Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — Q1 2022 Earnings Presentation
44 slides from Rhb Bank Bhd's earnings presentation, May 30, 2022
Slide 1: RHB Bank Berhad Analysts Presentation 1st Quarter 2022 Financial Results
RHB BANK BERHAD Analysts Presentation 1st Quarter 2022 Financial Results Mohd Rashid Mohamad Group Managing Director / Group Chief Executive Officer RHB Banking Group 30 May 2022
Slide 2: Agenda
1. Executive Summary 2. Q1 2022 Financial Results 3. Strategy Update 4. Sustainability Update 5. Summary and Outlook
Slide 3: Executive Summary
Executive Summary
Slide 4: Highlights of Q1 2022 Performance (1/2)
4 Highlights of Q1 2022 Performance (1/2) 4 Q1 2022 (Year-on-year) Net fund based income grew by 3.8% Y-o-Y to RM1,470.7 million from higher gross fund income Non-fund based income decreased 20.3% Y-o-Y to RM432.7 million due to lower fee income and net trading and investment income, offset by h
Slide 5: Highlights of Q1 2022 Performance (2/2)
5 Highlights of Q1 2022 Performance (2/2) 5 Gross loans and financing Expanded 1.4% Q-o-Q to RM201.3 billion attributed mainly to growth in mortgage, SME and Singapore (Domestic loans growth Q-o-Q: 1.0%) Expanded 7.0% Y-o-Y attributed mainly to growth in mortgage, auto finance, SME, Corporate
Slide 6: RHB Banking Group Scorecard for FY2022
RHB Banking Group Scorecard for FY2022 6 6 Top Level Indicators Target FY2022 Actual Q1 2022 Achieved Target N1 N1 ROE 8.5% [10.0%] 8.8% [9.9%] √ Annualised Loans Growth 4%-5% 5.7% √ CASA Composition 30.0% 29.0% x Gross Impaired Loans Ratio ≤1.70% 1.50% √ Cost-to-Income Ratio ≤45.0% 45.1% x N1 Norma
Slide 7: Repayment Assistance Update (1/2)
Repayment Assistance Update (1/2) 7 7 Domestic outstanding RA has further reduced from 12% as at 31st Jan 2022 to 5% as at 30th Apr 2022 For Retail portfolio, total outstanding deferment was 0.3% of total Retail portfolio and about 99% of deferment accounts have expired as at end-Apr 2022 Cumu
Slide 8: Repayment Assistance Update (2/2)
Repayment Assistance Update (2/2) 8 8 Analysis on Total Loans by Stage 2 and 3 Stage 2 loans for most segments showed improvement between December 2021 and April 2022 Slight uptick in Stage 3 loans for SME and Corporate Retail SME 5.6% 15.5% 16.4% 14.8% 5.4% 5.2% 0.7% 0.7% 0.7% 2.7% 2.8% 3.0% De
Slide 9: Q1 2022 Financial Results
Q1 2022 Financial Results
Slide 10: Q1 2022 results impacted by lower non-fund based income
Q1 2022 results impacted by lower non-fund based income; Maintained positive JAWS with 1010 improved CIR; Slight uptick in GIL and Stage 2 ratios N1 N1 Financial Results Profitability Ratios Total Operating Profit Profit Net Profit to Return on Cost-to-Income Non-Fund Based/ Income Before Allowances
Slide 11: Q1 2022 profit declined 7.7% Y-o-Y
Q1 2022 profit declined 7.7% Y-o-Y on lower non-fund based income and 4.9% Q-o-Q due to lower 1111 net fund based income and higher ECL Q1 Q4 Q1 RM’ mil Q-o-Q Y-o-Y 2021 2021 2022 Net Fund Based Income 1,417.0 1,533.9 1,470.7 -4.1% 3.8% Non-Fund Based Income 543.2 421.0 432.7 2.8% -20.3% Modificatio
Slide 12: Underlying Q1 2022 performance excluding prosperity tax impact
