Malayan Banking Berhad (Maybank) Q1 FY11 Analyst Briefing

FINANCIAL RESULTS1st Quarter FY2011 ended 30 Sept 2010

Analyst Briefing 12 November 2010

Executive Summary

Financial Performance

B siness Re ie

Adoption of FRS 139 and Basel II

Business Review

Country Review

Economics and Prospects

1

Key Highlights

PATAMI f 1Q11 16 6% Y Y d 12 7% Q Q t RM1 028 illi■ PATAMI for 1Q11 grew 16.6% YoY and 12.7% QoQ to RM1,028 million.

■ YoY revenue growth was mainly driven by Corporate Banking (+14.0% ), International Banking

(+7.8% ) and Insurance & Takaful (+27.2% ).

■ YoY profit growth mainly came from Community Financial Services and Corporate Banking which

recorded 63.8% and 21.5% growth respectively.

■ Sustained consumer loans growth of 10.0% and international loans growth at 7.0%, contributed by

30% th t BII d 5% th t Si H G l b 2 2% li d30% growth at BII and 5% growth at Singapore. However, Group loans grew by 2.2% annualised

due to large repayment of corporate loans.

■ Full adoption of FRS 139. Minimal impact on equity of ‐0.8%. Higher impairment ratios in line with

the industrythe industry.

■ Lower allowances for loss on loans due to improved bad debt recovery and higher specific

provisions in the previous corresponding period.

With d ti f B l II d RWCA F k it l i b t ith CAR* t 13 95% f■ With adoption of Basel II under RWCA Framework, capital remains robust with CAR* at 13.95% for

the Bank and 14.15% for the Group.

■ Normalised Return on Equity of 14.8% is on track to achieve full year target of 14%.

2

* Assuming full reinvestment of electable portion under the Dividend Reinvestment Plan

YTD Key Performance Indicators (KPI) for FY2011

Headline KPIs Target 1Q11 achievements

Return on Equity 14% 14.8% (normalised)

Loans and Debt Securities Growth 12% 4.6% annualised

h hOther targets Target 1Q11 achievements

Loans Growth

• Malaysia 12% ‐0.1%

• Singapore 5% 5.0%

• BII 24% 30.0%

Net Interest Margin Stable 2.75% (‐7 bps YoY)

Note: Loans growth for Singapore and BII are in local currency

Net Interest Margin Stable 2.75% ( 7 bps YoY)

Dividend Payout Ratio 40%‐60% Dividend to be determined in 1H11

3

Executive Summary


B siness Re ie


Business Review

Country Review


4

PATAMI rose to RM1.03 billion or 16.6%

Y Y Q QRM million 1Q11 1Q10

YoY Change

4Q10QoQ

Change

Net interest income 1,774.5 1,627.6 9.0% 1,792.2 ‐1.0%

Income from Islamic Banking 338.2 381.6 ‐11.4% 355.7 ‐4.9%

Net income from insurance business 86.7 72.0 20.5% 168.5 ‐48.5%

Non‐interest income 1,008.2 990.1 1.8% 878.8 14.7%

Net income 3,207.6 3,071.3 4.4% 3,195.2 0.4%

Overhead expenses (1 556 0) (1 490 9) 4 4% (1 536 5) 1 3%Overhead expenses (1,556.0) (1,490.9) 4.4% (1,536.5) 1.3%

Operating Profit before allowances for losses on loans

1,651.6 1,580.4 4.5% 1,658.7 ‐0.4%

Allowance for losses on loans (264.7) (417.7) ‐36.6% (311.2) ‐14.9%

Impairment losses on securities (13.9) (32.3) ‐56.8% (23.4) ‐40.6%

Operating Profit 1,373.0 1,130.4 21.5% 1,324.1 3.7%

Share of profits in associates 31.3 25.8 21.5% 35.0 ‐10.6%

Profit before taxation and zakat 1,404.3 1,156.2 21.5% 1,359.1 3.3%, , ,

Taxation & Zakat (350.7) 249.4 40.6% (384.1) ‐8.7%

Minority Interest (25.5) (25.0) 2.3% (62.5) ‐59.2%

PATAMI 1,028.1 881.8 16.6% 912.5 12.7%

5

EPS 14.53 sen 12.46 sen 16.6% 12.89 sen 12.7%

Normalised PBT for 1Q11 grew 14.1% YoY

RM million 1Q11 1Q10 YoY

Profit before tax (PBT) 1,404.3 1,156.2 21.5%

Unrealised (Gains)/Losses on derivatives (171.7) (84.5)

