Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — 9M 2022 Earnings Presentation
44 slides from Rhb Bank Bhd's earnings presentation, Nov 29, 2022
Slide 1: RHB Bank Berhad Analysts Presentation 9M 2022 Financial Results
RHB BANK BERHAD Analysts Presentation 9M 2022 Financial Results Mohd Rashid Mohamad Group Managing Director / Group Chief Executive Officer RHB Banking Group 29 November 2022
Slide 2: Executive Summary 9M 2022 Financial Results Strategy Update
1. Executive Summary 2. 9M 2022 Financial Results 3. Strategy Update 4. Sustainability Update 5. Summary and Outlook
Slide 3: Executive Summary
Executive Summary
Slide 4: Highlights of Q3 & 9M 2022 Performance (1/3)
4 Highlights of Q3 & 9M 2022 Performance (1/3) 4 Q3 2022 (Year-on-year) ▪ Net fund based income grew by 9.2% Y-o-Y to RM1,629.1 million from higher gross fund based income ▪ Non-fund based income decreased 9.1% Y-o-Y to RM564.5 million due to overall lower fee income, insurance underwriting surplus
Slide 5: Highlights of Q3 & 9M 2022 Performance (2/3)
5 Highlights of Q3 & 9M 2022 Performance (2/3) 5 9M 2022 (Year-on-year) ▪ Net fund based income grew by 7.4% Y-o-Y to RM4,662.3 million from higher gross fund based income ▪ Non-fund based income decreased 20.6% Y-o-Y to RM1,380.7 million due to overall lower fee income, insurance underwriting surpl
Slide 6: Highlights of Q3 & 9M 2022 Performance (3/3)
6 Highlights of Q3 & 9M 2022 Performance (3/3) 6 ▪ Gross loans and financing ▪ Expanded 2.3% Q-o-Q to RM209.7 billion primarily due to growth in mortgage, SME, Corporate, Commercial, Singapore and Cambodia (Domestic loans growth Q-o-Q: 2.0%) ▪ Expanded 5.7% YTD attributed mainly to growth in mortgag
Slide 7: RHB Banking Group Scorecard for 9M 2022
RHB Banking Group Scorecard for 9M 2022 7 7 Top Level Indicators Target FY2022 Actual 9M 2022 Achieved Target N1 N1 ROE 8.5% [10.0%] 9.3% [10.5%] √ Annualised Loans Growth 4%-5% 7.5% √ CASA Composition 30.0% 29.9% x Gross Impaired Loans Ratio ≤1.70% 1.57% √ Cost-to-Income Ratio ≤45.0% 44.8% √ N1 Nor
Slide 8: 9M 2022 Financial Results
9M 2022 Financial Results
Slide 9: 9M'22 results driven by higher net fund based income and lower ECL
9M’22 results driven by higher net fund based income and lower ECL, partially offset by lower 99 non-fund based income; GIL uptick within expectation N1 N1 Financial Results Profitability Ratios Total Operating Profit Profit Net Profit to Return on Cost-to-Income Non-Fund Based/ Income Before Allowa
Slide 10: Q3'22 results supported by higher net fund based income and lower ECL
Q3’22: Y-o-Y results supported by higher net fund based income and lower ECL; Q-o-Q driven by 1010 total income growth Q3 Q2 Q3 9M 9M RM’ mil Q-o-Q Y-o-Y Y-o-Y 2021 2022 2022 2021 2022 Net Fund Based Income 1,492.0 1,562.4 1,629.1 4.3% 9.2% 4,340.8 4,662.3 7.4% Non-Fund Based Income 621.1 383.5 564.
