Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — FY2022 Earnings Presentation
43 slides from Rhb Bank Bhd's earnings presentation, Feb 27, 2023
Slide 1: Analysts Presentation FY2022 Financial Results
RHB BANK BERHAD Analysts Presentation FY2022 Financial Results Mohd Rashid Mohamad Group Managing Director/Group Chief Executive Officer RHB Banking Group 27 February 2023
Slide 2: Agenda
1. Executive Summary 2. FY2022 Financial Results 3. Strategy Update 4. Summary and Outlook
Slide 3: Executive Summary
Executive Summary
Slide 4: Resilient performance: Quarterly net profit up by 22.3% Y-o-Y
4 Resilient performance: Quarterly net profit up by 22.3% Y-o-Y 4 Q4 2022 (Year-on-year) ▪ Net fund based income grew 11.9% Y-o-Y to RM1,717.0 million from higher gross fund based income ▪ Non-fund based income grew 30.3% Y-o-Y to RM548.7 million due to higher net gain on forex and derivatives, and
Slide 5: Full year net profit rose 3.4% to a record high of RM2.7 billion
5 Full year net profit rose 3.4% to a record high of RM2.7 billion, ROE at 9.7% 5 FY2022 (Year-on-year) ▪ Net fund based income grew 8.6% Y-o-Y to RM6,379.3 million from higher gross fund based income ▪ Non-fund based income decreased 10.6% Y-o-Y to RM1,929.4 million due to lower fee income, insuran
Slide 6: Group loans grew 6.9% Y-o-Y; intense deposits competition
Group loans grew 6.9% Y-o-Y while domestic was in line with industry; Intense deposits t6 6 competition continued to drive up cost of funds ▪ Gross loans and financing ▪ Expanded 1.2% Q-o-Q to RM212.2 billion primarily due to growth in mortgage, auto finance and Singapore (Domestic loans growth Q-o-
Slide 7: Capital and liquidity positions remained sound; second interim dividend
Capital and liquidity positions remained sound; In line with the stronger financials, declared 7 7 second interim dividend of 25 sen per share Strong capital and liquidity position ▪ Group CET 1 ratio at 16.9% (16.4% in Q3 2022; 17.2% in Q4 2021) and total capital ratio at 19.3% (18.8% in Q3 2022; C
Slide 8: RHB Banking Group Scorecard for FY2022
RHB Banking Group Scorecard for FY2022 8 8 Top Level Indicators Target FY2022 Actual FY2022 Achieved Target N1 N1 ROE 8.5% [10.0%] 9.7% [11.2%] √ Loans Growth 4%-5% 6.9% √ CASA Composition 30.0% 29.2% x Gross Impaired Loans Ratio ≤1.70% 1.55% √ Cost-to-Income Ratio ≤45.0% 44.7% √ N1 Normalised for P
Slide 9: FY2022 Financial Results
FY2022 Financial Results
Slide 10: Resilient results driven by higher net fund based income and lower ECL
Resilient results driven by higher net fund based income and lower ECL, partially offset by lower 1010 non-fund based income; slight uptick in CIR and GIL ratios N1 N1 Financial Results Profitability Ratios Total Operating Profit Profit Net Profit to Return on Cost-to-Income Non-Fund Based/ Income B
Slide 11: Q4'22: Q-o-Q and Y-o-Y growth backed by higher total income and lower ECL
Q4’22: Q-o-Q and Y-o-Y growth backed by higher total income and lower ECL 1111 Q4 Q3 Q4 RM’ mil Q-o-Q Y-o-Y FY2021 FY2022 Y-o-Y 2021 2022 2022 Net Fund Based Income 1,533.9 1,629.1 1,717.0 5.4% 11.9% 5,874.8 6,379.3 8.6% Non-Fund Based Income 421.0 564.5 548.7 -2.8% 30.3% 2,158.8 1,929.4 -10.6% Modi
Slide 12: Net fund based income grew; NIM strengthened by 4 bps to 2.24%
