ir presentation: hyundai card 1q 2012
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IR presentation: Hyundai Card 1Q 2012TRANSCRIPT
Hyundai Cardis... Investor Presentation Hyundai CardMay 2012
DisclaimerThese presentation materials have been prepared by Hyundai Card Co., Ltd. (“HCC or the Company”), solely for the use at this presentation and have not been independently verified. No representations or warranties, express or implied, are made as to, and no reliance should be placed on, the accuracy, fair-ness or completeness of the information presented or contained in this presentation. Neither the Companies nor any of theirs affiliates, advisers or representatives accepts any responsibility whatsoever for any loss or damage arising from any information presented or contained in this presentation. The information presented or contained in this presentation is cur-rent as of the date hereof and is subject to change without notice and its accuracy is not guaranteed. Neither the Companies nor any of their affiliates, advisers or representatives make any undertaking to update any such information subsequent to the date hereof. This presentation should not be construed as legal, tax, investment or other advice.
Certain information and statements made in this presentation contain “forward-looking statements.” Such forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “considering,” “depends,” “estimate,” “expect,” “intend,” “plan,” “planning,” “planned,” “project,” “trend,” and similar expressions. All forward-looking statements are the Companies’ current expectation of future events and are subject to a number of factors that could cause actual results to differ materially from those described in the forward-looking statements. Caution should be taken with respect to such statements and you should not place undue reliance on any such forward-looking statements.
Certain industry and market data in this presentation was obtained from various trade associations, and the Companies have not verified such data with independent sources. Accordingly, the Companies make no representations as to the accuracy or com-pleteness of that data, and such data involves risks and uncertainties and is subject to change based on various factors.
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The Premier Korean Credit Card Company01
Strong customer loyalty with high card usage per customer
- Excellent asset quality with the industry’s lowest delinquency rate of only 0.6%Industry leader across key quality metrics
Marketing innovations differentiate brand and drive growth- Strategic marketing program with Hyundai Motor Group - Leadership position in super premium segment
- Strong governance with GE Capital's active involvement in management & daily operations
Seven-year-long partnership between two global leaders : Hyundai Motor Group and GE Capital
Increasingly profitable since the inception of the joint venture(JV)
Growing Partnership with GE Capital
- Innovative “Point Programs”- Stable & solid operational base- Extensive sales network54.0%
43.0%
- Powerful financing arm- Effective marketing tool
- Most successful joint venture- Sole consumer finance window in Korea
- Advanced knowledge on risk of management- Financial support- Active involvement in management and daily operations
- GE Capital provides USD 200mm back-up credit line
- Total Investment : USD 649mm (as of March 31st 2012)
2010
2006 ~ 2008Exercising of Warrants(Additional equity investment)
2008
GE Capital increases paid incapital by KRW 165bn
2006
- Establishment of joint venturewith GE Capital
- GE Capital purchases KRW 200bn Subordinated bond
- GE Capital acquires KRW 313bn equity interest in HCC
2005
02
Management Strategy03
Use analytic insight and creative marketing to drive sustainable growth
Redress the balance between growth and risk management
