Slide 1: Investor Presentation FY2015 Financial Results
Investor Presentation FY2015 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 26 February 2016
Slide 2: Executive Summary
Executive Summary FY 2015 Financial Results Corporate and Strategy Update Summary and Outlook
Slide 3: Executive Summary (1/2)
Executive Summary (1/2) 1 FY 2015 pre-tax profit excluding one-off CTS expenses, at RM2.4 billion, 11.7% lower year-on-year Results generally underpinned by lower investment banking and securities market related fee 2 income in Malaysia and Singapore, lower trading income, higher impairment charges
Slide 4: Executive Summary (2/2)
Executive Summary (2/2) 6 ROE at 7.3%. Normalised ROE at 8.4% • RM2.343 billion Rights Issue completed in December 2015 7 • Proposed internal reorganisation targeted to be completed by Q1 2016 and listing of RHB Bank expected by Q2 2016 8 • Declared an interim single tier cash dividend of 12 sen per
Slide 5: RHB Banking Group Scorecard 2015
RHB Banking Group Scorecard 2015 Key Indicators Target 2015 Actual 2015 >11.5% 7.3% ROE (Exclude CTS: 8.4%) Loans Growth 10% 6.2% CASA Growth >10% 11.0% Gross Impaired <1.8% 1.88% Loans Ratio 61.3% Cost to Income Ratio <51% (Exclude CTS: 56.3%) Overseas Revenue 14.4% >13% Contribution Page | 5
Slide 6: Executive Summary
Executive Summary FY 2015 Financial Results Corporate and Strategy Update Summary and Outlook
Slide 7: Financial Results
Financial Results Year-on-Year Performance: Q-o-Q Y-o-Y Q4 Q3 FY FY ♦ Gross fund based income increased by 9.7% Change Change RM mil 2015 2015 2015 2014 on the back of 6.2% increase in gross loans % % and financing. Net Interest Income 872 844 3 3,300 3,291 - ♦ Funding and interest expense higher by
Slide 8: Key Financial Highlights
Key Financial Highlights Financial Position Financial Results Key Financial Ratios Operating Non Interest Total Gross Total Profit Before ROE N1 Income / Assets Loans Income Allowance Total Income +5% +6% -1% -4% -3.1% -2.8% 2015: RM230.7 bil 2015: RM151.4 bil 2015: RM6.2 bil 2015: RM2.7 bil N1 2015
Slide 9: Income Mix & NIM
Income Mix & NIM Non fund based affected by lower investment banking and securities market related fee, margin stabilised Income Mix 35% 32% 39% 35% 34% 31% 36% 37% 34% 41% 65% 68% 61% 65% 66% 69% 64% 63% 66% 59% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY2014 FY2015 Net Fund
Slide 10: Non Fund Based Income
Non Fund Based Income Lower investment and securities related fee, mitigated by growth in wealth management RM mil Composition FY 2014 2,294 FY2015 4% 6% (5%) 7% (7%) Fund Management & UT Fee ▲42% 67 227 (6%) Net Brokerage ▼7% - 26 337 18% (16%) Service Charges, Commission, 65% Guarantee & Commitmen
Slide 11: Operating Expenses
Operating Expenses Cost relatively well contained arising from strategic cost management RM mil Composition Exclude CTS 11% 11% FY2014 3,411 FY2015 10% 10% 20% 21% (10%) CTS ▲100% 309 309 (8%) 59% 58% Establishment Cost ▲10% 70 736 FY2014 FY2015 Administration and General Expenses Marketing Expenses
Slide 12: Allowances for Loan Impairment
Allowances for Loan Impairment Improving asset quality Increase/Decrease in Allowances for Loan Impairment RM mil 16 -46 -112 -211 263 340 206 FY2014 Increase in IA Decrease in Increase in Others Decrease in Decrease in CA FY2015 Recoveries Write Off Asset Quality Allowances for Loan Impairment & Cr
Slide 13: Asset Quality
