Silverlake Axis Ltd Corporate Presentation November 2014 - - PowerPoint PPT Presentation

Silverlake Axis Ltd

Corporate Presentation November 2014

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Disclaimer

This presentation may contain statements regarding the business of Silverlake Axis Ltd and its subsidiaries (the “Group”) that are of a forward looking nature and are therefore based on management’s assumptions about future developments. Such forward looking statements are typically identified by words such as ‘believe’, ‘estimate’, ‘intend’, ‘may’, ‘expect’, and ‘project’ and similar expressions as they relate to the Group. Forward looking statements involve certain risks and uncertainties as they relate to future events. Actual results may vary materially from those targeted, expected or projected due to various factors. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, interest rate charges and regulatory developments. Such factors that may affect the Group’s future financial results are detailed in our listing prospectus / circulars, listed in this presentation, or in the management discussion and analysis section of the company’s result report and filing with the SGX. The reader is cautioned to not unduly rely on these forward-looking

• statements. We do not undertake any duty to publish any update or revision of any forward looking

statements. The information contained in this presentation has not been independently verified. No representation

• r warranty expressed or implied is made as to, and no reliance should be placed on, the fairness,

accuracy, completeness or correctness of the information or opinions contained in this presentation. Neither Silverlake Axis or any of its affiliates, advisers or representatives shall have any liability whatsoever for any loss arising, whether directly or indirectly, from any use or distribution of this presentation or its contents. This presentation is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for shares in Silverlake Axis.

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Presentation Outline

I nvestment Merits

Business Overview Major Developments Results & Financials Prospects

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• A leading I T software and services company in the high

growth Asia Pacific Region

• 40% of leading SE Asian banks use Silverlake’s software and services
• 25 years track record of successful implementation of Silverlake’s enterprise

software applications in over 150 customer sites with 100% success rate

• Earnings turnaround with EPS growth in FY2011, FY2012,

FY2013 & FY2014

• Positive trends in banking industry

Increasing need of a common core platform for regional banks as well as need to keep up with regulatory changes, compliance and competition

• Strong balance sheet with net cash of RM421.0m as of 30

September 2014

• Strong margins above most peers

Strong EBIT margin with growth in SIBS licensing and maintenance & enhancement services revenue from new contracts

Key Points

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Presentation Outline

Investment Merits

Business Overview

Major Developments Results & Financials Prospects

Company Profile

Core Banking, Payment, Retail, Insurance Industry Software Business ASEAN, China, Japan Core Banking, Payment, Retail, Insurance Industry Services Business Implementation Services Application Maintenance & Management Services Expanding Market & Digital Economy Business Asia Pacific Economies Silverlake Axis Group Intellectual Property Development Intellectual Property Licensing

Silverlake is a leading provider of Digital Economy Solutions and Services for the banking and financial services, payments, retail, logistics and insurance businesses. We provide comprehensive methods and tools, business applications and integration technologies, implementation and application management services to deliver successful business strategy and operation transformations for our customers

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Business Evolution & Transformation

FY 2014 Revenue

RM500.7 mil

Licensing of Application Software

RM147.7 m 30%

Application Maintenance & Enhancement Services

RM210.3 m 42%

Sale of Hardware Products

RM32.4 m 6%

Software Project Services RM71.8 m

14%

Credit and Cards Processing

RM19.5 m 4%

I nsurance Processing

RM19.0 m 4%

Sale of Hardware Products Licensing

• f SI BS

RM90.6 m 61%

Branch Banking Maintenance Sale of Branch Banking Solution

FY 2008 Revenue

RM146.9 mil

RM19.0 m 14% RM16.4 m 11% RM20.9 m 14%

Sale of Branch Banking Solution Branch Banking Maintenance

FY 2005 Revenue

RM27.8 mil

RM19.4 m 70% RM8.4 m 30%

2006 to 2009 2010 to 2014 2003 to 2005 Axis Systems Limited (Listed on SGX in 2003) Silverlake Axis Limited (Post SIBS Acquisition 2006) SSB, QR, Isis, Merimen & CVSB Acquisitions 2015 & Beyond

Delivery Channels & Branch Banking Solutions Core Banking & Payments Solutions Structured Software Maintenance & Project Services, Retail, Logistics, Integration Software, Insurance, Mobility & Internet Solutions

