Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — 9M 2020 Earnings Presentation
41 slides from Rhb Bank Bhd's earnings presentation, Nov 30, 2020
Slide 1: RHB Bank Berhad Analyst Presentation 9M 2020 Financial Results
RHB BANK BERHAD Analyst Presentation 9M 2020 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 30 November 2020
Slide 2: Agenda
1. Executive Summary 2. 9M 2020 Financial Results 3. Strategy Update 4. Summary and Outlook
Slide 3: Executive Summary
Executive Summary
Slide 4: RHB remains committed in supporting our customers through Targeted Repayment Assistance
RHB remains committed in supporting our customers through Targeted Repayment Assistance 4 4 “Credit War Room” initiatives continued to be implemented: Credit strategy - coordinated efforts to ensure consistent and structured response across the Group with task forces for Retail Banking, Business
Slide 5: Repayment Assistance extended to our customers to-date
Repayment Assistance extended to our customers to-date 5 5 Repayment Assistance (as at 17 November 2020) Repayment Assistance Options Types of Repayment Assistance approved for Retail & % of Outstanding Approved R&R SME customers to date (as at 17 November 2020): Loan Balance RM bil % % of Approved
Slide 6: Highlights of 9M 2020 Performance
6 Highlights of 9M 2020 Performance 6 Year-on-year Net profit of RM1,593.9 million (-14.4% Y-o-Y). Normalised for one-off net modification loss (ML) of RM392.4 million, gain on disposal of RHB Securities Singapore of RM55.0 million and losses from discontinued operations of RM20.4 million, Group n
Slide 7: Completion of disposal of RHB Securities Singapore
Completion of disposal of RHB Securities Singapore 7 7 The Group completed the disposal of its entire equity interest in RHB Securities Singapore (RHBSS) to Phillip Securities Pte Ltd on 11 September 2020 The capital market businesses under RHBSS comprising client coverage, research and corporat
Slide 8: RHB Banking Group Scorecard for FY2020
RHB Banking Group Scorecard for FY2020 8 8 Top Level Indicators Revised Target FY2020 Actual 9M 2020 ROE ≥8.0%* 8.0% [9.3%**] Loans Growth 2%-3% 5.6% CASA Growth 5%-6% 32.6% Gross Impaired Loans Ratio <1.95% 1.69% Cost-to-Income Ratio <48.9%* 48.8% [45.3%**] * Excluding impact of net modification lo
Slide 9: 9M 2020 Financial Results
9M 2020 Financial Results
Slide 10: Profit impacted mainly by higher ECL allowances and net modification loss
Profit impacted mainly by higher ECL allowances and net modification loss; Higher credit charge 1010 ratio mainly to absorb potential COVID-19 effects Financial Position Financial Results * Key Financial Ratios * Total Gross Total Operating Profit Return on Non-Fund Based/ Assets Loan Income Before
Slide 11: Q3 profit from continuing operations declined 8.1% Y-o-Y on higher ECL allowances
Q3 profit from continuing operations declined 8.1% Y-o-Y on higher ECL allowances but grew 1111 41.0% Q-o-Q from absence of net modification loss and lower ECL allowances Q3 Q2 Q3 9M 9M RM’ mil Q-o-Q Y-o-Y Y-o-Y 2019 2020 2020 2019 2020 Net Interest Income 915.4 888.6 905.6 1.9% -1.1% 2,673.2 2,687.
Slide 12: Underlying performance of 9M and Q3 2020 supported by higher non-fund based income
Underlying performance of 9M and Q3 2020 Y-o-Y supported by higher non-fund based income 12 but affected by increased ECL allowances 12 Q3 Q2 Q3 9M 9M RM’ mil Q-o-Q Y-o-Y Y-o-Y 2019 2020 2020 2019 2020 Total Income (A) 1,730.3 1,558.3 1,830.1 17.4% 5.8% 5,224.1 5,117.7 -2.0% Add back: Net Modificati
Slide 13: Net fund based income grew 1.7% Y-o-Y; NIM compression continued
Net fund based income grew 1.7% Y-o-Y mainly due to proactive funding cost management; 1313 NIM compression continued in line with expectations RM’bil Y-o-Y: -10.2% Y-o-Y: -1.7% Y-o-Y: -19.3% Q-o-Q: +0.1% 8.51 Y-o-Y: +1.7% 7.64 2.86 2.54 2.36 4.84 3.67 3.91 3.74 1.60 1.26 1.31 1.24 1.12 1.24 Q3 2019
Slide 14: Non-fund based income grew 14.3% Y-o-Y
Non-fund based income grew 14.3% Y-o-Y mainly due to higher investment and trading income, 1414 insurance underwriting surplus, brokerage income and wealth management fees Y-o-Y: +25.8% Y-o-Y: +14.3% RM’mil Q-o-Q: -17.1% 1,774.0 712.9 1,551.9 55 Others 590.7 55 Treasury Income 22 723 469.6 13 607 In
Slide 15: Operating expenses grew marginally by 0.4% Y-o-Y
Operating expenses grew marginally by 0.4% Y-o-Y through disciplined cost management; 1515 Excluding net ML, CIR further improved to 45.3% Q3 Q2 Q3 9M 9M RM’ mil Q-o-Q Y-o-Y Y-o-Y 2019 2020 2020 2019 2020 Personnel Costs 494.3 508.1 529.9 4.3% 7.2% 1,498.0 1,541.7 2.9% Establishment Costs 184.6 186.
