Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — FY2020 Earnings Presentation
41 slides from Rhb Bank Bhd's earnings presentation, Feb 26, 2021
Slide 1: RHB Bank Berhad Analyst Presentation FY2020 Financial Results
RHB BANK BERHAD Analyst Presentation FY2020 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 26 February 2021
Slide 2: Agenda
1. Executive Summary 2. FY2020 Financial Results 3. Strategy Update 4. Summary and Outlook
Slide 3: Executive Summary
Executive Summary
Slide 4: Highlights of FY2020 Performance (1/2)
4 Highlights of FY2020 Performance (1/2) 4 Year-on-year Total income up by 1.8% to RM7,185.7 million, supported by growth in net fund based and non-fund based income, negated by impact of modification loss (ML). Net fund based income was also affected by 125 bps OPR cuts. Excluding both ML of RM41
Slide 5: Highlights of FY2020 Performance (2/2)
5 Highlights of FY2020 Performance (2/2) 5 Strong capital and liquidity position Capital Group CET 1 ratio at 16.2% (FY2019: 16.3%) and total capital ratio at 18.4% (FY2019: 18.6%) and Liquidity Bank entity CET 1 ratio at 14.6% (FY2019: 14.3%) and total capital ratio at 16.9% (FY2019: 16.5%)
Slide 6: RHB Banking Group Scorecard for FY2020
RHB Banking Group Scorecard for FY2020 6 6 Top Level Indicators Target FY2020 Actual FY2020 ROE ≥8.0% 7.7% [8.3%] N1 Loans Growth 2%-3% 5.6% CASA Growth 5%-6% 28.3% Gross Impaired Loans Ratio <1.95% 1.71% Cost-to-Income Ratio <48.9% 47.1%N2 [45.6%]N1 N1 Based on continuing operations and excluding n
Slide 7: FY2020 Financial Results
FY2020 Financial Results
Slide 8: Profit impacted by higher ECL and net modification loss despite income growth
Profit impacted mainly by higher ECL and net modification loss despite income growth; Higher 88 credit charge ratio from provisions for potential COVID-19 effects Financial Position Financial Results Key Financial Ratios Total Gross Total Operating Profit Return on Non-Fund Based/ Assets Loan Income
Slide 9: Q4 profit from continuing operations declined on higher ECL
Q4 profit from continuing operations declined Q-o-Q and Y-o-Y due to higher ECL despite growth 99 in total income Q4 Q3 Q4 RM’ mil Q-o-Q Y-o-Y FY2019 FY2020 Y-o-Y 2019 2020 2020 Total Net Fund Based Income (A) 1,285.1 1,239.5 1,531.5 23.6% 19.2% 4,957.3 5,267.6 6.3% of which : Unwinding of Modificat
Slide 10: Resilient FY2020 underlying performance
Resilient FY2020 underlying performance, supported by growth in fund based and non-fund based 10 income as well as tightly managed OPEX but affected by higher ECL 10 Q4 Q3 Q4 RM’ mil Q-o-Q Y-o-Y FY2019 FY2020 Y-o-Y 2019 2020 2020 Total Income (A) 1,833.4 1,830.1 2,068.0 13.0% 12.8% 7,057.5 7,185.7 1
Slide 11: Net fund based income grew 2.8% Y-o-Y; NIM 2.06%
FY2020 net fund based income grew 2.8% Y-o-Y mainly due to proactive funding cost 1111 management; NIM dropped 6 bps Y-o-Y to 2.06% in FY2020 RM’bil Y-o-Y: -12.2% Y-o-Y: +5.9% Y-o-Y: -23.8% Q-o-Q: +9.8% 11.38 9.99 Y-o-Y: +2.8% 2.87 6.43 2.36 2.35 5.10 4.96 4.89 1.58 1.29 1.24 1.36 1.12 0.99 N1 N1 Q4
Slide 12: Non-fund based income grew 11.2% Y-o-Y
Non-fund based income grew 11.2% Y-o-Y mainly due to higher investment and trading income, 1212 insurance underwriting surplus, brokerage income and wealth management fees Y-o-Y: +2.5% Y-o-Y: +11.2% RM’mil Q-o-Q: -4.8% 2,336.1 2,100.2 77 Others 77 590.7 562.1 890 Treasury Income 548.3 798 13 24 Insu
Slide 13: Operating expenses relatively flat; CIR improved
Operating expenses relatively flat on the back of disciplined cost management; Excluding net ML 1313 impact, CIR further improved to 45.6% Q4 Q3 Q4 RM’ mil Q-o-Q Y-o-Y FY2019 FY2020 Y-o-Y 2019 2020 2020 Personnel Costs 515.1 529.9 499.8 -5.7% -3.0% 2,013.1 2,041.6 1.4% Establishment Costs 197.2 180.
