Rhb Bank Bhd. · MYX:RHBBANK

Rhb Bank Bhd — Q1 2019 Earnings Presentation

31 slides from Rhb Bank Bhd's earnings presentation, May 27, 2019

  1. Slide 1: Analysts Presentation 1st Quarter 2019 Financial Results

    RHB BANK BERHAD Analysts Presentation 1st Quarter 2019 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 27 May 2019

  2. Slide 2: Agenda

    2 1. Executive Summary 2. 1st Quarter 2019 Financial Results 3. Strategy Update 4. Summary and Outlook

  3. Slide 3: Executive Summary

    3 Executive Summary

  4. Slide 4: Highlights of Q1 2019 Performance (1/2)

    4 Highlights of Q1 2019 Performance (1/2) Year-on-year:  Net profit rose 6.7% to RM630.2 million:  Net fund based income declined 2.2% to RM1,208.4 million mainly due to higher funding cost vs the positive impact of OPR hike seen in Q1 2018  Non-fund based income grew 0.3% to RM534.0 million cont

  5. Slide 5: Highlights of Q1 2019 Performance (2/2)

    5 Highlights of Q1 2019 Performance (2/2)  Group Wholesale Banking recorded a pre-tax profit of RM483.6 million, down 8.9% Y-o-Y:  Group Corporate & Investment Banking pre-tax profit declined 9.7% to RM155.3 million on the back of lower net fund based income and non-fund based income  Group Treas

  6. Slide 6: RHB Banking Group Scorecard for 2019

    6 RHB Banking Group Scorecard for 2019 Top Level Indicators Target 2019 Actual Q1 2019 ROE 10.5% 10.7% N1 Loans Growth 5.0% 5.6% N2 5.0% CASA Growth -8.1% N2 (Group) Gross Impaired Loans Ratio <2.0% 2.12% Cost to Income Ratio 49.0% 48.6% N1 : Annualised N2 : Year-on-year growth

  7. Slide 7: 1st Quarter 2019 Financial Results

    1st Quarter 2019 Financial Results

  8. Slide 8: Resilient Q1 2019 performance supported by sound cost management

    Resilient Q1 2019 performance supported by sound cost management and lower allowances for ECL; 8 CIR and credit charge ratio improved Financial Position Financial Results Key Financial Ratios Total Gross Total Operating Profit Non-Fund Based/ ROE Assets Loans Income Before Allowances Total Income +2

  9. Slide 9: Higher profit Y-o-Y from lower operating expenses and ECL allowances

    Higher profit Y-o-Y from lower operating expenses and ECL allowances, partly offset by lower net fund 9 based income due to the positive impact of OPR hike in Q1 2018; Q-o-Q profit grew mainly from higher non-fund based income and lower operating expenses Q1 Q4 Q1 Q-o-Q Y-o-Y RM’ mil 2018 2018 2019

  10. Slide 10: Net fund based income declined 2.2% Y-o-Y

    Net fund based income declined 2.2% Y-o-Y due to higher funding cost and normalisation of the OPR 10 hike a year ago; NIM compression is in line with expectations RM’bil Y-o-Y: -2% Q-o-Q: -3% 2.82 2.81 2.59 1.58 1.61 1.36 1.23 1.24 1.21 Q1 2018 Q4 2018 Q1 2019 Fund Based Income Fund Based Expenses N

  11. Slide 11: Non-fund based income remained stable Y-o-Y

    Non-fund based income remained stable Y-o-Y contributed mainly from growth in IB related fee income 11 and insurance underwriting surplus; Better Q-o-Q mainly from higher IB related fee income and trading & investment income Y-o-Y: +0.3% RM’mil Q-o-Q: +9% Others Treasury Related Income N2 532 534 19

  12. Slide 12: Operating expenses down 1.9% Y-o-Y

    Operating expenses down 1.9% Y-o-Y mainly from lower personnel costs and IT-related expenses; 12 Positive JAW maintained with CIR improving to 48.6% RM’mil Y-o-Y: -2% Q-o-Q: -3% 862 870 846 83 94 85 52 77 59 Administration & General Expenses 194 190 194 Marketing Expenses Establishment Costs 533 509

