#1Maybank Humanising Financial Services Investor Handout Invest Malaysia 2019 Shangri-La Hotel, Kuala Lumpur 19-20 March 2019 www.maybank.com#2Table of Contents Maybank's Strategic Presence in ASEAN FY2018 Financial Performance Prospects & Outlook Appendix: 1. Financial Performance 2. Community Financial Services 3. Global Banking 4. Maybank Singapore 5. Maybank Indonesia 6. Other segments 2 10 26 29 42 45 49 52 55#3Leading Regional Financial Services Group 2 Myanmar: 1 branch ⚫ Cambodia: TH 21 branches Laos: 2 branches Vietnam: LAOS ⚫ Thailand MKE: 43 branches CAMBODIA ⚫ MKE: 6 branches Malaysia: 355 branches Maybank IB: 7 branch ⚫ Labuan: M 1 branch SINGAPORE Singapore:ONESA 20 branches ⚫ MKE: 2 branches 2 branches • An Binh Bank: 165 branches ⚫ Brunei: 2 branches Indonesia Philippines: 74 branches MKE: 385 branches MKE: 12 branches Wide Branch Network Present in 18 countries 2,601 retail branches globally 3 branches 1,101 retail and brokerage branches in 10 ASEAN countries In five International Financial Centres Leadership Position No. 1 bank in Malaysia: Conventional and Islamic Top 4 bank in ASEAN by Total Assets, Loans and Deposits First Malaysian bank to break into the Top 500 Global Brands list by Brand Finance 'Bank of the Year in Malaysia' in 2018 by The Banker 'Brand of the Year' for 5 consecutive years by World Branding Awards 'Best Digital Bank (Malaysia)' in 2018 by Global Finance 1st company to breach RM100 billion market capitalisation on Bursa Malaysia Strong Shareholders and Credit Ratings 48%* owned by PNB and its funds and 12%* by EPF Foreign shareholding 19.4%** Strong credit rating, on par with Malaysia sovereign ■Moody's: A3 ■Fitch : A- S&P : A- Note: *As at 31st December 2018 **As at 8th March 2019 Maybank#4MYANMAR LAOS CAMBODIA VIETNAM BRUNEI PHILIPPINES THAILAND INDONESIA SINGAPORE MALAYSIA Maybank's Presence in All Ten ASEAN Countries BANK MARKET TOTAL CAP @ ASSETS @ Maybank 1 BCA 48.0 57.2 2 DBS 47.0 404.1 3 OCBC 34.8 343.0 * 4 UOB 30.8 284.7 5 Maybank 25.9 195.0 ● ● * 6 Public Bank 23.9 101.5 7 Bank Mandiri 23.5 83.3 8 SCB 14.6 98.6 9 CIMB 13.8 129.2 * 10 Bangkok Bank 12.6 96.4 11 BDO 10.8 57.7 Universal Banking Retail & Commercial Banking Investment Banking Affiliate/Representative Office * Wholesale Banking license only 28 Feb 19 31 Dec 18 (USD Bil) (USD Bil) Source: Bloomberg (for market cap & total assets data) 3#54 Top 4 Financial Services Provider in ASEAN by Total Assets, Loans & Deposits Total Assets (USD bil): 31 Dec 2018 DBS 404 OCBC 343 UOB 285 Maybank 195 CIMB 129 Public Bank 102 Siam Commercial Bank 99 Kasikornbank Bangkok Bank Bank Rakyat Indonesia ៖ ៖ ៖ ៖ No.4 PATAMI (USD mil): 12 months ended 31 Dec 2018 DBS OCBC UOB 4,138 3,333 2,964 Bank Rakyat Indonesia 2,269 Maybank 2,010 BCA 1,811 Bank Mandiri 1,757 CIMB 1,390 Public Bank 1,386 1,243 Loans and Deposits (USD bil): 31 Dec 2018 257 DBS OCBC 289 189 217 UOB 192 215 Maybank 1254 No.4 CIMB 840 Public Bank 782 Bangkok Bank 162 Siam Commercial Bank Bank Rakyat Indonesia Kasikornbank Loans ■Deposits Market Capitalisation (USD bil): 28 Feb 2019 Bank Central Asia 48.0 DBS OCBC 47.0 34.8 Bank Rakyat Indonesia 33.5 No.5 UOB 30.8 Maybank 25.9 Public Bank 23.9 Bank Mandiri 23.5 Kasikornbank Siam Commercial 15.1 14.6 Siam Commercial Bank Source: Bloomberg Note: Except for Market Capitalisation, Maybank's figures are computed based on internal exchange rate assumptions. - The deposit balances for Maybank and CIMB are inclusive of Investment Accounts. No.6 Maybank#6LO 5 Description Maybank Group's Key Business Pillars % of FY18 Business Pillars PBT 47.5% Group Community Financial Services Group Global Banking Group Insurance and Takaful Islamic Finance leverage model utilised to distribute Islamic products across the group, while international business operations are embedded within each business pillar. 45.7% 6.8% • Group CFS serves the Consumer, Retail SME and Business Banking (commercial and SMEs) segments of the Group. • Together with the Private Wealth desks, Group CFS operates in 9 countries. 3 Centres of Excellence (CoEs) established to drive key regional businesses across our ASEAN markets - Group Wealth Management, Regional Retail SME and Regional Cards. • • • • Group Global Banking covers Investment Banking (through Maybank Kim Eng), Global Markets, Corporate Banking, Transaction Banking and Asset Management. • Our geographical presence includes all 10 ASEAN countries, China as well as key financial centres of New York, London & Hong Kong. • Maybank Kim Eng (MKE) has been in ASEAN for over 40 years and is ASEAN's largest brokerage franchise which operates in 10 countries. Group Insurance and Takaful complements Maybank's growth internationally while leveraging on Etiqa's expertise in takaful and bancassurance. • Features a strong agency force comprising 8,100 agents, 46 branches and 17 offices, and over 490 bancassurance network (via Maybank branches and third-party banks, cooperatives and brokers) through our presence in Malaysia, Singapore, the Philippines and Indonesia. No. 1 digital insurance player in Malaysia. Maybank#7Maybank2020: Key Strategic Objectives' Achievements in FY2018 10 6 1 2 3 The Top ASEAN Community Bank Group Wealth Management grew 11% YoY to RM24.6 billion in investment AUM as our customer base expanded 18% to over 780,000 The local incorporation of Maybank Singapore Limited was completed with the transfer of its Singapore Community Financial Services business on 5 November 2018 The Leading ASEAN Wholesale Bank Linking Asia 1st in Malaysia's Equity & Rights Offerings and Malaysian Ringgit Islamic Sukuk rankings Completed the acquisition of Amanah Mutual Berhad and Singapore Unit Trusts Limited to expand our investment management solutions The Leading ASEAN Insurer In Malaysia, continued to be the No.1 General Insurer/General Takaful provider and Bancassurance player as well as top online insurer with over 60% market share In Singapore, recognised as the 'Most Innovative Finance Firm' and top digital insurer 4 The Global Leader In Islamic Finance Largest Islamic Bank by asset size in Malaysia for 10 consecutive years Recognised as the World's Best Islamic Financial Institution 2018 by Global Finance Magazine 5 The Digital Bank of Choice • Received numerous recognitions due to our innovative digital offerings, including World's Best Digital Bank (Malaysia) 2018 by Global Finance First bank in Malaysia to introduce a cashless payment solution, QRPay, with over 200,000 merchants on-boarded Maybank#8Becoming The Digital Bank of Choice (1/2) Digital Achievements in 2018-2019 Maybank 回时回 QRPAY Launched QRPay A cashless payment solution using QR codes, the first by a bank in Malaysia maybank2u.com Reimagined Maybank2u A complete change of user interface based on feedback from customers, offering a personalised and simplified online banking experience Maybank Grab Grab Partnership Formed a strategic partnership with Grab to drive the acceptance and usage of cashless payment etiga Implemented E-CLEVA A real-time video assisted claims care system for motor and fire insurance, allowing claims to be processed via