Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — RHB Banking Group — Q1 2015 Earnings Presentation
46 slides from Rhb Bank Bhd's earnings presentation, May 29, 2015
Slide 1: Group Managing Director presentation, 29 May 2015
Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 29 May 2015
Slide 2: Executive Summary
Executive Summary Q1 2015 Financial Results Key Corporate and Business Updates Summary
Slide 3: Executive Summary: Financial Performance
Executive Summary A. Financial Performance 1 Revenue up 2.9% year-on-year on the back of 2.4% increase in net fund base income and 2.9% increase in other operating income 2 Net profit increased by 5.7% year-on-year to RM476.3 million The Group's gross loans grew by 0.7% from December 2014 and increa
Slide 4: Executive Summary: Management and Appointment
Executive Summary B. Management and Corporate Update 1 Appointment of Dato' Khairussaleh Bin Ramli on 5 May 2015 as Group Managing Director Proposed Rights Issue and Group Internal Reorganisation submitted to BNM on 30 April 2015. Application to Bursa Securities for the listing of and quotation for
Slide 5: RHB Banking Group Scorecard 2015
RHB Banking Group Scorecard 2015 Top Level Indicators Target 2015 Q1 2015 ROE >11.5% 10.0%N1 Loans Growth 10% 0.7%N2 CASA Growth >10% 3.5%N2 Gross Impaired <1.8% 2.0% Loans Ratio Cost to Income Ratio <51% 54.3% International Contribution >13% 13.2% N1 Annualised N2 Changes from Q4 2014 to Q1 2015, n
Slide 6: Q1 2015 Financial Results
Executive Summary Q1 2015 Financial Results Key Corporate and Business Updates Summary
Slide 7: Financial Results
Financial Results Y-o-Y Q-o-Q Q1 Q1 Q4 Change Change RM mil 2015 2014 2014 % % Year-on-Year Performance: Net Interest Income 800 822 -3 805 -1 ♦ Net fund base income increased by 2% mainly due to Net Islamic Fund Base Income 179 136 32 178 - 14% increase in the Group’s gross loans and financing. Tot
Slide 8: Income Mix & NIM
Income Mix & NIM Income Mix 34% 30% 37% 40% 34% 10% 13% 13% 12% 12% 56% 57% 51% 48% 53% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Net Interest Income Islamic Banking Income Other Operating Income Net Interest Income & NIM 2.33% 2.40% 2.29% 2.29% 2.26% 2.35% 2.22% 2.30% 2.25% 2.20% 958 988 1,010 983 97
Slide 9: Other Operating Income
Other Operating Income RM mil Composition Q1 2014 492 Q1 2015 Corporate Advisory, Underwriting ▲15% 4 32 8% 4% & Arrangement Fees (8%) (5%) Fund Management 38 & UT Fee ▲6% 2 15% (15%) Net Brokerage ▲2% 2 86 11% 62% Service Charges, Commission, ▼1% (7%) (65%) Guarantee & Commitment Fees -1 140 Other
Slide 10: Operating Expenses
Operating Expenses Composition RM mil 11% 10% Q1 9% 8% Q1 2014 786 20% 21% 2015 Personnel 60% 61% ▲6% 28 503 Cost Q1 2014 Q1 2015 Establishment ▲11% Personnel Costs 18 174 Cost Establishment Costs Marketing Expenses Administration and General Expenses Admin & General ▼7% -6 81 Expenses Cost-to-Incom
Slide 11: Allowances for Loan Impairment
Allowances for Loan Impairment Increase/Decrease in Allowances for Loan Impairment RM mil -15 2 0.4 ▼ 7% 21 -12 54 50 50 Q1 2014 Decrease in CA Decrease in Write Decrease in Decrease in Others Increase in IA Q1 2015 Off Recoveries (Write-Back) Asset Quality Allowances for Loan Impairment & Credit Ch
Slide 12: Financial Position as at 31 March 2015
Financial Position as at 31 March 2015 Change for Y-o-Y Mar Dec Mar Change 3M 2015 RM mil 2015 2014 2014 % % Total assets increased by 3% mainly driven by growth of Financial Assets/Investments and loans Total Assets 225,064 219,354 196,944 3 14 and financing assets. Total Financial Excluding on
