Hong Leong Bank Bhd · MYX:HLBANK
Hong Leong Bank Bhd — FY2024 Earnings Presentation
27 slides from Hong Leong Bank Bhd's earnings presentation, Aug 29, 2024
Slide 1: FY2024 Results Analyst Presentation
FY2024 RESULTS ANALYST PRESENTATION 29 AUGUST 2024 The information contained in this presentation is strictly confidential for information of the intended recipient(s) only. The information may not be reproduced, redistributed or transmitted, directly or indirectly by any means to any other person o
Slide 2: GMD/CEO Opening
1 GMD/CEO OPENING Launch of HLB iconic Light Street Branch in Penang Offers a full range of banking services and solutions, a Priority Banking Centre, as well as robust solutions for every size of business from SMEs to the largest corporations HLB FY2024 ended 30 June 2024 2
Slide 3: CEO Message: Profit Milestone and Profit Engines
CEO Message 1 Profit Milestone Record breaking PBT and PAT 2 Profit Engines Focus on growing pre-BOCD core franchise Profit before associates Key growth segments: PROFIT BEFORE TAX contribution SME Wealth Management RM5,134 13.6% 40.4% million 6.2% loans/financing fee income 11.0% 0.0% y-o-y growth
Slide 4: CEO Message: Strong ROE and Higher Dividends
CEO Message 3 Strong ROE Delivering 11.8% ROE through key levers 4 Higher dividends 34% dividend payout ratio and progressively improve whilst ensuring capital remains strong Loans/Financing CASA 7.3% DIVIDEND 194.9 181.7 y-o-y 10.0% RM’bil 71.6 65.1 y-o-y RM’bil 68 sen FY2023 FY2024 FY2023 FY2024 1
Slide 5: Management Guidance: Target vs Achieved FY2024
Management Guidance Target FY2024 Achieved FY2024 Gross Loans Growth 6%-7% 7.3% P Net Interest Margin 1.8%-1.9% 1.86% P Accomplishment Cost-to-Income Ratio ~40% 40.5% P of meeting all management GIL Ratio <0.70% 0.53% P guidance for the financial year Net Credit Cost ~10 bps -6 bps P CASA Mix >30% 3
Slide 6: Financial Highlights: HLB Connect App
2 FINANCIAL HIGHLIGHTS HLB Connect App with a new and improved interface and functionality Includes a suite of upgraded features and capabilities, including an improved forex rate converter interface, paired with the ability for customers to keep, withdraw and spend their money in up to 12 currencie
Slide 7: Profit & Loss
Profit & Loss Change % RM’mil FY2023 FY2024 (YoY) RM’mil Net interest income 4,552 4,669 2.6% 4,196 Non interest income 1,133 1,102 (2.8%) 9.9% Sound 3,818 y-o-y Total income 5,686 5,771 1.5% underlying performance Operating expenses (2,233) (2,339) 4.7% 6.2% y-o-y contributed by Operating profit be
Slide 8: Net Interest Income & NIM
Net Interest Income & NIM 1.98% 1.86% 1.89% 2 bps 1.87% ▲ q-o-q 4,669 1.85% 4,552 Encouraging 1.84% 1.83% improvement in NIM for the fifth 1,206 consecutive 1,181 quarter driven by RM’mil 1,126 1,156 ▲ 2.1% q-o-q loans/financing 1,089 expansion and effective funding cost management Q4FY23 Q1FY24 Q2F
Slide 9: Non-Interest Income
Non-Interest Income 19.9% 19.1% FY2024 1,133 1,102 117 172 Wealth Wealth Management and ▲ 40.4% management 418 250 Bancassurance RM245.0 mil RM’mil business, credit Income card fees and GM franchise sales gained Fee income: Credit Card ▲ 10.5% traction for 680 of which 599 Related Fees RM233.0 mil s
Slide 10: Operating Expense
Operating Expense 38.1% Admin & general Domestic 36.9% 14% CIR Personnel cost 55% Marketing 8% 39.3% 40.5% ▪ Prudent FY2024 management 2,339 of expenses 2,233 through 343 302 Establishment strategic cost 181 196 23% management RM’mil 531 initiatives 532 RM'mil 628 ▪ Expenses 587 578 577 maintained a
Slide 11: Loans & Financing
Loans & Financing +8,589 +4,548 +45 7.3% RM’mil (+7.3%) (+9.1%) (+0.3%) 194,927 ▲ 181,677 y-o-y 8.0% y-o-y Strong growth Total Loans FY2023 Retail Business & Corporate International Total Loans FY2024 due to expansion Operations in segments of FY2024 mortgages, auto Domestic loans, SME and Residenti
Slide 12: Asset Quality
Asset Quality Gross Impaired Loans/Financing (GIL) Loans/Financing Impairment Coverage (LIC) 1.71% 1.61% 1.59% 239% Improved asset 224% 225% quality metrics 0.57% 0.57% 0.53% coupled with 169% 154% 155% sufficient loans/financing RM'mil impairment coverage 1,042 1,074 1,041 94.3% 92.7% 92.2% FY2023
Slide 13: Asset Quality by Segment
Asset Quality Malaysia Overseas 0.59% 0.58% 0.53% 0.43% 0.50% 0.56% 982 1,007 963 60 67 78 FY23 9MFY24 FY24 FY23 9MFY24 FY24 Continue to uphold sound asset quality across key Residential Properties Transport Vehicles SME segments 1.20% 1.06% 1.04% 0.45% 0.42% 0.41% 0.33% 0.35% 0.22% 430 391 404 393
Slide 14: Deposit