video calls within 15 minutes MAE Launched MAE A lifestyle-themed e-wallet, available to anyone above 12 year of age without the need to have a pre- existing Maybank account 7 • Key Focus Areas for 2018 Improving customer experience The new Maybank2u website was developed to provide customers with a single view of their financial holdings with the bank. Standardising the user experience and interface of the Maybank Mobile App across the region. • Build the right data architecture and infrastructure Initiated creation of a universal data lake for the Group to effectively house and mine all data in a secure manner. Established an offshore development centre to access digital talents with the necessary mathematical and computing skills for data analytics. • Outlook & Priorities for 2019 Improving in-house data management and utilisation abilities The governance of data mining activities to ensure that cyber defence capabilities remain robust Prioritise investments in infrastructure and monitoring tools on the back of heightened concerns over cyber crimes in the financial services industry and given added focus on these areas by regulators Continue to explore cashless payment modes that are safe, secure and convenient for customers. Maybank#9Becoming The Digital Bank of Choice (2/2) FutureReady Digital Upskilling Programme We introduced the first phase of our FutureReady Digital Upskilling Programme in January 2018 to increase employees' digital literacy and support the Group's aspiration to be The Digital Bank of Choice The Programme's comprehensive curricular is anchored on six key skill areas: 8 • Digital Awareness • Future Communication • Human Centred Design . Agile Data Driven Decision-Making • Risk & Governance in the Digital World Objectives & Approaches of Upskilling FutureReady Knowledge & Skills FutureReady Mindset Upskilling on six digital skill areas via: Digital Immersion Programme • E-Learning . Classroom programmes . Action Learning Projects Strategy, Artificial Intelligence and Machine Learning FutureReady Labs: Leadership Role Modelling Enabling Culture Practice & Habit We are the first bank in Malaysia to embark on a massive Digital Upskilling Programme Maybank's Group leadership bench (Board of Directors and EXCO members included) invested over 500 man-days in intensive classroom learning sessions. Learned new skills such as coding and algorithms programming, and how these skills can be developed in-house. Group Data Science Centre of Excellence Programme To enable employees to develop their data analytics skills and data science expert areas so they may add value to their respective departments and make data-driven decision by building: a. Systemic and conceptual thinking b. Innovative and practical problem-solving skills c. Strong business acumen and the ability to use analytical tools and techniques that can create value for the business Maybank#10Table of Contents Maybank's Strategic Presence in ASEAN FY2018 Financial Performance Prospects & Outlook Appendix: 1. Financial Performance 2. Community Financial Services 3. Global Banking 4. Maybank Singapore 5. Maybank Indonesia 6. Other segments 2 10 26 29 42 45 49 52 55#11Maybank Group FY2018 Overview New record net profit of RM8.11 billion on the back of strong net operating income of RM23.63 billion 10 1 2 Record Net Profit of RM8.11 billion New net operating income high of RM 23.63 billion supported by net fund based income growth of 3.1% YoY, as Group loans expanded 4.8% Overhead expenses lower by 1.0% YoY, resulting in PPOP growth of 4.2% YoY CIR of 47.4% within Group guidance of -48%, with positive JAWS position of 2.7% YoY Reduction in net impairment losses of 20.5% YoY Group ROE of 11.4%, exceeds Group guidance of -11% Asset Quality Indicators Lower QoQ Group GIL ratio of 2.41% due to slower new impaired loan formation and an increase in write-offs Slower YoY impaired loan formation resulted in a lower annual net credit charge off rate of 32 bps Loan loss coverage ratio including regulatory reserve of 93.6% as at end Dec 2018 3 Healthy Liquidity and Capital Positions Robust liquidity risk indicators with Group LCR at 132.4%, Group LDR at 92.7%, Group LTF at 86.2% and Group LTFE at 76.1% Total capital and fully loaded CET1 capital ratios at 18.51%* and 14.51%* respectively as at 31 Dec 2018 Attractive dividend yield of 6.0%, with total dividend per share of 57 sen Note: *After proposed dividend and assumption of 85% reinvestment rate. Maybank#12P&L Summary: FY2018 Record high PPOP at RM12.42 billion, up 4.2% YoY More details on RM million S.31 Net fund based income * s.15/ 16/31 Net fee based income * S.29/ 30 Net operating income s.17/ 32 Overhead expenses FY2018 FY2017 YOY 4Q 3Q FY2018 FY2018 4Q QoQ YOY FY2017 17,135.9 16,627.7 3.1% 4,474.6 4,268.2 4.8% 4,161.3 7.5% 6,493.8 6,610.5 (1.8)% 1,826.3 1,425.6 28.1% 1,885.6 (3.1)% 23,629.6 23,238.1 1.7% 6,300.9 5,693.8 10.7% 6,046.9 4.2% (11,213.7) (11,326.8) (1.0) % (3,068.4) (2,698.8) 13.7% (2,913.3) 5.3% s.30 Pre-provisioning operating profit (PPOP)1 12,416.0 11,911.3 4.2% 3,232.5 2,995.0 7.9% 3,133.6 3.2% Net impairment losses Operating profit s.29 Profit before taxation and zakat (PBT) 2 Net Profit (1,612.9) (2,027.8) (20.5) %: (162.3) (387.2) (58.1)%! (239.7) (32.3)%) 10,803.1 9,883.5 9.3% | 3,070.1 2,607.8 | 17.7% | 2,893.9 10,901.3 10,098.1 8.0% 3,095.6 2,639.5 17.3% i 2,926.1 8,113.3 7,520.5 7.9% 2,326.4 1,956.9 18.9% 2,132.1 I 6.1% 5.8% 9.1% EPS Basic (sen) 74.2 72.0 3.0% 21.1 17.9 17.5% 19.9 5.6% Note: * From consolidated Group numbers, Insurance and Takaful accounts for 6.6% of net fund based income and 7.0% of net fee-based income 1 Pre-provisioning operating profit (PPOP) is equivalent to operating profit before impairment losses 2 Net Profit is equivalent to profit attributable to equity holders of the Bank 11 Maybank#13Net Fund Based Income: FY2018 (1/3) Loans growth across home markets and segments supported by selective deposit growth Group Gross Loans (YoY) +4.8% (Reported) +5.0% (Normalised) Malaysia Singapore Indonesia Community Financial Services ■Global Banking +4.8% +4.5% +7.0% RM billion 493.8 517.3 Dec 17 Group Deposits (YoY) Dec 18 +5.6% (Reported) ▲ +5.9% (Normalised) RM billion 526.6 556.3 51.9 +63.6% 84.8 (2.5)% 278.3 271.5 +1.8% 196.4 199.9 Dec 17 CASA Ratio : 37.3% Dec 18 35.9% RM billion RM billion 285.5 299.2 81.9 +1.7% +6.0% 83.3 203.7 216.0 Dec 17 Dec 18 +8.2% 343.8 317.8 51.9 +63.6% 84.8 (8.8)% 138.1 125.8 +4.2% 127.8 133.1 Dec 17 Dec 18 40.2% 38.7% Note: Industry loans growth for Malaysia is 5.6%, Singapore is 5.3% and Indonesia is 11.8% • CASA ratio for Group and Malaysia includes investment accounts ⚫. Refer to pages 34-36 for detailed information on loans and deposits growth by country and products. 