  13. Slide 13: Loans grew 5.6% Y-o-Y driven by mortgage and SME

    13 Loans grew 5.6% Y-o-Y mainly driven by mortgage and SME while Singapore saw strong growth Composition Mar Dec Mar Q-o-Q Y-o-Y Dec Mar RM’mil 2018 2018 2019 Growth Growth 2018 2019 % % % % GROUP RETAIL 78,388 84,643 86,211 1.9 10.0 50 51 Mortgage 48,891 53,467 54,957 2.8 12.4 32 32 Commercial Prop

  14. Slide 14: Total deposits grew 9.5% Y-o-Y led by fixed deposits

    Total deposits grew 9.5% Y-o-Y led by higher fixed deposits; CASA competition remains intense with 14 CASA ratio at 24.5% CASA Customer Deposits Y-o-Y : -8% Y-o-Y : +10% RM’bil RM’bil Q-o-Q : -1% Q-o-Q : +4% 49.7 46.4 45.7 178.9 186.9 10.0 170.6 10.1 10.3 45.7 46.4 39.7 36.3 35.4 49.7 25.3 31.6 Mar

  15. Slide 15: Credit charge and GIL ratios saw slight uptick in Q1

    15 Credit charge and GIL ratios saw slight uptick in Q1 as we proactively manage some accounts into R&R Allowances for Loan Impairment Asset Quality RM’mil 250 RM’mil 2.38% 2.33% 2.37% N2 0.3 0% 4,400 2.29% 2.50% 0.26% 2.06% 2.12% 200 0.22% 4,200 2.00% 1.64% 1.76% 1.70% 1.72% 0.19% 0.18% 0.2 0% 1.62

  16. Slide 16: O&G Exposure declined further

    16 O&G Exposure (Loans + Bonds) declined further and continued to be closely monitored Oil and Gas Related Industry Upstream Downstream Total Loans + Bonds % to % to % to Outstanding RM’ bil Gross Loans RM’ bil Gross Loans RM’ bil Gross Loans Mar 2019 2.7 1.6% 1.5 0.8% 4.2 2.4% Dec 2018 3.3 1.9% 1.5

  17. Slide 17: Growth momentum continued for Retail and BBG profits

    Growth momentum continued for Retail and BBG profits; Treasury profit declined on lower forex gain 17 while CBIB contribution affected by lower net fund based and non-fund based income Revenue 4% 582 608 10% 8% RM’ mil 0% 431 410 387 377 267 267 9% 11% 103 94 38 42 Retail BBG CBIB Treasury Singapore

  18. Slide 18: Capital position remained robust

    18 Capital position remained robust for the Group and key banking subsidiaries RHB Bank Group RHB Bank 20. 0% 20. 0% 19. 0% 18. 0% 18. 0% 17. 0% 16. 0% 15. 0% 18.8% 19.0% 16. 0% 14. 0% 16.8% 17.2% 15.8% 14. 0% 13. 0% 15.5% 15.7% 15.7% 12. 0% 13.6% 13.8% 12. 0% 11. 0% 10. 0% 10. 0% 13.3% 13.5% 9.0 %

  19. Slide 19: Strategy Update

    Strategy Update

  20. Slide 20: FIT22 Key Highlights

    20 FIT22 Key Highlights Fund our Journey • Affluent : Increased Premier base by 4.0% YTD Mar 2019 to 63.0k customers from Dec 2018, of which 34.9% are SME owners. Total AUM of Premier customers grew by 8.2% to RM31.7 bil in the same period • SME : Business Banking loans remained flat from Dec 2018 a

  21. Slide 21: Summary and Outlook

    Summary and Outlook

  22. Slide 22: Economic Outlook

    22 Economic Outlook  Malaysia’s GDP is expected to moderate to 4.6% in 2019 (2018: 4.7%)  Downside risks still emanate from slowing global growth and continued uncertainty over the US-China trade tensions  Post-OPR rate cut in early May, BNM is expected to keep the rate unchanged at 3.00% for the

