Slide 1: Investor Presentation: 3rd Quarter 2013 Financial Results
Investor Presentation 3rd Quarter 2013 Financial Results Mr. Kellee Kam Group Managing Director RHB Banking Group 29 November 2013
Slide 2: Agenda
AGENDA Executive Summary 3rd Quarter 2013 Financial Results Integration Updates Summary
Slide 3: Executive Summary
Executive Summary 3rd Quarter 2013 Results ♦ Q3 performance rebounded strongly against previous 2 quarters, with pre-tax profit recording 33.6% increase q-o-q, mainly due to lower loan loss provision and higher non-interest income ♦ Revenue up 25.0% y-o-y to RM4.3 billion ♦ Good momentum in non-inte
Slide 4: RHB Banking Group Scorecard 2013
RHB Banking Group Scorecard 2013 Top Level Target Sept Indicators 2013 2013 ROE 12.0% 11.2% N1 Loans 12% 8.9% N2 Growth Deposits 10% -1.1% N2 Growth Gross Impaired <2.9% 2.9% Loans Ratio Cost to Income Ratio <50% 51.5% International 11% 10% Contribution N1: Annualised N2: Changes for 9M 2013, not an
Slide 5: Agenda
AGENDA Executive Summary 3rd Quarter 2013 Financial Results Integration Updates Summary
Slide 6: Financial Results
Financial Results Q-o-Q Y-o-Y Q3 Q2 9M 9M Change Change RM mil 2013 2013 2013 2012 For the first 9 months of 2013: % % Net Interest Income 829 802 3 2,410 2,186 10 ♦ Net interest income increased by 10% on the back of 9% loans growth Other Operating Income 554 486 14 1,490 927 61 ♦ Non-interest inco
Slide 7: Profit Contribution by Entity
Profit Contribution by Entity PBT by Entity (RM mil) % Contribution by Entity RHB Bank RHB Islamic 2% 3% 2% 7% -13% -4% 1,715 1,496 156 150 95% 91% 9M 2012 9M 2013 9M 2012 9M 2013 RHB Investment RHB Insurance Bank Group +100% +4% 9M 2012 9M 2013 RHB Bank Group 132 44 46 66 RHB Investment Bank Group
Slide 8: Total Income by Business Segment
Total Income by Business Segment Improvement seen across all business segment RM mil Composition 9M 2012 3,464 9M 2013 N1 11% (5%) CIB ▲46% 309 979 22% (18%) N1 7% (8%) Global Financial ▲>100% 290 489 Banking 10% (11%) Retail ▲5% 76 1,660 12% (14%) Islamic Banking ▲13% 37 316 38% (44%) Treasury ▲9%
Slide 9: PBT by Business Segment
PBT by Business Segment CIB & Business Banking impacted by higher loan loss impairment RM mil Composition 9M 2012 1,824 9M 2013 5% 7% Islamic Banking ▲72% 56 133 (2%) (4%) 20% (29%) Global Financial Banking N1 ▲94% 46 95 18% (15%) Treasury ▲8% 25 334 12% (15%) 38% (35%) Retail ▲3% 24 728 Business Ba
Slide 10: Income Mix
Income Mix Higher non-interest income ratio reflecting good results of OSKIB acquisition 29% 28% 24% 27% 33% 33% 34% 36% 34% 9% 11% 10% 10% 10% 10% 10% 10% 10% 61% 63% 65% 57% 57% 63% 56% 54% 56% Q112 Q212 Q312 Q412 Q113 Q213 Q313 9M 2012 9M 2013 Net Interest Income Islamic Banking Income Other Oper
Slide 11: Other Operating Income
Other Operating Income Gaining strong traction RM mil Composition 9M 2012 927 9M 2013 6% ▲>100% 5% (6%) Net Brokerage 237 295 (5%) Fund Management ▲>100% 117 & UT Fee 137 16% (20%) Corporate Advisory, Underwriting & Arrangement Fees ▲>100% 52 95 61% (52%) Service Charges, Commission, Guarantee & Com
Slide 12: Other Operating Expenses
Other Operating Expenses Cost-to-Income Ratio RM mil 9M 9M 2012 1,577 2013 (10%) Personnel (8%) ▲35% 330 1,282 Cost 52.7% 52.2% 52.5% Establishment ▲36% 118 447 Cost (21%) 49.7% Marketing Expenses ▲84% 111 244 46.0% Admin & 45.2% 45.4% General 73 236 ▲46% Expenses RHB-OSKIB Integration 19 19 Cost ▲1
Slide 13: Allowances for Loan Impairment
Allowances for Loan Impairment RM mil Increase/(Decrease) in Allowances for Loan Impairment ▼ >100% -3 44 85 329 -152 51 9M 2012 Recovered Written CA IA 9M 2013 Off Asset Quality Quarterly Allowances for Loan Impairment & RM mil Credit Charge Ratio RM mil 430 0 3.59% 0.0 4 200 0.35% 0.55% 0.49% 0.0
