ALLIANCE FINANCIAL GROUPANALYST BRIEFING

- 12 Months Ended 31 March 2011 -

• Key Messages

AGENDA

• FY2011 Financial Performance

• Questions & Answers

2

0%

3%

6%

9%

12%

15%

50

150

250

350

450

2009 2010 2011

PAT - lhs ROE - rhs

0%

4%

8%

12%

16%

60

80

100

120

4Q10 1Q11 2Q11 3Q11 4Q11

PAT - lhs ROE - rhs

Financial Performance

Robust financial position

RM ’mil RM ’mil

228.9 301.5 409.2

10.5%

77.2 110.5 102.4 111.3

Quarterly Results 12-Month Results

84.9

14.5%

13.8% 13.8%

12.9%

8.6%

10.5%

12.9%

3

Quarterly

4QFY10 4QFY11 % YoY

155.5 159.8 2.8%

71.1 58.5 -17.7%

51.0 52.2 2.4%

277.6 270.5 -2.5%

• Net interest income on +4.8% loans growth, relatively stable NIM and improved asset quality.

• Islamic banking income affected by planned slowdown in “Koop” loans.

• Non-interest income eased due to tough market conditions but supported by investment income and

fee income.

Financial Performance

Growth in net interest income

Cumulative 12 Months

(RM ’mil) FY2010 FY2011 % YoY

Net Interest Income 585.5 670.3 14.5%

Islamic Banking Income 245.8 232. 7 -5.3%

Non-Interest Income 233.2 225.7 -3.2%

Net Income 1,064.5 1,128.7 6.0%

4

Loans breakdown by businesses

• AFG loans growth of +4.8% YoY in FY2011.

• AFG loans growth was primarily driven by business banking. SME

loans grew 11.4% and Corporate & Commercial Banking loans rose

11.0% in FY2011.

• GSA loans have decreased further to RM145mil in FY2011 from

RM252mil in FY2010.

Financial Performance

Loans growth driven by business banking

(RM ’mil) FY 2010 FY 2011

Consumer 12,800 12,997

SME 4,235 4,719

Corporate &

Commercial4,123 4,578

GSA* 252 145

Total 21,410 22,439

Consumer

SME

Corporate & Commercial

3QFY11% change

% YoY % QoQ

13,026 1.5% -0.2%

4,528 11.4% 4.2%

3,920 11.0% 16.8%

188 -42.4% -22.8%

21,662 4.8% 3.6%

-1%

1%

3%

5%

10,500

11,500

12,500

13,500

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

RM 'mil - lhs

% QoQ - rhs

0%

1%

2%

3%

4%

5%

3,700

4,100

4,500

4,900

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

RM 'mil - lhs

% QoQ - rhs

-10%

0%

10%

20%

3,600

4,000

4,400

4,800

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

RM 'mil - lhs

% QoQ - rhs

5

* Note: GSA refers to Group Special Assets

2.0%

2.5%

3.0%

3.5%

4.0%

Apr-10 Jul-10 Oct-10 Jan-11

Corporate & Commercial

3.0%

3.5%

4.0%

4.5%

5.0%

Apr-10 Jul-10 Oct-10 Jan-11

SME

2.0%

2.5%

3.0%

3.5%

4.0%

Apr-10 Jul-10 Oct-10 Jan-11

Consumer

NIM OF KEY BUSINESSES

NIM NIM NIM

Financial Performance

Margins relatively stable despite rising market competition

FY2007 FY2008 FY2009 FY2010 FY2011

AFG 2.9% 3.0% 2.8% 2.5% 2.7%

Industry 2.6% 2.6% 2.7% 2.7% 2.6%

2.0%

2.5%

3.0%

3.5%

6

0%

5%

10%

15%

20%

25%

350

400

450

500

FY2009 FY2010 FY2011

Non-Interest Income - lhs NII / Total Income - rhs

0

50

100

150

200

250

FY2010 FY2011

Non-interest income - key area of focus

Financial Performance

400.2 479.0

RM ’mil

458.5

*

* Include Islamic Banking Income

22.4% 22.4%

81,146 (36.0%)

18,119(8.0%)

