Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — Q1 2023 Earnings Presentation
36 slides from Rhb Bank Bhd's earnings presentation, May 26, 2023
Slide 1: RHB Bank Berhad Analysts Presentation Q1 2023 Financial Results
RHB BANK BERHAD Analysts Presentation Q1 2023 Financial Results Mohd Rashid Mohamad Group Managing Director/Group Chief Executive Officer RHB Banking Group 26 May 2023
Slide 2: Executive Summary Q1 2023 Financial Results Strategy Update
1. Executive Summary 2. Q1 2023 Financial Results 3. Strategy Update 4. Summary and Outlook
Slide 3: Executive Summary
Executive Summary
Slide 4: Q1 2023 net profit up 30.8% Y-o-Y to RM761.7 million
Q1 2023 net profit up by 30.8% Y-o-Y to RM761.7 million despite higher funding costs; 4 4 ROE at 10.3% Q1 2023 (Year-on-year) ▪ Net fund based income declined 6.6% Y-o-Y to RM1,373.7 million from higher funding costs ▪ Non-fund based income grew 39.7% Y-o-Y to RM534.0 million due to higher net gain
Slide 5: Loans grew 6.0% Y-o-Y; strong capital and liquidity positions
Group and domestic loans grew 6.0% and 4.7% Y-o-Y respectively; Maintained strong capital and 5 liquidity positions ▪ Gross loans and financing ▪ Expanded 0.5% Q-o-Q to RM213.4 billion primarily due to growth in mortgage, auto finance and SME (Domestic loans growth Q-o-Q: 0.4%) ▪ Grew 6.0% Y-o-Y att
Slide 6: Q1 2023 Financial Results
Q1 2023 Financial Results
Slide 7: Higher profit Y-o-Y due to higher non-fund based income and lower ECL
Higher profit Y-o-Y due to higher non-fund based income and lower ECL, partially offset by lower 77 net fund based income; slight uptick in CIR and GIL ratios Financial Results Profitability Ratios Total Operating Profit Profit Net Profit to Return on Cost-to-Income Non-Fund Based/ Income Before All
Slide 8: Q1'23 profit declined marginally Q-o-Q
Q1’23 profit declined marginally Q-o-Q mainly attributed to lower net fund based income, offset 88 by lower operating expenses Q1 Q4 Q1 RM mil N2 N2 Q-o-Q Y-o-Y 2022 2022 2023 Net Fund Based Income 1,470.8 1,717.0 1,373.7 -20.0% -6.6% Non-Fund Based Income 382.1 519.4 534.0 2.8% 39.7% Total Income 1
Slide 9: Net fund based income impacted by steep increase in funding costs
Net fund based income impacted by steep increase in funding costs, resulting in NIM contraction 99 in Q1’23 Y-o-Y: +39.5% RM’bil Y-o-Y: ->100% Y-o-Y: -6.6% Q-o-Q: -20.0% Fund Based Income 3.40 3.38 Fund Based Expense 2.43 2.01 Net Fund Based Income 1.47 1.68 1.72 1.37 0.95 Q1 2022 Q4 2022 Q1 2023 NI
Slide 10: Non-fund based income growth underpinned by forex, derivatives and trading gains
Non-fund based income growth underpinned by higher net gain on forex and derivatives, and 10 higher net trading and investment income RM’mil Y-o-Y: +39.7% Q-o-Q: +2.8% 519.4 534.0 Others 24.5 5.1 382.1 Treasury Income 35.1 233.3 277.9 Net Income from 65.0 14.9 15.6 9.6 Insurance Business Fee Income
Slide 11: Operating expenses grew 3.1%; CIR at 44.9%
Operating expenses grew 3.1% mainly from higher establishment, marketing and A&G costs; 1111 CIR marginally higher Y-o-Y at 44.9% Q1 Q4 Q1 RM’ mil Q-o-Q Y-o-Y 2022 2022 2023 Personnel Costs 517.7 575.6 505.6 -12.2% -2.3% Establishment Costs 195.8 215.6 214.4 -0.6% 9.5% of which: IT Expenses 66.1 74.
