51st Annual General Meeting
Dato’ Sri Abdul Wahid Omar
President & CEO
29 September 2011
Humanising Financial Services Across Asia
IntroductionAnother record profit in FY2011 and exceeded our headline key performance indicators (KPIs)
Group transformation initiatives achieved growth across all our key business areas
Acquisition of Kim Eng is a testament of our success in expanding regional contribution
The new House of Maybank delivered strong performance across all business segments
Introduction
Financial Performance
Regional Expansion
Strategy and Achievements
Prospects
Exceeding our KPIs for FY2011
Note: Loans growth for Singapore and BII are in their local currencies
Headline KPIs Target FY11 achievements
Return on Equity 14% 15.2%
Loans and Debt Securities Growth 12% 22.6%
Other targets Target FY11 achievements
Loans Growth
• Malaysia 12% 16.8%
• Singapore 5% 25.8%
• BII 24% 25.8%
Net Interest Margin Decrease Normalised: 2.71% (-9 bps YoY)*
*Actual NIM is 2.59%, a decline of 21 bps YoY
FY2011 PATAMI rose 16.6% YoY to RM4.45 billion
*net of insurance claims
Record net profit of RM4.45 billion was mainly due to:
8.9% growth in net income
14.2% growth in overhead expenses
59.0% lower allowance for losses on loans
Broad based growth across key business segments
Group Profit Before Tax (PBT) by business sector (RM million)
Profit growth from home markets continues to be strong
International:
24%
Profit Before Tax by Geographical Locations
Loans grew 21.7% YoY, highest since FY2001Strong Loans growth in 3 home markets of Malaysia (16.8%), Singapore (25.8%)
and Indonesia (25.8%)
YoY GrowthLoans
Community Financial Services: Growth across all segments
• Industry figures for cards includes commercial banks and non-FI players
Cards performance outperforming industry
YoY Maybank Industry*
Cardbase -3.6% -8.7%
Billings 19.0% 14.4%
Receivables 15.6% 12.4%
Merchant Sales 12.3% 12.6%
Hire purchase grew 14.3% in FY2011Mortgage Loans grew 11.6% despite intense competition
SME loans market share recovering(based on Bank Negara definition)
Global Wholesale Banking: Loans growth improved to 25.6%
Investment Banking: Strong fee based income growth
Fee based Income rose 48.9% YoY
Industry Position & Market Shares Improved
Sourc
e:
Blo
om
berg
Maybank IB (without Kim Eng)Industry Rank
FY2010
Industry Rank
FY2011
Total Value (billion)
Deals/Issues Market Share
M&A 5 3 USD 9.3 31 25.7%
Equity & Rights Offerings 3 2 USD 0.86 9 9.6%
Debt Markets - Malaysia Domestic Bonds 4 2 RM 16.3 134 26.3%
Debt Markets - Malaysian Ringgit Islamic Bonds
2 1 RM 16.0 121 35.4%
Equity Brokerage 4 3 RM 63.5 n.a. 7.0%
Within Group Islamic Banking business, Maybank Islamic recorded strong financing growth of 35.1%
Improving key ratios
Group Islamic Banking Income and PBT**
*Maybank Islamic**Islamic Banking (includes Maybank Islamic and the Group’s other Islamic operations)
Maybank Islamic financing (35.1% growth)Total Gross Financing = RM46.8 billion as at Jun 11
Consumer: +30.7% Business: +47.6%
Etiqa: No.1 Position in Life/Family (new business) and General Business
Etiqa maintains top position
No. 1 in Life/Family (new business) with market share of 18.3%.
No. 1 in General with market share of 11.5%
Source: ISM Statistics (Apr10-Mar 11).
Combined Gross Premium
-2.1%
+4.5%
-76.6%
-6.8%
+1.8%
+29.6%
+29.6%
-20.5%
-2.2%
+19.5%
-13.9%
Overall Loss Ratio Lower Than Industry 55.3% (Etiqa) vs. 59.5% (Industry)
Source : Rolling 12 months (Jun10-Jun11)Note: Industry Loss Ratio is for conventional business only
Introduction
Financial Performance
Regional Expansion
Strategy and Achievements
Prospects
Worldwide Presence
ASEAN
Hong Kong:1 branchKim Eng: 1 branch
London:1 branchKim Eng: 1 branch
China:1 branch1 rep office
Papua New Guinea:
2 branches
Bahrain:1 branch
PakistanMCB: 1,134 branches
IndiaKim Eng: 1 branch
•New York:1 branch
•Kim Eng: 1 branch
Saudi Arabia*
* 1 office via Anfaal Capital** 1 office via 35% owned Uzbek Leasing International
Uzbekistan**
Maybank Group’s Regional Network2,100 Offices in 17 countries
Acquisition of Kim Eng accelerates the Group’s objective of being a regional investment bank. Kim Eng added 65 offices to the Group.
