Our Passion & Commitment Shine Out The energised, moving rays of light featured on our cover depict AmBank Group's passion and commitment and our accelerating pace of growth with Malaysia. With our 42 years of rich expertise, we at AmBank Group will remain steadfast and resilient in providing relevant financial solutions that will fit seamlessly into the daily lives of our fellow Malaysians. Over the years, we have realigned ourselves and streamlined our operations better. We constantly strive to improve our products, solutions and services, leveraging on the power of digital technology in order to meet the growing needs of our customers and to stay competitive in today’s financial landscape. The moving speed lines and rays that burst outwards illustrate that AmBank Group is an agile and fast-moving organisation. Our progressive services will empower individuals from all walks of life. ANNUAL REPORT TWENTY SEVENTEEN Annual Report Financial Report Our Report The Annual Report of AMMB Holdings Berhad is our main report of the year. It provides our stakeholders with the information they need to understand our various businesses and operations. We also supplement this report with additional online disclosures during the year, including quarterly financial statements. For the purposes of this report, we generally refer to AMMB Holdings as AmBank Group. Our financial year runs from 1 April until 31 March. In preparing our report, we were guided by the requirements of Malaysian statutory and reporting frameworks, including those of Bursa Malaysia. Corporate Section This is a detailed source of information about AmBank Group and gives an overview of the financial and non-financial milestones and achievements for our financial year. We include information on our businesses and performance and our approach to sustainability, governance and risk. We also lay out our strategy and our future goals. The format of our annual report is designed to be easy to read and to give stakeholders an overview of our operations. Financial Section This presents the full set of audited financial statements for AMMB Holdings Berhad. These statements give our stakeholders a clear and full analysis of our financial affairs at the end of our financial year on 31 March 2017. They are prepared in accordance with Malaysian financial reporting standards with the engagement of external auditors. Online Version ambankgroup.com th Annual General Meeting Grand Ballroom Date: Monday, 31 July 2017 of AMMB Holdings First Floor, Sime Darby Convention Centre Time: 10.00 a.m. 1A Jalan Bukit Kiara 1 26 Berhad 60000 Kuala Lumpur, Malaysia Annual Report 2017 INSIDE THIS AMMB Holdings Berhad REPORT Overview of the AmBank Group pg 88 Corporate Governance Group Financial 4 Our Purpose Review by Chief 180 Chairman’s Statement on Corporate Governance 6 Our Presence and Operations Financial Officer 181 Statement of Corporate Governance 202 Compliance with Bursa Securities Listing Key Highlights Requirements 8 Business Highlights 203 Compliance with the Malaysian Code on 9 Financial Highlights Corporate Governance 2017 214 Statement on Risk Management and Internal Key Messages Performance Review Control 216 Audit and Examination Committee Report 88 Group Financial Review by Group Chief 12 Letter to Shareholders 219 Statement on Internal Audit Financial Officer 221 Group Risk Management Report 91 FY18 Quarterly Results Announcements pg 14 222 Group Compliance 92 Five-Year Group Financial Summary Message From 223 Shariah Committee Report Group Chief 93 Five-Year Group Financial Highlights Executive Officer 94 Performance Scorecard Highlights and Achievements 95 Simplified Group Statements of Financial Position 228 Calendar Of Events 96 Segmental Analysis 228 Business Activities 99 Group Quarterly Financial Performance 233 Social And Sports Activities 100 Key Interest Bearing Assets and Liabilities 234 Notable Achievements 236 Media Highlights 14 Message From Group Chief Executive Officer 101 Statement of Value Added 102 Distribution of Value Added About Us 103 Capital Management Stakeholders Information 104 Dividends for FY17 27 AmBank Group Corporate Profile 240 Analysis of Shareholdings 105 Credit Ratings 244 Top 10 Properties of AmBank Group 28 Our Milestones 106 Balance Sheet Management 32 Corporate Information 245 Notice of Twenty-Sixth Annual General Meeting 107 Investor Relations 252 Statement Accompanying Notice Of Annual 34 Group Corporate Structure 111 AmBank Share Price and Volume 36 Strategic Business Entities General Meeting 113 Financial Calendar 253 Administrative Details For The 26th Annual Leadership General Meeting Business Review 255 Group Corporate Directory 40 Board of Directors 114 Wholesale Banking 263 Group Branch Network 42 Profile of Directors 