ALLIANCE FINANCIAL GROUPANALYST BRIEFING

- 3QFY11 Results ended 31 December 2010 -

• Key Messages

AGENDA

• 9MFY2011 Financial Performance

• Questions & Answers

2

• Operating profit of RM147.6mil (+12.3% YoY)

• Key drivers:

higher net interest income

lower overheads

• PBT of RM150.8mil (+15.1% YoY)

Financial Performance

Robust financial position

0

100

200

300

400

500

600

9M07 9M08 9M09 9M10 9M11

PBT Operating Profit

80

100

120

140

160

180

3Q10 4Q10 1Q11 2Q11 3Q11

PBT Operating ProfitRM ’mil RM ’mil

84.6

393.7

297.6 301.5

438.8

299.6

409.4 394.6371.0

459.6

131.5

138.8

151.4

160.5

147.6

131.0

107.4

150.3137.6

150.8

• Operating profit of RM459.6mil (+23.9% YoY)

• Key drivers:

net interest income due to growth in loans and

financing, and improved NIM

lower overheads

• PBT of RM438.8mil (+45.5% YoY)

Quarterly Results Cumulative 9 Months Results

3

Quarterly

3QFY10 3QFY11 % YoY

147.7 168.0 13.7%

65.7 59.0 -10.2%

64.9 58.0 -10.6%

278.3 285.0 2.4%

• Higher net interest income due to +3.3% loans growth and improved asset quality

• Islamic banking income affected by planned slowdown in “Koop” loans and prior PER adjustment

• Non-interest income eased due to tough market conditions and softer treasury income

Financial Performance

Growth in net interest income

Cumulative 9 Months

(RM ’mil) 9MFY10 9MFY11 % YoY

Net Interest Income 430.0 511.3 18.9%

Islamic Banking Income 174.8 173.4 -0.8%

Non-Interest Income 182.2 173.5 -4.7%

Net Income 787.0 858.2 9.1%

4

2.1%

2.4%

2.7%

3.0%

3.3%

Jul-09 Nov-09 Mar-10 Jul-10 Nov-10

Group Corporate

3.3%

3.7%

4.1%

4.5%

4.9%

Jul-09 Nov-09 Mar-10 Jul-10 Nov-10

Commercial

3.9%

4.2%

4.5%

4.8%

5.1%

Jul-09 Nov-09 Mar-10 Jul-10 Nov-10

SME

2.3%

2.7%

3.1%

3.5%

3.9%

4.3%

Jul-09 Nov-09 Mar-10 Jul-10 Nov-10

Consumer

KEY DRIVERS OF NIM

NIM NIM NIM NIM

Financial Performance

Competition drives lower NIM

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

GIM 4.4% 4.3% 4.4% 4.4% 4.7% 4.5% 4.6%

4.0%

4.2%

4.4%

4.6%

4.8%

5.0%

GIM NIM

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

NIM 2.3% 2.5% 2.6% 2.8% 2.8% 2.8% 2.5%

1.8%

2.0%

2.2%

2.4%

2.6%

2.8%

3.0%

5

0%

1%

2%

3%

4%

5%

3,500

3,800

4,100

4,400

4,700

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

RM 'mil - lhs

% QoQ - rhs

-10%

-5%

0%

5%

10%

3,600

3,800

4,000

4,200

4,400

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

RM 'mil - lhs

% QoQ - rhs

Loans breakdown by businesses

• AFG loans growth of 3.3% in 3QFY2011

• AFG loans growth was driven by SME and supported by Consumer

Banking loans, which grew by 11.6% and 3.2% respectively

• Corporate and Commercial Banking loans affected by a few lumpy

repayments/maturities

• Exit book loans have decreased to RM188mil in 3QFY2011 from

RM276mil in 3QFY2010

Financial Performance

Loans growth driven by SME

(RM ’mil)FYE

31/3/10

Consumer 12,800

SME 4,235

Corporate & Commercial 4,123

Exit Books 252

Total 21,410

FYE 2010 FYE 2011% YoY

3Q 3Q

12,621 13,026 3.2%

4,059 4,528 11.6%

4,016 3,920 -2.4%

276 188 -31.9%

20,972 21,662 3.3%

-1%

1%

3%

5%

10,500

11,500

12,500

13,500

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

RM 'mil - lhs

% QoQ - rhs

Consumer

SME

Corporate & Commercial

6

Financial Performance

Overhead expenses continue to be tightly managed

9MFY20119MFY2010

59.0%27.3%

2.7% 11.0%

62.1%

27.3%

2.9%7.7%

Personnel Costs Establishment Costs Marketing Expenses Admin & General Expenses

• We continue to manage our cost productivity without stifling out our overall business

productivity

• Personnel costs, which account to 62.1% of total costs, is the main operating cost as the

