Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — H1 2022 Earnings Presentation
43 slides from Rhb Bank Bhd's earnings presentation, Aug 29, 2022
Slide 1: RHB Bank Berhad Analysts Presentation H1 2022 Financial Results
RHB BANK BERHAD Analysts Presentation H1 2022 Financial Results Mohd Rashid Mohamad Group Managing Director / Group Chief Executive Officer RHB Banking Group 29 August 2022
Slide 2: Agenda
1. Executive Summary 2. H1 2022 Financial Results 3. Strategy Update 4. Summary and Outlook
Slide 3: Executive Summary
Executive Summary
Slide 4: Highlights of Q2 & H1 2022 Performance (1/4)
4 Highlights of Q2 & H1 2022 Performance (1/4) 4 Q2 2022 (Year-on-year) ▪ Net fund based income grew by 9.1% Y-o-Y to RM1,562.4 million from higher gross fund based income ▪ Non-fund based income decreased 33.1% Y-o-Y to RM383.5 million due to lower fee income, insurance underwriting surplus and net
Slide 5: Highlights of Q2 & H1 2022 Performance (2/4)
5 Highlights of Q2 & H1 2022 Performance (2/4) 5 H1 2022 (Year-on-year) ▪ Net fund based income grew by 6.5% Y-o-Y to RM3,033.2 million from higher gross fund based income ▪ Non-fund based income decreased 26.9% Y-o-Y to RM816.2 million due to lower fee income and net trading and investment income ▪
Slide 6: Highlights of Q2 & H1 2022 Performance (3/4)
6 Highlights of Q2 & H1 2022 Performance (3/4) 6 ▪ Gross loans and financing ▪ Expanded 1.8% Q-o-Q to RM204.9 billion attributed mainly to growth in mortgage, SME and Singapore (Domestic loans growth Q-o-Q: 1.2%) ▪ Expanded 3.2% YTD attributed mainly to growth in mortgage, auto finance, SME and Sing
Slide 7: Highlights of Q2 & H1 2022 Performance (4/4)
7 Highlights of Q2 & H1 2022 Performance (4/4) 7 Interim Dividend Dividend ▪ Declared interim dividend of 15 sen per share, representing 51.2% payout ratio ▪ Cash payout of 10 sen per share and an electable portion under Dividend Reinvestment Plan of 5 sen per share Other Credit Rating Upgrade by RA
Slide 8: RHB Banking Group Scorecard for FY2022
RHB Banking Group Scorecard for FY2022 8 8 Top Level Indicators Target FY2022 Actual H1 2022 Achieved Target N1 N1 ROE 8.5% [10.0%] 9.1% [10.3%] √ Annualised Loans Growth 4%-5% 6.5% √ CASA Composition 30.0% 29.3% x Gross Impaired Loans Ratio ≤1.70% 1.62% √ Cost-to-Income Ratio ≤45.0% 45.4% x N1 Norm
Slide 9: H1 2022 Financial Results
H1 2022 Financial Results
Slide 10: Resilient H1'22 results driven by higher net fund based income and lower ECL
Resilient H1’22 results driven by higher net fund based income and lower ECL, partially offset by 1010 lower non-fund based income; sustained loans growth while uptick in GIL ratio within expectation N1 N1 Financial Results Profitability Ratios Total Operating Profit Profit Net Profit to Return on C
Slide 11: H1'22 and Q2'22 results supported by higher net fund based income
H1’22 and Q2’22 results supported by higher net fund based income and lower ECL despite the 1111 drop in non-fund based income Q2 Q1 Q2 H1 H1 RM’ mil Q-o-Q Y-o-Y Y-o-Y 2021 2022 2022 2021 2022 Net Fund Based Income 1,431.9 1,470.7 1,562.4 6.2% 9.1% 2,848.8 3,033.2 6.5% Non-Fund Based Income 573.6 43
Slide 12: Net fund based income grew; NIM strengthened to 2.23%