Maintain strong capital structure and sound liquidity position
Place top priority on credit risk management
Maintain a diversified and stable funding portfolio
Investment Highlights04
Effective marketing lead to an increase in market share to 14.4% in 1Q12
Strong operating profit of KRW 79 billion and net income of KRW 75 billion
Maintained healthy asset quality with a 30+ day delinquency rate ofonly 0.6%, the lowest among Korean FIs
Reinforced strong commitment to abide by the target leverage of 4x
Strengthened liquidity management indicated by CP coverage of 784.6%
Compelling Business Environment
GDP Growth Trend
Source : Bank of Korea
* Source: the Credit Finance Association, as the end of 2011
Characteristics of Korean Credit Card Industry
2.8%
2008 2009 2010 2011 1Q12
2.2%
0.2%
6.1%
3.6%
05
GDP growth rate was 2.8% in 1Q12 (YoY) Payment service oriented ; similar to charge card concept- Proportion of revolving balance carried over : approximately 7.0%
Settlement ratio through credit card, 62.0%* of total private consumption
Strong credit infrastructure- Preemptive and conservative regulation by the Financial Supervisory Service
- Well-developed credit bureau system
Conservative Strategy Focused on Credit Purchase
Asset Portfolio (Unit: KRW Bn)
Lump Sum
Market Share Trend
Credit Purchase* Market
Total Credit Card Market (credit purchase*+ financial products)
Installments Cash Advance
Card Loan Other
06
Source : Company * Excludes corporate accounts Source : Company
15.5% 15.5%
14.3% 14.4%
1Q12
15.7% 15.7%
14.1%13.1%
2009 2010 2011
9,563
21.0%
10.6%
25.0%
42.8%
9,438
22.8%
10.1%
25.7%
41.1%
1Q122009
7,136
15.0%
10.7%
25.8%
48.5%
2010
9,186
21.6%
12.6%
25.0%
40.7%
2011
Innovative Programs Strengthen Bonds with Customers
Innovative Point Program with Hyundai Motor Group
Diversified Product Portfolio
-Increased card usage & loyalty -Continuous inflow of new applicants
-Able to offer more attractive mileage term
-Increased tendency to purchase HMC/KMC vehicles
-Enhanced customer retention capabilities
-Strong target-marketing practices through the analysis of cardholders’ lifestyle
07
Pre-rewardRepayment
Card UsageCar Purchase
Discount within Points
Point Accumulation
Pre-rewardSaveAuto
MPoint
GOODTHRU
MONTH / YEAR
GOODTHRU
MONTH / YEAR4028
GOODTHRU
4330
5289
Income Level
Super Premium
Point benefit
Multiple
Shopping
T&E
Niche
D/C benefit
Premium Prime
V2 PlatinumR3 Platinum
the Black the Redthe Purple
M Lady/ R
M
V
Middle
ZERO/ DIRECT
A2, K2, E2 PlatinumH3, T3 Platinum
C/ T/ H/ O
M2 PlatinumM3 Platinum
GOODTHRU
MONTH / YEAR4330GOODTHRU
MONTH / YEAR5433
GOODTHRU
MONTH / YEAR4330
GOODTHRU
MONTH / YEAR4330
GOODTHRU
MONTH / YEAR
GOODTHRU
MONTH / YEAR5433
4330
4330
4330
H / YEAR4330
GOODTHRU
MONTH / YEAR4330
GOODTHRU
MONTH / YEAR4028
GOODTHRU
MONTH / YEAR5433
GOODTHRU
MONTH / YEAR4028
ZERODIRECT
GOODTHRU
MONTH / YEAR
Creative Branding Drives High Awareness
Creative and Differentiated Marketing Strategies
Innovative Commercial
Strengthen and Elaborate Brand Activity- Launch a ‘Culture Project’ as an experimental attempt- Release Liquid Metal designed card to boast the unique identity
Super Series- Associate HCC with a “premium and artistic” image
The Modern Times - New communication
Global Alliance
08
Continuous growth in brand awareness
Source : Company
2008 2009 2010 2011
76.0%
80.4%
83.4%
88.1%
Pre-emptive Approach to Risk Management09
Risk Control Committee - Sets policies and reports to BOD- Equal membership between Hyundai Motor Group and GE Capital- Includes GE Capital’s Asia Chief Risk Officer
Using GE Capital’s expertise in risk management- Tailored use of GE Capital’s credit scoring system- Rigorous compliance and anti-fraud processes- Dynamic monitoring of payments, status changes - Adoption of GE Capital’s risk reporting format
Pursuing growth with a focus on stringent risk management- Application of Risk-Based Pricing(RBP)
