AFFIN BANK BERHAD Presentation to Analysts/Fund Managers

on 1Q2019 results

Kuala Lumpur 31 May 2019

Group CEO

Kamarul Ariffin Mohd Jamil

CONTENTS

1Q2019 Key Performance Highlights

Strategic Initiatives (on-going)

Overview of Financial Performance

Guidance & Economic Outlook

1

2

3

4

1Q2019 Key Performance Highlights

• Achieved a PBT after zakat of RM185.0 million

• Net income recorded was RM472.5 million

• Overhead expenses reduced by RM7.25 million to RM304.3 million from

RM311.6 million in 1Q2018

Profitability

• Gross Impaired Loans ratio was at 3.31% (2018 : 3.25%). Excluding R&R accounts, the Gross Impaired Loan ratio stood at 3.25%

• Loan Loss Reserve was at 97.39% (Dec 2018: 97.32%)

Asset Quality

• Total Capital ratio, Common Equity Tier-1 Capital ratio and Tier 1 Capital ratio of all banking entities within the Group remained at healthy levels, well above the minimum regulatory requirements.

• Total Capital Ratio for AFFIN Bank Berhad Group stood at 20.76%. (CET1:12.42%, Tier1: 14.08%)

• Total Capital Ratio for AFFIN Islamic Bank stood at 19.30% (CET1: 10.81%, Tier1: 12.80%)

• Total Capital Ratio for AFFIN Hwang Investment Bank Berhad Group stood at 32.04% (CET1: 30.62%, Tier1: 31.26%)

Capital Adequacy

Page 3

1Q2019 Key Performance Highlights

• Gross loans, advances and financing reduced by 0.9% during 1Q2019 to RM48.5 billion and customer deposits was at RM57.4 billion (31/12/2018 : RM57.3 billion)

Loans & Deposits Growth

• LCR was 146.76%, well above the BNM requirements.

• Preparing for NSFR via strategic funding plans, including tapping into the existing MTNs/Sukuk programmes.

Liquidity & other regulatory

requirements

Page 4

AFFINITY TRANSFORMATION PROGRAM

STRATEGIC RISK PROGRAM

The Bank has commenced a Strategic Risk Program early 2018, of which a total of 24 initiatives and 36 projects will be undertaken over a three-year period. The risk transformation journey is an evolvement from current “traditionalist” role which focused on regulatory compliance, controls and risk mitigation, to the desired target state of “specialist” role for the Bank’s Risk Management.

The target state of “specialist role” is envisaged to have a more advanced capabilities in terms of sophistication, analytics and systems and focused on enabling risk-reward decision making as well as more proactive risk management and business advisory / strategic function across the Group.

Affinity is the Bank Strategic program launched in 2016 with the objective to enable achievement through

operational enhancements and performance management. As at 31 March 2019, out of the 33 projects, 24

projects of the Program had been completed.

Seven (7) projects are currently on track with improvements seen in turnaround time (~20% average reduction)

for retail portfolios, loan stock, establishment of new departments/policies and growth in total income. Two (2)

projects are yet to begin.

Strategic Initiatives (On-going)

Page 6

PRIORITY ISLAMIC POLICY

The Group has adopted a Priority Islamic Policy (PIP) approach to tap into the faster growing Islamic banking

segment within the industry which had contributed to good performance. As at 31 March 2019, the Priority Islamic

Policy achieved 39% of total Islamic Financing Portfolios against total Affin Bank’s and Affin Islamic Bank’s Portfolio

target of 40% by year 2020.

DIVIDEND REINVESTMENT PLAN

A Dividend Reinvestment Plan (DRP) had been established by the Bank following the approval of the

Shareholders at the EGM held on 15 May 2018. The DRP gives the shareholders of the Company the option

to reinvest their whole or portion of the Dividend for which the reinvestment option applies in new Affin Bank

shares.

The DRP will also made available for any dividend to be declared in future, which the Board may in its

absolute discretion, determine whether the DRP will be applied to the dividend and the portion of the

dividend that can be reinvested into new Affin Bank shares.

