Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — 9M 2023 Earnings Presentation
37 slides from Rhb Bank Bhd's earnings presentation, Nov 27, 2023
Slide 1: Analysts Presentation 9M 2023 Financial Results
RHB BANK BERHAD Analysts Presentation 9M 2023 Financial Results Mohd Rashid Mohamad Group Managing Director/Group Chief Executive Officer RHB Banking Group 27 November 2023
Slide 2: Agenda
1. Executive Summary 2. 9M 2023 Financial Results 3. Strategy Update 4. Summary
Slide 3: Executive Summary
Executive Summary
Slide 4: Q3'23 net profit declined 6.5% Y-o-Y to RM649.9 million
4 Q3’23 net profit declined 6.5% Y-o-Y to RM649.9 million 4 Q3 2023 (Year-on-year) ▪ Net fund based income declined 14.8% Y-o-Y to RM1,387.7 million from higher funding costs ▪ Non-fund based income grew 8.3% Y-o-Y to RM571.5 million due to higher net gain on forex and derivatives, and higher net tr
Slide 5: 9M'23 net profit up 16.4% Y-o-Y to RM2,220.3 million; ROE at 10.0%
5 9M’23 net profit up 16.4% Y-o-Y to RM2,220.3 million; ROE at 10.0% 5 9M 2023 (Year-on-year) ▪ Net fund based income declined 11.9% Y-o-Y to RM4,106.9 million from higher funding costs ▪ Non-fund based income grew 30.3% Y-o-Y to RM1,639.5 million due to higher net gain on forex and derivatives, and
Slide 6: Loans and deposits grew 3.4% and 4.0% YTD; sustained capital and liquidity strength
Loans and deposits grew 3.4% and 4.0% YTD respectively; Sustained capital and liquidity strength 6 ▪ Gross loans and financing ▪ Expanded 2.4% Q-o-Q to RM219.4 billion primarily due to growth in mortgage, personal finance, SME and Singapore (Domestic loans growth Q-o-Q: 1.5%) ▪ Grew 3.4% YTD attribu
Slide 7: 9M 2023 Financial Results
9M 2023 Financial Results
Slide 8: 9M'23 results aided by higher non-fund based income and lower ECL
9M’23 results aided by higher non-fund based income and lower ECL; uptick in GIL ratio 88 Financial Results Profitability Ratios Total Operating Profit Profit Net Profit to Return on Cost-to-Income Non-Fund Based/ Income Before Allowances Before Tax Shareholders N1 Equity N1 Ratio Total Income -2.9%
Slide 9: Q3'23 results: Y-o-Y impacted by lower net fund based income
Q3’23: Y-o-Y results impacted mainly by lower net fund based income; Q-o-Q declined primarily 99 due to normalisation of allowance for ECL Q3 N2 Q2 Q3 9M N2 9M RM’ mil Q-o-Q Y-o-Y Y-o-Y 2022 2023 2023 2022 2023 Net Fund Based Income 1,629.2 1,345.5 1,387.7 3.1% -14.8% 4,662.4 4,106.9 -11.9% Non-Fund
Slide 10: Net fund based income improved Q-o-Q; NIM strengthened to 1.85%
Net fund based income improved Q-o-Q whilst Y-o-Y growth impacted by higher funding costs; 1010 NIM strengthened by 3 bps Q-o-Q to 1.85% Y-o-Y: +24.8% Y-o-Y: +32.6% RM’bil Y-o-Y: -95.9% Y-o-Y: -74.8% Y-o-Y: -11.9% Y-o-Y: -14.8% Q-o-Q: +3.1% Fund Based Income 3.51 3.64 10.54 2.92 7.95 Fund Based Expe
Slide 11: Non-fund based income growth supported by forex and derivatives gains
Non-fund based income growth continued to be supported by higher net gain on forex and 11 derivatives, and higher net trading and investment income Y-o-Y: +8.3% Y-o-Y: +30.3% RM’mil Q-o-Q: +7.0% 1,639.5 571.5 1,257.9 27.0 527.6 534.0 Others 11.5 9.3 12.5 62.3 832.3 Treasury Income 281.3 380.1 241.5
Slide 12: 9M'23 opex growth; CIR rose to 47.1%
9M’23 opex growth on the back of higher personnel, establishment and marketing costs; CIR rose 1212 to 47.1% Q3 Q2 Q3 9M 9M RM’ mil Q-o-Q Y-o-Y Y-o-Y 2022 2023 2023 2022 2023 Personnel Expenses 568.7 578.7 564.0 -2.5% -0.8% 1,608.9 1,648.4 2.5% Establishment Expenses 207.7 219.6 208.4 -5.1% 0.3% 605