+ + +

Asia’s

Largest Digital Economy Solutions

Company

Digital Economy Transformation Partnerships Across Asia and Beyond

Note: Silverlake Solution Limited (SSB), QR Technology Sdn Bhd (QR), Isis International Pte Ltd (Isis), Merimen Group, Cyber Village Sdn Bhd (CVSB)

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Business Overview

A leading long term value based provider of core banking, insurance, payment and retail solutions and application services to major financial institutions, retailers and conglomerates in Asia since

1989 40%

• f leading South-East Asia banks use the Silverlake

Axis Integrated Banking Solution (SIBS) to process their banking transactions everyday

100%

success track record in delivering End-to-End Core Banking, Payment and Retail solutions implementation and enhancement, backed by strong management and key software development team Provides proven, cost-effective and innovative front, middle and back office banking, payment, insurance and retail solutions

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Business Model

Credit & Cards Processing

Sale Of Software & Hardware Products

Software Project Services Insurance Processing Maintenance & Enhancement Services Software Licensing

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Growing Core Customer Revenues

Cumulative Revenue Per Customer Relationship Time

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Increasing Value Add to Customers

Time Series Recurring License Revenue Annual Recurring Maintenance Revenue Repeatable Project Implementation Revenue

Maintenance & Enhancement Services Project Services

I nitial Software License Software Licence Expansion/ Upgrade Software Licence Expansion/ Upgrade

Software License

Leading & Growing Market Share

Silverlake Axis Has More Than 150 Customers Who Are Leaders in the Markets They Serve and Known for Their Products & Services Innovation and Operational Excellence

LEADI NG MARKET SHARE Core System Platform Partner of Choice for 3 of the 5 Largest ASEAN Financial I nstitutions Over 40% of the Top 20 Largest Banks in South-East Asia run on SI BS Anchor Customers in China, Japan, Middle East, South Asia EXPANDI NG MARKET SHARE

As of Aug. 12, 2014 As of Jan. 1, 2005 Silverlake Customer Source: Bloomberg

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Note: The list of prominent core banking vendors in each market changes when non-top 10 institutions are included

Leadership in Asia Pacific Market

Country Prominent Core Banking Applications

Australia Internal/ Older proprietary, SAP , Oracle, Hogan China Local/ Internal/ Older Systems, Temenos, TCS Hong Kong Local/ Internal/ Older Systems India Infosys, Oracle, TCS FNS Indonesia

Silverlake Axis

Malaysia

Silverlake Axis

Philippines

Silverlake Axis, FIS, Infosys

Singapore

Silverlake Axis

South Korea Local core banking applications, Hyundai Taiwan Internal and proprietary systems Thailand

Silverlake Axis, FIS

Vietnam

Silverlake Axis, Temenos, Hyundai

Note: The list of prominent core banking vendors in each market changes when non-top 10 institutions are included Source: Table 1 - Leading Core Banking Players in the Top 10 Bank Segments in 12 Asia/Pacific Countries, IDC Financial Insights, 2013

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Boar d of Dir e c tor s Pr

• file

Goh Peng Ooi Group Executive Chairman

• Mr. Goh Peng Ooi was appointed as the Group Executive

Chairman of Silverlake Axis Ltd (“the Company”) on 23 May

• 2006. Prior to that, he was the Non-Executive Chairman of

the Company since 2002. He founded Silverlake Group in 1989 and has built it to become an established provider of cross industry high performance banking, payment and retail solutions .

• Dr. Kwong Yong Sin

Group Managing Director

• Dr. Kwong Yong Sin was appointed as the Group Managing

Director on 1 November 2005. He was previously the Managing Director of Silverlake Corporation from 2001 to 2005 where he completed several key SIBS customer transformation projects. Prior to Silverlake, he was the Partner and Senior Vice President of Ernst & Young and Cap Gemini E&Y Consulting.

Y Bhg. Datuk Sulaiman bin Daud

Non-Executive Director

Datuk Sulaiman bin Daud was appointed a Director in 2003. He was a Director of the Agricultural Bank of Malaysia for two years and later became Chairman for eight years. Under his leadership, the Bank was transformed into a corporatised entity, today known as AGRO Bank.