Page 7

Overview of Financial Performance

Highlights of financial performance by entities - Profit Before Tax after Zakat

Entity 1Q2018

(RM’’Mil)

1Q2019

(RM’Mil)

Variance

(RM’Mil) Commentary

AFFINBANK

(Bank Level) 108.0 103.7 (4.3)

Lower PBT was mainly due to reduction in net

interest income and lower writeback of credit

impairment losses, offset by lower overhead

expenses

AFFIN ISLAMIC 32.3 32.0 (0.3)

Slightly lower PBT was mainly attributable to lower

operating income, higher overhead expenses

cushioned by lower allowance for credit impairment

losses.

Affin Hwang Capital 42.0 45.2 3.2

Higher PBT was mainly attributed to higher net

gain on financial instruments, offset by lower net

fee and commission income and net interest

income

AXA Affin Life Insurance

Berhad (3.0) (4.6) (1.6)

Higher pre-tax loss was due to lower interest rates

leading to higher reserves for future policyholders’

liabilities.

AXA Affin General

Insurance Berhad 38.0 29.1 (8.9)

Lower PBT as the results of 1Q2018 included a

writeback of claim reserves. Excluding this one-off

writeback, the results for 1Q2019 is consistent with

the results of 1Q2018.

Affin Moneybrokers Sdn

Bhd 0.3 0.7 0.4

Higher PBT was mainly due to higher net

brokerage income net of higher overhead

expenses.

AFFINBANK Group 186.8 185.0 (1.8)

Page 9

186.8

108.0

32.3 42.0

(1.2) 13.5

0.3

185.0

103.7

32.0

45.2

(1.8) 9.1

0.7

Affin Bank (Group) Affin Bank (Banklevel)

Affin Islamic Bank Affin HwangCapital

AXA Affin Life AXA Affin General AffinMoneybrokers

1Q2018 1Q2019

Group PBT and contribution by Subsidiaries, Joint Venture

and Associate Company

Contribution of PBT by Entities (RM’ Million)

Page 10

Key drivers for improvement in Operating Performance

Profitability FY2018 (%) 1Q2019 (%) Increase/(decrease)

(%)

Return on Equity (After Tax) 5.94 5.79 (0.15)

Net Interest Margin 1.83 1.61 (0.22)

Cost to Income Ratio 63.39 64.40 1.01

Liquidity 4Q2018 (%) 1Q2019 (%) Increase/(decrease)

(%)

Liquidity Coverage Ratio (LCR) 169.32 146.79 (22.53)

Loan to Fund (LTF) 81.08 79.43 (1.65)

Loan to Fund and Equity (LTFF) 72.00 70.40 (1.60)

Asset Quality 4Q2018 (%) 1Q2019 (%) Increase/(decrease)

(%)

Gross Impaired Loans Ratio 3.25 3.31 0.06

Net Impaired Loans Ratio 2.59 2.63 0.04

Loans Loss Reserve Ratio 97.32 97.39 0.31

Capital Adequacy 4Q2018 (%) 1Q2019 (%) Increase/(decrease)

(%)

CET 1 Capital Ratio 11.92 12.42 0.50

Tier 1 Capital Ratio 13.56 14.08 0.52

Total Capital Ratio 19.00 20.76 1.76

Page 11

Gross Credit Cost (bps)

17.0

25.0 23.0

17.0

2016 2017 2018 1Q2019

Key drivers for improvement in Operating Performance

1.98 1.84 1.83 1.61

2016 2017 2018 1Q2019

Net Interest Margin (%)

Page 12

Group Income Statement at a glance

Profit Before Tax after Zakat

(RM million)

185.0 737.7 693.2 675.0

185.0

2016 2017 2018 1Q2019

Profit After Tax

(RM million)

143.7 579.8 534.9 527.4

143.7

2016 2017 2018 1Q2019

Operating Expenses

(RM million)

304.3 1142.9 1223.5 1217.5

304.3

2016 2017 2018 1Q2019

Earnings Per Share (sen)

6.94 29.03 26.54 25.89

6.94

2016 2017 2018 1Q2019

Net Fee and Commission Income

(RM million)

102.6 496.1 451.6 456.9

102.6

2016 2017 2018 1Q2019

Net Interest Income

(RM million)

188.4

Share of Profit in Joint Ventures /Associate

(RM million)

7.4

892.9 895.7 845.4

188.4

2016 2017 2018 1Q2019

48.9 40.9 46.9

7.4

2016 2017 2018 1Q2019

Note : Comparative results for 2016 and 2017 are for Affin Holdings Berhad’s Group

