Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — 9M 2021 Earnings Presentation
45 slides from Rhb Bank Bhd's earnings presentation, Nov 30, 2021
Slide 1: RHB Bank Berhad Analysts Presentation 9M 2021 Financial Results
RHB BANK BERHAD Analysts Presentation 9M 2021 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 30 November 2021
Slide 2: Executive Summary 9M 2021 Financial Results Strategy Update
1. Executive Summary 2. 9M 2021 Financial Results 3. Strategy Update 4. Sustainability Update 5. Summary and Outlook
Slide 3: Executive Summary
Executive Summary
Slide 4: Repayment Assistance Update (1/3)
Repayment Assistance Update (1/3) 4 4 Domestic outstanding RA increased marginally from 28% as at early-August 2021 to 31% as at 10th November 2021 The increase was observed across all segments, whilst Commercial recorded an improvement by RM0.5 bil contributed by borrowers who have exited the p
Slide 5: Repayment Assistance Update (2/3)
Repayment Assistance Update (2/3) 5 5 Analysis on outstanding RA by options For Retail, SME and Commercial, most of the borrowers opted for deferment of instalments whilst majority of Corporate borrowers are under R&R / reduction in instalments: Additional % of Outstanding RA (10th Nov 2021) Analy
Slide 6: Repayment Assistance Update (3/3)
Repayment Assistance Update (3/3) 6 6 Analysis on Total Loans by Stage 2 and 3 Stage 2 loans for all segments showed improvement between June and October 2021 Stage 3 loans remained benign across all segments Retail SME 16.5% 17.1% 16.4% 5.8% 5.6% 5.5% 1.0% 1.0% 0.9% 3.0% 3.0% 2.9% Jun-21 Sep-21
Slide 7: Highlights of Q3 & 9M 2021 Performance (1/3)
7 Highlights of Q3 & 9M 2021 Performance (1/3) 7 Q3 2021 (Year-on-year) Net fund based income grew 20.4% Y-o-Y to RM1,491.9 million from higher gross fund based income and lower funding cost Non-fund based income grew 5.2% Y-o-Y to RM621.1 million mainly from higher net trading and investment in
Slide 8: Highlights of Q3 & 9M 2021 Performance (2/3)
8 Highlights of Q3 & 9M 2021 Performance (2/3) 8 9M 2021 (Year-on-year) Net fund based income grew 16.2% Y-o-Y to RM4,340.8 million mainly due to proactive funding cost management Non-fund based income dipped 2.0% Y-o-Y to RM1,737.9 million mainly from lower net trading and investment income, de
Slide 9: Highlights of Q3 & 9M 2021 Performance (3/3)
9 Highlights of Q3 & 9M 2021 Performance (3/3) 9 Gross loans and financing Expanded 1.9% Q-o-Q to RM194.6 billion attributed to growth in mortgage, SME, Corporate, Commercial and Singapore (Domestic loans growth Q-o-Q: +1.6%) Expanded 4.6% YTD attributed to growth in mortgage, SME, Commercial
Slide 10: RHB Banking Group Scorecard for FY2021
RHB Banking Group Scorecard for FY2021 10 10 Top Level Indicators Target FY2021 Actual 9M 2021 N1 ROE 9.0% 9.7% [10.3%] Annualised Loans Growth 4%-5% 6.1% CASA Composition 30.0% 30.1% Gross Impaired Loans Ratio <2.00% 1.32% N1 Cost-to-Income Ratio ≤46.5% 44.5% [43.0%] N1 Excluding modification loss
Slide 11: 9M 2021 Financial Results
9M 2021 Financial Results
Slide 12: Resilient 9M 2021 performance driven by higher net fund based income
Resilient 9M 2021 performance driven by higher net fund based income; Maintained positive 1212 JAWS; Uptick in credit charge ratio N1 N1 Financial Results Profitability Ratios Total Operating Profit Profit Net Profit to Return on Cost-to-Income Non-Fund Based/ Income Before Allowances Before Tax Sha
