LeadingAsia ANNUAL REPORT 2012 ANNUAL REPORT 2012 MALAYAN BANKING BERHAD Today, we stand by Asia with assets in excess of RM495 billion. 16% Return on Equity Building Ahead of Target Today, we stand by Asia with assets in excess of RM495 billion. Maybank, one of Southeast Asia’s largest banks, has been supporting your aspirations for more Rising Regional than 50 years. Serving you in 20 countries across the globe and connecting you Strength to new opportunities through 2,200 offices across Southeast Asia, Greater China Contribution 30% International Profit Contribution and the world. We are Humanising Financial Services Across Asia. Across On Track with (3813-K) Maybank’s 2015 Southeast Asia www.maybank.com Strategic Objectives Presence in 10 Southeast Asian countries Leading in more ways than one. With a presence in 10 WE’RE LEADING ASIA Southeast Asian countries and expansion of our business footprint across the region, we have accelerated our momentum across Asia and we’re confident of our role in contributing to Asia’s prosperity and sustainability. We offer consistent service with seamless banking and a wider spectrum of value-added services. We provide our customers with easy access to financial services, fair terms and pricing and advise them on their financial needs. At the same time, we remain committed to being at the heart of the communities we serve. to grow in spite of a challenging world economy, we AS ASIA CONTINUES remain committed to its people and its diverse communities. In the spirit of Maybank, we continue to humanise financial services and provide enhanced value in the diversity of our products and services. OVER 2,200 20 47,000 OFFICES COUNTRIES MAYBANKERS ASIA TOTAL ASSETS RM495 BILLION NET PROFIT RM5.74 MARKET BILLION CAPITALISATION RM77 22 BILLION MILLION CUSTOMERS CONTENTS AT A GLANCE OUR PERFORMANCE 4 Highlights of 2012 68 Five-Year Group Financial Summary 6 Our Home Markets 70 Simplified Group Statements of Financial Position OUR PERSPECTIVE 71 Group Quarterly Financial 8 Chairman’s Statement Performance 9 President & CEO’s Statementt 72 Key Interest Bearing Assets and Liabilities WHO WE ARE 73 Statement of Value Added 18 Vision, Mission and Core Values 74 Segmental Information 19 Code of Ethics and Conduct 20 Corporate Profile & Global Network BUSINESS REVIEW 22 Key Business Entities 78 Group Financial Review 24 History, Innovation & Leadership 88 Economic & Banking 28 Group Corporate Structure 29 Group Organisation Structure Industry Review 91 Business Review: Overview OUR STRATEGY & ACHIEVEMENTS 92 Community Financial Services 100 Global Banking 32 Our Strategy 104 Investment Banking 40 Key Performance Indicators 42 Maybank Share 118 International Operations 48 Maybank in the News 122 Singapore 50 Event Highlights 124 Indonesia 66 Awards & Recognition 126 Philippines 127 Greater China 128 Indochina 129 Other Overseas Units 130 Insurance & Takaful 138 Islamic Banking 141 Shariah Committee 142 Group Human Capital 150 Enterprise Transformation Services OUR LEADERSHIP 172 Board of Directors 174 Board of Directors Profile 182 Group Executive Committee Our Our Perspective Strategy 832 rd ANNUAL GENERAL MEETING OF MALAYAN BANKING BERHAD 53 SIME DARBY CONVENTION CENTRE • GRAND BALLROOM, LEVEL 1 1A Jalan Bukit Kiara 1 • 60000 Kuala Lumpur, Malaysia Thursday : 28 March 2012 at 10.00am Refer to pages 242 to 246 for Annual General Meeting Information and Financial Calendar. OUR RESPONSIBILITY 232 Classification of Shareholders 233 Change in Share Capital 158 Corporate Responsibility 236 Properties Owned by Maybank 167 Investor Relations Group CORPORATE GOVERNANCE 237 List of Top 10 Properties Owned This annual report is available on by Maybank Group the web at www.maybank.com 192 Statement on Corporate 238 Corporate Information Governance 239 Group Directory To contact us, please refer to page 213 Statement on Internal Control 238 for Corporate Information and 216 Audit Committee Report AGM INFORMATION page 239 for Group Directory 221 Risk Management 242 Notice of the 53rd Annual 229 Anti-Money Laundering/Counter General Meeting Financing of Terrorism Policy The financial statements are 245 Statement Accompanying Notice available in the Financial OTHER INFORMATION of the 53rd Annual General Statements book of the Annual Meeting Report 2012 230 Analysis of Shareholdings 246 Financial Calendar • Form of Proxy Our Leadership 172 Business Our Review Responsibility 78 158 HIGHLIGHTS OF 2012 NET PROFIT Record earnings with profit after tax and minority interest (PATAMI), growing 17.6% to RM5.74 billion on the back of sustained growth in net fund based income RM5.74 billion and fee based income, supported by improved cost +17.6% efficiency. Refer to page 78 for Group Financial Review INTERNATIONAL PBT CONTRIBUTION PBT from international operations