Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — Q3 2017 Earnings Presentation
30 slides from Rhb Bank Bhd's earnings presentation, Nov 27, 2017
Slide 1: Analysts Presentation 3rd Quarter 2017 Financial Results
Analysts Presentation 3rd Quarter 2017 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 27 November 2017
Slide 2: Executive Summary
Executive Summary 3rd Quarter 2017 Financial Results Strategy Update Summary and Outlook
Slide 3: Highlights of Financial Performance (1/2)
Highlights of Financial Performance (1/2) Y-o-Y : Net profit grew 4.9% y-o-y to RM1.5 billion, pre-tax profit increased by 3.6% to RM2.0 Profitability billion Earnings improvement mainly due to lower impairment losses on other assets and higher net funding income, partially offset by lower non-f
Slide 4: Highlights of Financial Performance (2/2)
Highlights of Financial Performance (2/2) Higher profit in Group Treasury & Global Market mainly due to higher net funding income and higher impairment write-back on loans, partially offset by lower net FX gain and lower Business trading/investment income Performance Retail Banking - Mortgage lo
Slide 5: RHB Banking Group Scorecard For 2017
RHB Banking Group Scorecard For 2017 Top Level Indicators Target 2017 Actual 9M 2017 ROE 9% - 10% 8.9% N1 Loans Growth 5% 3.3% N2 CASA Growth 8% 11.9% N2 Gross Impaired Loans Ratio < 2.5% 2.31% Cost to Income Ratio < 50% 49.6% Overseas Profit Contribution 10% -7% N1: Annualised N2: Year-on-year grow
Slide 6: 3rd Quarter 2017 Financial Results
Executive Summary 3rd Quarter 2017 Financial Results Strategy Update Summary and Outlook
Slide 7: Sustained profitability amidst challenges in asset quality in oil and gas sector
Sustained profitability amidst challenges in asset quality in oil and gas sector; Results affected by increased allowances for loan and asset impairment though magnitude has moderated; Healthy balance sheet Financial Position Financial Results Key Financial Ratios Operating Non Interest Total Gross
Slide 8: Y-o-Y profits underpinned by higher fund based income and lower impairment
Y-o-Y profits underpinned by higher fund based income and lower impairment; Profit for Q-o-Q flat, impacted by impairment losses Q3 Q2 Q3 Q-o-Q Y-o-Y 9M 9M Y-o-Y 2017 2017 2016 Change Change 2017 2016 Change RM’mil % % % Net Interest Income 893 886 849 1 5 2,630 2,593 1 Net Islamic Fund Base Income
Slide 9: Net fund based income rose, supported by loans growth and margin stabilisation
Net fund based income rose, supported by loans growth and margin stabilisation from more prudent funding cost management RM’bil Y-o-Y: +9% Y-o-Y: +5% Q-o-Q: +1% 7.41 7.47 4.18 4.07 3.23 3.40 2.43 2.44 2.50 2.53 1.37 1.35 1.09 1.35 1.15 1.37 1.16 1.06 Q3 2016 Q1 2017 Q2 2017 Q3 2017 9M 2016 9M 2017 F
Slide 10: Lower non-fund based income contributed largely by lower net fx gain and fee income
Lower non-fund based income contributed largely by lower net fx gain and fee income from loan and loan related exposure, partially offset by increases in net wealth management fee income and brokerage income Y-o-Y: -11% RM’mil Y-o-Y: -18% 1,482 52 1,321 Others Q-o-Q: -2% 46 413 N2 282 Treasury Incom
Slide 11: Operating expenses well-contained, up 1% Q-o-Q and 2% Y-o-Y
Operating expenses well-contained, up 1% Q-o-Q and 2% Y-o-Y; increase is from higher personnel cost and IT-related expenses as the Group continued to invest into technology infrastructure and capabilities Y-o-Y: +2% Y-o-Y: +2% Q-o-Q: +1% 2,339 2,293 257 270 Administration & 173 178 General Expenses
Slide 12: Loans growth driven by mortgage and SME
Loans growth driven by mortgage and SME, partly offset by corporate repayments and tightening of credit underwriting in Singapore Q-o-Q YTD RM’mil Sep 2017 Jun 2017 Change Dec 2016 Change % % GROUP RETAIL 73,608 71,725 3 70,138 5 Mortgage 44,987 43,372 4 40,509 11 Commercial Property Financing 4,626
Slide 13: Healthy deposits growth to support liquidity and ensure ample funding
Healthy deposits growth to support liquidity and ensure ample funding for business growth Customer Deposits CASA Y-o-Y: +2% Y-o-Y: +12% RM’bil RM’bil 9M Growth : +2% 9M Growth : +7% 165.8 165.6 168.5 40.8 42.5 45.6 45.6 42.5 40.8 26.4 24.9 24.4 9.8 9.3 9.2 98.6 98.2 98.5 35.8 31.6 33.2 Sep 2016 Dec
Slide 14: Asset quality actively managed; improving loan loss coverage
Asset quality actively managed; improving loan loss coverage with additional top-up in regulatory reserve RM’mil Asset Quality RM’mil 450 Allowances for Loan Impairment 4,300 0.027 2.43% 2.39% 2.31% 400 2.25% 2.29% 0.38% 0.35% 0.37% 0.5 0% 4,100 0.022 0.25% 0.26% 350 1.65% 1.63% 1.64% 1.67% 3,900 1.