Slide 13: Loans growth led by mortgage, auto finance, personal finance, SME and Singapore
Loans growth led mainly by mortgage, auto finance, personal finance, SME and Singapore; 1313 Corporate continued to be impacted by repayments Sep Dec Jun Sep RM’bil Q-o-Q YTD Y-o-Y 2022 2022 2023 2023 GROUP COMMUNITY BANKING 131.1 133.2 136.1 138.5 1.8% 4.0% 5.6% Retail 104.9 106.8 109.1 111.1 1.9%
Slide 14: Deposits growth attributed to higher FD; CASA composition declined to 26.9%
Deposits growth attributed to higher FD, offset by lower CASA and MMTD; 1414 CASA composition declined to 26.9% Customer Deposits CASA by Segment RM’bil Y-o-Y: +4.7% Sep Dec Jun Sep YTD: +4.0% RM’bil Q-o-Q YTD Y-o-Y 2022 2022 2023 2023 Q-o-Q: +3.0% GROUP COMMUNITY BANKING 41.1 40.5 39.0 39.1 0.2% -3
Slide 15: Credit cost normalised to 30 bps in Q3'23
Credit cost normalised to 30 bps in Q3’23; Excluding writebacks, credit cost stood at 24 bps in 15 9M’23 800 1.5 0% 1,00 0 1.5 0% Allowances for Losses on Loans 700 1.0 0% 1.0 0% 800 RM’mil 600 500 0.40% 0.30% 0.5 0% 0.24% 0.5 0% 0.10% 600 0.07% 400 0.0 0% 0.0 0% 374 -0.12% 300 400 210 -0.19% 200 16
Slide 16: GIL ratio increased to 1.79% in Q3'23
GIL ratio impacted mainly by overseas impairment; increased to 1.79% in Q3’23 16 600000.00% Gross Impaired Loans 2.10% 550000.00% 5.67% 5.47% 5.71% 5.55% 5.20% 2.00% 500000.00% 1.90% 450000.00% 1.82% 400000.00% 1.79% 1.76% 1.80% 1.74% 350000.00% 1.72% 1.72% 1.70% 300000.00% 1.64% Gross Loans - Stage
Slide 17: GIL upticks Q-o-Q across most domestic and overseas operations
GIL upticks Q-o-Q across most domestic and overseas operations 17 Group Community Banking Mortgage Unsecured Auto Finance SME 3.76% 3.68% 3.95% 4.11% 8.09% 8.27% 8.41% 7.96% 5.77% 5.47% 5.77% 5.72% 12.78% 12.21% 12.06% 12.29% 1.40% 950 100 3.40% 0.93% 1.20% 0.48% 0.50% 0.62% 0.67% 3.08% 3.50% 0.92%
Slide 18: Segment revenue and pre-tax profit by GCB, GWB, GIB and Insurance
Profit grew for GCB due to higher total income; GWB supported by lower ECL; GIB impacted by 1818 higher opex and ECL; Insurance’s growth led by higher net trading and investment income Group Community Banking (GCB) Group Wholesale Banking (GWB) Group International Business (GIB) 9M 2022: RM2,986.9 m
Slide 19: Capital position remained robust for the Group and key subsidiaries
Capital position remained robust for the Group and key banking subsidiaries 19 19 RHB Bank Group RHB Bank 20. 0% 20. 0% 19. 0% 18. 0% 19.3% 19.0% 18. 0% 17.7% 18.0% 17. 0% 16. 0% 16. 0% 16.9% 16.2% 15. 0% 16.9% 16.2% 14. 0% 15.1% 14.9% 15.1% 14.9% 14. 0% 13. 0% 12. 0% 12. 0% 11. 0% 10. 0% 10. 0% 9.0
Slide 20: Strategy Update
Strategy Update
Slide 21: TWP24 strategy: Key Highlights
TWP24 strategy: Key Highlights 21 21 9M 2023 Achievements +4.0% Retail Loans +6.3% Mortgage Loans +8.0% Reflex Customers Be Everyone’s 9M FY2023 vs. FY2022 9M FY2023 vs. FY2022 9M FY2023 (162k) vs. FY2022 10.0% Return on Equity (ROE) Primary Bank FY2022: 9.7%* | TWP24: 11.5% +3.9% SME Loans +5.4% Au
Slide 22: Summary
Summary
Slide 23: Concluding Remarks
Concluding Remarks 23 23 ▪ Q3 2023 GDP expanded 3.3% YoY (Q2 2023: 2.9% YoY) supported by robust domestic demand and recovery in tourism activities ▪ Malaysia’s GDP is projected to grow by 4.3% and 4.6% in 2023 and 2024 respectively ▪ OPR level is expected to remain supportive of economic growth ▪ F
Slide 24: 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 25: Appendix
Appendix
Slide 26: Key Financial Data
