GDP : Consumption Private Consumption (%YoY)

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

8.00%

OPR, BLR OPR (%) BLR (%)

AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010 38Source : In‐house internal research

2010 GDP forecast : +3.5%

Progressive interest rate hike in 2010

Financial sector stable and financially healthier, hence can afford to “pass on” official interest rate cuts

Convergence of price competition and narrower viable sectors

Vigilant and responsive BNM

0.00

2.00

4.00

6.00

2008 2009F 2010E 2011E 2012E

1.0

2.0

3.0

4.0

2008 2009F 2010E 2011E 2012E

%Deposit Rates Retail Deposit Rate (%)

Corporate Deposit Rate (%)

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

NPL on a declining trend

Loan loss coverage rising steadily with exception of March 2009 due to some asset quality pressure from financial crisis

Overall, banking system asset quality

NPL Ratios in Banking System & Loan Loss Coverage Ratio

45.949.7

51.7 52.6 54.9 56.3 57.5 58.962.8

65.1

70.773.5

76.580.2

84.787.1 86.3 87.4 88.0

94.4

15.0

20.0

60.0

80.0

RM’bil %


system asset quality remains intact during the recent economic downturn

Banks have tightened lending policy and strengthened risk assessment, starting fundamentals are strong

Source : BNM monthly statistical bulletin

9.89.2

8.6 8.4 8.2 8.0 7.7 7.4 7.2 6.66.0 5.6

5.34.7 4.3 4.1 4.0 3.9 3.8

3.2

7.36.7

6.1 5.8 5.7 5.45.1 4.8

4.44.1

3.5 3.23.0 2.6 2.4 2.2 2.2 2.2 2.1 1.8

0.0

5.0

10.0

‐

20.0

40.0

Mar‐05 Jun‐05 Sep‐05Dec‐05Mar‐06 Jun‐06 Sep‐06Dec‐06Mar‐07 Jun‐07 Sep‐07Dec‐07Mar‐08 Jun‐08 Sep‐08Dec‐08Mar‐09 Jun‐09 Sep‐09Dec‐09

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

Contents


• Retail Banking









Banking Sector Share Price Movement /Target Price and Recommendations

Index Movement

(May 07 = 100)/ index change at close of 15 Jan 10 vs 18 May 07

AMMB + 34.1% (RM5.25)

PBB + 20.9% (RM11.64)

RHBC + 13.3% (RM5.35)

CIMB + 12.9% (RM13.44)

HLFG + 11.0% (RM7.55)

100% base index

KLCI Index – 4.3% (1,298.58)

MBB – 23.1% (RM6.91)20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

140.0%

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 Nov/09

DateMBB PBB CIMB RHBC AMMB HLFG KLCI Index 15 January 1018May 07

Banking Sector Share Price Movement


Stats

MedianAverageRange

6.30 6.15 6.14 6.10 6.00 6.00 5.80 5.76 5.75 5.70

5.55 5.50 5.47 5.35 5.24 5.20 5.20 5.10 5.10 5.00 4.90 4.90 4.80 4.78

AMMB HOLDINGS BERHAD Average TP : RM 5.49Buy : 20 (83.3%) Hold : 2 (8.3%) Sell : 2 (8.3%)

21 Jan 10

26 Ja

n 10

29Jan10

27 Jan 10

4 Jan 10

25 Ja

n 10

31Dec

09

26 Nov

09

9 Nov

09

9 Nov

09

7 Jan 10

14Jan 10

14Dec

09

19 Nov

09

P/ EPS = 13.65P/ BV = 1.62

6 Nov

09

11 Dec 09

20 Ja

n 10

29Dec

09

15Jan 10

9 Nov

09

18 Nov

09

24 Nov

09

9 Nov

09

9 Nov

09

Market Price: RM 4.86 6.70%

Target Price and Recommendations RM’mil 9MFY2010

Share Capital 3,014.2

Reserves 6,324.3

Shareholders’ Equity 9,338.5

Less: Intangible Assets (1,814.6)

NTA 7,524.0

NTA Per Ordinary Share (RM) 2.50

Net Asset Per Ordinary Share (RM)

