Invest Malaysia 2016 - Maybank Kim Eng - · PDF fileInvest Malaysia 2016 ... (MBI Group)...

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Invest Malaysia 2016

Humanising Financial Services

Shangri-La Hotel, Kuala Lumpur

12-13 April 2016

1


Financial Performance

Outlook and Strategic Priorities

Shareholder Returns

Strategy: Maybank2020

Overview

2

Leading Regional Financial Services Group Presence in all 10 ASEAN countries

■ No. 1 bank in Malaysia: Conventional and Islamic

■ Top 5 bank in ASEAN

■ No. 95 in The Banker’s Top 1000 World Banks

■ Most Valuable Company on Bursa Malaysia

■ Over 2,400 branches and offices in 20 countries

■ 1,176 branches in 10 ASEAN countries

■ 5 International Financial Centres

■ 48% owned by PNB and its funds and 16% by EPF *

■ Foreign shareholding 18.7% **

■ A− credit rating, on par with Malaysia sovereign

Wide Branch Network

Leadership Position

Strong Shareholders and Credit Ratings

* As at 31 Dec 2015 ** As at 4 April 2016

China

India

ASEAN

3

Strong Financial Position: Top 5 Bank in ASEAN Maybank is a Top 5 ASEAN banking group in terms of assets, loans and deposits, net profit and market cap

28.6

27.0

25.0

22.7

22.5

21.5

18.7

18.3

13.6

10.7

DBS

OCBC

Bank Central Asia

Maybank

UOB

Bank Rakyat Indonesia

Public Bank

Bank Mandiri

Siam Commercial

CIMB

43

63

66

77

84

107

165

223

275

323

Bank Central Asia


Bank Mandiri

Siam Commercial

Public Bank

CIMB

Maybank

UOB

OCBC

DBS

34.4

48.3

48.8

52.5

70.0

73.8

111.1

169.7

173.8

225.9

28.9

42.5

43.9

51.0

63.5

69.2

106.8

146.3

148.7

202.4

Bank Central Asia


Bank Mandiri

Siam Commercial

Public Bank

CIMB

Maybank

UOB

OCBC

DBS

Loans Deposits

727

1,297

1,345

1,386

1,520

1,759

1,896

2,335

2,843

3,246

CIMB

Public Bank

Bank Central Asia

Siam Commercial

Bank Mandiri

Maybank


UOB

OCBC

DBS

No.4

No.4 No.4

No.5

Source: Bloomberg

Total Assets (USD bil): 31 Dec 2015 Loans and Deposits (USD bil): 31 Dec 2015

PATAMI (USD mil): 12 months ended 31 Dec 2015 Market Capitalisation (USD bil): 31 Mar 2016

4

Expanding ASEAN footprint Maybank presence in all ten ASEAN countries makes it a truly ASEAN franchise

Universal Banking Retail & Commercial Banking Investment Banking Affiliate/Representative Office * Wholesale Banking license only

BANK

MARKET

CAP

@

31 Mar 16

(USD Bil)

TOTAL

ASSETS

@

31 Dec 15

(USD Bil)

MALAYSIA

SIN

GAPO

RE

IND

ON

ESIA

TH

AIL

AN

D

PH

ILIP

PIN

ES

BRU

NEI

VIE

TN

AM

CAM

BO

DIA

LAO

S

MYA

NM

AR

1 DBS 28.6 323

2 OCBC 27.0 276

3 BCA 25.0 43

4 Maybank 22.7 165 *

5 UOB 22.5 223

6 Public 18.7 84

7 Mandiri 18.3 66

8 SCB 13.6 77

9 CIMB 10.7 107

10 Bangkok 9.8 79

11 BDO 8.1 43

12 Metrobank 5.7 38

*

*

*

Source: Bloomberg (for market cap & total assets data)

5 5

Demographics

We are positive about the future of ASEAN and we are well-positioned to benefit from the long term

growth of the ASEAN Economic Community.

● 7th largest economy in the world, projected to

be 4th largest by 2030.

● Combined GDP of USD2.6 trillion, third largest

economy behind China and India in 2014.

● 76% increase in per capital GDP from USD2,343

in 2007 to USD4,135 in 2014.

