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Strictly Private & Confidential
MALAYSIA – OUTLOOK OF ISLAMIC
FINANCE INDUSTRY
Hizamuddin Jamalluddin
Group Chief Strategy Officer
BIMB Holdings Berhad
EXPERTS SPEAKER ROADSHOW 201621 July 2016
BRIEF HISTORY
Page 2
Islamic Financial
Services Act 2013
CIMB – Expert Speaker Roadshow 2016
DEVELOPMENT OF ISLAMIC FINANCE - MALAYSIA
Page 3
Instituting Foundation
• 1970 – 1992 (Establishment of Enabling Infrastructure)
• Islamic Banking Act 1983 – Establishment of Bank Islam Malaysia Berhad
• Merely as an alternative to conventional banking
Institutional Building, Activity Generation & Market Vibrancy
• 1993-2005 (Deepening, Creating Critical Mass & Liberalisation)
• Ensuring greater access to Islamic finance
Strategic Positioning & International Integration with Global Financial System.
• 2006 -2013
• Becoming hub of international Islamic finance
Advancing in Islamic Financing – Well Developed Marketplace
• 2013 onwards
• Islamic Financial Services Act 2013 – Moving from “Credit Intermediary” to “Investment Intermediary”
• Marketplace for Global Linkages
CIMB – Expert Speaker Roadshow 2016
KEY SUCCESS INGREDIENTS
Page 4
Enabling Environment
Business Modality
Resources
Financial Products & Services
Governance
Key Business/Operation
Infrastructure
Education &
Market
Readiness
CIMB – Expert Speaker Roadshow 2016
ENABLING ENVIRONMENT
Page 5
Political Will –
“As a National Agenda”
Central Bank as
“Champion”
Local Sponsor –
“Passion to Succeed”
Legislative, Legal &
Shariah Framework
Law of Land
(Taxation, Stamp Duty, etc to
cater for Shariah Contracts
Central Bank as
“Lender or Buyer of the Last Resort”(to address liquidity position or
absorb surplus)
Interbank Money
Market
Single Banking System
vs Dual Banking System
Regulatory
Supervisory
Framework(Islamic Financial
Service Authority)
Industry
Incentives
Building Critical
Mass
CIMB – Expert Speaker Roadshow 2016
ISLAMIC FINANCIAL SERVICES ACT 2013 – IN A NUTSHELL
Page 6
Forceful Governance / Oversight Framework
(Board/SSC Composition & Responsibilities)
Refined Ownership, Control & Financial Group/ Holding
Company
Demands Strong Capital Adequacy Ratio
Differentiates Deposit & Investment Account
Takaful Framework –Separation of Life &
General Takaful
Promotes Responsible Risk Sharing Business Model
Greater Transparency in Product Offerings &
Customers’ Protection
Robust Risk Management Capability & Capacity
More Extensive & Intrusive Regulation
CIMB – Expert Speaker Roadshow 2016
FUNDING STRUCTURE OF ISLAMIC BANK – IFSA 2013
Page 7
Deposits Investment Accounts Shareholders’ Funds
Current Account
Savings Account
Term Deposit
Unrestricted Investment
Account
Restricted Investment
Account
Paid Up Capital
Retained Earnings
Others
CIMB – Expert Speaker Roadshow 2016
NEW LOOK ON THE BALANCE SHEET – IFSA 2013
Page 8
ASSETS LIABILITIES
Cash & Short-term Funds Deposits from Customers
Financial Assets (HFT, AFS, HTM) i.e. PDS Investment Account of Customers (URIA/RIA)
(Note X)
Financing (Consumer. Commercial &
Corporate)
Deposit Placements of Banks & Financial
Institutions
Investment in Subsidiaries Zakat & Taxation
Other Assets Other Liabilities
Equity
Total Assets Total Liabilities & Equity
Note X : Describes the funding structure i.e. URIA or RIA, the amount of funds applied to
different Shariah contracts, and the underlying assets supporting the fund.
As RIA is off balance sheet, the information presented is for disclosure purposes.
CIMB – Expert Speaker Roadshow 2016
MALAYSIAN ISLAMIC FINANCE INDUSTRY AS AT DEC 2015
Page 9
Assets
26.8% of total banking system
Total Islamic banking asset : RM537 bil
CAGR 2011-2015 of 13%
Financing
Market share – 31.2%
Total financing: RM411 bil
CAGR 2011-2015 of 15.2%
Liabilities /Deposits
Market share – 30.4%
Total deposits : RM404 bil
Total Investment Account: RM47 bil
Overall : RM451 bil
CAGR 2011-2015 of 14.1%
… Islamic financing is expected to account
for 40 per cent of total financing in 2020
Total Capital Ratio – 15%
Liquidity Coverage Ratio – 113%
Net Impaired Financing -0.9%
CIMB – Expert Speaker Roadshow 2016
ASSETS
Page 10
-
500.0
1,000.0
1,500.0
2,000.0
2,500.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 May-16
Conventional
Islamic
88%
12%
85%
15%
83%
17%
82%
18%
80%
20%
79%
21%
78%
22%
77%
23%
RM billion
76%
24%
436.2
226.4
-
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
500.0
Jan
-07
Jul-
07
Jan
-08
Jul-
08
Jan
-09
Jul-
09
Jan
-10
Jul-
10
Jan
-11
Jul-
11
Jan
-12
Jul-
12
Jan
-13
Jul-
13
Jan
-14
Jul-
14
Jan
-15
Jul-
15
Jan
-16
Islamic
Conventional
Islamic banking assets grew by an average 14.4% in 2015 to RM535 bn from 13.2% in
the previous year. In 2016 and 2017, we expect it to moderate to around 8% to 9% in
tandem with the current economic challenges and a bigger balance sheet size.
Islamic banking assets Islamic banking assets (Jan 07 = 100)
Sources: CEIC & Bank Islam
CIMB – Expert Speaker Roadshow 2016
FINANCING
Page 11
-
200
400
600
800
1,000
1,200
1,400
1,600
2007 2008 2009 2010 2011 2012 2013 2014 2015 May-16
Conventional
Islamic
14%
86% 85%83%
82%
80%
79%
77%
75%
15%17% 18% 20%
21% 23%
25%
RM billion
73%
27%
73%
27%
515.3
204.8
-
100.0
200.0
300.0
400.0
500.0
600.0
Dec-06 Apr-09 Aug-11 Dec-13 Apr-16
Islamic
Conventional
Islamic banking financing assets grew by an average 19.5% in 2015 to RM391 bn from
18.2% in the previous year. In 2016 and 2017, we expect it to moderate to around 14%
to 15% notwithstanding continuous cannibalisation of existing conventional assets
Islamic banking financing assets Islamic banking financing assets
(Jan07 = 100)
Sources: CEIC & Bank Islam
CIMB – Expert Speaker Roadshow 2016
DEPOSITS
Page 12
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2007 2008 2009 2010 2011 2012 2013 2014 2015 May-16
Conventional
Islamic
86%
14%
84%
16%
82%
18%
81%
19%
80%
20%
78%
22%
77%
23%
76%
24%
RM billion
76%
24%
76%
24%
417.1
173.1
-
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
500.0
Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
Islamic
Conventional
Islamic banking deposits grew by an average 11.6% in 2015 to RM403 bn from 14.2% in
the previous year. In 2016, we expect it to register a flat growth of 0.5% before turning
around to 6% in 2017 taking into account stringent compliance with Shariah Contract
Based Regulatory Framework
Islamic banking deposits Islamic banking deposits (Jan 07 = 100)
Sources: CEIC & Bank Islam
CIMB – Expert Speaker Roadshow 2016
ASSET QUALITY
Page 13
Gross impairment ratio (%)
Sources: BNM & CEIC
1.32%
1.65%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
Ja
n-1
0
Ma
y-1
0
Se
p-1
0
Ja
n-1
1
Ma
y-1
1
Se
p-1
1
Ja
n-1
2
Ma
y-1
2
Se
p-1
2
Ja
n-1
3
Ma
y-1
3
Se
p-1
3
Ja
n-1
4
Ma
y-1
4
Se
p-1
4
Ja
n-1
5
Ma
y-1
5
Se
p-1
5
Ja
n-1
6
Ma
y-1
6
Islamic banking
Banking System
1.1%
1.3%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Ja
n-1
0
Ma
y-1
0
Se
p-1
0
Ja
n-1
1
Ma
y-1
1
Se
p-1
1
Ja
n-1
2
Ma
y-1
2
Se
p-1
2
Ja
n-1
3
Ma
y-1
3
Se
p-1
3
Ja
n-1
4
Ma
y-1
4
Se
p-1
4
Ja
n-1
5
Ma
y-1
5
Se
p-1
5
Ja
n-1
6
Ma
y-1
6
Islamic
Banking
Banking
System
CIMB – Expert Speaker Roadshow 2016
…expects to sustain existing healthy asset portfolio
ISLAMIC CAPITAL MARKETS
Page 14
40.6%
59.4%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
Dec-00 Jun-03 Dec-05 Jun-08 Dec-10 Jun-13 Dec-15
Islamic govt sec.
