Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — H1 2018 Earnings Presentation
32 slides from Rhb Bank Bhd's earnings presentation, Aug 30, 2018
Slide 1: Analysts Presentation First Half 2018 Financial Results
Analysts Presentation First Half 2018 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 30 August 2018
Slide 2: Executive Summary
Executive Summary H1 2018 Financial Results Strategy Update Summary and Outlook
Slide 3: Highlights of H1 2018 Performance (1/2)
Highlights of H1 2018 Performance (1/2) Year-on-year: Net profit up 16.0% to a record RM1,161.1 million, mainly due to higher net fund based and non-fund based income, and lower allowances for expected credit losses (ECL) on other assets Net fund based income rose 10.8% to RM2,481 million mainly
Slide 4: Highlights of H1 2018 Performance (2/2)
Highlights of H1 2018 Performance (2/2) Group Wholesale Banking recorded a pre-tax profit of RM971.3 million, an increase of 11.0% Y-o-Y: Group Corporate & Investment Banking pre-tax profit grew 29.0% to RM352.7 million on the back of higher net fund based and non-fund based income and lower all
Slide 5: RHB Banking Group Scorecard for 2018
RHB Banking Group Scorecard for 2018 Top Level Indicators Target 2018 Actual H1 2018 ROE 9.0% - 10.0% 10.2%N1 Loans Growth 6% 3.1%N2 CASA Growth 10% 4.2%N2 (MY Retail & BBG CASA growth of 5.4%) Gross Impaired Loans Ratio <2.2% 2.33% Cost to Income Ratio <50% 49.1% Overseas Profit Contribution +ve 4.
Slide 6: H1 2018 Financial Results
Executive Summary H1 2018 Financial Results Strategy Update Summary and Outlook
Slide 7: H1 profits rose Y-o-Y on higher net fund based income and lower allowances
H1 profits rose Y-o-Y arising from higher net fund based income and lower allowances for expected credit losses on other assets; CIR improved and loan loss coverage ratio remained above 100% Financial Position Financial Results Key Financial Ratios Operating Non-Fund Total Gross Total Profit Before
Slide 8: Q2 continued the year's momentum driven by lower overheads and allowances
Q2 continued the year’s momentum driven by lower overheads and allowances for ECL; One-off fee income gain in Q1 resulted in a marginal decline of net profit Q-o-Q Q2 Q1 Q2 Q-o-Q H1 H1 Y-o-Y RM’ mil 2017 2018 2018 % 2017 2018 % Net Interest Income 886 930 937 1 1,738 1,867 7 Net Islamic Fund Base In
Slide 9: Net fund based income growth supported by funding and liquidity management
Net fund based income growth supported by continuous funding and liquidity management; Margins showed further improvement Y-o-Y but remained stable against preceding quarter RM’bil Y-o-Y: +11% Y-o-Y: +9% Q-o-Q: +1% 5.27 4.94 2.59 2.68 2.70 2.79 2.50 2.48 2.24 1.35 1.36 1.24 1.43 1.24 1.15 Q2 2017 Q1
Slide 10: Non-fund based income grew Y-o-Y
Non-fund based income grew Y-o-Y supported by higher net forex gain, trading & investment income and commercial banking fee; Q-o-Q impacted mainly by lower forex gain, trading & investment income and brokerage income Y-o-Y: +1% RM’mil Y-o-Y: -14% Others N2 Q-o-Q: -30% 892 904 Treasury Related Income
Slide 11: Operating expenses grew 7.6% Y-o-Y
