Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — Q1 2021 Earnings Presentation
43 slides from Rhb Bank Bhd's earnings presentation, May 27, 2021
Slide 1: RHB Bank Berhad Analyst Presentation 1st Quarter 2021 Financial Results
RHB BANK BERHAD Analyst Presentation 1st Quarter 2021 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 27 May 2021
Slide 2: Executive Summary Q1 2021 Financial Results Strategy Update
1. Executive Summary 2. Q1 2021 Financial Results 3. Strategy Update 4. Sustainability Update 5. Summary and Outlook
Slide 3: Executive Summary
Executive Summary
Slide 4: Repayment Assistance Update (1/3)
Repayment Assistance Update (1/3) 4 4 Repayment assistance (RA) updates as of March 2021: Group Retail Banking Approved RA RM’bil % of Outstanding The increase in Retail RA is mainly led by mortgage and Loan Balance No of 16.5 RM bil % unsecured business accounts RA from B40 makes up 29% of to
Slide 5: Repayment Assistance Update (2/3)
Repayment Assistance Update (2/3) 5 5 Current outstanding RA accounts under Retail stood at RM8.3 billion as at end-March 2021, a reduction of RM8.2 billion (49.8%) from the approved amount of RM16.5 billion due to the expiry of certain accounts under RA Breakdown of the outstanding accounts: Ou
Slide 6: Repayment Assistance Update (3/3)
Repayment Assistance Update (3/3) 6 6 70% 91% Majority of those under % of RA with first request Outstanding Non % of RA with 2 or more requests Retail N1 RA are first Retail N1 Non Retail excluding Corporate time (Corporate RA = 100% first time applicants request) 30% 9% % based on amount outstandi
Slide 7: Highlights of Q1 2021 Performance (1/2)
7 Highlights of Q1 2021 Performance (1/2) 7 Year-on-year Total income grew 11.2% to RM1,923.3 million, supported by growth in net fund based and non-fund based income. Excluding both ML of RM37.3 million and unwinding of ML of RM33.4 million (collectively ‘net ML impact’), total income grew 11.5%
Slide 8: Highlights of Q1 2021 Performance (2/2)
8 Highlights of Q1 2021 Performance (2/2) 8 Gross loans and financing grew 6.8% Y-o-Y to RM188.2 billion attributed to growth in mortgage, auto finance, SME and Singapore. Domestic loans expanded 6.0% Y-o-Y, exceeding industry growth Assets Total customer deposits increased 12.4% Y-o-Y to RM218.
Slide 9: RHB Banking Group Scorecard for FY2021
RHB Banking Group Scorecard for FY2021 9 9 Top Level Indicators Target FY2021 Actual Q1 2021 ROE 9.0% 9.7% [9.8%] N1 Annualised Loans Growth 4%-5% 4.4% CASA Composition 30.0% 30.6% Gross Impaired Loans Ratio <2.00% 1.66% N1 Cost-to-Income Ratio <47.5% 46.0% [45.9%] N1 Excluding net ML impact
Slide 10: Q1 2021 Financial Results
Q1 2021 Financial Results
Slide 11: Strong Q1 2021 performance supported by higher income
Strong Q1 2021 performance supported by higher income; Positive JAWS led to improvement in 1111 CIR and ROE; Slight uptick in credit charge ratio Financial Position Financial Results Key Financial Ratios Total Gross Total Operating Profit Return on Non-Fund Based/ Assets Loan Income Before Allowance
Slide 12: Q1 profit increased 13.9% Y-o-Y on higher income
