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Cover Rationale
AMMB Holdings Berhad’s mission of connecting, growing and outperforming is emblazoned
across the cover, with a colour scheme that takes its cue from the Group’s corporate hues.
These three words form the cornerstone of our foundation, accentuating our core capabilities
in connecting with our people, customers and stakeholders, as we continue growing to further
cement our position as a prominent player. In the financial services landscape, we aspire to
exceed expectations by consistently outperforming previous achievements to offer better and
more innovative services as we uphold our role as Malaysia’s preferred diversified, internationally
connected financial solutions group.
AMMB HOLDINGS BERHAD
(223035-V)
(Incorporated in Malaysia)
Table of Contents
Notice of Twenty-Second Annual General Meeting 02
Letter to Shareholders 04
Message from Group Managing Director 10
Values 14
Our History 15
Corporate Structure – Subsidiaries and 20
Associated Companies
Board of Directors/Corporate Information 21
Organisation Structure 22
Profile of Directors 24
Group Managing Director and Direct Reports 32
Corporate Governance 34
Group Investor Relations and Planning 42
Statement on Risk Management and Internal 44
Control
Compliance with Bursa Securities Listing 46
Requirements
Group Financial Review 48
Group Financial Highlights 56
Five-Year Group Financial Highlights/Financial 57
Calendar
Risk Management 58
Business Operations Review 60
Group Information Services 86
Human Capital Agenda 87
Notables and Awards 89
Corporate Social Responsibility 95
Calendar of Events: Business Activities 100
Calendar of Events: Social and Sports Activities 104
Review and Outlook of the Malaysian Economy 107
Financial Statements 113
Pillar 3 Disclosures 294
List of Landed Properties 345
Shareholding Structure 347
Group Directory 350
Group Branch Network 356
Form of Proxy
2 AMMB Holdings Berhad (223035-V) | Annual Report 2013
NOTICE IS HEREBY GIVEN that the Twenty-Second Annual General Meeting of AMMB Holdings Berhad (the “Company”) will be
held at Manhattan II, Level 14, Berjaya Times Square Hotel Kuala Lumpur, No. 1 Jalan Imbi, 55100 Kuala Lumpur on Thursday,
22 August 2013 at 10.00 a.m. for the following purposes:
As Special Business
To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions:
8. Proposed Renewal of the Authority to Allot and Issue New Ordinary Shares in the Company,
Pursuant to the Company’s Executives’ Share Scheme
“THAT pursuant to the Company’s Executives’ Share Scheme (“ESS”) as approved at the Extraordinary Resolution No. 12
General Meeting of the Company held on 26 September 2008, the Directors of the Company be and are
hereby authorised to allot and issue such number of new ordinary shares in the Company from time to
time as may be required for the purpose of the ESS, provided that the total number of new and existing
ordinary shares in the Company to be allotted and issued and/or transferred, as the case may be, under
the ESS, shall not exceed ten percent (10%) in aggregate of the total issued and paid-up ordinary share
capital of the Company at any point of time throughout the duration of the ESS.”
9. Proposed Renewal of the Authority to Allot and Issue New Ordinary Shares in the Company to
Mr Ashok Ramamurthy, the Group Managing Director of the Company, Pursuant to the Company’s
Executives’ Share Scheme
“THAT subject to the passing of the Ordinary Resolution No. 12 above, the Directors of the Company Resolution No. 13
be and are hereby authorised to allot and issue such number of new ordinary shares in the Company
to Mr Ashok Ramamurthy, the Group Managing Director of the Company, from time to time pursuant to
the Executives’ Share Scheme as approved at the Extraordinary General Meeting of the Company held
on 26 September 2008 and in accordance with the By-Laws as set out in Appendix I to the Circular to
Shareholders dated 4 September 2008 and as amended on 28 June 2011.”
AMMB Holdings Berhad (223035-V) | Annual Report 2013 3
10. Proposed Renewal of the Authority to Allot and Issue New Ordinary Shares in the Company, for the
Purpose of the Company’s Dividend Reinvestment Plan
“THAT the Directors of the Company be and are hereby authorised to allot and issue such number of new Resolution No. 14
ordinary shares in the Company from time to time as may be required for the purpose of the Company’s
Dividend Reinvestment Plan as approved at the Extraordinary General Meeting of the Company held on
2 September 2010, which gives the shareholders of the Company the option to elect to reinvest their cash
dividend entitlements in new ordinary shares of the Company.”
11. Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965
“THAT subject to the approvals from the relevant authorities, where such approval is necessary, full Resolution No. 15
authority be and is hereby given to the Board of Directors pursuant to Section 132D of the Companies
Act, 1965 to issue shares in the capital of the Company at any time upon such terms and conditions and
for such purposes as the Directors, may, in their discretion, deem fit provided that the aggregate number
of shares to be issued pursuant to this resolution does not exceed ten percent (10%) of the issued share
capital of the Company for the time being.”
12. To transact any other business of which due notice shall have been received.
a. Shares transferred into the depositor’s securities account before 4.00 p.m. on 30 August 2013 in respect of ordinary transfers; and
b. Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities
Berhad.
Kuala Lumpur
31 July 2013
Notes:
(1) A member of the Company entitled to attend and vote at the (6) The instrument appointing a proxy must be deposited at the (10) Note to Resolution No. 14 - Proposed Renewal of the
Annual General Meeting (“AGM”) is entitled to appoint not more office of the Company’s Share Registrar, Symphony Share Authority to Allot and Issue New Ordinary Shares in the
than two (2) proxies to attend and vote instead of him. Where Registrars Sdn Bhd at Level 6, Symphony House, Block D13, Company, for the Purpose of the Company’s Dividend
a member appoints two (2) proxies, the appointments shall be Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Reinvestment Plan
invalid unless he specifies the proportion of his shareholdings Jaya, Selangor Darul Ehsan, Malaysia not less than forty-eight
to be represented by each proxy. (48) hours before the time appointed for holding the AGM or any Ordinary Resolution No. 14, if passed, will empower the Directors
adjournment thereof. of the Company to issue new ordinary shares pursuant to the
(2) A proxy need not be a member of the Company. There shall terms and conditions of the Company’s Dividend Reinvestment
be no restriction as to the qualification of the proxy. A proxy (7) Only Members whose names appear on the general meeting Plan (“DRP”) which are contained in the DRP Statement set out
appointed to attend and vote at the AGM shall have the same Record of Depositors of the Company as at 15 August 2013 in Appendix I to the Circular to Shareholders dated 11 August
rights as the member to speak at the AGM. shall be eligible to attend the AGM. 2010 (as may be amended in accordance with the provisions of
the said DRP).
(3) Where a member of the Company is an authorised nominee (8) Note to Resolutions No. 3, No. 4 and No. 10 - Assessment of
as defined in the Securities Industry (Central Depositories) Act, Independence of Independent Directors The authority conferred by such renewed mandate/authority will
1991 (“SICDA”), it may appoint not more than two (2) proxies in be effective from the date of the forthcoming AGM and unless
respect of each securities account it holds in ordinary shares The independence of Y Bhg Tan Sri Datuk Dr Aris Osman @ revoked or varied at a general meeting, will expire at the next
of the Company standing to the credit of the said securities Othman, Y Bhg Dato’ Rohana Mahmood and Y Bhg Tan Sri AGM.
account. The appointments shall be invalid unless the Datuk Clifford Francis Herbert who have served as Independent
proportion of shareholdings to be represented by each proxy Non-Executive Directors of the Company has been assessed The Directors of the Company did not allot, or issue ordinary
are specified in the instrument appointing the proxies. by the Group Nomination and Remuneration Committee and shares pursuant to the authority given by the shareholders at
affirmed by the Board. the previous AGM.
(4) Where a member of the Company is an exempt authorised
nominee which holds ordinary shares in the Company for (9) Note to Resolutions No. 12 and No. 13 – Proposed Renewal (11) Note to Resolution No. 15 - Authority to Issue Shares
multiple beneficial owners in one securities account (“omnibus of the Authority to Allot and Issue New Ordinary Shares Pursuant to Section 132D of the Companies Act, 1965
account”), there is no limit to the number of proxies which the in the Company, Pursuant to the Company’s Executives’
exempt authorised nominee may appoint in respect of each Share Scheme and Proposed Renewal of the Authority to Ordinary Resolution No. 15, if passed, will give the Directors
omnibus account it holds. An exempt authorised nominee Allot and Issue New Ordinary Shares in the Company to of the Company, from the date of the forthcoming AGM,
refers to an authorised nominee defined under the SICDA which Mr Ashok Ramamurthy, the Group Managing Director of the authority to allot and issue ordinary shares from the unissued
is exempted from compliance with the provisions of subsection Company, Pursuant to the Company’s Executives’ Share share capital of the Company up to an aggregate amount not
25A(1) of SICDA. The appointments shall be invalid unless the Scheme exceeding ten percent (10%) of the issued share capital of the
proportion of shareholdings to be represented by each proxy Company for the time being, as and when the need or business
are specified in the instrument appointing the proxies. Ordinary Resolutions No. 12 and No. 13, if passed, will opportunities arise which the Directors consider would be in the
empower the Directors of the Company to allot and issue new interest of the Company and/or in connection with proposals
(5) The instrument appointing a proxy in the case of an individual ordinary shares in the Company pursuant to the Company’s previously approved by the shareholders for issuance of shares.
shall be signed by the appointor or of his attorney duly Executives’ Share Scheme and in accordance with the By- This authority, unless revoked or varied at a general meeting,
authorised in writing or, in the case of a corporation, the Laws as set out in Appendix I to the Circular to Shareholders will expire at the next AGM.
instrument appointing a proxy or proxies must be under seal or dated 4 September 2008 and as amended on 28 June 2011.
under the hand of an officer or attorney duly authorised. The Directors of the Company did not allot, or issue ordinary
The authority conferred by such renewed mandates/approvals shares pursuant to the authority given by the shareholders at
will be effective from the date of the forthcoming AGM and the previous AGM.
unless revoked or varied at a general meeting, will expire at the
next AGM.
4 AMMB Holdings Berhad (223035-V) | Annual Report 2013
AMMB Holdings Berhad (223035-V) | Annual Report 2013 5
Letter to Shareholders
Our performance in FY2013 is a reflection AmConnective – brand repositioning research, better pricing and execution,
of the collective strength of AmBank for the AmBank Group and individuals looking for banks that
Group as we delivered on our strategic can help them achieve their financial
themes with focused execution. The In June 2012, we launched internally a goals. Our universal banking platform
Group has turned in six years of record new chapter for the Group’s brand with provides us capabilities to serve our
profit performance since 2008. The the Vision - As Malaysia’s preferred customers comprehensively.
investments we have made in the past diversified, internationally connected
few years have enabled us to improve financial solutions group, we take During FY2013 we implemented a more
our service offerings to our customers pride in growing your future with customer centric model in Retail Banking
and generate positive returns to our us. We will achieve this through our from a traditional products focused
shareholders. In FY2013, we achieved mission: Connecting, Growing and approach as we strategise on designing
profit after tax and minority interests Outperforming. Concurrently we refined and delivering innovative products and
of over RM1,635 million (up 10.2%), our brand values, personality and solutions that meet our customers’
return on equity of 14.0% (up 0.2%), employee value proposition under the personalised financial needs linked to
and earnings per share of 54.5 sen (up umbrella of “AmConnective”. life priorities.
9.8%) whilst maintaining our aggregated
banking entities’ capital ratios above Our AmConnective journey will help us The replacement of our core banking
Basel III requirements. to connect better internally, develop system is in progress and will allow us
products and services that meet our new capabilities to provide customised
The Board has proposed a final dividend customers’ needs more effectively, and solutions for targeted customer
of 15.0 sen bringing the total dividends strengthen the Group’s position to better segments. The Group will progressively
for the year to 22.0 sen, which is 9.5% compete with our peer banking groups. roll out initiatives to strengthen our
higher than last year’s total dividends of As we leverage on newer technologies to customer centricity agenda and refine
20.1 sen. This represents a 41% payout increase collaboration between divisions our brand positioning targeted at
from this year’s profits and is in line with and across geographies, we will uncover attracting emerging affluent and other
our guidance to maintain a dividend opportunities to more effectively meet a preferred segment customers.
payout ratio of between 40% – 50%. We greater share of our customers’ needs.
continue to generate sufficient capital to During our roadshows, it is heartening Customers have begun to experience
reinvest prudently in order to grow the to see our staff committed to work our refreshed branch design rolled out
Group and position our businesses for even more closely together to serve our at selected locations nationwide. It was
long term sustainable profit performance. customers. As our change management pioneered in the Taman Tun Dr Ismail
and refreshed brand initiatives are branch and features triage counters
As a testament to our strong governance progressively rolled out, our customers strategically located at the main entrance
and improved financial fundamentals, will be able to feel the increasing vibrancy area to better interact with customers.
Moody’s upgraded AmBank (M) of the Group. Service Ambassadors will be the main
Berhad’s credit ratings to Baa1/P-2, customer touch point as they walk into
with a stable outlook in December Constantly evolving to meet customer the branches, delivering greater product
2012. Subsequently in January 2013, needs knowledge, guiding customers through
RAM Ratings Services Berhad revised their transactions and playing a key
the outlook of AMMB Holdings Berhad, The needs of our customers are role in cross-selling activities. Since the
AmBank (M) Berhad, AmIslamic Bank constantly evolving and getting more launch of AmSignature Priority Banking
Berhad and AmInvestment Bank Berhad sophisticated. This includes clients’ last year, we now have three full-fledged
to positive from stable and reaffirmed requirements for strategic advice and Priority Banking centres complemented
their ratings. financing, investors seeking insightful by sky-lounge centres and selected
6 AMMB Holdings Berhad (223035-V) | Annual Report 2013
innovation and industry practice. Key Developing our people and growing Making a difference in our
awards won by AmInvest reflecting more our leaders communities
than 30 years’ track record of excellence
in both the conventional and shariah To be a dynamic company, we need to We are deeply committed to helping our
compliant asset management categories encourage a culture of excellence and communities succeed by contributing
include: institutionalise leadership capabilities. our time, talent and funds to drive
Training, talent retention, and the creation Corporate Social Responsibility activities
• Best Overall Fund Group, Best Bond of an environment that fosters continuous throughout Malaysia and sponsoring
Fund Group for the sixth consecutive learning and development are key areas various events in support of community
year, and Best Bond Malaysian that we invest in substantially to make projects. The AmBank MyKasih
Ringgit Fund (over five years) for AmBank Group a great place to work for Community Programme is allocated
the fifth consecutive year (the Edge- our employees. RM1 million annually for such purposes.
Lipper Malaysia Fund Awards 2013)
We actively seek feedback through The activities held under this banner
• Investment Management Company Group Employee Surveys and engage include student adoption programmes
of the Year for Malaysia for the employees to understand how we can to provide financial aid for schooling to
second year running (World Finance improve their job performance and career primary and secondary level students
Management Awards 2013) satisfaction because we understand that from low income families up to Form Five
the foundation of exceptional customer and organising festive charity sessions
• Best Fund House Award for experience is built from highly motivated for the less fortunate. In addition,
Malaysia under the Market Awards employees. employees, through the sports club of
category (AsianInvestor Investment AmBank Group, are active participants
Performance Awards 2013) Our employee engagement index has in organising events and contributing to
been improving steadily over the past charitable activities.
• Islamic Asset Management House three years. Our efforts have also led to
of Malaysia (Asset Triple A Islamic significant improvements across several Value adding strategic partnerships
Finance Awards 2012) employee satisfaction dimensions
over a two year period including Collaboration with the Australia and
In Markets, our foreign exchange and in communications, organisational New Zealand Banking Group (“ANZ”)
derivatives services was recognised image and competitive position, continues to grow strongly. Sharing of
at the sixth Annual Alpha Southeast career development and training, and best practices, joint account planning
Asia Best Financial Institution Awards leadership. and two-way customer referrals enable
2012 where we were awarded Best
FX Bank for Corporates and Financial
Institutions in Malaysia. Winning the
award validates our track record in
providing the best service in our foreign
exchange capabilities, both locally and
regionally and is a testament of the
trust placed in us by our clients, ranging
from government-linked companies,
multinationals and domestic corporates.
