Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — H1 2023 Earnings Presentation
41 slides from Rhb Bank Bhd's earnings presentation, Aug 29, 2023
Slide 1: RHB Bank Berhad Analysts Presentation H1 2023 Financial Results
RHB BANK BERHAD Analysts Presentation H1 2023 Financial Results Mohd Rashid Mohamad Group Managing Director/Group Chief Executive Officer RHB Banking Group 29 August 2023
Slide 2: Agenda
1. Executive Summary 2. H1 2023 Financial Results 3. Strategy & Sustainability Updates 4. Summary and Outlook
Slide 3: Executive Summary
Executive Summary
Slide 4: Q2'23 net profit up by 28.4% Y-o-Y to RM808.7 million
4 Q2’23 net profit up by 28.4% Y-o-Y to RM808.7 million 4 Q2 2023 (Year-on-year) ▪ Net fund based income declined 13.9% Y-o-Y to RM1,345.5 million from higher funding costs ▪ Non-fund based income grew 53.4% Y-o-Y to RM534.0 million due to higher net gain on forex and derivatives, and higher net tra
Slide 5: H1'23 net profit resilient at RM1,570.4 million, up 29.5% Y-o-Y
5 H1’23 net profit resilient at RM1,570.4 million, up 29.5% Y-o-Y; ROE at 10.6% 5 H1 2023 (Year-on-year) ▪ Net fund based income declined 10.4% Y-o-Y to RM2,719.2 million from higher funding costs ▪ Non-fund based income grew 46.3% Y-o-Y to RM1,068.0 million due to higher net gain on forex and deriv
Slide 6: Loan and deposit growth subdued; capital and liquidity strong; interim dividend declared
Loan and deposit growth continued to remain subdued; Capital and liquidity strength maintained; 6 Declared an interim dividend of 15 sen per share ▪ Gross loans and financing ▪ Expanded 0.4% Q-o-Q to RM214.2 billion primarily due to growth in mortgage, auto finance, SME and Singapore (Domestic loans
Slide 7: RHB Banking Group Scorecard for H1'23
RHB Banking Group Scorecard for H1’23 7 7 Top Level Indicators Target FY2023 Actual H1 2023 ROE ≥11.0% 10.6% Annualised Loans Growth 4%-5% 1.9% CASA Composition 30.0% 27.6% Gross Impaired Loans Ratio ≤1.50% 1.64% Cost-to-Income Ratio ≤44.6% 47.5%
Slide 8: H1 2023 Financial Results
H1 2023 Financial Results
Slide 9: H1'23 performance driven by higher non-fund based income and lower ECL
H1’23 performance driven by higher non-fund based income and lower ECL; uptick in GIL ratio 99 Financial Results Profitability Ratios Total Operating Profit Profit Net Profit to Return on Cost-to-Income Non-Fund Based/ Income Before Allowances Before Tax Shareholders N1 Equity N1 Ratio Total Income
Slide 10: Q2'23: Q-o-Q and Y-o-Y growth backed by lower ECL
Q2’23: Q-o-Q and Y-o-Y growth backed by lower ECL, offset by lower net fund based income and 1010 higher opex Q2 N2 Q1 Q2 H1 N2 H1 RM’ mil Q-o-Q Y-o-Y Y-o-Y 2022 2023 2023 2022 2023 Net Fund Based Income 1,562.5 1,373.7 1,345.5 -2.1% -13.9% 3,033.3 2,719.2 -10.4% Non-Fund Based Income 348.1 534.0 53
Slide 11: Net fund based income impacted by higher funding costs; NIM
Net fund based income continued to be impacted by higher funding costs; Q-o-Q NIM contracted 1111 by 8 bps to 1.82% Y-o-Y: +35.0% Y-o-Y: +37.2% RM’bil Y-o-Y: ->100% Y-o-Y: ->100% Y-o-Y: -10.4% Y-o-Y: -13.9% Q-o-Q: -2.1% 6.90 Fund Based Income 3.38 3.51 5.03 4.18 Fund Based Expense 2.60 2.01 2.17 3.0
Slide 12: Non-fund based income growth aided by forex and trading income
Non-fund based income growth aided by higher net gain on forex and derivatives, and higher net 12 trading and investment income Y-o-Y: +53.4% Y-o-Y: +46.3% RM’mil Q-o-Q: flat 1,068.0 14.4 534.0 534.0 730.2 Others 5.1 9.3 50.8 551.0 Treasury Income 348.1 138.6 15.8 277.9 273.2 34.4 17.6 Net Income fr
