Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — RHB Banking Group — H1 2015 Earnings Presentation
42 slides from Rhb Bank Bhd's earnings presentation, Aug 28, 2015
Slide 1: Together We Progress
TOGETHER WE PROGRESS Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 28 August 2015 1
Slide 2: Executive Summary
Executive Summary H1 2015 Financial Results Update on Corporate Exercise Reframed Group Strategy Summary and Outlook
Slide 3: Executive Summary (1/2)
Executive Summary (1/2) Net profit stood at RM1,000.9 million for the first six months of 2015. Pre-tax profit at RM1,337.2 1 million, 2.9% lower year-on-year. Excluding a one-off impairment write-back on other assets of RM112.4 million in 2014, normalized profit was higher by 5.8% 2 Revenue up 2.9%
Slide 4: Executive Summary (2/2)
Executive Summary (2/2) Early adoption of requirement to maintain collective allowances and regulatory reserves at 1.2%, 7 increased loan loss coverage ratio to 73.4%, from 60.7% in Q1 2015 Islamic financing portfolio grew by 8.6% for the first six months of 2015 and increased by 28.9% 8 year-on-yea
Slide 5: RHB Banking Group Scorecard 2015
RHB Banking Group Scorecard 2015 Top Level Indicators Target 2015 June 2015 ROE >11.5% 10.3%N1 Loans Growth 10% 1.5%N2 CASA Growth >10% 7.7%N2 Gross Impaired <1.8% 2.05% Loans Ratio Cost to Income Ratio <51% 55.5% International Contribution >13% 14.3% N1 Annualised N2 Changes from Dec 2014 to June 2
Slide 6: Corporate Development
Corporate Development RHB Islamic Bank has on 26 August 2015, entered into an exclusive Bancatakaful Service Arrangement with Syarikat Takaful Malaysia Berhad (“STMB”). Pursuant to the Service 1 Arrangement, STMB shall pay RHB Islamic Bank a total service fee of RM110 million and in consideration th
Slide 7: H1 2015 Financial Results
Executive Summary H1 2015 Financial Results Update on Corporate Exercise Reframed Group Strategy Summary and Outlook
Slide 8: Financial Results
Financial Results Q-o-Q Y-o-Y Year-on-Year Performance: Q2 2015 Q1 2015 Change H1 2015 H1 2014 Change RM mil % % ♦ Gross fund based income increased by 13.2% on the back of 9.2% growth in gross loans and financing. Net Interest Income 784 800 -2 1,584 1,650 -4 ♦ Funding and interest expense was high
Slide 9: Income Mix & NIM
Income Mix & NIM Income Mix 35% 32% 39% 35% 34% 33% 35% 41% 65% 68% 61% 59% 65% 66% 67% 65% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 H114 H115 Net Fund Based Income Non-fund Based Income Net Interest Income & NIM 2.33% 2.29% 2.29% 2.26% 2.22% 2.40% 2.35% 2.30% 2.13% 2.25% 2.20% 2.15% 2.10% 95
Slide 10: Other Operating Income
Other Operating Income RM mil Composition H1 2014 926 H1 2015 5% 7% Fund Management (5%) & UT Fee ▲34% 24 94 (8%) 17% Net Brokerage ▲1% 1 174 (14%) Service Charges, Commission, 8% 63% Guarantee & Commitment Fees ▼2% -5 263 (6%) (67%) Corporate Advisory, Underwriting & Arrangement Fees and Other Fee
Slide 11: Operating Expenses
Operating Expenses Composition RM mil 10% 10% 9% 9% H1 2014 1,583 H1 2015 20% 21% (10%) 61% (8%) 60% Personnel ▲4% 43 1,002 Cost H1 2014 H1 2015 Personnel Costs Establishment ▲7% 22 Cost 346 Establishment Costs Marketing Expenses Marketing Administration and General Expenses ▲10% 13 151 Expenses Cos
