GENERAL MEETING 19-August-20 38th ABMB Annual General Meeting 19 - PowerPoint PPT Presentation

38 th ANNUAL GENERAL MEETING 19-August-20 38th ABMB Annual General Meeting 19 August 2020

Key Results Contents 1 FY20 Financial Performance 2 FY20 Transformation Achievements 19-August-20 38th ABMB Annual General Meeting 19-August-20 38th ABMB Annual General Meeting 3 FY21 Strategic Priorities 1

FY20 Financial Key Results Performance Business growth: funding grew faster than loans Key Highlights: Gross Loans: driven by SME growth  Gross loans: +2.2% RM bil Corporate & Commercial SME +2.2% 43.7 42.7  SME: +7.6% Consumer 11.0 (vs industry: -10.4%) 11.4 9.4 8.7  Consumer: +2.8% 23.2 22.6 (Alliance ONE Account & personal financing) FY19 FY20 19-August-20 38th ABMB Annual General Meeting 19-August-20 38th ABMB Annual General Meeting  Customer based funding: Customer Based Funding: strong CASA growth +6.5% Others RM bil Fixed Deposits (FD) 37.4%  Alliance SavePlus 35.5% CASA CASA Ratio  Alliance@Work 48.9 45.9 3.9 4.3 +6.5%  CASA ratio: 37.4% 26.9 25.6 18.1 16.0 2 FY19 FY20

FY20 Financial Key Results Performance Revenue grew 4.1% year-on-year Key Highlights: Revenue grew despite OPR cut RM bil Non-interest income (NOII) Net interest income (NII)  Revenue: +4.1% Wealth mgmt +4.1% 1,689 1,622  Non-interest income: & treasury income NOII: 366 292 +25.2% , driven by: +25.2%  Wealth management fee NII: 1,330 1,324  Treasury income Flat OPR cuts 19-August-20 38th ABMB Annual General Meeting 19-August-20 38th ABMB Annual General Meeting FY19 FY20  Net interest income: Flat NIM better than Industry (impacted by Overnight Policy Rate (OPR) cuts) ABMB Industry^ OPR cuts 2.50%  Net interest margin: 2.40% 2.40% -10 bps to 2.40% 2.26% (vs industry: 2.13%) 2.17% 2.25% 2.20% 2.18% 2.15% 2.13% FY16 FY17 FY18 FY19 FY20 3 ^Based on local peers’ average

FY20 Financial Performance With a stable cost to income ratio, PPOP grew 4.1% Operating Expenses Pre-Provision Operating Profit (PPOP) RM mil OPEX CIR RM mil +4.1% 1,689 Revenue 1,622 47.8% 47.8% +4.1% 807 +4.1% 775 19-August-20 38th ABMB Annual General Meeting 19-August-20 38th ABMB Annual General Meeting 807 OPEX 775 +4.1% 882 PPOP 847 FY19 FY20 FY19 FY20 4

FY20 Financial Performance Net credit cost* at 72.1 bps; implemented proactive actions Net Credit Cost* (bps) bps +38.9 bps 72.1 +10.5 +13.8 47.8 +14.6 19-August-20 38th ABMB Annual General Meeting 19-August-20 38th ABMB Annual General Meeting 33.2 FY19 Mainly from AOA & FY20 One large corporate Early Covid19 Reported Mainly from AOA & One large corporate Reported Early COVID19 FY20 FY19^ Classic Mortgage account impact + Expected FY20 Classic Mortgage account FY20 impact + Expected Credit Losses model Credit Losses review model review *Net credit cost (including bond impairment) 5 ^Excluding debt-sale of -1.7 bps

FY20 Financial Performance Net profit after tax at RM 424 million Profit before tax at RM 568 million Profitability & ROE Profit Before Tax - RM mil Revenue impact Two credit issues +40 -75 708 -60 -45 568 19-August-20 38th ABMB Annual General Meeting 19-August-20 38th ABMB Annual General Meeting FY19 BAU business OPR cut + Corporate account Corporate Early Covid-19 Early COVID- FY20 FY19 BAU business OPR cut + FY20 growth Covid19 impact impairment account impact & Expected 19 impact & growth COVID19 on bonds Credit Losses impairment Expected impact on model review Credit Losses bonds model review 424 NPAT 538 ROE 9.9% 7.3% 6

FY20 Financial Performance Prioritising capital conservation Capital Position Total Capital Tier 1 CET 1  FY20 total dividend: 6.0 sen (payout ratio: 21.9%) 18.9% 18.5% 18.3%  1 st interim: 6.0 sen 17.2%  No 2 nd interim dividend 14.1% 12.6% 13.8% 19-August-20 38th ABMB Annual General Meeting 19-August-20 38th ABMB Annual General Meeting 11.8%  To consider future dividend proposals (once full COVID- 19 impact is clearer) 13.8% 13.4% 13.4% 12.6% Mar-17 Mar-18 Mar-19 Mar-20 7

