Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — RHB Banking Group — Q1 2016 Earnings Presentation
37 slides from Rhb Bank Bhd's earnings presentation, May 25, 2016
Slide 1: Investor Presentation 1st Quarter 2016 Financial Results
Investor Presentation 1st Quarter 2016 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 25 May 2016
Slide 2: Executive Summary
Executive Summary Q1 2016 Financial Results Corporate and Strategy Update Summary and Outlook
Slide 3: Executive Summary (1/3)
Executive Summary (1/3) First quarter 2016 pre-tax profit at RM746.5 million, 15.8% higher y-o-y Net profit at RM552.0 mil, 15.9% higher y-o-y. Earnings Strong performance driven by net interest income growth and positive results of cost optimisation efforts Positive jaw recorded. Cost-to-in
Slide 4: Executive Summary (2/3)
Executive Summary (2/3) RHB Bank Group maintained strong capitalisation, CET-1 at 12.2% and total CAR at Capital 16.5% and Enlarged RHB Bank Group on proforma basis as at 31 Dec 2015: Liquidity • CET-1 at 12.5% and total CAR at 17.2%, positioning us as one of the best capitalised banking groups
Slide 5: Executive Summary (3/3)
Executive Summary (3/3) The Edge-Thomson Reuters Lipper Fund Awards 2016 • The most awarded fund house in Malaysia for consecutive Awards 2 years, with 15 awards won across equity and fixed income category. Malaysian E-Payments Excellence Awards (MEEA) - organized by Malaysian Electronic Clearin
Slide 6: RHB Banking Group Scorecard For 2016
RHB Banking Group Scorecard For 2016 Top Level Indicators Target 2016 Actual Q1 2016 ROE 10% 9.6% N1 Loans Growth 8% -1.2% N2 CASA Growth 8% 0.1% N2 Gross Impaired Loans Ratio ≤ 2.0% 1.82% Cost to Income Ratio ≤ 53% 48.5% Overseas Profit Contribution 10% 8.3% N1 Anualised N2 Change from Dec 2015 Pag
Slide 7: Q1 2016 Financial Results
Executive Summary Q1 2016 Financial Results Corporate and Strategy Update Summary and Outlook
Slide 8: Our emphasis on profitability and quality growth is showing good progress
Our emphasis on profitability and quality growth is showing good progress, with positive JAW; asset quality improving Financial Position Financial Results Key Financial Ratios Operating Non Interest Total Gross Total Profit Before ROE N1 Income / Assets Loans Income Allowance Total Income -2.3% -1.2
Slide 9: We achieved 16% increase in pre-tax profit, with lowest cost-to-income ratio in 3 years
We achieved 16% increase in pre-tax profit, with lowest cost-to- income ratio in 3 years Q-o-Q Y-o-Y Q1 Q4 Change Q1 Change RM’mil 2016 2015 % 2015 % Net Interest Income 883 872 1 800 10 Net Islamic Fund Base Income 215 206 4 179 20 Total Net Fund Based Income (A) 1,098 1,078 2 979 12 Other Operatin
Slide 10: Solid net fund based income growth of 12.1%
Solid net fund based income growth of 12.1%, contributed by rights issue proceeds, focus on low cost deposits and expanded loan base in chosen market segments, resulting in improved NIM RM’bil Y-o-Y: +12% Y-o-Y: Q-o-Q: +2% ♦ Gross fund based income rose 5.1% on the 2.52 back of a 4.2% growth in loan
Slide 11: Non fund based income impacted by lower investment bank and securities fees
Non fund based income impacted by lower investment bank and securities related fees, as well as lower FX gain RM’mil Non Fund Based Income Y-o-Y RM’mil Q1 2016 Q1 2015 Change Y-o-Y: -5% Q-o-Q: -16% Fee Income - IB Related (A) 120 130 -8% Fee Income - Wealth 604 51 38 +34% Management (B) 530 22 505 F
Slide 12: Operating expenses down by 5%
Operating expenses down by 5%, testament to the Group’s effective cost optimisation efforts, resulting in lowest CIR since 2013 RM’mil Y-o-Y: -5% Q-o-Q: -19% 962 820 843 860 139 777 80 82 92 86 112 98 Admin & General Expenses 62 89 198 70 176 173 187 Marketing Expenses 178 Establishment Cost 513 Per
Slide 13: Asset quality continued to improve and loan loss coverage has increased
