Maybank 50th AGM Presentation by the President and CEO

50th Annual General Meeting50 ua Ge e a eet g

Dato’ Sri Abdul Wahid OmarPresident & CEO

29 September 2010

FY2010: Exceeding our targets

Headline KPIs Targets  Achievements

Return on Equity11% 

(revised to 13%)13.6%q y

(revised to 13%)Revenue (net income)

growth8%

(revised to 15% normalised)22.4%

(15.7% normalised)

Other targets Targets  Achievements

Gross Loans growth High single digit 10.3%

Net Interest Margin Stable+10 bpto 2.82%

Asset quality Charge off rate: 70‐75 bps 53 bps

Dividend Dividend payout : 40‐60% 76.5%

1

We are the leading bank in Malaysia …

256 337

CIMBMaybank

Total Assets (RM bn): 30 June 2010 Net Loans (RM bn): 30 June 2010

152 206

CIMBMaybankMAYBANK MAYBANK

4985

97 120

219

EON CapHL Bank

AMMBRHB Cap

Public …

3438

65 73

145

EON CapHL Bank

AMMBRHB Cap

Public Bank

33 43 49

AllianceAffin

EON Cap

21 25

34

AllianceAffin

EON Cap

D it (RM b ) 30 J 2010 M k t C it li ti (RM b ) 24 S 2010

44.359.360.7

Public BankCIMB

Maybank

175193

237

Public BankCIMB

Maybank

Deposits (RM bn): 30 June 2010 Market Capitalisation (RM bn): 24 Sep 2010

MAYBANK MAYBANK

4.84.9

14.415.2

17.1

AllianceEON CapHL Bank

RHB CapAMMB

3137

6870

88

AffinEON Cap

AMMBHL Bank

RHB Cap

2

4.68

Affin2331

AllianceAffin

… and among the Top 10 Banks in the Region

T t l A t (RM b ) 30 J 2010 N t L d D it (RM b ) 30 J 2010Total Assets (RM bn): 30 June 2010 Net Loans and Deposits (RM bn): 30 June 2010

492 638

1,052

OCBCDBSSBI

290425

789

240 336

619

UOBDBSSBI

**

219 256

337 355

441 9

Public BankCIMB

MaybankICICIUOB

194

168237

259

14152

163 206

217

CIMBICICI

MaybankOCBC

Net Loans

Net DepositsNo.6

*

*

PATAMI (RM bn): (12 mths to June 2010) Market Capitalisation (RM bn): 24 Sep 2010

120 9

RHB Cap88

17573

145

RHB CapPublic Bank No.5

6876

87136

OCBCDBSICICI

SBI

3 43.8

5.15.6

9.4

ICICIMaybank

OCBCUOBSBI

445961

6768

PublicCIMB

MaybankUOB

OCBC

1.42.7

3.23.33.4

RHB CapPublic

DBSCIMBICICI No.4

No.6

3

* As at 31 Mar 10   

M b k’ h i 28 1% d i FY2010 d

Share price rose 28% in FY2010

9.00

Maybank’s share price rose 28.1% during FY2010 and46.1% from 30 June 2009 to date.

8.00

8.50 30 Sep 09:

Maybank’s 49th AGMRM8.62

X+46.1%30 Jun 10

7.00

7.50

y

RM

RM7.56

X+28.1%

6.00

6.50

RM5 90

RM6.65X

X

5.00

5.50 RM5.90

4

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

Introduction

Fi i l P f

Introduction

Financial Performance

The Way Forward

Prospects

5

Record PATAMI of RM3.8 billion

RM millionFY10   

30 Jun 10   FY09   

30 Jun 09   YoY

change4Q10  

30 Jun 10  3Q10  

31 Mar 10  QoQ

change  

Net interest income 6,770.9  5,919.5  14.4% 1,792.2  1,668.0  7.4%

Income from IslamicIncome from Islamic Banking 

1,434.7  1,224.3  17.2% 355.8  341.5  4.2%

Non‐interest income 4,666.0  3,375.2  38.2% 1,127.2  1,178.8  ‐4.4%

Total net income 12,871.7 10,519.0 22.4% 3,275.1 3,188.3 2.7%

Overhead expenses (6,412.1) (5,559.2) 15.3% (1,616.4) (1,586.1) 1.9%

Loan Loss Provision & Impairment on securities

(1,211.0) (1,896.3) ‐36.1% (334.6) (173.0) 93.4%

Operating Profit 5,248.6  3,063.5 71.3.3% 1,324.1  1,429.1  ‐7.4%

Write off and impairmentlosses on goodwill and investment

‐ (1,972.6) ‐ ‐ ‐ ‐

Share of profits in associates

121.8  99.5  22.4% 35.0  26.0  34.6%

Profit Before Tax 5,370.4  1,674.3  220.8% 1,359.1  1,455.1  ‐6.6%

Profit After Tax and Minority Interest (PATAMI)