Asset Quality Additional allowances made to build loan loss coverage Gross Impaired Loans Ratio Gross Impaired Loans Ratio (%) by Purpose Loan Loss 68.1% 66.0% 63.7% 61.1% 83.3%* Working Capital Purchase of Residential Coverage Property (%) 3.59 6.1 5.3 5.3 2.99 2.81 3.9 3.3 3.1 4.4 3.4 2.5 2.1 2011
Slide 14: Financial Position as at 31 December 2015
Financial Position as at 31 December 2015 Q-o-Q Y-o-Y Increase in total assets driven mainly by growth in Dec Sep Dec Change Change loans and financing and financial investments AFS. RM mil 2015 2015 2014 % % Growth was broad based, predominantly from purchase of residential and non-residential
Slide 15: Loans, Advances and Financing
Loans, Advances and Financing Loans growth driven mainly by Retail and Business Banking RM mil 681 276 - 16 - 1,166 2,215 875 - 1,369 - 1,708 2,715 6,397 151,386 142,486 Dec 2014 Purchase of Working Purchase of Construction Personal Use Purchase of Credit Card Purchase of Purchase of Others Dec 2015
Slide 16: Loans Profile and Market Share
Loans Profile and Market Share Gross Loans Gross Loans by Interest/ RM bil Profit Rate Sensitivity 14% 25% 300 20% 16% 11% 17% 15% 16% 13% 9% 8% 250 14% 6% Fixed Rate 14% 10% 200 9% 21% 5% 10% 8% 5% 150 0% -5% 100 142.5 151.4 Variable 121.8 -10% -15% 97.4 111.5 50 Rate -20% 0 79% 2011 2012 2013 2014
Slide 17: Loans By Type of Customers
Loans By Type of Customers Rebalancing of portfolio Composition Loans by Type of Customers RM mil 3,501 - 4,880 6% 7% 3,937 9% 11% 13% 6,342 37% 40% 36% 32% 27% 151,386 12% 12% 15% 10% 10% 142,486 Dec 2014 SME Individuals International Corporates Dec 2015 45% 43% 45% 45% 45% December 2015 22,598 68,
Slide 18: Customer Deposits
Customer Deposits Strong CASA growth RM mil FD CASA Dec 2014 157,134 -2% +11% Demand Deposits 3,229 Dec 2015: RM120,190 mil Dec 2015: RM37,929 mil Dec 2014: RM122,935 mil Dec 2014: RM34,167 mil Saving Deposits 533 CA SA Fixed Deposits - 2,745 +12% +7% Dec 2015 158,151 +1% Dec 2015: RM29,469 (23%) mi
Slide 19: Customer Deposits Profile & Market Share
Customer Deposits Profile & Market Share RM bil Customer Deposits RM bil FD & NID Maturity Structure 23% 350 23% 19% 122.9 120.2 14% 20% 108.8 105.6 300 19% 8% 13% 88.1 0.8 1.5 250 14% 2% 10% 1.0 0.4 20.3 16.6 8% -0.4% 8% 1% 1.5 18.2 12.2 200 0% -2% 14.8 150 -2% -10% 100 89.6 93.0 101.8 102.1 138.2
Slide 20: Funding
Funding Casa growth at five-fold vs industry Funding Composition CASA Composition RM bil 1% 1% 1% 1% 1% 14% 15% 2% 3% 3% 3% 3% 81.0 11% 11% 12% 12% 14% 11% 11% 11% 7% 71.0 10% 8% 9% 10% 10% 10% 9% 9% 9% 61.0 6% 9% 6% 51.0 6% 6% 5% 4% 41.0 2% 79% 77% 75% 0% 74% 73% 31.0 21.0 37.9 32.1 34.2 -5% 27.8 2
Slide 21: PBT by SBG
PBT by SBG RM mil Retail TSY Composition FY2014 2,735 5% (4%) +35% +35% 21% 16% (11%) (43%) Retail 296 2015: RM1,147 mil 2015: RM427 mil 2014: RM851 mil 2014: RM316 mil TSY 111 14% (13%) BBG CIB 30 44% GIB (29%) -9% -56% BBG - 35 2015: RM363 mil 2015: RM551 mil 2014: RM1,263 mil Corporate & Investme
Slide 22: Market Capitalisation and Dividend
Market Capitalisation and Dividend Highest cash dividend payout in 5 years N1 Market Capitalisation Gearing and Double Leverage Times 9 7.48 7.69 7.90 7.62 8 149% 136% 137% 0.8 7 134% 5.67 6 106% 120 % 5 0.54 4 20.1 19.6 17.4 0.5 19.2 3 0.39 0.39 16.5 0.36 70% 2 0.29 1 0.0 0 0.2 20% 2011 2012 2013 2
Slide 23: Capital Position
Capital Position Capital adequacy ratios remain strong RHB Bank Group RHB Bank RM bil 35. 0 16.1% 35. 0 15.4% 15.0% 15% 14.5% 15% 30. 0 11.9% RM bil 30. 0 11.6% 12.0% 11.0% 11% 11% 25. 0 11.1% 11.6% 25. 0 11.6% 20.5 10.6% 19.1 17.0 20. 0 15.9 20. 0 7% 7% 13.6 14.1 14.9 15.4 13.4 15. 0 15. 0 12.3 12.