Operating expenses grew 7.6% Y-o-Y mainly from higher personnel and IT related expenses; Q-o-Q saw a decline in overheads as expenses normalised from absence of one-off increases in personnel and IT costs in preceding quarter; CIR improved further to 49.1% RM’mil Y-o-Y: +8% Y-o-Y: +2% 1,661 1,543 16
Slide 12: Loans grew 3.1% Y-o-Y driven by mortgage and SME growth
Loans grew 3.1% Y-o-Y mainly driven by continued mortgage and SME growth partially offset by large corporate repayments and impact of stronger RM in Singapore Composition Jun Dec Jun Jun Dec RM’mil 2018 2017 YTD 2017 YoY 2018 2017 % % % % GROUP RETAIL 80,544 76,266 5.6 71,722 12.3 50 48 Mortgage 50,
Slide 13: Marginal increase in total deposits while CASA grew 4.2%
Marginal increase in total deposits as we managed overall liquidity while CASA grew 4.2% Y-o-Y; CASA ratio remained healthy at 29.0% although balance was lower compared to end of 2017 Customer Deposits CASA RM’bil RM’bil Y-o-Y : +0.1% 6M Growth : -0.1% Y-o-Y : +4% 6M Growth : -5% 165.8 166.2 166.0 5
Slide 14: Allowances for loan impairment moderated; gross impaired loans ratio uptick
Allowances for loan impairment moderated further and credit charge ratio improved; Uptick in gross impaired loans ratio; Loan loss coverage maintained above 100%*N1 250 RM’mil Allowances for Loan Impairment 0.5 0% RM’mil Asset Quality 4,400 0.37% 0.35% 2.39% 2.38% 0.4 0% 2.29% 2.31% 2.29% 2.33% 2.23
Slide 15: O&G Exposure (Loans + Bonds) closely managed
O&G Exposure (Loans + Bonds) closely managed and continued to declined 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 Jun 2018 3.3 2.0% 1.6 1.0% 4.9 3.0% Mar 2018 3.3 2.0% 1.7 1.1% 5.0 3.1% O
Slide 16: Revenue increased across all domestic segments except Insurance
Revenue increased across all domestic segments except Insurance; Higher profit from CBIB’s net fund based & non-fund based income and Treasury’s net fund based income; Singapore improved from lower allowances for expected credit losses Revenue 13% 1,178 1,044 9% 5% 802 RM’ mil 9% 737 703 669 497 544
Slide 17: Interim cash dividend of 7.5 sen per share declared
Interim cash dividend of 7.5 sen per share declared Market Capitalisation Dividend Per Share (sen) 5.46 5.40 5.50 RHB Capital RHB Bank 5.06 5.00 5.00 4.68 4.71 15.00 21.9 21.7 20.3 20.1 12.00 4.50 18.8 18.9 12.00 10.00 4.00 7.00 7.50 6.00 12.00 3.50 7.50 6.00 5.00 5.00 - 3.00 28 Jun 31 Dec 30 Jun 31
Slide 18: Strong capital position for the Group and key banking subsidiaries
Strong capital position for the Group and key banking subsidiaries 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% 14.5% 14.7% 17.7% 7% 15.9% 16.1% 10. 0% 13.9% 14.2% 10. 0% 8.0 % 17.2% 8.0 % 13.1% 13.4% 12.4% 12.7% 3% 6.0 % 6.0 % 4.0 % 4.0 % -1%
Slide 19: Strategy Update
Executive Summary H1 2018 Financial Results Strategy Update Summary and Outlook
Slide 20: FIT22 Key Highlights
FIT22 Key Highlights Fund our Journey • Affluent : Grew number of Premier customers by 5.7% in H1 2018 to 48.5k customers, of which 38% are SME owners. Total AUM of Premier customers grew by 4.4% to RM26.0 bil • SME : Grew Business Banking loans by 2.9% in H1 2018 to RM24.6 bil driven by a 5.1% grow
Slide 21: Summary and Outlook
Executive Summary H1 2018 Financial Results Strategy Update Summary and Outlook
Slide 22: Economic Outlook
