1 Financial Highlights: FY18 Key financial highlights Strong - PowerPoint PPT Presentation

FY18 R ESULTS A NALYST P RESENTATION 28 August 2018 1

Agenda 1 Financial Highlights: FY18

Key financial highlights Strong performance backed by robust top-line, strategic cost management and improved efficiencies Opex & CIR Operating Profit Total Income • • • 4,840 4,551 6% 2,779 RM'mil RM'mil 2,543 9% 44.1% 42.6% RM'mil 2,060 2,008 FY2017 FY2018 FY2017 FY2018 FY2017 FY2018 GIL & Coverage Ratio Gross Loans Deposits • • • RM'bil 155% RM'bil 151% 157.4 155.2 1% 129.1 125.1 3% 96% 89% 0.96% 0.87% FY2017 FY2018 FY2017 FY2018 FY2017 FY2018 3 HLB FY18 ended 30 June 2018

Management guidance Stellar set of performance with all KPIs met Target FY18 Achieved FY18 3% - 4% P Gross Loan Growth 3.1% (revised) P 82.0% LD Ratio ~82% 82.0% P >2.1% 2.1% Net Interest Margin P 82.0% ~26% Non-Interest Income Ratio 27.8% P Cost-to-Income Ratio <44% 42.6% P Gross Impaired Loan Ratio <1% 82.0% 0.87% P Return on Equity 10% - 11% 11.3% 4 HLB FY18 ended 30 June 2018

Profit & Loss Robust growth on revenue, prudent cost management and strong contributions from BOCD Record profit 2,638 2,233 2,145 2,102 RM'mil 1,903 FY14 FY15 FY16 FY17 FY18 RM’mil FY17 FY18 YoY % • Record-breaking PBT and PAT, Total Income 4,551 4,840 +6% underpinned by robust top-line Operating expenses (2,008) (2,060) +3% performance, healthy NIM and +9% Operating profit before allowances 2,543 2,779 solid non-interest income Loan allowances & other impairments (159) (70) -56% • CIR lowest in 6 years, reaffirming positive JAWS for 8 consecutive Share of profits from associates & JV 364 537 +47% quarters Profit before tax 2,748 3,246 +18% • Strong growth in contributions Profit after tax 2,145 2,638 +23% from BOCD +17% Profit after tax (underlying)* 2,247 2,638 Note *: Excluding one-off tax impact of RM102 mil in FY17 5 HLB FY18 ended 30 June 2018

Net Interest Income & NIM Stable NIM underpinned by prudent pricing and funding cost management 2.10% 2.09% 2.14% 2.13% 2.13% 2.10% 2.03% 3,495 3,355 RM'mil 896 886 867 864 846 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 FY2017 FY2018 Net Interest Income NIM 6 HLB FY18 ended 30 June 2018

Non-Interest Income Strong momentum leading to an improved NII ratio of 28% 27.8% 26.3% Wealth Management Income (Malaysia) 1,344 70 1,196 RM’mil 105 FY18 68 FY17 24% RM105 mil 91 RM85 mil 623 427 Credit Card Fees 609 574 FY18 FY17 RM218 mil 8% RM236 mil (27) FY2017 FY2018 Fee Income Trading & Investment Forex Islamic and others Dilution of investment (BOCD) Non Interest Income ratio 7 HLB FY18 ended 30 June 2018

Operating Expense CIR lowest at 42.6% in the past 6 years, led by efficiency gains from continuous digitization efforts Composition of Operating Expenses Admin & general 12% Personnel Of which: cost 44.1% 54% Digitization Marketing 42.6% 8% related RM97 mil RM’mil 2,060 2,008 FY18 260 256 161 156 Establishment 534 484 26% Establishm ent 1,112 1,106 26% Digitization Related CAPEX RM'mil 32 FY2017 FY2018 18 Personnel cost Establishment Marketing 35 Admin & general CIR 38 FY2015 FY2016 FY2017 FY2018 8 HLB FY18 ended 30 June 2018

Loans Growth led predominantly by mortgages and SME 8.0% 7.9% 7.9% 7.7% 11.3% 11.3% 7.6% 11.2% 10.1% 9.4% 8.8% 61,370 56,861 51,510 18,446 129,069 17,584 16,894 RM'mil 125,147 120,605 113,418 104,169 FY16 FY17 FY18 FY16 FY17 FY18 7.0% 7.0% 6.7% 7.5% 7.5% 6.8% 20,480 20,377 19,226 1,812 1,678 1,850 3,998 3,899 3,755 FY16 FY17 FY18 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Credit Card Personal Loan Market Share % Note: * Loan figures (RM mil) are based on group, but market share data is based on domestic only. 9 HLB FY18 ended 30 June 2018

Asset Quality Stable asset quality with improved GIL ratio, impaired loans coverage at 155% with regulatory reserves Gross Impaired Loans Loan Impairment Coverage (LIC) 181% 177% 155% 151% 1.76% 1.63% 1.62% 1.61% 136% 1.58% 129% 120% 1.18% 96% 0.96% RM'mil 89% 0.87% 0.84% 0.79% 101% 95% 91% 86% 1,232 84% 1,203 1,126 957 948 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Gross impaired loans GIL Ratio Industry GIL ratio Industry LIC LIC LIC (incld reg reserve) Note: Industry ratio has been restated by regulators 10 HLB FY18 ended 30 June 2018

Asset Quality Healthy credit portfolios; as well as improvement to domestic asset quality 1.01% 0.91% 0.82% 0.25% 0.19% 0.09% 1,197 1,113 943 14 13 6 FY16 FY17 FY18 FY16 FY17 FY18 0.58% 1.72% 0.54% 1.49% 1.42% 0.45% 353 353 0.81% 307 0.79% 0.79% 303 273 233 145 143 134 FY16 FY17 FY18 FY16 FY17 FY18 FY16 FY17 FY18 11 HLB FY18 ended 30 June 2018

