Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — Q1 2020 Earnings Presentation
42 slides from Rhb Bank Bhd's earnings presentation, May 29, 2020
Slide 1: Analyst Presentation 1st Quarter 2020 Financial Results
RHB BANK BERHAD Analyst Presentation 1st Quarter 2020 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 29 May 2020
Slide 2: Executive Summary 1st Quarter 2020 Financial Results Strategy Update
2 1. Executive Summary 2. 1st Quarter 2020 Financial Results 3. Strategy Update 4. Summary and Outlook
Slide 3: Executive Summary
3 Executive Summary
Slide 4: Implemented comprehensive measures to mitigate effects of COVID-19
Implemented comprehensive measures to mitigate effects of COVID-19 4 4 Customers Employees Community Retail and SME: During MCO, ~50% of branches Contributed RM1 mil to Ministry of 6-month automatic moratorium for Retail and SME closed, only ~20% of branch staff Health for essential supplies
Slide 5: Continued to extend support to customers through moratorium and Special Relief Fund
Continued to extend support to customers through moratorium and Special Relief Fund 5 5 Moratorium* Special Relief Fund % of Outstanding Loan Balance % As at 15 May, we have approved loans with a total of almost RM1.3 billion for close to Mortgage 84.6 2,000 SMEs Commercial Property 86.8 Enabled
Slide 6: Business Continuity Plan and Digital enablement facilitated transition to the new normal
Coordinated execution of Business Continuity Plan and robust Digital enablement facilitated RHB’s 6 transition to the new normal 6 Ensuring Business Continuity Digital Enablement Established Pandemic Working Group since mid-Jan to monitor Online CASA Account Opening Online FD Placement Covid-19 ou
Slide 7: Highlights of Q1 2020 Performance
Highlights of Q1 2020 Performance 7 7 Year-on-year Net profit declined 9.4 % to RM570.9 million Total income grew marginally by 0.2% to RM1,745.2 million mainly from growth in net fund based income of 4.4%. Non-fund based income was down 9.3%, dragged mainly by unrealised losses from FVTPL finan
Slide 8: RHB Banking Group Scorecard for FY2020
RHB Banking Group Scorecard for FY2020 8 8 Top Level Indicators Target FY2020 Actual Q1 2020 ROE 10.3% - 10.5% 8.9% Loans Growth 4.0% 3.6% CASA Growth 4.0% (Group) 16.4% Gross Impaired Loans Ratio 1.95% 2.00% Cost-to-Income Ratio 48.9% 48.2%
Slide 9: 1st Quarter 2020 Financial Results
1st Quarter 2020 Financial Results
Slide 10: Profit impacted by higher ECL allowances; cost discipline maintained
Profit impacted by higher ECL allowances; Exercised cost discipline with positive JAWS 1010 maintained; Slight uptick in GIL ratio Financial Position Financial Results Key Financial Ratios Total Gross Total Operating Profit Return on Non-Fund Based/ Assets Loan Income Before Allowances Equity Total
Slide 11: Net fund based income grew 4.4% Y-o-Y
Net fund based income grew 4.4% Y-o-Y mainly due to proactive funding cost management; NIM 1111 declined to 2.11% in Q1 2020 Y-o-Y: +4.4% RM’bil Q-o-Q: -2.1% 2.81 2.87 2.75 1.60 1.58 1.49 1.21 1.29 1.26 Q1 2019 Q4 2019 Q1 2020 Fund Based Income Fund Based Expenses Net Fund Based Income NIM 2.16% 2.1
