AmBank Annual Report 2020
Tan Sri Azman Hashim
Non-Independent Non-Executive Chairman
Transformation at the Forefront

In the last four years, we have seen significant improvements across many key areas within the Bank. The Group and the leadership team has worked extremely hard to deliver the four-year strategic plans that were put in place, resulting in the solid foundation across key business parameters and corporate governance that we see today.

Strong Corporate Governance

More than ever, good leadership is key to withstanding the major challenges of the banking landscape and delivering superior performance. Therefore, the Board remains committed to maintaining the highest standards of good governance. In FY2020, we continued to strengthen the Group’s corporate governance with a common set of expected behaviours developed over time. Our corporate values and effective governance systems have created a strong ethical and governance culture across the Group. The principles governing our ethical standards are entrenched within our internal policies, such as the Code of Conduct, Code of Ethics and the Whistleblower Protection Policy.

Sustainable Banking

As a responsible bank, we are committed to balancing our profits with social and environmental well-being. The future growth of the company relies on our ability to mitigate Environmental, Social and Governance (ESG) risks. We developed the Group’s Sustainability Framework to outline the parameters of our journey towards becoming a sustainable bank. Through the implementation of this Framework, we integrate ESG and Value-Based Intermediation (VBI) considerations into our decision-making processes without compromising our financial objectives. The Framework aligns with the Group’s business priorities as well as key principles that contribute to positive social and environmental impact. The Sustainability Framework is governed by an enhanced sustainability governance structure consisting of new roles that are critical to effectively execute our sustainability strategies.

People-Oriented Bank

We are a people-oriented bank – our work revolves around creating value for people and is simultaneously driven by people. Our business objectives rely on the capability and well-being of our workforce. In line with our transformation into the new era of banking, we are providing opportunities for employees to leverage their various skill-sets with the power of data and advanced analytics. Our efforts in retraining, reskilling and redeploying resources are a continuous process that aims to improve the optimisation, competency and timing of our operations whilst concurrently gearing our workforce for the future.

Shareholder Value

The Board remains committed to enhancing shareholder value according to regulatory buffer and working capital requirements. We strive to ensure that our proposed dividend payout remains appropriate for the Group to continuously fulfil both our financial and prudential objectives.

For this financial year, we are pleased to declare a final dividend of 7.3 sen per share, bringing the total dividend to 13.3 sen. This year’s dividend payout ratio of 30% is a reflection of a more cautious outlook on the near-term economic conditions.

Looking Ahead

In the upcoming year, we anticipate the economic effects of the COVID-19 pandemic onto the business climate. While Malaysian banks’ capital and liquidity are substantial enough to absorb losses in the current economic conditions, we are entering unchartered territory. It is difficult to fully predict where a shock is going to come from as there is limited visibility on how the shocks will transmit and evolve. We expect that the pandemic, compounded by domestic challenges, will contribute to a decline in overall loans growth. There are also several key areas that demand the banking sector’s attention beyond business continuity, namely credit management, supporting our customers, digitalising service offering, and cost management.

With the completion of AmBank Group’s Top 4 Strategy, we begin the next stage of our transformation journey. We will focus on building new areas of growth surrounding the Group’s renewed vision of Growing Trust, Connecting People. This will be our key theme moving forward, which reflects our strong belief in the legacy and solid relationships we have built over decades – servicing our customers for generations; cementing our trusted partnerships; and witnessing their growth from the beginning to where they are today.

Dato' Sulaiman Mohd Tahir
Group Chief Executive Officer
Traction in The
Top 4 Strategy
We are in the final year of our Top 4 Strategy and have achieved tangible results which positively contributed to our Top 4 aspirations
New Digital
We launched AMYTM, a virtual financial assistant for AmOnline mobile banking, as well as formed strategic partnerships with industry players to diversify our ePayment offerings
and Talent
We invested in developing and nurturing future talents to ensure AmBankers succeed in their careers and are groomed as future leaders of the Bank
Branch Model
We have a new branch model that encompasses digitally-enabled capabilities to deliver seamless products and services across all lines of business to our valued customers
Total Income
Cost to Income Ratio
the Focus 8 Strategy
Focus 8 Areas
Jamie Ling
Group Chief Financial Officer
AmBank Group
Performance Review by
Group Chief
Financial Officer
Stepping Up Revenue Growth

Total income grew 7.8% to RM4,227.2 million. Our revenue growth was broad-based, with all divisions recording higher revenue year-on-year (YoY). This is a testament to our strategy execution in transforming the bank and attaining above-market growth.