Forex Realised/MTM (Gains)/Losses (37.8) (29.3)

Amortisation on Core Deposits (BII) 20.4 22.9p ( )

Normalised PBT 1,215.2 1,065.3 14.1%

6

Loans grew in tandem with deposits growth

Deposits growthLoans growth driven by CFS and BII though domestically YoYgrowth

Annualisedgrowth

144.2

218.8

155.5

236.9

154.8

237.8

Malaysia

TotalRM billion Sep‐10 Jun‐10 Sep‐09

Annualised growth

YoY Growth

Community Financial Services 105 7 104 4 94 5 4 9% 11 8%

p gloans were affected by chunky repayments

+7.4%

+8.7%

growthgrowth

‐1.7%

+1.5%

15.4

19.6

50.2

21.5

55.4

21.6

BII (Rupiah'bn)

Singapore (SGD'm) Sep‐10

Jun‐10

Sep‐09 +28.7%

Services 105.7 104.4 94.5 4.9% 11.8%

Consumer 78.4 76.5 68.6 10.0% 14.3%

Total Mortgage 35.2 34.6 32.0 7.7% 10.0%

Auto Finance 23.3 22.8 20.8 10.1% 12.0%

+10.3%

+41.5%

+2.83%

11.1 14.8 14.1 Other Oversea &

Subcos

Credit Cards 4.2 4.1 3.7 4.5% 12.9%

Unit Trust 14.2 13.7 10.6 16.7% 34.4%

Other Retail Loan 1.5 1.4 1.5 16.7% -2.1%

Commercial + SME 27.2 27.9 25.8 -9.2% 5.4% Loans‐to‐Deposit ratio

+26.2%‐21.0%

88 8%89.3%Malaysia

% %

GWB (M'sia Ops) 40.1 41.4 39.4 -12.9% 1.7%

Other Loans 0.2 0.2 0.1 25.7% 165.4%

Total Domestic 146.0 146.0 134.0 -0.1% 8.9%

Loans to Deposit ratio

87.3% 86.8% 87.3%Group

82.4% 92.1% 88.4%BII

87.9%88.8%International 70.3 69.1 65.8 7.0% 6.9%

Singapore (SGD mn) 17.8 17.5 16.6 5.0% 6.6%

BII (Rupiah bn) 50.8 47.3 36.5 30.0% 39.1%

Others 11.2 11.8 12.1 -17.9% -7.4%

84.0%

82.6% 82.6%

Singapore

7

1Q10 4Q10 1Q11

Gross Loans 216.4 215.2 200.1 2.2% 8.2%

Non‐Interest Income including insurance grew 3.1% YoY

+3.1% (including insurance)

+1.8%

1,095.01,062.1

990.1 1,008.2

639 7milli

on

+2.4%

624.6 639.7

RM

m

+41.5%+32.8% +97.3%‐17 2% 20 5%

152.9 104.4 59.1 94.3 72.0216.3

138.7

48.9

186.1 86.8

17.2% +20.5%

Total non‐interest income

Commission, service charges

and fees

Foreign Exchange income from customers

Investment & Trading Income

Other Income Unrealised gain/(losses) on securities & derivatives

Net income from insurance business

1Q10 1Q11

8

Overheads was contained in line with income growth at 4.4% YoY

+4.4% YoY

1,490.9 QoQ YoYP l t 12 0% 23 1%

+1.3% QoQ

1,556.01,536.6

*

569.4 632.5 524.9

Personnel costs 12.0% 23.1%IT Expenses 3.2% ‐10.1%Marketing Expenses 64.6% ‐28.0%Admin, general expenses & f & b k 17 0% 7 8%

*

123 6107.7

111.2 121.2 53.0

87.3

& fees & brokerage ‐17.0% ‐7.8%

Total 1.3% 4.4%

illion *Personnel cost rose 23.1 YoY due to increase in COLA, higher

bonus provisions and earlier timing of salary increment.

