2. 1
Disclaimer
These presentation materials have been prepared by Hyundai Capital Services., Inc. (“HCS” or “the Company”), solely
for the use at this presentation. This presentation material may not be reproduced, redistributed or passed on, directly
or indirectly, to any other person or published, in whole or in part, for any purpose.
The Company has not taken measures to independently verify data contained in this material. No representations or warranties, express or
implied, are made as to, and no reliance should be placed on, the accuracy, fairness or completeness of the information presented or contained
in this presentation. This presentation should not be construed as legal, tax, investment or other advice.
Financial statements in this document have been prepared in accordance with K-IFRS. Other additional market information has been sourced
from the Company or from other external institutions. The information presented or contained in this presentation is current as of the date
hereof and is subject to change without notice and its accuracy is not guaranteed.
Certain information and statements made in this presentation contain “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.
3. 2
Asset
Asset Portfolio 1H16 Performance Review
(unit: bn KRW)
2013 2014 2015 1H16 YTD
New car 10,509 10,472 11,552 11,639 0.8%
Auto lease 3,976 3,818 3,997 4,097 2.5%
Used car 1,484 1,464 1,396 1,334 -4.4%
P-loan 2,111 2,162 2,061 2,081 1.0%
Mortgage 1,796 1,745 1,836 2,088 13.8%
Corporate 211 350 597 745 24.8%
15,970 15,754 16,944 17,070
4,427 4,569
4,868 5,178
20,397 20,323
21,812 22,248
78.3% 77.5% 77.7% 76.7%
2013 2014 2015 1H16
Auto Non-Auto %age of Auto Assets Captive
• Maintain growth trend by continuing OEM co-marketing
• Expand co-marketing to Lease/Rent from New car financing
(e.g. new product ‘Economy Rent-a-Car’)
Corporate financing
• New-product oriented expansion (ABL, CDF etc.)
• Stable growth based on conservative risk management
(unit: bn KRW)
Source: managed asset
Ref) OEM Co-marketing Programs
’15. 12 Genesis ‘Genesis Lease – EQ900’ launch
’16. 01 KMC, K3 and K5 ‘My Style’ promotions
‘16. 05 HMC, Grandeur ‘Smart Exchange’ promotions
‘16. 06 HMC, Volume models ‘Economy Rent-a-Car’ launch
4. 3
2014 2015 YoY 1H15 1H16 YoY
Operating revenue 2,745.9 2,601.7 -5.2% 1,328.2 1,342.0 1.0%
• Despite lower APR, one-off loan disposal effect
led to increase (New Car APR 1H15 5.0% → 1H16 4.5%)
Operating expenses 2,423.8 2,265.6 -6.5% 1,121.2 1,071.3 -4.5%
Interest expenses 752.6 649.1 -13.8% 336.2 305.0 -9.3% • Lowered CoF on new funding
Bad debt expenses 418.3 307.2 -26.6% 149.2 123.7 -17.1%
• Asset quality improvement due to low-risk
product growth (new car, mortgage)
Operating income 321.9 339.1 5.3% 207.5 271.1 30.7%
Non-operating income 9.1 32.7 259.4% 21.8 35.9 64.2%
Equity method income 17.0 30.9 81.2% 19.1 32.6 71.2%
• Stable growth and profit increase from overseas
entities (China 26.6 bn + UK 5.8 bn)
Net income 237.7 276.7 16.4% 171.6 227.5 32.6%
ROA 1.2% 1.3% 0.1%p 1.7% 2.0% 0.3%p
Profitability
Summary of Income Statement
①
①
②
(unit: bn KRW)
① Excluding FX effects
② Excluding one-off impact (Disposal loss of HK Savings Bank)
5. 4
Asset Quality
Delinquency Reserves
2.7%
2.4%
1.9% 1.9%
1.1% 1.0%
0.7% 0.7%
2013 2014 2015 1H16
30+ days DQ ratio New car 30+ days DQ ratio
437 440 465 466
326 334 254 213
763 774 719 678
154.4% 162.2%
171.9%
162.0%
2013 2014 2015 1H16
Allowance Reserves 30+ days DQ asset coverage
Asset Quality Management
• Reinforced U/W led to continuous asset quality improvement