Y Bhg. Tan Sri Dato’Dr. Lin See- Yan

I ndependent Non-Executive Director

Tan Sri Dato’Dr. Lin See-Yan was appointed a Director in

• 2003. Tan Sri is currently an independent strategic and

financial consultant. Prior to 1998, he was Chairman and CEO of the Pacific Bank Group and for 14 years previously, he was the Deputy Governor of Bank Negara Malaysia (Central Bank of Malaysia).

Ong Kian Min

I ndependent Non-Executive Director

• Mr. Ong Kian Min was appointed a Director in 2003. Mr. Ong is

concurrently an Advocate and Solicitor practicing as a consultant with Drew & Napier LLC and a Senior Adviser with Alpha Advisory Pte. Ltd., an independent corporate advisory group providing advice to companies and businesses in the Asia Pacific region.

Lim Kok Min

I ndependent Non-Executive Director

• Mr. Lim Kok Min was appointed a Director on 15 June 2006.

He is currently the Chairman of IREIT Global Group Pte Ltd. He is the immediate past Chairman of Gas Supply Pte Ltd, the Singapore Institute of Directors, of Building & Construction Authority and of Senoko Power Limited.

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Ke y Manage me nt Pr

• file

Wong Yok Koon Senior EVP, SI BS Core Solutions

• Ms. Wong is one of the pioneer

employees and was instrumental in driving the Group’s core banking solution portfolio growth. She has over 25 years’ experience in core banking development and deployment at major regional and local financial institutions. Today, she continues to be responsible for core product development of Silverlake Axis Integrated Banking Solution (SIBS) particularly in cards and payments, and works with clients in their digital economy transformation.

Mary Yau Siew Moi Senior EVP, SI BS Core Solutions

• Ms. Yau has been a key driver in the

Group’s growth over the past 25 years and is one of the pioneer employees. Under her leadership, she has grown and enriched the capabilities of the core banking solution portfolio particularly in lending solutions. She is currently responsible for core product development

• f Silverlake Axis Integrated Banking

Solution (SIBS) and works collaboratively with the other entities in the Group to

• ffer digital transformation propositions

to customers.

Lau Siow Ling Senior EVP, Structured Services

• Ms. Lau has 28 years of IT industry

experience in sales, marketing and

• perations, spending 16 years in IBM

Malaysia before joining the Group. She was previously the IBM iSeries Country

• Manager. She is currently responsible for

the Silverlake Axis Integrated Banking Solution (SIBS) Application Maintenance and Management business, whereby she engages with our clients in ensuring the smooth running of their daily business

• perations and keeping up with the

dynamic industry changes.

Hoong Lai Ling Senior EVP, Administration & Finance

• Ms. Hoong is responsible for overseeing

the Group’s financial and administrative

• functions. She has 23 years of experience

in auditing and financial managerial

• positions. She is a qualified accountant

from the Malaysian Institute of Certified Public Accountants and was trained in Pricewaterhouse Malaysia. Prior to her current role, she was an accountant at Silverlake System from 1996 to 2002. She is also a member of the Malaysian Institute of Accountants.

Jean Aw Peng Mei Senior EVP, Digital Enterprise Solutions

• Ms. Aw is responsible for driving the

Group’s digital enterprise strategy by combining and creating digital solution propositions from our core and acquired

• businesses. She joined the Group in 2014

and brings 25 years experience in business and technology transformation of a number

• f global, regional and local banks. Prior to

her current role, she was Vice President at OCBC Bank and was previously Director at Ernst & Young Advisory Services.

Lee Cheen Siong EVP, SI BS Channel Solutions

• Mr. Lee has been with the Group since

2000 focusing on the development and implementation of Branch Delivery and Channels Solutions at major regional and local financial institutions. Today, his focus is on channels convergence and product development. He was appointed as EVP in June 2012. Prior to his current role, he was the country manager for Silverlake Axis in Beijing, China. Mr. Lee has 18 years of experience in the banking software industry.

