Cimb Group Holdings Bhd · MYX:CIMB

Cimb Group Holdings Bhd — FY2018 Earnings Presentation

43 slides from Cimb Group Holdings Bhd's earnings presentation, Feb 28, 2019

  1. Slide 1: Analyst Presentation FY18 Results

    Analyst Presentation FY18 Results CIMB Group Holdings 28 February 2019

  2. Slide 2: Key Financial Highlights

    Key Financial Highlights Net Net Profit (RM) ^ ROE ^ Gross Loan (RM) ~ 4,656mil 9.6% 343.8bil +4.0% Y-o-Y Flat Y-o-Y +7.0% Y-o-Y Cost-to-Income ^ Loan Loss Charge CET1 52.6% 0.41% 12.6% -80bps Y-o-Y -28bps Y-o-Y +40bps Y-o-Y Notes: ^ Includes CSI gain of RM163mil. Excludes CPAM & CPIAM gain of RM928

  3. Slide 3: Key Business/Operational Highlights

    Key Business/Operational Highlights Consumer and Commercial Banking Did Well Positive Provisions Trajectory (RM ’mil) (RM ’mil) Consumer Commercial LLC +15.2% Y-o-Y +180.1% Y-o-Y Loan Provisions 2017 2018 Weaker Wholesale Banking Strict Cost Controls Revenue (RM ’mil) Operating Costs (RM ’mil) -18.8

  4. Slide 4: PBT By Segment

    PBT By Segment ^  Consumer Banking did well YoY, but weaker QoQ from higher opex & provisions  Commercial Banking improved from lower FY18 provisions Group PBT RM6,273mil ^  Wholesale Banking: Weaker YoY markets and 2.7% lower QoQ provisions  GAMI lower from deconsolidation of CPAM & CPIAM  Gro

  5. Slide 5: PBT By Country

    PBT By Country  Malaysia: Lower YoY due to Wholesale. Consumer remained strong  Indonesia: Steady performance from lower provisions. Excluding FX PBT +11.4% YoY ^  Thailand: Lower provisions YoY. QoQ drop from higher opex and loss on sale of NPLs  Singapore: Improved from deconsolidation of CSI

  6. Slide 6: Performance vs 2018 Target

    Performance vs 2018 Target FY18 BAU^ FY18 Target ROE 9.6% 10.5% Dividend Payout Ratio 50.8% 40% - 60% Total Loan Growth * 7.0% (7.4%**) 6.0% Loan Loss Charge 0.41% 0.55% - 0.60% CET 1 (CIMB Group) 12.6% 12.0% Cost to income 52.6% 50.0% Notes: ^ Includes CSI gain of RM163mil. Excludes CPAM & CPIAM ga

  7. Slide 7: FY18 Financials

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  8. Slide 8: Operating Income

    Operating Income FY18 Q-o-Q (RM ‘mil) Y-o-Y 4Q18  Operating income BAU^ BAU^ declined 6.6% YoY due to weak MY markets Net interest income 11,904 (2.5%) 3,035 1.2%  Softer NII from Non interest income 4,550 (16.0%) 1,040 (8.8%) Commercial, Wholesale and CIMB Niaga Total 16,454 (6.6%) 4,075 (1.6%) 

  9. Slide 9: Operating Expenses

    Operating Expenses (RM ‘mil) FY18 Y-o-Y 4Q18 Q-o-Q  Sustained cost management efforts Personnel 4,927 (6.2%) 1,255 0.4%  Cost reduction mainly from deconsolidation of Establishment 1,947 (8.6%) 494 3.1% CSI (c.RM150m per quarter) and FX impact. Excluding CSI effect, Marketing 351 16.2% 150 123.9%

  10. Slide 10: Loan Provisions

    Loan Provisions -35.8% Y-o-Y -27.8% Q-o-Q  YoY Improvement from Consumer (-39.2% 2,231 YoY) and Commercial (-67.2% YoY) RM ’mil 1,432  Wholesale Banking provisions higher YoY 399 due to MY & ID 288 corporate banking and from writebacks in FY17 FY18 3Q18 4Q18 FY17  Improvement in allowance coverag

