Analyst Presentation FY18 Results CIMB Group Holdings 28 February 2019
Key Financial Highlights ^ ~ Net Profit (RM) Net ^ ROE Gross Loan (RM) 4,656mil 9.6% 343.8bil +4.0% Y-o-Y Flat Y-o-Y +7.0% Y-o-Y ^ Cost-to-Income Loan Loss Charge CET1 52.6% 0.41% 12.6% -80bps Y-o-Y -28bps Y-o-Y +40bps Y-o-Y Notes: ^ Includes CSI gain of RM163mil. Excludes CPAM & CPIAM gain of RM928mil ~ Excluding bad bank 2
Key Business/Operational Highlights Consumer and Commercial Banking Did Well Positive Provisions Trajectory (RM ’mil) (RM ’mil) Consumer Commercial LLC +15.2% Y-o-Y +180.1% Y-o-Y Loan Provisions 2018 2017 Weaker Wholesale Banking Strict Cost Controls Revenue (RM ’mil) Operating Costs (RM ’mil) -18.8% Y-o-Y 5,958 4,836 3,659 3,204 2,299 1,632 * NII NoII 3
PBT By Segment ^ Consumer Banking did well YoY, but weaker QoQ from higher opex & provisions Commercial Banking improved from lower provisions FY18 Group PBT Wholesale Banking: Weaker YoY markets and ^ RM6,273mil lower QoQ provisions 2.7% GAMI lower from deconsolidation of CPAM & CPIAM Group Funding higher from gain on sale of 50% of CSI Consumer Commercial Wholesale Group GAMI ^ Banking Banking Banking Funding Y-o-Y 15.2% 180.1% 31.7% 16.7% 30.1% Q-o-Q 19.8% 8.0% 37.3% 177.8% 65.9% Note: ^ Includes CSI gain of RM163mil (RM152mil in 1Q18 and RM11mil in 2Q18). Excludes CPAM & CPIAM gain of RM928mil 4
PBT By Country Malaysia: Lower YoY due to Wholesale. Consumer remained strong Indonesia: Steady performance from lower provisions. Excluding FX PBT +11.4% YoY ^ Thailand: Lower provisions YoY. QoQ drop from higher opex and loss on sale of NPLs Singapore: Improved from deconsolidation of CSI Malaysia ^ Indonesia Thailand Singapore Y-o-Y 7.5% 1.6% 116.8% 23.7% Q-o-Q 2.8% 32.6% 56.1% 0.9% Notes: Excluding HQ costs, which mainly comprise of funding costs ^ Includes CSI gain of RM163mil (RM152mil in 1Q18 and RM11mil in 2Q18). Excludes CPAM & CPIAM gain of RM928mil 5
Performance vs 2018 Target FY18 BAU^ FY18 Target ROE 9.6% 10.5% Dividend Payout Ratio 50.8% 40% - 60% Total Loan Growth * 7.0% (7.4% ** ) 6.0% Loan Loss Charge 0.41% 0.55% - 0.60% CET 1 (CIMB Group) 12.6% 12.0% Cost to income 52.6% 50.0% Notes: ^ Includes CSI gain of RM163mil. Excludes CPAM & CPIAM gain of RM928mil * Excluding bad bank ** Excluding FX fluctuations 6
FY18 Financials
Operating Income FY18 Q-o-Q (RM ‘mil) Y-o-Y 4Q18 Operating income BAU^ BAU^ declined 6.6% YoY due to weak MY markets Net interest income 11,904 (2.5%) 3,035 1.2% Softer NII from Commercial, Wholesale Non interest income 4,550 (16.0%) 1,040 (8.8%) and CIMB Niaga Total 16,454 (6.6%) 4,075 (1.6%) NIM declined 13bps YoY mainly due to compression in ID and Net Interest Margin* year-end pressure in MY Notes: ^ Includes CSI gain of RM163mil (RM152mil in 1Q18 and RM11mil in 2Q18). Excludes CPAM & CPIAM gain of RM928mil * Annualised 8
Operating Expenses (RM ‘mil) FY18 Y-o-Y 4Q18 Q-o-Q Sustained cost management efforts Personnel 4,927 (6.2%) 1,255 0.4% Cost reduction mainly from deconsolidation of Establishment 1,947 (8.6%) 494 3.1% CSI (c.RM150m per quarter) and FX impact. Excluding CSI effect, Marketing 351 16.2% 150 123.9% OPEX rose 1.2% YoY Excluding FX, FY18 Admin & General 1,431 (1.1%) 370 1.9% costs -1.4% YoY Including CPAM gain, Total 8,656 (5.2%) 2,269 5.1% CIR was 49.8% Cost-to-income Ratio ^ Note: ^ Includes CSI gain of RM163mil (RM152mil in 1Q18 and RM11mil in 2Q18). Excludes CPAM & CPIAM gain of RM928mil 9
Loan Provisions -35.8% Y-o-Y -27.8% Q-o-Q YoY Improvement from Consumer (-39.2% 2,231 YoY) and Commercial (-67.2% YoY) RM ’mil 1,432 Wholesale Banking provisions higher YoY 399 due to MY & ID 288 corporate banking and from writebacks in FY17 FY17 FY18 3Q18 4Q18 Improvement in allowance coverage to Allowance 106.3% and LLC to Coverage (%) ^ 0.41% Gross impaired Loans Ratio (%) Loan loss ~ Charge (%) Notes: ^ Including regulatory reserve ~ Annualised 10
