Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — RHB Banking Group — FY2014 Earnings Presentation
44 slides from Rhb Bank Bhd's earnings presentation, Feb 27, 2015
Slide 1: RHB Banking Group Analyst Briefing
Mr. Kellee Kam Group Managing Director RHB Banking Group 27 February 2015
Slide 2: Executive Summary
Executive Summary FY 2014 Financial Results Key Corporate and Business Updates Summary
Slide 3: Executive Summary
Executive Summary Revenue for FY 2014 was up 4.8% year-on-year on the back of higher fee and fund base income. 1 Other operating income to total income ratio rose to 35.5% from 35.0% in 2013. 2 Pretax profit increased by 10.7% year-on-year to RM2.7 billion. 3 Gross loans grew by 17.0% to RM142.5 bil
Slide 4: RHB Banking Group Scorecard 2014
RHB Banking Group Scorecard 2014 Top Level Indicators Target 2014 Actual 2014 ROE >12.0% 11.5% Loans Growth 12% 17.0% CASA Growth >15% 6.4% Gross Impaired <2.5% 2.0% Loans Ratio Cost to Income Ratio <50% 54.7% International Contribution >12% 13.1% 4
Slide 5: Quarterly Profit and ROE
Quarterly Profit and ROE 1400.0 18.0% 16.0% 1200.0 14.0% 1000.0 11.7% 11.8% 11.5% 11.5% 11.2% 12.0% 10.6% 800.0 9.9% 9.3% 739.8 739.1 10.0% 714.9 683.1 637.4 643.6 8.0% 600.0 553.7 559.1 556.5 544.6 494.3 504.5 486.2 450.7 6.0% 410.3 400.0 357.2 4.0% 200.0 2.0% 0.0 0.0% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14
Slide 6: FY 2014 Financial Results
Executive Summary FY 2014 Financial Results Key Corporate and Business Updates Summary
Slide 7: Financial Results
Financial Results Q-o-Q Y-o-Y Year-on-Year Performance: Q4 Q3 FY FY Change Change ♦ Net fund base income increased by 4% mainly due to RM mil 2014 2014 2014 2013 % % 17% increase in the Group’s gross loans and financing. Net Interest Income 805 836 -4 3,291 3,275 - ♦ Non interest income recorded gro
Slide 8: Income Mix & NIM
Income Mix & NIM Income Mix 33% 34% 36% 37% 34% 30% 37% 40% 35% 35% 10% 10% 10% 10% 13% 10% 12% 10% 12% 12% 57% 56% 54% 53% 56% 57% 51% 48% 55% 53% Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 2013 2014 Net Interest Income Islamic Banking Income Other Operating Income Net Interest Income & NIM 2.34% 2.33
Slide 9: Other Operating Income
Other Operating Income Composition RM mil 2013 2,085 FY2014 5% 7% (6%) Corporate Advisory, Underwriting & Arrangement Fees ▲60% 101 267 (5%) Fund Management 16% & UT Fee ▼10% -18 161 (16%) Net Brokerage ▼2% -9 6% 363 (10%) 66% Service Charges, Commission, (64%) Guarantee & Commitment Fees ▼0.3% -2 5
Slide 10: Other Operating Expenses
Other Operating Expenses Composition RM mil 11% 11% 12% 10% 2013 3,052 FY 2014 20% 20% 57% 59% Personnel 293 Costs ▲17% 2,028 2013 2014 Personnel Costs Establishment ▲8% 47 666 Establishment Costs Costs Marketing Expenses Administration and General Expenses Admin & General ▲4% 14 361 Expenses Cost-t
Slide 11: Allowances for Loan Impairment
Allowances for Loan Impairment Increase/(Decrease) in Allowances for Loan Impairment RM mil -325 212 ▼54% -30 448 -52 -47 206 2013 IA Written Recovered CA Others 2014 Off Asset Quality Allowances for Loan Impairment & Credit Charge Ratio RM mil RM mil 600 0.37% 3.59% 0.13% 0.14% 0.50% 4,500 4.00% 50
Slide 12: Financial Position as at 31 December 2014
Financial Position as at 31 December 2014 Q-o-Q Y-o-Y Total assets expanded by 15% to RM219.4 billion Dec Sep Dec Change Change mainly due to growth in loans and financing RM mil 2014 2014 2013 % % assets. Total Assets 219,354 209,454 191,090 5 15 Domestic gross loans increased by 14%. Total Fin
