Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — FY2019 Earnings Presentation
39 slides from Rhb Bank Bhd's earnings presentation, Feb 27, 2020
Slide 1: Analysts Presentation FY2019 Financial Results
RHB BANK BERHAD Analysts Presentation FY2019 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 27 February 2020
Slide 2: Agenda
2 1. Executive Summary 2. FY2019 Financial Results 3. Strategy Update 4. Summary and Outlook
Slide 3: Executive Summary
3 Executive Summary
Slide 4: Highlights of FY2019 Performance (1/2)
Highlights of FY2019 Performance (1/2) 4 4 Year-on-year Net profit rose 7.7% to RM2,482.4 million Total income grew 4.3% to RM7,100.8 million mainly from growth in non-fund based income of 14.7%. Net fund based income grew 0.4%, partly impacted by the OPR cut in May 2019 coupled with higher fund
Slide 5: Highlights of FY2019 Performance (2/2)
Highlights of FY2019 Performance (2/2) 5 Strong capital and liquidity position Capital Group CET 1 ratio at 16.3%, Tier 1 ratio at 16.3% and total capital ratio at 18.6% and Liquidity Bank entity CET 1 ratio at 14.3%, Tier 1 ratio at 14.3% and total capital ratio at 16.5% Healthy liquidity c
Slide 6: RHB Banking Group Scorecard for FY2019
RHB Banking Group Scorecard for FY2019 6 6 Top Level Indicators Target FY2019 Actual FY2019 ROE 10.5% 10.3% N1 Loans Growth 5.0% 4.3% CASA Growth 5.0% (Group) 5.5% Gross Impaired Loans Ratio <2.0% 1.97% Cost-to-Income Ratio 49.0% 48.9% N1 : ROE of 10.5% if normalised for FVOCI reserves growth YoY
Slide 7: FY2019 Financial Results
FY2019 Financial Results
Slide 8: Net profit up 7.7% from resilient income growth and lower ECL allowances
Net profit up 7.7% from resilient income growth and lower ECL allowances; CIR, GIL and credit 88 charge ratios improved in line with expectations Financial Position Financial Results Key Financial Ratios Total Gross Total Operating Profit Return on Non-Fund Based/ Assets Loan Income Before Allowance
Slide 9: Q4 pre-tax profit rose 9.9% Y-o-Y from higher income
Q4 pre-tax profit rose 9.9% Y-o-Y from higher income and absence of impairment losses made on 99 other non-financial assets, Q-o-Q growth affected by higher expenses and allowances for ECL Q4 Q3 Q4 RM’ mil Q-o-Q Y-o-Y 2018 2019 Y-o-Y 2018 2019 2019 Net Interest Income 897.6 917.2 931.2 1.5% 3.7% 3,6
Slide 10: FY2019 net fund based income growth impacted by OPR cut
FY2019 net fund based income growth was impacted by the OPR cut in May 2019 and higher 1010 funding cost; NIM continued to recover in Q4 2019 RM’bil Y-o-Y: +5.2% Y-o-Y: +3.6% 11.39 Y-o-Y: +9.2% Q-o-Q: +2.0% 10.83 Y-o-Y: +0.4% 2.82 2.86 2.87 6.43 5.89 4.94 4.96 1.58 1.60 1.58 1.24 1.26 1.29 Q4 2018 Q
Slide 11: Non-fund based income grew 14.7% Y-o-Y
