Mega Financial Holding Co., Ltd. · TWSE:2886
Mega Financial — 2Q 2014 Earnings Presentation
25 slides from Mega Financial's earnings presentation, 2014
Slide 1: 2Q / 2014 Investor/Analyst Briefing
2Q / 2014 (v.1) Investor/Analyst Briefing
Slide 2: Disclaimer
DISCLAIMER THE FINANCIAL INFORMATION IN THIS PRESENTATION AS OF AND FOR THE SIX MONTHS ENDED JUNE 30TH, 2014 ARE UN-AUDITED NUMBERS UNLESS SPECIFIED OTHERWISE. MEGA FHC HAS FILED ITS AUDITED FINANCIAL STATEMENTS THROUGH THE TAIWAN STOCK EXCHANGE MARKET OBSERVATION POST SYSTEM ON AUG 31ST, 2014. Thes
Slide 3: Agenda
Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 3
Slide 4: Total loan was up 6.8% YoY, driven by large corp., SME & mortgage loan growth
Total loan was up 6.8% YoY, driven by large corp., SME & mortgage loan growth Mega Bank quarterly loan balance* Mega Bank 2Q/14 loan breakdown by customer Other Unit: NT$bn 1,660 1,679 1,672 Growth Trend consumer Total:1,565 1,614 YoY: 6.8% 6% Mortgage QoQ: -0.4% 17% Gov.-linked Large corp. 728 735
Slide 5: Real estate, service industry and consumer loan growth were major growth drivers
Real estate, service industry and consumer loan growth were major growth drivers Mega Bank loan balance trend by industry* Mega Bank 2Q/14 loan breakdown by industry* Unit: NT$BN 2Q/14 1Q/14 2Q/13 477 Growth Trend Manufacturing 496 YoY: -3.0% 492 154 QoQ: -3.8% Transport & Telecom 155 Others 157 Gro
Slide 6: Volume growth slowed in 2Q/14 to focus on margin improvement
Volume growth slowed in 2Q/14 to focus on margin improvement Mega Bank 2Q/14 loan breakdown by regions * Unit: NT$bn 235 236 Growth Trend 224 221 Overseas 218 YoY: 8.3% branches QoQ: 0.4% Overseas 323 329 344 334 branches 315 OBU 14% Growth Trend YoY: 6.0% QoQ: -2.9% OBU (offshore banking unit) 20%
Slide 7: Both NTD/FCY loan remained flat in 2Q/14
Both NTD/FCY loan remained flat in 2Q/14 Mega Bank 2Q/14 loan breakdown by currency: NTD vs. foreign currency loan * Unit: NT$bn 660 654 FCY Loan** 633 633 611 Growth Trend FCY Loan YoY: 7.0% 39.1% QoQ: -0.9% NTD Loan 60.9% NTD Loan 958 1,004 1,013 1,018 931 Growth Trend YoY: 9.3% QoQ: 0.5% 2Q/13 3Q
Slide 8: NPL balance was down while LLR was up
NPL balance was down while LLR was up Mega Bank NPL balance & NPL ratio* Mega Bank loan loss reserved and coverage ratio 0.44% 0.45% 1333.85% 0.42% 0.38% Market 0.33% Avg. 963.83% Mega 0.28% 606.66% 794.40% 488.08% 512.96% Market Avg. 0.22% 0.23% 0.19% Mega 433.61% 0.16% 362.60% 0.12% 268.79% 260.83
Slide 9: New NPL formation showed record low number
New NPL formation showed record low number Mega Bank NPL ratio by customer * Mega Bank new NPL as % of total loan ** Large corp. NPL% 0.27% 0.12% 0.12% 0.10% 0.14% New NPL 0.07% 0.87% 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14 0.43% 0.34% 0.34% 0.19% 0.14% SME NPL % 0.49% 0.23% 0.34% 0.32% 0.13% 0.14% 2009
Slide 10: Deposit growth paused as RMB deposit growth slowed
Deposit growth paused as RMB deposit growth slowed Mega Bank’s deposit balance * Mega Bank’s demand deposit trend (%) Unit:NT$bn Growth Trend YoY: 7.1% QoQ: -1.5% 50.67% 50.28% 50.44% 1,938 1,908 49.10% 1,920 48.46% 48.14% Demand Total: 1,736 1,782 1,777 Deposit (%) 407 422 395 FX time 335 342 depos
Slide 11: LDR remained stable
LDR remained stable Mega Bank’s loan to deposit ratio (LDR) trend* 93.80% 93.70% 93.20% 95% 90.76% LDR (Total) 87.74% 87.73% 87.75% 86.55% 86.72% 85% 75% 1-2Q/12 1-3Q/12 1-4Q/12 1Q/13 1-2Q/13 1-3Q/13 1-4Q/13 1Q/14 1-2Q/14 * LDR calculation is based on average loan/deposit balance of that period. 11
Slide 12: Loan spread was up as overseas loan spread climbed back up
Loan spread was up as overseas loan spread climbed back up Mega Bank total loan interest spread* Mega Bank overseas loan interest spread* Spread Yield cost 2.32% Spread Yield cost 2.26% 2.15% 2.16% 2.16% 2.25% 1.82% 1.67% 1.62% 1.58% 1.53% 1.45% 2.10% 2.11% 2.15% 2.07% 2.07% 2.07% 0.80% 0.58% 0.79%
Slide 13: NIM was up 4bps QoQ as FCY NIM jumped higher