Slide 13: Loans, Advances and Financing
Loans, Advances and Financing RM mil 456 359 326 12 -9 1,953 2,536 3,185 5,951 142,486 5,964 121,753 2013 Working Purchase of Purchase of Purchase of Others Personal Use Purchase of Purchase of Merger and Credit Card 2014 Capital Res. Property Non-Res. Securities Transport PPE Other Acquisition Prop
Slide 14: Loans Profile and Market Share
Loans Profile and Market Share Gross Loans Gross Loans by Interest/ RM bil Profit Rate Sensitivity 14% 25% 300 20% 16% 11% 17% 16% 13% 9% 250 15% 14% 10% 14% 200 Fixed Rate 9% 24% 10% 5% 0% 8% 150 -5% 100 -10% 121.8 142.5 Variable 97.4 111.5 50 -15% Rate -20% 0 76% 2011 2012 2013 2014 Gross Loans To
Slide 15: Loans By Type of Customers
Loans By Type of Customers Composition Loans by Type of Customers RM mil 272 4,876 7% 5% 11% 10% 9% 11% 6% 7% 6,404 26% 29% 26% 30% 9,181 142,486 12% 10% 13% 10% 121,753 2013 Individuals SME International Corporate 2014 & Others 45% 43% 45% 45% Dec 2014 64,275 18,836 15,786 43,589 142,486 Y-o-Y Grow
Slide 16: Customer Deposits
Customer Deposits RM mil FD CASA 2013 137,741 Fixed Deposits 17,340 +16% +6% 2014: RM122,935 mil 2014: RM34,167 mil Demand 1,668 2013: RM105,595 mil 2013: RM32,105 mil Deposits Saving 394 Deposits CA SA NIDs -9 +7% +5% 2014 157,134 ▲14% 2014: RM26,240 (23%) mil 2014: RM7,927 mil 2013: RM24,572 mil 2
Slide 17: Customer Deposits Profile & Market Share
Customer Deposits Profile & Market Share RM bil Customer Deposits RM bil FD & NID Maturity Structure 23% 350 23% 19% 122.9 14% 20% 108.8 105.6 0.8 19% 300 8% 13% 88.1 10% 1.0 0.4 20.3 250 14% 18.2 -0.4% 8% 1.5 12.2 8% 14.8 200 0% 150 -2% -10% 100 89.6 93.0 101.8 138.2 137.7 157.1 71.8 115.9 -20% 50
Slide 18: Funding & Leverage
Funding & Leverage Funding Composition CASA Composition 1% 1% 1% 1% RM bil 2% 3% 3% 3% 11% 11% 12% 12% 7% 8% 60 .0 29 .5% 9% 10% 24.0% 50 .0 23.3% 24 .5% 21.3% 21.7% 40 .0 19 .5% 79% 77% 75% 74% 30 .0 14 .5% 20 .0 9.5 % 32.1 34.2 27.8 29.4 2011 2012 2013 2014 10 .0 4.5 % Customer Deposits Deposits f
Slide 19: PBT by SBG
PBT by SBG RM mil Composition CIB TSY 2013 2,471 3% +59% +17% 15% (3%) CIB 468 (15%) 2014: RM1,266 mil 2014: RM455 mil 2013: RM798 mil 2013: RM388 mil 41% TSY 67 13% (30%) (15%) GIB BBG GIB 39 28% +58% (37%) BBG 0.4 2014: RM106 mil 2014: RM405 mil 2013: RM67 mil 2013: RM405 mil Corporate & Investmen
Slide 20: Loans, Advances and Financing by SBG
Loans, Advances and Financing by SBG RM mil Retail GIB Composition 2013 121,753 9% (7%) 13% +16% +62% (13%) Retail 8,987 45% (45%) 2014: RM64,156 mil 2014: RM12,542mil 33% GIB 4,786 2013: RM55,169 mil 2013: RM7,756 mil (35%) CIB 4,457 CIB BBG Retail BBG 2,503 Corporate Investment Banking ('CIB') +10
Slide 21: Deposits by SBG
Deposits by SBG RM mil TSY Retail Composition 2013 137,741 +23% +11% 8% (7%) 2014: RM44,201 mil 2014: RM40,677mil 26% TSY 8,176 2013: RM36,025 mil 2013: RM36,564 mil (27%) 28% (26%) Retail 4,113 GIB BBG 24% 14% (26%) GIB 2,935 +29% +11% (14%) 2014: RM13,184 mil 2014: RM21,409 mil 2013: RM10,249 mil
Slide 22: Asset Quality
Asset Quality Gross Impaired Loans Ratio Gross Impaired Loans Ratio (%) by Purpose (%) Working Capital Purchase of Residential Property 3.59 6.1 5.3 5.3 3.9 3.3 4.4 3.4 2.5 2.99 2011 2012 2013 2014 2011 2012 2013 2014 2.81 2.68 2.54 2.45 2.29 2.03 2.03 1.84 1.83 1.77 1.78 Purchase of Non- Personal U