Slide 13: Loans, Advances and Financing
Loans, Advances and Financing RM mil 404 50 47 - 18 - 425 772 - 534 1,107 - 1,912 1,570 143,547 142,486 Dec 2014 Purchase of Working Purchase of Purchase of Personal Use Purchase of Credit Card Purchase of Merger and Others Mar 2015 Res. Property Capital Non-Res. Securities PPE Other Transport Acqui
Slide 14: Loans Profile and Market Share
Loans Profile and Market Share Gross Loans Gross Loans by Interest/ RM bil Profit Rate Sensitivity 14% 25% 300 16% 11% 17% 20% 16% 13% 14% 250 15% 9% 14% 10% Fixed Rate 14% 10% 200 9% 22% 10% 9% 5% 0% 8% 150 Variable -5% 100 -10% 111.5 121.8 142.5 143.5 Rate -15% 97.4 50 -20% 0 78% 2011 2012 2013 20
Slide 15: Loans By Type of Customers
Loans By Type of Customers Composition Loans by Type of Customers RM mil 1,286 -3,452 1,455 7% 5% 4% 11% 10% 1,772 9% 11% 12% 6% 7% 26% 29% 27% 26% 30% 143,547 142,486 12% 12% 12% 10% 10% Dec 2014 SME Individuals International Corporate Mar 2015 46% & Others 45% 43% 45% 45% Mar 2015 18,028 65,730 17
Slide 16: Customer Deposits
Customer Deposits RM mil FD CASA Dec 2014 157,134 Demand Deposits 979 +0.3% +4% Mar 2015: RM123,243 mil Mar 2015: RM35,364 mil Fixed Dec 2014: RM122,935 mil Dec 2014: RM34,167 mil 308 Deposits Saving 218 CA SA Deposits NIDs 45 +4% +3% Mar 2015 158,684 ▲1% Mar 2015: RM27,219 (23%) mil Mar 2015: RM8,1
Slide 17: Customer Deposits Profile & Market Share
Customer Deposits Profile & Market Share RM bil Customer Deposits RM bil FD & NID Maturity Structure 23% 350 23% 19% 122.9 123.3 14% 20% 300 19% 11% 108.8 105.6 0.8 0.4 8% 88.1 13% 9% 10% 1.0 0.4 20.3 20.2 250 14% -0.4% 8% 9% 1.5 18.2 12.2 200 8% 0% 14.8 150 -2% -10% 100 89.6 93.0 101.8 102.7 138.2
Slide 18: Funding
Funding Funding Composition CASA Composition 1% 1% 1% 1% 2% RM bil 2% 3% 3% 3% 3% 11% 11% 12% 12% 12% 7% 8% 60 .0 29 .5% 9% 10% 10% 24.0% 50 .0 23.3% 24 .5% 21.7% 22.3% 21.3% 40 .0 19 .5% 79% 77% 75% 74% 73% 30 .0 14 .5% 20 .0 9.5 % 34.2 35.4 32.1 27.8 29.4 2011 2012 2013 2014 Mar 2015 10 .0 4.5 % C
Slide 19: PBT by SBG
PBT by SBG RM mil Composition Retail GIB Q1 2014 637 +11% +142% 9% 5% Retail 30 (10%) (2%) 28% Q1 2015: RM309 mil Q1 2015: RM38 mil Q1 2014: RM279 mil Q1 2014: RM16 mil (32%) 16% GIB 22 (17%) TSY BBG TSY -1 42% -2% -5% (39%) BBG -5 Q1 2015: RM65 mil Q1 2015: RM113 mil Q1 2014: RM66 mil Q1 2014: RM11
Slide 20: Loans, Advances and Financing by SBG
Loans, Advances and Financing by SBG RM mil Retail BBG Composition Dec 2014 142,486 9% (9%) +2% +3% 13% (12%) Retail 1,472 46% (45%) Mar 2015: RM65,697 mil Mar 2015: RM18,307 mil 32% BBG 531 Dec 2014: RM64,225 mil Dec 2014: RM17,776 mil (34%) GIB 470 GIB CIB Retail CIB -1,412 Corporate Investment Ba
Slide 21: Deposits by SBG
Deposits by SBG RM mil Composition CIB GIB Dec 157,134 2014 +25% +8% 9% (8%) CIB 9,241 Mar 2015: RM46,904 mil Mar 2015: RM14,263 mil 25% Dec 2014: RM37,663 mil Dec 2014: RM13,184 mil (26%) 23% (28%) GIB 1,079 BBG Retail 13% 30% -3% -2% (14%) (24%) BBG -568 Mar 2015: RM20,841 mil Mar 2015: RM40,034 m
Slide 22: Asset Quality
Asset Quality Gross Impaired Loans Ratio Gross Impaired Loans Ratio (%) by Purpose (%) Working Capital Purchase of Residential Property 3.59 6.1 3.9 5.3 5.3 4.4 3.3 3.3 3.4 2.5 2.3 2.99 2.81 2011 2012 2013 2014 Mar 2011 2012 2013 2014 Mar 2.68 2015 2015 2.03 2.03 2.03 1.84 Purchase of Non-Residentia
Slide 23: RHB Capital: Capital Position & Market Capitalisation