743 3832.7

123.6

Admin, general expenses & fees & brokerage

k i

RM m

i

676.7 743.3 Marketing Expenses

IT Expenses

Personnel costs

9

1Q10 4Q10 1Q11

Maybank Group: Key Ratios

4Q10 3Q10 2Q10 1Q10

Net Interest Margin 2.88% 2.76% 2.77% 2.82%Return on Equity (normalised) 14.5% 13.8% 14.3% 13.4%

1Q11

2.75%14.8%

Fee to Income Ratio 35.2% 37.5% 38.4% 35.6%Cost to Income 46.9% 47.8% 48.1% 48.5%Adj. Cost to Income * 45.5% 49.7% 48.8% 48.4%Loan‐to‐Deposit Ratio 86.8% 84.8% 84.5% 87.3%

32.9%48.5%50.0%87.3%

Asset QualityGross NPL Ratio 4.70% 2.79% 2.90% 3.05% 3.26% 3.50%Net NPL Ratio 2.99% 1.20% 1.22% 1.36% 1.43% 1.60%

Post‐FRS 139 Pre‐FRS 139 Pre‐FRS 139

Net NPL Ratio 2.99% 1.20% 1.22% 1.36% 1.43% 1.60%Loan Loss Coverage 84.1% 125.6% 124.5% 120.5% 117.8% 113.2%SP / Impairment charge off rate (bps) 49 43 57 38 48 77 SP / Impairment charge off rate (bps) (exc. BII) 37 31 31 33 36 65

Capital Adequacy (Group)Capital Adequacy (Group)Core Capital Ratio 11.48%** 10.70% 11.06% 10.67% 10.76% 10.43%Risk Weighted Capital Ratio 14.15%** 13.64% 14.67% 14.50% 14.61% 14.28%

* Adjusted Cost to Income ratio: Overhead Expenses is adjusted to exclude insurance claims

10

**After Basel II and full electable portion dividend to be reinvested

Executive Summary


B siness Re ie


Business Review

Country Review


11

Adoption of full FRS139: minimal impact to shareholders’ funds

As

■ Maybank aligns itself with international standards by adopting full FRS 139 with minimal impact to

shareholders’ funds.

1 July 2010As

previously stated

Effect of FRS 139

Effect of FRS 4

As restated

Share Capital 7,078 7,078 Reserves ‐

Share Premium 5,903 5,903 Statutory Reserve 5,554 5,554 Capital Reserve 15 15

Unrealised Holding Reserve / (Deficit) 341 (48) 293

Exchange Fluctuation Reserve (949) (949) Revaluation Reserve 9 9 Retained Profits 9,926 (172) 2 9,756

27,877 (220) 2 27,659 Minority Interest 788 (6) 1 783

Total Equity 28,665 (226) 3 28,442

12

Total Equity 28,665 (226) 3 28,442

Asset Quality: More stringent methodology for FRS139

The more refined and stringent methodology under FRS139 resulted in higher impaired loan ratio though GP 3

112.87% 113.21% 117.79% 120.49% 124.52% 125.59% 87.58% 84.13%

Post‐FRS 139.

Loan loss coverage

provisioning continues to show improvementPre‐FRS 139.

2.83% 2.99%3.46% 3.50% 3.27%

3.07% 2.89% 2.79%

4.63% 4.70%

Loan loss coverage

Gross Impaired Loan Ratio

Net Impaired Loan Ratio

9.96 10.12

1.64% 1.60% 1.43% 1.36% 1.22% 1.20%

6.72 6.96 6.67 6.31 6.19 6.02

RM billion

4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 Day 1 1 Jul 10

1Q11 30 Sep

13

10Gross NPL / Impaired Loans

Full adoption of Basel II RWCA Framework

■ Maybank’s adoption of Basel II Risk Weighted Capital Adequacy (RWCA) Framework brings

it in line with regional peers.

■ Under Basel II, Risk Weighted Assets (RWA) increased due to inclusion of Operational RWA

of RM22.0 billion but mitigated by decrease in Credit RWA by RM38.9 billion.

■ Reduction in capital was due to different treatment of capital computation and provision

C i l Ad i h B l II d i h h d li d i i i h h■ Capital Adequacy with Basel II adoption, though declined, remains promising when the

transition period ends.