Slide 13: Overall increase in opex; CIR rose to 47.5%
Overall increase in opex; Higher personnel cost included collective agreement adjustments; 1313 CIR rose to 47.5% in H1’23 Q2 Q1 Q2 H1 H1 RM’ mil Q-o-Q Y-o-Y Y-o-Y 2022 2023 2023 2022 2023 Personnel Expenses 522.5 505.6 578.7 14.5% 10.8% 1,040.2 1,084.4 4.2% Establishment Expenses 202.0 214.4 219.6
Slide 14: YTD loan growth led by mortgage, auto finance, SME and Singapore
YTD loan growth led mainly by mortgage, auto finance, SME and Singapore but moderated by the 1414 contraction in corporate Jun Dec Mar Jun RM’mil Q-o-Q YTD Y-o-Y 2022 2022 2023 2023 GROUP COMMUNITY BANKING 128,584 133,189 134,480 136,111 1.2% 2.2% 5.9% Retail 102,821 106,843 107,834 109,115 1.2% 2.1
Slide 15: YTD deposit growth from higher FD; CASA composition 27.6%
YTD deposit growth attributed to higher FD, offset by lower CASA and MMTD; 1515 CASA composition at 27.6% Customer Deposits CASA by Segment RM’bil Y-o-Y: +1.5% Jun Dec Mar Jun YTD: +0.9% RM’bil Q-o-Q YTD Y-o-Y 2022 2022 2023 2023 Q-o-Q: +1.3% GROUP COMMUNITY BANKING 42.2 40.5 39.1 39.0 -0.3% -3.6% -
Slide 16: Q2'23 and H1'23 credit costs improved
Q2’23 and H1’23 credit costs improved due to lower ECL and writeback of management overlay 16 800 1.5 0% 800 1.5 0% Allowances for Losses on Loans 700 700 1.0 0% 1.0 0% RM’mil 600 600 0.40% 500 0.10% 0.5 0% 500 0.16% 0.5 0% 0.04% -0.12% -0.04% -0.19% 400 400 0.0 0% 0.0 0% 300 300 210 -0.50% 165 -0.5
Slide 17: GIL rose Q-o-Q to 1.64% in Q2'23
GIL rose Q-o-Q to 1.64% in Q2’23 17 600000.00% Gross Impaired Loans 2.20% 550000.00% 2.10% 6.28% 5.67% 5.47% 5.71% 5.55% 500000.00% 2.00% 450000.00% 1.90% 400000.00% 1.81% 1.82% 1.74% 1.76% 1.80% 350000.00% 1.72% 1.64% 1.70% 300000.00% 1.62% Gross Loans - Stage 2 (Group) 1.57% 1.59% 250000.00% 1.55%
Slide 18: GIL upticks Q-o-Q mainly from Retail and SME
GIL upticks Q-o-Q mainly from Retail and SME; other segments showed relatively stable GIL 18 Group Community Banking Mortgage Unsecured Auto Finance SME 4.27% 3.68% 4.05% 3.95% 8.42% 8.27% 8.42% 8.41% 6.04% 5.47% 5.64% 5.77% 13.48% 12.21% 12.38% 12.06% 1.40% 950 1.20% 3.23% 0.92% 90 0.36% 0.50% 0.57
Slide 19: Segment revenue and pre-tax profit by GCB, GWB and GIB
GCB profit growth attributed to higher total income; GWB and Insurance supported by higher net 1919 trading and investment income; GIB impacted by higher ECL Group Community Banking (GCB) Group Wholesale Banking (GWB) Group International Business (GIB) H1 2022: RM1,948.8 mil H1 2022: RM1,441.5 mil H
Slide 20: Capital position remained robust for the Group and key subsidiaries
Capital position remained robust for the Group and key banking subsidiaries 20 20 RHB Bank Group RHB Bank 20. 0% 20. 0% 19. 0% 18. 0% 19.3% 19.4% 18. 0% 17.7% 18.4% 17. 0% 16. 0% 16. 0% 16.9% 16.7% 16.9% 16.7% 15. 0% 14. 0% 15.1% 15.3% 15.1% 15.3% 14. 0% 13. 0% 12. 0% 12. 0% 11. 0% 10. 0% 10. 0% 9.0
Slide 21: Declared interim dividend of 15 sen per share, 40.9% payout ratio
Declared interim dividend of 15 sen per share, representing 40.9% payout ratio 21 21 Market Capitalisation Dividend Per Share (sen) 62.9% 62.5% 5.78 5.79 6.00 5.65 50.1% 60.0% 5.45 40.9% 5.37 5.50 34.8% 40.0% 40.00 40.00 20.0% 5.00 24.6 24.2 31.00 0.0% 23.2 4.50 25.00 25.00 -20.0% 22.2 21.9 18.50 4.