126 Retail Banking 51 Profile of Company Secretary 128 Business Banking • Proxy of Form 52 Senior Management Team 129 Islamic Banking 54 Profile of Group Senior Management 132 General Insurance 62 Group Organisation Structure 134 Life Insurance 64 Shariah Committee 135 Family Takaful 65 Profile of Shariah Committee Sustainability Statement Management Discussion and Analysis 140 Chairman’s Sustainability Message Strategic Review 141 About the Sustainability Statement 72 Economic and Banking Industry Review and 142 Embedding Sustainability Outlook 147 Managing Sustainability 74 Our Business Model 148 Responsible Banking 76 Material Matters Impacting Our Strategy 162 Employer of Choice 77 Key Risks and Mitigation 168 Positive Societal Impact 78 Our Strategy pg 138 81 FY17 Key Strategic Objectives and Sustainability Achievements Statement Key Initiatives Our Annual Report is printed on environmentally-friendly 82 Customer Experience ICON White paper. This paper is certified chlorine-free and 83 Human Resources: People, Talent and is completely recyclable and biodegradable. ICON White Culture is made from pulp that is harvested from sustainable 85 Integrating Digital Technology forests and is sourced from Japan. 86 Code of Ethics and Business Conduct 87 Ensuring Sustainable Value Creation OUR PURPOSE p. 4 p. 5 AMMB Holdings Berhad (223035-V) Annual Report 2017 ambankgroup.com OUR PURPOSE We exist to help individuals and businesses in Malaysia grow and win together We focus on relationships Externally we focus on Our business is centered on We believe in growth, for and are advisors and long building our customers into leveraging domestic growth our customers, for our people term partners to our winners. Internally we focus opportunities. We will and for our business. We customers. We help by being on performance, teamwork expand in Malaysia with support and empower our professional, reliable and and collaboration to win in Malaysian business. customers and our people to fast, and giving them the the market. achieve their aspirations. best service. By helping, we earn their trust. Overview MD&A MD&A MD&A Sustainability Corporate Key Highlights Key Messages About Us Leadership Strategic Review Performance Review Business Review Statement Governance Highlights and Achievements Stakeholders Information p. 1 - p. 7 p. 8 - p. 9 p. 10 - p. 21 p. 22 - p. 37 p. 38- p. 67 p. 226 - p. 237 p. 238 - p. 266 p. 70 - p. 87 p. 88 - p. 113 p. 114 - p. 135 p. 138 - p. 175 p. 178 - p. 225 OUR PRESENCE AND OPERATIONS We are a leading Malaysian bank AmBank Group is a leading Malaysian financial services group with 42 years of experience in supporting Malaysians in their economic development. Total Assets Market Capitalisation RM134.8 billion RM14 billion (at 31 March 2017) (at 31 March 2017) Geographical footprint Across Malaysia, AmBank Group has 175 branches, 766 ATMs and a network of 13 regional offices. Perlis Regional Branches ATM Offices Kedah Kelantan Sabah Perlis 1 3 Terengganu Pulau Pinang Labuan Kedah 6 24 1 Pulau Pinang 14 51 1 Perak Perak 18 45 1 Pahang Selangor 38 221 2 Selangor Kuala Lumpur 23 105 3 Sarawak Kuala Lumpur Putrajaya 1 3 Putrajaya Negeri Sembilan Negeri Sembilan 7 38 Melaka Melaka 6 34 1 Johor 21 81 1 Johor Pahang 9 29 1 Terengganu 4 16 Population Density < 100 persons per km2 1,001-1,500 persons per km2 Kelantan 2 16 101-500 persons per km2 > 1,501 persons per km2 Sabah 9 40 1 501-1,000 persons per km2 Labuan 1 3 Sarawak 15 57 1 175 766 13 AmBank Weekend Electronic Internet & SME ATMs @ AmInvestment AmCard Islamic banking banking mobile AmGeneral AmMetlife branches 7-Eleven Bank Services branches branches centres banking MBC 175 3 75 266 183 AmOnline 29 branches 15 branches 7 retail broking 25 (140 Cluster AmGenie 3 counters 48 agencies 6 corporate Branches) p. 6 p. 7 AMMB Holdings Berhad (223035-V) Annual Report 2017 ambankgroup.com Our Strategic Priorities FIRING UP NEW ATTAIN MARKET SETTING UP FOR OPTIMISE CURRENT GROWTH ENGINES LEADERSHIP IN KEY SUCCESS ENGINES PRODUCTS Win in fast growing, • Cards and Merchants Digital transformation – Leverage strengths in underserved segments • Transaction Banking channels, processes, corporate and investment productivity, analytics banking • SME • Markets • Mid Corp • Wealth Management Fully leverage distribution Strengthen retail deposit • Mass Affluent footprint, partnerships and franchise • Affluent new digital channels Break down organisational silos and focus on people, talent and culture Risk and compliance culture Diverse Range of Financial Services Contribution to Profits AmBank Group serves over 3 million individual and corporate customers. It provides services in wholesale banking, retail banking, investment banking and Divisional PAT Contribution (YoY) related