Supporting innovative culture and meritocracy- Merit-based culture with performance-linked compensation- Rewards for innovation and development of new business opportunities- High quality employees from diverse background
Committed to excellence in governance
- Transparent corporate governance
- GE Capital has veto rights on all major decisions
- Active board oversight supported by three key committees. Risk Control Committee. Executive Finance Committee. Asset & Liability Committee
Combining Strong Governance with Innovation10
Solid Profit Underscores Strong Fundamentals
Income Statement (Unit : KRW Bn) Operating Income (Unit: KRW Bn)
11
Profit on sale of Daewoo International share
- Regulatory changes had a negative effect on operating income
- Pursue income stability through conservative risk management
- Maintain a steady M/S and number of card holders
(Excluding FX Effect)
Operating Expense
ROA
Operating Income
Net Income
Bad debt expense
Provision for unused Credit Line
(luding FX Effect)
Operating Revenue
2010
1,884
1,961
4.8%
375
281
185
14
2,259
2,336
1Q11
486
510
4.3%
98
74
53
3
584
608
1Q12
521
537
3.4%
79
75
42
2
600
615
YoY
7.4%
5.3%
-19.7%
1.3%
-19.9%
-34.1%
2.8%
1.3%
2,054
2,084
3.6%
324
239
200
1
2,378
2,408
2011
79
1Q12
98
1Q11
324
2011
286
2009
278
375
2010
101
30+ Delinquency Rate(%)
Excellent Asset Quality & Conservative Reserve Policy12
Source: Company
0.4%0.6% 0.6%
0.3%
2009 2010 2011 1Q12 2011
123.9%127.7%
199.1% 197.3%
1Q12
114142
2009
148166
23
189
2010
190
204
378
174193
381
171
Total Reserve VS Regulatory Requirement(KRW Bn)
Regulatory Requirement
Supplemental
Reserve under K-IFRS
Tatal Reserve/ Regulatory Requirement
210
Solid Capital Base
Leverage Trend (Unit: KRW Bn) Capital Adequacy Ratio (Unit: KRW Bn)
Managed Borrowings
13
Maximum LeverageAccording to Dividend Policy :
4.0x
Source : Company
7,068
5,165
7,197
22.5%
18.7%19.6%
20.0%
3.5X 4.1X3.5X
3.4X
2009 2010 2011 1Q12
7,090
Source : Company
2009
1,4831,699
2010
1,737
1,843
2011
1,9971,845
2,0771,869
1Q12
Leverage Shareholder’s Equity Adjusted Capital CAR
Well Diversified Funding Portfolio
Funding Portfolio by Product
Funding Balance : KRW 7,090Bn
Long-term funding : 72.0%
Funding Principles
2012 Plan
14
Maintain the proportion of ABS under 20% andCP under 10%
Diversify funding portfolio in terms of currency, region and product
Maintain the average maturity ratio of liability-to-asset at over 100%
Contingency plans under regular review
Take advantage of favorable domestic funding environment :
Uphold stability of the funding portfolio
ABS12.7%
CP3.0%
Bond82.7%
Loan1.7%
Effectively Managed Liquidity
CP Coverage Ratio (Unit: KRW Bn) Debt Maturity Profile (Unit: KRW Bn)
Bond CP Loan ABS
15
* CP Coverage Ratio = (Cash + Unused Committed Credit Line) / CP BalanceSource: Company
CashCP Credit Line CP Coverage Ratio*
1Q122009 2010 2011 2H12 2013 2014 2015 2016~2Q12
784.6%
490
841
743
210
810
838
72.1%
57020
391
173.9%
323.2%
8.7%
13.3%
23.5% 22.7%
20.6%
11.3%
660650
498
478
140
618
840
70
940
1,477
1,260
50
298
1,007
450
800
40
149
1,666 1,608
1,457
80030
Source : Company
Investment Summary16
Effective marketing lead to an increase in market share to 14.4% in 1Q12
Strong operating profit of KRW 79 billion and net income of KRW 75 billion
Maintained healthy asset quality with a 30+ day delinquency rate ofonly 0.6%, the lowest among Korean FIs
Reinforced strong commitment to abide by the target leverage of 4x
Strengthened liquidity management indicated by CP coverage of 784.6%
Investor Relations Contacts
Jungsang Kim, Head of Investor RelationsPhone +82 2 2167 [email protected]
Brett Moffat, Manager of Investor RelationsPhone +82 2167 [email protected]
http://ir.hyundaicard.com
Minchul Seo, Deputy General Manager of Investor RelationsPhone +82 2 2167 [email protected]
Youn Chung, Manager of Investor RelationsPhone +82 2 3770 [email protected]