H1FY18 RESULTS ANALYST PRESENTATION. 26 February 2018

Transcription

1 RESULTS ANALYST PRESENTATION 26 February

2 Agenda 1 Financial Highlights:

3 Key financial highlights Strong underlying performance led by healthy top-line, improved efficiencies & stable asset quality Total Income Opex & CIR Operating Profit RM'mil 2,275 6% 2,407 RM'mil 43.6% 42.5% RM'mil 1,284 1, ,023 8% GIL & Coverage Ratio Gross Loans Deposits 167% 107% 151% 96% RM'bil % RM'bil % 0.86% 0.97% HLB ended 31 December

4 Management guidance Most KPIs met with a solid first half performance Target FY18 Achieved Gross Loan Growth 3-4% (revised) 1.8% y-o-y LD Ratio ~82% 80.8% P Net Interest Margin >2.1% 2.13% P Non- Interest Income Ratio ~26% 26% P Cost-to-income Ratio <44% 42.5% P Gross Impaired Loan Ratio <1% 0.97% P Return on Equity 10% - 11% 11.5% P HLB ended 31 December

5 Profit & Loss Net profit improved on strong revenue momentum, solid cost control and recovery from BOCD Profit after Tax RM'mil Achieved 5-Year record high PAT RM mil YoY % Total Income 2,275 2,407 +6% Operating expenses (991) (1,023) +3% Operating profit before allowances 1,284 1,384 +8% Loan allowances & other impairments (53) (53) - Share of profits from associates & JV % Profit before tax 1,371 1, % Profit after tax 1,093 1, % HLB ended 31 December

6 Net Interest Income & NIM Continued improvements in net interest income; NIM stable 2.05% 2.13% 2.08% 2.14% 2.14% 2.13% 2.13% RM'mil ,635 1,782 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Net Interest Income NIM HLB ended 31 December

7 Non Interest Income Continued growth in wealth management income; NII ratio within guidance at 26% 28.1% 26.0% Wealth Management Income RM mil RM49 mil RM59 mil 21% Credit Card Fees Fee income: of which RM123 mil RM115 mil 7% Fee Income Forex Non Interest Income ratio Trading & Investment Islamic and others HLB ended 31 December

8 Operating Expense 6 consecutive quarters of positive JAWS; CIR improved further to 42.5% Composition of Operating Expenses RM mil 43.6% 42.5% Admin & general 12% 991 1, Marketing 8% Personnel cost 55% Establishment 25% ent 24% Personnel cost Marketing CIR Establishment Admin & general HLB ended 31 December

9 Loans Growth led by mortgages, SME and overseas RM'mil 104, , , % y-o-y 8.0% 7.9% 7.9% 7.7% 7.6% 125, , % 11.3% 11.3% 56,861 59,118 51,510 FY16 FY % 9.4% 9.1% 18,446 17,584 17,311 FY16 FY17 7.5% 7.5% 7.0% 7.0% 7.0% 6.9% 1,850 1,812 1,752 3,755 3,998 3,911 19,226 20,377 20,767 FY14 FY15 FY16 FY17 FY16 FY17 Credit Card Personal Loan Market Share % FY16 FY17 Note: * Loan figures are based on group, but market share data is based on domestic only. HLB ended 31 December

10 Asset Quality GIL ratio stable q-o-q; Impaired loans coverage above 150% with pledged securities Gross Impaired Loans Loan Impairment Coverage (LIC) Provisions made on GIL Securities pledged 1.77% 1.18% 1.61% 1.63% 1.63% 1.52% 129% 177% 136% 181% 151% 151% RM'mil 0.84% 0.79% 0.96% 0.97% 120% 96% 96% 1, ,203 1, % 89% 85% 84% 84% FY14 FY15 FY16 FY17 Gross impaired loans GIL Ratio Industry GIL ratio FY14 FY15 FY16 FY17 LIC Industry LIC LIC (incld reg reserve) Note: Industry ratio has been restated by regulators HLB ended 31 December