Thailand Kim Eng: 44 branches
Brunei:3 branches
• Philippines:50 branches
• Kim Eng: 2 branches
•Malaysia:386 branches
IndonesiaBII: 344 branchesKim Eng: 5 branches
Singapore:22 branchesKim Eng:3 branches
• Cambodia:10 branches
• An Binh Bank: 122 branches
• Vietnam: 2 branches• Kim Eng: 7 branches
In 8 ASEAN countries
Kim Eng also maintains distribution presence in key financial markets including Hong Kong, London and New York
Maybank’s Expanded Presence with Kim Eng
Regional Investment Banking/Equities Capabilities Strengthened with Acquisition of Kim Eng
Mutual product offerings
Tapping into Kim Eng’s client base
of 200,000
Cross-selling
Other
Cash management support for
cash balances held in trust
Support for foreign exchange
flows and hedging
Improved funding cost
Kim Eng’s Business andFootprint Expansion
Maybank’s strong capital base
can support Kim Eng’s growth
initiatives (e.g. margin lending)
Access to Thailand and Thai
market intelligence
Enhanced Infrastructure
Maybank’s branch network to support
stockbroking expansion
Operational best practices in risk
management and IT delivery platform
Harnessing Synergies
Improved Investment Bankingand Underwriting Capability
Leveraging Maybank‘s strong
balance sheet and client
relationships
Ranking M. Share
#3 7%
#5 7%
#5 5%
Brokerage / Investment Banking
Other Services
Kim Eng
Commercial Banking
Brokerage / Investment Banking
Retail Banking
Other Services
Maybank
Ranking M. Share
#1 12%
#2 9%
#9 3%
ASEAN Stockbroking Champion
Kim Eng is now wholly-owned subsidiary of Maybank
Completed compulsory acquisition and delisted Kim Eng in August 2011
Maybank now owns 100% of Kim Eng
Maybank Shareholding in Kim Eng Holdings
1
Thailand: After the tender offer, Maybank now owns an aggregate 83.74% in Kim Eng Securities Thailand
Philippines: After acquisition, the aggregate holding in KimEng Financial Corporation (“ATRKE”) is 74.64%. As such, Kim Eng triggered a mandatory tender offer for the remaining ATRKE shares
Downstream offer2
New leadership has been defined: Tengku Dato’ Zafrul as the CEO of the investment banking business and Ronald Ooi as his Advisor.
Post-Merger Integration exercise is led by a Steering Committee, which is co-chaired by Tengku Dato’ Zafrul and Ronald Ooi.
Investment banking business realigned into 5 Business ‘Pillars’: Investment Banking and Advisory, Retail Equities, Institutional Equities, Equity and Commodity Solutions, and Asset Management.
Overall total outlay for the entire acquisition is RM4.692 billion.
Integration and Strategy of Kim Eng
3
Maybank/Kim Eng investment banking business reorganised into 5 pillars
The 5 regional business pillars
Investment Banking and Advisory
Equities – Retail Equities – InstitutionalEquity and
Commodity SolutionsAsset Management
• Corporate Finance,
• Strategic Advisory,
• Equity Capital Markets Debt Markets
• Retail stock broking business
• Institutional stock broking business
• Structured products and derivatives services,
• Futures broking
• Fund management products and services
Enablers (Support services)
Maybank’s Investment Banking Business
Pillar 1 Pillar 2 Pillar 3 Pillar 4 Pillar 5
FY 2015 “Regional Financial Powerhouse”
• Number 1 Malaysian investment bank• Top 5 position amongst regional leaders• Top 3 broker in Malaysia, Indonesia, Thailand,
Singapore and the Philippines
FY 2014Work towards
regional leadership
position
FY 2013Build home
markets, capture synergies
FY 2012Stabilise
operations, execute Quick
Wins
The 3-year roadmap
Singapore: PBT improved 11.0% on higher fee income and lower provision
Revenue and PBT rose 8% and 11% YoY respectively
Asset Quality continued to improve
Diversified Loan Portfolio
SG
D b
illi
on
Consumer
Corporate
Maybank Singapore loans growth outpaced industry‘s
BII: Revenue grew 20.4% on the back of 25.8% consolidated loans growth
Branches and ATM
Loan composition (Rp trillion)
25%
20.%
27%
77%
-20%
Growth (YoY)
Net Interest Margin
Jun’10 : before adoption SFAS No.50/55; Jun’11 after Adoption SFAS No.50/55
Introduction
Financial Performance
Regional Expansion
Strategy and Achievements
Prospects
To be a Regional Financial Services Leader
Humanising Financial Services Across Asia
By 2015
1. Undisputed No. 1 Retail Financial Services provider in Malaysia
2. Leading ASEAN wholesale bank eventually expanding to Middle East, China & India
3. Sustainable Champion for Insurance & Takaful
4. Truly regional organisation, with ~40% of pre-tax profit derived from international operations
5. Leading Islamic bank in ASEAN
Our Vision
Our Mission
Strategic Objectives