Slide 12: Allowances for Loan Impairment
Allowances for Loan Impairment Increase/Decrease in Allowances for Loan Impairment RM mil 7 ▼ 88% 25 95 -159 72 -31 9 H1 2014 Increase in IA Decrease in Increase in Others Decrease in CA Decrease in Write H1 2015 Recoveries (Write-back) Off Asset Quality Allowances for Loan Impairment & Credit Charg
Slide 13: Financial Position as at 30 June 2015
Financial Position as at 30 June 2015 Change for Y-o-Y June Dec June Change 6M 2015 RM mil 2015 2014 2014 % % Total assets increased by 1.8% mainly driven by growth of Financial Assets/AFS and loans and Total Assets 223,239 219,354 205,523 2 9 financing assets. Total Financial Excluding one larg
Slide 14: Loans, Advances and Financing
Loans, Advances and Financing RM mil 252 107 - 43 - 355 352 1,124 - 766 3,446 - 921 - 1,001 144,681 142,486 Dec 2014 Purchase of Purchase of Working Personal Use Purchase of Credit Card Purchase of Purchase of Merger and Others June 2015 Res. Property Non-Res. Capital PPE Other Securities Transport
Slide 15: Loans Profile and Market Share
Loans Profile and Market Share Gross Loans Gross Loans by Interest/ RM bil Profit Rate Sensitivity 14% 25% 300 20% 16% 11% 17% 15% 16% 13% 9% 9% 250 14% 9% Fixed Rate 14% 10% 200 9% 6% 21% 10% 5% 0% 8% 150 -5% 100 142.5 144.7 Variable 121.8 -10% -15% 97.4 111.5 50 Rate -20% 0 79% 2011 2012 2013 2014
Slide 16: Loans By Type of Customers
Loans By Type of Customers Composition Loans by Type of Customers RM mil 5% 4% 1,478 7% -6,249 11% 10% 2,461 11% 12% 4,505 9% 6% 7% 24% 26% 29% 27% 30% 144,681 142,486 14% 12% 10% 12% 10% Dec 2014 SME Individuals International Corporate Jun 2015 45% 45% 45% 46% & Others 43% June 2015 20,761 66,736 1
Slide 17: Customer Deposits
Customer Deposits RM mil FD CASA Dec 2014 157,134 -2% +8% Demand Deposits 2,356 Jun 2015: RM120,352 mil Jun 2015: RM36,783 mil Dec 2014: RM122,935 mil Dec 2014: RM34,167 mil Saving 260 Deposits CA SA Fixed - 2,583 Deposits +9% +3% Jun 2015 157,166 ▬ Jun 2015: RM28,596 (23%) mil Jun 2015: RM8,187 mil
Slide 18: Customer Deposits Profile & Market Share
Customer Deposits Profile & Market Share RM bil Customer Deposits RM bil FD & NID Maturity Structure 23% 350 23% 19% 122.9 120.4 14% 20% 108.8 105.6 0.8 0.5 300 19% 8% 8% 88.1 1.0 0.4 13% 10% 20.3 17.7 250 14% 5% 1.5 18.2 12.2 8% -0.4% 8% 2% 200 0% 14.8 150 -2% 101.8 102.2 -10% 89.6 93.0 100 71.8 13
Slide 19: Funding
Funding Funding Composition CASA Composition 1% 1% 1% 1% 2% RM bil 2% 3% 3% 3% 3% 11% 11% 12% 12% 12% 7% 8% 60.0 29.5% 9% 10% 9% 24.0% 23.4% 50.0 23.3% 24.5% 21.3% 21.7% 40.0 19.5% 79% 77% 75% 74% 74% 30.0 14.5% 20.0 9.5% 36.8 32.1 34.2 27.8 29.4 2011 2012 2013 2014 Jun 2015 10.0 4.5% Customer Depos
Slide 20: PBT by SBG
PBT by SBG RM mil Composition Retail TSY H1 2014 1,376 +43% +53% 6% 11% (3%) (7%) 23% Retail 202 H1 2015: RM671 mil H1 2015: RM159 mil (44%) H1 2014: RM469 mil H1 2014: RM104 mil 13% TSY 55 (15%) GIB BBG GIB 38 47% +80% -21% (31%) BBG - 49 H1 2015: RM85 mil H1 2015: RM182 mil Corporate & Investment
Slide 21: Asset Quality
Asset Quality Gross Impaired Loans Ratio Gross Impaired Loans Ratio (%) by Purpose Loan Loss 68.1% 66.0% 63.7% 61.1% 73.4%* Working Capital Purchase of Residential Coverage Property (%) 3.59 6.1 3.9 5.3 3.6 5.3 4.4 3.3 3.4 2.5 2.2 2.99 2.81 2011 2012 2013 2014 Jun 2011 2012 2013 2014 Jun 2.68 2015 2