Page 13

RM’000 ABB GROUP

1Q2018

ABB GROUP

1Q2019

(Increase/

Decrease)

Net interest income 215,807 188,383 (27,424)

Islamic banking income 98,517 97,395 (1,122)

Net fee and commission income 117,553 102,610 (14,943)

Net gains on financial instruments 33,233 71,511 38,278

Other income 11,507 12,617 1,110

Net Income 476,617 472,516 (4,101)

Operating expenses (311,575) (304,322) 7,253

Operating profit before allowances 165,042 168,194 3,152

Allowances for impairment losses 9,684 9,860 176

Operating profit 174,726 178,054 3,328

Share of results of a joint venture and associate 12,261 7,369 (4,892)

Profit before zakat and taxation 186,987 185,423 (1,564)

Zakat (237) (447) (210)

Profit before taxation after zakat 186,750 184,976 (1,774)

Taxation (40,763) (41,231) (468)

Net Profit for the financial period 145,987 143,745 (2,242)

Summary : Group Profit & Loss

Page 14

RM’000 ABB Group

1Q2018

ABB Group

1Q2019

(Increase/

Decrease)

Personnel cost 201,712 193,105 (8,607)

Promotion & marketing related expenses 15,471 17,041 1,570

Establishment-related expenses 65,975 67,806 1,831

General & administrative expenses 28,417 26,370 (2,047)

TOTAL 311,575 304,322 (7,253)

Cost to Income ratio (%) 63.39 64.40 1.01

Summary: Group Operating Expenses

Page 15

RM’000 ABB GROUP

1Q2018 ABB GROUP

1Q2019

(Increase/ Decrease)

Net brokerage 22,430 16,914 (5,516)

Underwriting fees - 1,443 1,443

Portfolio management fees 74,123 70,470 (3,693)

Corporate advisory fees 1,874 651 (1,223)

Commission 6,324 5,511 (813)

Service charges and fees 21,570 12,661 (8,909)

Guarantee fees 5,984 9,177 3,193

Arrangement fees 850 100 (750)

Agency fees 1,765 525 (1,240)

Initial service charges 37,773 13,894 (23,879)

Other fee income 1,519 1,829 310

Subtotal 174,212 133,175 (41,037)

Fee and commission expense (56,659) (30,565) 26,094

NET FEE AND COMMISSION INCOME 117,553 102,610 (14,943)

Summary of Net Fee And Commission Income

Page 16

Group Balance Sheet at a glance

Total Equity (RM billion)

9.2 8.7 9.1 8.7 9.2

2016 2017 2018 1Q2019

Gross Loans, Advances and Financing

(RM billion)

48.5

Total Deposits from Customers

(RM billion)

57.4

Total Assets (RM billion)

76.2

44.2 46.1 48.9 48.5

2016 2017 2018 1Q2019

51.5 50.9 57.3 57.4

2016 2017 2018 1Q2019

68.9 70.8 76.0 76.2

2016 2017 2018 1Q2019

Total Liabilities (RM billion)

67.1

Net Loans, Advances and Financing

(RM billion)

47.9

60.2 61.7 67.2 67.1

2016 2017 2018 1Q2019

43.7 45.7 48.4 47.9

2016 2017 2018 1Q2019

Net Assets Per Share

(Sen)

4.58 4.47 4.67 4.46 4.58

2016 2017 2018 1Q2019

Note : Comparative Results for 2016 and 2017 are for Affin Holdings Berhad’s Group

Page 17

94.3

98.5

97.3 97.4

2016 2017 2018 1Q2019

Loans Portfolio

20.8 22.4 24.9 25.2

19.7 18.8 19.9 19.2

3.7 4.9 4.1 4.1

2016 2017 2018 1Q2019

Consumer Corporate SMEs

Mortgage 43.9%

Hire Purchase

48.1%

Credit Card 0.6%

Overdraft &

personal loans 7.4%

44.2 46.1 48.9

Term Loans 69.1%

Revolving Credit

21.2%

Trade Products 9.7%

Term Loans 70.4%

Overdrafts

18.3%

Trade Products 11.3%

48.5

Gross Loans by Composition (RM Billion) Loan Loss Reserve (%)

