KKP Analyst Meeting 1Q16

Transcription

1 KKP Analyst Meeting 1Q16 April 28, Q16 Financial Performance Kiatnakin Phatra April

2 Table of Contents Performance Highlights Commercial Banking Business Capital Market Business Appendix 1Q16 Financial Performance Kiatnakin Phatra April

3 PERFORMANCE HIGHLIGHTS 1Q16 Financial Performance Kiatnakin Phatra April

4 1Q 2016 Key Performance Highlights Commercial Banking Business Loan Growth -1.2% loan growth in 1Q16 Hire Purchase 11.9% YoY decline in industry car sales during first 2 months of 2016 to 108,914 units -0.9% HP loan growth in 1Q16 Increasing penetration rate with 2M16 at 4.7% up from 4.2% at the end of % HP NPLs, declining from 2.4% at the end of 2015 Retail : Non Hire Purchase Good progress on loan expansions with 4.3% growth during 1Q16 Commercial lending -3.0% loan growth YTD RE NPLs increased to 21.4% from 19.7% at end of 2015 while SME NPLs increased slightly Corporate Banking Outstanding loan at Baht 8,075 million, -8.0% growth YTD Lombard loan Outstanding loan at Baht 1,881 million, 50% growth YTD SAM Baht 373 million NPA sales with gain of Baht 198 million Provision expenses Baht 584 million with Baht 350 million general reserve set up in 1Q16 Coverage ratio at 97.2% up from 91.9% at end of 2015 LLR/Required Reserve at 166.7% Funding COF stable at 2.7% from 4Q15 BIS Ratio BIS ratio at 17.19%, Tier I = 14.48% 1Q16 Financial Performance Kiatnakin Phatra April

5 1Q 2016 Key Performance Highlights Capital Market Business Equity Capital Market SET Index closed at 1,407.7 points up 9.3% from end of 2015 Average daily turnover (SET+mai) at Baht 46,540 million improving from 4Q15 but decreased significantly from 1Q15 Combined market share (SET+mai) without Prop. Trade 5.74%, ranked 3rd, (PTSEC = 5.04%, kktrade = 0.70%) Private Wealth Management AUA = Baht 334 billion, up 8% YTD with net new money of Baht 9,534 million Asset Management Business AUM of Mutual Funds and Property Funds = Baht 36,783 million Mutual Fund market share = 0.87% AUM of Private Funds = Baht 10,151 million Investment Business Investment business generated comprehensive revenue of Baht 292 million in 1Q16 1Q16 Financial Performance Kiatnakin Phatra April

6 Net Profits Net Profit (excl. MI) Comprehensive Income (excl. MI) Baht in Million Baht in Million Banking Business CMG ROAE ROAA Banking Business CMG ROAE ROAA Banking Business CMG ROAE ROAA 7.5% 7.1% 8.0% 14.0% 8.0% 8.4% 10.9% 7.6% 8.9% 1.6% 5.6% 7.2% 8.1% 10.0% 10.5% 11.5% 1.2% 1.3% 0.2% 1.2% 1.1% 1.2% 1.7% 2.3% 1.1% 1.4% 0.8% 1.1% 1.2% 1.5% 1.7% 1.9% 8.0% 8.0% 8.4% 8.4% 1.2% 1.2% 1.3% 1.3% 14.0% 14.0% 10.9% 10.9% 7.5% 7.5% 7.1% 7.1% 8.0% 8.0% 1.6% 1.6% 0.2% 0.2% 1.2% 1.2% 1.1% 1.1% 1.2% 1.2% 1.7% 1.7% 2.3% 2.3% 2,8783,317 3,119 2,878 2,878 3,119 3,119 2, , ,024 1,356 1,024 1,356 2, , ,024 1, , ,307 1,132 1, , ,107 2, , , , Q Q14 * 4Q14* * 4Q14* * Restated financial statement 1Q16 Financial Performance Kiatnakin Phatra April