● Large and young population.

● 622 million people currently, third largest in

the world after China and India.

● Over 50% are below 30 years old.

Economy

Foreign Direct Investment and

Infrastructure Investment

● USD24 billion intra-ASEAN trade, 2nd highest

source of FDI in 2014 at 17.9%, behind EU-28.

● Estimated infrastructure and real estate

investment requirement of USD7 trillion from

2015 and to 2030.

Financial Inclusion and Digitalisation

● Below 1% of financial assets to GDP ratio for

the ASEAN countries of Indonesia, Cambodia,

Laos, Myanmar and the Philippines, versus 3.5%

in OECD.

● 142% increase in internet subscriptions per 100

people, from 11.8 per 100 people in 2007 to

28.6 in 2014

Opportunities in the ASEAN Economic Community (1/2) Leveraging on our existing ASEAN presence

Source: The ASEAN Secretariat and EU-ASEAN Business Council

6 6

Opportunities in the ASEAN Economic Community (2/2) Strong GDP growth and Trade for ASEAN

Source: ASEAN 2030: Toward a Borderless Economic Community by

Asian Development Bank Institute

* CLMV: Cambodia, Laos, Myanmar and Vietnam

1.8% 1.9% 2.1% 2.1%

4.6% 4.7% 4.8% 5.1%

7.3% 6.9% 6.3%

6.0%

7.3% 7.3%

7.5% 7.5%

2014 2015 2016 2017

Advanced Economies ASEAN-5 China India

Source: World Economic Outlook Update, Jan 2016 by IMF

5.8% 5.1%

7.4%

6.4% 6.2%

7.9%

ASEAN ASEAN-6 CLMV

1991-2010 2011-2030

Comparative GDP growth Long term ASEAN GDP growth

1.6

2.5

2007 2014

24%

14% 10% 9% 8%

ASEAN China Euro Japan US

Total ASEAN Trade Intra-ASEAN Trade

Source: ASEAN Secretariat Source: ASEAN Secretariat

Between 2007 and 2014, total trade

increased by nearly US$1 trillion Intra-ASEAN trade comprised the

largest share of ASEAN's total trade

of US$2.5 trillion by partner in 2014

US$ t

rillio

n

7 7




Shareholder Returns


Overview

8

Vision

Strategic Objectives

Mission

To be a regional financial services leader


Community Financial

Services

1. Undisputed No. 1 Retail Financial Services provider in

Malaysia by 2015

2. Leading ASEAN wholesale bank eventually expanding to

Middle East, China & India

3. Undisputed Insurance & Takaful Leader in Malaysia and

Emerging Regional Player

4. Truly regional organisation with approximately 40% of pre-

tax profit derived from international operations by 2015

5. Global leader in Islamic Finance

Global Banking

Insurance and Takaful

International

Islamic Banking

Our Vision, Mission and Strategic Objectives for 2011-2015 We have concluded our 2011-2015 transformation

9

Strategic Objectives for 2011-2015 Achievements of our strategic objectives

Undisputed No. 1 Retail Financial Service provider in Malaysia by 2015

Market share leader in Unit Trust, Total Deposits, Retail CASA and Internet Banking (subscriber base)

Leading ASEAN wholesale bank, eventually expanding further into the

Middle East, China and India

Undisputed Insurance & Takaful leader in Malaysia and emerging regional player

Malaysia’s market leader for General Insurance & Takaful, with presence in Singapore and the Philippines

International FY2015 PBT under 30% due to lack of attractive M&A opportunities. However, our

complete ASEAN footprint positions us to capture trade, capital, investment and wealth flows in Asia

Truly regional organisation, with ˜40% of pre-tax profit derived from

international operations by 2015

Global leader in Islamic Finance

Leading Islamic bank in ASEAN and one of the top 5 Islamic banks globally

3

5

Top 4 in regional league tables for Investment Banking & Advisory, Debt Capital Market and M&A deals