Non-fund based income grew 14.7% Y-o-Y driven by higher investment and trading income, 11 11 insurance underwriting surplus and IB related fee income Y-o-Y: +13.0% Y-o-Y: +14.7% Q-o-Q: +15.5% 2,136.4 1,862.7 60483 553.7 61 Others 490.0 479.2 420 24 15 566 794 Treasury Income 18 146 191 Insurance Und
Slide 12: Operating expenses rose 3.4% Y-o-Y
Operating expenses rose 3.4% Y-o-Y due to higher personnel costs, IT-related expenses and 1212 marketing costs; Positive JAWS maintained with CIR improving further to 48.9% Q4 Q3 Q4 RM’ mil Q-o-Q Y-o-Y 2018 2019 Y-o-Y 2018 2019 2019 Personnel Costs 509.0 504.5 525.2 4.1% 3.2% 2,005.3 2,053.7 2.4% Es
Slide 13: Loans growth of 4.3% Y-o-Y led by mortgage, SME and Singapore
Loans growth of 4.3% Y-o-Y led mainly by mortgage, SME and Singapore; Corporate improved 1313 Q-o-Q Dec Sep Dec Dec 2018 Dec 2019 RM’ mil Q-o-Q Y-o-Y 2018 2019 2019 % % GROUP RETAIL 84,643 88,896 90,081 1.3% 6.4% 50 52 Mortgage 53,467 57,464 58,587 2.0% 9.6% 32 33 Commercial Property Financing 4,827
Slide 14: Total deposits grew 6.5% Y-o-Y; CASA growth 5.5%
Total deposits grew 6.5% Y-o-Y mainly from higher fixed deposits; CASA posted an encouraging 1414 annual growth of 5.5% with CASA ratio standing at 25.7% Customer Deposits CASA by Segment RM’bil Y-o-Y : +6.5% Q-o-Q : +4.1% 190.6 Dec Sep Dec 183.1 RM’bil Q-o-Q Y-o-Y 178.9 2018 2019 2019 48.9 Retail 1
Slide 15: Credit charge ratio improved; GIL ratio recovered Q-o-Q
FY2019 credit charge ratio improved; Q4 2019 GIL ratio recovered Q-o-Q; Both indicators are well 15 within the guidance Allowances for Loan Impairment 500 0.2 5% Gross Impaired Loans 200 RM’mil 0.2 5% 0.22% 450 6,000 2.15% 2.16% 2.20% 2.12% 180 400 0.19% 0.2 0% 5,500 2.06% 0.18% 0.18% 0.18% 0.18% 16
Slide 16: Impaired loans in key market segments improved Y-o-Y
Impaired loans in key market segments improved Y-o-Y 16 16 Retail Banking Business Banking Wholesale Banking Mortgage GBB Corporate 900 1.40% 1000 3.15% 3.50% 1.30% 2.97% 900 1.73% 1.75% 1.68% 850 1.23% 900 2.81% 3.00% 1.19% 1.18% 1.20% 819 1.60% 800 2.50%800 758 733 733 1.10% 800 751 729 RM’ mil 75
Slide 17: Profit grew in most key business segments
Profit grew in most key business segments; Singapore impacted by higher allowances for ECL 1717 Revenue 5.3% 2,546 2,680 RM’ mil 8.0% 6.4% 5.7% 1,424 1,311 1,388 1,477 4.5% 34.9% 1,066 1,126 9.9% 171 178 191 258 365 402 Retail GBB CBIB Treasury Singapore Others Insurance Pre-tax Profit 3.2% RM’ mil
Slide 18: Capital position remained robust for the Group and key banking subsidiaries
Capital position remained robust for the Group and key banking subsidiaries 18 18 RHB Bank Group RHB Bank 20. 0% 20. 0% 19. 0% 18. 0% 18. 0% 18.8% 18.6% 17. 0% 16. 0% 16.8% 16.5% 16. 0% 15. 0% 15.7% 16.3% 14. 0% 15.5% 16.3% 14. 0% 13.3% 14.3% 13.5% 14.3% 13. 0% 12. 0% 12. 0% 11. 0% 10. 0% 10. 0% 9.0
Slide 19: Declared a final dividend of 18.5 sen per share
