Hong Leong Bank Bhd · MYX:HLBANK
Hong Leong Bank Bhd — FY2017 Earnings Presentation
26 slides from Hong Leong Bank Bhd's earnings presentation, Aug 24, 2017
Slide 1: FY2017 Results Analyst Presentation
FY2017 RESULTS ANALYST PRESENTATION 24 August 2017 1
Slide 2: Agenda: Financial Highlights FY17
Agenda 1 Financial Highlights: FY17
Slide 3: Key financial highlights
Key financial highlights Robust top-line growth with continued positive JAWS leading to improved efficiencies Total Income Opex & CIR Operating Profit • • • RM'mil * RM'mil 4,551 45.8% 4,178 44.1% 2,543 9% RM'mil 2,263 MSS 172 BAU 2,008 1,915 12% FY2016 FY2017 FY2016 FY2017 FY2016* FY2017 GIL & Cove
Slide 4: Management guidance
Management guidance Most KPIs were met with healthy full year performance Target FY17 Achieved FY17 Industry Loan Growth Gross Loan Growth (4-5%) 3.8% y-o-y LD Ratio ~82% 80.6% P Net Interest Margin >2.0% 2.09% P Non- Interest Income Ratio > 25% 26.3% P Cost-to-income Ratio <46% 44.1% P 32 bps Gro
Slide 5: Profit & Loss
Profit & Loss Top-line and underlying operating profit at highest level in 5 years RM’mil 280 93 31 93 18 116 2,247 2,034 2,229 Core PAT * Net Non Opex LIP + Impairment BOCD & JV Tax Core PAT ^ FY2016 Interest Income Interest Income Loss FY2017 Change RM’mil FY16* FY17^ % (YoY) • Total Income 4,178
Slide 6: Net Interest Income & NIM
Net Interest Income & NIM NIM sustained in the final quarter; Full year NIM improved 15 bps y-o-y 2.09% 1.94% 2.14% 2.14% 2.08% 2.01% 1.95% 3,355 3,075 RM'mil 833 856 864 774 801 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 FY2016 FY2017 Net Interest Income NIM HLB FY17 ended 30 June 2017 6
Slide 7: Non Interest Income
Non Interest Income Robust contribution from wealth management and dividend income from investments 26.4% 26.3% FX Franchise FY16 FY17 1,196 RM211 mil RM200mil 5% 1,103 68 Forex: RM’mil 91 of which 68 151 427 268 Wealth Management Income FY16 FY17 Fee income: RM89 mil RM121mil 35% of which 617 609 C
Slide 8: Wealth Management Proposition
Wealth Management Proposition Record High Income (RM'mil) 10% NII Composition of wealth income contribution 121 89 28% 84 53% FY17 19% Banca Unit Trust Structured Products FY15 FY16 FY17 HLB FY17 ended 30 June 2017 8
Slide 9: Operating Expense
Operating Expense Positive JAWS sustained; savings channeled into investment for future growth Composition of Operating Expenses * 45.8% Admin & 44.1% general RM’mil 13% 2,087 2,008 Marketing - 8% 172 Personnel 256 cost 253 55% 156 162 FY17 484 438 1,061 1,112 Establishm Establishment ent 24% 24% FY
Slide 10: Loans
Loans Continued growth in mortgages and SME segment 3.8% y-o-y 11.1% 11.3% 8.2% 8.0% 10.8% 10.3% 7.9% 7.9% 7.7% 10.1% 9.4% 56,861 51,510 45,307 18,020 18,446 17,584 RM'mil 125,147 120,605 113,418 104,169 FY15 FY16 FY17 FY15 FY16 FY17 97,209 7.8% 7.5% 7.5% 7.1% 7.0% 6.9% 1,688 1,812 19,226 20,377 1,8
Slide 11: Asset Quality
Asset Quality GIL ratio up moderately, still below industry; Sound impaired loans coverage at 148% with collaterals Gross Impaired Loans Loan Impairment Coverage (LIC) Provisions Securities made on pledged GIL 181% 1.95% 177% 1.76% 1.61% 1.63% 1.63% 1.40% 136% 151% 131% 129% RM'mil 1.18% 0.96% 120%
Slide 12: Asset Quality
Asset Quality No major stress on portfolios; higher domestic GIL on isolated accounts 1.01% 0.86% 0.31% 0.82% 0.25% 0.09% 1,197 935 943 13 14 6 FY15 FY16 FY17 FY15 FY16 FY17 0.54% 1.42% 1.42% 1.49% 0.46% 0.45% 1.02% 307 0.79% 0.81% 303 252 273 233 207 184 145 143 FY15 FY16 FY17 FY15 FY16 FY17 FY15 F
Slide 13: Deposit
