Hong Leong Bank Bhd · MYX:HLBANK
Hong Leong Bank Bhd — H1 FY2024 Earnings Presentation
22 slides from Hong Leong Bank Bhd's earnings presentation, Feb 28, 2024
Slide 1: H1FY24 Results Analyst Presentation
H1FY24 RESULTS ANALYST PRESENTATION 28 FEBRUARY 2024 The information contained in this presentation is strictly confidential for information of the intended recipient(s) only. The information may not be reproduced, redistributed or transmitted, directly or indirectly by any means to any other person
Slide 2: Financial Highlights: H1FY24
1 FINANCIAL HIGHLIGHTS: H1FY24 HLB H1FY24 ended 31 December 2023 2
Slide 3: Key Financial Highlights
Key Financial Highlights Total Income Opex & CIR Profit before associates contribution • Pick up in topline underpinned by strong • Prudently managed cost results in • Consequently, delivered a resilient profit before loan/financing growth and improved non- sustainable CIR associates contribution in
Slide 4: Management Guidance
Management Guidance Target FY2024 Achieved H1FY24 Gross Loans Growth 6%-7% 7.5% P Net Interest Margin 1.8%-1.9% 1.85% P Cost-to-Income Ratio ~40% 39.7% P Remained on track to meet 0.56% P guidance for the GIL Ratio <0.70% financial year Net Credit Cost ~10 bps -3 bps P CASA Mix >30% 31.1% P Return o
Slide 5: Profit & Loss
Profit & Loss 4.7% 2,024 2,118 y-o-y 5.6% 1,042 1,088 q-o-q 1,030 930 RM’mil 865 1,837 1,781 914 893 799 889 702 Encouraging improvements Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 H1FY23 H1FY24 driven by non- Profit before associates contribution Profit after tax interest income, healthy asset Change % Cha
Slide 6: Net Interest Income & NIM
Net Interest Income & NIM 2.09% 2.14% 1.85% 1 bps ▲ 1.85% q-o-q 1.84% Uptick in NIM for 1.83% 1.82% 2,430 the third 2,282 consecutive RM'mil quarter driven by 1,198 1,156 expansion in ▲ 2.6% 1,089 1,126 1,033 q-o-q loan/financing portfolio and effective asset/liability management Q2FY23 Q3FY23 Q4FY2
Slide 7: Non-Interest Income
Non-Interest Income 20.2% H1FY24 18.6% Wealth Management and ▲ 19.4% Bancassurance RM108.0 mil 556 577 Growth in wealth Income RM’mil 49 74 management and Fee income: bancassurance of which 202 175 income, credit Credit Card ▲ 10.6% card and foreign Related Fees RM116.4 mil exchange gains led to hig
Slide 8: Operating Expense
Operating Expense 37.0% Admin & general Domestic 34.2% 14% CIR Personnel cost 55% Marketing 8% H1FY24 36.4% 39.7% ▪ Disciplined spending through 1,087 1,134 Establishment strategic cost 23% 150 158 management RM’mil 103 87 initiatives 264 269 RM'mil ▪ Effectively manage CIR at 546 559 587 556 578 su
Slide 9: Loans & Financing
Loans & Financing +3,654 +1,315 7.5% RM’mil +7,837 (+6.8%) (+8.0%) (+10.6%) 185,165 ▲ 172,281 y-o-y 8.0% y-o-y Robust growth trajectory Total Loans H1FY23 Retail Business & Corporate International Total Loans H1FY24 Operations underpinned by expansion in key H1FY24 segments of Domestic mortgages, au
Slide 10: Asset Quality
Asset Quality Gross Impaired Loans/Financing (GIL) Loan/Financing Impairment Coverage (LIC) 1.80% 1.71% 1.64% 1.62% 317% Asset quality 1.43% 282% metrics remain 247% solid with 239% 233% 212% 212% sufficient 0.61% 0.57% 0.56% loan/financing 0.46% 0.49% 169% 163% impairment 142% coverage, RM'mil 113%
Slide 11: Asset Quality