4

2

1

10

Maybank2020 Strategy The Next 5 Years in ASEAN

10

The AEC is expected to drive further intra- &

inter-regional trade activities, including

capital raising and transactions

Significant upside for Insurance

penetration in ASEAN

Islamic Banking is a differentiation

opportunity in an industry entrenched with

conventional banking solutions

1

2

3

4

Young population with 60% millennials – the

Digital Native generation

5

ASEAN population, with 660 million people,

swelling middle class, growing SMEs

11

Maybank2020: Strategic Objectives What we aim to be in the next 5 years

The Top ASEAN Community Bank

The Leading ASEAN Wholesale Bank Linking Asia

The Leading ASEAN Insurer

The Global Leader In Islamic Finance

Digital Bank Of Choice

By leveraging on our regional presence, banking expertise and ASEAN growth opportunities

By leveraging on our ASEAN leadership capabilities to deliver client solutions across Asia

By enhancing synergies between Maybank’s regional banking footprint and Etiqa’s expertise

in takaful & bancassurance

By continuing to deliver innovative client-centric universal financial solutions, building on

our global leadership position

By putting our customers’ preferences first and transforming to deliver next-generation

customer experience on mobile and digital platforms

1

2

3

4

5

12 12




Shareholder Returns


Overview

13

12% - 13%

8% - 9%

6% - 7%

5% - 6%

10% - 13%

10% - 11%

ROE

Group Loans

Growth

Malaysia Loans

Growth

Singapore

Loans Growth

Indonesia

Loans Growth

Group Deposits

Growth

Maybank Group realigns FY2015 guidance

in 2H 2015 to focus on balance sheet

initiatives:

More selective asset growth

Franchise-led deposits taking

Proactive management of asset quality

Maintain strong capital position

Continued focus on productivity

13% - 14%

9% - 10%

8% - 9%

8% - 9%

13% - 15%

9% - 10%

Initial FY2015

Guidance

Revised FY2015

Guidance

Continued softness in commodity prices

Weakening MYR vs USD

Slowing economic growth in China

Prolonged softness in macroeconomic

indicators for 2015

Revision in guidance during 2015 Maybank Group revised FY2015 guidance at mid-year due to less certainty in economic outlook

14

FY2015 Headline Key Performance Indicators Full year achievements reflect Group’s proactive balance sheet management

* in local currency terms

Key Performance Indicators FY2015 Guidance FY2015 Achievement

Return on Equity 12.0% - 13.0% 12.2%

Group Loans Growth 8.0% - 9.0% 12.0%

• Malaysia 6.0% - 7.0% 5.3%

• Singapore * 5.0% - 6.0% 6.0%

• Indonesia * 10.0% - 13.0% 5.0%

Group Deposits Growth 10.0% - 11.0% 12.8%

15

Summary Financial Performance for 2015 Full year revenue growth of 14.6% to RM21.2 billion with net profit of RM6.84 billion

Net fund based income rose as Group loans grew 12.0% and net

interest margin remained stable at 2.31% …

… while net fee based income increased due to higher net earned

premiums, forex gains and Islamic operations fee income …

… that was kept under control through Strategic Cost Management

Programme (SCMP), resulting in a positive JAW position …

… but performance was affected by higher loan loss provisions

and impairment in securities leading to a…

… net profit of RM6.8 billion, which was 1.8% higher than the

previous year.

EPS declined due to expanded capital base from the DRP and

revised guidance.

Net Fund Based Income

RM14.5b, +15.3%

Net Fee Based Income

RM6.7b, +13.2%

Net Income

RM21.2b, +14.6%

Overhead Expenses

RM10.3b, +12.9%

Impairment Losses

RM2.0b, +327.5%

Net Profit

RM6.8b, +1.8%

Earnings per Share

72.0 sen, -2.9%

… resulting in net income growth outpacing growth in

overheads …

PPOP

RM11.0b, +16.3% … and enabling Pre-Provision Operating Profit to grow by 16.3%...

