Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — H1 2017 Earnings Presentation
32 slides from Rhb Bank Bhd's earnings presentation, Aug 29, 2017
Slide 1: Analysts Presentation First Half 2017 Financial Results
Analysts Presentation First Half 2017 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 29 August 2017
Slide 2: Executive Summary
Executive Summary H1 2017 Financial Results Strategy Update Summary and Outlook
Slide 3: Highlights of H1 2017 Performance (1/2)
Highlights of H1 2017 Performance (1/2) First half 2017 net profit at RM1,001.2 million, 9.4% higher y-o-y Earnings improvement mainly due to higher net funding income and lower impairment Profitability losses on other assets, partially offset by lower non-fund based income, higher overheads and
Slide 4: Highlights of H1 2017 Performance (2/2)
Highlights of H1 2017 Performance (2/2) Higher profitability in Group Treasury & Global Market mainly due to higher net funding income and higher impairment write-back on loans, partially offset by lower net FX gain Business Performance Retail Banking - Mortgage loans and financing grew by 14.1%
Slide 5: Corporate & Strategy Updates
Corporate & Strategy Updates Board Board and Management Ms Ong Ai Lin appointed as Independent Non-Executive Director Changes • Member of the Board Audit Committee and Board Nominating & Remuneration Committee • Former Partner/Senior Executive Director of PwC • Over 30 years of experience in Busin
Slide 6: RHB Banking Group Scorecard For 2017
RHB Banking Group Scorecard For 2017 Top Level Indicators Target 2017 Actual H1 2017 ROE 9% - 10% 9.1% N1 Loans Growth 5% 3.2% N2 CASA Growth 8% 13.5% N2 Gross Impaired Loans Ratio < 2.5% 2.29% Cost to Income Ratio < 50% 49.3% Overseas Profit Contribution 10% -8% N1: Annualised N2: Year-on-year grow
Slide 7: Executive Summary
Executive Summary H1 2017 Financial Results Strategy Update Summary and Outlook
Slide 8: Improved profits and healthy balance sheet
Improved profits and healthy balance sheet; Results affected by increased allowances for loan and asset impairment though magnitude has moderated Financial Position Financial Results Key Financial Ratios Operating Non Interest Total Gross Total Profit Before ROE N1 Income / Assets Loans Income Allow
Slide 9: Y-o-Y profits underpinned by higher fund based income and lower one-off impairment
Y-o-Y profits underpinned by higher fund based income and lower one-off impairment; Profit for Q-o-Q flat, impacted by one-off impairment loss Q2 Q1 Q2 Q-o-Q Y-o-Y H1 H1 Y-o-Y 2017 2017 2016 Change Change 2017 2016 Change RM’mil % % % Net Interest Income 886 851 853 4 4 1,737 1,744 - Net Islamic Fun
Slide 10: Net fund based income rose, supported by loans growth and improved margin
Net fund based income rose, supported by loans growth and improved margin contributed by savings from more prudent funding cost management Y-o-Y: +8% Y-o-Y: +3% RM’bil Q-o-Q: +5% 4.98 4.94 2.81 2.70 2.45 2.44 2.50 2.17 2.24 1.39 1.35 1.35 1.15 1.06 1.09 Q2 2016 Q1 2017 Q2 2017 H1 2016 H1 2017 Fund B
Slide 11: Lower non-fund based income contributed largely by lower net fx gain and fee income
Lower non-fund based income contributed largely by lower net fx gain and fee income from loan and loan related exposure, partially offset by increases in net wealth management fee income and brokerage income Y-o-Y: -7% Y-o-Y: -11% RM’mil 964 Q-o-Q: -6% 37 895 31 247 202 Others 101 89 489 @ 462 Treas