Key Results Contents FY20 Financial Performance 1 Transformation Achievements 2 19-August-20 38th ABMB Annual General Meeting 19-August-20 38th ABMB Annual General Meeting FY21 Strategic Priorities 3 8

FY20 Achievements FY20 Transformation Achievements FY20 Achievement 1 2 3 Accelerate core businesses Partnerships Digital a. Ecosystem a. Branch-in-a-Tablet a. AOA: + 54% y-o-y to >RM5.0 billion  Consumer partnerships Digital account  b. Personal Financing: +10% y-o-y to Signed Memorandum opening for 19-August-20 38th ABMB Annual General Meeting 19-August-20 38th ABMB Annual General Meeting of Understanding individuals and ~ RM2.2 billion (MoU) with Celcom to businesses c. CASA: 56k new consumer CASA acquire SME clients d. SME loans: +8% y-o-y to RM9.4 billion Business e. Alliance@Work: +26% y-o-y to ~ 1,750 new Payroll Companies 9

Key Results Contents 1 FY20 Financial Performance FY 20 Transformation Achievements 2 19-August-20 38th ABMB Annual General Meeting 19-August-20 38th ABMB Annual General Meeting 3 FY21 Strategic Priorities 10

FY21 Strategic Priorities FY21 Strategic Priorities Financials Gross loans Revenue Operating expenses Accelerate digitisation & Branch 1 Covid-19 management 2 transformation 19-August-20 38th ABMB Annual General Meeting 19-August-20 38th ABMB Annual General Meeting a) Accelerate remote banking a) Helping employees b) Branch transformation b) Helping customers c) Helping community Keeping the Bank Safe: Ensure ample liquidity and enhanced credit control 11

FY21 Strategic Priorities Keeping Our Stakeholders and the Bank Safe During COVID-19 Keeping Our Stakeholders Safe Keeping the Bank Safe Ensure the Bank continues to have Helping our staff to stay safe and protected at ample liquidity the workplace Employees Working Environment Employee Welfares Liquidity Management  Sufficient liquidity to mitigate any Expanded Split payment shock Enhanced family Operations & hygiene  Liquidity Coverage medical >65% Work- >150% measures Ratio benefit from Home 19-August-20 38th ABMB Annual General Meeting 19-August-20 38th ABMB Annual General Meeting  Loan-to-Funds ratio 84% Helping the underserved in our communities Community during this difficult time COVID-19 funds SocioBiz Contributed Raised >RM650k RM300k 12

FY21 Strategic Priorities Keeping Our Stakeholders and the Bank Safe During COVID-19 Keeping Our Stakeholders Safe Keeping the Bank Safe Helping our clients stay financially healthy during Enhancing our credit controls and post-pandemic Conducted portfolio review 1 Result so far What do we offer? loan exposure to high-risk <5% Credit Risk Management sectors (significantly impacted by COVID-19) 1 Automatic  RM23.2 billion or 53% Moratorium  High Opt out: 19% 2 Enhanced credit risk Customers (individual & SME) framework 19-August-20 38th ABMB Annual General Meeting 19-August-20 38th ABMB Annual General Meeting  >RM620 million Special Relief 2 Engage with all customers 100% Facility (“SRF”)  Helped >900 Medium/ high risk: R&R Corporate & Help 3 (restructuring & rescheduling) Commercial  RM1.6 billion moratorium / R&R  20% of loan book Viable business: Grant (restructuring & Grow additional facilities rescheduling) Payment Relief Assistance  3 million views 3 4 #Support Lokal Post Moratorium  >50,000 link clicks 13

FY21 Strategic Priorities COVID-19: Managing the Bank’s financial impact in FY21 Key Performance Mitigating Action Plans Financial Impact Indicators 1 OPR cut: Manage Available-For- Grow core NIM lower by Revenue segments & lower Sale(AFS) ~24bps cost deposits investment (Permanent OPR cut portfolio impact: -7bps ) 19-August-20 38th ABMB Annual General Meeting 19-August-20 38th ABMB Annual General Meeting 2 Cost management: Moderated Manage Operating payroll & discretionary expenses Maintain similar stringent hiring expenses level 3 Asset quality Proactive Targeted management: customer assistance & Net credit cost engagement post <100bps payment relief internal diagnosis assistance (Industry: double ) 14

FY21 Strategic Priorities Industry-wide Recognition of our Digitisation Efforts 20 Best Banks 2020 in 2019 Digital Transformation Best Digital Bank in Malaysia Asia/Pacific Award 19-August-20 38th ABMB Annual General Meeting 19-August-20 38th ABMB Annual General Meeting By IDC Financial Insights By Red Hat APAC Asia Pacific Innovation Awards 15