Conventional govt sec.71.4%
28.6%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
Dec-00 Jun-03 Dec-05 Jun-08 Dec-10 Jun-13 Dec-15
Islamic PDS
Conventional PDS
Govt. Sec. % of total PDS % of total
Source: CEIC
More than two-thirds of PDS outstanding are emanated from Sukuk.
However, conventional government securities are predominantly
conventional based. But not for long.
CIMB – Expert Speaker Roadshow 2016
PROSPECTS FOR SUKUK / INFRASTRUCTRE PROEJCT FINANCING
Page 15
Projects awarded YTD in 2016
Source: Affin Hwang Investment Bank Bhd
Award Project Contractor Value
date RM Mil
Klang Valley Mass Rapid Transit Line 2 (Sg Buloh-Serdang-Putrajaya Line)
Apr-16 KVMRT Line 2 Package V201 (Sg Buloh-Persiaran Dagang) Sunway Construction 1,213
Mar-16 KVMRT Line 2 Package V202 (Persiaran Dagang-Jinjang) Ahmad Zaki 1,440
May-16 KVMRT Line 2 Package SY203 (electric trains and depot equipment) HAP Consortium 1,620
Mar-16 KVMRT Line 2 Package SBG201 (box girders for V201-V205) SPC Industries Sdn Bhd 199
Mar-16 KVMRT Line 2 Package SBG202 (box girders for V206-V210) Acre Works Sdn Bhd 170
Mar-16 KVMRT Line 2 Underground Work Package MMC-Gamuda 15,470
May-16 KVMRT Line 2 Package SY201 (signal and train control system) Bombardier-Global Rail 458
May-16 KVMRT Line 2 Package V210 (Persiaran APEC-Putrajaya Sentral) MRCB 648
May-16 KVMRT Line 2 Package V203 (Jinjang-Jln Ipoh) IJM Corp 1,470
May-16 Package DPT 203: Serdang depot TSR Capital 90
Sub total 22,778
Pan-Borneo Highway, Sarawak
Mar-16 PBH Phase 1: Serian Roundabout-Pantu Junction Kimlun-Zecon 1,461
Mar-16 PBH Phase 1: Bintangor-Julau-Sibu Airport-Sg Kua Bridge (Batang Rajang Bridge) Hock Seng Lee-Dhaya Maju Infra 1710
Sub total 3,171
Other projects
Mar-16 KVMRT SBK Line (Pasar Seni LRT link) TRC Synergy 104
Mar-16 Kuching City Central Wastewater Mgmt Syste Package 2 Hock Seng Lee 750
Mar-16 KVMRT SBK Line (MRT feeder buse depot at Kajang) Potensi Cekal Sdn Bhd 63
Feb-16 Samalaju-2 Substation Establishment Project in Samalaju, Bintulu Hock Seng Lee-Larsen & Tourbro 281
Jun-16 Lebuhraya Persisiran Pantai Barat (Teluk Intan - kg Lekir in perak) WZ Satu 43
Jun-16 Oxley Rising Sdn Bhd - mixed commercial building at Lot 99 Jln Ampang Econpile Holdings 208
Jun-16 Piping Erection Subcontract Package WZ Satu 19
May-16 Road, Drainage, Culvert and Duct Bank Works Package at Rapid Project Mitrajaya Holding 52
May-16 PETRONAS Refinery and Petrochemical Intergrated Development Project (RAPID) Barakah Offshore 84
Sub total 1604
Others 2,081
Grand total 29,634
FINANCIAL PERFORMANCE
Page 16
17.4 17.4
15.9
15.2
12.4
13.5
18.2
17.0
15.7
14.0
10.0
11.0
12.0
13.0
14.0
15.0
16.0
17.0
18.0
19.0
2011 2012 2013 2014 2015
ROE - Banking system
ROE - Islamic banking1.6 1.6
1.5 1.5
1.3
1.0
1.3
1.2
1.1
1.0
0.8
0.9
1.0
1.1
1.2
1.3
1.4
1.5
1.6
1.7
2011 2012 2013 2014 2015
ROA - Banking system
ROA - Islamic banking
Islamic banks registered higher ROE but lower ROA relative to conventional
banks in 2015.