Asset quality continued to improve and loan loss coverage has increased Asset Quality RM’mil RM’mil 3.60% 600 0.5 0% 0.37% 4,200.0 2.99% 3.10% 0.4 0% 2.81% 500 0.22% 0.21% 0.3 0% 0.14% 0.14% 2.60% 0.13% 0.2 0% 400 3,700.0 2.03% 2.03% 0.1 0% 1.84% 1.88% 1.82% 2.10% 300 0.0 0% 1.60% -0.10% 1.66% 1.60%
Slide 14: Total assets was lower due mainly to lower net loans and financial investments
Total assets was lower due mainly to lower net loans and financial investments AFS/HTM Change for 3M Y-o-Y Balance Sheet Mar Dec Mar 2016 Change RM’mil 2016 2015 2015 % % Total Assets 225,472 230,718 225,064 -2 - Total Financial Assets/ 43,197 47,024 45,571 -8 -5 Investments - Financial Assets FVTPL
Slide 15: Gross loans and financing decreased by 1.2%
Gross loans and financing decreased by 1.2% due to 1 large corporate repayment amounting to RM1.0 billion RM’bil Y-o-Y: +4% Q-o-Q: -1% 160 .0 150 .0 140 .0 130 .0 151.4 149.6 120 .0 143.5 110 .0 100 .0 Mar 2015 Dec 2015 Mar 2016 Domestic Loans Market Share Loans by Interest/Profit Rate Sensitivity 7
Slide 16: Focus on risk-adjusted returns and preferred customer segments
Our strategy is to focus on risk-adjusted returns and grow in preferred customer segment assets, and SME segment grew the most, by 12% y-o-y RM’mil 323 - 67 - 140 650 - 232 - 413 1,170 - 561 - 1,362 - 1,123 151,386 149,631 Dec 2015 Purchase Purchase Construction Credit Personal Purchase of Purchase
Slide 17: Loans growth driven mainly by Business Banking
Loans growth driven mainly by Business Banking, Corporate Banking was impacted by one large corporate repayment amounting to RM1.0 billion Composition Loans and Change for Y-o-Y Financing Mar 2016 Dec 2015 Mar 2015 3M Change 10% 10% by SBG RM’bil RM’bil RM’bil % % Group Retail 68.0 68.2 65.7 -0.3% +
Slide 18: Customer deposits remained relatively stable
Customer deposits remained relatively stable, with focus on growing CASA and active & efficient liquidity management Customer Deposits CASA RM’bil RM’bil Y-o-Y: +7% Y-o-Y: -1% Q-o-Q: -0.1% Q-o-Q: -0.4% 37.9 38.0 35.4 170 .0 8.4 8.8 160 .0 8.2 150 .0 140 .0 130 .0 158.7 158.2 157.5 27.2 29.5 29.2 120
Slide 19: Funding profile benefited from rights issue proceeds
Our funding profile has benefited from rights issue proceeds and we saw increase in market share across all types of deposits Funding Composition Domestic Market Share 1% 1% 1% 1% 1% 3% 3% 3% 3% 3% 11% 12% 12% 14% 14% 10. 0% 8% 9% 9.3% 10% 9% 8% 9.2% 8.8% 9.0% 9.0 % 8.4% 8.5% 8.5% 8.5% 8.0 % 8.2% 8.
Slide 20: Group International continue to gain traction
Group International continue to gain traction for greater profit contribution Profit Composition PBT by SBG Q1 2016 Q1 2015 Y-o-Y Change RM’mil RM’mil % 5% 8% 9% 14% Group Retail 294.6 308.9 -5% 28% Group Business 25% 105.5 112.7 -6% Banking 15% 14% Group CIB 192.4 201.1 -4% Group Treasury 106.7 53.
Slide 21: Capital adequacy of RHB Bank Group strengthened further
Capital adequacy of RHB Bank Group, the new holding company has strengthened further with rights issue proceeds … Proforma Post Internal Reorganisation 20. 0% and Capital Injection 15% 18. 0% 16. 0% 11% 14. 0% 12. 0% 16.5% 7% 16.5% 17.2% 10. 0% RHB Bank 8.0 % 12.3% 12.5% 12.9% 12.0% 3% Group 6.0 % 4
Slide 22: Capital adequacy ratio of key subsidiaries remains strong
... and capital adequacy ratio of key subsidiaries remains strong RHB Islamic Bank RHB Investment Bank 23.3% 23.3% 22.9% 23.3% 22.9% 14.6% 22.9% 14.0% 11.0% 11.0% 10.6% 10.6% Dec 2015 Mar 2016 Dec 2015 Mar 2016 CET 1 Capital Tier 1 Capital Total Capital CET 1 Capital Tier 1 Capital Total Capital Pag
Slide 23: Corporate and Strategy Update
Executive Summary Q1 2016 Financial Results Corporate and Strategy Update Summary and Outlook
Slide 24: Good progress across the initiatives under IGNITE 2017
We have made good progress across the 17 initiatives under IGNITE 2017 Retail Retail CASA grew 3.5% vs industry of 1.5% in Q1 2016 Residential property loans grew 3.7% vs. industry of 2.3% in Q1 2016 SME SME loans grew by 12% y-o-y SME market share improved to 8.9% in Q1 2016 from 8.7% in 20
