#1Hong Leong Bank Hong Leong Bank FY2023 RESULTS ANALYST PRESENTATION 30 AUGUST 2023 The information contained in this presentation is strictly confidential for information of the intended recipient(s) only. The information may not be reproduced, redistributed or transmitted, directly or indirectly by any means to any other person or published electronically or via print, in whole or in part, for any purpose without our prior written permission. When no longer needed, it should be immediately deleted from all electronic storage devices and/or any other retrieval system of any nature and any hardcopies made should be destroyed. The intellectual property in the presentation belongs to HLBB unless specifically indicated otherwise.#2Hong Leong Bank 7 FINANCIAL HIGHLIGHTS: FY2023 HLB FY2023 ended 30 June 2023 2#3Hong Leong Bank Key Highlights Healthy FY2023 profitability Profit after tax +16.1% y-o-y RM3.8 billion ROE 11.8% CIR 39.3% Supportive balance sheet Gross loans/financing +8.0% y-o-y RM181.7 billion Deposits +7.3% y-o-y RM211.7 billion Resilient asset quality GIL ratio 0.57% LIC ratio 169% Resilient business performance underpinned by healthy net profit and robust loan/financing expansion The Board has declared a final dividend of 38 sen per share, bringing the total dividend to 59 sen per share for FY2023 HLB FY2023 ended 30 June 2023 3#4Management Guidance Gross Loans Growth Target FY2023 Achieved FY2023 ~7% 8.0% Net Interest Margin ~2.00% 1.98% Cost-to-Income Ratio ≤38% 39.3% GIL Ratio ~0.60% 0.57% Net Credit Cost ~10 bps 6 bps Return on Equity >12.0% 11.8% CASA Mix >30% 30.8% Hong Leong Bank Delivering a set of commendable results against the challenging operating backdrop 4 HLB FY2023 ended 30 June 2023#5Profit & Loss RM'mil 3,289 154 259 269 3,818 48 66 135 PAT FY2022 Net Interest Non Interest Income Income Opex Loan & Other Associates Impairment Contribution Allowances Tax PAT FY2023 RM'mil FY2022 FY2023 Change % (YoY) Total income 5,597 5,686 1.6% Operating expenses (2,098) (2,233) 6.4% Operating profit before allowances 3,499 3,452 -1.3% Allowances for loans and other impairments (163) (115) -29.3% Profit before associates contribution 3,336 3,337 0.0% Share of profits from associates 1,030 1,289 25.1% Profit before tax 4,367 4,627 6.0% Profit after tax 3,289 3,818 16.1% Hong Leong Bank Reasonable net profit sustained by non-interest income growth and robust contributions from our associates HLB FY2023 ended 30 June 2023 5#6Net Interest Income & NIM RM'mil 2.10% 2.18% 2.14% 2.09% 1.98% 1.82% 1.83% 1,232 1,159 1,198 1,089 1,033 4,618 4,552 Q4FY22 Q1FY23 Q2FY23 Net interest income Q3FY23 NIM Q4FY23 FY2022 FY2023 Net interest income NIM HLB FY2023 ended 30 June 2023 Hong Leong Bank Prudent asset/liability management on the back of elevated funding cost pressure 6#7Non-Interest Income 17.5% 19.9% 1,133 117 979 RM'mil 63 418 307 FY2023 Credit Card Related Fees 8.9% RM211.0 mil Wealth 610 599 Fee income: of which Management and Bancassurance 12.6% RM174.5 mil Income FY2022 Islamic and others Fee Income FY2023 Trading, Investment & Forex Non Interest Income ratio HLB FY2023 ended 30 June 2023 Hong Leong Bank Greater contribution from improved credit card fees, trade finance and FX performance 7#8Operating Expense 36.9% Domestic 35.4% CIR 37.5% Admin & general 13% Personnel cost 54% Marketing 9% 39.3% 2,233 RM'mil 2,098 302 253 196 171 532 521 RM'mil 