Return on equity (ROE) Return on asset (ROA)
Source: Bank Negara Malaysia
CIMB – Expert Speaker Roadshow 2016
RETURN ON EQUITY – ISLAMIC BANKS
Page 43
21.14%
20.57%
17.65%
16.03%
15.88%
14.47%
13.99%
13.74%
11.26%
11.06%
10.45%
9.02%
8.53%
-0.44%
Dec 2015
22.80%
12.62%
19.86%
17.86%
17.89%
14.19%
12.40%
19.36%
12.99%
14.57%
12.23%
2.56%
7.42%
8.09%
Dec 2014
25.38%
25.55%
21.25%
19.39%
19.59%
11.73%
12.86%
20.12%
13.47%
16.93%
12.26%
9.81%
10.38%
9.42%
Maybank Islamic
OCBC Al-Amin
Bank Islam
Public Islamic
CIMB Islamic
RHB Islamic
Affin Islamic
Hong Leong Islamic
AmIslamic
HSBC Amanah
Alliance Islamic
SC Saadiq
Bank Muamalat
KFH
Dec 2013
3rd3rd 2nd
*
*
*
*
*
CIMB – Expert Speaker Roadshow 2016
RETURN ON EQUITY – BANKING GROUP
Page 44
21.22%
19.93%
19.84%
19.03%
17.65%
15.52%
15.48%
13.92%
13.67%
13.09%
11.30%
8.53%
8.20%
2.32%
-0.44%
Dec 2015
23.22%
22.11%
18.38%
20.85%
19.86%
17.75%
17.78%
17.83%
14.23%
17.02%
18.93%
7.42%
15.10%
12.92%
8.09%
Dec 2014
26.61%
24.53%
22.89%
22.67%
21.25%
18.16%
19.37%
23.78%
16.38%
18.39%
20.36%
10.38%
17.96%
19.07%
9.42%
Public Bank
HSBC
OCBC
UOB
Bank Islam
Alliance Bank
Maybank
AmBank
CIMB Bank
RHB Bank
Hong Leong Bank
Bank Muamalat
Affin Bank
Standard
Chartered
KFH
Dec 2013
The above are based on the respective financial institution’s latest financial statements* Position as at September 2015
5th4th6th
*
*
*
*
*
*
CIMB – Expert Speaker Roadshow 2016
RETURN ON ASSETS – ISLAMIC BANKS
Page 45
1.43%
1.23%
1.12%
1.07%
1.04%
0.98%
0.90%
0.87%
0.86%
0.82%
0.71%
0.70%
0.46%
-0.07%
Dec 2015
1.58%
0.73%
1.15%
1.29%
1.06%
1.37%
0.73%
0.93%
1.18%
0.95%
0.62%
0.87%
0.16%
1.33%
Dec 2014
1.70%
1.60%
1.29%
1.48%
0.98%
1.29%
0.73%
0.80%
1.41%
1.04%
0.84%
0.91%
0.67%
1.61%
Bank Islam
OCBC Al-Amin
Maybank Islamic
Public Islamic
CIMB Islamic
Hong Leong
Islamic
Affin Islamic
RHB Islamic
HSBC Amanah
Alliance Islamic
Bank Muamalat
AmIslamic
SC Saadiq
KFH
Dec 2013
1st1st1st
*
The above are based on the respective financial institution’s latest financial statements* Position as at September 2015
*
*
*
*
*
CIMB – Expert Speaker Roadshow 2016
RETURN ON ASSETS – BANKING GROUP
Page 46
1.83%
1.71%
1.45%
1.43%
1.36%
1.29%
1.23%
1.17%
1.16%
1.13%
1.01%
0.74%
0.71%
0.18%
-0.07%
Dec 2015
1.79%
1.83%
1.52%
1.58%
1.52%
1.49%
1.24%
1.16%
1.44%
1.62%
1.30%
1.24%
0.62%
0.97%
1.33%
Dec 2014
4th
1.83%
1.93%
1.57%
1.70%
1.68%
1.60%
1.62%
1.28%
1.82%
1.66%
1.36%
1.40%
0.84%
1.37%
1.61%
Public Bank
HSBC
UOB
Bank Islam
Maybank
Alliance
Bank
OCBC
CIMB Bank
AmBank
Hong Leong
Bank
RHB Bank
Affin Bank
Bank
Muamalat
Standard
Chartered
KFH
Dec 2013
4th4th
The above are based on the respective financial institution’s latest financial statements* Position as at September 2015
*
*
*
*
*
*
*
CIMB – Expert Speaker Roadshow 2016
TAKAFUL SECTOR
Page 21CIMB – Expert Speaker Roadshow 2016
Sources: BNM Financial Stability Report 2015
INSURANCE & TAKAFUL INDUSTRY
Page 22
22.9
25.0
26.5
28.8
30.0
20.0
22.0
24.0
26.0
28.0
30.0
32.0
2011 2012 2013 2014 2015
5-yr CAGR 5.6%
Life Insurance Net Premium (RM bn)
11.2
12.4
13.8
14.9
15.6
10.0
11.0
12.0
13.0
14.0
15.0
16.0
2011 2012 2013 2014 2015
5-yr CAGR 6.8%
General Insurance Earned Premium
(RM bn)
3.7
4.6 4.8 4.8
5.1
3.0
3.5
4.0
4.5
5.0
5.5
2011 2012 2013 2014 2015
5-yr CAGR 6.6%
1.1
1.3
1.4 1.5
1.7
1.0
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
2011 2012 2013 2014 2015
5-yr CAGR 8.9%
General Takaful Earned Contribution
Income (RM bn)
Source: Financial Stability and Payment Systems Report 2015 (BNM)
CIMB – Expert Speaker Roadshow 2016
FAMILY TAKAFUL
Page 23
Gross Contributions (RM million)
CIMB – Expert Speaker Roadshow 2016
GENERAL TAKAFUL
Page 24
Gross Contributions (RM million)
CIMB – Expert Speaker Roadshow 2016
PRESENTATION OUTLINE
Page 25
STATING THE OBVIOUS
MACRO TRENDS
OUTLOOK
CIMB – Expert Speaker Roadshow 2016
EXPERTS SPEAKER ROADSHOW 2016
LONG TERM RATES
Page 26
-1
0
1
2
3
4
5
6
Jan-08 Sep-09 May-11 Jan-13 Sep-14 May-16
US
UK
Germany
Japan
Source: Bloomberg
Long term rates are on declining trend. However, it does not signify lower
risks as incidence of abrupt volatility has become the norm in today’s
market. Perhaps, a decline in risk-free rate suggests widening of risk
premium.
10-year yields
CIMB – Expert Speaker Roadshow 2016
INCOME INEQUALITY
Page 27
28.3
29.0
30.8
33.0
40.1
41.0
47.3
47.4
47.7
- 10.0 20.0 30.0 40.0 50.0 60.0
Australia
Germany
France
UK
Malaysia
Indonesia
Singapore
China
US
Income inequality is also widening as major economies including Malaysia
showed Gini Coefficient of more than 40%. This is a major source of
instability. Perhaps, Islamic finance can address this issue via inclusion in
access to finance
Gini Coefficient
Source: World Income Inequality Database (WIID)
CIMB – Expert Speaker Roadshow 2016
SUKUK YIELD DETERMINATION
Page 28
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
Au
g-1
0
Dec
-10
Ap
r-1
1
Au
g-1
1
Dec
-11
Ap
r-1
2
Au
g-1
2
Dec
-12
Ap
r-1
3
Au
g-1
3
Dec
-13
Ap
r-1
4
Au
g-1
4
Dec
-14
Ap
r-1
5
Au
g-1
5
Dec
-15
Ap
r-1
6
MGS10yr GII10yr UST10yr
𝐺𝐼𝐼10𝑡 = 0.68 + 0.88𝐺𝐼𝐼10𝑡−1 + 0.32𝐺𝐼𝐼10𝑡−2 − 0.11𝑀𝐺𝑆10𝑡−1 − 0.31𝑀𝐺𝑆10𝑡−2
+ 0.31𝑈𝑆𝑇10𝑡−1 − 0.06𝑈𝑆𝑇10𝑡−2 Bond yield
Source: CEIC
We use Vector Autoregressive
(VAR) to model the 10-year GII
yield.
The 10-year US Treasury yields are
deemed to be a significant
factor in influencing the
movement in the 10-year GII
yields
While significant, the 10-year UST
yields is also positively related to
the 10-year GII yields
CIMB – Expert Speaker Roadshow 2016
SUKUK YIELD DETERMINATION - IMPLICATION
Page 29
Such findings are very much in tandem with studies done by
INCEIF* (Fadhlee Awaluddin and Professor Mansur Masih) in
2015.
Both researchers have found that GII and MGS yields are
sensitive to any movement of US Treasury.
Therefore, any changes in US monetary policy will have
immediate implication to local yields including GII.
Perhaps, by increasing the supply of GII would help to address
this issue and provide a better pricing mechanism for Sukuk.
*Sukuk pricing dynamics – factors influencing yield curve of the Malaysian Sukuk (26th August 2015)
CIMB – Expert Speaker Roadshow 2016
ECONOMIC CYCLE – REVELATION FROM SURAH YUSUF
Page 30
Verse 47: Yusuf (Joseph) said: “For seven consecutive years, you shallsow as usual and that (the harvest) which you reap you shall leave in
ears, (all) – except a little of it which you may eat.