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Ke y Manage me nt Pr

• file

Hidetoshi Neda Managing Director, Silverlake Japan Ltd

• Mr. Neda is responsible for the growth and

expansion of Silverlake Axis Group’s business in Japan and joined the Group in 2009. In his 23 years’ experience in the Credit Card and Retail Banking industries, he played a lead role in the Japan credit card market by developing new credit card products, payment products and services. These business products were successfully implemented in MasterCard, Citibank N.A., Shinsei Bank, Tokyo Star Bank and SBI Group.

Sua Shii Huey Director, Cyber Village Sdn Bhd

• Ms. Sua joined Cyber Village in its founding
• year. She has more than 18 years business

development and project management experience, specializing in e-commerce implementations and managing small to large enterprise scale e-business projects. Prior to Cyber Village, she was part of the team which set up the first image bank/stock photo company in Malaysia - Ultra Dimension and successfully signed up stock photo agencies in Singapore, Hong Kong and China.

Trevor Lok Theng Hey CEO, Merimen Group

• Mr. Lok is one of the pioneer employees
• f Merimen since 2002 and played an

instrumental role in its early success. He is currently responsible for the overall strategy and operations of Merimen’s business and leading Merimen’s business development and expansion. Before assuming his current role in 2013, he actively led the development of Merimen’s insurance policy solutions. He has over 12 years of experience in insurance solutions and services industry.

Sanjeev Dhar Managing Director, I sis Group

• Mr. Dhar joined the Group in 2011 and is

responsible for enterprise payment and integration technology platform business. He leads the R&D of “Implementable Architectures and Compliance”, and is responsible for managing Isis’ day to day

• perations, product development and

technology strategy. Prior to joining the Group, he was Senior Vice President at Isis since 1996 where he spearheaded all product

• development. He has over 19 years of

experience in banking technologies, financial systems and digital banking infrastructure.

Shieh Yee Bing Director, Cyber Village Sdn Bhd

• Ms. Shieh is one of the pioneer employees of

Cyber Village since 2000. She focuses on Cyber Village’s large enterprise scale projects and development of key banking accounts. Today, besides overseeing Cyber Village’s day to day operations, she also leads product development with special focus on portal and internet mobile financial self-service solutions. She has over 18 years experience in e- business projects across financial services, logistics, and education industries.

Andrew Ooi Su Jin CTO, Merimen Group

• Mr. Ooi is responsible for the technical

framework in which all Merimen solutions are built upon since the founding years. He assumed the role of Chief Technology Officer in 2013. Prior to Merimen, he worked as a Software Engineer in Sunway Workflow Automation (SWA), and was involved in the design and development

• f insurance automation systems. He has
• ver 15 years of experience in insurance

claim solution and services industry.

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Presentation Outline

Investment Merits Business Overview

Major Developments

Results & Financials Prospects

Acquisitions Made: 2010 - 2013

2010

Silverlake Solution Limited

(Structured Software Maintenance & Project Services)

2011

I sis I nternational Pte Ltd

(Enterprise Payment and Integration Platform)

2013

Merimen Group

(Insurance Claims & Policies Processing Software as a Service ‘SaaS’ Platform)

Cyber Village Sdn Bhd

(Mobile & Internet Solution)

QR Technology Sdn Bhd

(Retail & Logistic Solution)

I n addition to broadening the Group’s income base, these acquisitions have added depth and range to the Group’s portfolio of software solutions and services to deliver and support our customers’ transformations initiatives to compete and profit from the digital economy 17

Silverlake Axis Digital Economy Solution

* SCCIM: Silverlake Collaborative Capability and Intelligence Model

CORE Solutions

Silverlake Axis Integrated Banking Solution (SIBS) Silverlake Axis Integrated Islamic Banking Solution (SIIBS) Silverlake Axis Integrated Provident Fund System (SIPFS) Silverlake Axis Card System (SCS) Silverlake Axis Retail Merchandising System (PROFIT) Silverlake Axis Insurance Solution (MERIMEN)

CORE Integration

SIBS Delivery Service Processor (DSP)

Enterprise to Enterprise Collaboration (SCCIM*)

SIIBS DSP Complement (DSP-C)

Omni Channel Services

SCCIM.OS Social Network Services Technology Services Industry Services SCCIM.OS. Payment SCCIM.OS. Data

