Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — FY2023 Earnings Presentation
39 slides from Rhb Bank Bhd's earnings presentation, Feb 27, 2024
Slide 1: RHB Bank Berhad Analysts Presentation FY2023
RHB BANK BERHAD Analysts Presentation FY2023 Financial Results Mohd Rashid Mohamad Group Managing Director/Group Chief Executive Officer RHB Banking Group 27 February 2024
Slide 2: Agenda
1. Executive Summary 2. FY2023 Financial Results 3. Summary
Slide 3: Executive Summary
Executive Summary
Slide 4: FY2023: Net profit growth of 4.8% with decent ROE at 9.5%
4 FY2023: Net profit growth of 4.8% with decent ROE at 9.5% 4 Active funding cost / liability management via the FX, resulting in NIM uplift by 11 bps and cushioning the impact of margin compression Strong non-fund based income growth contributed by higher net gain on forex and derivatives, net trad
Slide 5: Managing asset quality is our priority
5 Managing asset quality is our priority 5 Higher GIL in domestic 1 is due to SME and specific major accounts Higher GIL from international businesses Despite lower LLC, RHB maintains its 1 prudent credit underwriting policy is mainly related to hospitality-related sectors & SME as most impaired acc
Slide 6: Consistent dividend payout to reward shareholders
Consistent dividend payout to reward shareholders with dividend yield > 7%, with continuous 6 optimisation of capital utilisation for better returns 6 Dividend Per Share (sen) Maintained robust capital positions Consistent dividend payout to reward shareholders 62.9% 63.2% 61.1% 50.1% 60.0% 34.8% Th
Slide 7: FY2023: Financial Highlights
7 FY2023: Financial Highlights 7 Net profit up 4.8% Y-o-Y Total Assets growth: 5.8% Group: CET1 16.7% to RM2,806.2 million Loans growth: 4.8% TCR 19.4% ▪ Non-fund based income up 30.3% to RM2.3 billion partially offsetting impact of lower net fund based income ▪ Opex up slightly 2.3% to RM3.7 billio
Slide 8: TWP24 strategy: Key Highlights
TWP24 strategy: Key Highlights 8 8 FY2023 Achievements +6.0% Retail Loans +8.6% Mortgage Loans +11.0% Reflex Customers FY2023 vs. FY2022 FY2023 vs. FY2022 FY2023 (166k) vs. FY2022 Be Everyone’s 9.5% Primary Bank +4.9% SME Loans +7.8% Auto Financing +49.0% Merchants Return on Equity (ROE) FY2023 vs.
Slide 9: FY2024: Outlook
9 FY2024: Outlook 9 1 ▪ Net fund based income – OPR is expected to be conducive and supportive of economic growth ▪ NIM expected to continue facing headwinds with emphasis on stabilisation via funding cost optimisation, active Income & liability management and disciplined pricing strategy Opex ▪ Non
Slide 10: FY2024: Key initiatives the Group is undertaking
10 FY2024: There will be several key initiatives that the Group is currently undertaking 10 BANCASSURANCE EDUCATION SUSTAINABILITY RHB-BOOST DIGITAL STRATEGY PARTNERSHIP PARTNERSHIP BANK LAUNCH REFINEMENT RENEWAL EXPANSION • Boost Bank received • RHB’s current banca • Through RHB’s • RHB is increasi
Slide 11: RHB Banking Group Scorecard for FY2023 & FY2024
RHB Banking Group Scorecard for FY2023 & FY2024 11 11 Top Level Indicators Target FY2023 Actual FY2023 Target FY2024 ROE ≥10.0% 9.5% x ≥10.0% Loans Growth 5.0% - 5.5% 4.8% x ≥4.5% CASA Composition 27% - 28% 27.9% √ ≥28.0% Gross Impaired Loans Ratio 1.70% - 1.80% 1.74% √ ≤1.75% Cost-to-Income Ratio 4