Tan Sri Azman Hashim distributing the Business Zakat for AmIslamic Bank to several homes and charity
organisations across the country.
8 AMMB Holdings Berhad (223035-V) | Annual Report 2013
global partnerships with ANZ and IAG driving AmBank Group’s growth agenda.
will be a key component in driving this We will miss their presence and wise
Group forward and plans for greater counsel.
collaborative efforts are in the pipeline.
We are pleased to welcome Messrs
Outlook and prospects for FY2014 Gilles Planté and Shayne Cary Elliott
as Non-Independent Non-Executive
Malaysia’s economic growth in 2013 Directors. Mr Elliott, currently ANZ’s
is expected to be sustained by private Chief Financial Officer and Mr Planté,
consumption and expansion in ANZ’s Chief Executive Officer for Asia
investments. The external environment Pacific region, have excellent credentials
remains challenging as the economic as international bankers. We look forward
recovery of major trading partners to their future contribution on our Board.
remain uncertain.
On behalf of AMMB Holdings Berhad’s
Domestic private investment supported Board of Directors and all our employees,
by the Economic Transformation I would like to thank you for your
Programme (“ETP”) is expected to play continuing confidence in us and in the
Tan Sri Azman Hashim at the Exchange Traded
Bonds and Sukuk (“ETBS”) signing and launch
a significant role as the government future of AmBank Group.
ceremony, with YAB Dato’ Sri Mohd Najib Tun consolidates its fiscal position. With a
Abdul Razak, Prime Minister of Malaysia and YB smooth transition post elections, the Moving ahead, I am confident that the
Dato’ Seri Ahmad Husni Hanadzlah, Minister of Government is expected to maintain its talent and passion of our management
Finance II looking on.
focus on sustaining growth momentum and employees, close collaborative
and facilitating long-term economic strategic partnerships and planned
us to grow new revenue streams while transformation plans. investments will position us well to drive
rolling out innovative products with future growth of the Group.
speed to market. For our clients, the In the local banking industry, the
Business Principles Agreement (“BPA”) moderating economy and price-based
with ANZ facilitates cross-border competition for loans and deposits are
referrals and distribution capabilities likely to pressure margins. The tougher
across 32 countries as we help our economic environment may put some
customers in their growth ambitions. We pressure on improving asset quality
are continuously exploring new areas of trends.
collaboration, leveraging the combined
strengths of both Groups to expand in Against this backdrop, AmBank Group’s
cash management, wealth management, strategic plans are positioned to continue Tan Sri Azman Hashim
capital markets both across conventional to deliver sound growth over the next Non-Independent
and Islamic, project finance and three years. Our Group Managing Non-Executive Chairman
international trade transactions. In Director will cover these in greater detail
retail, AmSignature Priority Banking in his statement.
allows our affluent customers to access Kuala Lumpur
personalised service catering to their Acknowledgment 27 June 2013
needs. Parents sending their children to
Australia for education have found our I would also like to take this opportunity
AmBank-ANZ Get Set account helpful as to thank Dr Robert John Edgar and Mr
evidenced by the growing number and Alexander Vincent Thursby who have
balances in foreign currency accounts resigned from the Board of AMMB
as well as utilisation of our Family First Holdings Berhad for their contribution
product suite to manage their funds. to the Group. Dr Edgar as ANZ’s
Deputy Chief Executive Officer in 2007
In general insurance, Insurance Australia was instrumental in establishing the
Group Ltd (“IAG”) played a key role partnership between ANZ and AmBank
in sharing expertise that have led to Group, and subsequently played a key
consistent improvement in profitability role on the Board using his vast banking
and was crucial in supporting our experience. Mr Thursby took over as the
acquisition and ongoing integration of Senior ANZ representative on our Board
Kurnia as we build scale in preparation in 2010 when Dr Edgar retired from ANZ,
for future challenges. Our strategic and was highly engaged on the Board in
AMMB Holdings Berhad (223035-V) | Annual Report 2013 9
AD
Islamic Asset Management House, Malaysia (2 consecutive years)
The Asset Triple A Awards for Islamic Finance 2013
It gives me great pleasure to write to you Accelerate growth and business mix The ongoing retail banking reshaping
again. It is over a year ago that I assumed changes programme is on-track, as we brought
the position of Group Managing Director all products under one line of business
of AmBank Group and what an exciting FY2013 result was underpinned by higher to offer customer driven solutions. We
journey it has been! We have unveiled the contributions from commercial banking aim to increase the depth of main bank
Group’s new Vision, Mission, Values and activities and recent acquisitions. Retail, relationships by providing segmented
Employee Value Proposition, appointed Business, and Corporate & Institutional offerings that are customised to
a few new members to my leadership Banking divisions delivered double-digit customers’ needs as we help them
team, acquired and welcomed Kurnia profit growth underpinned by increases transact, save, borrow and invest more
and MBF Cards into our AmBank Group, in sound lending and deposits and fee- smartly. Small businesses, a key part of
and delivered our sixth consecutive year based income. Islamic Banking asset Malaysia’s national agenda, will receive
of record profit performance. growth was strong while Transaction greater attention going forward as we
Banking CASA growth and trade support them to set up and expand their
We delivered 10.2% increase in profit utilisation were higher. New analytics businesses.
after tax and minority interest (“PATMI”) and segment strategies are in progress
to RM1,635 million for FY2013 with to reach our target segments and serve In non-retail, we continued outpacing
positive momentum across most our customers more effectively. We are the industry in loans growth at 13.2%,
divisions. Stronger performances across working to move away from product capitalising on opportunities provided
recurring non-interest income, interest focus to customer segment focus, and by the Economic Transformation
income and contributions from recent meeting more of our customer needs Programme (“ETP”). We expanded our
acquisitions were partly offset by lower across the Group. customer base and value of business in
trading volumes and capital market preferred sectors and enhanced cross-
activities. Nevertheless, non-interest On improving asset quality, gross selling of key products and solutions
income sources contributed 32% of impaired loans fell 47 basis points to under the wholesale banking platform.
total income, the result of disciplined 1.98% while allowance coverage of
execution of our strategic priorities. impaired loans rose to 129.3%, the Strengthen Customer Centricity &
highest on record. Credit cost at 0.21% Connectivity
Strong growth in current account was lower when compared with FY2012
savings account (“CASA”) from targeted at 0.50%. This reflects better recoveries Customers remain our number one
segments, outpacing the industry over but also our disciplined asset writing focus. Our constant interactions with
the last few years, resulted in lifting strategies and better risk management customers have enabled us to better
CASA composition to 20% when amidst tougher competition. understand their needs: a desire for
compared with 11% five years ago. We convenience while having easier access
are in the early stages of integrating Recurring non-interest income was to strategically located branches;
our recent acquisitions to extract supported by premium growth in general obtaining consistent service quality
synergies and have continued to invest insurance, growth from bancassurance, across the various customer touch
in our businesses to deliver sustainable retail wealth propositions, securing points; and receiving quality advice that
shareholder value. new structured trade mandates, funds helps them achieve their financial goals.
management and private banking.
In FY2013, we set out four strategic During the year, we have initiated
priorities to achieve our Vision - As A particular highlight is our funds various agenda centred on delivering
Malaysia’s preferred diversified, management business that has won superior customer experience. We are
internationally connected financial numerous awards attesting to its upgrading our channels and refining
solutions group, we take pride in investment management expertise our value proposition for a refreshed
growing your future with us: accelerate and fund performance. This business, customer experience. At the same
growth and business mix changes; rebranded AmInvest, grew assets under time, to extend customers’ control over
strengthen customer centricity and management by an impressive 20% their transactions and maintain tangible
connectivity; increase productivity and annually on average over the last three presence, we are expanding footprints
efficiency; and acquire and integrate. years to RM33 billion and we have also physically and virtually in addition to
We have made progress in each of these launched our new private retirement placing more self-service machines at
areas and I will share these in more detail scheme which is a longer term growth strategic locations. We have continued
with you. opportunity. to invest in our people skills through
AMMB Holdings Berhad (223035-V) | Annual Report 2013 11
12 AMMB Holdings Berhad (223035-V) | Annual Report 2013
Life. We are in discussions to bring in a complemented by opportunistic non-retail, we will focus on deepening
new equity partner into these businesses acquisitions/partnerships where there is our existing relationships with customers
in order to build scale, operational longer term value. Looking forward to via new product rollouts in Markets,
efficiencies and greater business FY2014, the Group will be guided by our foreign currency service propositions,
momentum. We aim to complete this by Vision and five strategic themes. and delivering our enhanced trade and
end CY2013. cash capabilities.
Firstly, integrate acquisitions and
deliver synergies. Our focus is on Fourthly, build scale in specialist
levels realising operational efficiencies from businesses with strategic partners.
economies of scale from our recent Our strategic partnership with ANZ
Our capital plan takes into account acquisitions and capitalising the in banking will continue to support
business as usual regulatory capital expanded customer base for cross- development of new customer solutions
requirements and is stress tested under selling opportunities and strengthening and provide greater cross-border
various scenarios. Considering the our competitive positioning to grow linkages for our customers. In general
uncertain economic environment and income. insurance, our partner IAG continues to
evolving global regulatory debate on play a key role in the integration of Kurnia
banking institutions’ capital structures, Secondly, simplify business model and and building international best practices
our approach is to remain capitalised streamline processes. With focus on into our business.
at the higher end of our internal target customer centricity, we are simplifying
ranges. Following the adoption of Basel business structures and processes to We are in the midst of finding a new equity
III in FY2013, the aggregated banking enhance customer experience, and partner for Life Assurance and Family
entities remain well capitalised and provide financial solutions that match Takaful businesses. This will enable us
operated within internal target capital customers’ lifestyle and lifecycle to accelerate our planned build-out of
levels with total capital ratio at 14.3%, needs. In addition, various process scale by leveraging their international
tier-1 capital adequacy at 10.6% and improvement programmes in business expertise and skilled resources, along
common equity tier-1 at 8.9%. and support functions are underway with our Group’s distribution and
to improve efficiency and productivity customer franchises.
The Group’s common equity ratio across the Group. This will enable us to
as above is well in excess of BNM’s reinvest what we save into future growth Fifthly, optimise capital and holding
proposed minimum requirements under initiatives. company structures. The Group
Basel III and we will manage our capital remains proactive in managing capital
levels proactively in light of future Thirdly, accelerate organic growth with according to evolving regulatory
regulatory developments. focus on cross-sell, flow business, requirements and evaluating business
small business, and emerging affluent opportunities on a risk adjusted basis for
Setting out strategic agenda for customers. In retail, the Group’s focus optimum returns on capital.
FY2014 – FY2016 is on building main bank relationships in
preferred customer segments including Conclusion
Our strategies place continued emphasis growing market share by attracting new
on organic growth via building diversified customers and via supporting SMEs to As the banking landscape and customer
and sustainable income streams, invest and expand their businesses. In requirements evolve, we will need to
remain agile, adaptive and responsive.
With the collective talents and
determination of our people, and focused
execution on our strategic agenda, we
believe that we can deliver growth for all
stakeholders in the years ahead.
Ashok Ramamurthy
Group Managing Director
Kuala Lumpur
Mr Ashok Ramamurthy, Tan Sri Azman Hashim, Madam Chong Yoke Har, Deputy Director General,
Ministry of Tourism, Malaysia, Mr Peter Jackson, Chief Executive Officer, Travelex Global and Tan Sri A.P.
27 June 2013
Arumugam, Chairman, Travelex Malaysia launching the official AmBank-Travelex tie-up.
14 AMMB Holdings Berhad (223035-V) | Annual Report 2013
Values
Appreciative
We value and recognise everyone’s
role and contribution, and always
provide support to our customers and
colleagues.
Connected
We are connected in everything we
do. We are part of an organisation
that fosters teamwork and open
communication.
Evolving
We strive to seek new and relevant ways
of growing ourselves, our customers,
our business and our community in a
sustainable manner.
AMMB Holdings Berhad (223035-V) | Annual Report 2013 15
Our History
The AmBank Group has enjoyed considerable success over the last three decades. Together,
we have built one of the largest and fastest-growing financial institutions in the country.
Tracing our early history, Arab-Malaysian Development Bank Berhad was incorporated on 5 August 1975 as a joint venture
between Malaysian Industrial Development Finance Berhad, with a 55.0% shareholding, Arab Investments for Asia (Kuwait) with
a 33.0% shareholding, and the National Commercial Bank (Saudi Arabia) holding 12.0%.
We commenced operations on 1 April 1976, and in December 1983 became known as Arab-Malaysian Merchant Bank Berhad,
a name by which we were known for over three decades until our rebranding in June 2002. Today, we have grown into a Group
with a staff strength of close to 10,000. With our extensive nationwide branch network, ATMs, and Internet banking services, we
are proud to acknowledge that the AmBank Group, as one of the largest financial services group in the country, is only a brick
and click away.
1976 1982
• The Group commenced operations • YBhg Tan Sri Azman Hashim
on 1 April 1976 as a joint venture acquired 100.0% shareholding in
comprising Arab and Malaysian the Group.
shareholders.
• The Group acquired the remaining
1977 30.0% shareholding of AMFB,
• The Group acquired a 70.0% making it a wholly owned finance
shareholding in Malaysian Industrial company subsidiary.
Finance Company Limited
(“MIFCL”), which was later renamed 1983
Arab-Malaysian Finance Berhad • The Group established a credit and
(“AMFB”). leasing company, Arab-Malaysian
Credit Berhad.
1980
• AMMB co-lead managed the 1984
USD200 million, 12-Year Syndicated • The Group launched the first venture
Term Loan for the Government of capital company to undertake
Malaysia. private equity investments –
Malaysian Ventures Berhad.
• AMMB initiated the formation of
Malaysian Kuwaiti Investment • The Group arranged the first
Company Sdn Bhd, a joint venture leveraged lease facility in the country
between Perbadanan Nasional for Sistem Televisyen Malaysia
Berhad and Kuwait Real Estate Berhad – TV3. 1985
Investment Consortium and Public • The Group acquired Perima
Institution for Social Security, • AMMB completed its Government Assurance Berhad, a life insurance
Kuwait. assigned study on the privatisation company. Both the life and general
of Jabatan Telekom. insurance companies were later
• AMMB acted as Adviser to Kuwait merged in 1987, holding composite
Real Estate Investment Consortium, • The Group acquired Arab-Malaysian insurance licences, and the entity’s
Singapore. Insurance Berhad, a general name changed to Arab-Malaysian
insurance company formerly known Eagle Assurance Berhad (now
• AMFB became the first private as Teguh Insurance Company Sdn known as AmLife Insurance Berhad
sector institution in Malaysia to issue Bhd. and AmG Insurance Berhad).
public bonds – RM20.0 million 8.5%
Guaranteed Bonds 1987, listed on 1986
the Kuala Lumpur Stock Exchange • The Group acquired a stockbroking
(“KLSE”). The Bonds, guaranteed firm, Kris Securities Sdn Bhd, later
by the Bank, marked a new chapter renamed as AmSecurities Sdn Bhd.
in the history of private sector fund
raising in the capital markets.
16 AMMB Holdings Berhad (223035-V) | Annual Report 2013
• On 19 June 2007, AMMB Holdings • Islamic Stockbroking (window • AmBank Group continues its
Berhad proposed the privatisation of service) was launched under the rollout of the RM1 million AmBank-
AIGB and the proposed rights issue brand of AmIslamic, the universal MyKasih Community Programme in
of up to 326,887,241 new shares, brand of Islamic products and Kuching, Kota Bharu, Subang Jaya,
on the basis of one (1) new share services across all subsidiaries of Kota Kinabalu, Klang Valley (Cheras,
for every eight (8) existing ordinary the AmBank Group. Klang and Pandan Jaya) and the
shares and every eight (8) Converting programme is renewed in Sentul and
Preference Share in the company at • On 9 December 2008, Friends Pulau Pinang where hard core poor
an issue price of RM3.40 per share. Provident plc (renamed Friends families are provided food allowance
Life FPL Limited from 1 July 2011) through the use of their MyKad.
