Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — Q3 2018 Earnings Presentation
30 slides from Rhb Bank Bhd's earnings presentation, Nov 27, 2018
Slide 1: Analysts Presentation 3rd Quarter 2018 Financial Results
Analysts Presentation 3rd Quarter 2018 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 27 November 2018
Slide 2: Executive Summary
Executive Summary 3rd Quarter 2018 Financial Results Strategy Update Summary and Outlook
Slide 3: Highlights of 9M 2018 Performance (1/2)
Highlights of 9M 2018 Performance (1/2) Year-on-year: Net profit up 16.8% to a record RM1,739.8 million, mainly due to higher net fund based and non-fund based income, and lower allowances for expected credit losses (ECL) Net fund based income rose 8.9% to RM3,700 million mainly underpinned by g
Slide 4: Highlights of 9M 2018 Performance (2/2)
Highlights of 9M 2018 Performance (2/2) Group Wholesale Banking recorded a pre-tax profit of RM1.4 billion, an increase of 7.3% Y-o-Y: Group Corporate & Investment Banking pre-tax profit grew 8.3% to RM446.9 million on the back of higher net fund based and non-fund based income and lower allowan
Slide 5: RHB Banking Group Scorecard for 2018
RHB Banking Group Scorecard for 2018 Top Level Indicators Target 2018 Actual 9M 2018 ROE 9.0% - 10.0% 10.3%N1 Loans Growth 3% - 4% 4.0%N2 4% - 5% 3.8%N2 CASA Growth (MY Retail & BBG) Gross Impaired Loans Ratio <2.2% 2.37%N3 Cost to Income Ratio <50% 49.0% Overseas Profit Contribution +ve 4.1% N1 : A
Slide 6: Executive Summary: 3rd Quarter 2018 Financial Results
Executive Summary 3rd Quarter 2018 Financial Results Strategy Update Summary and Outlook
Slide 7: 9M 2018 profits rose Y-o-Y on higher income and lower allowances
9M 2018 profits rose Y-o-Y arising from both higher total income and lower allowances for expected credit losses; CIR improved and loan loss coverage ratio remained above 100% Financial Position Financial Results Key Financial Ratios Operating Non-Fund Total Gross Total Profit Before ROE N1 Based/ A
Slide 8: Q3 2018 performance continued the year's momentum
Q3 2018 performance continued the year’s momentum driven by higher non-fund based income and lower allowances for ECL on loans and other assets Q3 Q2 Q3 Q-o-Q Y-o-Y 9M 9M Y-o-Y RM’ mil 2017 2018 2018 % % 2017 2018 % Net Interest Income 892 937 890 -5 0 2,630 2,758 5 Net Islamic Fund Base Income 266
Slide 9: 9M 2018 net fund based income continued to grow
9M 2018 net fund based income continued to grow; Re-pricing of deposits in Q3 moderated NIM downwards against preceding quarter, with year-to-date NIM remaining within expectations RM’bil Y-o-Y: +7% Y-o-Y: +5% Y-o-Y: +6% Q-o-Q: -2% Y-o-Y: +9% 8.01 7.48 4.08 4.31 3.40 3.70 2.53 2.68 2.74 1.37 1.16 1.