Slide 12: Non-fund based income declined 9.3% Y-o-Y
Non-fund based income declined 9.3% Y-o-Y mainly due to lower investment and trading income, 12 12 forex gain and IB related fee income Y-o-Y: -9.3% RM’mil Q-o-Q: -12.4% 534.6 553.7 Others 484.8 11 24 Treasury Income 20 204 191 Insurance Underwriting 127 Surplus 45 54 53 Fee Income 274 285 285 Q1 20
Slide 13: Trading and investment income impacted by yield curve movement
Trading and investment income materially impacted by yield curve movement in 2nd half of 13 13 March, but losses have subsequently reversed in April Trading & Investment Income MGS Yield Curve Q1 YTD Var RM’mil 2020 Apr 2020 M-o-M 3.33% Gain & MTM on Securities 73.3 234.9 161.6 3.22% of which: 3.17%
Slide 14: Operating expenses declined 0.6% Y-o-Y
Operating expenses declined 0.6% Y-o-Y on the back of lower IT-related expenditure, marketing 1414 and administration expenses; Positive JAWS maintained with CIR improving to 48.2% Q1 Q4 Q1 RM’mil Q-o-Q Y-o-Y 2019 2019 2020 Personnel Costs 507.8 525.2 517.5 -1.5% 1.9% Establishment Costs 193.9 204.5
Slide 15: Loans growth of 3.6% Y-o-Y
Loans growth of 3.6% Y-o-Y led mainly by mortgage, SME and Singapore; Corporate loans 1515 continued to register net repayments Mar Dec Mar Dec 2019 Mar 2020 RM’mil Q-o-Q Y-o-Y 2019 2019 2020 % % GROUP RETAIL 86,210 90,081 90,077 0.0% 4.5% 52 51 Mortgage 54,953 58,587 59,519 1.6% 8.3% 33 34 Commerci
Slide 16: Total deposits grew 3.8% Y-o-Y
Total deposits grew 3.8% Y-o-Y mainly attributed to growth in CASA and MMTD; CASA ratio stood 1616 at 27.4% Customer Deposits CASA by Segment RM’bil Y-o-Y : +3.8% Q-o-Q : +1.8% 194.0 Mar Dec Mar 190.6 RM’bil Q-o-Q Y-o-Y 186.9 2019 2019 2020 45.7 48.9 53.2 Retail 16.5 16.9 18.0 7.0% 9.3% Business Ban
Slide 17: Credit charge ratio rose in Q1 2020
Credit charge ratio rose in Q1 2020 due to higher ECL writeback in 2019 for Corporate, BBG and SG 17 as well as a sum set aside for COVID-19; Slight uptick in GIL ratio Allowances for Loan Impairment Gross Impaired Loans RM’mil 250 0.4 0% 0.34% 2.16% 2.15% 6,000 2.20% 2.12% 0.3 0% 2.00% 5,500 200 0.
Slide 18: Impaired loans in certain market segments increased but remain manageable
Impaired loans in certain market segments increased but remain manageable 18 18 Retail Banking Business Banking Wholesale Banking Mortgage GBB Corporate 900 1.40% 1000 3.25% 3.50% 2.50% 900 2.05% 850 1.30% 2.81% 2.85% 3.00% 1.82% 1.18% 1.18% 900 1.68% 2.00% 800 1.13% 1.20% 818 2.50%800 750 1.10% 800
Slide 19: Profit grew in key business segments except Treasury and overseas
Profit grew in key business segments except for Treasury and overseas; Treasury impacted mainly 1919 by lower trading & investment income and net forex gain, Singapore from higher ECL allowances Revenue 4.6% 649 679 20.5% RM’mil 1.3% 5.7% 346 341 377 5.0% 300 15.3% 267 282 8.6% 42 48 60 57 94 102 Re
Slide 20: Capital position remained robust
Capital position remained robust for the Group and key banking subsidiaries 20 20 RHB Bank Group RHB Bank 20. 0% 20. 0% 19. 0% 18. 0% 18. 0% 18.6% 18.3% 17. 0% 16. 0% 16.5% 16.2% 16. 0% 15. 0% 16.3% 16.0% 16.3% 16.0% 14. 0% 14. 0% 14.3% 14.1% 14.3% 14.1% 13. 0% 12. 0% 12. 0% 11. 0% 10. 0% 10. 0% 9.0
