Hong Leong Financial Group Bhd. · MYX:HLFG
Hong Leong Financial Group Bhd — Investor Presentation (August 2020)
34 slides from Hong Leong Financial Group Bhd's investor presentation, Aug 28, 2020
Slide 1: Investor Presentation
INVESTOR PRESENTATION 28 August 2020
Slide 2: Contents
Contents Corporate Structure / Principal Businesses FY20 Financial Highlights FY20 Results Summary – Segmental PBT HLFG Key Trends Highlights: Banking Division (Please refer to HLB’s IR slides) Insurance Division Investment Banking Division ESG Appendices FY20 Recognitions/ Awa
Slide 3: Corporate Structure / Principal Businesses
Corporate Structure / Principal Businesses Hong Leong Financial Group Financial services holding co. * 64.37% 100% * 81.33% Hong Leong Bank HLA Holdings Hong Leong Capital Commercial banking Insurance holding co. Investment holding 100% 70% 100% Hong Leong Islamic Bank Hong Leong Assurance Hong Leon
Slide 4: FY20 Financial Highlights
FY20 Financial Highlights Net Profit Attributable To Shareholders at RM1.86 bn, lower 3.2% yoy. HLFG Book Value per share increased 9.8% yoy to RM18.43. Net dividend per share: 38.0 sen, -4.0 sen yoy. Net Profit was RM2.50 bn, lower 6.4% yoy. HLB Loans grew 6.1% yoy, better than market (In
Slide 5: FY20 Results Summary – Segmental PBT
FY20 Results Summary – Segmental PBT Group (YE June) FY19 % FY20 % yoy RM'mil contribution contribution (%) Commercial Banking 3,186.0 90.9 2,989.4 90.6 (6.2) Insurance 329.2 9.4 256.4 7.8 (22.1) Investment Banking 76.7 2.2 95.8 2.9 24.9 Others (86.3) (2.5) (42.1) (1.3) (51.2) Pretax profit 3,505.6
Slide 6: HLFG Key Trends
HLFG Key Trends Despite Covid-19 impact, HLFG remained resilient. The Net Profit Attributable To Shareholder recorded at RM1,858 million, slightly reduced by 3.2% yoy. Net Profit Attributable To Shareholders PBT RMm RMm * MSIG MSIG * deal deal * * Normalised profit Covid-19 Impact & One-off Report
Slide 7: HLFG Key Trends
HLFG Key Trends Lower EPS and ROE due to Covid-19 impact. Earnings Per Share Return on Equity * sen % RM1.1 bn Rights Issue increased shareholders’ funds by 8% * * Normalised profit Covid-19 Impact & One-off Reported profit Denotes non-recurring portion 7
Slide 8: HLFG Key Trends
HLFG Key Trends Book value/share +9.8% yoy to RM18.43. Net DPS - 4 sen to 38.0 sen in FY20 (1st interim dividend = 13 sen; final dividend = 25 sen) Book Value Per Share Net Dividend Per Share RM sen - 4 sen Denotes non-recurring portion 8
Slide 9: HLFG Key Trends
HLFG Key Trends Capital and liquidity positions remained robust and sound to support our future needs even under stressed scenarios. Our Group consolidated capital position stayed comfortably above regulatory limits. Capital Position Debt to Equity & Double Leverage % % Total capital regulatory
Slide 10: Highlights: Banking Division (HLB)
Highlights: Banking Division (HLB) For further information on HLB, please refer to the HLB analyst information slides. 10
Slide 11: Highlights: Insurance Division (HLA)
Highlights: Insurance Division (HLA) FY20 Results Highlights Business Value Creation Strategy Embedded Value (EV) & New Business Embedded Value (NBEV) Market Position Revenue/Distribution Highlights Key Ratios 11
Slide 12: HLA: FY20 Results Highlights
HLA: FY20 Results Highlights Net Profit FY19 FY20 YoY Change YoY Change (RM’mil) (%) Covid-19 Associated Impacts to HLAH Group’s PBT The present short term volatility will not affect the delivery of our long term franchise value creation. Covid-19 12
Slide 13: Business Value Creation Strategy
HLA: Business Value Creation Strategy 13
Slide 14: Digital Transformation Plan
HLA: Digital Transformation Plan 14
Slide 15: HLA: Strategy
HLA: Strategy What do we focus on? 1. Drive NBEV. We are accelerating leverage of digital technologies to transform our 2. Focus on Non-Par/ business and create new value- Investment-Linked products. producing opportunities to better serve our stakeholders. 3. Build leading market position Non-P
Slide 16: HLA: EV & NBEV
HLA: EV & NBEV Embedded Value For the period FY19 FY20 YoY growth ended June (%) RMm (RM mil) + 3.0% EV 2,445 2,518 + 3.0 NBEV 200.3 147.8 - 26.2 NBEV Margin 38.5% 29.2% New Business Embedded Value EV improved by 3.0%. Growth in embedded value RMm reflecting satisfactory operating experience and -
Slide 17: HLA: Non-Par and Investment-Linked/ Par Ratio
HLA: Non-Par and Investment-Linked/ Par Ratio Higher (Non-Par and Investment-Linked)/Participating ratio = Higher New Business Embedded Value Margin. In general, Investment-Linked policies have higher EV margins than Ordinary Life policies. (Non-Par and Investment-Linked)/ Participating ratio
Slide 18: HLA: Market Position
HLA: Market Position Top 4 insurer in terms of New Business Regular Premium (“NBRP”). For FY20, our NBRP grew 3.6% to RM565.1 mil. Emphasis on Investment-Linked business has caused Investment-Linked market share to grow faster than Traditional Life. Market ranking improved to No. 3 position. Ord
Slide 19: HLA: Agency
HLA: Agency Agency growth has slowed in recent years due to higher base as well as non-productive agents leaving. Focus on building a productive and effective agency force. Agency NBRP recorded at RM380 mil, -1.9% yoy. Productivity per agent increased at a slower pace of 4% in FY20, after a sign
Slide 20: HLA: Bancassurance
HLA: Bancassurance No. 5 in Non-Agency (primarily bancassurance) NBRP with 9% market share. Leverage on HLB’s 254 branches. Growing Banca Consultants’ team. Aligned with profitability targets/strategy. Bancassurance tends to have a higher proportion of Non-Par and Investment-Linked policies.