Slide 13: 9M 2021 and Q3 profit grew Y-o-Y from higher net fund based income
9M 2021 and Q3 profit grew Y-o-Y from higher net fund based income, mitigated by higher ECL; 1313 Q3 profit declined Q-o-Q from ML impact and higher ECL Q3 Q2 Q3 9M 9M RM’ mil Q-o-Q Y-o-Y Y-o-Y 2020 2021 2021 2020 2021 Net Fund Based Income 1,239.5 1,431.9 1,491.9 4.2% 20.4% 3,735.9 4,340.8 16.2% No
Slide 14: Underlying performance of 9M 2021 aided by higher income
Underlying performance of 9M 2021 aided by higher income but partly offset by higher ECL 14 14 Q3 Q2 Q3 9M 9M RM’ mil Q-o-Q Y-o-Y Y-o-Y 2020 2021 2021 2020 2021 Total Income 1,830.1 2,005.5 1,940.9 -3.2% 6.1% 5,117.7 5,869.4 14.7% Add back: Modification Loss - - 172.1 - - 392.4 209.3 46.7 Normalised
Slide 15: Net fund based income grew 16.2% Y-o-Y; NIM at 2.13%
Net fund based income grew 16.2% Y-o-Y mainly due to proactive funding cost management; 1515 NIM dipped marginally to 2.13% RM’bil Y-o-Y: -6.8% Y-o-Y: +2.1% Y-o-Y: +28.9% Y-o-Y: +18.1% Y-o-Y: +16.2% 7.64 Y-o-Y: +20.4% 7.12 Q-o-Q: +4.2% Fund Based Income 2.36 2.35 2.41 4.34 3.91 3.74 Fund Based Expen
Slide 16: Customer fee related income increased 11.1% Y-o-Y
Customer fee related income increased 11.1% Y-o-Y; However, overall non-fund based income 16 declined mainly due to lower net trading and investment income 16 RM’mil Y-o-Y: +5.2% Y-o-Y: -2.0% Q-o-Q: +8.3% 1,774.2 1,737.9 49.5 47.2 Others 621.1 573.6 728.6 535.4 590.6 Treasury Income 12.7 8.7 17.8 19
Slide 17: Operating expenses grew by 4.6% Y-o-Y
Operating expenses grew by 4.6% Y-o-Y mainly from higher personnel, IT and marketing expenses; 1717 Maintained positive JAWS; CIR improved Y-o-Y to 44.5% Q3 Q2 Q3 9M 9M RM’ mil Q-o-Q Y-o-Y Y-o-Y 2020 2021 2021 2020 2021 Personnel Costs 529.9 528.7 531.0 0.4% 0.2% 1,541.7 1,612.0 4.6% Establishment C
Slide 18: Loans grew 4.6% YTD
Loans grew 4.6% YTD led mainly by mortgage, SME, Commercial and Singapore; 1818 Domestic loans grew 2.6% YTD, exceeding industry growth Sep Dec Jun Sep RM’mil Q-o-Q YTD Y-o-Y 2020 2020 2021 2021 GROUP COMMUNITY BANKING 115,237 116,976 119,218 120,778 1.3% 3.3% 4.8% Retail 93,512 94,973 96,364 97,114
Slide 19: Total deposits grew 5.2% YTD; CASA ratio at 30.1%
Total deposits grew 5.2% YTD attributed to growth in CASA, FD and MMTD; CASA ratio remained 1919 healthy at 30.1% Customer Deposits CASA by Segment RM’bil Y-o-Y: +8.8% Sep Dec Jun Sep YTD: +5.2% RM’bil Q-o-Q YTD Y-o-Y 2020 2020 2021 2021 Q-o-Q: -0.7% Group Community Banking 35.3 36.3 39.6 40.5 2.3%
Slide 20: Credit charge ratio remained elevated in Q3 2021
Credit charge ratio remained elevated in Q3 2021 as we continued to exercise prudence in 20 provisions Allowances for Losses on Loans RM’mil 1.18% 0.5 0% 0.45% 900 900 1.1 0% 800 0.9 0% 800 0.39% 0.4 0% 700 0.51% 0.7 0% 700 651 549 0.46% 0.39% 600 0.5 0% 600 N1 526 0.3 0% 92 500 0.37% 0.3 0% 500 N1
Slide 21: Improved GIL ratio in Q3 2021; LLC strengthened to 147.9%
Improved GIL ratio in Q3 2021 from write-offs and recoveries for non-retail borrowers; LLC 21 strengthened to 147.9% Gross Impaired Loans 600000.00% 7.45% 11.20% 10.45% 8.27% 8.23% 2.10% 550000.00% 500000.00% 1.90% 450000.00% 400000.00% 1.71% 1.69% 1.66% 1.70% 350000.00% 1.63% Gross Loans - Stage 2