  11. Slide 11: Gross Loans

    Gross Loans RM ’bil Dec-18 Y-o-Y Q-o-Q Loans-to-Deposit Ratio (%) Consumer Banking 180.3 7.4% 2.8% Commercial Banking 43.6 2.1% - Wholesale Banking 119.9 8.3% 0.4% + Total 343.8 7.0% 1.6% Loan Growth by Country (Y-o-Y) +~ ^ ** +10.5% +7.8% Others -2.6% 31 Dec-18 # RM343.8 bil ^ ^ ~ +1.8% +5.3% +7.4%

  12. Slide 12: Deposits

    Deposits RM ’bil Dec-18 Y-o-Y Q-o-Q CASA Ratio (%) Consumer Banking 182.8 10.7% 7.9% Commercial Banking 41.4 (9.8%) 2.7% Wholesale Banking 155.4 6.4% (1.2%) Total 379.6 6.3% 3.4% Deposits Growth by Country (Y-o-Y) ^ ** +6.9% +4.3% Others +37.6% 31 Dec-18 RM379.6 bil ^ ^ ~ +0.8% +6.5% +6.8% Notes: ~

  13. Slide 13: Capital and Liquidity Management

    Capital and Liquidity Management Total Capital  CET1 increased to 12.6% (+40bps YoY, +30bps QoQ)  Surpassed CET1 target of 12.0% for 2018  LCR remains comfortably above 100% for all banking ^ # ~ entities Liquidity Coverage Ratio  Proposed second interim dividend of 12sen/share. 50.8% CIMB Bank

  14. Slide 14: PBT by Segments

    PBT by Segments FY18 Q-o-Q (RM ‘mil) Y-o-Y 4Q18 BAU^ BAU^ Consumer Banking (47.1%) 2,957 15.2% 599 (19.8%) Commercial Banking (10.5%) 661 180.1% 190 8.0% Wholesale Banking (28.0%) 1,754 (31.7%) 486 37.3% Corporate Banking (20.0%) 1,255 (20.8%) 391 134.1% Treasury & Markets ~ (7.1%) 443 (47.3%) 97 (4

  15. Slide 15: Consumer Banking

    Consumer Banking (RM ‘mil) FY18 Y-o-Y 4Q18 Q-o-Q Net interest income 5,992 2.6% 1,487 (0.7%) Non interest income 2,070 0.5% 528 11.2% Operating income 8,062 2.0% 2,015 2.1% Gross Loans* RM180.3bil Overhead expenses (4,532) 3.2% (1,193) 5.1% 7.4% PPOP 3,530 0.6% 822 (1.9%) (Provisions) / Writeback (5

  16. Slide 16: Commercial Banking

    Commercial Banking (RM ‘mil) FY18 Y-o-Y 4Q18 Q-o-Q ^ Net interest income 1,699 (3.8%) 432 0.9% Non interest income 353 (15.1%) 68 (30.6%) Operating income 2,052 (6.0%) 500 (4.9%) Gross Loans* RM43.6bil Overhead expenses (1,131) (2.1%) (301) 7.5% 2.1% PPOP 921 (10.4%) 199 (19.1%) (Provisions) / Write

  17. Slide 17: Wholesale Banking

    Wholesale Banking (RM ‘mil) FY18 Y-o-Y 4Q18 Q-o-Q ^ Net interest income 3,204 (12.4%) 818 4.2% Non interest income 1,632 (29.0%) 388 (25.5%) Operating income 4,836 (18.8%) 1,206 (7.7%) Gross Loans* RM119.9bil Overhead expenses (2,342) (17.0%) (638) 8.1% 8.3% PPOP 2,494 (20.4%) 568 (20.7%) (Provision