Declared a final dividend of 18.5 sen per share; Full year payout of 50.1%, our highest ever 19 19 Market Capitalisation Dividend Per Share (sen) 5.78 5.58 RHB Capital RHB Bank 5.50 50.1% 5.29 50.0% 5.00 23.2 22.4 5.00 35.7% 31.00 40.0% 4.71 33.9% 4.68 30.8% 21.2 28.6% 30.0% 4.50 20.50 18.50 20.1 20
Slide 20: Strategy Update
Strategy Update
Slide 21: FIT22 Key Highlights (1/2)
FIT22 Key Highlights (1/2) 21 21 • Customer acquisition up by 15.2% in FY2019 to 69.8k customers, of which 34.4% are SME owners Affluent • Total AUM of Premier customers grew by 14.0% YoY to RM33.4 bil in Dec 2019 • Business Banking deposits grew 13.5% in FY2019 SME • SME loans grew 4.9% in Dec 2019
Slide 22: FIT22 Key Highlights (2/2)
FIT22 Key Highlights (2/2) 22 22 Analytics • Institutionalised 29 new analytics use cases for Retail Banking, Business Banking and Compliance delivering and big incremental revenue of RM50.4 mil for FY2019 data Invest to Win Digital Channel • Launched mobile banking app to the public in April 2019,
Slide 23: Summary & Outlook
Summary & Outlook
Slide 24: Economic Outlook
Economic Outlook 24 24 Malaysia’s GDP growth moderated to 3.6% Y-o-Y in Q4 2019 (Q3 2019: 4.4%) bringing full year GDP to 4.3% (4.7% in 1 2018) For the year 2020, GDP is expected to grow by 4.0% as downside risks continue to weigh on Malaysia’s economy as a 2 result of the outbreak of novel coro
Slide 25: RHB Banking Group Scorecard for FY2020
RHB Banking Group Scorecard for FY2020 25 25 Top Level Indicators Actual FY2019 Target FY2020 N1 ROE 10.3% 10.3%-10.5% Loans Growth 4.3% 4.0% CASA Growth 5.5% 4.0% Gross Impaired Loans Ratio 1.97% 1.95% Cost to Income Ratio 48.9% ≤ 48.7% N1 : ROE of 10.5% if normalised for FVOCI reserves growth Y-o-
Slide 26: GMD's Concluding Remarks
GMD’s Concluding Remarks 26 26 RHB continued to exhibit resilience under challenging market conditions Recorded the highest ever profit 1 Demonstrated the Group’s fundamental strengths – improved asset quality, CIR and capital ratios Moderate growth in loans and financing, consistent with in
Slide 27: 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 28: Appendix
Appendix
Slide 29: Key Financial Data
Key Financial Data 29 29 Financial Data FY2015 FY2016 FY2017 FY2018 FY2019 RM’ mil Income Statement Total Income 6,175 6,190 6,384 6,806 7,101 Pre-Provisioning Operating Profit 2,545 3,095 3,200 3,448 3,629 Profit Before Tax 2,251 2,232 2,558 3,119 3,350 Net Profit 1,665 1,682 1,950 2,305 2,482 Bala
Slide 30: Key Financial Ratios
Key Financial Ratios 30 30 Financial Ratios FY2015 FY2016 FY2017 FY2018 FY2019 Profitability Return on Equity* 10.1% 8.6% 9.1% 10.3% 10.3% Net Interest Margin 2.14% 2.18% 2.18% 2.24% 2.12% Cost to Income Ratio 58.8% 50.0% 49.9% 49.3% 48.9% Asset Quality Gross Impaired Loan Ratio 1.88% 2.43% 2.23% 2.
