Rhb Bank Bhd. · MYX:RHBBANK
Rhb Bank Bhd — H1 2016 Earnings Presentation
36 slides from Rhb Bank Bhd's earnings presentation, Aug 24, 2016
Slide 1: Analysts Presentation First Half 2016 Financial Results
Analysts Presentation First Half 2016 Financial Results Dato' Khairussaleh Ramli Group Managing Director RHB Banking Group 24 August 2016
Slide 2: Executive Summary
Executive Summary H1 2016 Financial Results Corporate and Strategy Update Summary and Outlook
Slide 3: Executive Summary (1/3)
Executive Summary (1/3) First half 2016 pre-tax profit at RM1,224.8 million, 12.7% lower y-o-y. Net profit at RM915.1 million, 14.7% lower y-o-y. Earnings Profits affected by full impairment on a corporate bond in Singapore. On normalised basis, pre-tax and net profit increased by 16.2% and 13.8
Slide 4: Executive Summary (2/3)
Executive Summary (2/3) Treasury & Global Market: 14.7% increase in pre-tax profit to RM439.2 million due mainly to higher net fund based income Business Business Banking: 49.4% increase in pre-tax profit to RM229.0 million due mainly due to Performance lower allowances for loans and financing a
Slide 5: Executive Summary (3/3)
Executive Summary (3/3) Proposed interim dividend of 5 sen per share for FY2016, representing 22% payout based on Dividend H1 FY2016 results Board: Board & Tan Sri Azlan Zainol - Non-Independent Non-Executive Chairman Management Newly appointed Independent Non-Executive Directors - Tan Sri Saw
Slide 6: RHB Banking Group Scorecard For 2016
RHB Banking Group Scorecard For 2016 Top Level Indicators Target 2016 Actual H1 2016 ROE 10% 10.5% N1 Loans Growth 8% 0.2% N2 CASA Growth 8% 7.2% N2 Gross Impaired Loans Ratio ≤ 2.0% 2.06% Cost to Income Ratio ≤ 53% 49.5% Overseas Profit Contribution 10% -13% N1 Annualised N2 Change from Dec 2015 Pa
Slide 7: H1 2016 Financial Results
Executive Summary H1 2016 Financial Results Corporate and Strategy Update Summary and Outlook
Slide 8: Emphasis on profitability and quality growth continue to show good progress
Emphasis on profitability and quality growth continue to show good progress with positive JAW, though results impacted by one-off charge in 2016 and one-off write-back in 2015 Financial Position Financial Results Key Financial Ratios Operating Non Interest Total Gross Total Profit Before ROE N1 Inco
Slide 9: Robust growth in operating profit driven by strong net fund based income
Robust growth in operating profit driven by strong net fund based income and effective cost management initiatives; profitability affected by one-off impairments Q-o-Q Y-o-Y Q2 Q1 Change H1 H1 Change RM’mil 2016 2016 % 2016 2015 % Net Interest Income 853 892 -4 1,745 1,640 6 Net Islamic Fund Base In
Slide 10: Solid net fund based income growth
Solid net fund based income growth attributable to focus on liquidity management efforts, low cost deposits and growth in chosen market segments RM’bil Y-o-Y: +8% Y-o-Y: +6% 4.80 4.99 Q-o-Q: -4% 2.79 2.82 2.38 2.53 2.45 2.01 2.17 1.38 1.42 1.39 1.00 1.11 1.06 Q2 2015 Q1 2016 Q2 2016 H1 2015 H1 2016
Slide 11: Non fund based income held up well under challenging market conditions
Non fund based income held up well under challenging market conditions - lower Fx gain and fee income but negated by higher insurance underwriting surplus Y-o-Y: -1% RM’mil Non Fund Based Income H1 H1 Y-o-Y RM’mil 2016 2015 Change Y-o-Y: +2% 46 42 233 264 -12% Fee Income - IB Related (A) Q-o-Q: +4%
Slide 12: Operating expenses down 4%
Operating expenses down 4%, effective cost optimisation measures continue to deliver positive results, maintaining cost-to-income ratio < 50% Y-o-Y: -4% Y-o-Y: -4% 154 198 Q-o-Q: +4% 151 151 349 363 Personnel Cost 79 Establishment Cost 98 100 89 Marketing Expenses 70 81 174 178 185 999 Admin & Gener
Slide 13: Overall quality of Group's loan portfolio remained fundamentally sound
Overall quality of Group’s loan portfolio remained fundamentally sound notwithstanding higher gross impaired loans ratio - impacted by a large corporate being classified as impaired Asset Quality RM’mil RM’mil 3.60% 200 0.25% 4,200.0 2.99% 3.10% 0.2 5% 2.81% 0.21% 180 0.19% 2.60% 0.16% 0.18% 0.2 0%
Slide 14: Total assets relatively stable; shareholders' funds increased
Total assets relatively stable; shareholders’ funds increased with completion of rights issue and internal reorganisation Change Balance Sheet Dec Jun for 6M 2016 RM’mil 2015 2016 % Total Assets 227,938 227,150 - Total Financial Assets/ 46,897 44,669 -5 Investments - Financial Assets FVTPL 1,626 1,5
Slide 15: Loan growth picked up in Q2 after a contraction in Q1
Loan growth picked up in Q2 after a contraction in Q1, SME’s growth offsetting decrease in corporate segment Domestic Loans Market Share RM’bil Y-o-Y: +5% 9.7% 6M Growth: +0.2% 9.5% Q-o-Q: +1.4% 9.4% 9.3% 9.2% 160 .0 150 .0 140 .0 2012 2013 2014 2015 Jun 2016 130 .0 Loans by Customer Type 151.4 149.
