Hong Leong Bank Bhd · MYX:HLBANK
Hong Leong Bank Bhd — H1 FY2018 Earnings Presentation
24 slides from Hong Leong Bank Bhd's earnings presentation, Feb 26, 2018
Slide 1: H1FY18 Results Analyst Presentation
H1FY18 RESULTS ANALYST PRESENTATION 26 February 2018 1
Slide 2: Agenda
Agenda 1 Financial Highlights: H1FY18
Slide 3: Key financial highlights
Key financial highlights Strong underlying performance led by healthy top-line, improved efficiencies & stable asset quality Total Income Opex & CIR Operating Profit • • • RM'mil RM'mil 2,407 2,275 6% RM'mil 43.6% 42.5% 1,384 1,284 991 1,023 8% H1FY17 H1FY18 H1FY17 H1FY18 H1FY17 H1FY18 GIL & Coverag
Slide 4: Management guidance
Management guidance Most KPIs met with a solid first half performance Target FY18 Achieved H1FY18 3-4% Gross Loan Growth (revised) 1.8% y-o-y LD Ratio ~82% 80.8% P Net Interest Margin >2.1% 2.13% P Non- Interest Income Ratio ~26% 26% P Cost-to-income Ratio <44% 42.5% P Gross Impaired Loan Ratio <1
Slide 5: Profit & Loss
Profit & Loss Net profit improved on strong revenue momentum, solid cost control and recovery from BOCD Profit after Tax Achieved 5-Year RM'mil record high PAT RM’mil H1FY17 H1FY18 YoY % • Total Income 2,275 2,407 +6% Operating expenses (991) (1,023) +3% Operating profit before allowances 1,284 1,38
Slide 6: Net Interest Income & NIM
Net Interest Income & NIM Continued improvements in net interest income; NIM stable 2.13% 2.05% 2.14% 2.14% 2.13% 2.13% 2.08% 1,782 1,635 RM'mil 886 896 833 856 864 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 H1FY17 H1FY18 Net Interest Income NIM HLB H1FY18 ended 31 December 2017 6
Slide 7: Non Interest Income
Non Interest Income Continued growth in wealth management income; NII ratio within guidance at 26% 28.1% 26.0% Wealth Management Income RM’mil 640 625 42 37 H1FY17 H1FY18 33 RM49 mil RM59 mil 21% 33 252 265 Credit Card Fees Fee income: of which 313 291 H1FY17 H1FY18 RM123 mil RM115 mil 7% H1FY17 H1F
Slide 8: Operating Expense
Operating Expense 6 consecutive quarters of positive JAWS; CIR improved further to 42.5% Composition of Operating Expenses 43.6% 42.5% Admin & general 12% RM’mil Marketing 1,023 8% Personnel 991 cost 123 55% 120 77 82 H1FY18 236 259 558 558 Establishm Establishment ent 25% 24% H1FY17 H1FY18 Personne
Slide 9: Loans
Loans Growth led by mortgages, SME and overseas 1.8% y-o-y 8.0% 7.9% 7.9% 11.2% 11.3% 11.3% 7.7% 7.6% 10.1% 9.4% 9.1% 56,861 59,118 51,510 18,446 17,584 17,311 RM'mil 125,147 125,549 120,605 113,418 104,169 FY16 FY17 H1FY18 FY16 FY17 H1FY18 7.5% 7.5% 7.0% 7.0% 6.9% 7.0% 1,850 1,812 1,752 20,377 20,7
Slide 10: Asset Quality
Asset Quality GIL ratio stable q-o-q; Impaired loans coverage above 150% with pledged securities Gross Impaired Loans Loan Impairment Coverage (LIC) Provisions Securities made on pledged GIL 181% 177% 1.77% 1.61% 1.63% 1.63% 1.52% 136% 151% 151% 1.18% 129% RM'mil 0.96% 0.97% 120% 0.84% 0.79% 96% 96%
Slide 11: Asset Quality
Asset Quality A very stable quarter; no significant stresses on our credit portfolio 1.01% 1.01% 0.82% 0.25% 0.20% 0.09% 1,197 1,203 943 14 13 6 FY16 FY17 H1FY18 FY16 FY17 H1FY18 0.54% 0.55% 1.42% 1.49% 1.47% 0.45% 307 324 0.81% 0.85% 303 306 0.79% 273 233 145 143 148 FY16 FY17 H1FY18 FY16 FY17 H1FY
Slide 12: Deposit
Deposit Led by strong up-lift from CASA deposits 3.1% y-o-y 8.6% 8.7% 8.4% 8.2% 8.2% 9.0% 9.0% 8.8% 7.5% 7.3% 7.4% 84,719 87,976 89,473 38,764 41,309 RM'mil 155,233 155,332 37,185 148,524 140,276 130,252 FY16 FY17 H1FY18 FY16 FY17 H1FY18 12.3% 12.5% 12.0% 7.3% 6.9% 6.6% 81,353 86,176 84,282 62,697 6