Deposit +862 4.1% RM’mil +5,663 (+1.6%) + 2,874 (+15.3%) ▲ 211,652 (+5.4%) 220,433 y-o-y -616 (-1.8%) Continued focus on CASA Total Deposits Retail Business & Global Markets International Total Deposits acquisition FY2023 Corporate Operations FY2024 achieved through FY2024 cash management solutions
Slide 15: Liquidity & Capital
Liquidity & Capital Liquidity Ratios Capital Adequacy ▪ Prudent 136% 137% 138% 137% liquidity and 127% capital positions for 122% 120% sustainable 119% 120% 118% 15.9% 15.7% 15.9% 15.5% 16.3% business 14.3% growth 13.9% 13.6% 13.9% 13.5% Average LDR of top 5 banks ▪ LTF and LTFE Mar-24: 90.7% ratios
Slide 16: Shareholder Value
Shareholder Value Return on Equity & Return on Assets & EPS Declared Dividend 54% 11.8% 11.8% 49% • Commendable ROE and ROA driven by 32% 34% upward trajectory in 1.43% 1.45% financial 68 performance 59 205 186 • Improved EPS 43 at 205 sen 38 • Higher dividend payout, total 21 25 dividend of 68 sen
Slide 17: Performance of Associated Company: Bank of Chengdu
Performance of Associated Company: Bank of Chengdu Co., Ltd. Financial Highlights for H1 ended 30 June 2024 (unaudited) Robust ROE 18.0% Operating Income Profit After Tax Solid Cost-to-income Ratio 23.8% RMB'mil RMB'mil 11,110 11,585 6,167 4% 5,576 11% Prudent Coverage Ratio 496% H1FY23 H1FY24 H1FY2
Slide 18: Awards & Accolades
Awards & 3 Accolades “Best SME Bank in Malaysia” Asian Banking & Finance (“ABF”) Retail Banking Awards 2024 Tax Corporate Governance (“TCG”) certification status Inland Revenue Board of Malaysia (“IRBM”) CLOSING REMARKS “Bank of the Year - Community Investment” Sustainability & CSR Malaysia Awards 2
Slide 19: Long Term Value Creation through Sustainability
Long term value creation through sustainability efforts Launching the Sustainable Finance Framework Workings toward our Net Zero Pathway Disclosing Scope 3 Higher standards of green and social Financed Emissions element and more stringent criteria for 2 asset classes 29% GHG Emissions (tCO2eq) Achie
Slide 20: Being a Digital Bank Plus Much More
Being a Digital Bank Plus Much More Apply@HLB (e-KYC & e-KYB) Customer Base Crossing 01 Full Digital 2.8m Personalised product offerings Onboarding (Self-service) 4 million 2.5m HLB Connect Mobile Banking User retail customers Complete 02 Close to 14% Retail Mobile Banking Hyper- suite of Transact &
Slide 21: Doubling Down on Digital at the Core
Doubling down on Digital at the Core AI realisation is here Significant improvements to operational efficiency and customer experience AI Collection Agents Hyper-personalised AI Telemarketers Sophia works on early bucket calling for collections Amelia works as a telemarketer, informing customers of
Slide 22: Management Guidance for FY2025
Management Guidance for FY2025 Actual FY2024 Target FY2025 Gross Loans Growth 7.3% 6.0%-7.0% Committed to Net Interest Margin 1.86% 1.85%-1.95% continue driving core franchise Cost-to-Income Ratio 40.5% ~41.0% performance while pacing investments to GIL Ratio 0.53% <0.65% deliver sustainable Net Cre
Slide 23: Closing Remarks
Closing Remarks ▪ Driving profit engines in the core HLB franchise ▪ Improving momentum on net interest margin and core franchise fee income On track performance of ▪ Paced investments in technology and people with sustainable CIR the 3-5 Year Strategic Plan ▪ Upholding healthy asset quality with in
Slide 24: Supplementary Information
4 SUPPLEMENTARY INFORMATION 11th Sustainability Roundtable In partnership with MASTEEL, PwC, MIDA and others, the roundtable themed “Greening the Supply Chain: The Malaysian Corporate Sector and the Global Sustainability Revolution: A Win-Win Convergence” discussed the challenges and opportunities i
Slide 25: Group Performance
Group Performance Change Change RM’mil FY2023 FY2024 Q4FY24 (YoY) (YoY) Net interest income 4,552 4,669 2.6% 1,206 10.7% Non-interest income 1,133 1,102 -2.8% 271 26.5% Total income 5,686 5,771 1.5% 1,477 13.3% Operating expenses (2,233) (2,339) 4.7% (628) 6.9% Operating profit before allowances 3,4
Slide 26: HLISB Key Highlights
HLISB Key Highlights Change Change RM’mil FY2023 FY2024 Q4FY24 (YoY) (YoY) Total net income 853 951 11.5% 254 30.9% Operating expenses (286) (312) 8.8% (80) 4.5% Profit before taxation and zakat 567 640 12.9% 174 48.0% Profit after taxation and zakat 425 481 13.2% 131 48.1% Cost-to-income ratio 29.7
Slide 27: Thank You / Disclaimer
Disclaimer This presentation has been prepared by Hong Leong Bank (“HLB”) for selected recipients for information purposes only and the information contained herein has been obtained from sources believed to be reliable. The information contained herein is believed to be correct as of the date of th
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