NIM was up 4bps QoQ as FCY NIM jumped higher Mega Bank quarterly NIM & NII * Mega Bank quarterly NTD NIM* 1.32% 1.12% 1.12% 1.10% 1.09% 1.10% 1.10% 1.10% 1.27% 1.28% 1.25% 1.25% 1.05% 1.22% 1.20% 1.19% 3Q/12 4Q/12 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14 Unit: NT$MN 8,832 8,359 8,103 7,607 Mega Bank quar
Slide 14: Steady WM fee income trend with improved bancassurance fee
Steady WM fee income trend with improved bancassurance fee Mega Bank quarterly wealth management gross fee revenue breakdown by product * Unit: NT$MN 619 584 104 554 Total: 517 523 530 510 132 490 105 Management fee** 94 93 99 107 118 100 107 108 138 159 Mutual fund fee 159 191 132 163 90 150 231 10
Slide 15: FX, brokerage and bills fee were up
FX, brokerage and bills fee were up Mega Securities Mega Bills Mega Bank net fee breakdown* net fee net fee 1H/13 1H/14 Unit: NT$MN 1,569 1,550 1,197 1,150 884 919 753 567 343 440 215 230 131 142 Wealth Mgmt** FX Corp. loan Custodian Credit card Securities Bills Highlights Mega FHC 1H/14 net fee bre
Slide 16: Agenda
Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 16
Slide 17: Group net revenue was up 17% YoY, due to strong NII, fee and trading gain
Group net revenue was up 17% YoY, due to strong NII, fee and trading gain Mega Group consolidated net revenue * Mega Group 1H/2014 net revenue breakdown Insurance Other Unit: NT$MN Revenue 1H/13 1H/14 premium 3% 6% ** Net trading gain 17,921 17% Net interest Net fee income 15,278 revenue 58% 16% Hig
Slide 18: Well-capitalized for Basel III requirements
Well-capitalized for Basel III requirements** Mega FHC* Mega Bank CAR / RBC Regulatory Moody’s: A3 Regulatory Moody’s: A1 / S&P: A / Fitch: A- Requirement : Requirement : 100% 8.0% Tier I capital ratio 131.79% 11.56% 11.86% 11.07% 11.88% 125.55% 126.28% 126.88% Credit rating 9.27% 9.66% 9.33% 9.49%
Slide 19: Record high ROE and stable cash dividend
Record high ROE and stable cash dividend Key Profitability Ratios To prevent over-inflated capital base 13.22% as well as to maintain sufficient capital ROE 10.33% 9.95% 8.74% for future growth, our dividend policy 7.66% 7.62% is: Maintain high payout ratio ROA 1.04% 0.81% 0.77% At least 50% of divi
Slide 20: 1H/2014 Mega FHC consolidated P&L statement
1H/2014 Mega FHC consolidated P&L statement* NT$MN, except per share data 1H/2014* 1H/2013 YoY 2013 Net interest income 17,921 15,278 17% 31,276 Net fee revenue 5,068 4,744 7% 9,789 Insurance premium 814 697 17% 1,480 Gain from fin. assets at fair value thru P&L 2,855 719 297% 3,622 Available for sa
Slide 21: 1H/2014 Mega FHC consolidated balance sheet
1H/2014 Mega FHC consolidated balance sheet* NT$MN 1H/2014* 1H/2013 YoY 2013 YTD Assets: Cash and due from banks 463,865 385,355 20% 551,247 -16% Bills and bonds under RP agreement 5,641 6,925 -19% 2,585 118% Fin. assets at fair value through P&L 175,726 195,343 -10% 195,801 -10% AFS financial asset
Slide 22: 1H/2014 Mega Bank P&L statement
1H/2014 Mega Bank P&L statement* NT$MN, except per share data 1H/2014* 1H/2013* YoY 2013 Net interest income 17,254 14,480 19% 30,217 Net fee revenue 3,971 4,002 -1% 8,103 Gain from fin. assets at fair value thru P&L 1,507 -44 - 1,294 Available for sales asset gain 638 897 -29% 1,291 Equity method i
Slide 23: 1H/2014 Mega Bank balance sheet
1H/2014 Mega Bank balance sheet* NT$MN 1H/2014* 1H/2013* YoY 2013 YTD Assets: Cash and due from banks 459,763 379,885 21% 546,393 -16% Bills and bonds under RP agreement 4,375 8,753 -50% 5,452 -20% Fin. assets at fair value through P&L 38,409 46,847 -18% 44,481 -14% AFS financial assets 183,209 177,
Slide 24: Agenda
Agenda 1 Operation Highlights 2 Financial Performance 3 Appendix 24
Slide 25: Most internationalized local bank.
Most internationalized local bank. Mega Bank’s Overseas Franchise Toronto London Amsterdam Richmond Toronto -Chinatown Vancouver Paris China: New York Suzhou branch Tokyo Silicon Valley Chicago Wujiang sub-branch Cambodia: Osaka Los Angeles Bahrain* 1 branch + 1 HK Taiwan (OBU) sub-branch Colon Abu
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