• A Memorandum of Understanding acquired 30.0% stake in AmLife
(“MOU”) was signed between Insurance Berhad (formerly known • AmBank Group launched the
AmInvestment Bank Berhad and as AmAssurance Berhad). Kechara Soup Kitchen (“KSK”)
Woori Investment & Securities building after sponsoring the
Co Ltd, on 29 November 2007 to • IAG increased its stakeholding in renovation as well as the cost of
promote the parties’ mutual interests AmG Insurance Berhad to 49.0% furniture and fixtures of the premises
for cooperation in the investment from 30.0%. with a total amount of RM350,000.
banking business.
2009 • AmIslamic Bank successfully issued
2008 • AmIslamic Funds Management RM550 million Senior Sukuk under
• Completed the AMMB Holdings Sdn Bhd obtains licence for its newly established 30-year RM3.0
Berhad (“AMMB”) rights issue Islamic funds management from billion Senior Sukuk Musyarakah
and privatisation of AIGB on 15 the Securities Commission to Programme.
January 2008, with AIGB effectively carry out management of offshore
becoming a wholly-owned and domestic Islamic financial • On 15 December, Standard &
subsidiary of AMMB. instruments for institutional and Poor’s Rating Services (“S&P”)
retail investors. raised its foreign currency long-
• Completed the transfer of the Fund term counterparty credit rating on
Based Activities of AmInvestment • AmCapital (B) Sdn Bhd officially AmBank (M) Berhad to ‘BBB’ from
Bank to AmBank (M) Berhad and opened on 11 May 2009, bringing ‘BBB-‘ and the short term rating to
AmIslamic Bank Berhad on 12 April expertise in funds management, ‘A-2’ from‘A-3’. S&P also raised the
2008 as part of AMMB’s internal Islamic finance and investment long-term counterparty credit rating
corporate restructuring post the advisory to Brunei Darussalam. on AmInvestment Bank Berhad to
AIGB privatisation. ‘BBB’ from ‘BBB-’, and its short
• YBhg Tan Sri Dato’ Sri Dr Zeti term rating to ‘A-2’ from ‘A-3’.
• Establishment of AmG Insurance Akhtar Aziz, Governor, Bank Negara
Berhad to facilitate the separation of Malaysia launches the Malaysia • AmInvestment Bank receives two
the composite insurance business Corporate Bond Handbook by Best Equity House awards, from
of AmAssurance Berhad into AmBank Group, a first-of-its-kind Finance Asia and Alpha South East
general insurance and life insurance one-stop source of corporate bond Asia.
businesses. information in Malaysia.
Corporate Structure
Board of Directors
Y Bhg Tan Sri Azman Hashim Y Bhg Dato’ Rohana Mr Soo Kim Wai
Non-Independent Non-Executive Tan Sri Mahmood Non-Independent Non-Executive Director
Chairman Independent Non-Executive Director
Mr Ashok Ramamurthy
Y Bhg Dato’ Azlan Hashim Y Bhg Dato’ Larry Gan Nyap Liou @ Group Managing Director
Non-Independent Non-Executive Gan Nyap Liow
Deputy Chairman Independent Non-Executive Director Mr Alistair Marshall Bulloch
(Alternate Director to Mr Shayne Cary
Y A Bhg Tun Mohammed Hanif Mr Shayne Cary Elliott Elliott, Mr Mark David Whelan and
bin Omar Non-Independent Non-Executive Director Mr Gilles Planté)
Non-Independent Non-Executive Director
Mr Mark David Whelan
Y Bhg Tan Sri Datuk Clifford Non-Independent Non-Executive Director
Francis Herbert
Senior Independent Non-Executive Mr Gilles Planté
Director Non-Independent Non-Executive Director
Corporate Information
GROUP COMPANY SECRETARY REGISTERED OFFICE PRINCIPAL BANKER
22nd Floor, Bangunan AmBank Group AmBank (M) Berhad
No. 55, Jalan Raja Chulan
50200 Kuala Lumpur, Malaysia
Telephone No. : 603-2036 2633 STOCK EXCHANGE LISTING
Facsimile No. : 603-2032 1914 Main Market of Bursa Malaysia
Securities Berhad (13.02.92)
REGISTRAR
Symphony Share Registrars Sdn Bhd WEBSITE
Level 6, Symphony House www.ambankgroup.com
Block D13, Pusat Dagangan Dana 1
Jalan PJU 1A/46, 47301 Petaling Jaya
Selangor, Malaysia INVESTOR RELATIONS
Telephone No. : 603-7841 8000 ir@ambankgroup.com
Facsimile No. : 603-7841 8008
AUDITORS
Messrs Ernst & Young
Ms Koid Phaik Gunn Chartered Accountants
MAICSA 7007433
Chartered Secretary (ICSA)
Bachelor of Laws (Hons)
Fellow of The Malaysian Institute
of Chartered Secretaries and
Administrators
22 AMMB Holdings Berhad (223035-V) | Annual Report 2013
Organisation Structure
AmGENERAL
• Deposits (Savings Accounts, Demand
INSURANCE Deposits, Investments & Structured
BERHAD AmLIFE Products)
INSURANCE • Retail Distribution (Branch distribution
network, AmSignature Priority Banking,
BERHAD
Internet Banking, Mobile Banking,
AmINVESTMENT Electronic Banking Centres, Contact
GROUP BERHAD Centre)
Business Banking
AmFAMILY • Commercial Banking
• SME Financing
TAKAFUL
• Deposits
BERHAD
Transaction Banking
AmINVESTMENT • Trade Financing (Domestic Sales &
BANK BERHAD Purchase Financing, Import/Export
Financing, Structured Trade, Supply
Chain Solutions, Trade Advisory)
AmISLAMIC • Cash Management Services (Payables,
BANK BERHAD Receivables, Liquidity Management)
AmBANK (M) • Gross Payroll Solution & Statutory
BERHAD Submissions
• Web Based Transaction Channels (Trade
Services, Cash Management Services,
Payroll Solutions, e-Commerce Solutions)
Profile of Directors
Y A Bhg Tun Mohammed Hanif bin Omar, a member of the Malaysian Equine Council
a Malaysian, aged 74, was appointed to the and a Council Member of the Malaysian
Board of AMMB Holdings Berhad on 6 May Crime Prevention Foundation. In addition,
1994. He is a Member of the Company’s he is the Chairman of the Yayasan Tun
Group Nomination and Remuneration Razak, a member of the Board of Trustees
Committee and Executives’ Share Scheme of the Malaysian Liver Foundation, Yayasan
Committee. DayaDiri, The MCKK Foundation and The
Community Chest, Malaysia.
Tun Mohammed Hanif is also a Board
member of the Company’s subsidiaries, Tun Mohammed Hanif received his
namely, AmBank (M) Berhad, AmIslamic Bachelor of Arts from the then University
Bank Berhad, AmInvestment Bank Berhad of Malaya, Singapore in 1959, Bachelor
and AMFB Holdings Berhad. He is currently of Laws (Honours) from Buckingham
the Deputy Executive Chairman of Genting University, United Kingdom in 1986 and
Berhad and Genting Malaysia Berhad and Certificate of Legal Practice (Honours) from
a board member of Genting Overseas the Legal Qualifying Board in 1987.
Holdings Ltd. He was the Inspector-
General of the Royal Malaysia Police for 20 He was conferred the Honorary Doctorate
years until his retirement in January 1994. of Law by Universiti Kebangsaan Malaysia
He has received honorary awards from in 1992, Honorary Doctorate of Philosophy
Malaysia, Indonesia, Thailand, Singapore, (Internal Security) by Universiti Pertahanan
Brunei and the Philippines for his invaluable Nasional Malaysia on 2 October 2011
contribution towards the region’s security. and Honorary Doctorate of Law by the
University of Buckingham on 16 March
He has been the President of the Malaysian 2012.
Institute of Management since 2001. He
is also the President of the Malaysian
Branch of the Royal Asiatic Society. He is
Y A BHG TUN MOHAMMED HANIF BIN OMAR
Non-Independent Non-Executive Director
26 AMMB Holdings Berhad (223035-V) | Annual Report 2013
Y Bhg Tan Sri Datuk Clifford Francis culminating as Secretary General to the
Herbert, a Malaysian, aged 71, was Treasury. He retired from the civil service in
appointed to the Board of AMMB Holdings 1997.
Berhad on 16 April 2004. He is the Chairman
of the Company’s Group Risk Management As Secretary General in the Ministry
Committee and Group Nomination and of Finance, he was also appointed as
Remuneration Committee and a Member alternate Governor of the World Bank. From
of the Company’s Audit and Examination 1994 to 2000, Tan Sri Datuk Herbert was
Committee. the Chairman of KL International Airport
Berhad which built the Kuala Lumpur
Tan Sri Datuk Herbert at present sits on International Airport. He had been a board
the boards of AmInvestment Bank Berhad, member of numerous statutory bodies
AmBank (M) Berhad, AmIslamic Bank and government related public companies
Berhad, Genting Malaysia Berhad, Shell among them being Kumpulan Khazanah
Refining Company (Federation of Malaya) Nasional Berhad, Malaysian Airline System
Berhad, Moet Hennessy Diageo Malaysia Berhad, Petroliam Nasional Berhad,
Sdn Bhd and FIDE Forum. Bank Negara Malaysia, the Securities
Commission and Chairman of Percetakan
Tan Sri Datuk Herbert joined the Malaysian Nasional Malaysia Berhad. Additionally,
Civil Service in 1964 as Assistant Secretary Tan Sri Datuk Herbert is also involved in
in the Public Services Department from several non-governmental organisations.
1964 to 1968. Subsequently, he served in
the Ministry of Finance from 1975 to 1997, Tan Sri Datuk Herbert holds a Masters of
Public Administration from University of
Pittsburgh, U.S.A., and a Bachelor of Arts
(Honours) from the University of Malaya.
Y Bhg Tan Sri Datuk Dr Aris Othman, a which he had served as Executive Director
Malaysian, aged 68, was appointed to the (South-East Asia Group) of the World Bank,
Board of AMMB Holdings Berhad on 1 April Washington D.C., U.S.A. from 1991 to 1994
2004. He is the Chairman of the Company’s and Secretary General to the Treasury from
Audit and Examination Committee and a 1998 to mid-1999. This was followed by
Member of the Group Risk Management a career in banking, where he had held
Committee and Group Nomination and the positions of Executive Chairman and
Remuneration Committee. Managing Director/Chief Executive Officer
of Bank Pembangunan dan Infrastruktur
Tan Sri Datuk Dr Aris is also a board Malaysia Berhad. He was also the Chairman
member of the Company’s subsidiary, of Malaysia Airports Holdings Berhad, and
AmInvestment Bank Berhad. He is currently Malaysia Design and Innovation Centre,
a Director of YTL Power International Cyberjaya.
Berhad.
Tan Sri Datuk Dr Aris holds a PhD in
Tan Sri Datuk Dr Aris had served in various Development Economics and a Master of
positions in the Economic Planning Unit, Arts in Political Economy both from Boston
Prime Minister’s Department from 1966 University, Massachusetts, a Master of Arts
to 1986. He was seconded to Bank in Development Economics from Williams
Bumiputra Malaysia Berhad, Kuala Lumpur College, Massachusetts, and a Bachelor
as Chief General Manager (Corporate of Arts (Honours) in Analytical Economics
Planning, Financial Subsidiaries, Treasury from University of Malaya.
and Human Resources) from 1986 to 1989.
From 1989 to 1999, Tan Sri Datuk Dr Aris
was with the Ministry of Finance, during
Y Bhg Dato’ Rohana Tan Sri Mahmood, a Dato’ Rohana is the Chairman of Tropicana
Malaysian, aged 58, was appointed to the Corporation Berhad (formerly known
Board of AMMB Holdings Berhad on 8 July as Dijaya Corporation Berhad) and a
2011. She is a Member of the Company’s board member of various private and
Group Nomination and Remuneration listed companies including Paramount
Committee and Group Information Corporation Berhad, KDU University
Technology Committee. College Sdn Bhd, YIM Technology
Resources Sdn Bhd and AmWater
Dato’ Rohana is also a board member of Investments Management Pte Ltd.
the Company’s subsidiary, AmInvestment
Bank Berhad. Dato’ Rohana is the President Emeritus
and founding member of the Kuala
Dato’ Rohana is the Chairman and Founder Lumpur Business Club, an exclusive (by
of RM Capital Partners Sdn Bhd, a invitation only) networking, and business
Malaysian private equity fund. She was the development organisation limited to
Chairman and co-founder of Ethos Capital, 100 members of Malaysia’s leading
a Malaysian private equity fund since 2007. corporate and business leaders. She is a
The fund successfully ended in November Distinguished Fellow and board member of
2012. the Institute of Strategic and International
Studies (ISIS) Malaysia. Prior to ISIS, Dato’
Dato’ Rohana is a Member of the Board Rohana was attached to the Ministry of
of Trustees of the Asia Society, New York, Foreign Affairs Malaysia.
member of Advisory Board of ACE Limited
International, New York and a board member Dato’ Rohana holds a Bachelor of Arts
of Pacific Basin Economic Council (PBEC). (Honours) in Politics, Essex University and
Masters in International Relations, Sussex
University, United Kingdom.
Y Bhg Dato’ Larry Gan Nyap Liou, a firm for 26 years until his retirement in
Malaysian, aged 58, was appointed to December 2004. He held many global
the Board of AMMB Holdings Berhad on leadership positions including Managing
15 March 2012. He is the Chairman of the Partner of Asia and Corporate Development
Company’s Group Information Technology Asia Pacific. He was the Chairman of the
Committee and a Member of the Audit CEO Advisory Council and a member of the
and Examination Committee and Group Global Management Council from 1997 to
Nomination and Remuneration Committee. 2004.
Mr Shayne Cary Elliott, a New Zealander, Mr Elliott joined ANZ in June 2009.
aged 49, was appointed to the Board of Previously, he was Chief Operating Officer,
AMMB Holdings Berhad on 18 June 2013. EFG Hermes, the largest investment bank
in the Middle East. He was responsible for
Mr Elliott was appointed Chief Financial corporate strategy, risk, human resources,
Officer of Australia and New Zealand marketing and implementing governance
Banking Group Limited (“ANZ”) from June and business management processes.
2012.
Mr Elliott was previously with Citigroup
Mr Elliott is responsible for all aspects of where he held various senior positions
Finance as well as Legal, Treasury and across geographies and business sectors
Investor Relations. In this role, Mr Elliott over the course of 20 years. Some of the
also has responsibility for Group Strategy roles he held during his time at Citigroup
and Mergers and Acquisitions. include: Chief Executive Officer Global
Transaction Services Asia Pacific, Chief
Prior to this role, Mr Elliott was Chief Executive Officer Corporate Bank Australia/
Executive Officer, Institutional, overseeing New Zealand and Country Corporate
all businesses that deal with ANZ’s large Officer, Vice President Strategic Planning
business, corporate and institutional New York, Head of Investor Derivative
customers. Sales London and Head of New Zealand
Derivatives Sales and Trading.
MR GILLES PLANTÉ
Non-Independent Non-Executive Director
Mr Soo Kim Wai, a Malaysian, aged 52, was He sits on the board of RCE Capital Berhad,
appointed to the Board of AMMB Holdings Amcorp Properties Berhad, ECM Libra
Berhad on 4 October 2002. He is a Member Financial Group Berhad and other private
of the Company’s Group Nomination and limited companies and foreign companies.
Remuneration Committee. He is also a board member of the British
Malaysian Chamber of Commerce.