Slide 22: Strategy & Sustainability Updates
Strategy & Sustainability Updates
Slide 23: The Group will stay the course in executing TWP24 strategy
The Group will stay the course in executing TWP24 strategy 23 23 TWP24 – H1 2023 Highlights H1 2023 Achievements +2.1% Retail Loans +3.8% Mortgage Loans +4.9% Reflex Customers Be Everyone’s H1 2023 vs. FY2022 H1 2023 vs. FY2022 H1 2023 (157k) vs. FY2022 10.6% Return on Equity (ROE) Primary Bank FY20
Slide 24: 5-year Sustainability Strategy Key Highlights – H1 2023
5-year (2022-2026) Sustainability Strategy 24 24 Key Highlights – H1 2023 1 2 3 Mobilise RM20b in Empower over Achieve Sustainable Financial 2 million targeted individuals and Carbon Neutral Services by 2026 businesses across ASEAN by 2026 Operations by 2030 Cumulative Achievements • Target GHG emis
Slide 25: Summary & Outlook
Summary & Outlook
Slide 26: Outlook for FY2023
Outlook for FY2023 26 26 ▪ Q2 2023 GDP expanded 2.9% YoY (Q1 2023: 5.6% YoY) underpinned by domestic demand and higher tourism Economic activities Outlook ▪ For 2023, Malaysia’s GDP is projected to grow by 4.3% YoY, whilst the OPR is expected to remain accommodative of the banking industry ▪ Elevate
Slide 27: Concluding Remarks
Concluding Remarks 27 27 ▪ The Group’s performance for the first half of the year reflects our ability to deliver sustained performance even during highly uncertain times ▪ However, we remain cautiously optimistic on the outlook for the remainder of FY2023 ▪ Continue to reward our shareholders with
Slide 28: 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 29: Appendix
Appendix
Slide 30: Repayment Assistance Update
Repayment Assistance Update 30 30 ▪ Domestic outstanding RA remained at 2% as at 31st July 2023 Outstanding RA as at: % of Outstanding 30th Apr 2023 31st Jul 2023 Loan Balance RM bil % RM bil % Group Community Banking 3.3 2% 2.6 2% Retail 2.6 2% 1.9 2% SME 0.7 3% 0.7 3% Group Wholesale Banking 1.3 3
Slide 31: Key Financial Data
Key Financial Data 31 31 Financial Data N1 FY2019 FY2020 FY2021 FY2022 H1 2023 RM’mil Income Statement Total Income 7,058 7,186 7,789 8,309 3,787 Operating Profit Before Allowances 3,670 3,799 4,266 4,592 1,987 Profit Before Tax 3,394 2,644 3,529 4,171 2,068 Net Profit 2,482 2,033 2,618 2,708 1,570
Slide 32: Key Financial Ratios
Key Financial Ratios 32 32 Financial Ratios FY2019 FY2020 FY2021 FY2022 H1 2023 Profitability Return on Equity 10.3% 7.7% 9.6% 9.7% 10.6% Net Interest Margin 2.12% 2.13% 2.20% 2.24% 1.85% Cost to Income Ratio 48.0% 47.1% 45.2% 44.7% 47.5% Asset Quality Gross Impaired Loan Ratio 1.97% 1.71% 1.49% 1.5
Slide 33: Segmental Performance
Segmental Performance 33 Group Community Banking Group Wholesale Banking H1 2022: RM1,684.1 mil H1 2022: RM1,062.6 mil 10.5% 45.4% H1 2023: RM1,860.2 mil H1 2023: RM580.5 mil 6.3% Net Fund 1,255 1,181 20.1% 32.9% 55.2% 17.5% Based Income 504 605 468 595 314 266 301 354 Retail SME CBIB Treasury Inter
Slide 34: O&G Exposure (Loans + Bonds)
O&G Exposure (Loans + Bonds) 34 34 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 2023 2.0 1.0% 1.2 0.5% 3.2 1.5% Dec 2022 2.2 1.0% 1.2 0.6% 3.4 1.6% Dec 2021 2.3 1.2% 1.4 0.7% 3.7 1.9% Dec
Slide 35: Retail Banking
Retail Banking 35 35 RM’bil Gross Loans RM’bil Customer Deposits Y-o-Y: +6.1% Y-o-Y: +7.1% 100 .0 73.6 78.8 80.0 13.5 12.1 10.3 9.4 109.1 60.0 40.0 102.8 49.7 57.4 20.0 - Jun 2022 Jun 2023 Jun 2022 Jun 2023 Fixed Deposits Demand Deposits Savings Deposits Retail Market Share * Asset Quality RM’bil 9.
