United Overseas Bank Limited · SGX:U11
United Overseas Bank — FY2018 Earnings Presentation
27 slides from United Overseas Bank's earnings presentation, Feb 22, 2019
Slide 1: UOB Group Financial Highlights
UOB Group For the Financial Year / Fourth Quarter Ended 31 December 2018 Financial Highlights Lee Wai Fai Group Chief Financial Officer 22 February 2019 Disclaimer: This material that follows is a presentation of general background information about the Bank’s activities current at the date of the p
Slide 2: Highlights
Highlights Full year profit crosses the $4 billion mark, supported by strong balance sheet FY18 earnings of $4.01 billion 18% YoY 4Q18 earnings of $916 million 7% YoY; 12% QoQ • Total income rose 6% to $9.12 billion led by strong growth in both net interest income and net fee and commission income •
Slide 3: New high full year earnings surpassing $4 billion
New high full year earnings surpassing $4 billion 2018 2017 YoY +/(-) $m $m $m % Net interest income 6,220 5,528 692 13 • Net interest income (NII) rose 12% lifted by higher margins and broad- based loan growth. Net fee income 1,967 1,873 94 5 • Higher net fee income driven by Other Non-NII 930
Slide 4: Fourth quarter earnings increased 7% from a year ago
Fourth quarter earnings increased 7% from a year ago 4Q18 4Q17 YoY +/(-) $m $m $m % Net interest income 1,608 1,461 148 10 • Higher net interest income led by 11% loan growth. Net fee income 467 509 (42) (8) • Lower net fee income as higher credit card fees were offset by lower wealth Other Non-
Slide 5: Net earnings 12% lower QoQ
Net earnings 12% lower QoQ 4Q18 3Q18 QoQ +/(-) $m $m $m % Net interest income 1,608 1,599 9 1 • Lower net fee income due to lower wealth management and loan-related fees on subdued market sentiment. Net fee income 467 484 (17) (4) • Other non-NII declined mainly due to Other Non-NII 140 244 (103
Slide 6: Regional operating profit up 8% YoY in constant currency
Regional operating profit up 8% YoY in constant currency 2018 At 10% constant 9% FX rate 3% Operating 2018 2017 +/(-) +/(-) 8% 57% Profit $m $m % % 13% Singapore 2,934 2,834 4 4 Regional: 1,669 1,535 9 8 2017 10% Malaysia 661 621 7 2 8% Thailand 393 350 12 9 3% Indonesia 132 156 (15) (8) 7% Greater
Slide 7: All business segments performed better YoY
All business segments performed better YoY 2018 4% -2% 2018 2017 +/(-) 40% Segment Operating Profit $m $m % Group Retail (GR) 2,023 1,981 2 58% Group Wholesale Banking (GWB) 2,982 2,713 10 Global Markets (GM) 220 187 17 2017 4% Others * (112) (57) (95) -1% 41% Total 5,113 4,824 6 56% * Comprises Inv
Slide 8: Higher NII driven by broad-based loan growth
Higher NII driven by broad-based loan growth Net Interest Income (NII) and Margin 2.20% 2.14% 2.19% 2.14% 2.14% 2.15% 2.14% 2.18% 2.22% 2.19% 2.15% 1.71% 1.77% 1.82% 1.73% 1.75% 1.79% 1.81% 1.84% 1.83% 1.81% 1.80% 0.77% 0.89% 0.82% 0.93% 0.94% 0.87% 0.90% 0.87% 0.60% 0.71% 0.38% 1,599 1,608 1,542 6,
Slide 9: QoQ lower fee and trading and investment income amid market uncertainties
QoQ lower fee and trading and investment income amid market uncertainties Non-Net Interest Income 3,035 2,896 2,799 260 282 800 263 771 749 758 756 761 63 86 728 68 70 58 57 902 647 58 877 607 198 187 216 240 221 186 243 82 59 1,873 1,967 1,659 509 517 498 484 439 448 477 467 2016 2017 2018 1Q 2Q 3Q