He is currently the Group Managing Director
of Amcorp Group Berhad. Mr Soo joined Mr Soo is a Chartered Accountant (Malaysian
Amcorp Group Berhad in 1989 as Senior Institute of Accountants), a Certified Public
Manager, Finance, and has since held Accountant (Malaysian Institute of Certified
various positions before he was promoted Public Accountants), Fellow of the Certified
to his current appointment. Prior to that, Practising Accountant (CPA), Australia and
he was with Plantation Agencies Sdn Bhd Fellow of the Association of Chartered
from 1985 to 1989, and in the accounting Certified Accountants (ACCA), United
profession for five years with Deloitte Kingdom.
KassimChan from 1980 to 1985.
Mr Alistair Marshall Bulloch, a British, and Chongqing Liangping ANZ Rural Bank
aged 55, is the Alternate Director to Co. Ltd (China), a Director of ANZ Bank
Mr Shayne Cary Elliott, Mr Mark David (China), ANZ Bank (Europe) Limited (United
Whelan and Mr Gilles Planté. Kingdom), ANZ Bank (Lao), ANZ Capital
(PVT) Limited (India), ANZ Pensions (UK)
He is currently the Managing Director/Head Limited, ANZ V-Trac International Leasing
of Asia Partnerships of Australia and New Company, Bank of Tianjin (China), Jikk
Zealand Banking Group Limited (“ANZ”). Pty Ltd., Saigon Securities Inc. (Vietnam),
Shanghai Rural Commercial Bank (China),
Mr Bulloch is responsible for developing Votraint No. 1103 Pty Ltd.
critical government and other relationships,
taking strategic leadership with key clients Mr Bulloch was the Head of Wholesale and
and has responsibility for all of ANZ partners Commercial Banking in Korea for Standard
in the region. Chartered First Bank. He has more than
20 years’ banking experience and was
Prior to this role, Mr Bulloch was the Deputy previously Head of Client Relationships in
Chief Executive Officer of Asia Pacific, both China and Taiwan. Mr Bulloch spent
Europe and America (APEA) and the Chief his childhood and a considerable part of his
Executive Officer of North East Asia of earlier career in Hong Kong and has also
ANZ. He was responsible for driving growth worked in the Middle East and Ireland.
and innovation in ANZ’s businesses and
partnerships in China, Hong Kong, Taiwan, He holds a Bachelor of Arts (Honours) in
Japan and Korea. Business Studies from Dundee College of
Technology, Scotland.
He is the Chairman and Director of ANZ
Bank (Vietnam) Limited, ANZ Insurance
Broker Co. Ltd. (Taiwan), ANZ Royal Bank
(Cambodia) Ltd, ANZ Bank (Taiwan) Limited MR ALISTAIR MARSHALL BULLOCH
(Alternate Director to Mr Shayne Cary Elliott,
Mr Mark David Whelan and Mr Gilles Planté)
AMMB Holdings Berhad (223035-V) | Annual Report 2013 31
Additional Information:
None of the Directors has any family relationships with other Directors or major shareholders of the Company,
except as disclosed herein.
Y Bhg Tan Sri Azman Hashim and Y Bhg Dato’ Azlan Hashim are brothers.
Y Bhg Tan Sri Azman Hashim is the Executive Chairman and a substantial shareholder of Amcorp Group Berhad
(“Amcorp”), which in turn is a substantial shareholder of AMMB Holdings Berhad.
Y Bhg Tan Sri Azman Hashim is a Director of Clear Goal Sdn Bhd, his family-owned company, which is deemed
a substantial shareholder of AMMB Holdings Berhad by virtue of its interest in Amcorp.
Mr Soo Kim Wai is the Group Managing Director of Amcorp, which is a substantial shareholder of AMMB Holdings
Berhad.
Mr Shayne Cary Elliott, Mr Mark David Whelan and Mr Gilles Planté are Board representatives of Australia and
New Zealand Banking Group Limited, which is a substantial shareholder of AMMB Holdings Berhad.
None of the Directors has been convicted for offences within the past 10 years. None of the Directors has any
conflict of interest with the Company other than as announced or set out in Note 43 to Financial Statements under
“Significant Related Party Transactions and Balances”.
32 AMMB Holdings Berhad (223035-V) | Annual Report 2013
Ashok Ramamurthy
Group Managing Director
AmBank Group
Chief Executive Officer Datuk Mohamed Azmi
AmBank (M) Berhad Mahmood
Deputy Group Managing Director
AmBank Group
Paul Lewis
Managing Director, Retail Banking
AmBank (M) Berhad
Pushpa Rajadurai
Managing Director, Corporate &
Intitutional Banking
AmInvestment Bank Berhad
Mandy Simpson
Chief Financial Officer
AmBank Group
Corporate Governance
In line with AmBank Group’s vision: “As Malaysia’s preferred diversified, internationally
connected financial solutions group, we take pride in growing your future with us”, the
Board of Directors of the Company (“Board”) is fully committed to ensuring that the
Company continues to maintain the highest standards in corporate governance, with a
view to continuously enhance the value of stakeholders.
The Board provides guidance and • Identifying and approving policies The Board delegates the authority and
oversight of the Group’s strategic agenda pertaining to the management of responsibility for managing the everyday
and its operations and acknowledges its all risk categories including but not affairs of the Group to the Group
overriding responsibility to act diligently limited to, credit, financial, market, Managing Director and through him and
and responsibly, in accordance with liquidity, operational, legal and subject to his oversight, to other Senior
applicable legislations and regulations reputational risks. Management. The Board monitors the
in serving the interests of shareholders, management and performance of the
as well as its customers, employees and • Reviewing the adequacy and Group Managing Director on behalf of
the community at large. the integrity of internal controls the shareholders.
and management information
The Company subscribes to and systems, including systems for Board Composition
conforms to the principles and compliance with applicable laws,
recommendations of the Malaysian rules, regulations, directives and The Board is chaired by a Non-
Code on Corporate Governance 2012 guidelines. Independent Non-Executive Director and
(“MCCG 2012”), save for the exception currently comprises twelve (12) Directors,
to the following recommendations, • Serving as the ultimate approving four (4) of whom are Independent
which are explained further under the authority for all significant financial Non-Executive Directors. The Board
caption on Board Composition and expenditure. continues to achieve a balance of skills,
Tenure, respectively in this statement knowledge, experience and perspective
hereinbelow – among its Directors.
Chairman and Group Managing
• the board must comprise a majority Director Recommendation 3.5 of the MCCG 2012
of independent directors where the provides that the board should comprise
chairman of the board is not an The roles of the Chairman and Group a majority of Independent Directors if the
independent director. Managing Director remain separate and Chairman is not an Independent Director.
• the tenure of an independent director are clearly distinct. The Chairman of
should not exceed a cumulative the Board is non-independent and non- Notwithstanding that the Board consists
term of nine (9) years. executive. of majority of Non-Independent Non-
Executive Directors, the Board strongly
BOARD OF DIRECTORS The Chairman plays an important believes that all the Directors act in the
leadership role within the Group and is best interest of all stakeholders.
Roles and Responsibilities of the involved in:
Board Appointment and Resignation
• Chairing the meetings of
• Reviewing and approving the Shareholders and the Board; • Mr Alexander Vincent Thursby, a
strategic business plans of the Non-Independent Non-Executive
Group as a whole and that of the • Monitoring the performance of the Director resigned as a Member of
individual operating units. This Board and the mix of skills and the Board with effect from 18 April
encompasses the annual budget, effectiveness of individual Board 2013 following his resignation from
medium term aspirations, new members’ contribution; and Australia and New Zealand Banking
investments/divestments as well as Group Limited (“ANZ”). Accordingly,
mergers and acquisitions. • Maintaining on-going dialogue with Mr Alistair Marshall Bulloch, ceased
the Chief Executive Officers of the to be his Alternate Director on 18
• Overseeing the conduct of the various major subsidiaries and April 2013.
business to ascertain its proper providing appropriate mentoring
management including setting clear and guidance.
objectives and policies within which
senior executives are to operate.
AMMB Holdings Berhad (223035-V) | Annual Report 2013 35
Seminars, conferences and training The Management is able to consult Board Meetings
courses attended by the Directors during the Directors as required on a regular
the financial year included the following basis. Employees and shareholders The Board meets a minimum of ten (10)
areas – have access to Directors through the times per year, wherein Board reports
Chairman, the Senior Independent are circulated prior to the meetings,
Board Competency Non-Executive Director and the Group allowing the Directors to review further
Roles & Responsibilities of a Bank Company Secretary. information that may be required.
Board following Global Financial Crisis Additional Board meetings are convened
ICLIF: Human Capital Management in whenever necessary. The Senior
the Boardroom Management team of the subsidiaries
Mandatory Accreditation Programme are invited to attend Board meetings
to provide presentations and detailed
explanations on matters that have been
tabled.
AMMB Holdings Berhad (223035-V) | Annual Report 2013 37
Ten (10) Board meetings were held during the financial year ended 2013 (“FY2013”). The attendance of every Board member at
the meetings of the Board and the various Board Committees is as set out below:
Group
Group Nomination
Group Group Audit and Group Risk Information and
Board of Nomination Remuneration Examination Management Technology Remuneration
Directors Committeea Committeea Committee Committee Committee Committeea
Tan Sri Azman 10 5b 5b N/A N/A N/A N/A
Hashim (Chairman)
Dato’ Azlan Hashim 7 N/A N/A 6 N/A 2c N/A
Tun Mohammed 9 5 N/A N/A N/A N/A 1
Hanif bin Omar
Tan Sri Datuk Clifford 8 5d 5 6 8 N/A 0
Francis Herbert (Chairman) (Chairman) (Chairman)
Tan Sri Datuk Dr Aris 10 5 5 7 9 N/A 1
Osman @ Othman (Chairman) (Chairman)
Dato’ Rohana binti 9 N/A N/A N/A N/A 3 -f
Mahmood
Dato’ Gan Nyap Liou 9 N/A N/A 6 N/A 4d -f
@ Gan Nyap Liow (Chairman)
Alexander Vincent 10 N/A N/A N/A N/A N/A N/A
Thursby
(resigned on
18.4.2013)
Dr Robert John Edgar 3 2 1 2 N/A N/A N/A
(resigned on
30.6.2012)
Mark David Whelan 10 N/A N/A N/A 9 N/A N/A
Gilles Planté 5 1 e
1 e
3 e
N/A N/A 1
(appointed on
8.10.2012)
Soo Kim Wai 10 N/A 5 N/A N/A N/A 1
Ashok Ramamurthy 10 N/A N/A N/A N/A 4 N/A
(appointed on
2.4.2012)
Number of meetings 10 5 5 7 9 4 1
held in FY 2013
a Consolidation of Group Nomination Committee and Group Remuneration Committee into a single committee known as Group Nomination
and Remuneration Committee on 4.3.2013
b Resigned as member on 4.3.2013
c Stepped down as Chairman on 11.9.2012 and remains as a member
d Appointed as Chairman on 11.9.2012
e Appointed as member on 8.10.2012
f Appointed as member on 19.3.2013
Notes:
1) All attendances reflect the number of meetings attended during the Directors’ tenure of service.
2) N/A represents non-committee member.
38 AMMB Holdings Berhad (223035-V) | Annual Report 2013
Board Committees • Recommending to the Board the There were four (4) meetings held during
framework/methodology for the the FY2013.
The Board delegates certain remuneration of the Directors,
responsibilities to the Board Committees. Chief Executive Officers and other RISK MANAGEMENT
The Committees that assist the Board Senior Management staff with the
are as follows: relevant experience and expertise Group Risk Management Committee
needed to assist in managing the of Directors
1. Group Nomination and Group effectively. The services of
Remuneration Committee consultants are utilised to review the The Group Risk Management
2. Audit and Examination Committee methodology for rewarding Executive Committee oversees the adequacy of
3. Group Risk Management Committee Directors and Management staff risk management within the Group.
4. Group Information Technology according to the Key Performance
Committee Indicators required to be achieved. The membership of the Committee
comprises three (3) members, all of
The criteria for the membership are based Group Information Technology whom are Non-Executive Directors
on a Director’s skills and experience, as Committee and is chaired by an Independent Non-
well as his ability to add value to the Executive Director. The responsibilities
Board Committee. Group Information Technology of the Committee include the review and
Committee (“GITC”) comprises four (4) evaluation of:
The Group Managing Director, the Chief members, three (3) of whom are Non-
Executive Officers and other Senior Executive Directors and two (2) out of • Senior Management’s activities in
Management staff are invited to attend the three (3) are Independent Directors. managing risk;
the relevant Board Committee meetings. The Committee is responsible to provide
governance for Information Technology • High-level risk exposures and
Group Nomination and Remuneration and to ensure that the overall strategic portfolio composition;
Committee IT direction is aligned with the Group’s
business objectives and strategy. GITC’s • The Company/Group’s major
The Committee was established key responsibilities include the following: risk strategies, policies and risk
following the consolidation of the Group tolerance standards; and
Nomination and Group Remuneration • To provide strategic direction for IT
Committees. The Committee comprises development within the Group and • The overall effectiveness of the
seven (7) members, all of whom are ensuring that IT strategic plans are risk management and control
Non-Executive Directors with a majority aligned with the Group’s business infrastructure.
of Independent Directors and chaired by objectives and strategy.
an Independent Non-Executive Director. There were nine (9) meetings held during
The Committee continues with the roles • To ensure the establishment of the FY2013.
of the previous Group Nomination and Groupwide IT policies, procedures
Group Remuneration Committees and is and frameworks including IT security ACCOUNTABILITY AND AUDIT
responsible for: and IT risk management.
Audit and Examination Committee
• Regularly reviewing the board • To provide oversight of the Group’s
structure, size and composition, as long term IT strategic plans and The Audit and Examination Committee
well as making recommendation budgets. (“AEC”) is responsible for the oversight
to the Board of the Company with and monitoring of:
regard to any changes that are • To establish and monitor the
deemed necessary. overall performance, efficiency and • The Group’s financial reporting,
effectiveness of IT services including accounting policies and controls;
• Recommending the appointment performance metrics.
of Directors to the Board and • The Group’s Internal Audit functions;
Committees of the Board as well • To review the adequacy and
as annually review the mix of skills, utilisation of the Group’s IT resources • Compliance with regulatory
experience and competencies including computer hardware, requirements;
that Non-Executive and Executive software, personnel and other IT
Directors should bring to the Board. related investments. • The appointment, performance
evaluation, transfer and dismissal of
• On an annual basis, assessing the • To advise the Board on IT related the Chief Internal Auditor; and
effectiveness of the Board as a whole issues; and
and the Committees as well as the • The appointment, scope of work and
contributions of the Chairman and • To review and approve allowed evaluation of the external auditor.
each Director to the effectiveness of deviations under BNM guidelines.
the Board.
AMMB Holdings Berhad (223035-V) | Annual Report 2013 39
It is the Board’s policy that at least one 2) To serve as an independent and 9) To ensure the adequacy and
(1) member of the AEC shall have an objective party in the review of appropriateness of the scope,
accounting qualification or experience the financial information of the functions and resources of the
in the field of finance. The AEC meets Company/Group that is presented internal audit and that they have the
regularly with the external auditor and by the Management to the Board necessary authority to carry out their
Group Internal Audit. and Shareholders. work.
The AEC met seven (7) times during the 3) To review the quarterly results and 10) To establish a mechanism to assess
FY2013. year-end financial statements of the performance and effectiveness
the Company/Group to ensure of the internal audit function.
Financial Controls compliance with accounting
standards and legal requirements, 11) To direct and supervise any special
Responsibility Statement and to ensure fair and transparent project or investigation considered
reporting and prompt publication of necessary.