Slide 31: Segmental Performance FY2019
Segmental Performance FY2019 31 31 Fund Based Income 6.9% 2,203 2,061 RM’ mil 6.7% 17.9% 6.3% 920 982 1,042 3.5% 854 800 856 431 447 Retail GBB CBIB Treasury International Non Fund Based Income 3.9% RM’ mil 1.0% 62.6% 605 581 503 498 545 0.9% 26.7% 335 111 140 146 145 Retail GBB CBIB Treasury Intern
Slide 32: O&G Exposure (Loans + Bonds)
O&G Exposure (Loans + Bonds) 32 32 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 2019 2.5 1.4% 1.6 1.0% 4.2 2.4% Sep 2019 2.6 1.5% 1.5 0.9% 4.1 2.4% Dec 2018 3.3 1.9% 1.5 0.9% 4.8 2.8% Dec
Slide 33: Retail Banking
Retail Banking 33 33 RM’bil Gross Loans RM’bil Customer Deposits Y-o-Y: +10.0% Y-o-Y: +6.4% 100 .0 52.5 57.7 90. 0 9.1 9.4 80. 0 70. 0 6.6 7.5 90.1 60. 0 50. 0 84.6 36.8 40.8 40. 0 30. 0 20. 0 Dec 2018 Dec 2019 Dec 2018 Dec 2019 Fixed Deposits Demand Deposits Savings Deposits Retail Market Share Ass
Slide 34: Asset Under Management and Market Positions
Asset Under Management and Market Positions 34 34 RM’bil Asset Under Management Market FY2019 Ranking Share Y-o-Y : +8.0% Equities Broking: 54.3 - By value 7.5% 5th 50.3 - By volume 11.2% 3rd 7.9 7.1 10.5 Debt Capital Markets: 12.6 - MYR sukuk 11.5% 3rd - Total MYR bonds (Conventional 10.2% 4th & Is
Slide 35: Investment Banking – Notable Deals
Investment Banking – Notable Deals 35 35 M&A DCM ECM Can-One Berhad DRB-HICOM Berhad Leong Hup International Berhad RM800.0 million to RM1,000.0 million RM3.5 billion Sukuk Programme RM1.19 billion Disposal of the entire issued share capital of Issuance of RM1.5 billion iMTN Main Market IPO F & B Nu
Slide 36: Business Banking
Business Banking 36 36 RM’bil Gross Loans Customer Deposits RM’bil Y-o-Y: +13.5% Y-o-Y: +2.7% 28.7 25.3 27. 0 26. 0 25. 0 14.4 24. 0 13.5 23. 0 25.3 25.9 22. 0 11.8 14.3 21. 0 20. 0 Dec 2018 Dec 2019 Dec 2018 Dec 2019 Fixed Deposits Demand Deposits SME Market Share RM’bil Asset Quality 9.6% 9.4% 3.2
Slide 37: Islamic Banking
Islamic Banking 37 37 PBT Gross Financing RM’mil Y-o-Y: +37.4% RM’bil Y-o-Y: +15.9% 70.0 60.0 50.0 40.0 796 30.0 52.3 60.6 579 20.0 10.0 - Dec 2018 Dec 2019 2018 2019 Market 9.1% 9.8% Share Gross Financing/ Asset Quality RM’mil Total Gross Financing (Domestic) 38.1% 0.97% 0.93% 37.0% 0.82% 0.87% 36.
Slide 38: RHB Singapore
RHB Singapore 38 38 SGD’mil PBT SGD’bil Loans, Deposits & Total Assets 70 36 7.1 60 50 28 6.2 40 0.2 0.2 30 56 35 20 10 6.0 6.9 4.4 4.1 5.4 - (7) 3.9 (1 0) (21) (2 0) (3 0) 2018 2019 DecDec 2018 DecDec 2019 2018 2019 Deposits Gross Loans RHB Bank Singapore RHB Securities Singapore Total Assets (RHB
Slide 39: Overseas Loans
Overseas Loans 39 39 Dec Sep Dec RM’ mil Q-o-Q Y-o-Y 2018 2019 2019 Overseas Operations 15,961 16,814 17,253 2.6% 8.1% Singapore 11,894 12,644 12,829 1.5% 7.9% Others 4,067 4,170 4,424 6.1% 8.8% Thailand 1,629 1,653 1,829 10.6% 12.3% Brunei 168 166 168 1.2% 0.0% Cambodia 1,823 2,001 2,113 5.6% 15.9%