Slide 21: Strategy Update
Strategy Update
Slide 22: FIT22 Key Highlights (1/2)
FIT22 Key Highlights (1/2) 22 22 • Premier Banking customers increased to 71.7k (+2.7% from Dec 2019), of which 34.2% are SME owners Affluent • Total AUM of Premier customers of RM34.0 bil (up from RM33.4 bil in Dec 2019) • Added 5,500 new-to-bank (NTB) SME customers as of Mar 2020 SME • Business Ba
Slide 23: FIT22 Key Highlights (2/2)
FIT22 Key Highlights (2/2) 23 23 Analytics • Continuing to drive business performance via analytics with RM23.8 mil of benefits realised as of Mar 2020. and big Majority of benefits (60%) via analytics campaigns related to cards, premier / wealth products, and deposits data • Pursuing an internal an
Slide 24: Summary & Outlook
Summary & Outlook
Slide 25: Outlook for FY2020 (1/2)
Outlook for FY2020 (1/2) 25 25 Net fund based income will likely be lower than FY2019 following OPR cuts with some positive offset through the reduction in Statutory Reserve Requirement (SRR) by 100bps to 2% Non fund based income: Growth will depend on a number of variable factors such as yiel
Slide 26: Outlook for FY2020 (2/2)
Outlook for FY2020 (2/2) 26 26 LCR as at end-March stood at 137.7%. We are confident that our LCR, as a result of the deferment of payments under the moratorium, will still be close to 100% Liquidity NSFR as at end-March at 108.5%. Taking account of potential moratorium impact, NSFR is still exp
Slide 27: Economic Outlook
Economic Outlook 27 27 Malaysia’s real GDP growth moderated sharply to +0.7% YoY in Q1 2020 (Q4 2019: +3.6%), dragged by net exports but mitigated by resilient private consumption Q1 2020 GDP growth rate reflected the initial impact on the economy arising from the COVID-19 pandemic and the resul
Slide 28: GMD's Concluding Remarks
GMD’s Concluding Remarks 28 28 Our fundamentals remained strong but we expect financial performance to be affected in this financial year as we are operating under an extremely tough and unprecedented economic environment Our priority is ensuring business continuity and providing the support to
Slide 29: 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
Slide 30: Appendix
Appendix
Slide 31: P&L Summary
P&L Summary 3131 Q1 Q4 Q1 RM’mil Q-o-Q Y-o-Y 2019 2019 2020 Net Interest Income 880.3 931.2 894.5 -3.9% 1.6% Net Islamic Fund Based Income 327.5 355.7 365.9 2.9% 11.7% Total Net Fund Based Income (A) 1,207.8 1,286.9 1,260.4 -2.1% 4.4% Total Non-Fund Based Income (B) 534.6 553.7 484.8 -12.4% -9.3% To
Slide 32: Key Financial Data
Key Financial Data 32 32 Financial Data FY2016 FY2017 FY2018 FY2019 Q1 2020 RM’mil Income Statement Total Income 6,190 6,384 6,806 7,101 1,745 Pre-Provisioning Operating Profit 3,095 3,200 3,448 3,629 904 Profit Before Tax 2,232 2,558 3,119 3,350 752 Net Profit 1,682 1,950 2,305 2,482 571 Balance Sh
Slide 33: Key Financial Ratios
Key Financial Ratios 33 33 Financial Ratios FY2016 FY2017 FY2018 FY2019 Q1 2020 Profitability Return on Equity* 8.6% 9.1% 10.3% 10.3% 8.9% Net Interest Margin 2.18% 2.18% 2.24% 2.12% 2.11% Cost to Income Ratio 50.0% 49.9% 49.3% 48.9% 48.2% Asset Quality Gross Impaired Loan Ratio 2.43% 2.23% 2.06% 1.
