Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — FY2021 Earnings Presentation
48 slides from Rhb Bank Bhd's earnings presentation, Feb 28, 2022
Slide 1: Analysts Presentation FY2021 Financial Results
RHB BANK BERHAD Analysts Presentation FY2021 Financial Results Mohd Rashid Mohamad Officer-in-Charge/Principal Officer RHB Banking Group 28 February 2022
Slide 2: Executive Summary FY2021 Financial Results Strategy Update
1. Executive Summary 2. FY2021 Financial Results 3. Strategy Update 4. Sustainability Update 5. Summary and Outlook
Slide 3: Executive Summary
Executive Summary
Slide 4: Highlights of Q4 & FY2021 Performance (1/4)
4 Highlights of Q4 & FY2021 Performance (1/4) 4 Q4 2021 (Year-on-year) Net fund based income grew marginally by 0.2% Y-o-Y to RM1,533.9 million from lower funding cost Non-fund based income decreased 25.1% Y-o-Y to RM421.0 million due to lower fee income from brokerage and commercial banking, an
Slide 5: Highlights of Q4 & FY2021 Performance (2/4)
5 Highlights of Q4 & FY2021 Performance (2/4) 5 FY2021 (Year-on-year) Net fund based income grew 11.5% Y-o-Y to RM5,874.7 million mainly due to proactive funding cost management Non-fund based income dipped 7.6% Y-o-Y to RM2,158.9 million mainly from lower brokerage income and net trading and in
Slide 6: Highlights of Q4 & FY2021 Performance (3/4)
6 Highlights of Q4 & FY2021 Performance (3/4) 6 Gross loans and financing Expanded 2.0% Q-o-Q to RM198.5 billion attributed mainly to growth in mortgage, auto finance and SME (Domestic loans growth Q-o-Q: 2.1%) Expanded 6.7% Y-o-Y attributed mainly to growth in mortgage, auto finance, SME, Com
Slide 7: Highlights of Q4 & FY2021 Performance (4/4)
7 Highlights of Q4 & FY2021 Performance (4/4) 7 Continue to reward shareholders with higher dividend Proposed a final dividend of 25 sen per share, consisting of cash payout of 15 sen per share and an electable portion under Dividend Reinvestment Plan of 10 sen per share Dividend Together with
Slide 8: RHB Banking Group Scorecard for FY2021
RHB Banking Group Scorecard for FY2021 8 8 Top Level Indicators Target FY2021 Actual FY2021 Achieved Target ROE 9.0% 9.6% [10.3%] N1 √ Loans Growth 4%-5% 6.7% √ CASA Composition 30.0% 30.0% √ Gross Impaired Loans Ratio <2.00% 1.49% √ Cost-to-Income Ratio ≤46.5% 45.2% [43.8%] N1 √ N1 Excluding modifi
Slide 9: Repayment Assistance Update (1/3)
Repayment Assistance Update (1/3) 9 9 Domestic outstanding RA has reduced significantly from 31% as at 10th Nov 2021 to 12% as at 31st Jan 2022 The reduction was from lower RA across all segments, as more borrowers exited the programme with the expiry of PEMULIH package and resumed their normal
Slide 10: Repayment Assistance Update (2/3)
Repayment Assistance Update (2/3) 10 10 Analysis on outstanding RA by option and risk category For Retail and Commercial, most of the borrowers are under deferment of instalments whilst majority of SME and Corporate borrowers are under R&R / reduction in instalments Most of the borrowers continu
Slide 11: Repayment Assistance Update (3/3)
Repayment Assistance Update (3/3) 11 11 Analysis on Total Loans by Stage 2 and 3 Stage 2 loans for all segments showed improvement between September 2021 and January 2022 Stage 3 loans remained benign across all key segments Retail SME 17.1% 15.5% 5.6% 5.4% 5.2% 15.0% 1.0% 0.7% 0.7% 3.0% 2.7% 2.