Verse 48: “Then will come after that, seven hard (years), which willdevour what you have laid by in advance for them, (all) except a little
of that which you have guarded (stored)
Verse 49: “Then thereafter will come a year in which people will haveabundant rain and in which they will press (wine and oil)
We should extract as much information
as we can from the Quran and Hadith
CIMB – Expert Speaker Roadshow 2016
ECONOMIC CYCLE – REVELATION FROM SURAH YUSUF
Page 31
-2.00%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
Jan-85 Mar-90 May-95 Jul-00 Sep-05 Nov-10 Jan-16
Aug-14
Peak Trough Cycle # of years
Apr-89 May-92 Down 3.13
Trough Peak Cycle # of years
May-92 Jul-94 Up 2.20
Peak Trough Cycle # of years
Jul-94 Oct-98 Down 4.31
Trough Peak Cycle # of years
Oct-98 Dec-03 Up 5.24
Peak Trough Cycle # of years
Dec-03 Mar-09 Down 5.33
Trough Peak Cycle # of years
Mar-09 Aug-14 Up 5.50
Peak Current Cycle # of years
Aug-14 May-16 Down 1.78
Source: Bank Islam
Economic cycle using IPI after seasonal adjustment & HP filter
Apr-89
May-92
Jul-94
Oct-98
Dec-03
Mar-09
Up cycle: 2 to 6 yrs
Down cycle: 3 to 5 yrs
CIMB – Expert Speaker Roadshow 2016
PRESENTATION OUTLINE
Page 32
STATING THE OBVIOUS
MACRO TRENDS
OUTLOOK
EXPERTS SPEAKER ROADSHOW 2016
MARKET ENVIRONMENT – BANKING INDUSTRY
Page 33CIMB – Expert Speaker Roadshow 2016
Slowdown in Loan/Financing Growth
Narrowing Net Income Margin
(Margin Contraction)
Tight Liquidity Environment
Potential Upturn in Credit Cost
FinTech & Digitalization
KEY CHALLENGES – BANKING INDUSTRY
Page 34CIMB – Expert Speaker Roadshow 2016
Impact on MFRS 9 –“Impairment”
Stringent Prudential Standards (Capital
Adequacy, Liquidity, Enhanced StandardisedApproach for Credit Risk
and etc)
Eased Consumer
Sentiment
Softening Property Market
Incidental Costs from Commodity Mudharabah
Transactions
Weak Commodity Prices
Increased Consumer Protection – Hinder Cross
Marketing Growth Potentials
Inevitable Innovative Technologies
War of Talent
GROWTH POTENTIALS – BANKING INDUSTRY
Page 35CIMB – Expert Speaker Roadshow 2016
EPF Simpanan Shariah as
“A New Catalyst”
Investment Account Platform
“ A New Marketplace”
Major Infra Projects Roll Outs
Cross Border Transactions -ASEAN Integrated Banking
Framework
Demand for Shariah Compliant Stocks –
Conversion / Cannibalisation
Corporate & Sovereign Refinancing of Maturing
Sukuk
Continuous Demand from Consumer Market
“Prohibition of Riba’”
Ocean Blue – WakafDevelopment
Supportive Government Policies & Incentives
MARKET ENVIRONMENT – TAKAFUL INDUSTRY
Page 36CIMB – Expert Speaker Roadshow 2016
Takaful Fund Assets
: About RM24.7 bil (Dec 2015)
: 9.4% of insurance & takaful industry
Net Contribution Income
: About RM6.8 bil
:12.9% of insurance & takaful industry
Double Digit 5-yr CAGR : 15%
(both, takaful fund assets & net contribution income)
Rapid Liberalisation
– 11 Takaful Operators
Stable Underwriting Margins, Sound Capital
Buffers & Robust Underwriting Contracts
Aggressive Marketing & Intensified Competition
Diversified Distribution Channels to widen
outreach
Claim Ratio for General Takaful : 51.9%
Stringent Regulatory Environment
(Risk-Based Capital for Takaful & Strengthened market
conduct to protect consumer )
KEY CHALLENGES – TAKAFUL INDUSTRY
Page 37CIMB – Expert Speaker Roadshow 2016
Economic Uncertainty –Weak Consumer Sentiment
Intensified Competition from Bank-backed
Insurance & Multinational Players
Higher & More Stringent Capital Requirements
Additional Cost from share of losses arising from
Malaysian Motor Insurance Pool
Slower Contribution from Credit Coverage due to
Slower Demand for Personal/House Financing
Portfolio
Possibility of Higher Claim Ratio
Lower Returns from Investment Portfolio
Continuous Investment in IT Infrastructure
Distribution Coverage
NEW OPERATING ENVIRONMENT FOR TAKAFUL
Page 38
Liberalisation of Motor &
Fire Tariff
CIMB – Expert Speaker Roadshow 2016
GROWTH POTENTIAL – TAKAFUL INDUSTRY
Page 39CIMB – Expert Speaker Roadshow 2016
Underpenetrated Market
Uptrend Shift by Muslim Community
(from Conventional Insurance to Takaful)
Increasing Demand for Healthcare Coverage
Unique Selling Propositions
(the first Takaful operator to offer 15% Cash Back)
High Demand for Investment-link Products
Greater Consumer Awareness
(amid rising medical costs and living expenses)
On-Going Expansion of Multi-Channel Distribution
Strategies
Strong Market Dynamics
- Urbanisation, Rising Disposable Income,
Growing Middle Class
Expectation of Continuous Double Digit Growth
CONCLUSION – “SUSTAINABLE GROWTH MOMENTUM”
Page 40
Revised Shariah Screening Methodolgy by SC – effective November 2013,two-tier approach will be used whether the listed company is deemed to
be Shariah compliant based on activity and financial ratios.
Islamic Financial Services Act (2013) – distinguishes investment accountfrom Islamic deposit i.e. no guarantees on investment return which was
launched in 2015.
Investment Account Platform (IAP) – launched in February 2016 to facilitatedirect investment by investors in viable ventures.
EPF Shariah Compliance Funds – Initial fund size of RM100 bn.Commencement – 1 January 2017. Open for all EPF Members, Dividend
based on actual performance. Members who have chosen to move to EPF
Simpanan Shariah are not allowed to revert back to conventional EPF after
the effective date.