Slide 14: Financial Position
Financial Position Change Y-o-Y ♦ Total Assets: for 9M Sept Dec Sept Change 2013 RM mil 2013 2012 2012 % % • For the first 9 months of the year, total assets decreased by RM1.4 bil due mainly to lower cash Total Assets 187,668 189,078 169,479 -1 11 and short term funds, partially offset by expansion
Slide 15: Loans, Advances and Financing
Loans, Advances and Financing RM mil 965 565 75 23 - 468 981 1,200 2,003 2,182 2,435 121,435 111,474 Dec 2012 Working Purchase of Purchase of Purchase of Personal Use Purchase of Purchase of Credit Card Merger and Others Sept 2013 Capital Res. Property Securities Non-Res. Transport PPE Other Acquisi
Slide 16: Loans Profile and Market Share
Loans Profile and Market Share Gross Loans & Growth (%) Gross Loans by Interest/Profit 22% Rate Sensitivity 25% RM bil 300 16% 20% 11% 14% 15% 13% 10% 20% 13% 14% 250 10%11% 16% 12% 200 10% 13% 14% 10% Fixed Rate 5% 9% 0% 8% 150 29% -5% 100 Variable 121.4 -10% 83.9 97.4 111.5 50 Rate -15% 63.2 69.6
Slide 17: Loans By Customers
Loans By Customers Composition by Type of Customers Loans by Type of Customers 1% 1% RM mil 7% 5% 6% 7% 7% 8% 843 1,818 5% 11% 11% 10% 9% 1,829 5,471 34% 28% 27% 26% 30% 29% 121,435 16% 13% 12% 17% 10% 10% 111,474 Dec 2012 Individuals International Corporate & SME Sept 2013 Others 43% 44% 45% 43% 44
Slide 18: Loans, Advances and Financing by SBG
Loans, Advances and Financing by SBG RM mil ▲7% ▼2% ▲27% 35.3 37.6 Sept Dec 2012 111,474 2013 Retail 6.3 5.0 Retail ▲9% 3,637 45,740 1.8 1.8 Retail excluding Credit Card Easy Credit Card & Islamic ▲15% Easy Banking 2,414 18,680 Dec 2012 Sept 2013 CIB ▲ 5% 1,693 36,801 Composition 6% Global ▲21% 1,29
Slide 19: Customer Deposits
Customer Deposits RM mil Composition Sept Dec 2012 138,224 2013 17% (16%) Demand Deposits ▲3% 714 23,219 5% (5%) Saving Deposits ▲7% 457 7,390 78% (79%) CASA ▲ 4% 1,171 30,609 Fixed Deposits ▼2% - 2,680 106,016 Demand Deposits NIDs ▼53% -48 42 Saving Deposits Fixed Deposits Sept 2013 136,667 ▼1% 136
Slide 20: Customer Deposits Profile & Market Share
Customer Deposits Profile & Market Share RM bil Customer Deposits RM bil FD & NID Maturity Structure 108.8 106.0 250 23% 95.8 1.0 0.4 15% 19% 88.1 89.3 89.5 15% 12% 20% 0.6 18.2 15.0 12% 23% 9% 1.5 0.5 0.5 12.3 200 19% 8% 15.8 12.3 11% 10% 14.8 150 14% 8% 7% -2% 9% 7% 0% 100 82.9 89.6 90.6 -4% -10%
Slide 21: Funding & Leverage
Funding & Leverage Funding Composition CASA Composition RM bil 60.0 29.5% 1% 1% 1% 1% 1% 24.0% 3% 3% 2% 3% 3% 22.4% 50.0 21.3% 24.5% 11% 11% 11% 11% 12% 40.0 19.5% 7% 8% 7% 8% 8% 30.0 14.5% 20.0 9.5% 27.8 29.4 30.6 10.0 4.5% - -0.5% 2011 2012 Sept 2013 CASA CASA Composition 78% 77% 79% 77% 76% Lever
Slide 22: Asset Quality
Asset Quality Gross Impaired Loans Ratio (%) by Purpose Gross Impaired Loans Ratio Working Capital Purchase of Residential (%) Property 4.59 6.1 5.4 5.3 3.9 4.4 3.7 3.59 3.59 3.36 3.33 2011 2012 Sept 2013 2011 2012 Sept 2013 3.12 3.15 2.99 2.95 2.92 2.68 2.54 2.23 2.13 1.99 2.03 1.99 1.96 Purchase o
Slide 23: Capital Position (1/2)
Capital Position (1/2) Times RHB Capital N1 0.8 152% 149% 0.7 0.63 136% 135% 0.6 0.54 130 % 0.5 0.4 0.39 0.39 0.3 0.2 80% Dec 2010 Dec 2011 Dec 2012 Sept 2013 Gearing Double Leverage RHB Bank Group: Capital Development in 9M 2013 ▲0.6% ▼0.4% 15.3% ▼1.3% 14.2% 10.8% 10.5% 8.0% 10.2% 10.0% 4.5% 3.5% D
Slide 24: Capital Position (2/2)
Capital Position (2/2) RHB Bank RM bil 25. 0 14.8% 13.8% Total capital ratio for RHB Bank decreased mainly due to application of transitional arrangement with the 15% 11.5% 11.3% 10% phased-out of sub-debts and Hybrid Tier-1 and 20. 0 11% 10.8% 10.8% 15. 0 7% increase in business volume 10.3 10.8