Transformation Programme spurring strong financial performance
New “House of Maybank” Organisation Structure to support aspirations since July 2010
E
N
A
B
L
E
M
E
N
T
Global Wholesale
Banking
Regaining
domestic
leadership and
aggressively
pursuing ASEAN
market expansion
by humanising
client interaction
Community
Financial
Services
Leveraging
shared
distribution,
Customer
Segment driven,
Community Bank
Insurance &
Takaful
Being the
National
Insurance
Champion and
Living the
ETIQA way
Enterprise Transformation Services
ISLAMIC FINANCE INSPIRED
INTERNATIONAL EXPANSION
Humanising Financial Services Across AsiaMaybank
Group CEO + Support (CFO, CRO,GHC, Legal, Compliance, Communications
Expanded Group Executive Committee to reflect regional focus and drive business growth
Key management changes: Muzaffar Hisham (CEO of Maybank Islamic Berhad and Head of Group Islamic Banking), Hans de Cuyper (Head, Etiqa Insurance & Takaful and CEO of Mayban Ageas Holdings Berhad) and Dr. John Lee Hin Hock (Group Chief Risk Officer)
New House of Maybank has accelerated the pace for growth and regional reach
All branches converted to one-stop-shops, providing
comprehensive range of financial services including serving
Business Banking and SME customers.
Extended network via Pos Malaysia offices.
Improved domestic loans and deposits growth.
Community Financial Services
Introduced Client Coverage Model to provide single touch point to
fulfill all the financial needs of corporate customers.
Restructured trade finance. Introduced TradeConnex.
Maybank IB secured major M&A deals and IPOs.
Regional investment banking/brokerage capability strengthened
with acquisition of Kim Eng.
Global Wholesale Banking
Regionalisation of products e.g. trade finance, cards, global markets.
BII added 70 branches increasing the total to 344.
Philippines expanded branch network to 50 with 5 new branches.
Cambodia opened 1 new branch in Kg Cham to reach 10 branches.
International
New House of Maybank has accelerated the pace for growth and regional reach (cont.)
Expanded agency business.
Actively promoted single-premium investment-linked products
through Bancassurance.
Completed key IT infrastructure rollout.
Insurance and Takaful
New Head of Islamic Banking joined in April 2011
Enhanced collaboration with CFS and GWB
Converted Maybank Indocorp into Maybank Syariah IndonesiaIslamic Banking
Embarked on IT transformation programme to deliver:
Consistent products and services across all sales channels
Convenience to meet customer needs
Customisation of product development and delivery
Service Quality transformation introduced.
Service Quality Department set up to centralise all quality
service units, maximising the strengths of service teams across
the Bank.
Enterprise Transformation Services
Humanising Financial Services Across Asia
Advise customers based on their
needs
Providing the people with access to
financing
Most extensive retail (386) and self-
service terminal (4611) network in
Malaysia
Largest virtual
banking presence
(55% market share)
via Maybank2u
Financial services
accessibility in rural areas
via mobile bus banking
and the only bank in 18
rural locations
Fair terms and pricing
Islamic financing as a driver
Promoting Islamic first
Being at the heart of community
User friendly facilities for physically
challenged customers
Maybank Global CSR Day (20 Nov 2010) where
Maybankers participated in group-wide
volunteerism
Ramps to ease access Automated sliding doors
Introduction
Financial Performance
Regional Expansion
Strategy and Achievements
Prospects
Malaysia: Sustained growth for 2011 -2012
25bp hikes in OPR in Mar, May, July 10 and May 11
OPR and SRR to remain unchanged at 3% and 4% respectively until end of 1H2012
Food & Non-Alcoholic Beverages
Utilities, Housing & Other Fuels
Transport (RHS)
CPI and components (% YoY)
Inflation expected to rise to 3.4% in 2011 (2010: 1.7%)
Aug CPI: +3.3% YoY
Growth to be sustained at 4.5% - 5% in 2011 & 3.5% - 4.5% in 2012 (2010: 7.2%)
Quarterly GDP and annual growth rateQ2 GDP: +4% YoY
Ringgit/USD: RM3.15 by end 2011 and RM3.05 by end 2012
RM3.18 per USD as at 26 Sep
Ringgit Malaysia per USD
Malaysia’s Banking Sector: Loans expected to moderate to 10% growth in 2012R
M b
illio
n
Total Loans grew 12.9% YoY for July 2011
RM
bill
ion
Total Deposits grew 11.3% YoY for July 2011
%
Capital Adequacy remains strong
14.3%
12.5%R
M b
illio
n
Gross NPL RM27.4b, Net NPL ratio: 1.99%
Domestic business activity is supported the government’s 10-year Economic Transformation Programme (ETP) under which the Entry Point Projects are gaining momentum.