3.10

Market Price (RM) 5.00

Price to Book [NTA / Net Asset]

2.00 / 1.61

EPS (sen) – basic, annualised 35.38

Dividend (gross sen / share) ‐

MBB PBB CIMB RHBC AMMB HLFG KLCI Index 15 January 1018 May 07

Source : Bloomberg

(strategic partnership with ANZ)

Index change market price close of 29 Jan 10 vs. 22 Jan 10 Buy/Outperform/Overweight/AddP/EPS : EPS annualized Apr‐Sept 09 P/BV : BV annualized Apr‐ Sept 09 Sell/Underperform/Fully valued/Reduce/Underweight

Hold / Neutral* As at 29 January 2010

Shareholding structure

Ranked No. 18 (Malaysia – market capitalisation) & 188 (global – 1,000 banks by market capitalisation) :

with market capitalization of RM15.07 billion on Bursa SahamMalaysia (N1)

As at 31 December 2009

100% 70%*100%

16.7% 12.9% 46.6%

Employees Provident Fund Board

AMMB Holdings Bhd

AmcorpGroup Bhd PublicANZ Funds Pty

Ltd #

23.8%

AMFB Holdings Bhd

100%

51%^

AMAB Holdings Sdn Bhd

100%

A G IA Lif I


y

and market capitalization of US$4.41 billion on Bloomberg (N2)

AHB in progress of due diligence to acquire :

general insurance business of a local insurance company

Foreign shareholding excluding ANZ :

100%

AmInvestmentGroup Berhad

AmBank (M) Berhad

AmIslamic Bank Bhd

^ Insurance Australia Group Ltd –49%

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

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

AmG Insurance Berhad

AmLife Insurance Berhad

* Friends Provident Fund PLC –30%

Source :N1 Starbiz (Top 100 Companies By Market Capitalization as at 31 December 2009)N2 Bloomberg (Global 1,000 banks By Market Capitalization as at 4 January 2010)

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

ANZ – AmBank strategic partnership

+ANZ is the only Australian bank to have been in the Asian region of over 40 years

Strategic banking partnerships and presence across 14

Malaysia


countries

In August 2009, ANZ acquired selected RBS businesses in Asia for US$550 million, thus reinforcing its strategic intent of a super regional objective

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

Director

Dr. Robert John EdgarBoard

Director

Alex Thursby

Senior

Management

Group CFO & Deputy Group MDAshok Ramamurthy

Chief Risk Officer

Andrew Kerr

Head of Retail Distrib & Deposits

Brad GravellManagement

Head of FX & Derivatives

Steve Kelly

Credit Risk/ Portfolio Mgt

Glenn Saunders

Head of Market Risk

Jonathan Manifold

Head of Systems Accounting

Ignatius Lim

Chief Operating Officer

Ross Neil Foden

Director

Mark Whelan

Head of Sales, FX & Derivatives

Peter Trumper

ANZ has provided key resources and support

Significant positions in major business

#2 auto financier : 20.9% mkt‐share; Best Auto Financier Award in 2007

Leverage on nationwide network : 4 regional business centres & 11

# 3 in motor insurance premiums (8.6%) and # 7 in general insurance

Investment Banking

Investment BankingRetail BankingRetail Banking Business

BankingBusiness Banking AssuranceAssurance

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

Islamic BankingIslamic Banking

Full range of banking products and services according to Syariah principles

Stay relevant & protect market share, and

preserve balance sheet quality

Leverage on existing customers, build

sustainable assets & deposit bases

Focus on profitability and build foundations for

growth

To be the top 3 insurer in terms of

premiums

To become Islamic bank of choice

# 2# 4 # 5 # 7 # 6 # 5[General] [Life]

Corporate & Institutional Banking*

Corporate & Institutional Banking*

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

Derisk, Diversify, Differentiate,

Consolidate, Grow, Build

# 5


# 6 (incl. foreign banks) in housing loans (5.6%)# 7 (incl. foreign banks) in credit cards (7.0%)# 3 in personal financing (7.1%)>1.4 products per customer# 4 in no. of branches & # 3 in no. of ATM’sPioneer in weekend and extended banking hours

centres & 11 commercial centres; and strong relationship managers forceLeader in cash management (full suite) and SME financingExpanding trade and remittance leveraging on ANZ’s regional network

insurance premiums (5.2%)# 6 in life insurance premiums (6.3%)Leverage IAG’s market and operational leadership in general insuranceNew strategic partner, Friends Provident, in life insurance