Slide 16: Loans up 5.6% Y-o-Y led by mortgage, SME and Singapore
Loans up 5.6% Y-o-Y led mainly by mortgage, SME and Singapore; Corporate grew by 1.4% Y-o-Y 1616 Sep Dec Sep Dec 2019 Sep 2020 RM’mil YTD Y-o-Y 2019 2019 2020 % % GROUP RETAIL BANKING 88,892 90,079 93,512 3.8% 5.2% 51 51 Mortgage 57,463 58,585 61,993 5.8% 7.9% 33 34 Commercial Property Financing 4,8
Slide 17: Total deposits grew 7.5% Y-o-Y; CASA ratio improved to 31.3%
Total deposits grew 7.5% Y-o-Y mainly attributed to growth in CASA and FD; CASA ratio improved 1717 further to 31.3% Customer Deposits CASA by Segment RM’bil Y-o-Y : +7.5% YTD : +3.3% 196.8 Sep Dec Sep 190.6 RM’bil YTD Y-o-Y 183.1 2019 2019 2020 48.9 61.6 Retail Banking 16.9 16.9 20.3 20.4% 20.3% 46
Slide 18: Credit charge ratio remained elevated in Q3 2020
Credit charge ratio remained elevated in Q3 2020 on higher ECL allowances set aside for potential 18 COVID-19 impact; YTD credit cost of 38 bps is within guidance; GIL ratio improved further Allowances for Loan Impairment Gross Impaired Loans 500 RM’mil 700 450 0.46% 0.5 0% 0.38% 0.5 0% 6,000 2.16%
Slide 19: GIL ratio in key segments continued to improve
GIL ratio in key segments continued to improve from intensive recovery efforts, as well as from 19 moratorium effects 19 Retail Banking Business Banking Wholesale Banking Mortgage GBB Corporate 1.40% 1000 3.50% 1.75% 1.80% 850 3.15% 900 1.23% 1.30% 2.82% 3.00% 1.75% 1.18% 900 1.67% 1.20% 2.44% 1.70%
Slide 20: Profit declined in most business segments
Profit declined in most business segments - Retail, Business Banking & CBIB from higher ECL; 2020 Treasury affected by lower net fund based income Revenue 0.1% 1,990 1,987 12.4% RM’mil 2.1% 1.9% 1,095 1,072 960 1,079 11.9% 12.3% 827 842 1.9% 130 146 192 216 294 299 Retail GBB CBIB Treasury Singapore
Slide 21: Capital position remains strong for the Group and key banking subsidiaries
Capital position remains strong for the Group and key banking subsidiaries 21 21 RHB Bank Group RHB Bank 20. 0% 20. 0% 19. 0% 18. 0% 18. 0% 18.6% 18.2% 17. 0% 16. 0% 16.5% 17.0% 16. 0% 15. 0% 16.3% 16.4% 16.3% 16.4% 14. 0% 14.3% 15.1% 14.3% 15.1% 14. 0% 13. 0% 12. 0% 12. 0% 11. 0% 10. 0% 10. 0% 9.0
Slide 22: Strategy Update
Strategy Update
Slide 23: FIT22 Key Highlights (1/2)
FIT22 Key Highlights (1/2) 23 23 • Premier Banking customers increased to 76.5k (+9.6% from December 2019), of which 33.9% are SME owners Affluent • Total AUM of Premier customers of RM38.3 bil (+14.7% from December 2019) • Deposits increased to RM33.1 bil (+16.9% from December 2019) SME • Business
Slide 24: FIT22 Key Highlights (2/2)
FIT22 Key Highlights (2/2) 24 24 Analytics • Continued to drive business performance via analytics with RM91.2 mil of benefits realised as of September 2020 and Big • Increased analytics use cases for 2020, targeting +RM43 mil of analytics benefits (use cases e.g. include Invest to Win Data identify
Slide 25: Summary & Outlook
Summary & Outlook
Slide 26: Outlook for the rest of FY2020
Outlook for the rest of FY2020 26 26 Net fund based income continued to be impacted by OPR cuts Net interest margin (NIM) is expected to recover slightly in Q4 but overall NIM for FY2020 is projected to be around 2.00% from 2.12% in FY2019 Income Non-fund based income: Fixed income securitie
Slide 27: Economic Outlook
Economic Outlook 27 27 Malaysia’s real GDP growth contracted -2.7% Y-o-Y in Q3 2020 (Q2 2020: -17.1%) dragged by weak private consumption and investment GDP is projected to contract by 4.0% in 2020 and grow by up to 7.0% in 2021 Support for economic recovery is expected to come from the recent
Slide 28: GMD's Concluding Remarks
GMD’s Concluding Remarks 28 28 Despite the challenging environment, our underlying performance remained resilient. We delivered commendable revenue growth, managed ongoing cost discipline and exercised robust risk management Committed in providing targeted repayment assistance to our customers i
Slide 29: 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 30: Appendix
Appendix
Slide 31: Key Financial Data
Key Financial Data 31 31 Financial Data FY2016 FY2017 FY2018 FY2019 9M 2020 RM’mil Income Statement Total Income 6,190 6,384 6,806 7,057 5,118 Pre-Provisioning Operating Profit 3,095 3,200 3,448 3,670 2,620 Profit Before Tax 2,232 2,558 3,119 3,394 2,070 Net Profit 1,682 1,950 2,305 2,482 1,594 Bala
Slide 32: Key Financial Ratios
Key Financial Ratios 32 32 Financial Ratios FY2016 FY2017 FY2018 FY2019 9M 2020 Profitability Return on Equity* 8.6% 9.1% 10.3% 10.3% 8.0% Net Interest Margin 2.18% 2.18% 2.24% 2.12% 2.04% Cost to Income Ratio 50.0% 49.9% 49.3% 48.0% 48.8% Asset Quality Gross Impaired Loan Ratio 2.43% 2.23% 2.06% 1.
