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1Q 2011 Results

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					1Q 2011 Results

 Investor Briefing
     31 May 2011
                       Vision And Mission
                                     Vision
  The preferred one stop financial services provider committed to meeting and
                     exceeding customers' expectations.

                                   Mission

Delivering premier investment and commercial banking solutions to satisfy the
                 needs of our valued clients in all sectors ;

Adoption of best business and management practices, investment in technology
and human resources and strategic alliances with reputable world class players;

       Achieving continuous growth and prosperity for the shareholders.




                                                                                2
        Group Structure as at 30 April 2011

                 59.28%



                                                     Others

        35.66%                            23.52%
                          20.69%
                                                     20.13%




 100%              100%
                                   100%
                                               51%        33.6%




100%
                                   100%
                                                                  3
                               Agenda


1) AFFIN Holdings 1Q 2011 financial results


2) Group transformation roadmap


3) The way forward




                                              4
  FY2010 Group Financial Performance




1) AFFIN Holdings 1Q2011 financial results




                                             5
                 1Q2011 Group Financial Performance
                         - Major Highlights -
1Q 2011 PBT decreased by 20.9% yoy to RM140.3m. The net interest income and Islamic Banking income
increased by RM14.0m or 5.7% as compared to 1Q2010. However, both the overhead expenses and
allowance for loan impairment were higher by RM17.2m and RM12.8m respectively.

1Q11 EPS was 7.1 sen vs. 9.1 sen in 1Q10.

Annualised ROE and ROA were 8.1% and 0.9% respectively.

Outstanding loans expanded by a strong annualised growth of 11.1% in 1Q11, slightly below the
industry’s growth of 13.2%.

Customer deposits also grew strongly at an annualised growth of 20.4%, more than double the pace of
the industry’s growth of 9.7% in 1Q11.

Notwithstanding the strong loans growth, assets quality continued to improve.

1Q11 credit cost improved to 9.1bps from 13.1bps in 4Q10.

Gross impaired loans ratio also improved to 3.4% in 1Q11 from 3.6% in 4Q10.

Capital adequacy remains healthy with RWCR at 12.24% and CCR at 11.08%, as at end March 2011.
Impaired loans coverage (under FRS 139) improved to 62.7% in 1Q11 from 59.7% in 4Q10.

Book Value Per Share (BVPS) increased further to RM3.54 as at end March 2011 from RM3.48 at end Dec
2010.
                                                                                                      6
                         1Q2011 Group Financial Performance
                                 - Quarterly results -
(RMm)                                                   1Q11           1Q10            YoY      4Q10            QoQ
                                                                                        (%)                     (%)
Interest Income                                            456.1          365.9       24.7%        444.0        2.7%

Interest Expense                                          (246.3)        (166.4)      48.0%       (235.1)       4.8%


Net Interest Income                                        209.8          199.4        5.2%        208.9        0.4%

Islamic Banking                                                47.1           43.5     8.3%            44.5     5.9%

Non-Interest Income                                            80.5           88.2     -8.7%       100.0       -19.5%

Operating Income                                           337.4          331.1        1.9%        353.4        -4.5%

Operating Expenses                                        (167.1)        (149.9)      11.5%       (165.2)       1.2%


Pre-provision Profit                                       170.3          181.2        -6.0%       188.3        -9.5%

Allowance for impairment on loans, advances and            (25.2)         (12.4)      103.2%       (32.9)      -23.4%
financing
Allowance for impairment on other assets and others             0.8            0.1    669.2%           (4.0)   -119.8%


Profit after provision                                     145.9          168.9       -13.6%       151.3        -3.6%

Finance cost                                                   (3.7)          (2.1)   76.2%            (3.8)    -2.6%


After tax profits from associates & JVs                        (1.9)          10.6    -118.0%           8.7    -121.9%


Gain on dilution of interest in associate                         -              -     0.0%             0.5    -100.0%

Pre-tax profit                                             140.3          177.3       -20.9%       156.7       -10.5%

Taxation & zakat                                           (34.2)         (42.0)      -18.5%       (30.1)      13.6%

Net Profit                                                 106.1          135.3       -21.6%       126.6       -16.2%
1Q 2011
EPS (sen)net profit dropped by 21.6% yoy to RM106.1m.          7.10           9.06    -21.6%           8.47    -16.2%
                                                                                                                         7
                        1Q2011 Group Financial Performance
                             - Key profitability ratios -
                                                                                 QoQ                        YoY
                                      2Q10       3Q10     4Q10       1Q11        Chg          1Q10          Chg
Profitability Ratios:


Net asset yield (%)                   4.09        4.40     4.33       4.04       -29bps        3.86        +18bps

Cost of funds (%)                     2.13        2.38     2.52       2.39       -13bps        1.93        +46bps

NIMs (%)                              2.61        2.69     2.47       2.27       -20bps        2.56        -29bps

Cost to income ratio (%)              48.28      47.25    46.73      49.53      +280bps       45.28       +425bps

Annualised ROE (%)                    8.96        9.01      9.76      8.09      -167bps       11.20        -311bps

Annualised ROA (%)                    1.07        1.05     1.10       0.89       -21bps        1.34        -45bps

Net Loan/Customer Deposit Ratio (%)   80.27      80.39    80.29      78.53      -176bps       80.47        -194bps



 1Q11 NIMs slide qoq due to a decline in asset yields.

 Net Interest Income growth of 5.2% was not sufficient to cushion the increase in both overhead expenses and allowance
 for loan impairment as well as the reduction in other operating income. As a result, annualised ROE dropped to 8.1 % in
 1Q11 from 9.8% in 4Q10.

 Cost-to-income ratio increased to 49.5% in 1Q11 vs. 46.7% in 4Q10 due to 11.5% increase in operating expenses.      8
                  1Q2011 Group Financial Performance
                    - Net Interest Income and NIMs -
Quarterly trend




 Trend analysis:
 Loans expanded by 2.8% from 4Q10 to 1Q11. The net interest income increased by 5.2% yoy.


                                                                                            9
                 1Q2011 Group Financial Performance
              - Segmental profits – By Business Entities -

(RMm)                        1Q11    1Q10    YoY Chg
                                                 (%)                 Comments

 ffin     ffin
A Bank & A Islamic Bank     123.4    139.0     (11.2) The increase in net interest income &
                                                      Islamic banking income was not
                                                      sufficient to cushion the increase in
                                                      overhead expenses and allowance for
                                                      loan impairment as a result of a one-off
                                                      settlement involving a long pending
                                                      legal case (BSNC)
                             17.3     27.9     (38.0) Lower due to higher gains on disposal
 ffin
A Investment Bank                                     of available-for-sale securities in 1Q10

Insurance divisions          (1.9)    10.6    (117.9) M  ainly due to operating loss by the
                                                      life unit while the General unit recorded
                                                      a lower profit.
Others                        1.5      0.2     650.0
Total                       140.3    177.7     (20.9)


                                                                                              10
               1Q2011 Group Financial Performance
                     - Gross Loans Growth -




Loans growth trend:
Outstanding gross loans expanded by 2.8% on a qoq. On an annualised basis, the gross loans
growth is 11.1%
Main drivers: Construction segment (10.70% qoq), non-residential mortgage segment (4.8% qoq),
hire purchase segment (4.3% qoq), residential mortgages segment (3.0% qoq).

                                                                                                11
       1Q2011 Group Financial Performance
             - Lending by Sectors -


                                                       Household
                                                         43.1%
        Education, health and
               others
                3.4%
                                                                     Others
                                                                     0.2%


Finance, insurance and                                                  Agriculture
       services                                                            1.8%
        15.6%                                                           Mining & quarrying
                                                                              1.3%


     Transport, storage &
                                                                      Manufacturing
       communication
                                                                         6.8%
           4.3%
                                                               Electricity, gas and water
          General commerce                                                0.8%
                4.7%                          Building and construction
                                Real estate             9.4%
                                  8.6%



                                                                                             12
1Q2011 Group Financial Performance
      - Lending by Purpose -




                                     13
                1Q2011 Group Financial Performance
                   - Customer Deposits growth -
                RMm
              40,000.0
                                                                                                       33,098
              35,000.0                                                                                                    34,790
                                                                                         28,599
              30,000.0                                          25,559       26,935
                                                25,688
                                                                                                                      66.3%
              25,000.0           21,465                                                                 67.0%

              20,000.0                         68.5%                                     62.9%
                                                               66.3%        61.7%
                                 71.5%
              15,000.0
                                                                         18.3%                      19.5%         19.1%
              10,000.0                      19.6%   11.9%                                       18.1%
                                                                    16.2%            19.0%
                                                                                 20.0%                       13.5%        14.5%
                         20.8%       7.7%                   17.5%
               5,000.0