12 SGD billion SGD billion 40.6 42.4 18.5 +6.7% 19.7 22.1 +2.6% 22.6 Dec 17 Dec 18 CASA FD Others 0.0% 46.2 46.2 31.6 (0.2)% 31.5 14.6 +0.3% 14.7 Dec 17 Dec 18 31.6% 31.7% IDR trillion IDR trillion 129.2 32.5 138.3 +6.8% +7.2% 34.7 96.4 103.3 Dec 17 Dec 18 (3.7)% 121.5 117.0 73.1 (0.6)% 72.7 48.4 (8.4)% 44.3 Dec 17 Dec 18 39.8% 37.9% Maybank#14Net Fund Based Income: FY2018 (2/3) Marginal NIM compression of 3 bps due to Group's liquidity drive in 1H FY2018 13 5 Year Trend Net Interest Margin (%) QoQ Trend 2.39 2.31 2.31 2.27 2.30 4Q '17 2.36 2.30 2.27 2.38 1Q '18 2Q '18 3Q '18 4Q '18 2.33 FY2014 FY2015 FY2016 FY2017 FY2018 Maybank#1514 Net Fund Based Income: FY2018 (3/3) Continued credit RWA optimisation on the back of selective loan growth RM billion Group Gross Loans 459.4 +5.7% 485.7 +4.8% +1.7% 517.3 493.8 RM billion Total Group RWA 373.3 +1.7% (1.2)% 379.6 375.1 (0.1)% 374.6 +7.7% +6.6% +4.3% 37.2 34.9 40.1 41.8 ■Operational RWA 12.9 11.3 +14.4% +11.5% 14.4 Market RWA +21.8% 17.5 +0.7% (2.7)% 327.2 329.5 320.7 (1.7)% Credit RWA 315.3 Dec 15 Dec 16 Dec 17 Dec 18 Dec 15 Dec 16 Dec 17 Dec 18 Maybank#1615 RM million Net Fee Based Income: YoY Lower net fee based income as a result of weaker equity market RM million FY2017 FY2018 YOY Commission, service charges and fees 3,564 3,358 (5.8)% Investment & Trading Income 1,057 (318) (>100)% Unrealised gain/(losses) on financial assets and investments 143 (228) (>100)% Derivatives and financial liabilities 294 930 > 100% - Unrealised gain/(losses) on derivatives (125) (149) 18.6% - Realised gain/(losses) on derivatives 399 369 (7.4)% - Unrealised gain/(losses) on financial liabilities 21 710 > 100% Foreign Exchange Profit 559 842 50.7% Other Income 411 334 (18.6)% (1.8)% ▼(18.4)% +30.8% +13.0% (3.5)% 6,610 6,494 6,027 4,919 5,934 5,251 FY2017 FY2018 420 549 Total Other Operating Income Fee Income from Islamic Operations Net Earned Insurance Premiums (5,087) (4,908) Net Insurance Benefits & Claims Incurred, Net Fee & Commission Expenses, Change in Expense Liabilities and Life & Takaful Fund Tax Maybank#17RM million 16 Net Fee Based Income: QoQ Higher QoQ net fee based income due to lower contractual liabilities for insurance business 1Q RM million 2Q FY2018 FY2018 FY2018 FY2018 3Q 4Q QoQ Commission, service charges and fees 836 857 883 782 (11.4)% Investment & Trading Income 109 (24) (68) (335) > 100% Unrealised gain/(losses) on financial assets and investments (135) (385) 310 (18) (>100)% Derivatives and financial liabilities 216 229 87 398 ▲ >100% Foreign Exchange Profit 131 268 199 245 23.0% Other Income 144 64 37 89 > 100% +5.4% (14.3)% +28.1% (22.6)% +43.7% (19.8)% +26.8% (27.1)% +11.1% (1.4)% (4.0)% +5.0% 1,826 1,579 1,663 1,426 1,448 1,302 1,161 1,008 1,511 1,490 1,430 1,502 130 165 120 134 Total Other Operating Income Fee Income from Islamic Operations Net Earned Insurance Premiums ■1Q FY2018 ■ 2Q FY2018 ■ 3Q FY2018 4Q FY2018 (26.7)% +57.3% (38.3)% (1,364) (1,000) (1,573)(970) Net Insurance Benefits & Claims Incurred, Net Fee & Commission Expenses, Change in Expense Liabilities and Life & Takaful Fund Tax Maybank#18Overheads: FY2018 Group CIR of 47.4% within Group's guidance of -48%, on disciplined cost management RM million FY2018 FY2017 YOY 4Q FY2018 3Q FY2018 4Q QoQ YOY FY2017 Personnel Costs 6,449.5 6,128.0 5.2% 1,751.0 1,557.2 12.4% 1,556.5 12.5% Establishment Costs 1,813.1 1,980.9 (8.5)% 491.8 447.9 9.8% 559.4 (12.1)% Marketing Expenses 542.8 515.1 5.4% 143.2 134.3 6.6% 153.3 (6.6)% Administration & General Expenses 2,408.2 2,702.8 (10.9)% 682.4 559.4 22.0% 644.0 6.0% Total 11,213.7 11,326.8 ¦ (1.0)% (1.0) % 3,068.4 2,698.8 13.7% 2,913.3 5.3% Group Cost to Income 1 (%) 47.4% 48.6% (1.2)% 48.7% 47.3% 1.4% 48.1% 0.6% Group JAWS Position 2.7% (3.0)% (1.1)% Note: 1 Total cost excludes amortisation of intangible assets for Maybank Indonesia and Maybank Kim Eng 17 Maybank#19RM million Asset Quality Moderating Group GIL ratio of 2.41% QoQ due to better asset quality trends across home markets Allowances for losses on loans Group Gross Impaired Loans (GIL) Ratio Composition Loan loss coverage incl. Regulatory Reserve Dec Loan loss coverage GIL Ratio Components 2018 Sep 2018 Jun 2018 Mar 2018 Dec 2017 Allowances for losses on loans Non Performing Loans (NPL) 1.74% 1.90% 1.81% 1.87% 1.80% 99.6% 95.3% 93.6% 92.6% 93.6% Restructured & 0.12% 0.16% 0.22% 0.26% 0.27% Rescheduled (R&R) Performing Loans 87.9% 80.7% 79.6% 83.6% 71.5% Impaired Due to 0.55% 0.59% 0.61% 0.24% 0.27% Judgmental/ Obligatory Triggers (IPL) GIL Ratio 2.41% 2.65% 2.64% 2.37% 2.34% 509.3 582.1 418.5 199.8 81.3 GIL Ratio by Home Markets 1,959.1 1,591.3 4.21% 4.05% 4.13% 3.56% 3.72% 2.36% 2.34% 3.68% 3.70% 3.43% 2.22% 2.13% 1.91% 2.11% 1.88% FY2017 FY2018 Dec 2017 Mar 2018 Jun 2018 Sep 2018 Dec 2018 Malaysia Singapore - Indonesia 4Q 1Q 2Q за 4Q FY2017 FY2018 FY2018 FY2018 FY2018 Note: 1 Loan loss coverage for 1Q FY2018 onwards include ECL for loans at FVOCI as per Note A11(xii) of the Group's Financial Statements 18 Maybank#20Asset Quality by Line of Business Improved quarterly trends across business segments, while consumer lines relatively stable Consumer Business Note: Mortgage Auto Finance Credit Cards 2.59% 2.61% 2.63% 2.14% 2.30% 1.42% 1.36% 1.34% 1.75% 1.84% 1.83% 1.84% 1.86% 1.08% 0.98% 1.73% 1.79% 1.78% 1.53% 0.83% 0.90% 0.85% 0.92% 0.69% 0.67% 0.71% 1.41% 0.65% 0.61% 0.50% 0.56% Dec 17 T 0.51% 0.34% 0.46% 0.44% 0.44% 0.26% 0.24% 0.22% 0.34% 0.77% 0.83% 0.88% 0.85% 0.62% T T T Mar 18 Jun 18 Sep 18 Dec 18 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Retail SME Business Banking Corporate Banking 12.05% 12.30% 2.53% 2.86% 11.40% 10.83% 2.64% 2.27% 2.39% 9.77% 2.56% 8.45% 2.27% 7.84% 2.51% 2.41% 7.66% 7.75% 7.10% 2.01% 2.18% 2.19% 2.15% 2.09% 2.68% 2.60% 2.73% 2.70% 2.64% 1.95% 4.14% 4.23% 7.05% 6.90% 6.59% 2.57% 2.61% 2.58% 2.23% 2.08% 2.34% 2.26% 1.58% Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Malaysia Singapore Indonesia Dec 17 Mar 18 2.33% Jun 18 Sep 18 Dec 18 2.01% In Malaysia, industry GIL ratio for mortgage (purchase of residential property) is 1.1%, 0.9% for auto finance, and 0.9% for credit cards. • • In Singapore, industry GIL figure is only available for mortgage, which was 0.4% as at December 2018. • In Indonesia, Business Banking includes Commercial, SME and Micro loans. Maybank Indonesia's GIL ratios are mapped in accordance to its local regulatory reporting requirements and does not include R&R. 19 Maybank#21Exposure to Oil & Gas and Real Estate Sectors: 31 December 2018 Group Exposure to Direct & Indirect Oil & Gas Borrowers Real Estate Exposure to Non-Retail Malaysian Borrowers Maybank Group Malaysia Singapore Indonesia 3.57% Note: ◉ Others 2.04% 1.21% 0.11% 0.21% Funded-only exposure is 2.85% for Group Borrowers' Status: Others, 31.1% High Rise Residential, 30.6% RM 31.83 bil (or 10.64% of Malaysia Gross Loans) Normal Of GIL breakdown: Watchlist ■Special Mention Account ■GIL 58% • 87% is from midstream Segmental Exposure: Upstream 34% Midstream 45% 28% 1% 13% Downstream Note: ☐ Hotels, 5.9% Offices, 5.9% Landed Residential, 16.4% Malls, 10.1% Funded-only exposure is 9.89% Borrowers' Status: Normal Watchlist ■Special Mention Account GIL 83% 12% 1% 4% 21% Of Watchlist breakdown: Of GIL breakdown: • 37% is from high rise residential • . 27% is from combined exposure 58% is from combined exposure to malls and hotels to malls, hotels and offices • 7% is from high rise residential Note: " Midstream refers to the transportation (i.e. pipeline, barge, oil tanker or truck), storage and wholesale marketing services of crude or refined petroleum products. 