11 Asset Quality A very stable quarter; no significant stresses on our credit portfolio 1.01% 1.01% 0.82% 943 1,197 1, % 0.09% 0.20% FY16 FY FY16 FY % 0.54% 0.55% 1.42% 1.49% 1.47% % 0.81% 0.85% FY16 FY17 FY16 FY17 FY16 FY17 HLB ended 31 December

12 Deposit Led by strong up-lift from CASA deposits 3.1% y-o-y 8.2% 8.2% 8.6% 8.7% 8.4% 7.5% 7.3% 7.4% 9.0% 9.0% 8.8% 84,719 87,976 89,473 RM'mil 130, , , , ,332 37,185 38,764 41,309 FY16 FY17 FY16 FY % 12.5% 12.0% 7.3% 6.9% 6.6% 81,353 86,176 84,282 62,697 63,340 63,187 FY14 FY15 FY16 FY17 FY16 FY17 FY16 FY17 Note: * Deposit figures are based on group, but market share data is based on domestic only; Business enterprise deposits including FI HLB ended 31 December

13 Liquidity & Capital Robust liquidity and capital positions Loan Deposit Ratio Capital Adequacy^ 82.3% 84.0% 89.3% 91.3% 91.4% 15.3% 15.1% 15.8% 15.3% 15.8% 80.0% 80.9% 81.2% 80.6% 80.8% 13.8% 13.4% 13.1% 12.7% 13.7% 13.3% 13.3% 13.8% 12.9% 13.1% FY14 FY15 FY16 FY17 Q2FY18 Industry LDR HLB LDR Note: * Industry data derived from banking system s commercial banks plus Islamic banks only Liquidity Coverage Ratio (LCR) Minimum requirement in Year 2017 Minimum requirement by Year 2019 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 CET1 Tier 1 Total capital ratio Note: ^ capital base & ratio after proposed dividends LCR 118% 80% 100% HLB ended 31 December

14 Shareholder Value Stronger returns from solid underlying performance; declared higher interim dividend of 16 sen per share Return On Equity & Return on Assets Net Assets & Earnings Per Share % 11.7% 10.2% 11.5% % 1.37% 1.15% 1.33% Q1FY18 Q2FY18 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 ROE ROA NAV/share EPS HLB ended 31 December

15 Agenda 2 Business Update

16 Digital Banking Retail HIGHLIGHTS FOR Active Users Mobile Users Transactional Users Transactional Volume +27% +71% +36% +70% Introduced e-ang Pow on Hong Leong Connect Connect users earn cash every time they send an e-ang Pow PLUS RM100,000 was up for grabs! CNY 2018: 8X growth in total e- angpow transactions 45,000 e-angpows HLB ended 31 December

17 WeChat Pay Marks the start of business collaborations between HLB and Chinese technology giant, Tencent 2017 Latest The first FI to sign-up WeChat Cross Border Master Merchant Acquiring Service Signed up first major merchant in Malaysia; Went live on 13 Feb Million million Active users worldwide Million Active users in Malaysia Chinese tourists HLB ended 31 December 2017 Convenience Allow Chinese tourists to continue using their WeChat accounts to make purchases when visiting Malaysia in RMB as well as other major currencies Easy to Adopt & User Friendly Easy and quick setup to onboard new merchants Simple user interface and payment procedures for customers best experience Opportunity for HLB Leveraging on merchants with the potential to improve on fee & FX income generation WeChat local e-wallet targeted to come to Malaysia in 2018 Creative Marketing 100% Digital transaction, e-receipts, payment confirmation 1 st of the kind payment platform in Malaysia Hotel & F&B reservations, transport, ticketing, investment all done within one app 17

18 Digital Banking Wholesale HIGHLIGHTS FOR Users Transactional Volume Transactional Users Transactional Amount +22% +20% +82% +31% Encouraging response Achievement cv >200 customers have signed up since its launch in November 2017 Best Bank in Malaysia for Asiamoney Cash Management Customer Satisfaction cv Award in Asiamoney magazine s survey in 2017 HLB ended 31 December