• Low-risk auto oriented asset portfolio
Internal Guidelines
• Max of expected loss, incurred loss or FSS requirement
• Continue to decrease due to low-risk-assets-centered growth
①
① (Allowance + Reserves) / 30+ days delinquent asset
(unit: KRW bn)
6. 5
2013 2014 2015 1H16 YTD
Total asset 22,369 22,508 24,219 25,366 3.2%
Total capital 3,383 3,395 3,671 3,563 2.4%
6.6X 6.6X 6.6X
7.1X
2013 2014 2015 1H16
15.1% 15.4% 14.9% 14.8%
2013 2014 2015 1H16
Capital Structure
Leverage Capital Adequacy Ratio
Highlights
• Interim dividend in November 2015
: Total dividends of KRW 250bn (KRW 2,517 per share)
(unit: KRW bn)
Source: separate financial statement, according to FSS guidelines
7. 6
51.6%
23.5%
9.9%
7.4%
6.9%
0.7%
Domestic Bond Overseas Bond
Domestic ABS Overseas ABS
Bank Loan CP & Short-term Debt
2.0yr
1.9yr 2.0yr
2.1yr
142.0%
132.0% 129.8% 134.1%
2013 2014 2015 1H16
Debt Maturity ALM ratio
Funding
Funding Position Maturity
Funding guidelines
• By product: ABS <20%, Short-term debt <10%
• ALM ratio: 100% or higher
Funding portfolio diversification
• Stable portfolio through product, maturity, currency
diversification
• (2Q16) AUD 300mm Kangaroo bond issuance
Source: Internal sources
KRW
20.3tn
8. 7
1,304 1,375 1,551 1,802
2,345 2,524
2,712
2,990
3,649 3,899
4,263
4,792
2013 2014 2015 1H16
Cash Credit line
4,953
5,790 5,772 5,968
73.7% 67.3% 73.9% 80.3%
2013 2014 2015 1H16
Short-term Debt Short-term Debt Coverage
Liquidity
Liquidity Position Short-term debt Coverage
(unit: KRW bn) (unit: KRW bn)
Contingency framework
• Early warning and response system in place
• Daily monitoring of key market indicators
Liquidity Management
• Satisfies Basel III Liquidity coverage ratio
• Diversified Credit lines by lender and tenor
Source: Internal sources
9. 8
1.8
2.4 2.5
31.1 40.0
24.0
0.4
0.7
2.0
3.4 3.7
24.0
58.1
77.1
26.8
32.7 34.4
'14 '15 1H16 '14 '15 1H16
-18.2
434.7
334.3
66.2
-4.7
Started Operation
(‘15.01)
Overseas Business
Strategy
Source: Internal sources (FX rate : as of period-end for receivables/period-average for IBT)
※ Brazil, Russia, India, Australia:
HCS advisories provide affiliate financing through domestic financiers
USA
(HCA)
UK
(HCUK)
China
(BHAF)
Canada
(HCCA)
Founded 1989.9 2012.2 2012.6 2014.4
Shares
structure
HMA 80%
KMA 20%
HCS 30%
HMUK 10%
KMUK 10%
SCUK 50%
HCS 46%
HMC 7%
BHMC 14%
BAI 33%
HMC 60%
KMC 40%
Overseas Entities
Overseas Performance
US
(HCA)
UK
(HCUK)
China
(BHAF)
Canada
(HCCA)
Support HMC/KMC sales by providing captive financing
• 4 overseas financiers (US, UK, China, Canada)
• Target mutual growth of auto sales & financing
Global coverage expansion
• Awaiting Bank License approval in Germany
• Preparing additional financiers (India, Brazil)
Receivables (KRW tn) IBT (KRW bn)
10. 9
Appendix
Item 2012 2013 2014 2015 1H16
Asset
Total 20.3tn 20.4tn 20.3tn 21.8tn 22.2tn
% of Auto asset 79.9% 78.3% 77.5% 77.7% 76.7%
Asset Quality
30+ days DQ ratio 2.5% 2.7% 2.4% 1.9% 1.9%
NPL Coverage 103.0% 94.4% 104.2% 133.9% 126.3%
Capital Structure
CAR①
14.5% 15.1% 15.4% 14.9% 14.8%
Leverage②
7.2X 6.6X 6.6X 6.6X 7.1X
Funding
Total 17.3tn 17.8tn 17.8tn 19.4tn 20.3tn
Bond 74.2% 76.1% 78.2% 73.8% 75.1%
Bank loan 9.4% 8.5% 7.8% 6.4% 6.9%
CP, Short-term debt 3.4% 1.8% 1.1% 3.5% 0.7%
ABS 13.0% 13.6% 12.9% 16.3% 17.3%
ALM
ALM ratio 148.0% 142.0% 132.0% 129.8% 134.1%
Asset maturity 1.4yr 1.4yr 1.5yr 1.5yr 1.6yr
Debt maturity 2.0yr 2.0yr 1.9yr 2.0yr 2.1yr
① Separate financial statement
② Total asset(current period) / Total capital(previous period) as of 2013