  18. Slide 18: Group Asset Management & Investments

    Group Asset Management & Investments Public Markets AUM (RM ‘mil) FY18 Y-o-Y 4Q18 Q-o-Q (RM ’mil) Public Markets 109 (20.6%) 10 (37.5%) +5.8% Y-o-Y -4.9% Q-o-Q Private Markets 1 108.4% (45) (255.2%) Direct Investments & 9 141.8% (34) (217.2%) Others Private Equity Fund (>1000.0 (11) (168.8%) (11) Ma

  19. Slide 19: CIMB Islamic

    CIMB Islamic Islamic Financing ^ (RM ‘mil) FY18 Y-o-Y 4Q18 Q-o-Q RM ’bil Net financing income 1,875 21.6% 495 2.5% +18.0% CAGR +22.8% Y-o-Y Non financing income 403 (23.1%) 83 1.2% Operating income 2,278 10.3% 578 2.3% Overhead expenses (716) 3.0% (181) 6.5% PPOP 1,562 13.9% 397 0.5% (Provisions) /

  20. Slide 20: T18 Summary

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  21. Slide 21: Closing Off T18

    Closing Off T18 1 The focus of T18 was on recalibrating our core and closing the gap between the Group and leading regional peers 2 In particular, good progress was made around our capital position as well as our cost / productivity 3 Across key metrics, we outperformed most of our peers in terms

  22. Slide 22: T18 Financial Targets Scorecard

    T18 Financial Targets Scorecard T18 Targets T18 Financial Progress 50.0% 59.1% Cost-to- 55.6% 53.9% 51.8% 52.6% Income 49.8% Incl. CPAM 12.2% 12.6% 12.0% 11.3% CET1 10.1% 10.4% 11.4% Incl. CPAM ROE 10.5% 9.6% 9.3% 9.6% 8.6% 8.3% Income 61% Contribution 60% 58% 57% 56% From Consumer 54% & Commercial

  23. Slide 23: Experienced Good Productivity Gains

    Experienced Good Productivity Gains PBT per Headcount Cost Savings (RM ’mil)  Initiatives throughout +79.4% improvement in productivity T18 resulted in cost savings and cost 0.174 avoidance of over RM2 0.163 bil from 2015 to 2018 0.125 0.113  Major cost savings 0.097 from: • MSS 2014 2015 2016 201

  24. Slide 24: Network Optimisation And Expansion

    Network Optimisation And Expansion Optimising Strategic Footprint the Platform Transactions and Expansion to New Partnerships Markets  Exited Australia, Taiwan, and  Stockbroking JV with China  Completed expansion to Bahrain; streamlined the rest Galaxy, extending our reach Vietnam in 2016 of Nor

  25. Slide 25: Strengthened Core and Foundations

    Strengthened Core and Foundations Structure and Governance Culture Transformation Regional Operating Model  Employee Engagement Survey (EES) participation  Extracted synergies across CIMB through rate of 92% in 2016 & 2018 governance and harmonisation  Leveraged on economies of scale and enhanced

  26. Slide 26: CIMB Outperformed The Majority of Our Regional Peers

    CIMB Outperformed The Majority of Our Regional Peers CIR Improvement CET1 Improvement ROE Improvement PBT CAGR 2014 – 2018 (%) 2014 – 2018 (%) 2014 – 2018 (%) 2014 – 2018 (%) 6.5 Bank A 4.7 Bank I 0.4 Bank C 13.2 Bank C 2.1 Bank F 4.5 0.3 Bank I 12.0 Bank A 1.2 Bank J Bank B -0.8 Bank B 10.0 3.9 Ban

  27. Slide 27: Regional Consumer Outperformed

    Regional Consumer Outperformed PBT Revenue Digital Banking (RM) (RM)  Cumulative Digital Sales Enablement Revenue Uplift was 51% above target 2.96bil 8.06bil (RM ’mil) 211 282 +19.3% 4Y-CAGR +7.7% 4Y-CAGR 55 4 2015 2016 2017 2018 Branch Productivity Loans Deposits  Improved revenue per branch in b