7 1Q16 Net Revenue Breakdown Commercial Banking Business* Capital Market Business Bancassurance 11% Other 7% IB 2% AM 10% Other 2% SAM 8% Int income from loan 74% & Investment 38% Brokerage Fee 48% Baht 3,097 million* Baht 734 million KK Phatra Financial Group Capital Market 19% Commercial Bank 81% *Incl G/L from NPA but excl G/L from car repossession Baht 3,831 million 1Q16 Financial Performance Kiatnakin Phatra April

8 1Q16 Net Interest Income : Non Interest Income Net Interest Income Non Interest Income* RE 14% SME 10% Others 3% SAM 2% Corp 3% Retail 68% IB 1% AM 5% SAM 13% Other 16% Brokerage Fee 24% Investment 18% Baht 2,337 million Bancassurance 23% Baht 1,494 million* Net Interest Income (NII) : Non Interest Income (Non-NII) *Incl G/L from NPA but excl G/L from car repossession Non-NII 39% NII 61% Baht 3,831 million 1Q16 Financial Performance Kiatnakin Phatra April

9 Consolidated Income Statements Baht in million 1Q15 * 2Q15 3Q15 4Q15 1Q16 QoQ YoY Y2014* * Y2015 Interest income 3,702 3,595 3,736 3,743 3,493 (7%) (6%) 15,929 14,776 Interest expense (1,502) (1,392) (1,260) (1,174) (1,156) (2%) (23%) (7,016) (5,328) NII 2,201 2,202 2,476 2,569 2,337 (9%) 6% 8,913 9,449 Fee income ,079 1,024 (5%) 6% 3,863 3,934 Fee expense (106) (104) (130) (123) (124) 1% 18% (411) (463) Net fees income (6%) 4% 3,452 3,471 Other operating income (41%) (25%) 1,546 2,137 G/L from sale of foreclosed assets (149) (87) (165) % (131%) (1,279) (381) Total operating income 3,445 3,167 3,842 4,223 3,679 (13%) 7% 12,633 14,676 Operating expense (1,732) (1,692) (1,696) (2,322) (1,706) (27%) (1%) (6,270) (7,441) Provision Expense (918) (524) (941) (824) (584) (29%) (36%) (3,199) (3,208) Income before income tax ,205 1,077 1,389 29% 75% 3,163 4,027 Net income -Bank ,107 13% 67% 2,734 3,317 Diluted EPS % 66% CI - Bank ,024 1,356 32% 95% 2,878 3,119 Headcount 4,032 3,942 4,028 4,127 4,148 3,984 4,127 * Restated financial statement 1Q16 Financial Performance Kiatnakin Phatra April

10 Financial Performance % 1Q15 2Q15 3Q15 4Q Q16 ROAE Loan Growth (1.8) (3.0) (3.6) (1.2) Retail (3.0) (2.3) (2.1) 0.4 (6.8) (0.7) Commercial 0.8 (2.6) 0.4 (2.5) (3.8) (3.0) Corporate 0.5 (21.2) (8.0) Loan Spread NPLs Ratio (Gross) NPA Sales (Baht in billion) Branches Q16 Financial Performance Kiatnakin Phatra April

11 COMMERCIAL BANKING BUSINESS 1Q16 Financial Performance Kiatnakin Phatra April

12 Loan Growth Gross Loan Composition Baht in billion Baht in billion -2% -3% -3% -2% -2% -3% 0.6% 0.6% -1.2% 250-2% -2% 0.6% 250-3% 0.6% Retail Banking (68.2%) contracted loan Auto Hire Purchase (65.6%) -0.9% loan growth YTD Outstanding HP loans of Baht 115,254 million New : Used = 53:47 HP NPLs decreased to 2.2% from 2.4% at end of 2015 Continuing improvement in loss from repossession/asset cost Other retail loans (2.6%) good progress with 4.3% growth YTD Personal loan - Baht 2,085 million Q14 3Q14 4Q14 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Commercial Corporate SAM Lombard Others Total Retail Commercial Corporate SAM Lombard Others Micro SMEs - Baht 1,361 million Housing loan - Baht 1,097 million Commercial Lending (25.5%) decreased 3.0% YTD RE - Real Estate Development (13.2%) -6.3% loan growth YTD NPLs at 21.4% increasing from 19.7% at end of 2015 SMEs loans (12.3%) 0.7% loan growth YTD NPLs at 6.6% slight increase from 6.5% Corporate Lending (4.6%) Baht 8,075 million outstanding loan, -8.0% loan growth YTD Lombard Loan (1.1%) Baht 1,881 million outstanding loan, 49.9% loan growth YTD 1Q16 Financial Performance Kiatnakin Phatra April