Slide 21: HLA: Distribution Channels
HLA: Distribution Channels Banca premiums have increased by 64% in 4 years. Growing telemarketing/ alternative channels but Agency will continue to be the main distribution channel (77% share of gross premium). Gross YoY Contri Premiums FY16 FY17 FY18 FY19 FY20 Comments (%) (%) (RM’mil) ■ HLA’s co
Slide 22: HLA: Product Category Segments
HLA: Product Category Segments Gross Premiums YoY Contri FY16 FY17 FY18 FY19 FY20 Comments By Segment (%) (%) (RM’mil) No. 8 among all life insurers in this segment by annualized 1. Ordinary NBRP. 2,030 2,045 1,745 1,441 1,210 (16) 43 Life (“OL”) 3.4% market share of NBRP in this segment. Buil
Slide 23: HLA: GP, NBRP & Persistency Ratio
HLA: GP, NBRP & Persistency Ratio Gross Premiums New Business Regular Premium RMm RMm + 3.6% Persistency Ratio RMm New product NBRP for FY20 stood at RM565.1 mil, grew mix/subdued 3.6% yoy. This is attributed to higher economy contribution from Bancassurance. * * * Gross Premiums supported by im
Slide 24: HLA: Cost Efficiency
HLA: Cost Efficiency Amongst the lowest Management Expense Ratio in the industry, we have been spending selectively on marketing & branding. Management Expense Ratio % Amongst the lowest 24
Slide 25: HLCB: FY20 Results Highlights
HLCB: FY20 Results Highlights Net Profit FY19 FY20 YoY Change YoY Change (RM’mil) (%) Covid-19 Associated Impacts to HLCB’s PBT Covid-19 25
Slide 26: Highlights: Investment Banking (HLCB)
Highlights: Investment Banking (HLCB) HLCB’s reported net profit increased 39.1% yoy to RM94.2 million. HLCB is less affected given positive results from its stockbroking division in this period and a steady asset management business with non-significant redemptions. To support the Group’s ini
Slide 27: HLIB & HLAM
HLIB & HLAM Stockbroking Division shows a strong profit growth in FY20, PBT increased almost double yoy. The growth was in line with the higher traded volume in the market. The contribution from stockbroking business to HLCB Group has expanded to 40%, from 30% as at June last year. Asset Manag
Slide 28: ESG
ESG We keep our environmental footprint low and promote responsible consumption to limit negative environmental externalities. Initiatives include minimizing the environmental impact of energy efficiency, reduce paper Environment usage and wastage. Menara Hong Leong was awarded a Green Buildin
Slide 29: Appendix: Further Information
Appendix: Further Information 29
Slide 30: FY20 Recognitions/ Awards
FY20 Recognitions/ Awards Best Cloud Based Project - The Asset Triple A Digital Awards 2020 by The Asset Excellence in Leadership in Asia 2020 - Euromoney Awards for Excellence 2020 Best SME Bank in Malaysia - Asiamoney Best Bank Awards 2019 Best Digital Bank Malaysia - Asiamoney Best Bank A
Slide 31: HLFG Market Capitalisation
HLFG Market Capitalisation RM’Billion X 1.7 times CAGR As at FY20 1-Year -29.6% 3-Year -8.1% 5-Year -1.3% 10-Year 5.4% 31
Slide 32: FY20 Results Summary – Covid-19 Impact
FY20 Results Summary – Covid-19 Impact Group (YE June) FY20 PBT RM'mil HLFG PBT 4,032 Commercial Banking Covid-19 Impact 609 Insurance Covid-19 Impact 50 Investment Banking Covid-19 Impact 18 Total Covid-19 Impact 676 Insurance One-off 56 HLFG PBT after Covid-19 Impact 3,300 32
Slide 33: MSIG (General Insurance)
MSIG (General Insurance) MSIG YE Dec FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 RMm Gross Premiums 965.1 1,241.8 1,326.3 1,425.9 1,486.7 1,535.4 1,522.5 1,536.7 1,536.9 1,470.4 Reinsurance (179.6) (238.4) (289.1) (306.3) (295.1) (301.8) (294.9) (288.2) (279.7) (276.8) Net Premium 785.5 1,003.
Slide 34: Disclaimer
Disclaimer This presentation has been prepared by Hong Leong Financial Group (“HLFG”) for selected recipients for information purposes only. The information contained herein is believed to be correct as of the date of this presentation and is given in summary form and does not purport to be complete
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