Group BankJun 10 Sep 10 Sep 10 Jun 10 Sep 10 Sep 10Basel I Basel I Basel II Basel I Basel I Basel II

Core capital ratio, assuming:full electable portion paid in cash 10.10% 9.84% 10.56% 13.78% 12.90% 12.80%full electable portion reinvested 10.97% 10.70% 11.48% 14.91% 14.01% 13.95%

Risk‐weighted capital ratio, assuming:full electable portion paid in cash 13.71% 12.79% 13.23% 13.78% 12.90% 12.80%full electable portion reinvested 14.58% 13.64% 14.15% 14.91% 14.01% 13.95%

14

Executive Summary


B siness Re ie


Business Review

Country Review


15

Strong performance in CFS and GWB’s corporate banking segments

Global Wholesale Banking (GWB)

3,071

3,208

1QFY10

1QFY11

M m

illion)

‐5.2%

4.4%Global Wholesale Banking (GWB)

1,480

210 411

68

891

147

1,403

240 420 45961

187

Revenu

e (RM

27.2%14.0%2.2%

‐34.2%

7.8%

‐64.8%

68 147

‐136

240 420 45 187

‐48

Total Community Financial Services

(CFS)

Corporate Banking Global Market Investment Banking International Banking

Insurance, Takaful & Asset

Management

Head Office & Others

million)

21 5%

1,156

1,404

( ) g

ore tax (RM m

63.8%4.3% ‐10.3%

21.5%

331 135

354

59

324

80 ‐126

542

164 369

7

290 79 ‐48

‐1.1%

Profit befo

21.5%

4.3%‐88.1%

10.3%

‐61.9%

16

Total Community Financial Services

Corporate Banking Global Market Investment Banking International Banking

Insurance, Takaful & Asset

Management

Head Office & Others

Community Financial Services: Mortgage Loans and Hire Purchase

Growth in mortgage loans remains above RM500 million Mortgage Loans: Improving Asset Quality7.6% 7.4%

6.9%6.3%

5.4%5.0%

556.8

855.3 888.2

783.2

665.8

g g Mortgage Loans: Improving Asset Quality

256.4

RM million

4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

Gross NPL

4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

Hire Purchase : Asset Quality remains lowGrowth in HP loans remains above RM500 million

631.3569.0 559.6

782.1

601.0 581.20.7%

0.8%0.9%

0.8%

0.6%0.7%

RM million

17

4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

Gross NPL

Gaining Market Share Card Growth above industry

Community Financial Services: Cards continues to gain market share

Sep 10 Sep 09

Cardbase 16.6% 15.2%

Billings 22.3% 21.5%

YoY Maybank Industry*

Cardbase ‐13.7% ‐21.1%


• Card base excludes Debit cards


Receivables 14.2% 14.2%

Merchant Sales 29.7% 28.6%


Receivables 12.9% 12.8%

Merchant Sales 14.3% 9.9%

• Industry figures for cards includes commercial banks and non FI players• Card base excludes Debit cards• Merchant and Billings consist of transactions done through

Credit, Charge and Debit cards

Cards Receivables

• Industry figures for cards includes commercial banks and non‐FI players

+12.9% YoY

3.70 3.87 3.904.13 4.18

3

4

5

12.9% YoY

+4.8% annualised

llion

1

2

3

RM bil

18

0

1Q10 2Q10 3Q10 4Q10 1Q11

GWB gross loans affected by chunky repayments

GWB gross loans declined by 12.9% annualised due to chunky repayments

6,726

12 729

6,650 Trade Finance ‐4.5%

12,222

20,729

12,729

T L & O d ft

Short Term Revolving Credit16.6%

‐31 4%22,495

‐ 5,000 10,000 15,000 20,000 25,000

Term Loan & Overdraft 31.4%

RM million

Sep 10 Jun 10

19

Global Markets performance boosted by trading activities

Growth in RevenueCredit Rating for Private Debt Securities in Malaysia

AAA36%A and Below

Growth in Revenue

2.2%

411.4 420.4

n

‐AA to AA3 %

33%

RM million

31%

Group Securities Portfolio grew 33.8% annualised

1Q10 1Q11

Revenue

Growth in PBT(Total = RM58 8 billion as at 30 Sep 10)

354.1 369.7

4.4%

on

+34.4%

+33.0%30.0

32.6

24.1 26.1

(Total = RM58.8 billion as at 30 Sep 10)