Best Deal, Best League Manager

► Ranked Top 3 in :M&A leagueMalaysian Ringgit Bond leagueFunds Under ManagementParticipating organisations’ Bursa trading summary

Syariah principles

Latest venture : set‐up of Islamic funds management division

# 2 in Islamic credit cards

Diversify Islamic banking business in Brunei

► Cross‐sell commercial banking products

► International businesses : Singapore, Indonesia & Brunei

► Diversify businesses in REITs and private equity

Key group information highlights : customer service and delivery channels

Branch Banking

E‐ Channels & Contact

Centre (incl.

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

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

Reaching out to our customers by expanding our self service machine network at branches, shopping centers and 7‐Eleven storesDrive profitability by expanding revenue streams through additional services like

Business Units Key Strategic Initiatives

Number of ATMs

2,8282,003

387 367249

189 186 185 139 102 91

Maybank CIMB Public AmBank RHB HLB EON Alliance Affin

Number of Branches #4

#3


Internet & Mobile Banking)

Wealth Mgmt

Interbank Loan & Bill Payment and a full suite of Prepaid Top Up servicesMaximizing our outbound sales productivity through our Award Winning Contact CentreEnhance customer experience via innovative mobile and internet banking services

Increase deposit size through innovative 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)

Deposit & Customer Solutions

Establishing new line of business i.e. premier banking to cater to Affluent segment Increase cross selling via AmUtopiaWM system – BITPC approval stage

736 649 459 315 229 175 145

Maybank CIMB AmBank RHB PBB HLB EON Alliance Affin

Source : Company websites of peer banks / MEPS informationNote : Peer groups as at 31 December 2009; AmBank as at latest practicable date

Total no

ATM’s at 7 Eleven 334

Electronic Banking Centers (EBC) 125

FUM no. of accounts 46 K

Life insurance policy holders ~400 K

General insurance policies in force ~1,160 K

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

AmBank at top 5 TOM brand recall

Continuous improvement initiatives on brand awareness campaigns

Efforts will continue to strengthen brand positioning

The AmBank brand : Top‐of‐Mind Brand Awareness & Service Performance

5 55 5

44 4541

38

11 10

17 16

7 8

1

7546

3 3 3

1211

2004* 2007* 2008* H1 09

AmBank Bank A Bank B Bank C Bank D Bank E

%

5%

3%

5%

7%

11%

12%

6%

6%

6%

9%

11%

15%

15%

14%

12%

7%

3%

8%

07*

08*

H109ADEX

(SOV

)

Figures are in %

(BankC)

(Bank D)(Bank E)(Bank B)(Bank A)(AmB)

311

2252048610591


Positively positioned against 2nd‐tier competitors

Strengths : “extended banking hours”, “convenient ATMs” & “many branches”

Ongoing efforts to improve performance matrixes

Note: ADEX (SOV) for H109 = (Apr 09 – Aug 09)

Assets as at June 09 (RM’000)

Brand Imagery | Overall

STAFF

BANK

Extensive electronic channels

Easy and simple to bank with

Has many branches

One stop financial svs provider

A friendly bank

Innovative bank

A progressing & fwd moving bank

Uses the techn. to the best advantage

Provides a good quality of products & services

Overall this is the bank that I prefer to do my banking

Extended banking hours

A financially strong bank

Long term r/ship brings value

With conveniently located ATMs outside bank branches

Helps to achieve my goals / aspirations

Base All respondents (N=525)