H1’22 and Q2’22 net fund based income grew mainly due to higher gross fund based income; NIM 1212 strengthened by 7bps Q-o-Q to 2.23% RM’bil Y-o-Y: +10.6% Y-o-Y: +6.7% Y-o-Y: -6.9% Y-o-Y: -13.0% Y-o-Y: +6.5% Y-o-Y: +9.1% 5.03 4.71 Q-o-Q: +6.2% 2.60 Fund Based Income 2.35 2.43 3.03 2.85 Fund Based Ex
Slide 13: Non-fund based income impacted by lower fee income and trading income
H1’22 and Q2’22 non-fund based income impacted by the lower fee income and net trading and 13 investment income RM’mil Y-o-Y: -33.1% Y-o-Y: -26.9% Q-o-Q: -11.4% 1,116.9 573.6 8.7 29.4 Others 432.7 816.2 187.8 383.5 291.1 35.1 50.7 Treasury Income 15.8 65.0 119.8 138.6 64.3 73.5 Insurance Underwritin
Slide 14: Operating expenses flat; CIR at 45.4%
H1’22 Operating expenses was flat from lower personnel, IT, marketing and A&G; CIR was higher 1414 at 45.4% due to lower non-fund based income Q2 Q1 Q2 H1 H1 RM’ mil Q-o-Q Y-o-Y Y-o-Y 2021 2022 2022 2021 2022 Personnel Costs 528.7 533.5 539.2 1.1% 2.0% 1,081.1 1,072.7 -0.8% Establishment Costs 188.8
Slide 15: Loans grew 3.2% YTD led by mortgage, auto finance, SME and Singapore
Loans grew 3.2% YTD led mainly by mortgage, auto finance, SME and Singapore; Domestic loans 1515 grew 2.3% YTD Jun Dec Mar Jun RM’mil Q-o-Q YTD Y-o-Y 2021 2021 2022 2022 GROUP COMMUNITY BANKING 119,218 124,096 126,368 128,583 1.8% 3.6% 7.9% Retail 96,364 99,688 101,147 102,822 1.7% 3.1% 6.7% Mortgag
Slide 16: Total deposits grew 3.3% YTD; CASA composition 29.3%
Total deposits grew 3.3% YTD attributed to growth in FD, MMTD and CASA; CASA composition 1616 improved to 29.3% attributed largely to Retail and SME Customer Deposits CASA by Segment RM’bil Y-o-Y: +4.8% Jun Dec Mar Jun RM’bil Q-o-Q YTD Y-o-Y YTD: +3.3% 2021 2021 2022 2022 Q-o-Q: -0.3% GROUP COMMUNIT
Slide 17: Credit charge ratio improved from lower ECL
H1’22 and Q2’22 credit charge ratio improved from lower ECL and higher bad debts recovered 17 Allowances for Losses on Loans 1,08 0 880 1.1 0% 1.1 0% 880 680 0.46% 0.51% 0.6 0% 680 0.42% 0.6 0% RM’mil 0.29% 480 0.16% 0.04% 480 399 N1 -0.15% 0.1 0% 92 0.1 0% 280 219 252 280 146 165 -0.40% -0.40% 80 (
Slide 18: Uptick in GIL; Stage 2 improved and LLC remained strong
Uptick in GIL; Stage 2 continued to improve and LLC remained strong 18 600000.00% Gross Impaired Loans 2.10% 550000.00% 8.27% 8.23% 7.10% 7.27% 6.28% 500000.00% 1.90% 450000.00% 400000.00% 1.63% 1.65% 1.70% 350000.00% 1.57% 1.55% 1.62% 300000.00% 1.62% 1.50% Gross Loans - Stage 2 (Group) 1.50% 1.46%
Slide 19: GIL uptick attributed mainly to unsecured, SME and Cambodia
GIL uptick attributed mainly to unsecured, SME and Cambodia 19 Group Community Banking Mortgage Unsecured Auto Finance SME 5.09% 4.65% 4.73% 4.27% 9.20% 8.41% 9.50% 8.42% 7.36% 7.03% 7.22% 6.04% 16.53% 15.53% 16.49% 13.48% 1.40% 3.23% 850 1.50% 3.50% 1.03% 1.20% 90 2.98% 1.57% 2.84% 750 80 2.71% 3.0
Slide 20: Profit grew in GCB and GIB; lower profit for GWB
Profit grew in GCB and GIB; lower profit for GWB due to lower non-fund based income and higher 2020 ECL, whilst Insurance impacted by lower underwriting surplus Group Community Banking (GCB) Group Wholesale Banking (GWB) Group International Business (GIB) H1 2021: RM1,862.3 mil H1 2021: RM1,747.5 mi