1Q10 1Q11

RM billion

RM milli

20

1Q10 1Q11

PBTJun 10 Sep 10

Government Securities Private Debt Securities

Brokerage activities contributed majority of IB income

Fee based Income 1Q11 Fee based Income SegmentationQ g

107 3

196.2

52.6

FY09

FY10

1QFY11

Arrangers' Fees

Corporate Advisory Fees

10%

Underwriting / Placement Fees

18%

97.9

198.3

107.3

FY07

FY08

FY09

Agency / Guarantee Fees

1%

8%

Brokerage Fee53%

54

0 50 100 150 200 250

FY06Miscellaneous Fee Income

10%RM million

Industry Position & Market Shares : July 10 – Sept 10

rg

Industry Rank Total Value (bil) Deals/Issues Market Share

M&A 3 RM 12.28 6 25.1%

Source: B

loom

ber

Equity & Rights Offerings 2 RM 2.16 8 20.6%

Debt Markets ‐Malaysia Domestic Bonds 2 RM 2.58 14 19.8%

Debt Markets ‐Malaysian Ringgit Islamic Bonds 2 RM 2.50 10 26.9%

21

Equity Brokerage 56.7% of Bursa Trading Value

n.a 6.7%

Etiqa maintains pole position in Life/Family and General

Market Share: No. 1 in Life/Family (new business) Market Share: No. 1 in General

9.3%

10.8%

Allianz General

Etiqa

13.2%

20.9%

ING Insurance

Etiqa

5.1%

6.3%

7.3%

Tokio Marine

MSIG

Kurnia

5.2%

10.9%

11.4%

MAA

Great Eastern Life

Prudential

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%

Overall Loss Ratio Lower Than Industry 45 2% (Maybank) vs 60 5% (Industry)

Source : ISM Report

Combined Gross PremiumIndustry

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

Single Premium

Credit Premium

Regular Premium

Combined Gross Premium 45.2% (Maybank) vs 60.5% (Industry)

79.2% 70.4% 66.6% 75.8% 50.7%Motor

-0.9%

-76.8%

-0.2%

48.3%

41.3%Misc.

y

60.5%

79.4%

45 0%

+62%

15 1%32.0%

21 0%9.3%

29.4%

FireFire

Motor

Total Life/Family1Q11

1Q10+17.7%

76.8%41.0% 43.3% 45.3%

‐8.4% 7.3% 6.4% 20.3%

281.7%

MAT

45.0%

21.1%

26.6%+5.2%

10 9%

-5.7%

22

15.1% 21.0%

1Q10 2Q10 3Q10 4Q10 1Q110 200 400 600 800 1000

Total General +10.9%

Maybank Islamic maintains strong financing growth of 25.8% YoY

Maybank Islamic financing (25.8% YoY growth)Income and PBT +12 3%

465.7 483.9 508.0 11.4

12.4

5 5

12.8

5.7 5 7

y g ( g )

+5.6%+147.8%

+83.3%+3.1% +21.9%

+12.3%+9 % YoY

+167% YoY

+5% QoQ

million

73.1 150.0

195.3

5.4

2.31.2

3.2 3.2

5.5

1.2 2.13.0

4.45.7

2.23.3 3.9

AITAB (Auto) House Term Cash Line‐i Trade Term

+30% QoQ

RM m

1Q10 4Q10 1Q11

Gross Attributable Income PBT and zakat

( )Financing Financing Financing Financing

1Q10 4Q10 1Q11

L di k h (b T l A )I i k i f M b k I l i

Consumer: +27% YoY Business: +24% YoY

1Q11 4Q10 1Q10

Financing to Deposits Ratio 96.6% 96.6% 112.0%Maybank Islamic,

17%EON Cap

Alliance Islamic, 2%

Others, 17%

Leading market share (by Total Assets)Improving key ratios for Maybank IslamicTotal Assets as at Sep 10 RM45.4 billion (+8.2% annualised)

Financing to Deposits Ratio 96.6% 96.6% 112.0%

Islamic Financing toTotal Domestic Loans

24.7% 24.0% 21.8%CIMB Islamic, 14%

Bank Islam, 12%

Public Islamic, 10%

Am Islamic, 7%

RHB Islamic 4%

Hong Leong Islamic, 4%

Kuwait Finance House, 4%

Islamic, 3%

23

Bank Muamalat, 6%

RHB Islamic, 4%

Executive Summary


B siness Re ie


Business Review

Country Review


24

Revenue and PBT rose 5.2% and 9.4% YoY respectively Diversified Loan Portfolio+6 6% YoY