Slide 24: Executive Summary
Executive Summary FY 2015 Financial Results Corporate and Strategy Update Summary and Outlook
Slide 25: Corporate Exercise: Key Milestones
Corporate Exercise: Key Milestones Transaction timeline 2015 2016 Feb Mar Apr Q2 1. Announcement of Proposals 1. All approvals from regulators expected to be 1. Approval from High Court for Capital Distribution on 13 Apr 2015 obtained. and Repayment. 2. Completion of Rights Issue 2. Completion of In
Slide 26: Significant progress across the 17 initiatives under IGNITE 2017
We have reframed our strategy and made significant progress across the 17 initiatives under IGNITE 2017 ♦ Tactical Cost Savings ♦ Capital Optimisation ♦ Retail • Effective cost management leading to full year • Drove capital efficiency resulting in • Retail CASA grew 5.9% vs industry cost increase c
Slide 27: Focus in 2016 on executing strategies anchoring on 3 key themes
We will remain focused in 2016 on executing our strategies anchoring on the 3 key themes Affluent Segment Strategy Tactical Cost Savings Capital Optimisation Relaunch Premier Banking with enhanced value Reduce cost through strategic sourcing, procurement Enhance capital efficiency through propositio
Slide 28: Executive Summary
Executive Summary FY 2015 Financial Results Corporate and Strategy Update Summary and Outlook
Slide 29: Economic Outlook
Economic Outlook Real GDP expected to slow down to 3.9% from 5.0% in 2015. Domestic demand will remain as the key driver of growth, driven mainly by private consumption and investment. A modest improvement in exports will benefit as well. Malaysian loans growth anticipated to moderate versus last ye
Slide 30: Summary and Concluding Remarks
Summary and Concluding Remarks FY2015 results affected by weak financial and capital market conditions, intensified deposit competition and one-off HR cost rebaseline. Additional allowances were made to build up loan loss coverage to 83% from 61% in FY2014. Continued focus on cost optimisation and p
Slide 31: RHB Banking Group Scorecard For 2016
RHB Banking Group Scorecard For 2016 Top Level Indicators Target 2016 Actual 2015 10% 7.3% ROE (Exclude CTS: 8.4%) Loans Growth 8% 6.2% CASA Growth 8% 11.0% Gross Impaired Loans ≤ 2.0% 1.88% Ratio 61.3% Cost to Income Ratio ≤ 53% (Exclude CTS: 56.3%) Overseas Profit 10% 6.0% Contribution Page | 31
Slide 32: www.rhbgroup.com
www.rhbgroup.com INVESTOR RELATIONS CONTACT: Ms Yap Choi Foong Group Chief Financial Officer +(603) 9280 2489 cfyap@rhbgroup.com Ms Teh Soh Geok Head, Group Financial Reporting +(603) 9280 2154 teh.soh.geok@rhbgroup.com This material is prepared for general circulation. Any recommendation or view co
Slide 33: Key Business Highlights
APPENDIX Key Business Highlights
Slide 34: Retail
Retail Mortgage 8.2% Personal Use 7.3% 7.7% 9.1% 9.5% 50.0 7.0% 7.0% 8.9% 40.0 7.4% 7.8% 30.0 5.0% 37.9 20.0 31.5 7.2 7.7 8.3 10.0 20.6 22.2 25.5 5.0 5.8 - 0.0% 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Mortgage Loans (RM bil) Market Share Personal Use (RM bil) Market Share Auto Finance Cred
Slide 35: CIB
CIB FY 2015 FY 2014 FY 2013 Market Share Ranking Market Share Ranking Market Share Ranking Debt Capital Markets - MYR sukuk* 20.61% 2 12.4% 4 17.6% 4 - conventional & 17.64% 4 11.5% 4 16.3% 4 Islamic bonds Mergers & Acquisitions - by value 5.65% 11 22.4% 1 11.8% 3 - by deal count 21 deals 1 27 deals
Slide 36: Equities, Futures & Asset Management
Equities, Futures & Asset Management Total AUM FY 2015 FY 2014 RM bil 15.0% Equities Market Market Ranking Ranking 12.1% 12.3% (by value) Share Share 10.0% 10.0% 52.0 Malaysia 10.0% 48.5 - By value 8.6% 5th 9.5% 3rd 8.2 5.9 - By volume 12.4% 3rd 13.7% 2nd 5.0% th th 2.6% 39.3 Singapore 4.3% 10 5.4%
Slide 37: Business Banking and SME
Business Banking and SME Gross Loans Customer Deposits RM bil RM bil 25. 0 35.0 17.4% 14.1% 12.8% 20. 0% 11.3% 9.3% 9.3% 8.8% 15. 0% 8.8% 30.0 20. 0 10. 0% 5.3% -0.4% 25.0 5.0 % 0.0 % 20.9 22.1 15. 0 20.0 19.2 -5.0% -10.0% 15.0 16.4 11.3 12.5 19.8 15.0 10.8 10. 0 17.8 9.4 -15.0% 14.5 15.8 -20.0% 8.9
Slide 38: Islamic Financial Performance
Islamic Financial Performance PBT Gross Financing RM mil RM bil 8.0% 400 6.9% 7.6% 350 6.5% 6.6% 300 250 200 349 150 304 31.1 100 209 218 25.5 211 18.7 50 13.1 16.3 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Growth 133% -1% 5% 39% 15% Growth 44% 25% 15% 36% 22% Gross Financing Market Share
Slide 39: RHB Singapore
RHB Singapore PBT Loans, Deposits & Total Assets SGD mil 74 SGD bil 75 65 7.7 7.5 32 6.1 0.3 0.3 55 42 39 34 5.2 0.9 0.8 45 4.5 4.9 35 9 4 4.1 4.1 3.4 3.6 2.8 7.4 7.2 25 46 2.5 39 33 35 42 1.7 2.3 2.1 5.2 15 4.4 5 (5 ) (12) 2011 2012 2013 2014 2015 Deposits Gross Loans (1 5) 2011 2012 2013 2014 2015