Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — H1 2021 Earnings Presentation
48 slides from Rhb Bank Bhd's earnings presentation, Aug 27, 2021
Slide 1: RHB Bank Berhad Analysts Presentation H1 2021 Financial Results
RHB BANK BERHAD Analysts Presentation H1 2021 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 27 August 2021
Slide 2: Agenda
1. Executive Summary 2. H1 2021 Financial Results 3. Strategy Update 4. Sustainability Update 5. Summary and Outlook
Slide 3: Executive Summary
Executive Summary
Slide 4: Repayment Assistance Update (1/4)
Repayment Assistance Update (1/4) 4 4 Repayment assistance (RA) updates as of June 2021: Total Approved RA Outstanding RA % of Outstanding N1 As at Jun 2021 As at Mar 2021 As at Jun 2021 Loan Balance RM bil % RM bil % RM bil % Group Retail Banking 17.3 18% 8.3 9% 5.0 5% Group Business Banking 5.2 17
Slide 5: Repayment Assistance Update (2/4)
Repayment Assistance Update (2/4) 5 5 We continue to assist our borrowers under the PEMULIH package (w.e.f. 7 July 2021) Moratorium PEMULIH Package N1 Of which: N2 % of Outstanding As at Sept 2020 As at early-Aug 2021 Existing RA New RA Loan Balance No of RM bil % RM bil % RM bil % RM bil % accoun
Slide 6: Repayment Assistance Update (3/4)
Repayment Assistance Update (3/4) 6 6 N1 Analysis on outstanding RA by RA options For Retail, SME and Commercial, most of the borrowers opted for deferment of instalments whilst majority of Corporate borrowers are under R&R / reduction in instalments: N1 Additional % of Outstanding RA (early-Aug 2
Slide 7: Repayment Assistance Update (4/4)
Repayment Assistance Update (4/4) 7 7 Analysis on Total Loans by Stage 2 and 3 For Retail, lower outstanding RA from RM8.3 bil in Mar’21 to RM5.0 bil in Jun’21 resulted in an improvement in Stage 2 loans. o Stage 2 in July increased in line with the PEMULIH assistance programme which took effect o
Slide 8: Highlights of H1 2021 Performance (1/2)
8 Highlights of H1 2021 Performance (1/2) 8 Year-on-year Net fund based income grew 12.8% Y-o-Y to RM2,815.5 million (normalised for ML impact) mainly due to proactive funding cost management Non-fund based income declined 5.6% Y-o-Y mainly from lower net trading and investment income, despite h
Slide 9: Highlights of H1 2021 Performance (2/2)
9 Highlights of H1 2021 Performance (2/2) 9 Gross loans and financing grew 5.7% Y-o-Y to RM191.0 billion, attributed to growth in mortgage, auto finance, SME and Singapore. Domestic loans expanded 4.1% Y-o-Y, exceeding industry growth Assets Total customer deposits increased 8.1% Y-o-Y to RM215.
Slide 10: RHB Banking Group Scorecard for FY2021
RHB Banking Group Scorecard for FY2021 10 10 Top Level Indicators Target FY2021 Actual H1 2021 N1 ROE 9.0% 9.9% [10.0%] Annualised Loans Growth 4%-5% 5.3% CASA Composition 30.0% 29.3% Gross Impaired Loans Ratio <2.00% 1.63% N2 Cost-to-Income Ratio ≤46.5% 44.5% [44.5%] N1 Excluding ML impact N2 Exclu
Slide 11: H1 2021 Financial Results
H1 2021 Financial Results
Slide 12: Resilient H1 2021 performance driven by higher net fund based income
Resilient H1 2021 performance driven by higher net fund based income; Maintained positive 1212 JAWS; Slight uptick in credit charge ratio N1 N1 Financial Results Profitability Ratios Total Operating Profit Profit Net Profit to Return on Cost-to-Income Non-Fund Based/ Income Before Allowances Before
Slide 13: Q2 profit growth: higher income and lower OPEX Q-o-Q