                    -
                                 2005           2006            2007         2008            2009       2010         1Q 2011
           CASA (RMm)        4,292.8           4,180.1         4,561.5      4,704.4      5,429.4       6,463.6       6,661.7
           FD (RMm)          14,633.0         17,290.8        15,860.7      16,521.7    17,992.6       22,167.0      23,067.0
           Others (RMm )     2,538.7           4,217.2         5,136.5      5,708.9      5,177.3       4,467.8       5,061.3
            TOTAL (RMm)      21,464.5         25,688.1        25,558.7      26,935.0    28,599.3       33,098.4      34,790.0




Customer Deposits growth trend:
Customer deposits expanded by 5.1% qoq. On an annualised basis, the Customer Deposits grew by
20.4%

The mix in deposits composition has seen stronger growth coming from FD (4.1% qoq), followed by
                                                                                                                                14
CASA (3.1% qoq).
1Q2011 Group Financial Performance
      - Non-interest income -




                        For 1Q11, non interest income declined
                        by 8.7% yoy to RM80.5m.




                                                          15
1Q2011 Group Financial Performance
      - Operating Expenses -




                         AFFIN’s cost-to-income ratio has
                         increased in the 1st quarter from
                         46.9% and 49.5% and this is
                         mainly due to investment in
                         human capital as well as opening
                         of new branches and re-branding
                         of our existing branches.



                                                         16
                                                    1Q2011 Group Financial Performance
                                                             - Asset Quality -
                                                                            Gross NPL ratio / Impaired loans ratio

                                     20.0                                   Loan loss coverage / Impaired loans coverage                                     90.0
                                            18.2
                                     18.0                                                                                  Post-FRS 139                      80.0
                                                       16.6




                                                                                                                                                                    Loan loss /Impaired loans cover (%)
Gross NPL/Impaired loans ratio (%)




                                     16.0                                                                     81.5
                                                                   14.3                                                                                      70.0
                                                                                         71.6
                                     14.0                                                                                                             62.7
                                                                                                                                         59.7                60.0
                                     12.0                            58.8
                                                                                                                      Pos                                    50.0
                                     10.0
                                                                                                                                                             40.0
                                      8.0                39.9
                                             35.1                                       5.8                                                                  30.0
                                      6.0
                                                                                                                3.7                3.6          3.4          20.0
                                      4.0

                                      2.0                                                                                                                    10.0

                                       -                                                                                                                     -
                                            2005       2006       2007                 2008                    2009               2010          2011



             note: FY10 ratios reflect FRS-139 accounting method and not directly comparable with the GP3 standards adopted in the past

             Asset quality trend:
             Asset quality has been improving given the declining trend in gross NPL ratio from a high of 18.2%
             in 2005 to 3.7% in 2009 (under GP3 guidelines). Under FRS 139, gross impaired loan ratio has now
             dipped further down to 3.4%
             Adoption of the FRS 139 had however resulted in a drop in Impaired Loans Coverage to 62.7% as at
             end-March 2011 vs. a Loan Loss Cover of 81.5% as at 31 December 2009 (under GP3).
                                                                                                                                                                                                          17
                                        1Q2011 Group Financial Performance
                                               - Capital Adequacy -
At Group Level (RMm)                                   2005       2006       2007       2008       2009       2010    1Q2011                           Comments
Tier-1 Capital
Share Capital                                        1,477.8    1,501.9    1,661.5    1,661.5    1,661.5    1,661.5     1,661.5
Allowable Reserves                                   1,014.8    1,258.8    1,362.9    1,569.7    1,832.2    2,143.8     2,055.1
Less: Goodwill & Deferred Tax                         267.4      198.5      230.5      246.3      253.8      196.0       199.0
                                                     2,225.2    2,562.2    2,793.9    2,984.9    3,239.9    3,609.3     3,517.7
Tier-2 Capital
Subordinated Loans                                    500.0      500.0      500.0      500.0      300.0      300.0       300.0
General Allowance                                     326.6      267.7      274.3      305.9      343.3         -          -
Collective Impairment                                   -           -         -           -          -       162.9       166.3
                                                      826.6      767.7      774.3      805.9      643.3      462.9       466.3
Tier 1 + Tier 2 Capital                              3,051.8    3,329.9    3,568.2    3,790.8    3,883.2    4,072.1     3,984.0                      e
                                                                                                                                  Affin does not hav hybrid capital in its Tier 1 or 2
                                                                                                                                  capital, which will be phased-out under the
Less: Investments incapital instruments
                                                                                                                                  proposed new guidelinesunder Basel 3.
of other banking institution/ subsidiaries/
associates                                             39.5       53.2       53.2       53.2      346.5       97.4         97.9
Capital Base                                         3,012.3    3,276.6    3,515.0    3,737.6    3,536.6    3,974.7     3,886.1


