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www.affin.com.my
40TH ANNUAL GENERAL MEETING Presentation to Shareholders
by En. Kamarul Ariffin bin Mohd Jamil, Group Chief Executive Officer
18 April 2016
www.affin.com.my
FY2015 Financial Performance
www.affin.com.my
PBT & PAT
382.2
598.5
2015 2014
RM Million
Profit After Tax
519.3
806.9
2015 2014
RM Million
Profit Before Tax and Zakat
www.affin.com.my
Total Income & Composition
947.8
238.9
615.7
969.3
220.4
630.1
Net interest income Islamic banking income Other operating income
RM Million
Income Composition
2015 2014
1,802.5 1,819.8
2015 2014
RM Million
Total Income
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Allowances/(Writeback) for Impairment Losses
Allowance/(Writeback) - Impairment Losses on Securities
RM Million (23.8) 0.3
2015
2014
188.4
(16.3)
2015 2014
RM Million
Allowance/(Writeback) - Impairment Losses on Loans, Advances
& Financing
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2.25% 2.17% 2.10% 2.02% 1.93%
2011 2012 2013 2014 2015
Group Net Interest Margin
…….. Net Interest Margin of is a downtrend due to margin compression despite growth in total loan base…
Net Interest Margin
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Operating Expenses
47.7% 46.0% 47.0% 54.8% 60.2%
2011 2012 2013 2014 2015
Cost to income ratio
54.9%
Personnel Admin & General
Promotion & Marketing
9.4% 12.2%
Establishment
23.5%
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Performance by Subsidiaries / Associate
AFFIN Hwang IB Group
Retained #1 position for total value & volume traded in the domestic market
16% AUM growth to RM35b; top 5 fund house in Malaysia
Thanachart & potential Indonesian alliance consolidating regional aspiration
Daiwa alliance gaining traction in the Capital Markets space; pending BNM for strategic equity stake in AHC
AXA AFFIN Life Insurance
Growth of weighted new business premium (WNBP) of 15% (Industry : 4%)
WNBP growth of 11% for agency and 21% for bancassurance & DM/TM
Gross premium growth of 10%
New business value growth of 21%
AXA AFFIN General Insurance
Achieved GWP of RM1.33 billion in 2015, a growth of 17.7%
Ranked 5th and is the fastest growing insurance group
Group health growth of 20% Motor growth of 21% Motorcycle growth of 33%
461.2
84.2 (29.2)
114.8
720.1
107.4 8.9
120.4
AFFIN Bank Group AFFIN Hwang IB Group AALIB AAGIB
RM Million
2015 2014
AFFIN Bank Group
Launched the first multi-bank platform - Investment Account Platform (IAP) which facilitates the channelling of funds from individual & institutional investors to finance projects and ventures.
The first financial institutions to offer the market an electronic subscription and payment service for the application of Rights Issue.
Expanded its network, total number of branches nationwide to 106.
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Loans, advances & financing by business segments
20.1 19.0
23.8 22.1
2015 2014
RM billion
Consumer Corporate
…Loans growth for 2015 was at 6.87% or RM2.8 billion…
43.9 41.1
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Deposits from Customers by business segments
12.8 13.7
37.7 36.9
2015 2014
RM billion
Consumer Corporate
50.5 50.6
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Total Capital Ratio 2015 2014
AFFIN Bank Berhad 14.33% 13.56%
AFFIN Islamic Bank Berhad 14.42% 13.67%
AFFIN Hwang Investment Bank Berhad 32.07% 30.72%
As at 31 December 2015, the Group’s CET Capital ratio, Tier 1 Capital ratio and Total Capital ratio are healthy and well above the regulatory requirements
Capital Adequacy
CET 1/TIER 1 Capital Ratio 2015 2014
AFFIN Bank Berhad 11.94% 12.32%
AFFIN Islamic Bank Berhad 13.20% 12.47%
AFFIN Hwang Investment Bank Berhad
32.07% 30.72%
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Asset Quality
2.84 2.28
1.98 1.82 1.90
1.32 1.13 0.92 0.84 1.02
(3.00)
(2.00)
(1.00)
-
1.00
2.00
3.00
0
250
500
750
1,000
1,250
1,500
2011 2012 2013 2014 2015
RM Million
Gross NPL/Impaired Loans Gross Impaired Loan ratio Net Impaired Loan ratio
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Gross Dividend & Dividends Payout Ratio
60.6 65.3
80.2
58.3 67.2
-
25.0
50.0
75.0
100.0
0
100
200
300
400
500
2011 2012 2013 2014 2015
% RM Million
Dividend Payout
Payment (RM Million) Dividend Payout Ratio (%)
12.0
15.0 15.0 15.0
7.99
2011 2012 2013 2014 2015
Gross Dividend Per Share (sen)
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Strategic Direction
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1. Creating a discernible impact in the marketplace- change inscale and performance along key measures
2. Establishing a cohesive franchise across distributionchannels, products and customer segments
3. Aligning assets and resources to deliver on planned goals
4. Fostering a culture and governance which will enableownership and accountability for results
5. Our transformation strategy will optimize shareholder returns.
AFFIN BANK GROUP TRANSFORMATION
• Increasingencroachment of non-banks- telcos, retailers,autos/developers, techcos.