Net fund based income grew due to higher gross fund based income; NIM strengthened by 4 bps 1212 to 2.24% in FY2022 RM’bil Y-o-Y: +37.7% Y-o-Y: +18.3% Y-o-Y: -33.8% Y-o-Y: -79.8% Y-o-Y: +8.6% Y-o-Y: +11.9% Q-o-Q: +5.4% 11.35 3.40 9.59 Fund Based Income 2.92 2.47 6.38 Fund Based Expense 5.87 1.53 1.6
Slide 13: FY'22 non-fund based income impacted by lower fee income
FY’22 non-fund based income impacted by lower fee income, insurance underwriting surplus and 13 net trading and investment income; Q4’22 Y-o-Y supported by higher forex gain RM’mil Y-o-Y: +30.3% Y-o-Y: -10.6% Q-o-Q: -2.8% 2,158.8 564.5 60.1 1,929.4 548.7 Others 11.6 86.8 421.0 24.5 617.3 Treasury In
Slide 14: FY'22 operating expenses grew 5.5%; CIR improved to 44.7%
FY’22 operating expenses grew 5.5% mainly from higher personnel and establishment costs; 1414 With positive JAWS, CIR improved to 44.7% Q4 Q3 Q4 RM’ mil Q-o-Q Y-o-Y FY2021 FY2022 Y-o-Y 2021 2022 2022 Personnel Costs 525.6 585.6 591.9 1.1% 12.6% 2,137.7 2,250.2 5.3% Establishment Costs 205.0 211.3 21
Slide 15: Loans grew 6.9% Y-o-Y led mainly by mortgage, auto finance, SME
Loans grew 6.9% Y-o-Y led mainly by mortgage, auto finance, SME, Commercial, Singapore and 1515 Cambodia; Domestic loans grew 5.3% Y-o-Y Dec Sep Dec RM’mil Q-o-Q Y-o-Y 2021 2022 2022 GROUP COMMUNITY BANKING 124,096 131,148 133,189 1.6% 7.3% Retail 99,688 104,919 106,843 1.8% 7.2% Mortgage 68,176 73,
Slide 16: Deposits grew 3.9% Y-o-Y; CASA composition at 29.2%
Deposits grew 3.9% Y-o-Y attributed to growth in FD and CASA; CASA composition at 29.2% 1616 Customer Deposits CASA by Segment RM’bil Y-o-Y: +3.9% Dec Sep Dec RM’bil Q-o-Q Y-o-Y Q-o-Q: +0.7% 2021 2022 2022 GROUP COMMUNITY BANKING 40.9 41.1 40.5 -1.6% -1.1% Retail 23.5 23.0 22.0 -4.3% -6.5% 218.7 225
Slide 17: Q4'22 credit cost at -12 bps due to ECL writeback
Q4’22 credit cost at -12 bps due to ECL writeback; FY’22 improved to 15 bps from lower ECL and 17 higher bad debts recovered 1.1 0% Allowances for Losses on Loans 1,48 0 880 1,28 0 1.1 0% 0.6 0% RM’mil 680 1,08 0 0.29% 0.40% 0.6 0% 880 0.15% 0.29% 575 480 0.1 0% 0.04% 680 -0.15% -0.12% 0.1 0% 480 21
Slide 18: GIL improved Q-o-Q to 1.55% whilst LLC remained healthy
GIL improved Q-o-Q to 1.55% whilst LLC remained healthy at 112.8% 18 Gross Impaired Loans 600000.00% 2.30% 7.10% 7.27% 6.28% 5.67% 5.47% 550000.00% 2.10% 500000.00% 450000.00% 1.81% 1.82% 1.90% 1.68% 1.71% 1.72% 400000.00% 1.62% 1.70% 1.57% 1.55% 350000.00% 1.49% 1.50% Gross Loans - Stage 2 (Group)
Slide 19: GIL upticks for Retail segment within expectation
GIL upticks for Retail segment within expectation; SME, Corporate and Cambodia showed 19 improvement Q-o-Q due to recoveries and write-offs Group Community Banking Mortgage Unsecured Auto Finance SME 4.65% 3.76% 3.68% 8.41% 8.09% 8.27% 7.03% 5.77% 5.47% 15.53% 12.78% 12.21% 1.40% 850 1.20% 1.40% 90
Slide 20: Profit grew in GCB and GIB; lower profit for GWB
Profit grew in GCB and GIB; lower profit for GWB due to lower total income; Insurance impacted 2020 by lower underwriting surplus Group Community Banking (GCB) Group Wholesale Banking (GWB) Group International Business (GIB) FY2021: RM3,709.2 mil FY2021: RM3,466.2 mil FY2021: RM713.9 mil FY2022: RM4