Q1 profit increased 13.9% Y-o-Y on higher income and 48.3% Q-o-Q mainly due to lower ECL 1212 Q1 Q4 Q1 RM’ mil Q-o-Q Y-o-Y 2020 2020 2021 Total Net Fund Based Income (A) 1,258.7 1,531.4 1,417.0 -7.5% 12.6% of which : Unwinding of Modification Loss - 170.2 33.4 -80.4% - Total Non-Fund Based Income (B
Slide 13: Q1 2021 underlying performance showed improvement
Q1 2021 underlying performance showed improvement; Y-o-Y led by growth in total income, 13 Q-o-Q higher primarily from lower ECL 13 Q1 Q4 Q1 RM’ mil Q-o-Q Y-o-Y 2020 2020 2021 Total Income (A) 1,729.2 2,068.0 1,923.3 -7.0% 11.2% Less: Unwinding of Modification Loss (B) - -170.2 -33.4 -80.4% - Add ba
Slide 14: Net fund based income grew 9.9% Y-o-Y
Net fund based income grew 9.9% Y-o-Y mainly due to proactive funding cost management; NIM 1414 increased marginally to 2.17% from 2.15% in Q4 2020 Y-o-Y: -15.1% Y-o-Y: +9.9% RM’bil Q-o-Q: +1.6% Y-o-Y: -36.4% 2.74 2.35 2.33 1.48 1.36 1.38 1.26 0.99 0.94 N1 N1 Q1 2020 Q4 2020 Q1 2021 Fund Based Incom
Slide 15: Non-fund based income grew 15.5% Y-o-Y
Non-fund based income grew 15.5% Y-o-Y mostly from higher brokerage and wealth management 15 income; partly offset by lower net trading and investment income due to movement in bond yield 15 Y-o-Y: +15.5% RM’mil Q-o-Q: -3.3% 562.2 543.6 470.5 23.6 21.0 Others 19.2 165.4 103.3 Treasury Income 126.7 5
Slide 16: Operating expenses grew by 8.3% Y-o-Y
Operating expenses grew by 8.3% Y-o-Y mainly from higher personnel costs; With positive JAWS, 1616 CIR improved to 46.0% Q1 Q4 Q1 RM’ mil Q-o-Q Y-o-Y 2020 2020 2021 Personnel Costs 503.8 499.8 552.3 10.5% 9.6% Establishment Costs 184.4 196.1 187.5 -4.4% 1.7% of which: IT Expenses 63.5 74.9 68.7 -8.3
Slide 17: Loans grew 6.8% Y-o-Y
Loans grew 6.8% Y-o-Y led mainly by mortgage, auto finance, SME and Singapore; 1717 Domestic loans grew 6.0% Y-o-Y, exceeding industry growth Mar Dec Mar RM’mil YTD Y-o-Y 2020 2020 2021 GROUP RETAIL BANKING 90,076 94,973 95,728 0.8% 6.3% Mortgage 59,517 63,083 64,264 1.9% 8.0% Commercial Property Fi
Slide 18: Total deposits grew 12.4% Y-o-Y
Total deposits grew 12.4% Y-o-Y mainly attributed to growth in CASA and FD; CASA ratio improved 1818 Y-o-Y to 30.6% Customer Deposits CASA by Segment RM’bil Y-o-Y : +12.4% YTD: +7.1% 218.0 Mar Dec Mar 194.0 203.5 RM’bil YTD Y-o-Y 2020 2020 2021 66.8 53.2 62.8 Retail Banking 18.0 20.7 22.5 8.3% 24.5%
Slide 19: Credit charge ratio of 0.39% in Q1 2021
Credit charge ratio of 0.39% in Q1 2021 in line with expectations; continued to set aside ECL 19 provisions for COVID-19 impact; GIL ratio improved further Allowances for Loan Impairment Gross Impaired Loans 900 RM’mil 1.18% 7.42% 7.66% 7.45% 11.20% 10.45% 6,000 2.20% 1.2 0% 800 700 2.00% 5,500 549
Slide 20: Uptick in GIL ratio for mortgage, unsecured business and GBB
Uptick in GIL ratio for mortgage, unsecured business and GBB; Lower GIL for Corporate due to 20 write-offs; Continued to focus on intensive recovery efforts 20 Retail Banking Business Banking Wholesale Banking Mortgage GBB Corporate 3.16% 10.60% 8.24% 18.70% 15.53% 15.54% 6.17% 10.36% 10.55% 1.40% 2