The Board of Directors is required by the financial accounts.
the Companies Act, 1965 to prepare 12)
To review any related party
financial statements for each financial 4) To determine that the Company/ transaction and conflict of interest
year which give a true and fair view of Group has adequate established situation that may arise within the
the Group and its state of affairs, results policies, procedures and guidelines, Company/Group including any
and cash flows at the end of the financial operating and internal controls, transaction, procedure or course
year. Following discussions with the and that they are being complied of conduct that raises questions of
statutory external auditors, the Directors with and are operating effectively management integrity.
consider that the appropriate accounting in promoting efficiency and proper
policies are consistently applied and conduct, and protecting the assets 13) To review and approve the Internal
supported by reasonable as well as of the Company/Group. Audit Charter of the Company.
prudent judgments and estimates, and
that all accounting standards which they 5) To evaluate the adequacy and 14) To prepare when deemed necessary,
consider applicable have been followed effectiveness of the Management periodic reports to the Board
during the preparation of the financial control systems of the Company/ summarising the work performed
statements. Group through the review of the in fulfilling the Committee’s primary
reports of both the external and responsibilities.
The Board of Directors is responsible internal auditors that highlight
for ensuring that the Group keeps internal accounting, organisational 15) To review the annual appointment of
accounting records which are disclosed and operating control weaknesses, the external auditors, or resignation
with reasonable accuracy, and for and to determine that appropriate or removal of external auditors, to
ensuring that the financial statements corrective actions are being taken approve the provision of non-audit
comply with the Companies Act, 1965. by the Management. services by external auditors, to
negotiate and approve the annual
The Board and Board Committees have 6) To review and approve the scope of audit fees or special audit fees and/
the general responsibility for taking such audits, audit plans and audit reports or non-audit service fees.
steps to safeguard the assets of the of both the external and internal
Group. auditors. 16)
To review the appointment,
performance evaluation, transfer
The Group’s Statement on Risk 7) To ensure through discussions with and dismissal, and remuneration of
Management and Internal Control is set the external and internal auditors the Chief Internal Auditor.
out on page 44 of this annual report. that no restrictions are being placed
by the Management and employees Summary of Key Activities
on the scope of their examinations.
Audit and Examination Committee The following is a summary of the main
(“AEC”) Report 8) To ensure that audit of specialised activities carried out by the Committee
areas is adequate by directing the during the year:
Terms of Reference engagement of external experts to
carry out the review, if required and Internal Audit
The functions of the AEC are as follows: ensure that the terms and scope
of the engagement, the working • Reviewed and approved the Group
1) To provide independent oversight arrangement with the internal Internal Audit’s annual audit plan,
of the Company/Group’s financial auditors and reporting requirements including its resource and training
reporting and internal control are clearly established. needs.
system, and ensuring checks and
balances within the Company/
Group.
40 AMMB Holdings Berhad (223035-V) | Annual Report 2013
• Reviewed Group Internal Audit’s Financial Results Group Internal Audit focuses its efforts on
achievement of its key strategic performing audits in accordance with the
initiatives undertaken to improve the • Reviewed the quarterly results and audit plan, which is prioritised based on
efficacy, effectiveness and profile of financial statements of the Group a comprehensive risk assessment of all
Group Internal Audit. before recommending them to the activities undertaken by the Group. The
Board of Directors for approval. structured risk assessment approach
• Reviewed the Group Internal Audit’s ensures that all risk-rated areas are
methodology in assessing the risk • Reviewed the annual audited kept in view to ensure appropriate audit
levels of the various auditable areas financial statements of the Group coverage and audit frequency. The risk-
and ensured that audit emphasis with the external auditor prior based audit plan is reviewed annually
was given on critical risk areas. to submission to the Board for taking into account the changing
approval. financial significance of the business and
• Reviewed the adequacy and risk environment. The AEC reviews and
effectiveness of the system • Compliance with the following approves Group Internal Audit’s annual
of controls, reporting and risk regulatory requirements was audit plan.
management to ensure there ensured :
is a systematic methodology in Group Internal Audit also performs
identifying, assessing and mitigating – Provisions of the Companies investigations and special review,
risk areas. Act, 1965 and the Banking and and participates actively in major
Financial Institutions Act, 1989 system development activities and
• Reviewed reports of Group project committees to advise on risk
Internal Audit (including internal – Capital Markets And Services Act, management and internal control
investigations, follow up on 2007 measures.
resolution of issues raised in reports
issued by Regulators, external – Securities Commission Act, 1993 The AEC approves the annual audit work
auditors and other external parties) plan, and a risk-based audit approach
and considered Management’s – Main Market Listing Requirements is used to ensure that the higher risk
response and accordingly directed of Bursa Malaysia Securities activities in each business unit are
Management to take the necessary Berhad audited each year.
remedial action. The Committee also
followed-up on resolution of major – Applicable accounting standards The audit activities can be summarised
issues raised in the reports and in Malaysia as follows:
requested for separate presentations
by Management where necessary. – Other relevant regulatory i) Scheduled and mandatory audits
requirements ii) Systems development life-cycle
• Monitored the progress of Group review of major IT infrastructure
Internal Audit in completing its audit Related Party Transactions projects
plan and assessed the performance iii) Unscheduled and special focus
of Group Internal Audit. • Reviewed related party transactions reviews
and the adequacy of the Group’s
External Audit procedures in identifying, The main objective of the audit reviews is
monitoring, reporting and reviewing to assess the adequacy and effectiveness
• Reviewed the appointment of related party transactions. of risk management and systems of
the external auditor and their internal controls in the following areas:
independence and effectiveness. Internal Audit
• Retail Banking
• Reviewed their audit plan, annual Internal Audit Function • Islamic Banking
audit fees and scope of work for • Business Banking
audit and non-audit assignments. Group Internal Audit function operates • Corporate & Institutional Banking
under a charter from the AEC that • Investment Banking
• Reviewed the external auditor’s gives it unrestricted access to review • Transaction Banking
results and report as well as all activities of the Group. The Head • Markets
the Management’s consequent of Group Internal Audit reports to the • Life & General Insurance
responses to the findings of the AEC. The internal auditing function is • Takaful Business
external auditor. conducted on an AmBank Groupwide • Funds & Asset Management
basis to ensure consistency in the • Asset & Liabilities Management
control environment and the application • Group Shared Services
of policies and procedures.
AMMB Holdings Berhad (223035-V) | Annual Report 2013 41
Group Internal Audit plays an active role in ensuring compliance with the requirements Non-Audit Services
of Regulatory Authorities. Group Internal Audit also works collaboratively with the
External Auditor, Risk Management Department and Group Regulatory Compliance The external auditor may not provide
to ensure maximum reliance and avoid duplication of effort. services that are perceived to be in
conflict with the role of the auditor. These
There is an effective process for ensuring prompt resolution of audit issues. Group include assisting in the preparation
Internal Audit tables regular updates to the AEC on the progress of significant issues of the financial statements and sub-
until such issues are satisfactorily resolved. contracting of operational activities
normally undertaken by Management,
For the financial year, total costs incurred on the Group internal audit function and engagements where the auditor
amounted to RM15.3 million (FY2012: RM15.1 million) may ultimately be required to express an
opinion on its own work.
Key Risk Areas and Internal Focus
Specifically the policy:
Bursa stock short name: AMBANK Bloomberg ticker: AMM MK EQUITY live event and replay of analyst briefing
made available on the Group’s website
AMMB Holdings Berhad (or “the Group”) investor relations activities promote (www.ambankgroup.com) for public
timely, comprehensive and fair communication with shareholders as well as other viewing. All press statements and
financial market participants about matters that may influence the Group’s share quarterly financial statements are
price. The Group is careful in structuring contacts between Senior Management with published on Bursa Malaysia and the
investors, and both buy and sell-side analysts to ensure equality, transparency and Group’s website.
completeness of a two-way communication regarding the company’s performance
along with developments in the business and industry. Annual General Meeting (AGM)
A dedicated Investor Relations & Planning team supports the Group Managing The Group’s AGM is held as an open
Director and Chief Financial Officer in maintaining a close and active dialogue with session allowing investors, in particular
the investment community. Senior Management personnel responsible for investor retail shareholders, to engage directly
relations activities are: with the Board of Directors, Senior
Management and the external auditor of
1. Mr Ashok Ramamurthy, Group Managing Director the Group. During the AGM, the Group’s
ashok-ramamurthy@ambankgroup.com Board of Directors report the results for
the financial year just ended and explain
2. Ms Mandy Simpson, Chief Financial Officer prospects for the current financial year.
mandy-simpson@ambankgroup.com
Analyst meetings
3. Mr Ganesh Kumar Nadarajah, Group General Manager,
Investor Relations & Planning The AMBANK stock receives wide
ganesh-kumar@ambankgroup.com coverage/interest from the domestic
and international investment community.
Quarterly result announcements Senior Management engages with
domestic and international analysts as
Before the publication of the Group’s quarterly results, the Group observes a well as institutional investors through
“closed-period”, during which we do not participate in broker conferences or hold one-to-one meetings, conference calls,
discussions/conference calls with investors and analysts. Briefing sessions for the and participating in conferences/road
media and analyst are conducted when quarterly results are released, with link to the shows to solicit their views on the Group.
Analyst coverage
FY2013
Countries / Cities
Asia Pacific Europe Canada and North America
• Hong Kong • Amsterdam • Boston
• Jakarta • Copenhagen • Los Angeles
• Kuala Lumpur • Edinburgh • Montreal
• Melbourne • Frankfurt • New York
• Singapore • Glasgow • San Francisco
• Sydney • London • Toronto
• Paris
Research Houses
• Affin Investment Bank • DBS Vickers • Macquarie
• Alliance Research Sdn Bhd • Deutsche Bank • Maybank Investment Bank
• Bank of America Merrill Lynch • Goldman Sachs • MIDF Research
• BNP Paribas • HLIB Research • Nomura
• CIMB Investment Research • HSBC • Public Invest Research
• Citi Investment Research • J.P. Morgan • RHB Research
• CLSA • KAF • TA Securities
• Credit Suisse • Kenanga • UBS
The Group recognises and values constructive feedback from the investment community. Feedback or enquiries relating to
investor relations may be emailed to ir@ambankgroup.com.
44 AMMB Holdings Berhad (223035-V) | Annual Report 2013
RESPONSIBILITY Officer that the Group’s risk management • Risk management principles,
and internal control system is operating policies, practices, methodologies
The Board of Directors (“Board”) adequately and effectively, in all material and procedures are made available
is responsible for the Group’s risk aspects, based on the risk management to appropriate staff in the Group.
management and internal control model adopted by the Group. These are regularly updated to
system and for reviewing its adequacy ensure they remain relevant and
and integrity. The Board has instituted The Board is of the view that the risk in compliance with regulatory
an ongoing process for identifying, management and internal control system requirements.
evaluating and managing the significant in place for the year under review and up
risks faced by the Group throughout the to the date of issuance of the financial The policies, methodologies and
financial year under review. This process statements is adequate and effective to procedures are enhanced whenever
is regularly reviewed by the Board and safeguard the shareholders’ investment, required to meet the changes in
accords with the guidance on internal the interests of customers, regulators operating environment and/ or for
control, Statement on Risk Management and employees, and the Group’s assets. continuous improvement in risk
and Internal Control: Guidelines for management.
Directors of Listed Issuers. KEY RISK MANAGEMENT
AND INTERNAL CONTROL • Organisation structure is designed
In establishing and reviewing the risk to clearly define the accountability,
PROCESSES
management and internal control reporting lines and approving
system, the Directors have considered authorities to build an appropriate
The Group has adopted a coordinated
the materiality of relevant risks, the system of checks and balances,
and formalised approach to risk
likelihood of losses being incurred and corresponding to the business and
management and internal control, which
the cost of control. Accordingly, the operations activities’ needs. This
includes the following:
purpose of the risk management and includes the empowerment and
internal control system is to manage setting of authority limits for proper
• The Board has formed Risk
and minimise rather than eliminate the segregation of duties.
Management Committee of Directors
risk of failure to achieve the policies and (“RMCD”) to assist in oversight of
objectives of the Group and can only • The Audit and Examination
overall risk management structure.
provide reasonable but not absolute Committees (“AEC”s) of the
The Board has also established
assurance against risk of material Company and its major subsidiaries
various Management Committees
misstatement or losses. assist the Board to evaluate the
at the Group level to assist it in
adequacy and effectiveness of the
managing the risks and businesses
The management assists the Board in the Group’s internal controls systems.
of the Group. These committees
implementation of the Board’s policies The AECs review the Group’s
address all classes of risk within
on risk management and internal control financial statements, and reports
Board delegated mandate: balance
by identifying and evaluating the risks issued by Group Internal Audit, the
sheet risk, credit risk, legal risk,
faced by the Group for consideration external auditors and regulatory
operational risk, market risk, shariah
by the Board and design, operate and authorities and follow-up on
risk, compliance risk, regulatory
monitor the system of risk management corrective action taken to address
compliance risk, reputational
and internal control to mitigate and issues raised in the reports.
risk, product risk and business
control the risks. and IT project risk. Effective April
• Group Internal Audit conducts
2013, the Group has restructured
CONCLUSION independent risk-based audits
and consolidated various Risk
and provides assurance that the
Management Committees into one
For the year under review, the Board design and operation of the risk
single committee (named as Group
has received the reports of the Audit and control framework across the
CEOs Committee), to streamline and
and Examination Committee and Risk Group is effective. The AECs review
manage more holistically the various
Management Committee of Directors. An the work of the Group Internal Audit
risks across AmBank Group.
annual assessment of the effectiveness Department, including reviewing its
of risk and internal control processes has audit plans, progress and reports
been conducted and the Board has also issued.
received the assurance from the Chief
Executive Officer and Chief Financial
AMMB Holdings Berhad (223035-V) | Annual Report 2013 45
1. Share Buy-back
The Company has not purchased any of its own shares during the financial year ended 31 March 2013.
2. Material contracts
There were no material contracts (not being a contract entered into in the ordinary course of business) entered into by the
Group which involved directors and shareholders, either still subsisting at the end of the financial year or entered into since
the end of the previous financial year.
5. Profit Guarantees
During the financial year, there were no profit guarantees given by the Company.
During the financial year, AMMB has issued three (3) series of MTNs amounting to RM1.3 billion.
Description (RM’000)
Working Capital 1,299,103
Payment of issuance expenses 897
Total Proceeds 1,300,000
(b) On 16 October 2012, AmBank issued the eight (8) tranches of Medium Term Notes amounting to RM710 million under
a RM2.0 billion subordinated Medium Term Notes programme. The proceeds were utilised by AmBank for rollover of
working capital.
(c) On 24 December 2012, AmIslamic Bank issued the third tranche of subordinated sukuk amounting to RM200 million
under a RM2.0 billion Subordinated Sukuk Musyarakah Programme. The proceeds were utilised by AmIslamic Bank as
working capital.
8. Variation in Results
The Company has not made or published any profit forecast or projection in respect of the financial year ended 31 March
2013.
AMMB Holdings Berhad (223035-V) | Annual Report 2013 47
The Transacting Parties for all the Related Parties comprise AMMB and its subsidiaries.
Details of Recurrent Related Party Transactions Conducted in Financial Year Ended 31 March 2013 Pursuant to
Shareholders’ Mandate
Yakimbi Sdn Bhd Group Provision of secure private cloud collaboration, 105
storage and mobility solutions
Notes:
1. IT consultancy related services consist of, but are not limited to, the following services:
(a) design, development and customisation of software;
(b) integration, installation, implementation, testing and commissioning of software on the designated systems;
(c) provision of maintenance services and upgrades to the existing mainframe related applications and systems;
(d) development, optimisation and implementation of the website; and
(e) provision of project management services.
2. The provision of technical services includes but are not limited to the following services:
(a) strategic business leadership, experience and know how;
(b) secondment of key ANZ resources to AMMB Group;
(c) technology and systems capabilities;
(d) foreign exchange, interest rate and commodities derivatives trading and sales solutions / products;
(e) distribution platform and processes documentation;
(f) market risk management tools, models, processes, procedures and policies;
(g) credit and risk management process and tools;
(h) international business transformation experience and skills; and
(i) global research capacity.
