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1 2 HLB H1FY20 ended 31 December 2019
Key Financial Highlights Strong underlying performance for H1FY20 Total Income Opex & CIR Operating Profit • Opex remains tightly managed; CIR improved • Strong top-line growth on the back of above • Solid underlying business performance amidst industry loan growth and prudent funding cost to 42.8% ongoing external headwinds management 45.0% 42.8% 2,453 2,301 7 % RM'mil 1,403 1,265 1,036 1,049 11 % 1 % RM'mil RM'mil H1FY19* H1FY20 H1FY19* H1FY20 H1FY19* H1FY20 GIL & Coverage Ratio Gross Loans Deposits • Loans growth accelerated led by business and • Asset • Healthy quality amongst the best; GIL deposit growth driven by CASA maintained below 1% mortgages segments expansion 201% 182% LIC 167.0 162.6 (including reg 3 % 141.3 131.6 reserves) RM'bil 122% 7 % 103% RM'bil 0.84% 0.80% H1FY19 H1FY20 H1FY19 H1FY20 H1FY19 H1FY20 Note *: Excluding one-off gain on divestment of joint venture of RM90 mil in H1FY19 3 HLB H1FY20 ended 31 December 2019
Management Guidance All but one KPI within guidance Target FY2020 Achieved H1FY20 Revised FY2020 P Gross Loan Growth 5%-6% 7.3% y-o-y 6.0% to 6.5% P 2.03% No Change Net Interest Margin ~2% >27% Non-Interest Income Ratio >28% 26.9% P Cost-to-Income Ratio 43%-43.5% 42.8% No Change P Gross Impaired Loan Ratio <1% 0.84% No Change P Return on Equity 10.5%-11% 10.8% >10.0% 4 HLB H1FY20 ended 31 December 2019
Profit & Loss Strong underlying performance supported by top-line growth and prudent cost control Core Profit After Tax RM'mil 1,390 1,322 1,304 1,093 847 H1FY16 H1FY17 H1FY18 H1FY19* H1FY20 Change RM’mil (underlying) H1FY19* H1FY20 YoY* • Top-line performance supported by strong 2,301 2,453 6.6% Total income loan expansion and sustained underlying (1,036) (1,049) 1.3% Operating expenses non-interest income contribution. 1,265 1,403 10.9% Operating profit before allowances • Expenses remained well-managed while delivering positive JAWS. 39 (12) ->100% Loan allowances & other impairments • Share of profits from associates remained 280 312 11.3% Share of profits from associates robust. 1,584 1,704 7.5% Profit before tax 1,304 1,390 6.6% Profit after tax Note *: Excluding one-off gain on divestment of joint venture of RM90 mil in H1FY19 5 HLB H1FY20 ended 31 December 2019
Net Interest Income & NIM Stable NIM with sustained improvements in net interest income Jan’20 OPR cut impact on FY2020 NIM is ~2-3 bps 5bps 1bps 2.03% 1.98% y-o-y q-o-q 2.04% 2.03% 2.00% 1.98% 1.89% 4.5% 1,793 1,716 y-o-y 3.4% RM'mil 912 882 q-o-q RM'mil 864 857 819 1.4% 4,119 4,063 y-o-y 1.2% 2,078 2,077 2,017 2,019 2,044 q-o-q 1,138 1,132 1,214 1,220 1,199 0.5% 5.5% 2,270 2,403 q-o-q y-o-y Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 H1FY19 H1FY20 Interest Expense Interest Income Net Interest Income NIM Net Interest Income Interest Income Interest Expense NIM 6 HLB H1FY20 ended 31 December 2019
Non-Interest Income Robust contribution supported by wealth management and gains from treasury operations 26.9% Credit Card H1FY19 H1FY20 25.4% 5.0% Retail Spend RM5.2 bil RM5.5 bil 659 585 61 33 46 78 Credit Card H1FY19 H1FY20 250 9.3% RM122 mil RM111 mil Fees 166 Fee income: Wealth of which 315 295 H1FY19 H1FY20 Management 19.9% RM55 mil RM66 mil Income H1FY19* H1FY20 Fee Income Trading & Investment Forex Islamic and others Non Interest Income ratio Note *: Excluding one-off gain on divestment of joint venture of RM90 mil in H1FY19 7 HLB H1FY20 ended 31 December 2019
Operating Expense Vigilant cost management with improved CIR of 42.8% Composition of Operating Expenses 45.0% 42.8% Admin & general 1,049 1,036 13% Personnel cost 130 125 Marketing 55% 83 87 8% 254 257 H1FY20 572 578 Establishment 24% H1FY19* H1FY20 Personnel cost Establishment Marketing Admin & general CIR Note *: Excluding one-off gain on divestment of joint venture of RM90 mil in H1FY19 8 HLB H1FY20 ended 31 December 2019