13 Funding Interest Bearing Debt Asset-Liability Duration Baht in billion Duration (yrs) Asset Duration Liability Duration Duration Gap Q14 3Q14 4Q14 CASA Fixed Deposits B/E Debentures Interbank During 1Q16, KKP issued debentures amounting to Baht 21,316 million of which Baht 1,500 million are subordinated debentures classified as Tier 2 capital Duration gap at 0.65 year 1Q16 Financial Performance Kiatnakin Phatra April

14 Loan spread Loan Spread Yield on Loans NIM Cost of Funds (incl.dpa fee) Loan Spread 7.9% 7.9% 7.6% 7.5% 7.4% 7.6% 7.6% 7.3% 7.3% 7.7% 7.8% 7.5% 4.0% 3.9% 3.9% 3.9% 4.0% 3.7% 3.4% 3.7% 3.8% 4.5% 3.0% 4.3% 4.9% 5.1% 3.6% 3.4% 4.2% 4.8% 4.2% 4.0% 3.7% 4.2% 4.0% 4.6% 4.9% 4.4% 4.1% 4.0% 3.5% 3.9% 3.4% 3.3% 3.1% 2.9% 2.7% 2.7% 2Q14 3Q14 4Q14 Loan spread improved from 4.5% in Y2015 to 4.8% in 1Q16 from the continuing decline in Cost of Fund from 3.0% in Y2015 to 2.7% in 1Q16 NIM = Net interest income / Average earning assets including Interbank, investment in securities, investment in loans, loans net deferred revenue 1Q16 Financial Performance Kiatnakin Phatra April

15 Asset Quality and Loan Loss Reserve Gross Classified Loan LLR / Required Reserve (Bank Only) Baht in billion 5.6% 5.6% 5.6% 4.2% 5.3% 5.4% 5.5% 4.1% % 6.5% 6.9% 6.4% % 6.5% % 5.7% 5.6% 5.5% LLR/Required reserve Q14 2Q14 3Q14 4Q14 Classified loan %Classified loan/ gross loan % BOT NPL ratio 1Q14 2Q14 3Q14 4Q14 * As of 2Q13, the Bank applied Collective Approach as mandatory reserve for HP loans causing LLR/ Required Reserve to rise NPLs decreased to 5.7% from 5.8% at the end of 2015 Continuous decline in HP NPLs since 2Q15 The ratio increased further in 1Q16 with the general reserve set up 1Q16 Financial Performance Kiatnakin Phatra April

16 NPL and Coverage ratio SAM % Classified loans / Gross loans % Reserve / Classified loans 100.0% 97% SAM 21.4% RE 2.5% 6.6% 5.7% Retail SME 53% SAM 34% RE 60% Retail 41% SME 66% (ex. general provision Baht 3.2 billion) Total gross loans (Baht in billion) Collateral Coverage 201% 177% 112%* 121% *excl. HP Total classified loans (Baht in billion) NPLs amount totaled Baht 10,106 million or 5.7% of gross loans, declining from 5.8% Coverage ratio at 97.2% with outstanding general provision of Baht 3,200 million 1Q16 Financial Performance Kiatnakin Phatra April

17 Liquidity Loan to Deposit & Borrowing Ratio Loan to deposit & borrowing Loan to deposit 123.5% 124.3% 139.6% 140.4% 143.4% 159.2% 170.6% 176.6% 96.5% 100.0% 105.5% 102.9% 105.3% 107.6% 107.6% 107.9% 2Q14 3Q14 4Q14 1Q16 Financial Performance Kiatnakin Phatra April