Offers competitive int. ratesProvides the best value for all its products

Has reasonable charges

Professional and knowledgeable staff

Responsive to customers’ needs

Excellent customer service

Quick to resolve my problems

Provides superior financial advice and guidance

24

3827

3446

3530

3429

1949

3728

22

3121

2630

2630

2325

22

PRODUCT

28

4533363840

2935

3028

4422

2925

2826

2327

3232

262428

14

2818

272828

1825

2018

1211

2114

251615

26

2228

1619

16

31

433133

3034

2734

292727

2234

29

382929

38

3836

272728

H109 strength 2008 strength

Competitor A Competitor F Competitor B

Figures are in %

Ratings upgrade

AmBank (M) BerhadRating Agency Long‐Term Short‐Term Outlook DateRAM AA3 P1 Stable Nov 09Instrument :

‐ RM500mil non‐cumulative perpetual capital securities A2 Nov 09‐ RM1.0bil negotiable instruments of deposits AA3 Nov 09‐ RM2.0bil medium term notes programme A1 Nov 09‐ RM500mil innovative tier‐1 capital securities programme A2 Nov 09Moody’s Baa2 P‐3 Under review Dec 09Instrument :USD200mil non‐cumulative non‐convertible guaranteed preference share Ba2 Dec 09

Fitch BBB‐ F3 Stable Feb 09Instrument :

USD200mil non‐cumulative non‐convertible guaranteed preference share BB Feb 09

S&P BBB‐ A‐3 Positive Dec 09


Instrument :USD200mil non‐cumulative non‐convertible guaranteed preference share BB Dec 09

Capital Intelligence BBB‐ A3 Positive Dec 09

AmInvestment Bank BerhadRating Agency Long‐Term Short‐Term Outlook DateRAM AA3 P1 Stable Nov 09Instrument :‐ RM200mil subordinated tier‐2 bonds A1 Nov 09MARC AA‐ MARC‐1 Stable Mar 09

S&P BBB‐ A‐3 Positive Dec 09

Fitch BBB‐ F3 Stable Feb 09

AmIslamic Bank BerhadRating Agency Long‐Term Short‐Term Outlook DateRAM AA3 P1 Stable Nov 09

Instrument :‐ RM400mil subordinated sukuk musyarakah A1 Nov 09

Research Coverage

No Research House Analyst

1 Affin Investment Bank Tan Ei Leen

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 CIMB Investment Bank Berhad Winson Ng

6 Citi Investment Research Fiona Leong

7 CLSA Securities Malaysia Sdn Bhd Loong Chee Wei

8 Deutsche Bank Malaysia Andrew Hill

9 ECM Libra Investment Research Ching Weng Jin

10 HwangDBS Vickers Research Sdn Bhd Lim Sue Lin

11 Inter‐Pacific Research Sdn Bhd Anthony Das


12 J.P. Morgan Chris Oh

13 KAF ‐ Seagroatt & Campbell Securities Sdn Bhd Chehan Perera

14 Kenanga Investment Bank Berhad Chan Chee Kin

15 Kim Eng Research Sdn Bhd Yew Chee Yoon

16 Macquarie Capital Securities (Singapore) Pte Ltd Tay Chin Seng

17 Maybank Investment Bank Berhad Wong Chew Hann

18 Nomura Malaysia Sdn Bhd Julian Chua

19 OSK Research Sdn Bhd Keith Wee

20 RHB Research Institute Sdn Bhd Low Yee Huap

21 Standard Chartered Bank Tan See Ping

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 / Disclaimer of Warranty and Limitation of Liability

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)

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

Business SegmentsBusiness segments

• comprise AmBank Group’s core operating businesses that generate profits from direct customer transactions and interactions• have relatively more stable income streams, incur the bulk of the costs and typically have a lower risk profile• in most instances have market shares and growth metrics that can be measured and benchmarked externally

Operating Segments


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

• 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

The information provided is believed to be correct at the time of presentation. AMMB Holdings Berhad or AMMB Holdings 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 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.

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 :

AMBANK GROUP – INVESTOR RELATIONS ‐ PRESENTATION 9M FY2010 ‐ 8FEB2010

www.ambankgroup.com

or contact

Ganesh Kumar NadarajahHead Group Investor Relations

Tel : (603) 2036 1435 Fax : (603) 2031 7384 e‐mail : ganesh‐[email protected] [email protected]

Documents

Microsoft PowerPoint - AHB 9MFY2010 Results _ Investors