20 20 Maybank#22Liquidity Management: 31 December 2018 Maintained strong Group liquidity risk indicators Note: Funding Breakdown Borrowings and Capital Instruments by Currency | Liquidity Risk Indicators I I I LDR LTF. LTFELCR 153.3% 133.1% 144.9% 130.5% 132.4% FI Deposits, 6% Equity, 11% HKD, 8% JPY, IDR, SGD, 10% I 10% 3% 94.4% 93.4% Borrowings, 4% Others, 92.5% 92.8% 92.7% RM721.3 billion Capital Instruments, RM, 2% 27% RM45.8 billion 9% 87.5% 85.8% 85.7% 86.3% 86.2% Customer Funding, 77% USD, 33% | 77.3% I 75.4% 76.0% 76.1% 75.3% By maturity: ≤ 1 Year 27% > 1 Year 73% • Customer Funding comprises Deposits from Customers & Investment Accounts of Customers. 21 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Note: 1) BNM's minimum LCR requirement for 2018 is 90% 2) LTF is gross loans divided by (deposits + borrowings + subdebt) while LTFE's denominator is (deposits + borrowings + subdebt + equity + capital securities) 3) LDR, LTF & LTFE excludes loans to banks and Fls Maybank#23ROE and Capital Positions: 31 December 2018 Total capital ratio of 18.51% and CET1 capital ratio of 14.51% (assuming 85% dividend reinvestment rate) Return on Equity 13.8% 12.2% 10.6% 10.9% 11.4% Regulatory Requirements 2018 Jan 2019 Onwards Minimum Common Equity 4.5% 4.5% Tier 1 Capital FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Common Equity Tier 1 (CET1) Ratio Minimum Tier 1 Capital 6.0% 6.0% 13.63% 14.19% 14.51% Minimum Total Capital 8.0% 8.0% 12.53% 11.39% Capital Conservation Buffer (Phase in) 1.875% 2.500% Other Capital Buffers FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Total Capital Ratio D-SIB Buffer To be determined 18.94% 18.80% 18.51% Countercyclical Capital 0% - 2.5% 17.49% buffer 15.88% FY 2014 FY 2015 FY 2016 Note: CET1 Ratios are based on 85% assumption rate for DRP 22 FY 2017 FY 2018 Maybank#24Dividend: FY2018 Single-tier final dividend of 32 sen consisting of 15 sen cash portion and 17 sen electable portion Dividend (sen), Payout Ratio (%) and Cash Component (%) Dividend Payout Ratio Cash Component 76.5% 74.9% 79.9% 78.5% 74.7% 71.9% 76.3% 78.1% 78.5% 77.3% 67% 53% 27% 20% 25% 27% 19% 13% 11% 12% 65.0 60.0 55.0 57.0 57.0 53.5 54.0 55.0 52.0 # 33 Final 32 85.7%* Interim 86.1%* 36.0 33 44 31 85.9%* 30 32+ 32 82.6%* 83.7%* 32 89.1%* 88.6%* 36 28 88.5%* 32 88.2%* 24 91.1%* 11 22.5 85.9%* 24 84.0%* 20 87.5%* 23 85.7%* 25 84.0%* 83.5%* FY08 FY09 FY10 FY11 FP11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Effective Γ Cash Dividend I 60.4% I I 61.4% 26.2% 17.2% Paid Out L I L 17.0% 19.0% | 22.0% I I | | I I 29.0% T I 23.2% | I 28.6% I 57.2% I 46.3% L L Note: * • + Actual Reinvestment Rate for Dividend Reinvestment Plan. The reinvestment rate for Final Dividend FY2018 is pending the execution of the 18th DRP. Effective payout for final dividend FY2018 is assuming a reinvestment rate of 85% The Final Dividend for FY2017 was paid fully in cash. # The Net Dividend is 28.5 sen of which 15 sen is single-tier dividend. Maybank adopted the single-tier dividend regime with effect from FY2012 23 Maybank#25Superior Dividend Yield Maybank continues to provide one of the best dividend yields among regional banks Annual Dividend Yield (%) 2014-2018 6.4 6.2 2014 2015 6.3 2016 6.0 5.6 2017 2018 Maybank CIMB Public Bank DBS OCBC UOB BCA Mandiri Bank Rakyat Bangkok Bank Kasikornbank Siam Comm Source: Bloomberg 24 Maybank#26Table of Contents Maybank's Strategic Presence in ASEAN FY2018 Financial Performance Prospects & Outlook Appendix: 1. Financial Performance 2. Community Financial Services 3. Global Banking 4. Maybank Singapore 5. Maybank Indonesia 6. Other segments 2 10 26 29 42 45 49 52 55#27Market Outlook FY2019 Industry outlook for our home markets Key Indicators Malaysia Industry Outlook • GDP: 4.9% (2019F) vs 4.7% (2018) • System loan: 5.1% (2019F) vs 5.6% (2018) • OPR: 3.25% (2019F) vs 3.25% (2018) • • USD/MYR average: 4.10 (2019F) vs 4.04 (2018) Inflation: 1.5% (2019F) vs 1.0% (2018) • Stable economic growth driven by growth in mining and agriculture sectors, private investments and positive net external demand • Potential deposit competition could place pressure on net interest margins (NIMS) • • • GDP: 1.8% (2019F) vs 3.2% (2018) System loan: 3.7% (2019F) vs 5.3% (2018) 3M SIBOR: 2.20% (2019F) vs 1.89% (2018) USD/SGD average: 1.35 (2019F) vs 1.36 (2018) Inflation: 1.2% (2019F) vs 0.4% (2018) • Economic growth could be affected by reduced pace of expansion in China and EU, and effects from the US-China trade war • Potentially slower loans growth arising from cautious business sentiment Rising rates could provide NIM upside Singapore • Indonesia • • GDP: 5.1% (2019F) vs 5.2% (2018) System loan: 10.5% (2019F) vs 11.8% (2018) • Reference Rate: 6.50% (2019F) vs 6.00% (2018) USD/IDR average: 14,301 (2019F) vs 14,267 (2018) Inflation average: 3.4% (2019F) vs 3.2% (2018) • Economic growth to be supported by consumption boosted by a minimum wage increase and stable inflation rate • Potentially lower domestic and foreign direct investments due to parliamentary and presidential election in 1H 2019 26 46 Maybank#28Maybank Performance Outlook Group guidance for FY2019 1 Income Growth Expand revenue streams through cross business collaborations Measured balance sheet expansion in line with economic growth of home markets and Group's conservative risk posture ➤ Group ROE guidance of -11.0% 2 Better Productivity Driving positive JAWS across business segments Managed Group cost growth with CIR -47% ➤ Continued emphasis on employee up-skilling for digital economy 3 Asset Quality Management Disciplined asset quality management and maintain ongoing recovery efforts 4 Liquidity and Capital Management Maintain stable liquidity risk indicators ahead of NSFR adoption in 2020 Maintain robust capital positions, while rewarding shareholders with strong effective cash dividend payout 5 Digitalisation 27 Conservative investment spend focused on improving customer experience with rollout of product/services ➤ Enhancing data driven analytics Maybank#29Table of Contents Maybank's Strategic Presence in ASEAN FY2018 Financial Performance Prospects & Outlook Appendix: 1. Financial Performance 2. Community Financial Services 3. Global Banking 4. Maybank Singapore 5. Maybank Indonesia 6. Other segments 2 10 26 29 42 45 49 52 55#30International & Malaysia Portfolio Mix FY2018 FY2018 - Net Operating Income (Jan 18 Dec 18) Profit Before Tax Overseas: 37.5% 7.4% 12.1% 18.0% RM23.63 billion 62.5% FY2017 (Jan 17 Dec 17) 7.9% 14.4% RM23.24 billion 59.5% 18.2% Overseas: 40.5% Overseas: 29.9% 10.8% 6.9% 12.2% RM10.90 billion 70.1% ■Malaysia ■Singapore ■Indonesia Overseas: 28.7% Note: * Including Islamic loans sold to Cagamas and excludes unwinding of interest 29 Gross loans* Overseas: 41.7% 8.5% 7.6% RM517.3 billion 25.6% 58.3% Others 10.7% 8.6% 9.4% RM10.10 billion 71.3% Overseas: 41.5% 8.0% 7.8% RM493.8 billion 25.7% 58.5% Maybank#31Note: Segmental Performance of Businesses: FY2018 (1/2) Net Operating Income +1.7% 23,238 23,630 Group Global Banking FY2017: 9,242 +1.0% FY2018: 9,336 +4.7% (8.5)% (61.3)% ■FY2017 ■FY2018 +0.3% (15.2)% 13,497 13,542 RM million 7,658 8,016 1,337 1,224 1,861 1,578 247 96 Total Group Community Financial Services Group Corporate PPOP +4.2% 11,911 12,416 Banking & Global Markets Group Investment Banking Group Asset Management Group Insurance & Takaful ■FY2017 Group Global Banking +3.4% ■FY2018 FY2017: 5,927 FY2018: 6,130 Л +0.8% +5.6% +7.2% (>100)% (26.6)% RM million 6,275 6,326 5,653 5,967 193 207 1,071 786 80 (45) Total Group Community Financial Services Group Corporate Banking & Global Markets Group Investment Banking Group Asset Management Group Insurance & Takaful Net income & PPOP for group includes expenditures of "Head Office & Others" of RM1.36 billion for FY2017 and RM826.2 million for FY2018. 