Slide 16: We continue to exercise balance sheet discipline
We continue to exercise balance sheet discipline, pacing growth and focusing on risk adjusted returns on capital RM’mil 422 - 18 - 171 - 250 1,198 - 723 - 886 2,502 - 1,846 72 151,386 151,686 151,686 Dec 2015 Purchase of Purchase of Construction Credit Card Purchase of Personal Working Purchase of P
Slide 17: Loans growth driven mainly by Business Banking
Loans growth driven mainly by Business Banking; Corporate loans impacted by large corporate repayments; Retail loans was relatively flat as growth in mortgages was offset by contraction in auto financing and loans for purchase of securities Composition 10% 10% Jun 2015 66.7 68.2 68.4 Dec 2015 Jun 20
Slide 18: Build up liquidity to ensure ample funding to support business growth
Build up liquidity to ensure ample funding to support business growth, focus on CASA - domestic CASA grew at annualised 9.2%, outpacing the industry Customer Deposits CASA RM’bil RM’bil Y-o-Y: +11% Y-o-Y: +4% 6M Growth : +7% 6M Growth: +4% 40.7 38.0 170 .0 36.8 160 .0 8.9 8.2 8.5 150 .0 140 .0 164.1
Slide 19: Our funding profile has benefited from rights issue proceeds
Our funding profile has benefited from rights issue proceeds; improvement in market share across all types of deposits Funding Composition Domestic Market Share 2% 2% 1% 2% 2% 2% 11% 11% 13% 10. 0% 9.3% 9.5% 10% 10% 8% 8.8% 9.0% 9.0 % 8.7% 8.4% 8.5% 8.5% 8.0 % 8.2% 8.3% 8.3% 8.0% 7.4% 7.4% 7.0 % 7.3
Slide 20: On a normalised basis, all businesses reported growth
On a normalised basis, all businesses reported growth - GIB impacted by one- off impairment on a corporate bond; Retail had one-off write back on loan loss impairment from model refinement on mortgage portfolio in 2015 Pre-tax Profit Normalised - As Reported Pre-tax Profit 664 H1 2015 570 570 533 H1
Slide 21: Capital adequacy of Group and key banking subsidiaries remained strong
Capital adequacy of Group and key banking subsidiaries remained strong RHB Bank Group RHB Bank 20. 0% 20. 0% 15% 18. 0% 15% 18. 0% 16. 0% 16. 0% 17.2% 11% 14. 0% 11% 14. 0% 12. 0% 15.4% 12. 0% 7% 7% 10. 0% 10. 0% 14.7% 13.3% 8.0 % 13.3% 3% 8.0 % 12.2% 3% 6.0 % 10.5% 13.0% 6.0 % 4.0 % 10.2% 4.0 % 10.