18 Efficiency ratio Cost to Income 1 Cost to Earning Assets 2 (annualized) 3.8% 44.4% 44.1% 44.8% 45.2% 40.2% 46.4% 47.2% 2.7% 3.3% 3.0% 2.8% 3.1% 3.3% Cost to income increased slightly QoQ from lower net revenue Operating costs to earning assets declined QoQ due mainly to lower variable expenses 1/ Operating expense (excl. Loss from fair value adjustment and G/L from sale of foreclosed assets)/ Net revenue (incl. G/L from sale of NPA) 2/ Earning assets includes net loan, NPA, Interbank & money markets and Investment in loans & properties 1Q16 Financial Performance Kiatnakin Phatra April

19 High quality capital (common equity) CAR Ratio and Tier 1 Ratio (BankOnly) Baht in million 16.54% Total Capital CAR Ratio Tier I Capital Ratio 16.54% 17.19% If including net profits up to 1Q16: CAR ratio =. 0% Tier 1 ratio =. % 14.69% 15.17% 14.77% 15.17% 15.36% 15.13% 14.91% 13.66% 14.77% 14.57% 14.01% 13.10% % 13.29% % 14.78% 14.97% 14.76% 14.53% 14.57% 14.48% Q14 3Q14 4Q14 1Q16 Financial Performance Kiatnakin Phatra April

20 CAPITAL MARKET BUSINESS 1Q16 Financial Performance Kiatnakin Phatra April

21 Capital Market Business - Financial Performance Summary (million baht) 1Q15 1Q16 % change Revenues Agency Business Brokerage fees % Fee and services income % Interest on margin loan % Agency Business % Investment Business % Others Income % Total Revenues % Total Expenses % Net Profit/(Loss) % Other comprehensive incomes : Gain/(Loss) on revaluation available-for-sale investment (34.7) % Acturial Loss on retirement % Deferred income tax 7.3 (3.3) % 1Q12 (Bt 1,019 mm) 1Q13 (Bt 1,524 mm) Total other comprehensive income (27.4) % Total comprehensive income for the period % 1Q16 Financial Performance Kiatnakin Phatra April

22 Agency Business Equity Brokerage Business Daily average trading of market in 1Q16 was 46,540 million baht, significant decreased from 1Q15. Combined s daily average trading value in 1Q16 were 6,587 million baht, increased 13% from 1Q15. Market Daily Average Trading Value (Bt million) 54,369 44,302 46, Q15 1Q16 Breakdown of client of SET & MAI 53.0% 59.2% 64.2% 11.4% 9.2% 8.2% 10.2% 9.4% 8.5% 22.2% 19.1% 25.4% Q15 1Q16 Foreign Local institutions Proprietary account Local retail Daily Average Trading Value (Bt million) Rank (client only) Phatra + kktrade ,000 6, ,000 4,000 5,224 4,950 6,010 3,000 2,000 1, Q15 1Q16 Phatra kktrade 15.0% 12.5% 10.0% 7.5% 5.0% 2.5% 0.0% Market share - Segmented by Investor 8.6% 7.6% 13.4% 9.2% 1.7% 1.9% 10.6% 10.1% 1.8% 13.0% 11.5% 10.7% 9.6% 1.9% 1.8% 1.3% 1.3% 1.3% 1.2% 1.2% Local Foreign PWM kktrade 1Q16 Financial Performance Kiatnakin Phatra April