Slide 22: Significant GIL improvement in Corporate and Singapore
Significant GIL improvement in Corporate and Singapore due to recoveries and write-offs, Stage 2 22 on improving trend in most key segments Group Community Banking Mortgage Unsecured Auto Finance SME 2.00% 10.60% 5.02% 4.79% 8.24% 11.96% 8.01% 7.33% 6.76% 11.58% 6.90% 7.55% 22.53% 18.11% 16.53% 17.0
Slide 23: Profit grew in most business segments
Profit grew in most business segments – Retail, SME, CBIB, Treasury and Overseas; Insurance 2323 impacted by MTM on securities’ losses Group Community Banking Group Wholesale Banking Group International Business 9M 2021: RM2.77 bil 9M 2021: RM2.69 bil 9M 2021: RM0.53 bil 9M 2020: RM2.63 bil 5.4% 9M
Slide 24: Capital position remained strong for the Group
Capital position remained strong for the Group and key banking subsidiaries; lower ratios for IB 24 mainly due to capital repayment to the Bank from disposal of RHB Securities Singapore 24 RHB Bank Group RHB Bank 20. 0% 20. 0% 19. 0% 18. 0% 18.4% 19.4% 18. 0% 16.9% 18.5% 17. 0% 16. 0% 16. 0% 16.2% 1
Slide 25: Strategy Update
Strategy Update
Slide 26: FIT22 Key Highlights (1/2)
FIT22 Key Highlights (1/2) 26 26 • Premier Banking customers increased to 82.2k (+3.5% from Dec 2020), of which 33.9% are SME owners Affluent • Total AUM of Premier customers grew to RM42.5 bil (+6.5% from Dec 2020) • Affluent fee income grew to RM165.9 mil (+50.0% from Sep 2020) • Deposits increase
Slide 27: FIT22 Key Highlights (2/2)
FIT22 Key Highlights (2/2) 27 27 Analytics • Continued to drive business performance via analytics with RM128.9 mil of benefits realised as at Sep 2021 and Big • Increased analytics use cases for 2021, e.g. identifying suitable customers for flexible lending offers, improving Data conversion rates f
Slide 28: Sustainability Update
Sustainability Update
Slide 29: Our Sustainability Key Highlights
Our Sustainability Key Highlights 29 RM5 bil Green Financing Commitment by 2025 - RM3.79 bil extended as at Sep-21; 19% for renewable energy projects Launched Sustainable Financing Programme for SMEs and Retail customers – a product bundle comprising Green Energy, Green Buildings, Green Process
Slide 30: Summary & Outlook
Summary & Outlook
Slide 31: Outlook for FY2021
Outlook for FY2021 31 31 Q3 2021 GDP contracted 4.5% year-on-year (Q2 2021: +16.1%) due to slowdown in economic activities Economic from the re-imposition of nationwide containment measures Outlook For 2022, Malaysia’s GDP is projected to improve further to 5.5% as recovery strengthens The ban
Slide 32: Concluding Remarks
Concluding Remarks 32 32 The Group delivered a resilient performance and maintained our strong fundamentals despite the continued challenging business environment in the first nine months of 2021 The positive pace of economic activity which supports recovery is expected to continue into 2022. Ho
Slide 33: 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 34: Appendix
Appendix
Slide 35: Key Financial Data
Key Financial Data 35 35 Financial Data FY2017 FY2018 FY2019 FY2020 9M 2021 RM’mil Income Statement Total Income 6,384 6,806 7,058 7,186 5,869 Pre-Provisioning Operating Profit 3,200 3,448 3,670 3,799 3,257 Profit Before Tax 2,558 3,119 3,394 2,644 2,606 Net Profit 1,950 2,305 2,482 2,033 1,987 Bala