48 AMMB Holdings Berhad (223035-V) | Annual Report 2013
Management Discussion and Analysis of Financial Statements. The growth in profits is mainly
attributable to growth in net fund
Sixth consecutive year of record performance for the Group. income, higher contributions from
insurance business coupled with lower
Simplified Income Statement
allowances for impairment on loans
RM Million FY2013 FY2012 +/- and financing.
RM Million %
Total Income – Revenue Growth
Net interest income 2,222.5 2,180.2 + 42.3 + 1.9
Net finance income from Islamic The major components of revenue are
banking business* 759.3 673.8 + 85.5 + 12.7 net fund income (net interest income and
Net fund income 2,981.8 2,854.0 + 127.8 + 4.5 net finance income from Islamic banking
Other income from Islamic business), other income from Islamic
banking business* 88.5 121.2 - 32.7 - 27.0 banking business, net income from
insurance business and other operating
Net income from insurance
income.
business 209.4 117.0 + 92.4 + 79.0
Other income 1,094.6 1,208.8 - 114.2 - 9.4 Revenue growth was underpinned
Total income 4,374.3 4,301.0 + 73.3 + 1.7 by higher net fund income and
Overheads (2,006.0) (1,791.1) - 214.9 - 12.0 contribution from insurance business
offset by lower investment and trading
Acquisition and business income.
efficiency expenses (45.4) - - 45.4 -
Operating profit 2,322.9 2,509.9 - 187.0 - 7.5 Total income for FY2013 was
Allowance for impairment on RM4,374.3 million, up 1.7%, driven
loans and financing (173.2) (382.0) + 208.8 + 54.6 by Retail Banking (up 5.3%), Business
Other (provisions)/writeback 42.1 (55.7) + 97.8 + 175.6 Banking (up 11.4%), Corporate &
Institutional Banking (up 36.7%) and
Impairment loss (12.2) (38.6) + 26.4 + 68.5 Insurance Business (up 26.5%). This
Profit before taxation and reflects the Group’s ability to execute
zakat 2,179.6 2,033.6 + 146.0 + 7.2 its strategy in a disciplined manner,
Taxation and zakat (486.4) (500.7) + 14.3 + 2.9 namely on increasing our share of
wallet from existing customers,
Profit after taxation 1,693.2 1,532.9 + 160.3 + 10.5
winning new clientele through product
Non-controlling interests (58.1) (48.5) - 9.6 - 19.8 innovation and superior service
Profit attributable to delivery, and diversifying into new
shareholders 1,635.1 1,484.4 + 150.7 + 10.2 income streams.
Other Income: RM1,094.6 million (-9.4% or -RM114.2 million) Overheads: RM2,006.0 million (+12.0%
or +RM214.9 million)
Other income, which comprises mainly income from investment and trading
activities as well as ancillary services connected to the Group’s lending activities, • Personnel expenses were 11.3%
was dampened by slower equity market activities and lack of significant primary or RM123.7 million higher, partly
issuance in the bond market. attributable to the staff costs of
recently acquired Kurnia and MBF
For FY2013: Cards as well as recruitment of
staff to support higher business
• Fee income increased by RM54.4 million (+8.9%) mainly attributable to higher volumes, annual salary adjustments
fees from financing and securities, unit trust management, portfolio management and bonuses coupled with the
and bancassurance commissions but offset by lower brokerage and corporate cost of shares and options granted
advisory fees. The higher fee income is partly attributed to contributions from the under the Group Executives’ Share
recently acquired MBF Cards. Scheme. As at 31 March 2013, the
number of employees of the Group
• Investment and trading activities recorded a lower contribution of RM395.0 million stood at 12,770 (FY2012:10,936).
compared to income of RM582.0 million in the previous year. This was mainly
due to lower gains from trading of securities, foreign exchange and derivatives • Establishment expenses were RM79.6
contributions, due to tough trading environment arising from uncertainties in the million higher due to increase in
local and global financial markets. amortisation of computer software
and higher computerisation costs
Operating Expenses from maintenance of application
systems rolled out during the year,
To stay competitive, the Group needs to focus on productivity and efficiency. The full year impact of operating lease
Group will continuously strengthen its capabilities and address strategic issues under the open infrastructure
whilst prudently managing its costs, to sustainably grow our business over the program and increased rentals and
medium term. The cost-to-income ratio expresses the Group’s operating expenses utilities of branch premises coupled
as a percentage of income and is one of the most widely used measures of with costs attributable to Kurnia and
efficiency in the banking industry. MBF Cards.
In FY2013, the cost-to-income ratio, including cost of acquisitions and business • Marketing and communication
efficiency expenses, stood at 46.9% (FY2012: 41.6%). The increase reflects the expenses increased by RM20.0
impact of acquisitions of Kurnia and MBF Cards as well as increased investment in million largely due to higher
human capital and infrastructure to support growth plans and deliver synergies. advertising and promotional
costs coupled with marketing
Operating expenses and communication expenses
attributable to Kurnia and MBF
RM Million FY2013 FY2012 +/-
Cards.
RM’ million %
• Administration expenses increased
by RM13.4 million largely due to
Personnel/staff 1,218.3 1,094.6 + 123.7 11.3%
expenses attributable to Kurnia and
Establishment 462.8 383.2 + 79.6 20.8% MBF Cards coupled with higher
Marketing and communication 164.8 144.8 + 20.0 13.8% donations from increased corporate
Administration and general 186.7 173.3 + 13.4 7.7% social responsibility activities,
mitigated by write back of provisions
Expenses capitalised (26.6) (4.8) - 21.8 > 100% no longer required relating to
Total 2,006.0 1,791.1 + 214.9 12.0% professional services, insurance
administration and management
expenses.
Asset Quality
RM’billion
20.0 4.5%
18.0 4.0%
3.8%
16.0
3.5%
3.3%
14.0
3.0%
12.0
2.4% 2.5%
10.0
2.0% 2.0%
8.0
1.5%
6.0
1.0%
4.0
2.0 0.5%
2.54 2.45 1.91 1.68
- 0.0%
Day 1 (1 April ‘10) FY2011 FY2012 FY2013
sundry receivables offset by lower Electricity, gas and water Education and health
write back of impairment provision on Construction Household
financial investments compared to the
Wholesale, retail, restaurant and hotel Others
year before.
Transport, storage and communication
Balance Sheet
receivables by RM0.4 billion to reach Savings account deposits Negotiable instruments of deposits
RM2.2 billion.
Securities
Deposits From Customers - Source
• Securities held for trading (“HFT”) are
acquired for purpose of benefitting
from short term price movements
2.0% 2.3%
or to lock in arbitrage profits. HFT
contracted by RM3.9 billion to RM7.0 11.6% 12.2%
billion mainly due to decreased
holdings of BNM Monetary Notes
and Malaysian Government
securities. The Group’s banking 40.0% 39.7%
subsidiaries as Principal Dealers for FY2013 FY2012
issuances of Malaysian Government
and BNM securities will subscribe
46.4% 45.8%
and sell down these securities in
the secondary market. Movement in
these securities is dependent on the
timing of issuances by BNM.
Individuals Government
• Securities available for sale (“AFS”) Business enterprises Others
are acquired for yield and liquidity
purposes. AFS increased by RM0.6
billion mainly in unquoted securities
attributable to Kurnia’s portfolio.
Deposits and Funding
• Securities held to maturity (“HTM”)
are securities with fixed or • The Group’s primary source of funding is from customer deposits, comprising
determinable payments and fixed term/investment deposits, savings account deposits, current account deposits,
maturity that the Group has positive and negotiable instruments of deposits. Other major sources of funds include
intent and ability to hold to maturity. shareholders’ funds, debt capital, term funding, interbank and other borrowings.
HTM grew by RM4.8 billion to reach
RM6.2 billion as at 31 March 2013, • Deposits from customers increased by RM7.6 billion (+9.8%) to RM84.9 billion,
mainly from investments in BNM whilst low cost deposits comprising current accounts and savings accounts
Monetary Notes and tax-exempt, (“CASA”) grew 28.0%. CASA as a proportion to total customer deposits is now
government-guaranteed private debt at 20.0% compared to 17.0% a year ago. Term/Investment deposits continued to
securities, in line with the strategy to make up the majority of customer deposits by type constituting 80.0% (FY2012:
provide high quality liquidity buffer 82.0%) of total customer deposits.
for contingency funding.
54 AMMB Holdings Berhad (223035-V) | Annual Report 2013
• Term funding initiatives included senior notes, sukuk and credit-link notes issuances. As at 31 March 2013, term funding
of the Group stood at RM6.3 billion, comprising term loans and revolving credit of RM1.3 billion, senior notes and sukuk of
RM4.5 billion and credit-link notes of RM0.4 billion. Loans sold to Cagamas Berhad with recourse stood at RM3.4 billion, up
from RM 3.1 billion a year ago.
• The Group stresses the importance of customer deposits as a source of funds to finance lending /financing to customers.
They are monitored using adjusted loan/financing to deposit ratio (“LDR”) which compares net loans/financing to customers
as a percentage of adjusted customer deposits (inclusive of loans/financing sold to Cagamas Berhad and term funding with
original maturity of 3 years and above). The Group aims for a LDR of approximately 90% with emphasis placed on supporting
loans growth through stable funding sources. As at 31 March 2013, the LDR of the Group stood at 88.7% (FY2012 89.5%).
Capital Ratios*
RM’billion
200.0 18.0%
Basel II Basel III
180.0 15.8% 16.0%
15.2% 15.4%
14.8%
160.0 14.4% 14.0%
140.0
12.0%
11.2% 11.0%
120.0
10.3% 10.2% 10.0%
9.7%
100.0
8.0%
80.0
6.0%
60.0
81.4 87.0 92.0 4.0%
40.0
63.0 70.5
20.0 2.0%
- 0.0%
FY2009 FY2010 FY2011 FY2012 FY2013
Risk-weighted assets Core capital ratio Risk-weighted capital ratio Tier 1 capital ratio Total capital ratio
*Based on aggregation of the consolidated capital positions (before proposed dividends) and risk-weighted assets of the regulated banking subsidiaries.
The Group’s Capital Management Plan is driven by its desire to maintain strong capital base to support the development of its
businesses, to meet regulatory capital requirements at all times and to maintain good credit ratings. This encompasses optimising
capital profile and buffer, enhancing scenario modelling, streamlining corporate structures, developing dynamic dividend policy
and proactively managing Basel III requirements.
The Group’s banking subsidiaries to which BNM’s Risk Weighted Capital Adequacy Framework apply are AmBank (M) Berhad
(“AmBank”), AmInvestment Bank Berhad (“AmInvestment Bank”) and AmIslamic Bank Berhad (“AmIslamic Bank”). With effect
from 1 January 2013, the capital adequacy ratios are computed in accordance with BNM’s guideline on Capital Adequacy
Framework (Capital Components), which is based on the Basel III capital accord, on a prospective basis. For FY2012, the capital
adequacy ratios were computed based on the Basel II accord.
Our capital levels remain sound, with the Group’s aggregated banking entities’ total capital ratio, before proposed dividend, at
14.8% (FY2012: 15.4%) and Tier 1 capital ratio of 11.0% (FY2012: 11.2%).
AMMB Holdings Berhad (223035-V) | Annual Report 2013 55
Credit Ratings
Reflecting the improvement in financial performance, Moody’s Investors Service upgraded the foreign currency deposit ratings
of AmBank, whilst RAM Rating Services revised the outlook of the Company, AmBank, AmIslamic Bank and AmInvestment Bank
to positive from stable. Fitch’s Ratings and Standards and Poor’s ratings were reaffirmed.
The credit ratings of the Company and its principal subsidiaries are as follows:
Credit Ratings
Dividend
Reflecting the robust financial performance in FY2013, the Directors are recommending a final single-tier dividend payment of
15.0%, which together with the interim dividend of 7.0% amounts to a cumulative total dividend of 22.0%, up 1.9% compared
to FY2012.
56 AMMB Holdings Berhad (223035-V) | Annual Report 2013
Financial Calendar
2012 2013
14 August 19 February
Announcement of unaudited consolidated results for the financial Announcement of unaudited consolidated results for the financial
first quarter ended 30 June 2012 third quarter ended 31 December 2012
15 August 16 May
21st Annual General Meeting Announcement of audited consolidated results for the financial
year ended 31 March 2013
10 September
Payment of final single tier dividend of 13.5% for the financial year 31 July
ended 31 March 2012 Notice of 22nd Annual General Meeting
8 November 22 August
Announcement of unaudited consolidated results for the financial 22nd Annual General Meeting
half year ended 30 September 2012
10 December
Payment of interim single tier divident of 7.0% for the financial year
ending 31 March 2013
58 AMMB Holdings Berhad (223035-V) | Annual Report 2013
Over the past year, Group Risk The “Advanced Risk Recognition For FY2013, the following have been
Management continued with the Programme” also delivered enhanced planned to be developed with roll out
implementation of its strategic risk models and risk infrastructure as scheduled for FY 2014:
change agenda via the “Advanced follows:
Risk Recognition Programme” aimed • Revamp system and process to
at improving risk recognition skills. i) Enhancing Governance: manage concentration risk to single
The programme incorporates a counterparty group to be in line with
comprehensive range of initiatives that • Restructured and consolidated Bank Negara Malaysia Guidelines
included: various Risk Management on Single Counterparty Exposure
Committees into one single Limit (“SCEL”).
• Enhancing governance committee (named as Group CEOs
• Upgrading risk infrastructure Committee), to streamline and • Revise the Credit Approval
• Harnessing risk appetite setting manage more holistically the various Delegation Authorities (“CAD”)
approach risks across AmBank Group. structure by giving Group Risk
• Positioning the AmBank Group for Management and business units
IRB status under Basel II • Enhanced Credit and Commitments personnel greater accountability
Committee’s governance and and joint responsibility to approve
The strategic initiatives under structure by formalising membership credits.
the “Advanced Risk Recognition and role of Chief Risk Officer.
Programme” has already delivered Market Risk Management:
substantial enhancements to Group Risk • Enhanced the timeliness and
Management and underlying profitability, oversight in the management of Key initiatives undertaken were as
evidenced by: higher risk accounts. follows:
• Lower impaired assets, lower annual ii) Upgrading Risk Infrastructure: • Commenced Risk Engine
loan loss provisioning charges and Replacement (“RER”) Project
improved loan loss coverage ratio. Credit Risk Management: to provide more timely and
accurate measurement of
• Enhanced diversification - with less Key initiatives undertaken were as market risk, and to support
dependence on Retail Banking via follows: new products and increase in
strong income and deposits growth business volume. RER project
in Business Banking and Corporate • Implemented 17 new Probability to be implemented in phases,
& Institutional Banking. of Default (“PD”) models for with Fixed Income module to be
wholesale customers to enable rolled out in May 2013.
• Enhanced Internal Capital Adequacy more accurate measurement of
Assessment Process (“ICAAP”) customers’ credit risk. • Enhanced Assets & Liabilities
framework to support the Group Management (“ALM”) system
Risk Appetite and strategic business • Developed new Retail and internal adoption of Basel III
objectives. Behavioral Scoring models to liquidity ratios and target.
provide real time assessment of
• Upgraded external rating by retail customers’ credit risk and Operational Risk Management:
Moody’s (from Baa2 to Baa1) in the enhanced strategies for cross-
past 12 months while AmBank’s selling. Key initiatives undertaken were as
other external ratings continued to follows:
remain at AA3 by RAM, BBB by Fitch • Enhanced the methodology and
and BBB+ by Standard & Poor’s. infrastructure in making loan • Introduced Operational Risk
provisioning and undertaking Appetite across the Group, to
stress testing. complement the Credit Risk and
Market Risk Appetite. This is
supplemented by the enhanced
governance in managing Key
Risk Indicators.
• Continuous programmes to
enhance awareness in Business
Continuity Management among
business and support units.