Excluding prosperity tax impact, underlying Q1 2022 performance dipped marginally from lower 12 non-fund based income 12 Q1 Q4 Q1 RM’ mil Q-o-Q Y-o-Y 2021 2021 2022 Total Income 1,922.9 1,919.3 1,903.4 -0.8% -1.0% Add back: Modification Loss 37.3 35.6 - - - Normalised1 Total Income 1,960.2 1,954.9 1
Slide 13: Net fund based income grew 3.8% Y-o-Y
Net fund based income grew 3.8% Y-o-Y mainly due to higher gross fund based income; 1313 NIM contracted by 5 bps Q-o-Q to 2.11% in Q1 2022 RM’bil Y-o-Y: 2.7% Y-o-Y: -1.0% Y-o-Y: +3.8% Q-o-Q: -4.1% Fund Based Income 2.36 2.47 2.43 Fund Based Expense 1.42 1.53 1.47 Net Fund Based Income 0.94 0.94 0.95
Slide 14: Non-fund based income declined 20.3% Y-o-Y
Non-fund based income declined 20.3% Y-o-Y mainly due to lower fee income and net trading and 14 investment income RM’mil Y-o-Y: -20.3% Q-o-Q: +2.8% 543.2 20.5 421.0 432.7 Others 103.3 13.0 35.1 Treasury Income 55.5 81.9 65.0 Insurance Underwriting 40.2 66.2 Surplus 363.9 285.9 266.4 Fee Income Q1 2
Slide 15: Operating expenses contracted by 2.9% Y-o-Y
Operating expenses contracted by 2.9% Y-o-Y from continued discipline in managing cost; 1515 Maintained positive JAWS; CIR further improved to 45.1% Q1 Q4 Q1 RM’ mil Q-o-Q Y-o-Y 2021 2021 2022 Personnel Costs 552.3 525.6 533.5 1.5% -3.4% Establishment Costs 187.5 205.0 199.7 -2.6% 6.5% of which: IT
Slide 16: Loans grew 7.0% Y-o-Y
Loans grew 7.0% Y-o-Y led mainly by mortgage, auto finance, SME, Corporate and Singapore; 1616 Domestic loans grew 5.6% Y-o-Y, exceeding industry growth Mar Dec Mar RM’mil YTD Y-o-Y 2021 2021 2022 GROUP COMMUNITY BANKING 118,117 124,161 126,439 1.8% 7.0% Retail 95,728 99,688 101,147 1.5% 5.7% Mortga
Slide 17: Total deposits grew 3.9% Y-o-Y
Total deposits grew 3.9% Y-o-Y attributed to growth in FD and MMTD; CASA ratio remained 1717 healthy at 29.0% Customer Deposits CASA by Segment RM’bil Mar Dec Mar Y-o-Y: +3.9% RM’bil YTD Y-o-Y 2021 2021 2022 YTD: +3.6% GROUP COMMUNITY BANKING 39.4 41.5 41.3 -0.5% 4.8% 218.0 218.7 226.5 Retail 22.5 2
Slide 18: Credit charge ratio of 0.29% in Q1 2022
Credit charge ratio of 0.29% in Q1 2022, in line with expectations 18 880 Allowances for Losses on Loans 1.1 0% RM’mil 680 0.46% 0.51% 0.6 0% 0.39% Management Overlay 0.29% (RM mil) 480 N1 92 -0.15% 0.1 0% 280 219 252 557 180 146 262 90 -0.40% (76) 80 FY 2020 FY 2021 YTD 2022 Q1 Q2 Q3 Q4 Q1 (1 20) -
Slide 19: Slight uptick in GIL and Stage 2 ratios
Slight uptick in GIL and Stage 2 ratios; LLC further strengthened to 125.7% 19 600000.00% Gross Impaired Loans 2.10% 550000.00% 10.45% 8.27% 8.23% 7.10% 7.27% 500000.00% 1.90% 450000.00% 400000.00% 1.66% 1.63% 1.70% 350000.00% 1.57% 1.62% 1.50% 1.54% 300000.00% Gross Loans - Stage 2 (Group) 1.58% 1.
Slide 20: GIL improved for most retail segments
GIL improved for most retail segments; Slight uptick for SME and Corporate; Stage 2 normalising 20 following expiry of Pemulih Group Community Banking Mortgage Unsecured Auto Finance SME 8.24% 4.65% 4.72% 12.32% 8.41% 9.50% 10.63% 6.54% 6.66% 18.21% 15.49% 16.43% 1.40% 850 1.50% 3.04% 3.50% 1.77% 1.