CIMB – Expert Speaker Roadshow 2016
Page 41
Commendable
Growth
MomentumFinancing Growth – 16.2%
5 yr Financing CAGR – 23.3%
Industry Growth – 7.9%
Sturdy
CapitalizationIssuance of RM700 million Tier II
Sukuk Murabahah (RM300 mil in
April and RM400 mil in Dec 2015)
RWCR – 15.30%
Pioneered the
investment
accountRestricted Investment Account
Term Unrestricted Investment A/C
Transactional Unrestricted Inv A/C
Respectable
ReturnsROE – 17.6%
ROA – 1.4%
Sound Asset
QualityGross Impaired Financing – 1.09%
Net Impaired Financing – (0.83%)
Credit Cost – 0.28%
Financing loss coverage ratio – 174.6%
Sustainable
LiquidityFDR – Below 80%
LCR – Above 90%
NSFR – Above 100%
>2/3 of marketable securities are
rated AAA or GG
Reaffirming its
Brand PositionVarious recognitions as “Best
Islamic Bank” and “Strongest
Local Bank”
APPENDICES
Page 42CIMB – Expert Speaker Roadshow 2016
POTENTIAL IMPLICATIONS OF EPF SIMPANAN SHARIAH
Page 43CIMB – Expert Speaker Roadshow 2016
Greater participation from pension funds in Islamic
Finance Sphere
Promotes growth of all players – Bigger counter-
party limits by asset management companies
or EPF placement in Islamic banking
Sustain the growth momentum and
continuous demand for Islamic financial products
Enhance Deepening of Islamic financial market –
trading both sukuk and equity
Conduit to develop future new Islamic Financial
Offerings
Promotes Participation in Responsible Risk Sharing
Business Model
Greater Transparency in Product Offerings & Investors’ Protection
Robust Risk Management Capability & Capacity
More Extensive Marketplace
ASEAN – NEW MARKET FOCUS
Page 44CIMB – Expert Speaker Roadshow 2016
“Closer to Home”
“Similar Credit Culture”
“Large & Young Population - >50% are below 40 years
old”
Growth Prospects
About 650 million people (3rd largest)
GDP of S2.4 trillion
Sustainable Economic Prospects
(7th largest economy in the world , projected to be 4th
largest economy by 2030)
Rising Middle Income
(Indonesia & Phillippines)
Stable & Growing Financial Industry
(Demand from development of new
infrastructure)
Relatively Low Penetration Rates
Strong Intra-Asean Trade
(USD24 billin 2014)
Cooperation amongst Regulatory Bodies
Integrated Efforts –“ASEAN Community”
INDONESIA – HUGE POTENTIALS
Page 45CIMB – Expert Speaker Roadshow 2016
Sources: EY World Islamic Banking Competitiveness Report 2016
Islamic
banking
penetration
rate
WAQAF DEVELOPMENT – A NEW POTENTIALS
Page 46
No States Total Waqaf Estimated value of
General Specific land area Waqaf land (RM)
1 Perlis 2.74 14.49 17.23 1,337,998.00
2 Kedah 158.62 1,086.25 1,244.87 1,997.00
3 Pulau Pinang 220.03 559.23 779.26 850,000,000.00
4 Perak 116.12 - 116.12 383.00
5 Selangor 235.63 31.82 267.45 200,000,000.00
6 Wilayah Persekutuan 0.49 1.59 2.08 16.00
7 Negeri Sembilan 1.01 14.49 15.50 36.00
8 Melaka 11.65 21.60 33.25 66.50
9 Johor 1,422.80 1,729.50 3,152.30 7,000,500.00
10 Pahang - 723.82 723.82 18,000,000.00
11 Kelantan 16.01 157.04 173.05 56,703,373.00
12 Terengganu 581.66 1,878.58 2,460.24 42,623,196.19
13 Sabah 2,062.88 32.28 2,095.16 103.00
14 Sarawak 6.86 4.04 10.90 1,416,781.90
Grand total 4,836.50 6,254.73 11,091.23 1,177,084,450.59
Waqaf land area (Hecter)
Total allocation of RM329.16 million was provided under 9MP & 10MP,
JAWHAR has developed 23.771 hecter of Waqaf land in Malaysia
(0.21% of total Waqaf land of 11,091.82 hecter).
Source: JAWHAR
Statistics as of 2014
CIMB – Expert Speaker Roadshow 2016
OUTLOOK – SADAQAH HOUSE (DATO DR ABDUL HALIM ISMAIL)*
Page 47
The formation of Sadaqah House (Bait as-Sadaqah)
In the business of providing products & services to collect various
types of Sadaqah, Waqf, Hibah & etc
It will invest in Islamic banking and financial instruments such as
various types of deposits, investment account, Sukuk and various
investment management products.
Sadaqah House is owned and controlled by the banking group –
financial institution licenced by BNM & SC
But why Sadaqah?
There is famous Hadith on the substance of Sadaqah Jariah
Abu Hurayah Rahimahullah reported that Allah’s Messenger S.A.W
said: “When a human being dies, all of his deeds are terminated
except for three types: an ongoing Sadaqah, a knowledge (of
Islam) from which others benefit, and righteous child who makes
supplication for him”* My Wishful Thought on the development of Islamic Banking and Finance products for the Social Welfare Sector (GIFF 2014)
CIMB – Expert Speaker Roadshow 2016
INDUSTRY BENCHMARK – ISLAMIC BANKING
Page 48CIMB – Expert Speaker Roadshow 2016
14.2 19.5
23.7 29.5
34.3
Dec 11 Dec 12 Dec 13 Dec 14 Dec 15
FINANCIAL HIGHLIGHTS
RM685.1
million FY2015 PBZT
+8.6% Total Assets
Growth
(Industry : 6.1%)
+16.2% Net Financing
Growth
(Industry : 8.6%)
79.0%Financing-to-
deposits ratio (+IA)
(Industry : 86.5%)
1.09%Gross Impaired
Ratio
(Industry : 1.6%)
PBZT (RM million)
Total assets (RM billion)
Net financing (RM billion)
-0.8% Net Impaired Ratio (Industry : 0.1%)
Page 49
493.0 600.3
683.0 701.2 685.1
Dec 11 Dec 12 Dec 13 Dec 14 Dec 15
32.2 37.5
42.8 45.849.8
Dec 11 Dec 12 Dec 13 Dec 14 Dec 15
CIMB – Expert Speaker Roadshow 2016
INCOME STATEMENT
Page 50
RM million FY2015 FY2014Variance
Amount %
Total revenue 2,641.6 2,431.4 210.2 8.6%
Profit to depositors (1,031.9) (851.6) (180.3) 21.2%
Net income 1,609.7 1,579.8 29.9 1.9%
Total operating overheads (837.8) (820.6) (17.2) 2.1%
Operating results 771.9 759.2 12.7 1.7%
Allowance for impairment on financing & advances (69.3) (60.0) (9.3) 15.5%
Allowance for impairment / (reversal) on other financial
assets(4.5) 2.0 (6.5) -325.0%
Finance cost from issuance of sukuk (13.0) - (13.0) -100.0%
Profit before zakat and taxation (PBT) 685.1 701.2 (16.1) -2.3%
Zakat (8.7) (12.8) 4.1 32.0%
Taxation (169.6) (179.4) 9.8 5.5%
Profit after zakat and taxation 506.8 509.0 (2.2) -0.4%
CIMB – Expert Speaker Roadshow 2016
PROFITABILITY
Page 51
492.5
597.4
677.3 702.8
685.7
493.0
600.3
683.0 701.2
685.1
Dec-11 Dec-12 Dec-13 Dec-14 Dec 2015
Profit before zakat and tax
RM million
Group Bank
335.3
506.3 506.5
335.6
167.0 166.6
475.8476.0
323.8322.5
June 2015June 2014June 2013
Mar 2015Mar 2014Mar 2013
150.3 151.5
Sept 2015Sept 2014Sept 2013
529.2529.6
350.3 350.0
173.6 173.5
CIMB – Expert Speaker Roadshow 2016
ZAKAT CONTRIBUTIONS
Page 52
-
2,000.00
4,000.00
6,000.00
8,000.00
10,000.00
12,000.00
14,000.00
2009 2010 2011 2012 2013 2014 2015
RM 9.34 mil
RM12.0 mil
RM8.070mil
RM 9.4 mil
RM12.46 mil
RM 12.75 mil
RM 8.70 mil
Zakat Paid
…continuous commitment and contribution to the Muslim ummah
Application of
new zakat
calculation
methodology
CIMB – Expert Speaker Roadshow 2016
NET INCOME MARGIN TREND – COMPRESSION CONTINUED