AMMB Holdings Berhad (223035-V) | Annual Report 2013 59
MFRS139
GP3
6.2% 6.3%
4.1% 3.81%
3.7%
3.18% 3.33%
2.6% 2.8%
2.45%
1.5% 1.98%
0.97%
0.60% 0.50%
0.88% 0.21%
FY2007 FY2008 FY2009 FY2010 Day 1 FY2011 FY2012 FY2013
Net Provisions Charge Net NPL Ratio Gross NPL Ratio Gross Impaired Loans Ratio Loan Loss Charge
129.3%
MFRS139
114.6%
GP3
99.5%
75.1%
67.3%
56.6%
5.53
3.60
3.18 2.43
2.02 1.87 2.54 2.45
1.50 1.01 1.91 1.68
FY2007 FY2008 FY2009 FY2010 Day 1 FY2011 FY2012 FY2013
Net NPL Gross NPL Gross Impaired Loans Loans Loss Coverage Allowance Coverage
• Enhanced Shariah Risk iii) Harnessing Risk Appetite Setting • Introduced Operational Risk
Management governance and Approach Appetite (as highlighted above),
processes with clarity in the to complement Credit Risk
roles and responsibilities of The Group continued to improve its Appetite and Market Risk
various stakeholders in the approach in setting its Risk Appetite Appetite, which has been
management of Shariah risk. during the year. Key initiatives established for the last three
undertaken were as follows: years.
During FY2013, the Group will
leverage on existing infrastructure • Extended the coverage to The Group will continue to refine its
using the Operational Risk include other major non-banking capital assessment by progressing
Management System (“ORMS”) to groups, i.e., the insurance towards Internal Rating Based Approach
track, monitor, and report Shariah companies. (“IRB”) status for credit risk.
non-compliance incidents.
• Incorporated the impact from
stress testing in setting the risk
appetite.
60 AMMB Holdings Berhad (223035-V) | Annual Report 2013
The sixth consecutive year of record performance for AmBank Group reflects the Group’s
consistent performance and disciplined execution of strategies. AMMB’s profitability is
further sustained with two strategic acquisitions made during the year: Kurnia in General
Insurance and MBF Cards in Retail Banking, which is anticipated to enhance scale in both
businesses and strengthen cross-selling opportunities across the Group.
Through our universal banking platform, Retail Banking Trade services include domestic sales
the Group offers both conventional and and purchase financing, import and
Islamic financial services, and covers Retail Banking provides a comprehensive export financing, structured trade, and
activities across retail banking, business range of banking products and related trade advisory.
banking, transaction banking, corporate financial services to our retail consumers.
and institutional banking, investment This encompass auto financing, Our cash management service is
banking, markets, general insurance, mortgage, deposits, asset financing and specifically designed to relieve clients
life assurance and family takaful. Our small business, credit cards, personal from the routine business of receivables
diversified portfolio of businesses financing, margin financing and other and payables, freeing them to focus on
provides us capabilities to customise consumer loans. During the year, we growing their business. Solutions offered
solutions to meet our customers’ strengthened our market presence include payment solutions, liquidity
evolving and diverse financial needs while through the acquisition of MBF Cards, management, collection solutions, as well
simultaneously increasing cross-selling placing us Top Three in merchants as electronic invoice presentation and
opportunities across the Group. acquiring and top six in cards issuance payment.
nationwide. We aim to be the main bank
Our strategic partnership with the Australia for our customers and have reorganised Both services are supported by an
and New Zealand Banking Group Limited ourselves to better focus on customers, extensive suite of 24x7 web based
(“ANZ”) continues to gain traction as we invested in segment focus relationship business channels capable of both
roll out innovative products and solutions, programmes, expanded self service enquiry and transaction functions. These
conduct joint account planning, increase touch points and strengthened our include e-AmBiz for cash management,
customer referrals and leverage access to wealth management offerings. To deliver e-AmPayDay for payroll solutions and the
the regional network and connectivity to a distinctive customer experience across recently launched AmTrade platform for
meet customer needs. all channels, we are rolling out new trade services.
branch concepts supported by enhanced
In General Insurance, the acquisition services. We continuously leverage ANZ to
of Kurnia Insurans (Malaysia) Berhad adopt best practices and enhance
(“Kurnia”), supported by the strategic Business Banking technological platforms for better client
partnership with Insurance Australia Group experience and to increase cross-border
Limited (“IAG”) cemented AmGeneral Business Banking partners the small transaction flows.
Insurance Berhad’s (“AmGeneral”) and medium enterprises (“SMEs”) and
leadership in the Malaysian market. The corporate customers by tailoring financial Corporate & Institutional Banking
Group is exploring strategic partnerships packages to suit their domestic and
for life assurance and family takaful international financial needs. Products Corporate & Institutional Banking
businesses to reposition our existing offered leverage AmBank Group’s focuses on strengthening relationships
business and tap new opportunities for universal banking platform and include with a diversified base of client groups
growth. working capital financing, trade financing, across the wholesale banking platform.
contract financing, factoring, deposits Our client base consists of government-
In Retail Banking, the acquisition of MBF and cash management. linked corporations (“GLCs”), government
Cards (M’sia) Sdn Bhd (“MBF Cards”) and state-owned public entities, foreign
has placed us Top Three in merchants Transaction Banking and local multinational companies,
acquiring business, strengthened cards financial institutional groups, privately
receivables and provided us full control Transaction Banking offers a full suite held conglomerates and public listed
over the line of credit business. of trade finance and cash management corporates. Our wholesale banking
services, implementing customised platform facilitates the integration of
Moving forward, we have clear strategies and valued added end-to-end solutions AmBank Group’s suite of products and
and are committed to achieving the to improve working capital cycles and innovative solutions to meet clients’
Group’s Vision – As Malaysia’s preferred process efficiency for our business/ total financial needs, while we leverage
diversified, internationally connected corporate clients. ANZ connectivity for cross-border
financial solutions group, we take pride in businesses.
growing your future with us.
AMMB Holdings Berhad (223035-V) | Annual Report 2013 61
Investment Banking cover both conventional and Islamic selected applications for financing have
mandates and specialises in Asian been made available via our website at
Investment Banking offers a full range equities as well as global bonds, including www.amIslamicbank.com.my.
of investment banking solutions and sukuk.
services, encompassing capital markets General Insurance
and asset management activities, equity Private Banking division offers high net
derivatives, broking including futures, and worth individuals comprehensive wealth- AmGeneral Insurance Berhad
private banking services. management solutions and provides (“AmGeneral”) is the number one motor
integrated access to expertise and insurer and a leading general insurer
Debt Capital Markets (“DCM”) provides resources of the entire AmBank Group. in Malaysia. It is backed by a strong
a wide spectrum of customised debt We offer customers a comprehensive and strategic partnership between AmBank
financing solutions ranging from private diversified range of products and services Group and IAG - Australia’s largest
debt securities and sukuk issuances to from a globally-linked platform that general insurance group.
loan syndications, structured financing includes cash management solutions,
solutions, and financing advisory services. asset allocation and selection, multi-asset AmGeneral was established following
The Islamic Markets unit complements advisory and discretionary mandates, the acquisition of Kurnia by AmG on
DCM, offering clients Islamic financing wealth protection, and financing facilities. 26 September 2012 and comprises
solutions as well as customised products the combined business of two former
and services including sukuk origination, Markets entities, namely AmG Insurance Berhad
Islamic equity capital markets, Islamic (“AmG”) and Kurnia.
private equity and Islamic syndication Markets continues to gain sustainable
that uphold Shariah integrity. traction and market share, after the Operating under its two well-known and
strategic alignment in FY2010 to deepen trusted brands, Kurnia and AmAssurance,
Corporate Finance (“CF”) provides a the division’s specialisation in foreign AmGeneral offers a comprehensive
full spectrum of corporate advisory and exchange, derivatives, commodities, range of general insurance solutions
fund raising services including mergers fixed income and structured solutions. distributed through a nationwide network
and acquisition, divestitures, initial of AmAssurance and Kurnia branches,
public offerings, equity and equity-linked The alignment enhanced customer focus approximately 7,600 agents and dealers,
issues, corporate restructurings, strategic and delivery capabilities in Markets’ as well as through AmBank’s channels.
business reviews and valuations. Equity regional footprint. Leveraging on the
Capital Markets (“ECM”) works closely exceptional regional presence of ANZ as a Life Assurance
with the CF team and deals mainly with strategic partner, Markets has developed
the marketing, sales and distribution of various risk management solutions to Life Assurance provides a variety
equities in the primary and secondary widen client-led innovative product of solutions in life insurance, wealth
equity and equity-linked markets. offering capability. This is evidenced protection/savings, health and medical
by the accolades received, which have protection as well as employee benefit
Equity Derivatives develops and issues placed AmBank Group in the forefront schemes. Our investment-linked
listed warrants, listed equity-linked bull in our foreign exchange, derivatives and protection solutions come with both
structures, equity-linked structured fixed income businesses. regular and single premium options, with
products, exchange-traded funds a choice to invest in several open-ended
(“ETFs”) and over-the-counter (“OTC”) Islamic Banking funds (domestic and international). The
solutions to provide investors a broader funds aim to meet different customers’
range of investment and hedging Islamic Banking adopts a holistic risk tolerance, ranging from low to high,
instruments to suit their risk profiles. approach to fulfil customer needs in line with investment horizons spanning
with the tenets and principles of Shariah medium to long term.
Equity Broking and Futures enable Law. Our aim to be the main bank for our
customers to trade equities in the local customers is supported by innovative Family Takaful
bourse and the Malaysian futures market, solutions offered via our universal banking
particularly in Bursa Malaysia Derivatives, platform. AmFamily Takaful Berhad (“AmTakaful”),
FTSE Bursa Malaysia KLCI Futures a licensed family takaful operator,
(“FKLI”) and Crude Palm Oil Futures Customers can access our products commenced business in January 2012.
(“FCPO”). We also provide securities and services through our 188 It has an experienced management team
trading services at our regional offices in branches nationwide, including three and is well positioned to capitalise on
Singapore and Jakarta. Clients can trade dedicated AmIslamic Bank branches. the cross-selling opportunities across
online through e-broking for securities Internet banking is provided through the Group.
trading and direct market access (“DMA”) AmOnline Internet Banking, AmGenie
for futures trading. Mobile Banking and e-banking Products launched during the year include
centres nationwide, facilitating online a single contribution investment-linked
Funds Management, recently rebranded transactions such as making payments takaful plan, group term takaful and group
as AmInvest, caters to both institutional for bills, financing, zakat and fund hospital and surgical, along with takaful
and retail market segments. Our funds transfers. For customer convenience, credit card protection plan (Ismah).
62 AMMB Holdings Berhad (223035-V) | Annual Report 2013
RETAIL BANKING growth in loans portfolio was achieved branch network and electronic banking
without sacrificing our asset quality. services. In addition, the employees
The Retail Banking division continuously Instead, with an implementation of risk benefit from special rates for auto
strives for excellence and has performed based pricing and stringent policies in and home financing, investment in
well in line with the Group’s Vision place, our gross impaired loan ratio has AmInvest equity funds and premiums
and Mission. Our distinct brand, multi improved to 2.6%. for the Group’s comprehensive personal
channel distribution network, wide range accident policy.
of banking products and committed In line with our objective to become
employees become our foundation in a liability led business and growing Apart from this, we have also rolled
providing our four million customers deposits, our total customer deposits out multiple campaigns throughout the
nationwide with a superior customer grew by 10.1% to RM37.2 billion. financial year to attract more deposits
experience. By prioritising on customers’ This was achieved through extensive such as Top Rate FD, the It’s Gold
needs, and operating responsibly and marketing campaigns, expansion of campaign, Am50 Plus, Prosperity
sustainably, we believe we can continue distribution networks and attrition Bonanza, AmBank – Madagascar 3,
to grow profitably and in size. Our aim prevention to reduce closure and activate to name a few. We have grown RM3.4
is to become the main banking partner dormant accounts. billion in total deposits despite strong
for our customers by understanding their market competition.
financial needs and providing solutions Deposits and Customer Solutions
to them. We deliver value through a Auto Financing
focus on three strategic areas: Retail Banking has been successfully
growing deposits in line with our AmBank continues to be the leading
Business Transformation aspiration to be a liability led business. brand in auto financing (“AF”) with a
Our wide range of product suites are 17% market share and remains as the
Design, develop and incubate a designed to suit our customers’ needs key contributor to Retail Banking’s
sustainable customer-centric and and to enable them to effectively manage revenue, contributing more than 30%.
segment-focused retail bank by driving their financial requirements. Our aim of We emphasise forming and sustaining
greater collaboration and cross product increasing CASA (current account and business relationships with business
development synergy. savings account) balances is well on its partners to ensure continuous business
way through partnerships with ANZ and growth and vehicle portfolio diversity. We
Operational Transformation collaboration with our Business Banking have established relationships with over
and Corporate & Institutional Banking 3,000 vehicle dealers nationwide and
Centralise common processes and divisions. With our joint effort, we have have strategic alliances with major car
aligning department structures into an introduced two banking solutions, manufacturers and dealers nationwide
optimised single platform to increase AmBank-ANZ Get Set and AmBank@ including Proton, Perodua, Naza Group
efficiency across the value chain, Work. of Companies, UMW Toyota, Honda
improve on economies of scale and Malaysia, the Sime Darby Automotive
effectively address customers’ needs. AmBank-ANZ Get Set is primarily aimed Group and Mercedes-Benz Malaysia.
at customers whose children are or will
Technological Transformation be studying in Australia. Customers are In 2011, we were the first to form
able to open an ANZ account in Australia a strategic alliance with MyEG (the
Enhance core systems to seamlessly by completing most of the formalities electronic Malaysian government
connect all our operations to improve at a local AmBank branch in Malaysia. services portal) to provide convenience
turnaround time and support long term Leveraging on the Group’s Foreign to our customers in renewing their road
sustainable business growth. Currency Current Account, the product tax at branches. We have increased
provides for funds to be available in the number of MyEG kiosks to 34
Overall Performance Australia prior to leaving Malaysia. kiosks, placed strategically at selected
Customers are able to enjoy reduced branches for easy access and hassle
In this financial year, Retail Banking remittance fees, preferential foreign free. In future, we plan to equip all the
reported a higher profit after tax exchange rates, e-remittance services branches with a similar facility to ensure
of RM591.1 million with a revenue and more bonus credit card points. a more convenient banking experience.
contribution of RM1.9 billion and remains Alternatives are also provided for
as the top contributor to the Group. In AmBank@Work is designed to offer customers who are unable to visit the
spite of the intense market pressure, comprehensive banking solutions to branches for road tax renewal. Our
global economic events and changes in both employer and employee, including 24-hour Auto Express renewal service
regulations, gross loans grew by RM2.7 payroll and cash management services. allows customers to renew, and have
billion to RM49.0 billion which was Upon the opening of a salary crediting their road tax delivered to their doorstep,
contributed mainly from auto financing deposit account, the customer is offered with just one phone call.
and mortgages. With rigorous credit risk special fee savings, bonus interest and
policies and prudent appetite for risk, our rewards, plus full access to our extensive
AMMB Holdings Berhad (223035-V) | Annual Report 2013 63
Moving forward, the Auto Finance and the service tax of RM50 per card has The AFSB division actively promotes
division will continue to reinforce its resulted in a drop of cards circulation in BNM-funded loan schemes, such as the
presence in the vehicle financing line with the drop registered within the Fund for Small and Medium Industries,
market through marketing initiatives, credit card industry. the New Entrepreneurs Fund, and CGC
participation in road shows and sales loan schemes, all of which are intended
promotions with vehicle distributors and To accommodate for this, we offer to assist SMEs in accessing cheaper
dealers nationwide. At the same time, we various co-branded cards with a loan financing. In line with Malaysian
will improve on overall profitability and number of strategic partners (including Government policy, we also offer Small
ensure continuous growth by improving Cosway, Rockwills, Royal Selangor Business Solution products which
the credit scoring model, streamlining Golf Club and non-profit organisations) provide financing to small businesses
processing operations throughout and have entered into strategic tie-ups by offering SME working capital loans/
the 21 auto finance business centres with merchants, such as Starbucks and financing at all our branches. Financing
nationwide and improving service and Cosway. We have also introduced the is available in amounts ranging from
turn-around time in credit appraisals and Signature, World and Infinite credit cards RM50,000 to RM500,000. Besides
disbursements. to cater for the affluent and high net focusing on direct sales, the marketing
worth customer segments. In addition, team also focuses on strengthening their
Mortgage we also offer credit cards packaged relationships with suppliers and vendors
together with other lending products, to secure strategic tie-ups and to obtain
The Mortgage division continues such as residential property loans and sales and business referrals.