17,837(7.9%)

55,964(24.8%)

15,236(6.7%)

7,415(3.3%)

225,722

30,005(13.3%)

RM ’000

69,172

14,932

26,613

51,296

21,859

11,673

233,170

37,625

Other Non-Operating Forex

Commission & Fees Wealth Management Credit Cards Brokerage Fees

Investment Sales Gain

20.8%

( ) denotes share of each component to total non-interest income

+9.1%

+21.3%

+17.3%

7

0 100 200 300 400 500 600

Financial Performance

CIR continued to improve

Cost-to-Income Ratio (CIR)

FY2011 FY2010

Total

Overhead

Expenses

Personnel

Costs

Establishment

Costs

Marketing

Expenses

Admin &

General

Expenses

544.9

554.6

333.3

331.8

139.0

156.4

18.6

16.5

54.0

49.8

42%

45%

48%

51%

54%

2009 2010 2011

AFG Industry

53.0%

52.1%

48.2%

48.5%

46.5%

44.9%

-1.8%

+0.5%

-11.2%

+12.5%

+8.3%

Breakdown of Total Overheads

8

60

65

70

75

80

85

90

95

100

3.1

3.5

3.9

4.3

4.7

4Q10 1Q11 2Q11 3Q11 4Q11

Gross Impaired Loans Ratio - Old GP3 - lhs

Gross Impaired Loans Ratio - FRS 139 - lhs

Loan Loss Coverage - rhs

Further improvement on asset quality

% %

85.6%

94.4%

83.2%

3.8% 3.8% 3.8%

0.1%

• The Group adopted FRS 139 w.e.f.

1 April 2010.

• Asset quality improved further to

3.3% in 4QFY2011 with focus to

improve on collection system and

credit risk.

• Loan loss coverage increased from

83.1% to 90.1% in 4QFY2011.

3.7%

83.1%

Financial Performance

FRS 139

Note: Collective allowance for domestic loans is computed

based on 1.5% requirement under the transitional

provisions of the BNM guidelines on Classification and

Impairment Provisions for Loans/Financing issued in

January 2010.

90.1%

3.3%

9

1.5%

1.8%

2.1%

2.4%

2.7%

4Q09 2Q10 4Q10 2Q11 4Q11

AFG Industry

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

4Q10 1Q11 2Q11 3Q11 4Q11

CASA Fixed Deposits Money Market Deposits Others

70%

75%

80%

85%

90%

95%

4Q09 2Q10 4Q10 2Q11 4Q11

AFG Industry

Financial Performance

Prudent liquidity management

82.8%

76.6%

90.3% 90.6%

78.2% 77.9%

81.3%

2.1%

1.7%

2.1%

79.2%81.2%

92.6%

82.4%

88.9%

73.7%

78.9%

77.2%

81.4%

2.4%

2.0%

1.7%

2.1%

RM ’mil

41.5% 41.5% 35.4% 34.9%

51.7% 50.8% 53.8% 51.0%

4.9% 5.9%

9.9% 9.7%1.9% 1.8%

0.9%4.4%

1.9%

82.0%

78.8%

2.1%

34.1%

51.4%

10.7%

3.8%

2.6%

2.2%2.1%

2.0% 2.0%

2.1%

2.3%2.4%

2.4%

AFG’s L/D ratio below industry average AFG’s cost of funds remain stable

AFG’s CASA at top quartile of industry

10

3QFY11

% change

% YoY % QoQ

2,603.2 14.5% 6.8%

3,520.6 11.1% 5.4%

15.9 +0.7 +0.2

11.8 +0.9 +0.2

Financial Performance

Capital position remains strong

(RM ’mil) FY 2010 FY 2011

Tier I Capital 2,429.2 2,782.3

Total Capital Base 3,339.3 3,712.1

RWCR (%) 15.4 16.1

Core Capital Ratio (%) 11.1 12.0

• AFG’s core capital and risk-

weighted capital ratio (RWCR)

continued to improve to 12.0%

and 16.1% in FY2011

compared to 11.1% and 15.4%

in FY2010.