Slide 12: FY2023 Financial Results
FY2023 Financial Results
Slide 13: FY'23 profit impacted by higher funding costs
FY’23 profit impacted by higher funding costs but partly offset by growth in non-fund based 1313 income; sustained assets growth despite the decline in asset quality ratios Financial Results Profitability Ratios Total Operating Profit Profit Net Profit Return on Cost-to-Income Non-Fund Based/ Income
Slide 14: Y-o-Y results impacted by lower net fund based income and higher ECL
Y-o-Y results impacted by lower net fund based income and higher ECL, with contained opex 1414 growth Q4 Q3 Q4 RM’ mil Q-o-Q Y-o-Y FY2022 FY2023 Y-o-Y 2022 2023 2023 Net Fund Based Income 1,717.0 1,387.7 1,343.6 -3.2% -21.7% 6,379.5 5,450.5 -14.6% Non-Fund Based Income 522.8 571.5 680.4 19.1% 30.1%
Slide 15: Net fund based income growth moderated; NIM contracted to 1.82%
Net fund based income growth moderated by higher funding costs under challenging market 1515 conditions; NIM contracted to 1.82% Y-o-Y: +9.3% Y-o-Y: +25.7% RM’bil Y-o-Y: -41.0% Y-o-Y: -77.3% Y-o-Y: -21.7% Y-o-Y: -14.6% Q-o-Q: -3.2% 14.26 3.64 3.72 11.35 Fund Based Income 3.40 8.81 2.38 Fund Based Ex
Slide 16: Non-fund based income growth
Non-fund based income growth driven by higher net gain on forex and derivatives, net trading 16 and investment income, and fee income Y-o-Y: +30.1% Y-o-Y: +30.3% RM’mil Q-o-Q: +19.1% 2,319.9 680.4 1,780.7 35.3 571.5 8.3 Others 522.8 86.9 12.5 1,194.3 Treasury Income 24.6 361.9 613.4 Net Income from
Slide 17: Continued discipline in managing opex
Continued discipline in managing opex with growth contained at 2.3% Y-o-Y focusing on IT 1717 enhancements; CIR stood at 47.5% in FY’23 Q4 Q3 Q4 RM’ mil Q-o-Q Y-o-Y FY2022 FY2023 Y-o-Y 2022 2023 2023 Personnel Expenses 575.5 564.0 566.8 0.5% -1.5% 2,184.3 2,215.2 1.4% Establishment Expenses 215.6 20
Slide 18: Loans growth led mainly by Singapore and Group Community Banking
Loans growth led mainly by Singapore and Group Community Banking (especially mortgage and 1818 SME); Domestic loans growth moderated by Corporate’s repayments Dec Sep Dec RM’bil Q-o-Q Y-o-Y 2022 2023 2023 GROUP COMMUNITY BANKING 133.2 138.5 140.9 1.7% 5.8% Retail 106.8 111.1 113.3 1.9% 6.0% Mortgage
Slide 19: Deposits growth attributed to higher FD and CASA
Deposits growth attributed to higher FD and CASA; CASA composition improved Q-o-Q to 27.9% 1919 Customer Deposits CASA by Segment RM’bil Y-o-Y: +7.9% Dec Sep Dec RM’bil Q-o-Q Y-o-Y Q-o-Q: +3.8% 2022 2023 2023 GROUP COMMUNITY BANKING 40.5 39.1 40.0 2.3% -1.1% 236.1 245.1 Retail 22.0 21.1 21.0 -0.9% -
Slide 20: FY'23 credit cost inched up to 16 bps
FY’23 credit cost inched up to 16 bps on the back of rising ECL for overseas but impact mitigated 20 by writeback of Covid-related overlays 1,00 0 1.5 0% 800 1.5 0% 700 Allowances for Losses on Loans 1.0 0% 800 1.0 0% RM’mil 600 500 0.30% 0.42% 0.5 0% 0.15% 0.16% 0.5 0% 600 400 0.10% 0.0 0% 0.0 0% 3
Slide 21: GIL ratio at 1.74%; LLC incl. Regulatory Reserve at 106.2%
GIL ratio at 1.74%; LLC incl. Regulatory Reserve is healthy at 106.2%, while LLC excl. Regulatory 21 Reserve declined slightly to 71.7% Q-o-Q with good collateral coverage for impaired loans 600000.00% 2.10% 550000.00% Gross Impaired Loans 2.00% 500000.00% 5.47% 5.71% 5.55% 5.20% 5.21% 1.90% 450000.