Slide 25: We will continue to execute our strategies anchoring on the 3 key themes
We will continue to execute our strategies anchoring on the 3 key themes Affluent segment strategy 1 • Relaunch of Affluent proposition in Q3 2016 Tactical cost savings 2 • Reduce cost through strategic sourcing in 3 key areas – Administrative expenses, Property management expenses and IT-related pr
Slide 26: Corporate Exercise: Milestone and Tentative Timeline
Corporate Exercise: Milestone and Tentative Timeline ♦ Despatch circular on Proposed Winding Up ♦ EGM for the ♦ Entitlement date for the Proposed Proposed Winding Up Obtained High Distribution and Capital Court Order Repayment ♦ Listing of RHB Bank 15 April 2016 End May 2016 Mid June 2016 13 May 201
Slide 27: Summary and Outlook
Executive Summary Q1 2016 Financial Results Corporate and Strategy Update Summary and Outlook
Slide 28: Economic Outlook
Economic Outlook The Malaysian economy started the year on a firmer footing following the rebound of commodity prices and the strengthening of Ringgit However, GDP growth is expected to moderate to 4% to 4.5% in 2016 from 5.0% in 2015 on the back of slower public spending, more cautious investme
Slide 29: Concluding Remarks
Concluding Remarks Positive start to the year, with record set of Q1 2016 results amidst a challenging market volatility and risk aversion Performance also reflects depth and quality of the RHB franchise and positive outcome of our reframed strategy under IGNITE 2017 transformation Strong capi
Slide 30: www.rhbgroup.com
www.rhbgroup.com INVESTOR RELATIONS CONTACT: Ms Yap Choi Foong Group Chief Financial Officer +(603) 9280 2489 cfyap@rhbgroup.com Ms Teh Soh Geok Head, Group Financial Reporting +(603) 9280 2154 teh.soh.geok@rhbgroup.com This material is prepared for general circulation. Any recommendation or view co
Slide 31: Key Business Highlights
APPENDIX Key Business Highlights
Slide 32: Retail
Retail Continuous emphasising on return on risk adjusted capital and focused growth in targeted market segment Mortgage Auto Finance RM’bil RM’bil Y-o-Y: +18% Y-o-Y: -12% Q-o-Q: +3% Q-o-Q: -4% 45. 0 14. 0 40. 0 12. 0 35. 0 10. 0 30. 0 8.0 25. 0 20. 0 15. 0 33.0 37.9 39.0 6.0 11.8 10.9 10.4 4.0 10. 0
Slide 33: CIB
CIB Prominent market position YTD Mar 2016 Ranking Market Share DCM Debt Capital Markets: SapuraKencana TMC Sdn Bhd - MYR sukuk 2 19.9% RM176 mil issuance out of RM7 bil Unrated Sukuk Programme Joint Lead Manager & Joint Bookrunner - conventional & 3 15.7% Islamic bonds Scientex Quatari Sdn Bhd RM15
Slide 34: Equities, Futures & Asset Management
Equities, Futures & Asset Management Prominent market position YTD Mar 2016 RM’bil Asset Under Management Equities Market Ranking (by value) Share Y-o-Y: +2% Q-o-Q: -4% Malaysia - By value 8.1% 5th 52.0 49.0 50.0 - By volume 12.5% 3rd 8.2 th 6.3 7.8 Singapore 3.6% 14 Hong Kong 0.1% 94th 21.2 21.3 21
Slide 35: Business Banking and SME
Business Banking and SME Continued improvement in market share and asset quality Gross Loans Customer Deposits RM’bil RM’bil Y-o-Y: +12% Y-o-Y: +5% Q-o-Q: +4% Q-o-Q: -1% 21. 0 20.3 21.5 21.3 19. 0 17. 0 15. 0 11.4 12.3 11.9 13. 0 19.8 20.5 11. 0 18.3 9.0 7.0 8.9 9.2 9.4 5.0 Mar 2015 Dec 2015 Mar 201
Slide 36: Islamic Financial Performance
Islamic Financial Performance Strong performance with enhanced contribution to the Group Gross Loans RM’mil RM’bil Y-o-Y: +21% 350 Q-o-Q: +4% 300 35. 0 30. 0 250 25. 0 200 349 20. 0 31.1 32.3 150 304 Y-o-Y: +35% 26.8 218 15. 0 100 209 10. 0 50 72 96 Mar 2015 Dec 2015 Mar 2016 0 2012 2013 2014 2015 Q
Slide 37: RHB Singapore
RHB Singapore PBT Loans, Deposits & Total Assets SGD’mil 74 SGD’bil 8.2 7.7 7.5 7.5 0.6 67 6.1 0.3 0.3 0.5 57 32 34 5.2 0.9 42 Y-o-Y: +14% 0.8 47 39 4.8 4.5 4.6 4.9 37 9 4 4.1 4.1 4.1 4.1 3.6 7.4 7.6 7.2 7.0 2.8 2.5 27 42 46 14 16 2.1 5.2 17 33 35 4.4 7 15 16 (3 ) (12) -1 -0.2 2012 2013 2014 Mar 201