Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — Q1 2018 Earnings Presentation
29 slides from Rhb Bank Bhd's earnings presentation, May 31, 2018
Slide 1: Analysts Presentation 1st Quarter 2018 Financial Results
Analysts Presentation 1st Quarter 2018 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 31 May 2018
Slide 2: Executive Summary
Executive Summary 1st Quarter 2018 Financial Results Summary and Outlook
Slide 3: Highlights of Q1 2018 Performance (1/2)
Highlights of Q1 2018 Performance (1/2) Year-on-year: Net profit rose 18.1% to RM590.8 million, pre-tax profit up 20.3% to RM791.9 million, mainly due to higher net fund based and non-fund based income, and lower allowance for expected credit losses Positive jaws maintained, though operating exp
Slide 4: Highlights of Q1 2018 Performance (2/2)
Highlights of Q1 2018 Performance (2/2) Group Wholesale Banking: Group Corporate & Investment Banking recorded 11.3% higher pre-tax profit at RM173.8 million on the back of higher non-fund based and net fund based income Group Treasury and Global Markets achieved 12.9% increase in pre-tax prof
Slide 5: RHB Banking Group Scorecard for 2018
RHB Banking Group Scorecard for 2018 Top Level Indicators Target 2018 Actual Q1 2018 ROE 9.0% - 10.0% 10.4%N1 Loans Growth 6% 4.3%N2 CASA Growth 10% 14.3%N2 Gross Impaired Loans Ratio <2.2% 2.29% Cost to Income Ratio <50% 48.8% Overseas Profit Contribution +ve 5.0% N1 : Annualised N2 : Year-on-year
Slide 6: 1st Quarter 2018 Financial Results
Executive Summary 1st Quarter 2018 Financial Results Summary and Outlook
Slide 7: Improved profitability Y-o-Y arising from higher income and lower allowances
Improved profitability Y-o-Y arising from higher net fund based & non-fund based income and lower allowances for loan and asset impairment; CIR and loan loss coverage ratio improved Financial Position Financial Results Key Financial Ratios Operating Non Interest Total Gross Total Profit Before ROE I
Slide 8: Strong operating performance continued Y-o-Y and Q-o-Q
Strong operating performance continued Y-o-Y and Q-o-Q, on the back of robust topline growth and further supported by lower allowances for loans and other assets Q1 Q1 Q4 Y-o-Y Q-o-Q 2018 2017 2017 Change Change RM’ mil % % Net Interest Income 929 851 892 9 4 Net Islamic Fund Base Income 306 242 264
Slide 9: Sound growth in net fund based income; higher NIM
Sound growth in net fund based income from continuous funding and liquidity management; Positive impact of rate hike reflected in higher NIM RM’bil Y-o-Y: +6% Y-o-Y: +13% 2.56 2.59 2.45 1.35 1.41 1.36 1.16 1.23 1.09 Q1 2017 Q4 2017 Q1 2018 Fund Based Income Fund Based Expenses Net Fund Based Income
Slide 10: Non-fund based income grew strongly Y-o-Y
Non-fund based income grew strongly Y-o-Y contributed largely by higher net forex gain and trading & investment income; Q-o-Q growth mainly from higher brokerage fee income and trading & investment income Y-o-Y: +16% RM’mil Q-o-Q: +4% 534 511 462 19 16 Others 12 N2 Treasury Income 113 164 212 Insura
Slide 11: Operating expenses grew 13.4% Y-o-Y
Operating expenses grew 13.4% Y-o-Y mainly due to higher personnel costs and IT- related expenses; Positive jaws maintained hence CIR improved further to 48.8% Y-o-Y: +13% Q-o-Q: +2 % 847 863 762 82 100 52 86 72 48 195 Administration & 181 165 General Expenses Marketing Expenses Establishment 495 53
Slide 12: Loans growth driven by mortgage and SME
Loans growth continued to be driven by mortgage and SME partially offset by large corporate repayments and impact of stronger RM in Singapore Composition Mar Dec Q-o-Q Mar Y-o-Y Mar Dec RM’mil 2018 2017 Growth 2017 Growth 2018 2017 % % % % GROUP RETAIL 78,486 76,266 2.9 70,480 11.4 48.7 47.6 Mortgag
Slide 13: Total deposits growth Y-o-Y led by higher current account
Total deposits growth Y-o-Y led by higher current account, Q-o-Q growth was mainly driven by fixed deposits and MMTD; CASA ratio remained healthy at 29.3% Customer Deposits CASA RM’bil RM’bil Y-o-Y : +3% Q-o-Q : +2% Y-o-Y : +14% Q-o-Q : -1% 165.6 166.2 169.8 50.5 49.7 43.5 50.5 49.7 43.5 9.9 10.0 28
Slide 14: Allowances for loan impairment moderated; asset quality
Allowances for loan impairment moderated further and credit charge ratio improved; Gross impaired loans ratio improved Y-o-Y but ticked up marginally Q-o-Q; Loan loss coverage maintained above 100%*N1 250 RM’mil Allowances for Loan Impairment RM’mil Asset Quality 1.0 0% 4,400 2.39% 2.31% 2.38% 2.29%
