Hong Leong Bank Bhd · MYX:HLBANK
Hong Leong Bank Bhd — 9MFY18 Earnings Presentation
20 slides from Hong Leong Bank Bhd's earnings presentation, May 30, 2018
Slide 1: 9MFY18 Results Analyst Presentation
9MFY18 RESULTS ANALYST PRESENTATION 30 May 2018 1
Slide 2: Agenda
Agenda 1 Financial Highlights: 9MFY18
Slide 3: Key financial highlights
Key financial highlights Strong performance led by improved top-line, continuous efficiency gain & solid asset quality Total Income Opex & CIR Operating Profit • • • RM'mil 3,663 RM'mil 3,399 43.9% 42.3% 2,114 8% RM'mil 1,906 1,492 1,550 11% 9MFY17 9MFY18 9MFY17 9MFY18 9MFY17 9MFY18 GIL & Coverage R
Slide 4: Management guidance
Management guidance With most KPIs met - encouraging nine months performance Target FY18 Achieved 9MFY18 Gross Loan Growth 3-4% 1.6% y-o-y LD Ratio ~82% 81.3% P Net Interest Margin >2.1% 2.12% P Non- Interest Income Ratio ~26% 28% P Cost-to-income Ratio <44% 42.3% P Gross Impaired Loan Ratio <1% 0
Slide 5: Profit & Loss
Profit & Loss Sustained growth on robust revenue, improved efficiencies and BOCD Profit after Tax Record profit achieved RM'mil RM’mil 9MFY17 9MFY18 YoY % • Total Income 3,399 3,663 +8% Operating expenses (1,492) (1,550) +4% Operating profit before allowances 1,906 2,114 +11% • Loan allowances & oth
Slide 6: Net Interest Income & NIM
Net Interest Income & NIM Healthy NIM traction with continued focus on pricing and funding cost management 2.12% 2.08% 2.14% 2.14% 2.13% 2.13% 2.10% 2,649 2,491 RM'mil 886 896 856 864 867 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 9MFY17 9MFY18 Net Interest Income NIM HLB 9MFY18 ended 31 March 2018 6
Slide 7: Non Interest Income
Non Interest Income NII ratio improves to 28%; healthy growth momentum in wealth management 27.7% 26.7% Wealth Management Income 1,014 RM’mil 908 56 66 9MFY17 9MFY18 56 20% 70 RM71 mil RM85 mil 453 324 Credit Card Fees Fee income: of which 459 438 9MFY17 9MFY18 RM180 mil RM169 mil 7% 9MFY17 9MFY18 F
Slide 8: Operating Expense
Operating Expense 7th consecutive quarter of positive JAWS; CIR enhanced further to 42.3% Composition of Operating Expenses 43.9% 42.3% RM’mil Admin & general 12% Personnel 1,492 1,550 cost Marketing 54% 193 8% 185 114 121 358 400 9MFY18 835 835 Establishm ent Establishment 26%26% 9MFY17 9MFY18 Pers
Slide 9: Loans
Loans Growth led predominantly by mortgages and SME; partially affected by corporate repayments 1.6% y-o-y 8.0% 7.9% 7.9% 11.2% 11.3% 11.3% 7.7% 7.5% 10.1% 9.4% 60,226 8.9% 56,861 51,510 18,446 17,584 16,962 RM'mil 125,147 125,427 120,605 113,418 104,169 FY16 FY17 9MFY18 FY16 FY17 9MFY18 7.5% 7.5% 7
Slide 10: Asset Quality
Asset Quality GIL ratio improved whilst impaired loans coverage at 162% with regulatory reserves Gross Impaired Loans Loan Impairment Coverage (LIC) Provisions Securities made on pledged GIL 181% 177% 1.77% 1.61% 1.63% 1.63% 1.56% 162% 136% 151% 1.18% 129% RM'mil 0.96% 120% 0.84% 0.79% 0.84% 96% 96%
Slide 11: Asset Quality