Slide 12: FY2021 Financial Results
FY2021 Financial Results
Slide 13: Resilient FY2021 performance supported by higher net fund based income
Resilient FY2021 performance supported by higher net fund based income and lower ML and ECL; 1313 Maintained positive JAWS; Improved asset quality with lower GIL and credit charge ratios N1 N1 Financial Results Profitability Ratios Total Operating Profit Profit Net Profit to Return on Cost-to-Income
Slide 14: FY2021 and Q4 profits grew Y-o-Y mainly due to lower ECL
FY2021 and Q4 profits grew Y-o-Y mainly due to lower ECL but negated by lower non-fund based 1414 income; Q-o-Q declined marginally despite lower ML and ECL Q4 Q3 Q4 RM’ mil Q-o-Q Y-o-Y FY2020 FY2021 Y-o-Y 2020 2021 2021 Net Fund Based Income 1,531.5 1,491.9 1,533.9 2.8% 0.2% 5,267.4 5,874.7 11.5% N
Slide 15: Underlying FY2021 performance aided by lower ECL
Underlying FY2021 performance aided by lower ECL but mitigated by lower non-fund based 15 income 15 Q4 Q3 Q4 RM’ mil Q-o-Q Y-o-Y FY2020 FY2021 Y-o-Y 2020 2021 2021 Total Income 2,068.0 1,940.9 1,919.3 -1.1% -7.2% 7,185.7 7,788.7 8.4% Add back: Modification Loss 25.6 172.1 35.6 79.3% -39.1% 418.0 244
Slide 16: Net fund based income grew 11.5% Y-o-Y
Net fund based income grew 11.5% Y-o-Y mainly due to proactive funding cost management; 1616 NIM strengthened by 8 bps to 2.14% in FY2021 RM’bil Y-o-Y: -5.6% Y-o-Y: -1.9% Y-o-Y: +24.1% Y-o-Y: +5.1% Y-o-Y: +11.5% 10.16 Y-o-Y: +0.2% 9.59 Q-o-Q: +2.8% Fund Based Income 2.52 2.41 2.47 5.87 Fund Based Ex
Slide 17: Customers fee related income grew 3.7% Y-o-Y
Customers fee related income grew 3.7% Y-o-Y; However, overall non-fund based income declined 17 mainly due to lower net trading and investment income 17 RM’mil Y-o-Y: -25.1% Y-o-Y: -7.6% Q-o-Q: -32.2% 2,336.3 2,158.9 72.9 60.2 Others 621.1 562.1 894.0 617.3 Treasury Income 17.8 421.0 23.5 216.5 235
Slide 18: Operating expenses grew by 4.0% Y-o-Y
Operating expenses grew by 4.0% Y-o-Y mainly from higher personnel, IT and A&G; Maintained 1818 positive JAWS; CIR further improved to 45.2% Q4 Q3 Q4 RM’ mil Q-o-Q Y-o-Y FY2020 FY2021 Y-o-Y 2020 2021 2021 Personnel Costs 499.8 531.0 525.6 -1.0% 5.2% 2,041.6 2,137.7 4.7% Establishment Costs 196.1 191
Slide 19: Loans grew 6.7% Y-o-Y
Loans grew 6.7% Y-o-Y led mainly by mortgage, auto finance, SME, Commercial and Singapore; 1919 Domestic loans grew 4.8% Y-o-Y, exceeding industry growth Dec Sep Dec RM’mil Q-o-Q Y-o-Y 2020 2021 2021 GROUP COMMUNITY BANKING 116,976 120,778 124,161 2.8% 6.1% Retail 94,973 97,114 99,688 2.7% 5.0% Mort
Slide 20: Total deposits grew 7.5% Y-o-Y
Total deposits grew 7.5% Y-o-Y attributed to growth in CASA, FD and MMTD; CASA ratio remained 2020 healthy at 30.0% Customer Deposits CASA by Segment RM’bil Dec Sep Dec Y-o-Y: +7.5% RM’bil Q-o-Q Y-o-Y 2020 2021 2021 Q-o-Q: +2.2% 40.5 41.5 2.4% 14.2% Group Community Banking 36.3 214.0 218.7 Retail 20
Slide 21: FY2021 credit cost strengthened to 0.29%
FY2021 credit cost strengthened to 0.29% from lower ECL on loans and higher bad debts 21 recovered during the year RM’mil Allowances for Losses on Loans 0.58% 880 1.18% 1.1 0% 1,60 0 0.6 1% 1,40 0 0.5 1% 680 549 0.46% 0.51% 1,20 0 1,075 0.39% 0.4 1% 0.6 0% 480 1,00 0 N1 0.29% 0.3 1% 92 N1 800 557 25
Slide 22: Remained prudent with LLC well above 100%
Remained prudent with LLC well above 100% 22 600000.00% Gross Impaired Loans 2.10% 550000.00% 11.20% 10.45% 8.27% 8.23% 7.10% 500000.00% 1.90% 450000.00% 400000.00% 1.71% 1.66% 1.63% 1.70% 350000.00% 1.57% 1.62% 1.49% 300000.00% 1.58% Gross Loans - Stage 2 (Group) 1.56% 1.50% 1.44% GIL Ratio (Group)
Slide 23: Improved GIL in most key segments
Improved GIL in most key segments due to recoveries and write offs; Stage 2 continued to be on 23 an improving trend Group Community Banking Mortgage Unsecured Auto Finance SME 10.60% 4.79% 4.65% 11.96% 7.33% 7.41% 11.58% 7.55% 6.54% 18.11% 17.07% 15.49% 1.40% 850 1.50% 3.50% 1.20% 120 2.93% 2.96% 7
