RHB Bank Bhd. · MYX:RHBBANK

RHB Bank Bhd — 9M 2019 Earnings Presentation

31 slides from RHB Bank Bhd's earnings presentation, Nov 25, 2019

  1. Slide 1: RHB Bank Berhad Analysts Presentation 9M 2019 Financial Results

    RHB BANK BERHAD Analysts Presentation 9M 2019 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 25 November 2019

  2. Slide 2: Executive Summary 9M 2019 Financial Results Strategy Update

    2 1. Executive Summary 2. 9M 2019 Financial Results 3. Strategy Update 4. Summary and Outlook

  3. Slide 3: Executive Summary

    3 Executive Summary

  4. Slide 4: Highlights of 9M 2019 Performance (1/2)

    4 Highlights of 9M 2019 Performance (1/2) Year-on-year:  Net profit rose 7.0% to RM1,861.4 million:  Total income grew 3.7% to RM5,260.1 million  Net fund based income declined by 0.6% to RM3,677.4 million as fund based income was partly impacted by the OPR cut in May 2019 coupled with higher fun

  5. Slide 5: Highlights of 9M 2019 Performance (2/2)

    5 Highlights of 9M 2019 Performance (2/2)  Group Wholesale Banking recorded a pre-tax profit of RM1,509.6 million, up 9.1% Y-o-Y:  Group Corporate & Investment Banking pre-tax profit up 21.4% to RM533.6 million on the back of lower ECL on loans, lower operating expenses and higher impairment write

  6. Slide 6: RHB Banking Group Scorecard for 2019

    6 RHB Banking Group Scorecard for 2019 Top Level Indicators Target 2019 Actual 9M 2019 ROE 10.5% 10.2% N1, N2 Loans Growth 5.0% 5.2% N3 5.0% CASA Growth 0.6% N3 (Group) Gross Impaired Loans Ratio <2.0% 2.16% Cost-to-Income Ratio 49.0% 48.5% N1 : Annualised N2 : ROE of 10.4% if normalised for FVOCI r

  7. Slide 7: 9M 2019 Financial Results

    9M 2019 Financial Results

  8. Slide 8: 9M 2019 profits up 7.0% Y-o-Y driven by resilient income growth

    9M 2019 profits up 7.0 % Y-o-Y driven by resilient income growth, positive JAWS and lower allowances 8 for ECL; CIR and credit charge ratio improved Financial Position Financial Results Key Financial Ratios Total Gross Total Operating Profit Non-Fund Based/ ROE Assets Loans Income Before Allowances

  9. Slide 9: Q3 profit rose on higher total income and lower allowances for ECL

    Q3 profit rose on the back of higher total income (net fund based income & non-fund based income) and 9 lower allowances for ECL Q3 Q2 Q3 Q-o-Q Y-o-Y 9M 9M Y-o-Y RM’ mil 2018 2019 2019 % % 2018 2019 % Net Interest Income 890 881 917 4 3 2,758 2,678 -3 Net Islamic Fund Based Income 329 326 345 6 5 94

  10. Slide 10: 9M 2019 net fund based income declined marginally by 0.6%

    9M 2019 net fund based income declined marginally by 0.6% Y-o-Y as income was partly affected by the 10 OPR cut in May 2019 and higher funding cost; NIM started to recover in Q3 2019 Y-o-Y: +6% RM’bil Y-o-Y: +12% Y-o-Y : +3% Y-o-Y: -0.6% Q-o-Q: +5% 8.52 8.01 4.84 4.31 3.70 3.68 2.74 2.85 2.86 1.52 1

  11. Slide 11: 9M 2019 non-fund based income grew 15.3% Y-o-Y

    9M 2019 non-fund based income grew 15.3% Y-o-Y driven by higher investment and trading income and 11 insurance underwriting surplus RM’mil Y-o-Y: +3% Y-o-Y: +15% Others 1,583 Q-o-Q: -16% Treasury Related Income N2 1,373 59 46 Insurance Underwriting Surplus 604 420 Fee Income N1 467 570 104 139 479 1