Risk-Weighted Assets                                21,027.7   23,140.1   24,801.2   26,926.5   25,550.2   28,559.5    31,739.7


                                                       2005       2006       2007       2008       2009       2010     1Q 2011

                                                                                                                                  The decrease in core capital ratio and risk weighted
Affin's core capital ratio (%) (before dividends)       10.6       11.1       11.3       11.1       12.7       12.6        11.1   capital ratio is mainlydue to an increase in Risk
Affin's RWCR (%) (before dividends)                     14.3       14.2       14.2       13.9       13.8       13.9        12.2   Weighted Asset in the 1st quarter as a result of BNM
                                                                                                                                  withdrawing the 0%risk weight assignedon
                                                                                                                                  commitments and contingencies effective
                                                                                                                                  01/01/2011


Industry core capital ratio (%)                         10.2       10.7       10.1       10.6       13.1       12.8        12.7
           CR
Industry RW (%)                                         13.1       13.5       13.2       12.7       14.7       14.6        14.3

                                                                                                                                                                                    18
          1Q2011 Group Financial Performance
                 - Capital Adequacy -
   (%)                            Aff in's core capital ratio (%) (before dividends)
                                  Aff in's RWCR (%) (before dividends)
 16.0                             Industry core capital ratio (%)
                                  Industry RWCR (%)

 15.0                                                                14.7              14.6
             14.3        14.2         14.2
                                                       13.9                                        14.3
 14.0                                                                 13.8             13.9

                        13.5                                        13.1
 13.0       13.1                      13.2                                             12.8
                                                       12.7                                        12.7
                                                                     12.7              12.6        12.2
 12.0
                                      11.3          11.1
                        11.1
 11.0       10.6                                                                                   11.1
                        10.7                          10.6
 10.0       10.2                      10.1

  9.0
          2005        2006        2007            2008            2009             2010       1Q 2011


AFFIN does not have any hybrid Tier 1 and Tier 2 capital securities, which will be phased-
out under the new proposed guidelines of Basel III.

                                                                                                          19
             1Q2011 Group Financial Performance
                   - Capital Management -




Dividends:
No dividends had been proposed for 1Q11. Going forward, the group is
committed to maintain a payout of around 10.0 sen per share.

                                                                       20
                1Q2011 Group Financial Performance
                    - Summary of Key Ratios -




* Post adoption of FRS-139

                                                     21
                1Q 2011 Group Financial Performance
                    - Key Performance Indicator -


Headline KPIs                             Set for FY11     Actual achieved for 1Q11


ROE (%)                                      10.0                    2.0

ROA (%)                                       1.1                    0.2

Gross Impaired Loan ratio (%)                 2.8                    3.4

EPS (sen)                                    35.3                    7.1




Comments:
The annualised ROE and ROA for 1Q 2011 are 8.1% and 0.9%, below the target of
10.0% and 1.1%




                                                                                      22
1Q2011 Group Financial Performance




 2) Group transformation roadmap




                                     23
              1Q 2011 Group Financial Performance
               - Group Transformation Roadmap -

•   AFFIN’s group total assets stood at RM48.7 bn as at 1Q2011, and ranks no.8 among
    the nine anchor banks in the country.

•   AFFIN remains adequately-capitalized and will be in compliance with the upcoming
    implementation of Basel 3.

•   AFFIN’s loans and deposits growth have exceeded the industry since 2009.

•   Assets quality has improved significantly subsequent to prudent risk management
    and balance sheet clean-up measures implemented since the peak in NPLs in
    2001/2002.

•   AFFIN’s gross impaired loans ratio of 3.4% is expected to improve in the coming
    quarters. Despite having a lower impaired loan coverage ratio of 62.7% as at 1Q
    2011 vis-a-vis the industry’s 91.8%, asset quality remains sound. RWCR and CCR
    stood at 12.2% and 11.1% as at end March 2011.