Slide 24: Profit grew in most business segments
Profit grew in most business segments; lower profit for CBIB due to higher ECL whilst Insurance 2424 impacted by MTM on securities’ losses Group Community Banking Group Wholesale Banking Group International Business FY 2021: RM3.71 bil FY 2021: RM3.47 bil FY 2021: RM0.71 bil FY 2020: RM3.58 bil 3.6%
Slide 25: Capital position remained strong for the Group
Capital position remained strong for the Group and key banking subsidiaries; lower ratios for IB 25 mainly due to capital repayment to the Bank from disposal of RHB Securities Singapore 25 RHB Bank Group RHB Bank 20. 0% 20. 0% 19. 0% 18. 0% 18.4% 19.8% 18. 0% 16.9% 18.2% 17. 0% 16. 0% 16. 0% 16.2% 1
Slide 26: Proposed a final dividend of 25 sen per share
Proposed a final dividend of 25 sen per share with 15 sen cash and 10 sen subject to DRP; 26 representing 62.9% payout ratio, our highest ever payout 26 Market Capitalisation Dividend Per Share (sen) 5.78 5.73 62.9% 50.1% 60.0% 5.45 5.37 5.50 35.7% 34.8% 5.29 30.8% 40.0% 5.00 40.00 23.7 5.00 20.0% 2
Slide 27: Strategy Update
Strategy Update
Slide 28: FIT22 Key Highlights (1/2)
FIT22 Key Highlights (1/2) 28 28 • Premier Banking customers decreased to 75.6k (-4.8% from Dec 2020), of which 36.2% are SME owners Affluent • Total AUM of Premier customers grew to RM42.9 bil (+7.6% from Dec 2020) • Affluent fee income grew to RM211.4 mil (+34.0% from Dec 2020) • Deposits increase
Slide 29: FIT22 Key Highlights (2/2)
FIT22 Key Highlights (2/2) 29 29 Analytics • Continued to drive business performance via analytics with RM185.0 mil of benefits realised as at Dec 2021 and Big • Increased analytics use cases for 2021, e.g. identifying suitable customers for flexible lending offers, improving Data conversion rates f
Slide 30: Sustainability Update
Sustainability Update
Slide 31: Our Sustainability Key Highlights
Our Sustainability Key Highlights 31 RM5 bil Green Financing Commitment by 2025 - RM4.32 bil as at Dec-21; 20.7% for renewable energy projects Increased RM1.21 bil @ 38.9% since Dec-20 (RM3.11 bil as at Dec-20) Launched Sustainable Financing Programme for SMEs and Retail customers – a product
Slide 32: Summary & Outlook
Summary & Outlook
Slide 33: Outlook for FY2022
Outlook for FY2022 33 33 GDP expanded 3.6% in Q4 2021 (Q3 2021: -4.5%) whilst 2021 GDP grew by 3.1% (2020: -5.6%) from the Economic improved economic activities following the easing of containment measures in Q4 2021 Outlook Malaysia’s GDP is projected to improve further to 5.5% whilst loans gro
Slide 34: RHB Banking Group Scorecard for FY2022
RHB Banking Group Scorecard for FY2022 34 34 Top Level Indicators Actual FY2021 Target FY2022 ROE 9.6% 8.5% [10.0%] N1 Loans Growth 6.7% 4%-5% CASA Composition 30.0% 30.0% Gross Impaired Loans Ratio 1.49% ≤1.70% Cost-to-Income Ratio 45.2% ≤45.0% N1 Normalised for Prosperity Tax (“Cukai Makmur”)
Slide 35: Concluding Remarks
Concluding Remarks 35 35 The Group exhibited resilience as it navigated through challenges amid continued uncertainty in the operating environment Continue to reward our shareholders with a final dividend of 25 sen per share, representing 62.9% payout for FY2021, highest ever payout for the Grou
Slide 36: 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 37: Appendix
Appendix
Slide 38: Key Financial Data
Key Financial Data 38 38 Financial Data FY2017 FY2018 FY2019 FY2020 FY2021 RM’mil Income Statement Total Income 6,384 6,806 7,058 7,186 7,789 Pre-Provisioning Operating Profit 3,200 3,448 3,670 3,799 4,266 Profit Before Tax 2,558 3,119 3,394 2,644 3,529 Net Profit 1,950 2,305 2,482 2,033 2,618 Balan
Slide 39: Key Financial Ratios
Key Financial Ratios 39 39 Financial Ratios FY2017 FY2018 FY2019 FY2020 FY2021 Profitability Return on Equity 9.1% 10.3% 10.3% 7.7% 9.6% Net Interest Margin * 2.18% 2.24% 2.12% 2.06% 2.14% Cost to Income Ratio 49.9% 49.3% 48.0% 47.1% 45.2% Asset Quality Gross Impaired Loan Ratio 2.23% 2.06% 1.97% 1.