Economic Outlook Malaysia is expected to register a moderate GDP expansion of 5.0% in 2018, against 5.9% growth registered in 2017 Growth is expected to be led by an acceleration in private sector consumption while exports, private investment and public spending are anticipated to grow at a slow
Slide 23: Concluding Remarks
Concluding Remarks The Group delivered sustained performance in H1 2018, continuing our solid start to the year Loans and financing continued to be driven by growth in mortgages and SME Prudent management of funding cost and impact of OPR hike in January 2018 resulted in further improvement to
Slide 24: RHB Banking Group Revised Scorecard for 2018
RHB Banking Group Revised Scorecard for 2018 Top Level Indicators Original Target 2018 Revised Target 2018 ROE 9.0% - 10.0% 9.0% - 10.0% Loans Growth 6% 3% - 4% 4% - 5% CASA Growth 10% (MY Retail & BBG) Gross Impaired Loans Ratio <2.2% <2.2% Cost to Income Ratio <50% <50% Overseas Profit Contributio
Slide 25: www.rhbgroup.com
www.rhbgroup.com INVESTOR RELATIONS CONTACT: Haryati Yahya Head, Investor Relations +(603) 9280 2489 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, financi
Slide 26: Key Business Highlights
APPENDIX Key Business Highlights
Slide 27: Retail Banking
Retail Banking MortgageN1 Auto FinanceN1 RM’bil Y-o-Y: +16% RM’bil Y-o-Y: +2% 9.0 60. 0 8.0 50. 0 7.0 6.0 40. 0 5.0 8.1 8.2 30. 0 50.5 4.0 20. 0 43.4 3.0 2.0 10. 0 1.0 0.0 0.0 Jun 2017 Jun 2018 Jun 2017 Jun 2018 Personal LoansN1 DepositsN1 RM’bil Y-o-Y: +12% RM’bil Y-o-Y: +27% 50.1 44.6 7.0 6.5 6.0
Slide 28: Investment Banking – Market Positions & Asset Management (1/2)
Investment Banking – Market Positions & Asset Management (1/2) RM’bil Asset Under Management YTD Jun 2018 Y-o-Y: -4% Market Ranking Share Equity: 51.8 49.7 th - By value 5 7.2% 7.2 - By volume 3rd 11.4% 6.8 19.0 12.9 Debt Capital Markets: - MYR sukuk 3rd 21.3% - Total MYR bonds (Conventional 3rd 18.
Slide 29: Investment Banking – Market Position (2/2)
Investment Banking – Market Position (2/2) YTD June 2018 Ranking Market Share DCM Debt Capital Markets: Lembaga Pembiayaan Perumahan Sektor - MYR sukuk 3rd 21.3% Awam (LPPSA) RM3.0 bil issuance out of RM25.0 bil ICP/IMTN Programme - Total MYR bonds 3rd 18.1% Joint Lead Manager & Joint Lead Arranger
Slide 30: Business Banking
Business Banking Gross LoansN1 Customer DepositsN1 RM’bil RM’bil Y-o-Y: +7% Y-o-Y: +8% 25. 0 21.8 23.5 24. 5 24. 0 13.3 23. 5 23. 0 12.6 24.6 22. 5 22. 0 21. 5 22.9 21. 0 20. 5 9.2 10.2 20. 0 Jun 2017 Jun 2018 Jun 2017 Jun 2018 Fixed Deposits Demand Deposits N1 SME Market Share RM’bil Asset Quality
Slide 31: Islamic Banking
Islamic Banking PBT Gross Financing RM’mil RM’bil Y-o-Y: +20% 50.0 Y-o-Y: +9% 45.0 40.0 35.0 30.0 46.0 25.0 480 20.0 38.3 432 15.0 349 10.0 304 275 253 5.0 - Jun 2017 Jun 2018 2014 2015 2016 2017 H1 H1 Market 8.3% 8.9% 2017 2018 Share Asset Quality Gross Financing/ RM’mil Total Gross Financing (Dome
Slide 32: RHB Singapore
RHB Singapore SGD’mil Loans, Deposits & Total Assets PBT SGD’bil 80 74 8.0 0.4 6.7 6.3 60 32 34 40 23 0.2 0.3 42 46 (89) (97) (27) 29 20 7.6 (12) 6.0 6.5 6.0 - (26) (6) 5.0 4.4 (2 0) 4.2 3.7 3.7 (1) (4 0) (81) (91) 2016 2017 Jun (6 0) (8) 2018 (8 0) (1 00) (6) Deposits 2014 2015 2016 2017 H1 H1 Gros