AMMB Holdings Berhad AmBank Group Investors Presentation FY2013 Results 16 May 2013 Vision As Malaysia’s preferred diversified, internationally connected financial Ashok Ramamurthy solutions group, we take pride in growing your future with us Group Managing Director 1 AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING
EXECUTIVE SUMMARY Page 3 1 FY2013 GROUP FINANCIAL PERFORMANCE Page 11 2 OUTLOOK & STRATEGIC PRIORITIES Page 22 3 DIVISIONAL STRATEGY & PERFORMANCE Page 26 4 SUPPLEMENTARY INFORMATION – AMBANK GROUP Page 38 5 6 SUPPLEMENTARY INFORMATION – ECONOMY & INDUSTRY Page 52 2 AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING
FY2013 Key Highlights 1 2 Consistent growth & returns Optimal diversification agenda Strong CASA growth, with CASA composition now 6th consecutive year of record performance, @ 20% consistently met financial aspirations LDR at preferred levels (circa 90% 2%), with FY2013 PATMI up 10.2% with positive diversified funding base momentum across most divisions Rebalancing loans portfolio via growing non-retail Improving returns (ROE: 14%) and in profitable retail segments Proposed dividend payout: 41% Banking entities capital optimally positioned for Basel 3 3 4 Clear strategic priorities Acquisition synergies on track Kurnia & MBF Cards: Stronger market position & Accelerate growth & business mix changes progressively realising synergies Strengthen customer centricity & connectivity AmLife & AmTakaful: Exploring strategic Increase productivity & efficiency partnerships 3 AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING
Continuing to deliver an optimal mix of growth, returns, and risk profile ∆% ^ CAGR ^ FY07 FY08 FY09 FY10 FY11 FY12 ^ FY13 FY13 vs FY12 FY07 - FY13 Pre ANZ Reposition, Build Aggressively Invest, Optimise & Improved Scale & New Growth Leverage Connectivity returns Presence Options 1 1,635.1 10.2% 19.7% 1 PATMI (mil) (282.5) 668.5 860.8 1,008.6 1,342.8 1,484.4 14.0% 0.2% 3.3% ROE -5.8 % 11.5 % 11.7 % 11.5 % 13.6% 13.8% Performance 1.40% 0.01% 0.26% ROA -0.17 % 1.02% 1.04% 1.13% 1.39% 1.39% EPS (sen, 54.5 9.8% 13.0% -13.3 28.2 31.6 34.7 44.7 49.6 basic) Consistent growth in shareholders‟ returns 2 Net Lending 50.3 54.4 57.9 64.8 82.6 9.1% 8.6% 71.1 75.7 (bil) Growth Customer 45.9 57.9 65.2 70.7 81.5 84.6 93.1 10.0% 12.5% Deposits 2 (bil) CASA (bil) 5.3 6.3 7.0 8.5 16.8 27.8% 21.2% 10.4 13.2 3 Net NPL / Gross 1.5% / 1.98% 0.47% 6.2% 3.7% 2.6% 3.33% 2.45% Impaired 3.81% Loans (FY10 onwards) Risk, Capital 14.8% RWCAR 4 10.1% 14.1 % 15.2 % 15.8 % 14.4% 15.7% & Funding Profile Basel III 9.3% CET 1 4 5.8% 7.6% 7.7% 8.1% 8.0% 9.2% 88.7% 0.8% LD Ratio 3 94.1% 88.7% 91.7% 87.3% 89.5% 109.8% CTI 38.8% 40.2% 43.3% 42.0% 46.9% 5.3% 39.9% 41.6% 1 CAGR computed based on FY2007 underlying profit of RM 556.9 million 2 Include term funding and loans sold with recourse 3 Based on net loans over adjusted customer deposits 4 Before proposed dividend ^ Restated with retrospective application of MFRS and BNM guidelines, where applicable 4 AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING
Commercial banking activities and recent acquisitions driving profit growth Commercial Banking 1 Investment Banking 2 PAT ( RM‟mil ) PAT ( RM‟mil ) 1,298.7 1294.0 449.2 982.5 982.3 930.7 930.7 867.3 867.3 308.0 283.0 243.4 ^ ^ FY10 FY11 FY12 FY13 FY10 FY11 FY12 FY13 General Insurance Life Assurance & Family Takaful PAT ( RM‟mil ) PAT ( RM‟mil ) 167.9 61.8 32.1 93.6 7.7 60.2 ^ 48.7 FY10 FY11 FY12 FY13 -63.9 FY10 FY11 FY12 FY13 1 Commercial banking represents Retail, Business, Corporate & Institutional Banking activities ^ Restated with retrospective application of MFRS and BNM guidelines, where applicable 2 Investment Banking represents Investment Banking and Markets activities 5 AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING
Steady progress made on diversification agenda and capital efficiency LDR: Operating within preferred levels Rebalancing loans portfolio 89.5% 88.7% 91.7% 87.3% Islamic 27% 93.1 RM’bil 84.6 81.5 70.7 Variable Fixed rate rate 55% 45% 82.6 75.7 71.1 64.8 FY10 FY11 FY12 FY13 ^ Conventional 73% Net lending Customer deposits LDR ^ Restated with retrospective application of MFRS and BNM guidelines, where applicable Capital: Optimally positioned for Basel III Diversified funding base ---------------------- Before proposed dividend --------------------------- 70.7 81.5 84.6 93.1 RM’bil Basel II Basel III 8.2 7.3 0.1 6.7 0.5 1.8 0.4 15.7% 15.8% 14.8% 14.4% 0.4 11.3% 11.0% 67.9 10.3% 10.2% 63.6 64.0 59.9 9.3% 9.2% 8.1%* 8.0%* 16.8 13.2 10.4 8.5 ^ FY10 FY11 FY12 FY13 FY10 FY11 FY12 FY13 * include preference shares CASA FD Negotiable Instruments Term funding CET 1 Ratio Tier 1 CAR RWCAR/Total Capital Ratio 6 AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING
FY2013: delivering on strategic priorities Strategic Priorities Progress New retail structure in place to drive reshaping program around customer solutions 1 Retail : non-retail loans mix portfolio improved to 58%:42% (FY12 – 59%:41%) Accelerate Growth & Good growth in Transaction banking (up 36.5%), increased collaboration with ANZ Business Mix Changes Expanding international connectivity initiatives (ANZ, Travelex, Western Union) Investing in IT and risk infrastructure to support medium term growth Launched AmSignature, Visa Infinite & World Mastercard and 5 Priority Banking 2 branches targeting affluent segments Strengthen Customer Optimized footprint and increased self-service machines at strategic locations Centricity & Connectivity Revamping of channels to refresh customer experience Launched our new brand values “P 2 ACE” – Principled, Proactive, Appreciative, Connected & Evolving CTI increased to 46.9% due to new acquisitions Integrations and other efficiency initiatives underway will deliver efficiency gains in 3 future years Increase Productivity & Unveiled Group‟s new Vision, Mission, values and employees value proposition - „ i Am Efficiency Connected‟ 4 Acquired Kurnia & MBF Cards - integrations on track to deliver synergies Acquire & Integrate Exploring potential strategic partnerships for AmLife and AmTakaful 7 AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING
AmGeneral Insurance: Kurnia integration on track to deliver synergies Investment summary: RM1.627 bil cash purchase price (valuation: P/B 1.95x based on Kurnia 30 Jun 2012 net assets) Funded by internal cash resources & ~ RM500 mil senior debt for AMMB‟s portion Synergistic benefits: 1 Mar 13 Today Q3 13 Q4 13 Q2 14 26 Sept 12 Synergies Synergistic Acquisition RM mil Cost Cumulative benefit cost cost Acquisition Vesting Integrated Integrated Completion FY13 (11.0)* 25.5 25.5 (20.5) of Kurnia Day 1 claims & sales & of FY14 (7.3)* 24.9 50.4 - operations underwriting integration FY15 (5.4)* 4.1 54.5 - * Includes depreciation, excludes funding cost Business priorities & progress and next steps Vesting day – 1 Mar 2013, AmG transferred its general insurance business to its wholly-owned subsidiary, Kurnia Insurans (M) Bhd. Concurrently, Kurnia was renamed “ AmGeneral Insurance Bhd ” Dual branding strategy – “AmAssurance” & “ Kurnia ”, first in the general industry for the Malaysian general insurance market 4 dual branded pilot branches launched, remainder of branch consolidation will be completed by end of 2013 # 1 position in motor & general insurance Branch network that has an extensive geographical coverage with combined dealers/agency force of over 7,600 • (as at 31 Mar 2013) Achieved GWP of >RM1.7 bil, with approx. 12% market share and over 3.6 million policyholders. • New management team appointed and agency and Bancassurance channels in place. • Underwriting model to be harmonized by Q4 2013 • Centralisation of policy processing and HR benefits alignment – target to complete by Q2 2014; roll-out of • Motor (phase 1) – Q4 2014 Full integration by Q2 2014 * Includes depreciation 8 AMBANKGROUP - GROUP INVESTOR RELATIONS & PLANNING
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