Slide 25: Agenda
AGENDA Executive Summary 3rd Quarter 2013 Financial Results Integration Updates Summary
Slide 26: Integration Updates
Integration Updates Recap: Estimated Synergies Over 3 Years RM mil ♦ Single Platform Day 1 effective 25 November 2013 324 ♦ 350 15 Synergies: 34 300 250 • RM95 mil realised post-completion, ahead of original Year 1 target 200 149 150 112 5 • Derived mainly from Investment Banking, Asset 63 5 17 275
Slide 27: Agenda
AGENDA Executive Summary 3rd Quarter 2013 Financial Results Integration Updates Summary
Slide 28: Summary
Summary Malaysian Banking sector outlook is expected to continue its growth in line with a 1 stable domestic operating environment, with system wide sound asset quality, strong capitalisation and funding profiles Business performance is expected to improve further given our enhanced 2 geographical f
Slide 29: END
END www.rhbgroup.com INVESTOR RELATIONS CONTACT: Ms Yap Choi Foong Group Chief Financial Officer +(603) 9280 2489 cfyap@rhbgroup.com Ms Teh Soh Geok Vice President +(603) 9280 2154 teh.soh.geok@rhbgroup.com This material is prepared for general circulation. Any recommendation or view contained in th
Slide 30: Appendix
Appendix Key Business Highlights
Slide 31: Retail Business Performance
Retail Business Performance Mortgage Personal Use 8.8% 7.4% 7.7% 7.4% 7.8% 7.1% 7.3% 7.0% 7.0% 6.6% 6.7% 5.7% 6.7 5.8 20.6 22.2 24.3 5.0 14.1 16.0 18.8 2.6 2.7 3.5 2008 2009 2010 2011 2012 Sept 2013 2008 2009 2010 2011 2012 Sept 2013 Mortgage Loans (RM bil) Market Share Personal Use (RM bil) Market
Slide 32: Easy by RHB
Easy by RHB Number of Outlets 268 236 245 25 25 25 70 50 50 ♦ Easy continue to register strong traction, PBT more than doubled y-o-y, mainly contributed by 111 42 42 44 higher net interest income, with relatively lower 7 19 cost-to-income ratio 32 128 128 129 14 53 2 July 2009 Dec 2009 Dec 2010 June
Slide 33: CIB Market Share
CIB Market Share YTD Sept 2013 FY 2012** FY 2011 Market Market Market Ranking Ranking Ranking Share Share Share Debt Capital Market * 19.1% #3 14.9% #4 9.7% #4 Mergers & Acquisitions 6.6% #12 7.1% #11 16.3% #3 Equities Capital Market ^ 7.2% #4 2.6% #11 6.8% #4 ** Combined RHBIB and OSKIB market data
Slide 34: Equities, Futures & Asset Management
Equities, Futures & Asset Management YTD Sept 2013 FY 2012 AUM - Malaysia RM bil 10.0% 10.4% Equities Market Market Ranking Ranking (by value) Share Share 36.2 Malaysia 2.6% 1.7% 30.4 - By value 9.2% #3 11.6% #2 20.0 - By volume 14.4% #1 16.2% #1 14.9 Singapore 8.0% #4 7.3% #4 14.3 12.3 Hong Kong 0.
Slide 35: Islamic Business Performance
Islamic Business Performance PBT Gross Loans RM mil 160 .0% RM bil 155 .0% 150 .0% 145 .0% 6.5% 6.9% 6.9% 140 .0% 215 135 .0% 130 .0% 5.6% 125 .0% 120 .0% 115 .0% 4.5% 110 .0% 105 .0% 165 100 .0% 95. 0% 90. 0% 85. 0% 80. 0% 75. 0% 115 70. 0% 211 209 65. 0% 60. 0% 18.7 55. 0% 50. 0% 16.3 65 150 45. 0
Slide 36: Business Banking and SME
Business Banking and SME 14. 0 RM bil Gross Loans 160 .0% RM bil Customer Deposits 155 .0% 18. 0 160 .0% 150 .0% 155 .0% 145 .0% 150 .0% 140 .0% 145 .0% 135 .0% 140 .0% 12. 0 16. 0 130 .0% 135 .0% 125 .0% 130 .0% 120 .0% 125 .0% 115 .0% 120 .0% 14. 0 110 .0% 115 .0% 10. 0 105 .0% 110 .0% 100 .0% 105
Slide 37: RHB Bank Singapore Business Performance
RHB Bank Singapore Business Performance 50 PBT 160 .0% 155 .0% 150 .0% Loans, Deposits & Total Assets 45 SGD mil 145 .0% 140 .0% 135 .0% SGD bil 130 .0% 125 .0% 40 120 .0% 115 .0% 110 .0% 5.1 4.4 105 .0% 35 100 .0% 95. 0% 90. 0% 3.6 85. 0% 30 80. 0% 75. 0% 70. 0% 3.4 25 65. 0% 60. 0% 55. 0% 2.7 2.9