Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — Q1 2017 Earnings Presentation
30 slides from Rhb Bank Bhd's earnings presentation, May 23, 2017
Slide 1: Analysts Presentation 1st Quarter 2017 Financial Results
Analysts Presentation 1st Quarter 2017 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 23 May 2017
Slide 2: Executive Summary
Executive Summary 1st Quarter 2017 Financial Results Strategy Update Summary and Outlook
Slide 3: Highlights of Q1 2017 Performance (1/2)
Highlights of Q1 2017 Performance (1/2) Quarter-on-quarter: • Net profit almost double the amount recorded in the preceding quarter, primarily due to Profitability higher non-fund based income, lower operating expenses and lower loan impairment allowances Year-on-year: • Net profit at RM500.3 mi
Slide 4: Highlights of Q1 2017 Performance (2/2)
Highlights of Q1 2017 Performance (2/2) Investment Banking business recorded better profitability on the back of higher brokerage and wealth management fee income Business Performance Higher profitability in Group Treasury & Global Market mainly due to higher net fund based income and trading/in
Slide 5: RHB Banking Group Scorecard For Q1 2017
RHB Banking Group Scorecard For Q1 2017 Top Level Indicators Target 2017 Actual Q1 2017 ROE 9% - 10% 9.1% N1 Loans Growth 5% 3.2% N2 CASA Growth 8% 14.5% N2 Gross Impaired Loans Ratio < 2.5% 2.39% Cost to Income Ratio < 50% 48.9% Overseas Profit Contribution 10% -2% N1: Annualised N2: Year-on-year g
Slide 6: 1st Quarter 2017 Financial Results
Executive Summary 1st Quarter 2017 Financial Results Strategy Update Summary and Outlook
Slide 7: Group recorded Q-o-Q improvements, however Y-o-Y profitability was impacted
Group recorded Q-o-Q improvements, however Y-o-Y profitability was impacted by margin compression, lower fee income and higher loan impairment allowances on loans impaired in 2016 Financial Position Financial Results Key Financial Ratios Operating Non Interest Total Gross Total Profit Before ROE Inc
Slide 8: Strong Q-o-Q results from higher non-fund based income and lower loan impairment loss
Strong Q-o-Q results from higher non-fund based income and lower loan impairment loss; Y-o-Y performance impacted by lower total income and higher impairment loss on certain accounts classified as impaired last year Q1 Q4 Q1 Q-o-Q Y-o-Y 2017 2016 2016 Change Change RM’mil % % Net Interest Income 851
Slide 9: Net fund based income declined as loans growth offset by margin compression
Net fund based income declined as loans growth and lower funding expenses were offset by margin compression RM’bil Y-o-Y: -1% Q-o-Q: +0.2% 2.53 2.45 2.43 2.44 2.47 1.42 1.39 1.37 1.38 1.35 1.11 1.06 1.06 1.09 1.09 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Fund Based Income Fund Based Expenses Net Fund
Slide 10: Lower non-fund based income contributed largely by lower fee income
Lower non-fund based income contributed largely by lower fee income from loan and loan related exposure 518 RM’mil 475 489 15 462 19 17 12 387 106 141 166 Others 12 113 46 49 52 53 53 44 @ Treasury Income 301 284 293 Insurance Underwriting 278 276 Surplus Fee Income # Q1 2016 Q2 2016 Q3 2016 Q4 2016
Slide 11: Operating expenses tightly managed, down 5% Q-o-Q and up 2% Y-o-Y
Operating expenses tightly managed, down 5% Q-o-Q and up 2% Y-o-Y; Increase is from higher personnel costs and IT-related expenses as the Group continued to invest into technology infrastructure and capabilities 102 85 89 85 83 58 61 64 48 54 Administration & General Expenses 185 176 192 169 179 Mar
Slide 12: Loans growth driven by mortgage and SME, partly offset by corporate repayments
Loans growth driven by mortgage and SME, partly offset by corporate repayments; Portfolio mix remain stable from end 2016 Q-o-Q Y-o-Y Composition RM’mil Mar 2017 Dec 2016 Change Mar 2016 Change Mar 2017 Dec 2016 % % GROUP RETAIL 70,483 70,138 - 67,989 4 46% 45% Mortgage 41,989 40,509 4 36,502 15 27%
Slide 13: Healthy deposits growth driven by CASA
Healthy deposits growth driven by CASA, further improving the Group’s CASA composition Customer Deposits CASA Y-o-Y: +5% Y-o-Y: +14% RM’bil RM’bil Q-o-Q: n/a Q-o-Q: +2% 165.8 165.8 157.5 42.5 43.5 42.5 43.5 38.0 38.0 9.3 9.6 24.9 8.8 32.0 28.0 33.2 33.9 98.4 94.3 29.2 87.5 Mar 2016 Dec 2016 Mar 2017
Slide 14: Impairment allowances moderated from the peak in Q4 2016
Impairment allowances moderated from the peak in Q4 2016; Impairment allowances in current quarter provided on certain accounts that have been classified as impaired last year, improving loan loss coverage RM’mil Allowances for Loan Impairment RM’mil Asset Quality 500 1.0 0% 3.60% 0.79% 5,000.0 450