Page 53CIMB – Expert Speaker Roadshow 2016
KEY FINANCIAL POSITION ITEMS
Page 54
RM million FY2015 FY2014Variance
Amount %
Total Assets 49,767.1 45,829.3 3,937.8 8.6%
of which:
Cash, short-term funds and placements 2,978.3 3,269.1 (290.8) -8.9%
Marketable securities 10,416.3 11,214.4 (798.1) -7.1%
Net financing, advances and others 34,294.7 29,524.6 4,770.1 16.2%
Gross impaired financing 381.3 344.5 36.8 10.7%
Net impaired financing (284.3) (242.6) 41.7 17.2%
Deposits from customers 43,594.9 41,021.6 2,573.3 6.3%
Investment account 676.1 - 676.1 -
Deposits and placements of banks and
other FIs- 300.0 (300.0) 0.0%
Sukuk liabilities 700.0 - 700.0 100.0%
Equity 4,033.1 3,730.6 302.5 8.1%
CIMB – Expert Speaker Roadshow 2016
Page 55
KEY FINANCIAL INDICATORS
Audited FY
Dec 11
Audited FY
Dec 12
Audited FY
Dec 13
Audited
Dec 14
Audited
Dec 15
Islamic
Banking
System
Banking
System
PROFITABILITY
Return on equity (%) – based on PBT 18.5% 20.4% 21.2% 19.9% 17.6% ^ 14.0% * 12.4% *
Return on equity (%) – based on PAT 14.1% 14.6% 15.3% 14.4% 13.1% - -
Return on assets (%) – based on PBT 1.6% 1.7% 1.7% 1.6% 1.4% ^ 1.0% * 1.3% *
Return on assets (%) – based on PAT 1.2% 1.2% 1.2% 1.1% 1.1% - -
Cost Income Ratio (%) 53.8% 51.4% 54.1% 51.9% 52.5% 46.3% * 48.8% *
Non-Fund Based Income Ratio (%) 13.8% 13.5% 12.6% 11.8% 10.4% 6.2% * 17.2% *
ASSET QUALITY
Gross Non-Performing/
Impaired Financing Ratio (%)2.6% 1.6% 1.2% 1.1% 1.09% 1.2% # 1.60% #
Net Non-Performing/Impaired
Financing Ratio - Less IA & CA (%)-0.2% -0.7% -0.9% -0.81% -0.83% 0.0% # 0.1% #
Financing Loss Coverage Ratio (%) 106.2% 142.6% 175.8% 170.4% 174.6% 100.5% # 95.6% #
EFFICIENCY
Financing to Deposits (%) 51.5% 61.2% 65.0% 73.4% 78.6% 99.3% # 87.3% #
CAPITALISATION
RWCR (2011-12) –
Total Capital Ratio (2013 onwards) (%)16.4% 13.9% 14.0% 13.3% 15.3% 16.1% # 16.1% #
…healthy capitalisation
… reaching an optimum level
…commendable performance amidst challenging banking landscape
…sound asset quality
CIMB – Expert Speaker Roadshow 2016
RETURN ON EQUITY TREND
Page 56
Excluding BHB Group, the other financial conglomerates operate both Islamic and conventional banking operations
CIMB – Expert Speaker Roadshow 2016
NET INCOME SPREAD
Page 51
5.0
9%
4.1
8%
4.5
8%
4.5
8%
4.5
6%
4.4
7%
4.4
9%
4.8
2%
4.6
0%
4.6
5%
4.8
9%
2.1
3%
1.6
4%
2.0
0%
2.2
2%
2.2
8%
2.5
6%
2.7
7%
2.6
0%
2.6
6%
2.6
5%
3.2
1%
2.96%2.55% 2.58%
2.36% 2.28% 1.91%1.71%
2.22%1.93% 2.00% 1.68%
0%
2%
4%
6%
Bank Islam HSBC SCB MBB CIMB OCBC UOB PBB RHB KFH Affin
5.1
8%
4.2
5%
4.6
4%
4.5
6%
4.4
4%
4.7
0%
4.9
2%
4.7
2%
4.6
8%
4.5
9%
4.9
1%
2.2
0%
1.6
7%
1.9
4%
2.4
0%
2.2
2%
2.8
0%
2.7
8%
2.6
8%
2.8
4%
2.5
2% 3.3
3%
2.98% 2.57% 2.70%2.16% 2.22% 1.90%
2.14% 2.04%1.84% 2.08%
1.58%
0%
2%
4%
6%
Bank Islam HSBC SCB MBB CIMB OCBC UOB PBB RHB KFH Affin
As at 31
December
2013
As at 31
December
2014
5.2
5%
4.3
3%
4.3
7%
4.6
6%
4.5
8%
4.9
7%
4.8
1%
4.8
4%
4.6
7%
4.5
9%
5.0
8%
2.4
7%
1.8
4%
2.1
2%
2.4
6%
2.4
8%
3.0
3%
2.8
8%
2.9
5%
3.0
4%
3.0
0%
3.6
0%
2.78% 2.49% 2.25% 2.19% 2.10% 1.94%1.93% 1.89%
1.62% 1.59% 1.48%
0%
2%
4%
6%
Bank Islam HSBC SCB* MBB CIMB OCBC* UOB* PBB RHB* KFH* Affin*
Average assets rate Average liabilities rate Net income spread
As at 31
December
2015
The above are based on the respective financial institution’s latest financial statements and derived from 2 points average* Position as at September 2015
CIMB – Expert Speaker Roadshow 2016
NON FUND BASED INCOME TREND – BANKING GROUP
Page 52
The above are based on the respective financial institution’s latest financial statements
* Position as at September 2015
HSBC SCB* MBB CIMB UOB* HLB Alliance PBB OCBC* RHB* Bank Islam AmBank Affin*Bank
MuamalatKFH*
Dec 2013 28.97% 23.85% 25.07% 18.59% 17.27% 15.84% 17.47% 12.80% 15.65% 13.81% 12.64% 11.88% 9.71% 10.20% 11.33%
Dec 2014 24.15% 21.70% 22.27% 15.35% 15.23% 11.04% 14.84% 12.70% 12.40% 12.41% 11.82% 9.88% 9.02% 7.83% 4.21%
Dec 2015 28.22% 25.17% 21.96% 17.35% 14.99% 14.26% 14.04% 13.76% 13.30% 11.23% 10.45% 8.99% 7.85% 7.41% 2.09%
28.22%
25.17%
21.96%
17.35%
14.99%
14.26% 14.04% 13.76% 13.30%
11.23% 10.45%
8.99%
7.85% 7.41%
2.09%
0%
5%
10%
15%
20%
25%
30%
35%
CIMB – Expert Speaker Roadshow 2016
COST INCOME RATIO TREND – BANKING GROUP
Page 53
The above are based on the respective financial institution’s latest financial statements
* Position as at September 2015
PBB UOB* OCBC* Alliance HSBC MBB Affin* Bank Islam CIMB HLB SCB* AmBank RHB*Bank
MuamalatKFH*
Dec 2013 30.69% 34.85% 39.97% 45.85% 41.62% 48.16% 44.46% 54.12% 54.77% 43.88% 48.11% 41.82% 43.54% 68.99% 80.46%
Dec 2014 30.04% 38.03% 40.76% 45.57% 45.40% 49.17% 45.43% 51.95% 53.05% 43.79% 51.62% 46.56% 48.39% 69.07% 77.33%
Dec 2015 30.54% 39.10% 41.10% 47.53% 48.19% 48.43% 49.83% 52.47% 52.59% 53.46% 53.96% 54.76% 55.41% 62.03% 75.83%
30.54%
39.10%41.10%
47.53% 48.19%48.43% 49.83%
52.47%52.59%
53.46%53.96%
54.76% 55.41%
62.03%
75.83%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
IMPAIRED FINANCING RATIOS – BANKING GROUP
Page 54
The above are based on the respective financial institution’s latest financial statements
*Position as at September 2015
PBB HLB Alliance Bank Islam UOB* AmBank HSBC CIMB MBB RHB* OCBC* Affin*Bank
MuamalatSCB* KFH*
GIF 1,489 1,052 406 345 1,069 1,647 688 4,372 6,234 2,730 1,277 714 403 1,124 527
NIF Ratio -0.14% -0.30% 0.07% -0.82% -0.07% -0.11% 0.15% 0.24% 0.07% 0.70% 0.43% 0.46% 0.39% 1.07% 1.66%
GIF Ratio 0.61% 0.98% 1.14% 1.14% 1.57% 1.89% 1.50% 2.07% 1.52% 1.93% 2.01% 1.78% 3.02% 3.25% 7.40%
1,489 1,052 406 345
1,069 1,647
688
4,372
6,234
2,730
1,277 714 403
1,124 527
-4.00%
0.00%
4.00%
8.00%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
RM mil
As at31 Dec2014
PBB HLB AllianceBankIslam
UOB* AmBank HSBC CIMB MBB RHB* OCBC* Affin*Bank
MuamalatSCB* KFH*
GIF 1,352 1,013 418 381 1,210 1,561 941 4,340 8,555 2,789 1,426 871 340 1,275 537
NIF Ratio -0.10% -0.22% 0.08% -0.83% 0.01% 0.10% 0.52% 0.19% 0.53% 0.78% 0.49% 0.81% 0.44% 0.88% 2.22%
GIF Ratio 0.49% 0.86% 1.08% 1.09% 1.73% 1.80% 1.81% 1.81% 1.86% 1.88% 2.05% 2.11% 2.32% 3.99% 7.46%
1,352 1,013 418 381
1,210 1,561
941
4,340
8,555
2,789
1,426 871 340
1,275 537
-4.00%
0.00%
4.00%
8.00%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
RM mil
As at 31 Dec 2015
CIMB – Expert Speaker Roadshow 2016
COLLECTIVE IMPAIRMENT PROVISION (CIP) - ISLAMIC BANKS
Page 55
The above CIP ratios are computed based on collective allowance (inclusive of regulatory reserves ) as % of gross financing and advances (excluding financing to Government &
statutory bodies and Restricted Profit Sharing Investment Account “RPSIA” financing), net of individual allowance.