Slide 11: Net fund based income grew; NIM strengthened to 2.27%
9M’22 and Q3’22 net fund based income grew mainly due to higher gross fund based income; 1111 NIM strengthened by 4 bps Q-o-Q to 2.27% RM’bil Y-o-Y: +21.4% Y-o-Y: +11.6% Y-o-Y: -18.3% Y-o-Y: -41.3% Y-o-Y: +7.4% Y-o-Y: +9.2% Q-o-Q: +4.3% 7.95 7.12 Fund Based Income 2.92 2.41 2.60 4.34 4.66 Fund Based
Slide 12: Non-fund based income impacted by lower fee income and underwriting surplus
9M’22 and Q3’22 Y-o-Y non-fund based income impacted by the overall lower fee income, 12 insurance underwriting surplus, and net trading and investment income RM’mil Y-o-Y: -9.1% Y-o-Y: -20.6% Q-o-Q: +47.2% 1,737.9 621.1 564.5 47.2 17.8 1,380.7 Others 11.6 383.5 535.4 62.3 Treasury Income 244.3 15.8
Slide 13: Operating expenses grew 3.7%; CIR at 44.8%
9M’22 operating expenses grew 3.7% from higher personnel, establishment, and A&G; CIR inched 1313 up to 44.8% Q3 Q2 Q3 9M 9M RM’ mil Q-o-Q Y-o-Y Y-o-Y 2021 2022 2022 2021 2022 Personnel Costs 531.0 539.2 585.6 8.6% 10.3% 1,612.0 1,658.3 2.9% Establishment Costs 191.5 205.6 211.3 2.8% 10.3% 567.8 616
Slide 14: Loans grew 5.7% YTD
Loans grew 5.7% YTD led mainly by mortgage, auto finance, SME, Commercial, Singapore and 1414 Cambodia; Domestic loans grew 4.3% YTD Sep Dec Jun Sep RM’mil Q-o-Q YTD Y-o-Y 2021 2021 2022 2022 GROUP COMMUNITY BANKING 120,778 124,096 128,584 131,148 2.0% 5.7% 8.6% Retail 97,114 99,688 102,821 104,919
Slide 15: Total deposits grew 3.1% YTD; CASA improved to 29.9%
Total deposits grew 3.1% YTD attributed to growth in FD, MMTD and CASA; CASA composition 1515 improved to 29.9% Q-o-Q Customer Deposits CASA by Segment RM’bil Y-o-Y: +5.4% Sep Dec Jun Sep RM’bil Q-o-Q YTD Y-o-Y YTD: +3.1% 2021 2021 2022 2022 Q-o-Q: -0.2% GROUP COMMUNITY BANKING 40.5 40.9 42.2 41.1 -
Slide 16: Credit cost increased to 0.40% in Q3'22
Q3’22 credit cost increased to 0.40% Q-o-Q whilst 9M’22 improved to 0.24% Y-o-Y 16 1.1 0% Allowances for Losses on Loans 1,48 0 880 1,28 0 1.1 0% 0.45% 0.6 0% RM’mil 680 1,08 0 0.51% 0.24% 0.40% 0.6 0% 880 480 0.29% 651 0.1 0% 0.04% 680 N1 -0.15% 0.1 0% 252 480 374 210 280 146 280 -0.40% -0.40% 80 1
Slide 17: GIL moderated slightly; LLC remained above 100%
GIL moderated slightly in Q3’22 from recoveries and write-offs; LLC remained well above 100% 17 Gross Impaired Loans 600000.00% 2.30% 8.23% 7.10% 7.27% 6.28% 5.67% 550000.00% 2.10% 500000.00% 1.79% 1.82% 1.90% 450000.00% 1.73% 1.71% 400000.00% 1.68% 1.62% 1.70% 1.57% 350000.00% 1.49% 1.50% Gross Loa
Slide 18: GIL improved in SME and Singapore
GIL improved in SME and Singapore due to recoveries and write-offs 18 Group Community Banking Mortgage Unsecured Auto Finance SME 4.81% 4.65% 4.27% 3.76% 8.46% 8.41% 8.42% 8.09% 8.04% 7.03% 6.04% 5.77% 17.07% 15.53% 13.48% 12.78% 1.40% 3.23% 850 1.50% 3.05% 3.50% 1.20% 90 2.96% 750 0.97% 80 2.71% 3.