1,154 1,203 FY2022 Personnel cost Marketing CIR FY2023 Establishment Admin & general Establishment 24% FY2023 587 560 541 546 559 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Operating expenses HLB FY2023 ended 30 June 2023 Hong Leong Bank Disciplined spending through strategic cost management initiatives Includes adjustment in Q4FY23 arising from the revised Collective Agreement 8#9Loans & Financing +7,811 (+7.1%) +3,328 (+7.2%) +2,210 (+18.8%) 8.0% 181,677 y-o-y RM'mil 168,234 Total Loans FY2022 Retail Business & Corporate International Operations Total Loans FY2023 FY2023 Domestic Residential Properties 8.1% RM89.1 bil Business 10.2% RM60.8 bil Singapore 22.9% RM9.4 bil Enterprises Transport Vehicle 10.9% RM19.6 bil SME 9.7% RM33.0 bil Vietnam 18.3% RM2.0 bil Unsecured (CC+PL) 5.1% RM5.4 bil Community SME Banking 13.2% RM12.9 bil Cambodia 5.6% RM2.6 bil HLB FY2023 ended 30 June 2023 Hong Leong Bank Commendable growth trajectory driven by expansion in key segments of mortgages, auto loans, SME and commercial banking, as well as overseas operations 9#10Asset Quality Gross Impaired Loans/Financing (GIL) Loan/Financing Impairment Coverage (LIC) 1.80% 1.75% 1.62% 1.54% 1.43% 317% 282% 247% 239% 0.78% 212%. 212% 0.61% 0.57% 0.46% 0.49% 188% 169% 142% 118% RM'mil 113% 1,071 1,042 890 820 717 98% 85% 99% 92% FY2019 FY2020 FY2021 FY2022 FY2023 FY2019 FY2020 FY2021 FY2022 FY2023 GIL GIL ratio Industry GIL Ratio LIC LIC (including security value) Industry LIC HLB FY2023 ended 30 June 2023 Hong Leong Bank Stable asset quality metrics while maintaining sufficient preemptive impairment buffers of RM574 million 10#11Asset Quality Malaysia Overseas 0.12% 0.43% 0.59% 0.48% 0.51% 0.12% 982 ...... 806 707 60 11 14 FY21 FY22 FY23 FY21 FY22 FY23 Residential Properties Transport Vehicles SME 1.25% 1.10% 1.06% 0.45% 0.43% 0.35% 0.38% 0.20% 0.22% 404 376 351 315 267 72 287 35 43 FY21 FY22 FY23 FY21 FY22 FY23 FY21 FY22 FY23 GIL RM'mil GIL ratio % HLB FY2023 ended 30 June 2023 Hong Leong Bank Healthy credit portfolio with improvements to SME asset quality 11#12Deposit RM'mil 197,292 +967 (+0.9%) +11,448 (+26.6%) -2,999 (-8.1%) + 4,943 (+35.7%) 7.3% 211,652 y-o-y Total Deposits FY2022 Retail Business & Corporate Global Markets International Operations FY2023 Hong Leong Bank Total Deposits FY2023 Individual Deposit Mix 49.4% Focus on CASA acquisition through the Bank's cash management solutions and community acquisition initiatives CASA Ratio ▼ 1.4% CASA Individuals RM65.1 bil 5.2% RM104.6 bil 30.8% Fixed Deposits 19.6% RM112.2 bil Business Enterprises 8.2% RM100.0 bil HLB FY2023 ended 30 June 2023 12#13Liquidity & Capital Liquidity Ratios 145.3% 145.2% 136.8% 136.4% 134.2% 126.5% 127.0% 127.0% 126.0% 122.0% 117.0% 114.0% Capital Adequacy 16.3% 16.5% 16.7% 16.2% 16.3% 15.9% Industry 14.2% 14.1% 14.5% 14.1% 13.9% LDR Jun-23: 86.8 % 13.3% 84.4% 82.0% 83.5% 83.9% 83.5% 84.3% FY2018 FY2019 FY2020 FY2021 LDR LCR 13.7% 13.1% 13.6% 13.4% 12.8% 12.6% FY2022 FY2023 FY2018 NSFR FY2022 FY2023 FY2020 FY2021 FY2019 ■CET1 Tier 1 Total Capital Ratio HLB FY2023 ended 30 June 2023 Hong Leong Bank ■ Maintaining prudent liquidity and capital positions ▪ LTF and LTFE ratios are well in line with the industry at 85.9% and 74.0% respectively 13#14Shareholder Value Return on Equity, Return on Assets & EPS 38% 11.8% 10.8% 10.9% 10.1% 9.5% 1.30% 1.16% 1.25% 1.34% 1.43% O 186 161 140 130 122 50 50 