Slide 10: Non-fund based income grew Y-o-Y
Non-fund based income grew Y-o-Y supported mainly by higher trading & investment income and net forex gain; Q-o-Q higher largely from trading & investment income and a recovery in insurance underwriting surplus Y-o-Y: +4% RM’mil Y-o-Y: +10% Others Treasury Related Income N2 Q-o-Q: +25% 1,370 1,317 4
Slide 11: Operating expenses grew 6.4% Y-o-Y
Operating expenses grew 6.4% Y-o-Y mainly from higher personnel and IT related expenses; Positive JAW maintained and CIR improved further to 49.0% Y-o-Y: +6% Y-o-Y: +4% 2,484 2,335 Q-o-Q: +3% 267 266 167 178 554 Administration & 519 General Expenses Marketing Expenses 792 824 799 Establishment 89 87
Slide 12: Loans grew 4.0% Y-o-Y driven by mortgage and SME
Loans grew 4.0% Y-o-Y mainly driven by continued mortgage and SME growth partially offset by large corporate repayments and impact of stronger RM in Singapore Composition Sep Dec Sep Sep Dec RM’mil 2018 2017 YTD 2017 YoY 2018 2017 % % % % GROUP RETAIL 82,747 76,266 8.5 73,605 12.4 50 47 Mortgage 52,
Slide 13: Marginal increase in total deposits Y-o-Y; CASA ratio at 26.9%
Marginal increase in total deposits Y-o-Y; CASA ratio remained at 26.9% compared with a year ago; Domestic Retail & BBG CASA grew 3.8% Y-o-Y CASA Customer Deposits Y-o-Y : +1% RM’bil RM’bil 9M Growth : -9% Y-o-Y : +1% 9M Growth : +3% 50.5 45.6 46.1 9.9 9.8 9.9 169.6 166.9 171.4 40.6 45.6 46.1 35.8 3
Slide 14: Credit charge ratio continued to improve; uptick in GIL ratio
Credit charge ratio continued to improve; Uptick in GIL ratio in Q3 mainly due to restructuring of debt through conversion of a bond to loan; LLC maintained above 100%N1 250 RM’mil Allowances for Loan Impairment 0.5 0% RM’mil Asset Quality 4,400 0.37% N2 0.35% 2.39% 2.38% 2.33% 2.37% 0.4 0% 2.29% 2.
Slide 15: O&G Exposure closely managed and continued to decline
O&G Exposure (Loans + Bonds) closely managed and continued to decline Oil and Gas Related Industry Upstream Downstream Total Loans + Bonds % to % to % to Outstanding RM’ bil Gross Loans RM’ bil Gross Loans RM’ bil Gross Loans Sep 2018 3.3 2.0% 1.5 0.9% 4.8 2.9% Jun 2018 3.3 2.0% 1.6 1.0% 4.9 3.0% Oi
Slide 16: 9M 2018 revenue and pre-tax profit by segment
9M 2018 revenue and pre-tax profit increased Y-o-Y across all domestic segments except Insurance; Singapore continued to improve from lower allowances for expected credit losses Revenue 11% 1,785 1,602 5% 7% RM’ mil 8% 1,110 1,169 975 1,044 751 813 -7% 2% -29% 292 273 128 131 185 132 Retail BBG CBIB
Slide 17: Strong capital position for the Group and key banking subsidiaries
Strong capital position for the Group and key banking subsidiaries; Islamic Bank capital ratio improved from transition to an IRB entity RHB Bank Group RHB Bank 20. 0% 20. 0% 18. 0% 15% 18. 0% 16. 0% 16. 0% 14. 0% 11% 14. 0% 12. 0% 12. 0% 14.8% 15.0% 18.0% 16.3% 7% 15.9% 10. 0% 13.9% 14.2% 10. 0% 8.