Slide 19: Profit by business segment
Profit grew in GCB and GIB; lower profit for GWB due to lower non-fund based income and higher 1919 ECL; Insurance impacted by lower underwriting surplus Group Community Banking (GCB) Group Wholesale Banking (GWB) Group International Business (GIB) 9M 2021: RM2,774.6 mil 9M 2021: RM2,689.0 mil 9M 20
Slide 20: Capital position remained robust
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% 19.8% 18.8% 18. 0% 18.2% 17.1% 17. 0% 16. 0% 16. 0% 15. 0% 14. 0% 17.2% 16.4% 17.2% 16.4% 14. 0% 15.2% 14.5% 13. 0% 12. 0% 11. 0% 10. 0% 12. 0% 10. 0% 15.2% 14.5% 9.0
Slide 21: Strategy Update
Strategy Update
Slide 22: TWP24 Key Highlights by Focus Areas (1/3)
TWP24 Key Highlights by 7 Focus Areas (1/3) 22 22 1 ▪ Total AUM of Affluent customers stood at RM54.7 bil (-0.3% from Dec 2021) Affluent ▪ Premier Banking customers stood at 68.0k (-10.6% from Dec 2021) ▪ Total Wealth and Banca fee income was RM258.3 mil (-4.0% from YTD Sep 2021) ▪ Total AUM of Mass
Slide 23: TWP24 Key Highlights by Focus Areas (2/3)
TWP24 Key Highlights by 7 Focus Areas (2/3) 23 3 ▪ Total loans grew to SGD6,960 mil (+10.5% from Dec 2021) of which SGD3,005 mil are Corporate loans Build an Singapore (+11.0% from Dec 2021) and SGD2,491 mil are Commercial/SME loans (+6.2% from Dec 2021) Integrated Overseas ▪ Total loans grew to USD
Slide 24: TWP24 Key Highlights by Focus Areas (3/3)
TWP24 Key Highlights by 7 Focus Areas (3/3) 24 6 Workforce ▪ Improved ‘Primary and Sales’ to ‘Support’ workforce ratio to 56.6% : 43.4% (from 55.5% : 44.5% in Dec 2021) Develop a Optimisation ▪ Grew our Digital, IT and Analytics workforce mix to 7.6% of total employees (from 6.2% in Dec 2021) Future
Slide 25: Sustainability Update
Sustainability Update
Slide 26: 5-year Sustainability Strategy (1/2)
RHB Banking Group’s 5-year (2022-2026) Sustainability Strategy (1/2) 26 5 key focus areas identified to support our 3 key Sustainability aspirations: ● As at 30 September 2022, YTD Actual achievement amounts to more than RM11 bil, which cuts across all business activities - lending, capital markets
Slide 27: 5-year Sustainability Strategy (2/2)
RHB Banking Group’s 5-year (2022-2026) Sustainability Strategy (2/2) 27 Achieve Carbon Neutral • To reduce operational GHG emission intensity per employee from base year of 2016 and achieve Carbon Neutrality by 2030 Operations by ➢ YTD 2022, the Group’s reduction is 42%; and on track to achieve our
Slide 28: Summary & Outlook
Summary & Outlook
Slide 29: Outlook for FY2022
Outlook for FY2022 29 29 ▪ Q3 2022 GDP expanded 14.2% (Q2 2022: 8.9%) on the back of strong domestic demand, improved labour Economic market, as well as ongoing policy support; and partly due to low base effect from contraction in Q3 2021 Outlook ▪ Malaysia’s GDP is projected to grow by 7.0% and 4.5
Slide 30: Concluding Remarks
Concluding Remarks 30 30 ▪ Delivered a strong financial performance for the nine months of the year against the backdrop of persistently challenging operating environment ▪ Barring any unforeseen circumstances, the Group expects performance to remain resilient this year ▪ With lingering macroeconomi
Slide 31: 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 32: Appendix
Appendix
Slide 33: Repayment Assistance Update
Repayment Assistance Update 33 33 ▪ Domestic outstanding RA remained at 4% as at 31st October 2022 Outstanding RA as at: % of Outstanding 31st Jul 2022 31st Oct 2022 Loan Balance No of RM bil % RM bil % accounts Group Community Banking 6.1 5% 21,270 5.9 4% Retail 3.3 3% 17,603 3.0 3% SME 2.8 11% 3,6