30 Maybank#32Segmental Performance of Businesses: FY2018 (2/2) Net Fund Based Income +3.1% RM million 16,628 17,136 Total Net Fee Based Income (1.8)% 6,610 6,494 Group Global Banking FY2017: 5,359 +4.6% FY2018: 5,606 +4.4% +3.3% (>100)% ■FY2017 FY2018 +0.3% +6.3% 10,292 10,320 5,058 5,282 302 312 (1) 12 1,094 1,163 Group Community Financial Services Group Corporate Banking & Global Markets Group Investment Banking Group Asset Management Group Insurance & Takaful Group Global Banking (4.0)% ■FY2017 ■FY2018 FY2017: 3,883 FY2018: 3,729 +0.5% +5.2% (11.9)% (66.3)% (45.9)% RM million 3,205 3,222 2,600 2,734 1,035 912 767 248 415 84 Note: Total Group Community Financial Services Net fund based income includes "Head Office & Others" expenditures of RM116.9 million for FY2017 and income of RM46.2 million for FY2018. Net fee based income includes expenditures of "Head Office & Others" of RM1.24 billion for FY2017 and RM872.4 million for FY2018. 31 Group Corporate Banking & Global Markets Group Investment Banking Group Asset Management Group Insurance & Takaful Maybank#33P&L Summary: QoQ RM million 1Q 2Q FY2018 FY2018 FY2018 3Q 4Q QoQ FY2018 4Q FY2017 YOY Net fund based income 4,155.2 4,268.2 Net fee based income Net operating income Overhead expenses Personnel Costs 4,237.9 1,578.6 1,663.2 1,425.6 1,826.3 28.1% 1,885.6 (3.1)% 5,816.5 5.818.4 5,693.8 6,300.9 6,046.9 4.2% (2,767.5) (2,678.8) (2,698.8) (3,068.4) (2,913.3) 5.3% 1,590.6 1,550.7 1,557.2 4,474.6 4.8% 4,161.3 7.5% 10.7% 13.7% 1,751.0 12.4% 1,556.5 12.5% Establishment Costs 457.2 416.1 447.9 491.8 9.8% 559.4 (12.1)% Marketing Expenses 142.8 122.5 134.3 143.2 6.6% 153.3 (6.6)% Administration & General Expenses 576.8 589.6 559.4 682.4 22.0% 644.0 6.0% Pre-provisioning operating profit (PPOP)1 3,048.9 3,139.6 2,995.0 3,232.5 7.9% 3,133.6 3.2% Net impairment losses (500.8) Operating profit 2,548.1 (562.5) (387.2) 2,577.1 2,607.8 (162.3) (58.1)% (239.7) (32.3)% 3,070.1 17.7% 2,893.9 6.1% Profit before taxation and zakat (PBT) Net Profit 2 2,556.7 2,609.6 2,639.5 1,871.0 1,959.0 1,956.9 3,095.6 17.3% 2,926.1 2,326.4 18.9% 2,132.1 5.8% 9.1% EPS - Basic (sen) 17.3 17.9 17.9 21.1 17.5% 19.9 5.6% Note: 1 Pre-provisioning operating profit (PPOP) is equivalent to operating profit before impairment losses 2 Net Profit is equivalent to profit attributable to equity holders of the Bank 32 Maybank#34Income Statement for Insurance and Takaful Business RM million Net interest income FY2018 FY2017 YOY Net earned premiums Other operating income Total operating income 1Q FY2018 1,163.0 1,086.9 7.0% 278.2 5,933.6 5,250.9 13.0% 1,511.4 1,490.0 1,430.0 1,502.2 5.0% (367.0) 806.6 (>100)% (62.1) (387.5) 333.1 (250.5) (>100)% 6,729.6 7,144.4 (5.8) % 1,727.5 1,383.4 2,057.9 1,560.8 (24.2)% 2Q FY2018 280.8 3Q FY2018 4Q FY2018 QoQ 294.8 309.2 4.9% Net insurance benefits & claims incurred, net fee & commission expenses, change in expense liabilities and life & takaful fund tax (5,165.7) (5,274.9) (2.1)% (1,428.3) (1,058.2) (1,648.5) (1,030.8) i (37.5)% Net operating income Overhead expenses PPOP Net impairment losses 1,563.9 1,869.5 (775.7) (807.9) 788.3 1,061.6 9.8 Operating profit (16.3)%; 299.2 325.2 (4.0)% (195.3) (200.4) (25.7)% 104.0 124.8 (62.4) (>100)% i 4.6 798.1 999.2 ¦ (20.1)%¦ 108.6 128.2 409.4 530.0 i 29.5% (210.3) (169.7) (19.3)% 3.4 199.2 0.6 360.3 i 80.9% 1.1 71.9% 199.8 361.4 80.9% Reconciliation of net insurance benefits & claims incurred, net fee & commission expenses, change in expense liabilities and life & takaful fund tax RM million FY2018 FY2017 YOY 1Q FY2018 2Q FY2018 30 4Q FY2018 FY2018 QoQ (5,165.7) (5,274.9) 258.1 187.5 Net insurance benefits & claims incurred, net fee & commission expenses, change in expense liabilities and life & takaful fund tax Less: intercompany elimination Total net insurance benefits & claims incurred, net fee & commission expenses, change in expense liabilities and life & takaful fund tax 33 (4,907.5) (5,087.3) (3.5)% (1,364.4) (999.7) (1,573.0) (970.3) (38.3)% Maybank (2.1)% 37.6% 63.8 58.4 (1,428.3) (1,058.2) (1,648.5) (1,030.8) (37.5)% 60.5 (19.9)% 75.4#35Group Gross Loans Growth: 31 December 2018 % of 31 Mar 30 Jun 30 Sep 31 Dec 31 Dec QoQ YOY Portfolio 2018 2018 2018 2018 2017 Group Gross Loans 493.4 502.4 507.7 517.3 ▲ 1.9% 493.8 4.8% Malaysia (RM billion) 58% 288.9 290.5 292.5 299.2 2.3% 285.5 4.8% Community Financial Services (reported) 72% 205.7 209.0 212.4 216.0 1.7% 203.7 6.0% Community Financial Services (rebased)1 72% 205.7 209.0 212.4 216.0 1.7% 203.2 ! 6.3% Global Banking (reported) 28% 83.2 81.6 80.1 83.3 4.0% 81.9 1.7% Global Banking (rebased)1 28% 83.2 81.6 80.1 83.3 4.0% 82.4 1.2% International (RM billion) 41% 197.2 204.3 208.0 211.8 1.8% 200.9 5.4% + Singapore (SGD billion) 61% 41.2 41.9 41.9 42.4 1.2% 40.6 4.5% Community Financial Services 53% 22.8 22.6 22.5 22.6 0.4% 22.1 2.6% Global Banking 47% 18.5 19.3 19.3 19.7 2.0% 18.5 6.7% Indonesia (IDR trillion) 18% 126.2 131.2 136.1 138.3 1.6% 129.2 7.0% Community Financial Services 75% 96.0 98.3 101.4 103.3 1.9% 96.4 7.2% İ i Global Banking 25% 30.0 32.6 34.4 34.7 1.0% 32.5 6.8% Other markets (RM billion) 21% 40.3 43.1 43.5 43.8 0.6% 39.5 10.9% Investment banking (RM billion) 1% 7.3 7.6 7.2 6.3 ▼(12.9)%! 7.4 (15.0)% Note: 1 Rebased loan growth figures are based on adjusted 31 December 2017 position in line with migration of client accounts, effective 1 January 2018 34 Maybank#36Malaysia Loans Growth: 31 December 2018 RM billion % of Portfolio 31 Mar 2018 30 Jun 2018 30 Sep 2018 31 Dec 31 Dec QoQ YOY 2018 2017 Community Financial Services (reported) 72% 205.7 209.0 212.4 216.0 1.7% 203.7 6.0% + + + Community Financial Services (rebased)¹ 72% 205.7 209.0 212.4 216.0 1.7% 203.2 6.3% Consumer 58% 165.8 168.2 171.3 174.4 1.8% 163.3 6.8% Total Mortgage 29% 82.4 83.9 85.5 87.5 2.3% 80.82 8.2% H Auto Finance 16% 46.2 46.8 47.6 47.9 0.5% 45.7 4.7% Credit Cards 3% 7.1 7.2 7.3 7.6 3.2% 7.2 4.5% Unit Trust 10% 27.6 27.7 28.3 29.0 2.4% 27.0 7.3% i ¡ Other Retail Loans 1% 2.6 2.6 2.6 2.5 (1.0)% 2.52 0.6% Business Banking + SME (reported) 14% 39.9 40.9 41.1 41.5 1.1% 40.3 3.0% Business Banking + SME (rebased)1 14% 39.9 40.9 41.1 41.5 1.1% 39.9 4.1% H SME (reported) 6% 15.4 15.9 16.5 17.1 3.9% 14.9 14.9% SME (rebased)1 6% 15.4 15.9 16.5 17.1 3.9% 14.8 15.9% Business Banking (reported) 8% 24.5 25.0 24.6 24.4 ▼ (0.8) % ! 