Slide 1: Analysts Presentation FY2018 Financial Results
Analysts Presentation FY2018 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 27 February 2019 1
Slide 2: Executive Summary
Executive Summary FY2018 Financial Results Strategy Update Summary and Outlook 2
Slide 3: Highlights of 2018 Performance (1/2)
Highlights of 2018 Performance (1/2) Year-on-year: Net profit up 18.2% to RM2,305.2 million, mainly due to higher net fund based and non-fund based income, and lower allowances for expected credit losses (ECL) Net fund based income rose 8.5% to RM4,942.3 million mainly underpinned by growth in l
Slide 4: Highlights of 2018 Performance (2/2)
Highlights of 2018 Performance (2/2) Group Wholesale Banking recorded a pre-tax profit of RM1,782.6 million, an increase of 2.7% Y-o-Y: Group Corporate & Investment Banking pre-tax profit grew 4.1% to RM593.8 million on the back of higher net fund based and non-fund based income, partly offset b
Slide 5: RHB Banking Group Scorecard for 2018
RHB Banking Group Scorecard for 2018 Top Level Indicators Target 2018 Actual FY2018 ROE 9.0% - 10.0% 10.3% √ Loans Growth 3% - 4% 5.5% √ 4% - 5% CASA Growth -0.4% x (MY Retail & BBG) Gross Impaired Loans Ratio <2.2% 2.06% √ Cost to Income Ratio <50% 49.3% √ Overseas Profit Contribution +ve 3.0% √ Pa
Slide 6: FY2018 Financial Results
Executive Summary FY2018 Financial Results Strategy Update Summary and Outlook 6
Slide 7: 2018 performance supported by healthy income growth, strong cost management
2018 performance supported by healthy income growth, strong cost management and lower allowances for ECL; CIR and GIL ratios improved further Financial Position Financial Results Key Financial Ratios Operating Non-Fund Total Gross Total Profit Before ROE Based/ Assets Loans Income Allowances Total I
Slide 8: Q4 profits driven by strong fund based income
Q4 profits driven by strong fund based income, with Y-o-Y increase further supported by lower ECL provision on loans and other assets; Q-o-Q profits down marginally from higher overheads and ECL provision on loans Q4 Q3 Q4 Q-o-Q Y-o-Y 2017 2018 Y-o-Y RM’ mil 2017 2018 2018 % % % Net Interest Income
Slide 9: 2018 net fund based income growth supported by loans growth
2018 net fund based income growth supported by loans growth and prudent management funding cost; NIM moderated further in Q4, with full year NIM remaining within expectations RM’bil Y-o-Y: +8% Y-o-Y: +7% Y-o-Y: +7% Q-o-Q: +2% Y-o-Y: +9% 10.82 10.04 5.49 5.88 4.55 4.94 2.56 2.74 2.82 1.41 1.15 1.52 1
Slide 10: 2018 non-fund based income grew 1.8% Y-o-Y
2018 non-fund based income grew 1.8% Y-o-Y supported mainly by higher trading & investment income and net forex gain; Q-o-Q higher largely from higher fee income and insurance underwriting surplus Y-o-Y: +2% RM’mil 1,863 Y-o-Y: -4% 1,830 Others 62 62 N2 Q-o-Q: +5% Treasury Related Income 447 566 Ins
Slide 11: Operating expenses grew 5.4% Y-o-Y
Operating expenses grew 5.4% Y-o-Y mainly from higher personnel and IT related expenses; Positive JAW maintained and CIR improved further to 49.3% RM’mil Administration & General Expenses Y-o-Y: +5% Marketing Expenses Establishment Y-o-Y: +3% 3,358 Costs 3,184 Personnel 367 Costs 369 Q-o-Q: +6% 245
Slide 12: Loans grew 5.5% Y-o-Y mainly driven by mortgage and personal financing