Loans Growth momentum continues to gain traction amid prevailing cautious business environment 1,111 2,300 7.3% (+16.7%) RM’mil 6,235 (+7.4%) y-o-y (+6.6%) 141,273 131,628 Total Loans H1FY19 Retail Business & Corporate International Operations Total Loans H1FY20 SME 20,782 Residential H1FY19 H1FY20 H1FY19 H1FY20 10.1% 9.8% Singapore RM’mil Properties RM64.3 bil RM70.6 bil RM5.0 bil RM5.5 bil 7.9% 19,261 Transport H1FY19 H1FY20 H1FY19 H1FY20 H1FY19 H1FY20 43.3% 0.7% Vietnam Vehicle RM17.2 bil RM17.4 bil RM0.5 bil RM0.8 bil SME Retagging Impact Community Unsecured H1FY19 H1FY20 H1FY19 H1FY20 37.7% H1FY19 H1FY20 SME 2.2% 33.2% Cambodia RM4.9 bil RM6.7 bil (CC+PL) RM7.0 bil RM7.1 bil RM1.1 bil RM1.5 bil Banking 9 HLB H1FY20 ended 31 December 2019
Asset Quality Solid asset quality position with GIL ratio maintained at trend low level Loan Impairment Coverage (LIC) Gross Impaired Loans 197% 182% 181% 1.62% 1.63% 1.60% 1.56% 1.50% 155% 151% 0.96% 120% 0.87% 118% 0.84% 0.79% 0.78% 103% 96% 89% RM'mil 1,203 1,180 1,126 1,071 97% 957 92% 90% 86% 84% FY16 FY17 FY18 FY19 H1FY20 FY16 FY17 FY18 FY19 H1FY20 Gross impaired loans GIL Ratio Industry GIL ratio LIC LIC (incld reg reserve) Industry LIC 10 HLB H1FY20 ended 31 December 2019
Asset Quality Indicators remained healthy with no pressure on any particular segment Malaysia Overseas 0.91% 0.82% 0.82% 1.07% 2 isolated 0.19% 0.10% cases of 1,113 1,097 1,064 83 ~RM77 mil in SG 13 7 FY18 FY19 H1FY20 FY18 FY19 H1FY20 Group SME Residential Properties Transport Vehicles 1.72% 0.58% 0.57% 0.56% 1.58% 1.54% 0.79% 0.70% 402 353 376 0.64% 331 329 353 134 122 111 FY18 FY19 H1FY20 FY18 FY19 H1FY20 FY18 FY19 H1FY20 GIL RM’mil GIL ratio % 11 HLB H1FY20 ended 31 December 2019
Deposit Robust growth supported by CASA expansion CASA Fixed Deposits 2.7% 5.4% y-o-y 7.3% y-o-y y-o-y Market Share: 8% Market Share: 8% Market Share: 7% RM’mil 97,575 91,064 RM’mil 26% mix 88,222 RM'mil 166,998 163,070 43,239 41,202 41,725 157,414 155,233 148,524 FY18 FY19 H1FY20 FY18 FY19 H1FY20 Individuals Business Enterprises 5.8% y-o-y 4.0% Market Share: 11% y-o-y RM’mil 54% mix Market Share: 6% 89,713 88,159 RM’mil 85,518 67,039 64,811 62,745 FY18 FY19 H1FY20 FY18 FY19 H1FY20 FY16 FY17 FY18 FY19 H1FY20 Note: * Deposit figures are based on group, but market share data is based on domestic only; Business enterprise deposits including FI 12 HLB H1FY20 ended 31 December 2019
Liquidity & Capital Prudent liquidity and capital positions Capital Adequacy ^ Loan Deposit Ratio (LDR) 16.4% 16.3% 16.3% 90.6% 90.6% 90.0% 90.6% 88.7% 15.9% 15.7% 14.1% 13.7% 13.6% 13.4% 13.3% 84.4% 84.6% 13.1% 13.1% 82.0% 81.2% 80.6% 12.8% 12.7% 12.6% FY16 FY17 FY18 FY19 H1FY20 Industry LDR HLB LDR Note: Industry data derived from banking system’s commercial banks plus Islamic banks only H1FY20 Liquidity Coverage Ratio (LCR) 123% Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Loan to Funds Ratio (LTF) 86% CET1 Tier 1 Total capital ratio Loan to Funds & Equity Ratio (LTFE) 75% Note: ^ Capital base & ratio after proposed dividends 13 HLB H1FY20 ended 31 December 2019
Shareholder Value Sustainable returns from solid underlying performance Net Assets & Earnings Per Share Return on Equity & Return on Assets 34 34 33 31 31 10.8% 10.8% 10.7% 10.8% 12.7 12.7 12.4 12.2 12.0 1.34% 1.33% 1.32% 1.26% Q2FY19* Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q1FY20 Q2FY20 H1FY19* H1FY20 NAV/share EPS ROE ROA Note *: Excluding one-off gain on divestment of joint venture of RM18 mil in Q2FY19 and RM90 mil in H1FY19 14 HLB H1FY20 ended 31 December 2019
Performance of Associated Company: Bank of Chengdu Co., Ltd. Market position in Chengdu* Financial Highlights for FY2019 (unaudited) Dec-19 No of branches / >190 Operating Income Profit After Tax outlets Loan 6 th RMB'mil 12,731 RMB'mil 5,551 11,590 Deposits 4 th 10 % 4,649 19 % Industry Benchmarking # ROE P FY2018 FY2019 FY2018 FY2019 16.6% 12.3% Total Assets GIL ratio Industry BOCD RMB'mil 558,075 492,285 13 % GIL ratio 1.54% 1.43% 11 bps P 1.43% 1.86% Industry BOCD FY2018 FY2019 FY2018 FY2019 Notes: * Benchmarked to latest available industry data # Industry data in relation to China Commercial Banks statistics for 3 rd quarter 2019 15 HLB H1FY20 ended 31 December 2019
2 16 HLB H1FY20 ended 31 December 2019
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