23 Agency Business (cont d) HNW s Asset Base Y2015 Total: Baht 310 billion Mutual Fund, 29.9% Bond & Cash & Structure Product & PF, 8.5% Stock, 61.6% 1Q2016 Total: Baht 334 billion Mutual Fund, 30.2% Bond & Cash & Structure Product & PF, 10.1% Stock, 59.7% Our Asset under Advise (AUA) grew 8% in 1Q16 and has net new money amount Baht 9,534 million Average Yield 0.23% 0.23% Asset Management Business Private Fund Mutual Fund % 2.03% 1.69% 1.58% 2.50% 2.00% 40, % 0.90% 0.87% 0.87% 0.87% 1.20% % 3,546 9,162 9,945 9,964 10, % 1.00% 0.50% 30,000 31,736 36,479 34,505 35,296 36, % 0.40% 0 Mar-15 Jun-15 Sep-15 Dec-15 Mar % 20,000 Mar-15 Jun-15 Sep-15 Dec-15 Mar % Phatra AUM Mkt share Mutual Fund AUM Mkt share 1Q16 Financial Performance Kiatnakin Phatra April

24 Investment Business Comprehensive Revenue Total Breakdown by Department Baht million Equity & Derivatives Trading Hedge Fund Direct Investment Treasury & Others Q2015 1Q2016 1Q Q2016 1Q16 Financial Performance Kiatnakin Phatra April

25 APPENDIX 1Q16 Financial Performance Kiatnakin Phatra April

26 HP Trend and Outlook Loans Loan Yield Portfolio Quality Baht in billion -2% -2% 1% -1% Baht in billion % % Coverage ratio % Classified loans % 2.8% 2.4% 147% 85% 94% 103% 128% 2.2% Highlights HP loans contracted slightly at 0.9% YTD with 4.7% penetration rate up from 4.2% in 2015 Increasing loan yield Continuous improvements in NPLs especially for used cars Improved loss on repossession per asset cost Outlook Focus on asset quality, rather than loan growth Emphasize pricing strategy that corresponds to borrowers risks Prudent risk control across loan process 1Q16 Financial Performance Kiatnakin Phatra April

27 HP portfolio breakdown Portfolio characteristic by location by class by car type Others* 21% BKK 29% Used cars 47% Non- BKK 71% New cars 53% 1 ton pick-up trucks 41% Sedans 38% * Others include vans and trucks 1Q16 Financial Performance Kiatnakin Phatra April

28 Other Retail Loans Trend and Outlook Loans Loan Yield Portfolio Quality Baht in billion Others Baht in billion % Coverage ratio Micro-SMEs Loans Other Retail Income Classified loans -3% -4% Housing Loans Personal Loans -3% 4% Other Retail Yield on Loan % 69% 70% 65% 60% % 16.6% 17.1% 13.3% % 1Q16 Financial Performance Kiatnakin Phatra April

29 RE Trend and Outlook Loans Loan Yield Portfolio Quality Baht in billion Baht in billion RE Income RE Yield on Loan % Coverage ratio %Classified loans -0.3% -3.3% -8.1% -6.3% % 35% 34% 34% 34% 17.9% 21.3% 20.2% 19.7% 21.4% Highlights RE loan decreased by 6.3% YTD Loan yield increased in 2H15 from cash basis interest income NPLs increasing Outlook Expect slight loan growth Policy to manage and control credit quality and reduce classified loans 1Q16 Financial Performance Kiatnakin Phatra April

30 RE portfolio breakdown Portfolio characteristic by location by class East 16% Northeast 2% Central 3% North 4% Others 2% Residential Condo 34% South 21% Greater BKK 54% SDH/TH 64% 1Q16 Financial Performance Kiatnakin Phatra April

31 SME Trend and Outlook Loans Loan Yield Portfolio Quality Baht in billion Construction &Machinery Baht in billion % Coverage ratio %Classified loans Specialized Industrial (Printing & Packaging) Floor Plan Logistics Income Yield on Loan Apartment and Hotel % 1% 5% 1% % 54% 48% 44% 41% 7.1% 6.7% 7.1% 6.5% 6.6% Highlight SME loans increased 0.7% YTD Slight decline in loan yield NPLs increased slightly Outlook Increase numbers of sectors to focus Expect yield to remain stable with close asset quality monitoring Cautious credit screening across portfolio 1Q16 Financial Performance Kiatnakin Phatra April