Slide 36: SME
SME 36 36 Gross Loans Customer Deposits RM’bil RM’bil Y-o-Y: +10.5% Y-o-Y: +4.8% 30.0 30.3 33.5 25.0 20.0 17.5 15.0 27.0 18.3 10.0 25.8 5.0 12.0 15.9 - Jun 2022 Jun 2023 Jun 2022 Jun 2023 Fixed Deposits Demand Deposits SME Market Share * RM’bil Asset Quality 3.23% 3.05% 3.08% 9.5% 2.98% 2.99% 9.4% 9
Slide 37: Asset Under Management and Market Positions
Asset Under Management and Market Positions 37 37 RM’bil Asset Under Management Market YTD Jun 2023 Ranking Share Y-o-Y : +5.6% Equities Broking: - By value 7.0% 5th 49.4 - By volume 8.3% 4th 46.8 6.5 8.4 Debt Capital Markets: 8.9 9.3 - MYR sukuk 24.3% 2nd - Total MYR bonds (Conventional 19.5% 3rd &
Slide 38: Investment Banking – Notable Deals
Investment Banking – Notable Deals 38 38 CF/ECM DCM M&A MMC Corporation Berhad MST Golf Group Berhad Sarawak Energy Berhad RM2,937.9 mil RM184.7 mil IPO Issuance of RM3.5 bil IMTN under its RM15.0 bil Sukuk Seaport Terminal (Johor) Sdn Bhd's privatisation of Sole Principal Adviser, Sole Underwriter
Slide 39: Islamic Banking
Islamic Banking 39 39 PBT Gross Financing RM’mil RM’bil Y-o-Y: +6.1% Y-o-Y: +6.3% 90.0 80.0 70.0 60.0 50.0 40.0 30.0 77.6 82.4 517.1 548.4 20.0 10.0 - Jun 2022 Jun 2023 H1 2022 H1 2023 Market 10.1% 9.8% Share Gross Financing/ Asset Quality Total Gross Financing (Domestic) RM’bil 1.38% 44.6% 44.9% 44
Slide 40: RHB Bank Singapore
RHB Bank Singapore 40 40 SGD’mil PBT Loans, Deposits & Total Assets SGD’bil Y-o-Y: -38.2% 40.0 35.0 30.0 25.0 9.9 11.2 20.0 37.4 8.1 15.0 6.8 6.9 7.1 10.0 23.1 5.0 - Jun 2022 Jun 2022 Jun 2023 H1 2022 H1 2023 Jun 2023 Gross Loans Deposits Total Assets Credit Charge Ratio Gross Impaired Loans Ratio 0
Slide 41: Overseas Loans
Overseas Loans 41 41 Jun Dec Mar Jun RM’mil Q-o-Q YTD Y-o-Y 2022 2022 2023 2023 Overseas Operations 26,887 28,792 29,171 30,548 4.7% 6.1% 13.6% Singapore 21,697 23,087 23,323 24,520 5.1% 6.2% 13.0% Cambodia 2,998 3,335 3,467 3,644 5.1% 9.3% 21.5% Others 2,192 2,370 2,381 2,384 0.1% 0.6% 8.8% Thailan