Slide 34: Key Financial Data
Key Financial Data 34 34 Financial Data FY2018 FY2019 FY2020 FY2021 9M 2022 RM’mil Income Statement Total Income 6,806 7,058 7,186 7,789 6,043 Operating Profit Before Allowances 3,448 3,670 3,799 4,266 3,333 Profit Before Tax 3,119 3,394 2,644 3,529 2,949 Net Profit 2,305 2,482 2,033 2,618 1,936 Bal
Slide 35: Key Financial Ratios
Key Financial Ratios 35 35 Financial Ratios FY2018 FY2019 FY2020 FY2021 9M 2022 Profitability Return on Equity 10.3% 10.3% 7.7% 9.6% 9.3% Net Interest Margin 2.24% 2.12% 2.13% 2.20% 2.20% Cost to Income Ratio 49.3% 48.0% 47.1% 45.2% 44.8% Asset Quality Gross Impaired Loan Ratio 2.06% 1.97% 1.71% 1.4
Slide 36: Segmental Performance
Segmental Performance 36 Group Community Banking Group Wholesale Banking 9M 2021: RM2,388.6 mil 9M 2021: RM1,648.2 mil 8.4% 3.7% 9M 2022: RM2,590.0 mil 9M 2022: RM1,587.2 mil 4.0% Fund Based 1,735 1,804 Income 20.2% 0.1% 8.7% 19.1% 930 931 654 786 718 656 408 486 Retail SME CBIB Treasury Internation
Slide 37: O&G Exposure (Loans + Bonds)
O&G Exposure (Loans + Bonds) 37 37 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 2022 2.2 1.0% 1.1 0.5% 3.3 1.6% Dec 2021 2.3 1.2% 1.4 0.7% 3.7 1.9% Dec 2020 2.8 1.5% 1.0 0.5% 3.8 2.0% Dec
Slide 38: Retail Banking
Retail Banking 38 38 RM’bil Gross Loans RM’bil Customer Deposits Y-o-Y: +8.0% Y-o-Y: +0.9% 71.0 71.6 100 .0 13.4 12.9 10.1 80.0 60.0 9.9 97.1 104.9 47.6 48.6 40.0 20.0 - Sep 2021 Sep 2022 Sep 2021 Sep 2022 Fixed Deposits Demand Deposits Savings Deposits Retail Market Share * Asset Quality RM’bil 8.8
Slide 39: SME
SME 39 39 Gross Loans Customer Deposits RM’bil RM’bil Y-o-Y: +7.1% Y-o-Y: +10.8% 30.0 28.1 30.1 25.0 20.0 15.0 17.2 18.1 10.0 23.7 26.2 5.0 10.9 11.9 - Sep 2021 Sep 2022 Sep 2021 Sep 2022 Fixed Deposits Demand Deposits SME Market Share * RM’bil Asset Quality 3.23% 3.05% 2.96% 2.84% 2.71% ** 8.8% 8.9
Slide 40: Asset Under Management and Market Positions
Asset Under Management and Market Positions 40 40 RM’bil Asset Under Management Market YTD Sep 2022 Ranking Share Y-o-Y : -21.1% Equities Broking: - By value 6.9% 6th 58.3 - By volume 8.8% 4th 8.8 46.0 9.2 Debt Capital Markets: 6.8 - MYR sukuk 16.9% 3rd 9.0 - Total MYR bonds (Conventional 17.2% 3rd
Slide 41: Investment Banking – Notable Deals
Investment Banking – Notable Deals 41 41 CF/ECM DCM M&A MMC Corporation Berhad Sarawak Petchem Sdn Bhd RM2,937.9 mil Issuance of RM4.0 bil IMTN under its RM6.0 bil Sukuk Seaport Terminal (Johor) Sdn Bhd's privatisation of MMC AME Real Estate Investment Trust Wakalah Programme Corporation Berhad by w
Slide 42: Islamic Banking
Islamic Banking 42 42 PBT Gross Financing RM’mil RM’bil Y-o-Y: +11.2% Y-o-Y: +11.6% 90.0 80.0 70.0 60.0 50.0 40.0 30.0 71.5 79.7 718.7 798.9 20.0 10.0 - Sep 2021 Sep 2022 9M 2021 9M 2022 Market 10.1% 10.0% Share Gross Financing/ Asset Quality Total Gross Financing (Domestic) RM’bil 0.68% 43.9% 0.61%
Slide 43: RHB Bank Singapore
RHB Bank Singapore 43 43 SGD’mil PBT Loans, Deposits & Total Assets SGD’bil Y-o-Y: >200% 49.9 39.9 29.9 48.4 9.3 10.2 7.0 7.0 19.9 6.3 6.5 9.9 13.6 (0 .1) Sep 2021 Sep 2021 Sep 2022 9M 2021 9M 2022 Sep 2022 Gross Loans Deposits Total Assets Credit Charge Ratio Gross Impaired Loans Ratio 0.66% 2.11%
Slide 44: Overseas Loans
Overseas Loans 44 44 Sep Dec Jun Sep RM’mil Q-o-Q YTD Y-o-Y 2021 2021 2022 2022 Overseas Operations 24,174 24,433 26,887 28,094 4.5% 15.0% 16.2% Singapore 19,370 19,446 21,697 22,525 3.8% 15.8% 16.3% Cambodia 2,709 2,829 2,998 3,337 11.3% 18.0% 23.2% Others 2,095 2,158 2,192 2,232 1.8% 3.4% 6.5% Tha