Continue to Improve Operational Efficiencies

As we continue to drive operational efficiency and paced our investments, overall expenses were down 1.1% YoY which contributed to delivering a cost-to-income (CTI) ratio of 49.9%, and achieving our FY2020 target. Our Business Efficiency Transformation (BET) programme delivered a gross cost reduction of RM103 million during the year and cumulatively over the last three years delivered a total gross cost savings of RM380 million, above our target of RM300 million.

With income growth and expense management, we delivered a profit before provision (PBP) of RM2,119.0 million, an increase of 18.3% YoY.

Good Balance Sheet Growth

The Group’s gross loans and financing and deposits from customers expanded by 5.3% and 5.7% respectively, outperforming the industry’s growth for the same period. Our current account and savings account (CASA) balances also increased by 15.9%, driving higher CASA mix at 25.5% (FY2019: 23.3%).

Sound Capital and Liquidity Metrics

While we are navigating the ongoing economic uncertainties and challenges posed by the COVID-19 pandemic, we have continued to improve the resiliency of our balance sheet. The Group’s Common Equity Tier 1 (CET1) ratio and total capital ratio have strengthened to 12.4% and 15.8% respectively. The Group remains highly liquid, with a liquidity coverage ratio (LCR) of 158.2% and net stable funding ratio (NSFR) of all banking subsidiaries above 100% as at 31 March 2020.


The Group declared a final dividend of 7.3 sen per share, bringing the total dividend for the year to 13.3 sen and payout ratio of 30%. This year’s payout is a reflection of a more cautious outlook, in light of the economic impact of the COVID-19 pandemic in the near-term.

Subsequent Events

On 25 March 2020, Bank Negara Malaysia (BNM) announced that with effect from 1 April 2020, banking institutions are required to provide an automatic deferment of all loan/ financing repayments (except for credit card balances) for a period of 6 months. This is one of the measures implemented by BNM to assist individuals, small and medium enterprises (SME) and corporations to manage the impact of the COVID-19 pandemic. The 6-month moratorium granted to eligible borrowers is applicable to performing loans, denominated in Ringgit Malaysia, that have not been in arrears for more than 90 days as at 1 April 2020. The financial impact arising from this moratorium will be a modification to the contractual cash flows of loans, advances and financing of the Group which will result in a recognition of a modification loss to be recognised in the profit and loss in the next financial year. The Group’s current financial year results ended 31 March 2020 is not impacted from the 6-month moratorium as the effective date is after the end of the Group’s reporting period. The Group is currently monitoring and assessing the impact of this modification which is expected to be finalised in the first quarter of the financial year ending 31 March 2021.

Business Review
Wholesale Banking

Wholesale Banking continues to deliver strong performance with an income growth of 15% year-on-year (YoY). Through efficient and effective capital management, we have managed to enhance our return on capital employed (ROCE) to a stellar 15%. We continue to focus on customer experience by developing bespoke Cash Management solutions for our clients. As a result, our Current Account Savings Account (CASA) base has recorded a double-digit increase of 14% YoY. In addition, despite the challenging landscape, Group Treasury and Markets (GTM) has managed to deliver impressive results with higher growth in investment, treasury solutions and trading income.

Managing Director, Wholesale Banking
AmBank Group
Business Review
AmInvestment Bank

AmInvestment Bank’s FY2020 priorities were to contribute to the Group’s overall Top 4 Strategy, in which we continued to excel in areas such as Corporate Finance and Capital Markets whilst showing marked improvements in Fund Management and Private Banking. Our licensed professionals have decades of investment banking experience, and are committed to giving our clients the best possible advice and the highest standards of deal execution. We believe that providing such value-added services will enable us to build a sustainable business, with repeat mandates from discerning clients.

Chief Executive Officer
AmInvestment Bank Berhad
* Resigned effective 1 July 2020
Business Review
Retail Banking

In FY2020, we continued to execute our strategy of building our business centred around high-value segments, namely affluent individuals and small and medium-sized enterprises (SMEs). We strengthened our Priority Banking proposition, which has allowed us to grow our Priority Banking client base significantly where we now offer a wider range of wealth management products and services including foreign currency products, retail bonds and investment-link products. We have also grown our retail SME franchise significantly, with Current Account Savings Account (CASA) growing 13.6% and loans 34.8% YoY.