                                                                                   24
                                                                1Q 2011 Group Financial Performance
                                                                 - Group Transformation Roadmap -
      Group total assets stood at RM49bn. Ranks no. 8 among nine local anchor banks
        Total Assets – AFFIN                                                                                                                                                                    RWCR – AFFIN vs. industry




                                                                                                                                                      48,748.17




                                                                                                                                                                             48,748.17
        RMm




                                                                                                                                                                  47,003.9
                                                                                                                                                                                                 (%)
                                                                                                                                                                                         18.0




                                                                                                                                           42,804.0
                                                                                                                                                                                                                      Affi n -RWCR                       stry
                                                                                                                                                                                                                                                     Indu RWCR
  60,000
                                                                               38,178.5
                                                                                                                                                                                                                                                 15. 7




                                                                                                                 36,828.1

                                                                                                                               37,385.9
                                                                                                      36,132.9
                                                     35,222.8




                                                                                                                                                                                         16.0
                                         33,299.5




                                                                 32,855.8




                                                                                           32,855.8
                                                                                                                                                                                                                                                                                                              14.7         14. 6
                              31,305.2




                                                                                                                                                                                                                                     4.0
                                                                                                                                                                                                                                     1                       14.3       14. 2       14.2     13.9                                       14.3
  50,000                                                                                                                                                                                                       13.0          1
                                                                                                                                                                                                                             3.2                                 13.1                                  13.8          3.9
                                                                                                                                                                                                                                                                                                                     1
                                                                                                                                                                                         14.0                                              3.8
                                                                                                                                                                                                                                           1         13. 7
                  25,191.6




                                                                                                                                                                                                       2.5
                                                                                                                                                                                                       1                                                                    13. 5      3.2
                                                                                                                                                                                                                                                                                       1                                           2.2
                                                                                                                                                                                                                                                                                                                                   1
                                                                                                                                                                                                                                                                                                12.7
  40,000                                                                                                                                                                                 12.0                          1.7
                                                                                                                                                                                                                       1
                                                                                                                                                                                                 10.0        0.0
                                                                                                                                                                                                             1
  30,000                                                                                                                                                                                 10.0

                                                                                                                                                                                         8.0
  20,000
                                                                                                                                                                                         6.0
  10,000
                                                                                                                                                                                         4.0
        -
                                                                                                                                                                                         2.0
                  2000

                              2001

                                         2002

                                                     2003

                                                                 2004

                                                                               2005

                                                                                           2006

                                                                                                      2007

                                                                                                                 2008

                                                                                                                               2009

                                                                                                                                            2010




                                                                                                                                                                  2010
                                                                                                                                                      2011




                                                                                                                                                                             1Q 2011
                                                                                                                                                                                         -
                                                                                                                                                                                                     2000     2001       2002        2003         2004        2005       2006        2007     2008       2009         2010         1Q 2011




        CCR – AFFIN vs. industry

      (%)
                                                    Affin -CCR                      Industry CCR
14.0                                                                                                        12.7 13.1 12.6 12.8 12.7
                                                                            11.8
12.0          10.7            11.1         11.1 11.1                                        11.1 11.3 11.1                     11.1                                                              •          AFFIN’s assets had grown by more than 80% since
                                                                               10.7 10.610.2 10.7
                                               10.1                                                  10.1 10.6
10.0        8.6                          8.9                                                                                                                                                                2000.
                       7.7
 8.0
 6.0                                                                                                                                                                                             •          No issue with AFFIN’s capital adequacy in
 4.0                                                                                                                                                                                                        complying with the Basel 3 requirements. Major
 2.0                                                                                                                                                                                                        shareholders are prepared to inject capital should
  -                                                                                                                                                                                                         there be a need for more capital to fund organic
            2000             2001        2002             2003              2004          2005          2006                2007          2008        2009               2010 1Q 2011
                                                                                                                                                                                                            and/or inorganic growth.
      Source: AFFIN estimates, Company data

                                                                                                                                                                                                                                                                                                                                   25
                          1Q 2011 Group Financial Performance
                           - Group Transformation Roadmap -
AFFIN vs. industry loans growth                           AFFIN vs. industry deposits growth