Slide 21: Profit grew in most business segments
Profit grew in most business segments – Retail, CBIB, Treasury and Other Overseas; GBB and 2121 Singapore impacted by higher ECL; Insurance weighed down by losses on MTM on securities Revenue 5.3% 655 690 11.2% RM’mil 50.6% 0.6% 383 426 379 8.0% 296 294 10.2% 34.3% 252 48 52 57 102 112 37 Retail GBB
Slide 22: Capital position remained strong for the Group
Capital position remained strong for the Group and key banking subsidiaries 22 22 RHB Bank Group RHB Bank 20. 0% 20. 0% 19. 0% 18. 0% 18. 0% 18.4% 17.7% 17. 0% 16. 0% 16.9% 16.5% 16. 0% 15. 0% 16.2% 15.6% 14. 0% 16.2% 15.6% 14. 0% 13. 0% 12. 0% 11. 0% 10. 0% 12. 0% 10. 0% 14.6% 14.3% 14.6% 14.3% 9.0
Slide 23: Strategy Update
Strategy Update
Slide 24: FIT22 Key Highlights (1/2)
FIT22 Key Highlights (1/2) 24 24 • Premier Banking customers increased to 81.2k (+2.3% from Dec 2020), of which 33.7% are SME owners Affluent • Total AUM of Premier customers grew to RM41.7 bil (+4.5% from Dec 2020) • Affluent fee income grew to RM82.1 mil (+59.4% from Mar 2020) • Deposits increased
Slide 25: FIT22 Key Highlights (2/2)
FIT22 Key Highlights (2/2) 25 25 Analytics • Continued to drive business performance via analytics with RM37.8 mil of benefits realised as at Q1 2021 and Big • Increased analytics use cases for 2021, e.g. identifying good customers for flexible lending offers, dormant Data customers identification &
Slide 26: Sustainability Update
Sustainability Update
Slide 27: Group Sustainability Framework
Group Sustainability Framework 27 Highlights for Q1 2021 RM5 billion Green Financing Commitment by 2025: RM3.1 billion extended as at Mar-21 • Of which, 17.9% is for renewable energy projects ESG Risk Management • ESG risk-related activities identified under Prohibited Credits - implemented in Malay
Slide 28: Summary & Outlook
Summary & Outlook
Slide 29: Outlook for FY2021
Outlook for FY2021 29 29 GDP contraction narrowed to -0.5% in Q1 2021 (Q4 2020: -3.4%) underpinned by better exports performance and improvement in domestic demand Economic Government’s stimulus package and roll out of vaccination programme are expected to support economic Outlook recovery Ind
Slide 30: Concluding Remarks
Concluding Remarks 30 30 We registered a record quarterly results for Q1 2021, despite operating in a challenging business environment, with strong topline growth In view of gradual economic recovery, we expect our performance in FY2021 to be better than FY2020 Continue to put significant impo
Slide 31: 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 32: Appendix
Appendix
Slide 33: Key Financial Data
Key Financial Data 33 33 Financial Data FY2017 FY2018 FY2019 FY2020 Q1 2021 RM’mil Income Statement Total Income 6,384 6,806 7,058 7,186 1,923 Pre-Provisioning Operating Profit 3,200 3,448 3,670 3,799 1,038 Profit Before Tax 2,558 3,119 3,394 2,644 864 Net Profit 1,950 2,305 2,482 2,033 650 Balance
Slide 34: Key Financial Ratios