Slide 22: RHB Capital: Capital Position & Market Capitalisation
RHB Capital : Capital Position & Market Capitalisation N1 Leverage Ratio Gearing and Double Leverage N2 Multiple (times) Times 13.1 0.8 149% 136% 134% 137% 134% 12.5 120 % 0.54 11.7 11.4 0.5 11.1 0.39 0.39 0.36 0.36 70% 0.2 20% 2011 2012 2013 2014 Jun 2015 2011 2012 2013 2014 Jun 2015 Gearing Double
Slide 23: Capital Position (1/2)
Capital Position (1/2) RHB Bank Group: Capital Development in H1 2015 ▲0.9% ▲0.5% ▲0.1% 16.5% 15.0% 12.2% 11.0% 15.0% 15.9% 16.4% 8.0% 11.9% 6.0% 10.6% 4.5% Dec 2014 Capital Optimisation Increase Issuance of New Jun 2015 2015 Requirements & Porfolio Migration in CET1 Sub-Debt/Effect of to IRB Transi
Slide 24: Capital Position (2/2)
Capital Position (2/2) RM bil RHB Islamic Bank RM bil RHB Investment Bank 16.3% 18% 2.5 35% 6.5 15.2% 16% 2.3 5.5 2.1 26.3% 30% 14% 1.9 25% 1.7 4.5 12% 23.3% 12.9% 1.5 20% 3.5 2.8 11.5% 3.0 10% 1.3 1.0 1.0 1.0 1.0 1.1 2.5 2.2 2.3 8% 0.9 15% 0.7 6% 10% 1.5 0.5 4% 0.3 5% 0.5 0.1 2% -0.1 0% -0.5 Dec 20
Slide 25: Update on Corporate Exercise
Executive Summary H1 2015 Financial Results Update on Corporate Exercise Reframed Group Strategy Summary and Outlook
Slide 26: Shareholders at EGM Approved All Resolutions
Shareholders, at EGM on 27 August approved all resolutions Resolutions passed: 1 i. Ordinary Resolution 1 : Proposed Rights Issue ii. Ordinary Resolution 2: Proposed Transfer of Listing Status to RHB Bank iii. Special Resolution 1: Proposed Distribution and Capital Repayment by RHB Capital iv. Spe
Slide 27: Internal Reorganisation Plan
Internal Reorganisation Plan The key milestones as set out in the Circular to Shareholders are as follow: 13 Apr Board approval and Announcement to Bursa 23 Jul Mid Nov Approval from Bank 28 May Negara Malaysia Completion of Internal Application to Bursa Reorganization and Securities 27 Aug Co
Slide 28: Reframed Group Strategy
Executive Summary H1 2015 Financial Results Update on Corporate Exercise Reframed Group Strategy Summary and Outlook
Slide 29: Reframed Strategy: Focus more on performance over size
Reframed Strategy: Focus more on performance over size By 2020 To be a leading multinational financial services group Original Aspirations Revised Aspirations Focus on Top 3 in Malaysia/Top 8 in ASEAN 1 Top 3 in Malaysia/Top 8 in ASEAN performance by size and performance over size by performance Str
Slide 30: Target ROE of 13% in 2017 and 15% in 2020
Our focus on performance (i.e. ROE) is anchored on 3 key broad themes Target ROE of 13% in 2017 and 15% in 2020 3 “…Address fundamentals “…Creating the competitive of our business to Optimise capital and balance advantage to drive generate profits to fund sheet 4 sustained growth and our journey and
Slide 31: Sharpening Focus on 17 Initiatives to Deliver IGNITE 2017
Reframed Strategy: Sharpening our focus on 17 initiatives to deliver IGNITE 2017 ♦ Affluent Segment Strategy ♦ Tactical Cost Savings ♦ Capital Optimisation Leverage strong relationship with Reducing non-payroll cost by 10% Reduce capital consumption through SME owners and corporate C-suites ♦ Produc
Slide 32: Summary and Outlook