Asset Quality Malaysia Overseas 0.59% 0.57% 0.51% 0.43% 0.45% 0.12% 806 982 972 60 61 14 FY22 FY23 H1FY24 FY22 FY23 H1FY24 Healthy indicators across all key Residential Properties Transport Vehicles SME portfolios 1.25% 1.16% 1.06% 0.45% 0.40% 0.38% 0.31% 0.20% 0.22% 404 367 376 351 397 315 35 43 64
Slide 12: Deposit
Deposit 6.2% ▲ RM’mil y-o-y +8,242 + 5,456 +2,554 (+18.3%) 211,184 (+2.5%) (+27.0%) 198,868 -3,118 (-8.7%) Focus on CASA acquisition Total Deposits Retail Business & Global Markets International Total Deposits H1FY23 Corporate Operations H1FY24 supported by the Bank’s community H1FY24 acquisition in
Slide 13: Liquidity & Capital
Liquidity & Capital Liquidity Ratios Capital Adequacy 138% ▪ Maintaining 136% 137% healthy liquidity and capital 122% positions 120% 15.9% 15.7% 15.9% 119% 13.9% 13.6% 13.9% ▪ LTF and LTFE ratios are well in Average LDR line with the of top 5 banks Sep-23: 94.2% industry at 86.9% and 74.6% 85.4% 86.
Slide 14: Shareholder Value
Shareholder Value Return on Equity & Return on Assets Declared Dividend & Earnings Per Share 140 186 • Committed to 120 deliver 161 11.8% 12.2% sustainable 10.9% 140 100 returns for our 99 103 shareholders, 80 record a commendable 59 ROE of 12.2% 1.43% 1.50% 60 55 1.34% 50 • Improved Net 40 DPS and
Slide 15: Closing Remarks
2 CLOSING REMARKS HLB H1FY24 ended 31 December 2023 15
Slide 16: Regional Wealth Management
Regional Wealth Management 1 People 4 Branding & Client Engagement Established Strong Team To Drive Wealth Symposium – Market Outlook 2024 with 700 esteemed clients Income Growth Podcast & Wealth Survey | Regional Heads | Senior Wealth Bankers | Bancassurance Advisors Unlocking 2 Performance Managem
Slide 17: Key Sustainability Highlights
Key Sustainability Highlights FY2024 Sustainability Targets Key Sustainability Initiatives and Recognitions Renewable Energy Cumulatively Approved FY2024 target: FY2022 RM3.4b Appointment of Chief Sustainability HLB Sustainability Report 2023 ✓ Officer and establishment of a and Green Bonds H1FY24 3
Slide 18: Closing Remarks
Closing Remarks ▪ Resilient business performance underpinned by robust loans/financing growth, improved non-interest income and solid asset quality ▪ Disciplined cost management results in CIR remained sustainable around 40% Execution of 3-5 Year Strategic Plan to achieve our aspirations to ▪ Health
Slide 19: Supplementary Information
3 SUPPLEMENTARY INFORMATION HLB H1FY24 ended 31 December 2023 19
Slide 20: Group Performance
Group Performance Change Change RM’mil H1FY23 H1FY24 Q2FY24 (YoY) (QoQ) Net interest income 2,430 2,282 -6.1% 1,156 2.6% Non-interest income 556 577 3.7% 309 15.3% Total income 2,986 2,859 -4.3% 1,465 5.1% Operating expenses (1,087) (1,134) 4.4% (578) 3.8% Operating profit before allowances 1,900 1,
Slide 21: HLISB Key Highlights
HLISB Key Highlights Change Change RM’mil H1FY23 H1FY24 Q2FY24 (YoY) (QoQ) Total net income 469 456 -2.7% 225 -3.2% Operating expenses (137) (151) 10.2% (78) 6.1% Profit before taxation and zakat 333 306 -8.0% 147 -7.4% Profit after taxation and zakat 249 230 -7.7% 111 -7.2% Cost-to-income ratio 26.
Slide 22: Thank You
Disclaimer This presentation has been prepared by Hong Leong Bank (“HLB”) for selected recipients for information purposes only and the information contained herein has been obtained from sources believed to be reliable. The information contained herein is believed to be correct as of the date of th
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