Against All Odds, We Are Inspired
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Against all odds, we are inspired... Bumiputra-Commerce Holdings Berhad (50841-W) Annual Report 2007 Cover Rationale Our successful transformation into a regional Universal Bank, has been driven by the creation of synergies within our Group. We’ve continued to drive our resources to deliver more value to our customers and shareholders via enhanced product and service offerings delivered by our teams partnering across internal divisions, geographies and companies. This year’s cover is a continuation of the previous year where our theme of looking beyond and blending the ingredients for the future has now taken the next step with the focus of synergising our various businesses and functions. The vast Blue Ocean symbolises the expanse of our market space and the creative thinking we encourage of our people. The children represent not only our future and rapid growth story but also our emphasis on playing as teams. Five Year Group Financial Highlights 9,011 2,793 83.87 3,686 6,393 2,002 1,504 4,723 4,155 3,579 30.56 30.45 1,310 48.74 1,241 27.61 827 1,053 782 735 07 06 05 04 03 07 06 05 04 03 07 06 05 04 03 07 06 05 04 03 Total Income Profit Before Profit After Net Earnings Per RM million Taxation Taxation Share RM million RM million Sen 2007 2006 2005 2004 2003 1. INCOME (RM’000) (i) Net interest income 4,435,159 3,656,447 2,986,247 2,690,511 2,546,633 (ii) Non-interest income 4,576,350 2,736,123 1,736,733 1,464,311 1,031,934 (iii) Profit before allowances 4,783,833 3,034,600 2,444,881 2,201,415 1,872,388 (iv) Profit before taxation 3,685,803 2,002,042 1,309,967 1,052,647 1,240,867 (v) Net profit for the financial year 2,793,273 1,504,427 826,825 734,540 782,300 2. BALANCE SHEET (RM’000) Assets (i) Total assets excluding contra 182,831,642 156,952,209 113,525,964 112,382,591 97,933,977 (ii) Total assets including contra 201,053,695 171,670,775 124,197,350 121,076,245 105,658,371 (iii) Loans, advances and financing 95,904,058 90,334,759 69,095,880 62,603,030 54,496,898 Liabilities and Shareholders’ Funds (i) Total deposits 139,751,258 111,241,419 81,740,235 81,623,044 71,505,038 (ii) Paid-up capital 3,374,181 3,184,429 2,756,398 2,691,740 2,628,960 (iii) Total shareholders’ funds 15,710,051 11,784,530 9,637,453 8,959,476 7,899,587 139,751 15,710 182,832 95,904 90,335 156,952 111,241 11,785 69,096 62,603 113,526 112,383 9,637 81,740 81,623 54,497 8,959 97,934 71,505 7,900 07 06 05 04 03 07 06 05 04 03 07 06 05 04 03 07 06 05 04 03 Total Assets Loans, Advances Total Deposits Shareholders’ RM million and Financing RM million Funds RM million RM million 2007 2006 2005 2004 2003 3. PER SHARE (i) Gross earnings (sen) Δ 110.68 64.86 48.25 39.57 48.47 (ii) Net earnings (sen) Δ 83.87 48.74 30.45 27.61 30.56 (iii) Net tangible asset (RM) 3.17 2.11 3.26 3.19 2.92 (iv) Gross dividend (sen) * 40.00 15.00 15.00 10.00 5.00 4. FINANCIAL RATIO (%) (i) Return on average equity 20.05# 13.98 8.89 8.71 10.38 * Gross dividend is computed based on the actual payment made in the respective financial years. Δ Based on the weighted average number of 3,330,288,000 (2006: 3,086,650,000) ordinary share of RM1.00 each in issue during the financial year ended 31 December 2007. # Return on average equity ratio is computed based on weighted average monthly shareholders’ funds balances. Contents 002 Group Financial Highlights Our Values Other Information 004 Our Vision 100 Statement on Corporate Governance 185 Additional Compliance Information 005 Core Philosophies of the Group 117 Audit Committee Report 186 Shareholder’s Statistics 122 Statement on Internal Control 189 Analysis of RCULS Holdings Our Group 130 Risk Management 191 Top 10 Properties of the Group 008 Corporate Profile 192 Notice of Annual General Meeting 010 Corporate Structure Our Customers 195 Statement Accompanying Notice of Annual General Meeting 011 Corporate History 138 Notable Deals 204 Group Corporate Directory 014 Chairman’s Message 148 2007 Corporate Achievements Proxy Form 020 Performance Review by Group Chief Executive Our Partnerships 