Slide 12: Operating expenses well-contained, up 3% Q-o-Q and 2% Y-o-Y
Operating expenses well-contained, up 3% Q-o-Q and 2% Y-o-Y; increase is from higher personnel cost and IT-related expenses as the Group continued to invest into technology infrastructure and capabilities Y-o-Y: +2% Y-o-Y: +2% Q-o-Q: +3% 1,517 1,545 168 180 Administration & General Expenses 112 115
Slide 13: Loans growth driven by mortgage and SME
Loans growth driven by mortgage and SME; Corporate loans showing a rebound from contraction in Q1 2017 Q-o-Q YTD RM’mil Jun 2017 Mar 2017 Change Dec 2016 Change % % GROUP RETAIL 71,725 70,483 2 70,138 2 Mortgage 43,372 41,989 3 40,509 7 Commercial Property Financing 4,605 4,585 - 4,550 1 Securities
Slide 14: Healthy deposits growth driven by CASA
Healthy deposits growth driven by CASA, further improving the Group’s CASA composition Customer Deposits CASA Y-o-Y: +1% Y-o-Y: +14% RM’bil RM’bil 6M Growth : n/a 6M Growth : +9% 163.9 165.6 165.8 46.2 40.7 42.5 46.2 42.5 40.7 9.7 24.9 24.9 22.3 9.3 8.9 98.3 98.2 97.3 36.5 31.8 33.2 Jun 2016 Dec 201
Slide 15: Asset quality actively managed with improving loan loss coverage
Asset quality actively managed with improving loan loss coverage RM’mil Asset Quality RM’mil Allowances for Loan Impairment 4,300.0 0.6 0% 0.027 2.43% 2.39% 235 2.29% 4,100.0 2.06% 0.35% 0.4 0% 0.022 1.66% 1.61% 1.63% 1.64% 0.21% 3,900.0 0.017 185 0.16% 0.18% 0.2 0% 0.08% 3,700.0 0.012 0.0 0% 3,500.
Slide 16: Treasury recorded better profitability while margin compression affected Retail and CBIB
Treasury recorded better profitability while margin compression and lower non-fund based income affected Retail and CBIB; Higher loan impairment allowances resulted in lower profit at BBG; Singapore impacted by impairments in oil and gas sector Pre-tax Profit H1 2016 H1 2017 601 570 545 439 372 273
Slide 17: Capital adequacy of Group and key banking subsidiaries remain strong
Capital adequacy of Group and key banking subsidiaries remain strong RHB Bank Group RHB Bank 20. 0% 20. 0% 18. 0% 15% 18. 0% 16. 0% 16. 0% 14. 0% 11% 14. 0% 12. 0% 12. 0% 7% 17.0% 10. 0% 13.4% 13.6% 10. 0% 8.0 % 13.1% 13.4% 17.2% 8.0 % 13.1% 13.4% 15.4% 12.8% 13.1% 15.8% 3% 6.0 % 6.0 % 4.0 % 4.0 % -
Slide 18: Declared interim cash dividend of 5 sen per share
Declared interim cash dividend of 5 sen per share, representing 20% dividend payout Dividend Per Share (sen) Market Capitalisation RHB Capital RHB Bank 5.06 5.05 5.00 4.68 4.71 16.30 4.50 12.00 12.00 20.3 4.00 18.8 18.9 20.3 10.30 7.00 6.00 12.00 5.00 3.50 6.00 6.00 5.00 5.00 - 3.00 28 Jun N1 31 Dec
Slide 19: Executive Summary
Executive Summary H1 2017 Financial Results Strategy Update Summary and Outlook
Slide 20: Key updates on the progress of IGNITE 2017 (1/3)
Key updates on the progress of IGNITE 2017 (1/3) Initiative Objective / Target Achievement Affluent segment • Relaunch Premier Since the launch of the new value proposition in July 2016: strategy Banking with enhanced – Affluent AUM grew by 15.2% value proposition, – Premier Banking customer base
Slide 21: Key updates on the progress of IGNITE 2017 (2/3)