Slide 22: GIL improved Q-o-Q across most domestic segments
GIL improved Q-o-Q across most domestic segments due to recoveries and write-offs; challenges 22 in overseas operations Group Community Banking Mortgage Unsecured Auto Finance SME 3.68% 4.11% 3.98% 8.27% 7.96% 7.61% 5.47% 5.72% 5.46% 12.21% 12.29% 12.66% 1.40% 950 100 3.40% 0.93% 0.95% 1.20% 1.46% 0
Slide 23: Segment profit performance: GCB, GWB, GIB, Insurance
GCB’s profit growth contributed by higher income and lower ECL arising from sustainable growth of assets; GWB aided by ECL writeback; GIB recorded high assets growth in Singapore but muted 2323 profitability due to higher ECL; Insurance led by higher net trading and investment income Group Community
Slide 24: Capital position remained robust
Capital position remained robust for the Group and key banking subsidiaries 24 24 RHB Bank Group RHB Bank 20. 0% 20. 0% 19. 0% 18. 0% 19.3% 19.4% 18. 0% 17.7% 18.2% 17. 0% 16. 0% 16. 0% 16.9% 16.7% 16.9% 16.7% 15. 0% 14. 0% 15.1% 15.2% 15.1% 15.2% 14. 0% 13. 0% 12. 0% 12. 0% 11. 0% 10. 0% 10. 0% 9.0
Slide 25: Summary
Summary
Slide 26: Concluding Remarks
Concluding Remarks 26 26 ▪ FY2023 performance remained resilient amidst a challenging operating environment ▪ The Group’s immediate focus areas will be: i. optimising cost of funds through liability management initiatives and realisation of CASA balances through various projects such as MoHE and Mul
Slide 27: 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 28: Appendix
Appendix
Slide 29: Key Financial Data
Key Financial Data 29 29 Financial Data FY2019 FY2020 FY2021 FY2022 FY2023 RM’mil Income Statement Total Income 7,058 7,186 7,789 8,160 7,770 Operating Profit Before Allowances 3,670 3,799 4,266 4,554 4,081 Profit Before Tax 3,394 2,644 3,529 4,133 3,753 Net Profit 2,482 2,033 2,618 2,678 2,806 Bala
Slide 30: Key Financial Ratios
Key Financial Ratios 30 30 Financial Ratios FY2019 FY2020 FY2021 FY2022 FY2023 Profitability Return on Equity 10.3% 7.7% 9.6% 9.6% 9.5% Net Interest Margin 2.12% 2.13% 2.20% 2.24% 1.82% Cost to Income Ratio 48.0% 47.1% 45.2% 44.2% 47.5% Asset Quality Gross Impaired Loan Ratio 1.97% 1.71% 1.49% 1.55%
Slide 31: Segmental Performance
Segmental Performance 31 Group Community Banking Group Wholesale Banking FY2022: RM3,514.5 mil FY2022: RM2,096.9 mil 3.3% 36.3% FY2023: RM3,631.0 mil FY2023: RM1,334.9 mil 0.4% Net Fund 2,440 2,430 11.7% 13.6% 51.2% 3.2% Based Income 1,075 1,201 1,270 827 715 620 675 697 Retail SME CBIB Treasury Int
Slide 32: O&G Exposure (Loans + Bonds)
O&G Exposure (Loans + Bonds) 32 32 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 Dec 2023 2.0 0.9% 1.2 0.6% 3.3 1.5% Dec 2022 2.2 1.0% 1.2 0.6% 3.4 1.6% Dec 2021 2.3 1.2% 1.4 0.7% 3.7 1.9% Dec
Slide 33: Retail Banking
Retail Banking 33 33 RM’bil Gross Loans RM’bil Customer Deposits Y-o-Y: +6.0% Y-o-Y: +12.9% 100 .0 71.5 80.8 80.0 11.6 12.4 9.3 60.0 106.8 113.3 9.6 59.8 40.0 20.0 49.6 - Dec 2022 Dec 2023 Dec 2022 Dec 2023 Fixed Deposits Demand Deposits Savings Deposits Retail Market Share * Asset Quality RM’bil 9.