Slide 12: Loans grew 6.0% Y-o-Y led by mortgage, auto finance, SME and Singapore
Loans grew 6.0% Y-o-Y led mainly by mortgage, auto finance, SME and Singapore; Domestic loans 1212 grew 4.7% Y-o-Y Mar Dec Mar RM’mil YTD Y-o-Y 2022 2022 2023 GROUP COMMUNITY BANKING 126,368 133,189 134,480 1.0% 6.4% Retail 101,147 106,843 107,834 0.9% 6.6% Mortgage 69,726 75,024 76,563 2.1% 9.8% Co
Slide 13: Deposits stable Y-o-Y; CASA composition at 28.1%
Deposits remained stable Y-o-Y supported by higher FD, partially offset by lower CASA and 1313 MMTD; CASA composition at 28.1% Customer Deposits CASA by Segment RM’bil Y-o-Y: flat Mar Dec Mar RM’bil YTD Y-o-Y YTD: -0.3% 2022 2022 2023 GROUP COMMUNITY BANKING 40.8 40.5 39.1 -3.3% -4.2% Retail 23.5 22
Slide 14: Credit cost of 10 bps in Q1'23; LLC robust at 109.4%
Credit cost of 10 bps in Q1’23; Slight uptick Q-o-Q in Stage 2 and GIL ratios; LLC remained robust at 14 109.4% 880 Allowances for Losses on Loans Gross Impaired Loans 1.1 0% RM’mil 680 7.27% 6.28% 5.67% 5.47% 5.71% 2.39% 0.40% 0.6 0% 480 0.29% 2.19% 0.04% 0.10% 1.99% 0.1 0% 1.81% 1.82% 1.70% 1.72%
Slide 15: GIL stable Q-o-Q for most segments
GIL remained relatively stable Q-o-Q for most segments; Slight uptick for Commercial and 15 Cambodia Group Community Banking Mortgage Unsecured Auto Finance SME 4.73% 3.68% 4.05% 9.50% 8.27% 8.42% 7.22% 5.47% 5.64% 16.49% 12.21% 12.38% 1.40% 850 1.20% 1.40% 90 3.50% 0.83% 0.85% 1.00% 2.98% 2.99% 750
Slide 16: Profit growth for GCB and GIB; GWB impacted by lower net fund based income
Profit grew for GCB and GIB attributed to higher total income and lower ECL; Profit for GWB 1616 impacted by lower net fund based income; Insurance supported by higher net investment income Group Community Banking (GCB) Group Wholesale Banking (GWB) Group International Business (GIB) Q1 2022: RM975.
Slide 17: Capital position remained robust for the Group and key banking subsidiaries
Capital position remained robust for the Group and key banking subsidiaries 17 17 RHB Bank Group RHB Bank 20. 0% 20. 0% 19. 0% 18. 0% 19.3% 19.7% 18. 0% 17.7% 18.4% 17. 0% 16. 0% 16. 0% 16.9% 16.9% 16.9% 16.9% 15. 0% 15.1% 15.3% 14. 0% 15.1% 15.3% 14. 0% 13. 0% 12. 0% 12. 0% 11. 0% 10. 0% 10. 0% 9.0
Slide 18: Strategy Update
Strategy Update
Slide 19: The Group will stay the course in executing TWP24 strategy
The Group will stay the course in executing TWP24 strategy 19 19 TWP24 – Q1 2023 Highlights Q1 2023 Achievements +0.9% Retail Loans +2.1% Mortgage Loans +2.3% Reflex Customers Be Everyone’s Q1 2023 vs. FY2022 Q1 2023 vs. FY2022 Q1 2023 (153k) vs. FY2022 10.3% Return on Equity (ROE) Primary Bank FY20
Slide 20: Summary & Outlook
Summary & Outlook
Slide 21: Outlook for FY2023
Outlook for FY2023 21 21 Economic ▪ Malaysia’s GDP and industry loans are both projected to moderate to 5.0% year-on-year in 2023 vs 2022 Outlook ▪ Monetary policy to remain accommodative, displayed by the recent normalisation of OPR to 3.00% ▪ Funding costs are expected to remain elevated with cont
Slide 22: Concluding Remarks
Concluding Remarks 22 22 ▪ The Group delivered a better year-on-year performance amid continued challenges in the operating environment ▪ As macroeconomic headwinds continue to persist, we remain cautiously optimistic on the outlook for FY2023 ▪ Our prudent management stance has put us in good stead
Slide 23: 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 24: Appendix
Appendix
Slide 25: Repayment Assistance Update
Repayment Assistance Update 25 25 ▪ Domestic outstanding RA has reduced from 3% as at 31st January 2023 to 2% as at 30th April 2023 Outstanding RA as at: % of Outstanding 31st Jan 2023 30th Apr 2023 Loan Balance RM bil % RM bil % Group Community Banking 3.6 3% 3.3 2% Retail 2.8 3% 2.6 2% SME 0.8 3%