Singapore: PBT improved 3.6% on higher income and lower provision

3 3 3 3

4.2 4.4 4.6Others

Car Loans

16.65 17.54 17.75150.4 158.2

84 1

+5.2%

+3.6%

+6.6% YoY

+5.0% annualised

llion

3.2 3.6 3.71.8 2.2 2.14.2 4.1 4.0

3.3 3.3 3.3

Housing Loans

General Commerce

81.2 84.1 Revenue

PBTSGD mil

SGD billion

1Q10 4Q10 1Q11Building & Construction

1 01%Loans Growth vs IndustryAsset Quality improving

1Q10 1Q11

1.01% 0.93%

0.77% 0.75%0.63%

0.58%

32.0%18.4%

23.4% 4.97%8.6% 6 6%

13.6%16.2%

30.6%

11.4% 11.9%

0.16%0.10% 0.09% 0.07% 0.09% 0.07%

4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

8.6% 6.6%-1.38%

Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Sep-10

25

Gross NPL ratio Net NPL ratio Maybank Singapore Growth Industry Growth

Bank Internasional Indonesia

I St t tIncome Statement

Rp Billion Jul 10-Sept 10 Jul 09-Sept 09

Interest income 1 688 1 474Interest income 1,688 1,474 Interest expense (739) (721) Net interest income 949 753 Non-interest income 512 439Non interest income 512 439 Gross Operating income 1,461 1,192 Operating expenses (excluding prov.) (984) (869) Operating income before provision 477 323 p g pProvisions (393) (251)

Profit before taxation and zakat 84 72

Note:• Based on income statement consolidated into Group accounts.

26


Revenue and PBTNet Interest Margin+22 6% Net Interest Margin

6.85%

6.15% 6.10% 6.09%6.62%

6.05%5.90%

1,192

1,461 Revenue

PBT

+22.6%

h billion

5.91%

72 84

+16.7Rupiah

Loan‐to‐Deposit Ratio

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10

Gross Loans: Composition (Rp trillion) and growth (+38%)17.7

YoY

1Q10 1Q11

89 3% 89.9%91.3%

(+45%)

(+36%)

8.9 9.6

12.0

12.814.4

12.2 13.0

17.6

86.6%

89.3%

82.4% 82.4% 82.9%

85.4%

(+20%)(+33%)

(+32%)2.3 2.1 3.0

0.50.40.4

Sep‐09 Dec‐09 Sep‐10

Corporate SMEC Consumer Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10

27

Corporate SMEC Consumer

Syariah SubsidiariesDec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10


Asset QualityBranches and ATM

430

740 745 743 748 787 806 844893 Branches

ATM + CDM

Q yBranches and ATM

3.20% 3.46% 3.50%2 79% 2.88%

3.52%

4.74%

PSAK 50 & 55

249 252 255 255 255 260 274 295370

430

S S

2.00%2.79%

1.85% 1.87% 1.56% 1.92% 1.87% 1.97%

2.39%2.79% 2.88%

Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10

`

Dec‐08

Mar‐09

Jun‐09

Sep‐09

Dec‐09

Mar‐10

Jun‐10

Sep‐10

Jun‐11

Jun‐12

Projected

Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10

Net NPL Gross NPL

Capital Adequacy: bank only( dit & k t i k)

Cost to Income Ratio(credit & market risk)

19.44% 20.20% 19.73% 19.04%

14 71% 14 39% 15.57% 14 35%

66.7%

63.9%

14.71% 14.39% 15.57% 14.35%

28

Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10Sep 09 Sep 10

Bank Internasional Indonesia: WOM Finance

Monthly Sales VolumeRevenue and PBT

42 145.6 44.5

52.855.7 54.2

56.961.0

63.8

51.150.0

60.0

70.0

yThousands of units

on

323

407

300

350

400

450+26.0%

36.140.9

36.842.1

10 0

20.0

30.0

40.0

Rupiah

Billio

3559100

150

200

250

300

Total Revenue

Profit Before Tax+68.6%

0.0

10.0

Sep‐09

Oct‐09

Nov‐09

Dec‐09

Jan‐10

Feb‐10

Mar‐10

Apr‐10

May‐10

Jun‐10

Jul‐1

0

Aug‐10

Sep‐10

A Q li D f lt R t ( 90 d )

35

‐

50

1Q10 1Q11

Asset Quality Default Rate (>90 days)