Consumer Loans

1Q2019

Corporate Loans

1Q2019

SMEs

1Q2019

Page 18

* 706.2

2015

Gross Impaired Loans

700.3 1,143.1

1,493.5 1,575.1 37.0

24.2

96.4 31.2

2016 2017 2018 1Q2019

R&R Loans

Impaired Loans

1.90 1.67

2.53

3.25 3.31

1.53

2.48

2.97 3.25

2015 2016 2017 2018 1Q2019

Gross Impaired Loan Ratio

Gross Impaired Loan Ratio - Excluding R&R

0.95

1.03

2.10

2.59 2.63

0.95

2.05 1.94

2.56

2015 2016 2017 2018 1Q2019

Net Impared Loan Ratio

Net Impared Loan Ratio - Excluding R&R

Gross Impaired Loans (RM Mil)

Net Impaired Loans Ratio (%) Gross Impaired Loans Ratio (%)

Page 19

GROSS LOAN BY ECONOMIC PURPOSE - 31.03.2019 (%)

GROSS LOAN BY ECONOMIC PURPOSE - 31.12.2018 (%)

Gross Loans Portfolio by Economic Purpose

31/3/2019

RM ‘000

Construction 3.470,097

Purchase of residential properties 10,863,836

Purchase of non-residential properties 6,821,901

Purchase of securities 1,596,270

Purchase of transport vehicles 12,426,067

Working Capital 10,675,901

Personal use 852,303

Others 1.803,776

TOTAL 48,510,151

31/12/2018

RM ‘000

Construction 3,459,827

Purchase of residential properties 10,435,105

Purchase of non-residential properties 6.654,767

Purchase of securities 1.615,833

Purchase of transport vehicles 12,799,056

Working Capital 11,354,983

Personal use 776,714

Others 1,876,519

TOTAL 48,972,804

7.2

22.4

14.1

3.3

25.6

22.0

1.8 3.7

Construction Purchase ofresidentialproperties

Purchase ofnon

residentialproperties

Purchase ofsecurities

Purchase oftransportvehicles

Workingcapital

Personal use Others

7.1

21.3

13.6

3.3

26.1

23.2

1.6 3.8

Construction Purchase ofresidentialproperties

Purchase ofnon

residentialproperties

Purchase ofsecurities

Purchase oftransportvehicles

Workingcapital

Personal use Others

Page 20

51.5 50.9

57.3 57.4

2016 2017 2018 1Q2019

35.2

16.6

5.5

34.4

17.8

5.2

Corporate Consumer SME

2018 1Q2019

Customers Deposits

Deposits (RM’ Billion)

Y-o-Y -2.3%

Y-o-Y 7.2%

Q-o-Q -5.5%

Deposits by Sector (RM’ Billion)

Y-o-Y - 1.2% Y-o-Y 12.6%

81.1

72.0

79.4

70.4

Loans to Fund Ratio (LTF) Loan to Funds and Equity Ratio(LTFE)

2018 1Q2019

Industry LTF 2018 82.7 1Q2019 82.5

Industry LTFE

2018 72.4 1Q2019 71.9

Q-o-Q 0.2%

Page 21

31/03/2019 31/12/2018

Deposits from Customers

RM57.4 billion Deposits from Customers

RM57.3 billion

8.8 14.5

76.6

Money Market andOther Deposits

CASA Fixed Deposits

9.7 15.6

74.7

Money Market andOther Deposits

CASA Fixed Deposits

Customers Deposits by Segments

Page 22

Economic Outlook for 2019

Overnight Policy Rate (OPR) BNM decided to cut its OPR by 25 bps to 3.0% at the latest Monetary Policy Committee meeting. This was the first policy rate cut since July 2016. BNM maintained its cautious tone on the global growth outlook citing that risks remain tilted towards the downside, stemming from the unresolved trade tensions and prolonged country-specific weaknesses in the major economies, which will dampen global trade and investment activities. Slower external and domestic demand envisaged for 2019 We expect the country’s real GDP growth to slowdown from 4.5% yoy in 1Q2019 to 4.4% in 2Q2019 before recovering to 4.7% yoy in 2H2019. We are revising our GDP growth forecast from 4.7% previously to 4.5% for 2019, although this is still at the mid-point of the official forecast range of 4.3% to 4.8%. Going forward, with the trade tensions escalating between the US and China, and Malaysia being an open economy that is highly dependent on exports and the manufacturing sector, we believe that Malaysian external demand could be dampened on possible global chain disruptions.