Slide 34: Segmental Performance Q1 2020
Segmental Performance Q1 2020 34 34 Fund Based Income 6.3% 535 569 RM’mil 8.4% 24.3% 10.8 230 250 %212 232 8.2% 191 175 110 119 Retail GBB CBIB Treasury International Non Fund Based Income RM’mil 7.8% 8.1% 23.8% 161 148 145 119 11.3% 14.7% 110 111 28 32 37 33 Retail GBB CBIB Treasury International Q
Slide 35: O&G Exposure (Loans + Bonds)
O&G Exposure (Loans + Bonds) 35 35 Oil and Gas Related Industry Upstream Downstream Total Loans + Bonds Outstanding % to Gross % to Gross % to Gross RM’bil RM’bil RM’bil Loans Loans Loans Mar 2020 3.1 1.7% 1.1 0.6% 4.2 2.4% Dec 2019 2.5 1.4% 1.6 1.0% 4.2 2.4% Dec 2018 3.3 1.9% 1.5 0.9% 4.8 2.8% Dec
Slide 36: Retail Banking
Retail Banking 36 36 RM’bil Gross Loans RM’bil Customer Deposits Y-o-Y: +3.9% Y-o-Y: +4.5% 56.7 59.0 100 .0 90. 0 9.5 10.2 80. 0 70. 0 7.0 7.9 90.1 60. 0 50. 0 86.2 40.2 40.9 40. 0 30. 0 20. 0 Mar 2019 Mar 2020 Mar 2019 Mar 2020 Fixed Deposits Demand Deposits Savings Deposits Retail Market Share Ass
Slide 37: Asset Under Management and Market Positions
Asset Under Management and Market Positions 37 37 RM’bil Asset Under Management Market YTD Mar FY2020 Ranking Share Y-o-Y : +0.8% Equities Broking: 51.1 - By value 8.0% 5th 50.7 - By volume 10.9% 3rd 7.1 7.7 12.3 10.1 Debt Capital Markets: - MYR sukuk 12.6% 3rd - Total MYR bonds (Conventional 15.3%
Slide 38: Investment Banking – Notable Deals
Investment Banking – Notable Deals 38 38 M&A DCM ECM Paramount Corporation Berhad RM540.5 mil WCT Holdings Berhad Disposal of controlling equity interest in Paramount’s Pre- Issuance of RM204.5 mil via its RM1.0 bil Perpetual Sukuk Vizione Holdings Berhad Tertiary Education Group Musharakah Programm
Slide 39: Business Banking
Business Banking 39 39 RM’bil Gross Loans Customer Deposits RM’bil Y-o-Y: +3.6% Y-o-Y: +4.3% 27.1 28.1 27. 0 26. 0 25. 0 13.5 14.5 24. 0 23. 0 25.2 26.3 22. 0 13.6 13.6 21. 0 20. 0 Mar 2019 Mar 2020 Mar 2019 Mar 2020 Fixed Deposits Demand Deposits SME Market Share RM’bil Asset Quality 9.6% 9.4%* 3.2
Slide 40: Islamic Banking
Islamic Banking 40 40 PBT Gross Financing RM’mil Y-o-Y: +14.1% RM’bil Y-o-Y: +11.4% 70.0 60.0 50.0 40.0 30.0 54.4 60.6 20.0 155 177 10.0 - Mar 2019 Mar 2020 Mar 2019 Mar 2020 Market 9.4% 9.8% Share Gross Financing/ Asset Quality RM’mil Total Gross Financing (Domestic) 0.93% 0.82% 0.87% 38.1% 38.5% 0
Slide 41: RHB Singapore
RHB Singapore 41 41 SGD’mil PBT SGD’bil Loans, Deposits & Total Assets 30 21 6.5 7.9 20 1 0.1 7 10 20 0.2 8 (1) - 7.8 6.3 5.6 (1 0) 4.0 4.5 4.8 (2 0) Mar 2019 Mar 2020 (3 0) Mar 2019 Mar MarMar 2020 2019 2020 Deposits Gross Loans RHB Bank Singapore RHB Securities Singapore Total Assets (RHB Securiti
Slide 42: Overseas Loans
Overseas Loans 42 42 Mar Dec Mar RM’mil Q-o-Q Y-o-Y 2019 2019 2020 Overseas Operations 16,227 17,253 18,975 10.0% 16.9% Singapore 12,257 12,829 14,733 14.8% 20.2% Others 3,970 4,424 4,242 -4.1% 6.9% Thailand 1,581 1,829 1,483 -18.9% -6.2% Brunei 167 168 169 0.6% 1.2% Cambodia 1,843 2,113 2,348 11.1%