32 Corporate Baht in billion -21.2% 62.4% Loans Loan Yield Portfolio Quality % % 8.1 Baht in billion 5.9% 5.7% 5.9% 5.8% Yield on Loan 5.6% %Classified loans % 0.0% 0.0% 0.0% 0.0% Highlight Portfolio decreased 8.0% YTD Declining loan yield Good credit quality Outlook Vast opportunity for growth Steady loan yield or possibly lower for those with good credit rating Low risk with sufficient collateral 1Q16 Financial Performance Kiatnakin Phatra April

33 Lombard Loan Loans Loan Yield Baht in billion Outstanding Loans Outstanding Loans % % 5.2% 5.1% 0.6 2Q15 3Q15 4Q15 1Q16 2Q15 3Q15 4Q15 1Q16 3Q15 4Q15 1Q16 Highlight Multi-purpose credit facility for Wealth Management clients using financial assets as collateral Positive feedback since product launched in 3Q15 1Q16 Financial Performance Kiatnakin Phatra April

34 Financial Markets Revenue Ranking Baht in million 190 Ranking All Dealer Ranking Corporate Bond Dealer Highlight Offering more comprehensive banking products and services Focus on collaborations within the business group to expand KKP wholesale banking business 1Q16 Financial Performance Kiatnakin Phatra April

35 SAM Trend and Outlook Highlight Outlook Assets Baht in billion 40% 53% Asset increased from increased in foreclosed assets Portfolio in liquidation process 7% Total Assets 1Q15 3Q15 1Q16 Investment in loans 1Q15 3Q15 1Q16 Financial claim loans 1Q15 3Q15 1Q16 Foreclosed assets Income Baht in million 19% 11% 70% NPA sales in 1Q16 totaled Baht 373 million with Baht 198 million in gain Q15 1Q16 1Q15 3Q15 1Q16 Q Q Q 1Q15 3Q15 1Q16 Total income Interest income from investment in loans Interest income from Financial claim loans Gain from NPA sale 1Q16 Financial Performance Kiatnakin Phatra April

36 SAM: foreclosed asset with significant value buffer Trend and Outlook (Cont d) Foreclosed assets (including RE) Financial claim loans Assets Baht in billion Book value Appraised value Portfolio quality % Coverage ratio % Classified loans Q16 100% 100% 100% 100% 100% Sales (YTD) Book value Baht in billion Appraised value 58% 53% Sold Value 45% 45% 44% Q16 Highlight and outlook Appraised value of foreclosed assets significantly higher than book value; this is reconfirmed by the sales value being consistently higher than book value of assets sold 1Q16 Financial Performance Kiatnakin Phatra April

37 Foreclosed assets* sold and appraised value Trend and Outlook (Cont d) Baht in million Year Assets sold Appraised value Sold/Appraised % % ,521 1, % ,819 2,839 99% % % % ,960 1, % ,973 2, % ,959 2, % ,958 3, % ,175 2, % ,209 2, % ,777 2, % ,222 2, % ,597 1, % 1Q % Total 32,402 30, % *Includes foreclosed assets from RE business 1Q16 Financial Performance Kiatnakin Phatra April

38 Foreclosed assets breakdown Portfolio characteristic by location by class East 3% Northeast 4% Central 6% North 8% Residential Condo 8% Housing 35% South 19% Greater BKK 60% Lands 57% 1Q16 Financial Performance Kiatnakin Phatra April

39 Investor Relations Kiatnakin Phatra Financial Group KIATNAKIN BANK PUBLIC COMPANY LIMITED 209/1, K Tower B, 31st Floor., Sukhumvit 21 (Asoke) Klongtoey-nua, Wattana Bangkok Tel. (662) Fax: (662) investor_relations@kiatnakin.co.th Disclaimer: This presentation contains some information from other sources, KK and PHATRA cannot confirm, in all cases, the accuracy and completeness of such data, particularly where the data sourced from outside the Group. In addition, any forward looking statements are subject to change as a result of market conditions and the final result may be different to that indicated. The Bank makes no representation or warranty of any type whatsoever on the accuracy or completion of the information contained herein. 1Q16 Financial Performance Kiatnakin Phatra April