Q2 profit growth: Q-o-Q from higher income and lower OPEX while Y-o-Y due to higher net fund 1313 based income and absence of ML; Both Q-o-Q and Y-o-Y impacted by higher ECL Q2 Q1 Q2 H1 H1 RM’ mil Q-o-Q Y-o-Y Y-o-Y 2020 2021 2021 2020 2021 Total Net Fund Based Income (A) 1,237.8 1,417.0 1,431.9 1.1%
Slide 14: Underlying H1 2021 profit aided by higher income
Underlying H1 2021 profit aided by higher income but partly offset by higher OPEX and ECL 14 14 Q2 Q1 Q2 H1 H1 RM’ mil Q-o-Q Y-o-Y Y-o-Y 2020 2021 2021 2020 2021 Total Income (A) 1,558.3 1,922.9 2,005.5 4.3% 28.7% 3,287.6 3,928.4 19.5% Less: Unwinding of Modification Loss (B) - -33.4 - - - - -33.4 -
Slide 15: Net fund based income grew 12.8% Y-o-Y
Net fund based income grew 12.8% Y-o-Y mainly due to proactive funding cost management; 1515 NIM dipped marginally to 2.15% RM’bil Y-o-Y: -11.5% Y-o-Y: -7.5% Y-o-Y: -33.2% Y-o-Y: -29.5% Y-o-Y: +12.8% Y-o-Y: +15.7% 5.29 4.68 Q-o-Q: +3.5% Fund Based Income 2.54 2.35 2.33 2.79 2.82 Fund Based Expense 2
Slide 16: Non-fund based income declined 5.6% Y-o-Y
Non-fund based income declined 5.6% Y-o-Y primarily from lower treasury income despite higher 16 capital market, brokerage, wealth management and commercial banking fee income 16 RM’mil Y-o-Y: -19.5% Y-o-Y: -5.6% Q-o-Q: +5.6% 1,183.4 1,116.8 40.9 29.3 Others 712.9 21.7 543.2 573.6 513.4 291.1 Treasu
Slide 17: Operating expenses grew by 6.4% Y-o-Y
Operating expenses grew by 6.4% Y-o-Y mainly from higher personnel costs; Maintained positive 1717 JAWS; CIR improved Y-o-Y to 44.5% Q2 Q1 Q2 H1 H1 RM’ mil Q-o-Q Y-o-Y Y-o-Y 2020 2021 2021 2020 2021 Personnel Costs 508.1 552.3 528.7 -4.3% 4.1% 1,011.9 1,081.1 6.8% Establishment Costs 186.2 187.5 188
Slide 18: Loans grew 5.7% Y-o-Y
Loans grew 5.7% Y-o-Y led mainly by mortgage, auto finance, SME and Singapore; 1818 Domestic loans grew 4.1% Y-o-Y, exceeding industry growth Jun Dec Jun RM’mil YTD Y-o-Y 2020 2020 2021 GROUP RETAIL BANKING 90,556 94,973 96,364 1.5% 6.4% Mortgage 60,346 63,083 65,148 3.3% 8.0% Commercial Property Fi
Slide 19: Total deposits grew 8.1% Y-o-Y
Total deposits grew 8.1% Y-o-Y attributed to growth in CASA, FD and MMTD; CASA ratio remained 1919 healthy at 29.3% Customer Deposits CASA by Segment RM’bil Y-o-Y: +8.1% YTD: +6.0% 215.6 Jun Dec Jun 199.4 203.5 RM’bil YTD Y-o-Y 2020 2020 2021 63.1 57.0 62.8 Retail Banking 19.6 20.7 22.9 10.8% 17.3%
Slide 20: Credit charge ratio remained elevated in Q2 2021
Credit charge ratio remained elevated in Q2 2021 as we continued to exercise prudence in 20 provisions Allowances for Losses on Loans 1.18% RM’mil 600 0.5 0% 900 1.1 0% 0.42% 0.40% 800 0.9 0% 500 0.4 0% 700 0.7 0% 399 0.46% 549 0.46% 358 0.39% 600 400 0.37% 0.5 0% N1 255 0.3 0% N2 N1 114 500 0.3 0%
Slide 21: GIL ratio remained benign; LLC at 124.1%
GIL ratio remained benign as we continued to extend repayment assistance to borrowers; 21 LLC comfortable at 124.1% Gross Impaired Loans 7.66% 7.45% 11.20% 10.45% 8.27% 600000.00% 2.20% 550000.00% 2.00% 500000.00% 1.87% 450000.00% 1.80% 1.69% 1.71% 1.66% Gross Loans - Stage 2 (Group) 1.63% 400000.00
Slide 22: Uptick in GIL ratio for mortgage, unsecured business and GBB
Uptick in GIL ratio for mortgage, unsecured business and GBB; Lower GIL for Corporate due to 22 write-offs; asset quality will continue to be closely monitored during the moratorium 22 Retail Banking Business Banking Wholesale Banking Mortgage GBB Corporate 2.84% 10.60% 5.02% 18.53% 15.53% 14.04% 8.