* Position as at September 2015
1.71%
7.46%
2.64%1.93%
1.09%
2.24% 2.32%1.44%
0.61% 0.66% 0.72% 1.05% 0.67% 0.76%
0.0%
2.0%
4.0%
6.0%
8.0%
Affin Islamic* KFH* OCBC Al-Amin*
HSBCAmanah
Bank Islam AmIslamic BankMuamalat
RHB Islamic* SC Saadiq* PublicIslamic
HL Islamic CIMB Islamic MaybankIslamic
AllianceIslamic
Gross Impaired Financing Ratio
36.0 38.0 52.1 48.2
133.8
73.3 35.8 51.1
13.7 15.8 0.1
(2.6)(27.1) (20.8)
-200.0
0.0
200.0
Affin Islamic* KFH* OCBC Al-Amin*
HSBCAmanah
Bank Islam AmIslamic BankMuamalat
RHB Islamic* SC Saadiq* PublicIslamic
HL Islamic CIMB Islamic MaybankIslamic
AllianceIslamic
RM’m
Excess/(shortfall) of CA
1.84% 1.75% 1.70% 1.66% 1.59% 1.48% 1.46% 1.45% 1.40%1.25% 1.20% 1.19% 1.16%
0.90%
0.0%
1.2%
2.4%
Affin Islamic* KFH* OCBC Al-Amin*
HSBCAmanah
Bank Islam AmIslamic BankMuamalat
RHB Islamic* SC Saadiq* PublicIslamic
HL Islamic CIMB Islamic MaybankIslamic
AllianceIslamic
Current CIP
Regulatory reserves
67.2 34.0 137.2 68.7 54.3 61.0 430.2
CIMB – Expert Speaker Roadshow 2016
COLLECTIVE IMPAIRMENT PROVISION (CIP) – BANKING GROUP
Page 56
The above CIP ratios are computed based on collective allowance (inclusive of regulatory reserves ) as % of gross financing and advances (excluding financing to Government &
statutory bodies and Restricted Profit Sharing Investment Account “RPSIA” financing), net of individual allowance
•Position as at September 2015
1.97%1.75%
1.59%1.46% 1.46% 1.44% 1.40% 1.32% 1.27% 1.22% 1.22% 1.21% 1.20% 1.19%
0.85%
0.0%
1.2%
2.4%
SCB* KFH* Bank Islam AmBank BankMuamalat
HSBC UOB* CIMB OCBC* PBB Affin* HLB RHB* MBB Alliance
Current CIP
3.99%
7.46%
1.09% 1.80%2.32%
1.81% 1.73% 1.81% 2.05%
0.49%
2.11%
0.86%
1.88% 1.86%1.08%
0.0%
2.0%
4.0%
6.0%
8.0%
SCB* KFH* Bank Islam AmBank BankMuamalat
HSBC UOB* CIMB OCBC* PBB Affin* HLB RHB* MBB Alliance
Gross Impaired Financing Ratio
239.7 38.0 133.8 213.9
35.8 122.2 142.0 276.5
51.8 57.5 7.1 11.1 5.3
(107.8) (133.5)
-1,000.0
0.0
1,000.0
SCB* KFH* Bank Islam AmBank BankMuamalat
HSBC UOB* CIMB OCBC* PBB Affin* HLB RHB* MBB Alliance
RM’m
Excess/(shortfall) of CA
Regulatory reserves
260.0 284.0 1,019.5 145.0 1,810.8 231.1 463.2 491.5 1,247.5
CIMB – Expert Speaker Roadshow 2016
ASSETS AS AT 31 DECEMBER 2015
Banking
System^
(RM’ bil)
Selected Banking Group
Total Assets 2,355.7 708.3 376.3 363.8 230.7 49.8
Growth (12
mths136.4 68.0 38.7 18.1 11.4 3.9
% Growth 6.1% 10.6% 11.4% 5.2% 8.8% 8.6%
Market
ShareDec 15 30.1% 16.0% 15.4% 9.8% 2.1%
Dec 14 28.4% 15.0% 15.4% 9.9% 2.0%
Page 63
Islamic
Banking
System^
(RM’bil)
Selected Banking Group
Total Assets 535.4 156.4 54.6 49.8 45.7 44.1
Growth (12
mths58.3 20.0 4.7 3.9 7.5 8.0
% Growth 12.2% 14.7% 9.4% 8.6% 19.7% 22.2%
Market
ShareDec 15 29.2% 10.2% 9.3% 8.5% 8.2%
Dec 14 30.1% 10.2% 9.4% 7.8% 7.6%
MBB,
30.1%
CIMB,
16.0%PBB,
15.4%
RHB
Cap
9.8%
Bank
Islam,
2.1%
Others,
26.6%
MBB-i,
29.2%
CIMB-i,
10.2%
Bank
Islam,
9.3%
PBB-i,
8.5%
RHB-i,
7.6%
Others,
34.6%
Islamic Banking System
Banking System
CIMB – Expert Speaker Roadshow 2016
22,357.2
4,116.3 3,518.2
25,634.5
4,787.44,301.5
Consumer Commercial Corporate
Dec 14 Dec 15
In R
M m
illio
n
Gro
ss F
inancin
g In R
M m
illio
n
Steady growth in net financing 16.2% Gross financing growth of 16.1%
ROBUST FINANCING GROWTH
Page 64
14,160.3
19,508.7
23,740.9
29,524.6
34,294.7
Dec 11 Dec 12 Dec 13 Dec 14 Dec 15
+14.7%
+16.3%+22.3%
CIMB – Expert Speaker Roadshow 2016
CONSUMER FINANCING DRIVEN MAINLY BY HOUSE FINANCING
RM million Dec 15 Dec 14
Growth
Amount %
Housing Financing 12,137.7 9,666.8 2,470.9 25.6%
Personal Financing 10,386.9 9,435.9 951.0 10.1%
Vehicle Financing 2,592.5 2,728.6 (136.1) -5.0%
Credit Card 443.5 435.6 7.9 1.8%
Ar-Rahnu 73.9 90.3 (16.4) -18.2%
Total 25,634.5 22,357.2 3,277.3 14.7%
Page 65CIMB – Expert Speaker Roadshow 2016
NET FINANCING AS AT 31 DECEMBER 2015
Banking
System^
(RM’bil)
Selected Banking Group
Net
Financing1,423.9 453.5 235.4 271.8 149.6 34.3
Growth –
12mths106.2 50.0 27.5 28.6 8.9 4.8
% Growth 8.1% 12.4% 13.2% 11.8% 6.3% 16.2%
Market
ShareDec 15 31.8% 16.5% 19.1% 10.5% 2.4%
Dec 14 30.6% 15.8% 18.5% 10.7% 2.2%
Page 66
Islamic
Banking
System^
(RM’bil)
Selected Banking Group
Net
Financing384.5 130.2 40.3 34.3 31.7 30.9
Growth –
12mths54.3 22.4 4.0 4.8 6.3 5.6
% Growth 16.4% 20.8% 11.1% 16.2% 24.8% 22.1%
Market
ShareDec 15 33.9% 10.5% 8.9% 8.3% 8.0%
Dec 14 32.6% 11.0% 8.9% 7.7% 7.7%
MBB,
31.8%
CIMB,
16.5%
PBB,
19.1%
RHB,
10.5%
Bank
Islam,
2.4%
Others,
19.7%
MBB-i,
33.9%
CIMB-i,
10.5
Bank
Islam,
8.9%
PBB-i,
8.3%
RHB-i
7.7%
Others,
30.4%
Islamic Banking System
Banking System
CIMB – Expert Speaker Roadshow 2016
GROSS FINANCING - COMPOSITION
Page 67
# Above excludes Corporate Banking
CIMB – Expert Speaker Roadshow 2016
CUSTOMER DEPOSITS & INVESTMENT ACCOUNT
Page 68
Investment accounts have
grown steadily since its
inception in June 2015.