25.4 ▼ (3.9)% Business Banking (rebased)1 8% 24.5 25.0 24.6 24.4 ▼ (0.8)% 25.1 ▼ (2.8)% Global Banking (Corporate) (reported) 28% 83.2 81.6 80.1 83.3 4.0% I 81.9 1.7% Global Banking (Corporate) (rebased)1 28% 83.2 81.6 80.1 83.3 4.0% 82.4 1.2% Total Malaysia 288.9 290.5 292.5 299.2 2.3% 285.5 4.8% 35 55 Note: 1 Rebased loan growth figures are based on adjusted 31 December 2017 position in line with migration of client accounts, effective 1 January 2018 2 Restated figures for 31 December 2017 due to changes in capturing of product type Maybank#37Group Deposits Growth: 31 December 2018 36 % of Portfolio 31 Mar 30 Jun 30 Sep 31 Dec 31 Deci QoQ YOY 2018 2018 2018 2018 2017 Group Gross Deposits 532.1 539.8 536.6 556.3 3.7% 526.6 5.6% Malaysia (RM billion) 62% 336.4 335.8 331.3 343.8 3.8% 317.8 8.2% Savings Deposits 12% 42.5 42.8 42.1 42.8 1.6% 40.7 5.2% Current Accounts 26% 82.9 82.5 83.3 90.3 8.4% 87.1 3.7% Fixed Deposits 37% 141.6 145.1 134.9 125.8 ▼ (6.7)% 138.1 ▼ (8.8%) Others 25% 69.4 65.4 71.0 84.8 19.5% 51.9 63.6% International 38% 197.5 205.8 207.1 214.1 3.4% 210.3 1.8% Singapore (SGD billion) 65% 43.8 47.0 44.9 46.2 2.7% 1 46.2 0.0 Savings Deposits 15% 6.1 6.2 6.4 7.0 10.4% 7.0 0.7% Current Accounts 16% 7.4 7.8 7.1 7.6 6.7% 7.6 i ▼ (0.1)% Fixed Deposits 68% 30.3 33.0 31.4 31.5 0.3% 31.6 ▼ (0.2)% ! ! ! Indonesia (IDR trillion) 16% 121.0 113.9 110.8 117.0 5.6% 121.5 ▼ (3.7)% Savings Deposits 17% 24.0 23.7 22.5 19.9 ! ▼(11.7)% 24.8 ▼(19.8)% H Current Accounts 21% 23.9 23.9 23.3 24.4 5.1% 23.6 3.6% Fixed Deposits 62% 73.2 66.3 65.0 72.7 11.8% 73.1 ▼ (0.6)% Maybank#38LDR and CASA Ratio Group -LDR CASA CASA (without IA) Malaysia 93.4% 92.5% 92.8% 94.4% 92.7% 91.2% 87.0% 87.8% 89.5% 87.9% 37.3% 35.3% 35.1% 35.1% 35.9% 40.2% 37.3% 37.3% 37.9% 38.7% 35.4% 33.5% 33.2% 33.2% 33.6% 37.1% 34.5% 34.3% 34.9% 34.9% Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Singapore Indonesia ALDR (Bank Level) 94.1% 93.2% 87.8% 89.2% 91.8% 119.2% 111.8% 113.8% 103.0% 101.1% 100.6% 88.1% 94.0% 96.5% 85.6% 31.6% 30.9% 29.8% 30.1% 31.7% 39.8% 39.6% 41.8% 41.3% 37.9% Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Note: Group and Indonesia LDR excludes loans to banks and Fls • Group and Malaysia LDRs include investment accounts totaling RM23.57 billion for 31 Dec 2018, RM18.77 billion for 30 Sep 2018, RM19.18 billion for 30 June 2018, RM21.84 billion for 31 Mar 2018 and RM24.56 billion for 31 Dec 2017. 37 Maybank#39Strong Capital Position: 31 December 2018 Before proposed dividend After proposed dividend, Regulatory Requirements Jan 2019 assuming 85% reinvestment rate 2018 Onwards Minimum Common Equity Tier 1 4.5% 4.5% Capital 19.38% 19.02% 18.51% Minimum Tier 1 Capital 6.0% 6.0% Group Minimum Total Capital 8.0% 8.0% 16.46% 15.98% 15.47% Capital Conservation Buffer (Phase in) 1.875% 2.500% 14.77% Dec 17 15.03% Dec 18 14.51% Dec 18 Other Capital Buffers D-SIB Buffer Countercyclical Capital buffer To be determined 0% - 2.5% Total Capital Ratio Tier 1 Capital Ratio CET 1 Capital Ratio 19.31% 18.27% Bank 17.40% • 17.95% 14.87% 14.01% • 15.85% 13.76% 12.89% Dec 17 Dec 18 Dec 18 ■Total Capital Ratio Tier 1 Capital Ratio CET 1 Capital Ratio Maybank Singapore Limited (MSL) The Incorporation of MSL was completed on 5 November 2018 The transfer of our Singapore Community Financial Services business to MSL would impact Maybank Bank-level CET 1 capital ratio by ~50 bps. 38 15.70% Total Capital Ratio 15.46% CET1 Capital & Tier 1 Capital Ratios Dec 18 Maybank#40Financial Statements Impact Arising from MFRS 16 Adoption 39 MFRS 16 Adoption (effective 1 January 2019) MFRS 16 replaces existing accounting standard MFRS 117 MFRS 16 eliminates the distinction between operating and finance leases for all lessees Under MFRS 16, a lessor's accounting is substantially unchanged; the main impact is on a lessee On its balance sheet, a lessee will now present a liability representing its obligation to make rental payment to the asset owner while recognising a corresponding asset representing its right to control the use of another's asset to generate income ◉ Balance Sheet Change Recognition of: Right-of-use (ROU) assets Lease liabilities at the present value of future lease payments However, short-term and low value leases are exempted from the treatment above Impact to Lessee: Balance sheet will show an increase in both assets and liabilities. ☐ Income Statement Change Lease rental expenses replaced by: interest from amortisation of the lease liability depreciation of the ROU asset Impact to Lessee: A lease now has a front-loaded expense profile that gradually tapers off towards the end of the lease term compared with the previous accounting treatment of a straight-line expense profile over the lease term. Initial Finding: Impact to Maybank Group's capital ratios is expected to be minimal <10 bps for Day 1 adjustment on 1 January 2019. The final impact is still being assessed and is subject to further refinement. Maybank#41Key Operating Ratios % FY2018 FY2017 YOY 1Q 2Q 3Q 4Q FY2018 FY2018 FY2018 FY2018 4Q QoQ YOY FY2017 Return on Equity 11.4 10.9 0.5% 10.5 11.1 11.0 13.0 2.0% 12.4 0.6% Net Interest Margin 2.33 2.36 (3) bps 2.39 2.27 2.30 2.38 8 bps 2.30 8 bps Fee to Income Ratio 27.5 28.4 (0.9)% 27.1 28.6 25.0 29.0 4.0% 31.2 (2.2)% Loans-to-Deposit Ratio 1 92.7 93.8 (1.1)% 92.5 92.8 94.4 92.7 (1.7)% 93.4 (0.7)% 2 Cost to Income Ratio 47.4 48.6 (1.2)% 47.5 46.0 47.3 48.7 1.4% 48.1 0.6% Asset Quality Gross Impaired Loans Ratio 2.41 2.34 7 bps 2.37 2.64 2.65 2.41 (24) bps 2.34 7 bps Loans Loss Coverage 83.6 71.5 12.1% 87.9 80.7 79.6 83.6 4.0% 71.5 12.1% Net Charge off rate (bps) (32) (40) 8 bps (41) (47) (34) (7) 27 bps (16) 9 bps Capital Adequacy 3 CET1 Capital Ratio 14.51 14.19 32 bps 13.37 13.16 13.59 14.51 92 bps 14.19 32 bps Total Capital Ratio 18.51 18.80 (29) bps 18.12 17.78 17.62 18.51 89 bps 18.80 (29) Bps Note: 1 LDR excludes loans to banks and Fls. 2 Total cost excludes amortisation of intangibles for Maybank Indonesia and Maybank Kim Eng. 3 The capital ratios are adjusted based on the assumption of 85% reinvestment rate under the DRP for the period. CET1 ratio for 1Q FY2018 onwards is computed based on fully loaded basis with effect from 1 Jan 2018. Capital ratios for 1Q FY2018 are after final cash dividend. 