Slide 21: Lower profit for Retail and GWB
Lower profit for Retail and GWB due to lower non-fund based income; SME and Singapore grew 2121 mainly from higher net fund based income; Insurance supported by MTM on securities’ gains Group Community Banking Group Wholesale Banking Group International Business Q1 2021: RM943.6 mil Q1 2021: RM845.3
Slide 22: Capital position remained strong
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% 19.8% 19.4% 18. 0% 17. 0% 16. 0% 16. 0% 18.2% 17.6% 15. 0% 14. 0% 17.2% 16.8% 17.2% 16.8% 14. 0% 15.2% 14.7% 13. 0% 12. 0% 11. 0% 10. 0% 12. 0% 10. 0% 15.2% 14.7% 9.0
Slide 23: Strategy Update
Strategy Update
Slide 24: TWP24 - Centred around three strategic objectives
TWP24 - Centred around three strategic objectives 24 24 TWP24 is RHB’s new 3-year corporate strategy from 2022 to 2024 TWP24 Be • Build deeper relationships with our target customers (e.g. Affluent, Mass Affluent, SME, LC, MC) Everyone’s • Embed our presence across all financial needs (e.g. savings,
Slide 25: Anchored against 7 focus areas
… anchored against 7 focus areas 25 25 Purpose Strategic Objectives Focus Areas (2022-2024) Value Created for Our Stakeholders 1 Be the Be Everyone’s Primary Customers Financial Partner our customers Primary 2 for success Services Integrate Bank Provider into Key Islamic Colleagues 3 Grow our collea
Slide 26: Sustainability Update
Sustainability Update
Slide 27: 5-year (2022-2026) Sustainability Strategy (1/2)
RHB Banking Group’s 5-year (2022-2026) Sustainability Strategy (1/2) 27 5 key focus areas identified to support our 3 key Sustainability aspirations: Achieved RM9.24 billion on Sustainable Financial Services as at Q1 2022, of which: Mobilise RM20b ~RM 4.8 billion Green Financing in Sustainable
Slide 28: 5-year (2022-2026) Sustainability Strategy (2/2)
RHB Banking Group’s 5-year (2022-2026) Sustainability Strategy (2/2) 28 Achieve Carbon • To reduce operational GHG emission intensity per employee by 45% (from baseline year 2016 of 38%) Neutral Operations by The Group is currently on track in achieving our 2026 target, with new installation of en
Slide 29: Summary & Outlook
Summary & Outlook
Slide 30: Outlook for FY2022
Outlook for FY2022 30 30 GDP grew 5.0% in Q1 2022 (Q4 2021: 3.6%) from higher consumption and investments following gradual Economic normalisation of economic activities Outlook Malaysia’s GDP is projected to grow by 5.5% with loans growth of 5.2% in 2022 Net fund based income – OPR is expecte
Slide 31: Concluding Remarks
Concluding Remarks 31 31 The Group delivered an encouraging performance for the first quarter of the year despite continued challenges in the operating environment We remain cautiously optimistic that FY2022 performance will be better than FY2021 as risks to economic recovery persist The Group
Slide 32: 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 33: Appendix
Appendix
Slide 34: Key Financial Data
Key Financial Data 34 34 Financial Data FY2018 FY2019 FY2020 FY2021 Q1 2022 RM’mil Income Statement Total Income 6,806 7,058 7,186 7,789 1,903 Pre-Provisioning Operating Profit 3,448 3,670 3,799 4,266 1,044 Profit Before Tax 3,119 3,394 2,644 3,529 891 Net Profit 2,305 2,482 2,033 2,618 600 Balance