Slide 18: Strategy Update
Executive Summary 3rd Quarter 2018 Financial Results Strategy Update Summary and Outlook
Slide 19: FIT22 Key Highlights
FIT22 Key Highlights Fund our Journey • Affluent : YTD Sep 2018 grew number of Premier customers by 15.7% to 53.1k customers from 45.9k in Dec 2017, of which 37% are SME owners. Total AUM of Premier customers grew by 11.2% to RM27.7 bil in the same period • SME : Grew Business Banking loans by 4.4%
Slide 20: Summary and Outlook
Executive Summary 3rd Quarter 2018 Financial Results Strategy Update Summary and Outlook
Slide 21: Economic Outlook
Economic Outlook Malaysia’s GDP is expected to moderate to 4.6% in 2018 from 5.9% in 2017 Growth is anticipated to be driven mainly from resilience in private sector consumption Downside risks still emanate from escalating trade tensions, and volatility in financial markets and oil prices BN
Slide 22: Concluding Remarks
Concluding Remarks The Group continued to deliver strong performance in the first nine months of 2018 Loans and financing continued to be driven by growth in mortgages and SME Effect on re-pricing of deposits has taken place as expected, as seen in the moderation of NIM We continued to have
Slide 23: www.rhbgroup.com
www.rhbgroup.com INVESTOR RELATIONS CONTACT: Haryati Yahya Head, Investor Relations +(603) 9280 2489 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, financi
Slide 24: Key Business Highlights
APPENDIX Key Business Highlights
Slide 25: Retail Banking
Retail Banking MortgageN1 Auto FinanceN1 RM’bil Y-o-Y: +16% RM’bil Y-o-Y: +4% 9.0 60. 0 8.0 50. 0 7.0 6.0 40. 0 5.0 52.0 8.4 30. 0 4.0 8.0 20. 0 45.0 3.0 2.0 10. 0 1.0 0.0 0.0 Sep 2017 Sep 2018 Sep 2017 Sep 2018 Personal LoansN1 DepositsN1 RM’bil Y-o-Y: +10% RM’bil Y-o-Y: +25% 51.0 46.5 7.0 6.5 9.0
Slide 26: Investment Banking – Market Positions & Asset Management (1/2)
Investment Banking – Market Positions & Asset Management (1/2) RM’bil Asset Under Management YTD Sep 2018 Y-o-Y: -7% Market Ranking Share 52.7 Equity: 49.2 th - By value 5 7.2% 6.2 - By volume 3rd 11.4% 7.1 17.1 13.2 Debt Capital Markets: - MYR sukuk 3rd 21.0% - Total MYR bonds (Conventional 4th 16.
Slide 27: Investment Banking – Market Position (2/2)
Investment Banking – Market Position (2/2) YTD Sep 2018 Ranking Market Share DCM Debt Capital Markets: GENM Capital Berhad - MYR sukuk 3rd 21.0% RM2.6 bil issuance out of RM3.0 bil Medium Term Note Programme - Total MYR bonds 4th 16.6% Joint Lead Manager (Conventional & Islamic bonds) Serba Dinamik
Slide 28: Business Banking
Business Banking Gross LoansN1 Customer DepositsN1 RM’bil RM’bil Y-o-Y: +7% Y-o-Y: +14% 26. 0 21.6 24.6 25. 0 24. 0 13.1 23. 0 12.2 24.9 23.4 22. 0 21. 0 9.4 11.5 20. 0 Sep 2017 Sep 2018 Sep 2017 Sep 2018 Fixed Deposits Demand Deposits N1 SME Market Share RM’bil Asset Quality 3.20% 3.02% 8.8% 9.0% 8
Slide 29: Islamic Banking
Islamic Banking PBT Gross Financing RM’mil RM’bil Y-o-Y: +19% Y-o-Y: +16% 50.0 48.0 46.0 44.0 48.3 480 42.0 432 416 40.0 349 360 40.7 304 38.0 36.0 Sep 2017 Sep 2018 2014 2015 2016 2017 9M 9M Market 8.7% 9.2% 2017 2018 Share Asset Quality Gross Financing/ RM’mil Total Gross Financing (Domestic) 1.1%
Slide 30: RHB Singapore
RHB Singapore PBT SGD’mil Loans, Deposits & Total Assets SGD’bil 74 8.0 80 60 32 34 35 6.6 40 0.4 6.3 0.2 42 46 46 0.3 (89) (97) (35) 20 (12) (11) - (31) 7.6 (2 0) 6.0 6.4 6.1 (4) 4.2 5.0 4.4 (4 0) (81) (91) 3.7 3.8 (6 0) (8) 2016 2017 Sep (8 0) (6) (1 00) 2018 2014 2015 2016 2017 9M 9M Deposits 201