  28. Slide 28: Modest Commercial & Wholesale Growth

    Modest Commercial & Wholesale Growth Commercial Banking Commercial Banking Provision Dropped (RM ‘mil) PBT Revenue PPOP (RM) (RM) (RM) -67.2% Y-o-Y 0.66bil 2.05bil 0.92bil 792 -1.8% 4Y-CAGR +5.6% 4Y-CAGR +9.6% 4Y-CAGR 260 2017 2018 Private Banking PBT Wholesale Banking Improved (RM ‘mil) PBT Revenue

  29. Slide 29: 2019 Targets

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  30. Slide 30: 2019 Targets

    2019 Targets FY19 Target ROE 9.0% - 9.5% Dividend Payout Ratio 40% - 60% Total Loans Growth * 6.0% Loan Loss Charge 0.40% - 0.50% CET 1 (CIMB Group) >12.0% Cost to income Flat Notes: * Excluding bad bank 30

  31. Slide 31: Appendices

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  32. Slide 32: Earnings Summary

    Earnings Summary FY18 (RM ’mil) FY17 Y-o-Y 4Q18 3Q18 Q-o-Q BAU^ Net interest income 11,904 12,207 (2.5%) 3,035 3,000 1.2% Non interest income 4,550 5,419 (16.0%) 1,040 1,140 (8.8%) Operating income 16,454 17,626 (6.6%) 4,075 4,140 (1.6%) Overhead expenses (8,656) (9,133) (5.2%) (2,269) (2,159) 5.1%

  33. Slide 33: Key Ratios

    Key Ratios FY18 (%) FY17 Y-o-Y 4Q18 3Q18 Q-o-Q BAU^ ROE ~ 9.6 9.6 8.8 9.6 NIM ~** 2.50 2.63 2.45 2.49 Non-interest income / total income 27.7 30.7 25.5 27.5 Cost to income 52.6 51.8 55.7 52.1 Allowance coverage (including regulatory reserve) 106.3 84.1 106.3 107.1 Allowance coverage (excluding regul

  34. Slide 34: PBT by Segment and Country

    PBT by Segment and Country Consumer Banking FY18 FY17 Y-o-Y 4Q18 3Q18 Q-o-Q Malaysia (RM ‘mil) 2,049 2,003 2.3% 387 508 (23.8%) Indonesia (IDR ‘bil) 1,819 625 191.0% 569 544 4.6% Thailand (THB ‘mil) 2,187 2,036 7.4% 277 451 (38.6%) Singapore (SGD ‘mil) 31 28 10.7% 3 7 (57.1%) Others * (RM ‘mil) 27 1

  35. Slide 35: Consumer Banking Key Highlights

    Consumer Banking Key Highlights Malaysia Y-o-Y Q-o-Q Indonesia Y-o-Y Q-o-Q Consumer Gross Loans * 8.3% 2.5% Consumer Gross Loans* 0.9% 1.2% Mortgages 9.4% 2.6% Mortgages 11.2% 3.0% Term loans 7.0% 2.8% Auto (28.7%) (8.7%) Auto 4.9% - Credit cards 5.5% 3.8% Credit cards - 1.7% Consumer Deposits 0.7%

  36. Slide 36: Group Funding

    Group Funding FY18 (RM ‘mil) FY17 Y-o-Y 4Q18 3Q18 Q-o-Q BAU^ Net interest income 986 909 8.5% 293 285 2.8% Non interest income 180 154 16.9% 22 (23) 195.7% Operating income 1,166 1,063 9.7% 315 262 20.2% Overhead expenses (381) (458) (16.8%) (62) (109) (43.1%) PPOP 785 605 29.8% 253 153 65.4% (Provi