Slide 35: Key Financial Ratios
Key Financial Ratios 35 35 Financial Ratios FY2018 FY2019 FY2020 FY2021 Q1 2022 Profitability Return on Equity 10.3% 10.3% 7.7% 9.6% 8.8% Net Interest Margin * 2.24% 2.12% 2.06% 2.14% 2.11% Cost to Income Ratio 49.3% 48.0% 47.1% 45.2% 45.1% Asset Quality Gross Impaired Loan Ratio 2.06% 1.97% 1.71% 1
Slide 36: Segmental Performance
Segmental Performance 36 Group Community Banking Group Wholesale Banking Q1 2021: RM788.0 mil Q1 2021: RM533.0 mil 6.3% 2.3% Q1 2022: RM837.4 mil Q1 2022: RM520.7 mil 1.6% Fund Based 578 587 Income 19.1% 3.8% 7.0% 301 10.7% 250 232 241 279 210 138 125 Retail SME CBIB Treasury International Group Com
Slide 37: O&G Exposure (Loans + Bonds)
O&G Exposure (Loans + Bonds) 37 37 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 2022 2.3 1.1% 1.1 0.6% 3.4 1.7% Dec 2021 2.3 1.2% 1.4 0.7% 3.7 1.9% Dec 2020 2.8 1.5% 1.0 0.5% 3.8 2.0% Dec
Slide 38: Retail Banking
Retail Banking 38 38 RM’bil Gross Loans RM’bil Customer Deposits Y-o-Y: +5.7% Y-o-Y: +5.9% 73.1 69.0 13.2 100 .0 90.0 12.7 80.0 70.0 9.7 10.3 60.0 50.0 95.7 101.1 40.0 30.0 46.6 49.6 20.0 10.0 - Mar 2021 Mar 2022 Mar 2021 Mar 2022 Fixed Deposits Demand Deposits Savings Deposits Retail Market Share *
Slide 39: SME
SME 39 39 Gross Loans Customer Deposits RM’bil RM’bil Y-o-Y: +9.6% Y-o-Y: +13.0% 30.0 26.9 29.5 25.0 20.0 15.0 16.9 17.7 10.0 22.4 25.3 5.0 10.0 11.7 - Mar 2021 Mar 2022 Mar 2021 Mar 2022 Fixed Deposits Demand Deposits SME Market Share * RM’bil Asset Quality ** 3.04% 2.98% 2.96% 9.7% 9.7% 9.7% 2.82%
Slide 40: Asset Under Management and Market Positions
Asset Under Management and Market Positions 40 40 RM’bil Asset Under Management Market Y-o-Y : -14.2% YTD Mar 2022 Ranking Share 57.0 Equities Broking: - By value 7.0% 6th 8.7 48.9 - By volume 9.3% 3rd 9.2 6.5 8.9 Debt Capital Markets: - MYR sukuk 13.3% 4th 39.1 - Total MYR bonds (Conventional 14.1%
Slide 41: Investment Banking – Notable Deals
Investment Banking – Notable Deals 41 41 CF/ECM DCM M&A Kuala Lumpur Kepong Berhad Custom Food Ingredients Sdn Bhd Farm Fresh Berhad Issuance of RM2.0 bil under its RM160.0 mil RM1.0 bil IPO Islamic Medium Term Notes Programme Partial disposal of equity interest Joint Underwriter Joint Principal Adv
Slide 42: Islamic Banking
Islamic Banking 42 42 PBT Gross Financing RM’mil RM’bil Y-o-Y: -0.1% Y-o-Y: +11.1% 90.0 80.0 70.0 60.0 50.0 40.0 30.0 68.9 76.5 20.0 10.0 255.4 255.1 - Mar 2021 Mar 2022 Q1 2021 Q1 2022 Market 10.1% 10.3% Share Gross Financing/ Asset Quality Total Gross Financing (Domestic) RM’bil 0.65% 0.65% 43.5%
Slide 43: RHB Bank Singapore
RHB Bank Singapore 43 43 SGD’mil PBT Loans, Deposits & Total Assets SGD’bil Y-o-Y: >500% 1.5 1.3 1.1 0.9 0.7 1.3 8.7 9.6 0.5 5.5 5.9 6.6 6.6 0.3 0.1 0.2 (0 .1) Q1 2021 Q1 2022 MarMar 2021 Mar Mar 2022 2021 2022 Gross Loans Deposits Total Assets Gross Impaired Loans Ratio Credit Charge Ratio 4.66% 4.
Slide 44: Overseas Loans
Overseas Loans 44 44 Mar Dec Mar RM’mil YTD Y-o-Y 2021 2021 2022 Overseas Operations 21,579 24,433 25,443 4.1% 17.9% Singapore 17,051 19,446 20,503 5.4% 20.2% Others 4,528 4,987 4,940 -0.9% 9.1% Cambodia 2,477 2,829 2,780 -1.7% 12.2% Thailand 1,557 1,721 1,755 2.0% 12.7% Brunei 193 184 182 -1.1% -5.