14.0%

11.8%

5.50%

PSAK 50 & 55

5.8% 6.7% 7.1%Default Rate

2.96%

1.94% 1.83% 1.85%

3.43%

1.31% 1.06% 1.17%0.73%

Gross NPL

Net NPL

29

3Q09 4Q09 1Q10 2Q10 3Q103Q09 4Q09 1Q10 2Q10 3Q10

+11 5%

MCB Bank: Financial Highlights

Revenue and PBT

9.810.9

6 0

7.2

+11.5%

+20.3

llion

YTD YTD6.0 Revenue

PBTPK

R b

i Key Ratios YTD Sept 10

YTD Sept 09

ROA 3.2% 3.5%

ROE 26 0% 28 3%

%

1Q10 1Q11

Loans and Deposits

ROE 26.0% 28.3%

Cost to Income Ratio 56.1% 51.4%

Loan-Deposit Ratio 58.5% 69.9%

253.2 246.9

362.1

422.3

Gross loans

‐2.5%

+16.6%

billio

n

NPL Ratio 9.7% 8.6%

Net Interest Margin 7.7% 7.9%

Capital Adequacy Ratio 23.2% 20.6%Gross loans

DepositsPKR

30

Sep 09 Sep 10

Executive Summary


B siness Re ie


Business Review

Country Review


31

Malaysia: Economic Rebound

Inflation expected to rise to 1.7% in 2010 (2011: 2.5%)2010 GDP revised upward to 7.5%; 6.1% in 2011

5

10

15

20

25

8

10

12

14

Transport (RHS)

3

6

9

12

130

140

150 CPI and components (% YoY)Quarterly GDP and annual growth rate

p ;

(25)

(20)

(15)

(10)

(5)

0

0

2

4

6

8

Utilities, Housing & Other Fuels

Food & Non-Alcoholic Beverages

(9)

(6)

(3)

0

90

100

110

120

6 6 6 7 7 7 7 8 8 8 8 9 9 9 9 0 0 (25)0

Jun-

02

Nov

-02

Apr-

03

Sep-

03

Feb-

04

Jul-0

4

Dec

-04

May

-05

Oct

-05

Mar

-06

Aug-

06

Jan-

07

Jun-

07

Nov

-07

Apr-

08

Sep-

08

Feb-

09

Jul-0

9

Dec

-09

May

-10

3.90 4.0

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

RMb (LHS) % YoY (RHS) % QoQ (RHS)

After July 8 hike to 2.75%, interest rate is not expected to rise until 2Q11

Ringgit stabilising at RM3.10‐3.15 by year end

3 40

3.50

3.60

3.70

3.80

2 0

2.5

3.0

3.5 Overnight Policy Rate: Bank Negara Malaysia

Ringgit Malaysia per USD 25bp hikes in Mar, May and July 10

3.00

3.10

3.20

3.30

3.40

0.5

1.0

1.5

2.0

4 4 4 5 5 5 6 6 6 7 7 7 8 8 8 9 9 9 0 0

Overnight Policy Rate: Bank Negara MalaysiaOvernight Policy Rate

32

Aug

-05

Dec

-05

Mar

-06

Jun

-06

Sep

-06

Dec

-06

Mar

-07

Jun

-07

Sep

-07

Dec

-07

Mar

-08

Jun

-08

Sep

-08

Dec

-08

Mar

-09

Jun

-09

Sep

-09

Dec

-09

Mar

-10

Jun

-10

Sep

-10

Apr

-04

Aug

-04

Dec

-04

Apr

-05

Aug

-05

Dec

-05

Apr

-06

Aug

-06

Dec

-06

Apr

-07

Aug

-07

Dec

-07

Apr

-08

Aug

-08

Dec

-08

Apr

-09

Aug

-09

Dec

-09

Apr

-10

Aug

-10

Total Loans grew 11 9% YoY for Sep 2010 Total Deposits grew 8.9% YoY for Sep 2010