Slide 14: Loans grew 5.6% Y-o-Y
Loans grew 5.6% Y-o-Y led mainly by mortgage, auto finance, SME and Singapore; 1414 Domestic loans grew 4.5% Y-o-Y, exceeding industry growth Dec Sep Dec Dec 2019 Dec 2020 RM’mil Q-o-Q Y-o-Y 2019 2020 2020 % % GROUP RETAIL BANKING 90,079 93,512 94,973 1.6% 5.4% 51 51 Mortgage 58,585 61,993 63,083 1.
Slide 15: Total deposits grew 6.8% Y-o-Y; CASA ratio improved
Total deposits grew 6.8% Y-o-Y mainly attributed to growth in CASA and FD; CASA ratio improved 1515 Y-o-Y to 30.9% Customer Deposits CASA by Segment RM’bil Y-o-Y : +6.8% Q-o-Q: +3.4% 203.5 Dec Sep Dec 190.6 196.8 RM’bil Q-o-Q Y-o-Y 2019 2020 2020 48.9 61.6 62.8 Retail Banking 16.9 20.3 20.7 2.1% 22.
Slide 16: Credit charge ratio rose in Q4 2020; GIL ratio uptick
Credit charge ratio rose in Q4 2020 on higher ECL set aside for potential COVID-19 impact; FY2020 16 credit cost stood at 58 bps; Uptick in GIL ratio in Q4 2020 Allowances for Loan Impairment Gross Impaired Loans 900 RM’mil 0.58% 1.18% 1,40 0 0.6 0% 7.69% 7.42% 7.66% 7.45% 11.20% 1.2 0% 800 6,000 2.
Slide 17: GIL ratio uptick in Q4 for Retail segment
GIL ratio uptick in Q4 for Retail segment in tandem with the end of moratorium while R&R kept 17 GIL under control for Non-Retail segment; Intensive recovery efforts continued 17 Retail Banking Business Banking Wholesale Banking Mortgage GBB Corporate 3.66% 2.00% 10.60% 19.54% 18.52% 15.50% 5.14% 8.
Slide 18: Profit declined in most business segments
Profit declined in most business segments – Retail, Business Banking, CBIB & Overseas Operations 1818 from higher ECL; Treasury profit up marginally on higher trading & investment income Revenue 0.9% 2,699 2,723 10.9% RM’mil 1.6% 0.9% 1,323 1,467 1,382 1,405 12.9% 4.1% 1,126 1,136 1.6% 178 201 258 2
Slide 19: Capital position remains strong for the Group and key subsidiaries
Capital position remains strong for the Group and key banking subsidiaries 19 19 RHB Bank Group RHB Bank 20. 0% 20. 0% 19. 0% 18. 0% 18. 0% 18.6% 18.4% 17. 0% 16. 0% 16.5% 16.9% 16. 0% 15. 0% 16.3% 16.2% 16.3% 16.2% 14. 0% 14. 0% 14.3% 14.6% 14.3% 14.6% 13. 0% 12. 0% 12. 0% 11. 0% 10. 0% 10. 0% 9.0
Slide 20: Proposed final dividend of 7.65 sen per share subject to DRP
Proposed a final dividend of 7.65 sen per share subject to DRP; Full year payout of 34.8% 20 20 Market Capitalisation Dividend Per Share (sen) 5.78 60.0% 50.1% 5.45 5.39 5.50 50.0% 5.29 35.7% 40.0% 23.2 30.8% 34.8% 5.00 28.6% 31.00 5.00 30.0% 4.68 4.71 21.9 21.6 20.0% 21.2 4.50 20.50 18.50 10.0% 20.