Asset Quality Credit portfolios remains healthy; as well as improvement to domestic portfolio 1.01% 0.87% 0.26% 0.82% 0.25% 0.09% 1,197 943 1,042 14 16 6 FY16 FY17 9MFY18 FY16 FY17 9MFY18 0.54% 1.63% 0.51% 1.42% 1.49% 0.45% 336 307 305 0.79% 0.81% 0.76% 303 273 233 145 143 129 FY16 FY17 9MFY18 FY16
Slide 12: Deposit
Deposit Growth driven mainly by healthy CASA traction 1.3% y-o-y 8.6% 8.7% 8.2% 8.2% 8.2% 9.0% 9.0% 7.5% 7.4% 8.4% 7.3% 84,719 87,976 87,505 RM'mil 155,233 38,764 41,081 154,215 37,185 148,524 140,276 130,252 FY16 FY17 9MFY18 FY16 FY17 9MFY18 12.3% 12.5% 12.3% 7.3% 6.9% 6.4% 86,176 88,184 81,353 62,
Slide 13: Liquidity & Capital
Liquidity & Capital Robust liquidity and capital positions Loan Deposit Ratio Capital Adequacy^ 15.8% 15.8% 89.3% 91.3% 90.2% 15.1% 15.3% 15.3% 82.3% 84.0% 13.7% 13.8% 13.1% 13.3% 13.3% 12.7% 12.9% 13.1% 12.7% 12.0% 80.0% 80.9% 81.2% 80.6% 81.3% FY14 FY15 FY16 FY17 Q3FY18 Industry LDR HLB LDR Note:
Slide 14: Shareholder Value
Shareholder Value ROE continues to improve on strong underlying performance Return On Equity & Return on Assets Net Assets & Earnings Per Share 33 34 31 29 28 11.7% 11.9% 11.7% 10.3% 11.4 11.3 11.4 10.8 11.1 1.37% 1.38% 1.37% 1.15% Q2FY18 Q3FY18 9MFY17 9MFY18 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 ROE R
Slide 15: Performance of Associated Company: Bank of Chengdu Co., Ltd.
Performance of Associated Company: Bank of Chengdu Co., Ltd. Financial Highlights as at Q1 ended 31 March 2018 (unaudited) RMB'mil RMB'mil 154,089 Robust ROE 15.2% 32% 1,921 4% 148,663 1,451 Q1FY17 Q1FY18 Q1FY17 Q1FY18 24.6% Solid Cost-to-income Ratio RMB'mil Prudent Coverage 204% 2.07% 1,031 1.68%
Slide 16: Summary
Summary Solid 9MFY18 results, setting the pace for another good finish in FY18 Healthy traction on top-line growth with strong focus on NIM management and franchise led income. Expenses were well managed, delivered positive JAWS for the 7th consecutive quarter, with record CIR of 42.3%. Credit
Slide 17: Appendix: Supplementary Information
Appendix 3 Supplementary Information
Slide 18: Group Performance
Group Performance Change Change Change RM’mil 9MFY17 9MFY18 Q3FY18 % (YoY) % (YoY) % (QoQ) Net interest income 2,491 2,649 +6.4% 867 +1.3% -3.2% Non interest income 908 1,014 +11.7% 389 +45.4% +17.0% Total income 3,399 3,663 +7.8% 1,256 +11.8% +2.2% Operating expenses (1,492) (1,550) +3.8% (527) +5.
Slide 19: HLISB - Key financial highlights
HLISB - Key financial highlights Total Net Income Opex & CIR Profit after Tax & Zakat • • • 483 37.2% RM'mil 213 31.8% RM'mil 407 175 19% 152 153 22% 9MFY17 9MFY18 9MFY17 9MFY18 9MFY17 9MFY18 Gross Financing Deposits Capital Adequacy • • • RM'bil 23.7 24.9 RM'bil 21.7 20.2 5% 15.4% 7% 13.7% 9MFY17 9
Slide 20: Thank You / Disclaimer
Disclaimer This presentation has been prepared by Hong Leong Bank (“HLB”) for selected recipients for information purposes only and the information contained herein has been obtained from sources believed to be reliable. The information contained herein is believed to be correct as of the date of th
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