Private consumption likely to slow down We expect the Malaysian domestic economy, especially private consumption growth to slowdown in 2Q2019,

due to further normalisation in spending following the frontloading of purchases during the tax holiday period

(from 1 June to 31August 2018 when the GST rate was set at zero), as well as weaker consumer sentiment due

to slower economic growth and the weaker Ringgit. We foresee some support for private consumption from

government assistance and the fuel targeted subsidy to be implemented in 2H2019. Private investment to be supported by primary-related sectors Although private investment slowed sharply yoy in 4Q2018 to 0.4% in 1Q2019, reflecting a continued cautious business sentiment as well as lower capital expenditures of heightened uncertainty over global trade negotiations and weaknesses in the broad property segment, there were some improvement in spending on large multi-year projects, particularly in the primary-related manufacturing and utilities services sub-sectors, which provided some cushion to private investment growth.

Page 24

Economic Outlook for 2019

Still substantial amount of development expenditure to be spent We expect the possibility of an acceleration in the Federal Government’s developments expenditure as well as improvement in public operations’ capital spending. This is to support domestic demand and provide some cushion to slowing exports due to the escalation in US-China trade tensions. Nevertheless, external risks remain elevated.

Stance of monetary policy likely to remain accommodative BNM cautioned that risks to the global growth outlook remain tilted to the downside, citing possible further escalation in trade tensions, where BNM will likely hold its OPR at 3.0% throughout 2019. BNM will continue to monitor and assess the balance of the risks surrounding the outlook for domestic growth and inflation. The recent adjustment in OPR is intended to preserve the degree of monetary accommodativeness. Economic fundamentals to support Ringgit against USD ASEAN region will likely experience short-term volatility in the financial markets, possibly due to investor concerns, regarding President Trump’s latest threat to hike tariffs on Chinese goods, which may lead to some weaknesses in the regional currencies. We expect the Malaysian Ringgit to appreciate gradually towards RM4.10 against the USD by end 2019 against our earlier projection of RM3.90/USD by end 2019 (RM4.19/USD currently).

Malaysia’s inflation will likely remain low and manageable in 2019 The headline inflation is expected to remain low, due to policy measures which include the price ceiling on domestic retail fuel prices until the end of 1H2019 and the impact of the changes in the consumption tax policy.

Page 25

2019 Group guidance: a positive balance

Loan Growth 6-7%

Deposit Growth 11%

Cost to Income Ratio <60%

Gross Credit Cost 30-40bps

Fee Based ratio 40.0%

2019 Guidance for AFFINBANK Group 2019 Guidance for Malaysia

GDP

4.5%

CPI

0.7% - 1.7%

OPR

3.00%

RM/USD

4.10

Page 26

Shareholding statistics as at 30 April 2019

LTAT 35.51

BHB 20.73

BEA 23.56

EPF 6.54

[CATEGORY

NAME] 13.66

Substantial Shareholders (%) Foreign Shareholdings (%)

JAN 2019

FEB 2019

MAR 2019

APRIL 2019

26.61 26.57 26.55 26.56

23.56 23.56 23.56 23.56

3.05 3.01 2.99 3.00

J F M A

BEA Others

Page 27

THANK YOU

For any enquiries, please email ir@affinbank.com.my or call us at

+603-2055-9005 (Investor Relations Department)

Disclaimer. This presentation has been prepared by AFFIN Holdings Berhad (the “Company”) for information purposes only and does not purport to contain all the information that may be required to evaluate the Company or its financial position. No representation or warranty, express or implied, is given by or on behalf of the Company as to the accuracy or completeness of the information or opinions contained in this presentation. The presentation does not constitute or form part of an offer, solicitation or invitation of any offer, to buy or subscribe for any securities, nor should it or any part of it form the basis of, or be relied in any connection with, any contract, investment decision or commitment whatsoever. The Company does not accept any liability whatsoever for any loss howsoever arising from any use of this presentation or their contents or otherwise arising in connection therewith.