Slide 40: Segmental Performance
Segmental Performance 40 Group Community Banking Group Wholesale Banking FY 2021: RM3.19 bil FY 2021: RM2.23 bil FY 2020: RM3.12 bil 2.4% FY 2020: RM1.70 bil 30.8% Fund 1.7% Based 2,266 2,304 Income 78.8% 3.5% 4.4% 1,267 15.7% 851 888 994 959 708 479 554 Retail SME CBIB Treasury International Group
Slide 41: O&G Exposure (Loans + Bonds)
O&G Exposure (Loans + Bonds) 41 41 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 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 2019 2.5 1.4% 1.6 1.0% 4.2 2.4% Dec
Slide 42: Retail Banking
Retail Banking 42 42 RM’bil Gross Loans RM’bil Customer Deposits Y-o-Y: +5.0% Y-o-Y: +8.1% 72.1 100 .0 66.7 90.0 11.7 13.4 80.0 70.0 9.0 10.2 60.0 50.0 95.0 99.7 46.0 48.6 40.0 30.0 20.0 10.0 - Dec 2020 Dec 2021 Dec 2020 Dec 2021 Fixed Deposits Demand Deposits Savings Deposits Retail Market Share *
Slide 43: SME
SME 43 43 Gross Loans Customer Deposits RM’bil RM’bil Y-o-Y: +14.6% Y-o-Y: +11.2% 30.0 25.1 28.7 25.0 20.0 15.0 15.6 18.0 10.0 22.0 24.5 5.0 9.5 10.8 - Dec 2020 Dec 2021 Dec 2020 Dec 2021 Fixed Deposits Demand Deposits SME Market Share * RM’bil Asset Quality 9.7% 9.7% 2.93% 3.01% 2.98% 2.96% 9.7% 2.
Slide 44: Asset Under Management and Market Positions
Asset Under Management and Market Positions 44 44 RM’bil Asset Under Management Market FY 2021 Ranking Share Y-o-Y : -4.4% Equities Broking: 56.5 - By value 8.9% 4th 54.0 - By volume 3rd 10.5% 8.3 8.2 10.0 9.0 Debt Capital Markets: - MYR sukuk 15.4% 3rd - Total MYR bonds (Conventional 14.9% 3rd & Is
Slide 45: Investment Banking – Notable Deals
Investment Banking – Notable Deals 45 45 CF/ECM DCM M&A MMC Corporation Berhad Malaysian Resources Corporation Berhad RM2,937.9 mil CTOS Digital Berhad Third issuance of RM600.0 mil via its Seaport Terminal (Johor) Sdn Bhd's proposed privatisation of RM1.2 bil IPO RM5.0 bil Sukuk Murabahah Programme
Slide 46: Islamic Banking
Islamic Banking 46 46 PBT Gross Financing RM’mil RM’bil Y-o-Y: +>100% Y-o-Y: +11.4% 80.0 70.0 60.0 50.0 40.0 30.0 67.2 74.9 1,031 20.0 10.0 - 451 Dec 2020 Dec 2021 FY 2020 FY 2021 Market 10.0% 10.3% Share Gross Financing/ Asset Quality Total Gross Financing (Domestic) RM’bil 0.65% 0.65% 0.65% 43.0%
Slide 47: RHB Bank Singapore
RHB Bank Singapore 47 47 SGD’mil PBT Loans, Deposits & Total Assets SGD’bil Y-o-Y: >200% 18.0 16.0 14.0 12.0 10.0 8.1 9.3 14.9 8.0 6.0 5.8 6.3 6.7 4.0 5.1 2.0 4.6 - FY 2020 FY 2021 DecDec 2020 Dec Dec 2021 2020 2021 Gross Loans Deposits Total Assets Gross Impaired Loans Ratio Credit Charge Ratio 4.8
Slide 48: Overseas Loans
Overseas Loans 48 48 Dec Sep Dec RM’mil Q-o-Q Y-o-Y 2020 2021 2021 Overseas Operations 20,017 24,174 24,433 1.1% 22.1% Singapore 15,568 19,370 19,446 0.4% 24.9% Others 4,449 4,804 4,987 3.8% 12.1% Cambodia 2,353 2,709 2,829 4.4% 20.2% Thailand 1,574 1,667 1,721 3.2% 9.3% Brunei 173 185 184 -0.5% 6.4