Slide 26: Key Financial Data
Key Financial Data 26 26 Financial Data N1 FY2019 FY2020 FY2021 FY2022 Q1 2023 RM’mil Income Statement Total Income 7,058 7,186 7,789 8,309 1,908 Operating Profit Before Allowances 3,670 3,799 4,266 4,592 1,051 Profit Before Tax 3,394 2,644 3,529 4,171 1,005 Net Profit 2,482 2,033 2,618 2,708 762 Ba
Slide 27: Key Financial Ratios
Key Financial Ratios 27 27 Financial Ratios FY2019 FY2020 FY2021 FY2022 Q1 2023 Profitability Return on Equity 10.3% 7.7% 9.6% 9.7% 10.3% Net Interest Margin 2.12% 2.13% 2.20% 2.24% 1.90% Cost to Income Ratio 48.0% 47.1% 45.2% 44.7% 44.9% Asset Quality Gross Impaired Loan Ratio 1.97% 1.71% 1.49% 1.5
Slide 28: Segmental Performance
Segmental Performance 28 Group Community Banking Group Wholesale Banking Q1 2022: RM837.4 mil Q1 2022: RM520.7 mil 12.0% 43.7% Q1 2023: RM937.6 mil Q1 2023: RM293.3 mil Net Fund 7.3% Based 22.8% 39.3% 47.5% 22.9% Income 587 630 250 307 241 147 279 147 138 170 Retail SME CBIB Treasury International G
Slide 29: O&G Exposure (Loans + Bonds)
O&G Exposure (Loans + Bonds) 29 29 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 Mar 2023 2.1 1.0% 1.4 0.6% 3.5 1.6% Dec 2022 2.2 1.0% 1.2 0.6% 3.4 1.6% Dec 2021 2.3 1.2% 1.4 0.7% 3.7 1.9% Dec
Slide 30: Retail Banking
Retail Banking 30 30 RM’bil Gross Loans RM’bil Customer Deposits Y-o-Y: +6.6% Y-o-Y: +3.7% 73.1 75.8 12.2 100 .0 13.2 80.0 10.3 9.5 60.0 101.1 107.8 40.0 49.6 54.1 20.0 - Mar 2022 Mar 2023 Mar 2022 Mar 2023 Fixed Deposits Demand Deposits Savings Deposits Retail Market Share * Asset Quality RM’bil 8.
Slide 31: SME
SME 31 31 Gross Loans Customer Deposits RM’bil RM’bil Y-o-Y: +6.7% Y-o-Y: +5.7% 30.0 28.9 30.9 25.0 17.4 20.0 17.3 26.6 15.0 10.0 25.2 5.0 11.7 13.5 - Mar 2022 Mar 2023 Mar 2022 Mar 2023 Fixed Deposits Demand Deposits SME Market Share * RM’bil Asset Quality 3.23% 3.05% 2.84% 2.98% 2.99% 9.1% 9.2% 9.
Slide 32: Asset Under Management and Market Positions
Asset Under Management and Market Positions 32 32 RM’bil Asset Under Management Market YTD Mar 2023 Ranking Share Y-o-Y : -2.7% Equities Broking: - By value 7.0% 5th 48.9 - By volume 8.3% 4th 47.6 6.5 8.1 8.9 Debt Capital Markets: 9.1 - MYR sukuk 14.9% 3rd - Total MYR bonds (Conventional 14.4% 3rd &
Slide 33: Investment Banking – Notable Deals
Investment Banking – Notable Deals 33 33 CF/ECM DCM M&A MMC Corporation Berhad Petroleum Sarawak Exploration & Production Sdn Bhd RM2,937.9 mil Kumpulan Kitacon Berhad Issuance of RM1.5 bil IMTN under its RM15.0 bil Seaport Terminal (Johor) Sdn Bhd's privatisation of RM94.2 mil IPO Sukuk Wakalah Pro
Slide 34: Islamic Banking
Islamic Banking 34 34 PBT Gross Financing RM’mil RM’bil Y-o-Y: +1.8% Y-o-Y: +8.1% 90.0 80.0 70.0 60.0 50.0 40.0 30.0 76.5 82.8 20.0 10.0 255.1 259.7 - Mar 2022 Mar 2023 Q1 2022 Q1 2023 Market 10.2% 9.9% Share Gross Financing/ Asset Quality Total Gross Financing (Domestic) RM’bil 0.78% 0.73% 0.68% 44
Slide 35: RHB Bank Singapore
RHB Bank Singapore 35 35 SGD’mil PBT Loans, Deposits & Total Assets SGD’bil Y-o-Y: >100% 18.0 16.0 14.0 12.0 10.0 9.6 10.7 8.0 6.0 15.3 6.6 6.6 7.0 7.1 4.0 2.0 1.3 - Q1 2022 Q1 2023 MarMar 2022 Mar Mar 2023 2022 2023 Gross Loans Deposits Total Assets Credit Charge Ratio Gross Impaired Loans Ratio 0.
Slide 36: Overseas Loans
Overseas Loans 36 36 Mar Dec Mar RM’mil YTD Y-o-Y 2022 2022 2023 Overseas Operations 25,443 28,792 29,171 1.3% 14.7% Singapore 20,503 23,087 23,323 1.0% 13.8% Cambodia 2,780 3,335 3,467 4.0% 24.7% Others 2,160 2,370 2,381 0.5% 10.2% Thailand 1,755 1,967 1,959 -0.4% 11.6% Brunei 182 195 191 -2.1% 4.9