Slide 23: RHB Capital: Capital Position & Market Capitalisation
RHB Capital : Capital Position & Market Capitalisation N1 Leverage Ratio Gearing and Double Leverage N2 Multiple (times) Times 13.1 149% 0.8 136% 134% 137% 12.5 120% 0.54 11.7 11.4 0.5 0.39 0.39 0.36 70% 0.2 20% 2011 2012 2013 2014 2011 2012 2013 2014 Gearing Double Leverage Share Price & Market Cap
Slide 24: Capital Position (1/2)
Capital Position (1/2) RHB Bank Group: Capital Development in 2014 ▲1.1% ▼0.4% ▲1.1% ▼1.1% 14.3% 15.0% 10.8% 11.0% 14.6% 8.0% 10.3% 10.6% 5.5% 4.0% 2013 Increase Issuance of Effect of Increase in 2014 2014 Requirements in CET1 New Sub-Debts Transitional Business Treatment Volume CET 1 Tier 1 Total C
Slide 25: Capital Position (2/2)
Capital Position (2/2) RM bil RHB Islamic Bank RHB Investment Bank RM bil 16.3% 18% 2.5 35% 6.5 14.4% 2.3 16% 30% 2.1 5.5 14% 1.9 24.6% 26.3% 25% 4.5 13.9% 12% 1.7 12.9% 1.5 20% 10% 1.0 1.0 1.3 2.8 3.5 1.1 1.0 1.0 2.5 2.0 2.1 2.2 8% 0.9 15% 6% 0.7 10% 1.5 0.5 4% 0.3 5% 0.5 2% 0.1 -0.1 0% -0.5 2013 2
Slide 26: Key Corporate and Business Updates
Executive Summary FY 2014 Financial Results Key Corporate and Business Updates Summary
Slide 27: Key Business Initiatives Update
Key Business Initiatives Update Contribution to Group and Growth Bank@ Work Secured PBT PBT Contribution Workforce Base Companies -15.4% -35.6% 2014: -5.2% 2014: -0.2% RM127.4 mil+0.4% + 5.6% 4.7% +76% +74% 2014: 2,815 2014: 196,851 2013: RM120.6 mil 2013: 4.9% 2013: 1,596 2013: 113,277 • MOP was hi
Slide 28: RHB-OSK Integration Update
RHB-OSK Integration Update Recap: Estimated Synergies Over 3 Years RM mil 324 15 35 0 30 0 34 25 0 149 20 0 112 5 63 275 15 0 5 17 10 0 5 15 50 2 92 127 0 56 Year 1 Year 2 Year 3 Total Synergies RM mil 367 7 16 Revenue 154 107 106 Cost 4 344 2 10 1 5 Funding 1 140 104 100 Year 1 Year 2 PTD Year 3 Cu
Slide 29: IGNITE 2017 building blocks for regional transformation
IGNITE 2017 is driven by six strategic levers which serve as the building blocks for RHB’s regional transformation To be a Leading Multinational Financial OUR ASPIRATIONS… Services Group 1 Top 3 in Malaysia, Top 8 in ASEAN 2 Strong market leadership in Malaysia 3 Regional powerhouse in ASEAN+ 4 Next
Slide 30: IGNITE 2017 aims to accelerate the achievement of RHB's aspirations
IGNITE 2017 aims to accelerate the achievement of RHB’s aspirations 2016 Scale Regional Businesses and 2017 2015 Capabilities Launch Differentiated and A Regional 2014 Regional Capabilities Powerhouse Strengthen Value Propositions and Core Transform Core Banking Capabilities platform and capabilit
Slide 31: IGNITE has generated over RM425m of value since 2014
IGNITE has generated over RM425m of value since its inception in 2014 MANY INITIATIVES HAVE BEEN CATALYSTS FOR QUANTITATIVE & QUALITATIVE GROWTH TO THE GROUP Implementation of fully leveraged Islamic Banking model from May 2014 leading to value capture of over RM68 million More than RM55 million
Slide 32: Further Growth Opportunities
Further Growth Opportunities ♦ Enhanced Customer Experience through : - Nationwide implementation of CONNECT – Branch Sales & Service Transformation - Implement ‘RHB Way’ - Continued implementation of Global Account Management - Segmented value propositions and products and services offerings ♦ Indu
Slide 33: IGNITE Year in Review 2014