Deposit Healthy growth on the back of solid CASA momentum 8.7% 8.6% 8.4% 9.0% 9.0% 8.2% 8.2% 7.5% 8.4% 7.5% 7.3% 87,976 88,222 84,719 41,202 38,764 37,185 157,414 RM'mil 155,233 148,524 140,276 130,252 FY16 FY17 FY18 FY16 FY17 FY18 12.5% 12.3% 12.1% 7.3% 6.9% 6.6% 88,159 86,176 81,353 63,340 62,697 62,745 FY14 FY15 FY16 FY17 FY18 FY16 FY17 FY18 FY16 FY17 FY18 Note: * Deposit figures are based on group, but market share data is based on domestic only; Business enterprise deposits including FI 12 HLB FY18 ended 30 June 2018

Liquidity & Capital Robust liquidity and capital positions Capital Adequacy ^ Loan Deposit Ratio 91.3% 91.3% 89.3% 84.0% 82.3% 16.3% 15.8% 14.7% 14.6% 14.3% 13.7% 13.3% 13.1% 82.0% 80.9% 81.2% 80.6% 80.0% 13.3% 12.7% 11.9% 11.9% 12.6% 10.8% 10.5% FY14 FY15 FY16 FY17 FY18 Industry LDR HLB LDR Note: * Industry data derived from banking system’s commercial banks plus Islamic banks only Liquidity Coverage Ratio (LCR) Minimum Minimum FY14 FY15 FY16 FY17 FY18 requirement in requirement FY18 Year 2018 by Year 2019 CET1 Tier 1 Total capital ratio LCR 126% 90% 100% Note: ^ Capital base & ratio after proposed dividends 13 HLB FY18 ended 30 June 2018

Shareholder Value ROE continues to improve on strong underlying performance Return on Equity, Return on Assets & EPS Declared Higher DPS 44% 43% 11.3% 10.7% 10.3% 37% 34% 32% 48 1.32% 1.09% 1.17% 45 41 41 41 129.0 109.8 106.6 FY2016 FY2017^ FY2018 FY14 FY15 FY16 FY17 FY18 Net DPS Dividend Payout (on actual reported PAT) EPS ROE ROA Note: * Excluding one-off MSS costs; ^ Excluding one-off tax impact of RM102 mil 14 HLB FY18 ended 30 June 2018

Performance of Associated Company: Bank of Chengdu Co., Ltd. Financial Highlights as at H1 ended 30 June 2018 (unaudited) 15.1% 1% Improved ROE RMB'mil RMB'mil 2,124 4,081 41% 1,651 29% 2,897 24% Solid Cost-to-income H1FY17 H1FY18 H1FY17 H1FY18 Ratio 162,783 Prudent Coverage RMB'mil 232% 2.05% 143,850 Ratio 13% 1.61% 0.44% Healthy 13.7% 7% H1FY17 H1FY18 H1FY17 H1FY18 Total Capital Ratio 16 HLB FY18 ended 30 June 2018

Agenda 2 Business Update

Digital Banking (Wholesale) KEY DIGITAL METRICS Y-o-Y FY18 Wholesale Users Transactional Transactional Transactional Amount Users Volume +57% 7% +22 22% +45 45% +20 20% Partner Collaboration Value added services to support our GSME customers cv Cloud accounting system for business starters including Simplifying HR by providing one platform to manage free access billing, invoice issuance, system automated payroll, benefits, employee information & more. cv bookkeeping & more. 17 HLB FY18 ended 30 June 2018

Digital Banking (Retail) KEY DIGITAL METRICS Y-o-Y FY18 Retail Active Mobile Transactional Transactional Users Users Users Volume +29 29% +70 70% +64 64% +26 26% HIGHLIGHTS FOR Q4FY18 cv JUNE MAY JUNE Credit Card self-service via Connect will JomRaya trended #1 on Google Play In-Principle-Approval for online cv accelerate migration from Call Center with (Arcade Game) within 7 days of launch Personal Loan will accelerate digital 41% adoption rate in the first month contribution from 12% to 20% 18 HLB FY18 ended 30 June 2018

■ WeChat Pay ■ Strategic collaboration with Tencent Cross Border Master Merchant Acquirer in 1st Malaysia (Feb 2018) Bank in Malaysia to attain Local Currency 1st Master Merchant Acquirer (July 2018) 46 466 % 1st Bank in Malaysia to introduce the new Q-o-Q growth in Android Based All-In-One Smart Terminal transaction value >10 1000 00 Terminals in less than x3 ti x3 6 months times es by Dec 2018 On-going collaboration with via Gamification Retail, Groceries, F&B, Convenience Stores, Entertainment & many more! e-Sports sponsorship, customized game weapons, PLAY NOW exclusive partnerships 19 HLB FY18 ended 30 June 2018

■ Digital Transformation Milestones SHIFT: TRADITIONAL >>> DIGITAL COST SAVINGS FY18 86.0m (20%) 84.4m 78.7m (28%) 75.5m (35%) RM 61 61 (42%) 24.5m (6%) 74% 28.4m (9%) million 116.4m (27%) 29.5m (13%) 49.1m (16%) 30.6m (17%) 21.7m (10%) 42% 8.3m (5%) - 3 % 202.2m 138.6m 96.0m 67.3m (47%) (46%) (43%) (37%) Resulting in a 3% reduction FY15 FY16 FY17 FY18 of total cost base Internet Mobile Branch SST 20 HLB FY18 ended 30 June 2018