Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — FY2016 Earnings Presentation
34 slides from Rhb Bank Bhd's earnings presentation, Feb 24, 2017
Slide 1: Analysts Presentation FY2016 Financial Results
Analysts Presentation FY2016 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 24 February 2017
Slide 2: Executive Summary
Executive Summary FY2016 Financial Results Corporate and Strategy Update Summary and Outlook
Slide 3: Highlights of FY2016 Performance
Highlights of FY2016 Performance Operating profit before allowances recorded strong growth of 21.6% to RM3.1 billion (8.4% excluded CTS expenses), underpinned by healthy net fund based income growth and effective Profitability cost management initiatives Net profit increased by 1.0% to RM1.7 bil
Slide 4: RHB Banking Group Scorecard For 2016
RHB Banking Group Scorecard For 2016 Top Level Indicators Target 2016 Actual FY2016 ROE 10% 8.5% Loans Growth 8% 2.0% CASA Growth 8% 11.9% Gross Impaired Loans Ratio ≤ 2.0% 2.43% Cost to Income Ratio ≤ 53% 50.0% Overseas Profit Contribution 10% -11.4% Page | 4
Slide 5: Executive Summary: FY2016 Financial Results
Executive Summary FY2016 Financial Results Corporate and Strategy Update Summary and Outlook
Slide 6: Operating matrix continued to demonstrate resilience and improvement
Operating matrix continued to demonstrate resilience and improvement, though 2016 performance was impacted by impairment on corporate bond and loan loss on certain corporate loan accounts Financial Position Financial Results Key Financial Ratios Operating Non Interest Total Gross Total Profit Before
Slide 7: Robust growth in operating profit before allowances
Robust growth in operating profit before allowances driven by strong net fund based income and effective cost management initiatives; profitability affected by impairment on other assets and increase in individual loan allowances Q4 Q3 Q4 Q-o-Q Y-o-Y FY FY Y-o-Y 2016 2016 2015 Change Change 2016 201
Slide 8: Active management of funding and liquidity resulted in solid net fund based income growth
Active management of funding and liquidity resulted in solid net fund based income growth and NIM improvement RM’bil Y-o-Y: +3% Y-o-Y: -1% 9.77 9.88 Q-o-Q: +3% 5.58 5.56 2.53 2.53 2.45 2.47 2.43 4.19 4.32 1.43 1.42 1.39 1.37 1.38 1.10 1.11 1.06 1.06 1.09 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 2015
Slide 9: Volatility in capital and financial market affected fee income
Volatility in capital and financial market, and fx fluctuations affected fee income, partially offset by higher insurance underwriting surplus and trading/investment income Y-o-Y: -5% Non Fund Based Income Y-o-Y RM’mil Y-o-Y: -30% RM’mil 2016 2015 Change Q-o-Q: -25% Total Fee Income (A) 1,143 1,261
Slide 10: Cost-to-income ratio improved from efficient cost management
Cost-to-income ratio improved from efficient cost management 12% personnel cost savings was partly offset by higher communication expenses and higher IT expenses as the Group continued to invest in technology capabilities and infrastructure Y-o-Y: -7% Y-o-Y: -10% Q-o-Q: +3% 337 241 363 238 736 731 1
Slide 11: Loans growth driven by retail and SME
Loans growth driven by retail and SME, partly offset by corporate repayments; portfolio rebalancing showing steady progress Y-o-Y Growth Composition 2016 2015 % 2016 2015 GROUP RETAIL 70,138 68,191 3 45% 45% Mortgage 40,902 35,529 15 26% 23% Commercial Property Financing 4,176 4,104 2 3% 3% Securiti