RHB IGN¢ YEAR REVIE 2014 x cal So Nn to outcomes Turning aspirations in RM +425m tn 2014 REGIONAL ASSET GROWTH Corporate = Website retreshed —, | 0SK188 Mobile App in 3 months me 21,408 32,610 | © uss 459% ex neded vane > O8m! The journey Begins | RM 306m wume = Enhanced Policy & | / ® syeaport 59%
Slide 34: Going Forward
Executive Summary FY 2014 Financial Results Key Corporate and Business Updates Going Forward
Slide 35: 2015 Target
2015 Target Target Actual Top Level Indicators 2015 2014 ROE >11.5% 11.5% Gross Impaired <1.8% 2.0% Loans Ratio Loans 10% 17.0% Growth CASA >10% 6.4% Growth Cost to Income Ratio <51% 54.7% International >13% 13.1% Contribution 35
Slide 36: Summary
Summary Things we are happy about in 2014:- a. Financial performance broadly in line with what we set out to do notwithstanding the merger discussions b. IGNITE 2017 plan on-track with progress and value capture targets exceeding plan c. RHB / OSK combination continues to outperform our expectations
Slide 37: www.rhbgroup.com
www.rhbgroup.com INVESTOR RELATIONS CONTACT: Ms Yap Choi Foong Group Chief Financial Officer +(603) 9280 2489 cfyap@rhbgroup.com Mr Khairul Rifaie Head, Investor Relations / Chief Financial Officer, RHB Bank Berhad +(603) 9280 5711 khairul.rifaie@rhbgroup.com This material is prepared for general ci
Slide 38: Key Business Highlights
Appendix Key Business Highlights
Slide 39: Retail Business Performance
Retail Business Performance Mortgage Personal Use 7.7% 7.3% 7.7% 7.0% 7.0% 8.9% 9.1% 7.4% 7.8% 6.7% 31.5 20.6 22.2 25.5 7.7 18.8 5.8 7.2 3.5 5.0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Mortgage Loans (RM bil) Market Share Personal Use (RM bil) Market Share Auto Finance Credit Card 8.2% 5.8
Slide 40: CIB Market Share
CIB Market Share FY 2014 FY 2013 FY 2012** Market Share Ranking Market Share Ranking Market Share Ranking Debt Capital Market * 11.5% 4 16.3% 4 14.9% 4 Mergers & Acquisitions - by value 22.4% 1 11.8% 3 7.1% 11 - by deal count 27 deals 1 NA 1 NA 1 Equities Capital Market ^ 8.6% 4 7.9% 3 2.6% 11 ** Co
Slide 41: Equities, Futures & Asset Management
Equities, Futures & Asset Management FY 2014 FY 2013 Total AUM RM bil Equities Market Market Ranking Ranking 15.0% (by value) Share Share 12.1% 10.0% 10.0% Malaysia 48.5 10.0% 9.5% 3 5.9 - By value 8.8% 3 1.7% 2.6% 39.3 5.0% - By volume 13.7% 2 14.3% 1 1.3 31.0 0.0% 21.3 Singapore 5.4% 10 7.4% 6 0.6
Slide 42: Business Banking and SME
Business Banking and SME Gross Loans Customer Deposits RM bil RM bil 17.4% 30.0 25.0 14.1% 15.8% 20.0% 18.0% 8.8% 25.0 11.3% 20.0 5.2% 10.0% 10.6% 9.3% 9.3% 13.0% -0.4% 20.0 0.0% 8.0% 15.0 15.0 -10. 0% 3.0% 10.0 18.3 10.0 19.2 21.4 14.5 15.8 -20. 0% 16.4 -2.0 % 5.0 12.7 12.7 13.7 15.0 5.0 -30. 0% -7
Slide 43: Islamic Financial Performance
Islamic Financial Performance Gross Loans RM mil PBT RM bil 7.7% 6.5% 6.9% 6.6% 350 160.0% 155.0% 5.6% 150.0% 145.0% 140.0% 135.0% 300 130.0% 125.0% 120.0% 115.0% 110.0% 250 105.0% 100.0% 95.0% 90.0% 85.0% 80.0% 200 75.0% 70.0% 65.0% 60.0% 150 304 55.0% 50.0% 45.0% 40.0% 25.5 35.0% 100 211 209 218 3
Slide 44: RHB Bank Singapore Business Performance
RHB Bank Singapore Business Performance 50 PBT 160.0% Loans, Deposits & Total Assets SGD mil 155.0% 150.0% 145.0% SGD bil 45 140.0% 135.0% 130.0% 7.4 125.0% 40 120.0% 115.0% 110.0% 105.0% 35 100.0% 30 95.0% 90.0% 85.0% 5.2 4.5 80.0% 4.4 75.0% 25 70.0% 65.0% 4.1 60.0% 55.0% 3.4 3.6 39 42 50.0% 2.9 2.