Slide 15: Exposure to oil and gas industry actively managed
Exposure to oil and gas industry actively managed; Decline in exposure due to repayment Oil and Gas Related Industry Loans Outstanding Upstream Downstream Total Mar 2017 2.1% 1.3% 3.4% Dec 2016 2.6% 1.0% 3.6% Oil & Gas Exposure 8% Country % of Loans Outstanding 45% Malaysia 83% 47% Singapore 16% Tha
Slide 16: Investment Banking and Treasury recorded better profitability
Investment Banking and Treasury recorded better profitability while margin compression and lower non-fund based income affected Retail and CIB; Higher loan impairment allowances resulted in lower profit at BBG and Singapore Pre-tax Profit 303 295 258 213 192 Q1 2016 156 Q1 2017 112 88 41 17 16 -28 W
Slide 17: Capital adequacy of Group and key banking subsidiaries remain strong
Capital adequacy of Group and key banking subsidiaries remain strong RHB Bank Group RHB Bank 20. 0% 20. 0% 18. 0% 15% 18. 0% 16. 0% 16. 0% 14. 0% 11% 14. 0% 12. 0% 12. 0% 7% 17.0% 10. 0% 10. 0% 13.4% 17.2% 13.2% 13.5% 13.1% 13.4% 15.4% 15.2% 8.0 % 13.1% 8.0 % 12.3% 12.6% 3% 6.0 % 6.0 % 4.0 % 4.0 % -
Slide 18: Strategy Update
Executive Summary 1st Quarter 2017 Financial Results Strategy Update Summary and Outlook
Slide 19: Key updates on the progress of IGNITE 2017
Key updates on the progress of IGNITE 2017 Retail Banking Mortgages grew 3.5% vs. industry of 1.9% in Q1 2017 Affluent AUM grew by 15.4% since the launch of our Affluent value proposition in July 2016 Launched RHB Smart account and Smart account-i in Mar 2017, rewarding customers based on thei
Slide 20: Summary and Outlook
Executive Summary 1st Quarter 2017 Financial Results Strategy Update Summary and Outlook
Slide 21: Economic Outlook
Economic Outlook Malaysia’s GDP is forecast to grow 4.8% in 2017 though the Q1 2017 GDP was a strong 5.6%: • Improvement in overall economic activity driven by the recovery in both exports and domestic demand • Higher exports growth is expected to lead to better consumer spending and private inves
Slide 22: Concluding Remarks
Concluding Remarks The Group has moved on from a challenging fourth quarter in 2016 and delivered a much improved profitability in the current period We expect a better performance this year compared to 2016 Our SME and Islamic banking portfolios have maintained their strong performance for th
Slide 23: www.rhbgroup.com
www.rhbgroup.com INVESTOR RELATIONS CONTACT: Mr. Syed Ahmad Taufik Albar Group Chief Financial Officer +(603) 9280 7090 taufik.albar@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 o
Slide 24: Key Business Highlights
APPENDIX Key Business Highlights
Slide 25: Retail Banking
Retail Banking Mortgage Auto Finance RM’bil Y-o-Y: +13% RM’bil Y-o-Y: -14% Q-o-Q: +3% Q-o-Q: -3% 12. 0 50. 0 45. 0 10. 0 40. 0 35. 0 8.0 30. 0 6.0 25. 0 20. 0 39.0 42.9 44.3 4.0 10.4 9.2 8.9 15. 0 10. 0 2.0 5.0 0.0 0.0 Mar 2016 Dec 2016 Mar 2017 Mar 2016 Dec 2016 Mar 2017 Market Market 8.3% 8.6% 8.7
Slide 26: Investment Banking – Market Position (1/2)
Investment Banking – Market Position (1/2) YTD Mac 2017 Ranking Market Share DCM Debt Capital Markets: DanaInfra Nasional Berhad - MYR sukuk 4 11.4% RM2.68 bil IMTN issuance out of RM46.0 bil ICP/IMTN Programme - Total MYR bonds 4 10.4% Joint Lead Arranger & Joint Lead Manager (Conventional & Islami
Slide 27: Investment Banking – Equities, Futures & Asset Management (2/2)
Investment Banking – Equities, Futures & Asset Management (2/2) YTD Mar 2017 RM’bil Asset Under Management Equities Market Ranking Y-o-Y: +2% (by value) Share Q-o-Q: -2% Malaysia - By value 8.1% 5th 52.3 50.0 51.2 - By volume 12.3% 3rd 7.9 7.8 7.7 th Singapore 2.7% 15 Hong Kong 0.1% 91st 19.7 19.4 t
Slide 28: Business Banking
Business Banking RM’bil Gross Loans RM’bil Customer Deposits Y-o-Y: +1% Y-o-Y: +9% Q-o-Q: +2% Q-o-Q: -3% 21. 0 21.3 22.1 21.5 19. 0 17. 0 15. 0 11.9 12.7 12.2 13. 0 20.5 22.0 22.4 11. 0 9.0 7.0 9.4 9.4 9.3 5.0 Mar 2016 Dec 2016 Mar 2017 Mar 2016 Dec 2016 Mar 2017 Fixed Deposits Demand Deposits SME M
Slide 29: Islamic Banking
Islamic Banking PBT Gross Financing RM’mil RM’bil Y-o-Y: +11% Q-o-Q: +5% 405 40.0 355 35.0 305 30.0 255 205 432 Y-o-Y: +3% 25.0 349 32.3 34.1 35.7 304 20.0 155 105 218 15.0 10.0 55 96 99 5 Mar 2016 Dec 2016 Mar 2017 2013 2014 2015 2016 Q1 Q1 Market 2016 2017 8.1% 7.8% 8.0% Share Asset Quality Gross
Slide 30: RHB Singapore
RHB Singapore SGD’mil PBT Loans, Deposits & Total Assets SGD’bil 74 80 7.5 8.0 7.8 39 34 0.5 60 32 0.3 0.4 4 7.2 40 6.0 6.0 7.3 42 46 (92) 16 4.9 35 (8) 20 16 4.1 4.2 4.1 (6) - (12) 7.6 (2 0) (2) (4 0) (81) (6 0) (8 0) 2015 2016 Mar (11) 2017 (1 00) 2013 2014 2015 2016 Q1 Q1 Deposits 2016 2017 Gross