55.7% of the 131 projects have been announced since October 2010, of which 57% have commenced implementation
In terms of investment value, 21.7% of the targetted RM794.5 billion have been committed.
Target:RM794.5 b
21.7% or RM171.2b of investment value has been committed since Oct 2010
Investment Value of EPPs
21.7%
Entry Point Projects (EPPs)
Target:131
Projects
73 Announced
(55.7%) Commenced,57%
Operational,26%
Work-inProgress, 16%
57% of the 73 projects announced have commenced
Top 10 Projects Announced
1.Mass Rapid Transit (RM36.6 b)
2.KL International Financial District (KLIFD) (RM26 b)
3.Exxon Mobil & Petronas Carigali’s Tapis Field & Telok gas development project Tapis Field (RM10 b)
4.Petronas’ Refinery and Petrochemical Integrated Development (RAPID)(RM 60 b)
5.Karambunai Integrated Resort City (KIRC) (RM 9.6 b)
6.Independent Deepwater Petroleum Terminal project in Pengerang(RM5 b)
7.Tanjung Agas Oil & Gas and Logistic Industrial Park (RM 3 b)
8.Berantai's Marginal Oil & Gas Fields development (RM 2.6 b)
9.AUO Sun Power's solar cell fabrication facility (RM 2.2 b)
10.University Malaya Health Metropolis (RM 1.3 b)
Beneficiary of government economic development initiatives
Priorities for the next 12 months
1. Grow loans and deposits with pricing discipline.
2. Reinforce community banking focus for distribution channels. Address fundamentals for SME to gear-up for growth.
3. Intensify client coverage collaboration with product partners, with regional responsibility.
4. Realise investment banking synergies between Maybank IBand Kim Eng.
5. Continue asset and network expansion in BII, fix WOM andgrow syariah banking business in Indonesia.
6. Grow insurance assets under management and build agency force.
7. Enhance service quality, customer experience and satisfaction.
8. Implement the Group IT Transformation.
9. Complete infrastructure and framework across multiple productsand countries.
10.Gear-up for Basel III requirement.
11.Brand Refresh for the Group.
Refreshing the Maybank brand
ProspectsGroup’s business momentum expected to remain robust despite challenging global
economic conditions and stiffer competition.
Economic growth supportive of loans growth in 3 home markets. Loans growth in
Malaysia expected to be 12%, led by corporate segment. Moderate pace expected
for retail segment, amid intense competition and the expectation of further
introduction of measures to reign in household debt levels
Loans growth in Indonesia expected to be strongest in the Group at 24%,
Singapore remains broad based but with moderate growth at 8%.
Interest margin pressure anticipated due to competition and benign interest rate
outlook.
Fee based income, particularly from Global Wholesale Banking business and the
regional investment banking platform of Maybank IB/Kim Eng.
Credit costs expected to rise with loans growth and stabilisation of FRS 139.
Healthy capital levels to be maintained by DRP and raising of capital instruments
whilst monitoring development and impact of Basel III.
Given global volatility, we will adopt a cautious approach and grow responsibly.
Key Performance Indicators (KPIs) for financial period ending 31 Dec 2011
Note: Loans growth for Singapore and BII are in local currency
51 Years
Of Growth
Thank you for your trust in us
Worldwide
in 17 Countries
RM412 billion
RM4.45 billion
42,000 Maybankers
2,100 Offices
> 21 million Customers
Total Assets
Profit After Tax
Human Capital
Global Network
Customers
Public Ownership
> 10.5 million Unit Holders
Thank You
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