40 Maybank#42Table of Contents Maybank's Strategic Presence in ASEAN FY2018 Financial Performance Prospects & Outlook Appendix: 1. Financial Performance 2. Community Financial Services 3. Global Banking 4. Maybank Singapore 5. Maybank Indonesia 6. Other segments 2 10 26 29 42 45 49 52 55#43Community Financial Services: Overview of Market Share for Malaysia Market share Sep-18 Market Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 VS Dec-18 position Loans Total consumer (Household) Auto (Purchase of transport vehicles) Total mortgage * Credit cards ** 18.8% 17.6% 17.6% 26.5% 26.7% 13.3% 13.3% 19.0% Unit trust 51.1% 50.9% 17.6% 17.7% 27.1% 27.3% 27.7% 13.3% 13.4% 13.5% 19.0% 19.1% 50.4% 50.1% 49.6% 17.7% 2 2 2 19.2% 1 1 Deposits Total deposits *** Total core retail deposits Retail CASA ^ Λ Retail savings ^ Demand deposits Retail fixed deposits ^ 18.4% 18.8% 18.6% 18.3% 18.4% 1 Λ 17.7% 17.8% 17.9% 17.8% 17.2% 2 24.5% 24.9% 28.2% 18.3% 18.9% 14.4% 14.2% 28.5% 25.0% 24.9% 28.6% 28.2% 28.5% 19.0% 19.1% 18.9% 14.4% 14.4% 25.0% 1 1 1 13.5% 2 Channels Internet banking - Subscriber base Mobile banking - Subscriber base Internet banking - Transaction Volume 1 ^^ 54.7% 42.6% 41.8% 31.7% 31.3% 53.8% Mobile banking - Transaction Volume Branch network ^^^ 1 61.5% 18.6% 41.0% 40.2% 31.4% 30.9% 30.7% 53.8% 53.3% 52.8% 70.4% 65.9% 65.4% 66.7% 18.6% 18.6% 19.0% 39.7% 1 1 1 19.2% 1 Note: 1 Rebased market share due to adjustment made to Industry data by BNM from Jan'17. * Refers to housing, shophouse and other mortgage loans ** Credit cards market share refer to receivables for commercial *** Total bank deposits inclusive of investment asset ("IA") 42 Λ ^^ ΑΛΛ Without IA. With IA, the market share as at Dec' 18 for Total Core Retail Deposits, Retail CASA, Retail Savings, Demand Deposits and Retail Fixed Deposits are 18.0%, 26.1%, 28.5%, 21.8% and 14.9% respectively (against MBB retail IA). Excluding non-financial transactions as per BNM guidelines Industry numbers as at Dec' 18. Maybank#4443 Community Financial Services: Overview of Malaysia Portfolio Total CFS loans on an upward trend of 6.0% YoY and 1.7% QoQ Individual customer TFA grew 3.9% YoY to RM313.7 billion driven by HNW & Affluent Banking customer TFA +6.0% YoY +1.7% QoQ 203.7 40.3 212.4 216.0 41.1 41.5 163.3 171.3 174.4 +3.9% YoY +0.7% QoQ 302.1 311.5 313.7 197.5 204.3 205.3 Dec 17 Sep 18 Consumer BB + SME Dec 18 Total CFS deposits decreased by 5.5% YoY, due to reduction in high cost deposits, mitigated by CASA growth of 4.5% (5.5)% YoY +1.4% QoQ Note: 104.6 Dec 17 107.2 Sep 18 Mass - НАВ 108.5 Dec 18 ⚫ Customer classification: HAB (IA>RM50k, TFA>RM250k). HAB comprises of HNW, Affluent and Emerging Affluent segments. ⚫TFA: Total Financial Assets (Deposits, Investments, Financing & Protection). Maybank2u 1-month active users grew 17% YoY driven by growth in mobile users Maybank2u 1-month active users +17% YoY 5.2 4.5 of which Mobile 1-month active users RM billion 212.3 197.8 200.6 74.9 59.6 63.5 137.5 138.2 137.1 Dec 17 Sep 18 Dec 18 Consumer BB + SME In million +43% YoY 2.7 1.9 Dec 17 Dec 18 Dec 17 Dec 18 Maybank#45Table of Contents Maybank's Strategic Presence in ASEAN FY2018 Financial Performance Prospects & Outlook Appendix: 1. Financial Performance 2. Community Financial Services 3. Global Banking 4. Maybank Singapore 5. Maybank Indonesia 6. Other segments 2 10 26 29 42 45 49 52 55#46Global Banking: Overview of Malaysia Corporate Banking Portfolio Total GB loans increased 1.7% YoY to RM83.3 billion Trade Finance market share RM billion Term Loan 24.4% 23.5% 45.1 22.8% 22.4% 22.2% +7.5% YoY 44.7 42.0 Short Term 26.9 Revolving (4.7)% YoY 24.9 Credit 28.2 11.3 Trade Finance 10.4 and Others 11.7 ■Dec 18 Sep 18 Dec 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Note: Market share of total trade products (On Balance Sheet items, Contingent Liabilities and Others) Corporate Banking GIL ratio (3.9)% YoY 1.58% 2.34% 2.26% 2.33% 2.01% T Dec 17 Mar 18 Jun 18 Sep 18 Note: 'Term Loan' includes foreign currency denominated accounts, while 'Trade Finance and Others' is combined with 'Overdraft'. 45 Dec 18 Maybank#47Global Banking: Overview of Group Securities and Global Markets Portfolio Group Securities Portfolio' grew 15.5% YoY +15.5% 179.0 178.3 172.3 6.9 7.0 154.4 154.6 9.1 9.1 10.4 Group Securities Portfolio': 35.5% Foreign Securities as at FY2018 FY2018 Others (NIDS, BA, etc) PDS - 3.9% Foreign 12.7% RM 178.3 billion Government Securities - Domestic 28.9% RM billion 81.5 79.2 83.6 77.6 74.2 90.6 92.1 79.6 67.7 70.0 31.7% PDS/Corp Bonds - Domestic FY2017 Others 22.8% Government Securities - Foreign (NIDS, BA, etc) 5.9% PDS - Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Foreign Government Securities Domestic 18.5% 24.8% Govt. Securities PDS/Corp Bonds Others RM 154.4 billion Note: 1 Group Securities Portfolio is inclusive of Financial assets designated upon initial recognition (part of FVTPL) 46 31.7% PDS/Corp Bonds - Domestic 19.1% Government Securities - Foreign Maybank#48Global Banking: Overview of Group Investment Banking Portfolio FY2018 Total Income Breakdown by Country Hong Kong Others Philippines 3% 3% 4% Maybank Kim Eng Total Income for Maybank Kim Eng¹ 1,337.3 (8.5)% YoY Indonesia 4% Thailand 18% RM1,224.1 million Malaysia 38% Singapore 30% RM million FY2017 1,224.1 FY2018 Note: Fees 4.9% Market Country Rank Share Thailand 2 6.1% 47,135 FY2018 Brokerage Market Share by Country Trading Value (USD'mil) FY2018 Fee-based Income for Malaysia Arranger Fees 18.7% Underwriting & Placement Malaysia 3 9.0% 28,092 Philippines 6 5.1% 3,356 Brokerage Indonesia 13 2.4% 6,802 Fees 59.6% Hong Kong Tier 2 0.3% 18,586 Singapore 14 3.6% 15,801 Vietnam >10 2.2% 3,129 1 Maybank Kim Eng represents the combined business of Maybank IB and business segments under Maybank Kim Eng Holdings. 47 Advisory Fees 3.9% Agency/ Guarantee Fees 5.0% Other Fee Income 8.0% Maybank#49Table of Contents Maybank's Strategic Presence in ASEAN FY2018 Financial Performance Prospects & Outlook Appendix: 1. Financial Performance 2. Community Financial Services 3. Global Banking 4. Maybank Singapore 5. Maybank Indonesia 6. Other segments 2 10 26 29 42 45 49 52 55#50Maybank Singapore: P&L Summary SGD million FY2018 FY2017 YOY Net fund based income 752.08 686.02 9.6% Net fee based income 358.16 326.49 9.7% Net income 1,110.25 1,012.51 9.7% Overhead expenses (434.97) (387.86) 12.1% Operating profit 675.28 624.65 8.1% Profit before taxation 421.37 315.50 33.6% Net fund-based income rose 9.6%, driven by loan expansion and improvement in net interest margin. Fee-based income grew 9.7% YoY, led by an increase in treasury income. Contribution also came from wealth management, on the back of higher bancassurance fee. Overheads increased 12.1% arising from higher investment in staff and information technology. The local incorporation of the Community Financial Services (CFS) business in Singapore also contributed to the higher spend in the year. Operating profit was 8.1% higher YoY. FY2018 profit before tax grew 33.6% YoY to SGD 421.4 million due to lower impairment allowances. 