Key updates on the progress of IGNITE 2017 (2/3) Initiative Objective / Target Achievement Digital and Build and develop a digital ♦ Launched initiatives to improve customers’ online and mobile banking payments ecosystem to cater to our experience: customers lifestyle needs – Launched various paymen
Slide 22: Key updates on the progress of IGNITE 2017 (3/3)
Key updates on the progress of IGNITE 2017 (3/3) Initiative Objective / Target Achievement CIB growth Boost returns via reinforcement of Increased product holding ratio for domestic top corporates to 5.09 in Q2 strategy Client Coverage Model 2017 from 4.97 in Q1 2017 through refined client coverag
Slide 23: Executive Summary
Executive Summary H1 2017 Financial Results Strategy Update Summary and Outlook
Slide 24: Economic Outlook
Economic Outlook Malaysia’s GDP is forecast to grow 5.3% in 2017, up from 4.2% recorded in 2016: • Robust GDP growth of 5.8% in second quarter y-o-y, up from 5.6% in first quarter • Continued expansion in exports, albeit at a moderate pace • Pick up in domestic demand • Increase in public spending
Slide 25: Concluding Remarks
Concluding Remarks The Group achieved two consecutive quarters of sustained profitability Our overall loans growth picked up in second quarter, compared to first quarter. Combined with our ability to manage funding cost, our net interest margin has improved Despite the challenges in asset qual
Slide 26: www.rhbgroup.com
www.rhbgroup.com INVESTOR RELATIONS CONTACT: Mr. Syed Ahmad Taufik Albar Group Chief Financial Officer +(603) 9280 7090 taufik.albar@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 o
Slide 27: Key Business Highlights
APPENDIX Key Business Highlights
Slide 28: Retail Banking
Retail Banking Mortgage Auto Finance RM’bil Y-o-Y: +13% RM’bil Y-o-Y: -13% 6M Growth: +6% 6M Growth: -5% 12. 0 50. 0 45. 0 10. 0 40. 0 35. 0 8.0 30. 0 6.0 25. 0 40.4 42.9 45.5 10.0 9.2 20. 0 15. 0 4.0 8.7 10. 0 2.0 5.0 0.0 0.0 Jun 2016 Dec 2016 Jun 2017 Jun 2016 Dec 2016 Jun 2017 Market Market 8.4%
Slide 29: Investment Banking – Market Positions & Asset Management
Investment Banking – Market Positions & Asset Management YTD Jun 2017 RM’bil Asset Under Management Market Share Ranking Y-o-Y: -2% Equity: 6M Growth: -1% - By value 8.5% 5th - By volume 12.4% 3rd 53.1 52.3 51.8 7.9 7.9 7.2 Debt Capital Markets: - MYR sukuk 13.9% 4th 21.4 19.7 19.0 - Total MYR bonds
Slide 30: Business Banking
Business Banking Gross Loans Customer Deposits RM’bil RM’bil Y-o-Y: +8% Y-o-Y: +1% 6M Growth: +4% 6M Growth: -1% 21. 0 21.8 22.1 22.0 19. 0 17. 0 15. 0 12.1 12.7 12.6 13. 0 21.1 22.0 22.9 11. 0 9.0 7.0 9.7 9.4 9.4 5.0 Jun 2016 Dec 2016 Jun 2017 Jun 2016 Dec 2016 Jun 2017 Fixed Deposits Demand Deposi
Slide 31: Islamic Banking
Islamic Banking PBT Gross Financing RM’mil RM’bil Y-o-Y: +13% Y-o-Y: +28% 6M Growth: +12% 405 40.0 355 35.0 305 30.0 255 432 38.3 25.0 33.9 34.1 205 349 20.0 155 304 218 253 15.0 105 197 10.0 55 Jun 2016 Dec 2016 Jun 2017 5 2013 2014 2015 2016 H1 H1 Market 8.3% 7.8% 8.4% 2016 2017 Share Asset Qualit
Slide 32: RHB Singapore
RHB Singapore SGD’mil Loans, Deposits & Total Assets PBT SGD’bil 74 7.5 8.0 80 7.4 34 0.3 0.4 0.4 60 39 32 7.2 6.0 5.5 4 7.0 40 4.9 20 35 42 46 (30) 4.1 4.2 4.0 (92) (59) - 7.6 (12) (26) (2 0) (55) (4) (4 0) (81) (6 0) (4) 2015 2016 Jun 2017 (8 0) (11) (1 00) 2013 2014 2015 2016 H1 H1 Deposits 2016