Loans grew 5.5% Y-o-Y mainly driven by mortgage and personal financing in Retail and a resilient SME growth in Business Banking, partially offset by large corporate repayments Composition Dec Dec Dec Dec RM’mil 2017 2018 YoY 2017 2018 % % % GROUP RETAIL 76,266 84,643 11.0 47 50 Mortgage 46,920 53,49
Slide 13: Total deposits grew by 7.2% Y-o-Y; CASA ratio at 25.9%
Total deposits grew by 7.2% Y-o-Y supported by MMTD and fixed deposits growth; CASA ratio at 25.9% CASA Customer Deposits Y-o-Y : -8% RM’bil RM’bil Q-o-Q: +1% Y-o-Y : +7% Q-o-Q : +4% 50.5 46.1 46.4 9.9 178.9 9.9 10.1 171.4 166.9 46.4 40.6 46.1 36.2 36.3 50.5 26.8 31.6 Dec 2017 Sep 2018 Dec 2018 20.9
Slide 14: Credit charge ratio and GIL ratio improvement
Credit charge ratio saw a slight uptick in Q4 but recorded a significant improvement for the full year; GIL ratio improved in Q4 primarily from reclassification / recoveries of certain accounts 700 RM’mil Allowances for Loan Impairment 0.5 0% RM’mil Asset Quality 4,800 0.4 0% 2.53% N2 600 2.33% 2.37
Slide 15: O&G Exposure continued to decline to below 3% of portfolio
O&G Exposure (Loans + Bonds) continued to decline to below 3% of total portfolio 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 2018 3.3 1.9% 1.5 0.9% 4.8 2.8% 2017 3.4 2.1% 1.7 1.1% 5.1 3.2%
Slide 16: Positive profit contribution from all business segments
2018 saw positive profit contribution from all business segments with Singapore achieving a healthy turnaround mainly from lower allowances for ECL; Insurance profit impacted by higher claims Revenue 10.2% 2,405 2,183 5.8% 2.4% RM’ mil 6.6% 1,489 1,574 1,328 1,360 1,017 1,084 -2.2% 3.9% -21.8% 374 3
Slide 17: Strong capital position for the Group and key banking subsidiaries
Strong capital position for the Group and key banking subsidiaries; Islamic Bank capital ratio improved from transition to an IRB entity 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% 15.5% 15.7% 18.8% 12. 0% 16.8% 7% 15.9% 10. 0% 13.9% 14.2% 13.3% 13.
Slide 18: Final cash dividend of 13 sen per share proposed
Final cash dividend of 13 sen per share proposed, with a higher payout of 35.7% (2017: 30.8%); Future dividend payouts will be at least 30% of net profit Market Capitalisation Dividend Per Share (sen) 5.59 5.50 5.29 RHB Capital RHB Bank 35.7% 40.0% 5.00 33.9% 5.00 28.6% 30.8% 30.0% 4.71 20.50 4.68 2
Slide 19: Strategy Update
Executive Summary FY2018 Financial Results Strategy Update Summary and Outlook 19
Slide 20: FIT22 Key Highlights
FIT22 Key Highlights Fund our Journey • Affluent : Grew number of Premier customers by 32% to 60.6k customers as at Dec 2018 from 45.9k in Dec 2017, of which 34% are SME owners. Total AUM of Premier customers grew by 23% to RM29.3 bil in the same period • SME : Grew Business Banking loans by 5.7% as
Slide 21: Summary and Outlook
Executive Summary FY2018 Financial Results Strategy Update Summary and Outlook 21
Slide 22: Economic Outlook
Economic Outlook Malaysia’s GDP is expected to grow by 4.6% in 2019 Growth is anticipated to be driven mainly from resilience in private sector consumption and a recovery in the commodity output Downside risks still emanate from escalating trade tensions, and volatility in financial markets
Slide 23: RHB Banking Group Scorecard for 2019