Slide 23: Profit grew in most business segments
Profit grew in most business segments – Retail, CBIB, Treasury and Overseas; GBB impacted by 2323 higher ECL; Insurance weakened from MTM on securities’ losses Revenue 6.0% 1,275 1,351 4.6% 16.7% RM’mil 5.0% 789 826 828 710 575 604 21.0% 0.4% 22.4% 98 98 151 117 201 243 Retail GBB CBIB Treasury Sing
Slide 24: Capital position remained strong
Capital position remained strong for the Group and key banking subsidiaries; lower ratios for IB 24 mainly due to capital repayment to the Bank from disposal of RHB Securities Singapore 24 RHB Bank Group RHB Bank 20. 0% 20. 0% 19. 0% 18. 0% 16.9% 18.6% 18. 0% 18.4% 19.3% 17. 0% 16. 0% 16. 0% 16.2% 1
Slide 25: Declared interim dividend of 15.0 sen per share
Declared interim dividend of 15.0 sen per share with 5.0 sen cash and 10.0 sen subject to DRP; 25 representing 45.1% payout ratio, our highest ever for an interim 25 Market Capitalisation Dividend Per Share (sen) 5.78 60.0% 50.1% 5.48 45.1% 50.0% 5.45 5.50 5.29 35.7% 34.8% 40.0% 30.8% 5.00 23.2 31.0
Slide 26: Strategy Update
Strategy Update
Slide 27: FIT22 Key Highlights (1/2)
FIT22 Key Highlights (1/2) 27 27 • Premier Banking customers increased to 81.9k (+3.3% from Dec 2020), of which 33.9% are SME owners Affluent • Total AUM of Premier customers grew to RM41.9 bil (+5.0% from Dec 2020) • Affluent fee income grew to RM123.5 mil (+79.0% from Jun 2020) • Deposits increase
Slide 28: FIT22 Key Highlights (2/2)
FIT22 Key Highlights (2/2) 28 28 Analytics • Continued to drive business performance via analytics with RM81.4 mil of benefits realised as at Jun 2021 and Big • Increased analytics use cases for 2021, e.g. identifying suitable customers for flexible lending offers, improving Data conversion rates fo
Slide 29: MoU with Axiata Group Berhad
MoU with Axiata Group Berhad 29 29 The Group entered into an MoU with Axiata Group on 2 June 2021 to jointly explore potential collaboration opportunities Submitted application to BNM for a digital banking license with an Axiata subsidiary, Boost Holdings on 30 June 2021 The proposed sharehold
Slide 30: Sustainability Update
Sustainability Update
Slide 31: Our Sustainability Key Achievements
Our Sustainability Key Achievements 31 ESG Ratings Highlights as at H1 2021 FTSE4Good Index Series ENHANCED GROUP SUSTAINABILITY GOVERNANCE STRUCTURE constituent • Set up Group Sustainability Committee comprising senior management, chaired by GMD / CEO, to strategically drive Group’s • FTSE4Good Bur
Slide 32: Our Sustainability Key Achievements
Our Sustainability Key Achievements 32 Highlights as at H1 2021 ESG Risk Management • ESG-related activities identified under Prohibited Credits - implemented across the Group • ESG Sensitive Sectors for non-retail lending identified, with Industry Specific ESG Risk Assessment (ERA) tool adopted for
Slide 33: Summary & Outlook
Summary & Outlook
Slide 34: Outlook for FY2021
Outlook for FY2021 34 34 Q2 2021 GDP expanded by 16.1% (Q1 2021: -0.5%) supported by improved economic activities at the Economic beginning of Q2 2021 and low base effect from economic slowdowns in Q2 2020 Outlook Accelerated pace of vaccination is expected to support economic recovery, but down
Slide 35: Concluding Remarks
Concluding Remarks 35 35 The Group delivered a resilient performance for the first half of the year despite the challenging business environment Continue to reward our shareholders with an interim dividend of 15 sen per share, representing 45.1% payout FY2021 performance is expected to be bett
Slide 36: 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 37: Appendix