• Total capital base of RM3.7bil,

increased by 11.1% YoY. Tier 1

capital represents 75% of total

capital, improved further to

RM2.8bil.

• Healthy capital position and is

in line with BASEL III

requirements.

11

FY 2010 FY 2011

Profitability• NIM

• Cost of Funds

2.5

1.9

2.7

2.1

Business

Performance

• NII / Total Income

• Cost Income Ratio

• LD Ratio

• RWCR

22.4

52.1

90.6

15.4

20.8

48.2

78.8

16.1

Asset

Quality

• Gross Impaired Loans

• LLC

3.8

94.4

3.3

90.1

Shareholder

Value

• ROAA

• ROAE

• P / BV

0.9

10.5

1.5x

1.2

12.9

1.5x

Financial Performance

Key financial ratios

FY 2010 FY 2011

3Q 4Q 1Q 2Q 3Q 4Q *

2.6

1.9

2.8

1.7

2.8

1.7

2.8

2.1

2.5

2.1

2.4

2.1

20.4

52.7

88.9

15.2

22.4

50.0

90.6

15.4

19.4

45.2

92.6

15.5

20.9

45.9

82.8

16.1

21.0

48.2

77.2

15.9

20.8

54.1

78.8

16.1

3.9

91.0

3.8

94.4

3.8

85.6

3.8

83.2

3.7

83.1

3.3

90.1

0.9

10.5

1.4x

0.9

10.5

1.5x

1.4

14.5

1.4x

1.3

13.8

1.5x

1.3

13.8

1.4x

1.2

12.9

1.5x

* Note: comparison made between FY2010 against FY2011 12

• Key Messages

AGENDA

• FY2011 Financial Performance

• Questions & Answers

13

Corporate & Commercial Banking

Choo Joon Keong

Investment Management

Nik Azhar bin Abdullah

Financial Markets

Yeo Chin Tiong

Islamic Banking

Tuan Haji Yahya Ibrahim

Organisational Chart- Business Units

Key roles are filled

Business Units

Consumer Banking

Ronnie Lim • Transaction Banking

Victor Khor

SME Banking

Steve Miller

Investment Banking

Rafidz Rasiddi

• Equity

Teh Chi-Cheun

14

Group Chief Financial Officer

Eric Lee

Group Legal

S. Gerard Anand A/L S. Sinnappah

Organisational Chart- Support Functions

Key roles are filled

Support Functions

Group Internal Audit

Leong Sow YokeGroup Compliance

Vacant

Group Chief Operating Officer

Raymond Leung

• Group Information Systems

Mary James

Group Chief Credit Officer

Low Choon Seong

Group Chief Risk Officer

Pang Choon Han

• Branch Operations Service

Quality & Development

Yong Kok Mun

Corporate Strategy & Corporate

Communications

Timothy Daniels

Group Human Resource

Michelle Chow

15

Building sustainable growth

Key Focus

CONSUMER

• Mortgage Loans

• Credit Cards

• Personal Loans

• Deposits

Very

Competitive

SME

CORPORATE &

COMMERCIAL

• Transaction Banking

Cash Management

Trade Finance

• Treasury Sales

• Syndicated Deals

Existing

Opportunities

• Wealth Management

• Bancassurance

• Treasury Sales

• Stockbroking

New

Growth

Consumer SMECorporate

& CommercialTreasury

Investment

BankIslamic

Driving Fee Income and Cross-Selling

16

• Ensure transactional

capabilities are user-

friendly, safe, fast

and relevant

• Provide innovative

transactional tools

and channels

• Provide a competitive

range of transactional

and advisory services

& solutions

Value PropositionKey Income Drivers

Deepen Wallet Share

Increase Stickiness

Reduce Cost-to-Serve

Increase Fee Income

Expected Benefits

Key Strategic Priorities

Transaction banking

Cash Management

Trade Finance

Payments

Deposits

SME Banking

Corp & Comm. Banking

Business Focused

Consumer Banking

17

Treasury

• Institutionalise

cooperation with LOBs

• Identify and fill critical

product gaps

• Build capabilities

Key Business Initiatives

SME Banking

Corp & Comm.