Group continues to invest in its people

• Establishment costs remain stable in tandem with the Group’s business strategy

RM415.9mil RM398.6mil

7

70

75

80

85

90

95

3.4

3.8

4.2

4.6

3Q10 4Q10 1Q11 2Q11 3Q11

Gross Impaired Loans Ratio - Old GP3 - lhs

Gross Impaired Loans Ratio - FRS 139 - lhs

Loan Loss Coverage - rhs

Further improved asset quality

% %

91.0%

85.6%

94.4%

83.2%

3.9%

3.8% 3.8% 3.8%

0.1%

• The Group adopted FRS 139 w.e.f.

1 April 2010

• Asset quality remains stable at

3.7% in 3QFY2011 with focus to

improve on collection system and

credit risk

• Loan loss coverage reduced from

83.2% to 83.1% in 3QFY2011

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

8

-10%

0%

10%

20%

30%

1.4%

1.8%

2.2%

2.6%

3.0%

3Q09 1Q10 3Q10 1Q11 3Q11

Cost of Funds - lhs Deposit Growth - rhs

70%

75%

80%

85%

90%

95%

3Q09 1Q10 3Q10 1Q11 3Q11

AFG Industry

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

3Q10 4Q10 1Q11 2Q11 3Q11

CASA Fixed Deposits Money Market Deposits Others

Financial Performance

AFG’s L/D ratio below industry average

L/D ratio superior to industry average

Cost of funds stable despite stronger deposit growth

82.8%

76.6%

90.3% 90.6%

73.5%

78.2% 77.9%

81.4%

2.6%

2.1% 1.7%

2.1%

CASA at top quartile of industry

79.2%

81.2%

1.9%

92.6%

82.4%

84.1%

88.9%

73.7%

78.9%

77.2%

81.4%

2.4%

2.0%

1.7%

2.1%

RM ’mil

40.9% 41.5% 41.5% 35.4% 34.9%

51.8% 51.7% 50.8% 53.8% 51.0%

4.7% 4.9% 5.9%

9.9% 9.7%

2.6% 1.9% 1.8%

0.9%4.4%

11.9%

19.8%

11.9%

0.0%

2.1%-7.6%

-4.0%

15.8%19.0%

9

3QFY10 3QFY11 % YoY

2,429.1 2,603.2 7.2%

3,328.7 3,520.6 5.8%

15.2 15.9 +0.7

11.0 11.8 +0.8

Financial Performance

Capital position remains strong

(RM ’mil) FY 2009 FY 2010

Tier I Capital 2,234.1 2,429.2

Total Capital Base 3,167.3 3,339.3

RWCR (%) 14.7 15.4

Core Capital Ratio (%) 10.3 11.1

• AFG’s core capital and risk-

weighted capital ratio (RWCR)