Executive Summary H1 2015 Financial Results Update on Corporate Exercise Reframed Group Strategy Summary and Outlook
Slide 33: Economic Outlook
Economic outlook Economic outlook to remain challenging on weaker domestic demand as consumers and businesses adjust to the implementation of the GST Business and consumer sentiment may also be affected by the slowdown in the property market, commodity weakness and the current level of the ringgit E
Slide 34: Summary and Concluding Remarks
Summary and concluding remarks H1 2015 results credible in the midst of current global macroeconomic environment Global economic outlook is expected to remain challenging, hence immediate focus on optimizing cost and capital efficiency and managing asset quality Boosted loan loss coverage ratio towa
Slide 35: Investor Relations Contact
www.rhbgroup.com INVESTOR RELATIONS CONTACT: Ms Yap Choi Foong Group Chief Financial Officer +(603) 9280 2489 cfyap@rhbgroup.com Mr Khairul Rifaie Head, Investor Relations +(603) 9280 5711 khairul.rifaie@rhbgroup.com This material is prepared for general circulation. Any recommendation or view conta
Slide 36: Key Business Highlights
mem Arnineindix rhe Key Business Highlights be | Myanmar 4
Slide 37: Retail Business Performance
Retail Business Performance Mortgage Personal Use 7.7% 8.0% 7.3% 7.0% 7.0% 8.9% 9.1% 9.2% 7.4% 7.8% 31.5 33.1 20.6 22.2 25.5 7.7 7.9 5.8 7.2 5.0 2011 2012 2013 2014 Jun 2015 2011 2012 2013 2014 Jun 2015 Mortgage Loans (RM bil) Market Share Personal Use (RM bil) Market Share Auto Finance Credit Card
Slide 38: CIB Market Share
CIB Market Share YTD Jun 2015 FY 2014 FY 2013 Market Share Ranking Market Share Ranking Market Share Ranking Debt Capital Market - sukuk* 20.13% 1 12.4% 4 17.6% 4 - conventional & 23.37% 1 11.5% 4 16.3% 4 Islamic bonds Mergers & Acquisitions - by value 5.02% 10 22.4% 1 11.8% 3 - by deal count 11 dea
Slide 39: Equities, Futures & Asset Management
Equities, Futures & Asset Management Jun 2015 FY 2014 Total AUM RM bil Equities Market Market Ranking Ranking (by value) Share Share 12.1% 12.1% 15.0% 10.0% 10.0% Malaysia 48.5 49.4 10.0% - By value 8.6% 4th 9.5% 3rd 39.3 5.9 2.6% 5.9 5.0% - By volume 12.8% 2nd 13.7% 2nd 1.3 31.0 0.0% 21.3 21.3 Sing
Slide 40: Business Banking and SME
Business Banking and SME Gross Loans Customer Deposits RM bil RM bil 25. 0 35.0 17.4% 14.1% 12.8% 12.8% 20. 0% 8.8% 9.3% 9.3% 8.8% 15. 0% 30.0 7.1% 20. 0 10. 0% -0.4% 25.0 5.0 % 0.0 % 20.9 21.2 15. 0 20.0 19.2 -5.0% -10.0% 15.0 16.4 15.0 11.3 12.0 18.9 10.8 10. 0 17.8 9.4 -15.0% 14.5 15.8 -20.0% 8.9
Slide 41: Islamic Financial Performance
Islamic Financial Performance PBT Gross Loans RM mil RM bil 350 6.9% 7.6% 7.6% 6.5% 6.6% 300 250 200 150 304 27.7 25.5 211 209 218 18.7 100 169 16.3 50 13.1 0 2011 2012 2013 2014 H1 2015 2011 2012 2013 2014 Jun 2015 Growth 133% -1% 5% 39% 33%* Growth 44% 25% 15% 36% 29%* Gross Loans Market Share Ass
Slide 42: RHB Singapore Business Performance
RHB Singapore Business Performance 80 PBT Loans, Deposits & Total Assets SGD mil 74 SGD bil 70 8.3 60 32 7.7 0.5 0.3 50 6.1 42 39 5.2 0.9 30 40 9 4 0.8 4.5 4.8 30 4.1 4.2 3.4 3.6 7.8 2.8 7.4 20 39 42 2.5 33 35 32 1.7 2.3 2.1 5.2 10 4.4 - (2) (1 0) 2011 2012 2013 2014 Jun 2015 2011 2012 2013 2014 H1