Declared Dividend 30% 36 36% 35% 32% 59 55 50 50 FY2022 FY2023 Dividend Payout (on actual reported PAT) FY2019 FY2020 FY2021 FY2022 FY2023 FY2019 FY2020 FY2021 EPS ROE ROA Net DPS (sen) HLB FY2023 ended 30 June 2023 Hong Leong Bank Committed to sustainable returns for our shareholders, declared final dividend of 38 sen per share Improved ROE of 11.8% 14#15Performance of Associated Company: Bank of Chengdu Co., Ltd. Financial Highlights for H1 ended 30 June 2023 (unaudited) Hong Leong Bank Operating Income Profit After Tax Robust ROE 19.1% RMB'mil 11,110 9,995 11% RMB'mil 5,576 4,457 25% Solid Cost-to- income Ratio 23.3% H1FY22 H1FY23 Gross Loan RMB'mil 575,375 455,748 26% H1FY22 H1FY23 GIL ratio 0.83% 11bps 0.72% H1FY22 H1FY23 H1FY22 H1FY23 Prudent Coverage 512% Ratio Healthy Total Capital Ratio 12.9% HLB FY2023 ended 30 June 2023 15#162 CLOSING REMARKS Hong Leong Bank HLB FY2023 ended 30 June 2023 16#17Key Sustainability Highlights Met Green Financing Targets Renewable Energy Cumulatively Approved FY2024: RM3.4b FY2023 target: RM2.9b FY2023 Initiatives 戲 Recognition Sustainability Assurance by External Auditor 3.2b Global ESG Indices and Assessment: FTSE4GOOD BURSA - 2023 Score: 3.9 out of 5 (vs industry average of 3.1) Green Auto Disbursement FY2024: RM500m FY2023 target: RM240m FY2023 392m Assessment of Physical Risk for Collaterals and Assets 000 Signatory to the Partnership in Carbon Accounting Financials ("PCAF") ✰ Gold in financial services sector The Edge ESG Awards 2022 ✰ Best Green Bond in Malaysia The Asset Triple A Awards ✰ ESG Leadership Award Sustainability & CSR Malaysia Awards 2023 Titanium+ Tier Certification for new data center Green Climate Initiative Green & Affordable Mortgages Loans FY2024: RM14.4b FY2023 target: RM12.1b FY2023 13.2b Completion of the 50,000 Mangrove Trees Plantation HLB FY2023 ended 30 June 2023 Hong Leong Bank Continue leadership and commitment in sustainability 17#18Key Digital Highlights Results Key Digital Highlights Hong Leong Bank An increase in our retail internet and mobile banking customer base, which grew by 12% and 19% respectively Our retail digital platform has processed close to 200 million transactions (+12% y-o-y) 92% of all new business customers were on-boarded digitally Online banking transactions for businesses have increased by 40% y-o-y, while mobile banking transactions have risen by 105% y-o-y 93% of retail banking transactions are conducted via our internet and mobile banking platforms HLB Wallet Instant account opening leveraging eKYC & access to HLB Connect HL Wealth HLB Wealth Access to buy and sell unit trusts directly through internet banking for consumers HL Bank SINGAPORE Mobile Banking Singapore Simple, modern experience allowing customers to bank on the move Sole Prop Pay & Save Launched Pay & Save account for Sole Proprietors available via tablet BCB Web Recommender Helping businesses find the right products. Single application vs. multiple applications Bakong Cambodian Real Time P2P payments & interoperable QR connectivity Digital at the Core bearing fruits HLB FY2023 ended 30 June 2023 18#19Closing Remarks Hong Leong Bank Resilient business performance supported by sustained loan/financing growth and higher non-interest income Disciplined cost management where expenses were tightly controlled with a sustainable CIR Healthy asset quality with a stable GIL ratio Stable liquidity and