Key Financial Ratios 34 34 Financial Ratios FY2017 FY2018 FY2019 FY2020 Q1 2021 Profitability Return on Equity 9.1% 10.3% 10.3% 7.7% 9.7% Net Interest Margin * 2.18% 2.24% 2.12% 2.06% 2.17% Cost to Income Ratio 49.9% 49.3% 48.0% 47.1% 46.0% Asset Quality Gross Impaired Loan Ratio 2.23% 2.06% 1.97% 1
Slide 35: Segmental Performance Q1 2021
Segmental Performance Q1 2021 35 35 Fund Based Income 1.9% 567 578 75.2% RM’mil 1.2% 13.1% 308 250 247 5.0% 213 185 176 119 125 Retail GBB CBIB Treasury International Non-Fund Based Income 41.8% RM’mil 27.2% 240 2.7% 26.7% 170 6.1% 112 46 48 31 40 88 76 72 Retail GBB CBIB Treasury International Mar
Slide 36: O&G Exposure (Loans + Bonds)
O&G Exposure (Loans + Bonds) 36 36 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 2021 3.2 1.7% 1.1 0.6% 4.3 2.3% Dec 2020 2.8 1.5% 1.0 0.5% 3.8 2.0% Dec 2019 2.5 1.4% 1.6 1.0% 4.2 2.4% Dec
Slide 37: Retail Banking
Retail Banking 37 37 RM’bil Gross Loans RM’bil Customer Deposits Y-o-Y: +6.3% Y-o-Y: +17.1% 69.0 100 .0 59.0 90.0 12.7 80.0 10.2 9.7 70.0 7.9 60.0 90.1 95.7 50.0 40.0 40.9 46.6 30.0 20.0 Mar 2020 Mar 2021 Mar 2020 Mar 2021 Fixed Deposits Demand Deposits Savings Deposits Retail Market Share * Asset Q
Slide 38: Asset Under Management and Market Positions
Asset Under Management and Market Positions 38 38 RM’bil Asset Under Management Market YTD Mar 2021 Ranking Share Y-o-Y : +11.5% Equities Broking: 57.0 - By value 9.6% 4th 51.1 - By volume 11.0% 3rd 8.7 7.7 9.2 10.1 Debt Capital Markets: - MYR sukuk 14.4% 3rd - Total MYR bonds (Conventional 13.7% 3r
Slide 39: Investment Banking – Notable Deals
Investment Banking – Notable Deals 39 39 CF/ECM DCM M&A AirAsia Group Berhad FGV Holdings Berhad Tranche 1 : RM249.6 mil Private Placement Petroleum Sarawak Exploration & Production Sdn Bhd RM2.35 bil Principal Adviser & Joint Placement Agent First issuance of RM1.5 bil via its Unconditional mandato
Slide 40: Business Banking
Business Banking 40 40 RM’bil Gross Loans Customer Deposits RM’bil Y-o-Y: +20.9% Y-o-Y: +12.2% 33.5 30.0 27.7 29.0 28.0 27.0 18.2 26.0 14.3 25.0 24.0 29.4 23.0 22.0 26.2 13.5 15.3 21.0 20.0 Mar 2020 Mar 2021 Mar 2020 Mar 2021 Fixed Deposits Demand Deposits SME Market Share * RM’bil Asset Quality 9.7
Slide 41: Islamic Banking
Islamic Banking 41 41 PBT Gross Financing RM’mil RM’bil Y-o-Y: +13.7% 80.0 Y-o-Y: +44.2% 70.0 60.0 50.0 40.0 30.0 60.6 68.9 20.0 255 10.0 177 - Mar 2020 Mar 2021 Mar 2020 Mar 2021 Market 9.7% 10.1% Share Gross Financing/ Asset Quality Total Gross Financing (Domestic) RM’mil 41.3% 0.78% 40.6% 40.5% 0
Slide 42: RHB Bank Singapore
RHB Bank Singapore 42 42 SGD’mil PBT * Loans, Deposits & Total Assets SGD’bil 7.0 6.0 5.0 4.0 3.0 5.8 Y-o-Y: -96.3% 7.8 8.7 2.0 4.8 5.6 5.5 5.9 1.0 0.2 - MarMar 2020 Mar Mar 2021 Mar 2020 Mar 2021 2020 2021 * PBT at Entity level, excluding consol adjustments Gross Loans Deposits Total Assets Gross I
Slide 43: Overseas Loans
Overseas Loans 43 43 Mar Dec Mar RM’mil YTD Y-o-Y 2020 2020 2021 Overseas Operations 18,975 20,017 21,579 7.8% 13.7% Singapore 14,733 15,568 17,051 9.5% 15.7% Others 4,242 4,449 4,528 1.8% 6.7% Cambodia 2,348 2,353 2,477 5.3% 5.5% Thailand 1,483 1,574 1,557 -1.1% 5.0% Indonesia 34 189 148 -21.7% 335