Slide 21: Capital position remained strong for the Group and key banking subsidiaries
Capital position remained strong for the Group and key banking subsidiaries 21 21 RHB Bank Group RHB Bank 20. 0% 20. 0% 19. 0% 18. 0% 19.8% 19.2% 18. 0% 18.2% 17.7% 17. 0% 16. 0% 16. 0% 15. 0% 17.2% 16.6% 17.2% 16.6% 14. 0% 15.2% 14.8% 15.2% 14.8% 14. 0% 13. 0% 12. 0% 12. 0% 11. 0% 10. 0% 10. 0% 9.0
Slide 22: Declared interim dividend of 15 sen per share
Declared interim dividend of 15 sen per share with 10 sen cash and 5 sen subject to DRP; 22 representing 51.2% payout ratio 22 Market Capitalisation Dividend Per Share (sen) 62.9% 5.78 5.79 6.00 50.1% 51.2% 60.0% 5.45 5.37 35.7% 34.8% 5.29 5.50 40.0% 24.4 40.00 20.0% 5.00 23.2 31.00 0.0% 22.2 21.9 4
Slide 23: Strategy Update
Strategy Update
Slide 24: TWP24 Key Highlights by Focus Areas (1/3)
TWP24 Key Highlights by 7 Focus Areas (1/3) 24 24 1 ▪ Total AUM of Affluent customers grew to RM56.0 bil (+2.2% from Dec 2021) Affluent ▪ Premier Banking customers stood at 75.0k (-1.3% from Dec 2021) ▪ Total Wealth and Banca fee income was RM174.5 mil (-10.5% from Jun 2021) ▪ Total AUM of Mass Affl
Slide 25: TWP24 Key Highlights by Focus Areas (2/3)
TWP24 Key Highlights by 7 Focus Areas (2/3) 25 3 ▪ Total loans grew to SGD6,855 mil (+8.8% from Dec 2021) of which SGD3,016 mil are Corporate loans Build an Singapore (+11.7% from Dec 2021) and SGD2,430 mil are Commercial/SME loans (+3.7% from Dec 2021) Integrated Overseas ▪ Total loans grew to USD6
Slide 26: TWP24 Key Highlights by Focus Areas (3/3)
TWP24 Key Highlights by 7 Focus Areas (3/3) 26 6 Workforce ▪ Improved ‘Primary and Sales’ to ‘Support’ workforce ratio to 55.7% : 44.3% (from 55.5% : 44.5% in Dec 2021) Develop a Optimisation ▪ Grew our Digital, IT and Analytics workforce mix to 7.2% of total employees (from 6.2% in Dec 2021) Future
Slide 27: Summary & Outlook
Summary & Outlook
Slide 28: Outlook for FY2022
Outlook for FY2022 28 28 ▪ Q2 2022 GDP expanded 8.9% (Q1 2022: 5.0%) as domestic demand strengthened amid normalising economic Economic activities Outlook ▪ For 2022, Malaysia’s GDP is projected to grow by 6.0%; Banking industry is expected to remain resilient with loans growth forecast of 5.1% ▪ Ne
Slide 29: Concluding Remarks
Concluding Remarks 29 29 ▪ Delivered a resilient financial performance for the first half of the year on the backdrop of challenging operating environment ▪ Continue to reward our shareholders with an interim dividend of 15 sen per share, representing 51.2% payout ▪ With lingering headwinds expected
Slide 30: 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 31: Appendix
Appendix
Slide 32: Repayment Assistance Update
Repayment Assistance Update 32 32 ▪ Domestic outstanding RA has reduced from 5% (RM9.2 bil) as at 30th April 2022 to 4% (RM7.5 bil) as at 31st July 2022 ▪ The outstanding RA was mainly for R&R following the expiry of all Retail and SME deferments ▪ Repayment status for expired deferments as at 31st
Slide 33: Key Financial Data
Key Financial Data 33 33 Financial Data FY2018 FY2019 FY2020 FY2021 H1 2022 RM’mil Income Statement Total Income 6,806 7,058 7,186 7,789 3,849 Operating Profit Before Allowances 3,448 3,670 3,799 4,266 2,102 Profit Before Tax 3,119 3,394 2,644 3,529 1,909 Net Profit 2,305 2,482 2,033 2,618 1,235 Bal