Slide 22: Declared interim cash dividend of 5 sen per share
Declared interim cash dividend of 5 sen per share Market Capitalisation RHB Capital RHB Bank 7.69 7.90 7.62 8 6.00 7 5.67 5.00 6 4.68 5.00 5 4 4.00 3 20.1 3.00 20.1 19.6 17.4 2 19.2 1 18.8 2.00 0 1.00 -1 0.0 -2 - 0.00 2012 2013 2014 Dec 2015 28 Jun 2016^ 23 Aug 2016 Market Capitalisation (RM bil) Sh
Slide 23: Corporate and Strategy Update
Executive Summary H1 2016 Financial Results Corporate and Strategy Update Summary and Outlook
Slide 24: We have made good progress across the initiatives under IGNITE 2017
We have made good progress across the 17 initiatives under IGNITE 2017 Retail Banking Launched new RHB Premier banking value proposition Launched new product bundling targeting Millenials Residential property loans grew 7.4% vs. industry of 4.7% in 1H 2016 All branches are enabled with Easy
Slide 25: We will continue to execute our strategies anchoring on the 3 key themes
We will continue to execute our strategies anchoring on the 3 key themes Affluent segment strategy 1 • Launched Affluent mobile App in Q4 2016 Mass Affluent 2 • Online account opening bundled with incentives to enhance transactions/payments SME growth strategy 3 • Deepen share of wallet to improve s
Slide 26: Summary and Outlook
Executive Summary H1 2016 Financial Results Corporate and Strategy Update Summary and Outlook
Slide 27: Economic Outlook
Economic Outlook H2 2016 will continue to be challenging as macro-economic uncertainties in most parts of the world will not spare Malaysia from the headwinds. Risks on external demands and softer consumer sentiments are expected to moderate Malaysia’s GDP growth in 2016 to about 4.0% from 5.0%
Slide 28: Concluding Remarks
Concluding Remarks We recorded strong pre-provisioning operating profit, though impairment on a corporate bond affected bottom line Improvement in normalised profit reflects depth and quality of the RHB franchise and positive outcome of our reframed strategy of focusing on performance. We will s
Slide 29: www.rhbgroup.com
www.rhbgroup.com INVESTOR RELATIONS CONTACT: Ms Yap Choi Foong Group Chief Financial Officer +(603) 9280 2489 cfyap@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, financ
Slide 30: Key Business Highlights
APPENDIX Key Business Highlights
Slide 31: Retail
Retail Continuous emphasising on return on risk adjusted capital and focused growth in targeted market segment Mortgage Auto Finance RM’bil RM’bil Y-o-Y: +16% Y-o-Y: -13% 6M Growth: +7% 6M Growth: -8% 45. 0 14. 0 40. 0 12. 0 35. 0 10. 0 30. 0 8.0 25. 0 20. 0 34.9 37.9 40.4 6.0 11.5 10.9 15. 0 4.0 10
Slide 32: CIB - Prominent market position, maintaining 1st position in M&A
CIB - Prominent market position, maintaining 1st position in M&A in both value and deal count YTD June 2016 Ranking Market Share DCM Tadamun Services Berhad Debt Capital Markets: RM350 mil - MYR sukuk 2 21.5% Wakalah Bi al-Istithmar Sukuk Offering Joint Principal Adviser, Joint Lead Arranger & - Tot
Slide 33: Equities, Futures & Asset Management
Equities, Futures & Asset Management YTD Jun 2016 RM’bil Asset Under Management Equities Market Ranking Y-o-Y: +7% (by value) Share 6M Growth: +2% Malaysia - By value 7.8% 5th 52.0 53.1 49.4 - By volume 12.4% 3rd 7.9 5.9 8.2 Singapore 3.6% 15th Hong Kong 0.1% 95th 21.4 21.3 21.3 th Indonesia 2.6% 14
Slide 34: 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: +6% 6M Growth: +7% 6M Growth: +2% 21. 0 20.6 21.5 21.8 19. 0 17. 0 15. 0 11.8 12.3 12.1 13. 0 19.8 21.1 11. 0 18.9 9.0 7.0 8.8 9.2 9.7 5.0 Jun 2015 Dec 2015
Slide 35: Islamic Financial Performance
Islamic Financial Performance Strong performance with enhanced contribution to the Group and increasing market share PBT Gross Loans RM’mil RM’bil Y-o-Y: +22% 350 6M Growth: +9% 40.0 300 250 Y-o-Y: +17% 35.0 30.0 200 25.0 349 33.9 150 304 31.1 27.7 20.0 100 209 218 197 15.0 169 10.0 50 Jun 2015 Dec
Slide 36: RHB Singapore - Affected by one-off impairment on a corporate bond
RHB Singapore - Affected by one-off impairment on a corporate bond and a weaker capital and financial market PBT Loans, Deposits & Total Assets SGD’mil SGD’bil 74 8.3 8.3 7.5 60 32 0.5 0.6 42 39 34 0.3 40 9 4 30 7.8 7.7 7.2 42 46 4.7 4.9 5.3 35 20 33 32 4.3 -59 4.2 4.1 - (12) (2) (2 0) (55) (4 0) (6