3,818.2  691.9  451.9% 912.5  1,030.4  ‐11.4%

6

Normalised PBT 5.012.0 3.806.9 31.7% 1,416.7.7 1,219.8 16.1%

Broad‐based Growth

8.3% 302.2% 30.5% 135.1% 34.8% 18.8%

Record profits due to improved performance across all business segments

onRM

 millio

7

Strong Profit growth from home markets

4,243

239% Profit Before Taxby Geographical Locations

(1.3%)

1 249RM m

illion

32% 290%International:21.0%

( 2%)

(4.4%)

1,249

618

82

818

238

R

(79.0%)(15.2%)

Malaysia Singapore Indonesia (BII)

8

FY09 FY10

Consumer Banking: Housing Loans and Auto Loans

Housing Loans market share stabilising Uplift in new housing loansg g

on

500

600

700FY10: RM2.14 bil.

p g

14.9%

13.9%13.4%14%

15%

16%‐1.0%

‐0.5%242%uplift

RM m

illio

0

100

200

300

400 FY09: RM0.63 bil.13.4%

11%

12%

13%

01Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

10%FY08 FY09 FY10

Housing includes other mortgage loans

Uplift in new auto LoansImproving auto loans market share

800

1,000on

FY09 RM1.98 b

FY10 RM2.48 b

16.8%17.4%

17%

18%25%uplift

0

200

400

600

RM m

illio15.7%

14%

15%

16%

9

0

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10FY08 FY09 FY10

Business and Corporate Banking

Growth spearheaded by term loansLoans growth led by Commercial and Corporate Banking

STRC

Trade Bills

FY10

FY09

Growth spearheaded by term loans Loans growth led by Commercial and Corporate Banking

‐1.4%

2.6%

lion

64.068.8

Term Loans

OD

FY09

0.3%

17.8%

RM  bil

- 10 20 30 40

Improvement in Asset Quality (Gross NPL ratio)Diversified loans by economic sector

Wholesale &

Transport & Comm.

8%Finance,

Insurance, Real Estate

27%

Education & Health

2%

Sectors N.E.C2%

Primary Agriculture

4%Construction

15%

Retails Trade12%

2%

10

Manufacturing 23%Utilities

7%

Insurance and takaful

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

Overall Loss Ratio Lower Than Industry 55 3% (Maybank) vs 61 3% (Industry)

Source : ISM Report

Combined Gross Premium grew 27% YoYIndustry55.3% (Maybank) vs 61.3% (Industry)

Single Premium

Regular Premium

CombinedGross Premium

Life/Family+8%

+54%

+27%y

61.3%

79.5%

43 8%

Total General

Fire

Motor

Total Life/Family FY10FY09

+8%

+23%

+16%

General

+33% 43.8%

29.1%

26.4%

11

0.0 1.0 2.0 3.0 4.0 5.0

Total General

RM billion

16% 26.4%

Islamic Banking 

Maybank Islamic financing (YoY growth)Income and PBT+20%

10.6

5 0

12.4

5 5

FY09 FY10+17%

+10%

+3%‐15% +63%n on

+20%

5.0

0.8 2.1

3.5 2.7 5.5

1.2 2.1 3.0 4.4

AITAB House Financing

Term Financing

Cash Line i

Trade Financing

Term Financing

+59%+3%

RM m

illio

RM  billi

+12%

Financing Financing Line-i Financing Financing

Consumer: +16% Business: +14%

Improving key ratios for Maybank IslamicLeading market share (by Total Assets)