Implications
• WTO/TPPA• Gravitation to scale and
size• Rise of Islamic FIs• Borderless players-
offshore FIs
• Changes in socio-demographics
• Rise of new affluentsegments
• Rise of more self-directed customerswith technologysavviness
• Funding suppliers(customers) market,multiple options
• Talent wars andretention
• Risk of gettingstuck-in-the-middle-limits ofdomestic growth
• Universalapproach tomarkets
• Risk ofdisintermediation inpayments andlending spaces
• Need to think“alliance” andcollaboration
• Product innovationand positioningcritical
• Challenge of participating in“Banking Renaissance” withcurrent operating model-channels, products, customers
• Significant investments incapabilities and peoplerequired to stay relevant overthe medium to long term
• Rethink business boundariesin terms of products andservices, channel partners,product alliances
• Increasingly higherawareness and/ofwider choices
• Pressure to create“intelligentworkforce”
AFFIN Bank Group operates in an increasingly challenging environment across every aspect of the industry
In-Flight Transformation End-Goals (2020)
1. Cradle to Grave Banking- despitesize, to provide services to allbankable segments of the economy
2. Embrace the digitalization- specificfocus on mobile payment and mobilebanking
3. Move towards a consumer basedbank- with 60% consumer 40%corporate
4. Increase fee based income- 30% oftotal income from 20% currently
5. Restructure deposit profile- 40%CASA, 60% FD
6. Expand into external markets
1. Functional structure alreadyrolled out. Some adjustment stillneeded
2. Consumer transformation beingimplemented resulted in loan stockincrease and improved turnaroundtime
3. Adjustment in salaries to addressfor internal equity
4. Compliance framework andcapability enhanced
5. Performance based KPIs withnegative KPIs implemented atsenior management level
6. Separation of credit managementand risk management
In-Flight Transformation Initiatives
AFFIN BANK GROUP TRANSFORMATION
Pillar 6 People & Organization
Pillar 5 Technology
Pillar 2 Distribution Channels
Pillar 3 Products & Solutions
Pillar 4 Operations
Pillar 7 Performance Management
Pillar 1 Target
Customer Segments
Business Scope Components: Addresses strategic questions on who are our customers, what do they need and how do we reach them
Operations Enablers: Links and supports the execution and delivery capability with the business model goals around Operations, Technology and People
Performance Management Components: Ensures goals and model discipline through a comprehensive set of metrics
Target Operating Model Blueprint
The blueprint for the new target operating model comprises seven key pillars covering business scope, operations enablers and performance management
Snapshot of the new building
Net Floor Area : 660,000sqft
Number of floors : 35 floors
Number of parking bays : 830 bays
Average plot ratio : 15.2x
Average floor plate : 23,530 sqft
AFFIN GROUP NEW HEAD OFFICE The new building located at Tun Razak Exchange (TRX) will house all AFFIN
Group of Companies including AFFIN Holdings Berhad, AFFIN Bank Berhad,AFFIN Islamic Bank Berhad, Affin Hwang Investment Bank Group, AXA AFFINLife and General insurance
The building will have state of the art technology driven Central Branch, digitaltechnology centre, credit card and wealth management centre, stockbrokingcentre, staff training centre, call centre, meeting rooms, cafeteria, gym, nurseryand auditorium.
The Group is expected to achieve cost savings from the rental being paidcurrently, which is estimated to be RM26.0 million per annum and the Group willalso enjoy TRX-specific tax incentives.
AFFIN GROUP NEW HEAD OFFICE
AFFIN GROUP NEW HEAD OFFICE
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www.affin.com.my
FY2015 Performance
Equity Brokerage for total value and volume traded in the Malaysian market in 2014 and 2015 #1
Asset Manager by AUM, and recognised as top fund houses in Malaysia for 2014 and 2015
Top
5
Profit Before Tax
84.2
107.4
2015 2014
Results is in line with challengingcapital markets environment in2015
First full-year results postHwangDBS IB acquisition (Apr’14 )& merger with AFFIN IB (Sep’14)
One-off integration-relatedexpenses
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Strategy Going Forward
Consolidation Strengthening Market Position
Business Resilience & Diversification
ASEAN Network
Broadening equity tradingcoverage thru key strategicpartners - Daiwa & Thanachart
Securing Asian partnerships forremaining jurisdictions
#1 Equity Brokerage Top 5 Asset Manager Position of significance for deal
advisory & fund raising
Strategic business performanceinitiatives
Complimentary business & incomediversification
Expanding product capability &reach thru Daiwa collaboration
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THANK YOU