                                                        Growth (%)                      Affin Deposit Growth
                                                                      25.0              Industry Deposit Growth
                                                                      20.0                                                                  20.4
                                                                      15.0

                                                                      10.0                                                                  9.7

                                                                       5.0

                                                                        -

                                                                      (5.0)
                                                                                2005      2006       2007         2008   2009   2010   1Q 2011
 Source: AFFIN estimates, Company data
                                                        Source: AFFIN estimates, Company data

 AFFIN vs. industry Loan-to-Deposit ratio

                                                    •       As at 1Q 2011, AFFIN recorded an annualised
                                                            loan growth of 11.1% (vs. industry 13.2%) and
                                                            annualised customer deposit growth of 20.4%
                                                            (vs. industry 9.7%).




            Source: AFFIN estimates, Company data

                                                                                                                                       26
                        1Q 2011 Group Financial Performance
                         - Group Transformation Roadmap -
Reduction of RM6bn in gross NPLs since the peak in 2001
Gross NPL/Impaired Loans - AFFIN                 Gross NPL/Gross Impaired Loan ratio – AFFIN vs Industry




                                                 •   Gross NPLs have been brought down from RM7bn
                                                     since the peak in 2001 to RM861m in 2009, (down
                                                     88%). Subsequent to the adoption of FRS 139,
                                                     impaired loan stood at RM959m. In 1Q11

                                                 •   Hence, the reduction in gross NPL ratio from 30.6%
                                                     in 2001 to 3.7% in FY09. Under FRS 139, gross
                                                     impaired loan ratio stood at 3.4% as at 1Q2011.

                                                 * Note: FY10 refers to Impaired Loans data under
                                                    FRS139
                                                                                                           27
                              1Q 2011 Group Financial Performance
                               - Group Transformation Roadmap -
Credit cost trend is expected to decline. Impaired loans cover rising.
Loan loss provision/Impairment allowance - AFFIN    Loan loss/Impaired loan loss cover – AFFIN vs. industry




   Source: AFFIN estimates, Company data            * Note: FY10 refers to Impaired Loans Allowance/Cover under
                                                    FRS139




Impaired loans coverage ratio stood at 62.7% as at 1Q 2011 vs. the industry’s 91.8%. This is not
comparable with the loan loss cover of 81.5% as at end-2009, which was under the GP3 guidelines.

Credit cost edged down from 13.1bps in 4Q10 to 9.1bps in 1Q11 (under the adoption of FRS 139
accounting standard).



                                                                                                                  28
                                1Q 2011 Group Financial Performance
                                 - Group Transformation Roadmap -
ROE is catching-up with the industry                          Stable cost-to-income ratio
ROE – AFFIN vs. Industry                                      AFFIN cost-to-income ratio




Source: AFFIN estimates, Company data
Note: 2010* is annualized data
                                                                Source: AFFIN estimates, Company data
The Group ROE, which has been on a rising trend since 2002 as a result of more aggressive credit expansion and market
penetration drives, was weighed down by lower ROE generation at the general and life insurance arms. In comparison with
1Q 2011 industry average of 15.2%, AFFIN’s 1Q2011 annualised ROE was 8.1%. Meanwhile, AFFIN Bank’s and AFFIN
Investment Bank’s annualised ROEs are at 11.4% and 8.6% respectively.

Cost-to-income ratio has been easing from 51.6% in 2008 to 49.5% in 1Q2011 .

                           CIMB         Public   Maybank   RHBCap AMMB           HongLeong              EONCap   AFFIN   AFG
Cost-to-income (%)         64.1         30.4     49.0      43.2   41.5           42.0                   51.1     49.5    54.1
(based on latest
available data)

                                                                                                                                29
1Q 2011 Group Financial Performance
        - The Way Forward -




           3) The Way Forward

     i) Business review and outlook
     ii) Management’s priorities and strategies




                                                  30
             1Q 2011 Group Financial Performance
                     - The Way Forward -
Business review and outlook
•   On the commercial/retail banking division, the Group has launched new deposit
    campaigns to expand CASA base. As a result, CASA expanded by 3.1% qoq while FD
    grew by 4.1% qoq.

•   To enhance asset quality, the Group will stay prudent and selective with certain sectors
    of the economy while being more aggressive in expanding into areas where we are
    strong.

•   The Group targets to grow fee income (up to 25% of operating income) via cross-
    selling/referrals of customers within various divisions.