Malaysia: Banking Sector

12%

14%

16%

18%

760

810

860

910Total Loans grew 11.9% YoY for Sep 2010

20.0%

25.0%

1050

1100

1150

Total Deposits Total Deposits YoY Growth

p g p

on n

4%

6%

8%

10%

610

660

710

760

Total LoansTotal Loans YoY GrowthHousehold YoY GrowthBusiness YoY Growth

5.0%

10.0%

15.0%

800

850

900

950

1000

RM billio

RM billion

2%560

Jan-

07

Apr-

07

Jul-0

7

Oct

-07

Jan-

08

Apr-

08

Jul-0

8

Oct

-08

Jan-

09

Apr-

09

Jul-0

9

Oct

-09

Jan-

10

Apr-

10

Jul-1

0

Business YoY Growth0.0%750

Jan‐07

Apr‐07

Jul‐0

7

Oct‐07

Jan‐08

Apr‐08

Jul‐0

8

Oct‐08

Jan‐09

Apr‐09

Jul‐0

9

Oct‐09

Jan‐10

Apr‐10

Jul‐1

0

Gross NPL RM29b Gross NPL ratio: 2 0%

4%4%5%5%

45

50

55

NPL‐3 Months (LHS) Net NPL ratio

13141516 14.8%

Capital Adequacy remains strong

13 1%

Gross NPL RM29b, Gross NPL ratio: 2.0%

ion

0%1%1%2%2%3%3%

20

25

30

35

40

6789

101112

Risk Weighted Capital Ratio

Core Capital Ratio

13.1%RM

bill

%

33

0%20

Jan‐07

Apr‐07

Jul‐0

7

Oct‐07

Jan‐08

Apr‐08

Jul‐0

8

Oct‐08

Jan‐09

Apr‐09

Jul‐0

9

Oct‐09

Jan‐10

Apr‐10

Jul‐1

0

6

Jan-

07

Apr-0

7

Jul-0

7

Oct-0

7

Jan-

08

Apr-0

8

Jul-0

8

Oct-0

8

Jan-

09

Apr-0

9

Jul-0

9

Oct-0

9

Jan-

10

Apr-1

0

Jul-1

0

Economic Transformation Plan (ETP): Banks to benefit

■ Banks to benefit from the filtering down of a larger domestic economic activity base

■ Potential loan base of RM1.29 trillion based on RM1.4 trillion investment requirement under the ETP (2011‐2020)

■ Of which 92% is targeted to come from the private sector (8% from public sector)

■ Accelerate private pensions

■ Banks to also benefit indirectly from enlarged activities under the 10 Entry Point Projects (EPP) for Financial Services NKEA:

■ Revitalise equity markets ■ Accelerate private pensions

■ Spur growth of wealth management

■ Kick start and sustain an asset

■ Revitalise equity markets

■ Deepen and broaden bond markets

■ Transform development financial institutions ■ Kick‐start and sustain an asset

management industry

■ Create regional champions

■ Global Islamic financial hub

institutions

■ Create integrated payment eco‐system

■ Insuring our population

34

■ Global Islamic financial hub■ Insuring our population

Prospects

■ Banking sector prospects remain positive, supported by improved consumer and business sentiment on the back of sustained economic growth, forecast at 7.5% in 2010 and 6.1% in 2011.

■ Competition in the financial services industry is intensifying, driven by strong domestic players, new entries and further liberalisation of the banking sectornew entries, and further liberalisation of the banking sector.

■ With focus on its three key home markets of Malaysia, Singapore and Indonesia and through its realigned organisation structure, focusing on three key business pillars of Community Financial Services (CFS), Global Wholesale Banking (GWB) and Insurance and Takaful, growth in loans and debt securities is expected to gain momentum towards meeting the target of 12% for FY2011.

■ No significant impact from new Bank Negara cap on Loan to Value for mortgages since Maybank’s focus has been on first time home owners, up graders and for own occupation.

■ Maybank will continue to focus on improving asset quality and lowering credit cost as well as invest in people, technology and processes

■ Capital and risk management continuously being enhanced to meet more stringent Basel II requirements Under the new Basel III capital requirements Maybank would be able to meet therequirements. Under the new Basel III capital requirements, Maybank would be able to meet the minimum Core Equity Ratio of 7.0% without the need to raise equity capital apart from the Dividend Reinvestment Plan.

■ Barring unforeseen circumstances, the Group is expected to perform better than the previous f l d k ( ) f

35

financial year and is on track to meet its target Return on Equity (ROE) of 14%

Thank YouThank You

Disclaimer. This presentation has been prepared by Malayan Banking Berhad (the “Company”) for information purposes only and does not purport to contain allthe information that may be required to evaluate the Company or its financial position. No representation or warranty, express or implied, is given by or onbehalf 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 partThe 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 partof 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 inconnection therewith.

Khairussaleh RamliChief Financial OfficerContact: (6)03‐2074 4288 Email: [email protected]

MALAYAN BANKING BERHAD14th Floor, Menara Maybank100, Jalan Tun Perak50050 Kuala Lumpur, MalaysiaTel : (6)03‐2070 8833

Hazimi KassimHead, Strategy and Corporate FinanceContact: (6)03‐2074 8101Email: [email protected]

Raja Indra PutraHead, Investor RelationsContact: (6)03‐2074 8582Email: [email protected]

36

www.maybank.com

Malayan Banking Berhad (Maybank) Q1 FY11 Analyst Briefing

Economy & Finance