Key Financial Data 26 26 Financial Data N1 FY2019 FY2020 FY2021 FY2022 9M 2023 RM’mil Income Statement Total Income 7,058 7,186 7,789 8,309 5,746 Operating Profit Before Allowances 3,670 3,799 4,266 4,592 3,038 Profit Before Tax 3,394 2,644 3,529 4,171 2,948 Net Profit 2,482 2,033 2,618 2,708 2,220
Slide 27: Key Financial Ratios
Key Financial Ratios 27 27 Financial Ratios FY2019 FY2020 FY2021 FY2022 9M 2023 Profitability Return on Equity 10.3% 7.7% 9.6% 9.7% 10.0% Net Interest Margin 2.12% 2.13% 2.20% 2.24% 1.85% Cost to Income Ratio 48.0% 47.1% 45.2% 44.7% 47.1% 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 9M 2022: RM2,590.0 mil 9M 2022: RM1,587.2 mil 6.1% 39.6% 9M 2023: RM2,746.8 mil 9M 2023: RM958.1 mil 2.4% Net Fund 1,804 1,848 14.4% 17.5% 55.2% 8.2% Based 786 898 931 Income 656 541 417 486 526 Retail SME CBIB Treasury Interna
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 Sep 2023 2.0 0.9% 1.1 0.5% 3.1 1.4% 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: +5.9% Y-o-Y: +10.0% 100 .0 71.6 78.7 80.0 11.9 12.9 9.3 60.0 104.9 111.1 10.1 40.0 48.6 57.6 20.0 - Sep 2022 Sep 2023 Sep 2022 Sep 2023 Fixed Deposits Demand Deposits Savings Deposits Retail Market Share * Asset Quality RM’bil 9
Slide 31: SME
SME 31 31 Gross Loans Customer Deposits RM’bil RM’bil Y-o-Y: +11.4% Y-o-Y: +4.4% 30.0 30.0 33.5 25.0 20.0 17.9 15.0 27.4 18.1 10.0 26.2 5.0 11.9 15.5 - Sep 2022 Sep 2023 Sep 2022 Sep 2023 Fixed Deposits Demand Deposits SME Market Share * RM’bil Asset Quality 3.40% 9.5% 3.05% 2.98% 2.99% 3.08% 9.3% 9
Slide 32: Asset Under Management and Market Positions
Asset Under Management and Market Positions 32 32 RM’bil Asset Under Management Market YTD Sep 2023 Ranking Share Y-o-Y : +8.5% Equities Broking: - By value 7.1% 5th 49.9 - By volume 8.4% 4th 46.0 8.4 6.8 Debt Capital Markets: 9.0 9.9 - MYR sukuk 22.5% 2nd - Total MYR bonds (Conventional 18.7% 3rd &
Slide 33: Investment Banking – Notable Deals
Investment Banking – Notable Deals 33 33 CF/ECM DCM M&A Caring Pharmacy Group Bhd RM900 mil MST Golf Group Berhad Sarawak Energy Berhad Proposed Disposal of 100% equity stake by 7-Eleven Malaysia RM184.7 mil IPO Issuance of RM3.5 bil IMTN under its RM15.0 bil Sukuk Holdings Berhad and Motivasi Optim
Slide 34: Islamic Banking
Islamic Banking 34 34 PBT Gross Financing RM’mil RM’bil Y-o-Y: +1.7% Y-o-Y: +5.2% 90.0 80.0 70.0 60.0 50.0 40.0 30.0 79.7 83.9 798.9 812.4 20.0 10.0 - Sep 2022 Sep 2023 9M 2022 9M 2023 Market 10.0% 9.7% Share Gross Financing/ Asset Quality Total Gross Financing (Domestic) RM’bil 1.38% 1.41% 44.6% 44
Slide 35: RHB Bank Singapore
RHB Bank Singapore 35 35 SGD’mil PBT Loans, Deposits & Total Assets SGD’bil Y-o-Y: -20.7% 60.0 50.0 40.0 11.8 10.3 7.8 8.2 30.0 48.4 7.0 7.0 20.0 38.4 10.0 - Sep 2022 Sep 2022 Sep 2023 9M 2022 9M 2023 Sep 2023 Gross Loans Deposits Total Assets Gross Impaired Loans Ratio Credit Charge Ratio 0.66% 0.0
Slide 36: Overseas Loans
Overseas Loans 36 36 Sep Dec Jun Sep RM’bil Q-o-Q YTD Y-o-Y 2022 2022 2023 2023 Overseas Operations 28.1 28.8 30.5 32.9 7.8% 14.4% 17.2% Singapore 22.5 23.1 24.5 27.0 9.9% 16.8% 19.7% Cambodia 3.3 3.3 3.6 3.7 0.3% 9.6% 9.5% Others* 2.2 2.4 2.4 2.3 -2.3% -1.7% 4.3% of which: Thailand 1.8 2.0 2.0 1.9
Slide 37: Repayment Assistance Update
Repayment Assistance Update 37 37 ▪ Domestic outstanding RA reduced from 2% as at 31st July 2023 to 1% as at 31st October 2023 Outstanding RA as at: % of Outstanding 31st Jul 2023 31st Oct 2023 Loan Balance RM bil % RM bil % Group Community Banking 2.6 2% 2.5 2% Retail 1.9 2% 1.8 2% SME 0.7 3% 0.7 2