capital positions; allowing us to continuously support future business growth Anchoring on our solid foundation to deliver sustainable outcomes through committed execution of aligned strategic priorities Strong underlying performance backed by above industry loan/ financing growth, discipline cost management and healthy asset quality HLB FY2023 ended 30 June 2023 19#20Guidance for FY2024 Strong loan/financing growth momentum of 6% to 7% NIM in the region of 1.8% to 1.9% Sustainable CIR ratio of <40% Uphold GIL ratio <0.70% ☐ Net credit cost of ~10 bps Continue to drive CASA with a mix of >30% Robust ROE of ~12% HLB FY2023 ended 30 June 2023 Hong Leong Bank Anchoring on our solid foundation to deliver sustainable outcomes through committed execution of aligned strategic priorities 20 20#213 SUPPLEMENTARY INFORMATION Hong Leong Bank HLB FY2023 ended 30 June 2023 21#22Key Financials - 5 Years Trend Total Income (RM❜mil) PAT (RM❜mil) 1.0% Resilient top-line -6.4% 5,467 5,597 5,686 4,726 4,778 FY19 FY20 FY21 FY22 FY23 NIM (%) Hong Leong Bank 14.7% 15.0% 16.1% O. 3,818 3,289 2,665 2,861 2,495 FY19 FY20 FY21 FY22 FY23 CIR (%) y-o-y growth Overall improved performance Compressed NIM driven by funding cost pressure Solid CIR through strategic cost management initiatives 44.3% 44.0% 2.14% 2.14% 1.96% 1.98% 39.3% 38.0% 37.5% 1.88% FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 HLB FY2023 ended 30 June 2023 22 22#23Group Performance Hong Leong Bank Change RM'mil FY2022 FY2023 (YoY) Net interest income 4,618 4,552 -1.4% Non-interest income Total income 979 1,133 15.8% 5,597 5,686 1.6% Operating expenses (2,098) (2,233) 6.4% Operating profit before allowances 3,499 3,452 -1.3% Allowances for loans and other impairments (163) (115) -29.3% Share of profits from associate 1,030 1,289 25.1% Profit before tax 4,367 4,627 6.0% Profit after tax 3,289 3,818 16.1% HLB FY2023 ended 30 June 2023 23 23#24HLISB Key Highlights Change RM'mil FY2022 FY2023 (YoY) Total net income 699 853 22.0% Operating expenses (261) (286) 9.8% Profit before taxation and zakat 438 567 29.2% Profit after taxation and zakat 297 425 43.1% Cost-to-income ratio Gross Financing Deposits Capital Adequacy 28.8% 29.7% 0.9% 36,367 41,071 12.9% 38,919 44,894 15.4% 15.1% 15.1% 0.0% HLB FY2023 ended 30 June 2023 Hong Leong Bank 24#25Hong Leong Bank Disclaimer This presentation has been prepared by Hong Leong Bank ("HLB") for selected recipients for information purposes only and the information contained herein has been obtained from sources believed to be reliable. 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 guarantee, representation or warranty, whether expressed or implied, as to the adequacy, accuracy or completeness or reliability 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 specific investment objectives, financial situation or particular 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. The information contained in this presentation is strictly confidential and its contents, views or opinions 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. The intellectual property in the presentation belong to HLB unless specifically indicated otherwise. For further information, please visit www.hlb.com.my or contact: Investor Relations: Chow Sheng Wai Head, Corporate Finance & Investor Relations DID: +603 2081 2972 Email: [email protected] THANKYOU HLB FY2023 ended 30 June 2023 25 25