Maybank Islamic,

17%

Public Islamic

Others, 42%

FY10 FY09

Maybank Islamic’s Total Asset grew 28% to RM44.5 bil. in Islamic,

11%

CIMB Islamic,

12%

42%Financing to Deposits Ratio 97.0% 105.0%

Islamic Financing toTotal Domestic 24 2% 20 5%

FY10

12

Bank Islam, 11%

Am Islamic, 7%

Total Domestic Loans

24.2% 20.5%

Singapore

PBT rose 36% yoy Diversified Loan PortfolioPBT rose 36% yoy Diversified Loan Portfolio

4.34.315

20 Others

Car loans

+8.6%

llion

+36%

n

17.516.1

3 2 3.61.8 2.23.7 4.13.2

3.34.3

5

10 Housing Loans

General Commerce

SGD m

i

SGD billio

M b kLoans Growth exceeds Industry

3.2 3.60

FY09 FY10Building & Construction

Asset Quality improving MaybankSingaporeGrowth

13

Bank Internasional Indonesia

I St t tIncome Statement

Rp Billion Jul 09-Jun 10 Contribution

Jul 08-Jun 09 Contribution

I t t i 6 065 4 915Interest income 6,065 4,915 Interest expense (2,753) (2,727) Net interest income 3,312 2,188 Non-interest income 1 762 1 187Non interest income 1,762 1,187 Gross Operating income 5,074 3,375 Operating expenses (excluding prov.) (3,419) (2,147) Operating income before provision 1,655 1,228 p g pProvisions (1,048) (1,082) Profit before taxation and zakat 607 146 Net profit 498 14

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

• The accounts of BII were consolidated into Maybank Group beginning October 2008 after the acquisition of the 56% in BII was completed at the end of September 2008. In early December, Maybank completed the acquisition of 97.5% of BII.

14

Bank Internasional Indonesia

Asset QualityGross Loans: Composition (Rp trillion) and growth 

3.20%

4.74%

3.46% 3.49%

2.39%2.79% 2.88%

2 79%

(+36%)

(+37%)

9 6 11.3

12.6 14.4

17.1

11.6 13.0

15.9

(+33%)

2.00%

2.79%

1.85% 1.90%1.56%

1.92% 1.87%

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

(+67%)

(+33%)

(+4%)8.5 9.6 11.3

0.3 0.4 0.5

2.4 2.1 2.5

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

Gross NPL Net NPLCorporate SMECConsumer Syariah

Net Interest Margin  Branches and ATM Branches

6.85%6.15%

6 10%

6.41% 6.62%

5 91% 249 252 255 255 255 260 274370 430

740 745 743 748 787 806 844 ATM + CDM

6.10% 5.91% 5.90%

Local Statutory report &Local Accounting Policy NIM 2Q10 = 5.70%

249 252 255 255 255 260 274ec

-08

ar-0

9

un-0

9

ep-0

9

ec-0

9

ar-1

0

un-1

0

un-1

1

un-1

2

15

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10Projected

De Ma

Ju Se De Ma

Ju Ju Ju

Introduction

Fi i l P f

Introduction

Financial Performance

The Way Forward

Prospects

16

Transformation Journey

2010

Phase 2

20082010

2015Beyond 

Phase 1LEAP30 Creates Momentum

CEO‐driven agenda – 1st 

Converging Aspirations. Active SectoralParticipation

Transformation

gwave target to deliver PBT impact to Groupwideperformance.

Sector driven agenda –agenda framed and owned organisation‐

Building up project execution capabilities.

Centralised Transformation

wide.

Sectors become key drivers of change.Centralised Transformation 

office as key driver of change.

30 initiatives cutting across

g

Execution led by sectors and supported by the Transformation team

17

30 initiatives cutting across all areas

Transformation team.

Reframing our Vision, Mission and Strategic Objectives

B 2015

Our Vision To be a Regional Financial Services Leader

By 2015

Our Mission Humanising Financial Services from the Heart of ASEAN

Strategic Objectives 1.  Undisputed No. 1 Retail Financial Services provider in Malaysia by 2015

2 di S h l l b k ll di2.  Leading ASEAN wholesale bank eventually expanding to Middle East, China & India

3.  Domestic Insurance Champion and emerging regional player

4.  Truly regional organisation, with ~40% of pre‐tax profit derived from international operations by 2015

5 L t I l i b k i ASEAN

18

5.  Largest Islamic bank in ASEAN 

Our Mission

Humanising Financial Services from the Heart of ASEAN

Providing the people with access to financing

Fair terms and pricingp g

Being at the heart of the community

19

Strategic Objectives: Retail Financial Services

1.  Undisputed No. 1 Retail Financial Services provider 

Grow market share of individual and non retail

p pin Malaysia by 2015

Grow market share of individual and non‐retail deposits domestically and leverage on shared distribution synergies

Re‐align SME market segment focus.