16 16

2.80

2.56 2.53 2.48

2.43

2.31 2.31

FY10 FY11 PF11 FY12 FY13 FY14 FY15

46.5

49.2 49.7

48.6

47.8

48.9 48.2


86.9

90.2

87.8

89.8 89.9

91.8 91.5


14.5 14.5 15.2

16.0 15.1

13.8

12.2


Key Operating Ratios Maintained good performance amidst challenging environment

2016 guidance: 11%-12%

2016 guidance

-8 to -10 bps

2016 guidance: <50%

Return on Equity (%) Net Interest Margin (%)

Loan to Deposit Ratio (%) Cost to Income Ratio (%)

2016 guidance:

91%-92%

17

Asset Quality Uptick in impaired loans ratio

Indonesia (MBI Group)

Singapore

Malaysia

Gross Impaired Loans Ratio Group Gross Impaired Loans Ratio

and Loan Loss Coverage Ratio

*

* Inclusive of regulatory reserve is 86.6%

3.93% 3.51%

2.00% 1.69% 1.85% 1.76%

FY11 PF11 FY12 FY13 FY14 FY15

0.53% 0.42%

0.29% 0.23%

0.45%

PF11 FY12 FY13 FY14 FY15

2.29% 2.18% 2.81%

3.24% 4.15%


86.9%

105.6% 107.5%

95.6%

72.0%*

2.84%

1.78%

1.48% 1.52%

1.86%

0%

1%

2%

3%

4%

5%

0%

20%

40%

60%

80%

100%

120%


Loan Loss Coverage

Group Gross Impaired Loans Ratio

18

Asset Quality: Malaysia GIL ratios for consumer and business portfolios below industry, except for Business Banking

Mortgage Auto Finance Credit Cards

Retail SME Business Banking Corporate Banking

Consumer

Business

0.7% 0.6%

0.5%

1.2%

2013 2014 2015 Industry

0.4% 0.5% 0.5%

1.0%

2013 2014 2015 Industry

0.9%

0.7% 0.8%

1.3%

2013 2014 2015 Industry

3.5%

2.4% 2.0%

2.4%

2013 2014 2015 Industry

8.4%

10.3% 10.0%

2.0%

2013 2014 2015 Industry

1.4% 1.4% 1.5%

2.0%

2013 2014 2015 IndustryNote:

As at Dec 2015, industry GIL for BB and Corporate Banking are proxy figures based on total industry GIL after deducting Consumer and SME GIL

19

Asset Quality: Singapore Impaired Loans Ratios rising from low levels and still manageable


Retail SME Business Banking Corporate Banking

Consumer

Business

0.19%

0.33%

0.47%

2013 2014 2015

0.20% 0.23%

0.33%

2013 2014 2015

1.05% 1.35%

2.66%

2013 2014 2015

N.A. N.A.

1.16%

2013 2014 2015

0.56% 0.57%

0.64%

2013 2014 2015

0.23%

0.15%

0.41%

2013 2014 2015

20

Asset Quality: Indonesia Impaired Loans Ratios improved for Auto Finance and Business Banking


Retail Banking Business Banking Corporate Banking

Consumer

Business

0.34%

0.44%

0.63%

2013 2014 2015

1.02%

1.48% 1.40%

2013 2014 2015

2.08% 1.90%

2.31%

2013 2014 2015

0.84%

1.10% 1.16%

2013 2014 2015

1.28%

1.50%

1.23%

2013 2014 2015

6.86%

10.24%

14.94%

2013 2014 2015Note:

Retail banking includes mortgage, credit card, personal and auto finance loans. Business Banking also includes SME loans.

21

1.67% 1.67%

2014 2015

2.69% 2.76%

2014 2015

Agriculture Energy Metals & Mining

Malaysia

Group

Commodities Exposure (1/2) Maybank Group’s loan exposure for its home markets Malaysia, Singapore and Indonesia

2.99% 2.73%

2014 2015

2.67% 2.43%

2014 2015

2.49%

2.11%

2014 2015

1.47% 1.43%

2014 2015Notes:

1) Group exposure is for three home markets Malaysia, Singapore and Indonesia.

2) Data for 2014 is as at 31 Dec 2014 while data for 2015 is as at 30 Sept 2015.

3) Energy exposure, which is oil and gas and nuclear fuel, includes IPPs for Malaysia only in 2014. For 2015, energy includes IPPs for Malaysia and Indonesia while for Singapore, energy perimeter was

widen to include wholesale providers of solid, liquid and gaseous fuels and related products NEC as well as manufacturers of water and gas pipe-line.