Slide 12: Healthy deposits growth driven by CASA
Healthy deposits growth driven by CASA resulting in higher CASA composition Customer Deposits CASA Y-o-Y: +5% Y-o-Y: +12% RM’bil RM’bil Q-o-Q: -0.1% Q-o-Q: +4% 166.0 165.8 42.5 158.2 40.7 38.0 40.7 42.5 9.3 38.0 9.1 8.5 26.4 24.9 31.8 31.6 33.2 29.5 88.4 98.9 98.4 Dec 2015 Sep 2016 Dec 2016 Dec 2015
Slide 13: Asset quality impacted by certain corporate accounts in oil and gas
Asset quality impacted by certain corporate accounts in oil and gas and pre-emptive provision for legacy steel related exposure RM’mil Allowances for Loan Impairment RM’mil Asset Quality 1,00 0 1.0 0% 0.80% 3.60% 900 0.8 0% 0.63% 2.99% 3.10% 800 0.6 0% 4,500.0 2.81% 2.43% 2.60% 0.39% 700 0.31% 0.4 0
Slide 14: Exposure to oil and gas industry actively managed
Exposure to oil and gas industry actively managed; Steel related exposure is negligible Oil and Gas Related Industry Steel Related Upstream Downstream Total Industry Total Loans Outstanding 2.6% 1.0% 3.6% 1.2% 4.9% Oil & Gas Exposure 8% Country % of Loans Outstanding 46% Malaysia 84% 46% Singapore 1
Slide 15: Retail, Business Banking and International Business registered profit growth
Retail, Business Banking and International Business registered profit growth year-on-year N1 Pre-tax Profit 1,058 976 886 882 573 526 447 307 103 35 36 2015 2016 -269 Wholesale Banking GIB N2 Retail BBG CBIB Treasury Others Singapore Business Unit Y-o-Y Growth ▲ 9% ▲ 45% ▼ 8% ▼ 0.4% ▲ 3% ▼ >100% N1
Slide 16: 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% 15% 18. 0% 15% 18. 0% 16. 0% 16. 0% 11% 14. 0% 11% 14. 0% 12. 0% 12. 0% 7% 7% 15.2% 10. 0% 10. 0% 15.4% 8.0 % 13.4% 17.2% 8.0 % 12.8% 13.4% 11.0% 3% 10.9% 11.3% 3% 6.0 % 10.7% 13.1% 6.0 % 13.1%
Slide 17: Proposed final cash dividend of 7 sen per share, 29% payout
Proposed final cash dividend of 7 sen per share, 29% payout Market Capitalisation RHB Capital RHB Bank 7.69 7.90 7.62 4.94 8 5.00 4.71 7 4.68 4.80 5.67 6 4.60 5 4.40 4 4.20 3 19.8 4.00 20.1 19.6 18.8 18.9 17.4 2 3.80 19.2 1 3.60 0 3.40 -1 3.20 0.0 -2 - 3.00 N1 2012 2013 2014 2015 28 Jun 31 Dec 23 Fe
Slide 18: Executive Summary: Corporate and Strategy Update
Executive Summary FY2016 Financial Results Corporate and Strategy Update Summary and Outlook
Slide 19: Key updates on the progress of IGNITE 2017 (1/2)
Key updates on the progress of IGNITE 2017 (1/2) Retail Banking Mortgages grew 13.3% vs. industry of 9.2% in 2016 Affluent AUM grew by 12% since the launch of our Affluent value proposition in Jul 2016 Retail CASA grew by 7.5% vs industry of 6.8% in 2016 All branches have been enabled with E
Slide 20: Key updates on the progress of IGNITE 2017 (2/2)
Key updates on the progress of IGNITE 2017 (2/2) International and Loan growth of 4% for Cambodia, 28% for Thailand and for 71% for Laos in 2016 Singapore Singapore – Loans growth of 1.4% vs. industry of 0.5% – Deposit growth of 23.1% vs. industry of 6.5% – Closure of Bureau-de-Change business,
Slide 21: Executive Summary: Summary and Outlook
Executive Summary FY2016 Financial Results Corporate and Strategy Update Summary and Outlook
Slide 22: Economic Outlook
Economic Outlook Malaysia’s GDP is forecast to grow 4.5% in 2017: • Domestic demand to remain resilient • Exports to show moderate recovery, on the back of higher commodity price, better electrical & electronics export and improving global trade outlook • Public spending and private investment exp
Slide 23: Concluding Remarks