Slide 13: Liquidity & Capital
Liquidity & Capital Robust liquidity and capital positions Loan Deposit Ratio Capital Adequacy^ 89.3% 91.3% 91.4% 82.3% 84.0% 15.8% 15.8% 15.3% 15.1% 15.3% 13.8% 13.7% 13.8% 13.1% 13.3% 13.4% 13.3% 13.1% 80.9% 81.2% 80.8% 12.7% 12.9% 80.0% 80.6% FY14 FY15 FY16 FY17 Q2FY18 Industry LDR HLB LDR Note:
Slide 14: Shareholder Value
Shareholder Value Stronger returns from solid underlying performance; declared higher interim dividend of 16 sen per share Return On Equity & Return on Assets Net Assets & Earnings Per Share 33 31 29 28 27 11.7% 11.5% 11.1% 10.2% 11.4 11.3 10.8 11.1 10.7 1.30% 1.37% 1.33% 1.15% Q1FY18 Q2FY18 H1FY17
Slide 15: Agenda: Business Update
Ill Agenda Business Update
Slide 16: Digital Banking – Retail
Digital Banking – Retail HIGHLIGHTS FOR H1FY18 Active Mobile Transactional Transactional Users Users Users Volume +27% +71% +36% +70% Introduced e-Ang Pow on Hong Leong Connect CNY 2018: Connect users earn cash every time they send an • 8X growth in total e- e-Ang Pow PLUS RM100,000 was up for grabs
Slide 17: WeChat Pay
WeChat Pay Marks the start of business collaborations between HLB and Chinese technology giant, Tencent Latest The first FI to sign-up WeChat Cross Border Master Merchant Acquiring Service 2017 Signed up first major merchant in Malaysia; Went live on 13 Feb 2018 980 Convenience Million Active us
Slide 18: Digital Banking – Wholesale
Digital Banking – Wholesale HIGHLIGHTS FOR H1FY18 Users Transactional Transactional Transactional Volume Users Amount +22% +20% +82% +31% Encouraging response Achievement cv Best Bank in Malaysia for Asiamoney Cash >200 customers have signed up since Management Customer Satisfaction cv Award its lau
Slide 19: Digital Transformation Milestones: Shift to Digital Cost Savings
■Digital Transformation Milestones SHIFT: TRADITIONAL >>> DIGITAL COST SAVINGS 42.2m H1FY18 84.4m (21%) 78.7m (28%) 75.5m (35%) 30 (42%) 12.7m RM (6%) 28.4m 72% (9%) million 29.5m 54.1m (13%) 49.1m (27%) 30.6m (16%) (17%) 21.7m (10%) 42% 8.3m (5%) - 3% 138.6m 89.5m 67.3m 96.0m (46%) (45%) (37%) (43%
Slide 20: Summary
Summary Strong set of numbers for first half FY2018 Continued to maintain good traction in top-line growth with strong focus on NIM management and franchise led income. Expenses are tightly managed, delivered positive JAWS for the 6th consecutive quarter. Credit quality: Stable in the second q
Slide 21: Appendix: Supplementary Information
Appendix 3 Supplementary Information
Slide 22: Group Performance
Group Performance Change Change Change RM’mil H1FY17 H1FY18 Q2FY18 % (YoY) % (YoY) % (QoQ) Net interest income^ 1,635 1,782 +9.0% 896 +7.6% +1.2% Non interest income^ 640 625 -2.4% 332 -3.8% +13.4% Total income 2,275 2,407 +5.8% 1,229 +4.2% +4.2% Operating expenses* (991) (1,023) +3.2% (516) +3.0% +
Slide 23: HLISB - Key financial highlights
HLISB - Key financial highlights Total Net Income Opex & CIR Profit after Tax & Zakat • • • 317 37.1% RM'mil 268 31.8% RM'mil 134 18% 115 99 101 16% H1FY17 H1FY18 H1FY17 H1FY18 H1FY17 H1FY18 Gross Financing Deposits Capital Adequacy • • • RM'bil 24.5 RM'bil 22.5 21.3 19.6 9% 16.0% 9% 14.2% H1FY17 H1
Slide 24: Thank You
Disclaimer This presentation has been prepared by Hong Leong Bank (“HLB”) for selected recipients for information purposes only. The information contained herein is believed to be correct as of the date of this presentation and is given in summary form and does not purport to be complete. HLB does n
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