22

0.02%

0.01%

2014 2015

0.10%

0.27%

2014 2015

Agriculture Energy Metals & Mining

Indonesia

Singapore

Notes:

1) Group exposure is for three home markets Malaysia, Singapore and Indonesia.

2) Data for 2014 is as at 31 Dec 2014 while data for 2015 is as at 30 Sept 2015.

3) Energy exposure, which is oil and gas and nuclear fuel, includes IPPs for Malaysia only in 2014. For 2015, energy includes IPPs for Malaysia and Indonesia while for Singapore, energy perimeter was

widen to include wholesale providers of solid, liquid and gaseous fuels and related products NEC as well as manufacturers of water and gas pipe-line.

Commodities Exposure (2/2) Maybank Group’s loan exposure for its home markets Malaysia, Singapore and Indonesia

0.09% 0.10%

2014 2015

0.24%

0.19%

2014 2015

0.10%

0.38%

2014 2015

0.18%

0.23%

2014 2015

23 23

Capital Adequacy (1/2) Strong capital while growing responsibly

410.5

459.8

Dec 14 Dec 15

352.9 373.3

Dec 14 Dec 15

Total capital ratio of 17.49%

and CET1 capital ratio of

12.53% (after proposed

dividend and assuming 85%

dividend reinvestment rate)

11.38% 12.53%

13.17% 14.22%

15.87% 17.49%

Dec 14 Dec 15

Total Capital Ratio

Tier 1 Capital Ratio

CET 1 Capital Ratio

Managed Risk Weighted Assets growth of 5.8%

vs loan growth of 12.0% in 2015

Group Gross Loans

RM

billion

Total Group RWA

+5.8%

RM

billion

+12.0%

24 24




Shareholder Returns


Overview

25 25

3.82 4.45

2.58

5.75 6.55 6.72 6.84

FY 2010 FY 2011 ^ 6 monthsFP2011

FY 2012 FY 2013 FY 2014 FY 2015

14.5% 15.2% 16.2% 16.0% 15.1%

13.8% 12.2%

Launched

House of

Maybank

Acquired

Kim Eng

RM 3.66 billion

Equity Private

Placement

Sale of Papua

New Guinea

operations

Malaysian Banks adopt

Basel III Capital

Requirements

Summary of Analysts' Recommendations

as at 10 March 2016

Target Price RM8.94

Coverage 24 analysts

Recommendations 13 Buy, 8 Hold, 3 Sell

Analysts'

Consensus:

Net Profit

(RM mil)

FY2015 6,627

FY2016 6,963

^ 6 months Financial Period ended 31 Dec 2011 due to change in financial year end

FY2015 PATAMI of RM6.84

billion was 3% ahead of

consensus

ROE

Net

Pro

fit

(RM

billion)

Delivering Shareholder Return Maybank’s earnings have grown as we stayed focused on our regional strategy and business growth;

Malaysian Banks adopt Basel III requirements

26 26

Annual Dividend Yield (%)

2010-2015

Source: Bloomberg

(%)

7.3

6.7

8.4

6.1

6.6 6.4

2010 2011 2012 2013 2014 2015

Maybank Public Bank CIMB DBS UOB OCBC Mandiri BCA Bank Rakyat Siam Comm Kasikorn Bank Bangkok Bank

Dividend Yield Maybank continues to provide superior dividend yield amongst most regional banks

27 27

High Dividend Payout Gross dividend for 2015 at 54 sen

61.0%

76.5% 74.9% 79.9%

74.7% 71.9%

78.5% 76.3%

11

28 32

22.5 24 24

44

32

36

33

31 33 30

FY10 FY11 FP11 FY12 FY13 FY14 FY15

Final

Interim

54.0

82.6%*

● Dividend payout ratio for 2015 at 76.3% continues to be above policy rate of 40% - 60%

* Reinvestment rate for the Dividend Reinvestment Plan

# The Net Dividend is 28.5 sen of which 15 sen is single-tier dividend.

85.9%*

85.7%*

88.2%* 85.9%*

88.5%* 91.1%*

86.1%*

88.6%*

#

N.A.*

55.0 60.0

36.0

65.0

53.5 57.0

84.0%*

Dividend

Payout Ratio

Gross Dividend (sen) and Payout Ratio (%)