Managing Director, Retail Banking
AmBank Group
Business Review
Business Banking

Business Banking focuses on the small and medium-sized enterprises (SMEs), comprising of Enterprise Banking and Commercial Banking. Over the last year, together with Wholesale Banking and Retail Banking, we have onboarded more than 15,000 new SME accounts. SMEs are a key client segment for AmBank Group, and the potential for growth in the SME market is tremendous. Over the years, AmBank Group has grown its SME loan balances from approximately RM15 billion in 2017 to more than RM20 billion in 2019.

Managing Director, Business Banking
AmBank Group
Business Review
AmBank Islamic

Given the challenging global economic outlook in 2020, AmBank Islamic Berhad (AmBank Islamic) is cautiously optimistic with the business outlook in FY2021. In FY2020, we accelerated selected businesses such as Amanah Saham Bumiputera (ASB) and home financing, wealth management and bancatakaful. We consistently nurture our relationship with our middle corporate (Mid-Corp) customers, which resulted in a 22% growth in financing to this segment. AmBank Islamic also provided several capacity-building platforms for small and medium-sized enterprises (SMEs) to grow via networking and knowledge-building events. In addition, the access to financing for start-up businesses was provided through our SME Biz Start-up-i Programme. The Best Islamic Finance SME Bank Malaysia 2019 Award won is a testament to our role in supporting the growth of Malaysia’s SMEs. The trading in fixed income securities bolstered our non-funded income (NOFI) by 34.6% in FY2020.

Chief Executive Officer
AmBank Islamic Berhad
Business Review

During the financial year, AmGeneral set out concrete approaches to achieve the targets for the Top 4 Strategy, and has since delivered multiple products to continually address fast-changing customer needs. Throughout the journey, we have seen many positive developments while focusing on existing and new distributors for a quality business to deliver both growth and profitability in the motor segment. We have also designed and implemented Voice of Customer capability to drive customer retention performance and advocacy, leading to an 18% improvement in our overall Net Promoter Score (NPS) from 32 points in FY2019 to 38 points in FY2020. We have achieved exceptional claims track record by creating a first-class customer experience and effective management of claims costs by owning the supply chain with our Vehicle Accident Management (VAM) model.

Chief Executive Officer
AmGeneral Insurance Berhad
Business Review

The year under review was focused on improving our processes, people, products and solutions to better serve our customers’ needs. AmMetLife delivered customised solutions that provide keyman insurance coverage to AmBank Business Banking and Retail SME customers, while also accelerating the growth of Bancassurance Specialists through referral programmes to extend coverage for AmBank Group customers. Additionally, we implemented various digitalisation initiatives to transform customer experience and drive sales momentum. With regards to talent development, we launched the Young Entrepreneurs Scheme to attract new agents, which was supported by a revamped agency development programme that grooms agents into future agency leaders.

Chief Executive Officer
AmMetLife Insurance Berhad
Business Review
AmMetLife Takaful

In FY2020, AmMetLife Takaful generated RM125.5 million in revenue by fully optimising our Bancatakaful potential. This includes accelerating existing Bancatakaful arrangements with AmMetLife Specialist model (BAS) and harnessing business banking opportunities. We also developed alternative distribution channels by proactively seeking business opportunities with third-party banks, government bodies and other co-operations. Moreover, we differentiated our product portfolio, targeting Muslim-centric product propositions for all market segments.

Chief Executive Officer
AmMetLife Takaful Berhad
Sustainability Report

As a responsible corporate citizen, we are committed to improving our sustainability practices beyond the minimum regulatory requirements. Our sustainability agenda aims to make us more competitive, more resilient to disruptions, more flexible to change, more unified in our core values, and more accountable in the way that we treat people and the planet.

Group Chief Executive Officer
Sustainability Report
Matters (Matrix)
Sustainability Report
Sustainability Key Achievements
Sustainability Report
Sustainability Framework - Moving Forward
Sustainability Report
Sustainability Governance Structure - Moving Forward
The new governance structure aims to enhance our approach to sustainability. The clear delineation of responsibilities across the Group enables better accountability, transparency and implementation of sustainability decisions. In the next financial year, sustainability related KPIs will also be set for mission-critical positions with sustainability-related criteria embedded in the scorecards of performance assessments.