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
2013 2014 2015 1Q16 YTD
New car 10,510 10,472 11,552 11,393 -1.4%
Auto lease 3,976 3,818 3,997 4,049 1.3%
Used car 1,484 1,464 1,396 1,361 -2.5%
P-loan 2,111 2,162 2,061 2,023 -1.8%
Mortgage 1,796 1,745 1,836 1,953 6.4%
Auto business
• Maintain captive M/S through OEM co-marketing
• Expand Rent for profit base diversification
Non-Auto business
• Exploit opportunities in 1.5 tier financing based on auto customers
• Prime-oriented sales increase on mortgage product
15,970 15,754 16,944 16,803
4,427 4,569
4,867 4,986
20,397 20,323
21,812 21,789
78.3% 77.5% 77.7% 77.1%
2013 2014 2015 1Q16
Auto Non-auto % of Auto Assets
Ref) OEM Co-marketing Programs
’15. 01 KMC, all models’ interest rate lowered by 1%p
‘15. 03 HMC, all models’ interest rate lowered by 1%p
HMC, Avante ‘Miracle of 100K KRW’ promotions
‘15. 05 HMC, Sonata interest free
’16. 01 KMC, K3 and K5 ‘My Style’ promotions
‘16. 03 HMC, Grandeur ‘Smart Exchange’ promotions
Source: managed asset
Asset
Asset Portfolio 2016 Strategies
(unit: KRW bn)
(unit: bn KRW)
4. 3
Profitability
① Excluding FX effects
② Excluding one-off impact (Disposal loss of HK Savings Bank)
Summary of Income Statement
(unit: bn KRW)
2014 2015 YoY 1Q15 1Q16 YoY
Operating revenue 2,745.9 2,601.7 -5.2% 647.1 635.3 -1.8% • Lower product interest rate
(New Car APR 1Q15 5.4% → 1Q16 4.9%)
Operating expenses 2,423.8 2,265.6 -6.5% 559.5 527.9 -5.6%
Interest expenses 752.6 649.1 -13.8% 172.3 152.7 -11.3% • Lowered CoF on new funding
Bad debt expenses 418.3 307.2 -26.6% 76.9 56.7 -20.2%
• Asset quality improvement due to low-risk
product growth (new car, mortgage)
Operating income 321.9 339.1 5.3% 87.8 106.5 21.4%
Non-operating
income
9.1 32.7 259.4% 10.9 17.9 64.0%
Equity method
income
17.0 30.9 81.2% 8.8 17.1 94.2% • BHAF (China) 14.5 bn + HCUK (UK) 2.6 bn
Net income 237.7 276.7 16.4% 74.6 90.4 21.2%
ROA 1.2% 1.3% 0.1%p 1.5 1.7 0.2%p
①
①
②
5. 4
2.7%
2.4%
1.9% 2.0%
1.1% 1.0%
0.7% 0.7%
2013 2014 2015 1Q16
30+ days delinquency ratio
New car 30+ days delinquency ratio
437 440 465 466
326 334 254 251
763 774 719 716
154.4% 162.2%
171.9%
161.6%
2013 2014 2015 1Q16
Allowance Reserves 30+ days delinquent asset coverage
Conservative reserve policy
• Max of expected loss, incurred loss or FSS requirement
• Total asset growth driven by low-risk assets led to slight
decrease of total reserves
①
① (Allowance + Reserve) / 30+ days delinquent asset
Asset Quality
Delinquency Reserve
(unit: KRW bn)
Continuous stabilization
• Reinforced underwriting led to continuance of asset quality
improvement
6. 5
Capital Structure
Leverage
2013 2014 2015 1Q16 YTD
Total asset 22,369 22,508 24,219 24,582 1.5%
Total capital① 3,383 3,395 3,671 3,480 -5.2%
6.6X 6.6X 6.6X 7.1X
2013 2014 2015 1Q16
15.1% 15.4% 14.9% 15.0%
2013 2014 2015 1Q16
Source: separate financial statement
① Based on previous quarter’s total capital since 2013
Highlights
• Interim dividend in November 2015
: Total dividends of KRW 250bn (KRW 2,517 per share)
Capital Adequacy Ratio
(unit: KRW bn)
7. 6
Funding
Funding Position Maturity
Funding guidelines
• By product: ABS <20%, Short-term debt <10%
• ALM ratio: 100% or higher
51.9%
23.6%
8.8%
8.0%
6.3%
1.3%
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%
134.3%
2013 2014 2015 1Q16
Debt maturity ALM ratio
KRW
19.7tn
Source: Internal sources
Funding portfolio diversification
• Stable portfolio through product, maturity, currency
diversification
• (1Q16) USD 500mm Green bond issuance
8. 7
Liquidity
Liquidity Position Short-term debt Coverage
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
1,304 1,375 1,551 1,569
2,345 2,524
2,712 2,308
3,649 3,899
4,263
3,877
2013 2014 2015 1Q16
Cash Credit line
4,953
5,790 5,772 6,043
73.7% 67.3% 73.9%
64.2%
2013 2014 2015 1Q16
Short-term debt Short-term debt coverage
Source: Internal sources
(unit: KRW bn) (unit: KRW bn)
9. 8
Overseas Business
Strategy
Source: Internal sources (FX rate as of each period-end)
※ 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)
“Expenses
increase (bad
debt etc.)
Support HMC/KMC sales by providing captive financing
• 4 overseas financiers (US, Canada, China, UK)
• Target mutual growth of auto sales & financing
Global coverage expansion
• Awaiting License for Internet bank in Germany
• Additional financiers set up in preparation (India, Brazil)
1.8
2.4 2.5
31.1 40.0
10.7
0.4 0.5
2.0
3.4 3.6
24.0
58.1
41.9
26.8
32.7 33.0
'14 '15 1Q16 '14 '15 1Q16
-18.2
434.7 360.5
21.9
-4.6
Receivables (KRW tn) IBT (KRW bn)
10. 9
Appendix
① Separate financial statement
② Total asset(current period) / Total capital(previous period) as of 2013
Item 2012 2013 2014 2015 1Q16
Asset
Total 20.3tn 20.4tn 20.3tn 21.8tn 21.8tn
% of Auto asset 79.9% 78.3% 77.5% 77.7% 77.1%
Asset Quality
30+ days DQ ratio 2.5% 2.7% 2.4% 1.9% 2.0%
NPL Coverage 103.0% 94.4% 104.2% 133.9% 136.4%
Capital Structure
CAR①
14.5% 15.1% 15.4% 14.9% 15.0%
Leverage②
7.2X 6.6X 6.6X 6.6X 7.1X
Funding
Total 17.3tn 17.8tn 17.8tn 19.4tn 19.7tn
Bond 74.2% 76.1% 78.2% 73.8% 75.5%
Bank loan 9.4% 8.4% 7.8% 6.4% 6.3%
CP, Short-term debt 3.4% 1.8% 1.1% 3.5% 1.3%
ABS 13.0% 13.6% 12.9% 16.3% 16.9%
ALM
ALM ratio 148.0% 142.0% 132.0% 129.8% 134.3%
Asset maturity 1.4yr 1.4yr 1.5yr 1.5yr 1.5yr
Debt maturity 2.0yr 2.0yr 1.9yr 2.0yr 2.1yr