Appendix
Slide 38: Key Financial Data
Key Financial Data 38 38 Financial Data FY2017 FY2018 FY2019 FY2020 H1 2021 RM’mil Income Statement Total Income 6,384 6,806 7,058 7,186 3,928 Pre-Provisioning Operating Profit 3,200 3,448 3,670 3,799 2,179 Profit Before Tax 2,558 3,119 3,394 2,644 1,777 Net Profit 1,950 2,305 2,482 2,033 1,352 Bala
Slide 39: Key Financial Ratios
Key Financial Ratios 39 39 Financial Ratios FY2017 FY2018 FY2019 FY2020 H1 2021 Profitability Return on Equity 9.1% 10.3% 10.3% 7.7% 9.9% Net Interest Margin * 2.18% 2.24% 2.12% 2.06% 2.15% Cost to Income Ratio 49.9% 49.3% 48.0% 47.1% 44.5% Asset Quality Gross Impaired Loan Ratio 2.23% 2.06% 1.97% 1
Slide 40: Segmental Performance H1 2021
Segmental Performance H1 2021 40 40 Fund Based Income 2.3% 1,130 1,156 3.7% 82.3% RM’mil 9.9% 638 492 510 13.7% 415 374 350 233 265 Retail GBB CBIB Treasury International Non-Fund Based Income RM’mil 20.6% 33.6% 14.5% 451 47.2% 16.9% 374 360 83 95 65 76 146 195 190 Retail GBB CBIB Treasury Internati
Slide 41: O&G Exposure (Loans + Bonds)
O&G Exposure (Loans + Bonds) 41 41 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 Jun 2021 2.7 1.4% 1.0 0.5% 3.7 2.0% Dec 2020 2.8 1.5% 1.0 0.5% 3.8 2.0% Dec 2019 2.5 1.4% 1.6 1.0% 4.2 2.4% Dec
Slide 42: Retail Banking
Retail Banking 42 42 RM’bil Gross Loans RM’bil Customer Deposits Y-o-Y: +6.4% Y-o-Y: +12.9% 69.3 100 .0 61.4 90.0 13.2 80.0 11.1 9.7 8.4 70.0 60.0 50.0 90.6 96.4 46.4 40.0 30.0 20.0 41.9 10.0 - Jun 2020 Jun 2021 Jun 2020 Jun 2021 Fixed Deposits Demand Deposits Savings Deposits Retail Market Share *
Slide 43: Asset Under Management and Market Positions
Asset Under Management and Market Positions 43 43 RM’bil Asset Under Management Market YTD Jun 2021 Ranking Share Y-o-Y : +3.8% Equities Broking: - By value 9.2% 4th 55.2 57.3 - By volume 10.7% 3rd 7.7 8.5 8.8 Debt Capital Markets: 10.5 15.2% 3rd - MYR sukuk - Total MYR bonds (Conventional 15.1% 3rd
Slide 44: Investment Banking – Notable Deals
Investment Banking – Notable Deals 44 44 CF/ECM DCM M&A CTOS Digital Berhad MMC Corporation Berhad Bank Pembangunan Malaysia Berhad RM2,938.0 mil RM2.4 bil IPO Second issuance of Sukuk Wakalah RM1.25 bil via its Joint Principal Adviser, Joint Global Coordinator, Seaport Terminal (Johor) Sdn Bhd's pr
Slide 45: Business Banking
Business Banking 45 45 Gross Loans Customer Deposits RM’bil RM’bil Y-o-Y: +20.2% Y-o-Y: +9.1% 29.0 35.7 28.0 29.7 27.0 26.0 18.0 25.0 29.8 15.3 27.3 24.0 23.0 22.0 14.4 17.7 21.0 20.0 Jun 2020 Jun 2021 Jun 2020 Jun 2021 Fixed Deposits Demand Deposits SME Market Share * RM’bil Asset Quality 9.7% 9.7%
Slide 46: Islamic Banking
Islamic Banking 46 46 PBT Gross Financing RM’mil RM’bil Y-o-Y: +10.7% Y-o-Y: + >100% 80.0 70.0 60.0 50.0 70.7 40.0 30.0 63.9 517 20.0 10.0 - 133 Jun 2020 Jun 2021 H1 2020 H1 2021 Market 10.0% 10.3% Share Gross Financing/ Asset Quality Total Gross Financing (Domestic) RM’bil 0.67% 0.65% 0.65% 0.65% 4
Slide 47: RHB Bank Singapore
RHB Bank Singapore 47 47 SGD’mil PBT * Loans, Deposits & Total Assets SGD’bil 6.2 Y-o-Y: 0.8% 6.1 6.0 5.9 6.1 9.2 6.0 8.0 5.9 6.0 6.2 5.8 5.7 4.8 5.6 Jun 2020 Jun 2020 Jun 2021 H1 2020 H1 2021 Jun 2021 * PBT at Entity level, excluding consol adjustments Gross Loans Deposits Total Assets Gross Impair
Slide 48: Overseas Loans
Overseas Loans 48 48 Jun Dec Jun RM’mil YTD Y-o-Y 2020 2020 2021 Overseas Operations 19,531 20,017 23,260 16.2% 19.1% Singapore 14,900 15,568 18,578 19.3% 24.7% Others 4,631 4,449 4,682 5.2% 1.1% Cambodia 2,435 2,353 2,607 10.8% 7.1% Thailand 1,755 1,574 1,624 3.2% -7.5% Brunei 171 173 192 11.0% 12.