RHB Banking Group Scorecard for 2019 Top Level Indicators Actual FY2018 Target 2019 ROE 10.3% 10.5% Loans Growth 5.5% 5.0% -0.4% 5.0% CASA Growth (MY Retail & BBG) (Group) Gross Impaired Loans Ratio 2.06% <2.0% Cost to Income Ratio 49.3% 49.0% Page | 23
Slide 24: Concluding Remarks
Concluding Remarks The Group recorded highest profit ever in 2018 Results demonstrate the Group’s strengths and resilience operating under challenging environment and good progress in FIT22 implementation Loans and financing continued to be driven by growth in mortgages and SME NIM moderated
Slide 25: www.rhbgroup.com
www.rhbgroup.com INVESTOR RELATIONS CONTACT: Haryati Yahya Head, Investor Relations +(603) 9280 2489 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, financi
Slide 26: Accolades and recognition; Key Business Highlights
Accolades and recognition Key Business Highlights 26
Slide 27: Notable Awards & Recognition 2018
Notable Awards & Recognition 2018 ASEAN Corporate Governance Awards Putra Brand Awards Top 30 ASEAN PLCs People’s Brand Choice in the Banking, Investment & Insurance category HR Excellence Awards 2018 HR Leader of the Year (En Jamaluddin THE ASIAN BANKER Bakri) Best Trade Finance Bank in Malaysi
Slide 28: Accolades and recognition; Key Business Highlights
Accolades and recognition Key Business Highlights 28
Slide 29: Retail Banking
Retail Banking MortgageN1 Auto FinanceN1 RM’bil Y-o-Y: +14% RM’bil Y-o-Y: +4% 9.0 60. 0 8.0 50. 0 7.0 6.0 40. 0 5.0 53.5 8.1 8.4 30. 0 46.9 4.0 20. 0 3.0 2.0 10. 0 1.0 0.0 0.0 2017 2018 2017 2018 Personal LoansN1 DepositsN1 Y-o-Y: +10% RM’bil RM’bil Y-o-Y: +19% 52.5 7.5 47.5 7.0 6.5 8.9 9.1 6.6 7.5
Slide 30: Business Banking
Business Banking Gross LoansN1 Customer DepositsN1 RM’bil RM’bil Y-o-Y: +6% Y-o-Y: +16% 26. 0 25.7 25. 0 22.2 13.8 24. 0 23. 0 25.3 13.2 22. 0 23.9 21. 0 9.0 11.9 20. 0 2017 2018 2017 2018 Fixed Deposits Demand Deposits N1 SME Market Share RM’bil Asset Quality 2.97% 8.8% 9.0% 9.0% 8.7% 2.86% 7.2% 0.
Slide 31: Investment Banking – Market Positions & Asset Management
Investment Banking – Market Positions & Asset Management RM’bil Asset Under Management 2018 Y-o-Y: -9% Market Ranking Share 55.2 Equity: 50.3 th 6.2 - By value 5 7.4% - By volume 3rd 11.7% 7.1 16.5 12.6 Debt Capital Markets: - MYR sukuk 2nd 21.2% - Total MYR bonds (Conventional 4th 16.8% & Islamic b
Slide 32: Investment Banking – Major Transactions
Investment Banking – Major Transactions M&A DCM ECM Air Asia Group Berhad (“AAGB”) Edra Energy Sdn Bhd SP Setia Berhad RM4,647.0 mil RM5.085 bil issuance out of RM5.28 bil RM2,261.0 mil Disposal of AAGB’s aircraft leasing Sukuk Wakalah Programme Rights Issue operations Joint Lead Manager Joint Under
Slide 33: Islamic Banking
Islamic Banking PBT Gross Financing Y-o-Y: +21% RM’mil RM’bil Y-o-Y: +22% 60.0 50.0 40.0 579 52.3 30.0 480 43.0 432 20.0 349 304 10.0 - 2017 2018 2014 2015 2016 2017 2018 Market 8.9% 9.7% Share Asset Quality Gross Financing/ RM’mil Total Gross Financing (Domestic) 1.0% 0.8% 34.2% 29.7% 509 23.0% 24.
Slide 34: RHB Singapore
RHB Singapore PBT SGD’mil Loans, Deposits & Total Assets SGD’bil 74 80 8.0 34 36 60 32 0.4 6.6 6.2 0.2 40 56 0.2 42 46 (89) (97) 20 (12) 7.6 - (21) 6.0 6.4 6.0 (2 0) 4.2 5.0 4.4 3.7 3.9 (4 0) (81) (91) (6 0) 2016 2017 2018 (8) (8 0) (6) Deposits (1 00) 2014 2015 2016 2017 2018 Gross Loans Total Asse