Slide 21: Strategy Update
Strategy Update
Slide 22: FIT22 Key Highlights (1/2)
FIT22 Key Highlights (1/2) 22 22 • Premier Banking customers increased to 79.3k (+13.6% YoY), of which 33.9% are SME owners Affluent • Total AUM of Premier customers grew to RM40.1 bil (+20.1% YoY) • Deposits increased to RM32.8 bil (+16.1% YoY) SME • Business Banking loans grew 11.3% YoY to RM28.8
Slide 23: FIT22 Key Highlights (2/2)
FIT22 Key Highlights (2/2) 23 23 Analytics • Continued to drive business performance via analytics with RM119.5 mil of benefits realised as of December 2020 and Big • Increased analytics use cases for 2020, e.g. identifying good customers for flexible lending offers, dormant Data customers identific
Slide 24: Summary & Outlook
Summary & Outlook
Slide 25: Outlook for FY2021
Outlook for FY2021 25 25 GDP contracted 3.4% in Q4 2020 (Q3 2020: -2.6%), full year GDP contracted by 5.6% (2019: +4.3%) Economic Economy is forecast to rebound this year but downside risks remain Outlook Implementation of Budget 2021 initiatives, the government's recently announced stimulus p
Slide 26: RHB Banking Group Scorecard for FY2021
RHB Banking Group Scorecard for FY2021 26 26 Top Level Indicators Actual FY2020 Target FY2021 ROE 7.7% 9.0% Loans Growth 5.6% 4%-5% CASA Composition 30.9% 30.0% Gross Impaired Loans Ratio 1.71% <2.00% Cost-to-Income Ratio 47.1% <47.5%
Slide 27: Concluding Remarks
Concluding Remarks 27 27 Our fundamentals remained sound as reflected by our strong capital, liquidity and loan loss coverage positions despite operating under an extremely tough and unprecedented economic environment Continue to reward our shareholders with 34.8% dividend payout; DRP to be appl
Slide 28: 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 29: Appendix
Appendix
Slide 30: Key Financial Data
Key Financial Data 30 30 Financial Data FY2016 FY2017 FY2018 FY2019 FY2020 RM’mil Income Statement Total Income 6,190 6,384 6,806 7,058 7,186 Pre-Provisioning Operating Profit 3,095 3,200 3,448 3,670 3,799 Profit Before Tax 2,232 2,558 3,119 3,394 2,644 Net Profit 1,682 1,950 2,305 2,482 2,033 Balan
Slide 31: Key Financial Ratios
Key Financial Ratios 31 31 Financial Ratios FY2016 FY2017 FY2018 FY2019 FY2020 Profitability Return on Equity* 8.6% 9.1% 10.3% 10.3% 7.7% Net Interest Margin 2.18% 2.18% 2.24% 2.12% 2.06% ** Cost to Income Ratio 50.0% 49.9% 49.3% 48.0% 47.1% Asset Quality Gross Impaired Loan Ratio 2.43% 2.23% 2.06%
Slide 32: Targeted Repayment Assistance Update
Targeted Repayment Assistance Update 32 32 Targeted Repayment Assistance for individuals and SMEs available until 30 June 2021. Updates as at 8 February 2021: % of Outstanding Approved R&R Loan Balance RM bil % GROUP RETAIL 15.8 17% Mortgage 10.4 16% Commercial Property 0.7 14% Auto Finance 1.6 17
Slide 33: Segmental Performance FY2020