Slide 15: O&G Exposure declined with lower impaired amount
O&G Exposure (Loans + Bonds) declined with lower Impaired amount 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 2018 3.3 2.05% 1.7 1.07% 5.0 3.12% Dec 2017 3.4 2.12% 1.8 1.09% 5.2 3.21% O
Slide 16: Revenue increased across all domestic segments and Singapore
Revenue increased across all domestic segments and Singapore; Higher profit from CBIB’s net fund based & non-fund based income and Treasury’s foreign exchange gain and investment & trading gain; Singapore improved from lower impairment losses and higher non fund based income Revenue 6% 610 575 12% 1
Slide 17: MFRS 9 Day 1 adjustment impact on capital
MFRS 9 Day 1 adjustment impact on capital within expectations; LLC excluding RR improved significantly with LLC including RR maintained above 100% 31 Dec 2017 Day 1 1 Jan (MFRS 139) Adjustment 2018 31 Mar 2018 (RM million) (MFRS 9) A B C=A+B Allowance for impaired loans and other assets: Loans 1,826
Slide 18: Capital position at end March 2018 remained robust
Capital position at end March 2018 remained robust for Group and key banking subsidiaries RHB Bank Group RHB Bank 20. 0% 20. 0% 18. 0% 15% 18. 0% 16. 0% 16. 0% 14. 0% 11% 14. 0% 12. 0% 12. 0% 7% 10. 0% 15.9% 10. 0% 8.0 % 13.9% 14.2% 17.2% 13.5% 13.7% 16.7% 13.1% 13.4% N1 14.9% 11.4% 8.0 % 6.0 % 6.0
Slide 19: Summary and Outlook
Executive Summary 1st Quarter 2018 Financial Results Summary and Outlook
Slide 20: Economic Outlook
Economic Outlook Malaysia is expected to register a moderate GDP expansion of 5.2% in 2018, against 5.9% growth registered in 2017, supported by resilient domestic demand, as exports continue to expand and create positive spillover effects into consumer spending and private investments Market an
Slide 21: Concluding Remarks
Concluding Remarks The Group delivered best ever quarterly profit performance in Q1 2018 Loans and financing continued to be driven by strong growth in mortgages and retail SME Prudent management of funding cost and impact of OPR hike in January 2018 resulted in uptick in net interest margin
Slide 22: www.rhbgroup.com
www.rhbgroup.com INVESTOR RELATIONS CONTACT: Mr. Syed Ahmad Taufik Albar Group Chief Financial Officer +(603) 9280 7090 taufik.albar@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 o
Slide 23: Key Business Highlights
APPENDIX Key Business Highlights
Slide 24: Retail Banking
Retail Banking Mortgage Auto Finance RM’bil Y-o-Y: +16% RM’bil Y-o-Y: -1% 9.0 60. 0 8.0 50. 0 7.0 6.0 40. 0 5.0 30. 0 8.2 8.1 48.9 4.0 20. 0 42.0 3.0 2.0 10. 0 1.0 0.0 0.0 Mar 2017 Mar 2018 Mar 2017 Mar 2018 Personal Loans Deposits RM’bil Y-o-Y: +8% RM’bil Y-o-Y: +27% 48.4 45.0 6.5 6.0 5.5 8.8 9.1 5
Slide 25: Investment Banking – Market Positions & Asset Management (1/2)
Investment Banking – Market Positions & Asset Management (1/2) YTD Mar 2018 RM’bil Asset Under Management Market Share Ranking Y-o-Y:-3% Equity: - By value 7.8% 5th - By volume 11.8% 3rd 51.2 49.9 7.7 6.5 Debt Capital Markets: - MYR sukuk 28.6% 1 12.3 - Total MYR bonds (Conventional 26.9% 2 19.4 & I
Slide 26: Investment Banking – Market Position (2/2)
Investment Banking – Market Position (2/2) YTD March 2018 Ranking Market Share DCM Debt Capital Markets: Edra Energy Sdn Bhd - MYR sukuk 1 28.6% RM5.085 bil issuance out of RM5.28 bil Sukuk Wakalah Programme - Total MYR bonds 2 26.9% Joint Lead Manager (Conventional & Islamic bonds) Danga Capital Be
Slide 27: Business Banking
Business Banking Gross LoansN1 Customer DepositsN1 RM’bil RM’bil Y-o-Y: +9% Y-o-Y: +4% 25. 0 21.2 22.3 24. 5 24. 0 23. 5 23. 0 12.2 13.1 22. 5 22. 0 24.3 21. 5 22.4 9.3 21. 0 20. 5 9.2 20. 0 Mar 2017 Mar 2018 Mar 2017 Mar 2018 N1: Domestic only Fixed Deposits Demand Deposits SME Market Share RM’bil
Slide 28: Islamic Banking
Islamic Banking PBT Gross Financing RM’mil RM’bil Y-o-Y: +29% 45.0 40.0 35.0 Y-o-Y: +50% 46.1 30.0 480 25.0 35.7 432 349 20.0 304 15.0 149 10.0 99 Mar 2017 Mar 2018 2014 2015 2016 2017 Q1 Q1 Market 8.0% 9.2% 2017 2018 Share Asset Quality Gross Financing/ RM’mil Total Gross Financing (Domestic) 1.1%
Slide 29: RHB Singapore
RHB Singapore SGD’mil Loans, Deposits & Total Assets PBT SGD’bil 74 80 8.0 34 0.4 6.7 6.3 60 32 40 0.2 0.3 20 42 46 (89) (97) (8) 10 11 7.6 (12) (9) 6.0 6.5 6.0 - (1) 5.0 (2 0) (2) 4.2 3.7 3.7 4.5 (4 0) (81) (91) 2016 2017 Mar (6 0) (8) 2018 (8 0) (1 00) (6) Deposits 2014 2015 2016 2017 Q1 Q1 Gross