Slide 21: Capital position remained robust for the Group and key banking subsidiaries
Capital position remained robust for the Group and key banking subsidiaries 21 21 RHB Bank Group RHB Bank 20. 0% 20. 0% 19. 0% 18. 0% 19.8% 19.3% 18. 0% 18.2% 17.7% 17. 0% 16. 0% 16. 0% 15. 0% 17.2% 16.9% 17.2% 16.9% 14. 0% 15.2% 15.1% 15.2% 15.1% 14. 0% 13. 0% 12. 0% 12. 0% 11. 0% 10. 0% 10. 0% 9.0
Slide 22: Declared second interim dividend of 25 sen per share
Declared second interim dividend of 25 sen per share with 20 sen cash and 5 sen subject to DRP 22 representing 62.5% payout ratio for FY2022 22 Market Capitalisation Dividend Per Share (sen) 62.9% 62.5% 5.78 5.79 6.00 50.1% 60.0% 5.45 5.48 35.7% 5.37 34.8% 5.29 5.50 40.0% 24.6 40.00 40.00 20.0% 5.00
Slide 23: Strategy Update
Strategy Update
Slide 24: Our corporate strategy, Together We Progress 2024 (TWP24)
Recap: Our corporate strategy, Together We Progress 2024 (TWP24) has three strategic objectives 24 24 TWP24 – Targets • Build deeper relationships with our target customers (e.g. Affluent, Mass Affluent, SME, LC, MC) Be Everyone’s 11.5% Primary Bank • Embed our presence across all financial needs th
Slide 25: FY2022 achievements on track to meet TWP24 targets
In FY2022, we have achieved encouraging results and are on track to meet our TWP24 targets 25 25 TWP24 – FY2022 Highlights FY2022 Achievements +7.2% Retail Loans +10.0% Mortgage Loans +12% Reflex Customers Be Everyone’s vs. FY2021 vs. FY2021 vs. FY2021 (to 150k customers) 9.7%* Driven by innovative
Slide 26: Summary & Outlook
Summary & Outlook
Slide 27: Outlook for FY2023
Outlook for FY2023 27 27 ▪ GDP expanded 7.0% in Q4 2022 and 8.7% for the full year supported largely by robust domestic activities Economic ▪ For 2023, Malaysia’s GDP is expected to grow but at a more modest pace of 5.0%. Loans growth is also Outlook projected to moderate in tandem with GDP ▪ OPR is
Slide 28: RHB Banking Group Scorecard for FY2023
RHB Banking Group Scorecard for FY2023 28 28 Top Level Indicators Actual FY2022 Target FY2023 ROE 9.7% ≥11.0% Loans Growth 6.9% 4%-5% CASA Composition 29.2% 30.0% Gross Impaired Loans Ratio 1.55% ≤1.50% Cost-to-Income Ratio 44.7% ≤44.6%
Slide 29: Concluding Remarks
Concluding Remarks 29 29 ▪ The Group delivered a commendable performance for FY2022 amid persistently challenging operating environment ▪ We are delighted to reward our shareholders with a second interim dividend of 25 sen per share, bringing FY2022 dividend to 40 sen per share, representing 62.5% p
Slide 30: 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 31: Appendix
Appendix
Slide 32: Repayment Assistance Update
Repayment Assistance Update 32 32 ▪ Domestic outstanding RA remained at 4% as at 31st January 2023 Outstanding RA as at: % of Outstanding 31st Oct 2022 31st Jan 2023 Loan Balance RM bil % RM bil % Group Community Banking 5.9 4% 5.6 4% Retail 3.0 3% 2.8 3% SME 2.9 11% 2.8 11% Group Wholesale Banking
Slide 33: Key Financial Data
Key Financial Data 33 33 Financial Data FY2018 FY2019 FY2020 FY2021 FY2022 RM’mil Income Statement Total Income 6,806 7,058 7,186 7,789 8,309 Operating Profit Before Allowances 3,448 3,670 3,799 4,266 4,592 Profit Before Tax 3,119 3,394 2,644 3,529 4,171 Net Profit 2,305 2,482 2,033 2,618 2,708 Bala