Slide 36: Key Financial Ratios
Key Financial Ratios 36 36 Financial Ratios FY2017 FY2018 FY2019 FY2020 9M 2021 Profitability Return on Equity 9.1% 10.3% 10.3% 7.7% 9.7% Net Interest Margin * 2.18% 2.24% 2.12% 2.06% 2.14% Cost to Income Ratio 49.9% 49.3% 48.0% 47.1% 44.5% Asset Quality Gross Impaired Loan Ratio 2.23% 2.06% 1.97% 1
Slide 37: Segmental Performance 9M 2021
Segmental Performance 9M 2021 37 Group Community Banking Group Wholesale Banking 9M 2021: RM2.39 bil 9M 2021: RM1.65 bil 9M 2020: RM2.32 bil 2.8 9M 2020: RM1.24 bil 33.1% Fund 2.8% Based Income 1,688 1,735 97.9% 2.8% 8.6% 960 17.9% 636 654 753 688 485 347 409 Retail SME CBIB Treasury International G
Slide 38: O&G Exposure (Loans + Bonds)
O&G Exposure (Loans + Bonds) 38 38 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 Sep 2021 2.6 1.3% 1.0 0.5% 3.6 1.9% Dec 2020 2.8 1.5% 1.0 0.5% 3.8 2.0% Dec 2019 2.5 1.4% 1.6 1.0% 4.2 2.4% Dec
Slide 39: Retail Banking
Retail Banking 39 39 RM’bil Gross Loans RM’bil Customer Deposits Y-o-Y: +3.9% Y-o-Y: +9.9% 71.0 100 .0 64.6 90.0 11.6 13.4 9.9 80.0 70.0 60.0 8.7 50.0 93.5 97.1 44.3 47.6 40.0 30.0 20.0 10.0 - Sep 2020 Sep 2021 Sep 2020 Sep 2021 Fixed Deposits Demand Deposits Savings Deposits Retail Market Share * A
Slide 40: SME
SME 40 40 Gross Loans Customer Deposits RM’bil RM’bil Y-o-Y: +8.3% Y-o-Y: +8.9% 30.0 25.9 28.1 25.0 17.2 20.0 15.0 15.0 10.0 21.7 23.7 5.0 10.9 10.9 - Sep 2020 Sep 2021 Sep 2020 Sep 2021 Fixed Deposits Demand Deposits SME Market Share * RM’bil Asset Quality 9.7% 9.7% 2.90% 3.01% 2.98% 9.6% 2.67% 2.9
Slide 41: Asset Under Management and Market Positions
Asset Under Management and Market Positions 41 41 RM’bil Asset Under Management Market YTD Sep 2021 Ranking Share Y-o-Y : +2.3% Equities Broking: - By value 9.2% 4th 57.0 58.3 - By volume 10.7% 3rd 8.0 8.8 10.2 9.2 Debt Capital Markets: - MYR sukuk 14.7% 3rd - Total MYR bonds (Conventional 15.1% 3rd
Slide 42: Investment Banking – Notable Deals
Investment Banking – Notable Deals 42 42 CF/ECM DCM M&A CTOS Digital Berhad MMC Corporation Berhad Malaysia Rail Link Sdn Bhd RM2,938.0 mil RM1.2 bil IPO Third issuance of Sukuk Murabahah RM2.5 bil via its Joint Principal Adviser, Joint Global Coordinator, Seaport Terminal (Johor) Sdn Bhd's proposed
Slide 43: Islamic Banking
Islamic Banking 43 43 PBT Gross Financing RM’mil RM’bil Y-o-Y: + >100% Y-o-Y: +7.8% 80.0 70.0 60.0 50.0 71.5 40.0 30.0 66.3 719 20.0 10.0 - 285 Sep 2020 Sep 2021 9M 2020 9M 2021 Market 10.0% 10.2% Share Gross Financing/ Asset Quality Total Gross Financing (Domestic) RM’bil 0.65% 0.65% 0.65% 42.2% 41
Slide 44: RHB Bank Singapore
RHB Bank Singapore 44 44 SGD’mil PBT Loans, Deposits & Total Assets SGD’bil 12.6 Y-o-Y: 2.3% 11.6 10.6 9.6 8.6 8.1 9.3 10.3 10.5 5.8 6.3 6.5 4.9 7.6 6.6 5.6 Sep 2020 Sep 2020 Sep 2021 9M 2020 9M 2021 Sep 2021 Gross Loans Deposits Total Assets Gross Impaired Loans Ratio Credit Charge Ratio 5.35% 4.89
Slide 45: Overseas Loans
Overseas Loans 45 45 Sep Dec Jun Sep RM’mil Q-o-Q YTD Y-o-Y 2020 2020 2021 2021 Overseas Operations 19,200 20,017 23,260 24,174 3.9% 20.8% 25.9% Singapore 14,931 15,568 18,578 19,370 4.3% 24.4% 29.7% Others 4,269 4,449 4,682 4,804 2.6% 8.0% 12.5% Cambodia 2,383 2,353 2,607 2,709 3.9% 15.1% 13.7% Tha