Banking

Consumer Banking

Improve Service Level to

Customers

Improve Treasury Products

Knowledge for LOBs and

RMs

Increase Sales Volume and

Revenue via Existing and

New Customers

Deepen Relationships with

Customers

Expected Benefits

Key Strategic Priorities

18

Gross

Impaired

Loans

CIR

ROE

Dividend

Policy

Over the medium term (3-5 years), we will ...

… be in line with industry average

… move to industry average (45 - 48%) through YoY

improvements, driven by:

• targeted revenue growth

• productivity focus

… achieve industry average (14 - 16%) through YoY

improvements, driven by:

• focus on underlying earnings

• prudent capital management

… pay “as much as we can afford, whenever we can”

Q1 Q2 Q3 Q4

Looking Ahead

… and increase non-interest income to be 30% of total revenue

19

Key Messages

The Bank remains strong and well positioned.

Clear strategy and the right team to deliver it.

Achieving growth.

• Performed well in FY2011 despite competitive operating environment.

• Strong balance sheet and corporate governance.

• Clear niche position in Consumer and Business Banking segments.

• High level of customer focus is key.

• Strong full senior management team now in place.

• Our strategy does not require us to do M&A.

• Focus on revenue growth.

• Leverage all our business franchises.

• Ensure growth is value creating.20

Investor Relations

Alliance Financial Group7th Floor, Menara Multi-Purpose, Capital Square

8 Jalan Munshi Abdullah

50100 Kuala Lumpur, Malaysia

www.alliancebank.com.my/investorrelations.html

THANK YOU

21

Income Statement (RM ’mil) FY2011 FY2010 % YoY

Interest Income 1,203.5 1,063.0 13.2%

Interest Expense (533.2) (477.5) 11.6%

Net Interest Income 670.3 585.5 14.5%

Islamic Banking Income 232.7 245.8 (5.3%)

Non-Interest Income 225.7 233.2 (3.2%)

Net Income 1,128.7 1,064.5 6.0%

Operating Expenses (544.9) (554.6) (1.8%)

Share of Loss in An Associate (1.5) 0.0 -

Operating Profit 582.3 509.9 14.2%

Write Back/Allowance for NBD (33.3) 31.9 (204.4%)

Allowance for Impairment 4.1 (132.9) (103.1%)

Loan Impairment Allowances (29.2) (101.0) (71.1%)

Profit before Taxation &

Zakat553.1 408.9 35.3%

Taxation & Zakat (143.9) (107.4) 34.0%

Profit after Taxation & Zakat 409.2 301.5 35.7%

4QFY11 3QFY11 % QoQ 4QFY10 % YoY

309.5 313.2 (1.2%) 259.5 19.3%

(149.6) (145.2) 3.0% (104.0) 43.3%

159.9 168.0 (4.3%) 155.5 2.3%

58.5 59.0 (0.3%) 71.1 (21.5%)

52.2 58.0 (0.1%) 51.0 2.4%

270.6 285.0 (5.1%) 277.6 (2.5%)

(146.3) (137.4) 6.5% (138.7) 5.5%

(1.5) - - - -

122.8 147.6 (16.3%) 138.9 (11.6%)

(9.3) (0.7) 1,223.6% (19.5) (52.3%)

0.9 3.9 (76.3%) (12.0) (107.5%)

(8.4) 3.2 (362.5%) (31.5) (73.3%)

114.4 150.8 (24.1%) 107.4 6.5%

(29.5) (39.5) (25.3%) (30.2) (2.3%)

84.9 111.3 (23.7%) 77.2 9.4%

Financial Performance

22

Economic PurposeLoan

(RM ’mil)% YoY

Gross

Impaired

Loans

(RM ’mil)

% Share

Gross

Impaired

Loans Rate

(%)