Segmental Performance FY2020 33 33 Fund Based Income 3.2% 2,204 2,275 RM’mil 3.3% 4.7% 17.3% 982 1,014 6.9% 786 823 856 708 447 478 Retail GBB CBIB Treasury International Non-Fund Based Income 32.3% RM’mil 19.9% 9.5% 696 644 1.5% 15.2% 537 526 495 448 145 123 133 131 Retail GBB CBIB Treasury Interna
Slide 34: O&G Exposure (Loans + Bonds)
O&G Exposure (Loans + Bonds) 34 34 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 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 2018 3.3 1.9% 1.5 0.9% 4.8 2.8% Dec
Slide 35: Retail Banking
Retail Banking 35 35 RM’bil Gross Loans RM’bil Customer Deposits Y-o-Y: +5.4% Y-o-Y: +15.5% 66.7 100 .0 57.7 90. 0 11.7 80. 0 9.4 9.0 70. 0 7.4 90.1 95.0 60. 0 50. 0 40. 0 40.9 46.0 30. 0 20. 0 Dec 2019 Dec 2020 Dec 2019 Dec 2020 Fixed Deposits Demand Deposits Savings Deposits Retail Market Share As
Slide 36: Asset Under Management and Market Positions
Asset Under Management and Market Positions 36 36 RM’bil Asset Under Management Market Year 2020 Ranking Share Y-o-Y : +4.1% Equities Broking: 56.5 - By value 9.2% 4th 54.3 - By volume 10.3% 3rd 7.9 8.3 10.5 10.0 Debt Capital Markets: - MYR sukuk 14.4% 3rd - Total MYR bonds (Conventional 13.7% 3rd &
Slide 37: Investment Banking – Notable Deals
Investment Banking – Notable Deals 37 37 CF/ECM DCM M&A UOA REIT Mr D.I.Y. Group (M) Berhad Pengerang LNG (TWO) Sdn Bhd RM1.5 bil IPO First issuance of RM1.7 bil via its RM700.0 mil Listing on the Main Market of Bursa Malaysia Securities Berhad RM3.0 bil Sukuk Murabahah Programme Acquisition of UOA
Slide 38: Business Banking
Business Banking 38 38 RM’bil Gross Loans Customer Deposits RM’bil Y-o-Y: +16.1% Y-o-Y: +11.3% 32.8 30. 0 28.3 29. 0 28. 0 17.0 27. 0 26. 0 14.2 28.8 25. 0 24. 0 23. 0 22. 0 25.9 14.1 15.8 21. 0 20. 0 Dec 2019 Dec 2020 Dec 2019 Dec 2020 Fixed Deposits Demand Deposits SME Market Share RM’bil Asset Qu
Slide 39: Islamic Banking
Islamic Banking 39 39 PBT Gross Financing RM’mil RM’bil Y-o-Y: +11.0% 80.0 Y-o-Y: -43.4% 70.0 60.0 50.0 40.0 30.0 60.6 67.2 796 20.0 451 10.0 - Dec 2019 Dec 2020 FY 2019 FY 2020 Market 9.8% 10.0% Share Gross Financing/ Asset Quality RM’mil Total Gross Financing (Domestic) 0.77% 0.78% 40.6% 0.67% 0.6
Slide 40: RHB Singapore
RHB Singapore 40 40 SGD’mil PBT SGD’bil Loans, Deposits & Total Assets 40 28 34 8.2 7.1 30 18 0.1 0.2 35 20 16 10 6.9 8.1 - 5.4 5.1 5.8 (7) 4.1 (1 0) (2 0) FY 2019 FY 2020 DecDec 2019 DecDec 2020 (3 0) 2019 2020 Deposits Gross Loans RHB Bank Singapore RHB Securities Singapore Total Assets (RHB Secur
Slide 41: Overseas Loans
Overseas Loans 41 41 Dec Sep Dec RM’mil Q-o-Q Y-o-Y 2019 2020 2020 Overseas Operations 17,252 19,200 20,017 4.3% 16.0% Singapore 12,828 14,931 15,568 4.3% 21.4% Others 4,424 4,269 4,449 4.2% 0.6% Cambodia 2,113 2,383 2,353 -1.3% 11.4% Thailand 1,829 1,438 1,574 9.5% -13.9% Indonesia 89 96 189 96.9%