  12. Slide 12: Operating expenses rose 2.6% Y-o-Y

    Operating expenses rose 2.6% Y-o-Y mainly from higher personnel costs, IT-related expenses and 12 marketing costs; Positive JAWS maintained with CIR improving to 48.5% Y-o-Y : +3% RM’mil Y-o-Y : +2% Q-o-Q : -2% Administration & General Expenses 2,551 2,487 Marketing Expenses 273 256 167 182 Establis

  13. Slide 13: Gross loans grew 5.2% Y-o-Y

    Gross loans grew 5.2% Y-o-Y driven mainly by mortgage, SME and Singapore; Corporate continued to 13 show net repayments Composition Sep Dec Sep YTD Y-o-Y Dec Sep RM’mil 2018 2018 2019 Growth Growth 2018 2019 % % % % GROUP RETAIL 82,649 84,643 88,896 5.0 7.6 51 52 Mortgage 52,014 53,467 57,464 7.5 10

  14. Slide 14: Total deposits grew 6.9% Y-o-Y

    14 Total deposits grew 6.9% Y-o-Y led by higher fixed deposits; CASA ratio stood at 25.4% CASA Y-o-Y : +1% RM’bil YTD : +0.1% Customer Deposits Y-o-Y : +7% 46.1 46.4 46.4 RM’bil YTD : +2% 9.9 10.1 10.3 178.9 183.1 36.2 36.3 36.1 171.4 46.4 Sep Dec Sep 46.4 2018 2018 2019 46.1 24.4 Current Deposits S

  15. Slide 15: Credit charge ratio improved further; uptick in GIL ratio

    Credit charge ratio improved further; Uptick in GIL ratio in Q3 mainly from domestic, but overall in line 15 with expectations RM’mil Allowances for Loan Impairment RM’mil Asset Quality 350 0.2 5% 6,000 0.22% N2 2.37% 2.50% 300 0.20% 2.16% 2.12% 2.15% 5,500 0.2 0% 0.18% 0.18% 2.06% 0.18% 0.16% 250 2

  16. Slide 16: O&G exposure continued to be managed

    16 O&G exposure (Loans + Bond) continued to be managed Oil and Gas Related Industry Upstream Downstream Total Loans + Bonds % to % to % to Outstanding RM’ bil Gross Loans RM’ bil Gross Loans RM’ bil Gross Loans Sep 2019 2.6 1.5% 1.5 0.9% 4.1 2.4% Jun 2019 2.7 1.6% 1.4 0.8% 4.1 2.4% Dec 2018 3.3 1.9%

  17. Slide 17: 9M 2019 profit growth driven by BBG, CBIB, Treasury and Insurance

    9M 2019 profit growth was driven by BBG, CBIB, Treasury and Insurance; Retail and Singapore impacted 17 by higher allowances for ECL Revenue 4% 1,787 1,859 7% 7% RM’ mil 3% 1,162 1,080 1,064 1,142 800 827 3% 46% 8% 294 126 130 132 192 273 Retail BBG CBIB Treasury Singapore Others Insurance Pre-tax P

  18. Slide 18: Capital position remained robust

    18 Capital position remained robust for the Group and key banking subsidiaries RHB Bank Group RHB Bank 20. 0% 20. 0% 19. 0% 18. 0% 18. 0% 18.8% 19.0% 17. 0% 16. 0% 16. 0% 15. 0% 14. 0% 13. 0% 15.5% 16.5% 15.7% 16.6% 14. 0% 16.8% 16.9% 12. 0% 11. 0% 10. 0% 9.0 % 12. 0% 10. 0% 13.3% 14.4% 13.5% 14.6%

  19. Slide 19: Strategy Update

    Strategy Update

  20. Slide 20: FIT22 Key Highlights – Our Progress So Far

    20 FIT22 Key Highlights – Our Progress So Far Fund our Journey • Affluent : Steady traction on customer acquisition by 11.9% YTD Sep 2019 to 67.8k customers from Dec 2018, of which 34.5% are SME owners. Total AUM of Premier customers grew by 12.3% to RM32.9 bil in the same period • SME : Strong grow