RHB Capital : Capital Position & Market Capitalisation N1 Leverage Ratio Gearing and Double Leverage N2 Multiple (times) Times 13.1 149% 0.8 136% 134% 137% 138% 12.5 120% 0.54 11.7 11.6 11.4 0.5 0.39 0.39 0.39 0.36 70% 0.2 20% 2011 2012 2013 2014 Mar 2015 2011 2012 2013 2014 Mar 2015 Gearing Double
Slide 24: Capital Position (1/2)
Capital Position (1/2) RHB Bank Group: Capital Development in Q1 2015 ▲0.1% ▼0.2% ▼0.3% 15.0% 14.6% 11.0% 10.9% 15.0% 14.9% 14.6% 8.0% 10.6% 10.6% 6.0% 4.5% Dec 2014 Increase Increase in Effect of Mar 2015 2015 Requirements in CET1 Business Volume Transitional Treatment CET 1 Tier 1 Total Capital RH
Slide 25: Capital Position (2/2)
Capital Position (2/2) RM bil RHB Islamic Bank RM bil RHB Investment Bank 16.3% 15.7% 18% 2.5 35% 6.5 2.3 16% 5.5 2.1 26.3% 30% 14% 1.9 25% 4.5 12% 1.7 24.3% 12.9% 12.3% 1.5 20% 10% 1.3 3.5 2.8 2.9 1.1 1.0 1.0 1.0 1.0 2.5 2.2 2.3 8% 0.9 15% 0.7 6% 10% 1.5 0.5 4% 0.3 5% 0.5 0.1 2% -0.1 0% -0.5 Dec 20
Slide 26: Key Corporate and Business Updates
Executive Summary Q1 2015 Financial Results Key Corporate and Business Updates Summary
Slide 27: Key Business Initiatives Update
Key Business Initiatives Update Contribution to Group and Growth Bank@ Work Secured PBT PBT Contribution Workforce Base Companies -15.4% Q1 2015: -5.2% Q1 2015: -35.6% RM49.1 mil +0.4% 7.6% +2.3% +11% +7% +44% Mar 2015: 3,120 Mar 2015: 210,818 Q1 2014: RM34.1 mil Q1 2014: 5.3% Dec 2014: 2,815 Dec 20
Slide 28: RHB-OSK Integration Update
RHB-OSK Integration Update Recap: Estimated Synergies Over 3 Years RM mil 324 15 35 0 34 30 0 25 0 149 20 0 112 5 63 275 15 0 5 17 10 0 5 15 50 2 92 127 0 56 Year 1 Year 2 Year 3 Total Synergies RM mil 405 7 23 Revenue 154 Cost 144 107 4 1 375 2 10 12 Funding 1 104 140 131 Year 1 Year 2 Nov 2014 - M
Slide 29: IGNITE 2017 realising RM218 mil of value
IGNITE 2017 performance in Q1 indicates a promising year ahead, realising RM218 mil of value with positive PBT impact of RM86 mil… IGNITE 2017 CONTINUES TO DERIVE SYNERGIES AND VALUE FROM KEY INITIATIVES LAUNCHED LAST YEAR The fully leveraged Islamic Banking model continued to bring in Groupwide s
Slide 30: Momentum continues in 2015, priorities revisited
…and its momentum continues to be strong in 2015, priorities revisited to ensure a robust and holistic programme equipped to meet the needs of the ever changing market IN Q1 2015 ALONE, SIGNIFICANT ACHIEVEMENTS WERE ACCOMPLISHED IN LINE WITH THE GROUP’S STRATEGY Developed the Employee Value Launched
Slide 31: DIGICOLOGY: RHB Digital Journey
RHB Digital Journey public launch in Q2 2015… “DIGICOLOGY” DIGITAL + ECOLOGY “A holistic approach to provide our customers with a seamless experience through solutions built around their needs” Providing customers with simplified, convenient, easily accessible digital banking experience Using di
Slide 32: Launch of the first of many innovative solutions
Launch of the first of many innovative solutions for your financial needs 32
Slide 33: Summary
Executive Summary Q1 2015 Financial Results Key Corporate and Business Updates Summary
Slide 34: Summary
Summary Despite a challenging first quarter, the Group managed to record quality earnings growth and continues to gain traction in targeted segments IGNITE 2017 progress is on-track with positive results, expected to gain further momentum going into full year 2015 with a set of prioritised initiativ
Slide 35: Investor Relations Contact