Concluding Remarks Our core earnings continued to demonstrate resilience amidst the weak economic conditions, resulting from prudent funding cost management and lower overhead costs Our core commercial banking of Retail & SME registered profit growth and our efforts to grow CASA is showing good
Slide 24: RHB Banking Group Scorecard For 2017
RHB Banking Group Scorecard For 2017 Top Level Indicators Target 2017 Actual FY2016 ROE 9% - 10% 8.5% Loans Growth 5% 2.0% CASA Growth 8% 11.9% Gross Impaired Loans Ratio < 2.5% 2.43% Cost to Income Ratio < 50% 50.0% Overseas Profit Contribution 10% -11.4% Page | 24
Slide 25: 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 26: Key Business Highlights
APPENDIX Key Business Highlights
Slide 27: Retail
Retail Continued emphasis on return on risk adjusted capital and focused growth in targeted market segment Mortgage Auto Finance RM’bil RM’bil Y-o-Y: +13% Y-o-Y: -15% 50. 0 12. 0 45. 0 10. 0 40. 0 35. 0 8.0 30. 0 25. 0 6.0 42.9 10.9 20. 0 15. 0 37.9 4.0 9.2 10. 0 2.0 5.0 0.0 0.0 2015 2016 2015 2016
Slide 28: IB market position
IB market position YTD Dec 2016 Ranking Market Share DCM DanaInfra Nasional Berhad Debt Capital Markets: RM4.5 bil IMTN issuance out of RM46 bil - MYR sukuk 3 18.5% ICP/IMTN Programme Joint Lead Arranger & Joint Lead Manager - Total MYR bonds 4 15.7% Housing and Development Board Singapore (Conventi
Slide 29: Equities, Futures & Asset Management
Equities, Futures & Asset Management YTD Dec 2016 Asset Under Management Equities Market RM’bil Ranking Y-o-Y: +1% (by value) Share Malaysia - By value 7.7% 5th 52.3 52.0 - By volume 12.2% 3rd 8.2 7.9 th Singapore 3.5% 16 Hong Kong 0.1% 91st 21.3 19.7 th Indonesia 2.1% 18 Thailand 1.5% 28th Cambodia
Slide 30: Business Banking and SME
Business Banking and SME Continued improvement in market share and asset quality RM’bil Gross Loans RM’bil Customer Deposits Y-o-Y: +12% Y-o-Y: +5% 21. 0 21.5 22.5 19. 0 17. 0 15. 0 12.3 12.9 22.1 19.8 13. 0 11. 0 9.0 7.0 9.2 9.6 5.0 2015 2016 2015 2016 Fixed Deposits Demand Deposits SME Market Shar
Slide 31: Islamic Financial Performance
Islamic Financial Performance Strong performance with enhanced contribution to the Group and increasing market share PBT Gross Financing RM’mil Y-o-Y: +24% RM’bil Y-o-Y: +10% 350 40.0 300 35.0 250 30.0 200 432 25.0 349 34.1 150 304 20.0 31.1 100 209 218 15.0 10.0 50 2015 2016 0 2012 2013 2014 2015 2
Slide 32: RHB Singapore - Affected by impairment on a corporate bond and loan allowances in oil and gas
RHB Singapore - Affected by impairment on a corporate bond and loan allowances in oil and gas PBT Loans, Deposits & Total Assets SGD’mil SGD’bil 74 8.0 80 7.5 32 0.3 0.4 60 42 34 39 40 9 4 7.2 6.0 7.6 35 42 46 4.9 33 20 (92) 4.1 4.2 - (12) (2 0) (4 0) (81) (6 0) (8 0) 2015 2016 (11) (1 00) 2012 2013
Slide 33: Total assets higher by 4%; shareholders' funds increased
Total assets higher by 4%; shareholders’ funds increased with completion of rights issue and internal reorganisation Q-o-Q Y-o-Y Balance Sheet Dec Sep Dec Change Change RM’mil 2015 2016 2016 % % Total Assets 227,938 229,293 236,679 3 4 Total Financial Assets/ 46,897 44,301 48,799 10 4 Investments -
Slide 34: Funding sources well diversified
Funding sources well diversified, benefited from rights issue proceeds in 2015 and USD500 million senior debt securities issued in Oct 2016 Funding Composition Domestic Market Share 2% 2% 2% 2% 2% 3% 11% 13% 12% 10. 0% 10% 8% 10% 9.3% 8.8% 9.0% 9.0% 9.0 % 8.4% 8.5% 8.5% 8.0 % 8.5% 8.3% 8.2% 8.0% 7.9