  23. Slide 23: Concluding Remarks

    23 Concluding Remarks  The Group exhibited resilience in its Q1 2019 performance  Loans and financing continued to be driven by strong growth in mortgages and SME; Singapore loans growth picked up  NIM moderated on funding cost pressure; recent OPR cut is expected to further compress NIM by appro

  24. Slide 24: Thank You

    THANK YOU www.rhbgroup.com INVESTOR RELATIONS CONTACT Haryati Yahya Direct Line : +(603) 9280 2489 Email : haryati.yahya@rhbgroup.com This material is prepared for general circulation. Any recommendation or view contained in this document does not have regard to the specific investment objectives, f

  25. Slide 25: Appendix

    Appendix

  26. Slide 26: Retail Banking

    26 Retail Banking Mortgage Auto Finance RM’bil Y-o-Y: +12% RM’bil Y-o-Y: +3% 9.0 60. 0 8.0 50. 0 7.0 6.0 40. 0 5.0 30. 0 55.0 8.1 8.4 48.9 4.0 3.0 20. 0 2.0 10. 0 1.0 0.0 0.0 Mar 2018 Mar 2019 Mar 2018 Mar 2019 Personal Loans Deposits RM’bil RM’bil Y-o-Y: +17% Y-o-Y: +15% 56.7 48.4 7.5 9.5 7.0 9.1 6

  27. Slide 27: Investment Banking – Market Positions & Asset Management (1/2)

    27 Investment Banking – Market Positions & Asset Management (1/2) Market RM’bil Asset Under Management YTD Mar 2019 Share Ranking Y-o-Y : +2% Equity: - By value 8.3% 4th - By volume 13.2% 3rd 49.9 50.7 6.5 7.1 Debt Capital Markets: - MYR sukuk 6.9% 5th 12.3 12.3 - Total MYR bonds (Conventional & 7.5

  28. Slide 28: Investment Banking – Notable Deals (2/2)

    28 Investment Banking – Notable Deals (2/2) M&A DCM ECM Sapura Energy Berhad Danum Capital Berhad Sapura Energy Berhad Up to USD975 mil RM10.0 bil IMTN Programme RM3.979 bil Strategic Partnership with OMV Aktiengesellschaft Issuance of RM1.5 bil Rights Issue Joint Principal Adviser Joint Lead Manage

  29. Slide 29: Business Banking

    29 Business Banking Gross LoansN1 Customer DepositsN1 RM’bil RM’bil Y-o-Y: +3% Y-o-Y: +22% 26. 0 27.1 25. 0 22.3 24. 0 13.5 23. 0 13.1 22. 0 24.3 25.2 13.6 21. 0 9.2 20. 0 Mar 2018 Mar 2019 Mar 2018 Mar 2019 Fixed Deposits Demand Deposits RM’bil Asset QualityN1 SME Market Share 9.1% 3.25% 9.0% 9.0%

  30. Slide 30: Islamic Banking

    30 Islamic Banking PBT Gross Financing RM’mil RM’bil Y-o-Y: +18% 60.0 Y-o-Y: +4% 50.0 40.0 579 54.4 30.0 480 20.0 46.1 432 349 10.0 - 149 155 Mar 2018 Mar 2019 2015 2016 2017 2018 Q1 Q1 Market 2018 2019 9.2% 9.9% Share Gross Financing/ Total Gross Financing (Domestic) RM’mil Asset Quality 0.94% 0.93

  31. Slide 31: RHB Singapore

    31 RHB Singapore SGD’mil PBT SGD’bil Loans, Deposits & Total Assets 80 34 36 60 6.6 6.5 6.2 40 21 0.2 0.2 56 10 0.2 20 46 (89) (97) 1 11 20 (12) - (21) (1) 6.4 6.0 6.3 5.0 (2 0) 3.7 3.9 4.4 4.0 4.5 (4 0) (81) (91) (6 0) (8 0) (8) 2017 2018 Mar (6) 2019 (1 00) 2015 2016 2017 2018 Q1 2018 Q1 2019 Depo

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