continued to improve to 11.8%

and 15.9% in 3QFY2011

compared to 11.0% and 15.2%

in 3QFY2010

• Total capital base of RM3.5bil,

increased by 5.8% YoY. Tier 1

capital represents 74% of total

capital, improved further to

RM2.6bil

• Healthy capital position and is

in line with BASEL III

requirements

10

FY 2009 FY 2010

Profitability• Net Interest Margin

• Cost of Funds

2.8

2.7

2.7

1.9

Business

Performance

• NII / Total Income

• Cost Income Ratio

• LD Ratio

• RWCR

22.4

53.0

76.6

14.7

24.0

52.1

90.6

15.4

Asset

Quality

• Gross Impaired Loans

• LLC

4.5

99.7

3.8

94.4

Shareholder

Value

• ROAA

• ROAE

• P / BV

0.8

8.6

0.9x

0.9

10.5

1.5x

Financial Performance

Key financial ratios

FY 2010 FY 2011

3Q 4Q 1Q 2Q 3Q *

2.6

1.9

2.8

1.7

2.8

1.7

2.8

2.1

2.5

2.1

24.5

52.7

88.9

15.2

24.0

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

3.9

91.0

3.8

94.4

3.8

85.6

3.8

83.2

3.7

83.1

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

1.5x

* Note: comparison made between FY2010 against 3QFY2011 11

• Key Messages

AGENDA

• 9MFY2011 Financial Performance

• Questions & Answers

12

Organisational Chart

Key roles being filled

Raymond Leung

Group Chief Operating Officer

Eric Lee

Group Chief Financial Officer

Low Choon Seong

Group Chief Credit Officer

Timothy Daniels

Corporate Strategy &

Corporate Communications

Group Human Resource

Michelle Chow

Group Legal

S. Gerard Anand A/L S.

Sinnappah

Leong Sow Yoke

Group Internal Audit

Pang Choon Han

Group Chief Risk Officer

Group Compliance

Teow Leong Wah

Ronnie Lim

Consumer Banking

Choo Joon Keong

Corporate & Commercial

Banking

Steve Miller

SME Banking

Nik Azhar Bin Abdullah

Investment Management

Tuan Haji Yahya Ibrahim

Islamic Banking

New CEO Identified

Investment Banking

Yeo Chin Tiong

Financial Markets

13

Building sustainable growth

Key Focus

NEM

&

ETP

Talent

Management

Framework

Shared

Expertise

CONSUMER

• Mortgage Loans

• Credit Cards

• Personal Loans

• Deposits

Very

Competitive

SME

CORPORATE &

COMMERCIAL

• Transaction Banking

• Treasury Sales

• Cash Management

• Syndicated Deals

Existing

Opportunities

• Wealth Management

• Bancassurance

• Asset Management

• Treasury Sales

• Stockbroking

New

Growth

High

Household

Debts

Driving Fee Income and Cross-Selling

14

Gross

Impaired

Loans

CIR

ROE

Dividend

Policy

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

… to be in line with industry average

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

improvements, driven by:

• targeted revenue growth

• productivity focus

… achieve industry average (14 - 16%) through Y-o-Y

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

15

Key Messages

Bank is strong and performing well

Delivering value to our shareholders

We are gaining momentum

• The Group has performed well in 3QFY2011 despite a competitive operating environment

• We are executing based on transformation and investments made, and will leverage on and

aggressively expand our prudent suite

• Growth to be in-line with the economic cycle supported by sustainable loans growth and higher

customer acquisition capacity to build further on fee income growth

• We remain well-capitalised

• We pay good dividends

• All our business decisions will be evaluated based on a long-term perspective

• We are ensuring growth is value creating and give best customers’ experience16

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

17

Income Statement (RM ’mil) 9MFY11 9MFY10 % YoY

Interest Income 901.5 803.6 12.2%

Interest Expense (390.2) (373.5) 4.5%

Net Interest Income 511.3 430.1 18.9%

Islamic Banking Income 173.4 174.7 -0.8%

Non-Interest Income 173.5 182.2 -4.7%

Net Income 858.2 787.0 9.1%

Operating Expenses (398.6) (416.0) -4.2%

Operating Profit 459.6 371.0 23.9%

Write Back/Allowance for NBD (24.0) 51.4 -146.7%

Allowance for Impairment 3.2 (120.9) -102.6%

Loan Impairment Allowances (20.8) (69.5) -70.0%

Profit before Taxation &

Zakat438.8 301.5 45.5%

Taxation & Zakat (114.5) (77.3) 48.2%

Profit after Taxation & Zakat 324.3 224.2 44.6%

3QFY11 2QFY11 % QoQ 3QFY10 % YoY

313.2 311.6 0.5% 265.2 18.1%

(145.2) (137.4) 5.7% (117.5) 23.6%

168.0 174.2 -3.5% 147.7 13.7%

59.0 58.7 0.5% 65.7 -10.2%

58.0 64.0 -9.4% 64.8 -10.5%

285.0 296.9 -4.0% 278.2 2.4%

(137.4) (136.4) 0.7% (146.8) -6.4%

147.6 160.5 -8.0% 131.4 12.3%

(0.7) (22.8) -96.9% (2.4) -70.8%

3.9 (0.1) -4,000.0% 2.0 95.0%

3.2 (22.9) -114.0% (0.4) -900.0%

150.8 137.6 9.6% 131.0 15.1%

(39.5) (35.2) 12.2% (31.0) 27.4%

111.3 102.4 8.7% 100.0 11.3%

Financial Performance

18

Economic PurposeLoan

(RM ’mil)% YoY

Gross

Impaired

Loans

(RM ’mil)