Purchase of Securities 355.0 0.9% 10.3 1.4% 2.9%

Purchase of Transport Vehicles 704.0 -22.4% 8.9 1.2% 1.3%

Purchase of Landed Property 11,514.8 3.8% 283.4 38.3% 2.5%

Purchase of Fixed Assets 99.8 50.0% 0.2 0.0% 0.2%

Personal Use 2,094.0 4.3% 37.1 5.0% 1.8%

Credit Cards 663.1 -3.2% 12.7 1.7% 1.9%

Construction 253.6 -13.5% 12.8 1.7% 5.0%

Working Capital 6,116.6 10.9% 316.0 42.6% 5.2%

Others 638.5 30.0% 59.9 8.1% 9.4%

Total 22,439.4 4.8% 741.3 100.0% 3.3%

Financial Performance

* Note: as at 31 March 2011 23

Economic Purpose % Share

Gross Impaired Loans Rate (%)

*

4Q10 1Q11 2Q11 3Q11 4Q11

Purchase of Securities 1.4% 4.7% 5.4% 5.0% 3.8% 2.9%

Purchase of Transport

Vehicles1.2% 1.5% 1.6% 1.3% 1.4% 1.3%

Purchase of Landed Property 38.3% 3.0% 2.8% 2.8% 2.7% 2.5%

Purchase of Fixed Assets 0.0% 0.3% 0.2% 0.2% 0.2% 0.2%

Personal Use 5.0% 2.0% 2.0% 1.9% 1.7% 1.8%

Credit Cards 1.7% 2.1% 2.2% 2.2% 2.1% 1.9%

Construction 1.7% 5.1% 8.9% 6.2% 6.1% 5.0%

Working Capital 42.6% 5.8% 6.3% 6.6% 6.5% 5.2%

Others 8.1% 9.8% 8.0% 7.9% 8.2% 9.4%

Total 100.0% 3.8% 3.8% 3.8% 3.7% 3.3%

Financial Performance

* Note: comparison made between 4QFY2010 against 4QFY2011 24

Breakdown of Loans by LOB

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

Consumer 59.4% 59.2% 60.2% 59.8% 59.5% 59.1% 60.1% 57.9%

Corporate & Commercial 19.3% 19.8% 19.1% 19.2% 19.4% 19.7% 18.1% 20.4%

SME 19.8% 19.6% 19.4% 19.8% 20.0% 20.2% 20.9% 21.0%

GSA* 1.5% 1.4% 1.3% 1.2% 1.1% 1.0% 0.9% 0.7%

Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Financial Performance

25

* Note: GSA refers to Group Special Assets

20%

25%

30%

35%

40%

45%

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

AFG Industry

CASA ratio vs. industry

33.0%

34.6%

25.3%

40.9%41.5% 41.5%

35.4%34.9%

24.6%25.3% 25.2% 25.0% 25.0% 25.0% 25.4%

38.1%

Financial Performance

25.3%

34.1%

26

AFG’s deposit profile

By Type of Deposits % Share

% YoY

4Q10 1Q11 2Q11 3Q11 4Q11

CASA 34.1% 16.1% 14.9% 7.8% 1.5% -1.6%

- Demand Deposits 28.3% 19.2% 18.6% 10.2% 2.4% -1.4%

- Savings Deposits 5.8% 3.1% -0.6% -2.7% -2.6% -2.7%

Fixed/Investment Deposits 51.4% -13.3% -12.8% 8.8% 17.2% 19.4%

Money Market Deposits 10.7% -43.7% -11.0% 376.9% 149.4% 162.1%

Negotiable Instruments of Deposits 3.5% -58.2% -47.1% -55.5% 98.7% 142.7%

Structured Deposits 0.3% 1,030.8% 32.1% -33.9% 34.9% 108.0%

Total Deposits 100.0% -7.6% -4.0% 15.8% 19.0% 20.0%

Financial Performance

27

Collateralised Loan Obligations (CLOs) are a matter of the past

• As at March 2010, the

Group had made a

100% provision.

Key points: • Matured.

• AFG’s exposure at

super senior level.

• Matured.

• AFG’s exposure is fully

covered.

(RM ’mil) Kerisma Idaman Capital CapOne

Total

Issuance

AFG’s

Exposure

Total

Issuance

AFG’s

Exposure

Total

Issuance

AFG’s

Exposure

• Total Issuance 1,000mil175mil

(17.5%)800mil

240mil

(30%)1,000mil

10mil

(1%)

• Maturity Date Jun-09 Oct-11 Sep-10

Financial Performance

28