20

Strategic Objectives: Wholesale Banking

2. Leading ASEAN wholesale bank eventually g yexpanding to Middle East, China & India

Ramp up universal wholesale banking model growth in core ASEAN markets

Strengthen transaction banking franchise

Grow investment banking capabilities and deals

21

Strategic Objectives: Insurance and takaful

3. Domestic Insurance Champion and emerging regional player

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

Gain leadership in domestic insurance business

Source : ISM Report

22

Strategic Objectives: International Operations

f f4. Truly regional organisation, with ~40% of pre‐tax profit derived from international operations by 2015

F I d i hi l d hi i 5 kFor Indonesia, achieve leadership in 5 key business segments by 2015

Plan to expand into Middle East, China and India at the right time and rightand India at the right time and right opportunity.

Ramping up Universal Wholesale Banking model in Singapore and Indonesiamodel in Singapore and Indonesia.

Regional Center of Excellence to enhance global market trading activities

F ll i t t d d t d i l t dFull integrated end‐to‐end regional trade finance and cash management platform

Effective IT infrastructure and risk management systems

23

management systems.

Strategic Objectives: Islamic Banking

5. Largest Islamic bank in ASEAN 

Maybank I l i

Maybank Islamic is Malaysia’s 

largest Islamic financial services 

provider.Islamic,

17%

Public Islamic,

11%

Others, 42%

Maybank Islamic’s Total Asset grew 

28% to RM44.5 bil. in FY10.

Conversion of Bank Maybank  11%

CIMB Islamic,

12%

y

Indocorp into Maybank Syariah

Indonesia.

Bank Islam, 11%

Am Islamic, 7%

M k t h b T t l A t

24

Market share by Total Assets

New Group Organisation Structure to support aspirations

MaybankGroup CEO + Support 

(CFO CRO GHC L l C li C i ti ))

EN

Global Wholesale Banking

Community Financial 

Insurance & TakafulISLAMIC 

(CFO, CRO,GHC, Legal, Compliance, Communications))

NABLE

Regaining domestic 

leadership and 

Services

Leveraging shared 

distribution, 

Being the National Insurance

INSPIRED

EMENT

aggressively pursuing ASEAN market expansion by humanising

Customer Segment driven, Community 

Bank

Insurance Champion and Living the ETIQA way

INTERNATIONAL EXPANSION

Tclient interaction

Enterprise Transformation Services

25

Expanded  Group Executive Committee with key divisions represented

26

Introduction

Fi i l P f

Introduction

Financial Performance

The Way Forward

Prospects

27

Malaysia: Economic Rebound

Inflation expected to rise to 2.0% in 2010 (2009: 0.6%)GDP to rebound with 7.5% growth in 2010; 6.1% in 2011

3

6

9

12

130

140

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

p ( )g ;

(9)

(6)

(3)

0

3

90

100

110

120

(9)90

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  Ringgit to expected to rise to RM3.10‐3.15 by year end

2.5

3.0

3.5

4.0 Overnight Policy Rate: Bank Negara Malaysia

3 403.503.603.703.803.90

expected to rise in the next 9‐12 monthsRinggit Malaysia per USD

25bp hikes in Mar, May and July 10

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 Malaysia 3.003.103.203.303.40

ul-0

5

v-05

ar-0

6

ul-0

6

v-06

ar-0

7

ul-0

7

v-07

ar-0

8

ul-0

8

v-08

ar-0

9

ul-0

9

v-09

ar-1

0

ul-1

0

Overnight Policy Rate

28

Apr

-0

Aug

-0

Dec

-0

Apr

-0

Aug

-0

Dec

-0

Apr

-0

Aug

-0

Dec

-0

Apr

-0

Aug

-0

Dec

-0

Apr

-0

Aug

-0

Dec

-0

Apr

-0

Aug

-0

Dec

-0

Apr

-1

Aug

-1

01-J

u

01-N

o

01-M

a

01-J

u

01-N

o

01-M

a

01-J

u

01-N

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01-M

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01-J

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01-N

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01-M

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01-J

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01-N

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01-M

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01-J

u

Economic Transformation Plan (ETP): Economic targets

S t th k i t t f th t 10■ Sets the key economic targets for the next 10 years

■ Malaysia’s real GDP needs to grow by 6% p.a.