49 49 Maybank#5150 SGD billion Maybank Singapore: Overview of Loans and Deposits Portfolio Diversified Loan Portfolio Consumer deposits' composition at 51% of total deposits +4.5% YoY 0.0% YoY 40.6 41.9 42.4 3.5 3.1 3.1 2.1 2.4 2.4 Other (Consumer) Car Loan 46.2 44.9 46.2 ■Consumer - Time Deposits Consumer 39% 15.8 16.3 15.9 Consumer 51 % ■Consumer CASA 10.6 10.8 10.9 Housing Loan 7.8 7.1 7.8 6.7 6.2 6.0 Others (Corporate) 4.5 5.3 5.6 Corporate 61% ■Non-Bank SGD billion 15.7 15.2 15.5 Corporate 49 % ■Business Time Deposits 6.8 6.4 6.9 4.5 4.7 5.0 Dec 17 8.5 9.3 9.3 financial Inst ■General Commerce ■ Building & Construction Deposits remained relatively stable compared to last year Business CASA Sep 18 Dec 18 Dec 17 Sep 18 Dec 18 Maybank Singapore loans rose 4.5% YoY % YoY change 8.9% 9.9% 8.0% 7.8% 5.3% 8.9% 7.1% 4.5% 4.3% 5.5% Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Maybank Singapore Growth Industry Growth CASA ratio improved to 31.7% in Dec 2018 from 30.1% in Sep 2018 SGD billion ■Time Deposits ■Demand Deposits 31.6 31.4 31.5 ■Savings 7.6 7.1 7.0 6.4 7.6 7.0 CASA Ratio: 31.7% Dec 17 Sep 18 Dec 18 Maybank#52Table of Contents Maybank's Strategic Presence in ASEAN FY2018 Financial Performance Prospects & Outlook Appendix: 1. Financial Performance 2. Community Financial Services 3. Global Banking 4. Maybank Singapore 5. Maybank Indonesia 6. Other segments 2 10 26 29 42 45 49 52 55#53Maybank Indonesia: P&L Summary 4Q 3Q IDR billion FY2018 FY2017 I YOY QoQ FY2018 FY2018 Net Fund Based income 8,100 7,702 5.2% 2,060 2,108 (2.3)% Net Fee Based income 2,267 2,729 (17.0)% 756 489 54.7% Net income 10,367 10,431 | (0.6)% 2,816 2,597 8.4% Overhead expenses (6,023) (5,793) 4.0% (1,541) (1,494) 3.2% Personnel (2,461) (2,387) 3.1% (554) (620) (10.6)% General and Administrative (3,562) (3,406) 4.6% (987) (874) 12.9% Operating profit 4,344 4,638 | (6.4)% ! 1,275 1,103 15.5% Provisions Expenses (1,311) (2,134) (38.6)% i (311) (333) (6.6)% Non Operating (Expense)/Income 3 15 (82.9)% 5 0 >100% Profit Before Tax and Non-Controlling Interest 3,036 2,520 20.5% 969 771 25.7% Tax and Non-Controlling Interest (841) (716) 17.5% - (271) (206) 31.8% Profit After Tax and Non-Controlling Interest 2,195 1,804 21.6% 697 565 23.5% EPS Basic (IDR) 30.44 26.63 14.3% 9.26 7.44 24.5% 52 62 Maybank#5453 53 Maybank Indonesia: Financial Ratios and Loans Portfolio Breakdown Key Operating Ratios Loans Portfolio Breakdown Key Operating Ratios Dec18 Sep 18 Dec 17 YOY IDR Trillion 31 Dec 2018 30 Sep 31 Dec QoQ YOY 2018 2017 Profitability & Efficiency CFS 102.3 100.1 2.2% 95.3 7.4% Return On Assets 1.74% 1.59% 1.48% 0.26% CFS Retail 44.0 44.3 (0.5)% 42.7 3.1% Return On Equities (Tier 1) 10.21% 9.53% 9.91% 0.30% Auto Loan 24.9 25.2 (1.3)% 23.4 6.3% Net Interest Margin 5.24% 5.24% 5.17% 0.07% Mortgage 15.7 15.6 0.2% 16.0 (2.2)% Cost to Income Ratio 58.10% 59.35% 55.53% 2.56% CC + Personal Loan 3.1 3.0 2.5% 2.8 7.6% Asset Quality Other loans 0.4 0.4 (2.3)% 0.4 0.8% NPL - Gross 2.59% 2.73% 2.81% (0.22)% CFS Non-Retail 58.3 55.8 4.4% 52.6 10.9% Liquidity & Capital Adequacy Business Banking 34.0 32.7 3.8% 30.9 9.8% LCR CET1 CAR 118.58% 116.01% 140.74% 16.85% 16.44% 14.64% 2.21% 19.04% 18.78% 17.53% 1.51% (22.17)% RSME 24.3 23.1 5.2% 21.6 12.4% Global Banking 31.0 31.1 (0.3)% 30.2 2.9% Total 133.3 131.2 1.6% 125.4 6.3% Note: Maybank Indonesia's loans breakdown is mapped in accordance to its local regulatory reporting requirements. Maybank#55Table of Contents Maybank's Strategic Presence in ASEAN FY2018 Financial Performance Prospects & Outlook Appendix: 1. Financial Performance 2. Community Financial Services 3. Global Banking 4. Maybank Singapore 5. Maybank Indonesia 6. Other segments 2 10 26 29 42 45 49 52 55#56Islamic Banking: Performance Overview Group Islamic Banking Financial Performance RM million FY2018 Maybank Islamic Maybank Islamic: Total Gross Financing grew to RM176.8 billion FY2017 YOY Total Income 5,118.1 4,600.4 11.3% Profit Before Tax 3,033.7 2,751.8 10.2% Financing & Advances 186,709.4 174,907.7 6.7% Deposits & Investment Account: 180,595.2 162,986.9 10.8% Deposits from Customers 157,030.1 138,431.5 13.4% Investment Account 23,565.1 24,555.4 (4.0)% Group Islamic Banking's performance includes key markets in Malaysia, Indonesia and Singapore Maybank Islamic: Key Financial Ratios Key Financial Ratios FY2018 FY2017 Total Capital Ratio (TCR) 22.55% 20.78% Net Profit Margin (YTD) 1.91% 1.90% Cost to Income Ratio (CIR) Direct FDR¹ 32.29% 35.12% 93.9% 95.1% Note: 1 Direct Financing to Deposits Ratio (FDR) comprising gross financing against deposit and Unrestricted Investment Account (exc. RPSIA assets and liabilities) 55 RM billion ■Dec-17 Dec-18 12% 11% 47.5 3% 42.6 39.1 32.4 33.3 35.4 17% (6%) 28.8 24.6 22.6 21.3 11% 6.1 6.8 AITAB Mortgage Term Financing Others (CFS) Term Financing Others (GB) CFS: 19% Note: Figures are as per latest segmentation breakdown GB: 6% Maybank Islamic Contribution to Maybank Malaysia Loans and Financing as at December 2018 Year Contribution Maybank Islamic, Dec 2017 56.9% 58.7% Mar 2018 57.7% Maybank Conventional, Malaysia, 41.3% Jun 2018 58.5% Sep 2018 58.3% Dec 2018 58.7% Maybank#57Islamic Banking: Market Share Maybank Islamic Market Share Market Share by Product (Malaysia) Maybank Islamic 33.8% 33.6% 33.2% 32.6% 32.7% Key Products Dec 18 Dec 17 Automobile Financing 45.5% 45.0% 31.2% 30.4% 30.4% 30.4% Home 27.1% 27.7% 29.9% Term financing 31.7% 31.6% Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 -Financing Deposits & Investment Accounts Source for industry numbers: Latest BNM Monthly Statistical Bulletin Maybank Islamic ranks No. 1 by Asset Market Share in Malaysia Source for industry numbers: Latest BNM Monthly Statistical Bulletin Sukuk League Table Ranking December 2018 Malaysia Maybank Islamic CIMB Islamic Public Islamic Asset Market Share September 18 Global Sukuk League Table Ranking Market Share (%) Amount (USD million) Issues Rank #3 Maybank 8.8% 3,935.2 145 30% 1 14% 2 MYR Sukuk League Table Ranking Market Share (%) Amount (USD million) Issues 9% 3 #1 Maybank 24.6% 4,385.6 148 Source: Latest BNM monthly statistical bulletin & respective Bank's Financial Statements Source: Bloomberg 56 56 Maybank#58Insurance and Takaful: Performance Overview Life / Family (New Business) Market Share etiQa Gross Premium Single Premium Regular Premium 71.7% 4.4% Credit Premium Group Premium 33.7% 14.5% Total Life/Family Fire 34.5% Motor 12.3% MAT 9.7% Personal Accident ▲ 6.3% Misc ▲ 36.9% Total General Total Life/Family & 16.9% ■FY2018 ■FY2017 AIA Ins. & Tak. GE Ins. & Tak. Prudential Ins. & Tak. 16.5% Etiqa Ins. & Tak. 0.0% 16.6% General 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 RM Million Profit Before Tax (18.6)% YoY 1,013.3 257.0 RM million 334.5 421.8 FY2017 825.0 129.6 265.0 430.4 FY2018 Shareholder's Fund Life/Family ■General Note: Gross Premium, Profit Before Tax and Total Assets are presented at EIH Group level 57 20.7% 13.8% No. 4 in Life/Family (New Business) 13.4% 11.5% 5.0% 10.0% 15.0% 20.0% 25.0% General Insurance and Takaful Market Share Etiqa Ins. & Tak. Allianz Insurance HL-MSIG Ins. & Tak. 0.0% 11.7% No. 1 in General 10.4% Insurance and Takaful 7.7% 5.0% 10.0% 15.0% Note: Market Share is for period Oct'17 Sep '18 (Source: LIAM / ISM Statistics) Total Assets RM billion 34.5 +4.7% YoY 36.1 Dec 17 Dec 18 Maybank#59Maybank Humanising Financial Services MALAYAN BANKING BERHAD 14th Floor, Menara Maybank 100, Jalan Tun Perak 50050 Kuala Lumpur, Malaysia Tel (6)03-2070 8833 www.maybank.com Disclaimer. This presentation has been prepared by Malayan Banking Berhad (the "Company") for information purposes only and does not purport to contain all the information that may be required to evaluate the Company or its financial position. No representation or warranty, express or implied, is given 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 it or 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 otherwise arising in connection therewith.