Web ATM Branch Teller & Sales Loan Origination Contact Centre Collection Self/ Kiosk Service Customer Relationship Management (CRM) Internet Banking Smart Mobile Banking eWallet Mobile Advertisement Virtual Real Super Mall Augmented Reality GeoGate ICMS Mobile Mobile Loyalty Programme Identity Access Management Mobile Game Mobile POS Notification Mobile Alert Offers Mobile Stock Trading Internet Mobile Convergence Mobile Apps (iOS, Android, Windows, BB) Smart Devices, Tablets and Web Virtual Card Online Share Trading Personalization eLoyalty ePayment eProcurement Facebook Banking eRemittance P2P Payment Web POS Portals Express Banking

The Silverlake Collaborative Architecture (CORE + SCCI M) drives our industry and cross industry solution roadmap for digital economy enterprises

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Silverlake Axis Digital Economy Core Capabilities and Ecosystem Offerings

Healthcare Ecosystem Education Ecosystem Hospitality Ecosystem Merimen Software-As- A-Service Insurance Platform Insurers

Workshops & Repair Centres Motor Part Suppliers Loss Adjustors Insurance Intermediaries

Cyber Village Mobile & Internet Solution I sis Integration and Enterprise Payment Platform Silverlake Axis Integrated Banking Solution (SIIBS) Silverlake Axis Integrated Islamic Banking Solution (SIIBS) Silverlake Axis Card Solution (SCS) QR Retail Merchandising

System (PROFIT)

Online Stores Physical Stores Warehouse Digital Payment Logistic

* Silverlake Collaborative Capability and Intelligence Model

Solicitors

Business Platform Capabilities

Islamic Financial Institutions Regional Financial Institutions Exchanges & Payment Gateways Domestic Financial Institutions

CORE SCCIM*

Omni Channel Services CORE Integration

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Silverlake Axis Banking Ecosystem

Cyber Village Mobile & Internet Solution Isis Integration and Enterprise Payment Platform Silverlake Axis Integrated Banking Solution (SIIBS) Silverlake Axis Integrated Islamic Banking Solution (SIIBS) Silverlake Axis Card System (SCS)

Islamic Financial Institutions Regional Financial Institutions Exchanges & Payment Gateways Domestic Financial Institutions

Core System Platform Partner of Choice for Top 3 of the 5 Largest ASEAN Financial Institutions Over 40% of the Top 20 Largest Banks in South-East Asia run on SIBS 100% Successful Implementation Track In Over 100 Core Institution Migrations In Asia & Middle East Compliant in 20 Countries’ Banking Ecosystem (i.e. e-Govt, Financial Exchanges, Payment Gateways)

Healthcare Ecosystem Education Ecosystem Hospitality Ecosystem Insurers

Workshops & Repair Centres Motor Part Suppliers Loss Adjustors Insurance Intermediaries Online Stores Physical Stores Warehouse Digital Payment Logistic Solicitors

Business Platform Capabilities

CORE SCCIM*

Omni Channel Services CORE Integration

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Silverlake Axis I nsurance Ecosystem

Merimen Software-As-A-Service Insurance Platform

Primary markets are Malaysia, Singapore and Indonesia Over 80 insurers, encompassing most major international insurers and many bank- affiliated insurers, covering both conventional and takaful operators Over 4,000 automobile workshops and repair centres Over 25 major automobile brands Over 250 loss adjusters and law firms Over 3,500 insurance intermediaries

Insurers

Workshops & Repair Centres Motor Part Suppliers Loss Adjustors Insurance Intermediaries Solicitors

Healthcare Ecosystem Education Ecosystem Hospitality Ecosystem

Online Stores Physical Stores Warehouse Digital Payment Logistic

Business Platform Capabilities

Islamic Financial Institutions Regional Financial Institutions Exchanges & Payment Gateways Domestic Financial Institutions

CORE SCCIM*

Omni Channel Services CORE Integration

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Silverlake Axis Retail Ecosystem

QR Retail Merchandising System (PROFIT)

Online Stores Physical Stores Warehouse Digital Payment Logistic

16 installations across the fastest

growing markets in Asia: China, Malaysia, Philippines, Singapore, Thailand, Vietnam, Cambodia & Indonesia Over 45,000 Suppliers More than 350 Retail Outlets