87.5%*

28 28




Shareholder Returns


Overview

29 29

Market Outlook 2016 outlook for our home markets

Key Indicators Outlook

Singapore

Malaysia

Indonesia

• GDP (f) 4.3% (2015: 5.0%)

• System loan (f) 6.5%

• OPR(f) 3.00%-3.25% (2015: 3.25%)

• USD/MYR (f) 3.85 (2015: 4.29)

• Inflation (f) 3.0-3.5% (2015: 2.1%)

• GDP (f) 1.7% (2015: 2.0%)

• System loan (f) 2%-3%

• System deposit (f) 5%

• 3M SIBOR (f) 1.52% (2015: 1.1%)

• USD/SGD (f) 1.37 (2015: 1.42)

• Inflation (f) -0.4% (2015: -0.5%)

• GDP(f) 5.2% (2015: 4.79%)

• System loan (f): 12.8%

• System deposit (f): 11.5

• Reference Rate (f) 6.25%-6.50% (2015:

7.50%)

• USD/IDR average (f) 13095 (2015: 13458)

• Inflation average (f) 3.98% (2015: 6.38%)

• Government infrastructure spending to drive Indonesia’s

economic growth in 2016

• Increased funding following domestic economy recovery

• Rate cut by 75 bps to 6.75% will help increase demand

for credit, which in turn will stimulate Indonesia’s

economic growth

• Loan growth expected to remain muted due to slower

regional and domestic economic growth

• Asset quality may continue to rise as credit cycle turns

and if weakness in oil & gas sector persists

• Stable to modest improvement in NIMs

• Capital and liquidity buffers to remain healthy

• Slowdown in household loan growth to 6.1% (2015: 7.7%)

and moderation in non-household to 7% (2015: 8%)

• Competition for deposits to remain keen

• Credit cost uptick on growing NPLs

• Cost and capital management will remain key priorities

30 30 30

Remain focused on selective asset growth in line with capital position

Manage liquidity effectively through high-quality liquid assets

Improve productivity and manage discretionary spend

Downside risks include further global macroeconomic headwinds

Credit cost expected to remain elevated

Group Strategic Priorities for 2016 Managing growth amidst a more challenging environment

31 31

Headline KPI

Return on Equity 12-13% 11% - 12%

Other targets

Group Loans Growth 8% - 9% 8% - 9%

• Malaysia 6% - 7% 6% - 7%

• Singapore 5% - 6% 3% - 4%

• Indonesia 10% - 13% 11% - 13%

Group Deposits Growth 10% - 11% 10% - 11%

Key Performance IndicatorsFY2016

Guidance

FY2015

Revised

Guidance

Key Performance Indicators Our targets for 2016 reflect our continued focus on balance sheet management

32

Disclaimer. This presentation has been prepared by Malayan Banking Berhad (the “Company”) for information purposes only and does not purport to contain all the

information that may be required to evaluate the Company or its financial position. No representation or warranty, express or implied, is given by or on behalf of the

Company as to the accuracy or completeness of the information or opinions contained in this presentation.

The presentation does not constitute or form part of an offer, solicitation or invitation of any offer, to buy or subscribe for any securities, nor should it or any part of

it form the basis of, or be relied in any connection with, any contract, investment decision or commitment whatsoever.

The Company does not accept any liability whatsoever for any loss howsoever arising from any use of this presentation or their contents or otherwise arising in

connection therewith.


Dato’ Mohamed Rafique Merican

Group Chief Financial Officer

Contact: (6)03-2074 7878

Email: [email protected]

MALAYAN BANKING BERHAD

14th Floor, Menara Maybank

100, Jalan Tun Perak

50050 Kuala Lumpur, Malaysia

Tel : (6)03-2070 8833

www.maybank.com

Jeeva Arulampalam

Acting Head, Group Investor Relations

Contact: (6)03-2074 8346

Email: [email protected]

Investor Relations Contact

Invest Malaysia 2016 - Maybank Kim Eng - · PDF fileInvest Malaysia 2016 ... (MBI Group)...

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