Deposit Growth led by strong retail franchise 4.5% y-o-y 8.6% 8.7% 8.3% 9.9% 9.8% 8.3% 8.2% 8.2% 8.0% 8.0% 9.4% 84,719 87,976 77,791 35,889 37,185 38,764 RM'mil 155,233 148,524 140,276 130,252 123,637 FY15 FY16 FY17 FY15 FY16 FY17 12.3% 12.5% 11.2% 7.2% 7.3% 6.9% 81,353 86,176 70,162 65,027 62,697 6
Slide 14: Liquidity & Capital
Liquidity & Capital Healthy liquidity position and well capitalized Loan Deposit Ratio Capital Adequacy^ 89.2% 91.3% 81.1% 82.7% 84.0% 15.8% 14.8% 14.6% 14.7% 14.3% 13.7% 78.6% 80.0% 80.9% 81.2% 80.6% 13.1% 13.3% 11.9% 11.9% 12.7% 11.9% 10.2% 10.5% 10.8% FY13 FY14 FY15 FY16 FY17 Industry LDR HLB LDR
Slide 15: Shareholder Value
Shareholder Value Underlying returns came in within guidance; higher DPS declared Return On Equity, Return on Assets & EPS Declared Higher DPS; stable payout 44% 43% 10.4% 10.4% 10.7% 10.3% 34% 32% 32% 1.18% 1.20% 1.09% 1.17% 45 41 41 41 34 107 110 28 29 Q3FY17 Q4FY17^ FY2016* FY2017^ FY13 FY14 FY15
Slide 16: Agenda: Business Update
Ill Agenda Business Update
Slide 17: Digital Banking
Digital Banking • • • • • • • HLB FY17 ended 30 June 2017 17
Slide 18: Awards & Accolades: In recognition of our digital efforts
Awards & Accolades: In recognition of our digital efforts HLB FY17 ended 30 June 2017 18
Slide 19: Summary
Summary We delivered in FY17; setting the pace for the new financial year Overall a solid year with healthy top-line and strong operating metrics led by prudent loan growth, funding cost management as well as franchise-led non-interest income Well managed expenses through strategic cost manageme
Slide 20: Management Guidance
Management Guidance Guidance for FY18 FY17 Actual Target FY18 Gross Loan Growth 3.8% y-o-y 5-6% LD Ratio 80.6% ~82% Net Interest Margin 2.09% >2.1% Non- Interest Income 26% ~26% Ratio Cost-to-income Ratio 44.1% <44% Gross Impaired Loan Ratio 0.96% <1% Return on Equity 10.3%* 10-11% Note*: Excluding
Slide 21: Appendix: Supplementary Information
Appendix 3 Supplementary Information
Slide 22: Key Financials – 5 Years Trend
Key Financials – 5 Years Trend 8.9% 15.4% 9.2% 7.0% 5.1% 3.3% 2.7% Record high 0.8% 0.7% New milestone achieved -13.3% 2,748 4,551 4,039 4,067 4,178 2,746 4,007 2,613 2,393 2,382 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 49.9% 2.13% 2.15% 2.06% 2.09% 46.1% 1.94% 44.4% 44.6% 44.1% Solid NIM d
Slide 23: Group Performance
Group Performance Change Change Change RM’mil FY16* FY17^ Q4FY17^ % (YoY) % (YoY) % (QoQ) Net interest income# 3,075 3,355 +9.1% 864 +11.6% +0.9% Non interest income# 1,103 1,196 +8.4% 288 -5.5% +7.7% Total income 4,178 4,551 +8.9% 1,152 +6.8% +2.5% Operating expenses* (1,915) (2,008) +4.8% (515) +4
Slide 24: Highlights of Key KPIs
Highlights of Key KPIs Q4FY16 Q3FY17 Q4FY17 FY2016 FY2017 Net Interest Margin 1.95% 2.14% 2.14% 1.94% 2.09% Non-interest Income Ratio 28.2% 23.8% 25.0% 26.4% 26.3% Cost-to-Income Ratio 45.7%* 44.6% 44.7% 45.8%* 44.1% ROE 10.8%* 10.4% 10.4%^ 10.7%* 10.3%^ ROA 1.18%* 1.18% 1.20%^ 1.09%* 1.17%^ Loan-to
Slide 25: HLISB - Key financial highlights
HLISB - Key financial highlights Total Net Income Opex & CIR Profit after Tax & Zakat • • • RM'mil 498 39.6%* 37.2% 457 223 9% RM'mil 201 RM'mil MSS 5 11% BAU 185 204 FY16 FY17 FY16 FY17 FY16 * FY17 Gross Financing Deposits Capital Adequacy • • • RM'bil 24.6 RM'bil 21.9 20.8 12% 18.6 12% 13.9% 13.9%
Slide 26: Thank You
Disclaimer This presentation has been prepared by Hong Leong Bank (“HLB”) for selected recipients for information purposes only. The information contained herein is believed to be correct as of the date of this presentation and is given in summary form and does not purport to be complete. HLB does n
Hong Leong Bank Berhad — FY2017 Earnings Presentation on 6ix