  37. Slide 37: CIMB Niaga : Earnings Summary

    CIMB Niaga : Earnings Summary (IDR ‘bil) FY18 FY17 Y-o-Y 4Q18 3Q18 Q-o-Q Net interest income 12,012 12,403 (3.2%) 2,999 3,024 (0.8%) Non interest income 3,816 3,353 13.8% 950 1,003 (5.3%) Operating income 15,828 15,756 0.5% 3,949 4,027 (1.9%) Overhead expenses (7,947) (7,521) 5.7% (2,004) (2,064) (2

  38. Slide 38: CIMB Niaga : Key Ratios

    CIMB Niaga : Key Ratios (Consolidated, %) FY18 FY17 Y-o-Y 4Q18 3Q18 Q-o-Q ROE ^ 9.1 8.3 9.1 8.5 NIM ^ 5.12 5.60 5.11 5.17 Cost to Income 50.2 47.7 50.8 51.3 Loan Loss Coverage # 105.9 107.2 105.9 101.2 Allowance Coverage 80.0 77.5 80.0 78.4 Loan Loss Charge ^ 1.6 2.2 1.5 1.7 Gross Impaired Loans Rat

  39. Slide 39: CIMB Thai : Earnings Summary

    CIMB Thai : Earnings Summary Before GAAP Adjustments FY18 FY17 Y-o-Y 4Q18 3Q18 Q-o-Q (THB ‘mil) Net interest income 10,747 10,202 5.3% 2,804 2,707 3.6% Non interest income 2,790 2,952 (5.5%) 647 583 11.0% Operating income 13,536 13,155 2.9% 3,451 3,290 4.9% Overhead expenses (8,346) (7,613) 9.6% (2,

  40. Slide 40: CIMB Thai : Key Ratios

    CIMB Thai : Key Ratios (Consolidated, %) FY18 FY17 Y-o-Y 4Q18 3Q18 Q-o-Q ROE ^ 0.02 1.3 (5.7) 2.1 NIM ^ 3.71 3.89 3.56 3.57 Cost to Income 61.7 57.9 67.4 65.2 Loan Loss Coverage ** 107.0 93.2 107.0 94.1 Loan Loss Charge ^ 2.2 2.4 2.8 1.7 Gross NPL ratio ** 4.3 4.8 4.3 5.7 Net NPL ratio ** 2.3 2.4 2.

  41. Slide 41: IB Market Share and Ranking (1)

    IB Market Share and Ranking (1) FY18 FY17 FY18 FY17 Market Market Market Market Rank Rank Rank Rank Share Share Share Share DCM Domestic 22.6% 1 28.6% 1 DCM 10.1% 4 10.3% 4 Sukuk 20.4% 3 28.2% 2 M&A - - 1.6% 7 M&A 4.3% 8 4.3% 2 Syndication ^ 6.7% 5 3.4% 8 Syndication ^ 2.5% 10 7.1% 4 IPO 3.9% 10 10.

  42. Slide 42: IB Market Share and Ranking (2)

    IB Market Share and Ranking (2) FY18 FY17 FY18 FY17 Market Market ASEAN Market Market Rank Rank Rank Rank Share Share Share Share M&A 0.3% 36 0.2% 56 DCM 10.1% 1 14.0% 1 Syndication ^ - - - - M&A 1.0% 29 3.1% 17 IPO - - 0.1% 75 Syndication ^ 2.8% 12 1.7% 16 ECM 0.2% 44 0.1% 90 IPO 0.7% 31 6.2% 1 ~ C

  43. Slide 43: Corporate Responsibility

    Corporate Responsibility CSR Spend as at Dec 2018 CIMB Non-CIMB Foundation Foundation* RM 20.2mil RM 13.6mil CIMB partners PDRM to alert Let Children Color Their Given 120 Children school public on scams, KL Dreams at Sawatdee Wittaya packs at River Safari, School, Thailand Singapore Note: 1. YTD 20

CIMB Group Holdings — FY2018 Earnings Presentation on 6ix