19 Digital Transformation Milestones SHIFT: TRADITIONAL >>> DIGITAL COST SAVINGS 42% 75.5m (42%) 30.6m (17%) 8.3m (5%) 78.7m (35%) 29.5m (13%) 21.7m (10%) 84.4m (28%) 28.4m (9%) 49.1m (16%) 42.2m (21%) 12.7m (6%) 72% 54.1m (27%) RM 30 million 67.3m (37%) 96.0m (43%) 138.6m (46%) 89.5m (45%) - 3% FY15 FY16 FY17 H1 FY18 Internet Mobile Branch SST Resulting in a 3% reduction of total cost base HLB ended 31 December

20 Summary Strong set of numbers for first half FY2018 Continued to maintain good traction in top-line growth with strong focus on NIM management and franchise led income. Expenses are tightly managed, delivered positive JAWS for the 6 th consecutive quarter. Credit quality: Stable in the second quarter, with no particular credit stresses in any segment. GIL are well secured with collateral. BOCD: continued to show good momentum with steady recovery; listed on Shanghai Stock Exchange on 31 Jan Liquidity and capital positions remain strong and supportive of further growth. HLB ended 31 December

21 Appendix 3 Supplementary Information

22 Group Performance RM mil Change % (YoY) Q2FY18 Change % (YoY) Change % (QoQ) Net interest income^ 1,635 1, % % +1.2% Non interest income^ % % +13.4% Total income 2,275 2, % 1, % +4.2% Operating expenses* (991) (1,023) +3.2% (516) +3.0% +1.7% Operating profit before allowances* 1,284 1, % % +6.1% Allowances for loans and other impairments (53) (53) +0.3% (10) -62.9% -77.1% Share of profits from associate & JV >100% 130 +>100% -14.5% Profit before tax 1,371 1, % % +6.8% Profit after tax 1,093 1, % % +6.9% HLB ended 31 December

23 HLISB - Key financial highlights Total Net Income Opex & CIR Profit after Tax & Zakat RM'mil % % 31.8% RM'mil % 134 Gross Financing Deposits Capital Adequacy RM'bil % 21.3 RM'bil % % 16.0% HLB ended 31 December

24 Disclaimer This presentation has been prepared by Hong Leong Bank ( HLB ) for selected recipients for information purposes only. The information contained herein is believed to be correct as of the date of this presentation and is given in summary form and does not purport to be complete. HLB does not make any representation or warranty, whether expressed or implied, as to the adequacy, accuracy or completeness of any such information, opinion or estimate contained and shall not be responsible or liable for any consequences of any reliance thereon by any recipient. Opinions and estimates constitute the judgment of HLB as of the date of this presentation and are subject to change without notice. HLB does not act as any recipient s financial advisor or agent and the information contained herein is not intended to be relied upon as advice to any recipient and should not be construed as an offer or recommendation to buy or sell securities. This presentation does not purport to contain all the information that a prospective investor may require and the information contained herein does not take into account the investment objectives, financial situation or needs of every recipient hence it may not be appropriate for all persons. Each recipient is responsible to make his or her own independent assessment of the information provided herein and should not treat the information provided as advice relating to investment or related matters. Each recipient should consult his or her own advisers and must make his or her own independent decision regarding any investment. Certain statements contained in this presentation may be statements of future expectations and involve known and unknown risks and uncertainties. Forward-looking statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. HLB does not have any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Each recipient should not place undue reliance on forward-looking statements, which is believed to be correct only as of the date of this presentation. This presentation is being furnished to each recipient solely for his or her information and may not be reproduced, redistributed, transmitted or passed on, directly or indirectly, to any other person or published electronically or via print, in whole or in part, for any purpose. THANK YOU For further information, please visit or contact: Investor Relations: Jason Teh Head, Corporate Finance & Investor Relations DID: IR@hlbb.hongleong.com.my