Slide 33: Segmental Performance 9M 2020
Segmental Performance 9M 2020 33 33 Fund Based Income 3.7% 1,632 1,692 RM’mil 5.1% 6.7% 27.1% 719 756 5.2% 571 609 665 485 329 346 Retail GBB CBIB Treasury International Non Fund Based Income 36.8% RM’mil 20.8% 17.6% 587 20.4% 470 4.2% 389 429 358 108 95 99 295 86 Retail GBB CBIB Treasury Internatio
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 Sep 2020 2.9 1.6% 1.0 0.5% 3.9 2.1% 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: +5.2% Y-o-Y: +13.0% 57.2 64.6 11.6 100 .0 90. 0 9.4 8.7 80. 0 70. 0 7.5 93.5 60. 0 50. 0 88.9 40.3 44.3 40. 0 30. 0 20. 0 Sep 2019 Sep 2020 Sep 2019 Sep 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 YTD Sep 2020 Ranking Share Y-o-Y : +7.1% Equities Broking: 57.0 - By value 8.0% 5th 53.2 - By volume 10.9% 3rd 8.0 7.8 10.2 10.7 Debt Capital Markets: - MYR sukuk 19.5% 3rd - Total MYR bonds (Conventional 17.6% 3r
Slide 37: Investment Banking – Notable Deals
Investment Banking – Notable Deals 37 37 M&A DCM CF/ECM RHB Securities Singapore Pte. Ltd. Pengerang LNG (TWO) Sdn Bhd Mr D.I.Y. Group (M) Berhad SGD108.0 mil First issuance of RM1.7 bil via its RM1.5 bil IPO Disposal by RHB Investment Bank Berhad of its entire RM3.0 bil Sukuk Murabahah Programme Li
Slide 38: Business Banking
Business Banking 38 38 RM’bil Gross Loans Customer Deposits RM’bil Y-o-Y: +15.7% Y-o-Y: +8.0% 28.6 33.1 29. 0 28. 0 27. 0 16.4 26. 0 13.8 25. 0 24. 0 28.1 23. 0 22. 0 26.0 14.8 16.7 21. 0 20. 0 Sep 2019 Sep 2020 Sep 2019 Sep 2020 Fixed Deposits Demand Deposits SME Market Share RM’bil Asset Quality 9
Slide 39: Islamic Banking
Islamic Banking 39 39 PBT Gross Financing RM’mil RM’bil Y-o-Y: +15.0% 70.0 Y-o-Y: -48.4% 60.0 50.0 40.0 30.0 57.6 66.3 20.0 552 10.0 - 285 Sep 2019 Sep 2020 9M 2019 9M 2020 Market 9.5% 10.0% Share Gross Financing/ Asset Quality RM’mil Total Gross Financing (Domestic) 0.87% 40.6% 0.77% 0.78% 39.6% 0.
Slide 40: RHB Singapore
RHB Singapore 40 40 SGD’mil PBT SGD’bil Loans, Deposits & Total Assets 43 8.2 50 40 18 6.8 0.1 30 13 0.2 20 10 17 25 8.1 - 6.6 5.8 (1 0) (4) 4.1 5.0 4.9 9M 2019 9M 2020 (2 0) (3 0) Sep Sep 2019 2019 Sep Sep 2020 2020 Deposits Gross Loans RHB Bank Singapore RHB Securities Singapore Total Assets (RHB
Slide 41: Overseas Loans
Overseas Loans 41 41 Sep Dec Sep RM’mil YTD Y-o-Y 2019 2019 2020 Overseas Operations 16,814 17,252 19,200 11.3% 14.2% Singapore 12,644 12,828 14,931 16.4% 18.1% Others 4,170 4,424 4,269 -3.5% 2.4% Cambodia 2,001 2,113 2,383 12.8% 19.1% Thailand 1,653 1,829 1,438 -21.4% -13.0% Laos 206 198 182 -8.1%