INVESTMENT ACCOUNT
RM Million
CIMB – Expert Speaker Roadshow 2016
DEPOSITS AS AT 31 DECEMBER 2015
Banking
System^
(RM’bil)
Selected Banking Group
Deposits 1,671.1 478.2 263.3 301.2 178.8 43.6
Growth –
12mths29.5 38.6 28.0 24.6 0.3 2.6
% Growth 1.8% 8.8% 11.9% 8.9% 0.2% 6.3%
Market
ShareDec 15 28.6% 15.8% 18.0% 10.7% 2.6%
Dec 14 26.8% 14.3% 16.8% 10.9% 2.5%
Page 69
Islamic
Banking
System^
(RM’bil
Selected Banking Group
Deposits 402.7 105.8 44.2 43.6 39.1 29.5
Growth-
12mths2.0 6.1 2.9 2.6 8.4 2.5
% Growth 0.5% 6.1% 7.1% 6.3% 27.2% 9.2%
Market
ShareDec 15 26.3% 11.0% 10.8% 9.7% 7.3%
Dec 14 24.9% 10.3% 10.2% 7.7% 6.7%
MBB,
28.6%
CIMB,
15.8%
PBB,
18.0%
RHB,
10.7%
Bank
Islam,
2.6%
Others,
24.3%
MBB-i,
26.3%
CIMB-i,
11%
Bank
Islam,
10.8%
PBB-
i9.7%
Am-i,
7.3%
Others,
34.9%
Islamic Banking System
Banking System
CIMB – Expert Speaker Roadshow 2016
DEFENDING CASA DEPOSITS
Page 70
Dec 11 Dec 12 Dec 13 Dec 14 Dec 15
CASA to Total Deposits (%)
43.4% 41.1% 39.1% 38.1% 35.1%
12,283 13,426 14,566
-2.2%
CIMB – Expert Speaker Roadshow 2016
CASA AS AT 31 DECEMBER 2015
Banking
System^
(RM’bil)
Selected Banking Group
CASA 427.4 161.2 84.1 73.0 37.9 15.3
Growth –
12mths6.6 6.4 7.1 3.8 3.7 (0.3)
% Growth 1.6% 4.1% 9.2% 5.6% 11.0% (2.2%)
Market
ShareDec 15 33.7% 19.7% 17.1% 8.9% 3.6%
Dec 14 36.8% 18.3% 16.4% 8.1% 3.7%
Page 71
Islamic
Banking
System^
(RM’bil
Selected Banking Group
CASA 101.5 29.5 15.3 11.9 9.0 5.6
Growth-
12mths2.0 (2.4) (0.3) 1.8 0.6 0.1
% Growth 2.0% (7.6%) (2.2%) 18.1% 7.4% 1.5%
Market
ShareDec 15 29.0% 15.1% 11.8% 8.9% 5.6%
Dec 14 32.1% 15.7% 10.2% 8.4% 5.6%Islamic Banking System
Banking System
MBB,
33.7%
CIMB,
19.1%
PBB,
17.1%
RHB,
8.9%
Bank
Islam,
3.6% Others,
17%
MBB-i,
29.0%
Bank
Islam,
15.1%CIMB-i,
11.8%
PBB-i,
8.9%
Am-i,
5.6%
Others,
29.6%
CIMB – Expert Speaker Roadshow 2016
CREDIT QUALITY TREND
Page 72
19,949
Gross impaired
financing ratio
CIMB – Expert Speaker Roadshow 2016
HEALTHY CAPITAL ADEQUACY RATIO
Page 73
RM million Dec 11 Dec 12 Dec 13 Dec 14 Dec 15
Total Risk-Weighted Assets 16,863 22,466 25,449 30,194 33,051
Improved RWCR arising
from capitalisation
of Jul-Dec 2015 profits and
sukuk issuance
Rated AA3 &
P1by Rating
Agency Malaysia
CIMB – Expert Speaker Roadshow 2016
INDUSTRY BENCHMARK – INSURANCE & TAKAFUL
Page 74CIMB – Expert Speaker Roadshow 2016
INDUSTRY BENCHMARK – FAMILY TAKAFUL
Page 75
Gross Contributions (RM million)
CIMB – Expert Speaker Roadshow 2016
FAMILY TAKAFUL INDUSTRY IN MALAYSIA – TOTAL
CONTRIBUTIONS
Page 76CIMB – Expert Speaker Roadshow 2016
LIFE INSURANCE & FAMILY TAKAFUL INDUSTRY IN MALAYSIA
(TOP 10)
Page 77CIMB – Expert Speaker Roadshow 2016
INDUSTRY BENCHMARK – GENERAL TAKAFUL
Page 78
Gross Contributions (RM million)
CIMB – Expert Speaker Roadshow 2016
GENERAL TAKAFUL INDUSTRY IN MALAYSIA – TOTAL
CONTRIBUTIONS
Page 79CIMB – Expert Speaker Roadshow 2016
TOP 20 GENERAL INSURANCE & GENERAL TAKAFUL COMPANIES
(GROSS)
Page 80CIMB – Expert Speaker Roadshow 2016
FINANCIAL DYNAMICS – GENERAL NET CLAIMS RATIO
Page 81CIMB – Expert Speaker Roadshow 2016
FINANCIAL DYNAMICS – MANAGEMENT EXPENSES RATIO
Page 82CIMB – Expert Speaker Roadshow 2016
FINANCIAL DYNAMICS – RETURN ON EQUITY
Page 83CIMB – Expert Speaker Roadshow 2016
FINANCIAL DYNAMICS – RETURN ON ASSETS
Page 84CIMB – Expert Speaker Roadshow 2016