% Share

Gross

Impaired

Loans Rate

(%)

Purchase of Securities 342.1 -3.0% 12.9 1.6% 3.8%

Purchase of Transport Vehicles 746.7 -22.8% 10.2 1.3% 1.4%

Purchase of Landed Property 11,411.7 4.0% 313.0 39.0% 2.7%

Purchase of Fixed Assets 97.4 63.1% 0.2 0.0% 0.2%

Personal Use 2,141.9 14.4% 37.0 4.6% 1.7%

Credit Cards 679.8 -2.5% 14.5 1.8% 2.1%

Construction 222.2 -15.5% 13.5 1.7% 6.1%

Working Capital 5,413.8 4.0% 351.0 43.8% 6.5%

Others 606.7 3.1% 49.6 6.2% 8.2%

Total 21,662.3 3.3% 801.9 100.0% 3.7%

Financial Performance

19

Economic Purpose % Share

Gross Impaired Loans Rate (%)

*

3Q10 4Q10 1Q11 2Q11 3Q11

Purchase of Securities 1.6% 4.6% 4.7% 5.4% 5.0% 3.8%

Purchase of Transport

Vehicles1.3% 1.7% 1.5% 1.6% 1.3% 1.4%

Purchase of Landed Property 39.0% 3.3% 3.0% 2.8% 2.8% 2.7%

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

Personal Use 4.6% 2.5% 2.0% 2.0% 1.9% 1.7%

Credit Cards 1.8% 2.3% 2.1% 2.2% 2.2% 2.1%

Construction 1.7% 7.5% 5.1% 8.9% 6.2% 6.1%

Working Capital 43.8% 5.9% 5.8% 6.3% 6.6% 6.5%

Others 6.2% 7.5% 9.8% 8.0% 7.9% 8.2%

Total 100.0% 3.9% 3.8% 3.8% 3.8% 3.7%

Financial Performance

* Note: comparison made between FY2010 against 3QFY2011 20

Breakdown of loans by LOB

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

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

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

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

Exit Books 1.5% 1.4% 1.3% 1.2% 1.1% 1.0% 0.9%

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

Financial Performance

21

0

30

60

90

120

150

180

210

9M10 9M11

-5

5

15

25

35

45

55

65

75

3Q10 3Q11

Non-interest income - driven by challenging market conditions

17,45318,811

4,5514,701

9,812

RM ’000

5,005 4,943

24,038 20,326

5,069

2,866

-2,748-1,138

64,790

57,933

9,034

% YoY

+7.8%

+3.3%

-7.9%

-1.2%

-15.4%

-43.5%

-141.5%

Commission & Fees

(32.5%)

Wealth Management

(8.1%)

Credit Cards

(15.6%)

Brokerage Fees

(8.5%)

Investment Sales Gain

(35.1%)

Other Non-Operating

(4.9%)

Forex

(-4.7%)

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

Financial Performance

61,941

13,750

12,393

44,181

10,071

5,496

173,521

25,689

RM ’000

52,668

12,245

20,853

42,488

17,141

7,010

182,174

29,769

22

CASA ratio vs. industry

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

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

AFG - lhs Industry - rhs

24.9%

33.0%

34.6%

25.3%

40.9%41.5% 41.5%

35.4% 34.9%35.5%

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

38.1%

Financial Performance

23

AFG’s deposit profile

By Type of Deposits % Share

% YoY

3Q10 4Q10 1Q11 2Q11 3Q11

CASA 34.9% 17.7% 16.1% 14.9% 7.8% 1.5%

- Demand Deposits 29.2% 22.3% 19.2% 18.6% 10.2% 2.4%

- Savings Deposits 5.7% -0.5% 3.1% -0.6% -2.7% -2.6%

Fixed/Investment Deposits 51.0% -3.9% -13.3% -12.8% 8.8% 17.2%

Money Market Deposits 9.7% 1.0% -43.7% -11.0% 376.9% 149.4%

Negotiable Instruments of Deposits 4.2% -46.5% -58.2% -47.1% -55.5% 98.7%

Structured Deposits 0.2% - 1,030.8% 32.1% -33.9% 34.9%

Total Deposits 100.0% 2.1% -7.6% -4.0% 15.8% 19.0%

Financial Performance

24

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

25