154 Our Alliances Our People 156 International Advisory Panel 054 Corporate Information 157 Investor Relations 056 Corporate Organisation Chart 158 Snapshot of Corporate Events 058 Board of Directors 172 Corporate Social Responsibility 060 Board of Directors’ Profiles 183 Recreation 069 Joint Company Secretaries’ Profiles 070 Group Management Committee Profiles 081 Group Shariah Committee Profiles 084 Functional Divisions 096 Boards of Major Subsidiaries Group Financial Highlights Financial Year Ended 31 December Changes 2007 2006 2005 2007 2006 2005 INCOME STATEMENT AND BALANCE SHEET RM’000 RM’000 RM’000 % % % Net interest income 4,435,159 3,656,447 2,986,247 21.30 22.44 10.99 Non-interest income 4,576,350 2,736,123 1,736,733 67.26 57.54 18.60 Overheads 4,227,676 3,357,970 2,278,099 25.90 47.40 16.62 Profit before allowances 4,783,833 3,034,600 2,444,881 57.64 24.12 11.06 Allowance for losses on loans, advances and financing 1,127,431 1,016,595 1,021,863 10.90 (0.52) (8.96) Profit before taxation 3,685,803 2,002,042 1,309,967 84.10 52.83 24.44 Net profit for the financial year 2,793,273 1,504,427 826,825 85.67 81.95 12.56 Gross dividends paid 1,346,833 472,717 406,504 184.91 16.29 52.59 Loans, advances and financing 95,904,058 90,334,759 69,095,880 6.17 30.74 10.37 Total assets 182,831,642 156,952,209 113,525,964 16.49 38.25 1.02 Deposits from customers 126,866,791 104,219,640 74,323,587 21.73 40.22 0.29 Total liabilities 165,977,032 144,362,889 102,419,486 14.97 40.95 0.04 Shareholders’ funds 15,710,051 11,784,530 9,637,453 33.31 22.28 7.57 Commitments and contingencies 267,168,733 240,722,060 149,479,744 10.99 61.04 (28.34) RATIOS % % % % % % Core capital ratio 10.16 9.72 11.20 4.53 (13.21) 12.45 Risk-weighted capital ratio 13.21 13.74 15.23 (3.86) (9.78) 10.28 Return on average equity 20.05* 13.98 8.89 43.42 57.26 2.66 Return on total assets 1.53 0.96 0.73 59.38 31.51 12.31 Cost to income ratio 46.91 52.53 48.23 (10.70) 8.92 2.57 Cost to total assets 2.31 2.14 2.01 7.94 6.47 15.52 Gross NPL to gross loans 7.21 8.84 8.69 (18.44) 1.73 (9.20) Net NPL to net loans 3.85 5.49 5.69 (29.87) (3.51) (18.25) Coverage ratio 69.30 57.51 55.18 20.50 4.22 16.05 Loan deposit ratio 75.59 86.68 92.97 (12.79) (6.77) 10.05 Equity to assets 8.59 7.51 8.49 14.38 (11.54) 6.52 Equity to loans 16.38 13.05 13.95 25.52 (6.45) (2.52) OTHER INFORMATION Earnings per share (Sen) - Basic 83.87 48.74 30.45 72.08 60.06 10.29 - Fully diluted 83.77 48.12 30.07 74.09 60.03 13.99 Net tangible assets per share (RM) 3.17 2.11 3.26 50.24 (35.28) 2.19 Gross dividend per share (Sen) 40.00 15.00 15.00 166.67 0.00 0.00 Number of shares in issue (‘000) 3,374,181 3,184,429 2,756,398 5.96 15.53 2.40 Weighted average number of shares in issue (‘000) 3,330,288 3,086,650 2,715,015 7.89 13.69 2.06 Share price at year-end (RM) 11.00 7.75 5.70 41.94 35.96 21.28 Number of employees 25,614 24,267 18,335 5.55 32.35 12.90 * Based on weighted average monthly shareholders’ funds balances 002 Bumiputra-Commerce Holdings Berhad (50841-W) • Annual Report 2007 Group Financial Highlights Financial year ended 31 December SELECTED KEY PERFORMANCE INDICATORS Return on average equity % 07 20.05 06 13.98 05 8.89 Gross dividend per share sen 07 40.00 06 15.00 05 15.00 Risk-weighted capital ratio % 07 13.21 06 13.74 05 15.23 Net NPL ratio % 07 3.85 06 5.49 05 5.69 Loan loss coverage ratio % 07 69.30 06 57.51 05 55.18 BCHB’s total returns outperform KLCI 200 150 Total Returns as at 31 December 2007 BCHB : 163.46% 100 KLCI : 87.51% 50 Total Returns (%) 0 -50 2005 2006 2007 Year BCHB Kuala Lumpur Composite Index (“KLCI”) Source: Bloomberg Bumiputra-Commerce Holdings Berhad (50841-W) • Annual Report 2007 003 Our Vision To be South East Asia’s Most Valued Universal Bank 004 Bumiputra-Commerce Holdings Berhad (50841-W) • Annual Report 2007 Core Philosophies of the Group We are in the business of creating We believe the best way to create In order to protect our reputation value for our customers the most value is by enabling our and business, we speak and act people with integrity We exist to create value for our customers.