Slide 15: Treasury recorded better profitability while margin compression affected Retail
Treasury recorded better profitability while margin compression affected Retail; Higher loan impairment allowances resulted in lower profit at CBIB and BBG; Singapore impacted largely by impairments in oil and gas sector RM’ mil Pre-tax Profit 9M 2016 865 826 9M 2017 799 703 528 413 329 277 29 41 -1
Slide 16: Capital adequacy of Group and key banking subsidiaries remain strong
Capital adequacy of Group and key banking subsidiaries remain strong RHB Bank Group RHB Bank 20. 0% 20. 0% 18. 0% 15% 18. 0% 16. 0% 16. 0% 14. 0% 11% 14. 0% 12. 0% 12. 0% 10. 0% 17.9% 17.2% 7% 13.6% 13.8% 10. 0% 13.1% 13.4% 17.2% 14.8% 13.1% 13.4% 12.4% 12.7% 8.0 % 8.0 % 3% 6.0 % 6.0 % 4.0 % 4.0 % -
Slide 17: Strategy Update
Executive Summary 3rd Quarter 2017 Financial Results Strategy Update Summary and Outlook
Slide 18: Key updates on the progress of IGNITE 2017 (1/3)
Key updates on the progress of IGNITE 2017 (1/3) Initiative Objective / Target Achievement Affluent • Relaunch Premier Banking with Since the launch of the new Premier Banking value proposition in July 2016: segment enhanced value proposition, – Affluent AUM grew by 23.4% from RM 26.2 billion to R
Slide 19: Key updates on the progress of IGNITE 2017 (2/3)
Key updates on the progress of IGNITE 2017 (2/3) Initiative Objective / Target Achievement Digital Build and develop a digital ♦ Ecosystem partnership with RinggitPlus for personal loan origination via chatbot in and ecosystem to cater to our Oct 2017 payments customers’ lifestyle needs ♦ Launched v
Slide 20: Key updates on the progress of IGNITE 2017 (3/3)
Key updates on the progress of IGNITE 2017 (3/3) Initiative Objective / Target Achievement CIB growth Boost returns via reinforcement of Increased product holding ratio for domestic top corporates to 5.29 as at Sep 2017 strategy Client Coverage Model from 4.56 in Dec 2016 through refined client co
Slide 21: Summary and Outlook
Executive Summary 3rd Quarter 2017 Financial Results Strategy Update Summary and Outlook
Slide 22: Economic Outlook
Economic Outlook Malaysia’s real GDP recorded a strong growth of 6.2% Y-o-Y in 3Q17 and is forecast to grow 5.6% in 2017, up from 4.2% recorded in 2016: • Continued strength in exports • Increase in domestic demand underpinned by investment spending ♦ Interest rate expected to be stable, with OPR
Slide 23: Concluding Remarks
Concluding Remarks The Group continues to achieve consecutive quarters of sustained profitability Loans growth picked up in Q3 2017 Combined with our prudent management of funding cost, net interest margin has been holding up over the last three quarters Notwithstanding challenges in asset q
Slide 24: Investor Relations Contact
www.rhbgroup.com INVESTOR RELATIONS CONTACT: Mr. Syed Ahmad Taufik Albar Group Chief Financial Officer +(603) 9280 7090 taufik.albar@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 o
Slide 25: Key Business Highlights
APPENDIX Key Business Highlights
Slide 26: Retail Banking
Retail Banking Mortgage Auto Finance RM’bil Y-o-Y: +12% RM’bil Y-o-Y: -9% 9M Growth: +9% 9M Growth: -5% 10. 0 50. 0 9.0 45. 0 8.0 40. 0 7.0 35. 0 6.0 30. 0 9.5 9.2 5.0 46.9 25. 0 20. 0 41.7 42.9 4.0 8.7 3.0 15. 0 2.0 10. 0 1.0 5.0 0.0 0.0 Sep 2016 Dec 2016 Sep 2017 Sep 2016 Dec 2016 Sep 2017 Market
Slide 27: Investment Banking – Market Positions & Asset Management
Investment Banking – Market Positions & Asset Management YTD Sep 2017 RM’bil Asset Under Management Market Share Ranking Y-o-Y: -4% Equity: 9M Growth: +1% - By value 8.5% 5th - By volume 12.3% 3rd 54.9 52.7 52.3 8.1 6.2 7.9 Debt Capital Markets: 17.1 21.8 19.7 - MYR sukuk 13.3% 4th - Total MYR bonds
Slide 28: Business Banking
Business Banking Gross Loans Customer Deposits RM’bil RM’bil Y-o-Y: +8% Y-o-Y: -2% 9M Growth: +7% 9M Growth: -1% 21. 0 22.2 22.1 21.9 19. 0 17. 0 15. 0 12.2 12.7 12.3 13. 0 21.7 22.0 23.4 11. 0 10.0 9.0 7.0 9.4 9.6 5.0 Sep 2016 Dec 2016 Sep 2017 Sep 2016 Dec 2016 Sep 2017 Fixed Deposits Demand Depos
Slide 29: Islamic Banking
Islamic Banking PBT Gross Financing RM’mil Y-o-Y: +20% Y-o-Y: +19% RM’bil 9M Growth: +19% 405 40.0 355 35.0 305 30.0 255 432 25.0 40.7 205 360 34.2 34.1 349 20.0 155 304 299 15.0 105 218 10.0 55 Sep 2016 Dec 2016 Sep 2017 5 2013 2014 2015 2016 9M 9M Market 8.2% 7.8% 8.7% 2016 2017 Share Asset Qualit
Slide 30: RHB Singapore
RHB Singapore SGD’mil Loans, Deposits & Total Assets PBT SGD’bil 7.5 8.0 80 74 6.8 0.3 0.4 60 32 34 0.3 39 7.2 6.0 4 4.8 40 4.9 6.5 20 35 42 46 (35) 4.1 4.2 3.8 (92) (67) - 7.6 (12) (2 0) (31) (59) (4) (4 0) (81) (8) (6 0) 2015 2016 Sep 2017 (8 0) (11) (1 00) 2013 2014 2015 2016 9M 9M Deposits 2016