Slide 34: Key Financial Ratios
Key Financial Ratios 34 34 Financial Ratios FY2018 FY2019 FY2020 FY2021 H1 2022 Profitability Return on Equity 10.3% 10.3% 7.7% 9.6% 9.1% Net Interest Margin 2.24% 2.12% 2.13% 2.20% 2.18% Cost to Income Ratio 49.3% 48.0% 47.1% 45.2% 45.4% Asset Quality Gross Impaired Loan Ratio 2.06% 1.97% 1.71% 1.4
Slide 35: Segmental Performance
Segmental Performance 35 Group Community Banking Group Wholesale Banking H1 2021: RM1,587.0 mil H1 2021: RM1,092.0 mil 6.1% 2.7% H1 2022: RM1,684.1 mil H1 2022: RM1,062.6 mil 2.1% Fund Based 1,156 1,181 Income 16.9% 3.2% 2.0% 614 13.8% 595 431 504 478 468 265 301 Retail SME CBIB Treasury Internation
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 Jun 2022 2.5 1.2% 1.1 0.5% 3.6 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 37: Retail Banking
Retail Banking 37 37 RM’bil Gross Loans RM’bil Customer Deposits Y-o-Y: +6.7% Y-o-Y: +6.2% 73.6 69.4 13.5 100 .0 90.0 13.2 80.0 70.0 9.7 10.3 60.0 50.0 96.4 102.8 40.0 30.0 46.4 49.7 20.0 10.0 - Jun 2021 Jun 2022 Jun 2021 Jun 2022 Fixed Deposits Demand Deposits Savings Deposits Retail Market Share *
Slide 38: SME
SME 38 38 Gross Loans Customer Deposits RM’bil RM’bil Y-o-Y: +13.3% Y-o-Y: +12.7% 30.0 26.7 30.3 25.0 20.0 15.0 16.6 18.3 10.0 22.9 25.8 5.0 10.1 12.0 - Jun 2021 Jun 2022 Jun 2021 Jun 2022 Fixed Deposits Demand Deposits SME Market Share * RM’bil Asset Quality 3.23% 2.98% 2.96% 2.84% 9.8% 2.71% 9.7%
Slide 39: Asset Under Management and Market Positions
Asset Under Management and Market Positions 39 39 RM’bil Asset Under Management Market YTD Jun 2022 Ranking Share Y-o-Y : -18.3% Equities Broking: - By value 6.8% 6th 57.3 - By volume 8.9% 4th 8.5 46.8 8.8 6.5 Debt Capital Markets: - MYR sukuk 18.9% 3rd 8.9 - Total MYR bonds (Conventional 16.8% 3rd
Slide 40: Investment Banking – Notable Deals
Investment Banking – Notable Deals 40 40 CF/ECM DCM M&A Danum Capital Berhad TSH Resources Berhad Danum Capital Berhad RM731.1 mil Farm Fresh Berhad Issuance of RM2.0 bil Sukuk Danum Proposed disposal by PT Bulungan Citra Agro Persada RM1.0 bil IPO under its RM20.0 bil Sukuk Danum Programme (“BCAP”)
Slide 41: Islamic Banking
Islamic Banking 41 41 PBT Gross Financing RM’mil RM’bil Y-o-Y: Unch. Y-o-Y: +9.7% 90.0 80.0 70.0 60.0 50.0 517.1 517.1 40.0 30.0 70.7 77.6 20.0 10.0 - Jun 2021 Jun 2022 H1 2021 H1 2022 Market 10.3% 10.2% Share Gross Financing/ Asset Quality Total Gross Financing (Domestic) RM’bil 0.65% 43.5% 43.6% 0
Slide 42: RHB Bank Singapore
RHB Bank Singapore 42 42 SGD’mil PBT Loans, Deposits & Total Assets SGD’bil Y-o-Y: >500% 39.9 34.9 29.9 24.9 9.2 9.9 37.5 19.9 14.9 6.0 6.2 6.8 6.9 9.9 5.9 4.9 (0 .1) Jun 2021 Jun 2021 Jun 2022 H1 2021 H1 2022 Jun 2022 Gross Loans Deposits Total Assets Gross Impaired Loans Ratio Credit Charge Ratio
Slide 43: Overseas Loans
Overseas Loans 43 43 Jun Dec Mar Jun RM’mil Q-o-Q YTD Y-o-Y 2021 2021 2022 2022 Overseas Operations 23,260 24,433 25,443 26,887 5.7% 10.0% 15.6% Singapore 18,578 19,446 20,503 21,697 5.8% 11.6% 16.8% Others 4,682 4,987 4,940 5,190 5.1% 4.1% 10.9% Cambodia 2,607 2,829 2,780 2,998 7.8% 6.0% 15.0% Thai