Slide 34: Key Financial Ratios
Key Financial Ratios 34 34 Financial Ratios FY2018 FY2019 FY2020 FY2021 FY2022 Profitability Return on Equity 10.3% 10.3% 7.7% 9.6% 9.7% Net Interest Margin 2.24% 2.12% 2.13% 2.20% 2.24% Cost to Income Ratio 49.3% 48.0% 47.1% 45.2% 44.7% Asset Quality Gross Impaired Loan Ratio 2.06% 1.97% 1.71% 1.49
Slide 35: Segmental Performance
Segmental Performance 35 Group Community Banking Group Wholesale Banking FY2021: RM3,192.0 mil FY2021: RM2,226.2 mil 10.1% 5.8% FY2022: RM3,514.5 mil FY2022: RM2,096.9 mil 5.9% Net Fund Based 2,304 2,440 Income 21.0% 0.3% 13.8% 22.1% 1,075 1,267 1,270 888 959 827 553 675 Retail SME CBIB Treasury Int
Slide 36: O&G Exposure (Loans + Bonds)
O&G Exposure (Loans + Bonds) 36 36 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 2022 2.2 1.0% 1.2 0.6% 3.4 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 37: Retail Banking
Retail Banking 37 37 RM’bil Gross Loans RM’bil Customer Deposits Y-o-Y: +7.2% Y-o-Y: -0.8% 72.1 71.5 100 .0 13.4 12.4 10.2 9.6 80.0 60.0 99.7 106.8 48.6 49.6 40.0 20.0 - Dec 2021 Dec 2022 Dec 2021 Dec 2022 Fixed Deposits Demand Deposits Savings Deposits Retail Market Share * Asset Quality RM’bil 8.8
Slide 38: SME
SME 38 38 Gross Loans Customer Deposits RM’bil RM’bil Y-o-Y: +9.7% Y-o-Y: +7.9% 30.0 28.0 30.8 25.0 20.0 15.0 17.4 18.5 10.0 24.4 26.3 5.0 10.7 12.3 - Dec 2021 Dec 2022 Dec 2021 Dec 2022 Fixed Deposits Demand Deposits SME Market Share * RM’bil Asset Quality 3.23% 3.05% 2.84% 2.98% 2.71% 9.1% 9.2% 8.
Slide 39: Asset Under Management and Market Positions
Asset Under Management and Market Positions 39 39 RM’bil Asset Under Management Market Year 2022 Ranking Share Y-o-Y : -17.3% Equities Broking: - By value 6.8% 6th 53.9 - By volume 8.8% 4th 8.2 44.6 8.9 6.6 Debt Capital Markets: 9.1 - MYR sukuk 18.4% 3rd - Total MYR bonds (Conventional 18.1% 3rd & I
Slide 40: Investment Banking – Notable Deals
Investment Banking – Notable Deals 40 40 CF/ECM DCM M&A MMC Corporation Berhad RM2,937.9 mil Projek Lebuhraya Usahasama Berhad CIMB Group Holdings Berhad Seaport Terminal (Johor) Sdn Bhd's privatisation of MMC Issuance of IMTN under the RM25.2 bil IMTN Programme RM227.4 mil Secondary Placement Corpo
Slide 41: Islamic Banking
Islamic Banking 41 41 PBT Gross Financing RM’mil RM’bil Y-o-Y: +10.6% Y-o-Y: +9.2% 90.0 80.0 70.0 60.0 50.0 40.0 30.0 74.9 81.7 1,139.4 20.0 1,030.5 10.0 - Dec 2021 Dec 2022 FY2021 FY2022 Market 10.2% 9.9% Share Gross Financing/ Asset Quality Total Gross Financing (Domestic) RM’bil 0.73% 0.68% 44.6%
Slide 42: RHB Bank Singapore
RHB Bank Singapore 42 42 SGD’mil PBT Loans, Deposits & Total Assets SGD’bil Y-o-Y: >300% 90.0 80.0 70.0 10.4 60.0 50.0 94.2 9.3 40.0 30.0 6.3 6.7 7.0 7.3 20.0 10.0 - 19.4 FY2021 FY2022 DecDec 2021 Dec Dec 2022 2021 2022 Gross Loans Deposits Total Assets Gross Impaired Loans Ratio Credit Charge Ratio
Slide 43: Overseas Loans
Overseas Loans 43 43 Dec Sep Dec RM’mil Q-o-Q Y-o-Y 2021 2022 2022 Overseas Operations 24,433 28,094 28,831 2.6% 18.0% Singapore 19,446 22,525 23,087 2.5% 18.7% Cambodia 2,829 3,337 3,335 -0.1% 17.9% Others 2,158 2,232 2,409 7.9% 11.6% Thailand 1,721 1,840 2,006 9.0% 16.6% Brunei 184 190 195 2.6% 6.