www.rhbgroup.com INVESTOR RELATIONS CONTACT: Ms Yap Choi Foong Group Chief Financial Officer +(603) 9280 2489 cfyap@rhbgroup.com Mr Khairul Rifaie Head, Investor Relations +(603) 9280 5711 khairul.rifaie@rhbgroup.com This material is prepared for general circulation. Any recommendation or view conta
Slide 36: Corporate Restructuring Plan and Rights Issue
Corporate Restructuring Plan and Rights Issue
Slide 37: Corporate Restructuring Plan and Rights Issue (1/3)
Corporate Restructuring Plan and Rights Issue (1/3) WHY? WHAT IS IT? BENEFITS 1 Tax inefficiencies due to single tier tax: ► Improve tax efficiency and reduce holdco inefficiencies Interest payments at RHB Capital cannot be The Group Corporate Restructuring used as deductibles. Plan involving : ►
Slide 38: Corporate Restructuring Plan and Rights Issue (2/3)
Corporate Restructuring Plan and Rights Issue (2/3) Fund raising by RHB Capital EPF Aabar OSK MI 41.5% 21.2% 9.9% 27.4% a) Rights Issue proceeds RHB Capital Berhad b) Rights Issue RHB proceed to RHB Bank RHBIB Insurance recapitalize 100% 100% 94.7% RHB Bank Internal restructuring (Sale of RHB Capita
Slide 39: Corporate Restructuring Plan and Rights Issue (3/3)
Corporate Restructuring Plan and Rights Issue (3/3) RHB Capital to distribute RHB Bank shares EPF Aabar OSK MI 41.5% 21.2% 9.9% 27.4% RHB Capital distributes its entire shareholdings in RHB Bank to shareholders. RHB Capital Berhad Post distribution of RHB Bank shares, RHB Capital will become dormant
Slide 40: Appendix: Key Business Highlights
mom Anpendix rhe Key Business Highlights be | Myanmar 4
Slide 41: Retail Business Performance
Retail Business Performance Mortgage Personal Use 7.3% 7.7% 7.8% 8.9% 9.1% 9.2% 7.0% 7.0% 7.8% 7.4% 31.5 31.6 20.6 22.2 25.5 7.7 7.7 5.8 7.2 5.0 2011 2012 2013 2014 Mar 2015 2011 2012 2013 2014 Mar 2015 Mortgage Loans (RM bil) Market Share Personal Use (RM bil) Market Share Auto Finance Credit Card
Slide 42: CIB Market Share
CIB Market Share YTD Mar 2015 FY 2014 FY 2013 Market Share Ranking Market Share Ranking Market Share Ranking Debt Capital Market - sukuk* 27.2% 1 12.4% 4 17.6% 4 - conventional 20.3% 2 11.5% 4 16.3% 4 bonds & sukuk Mergers & Acquisitions - by value 11.3% 4 22.4% 1 11.8% 3 - by deal count 7 deals 1 2
Slide 43: Equities, Futures & Asset Management
Equities, Futures & Asset Management Mar 2015 FY 2014 Total AUM RM bil Equities Market Market Ranking Ranking 15.0% (by value) Share Share 12.1% 11.8% 10.0% 10.0% Malaysia 48.5 49.0 10.0% - By value 8.7% 4th 9.5% 3rd 2.6% 39.3 5.9 6.3 5.0% - By volume 13.3% 2nd 13.7% 2nd 1.3 31.0 0.0% 21.3 21.2 th t
Slide 44: Business Banking and SME
Business Banking and SME Gross Loans Customer Deposits RM bil 30.0 RM bil 17.4% 25.0 14.1% 15.8% 13.8% 17.0% 11.3% 20.0% 8.8% 25.0 9.3% 9.3% 7.8% 12.0% 20.0 10.0% -0.4% 7.0% 20.0 2.0% 0.0% 15.0 -3.0 % 15.0 -10. 0% -8.0 % 10.0 18.3 18.3 21.4 20.8 19.2 10.0 14.5 15.8 -20. 0% -13. 0% 12.7 15.0 16.4 -18
Slide 45: Islamic Financial Performance
Islamic Financial Performance PBT Gross Loans RM mil RM bil 350 6.9% 7.6% 7.6% 6.5% 6.6% 300 250 200 150 304 26.8 25.5 100 211 209 218 18.7 16.3 50 13.1 72 0 2011 2012 2013 2014 Q1 2015 2011 2012 2013 2014 Mar 2015 Growth 133% -1% 5% 39% 8%* Growth 44% 25% 15% 36% 40%* Gross Loans Market Share Asset
Slide 46: RHB Singapore Business Performance
RHB Singapore Business Performance PBT Loans, Deposits & Total Assets 74 80 SGD mil SGD bil 70 8.2 60 32 7.7 0.6 0.3 50 6.1 42 39 5.2 0.9 0.8 40 9 4 4.6 30 3.6 4.1 4.5 4.1 3.4 2.8 7.4 7.6 20 39 42 14 2.3 2.5 33 35 1.7 2.1 5.2 10 29 4.4 15 - -1 2011 2012 2013 2014 Mar 2015 (10) 2010 2011 2012 2013 20