Healthcare Ecosystem Education Ecosystem Hospitality Ecosystem Insurers

Workshops & Repair Centres Motor Part Suppliers Loss Adjustors Insurance Intermediaries Solicitors

Business Platform Capabilities

Islamic Financial Institutions Regional Financial Institutions Exchanges & Payment Gateways Domestic Financial Institutions

CORE SCCIM*

Omni Channel Services CORE Integration

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Presentation Outline

Investment Merits Business Overview Major Developments

Results & Financials

Prospects

Q1 FY2015 Results Summary

(RM Million) Q1 FY2015 Q1 FY2014 % change

Revenue 116.3 101.4 + 15% Gross Profit 75.0 58.9 + 27% Pre-tax Profit 63.0 55.2 + 14% Income Tax (3.3) (4.0) (19% ) Net Profit 59.7 51.2 + 17%

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Revenue by Business Activities

% change

+ 22% + 84% (43% ) (78% ) (3% ) (6% )

56.5 38.0 12.6 0.8 4.7 3.7 46.2 20.6 22.2 3.6 4.9 3.9

10 20 30 40 50 60

Maintenance & Enhancement Services Software Licensing Software Project Services Sale of Software and Hardware Products Insurance Processing Credit and Cards Processing

RM ' m Q1 FY2015 Q1 FY2014

65% 54% 5% 51%

7% 58% 54% 50%

0% 10% 20% 30% 40% 50% 60% 70% Gross Profit Margin Pretax Profit Margin Net Profit Margin Effective Tax Rate

Q1 FY2015 Q1 FY2014

Q1 FY2015 Selected Ratios

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Dividend

Dividend

(Singapore cents per share)

First Interim Second Interim Third Interim Final Special Total FY2013 0.5 0.7 0.8 1.1

• 3.1

FY 2014 0.8 0.9 1.0 1.2 0.6 4.5 FY 2015 0.8*

• * First interim cash dividend for Q1 FY2015 is payable on 12 December 2014

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Balance Sheet

(RM millions) 30 Sep 2014 30 Jun 2014

CURRENT ASSETS 557.3 516.3

• Trade and other receivables

79.6 102.6

• Cash and bank balances

424.4 349.8 NON-CURRENT ASSETS 249.0 250.4 TOTAL ASSETS 806.3 766.7 CURRENT LI ABI LI TI ES 92.2 115.0 NON-CURRENT LI ABI LI TI ES 35.1 35.3

• Loans and borrowings

2.3 2.6

• Other payables

17.6 17.3 SHAREHOLDERS’ EQUI TY 679.0 616.4 TOTAL LI ABI LI TI ES & EQUI TY 806.3 766.7

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Presentation Outline

Investment Merits Business Overview Major Developments Results & Financials

Prospects

Technology Spending Drivers

Compliance Competition

• Mergers & Acquisitions
• Strategic Alliances

Consolidation Cost Efficiency

• Economies of Global

Processing Hubs

• Improving Return on IT

Investment

• Basel 3 & AML
• Major New

Regulations

• Regional & Global

Competition

• Universal Banking

Expansion (Conventional, Islamic, Micro-banking)

1 2 3 4

 Core Banking Transformation  Delivery Channels Modernisation  Regulatory/ Risk Compliance  Performance Management

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Source: IDC Financial Insights Asia Pacific, 2013-2014

I T Budget Deployment 2013-2014

How new IT budgets will be spent…

BAU Projects

Singapore $4bn $1bn Thailand, Indonesia, Malaysia combined $3bn $1.5bn China $16bn $4bn Australia $10bn $3bn India $5bn $2bn Currency: US$

Note: BAU: “Business As Usual” spending which generally falls under Bank’s Operating Expenditure category including Maintenance & Enhancement

9% 16% 30% 12% 28% 5% Multi Channels & Distribution Business Process Re-engineering Core Refreshment/ Replacement Enterprise Data Management Governance, Risk & Compliance Enterprise & Retail Payments

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Thank You

Dr Raymond Kwong Group Managing Director Silverlake Axis Ltd raymondkwong@silverlakeaxis.com Meeting request, please contact: Lee Teong Sang Mobile: +65 9633 9035 teongsang@cyrus.com.sg

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