•   Continuous investment in IT infrastructure and training for staff to enhance efficiency
    and raise productivity. Prudent risk management process and capability will continue
    to be enhanced.

•   Implementation of the 70% Loan-to-Value ratio cap on the third mortgage is not
    expected to affect AFFIN Bank’s loan growth as our primary focus is on the mass
    to mid-residential housing segment, which consists mainly of owner-occupiers.

•   Pursue greater collaboration with our strategic shareholders, especially BEA and
    cross-selling within the Group.                                                 31
               1Q 2011 Group Financial Performance
- The Way Forward ~ Management’s priorities and strategies -
AFFIN Bank
•   Business Banking. Widen BLC networks from 12 to 18 by 2011 and target new customers via
    cross-referrals/introduction of 2nd Banker Program. Leverage on upcoming opportunities
    arising from 10MP, Budget 2011 and ETP. Focus would shift to enhancing quality of sales and
    services through a dedicated team of Relationship Managers/Executives.

•   Consumer Banking. Enhance deposit products to tailor to specific market segments and
    introduction of new deposit campaigns. Increase mortgage financing of completed properties
    and tie-ups with developers. On the HP segment, moving toward luxury car segment and
    maintain niche in Toyota, Honda and Mercedez Benz. Improve bancassurance
    products/services with AXA AFFIN.

•   Interest Income growth. Focus on corporate and government sectors loan volumes. Work with
    treasury to ensure cheaper cost of fund, tiered-rates and encourage utilization of facilities
    through tiered-pricing. Mandatory opening of current accounts for Corporate/SME/ customers.
    BLCs to focus on BLR-based pricing for SME customers.

•   Fee Income. Enhance trade finance capabilities beyond traditional financing of BA, TR via
    customized solutions.

•   Acquisition of PT Bank Ina Perdana. BNM had on 23 December 2010 given the approval for
    AFFIN Bank to establish a subsidiary by acquiring the Indonesian bank and to issue 121.356m
    new AFFIN Bank shares to fund the acquisition. Completion of the acquisition is expected by
    4QFY11.
                                                                                                32
              1Q 2011 Group Financial Performance
- The Way Forward ~ Management’s priorities and strategies -

AFFIN Investment Bank

 •   Expand market share and customer reach
        Growing business opportunities with Shareholders and group of companies
        Capitalising on cross selling opportunities within the Affin Banking Group
        Partnerships and alliances with other financial institutions and other strategic
        business partners
        Expand online retail trades, cross-border trading and premium broking
        Develop new sales avenues through bank/branch broking

 •   Areas of Cooperation with BEA
         Developing business collaboration in the areas of Investment Banking and
         Stockbroking
         Staff training and experience sharing programme




                                                                                           33
               1Q 2011 Group Financial Performance
- The Way Forward ~ Management’s priorities and strategies -

AFFIN Islamic Bank
•   Growing traditional business. Widen consumer/business banking coverage and
    enhance wealth management business. Encourage customer to increase utilization
    of facilities and expedite disbursements. Continue to boost up cheap deposit base.

•   Development of innovative/structured products. More diverse debt-based and equity-
    based financing structures through a variety of financing concepts

•   Internationalisation of AFFIN Islamic. Expansion in regional countries, e.g.
    Indonesia.

•   Moving towards globally accepted Islamic products. Implementation of globally
    acceptable Syariah products. Maintain continuous compliance with globally
    accepted principles and practices.

•   Improvement in asset quality. Bring down gross impaired loans ratio lower than 3%.




                                                                                         34
              1Q 2011 Group Financial Performance
                         - Disclaimer -

Disclaimer. This presentation is intended for information purposes only and has been prepared by
    AFFIN Holdings Bhd (The Company) for general circulation. The content of this material is
  believed to be correct at the time of issue and does not purport to contain all the information a
 prospective investor may require. Forward-looking statements and management discussion with
  regards to future financial performance and operational conditions of The Company may differ
                  materially from actual results or performance of The Company.


Under no circumstances shall this presentation be construed as an offer to sell or a solicitation of
 an offer to buy any securities. The Company and/or any of its directors and/or employees may
 have an interest in the securities mentioned therein. The Company does not accept any liability
whatsoever for any loss howsoever arising from any use of this presentation of their contents or
                            otherwise arising in connection therewith.




                                   - Thank You -


                                                                                                       35
 Q&A

- End Session -



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