■ Lifting per capita income to USD15,000 (2020) from USD6,700 (2009)

Malaysia: Increase in GNI Between 2009 and 2020 via 6% p.a. Real GDP Growth to Double Per Capita Income

USD523b 600(RM1,733b)

400

500

USD188b (RM661b)

100

200

300

0

100

2009 2020Per Capita IncomePer Capita Income Per Capita IncomePer Capita Income

29

pUSD15,000 (RM48,000)

pUSD6,700 (RM23,770)

pUSD15,000 (RM48,000)

pUSD6,700 (RM23,770)

:

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

30

■ Global Islamic financial hub■ Insuring our population

Prospects for FY2011

■ Recovering regional economies to spur demandwith loans growth of 12% in Malaysia, 24% at BII and 5% in Singapore.Malaysia, 24% at BII and 5% in Singapore. 

■ International  contribution is expected to increasemainly from 2 key home markets f d d d lof Singapore and Indonesia and leveraging 

on Global Wholesale Banking platform. 

■ Islamic Banking is identified as key■ Islamic Banking is identified as key differentiator with target financing growth of 25%.

■ Margins expected to be stable.

31

Prospects for FY2011

■ The reframed vision and mission supported by new organisation structure is expected to drive growth.is expected to drive growth. 

■ Investment in people, technology and processes to realise vision and strategic bj ti ith ff t t d tobjectives, with efforts to reduce costs 

through synergies and centre of excellence.

■ Dividend Reinvestment Plan in place to ensure robust capital adequacy.

■ Two Key Performance Indicators (KPIs)■ Two Key Performance Indicators (KPIs) for FY2011: Group’s loans and debt securities growth of 12% and ROE of 14 %.

32

Basel III: Maybank able to comply

L t t P l I t M b k (B k l l)Latest Proposals

1. Minimum Core Equity Ratio (CER) of 4.5% by 2015. Staggered 

Impact on Maybank (Bank level)

1. Proforma CER as at 30 June 2010 above 10%. Going forward, expect to meet y gg

implementation of capital conservation buffer up to 2.5% in 2019.

minimum CER of 7% without any equity capital raising.

Awaiting clarity of Basel III rules on l d b d b

Minimum Risk Weighted Capital Ratio (RWCR) to remain at 8%.

capital securities and sub‐debt. 

2 Proforma leverage ratio of 4 8%2. Minimum leverage ratio of 3% 2. Proforma leverage ratio of 4.8% (31 March 2010), well above min. 3% requirement.

3. Introduction of Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSF) in 2015 and 2018 

i l

3. LCR and NSF ratio at above 100%.

33

respectively.

Key Performance Indicators (KPI) for FY2011

Headline KPIs

R t E it 14%Return on Equity 14%

Loans and Debt Securities Growth

12% 

O hOther targets

Loans Growth

• Malaysia 12%

• Singapore 5%

• BII 24%

Net Interest Margin Stable

Dividend Payout Ratio 40%‐60%

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

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As we celebrate our 50th

a iv r ar i 2010 Ma ba k anniversary in 2010, Maybank has proven its worth as a bank b l h k blbuilt on an unshakeable foundation capable of withstanding crises, and always delivering on its y gpromise.

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Thank YouThank You

Disclaimer. This presentation has been prepared by Malayan Banking Berhad (the “Company”) for information purposes only and does not purport tocontain all the information that may be required to evaluate the Company or its financial position. No representation or warranty, express or implied, isgiven by or on behalf of the Company as to the accuracy or completeness of the information or opinions contained in this presentation.

The presentation does not constitute or form part of an offer solicitation or invitation of any offer to buy or subscribe for any securities nor should itThe 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 itor any part of it form the basis of, or be relied in any connection with, any contract, investment decision or commitment whatsoever.

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

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www.maybank.com