Slide 34: SME
SME 34 34 Gross Loans Customer Deposits RM’bil RM’bil Y-o-Y: +11.9% Y-o-Y: +4.9% 30.0 25.0 30.6 34.2 20.0 18.5 19.1 27.6 15.0 10.0 26.3 5.0 12.2 15.2 - Dec 2022 Dec 2023 Dec 2022 Dec 2023 Fixed Deposits Demand Deposits SME Market Share * RM’bil Asset Quality 3.40% 3.08% 3.20% 2.98% 2.99% 9.3% 9.2% 9
Slide 35: Asset Under Management and Market Positions
Asset Under Management and Market Positions 35 35 RM’bil Asset Under Management Market FY2023 Ranking Share Y-o-Y : +11.9% Equities Broking: - By value 6.8% 5th 49.9 - By volume 8.2% 4th 44.6 8.3 6.6 Debt Capital Markets: 10.2 9.1 - MYR sukuk 17.2% 3rd - Total MYR bonds (Conventional 19.8% 3rd & Isl
Slide 36: Investment Banking – Notable Deals
Investment Banking – Notable Deals 36 36 CF/ECM DCM M&A Caring Pharmacy Group Bhd Sarawak Petchem Sdn Bhd RM900.0 mil MST Golf Group Berhad RM4.0 bil issuance under its Sukuk programme and Proposed Disposal of 100% equity stake by 7-Eleven Malaysia RM184.7 mil IPO USD380.0 mil Syndicated Term Loan H
Slide 37: Islamic Banking
Islamic Banking 37 37 PBT Gross Financing RM’mil RM’bil Y-o-Y: -1.0% Y-o-Y: +2.8% 90.0 80.0 70.0 60.0 50.0 40.0 30.0 81.7 84.0 1,139.4 1,127.5 20.0 10.0 - Dec 2022 Dec 2023 FY2022 FY2023 Market 9.9% 9.5% Share Gross Financing/ Asset Quality Total Gross Financing (Domestic) RM’bil 1.38% 1.41% 1.45% 4
Slide 38: RHB Bank Singapore
RHB Bank Singapore 38 38 SGD’mil PBT Loans, Deposits & Total Assets SGD’bil Y-o-Y: -47.7% 120 .0 100 .0 80.0 60.0 12.5 96.5 10.4 9.4 40.0 7.0 7.3 7.8 20.0 50.5 - FY2022 FY2023 DecDec 2022 Dec Dec 2023 2022 2023 Gross Loans Deposits Total Assets Gross Impaired Loans Ratio Credit Charge Ratio 0.08% 0.
Slide 39: Overseas Loans
Overseas Loans 39 39 Dec Sep Dec RM’bil Q-o-Q Y-o-Y 2022 2023 2023 Overseas Operations 28.8 32.9 32.8 -0.5% 13.8% Singapore 23.1 27.0 27.1 0.6% 17.5% Cambodia 3.3 3.7 3.5 -4.0% 5.2% Others* 2.4 2.3 2.1 -8.3% -9.9% of which: Thailand 2.0 1.9 1.7 -10.9% -15.1% Brunei 0.2 0.2 0.2 1.9% 11.3% Indonesia 0