Gross Loans RM ’ bil Dec-18 Y-o-Y Q-o-Q Loans-to-Deposit Ratio (%) Consumer Banking 180.3 7.4% 2.8% Commercial Banking 43.6 2.1% - Wholesale Banking 119.9 8.3% 0.4% + Total 343.8 7.0% 1.6% +~ Loan Growth by Country (Y-o-Y) ^ ** +10.5% +7.8% -2.6% Others # 31 Dec-18 RM343.8 bil ~ ^ ^ +1.8% +5.3% +7.4% Notes: + Excluding bad bank ~ Excluding FX fluctuations ^ In local currency # Based on geographical location of counterparty, excluding bad bank ** Including Labuan, London, Cambodia, Vietnam, Hong Kong & Shanghai 11
Deposits RM ’ bil CASA Ratio (%) Dec-18 Y-o-Y Q-o-Q Consumer Banking 182.8 10.7% 7.9% Commercial Banking 41.4 (9.8%) 2.7% Wholesale Banking 155.4 6.4% (1.2%) Total 379.6 6.3% 3.4% Deposits Growth by Country (Y-o-Y) ^ ** +6.9% +4.3% +37.6% Others 31 Dec-18 RM379.6 bil ~ ^ ^ +0.8% +6.5% +6.8% Notes: ~ Excluding FX fluctuations ^ In local currency ** Including Labuan, London, Cambodia, Vietnam, Hong Kong & Shanghai 12
Capital and Liquidity Management Total Capital CET1 increased to 12.6% (+40bps YoY, +30bps QoQ) Surpassed CET1 target of 12.0% for 2018 LCR remains comfortably above 100% for all banking ~ # ^ entities Proposed second Liquidity Coverage Ratio interim dividend of 12sen/share. 50.8% CIMB Bank Global * payout based on BAU net profit CIMB Islamic CIMB Niaga CIMB Thai Notes: ^ Post CIMBGH’s FY17 Second Interim Dividend of RM1,107 mil & actual corresponding DRS (81.1% take-up rate); and reinvestment of cash dividend surplus into CIMB Bank # Post CIMBGH’s FY18 First Interim Dividend of RM1,218 mil & actual corresponding DRS (86.3% take-up rate); and reinvestment of cash dividend surplus into CIMB Bank ~ Post CIMBGH’s FY18 Second Interim Dividend of RM1,148 mil & projected corresponding DRS (80.0% take-up rate); and projected reinvestment of cash dividend surplus into CIMB Bank * CIMB Bank + CIMB Singapore + CIMB London + CIMB Hong Kong + CIMB Shanghai + CIMB Labuan Offshore + CIMB Labuan Ltd 13
PBT by Segments FY18 Q-o-Q (RM ‘mil) Y-o-Y 4Q18 BAU^ BAU^ Consumer Banking (47.1%) 2,957 15.2% 599 (19.8%) Commercial Banking (10.5%) 661 180.1% 190 8.0% Wholesale Banking (28.0%) 1,754 (31.7%) 486 37.3% Corporate Banking (20.0%) 1,255 (20.8%) 391 134.1% Treasury & Markets ~ (7.1%) 443 (47.3%) 97 (42.9%) Investment Banking + (0.9%) 56 (60.3%) (2) (111.8%) GAMI ** (1.8%) 110 (16.7%) (35) (177.8%) ^ Group Funding # (12.6%) 791 30.1% 272 65.9% PBT 6,273 2.7% 1,512 1.7% Notes: ^ Includes CSI gain of RM163mil (RM152mil in 1Q18 and RM11mil in 2Q18). Excludes CPAM & CPIAM gain of RM928mil ~ Including treasury operations, markets and transaction banking + Including advisory, equities, capital markets, private banking and research ** Including asset management and strategic investments # Including capital investments in fixed income securities and investment in Group’s proprietary capital 14
Consumer Banking (RM ‘mil) FY18 Y-o-Y 4Q18 Q-o-Q Net interest income 5,992 2.6% 1,487 (0.7%) Non interest income 2,070 0.5% 528 11.2% Operating income 8,062 2.0% 2,015 2.1% Gross Loans* RM180.3bil Overhead expenses (4,532) 3.2% (1,193) 5.1% 7.4% PPOP 3,530 0.6% 822 (1.9%) (Provisions) / Writeback (575) (39.2%) (223) 145.1% Share of JV / Associates 2 (60.0%) - - PBT 2,957 15.2% 599 (19.8%) FY18 revenue growth driven by Malaysia loans, wealth management and bancassurance Costs remain well under control Deposits Improved provisions YoY from comparatively higher provisions in RM182.8bil FY17. QoQ provisions were up from methodology refinement 10.7 % Note: * Loan base excludes bad bank 15
Commercial Banking (RM ‘mil) FY18 Y-o-Y 4Q18 Q-o-Q ^ ^ Net interest income 1,699 (3.8%) 432 0.9% Non interest income 353 (15.1%) 68 (30.6%) Operating income 2,052 (6.0%) 500 (4.9%) Gross Loans* RM43.6bil Overhead expenses (1,131) (2.1%) (301) 7.5% 2.1% PPOP 921 (10.4%) 199 (19.1%) (Provisions) / Writeback (260) (67.2%) (9) (87.1%) Share of JV / Associates - - - - PBT 661 180.1% 190 8.0% Commercial Banking recalibration continues to gain traction Overall operating expenses remain under control Improved provisions as a result of effective control in risk and Deposits asset quality management RM41.4bil 9.8% Notes: * Loan base excludes bad bank ^ Including Labuan, London, Cambodia, Vietnam, Hong Kong & Shanghai 16
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