surged to 30.2% from 23.8% a year earlier as international revenue grew 15.5% on the back of a 12.9% growth in Gross 30% international loans. CY2011: 23.8% Refer to page 82 in Group Financial Review Maybank Kim Eng integration on track, and creating value for the Global Wholesale Banking sector (now known as Global Banking). Notable deals in 2012 included IPOs, M&As, private placements and project financing in Malaysia, Singapore, Hong Kong & Philippines. Refer to page 104 for Investment Banking We strengthened our regional presence, and are now in 10 Southeast Asian countries with the opening of offices 10 in Myanmar and Laos in 2012 and enhanced focus in SOUTHEAST ASIAN Greater China after opening our new Beijing branch. COUNTRIES Refer to page 118 for International Operations STRENGTHENED CAPITAL POSITION Completed a landmark equity placement of RM3.66 billion, the largest in Malaysian corporate history, to AHEAD OF strengthen our capital position ahead of Basel III, and BASEL III support the Group’s operations. Refer to page 85 in Group Financial Review Note: The Group has changed its financial year-end from 30 June to 31 December. Comparatives are for 12 months results beginning 1 January 2011 to 31 December 2011. The figures are unaudited, and are referred to as CY2011 in this Annual Report. Figures for FP2011 are audited results for the six-months financial period ended 31 Dec 2011 as part of the Group’s transition to a December financial year end. Figures for FY2009-FY2011 are twelve-months audited figures for the financial year ended 30 June. Maybank Annual Report 2012 4 at a glance FINANCIAL HIGHLIGHTS 65 sen Share Dividend Per RM494.9 billion Assets Total RM5.74 billion Equity HoldersoftheBank Profit Attributable to Human Capital NON-FINANCIAL HIGHLIGHTS Global Network Customers 47,000 FY09 FY10 FY11 FP11 FY12 FY09 FY10 FY11 FP11 FY12 FY09 FY10 FY11 FP11 FY12 FY09 FY10 FY11 FP11 FY12 FY09 FY10 FY11 FP11 FY12 8 310.7 0.69 Maybankersworldwide 55 336.7 3.82 60 411.3 4.45 36 451.6 2.59 65 494.9 5.74 RM76.6 billion Market Capitalisation RM311.8 billion Advances andFinancing Loans, Earnings Per Share Earnings Per 72.7 sen FY09 FY10 FY11 FP11 FY12 FY09 FY10 FY11 FP11 FY12 FY09 FY10 FY11 FP11 FY12 2,200 41.8 186.3 12.0 53.5 205.9 53.9 offices 66.9 255.0 61.4 20 65.6 276.3 34.5 countries 76.6 311.8 72.7 16.0 % * assumingfullreinvestmentofDRP RWCR: 17.35% RWCR: Capital Adequacy Ratio Share Price RM9.20 Return onEquity FY09 FY10 FY11 FP11 FY12 5.90 10.81 14.81 3.1 22 million 7.56 10.97 14.58 14.5 8.94 11.84 15.36 14.5 worldwide 8.58 11.65 16.37 15.2 9.20 13.54 17.35 16.0 at aglance 5 Our Perspective Who We Are Our Strategy Our Performance Business Review Our Responsibility Our Leadership Corporate Governance Other In Other Governance Corporate Leadership Our Responsibility Our Review Business Performance Are StrategyWe Our Our Who Perspective Our Glance A At formation AGM Information AGM formation our HOMEmarkets In 2012, our three home markets in Malaysia, Singapore and Indonesia contributed 91.2% of total Group PBT on the back of strong economic fundamentals and domestic growth drivers including consumer spending and infrastructure investments. In Malaysia, where we have the largest distribution network, our strategy is to lead industry growth and ensure balanced growth across all key sectors. In Singapore, our long standing presence has enabled us to form strong relationships with our clients, and our service levels are consistently recognised by the industry. In Indonesia, we are encouraged by the traction that we see arising from the ongoing transformation programme, and as we expand our distribution network, we seek to grow in line with the industry. Our growth, however, will continue to be predicated on being able to grow profitably and responsibly, and to be able to conduct our activities in line with our mission of humanising financial services. MALAYSIA Malaysia remains the core domestic market for the Maybank Group, with 63.3% of Group gross loans originating from this market and contributing 69.8% of Group PBT. The domestic loan portfolio is well balanced between consumer and non-consumer segments. As at end 2012, 54% of the domestic portfolio comprised consumer loans, while corporate loans made up 32% and the remaining 14% were SME and Business Banking loans. Our leading position in the overall loans and deposits markets is supported by a sizeable domestic franchise made up of 26,473 employees, 401 branches and over 4,700 self service terminals and mobile banking services. In 2012, we achieved many milestones. We ranked first on the domestic league tables for M&As and ranked second for domestic bonds. We also retained our lead in the Islamic banking market, with Islamic loans contribution to total domestic loans up from 26.1% in 2010 to 30.6% in 2012.