  21. Slide 21: Summary and Outlook

    Summary and Outlook

  22. Slide 22: Economic Outlook

    22 Economic Outlook  Malaysia’s GDP growth moderated to 4.4% Y-o-Y in Q3 2019 (Q2 2019: 4.9%) as a result of lower growth in key sectors  For the year 2019, GDP is expected to grow by 4.5% (2018: 4.7%) as down side risks continue to weigh on Malaysia’s economy as a result of the protracted global

  23. Slide 23: Concluding Remarks

    23 Concluding Remarks  The Group demonstrated resilience in Q3 2019 despite the prolonged challenges in the operating environment  Loans and financing Y-o-Y growth continued to be driven by mortgages, SME and Singapore  We maintain full year 2019 NIM outlook of between 2.12% - 2.13% for 2019 whil

  24. 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

  25. Slide 25: Appendix

    Appendix

  26. Slide 26: Retail Banking

    26 Retail Banking Gross Loans Customer Deposits RM’bil RM’bil Y-o-Y: +8% Y-o-Y: +12% 100 .0 90. 0 51.0 57.2 80. 0 9.4 70. 0 9.0 7.5 60. 0 6.8 50. 0 82.6 88.9 40. 0 35.2 40.3 30. 0 20. 0 Sep 2018 Sep 2019 Sep 2018 Sep 2019 Fixed Deposits Demand Deposits Savings Deposits Retail Market Share Asset Qual

  27. Slide 27: Investment Banking – Market Positions & Asset Management (1/2)

    27 Investment Banking – Market Positions & Asset Management (1/2) Market RM’bil Asset Under Management YTD Sep 2019 Share Ranking Y-o-Y : +8% Equity: - By value 7.7% 5th - By volume 11.6% 3rd 53.2 49.2 7.8 7.1 Debt Capital Markets: 10.7 - MYR sukuk 10.5% 3rd 13.2 - Total MYR bonds (Conventional & 9.

  28. Slide 28: Investment Banking – Notable Deals (2/2)

    28 Investment Banking – Notable Deals (2/2) M&A DCM ECM Can-One Berhad DanaInfra Nasional Berhad Leong Hup International Berhad RM800.0 million to RM1,000.0 million RM13.0 bil ICP/IMTN Programme RM1.19 bil Disposal of the entire issued share capital of Issuance of RM417.0 mil Main Market IPO F & B N

  29. Slide 29: Business Banking

    29 Business Banking Gross Loans Customer Deposits RM’bil RM’bil Y-o-Y: +4% Y-o-Y: +16% 27. 0 28.6 24.6 26. 0 25. 0 24. 0 13.7 13.1 23. 0 26.0 22. 0 24.9 21. 0 11.4 14.8 20. 0 Sep 2018 Sep 2019 Sep 2018 Sep 2019 Fixed Deposits Demand Deposits SME Market Share RM’bil Asset Quality 9.4% 3.25% 3.15% 3.0

  30. Slide 30: Islamic Banking

    30 Islamic Banking PBT Gross Financing RM’mil RM’bil Y-o-Y: +19% Y-o-Y: +32% 70.0 60.0 50.0 40.0 30.0 48.3 57.6 552 20.0 416 10.0 - Sep 2018 Sep 2019 9M 2018 9M 2019 Market 8.7% 9.5% Share Gross Financing/ Total Gross Financing (Domestic) RM’mil Asset Quality 1.08% 0.97% 0.93% 37.0% 0.82% 0.87% 36.0

  31. Slide 31: RHB Singapore

    31 RHB Singapore SGD’mil PBT SGD’bil Loans, Deposits & Total Assets 50 35 40 6.3 6.8 0.2 0.2 30 20 46 13 6.1 6.6 4.4 4.1 5.0 10 17 3.8 (4) - (11) Sep 2018 Sep 2019 (1 0) 9M 2018 9M 2019 Deposits Gross Loans RHB Bank Singapore RHB Securities Singapore Total Assets (RHB Securities Singapore) Total Ass

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