to focus on quality segments and auto financing. We have also launched
becoming a major player in the mortgage multiple campaigns throughout the Personal Financing
industry. Despite fierce competition year aimed at encouraging spending
and regulatory impact, mortgage gross and increasing receivables. Some of The principal personal financing
loans grew by 6.6% and remains as our campaigns launched during the products offered by the Personal
the second largest gross loans portfolio year includes Spend and Get, Balance Financing division are personal loans
in Retail Banking. The implementation Transfer and Quick Cash, i-Phone 4S aimed at members of co-operatives
of stringent risk based pricing and Acquisition Campaign, AmFlexi Promo, who are government employees. The
adherence to the Asset Writing Strategy Caltex Rewards Programme, Ramadan asset quality of such personal loans is
has resulted in an improvement in asset Campaign and Yee Sang Campaign. significantly enhanced by the method
quality and better risk grade customers, of repayment, which is typically via a
whilst growing profitability and keeping Besides this, we also offer various deduction from their monthly salary. In
risk at acceptable levels. This was prepaid cards products, which provide view of new measures introduced by
demonstrated with a drop in the gross flexibility to the cardholders with no BNM, including responsible lending
impaired loan ratio to 3.7% and a 15.7% conditions on age limit and income. guidelines, we have refined our business
growth in profit after tax. Some of our new products launched model and are focusing on strategic
include NexG Prepaid Mastercard, NexG- alliances and credit policies. For
The strategic priorities in the mortgage Cathay Cineplexes Prepaid MasterCard, example, we have formed alliances with
division are to focus on property Tropicana Prepaid Mastercard, our business partners to offer personal
development aligned to the second Cosway Prepaid MasterCard and also financing products to, among others,
phase Mass Rapid Transit (“MRT”) SmartLink2u Prepaid MasterCard. We employees of government departments
linked project, leveraging on government have become the largest prepaid cards and quasi-government companies.
initiated schemes (i.e. My First Home issuer in Malaysia with 27,000 prepaid We have also intensified our marketing
Scheme and Perumahan Rakyat cards in circulation. campaigns and sales promotional
1Malaysia (“PR1MA”), strategic alliances programmes to attract more customers
with government-linked/public-listed Asset Financing & Small Business and to build our loan growth.
companies and expanding developer (“AFSB”)
tie-ups in suburban and rural areas. Branch Network & eChannels
Asset Financing & Small Business
Credit Cards and Line of Credit primarily provides financing products AmBank’s large distribution network of
focusing on equipment, working capital 188 branches, supported by continuous
During the year, we concluded the financing and multi-trade facilities to staff training and process improvements,
acquisition of MBF Cards (M’sia) Sdn SMEs. These products include industrial promises to provide a distintively
Bhd. We have become the third largest hire purchase products, loans funded superior customer experience.
merchant acquirer in the market and by Bank Negara Malaysia (“BNM”),
the sixth largest credit card issuer in loans backed by Credit Guarantee AmBank continued to expand its wide
Malaysia. The prudential guidelines Corporation Malaysia Berhad (“CGC”), network by adding new self service
introduced by the regulators in the credit block discounting, overdrafts, Bumiputra machines, bringing the total to 882
card industry, limiting the maximum of development loans and direct access automated teller machines (“ATMs”),
two cards for certain income thresholds guarantee schemes (“DAGS”). 278 cash deposit machines (“CDM”),
64 AMMB Holdings Berhad (223035-V) | Annual Report 2013
205 cheque scanning machines (“CQM”) and services, being a platform for cross- BUSINESS BANKING
and 163 self-service Electronic Banking border opportunities, as well as widening
Centres (“EBC”) in Malaysia. our regional and global distribution reach Business Banking reported another
and footprint. Among the key initiatives year of solid growth. Gross loans and
Acknowledging the importance of will be to forge strategic partnerships advances grew by 11.1% year-on-
customer service, our Contact Centre, with international icons that can help year while deposits grew by 20%.
which operates 24 hours a day, provides us elevate our positioning in the foreign Total income grew 11.4% year-on-year.
greater convenience for customers to exchange space to deliver winning Interest income grew 10.8% despite
access financial products and services solutions and world class customer margin compression and portfolio shift.
over the telephone with both an experience. Fee income expanded by 13.9% with
automated system and live operators. a good mix from the lending and trade
With advanced facilities available at International Solutions’ services are in businesses.
their service, customers can check partnerships with two of the world’s
their account balances and transaction leading international icons: Small & Medium Enterprise (“SME”)
history, transfer funds, obtain insurance customers remain our main focus. This
services, make credit card and loan • Travelex is the world’s largest segment grew by 31.3% during the year
repayments, and subscribe to new foreign exchange specialist with and accounts for 46.4% of the Business
services over the phone. We also provide a global presence boasting the Banking portfolio.
internet banking facilities, namely largest network of airport branches
AmOnline and AmGenie, which allow worldwide, and over 1,300 retail Regional Business Centres (“RBCs”,
our customers to perform online banking stores in over 25 countries including including Commercial Business
from anywhere. 115 major airports Centres) continue to play a key role in
Business Banking’s growth. The RBCs’
Priority Banking • Western Union is the world’s total portfolio expanded by 30.8%
leading international money transfer and accounted for 25.8% of the total
The Priority Banking division is aimed operator with 463,000 agents in over Business Banking portfolio, up from
at high-end customer segments, 200 countries, with its dominance in 22% a year ago.
focusing on building relationships and both local and international markets
understanding customers’ financial goals due to its strong branding, extensive For FY2014, the Business Banking unit’s
in a more personal way. Our objective is marketing activities and network aim is to develop a well diversified,
to provide these customers with more profitable and sustainable customer
than just banking products and facilities. AmBank, Travelex and Western Union base while exercising prudence in risk
We strive to provide a relationship that believe that the partnership will deliver management. The unit will continue to
works and evolves with our customers, a compelling offer to the Malaysian enhance the current collaboration with
whilst focusing on their financial goals. community at large, as well as the trade ANZ to achieve greater international
Our teams of relationship managers and travel industries. Travelex’s and connectivity for customers, and greater
are professionally trained to help our Western Union’s global expertise and growth.
customers in investments and financial experience combined with AmBank’s
needs, giving them complete financial stronghold in the country will enable the TRANSACTION BANKING
advice and assistance. During the year, introduction of global financial solutions
we launched five Priority Banking Centres at international standards into the Transaction Banking closed FY2013
and five prime branches nationwide, Malaysian landscape. with a 22% revenue growth, where
and we are currently expanding further Trade Finance contributed 48% of
to provide our customers with easier The AmBank “International Connectivity” Transaction Banking revenues whilst
accessibility. agenda will see the group focusing Cash Management saw a contribution of
on significantly expanding its foreign 52%.
International Solutions currency and cross-border products and
service offerings. Over the same period, Transaction
In line with AmBank Group’s vision Banking saw CASA (current account and
of becoming Malaysia’s preferred, savings account) Ringgit deposits grow
diversified, internationally connected by 60%. This is attributed to continued
financial solutions provider that takes effort in working with Relationship
pride in growing our customers’ Managers to offer customised solutions
future with us, strategic alliances with to facilitate new customer acquisition
international partnerships are being built and gain greater wallet share from
to enhance International Solutions’ value existing customers.
proposition. This includes providing a
unique and compelling suite of foreign
currency and other related products
AMMB Holdings Berhad (223035-V) | Annual Report 2013 65
The Malaysian loan syndication market remains on a growth path, with volumes raised in 2012 hitting a new high of USD18.3
billion or a 19.1% increase from 2011. Loan syndication continues to complement the bond market as a financing option for
projects under the Economic Transformation Programme (“ETP”). It also provides funding for large corporate exercises and
acquisitions.
DCM continues to build its resources with a strong sectorial focus particularly in the oil & gas industry. It has also strengthened its
Structured Finance unit and the Capital and Project Advisory team. This carving-out of a reputational niche for product innovation
in the market provides a service differentiation that enables the Division to overcome fee pressure in a competitive landscape and
deliver customised and optimal solutions for clients.
In FY2013, DCM completed 59 PDS/Sukuk and syndicated financing transactions amounting to over RM16.9 billion. This covers
a diverse portfolio of financing instruments that caters to issuers over a broad spectrum of industry sectors including oil & gas,
financial services, infrastructure and, utilities. DCM’s long-standing market dominance was again demonstrated in the current
financial year by its involvement in 11 of the total 14 Government-Guaranteed issuances.
No. Issue Date Issuer Tenor (Years) Amount (RM mil) DCM Portion
(RM mil) (%)
1 14 Jun 12 Johor Corporation 5 / 7 / 10 3,000 750 25%
2 15 Jun 12 PTPTN 10 2,500 - -
3 20 Jul 12 DanaInfra Nasional Berhad 7 / 10 / 12 / 15 2,400 480 20%
4 13 Aug 12 SME Bank 7 / 10 500 167 33%
5 3 Sep 12 Khazanah Nasional Berhad 10 / 20 2,500 1,100 44%
6 6 Sep 12 Syarikat Prasarana Negara 10 / 15 2,000 - -
7 12 Oct 12 Khazanah Nasional Berhad 5 / 15 1,538 908 59%
8 19 Nov 12 Turus Pesawat Sdn Bhd 10 / 12 / 15 / 20 3,400 425 13%
9 14 Dec 12 Senai Airport Terminal 11.5 80 - -
10 5 Feb 13 Turus Pesawat Sdn Bhd 10 / 12 / 15 1,195 149 12%
11 8 Feb 13 DanaInfra Nasional Berhad 10 / 12 / 15 / 20 1,500 315 21%
12 28 Feb 13 PTPTN 10 / 15 1,200 600 50%
13 8 Mar 13 Khazanah Nasional Berhad 8 740 666 90%
14 11 Mar 13 Turus Pesawat Sdn Bhd 10 / 15 / 18 715 89 12%
Total 23,268 5,649 24%
The Division continues to project its presence in product innovation in the market with its role as a Joint Lead Arranger and
Participating Financial Institution for the first retail sukuk offering in Malaysia. The retail sukuk of RM300 million was issued by
DanaInfra Nasional Berhad to retail investors via the Exchange Traded Bonds/Sukuk (“ETBS”) to fund the Mass Rapid Transit
(“MRT”) project.
Moving forward, with GDP growth projected at 5.0% - 5.3% in 2013, gross PDS supply is estimated to reach RM80 - RM90
billion. This is supported by a strong domestic market liquidity that would be spearheaded by government projects from the ETP
as well as an expected increase in corporate expansions and investment activities, particularly in the oil & gas sector.
68 AMMB Holdings Berhad (223035-V) | Annual Report 2013
MISC Berhad
RM2.5 Billion Murabahah Medium Term Notes Programme
• Joint Principal Adviser/Joint Lead Arranger/Joint Lead Manager for issuance of RM500.0
million
Large Corporates
Cagamas Berhad
RM20.0 Billion Islamic Commercial Papers (“ICP”) Programme and RM40.0 Billion
Islamic Medium Term Notes (“IMTN”) Programme
• Lead Manager for the issuance of RM125 million IMTN under the IMTN Programme in
January 2013
• Joint Lead Manager for the issuance of RM500 million ICP and RM700 million IMTN under
the ICP and IMTN Programmes in December 2012
Government-Guaranteed
Khazanah Nasional Berhad
RM20.0 Billion Sukuk Programme
• Joint Lead Manager for the issuance of RM2.5 billion Government-Guaranteed Sukuk in
September 2012
• Joint Lead Manager for the issuance of RM2.0 billion Government-Guaranteed Sukuk in
October 2012
• Joint Lead Manager for the issuance of RM1.0 billion Government-Guaranteed Sukuk in
March 2013
Johor Corporation
RM3.0 Billion Sukuk Programme
• Joint Lead Manager for issuance of Government Guaranteed Sukuk Wakalah in a single
tranche in June 2012
Financial Institutions
HSBC Amanah Malaysia Berhad
RM3.0 Billion Multi-Currency Sukuk Programme
• Joint Lead Manager for first issuance of RM500.0 million
• HSBC Amanah’s maiden senior Sukuk issuance is the first to be issued globally by any
HSBC group of companies globally
Loan Syndication
DRB-Hicom Berhad
RM800 Million Syndicated Bridging Loan
• Joint Mandated Lead Arranger for the RM800 million Syndicated Bridging Loan
Islamic Markets Likewise, we put in place the best 2011 record of USD27.0 billion (RM83.6
industry practices to ensure work billion), as reported by Bloomberg. The
Islamic Markets LOB is the Islamic transparency and strict compliance with extraordinary growth was contributed
investment banking arm of the Shariah requirements as guided by the mainly by two large issuances coming
AmBank Group and a pioneer in the parameters of Bank Negara Malaysia’s from Malaysia and Saudi Arabia, that
development of the sukuk market since Shariah Governance Framework. accounted for more than 24% of the
its commencement in 1994. Through total global sukuk issuance. Bloomberg
Islamic Markets, AmInvestment Bank Islamic Markets remains a strong reported that 55.9% or USD31.3 billion
continues to be at the forefront of the promoter of the Islamic capital markets (RM97.0 billion) of these global sukuk
Malaysian Islamic capital markets by and, through selective sponsorship and issuances were issued in Malaysia,
consistently maintaining its position industry training, supports the profiling strengthening the country’s dominance
amongst the top three market leaders efforts initiated by both the Securities in the global sukuk market as the largest
for the past 17 years. Islamic Markets Commission and Bank Negara sukuk issuer and its goal to be the global
offers clients innovative Islamic financial Malaysia as well under the Malaysia hub for Islamic finance and Islamic
solutions, both domestically or off- International Islamic Financial Centre capital markets. Domestic demand for
shore, by way of customised products (“MIFC”) initiatives. As a demonstration new sukuk issuances had been buoyed
and services including sukuk origination, of this commitment, in 2012, we have by a local preference for sukuk over
Islamic equity or equity-related capital sponsored some of the significant conventional avenues to raise funds,
markets offerings, Islamic private equity, events in the Islamic capital markets sufficient liquidity in a fast maturing capital
structured funds, and Islamic syndication fraternity including the Global Islamic markets and, a confidence-boosting
that upholds Shariah integrity at the Finance Forum, Islamic Finance News comprehensive regulatory framework.
same time. We also provide Shariah Forum and Kuala Lumpur Islamic In the global Islamic capital markets,
advisory and other technical support Finance Forum (“KLIFF”). We have also sukuk origination was spearheaded by
to the other divisions within the Bank, conducted industry training for some of sovereign issuances, particularly from
particularly to DCM. As a leader in the reputable organisers such as KLIFF Malaysia, Qatar and Turkey in terms of
the local Islamic capital markets, we and Centre for Research and Training issue value and milestones. Sovereign
stay abreast with the latest global (“CERT”). issues are seen as a valuable catalyst
developments in both Islamic finance to the development of the global sukuk
and the Islamic capital markets. We Islamic Capital Markets Review market and a viable alternative to raise
inculcate a culture of work excellence, public funding for economic growth. Gulf
strong teamwork and responsible 2012 has been another milestone year Cooperation Council (“GCC”) issuers
practices to ensure that we consistently for the global Islamic capital markets with had also been active in the primary
deliver to our clients solutions that are total global sukuk issuances exceeding sukuk market on the back of favourable
optimum in terms of cost efficiency, USD56.0 billion (RM173.6 billion). This macroeconomic conditions, smooth
structure, appropriateness and flexibility. is more than double that of the previous debt-restructuring and a recovery of the