Slide 10: Cost/Income ratio remained stable
Cost/Income ratio remained stable Operating Expenses and Cost / Income Ratio 44.0% 43.7% 43.9% 46.0% 43.2% 43.8% 44.2% 43.6% 43.4% 44.4% 41.6% 4,003 3,739 3,425 1,027 1,022 1,011 1,556 987 984 1,515 925 900 887 1,375 419 381 403 384 387 360 379 357 2,447 2,050 2,224 608 606 619 626 597 526 547 543 2
Slide 11: IT Investments Towards “Changing the Bank”
IT Investments Towards “Changing the Bank” Focus Centralisation and Standardisation Connectivity and Digital for Growth Cumulative 2009 to 2013 2014 to 2018 IT investments (cSGD0.6 b) (cSGD1.6 b) Total IT investments Global Market Platform: Customer flow income +9%1 Cash Management Platform: 36% 34%
Slide 12: Total credit costs increased QoQ to 22 bps
Total credit costs increased QoQ to 22 bps Total Allowances on Loans 125bp 61bp 45bp 49bp 37bp 16bp 32bp 12bp 13bp 18bp 22bp 32bp 28bp 15bp 32bp 30bp 32bp 693 17bp 11bp 11bp 15bp 20bp 660 390 184 184 188 131 104 113 81 65 2016 2017 2018 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 2017 2018 Total Allowan
Slide 13: QoQ non-performing assets decreased 5%
QoQ non-performing assets decreased 5% 2017 2018 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q $m $m $m $m $m $m $m $m NPA at start of period 3,480 3,543 3,587 3,919 4,389 4,323 4,404 4,374 New NPA 424 537 799 1,167 416 436 475 609 Upgrades, recoveries and translations (293) (255) (369) (354) (310) (212) (398) (382) Writ
Slide 14: NPL ratio improved to 1.5%
NPL ratio improved to 1.5% NPL ($m) 3,399 3,466 3,748 4,211 4,138 4,208 4,185 3,994 NPL Ratio 1.5% 1.5% 1.6% 1.8% 1.7% 1.7% 1.6% 1.5% NPL ($m) 303 290 300 290 132 139 138 230 150 120 272 244 694 692 721 749 545 257 285 304 261 608 439 456 485 482 416 623 641 386 585 558 603 623 629 370 392 563 487 5
Slide 15: Adequate NPA coverage
Adequate NPA coverage Total Allowances ($m) 4,132 4,062 4,190 3,990 3,913 3,935 3,935 3,636 NPA coverage (%) 117 113 107 91 91 89 90 87 Unsecured NPA coverage (%) 232 232 223 187 190 190 189 202 Total Allowances ($m) 2,619 2,635 2,610 1,976 2,014 1,978 1,935 1,998 1,937 1,991 1,944 1,984 1,580 1,651
Slide 16: Strong capital and funding supported broad-based loan growth across the Group
Strong capital and funding supported broad-based loan growth across the Group Dec-18 18% Dec-18 Dec-17 +/(-) Sep-18 +/(-) 36% Gross Loans $b $b % $b % 8% 41% Singapore 137 128 8 133 3 59% Regional: 97 85 15 95 2 31% 4% 3% Malaysia 29 27 9 29 1 Thailand 17 15 12 16 3 Dec-17 Indonesia 11 11 5 11 2 Gre
Slide 17: Diversified funding sources
Diversified funding sources Dec-18 14% Dec-18 Dec-17 +/(-) Sep-18 +/(-) Customer Deposits $b $b % $b % 42% Singapore 195 185 5 197 (1) Regional: 76 69 11 75 2 44% Malaysia 30 28 6 30 (1) Thailand 17 16 12 18 (1) Indonesia 7 7 (1) 7 (1) Dec-17 14% Greater China 22 18 22 20 9 Others 23 19 19 22 5 43%
Slide 18: Stable liquidity position with LCR at 127% and NSFR at 107%
Stable liquidity position with LCR at 127% and NSFR at 107% Customer Loans and Deposits; LDR, LCR and NSFR 154% 157% 142% 135% 128% 142% 142% 127% 86.7% 86.1% 85.8% 85.1% 86.7% 85.7% 85.7% 88.2% 288 294 293 268 273 274 260 260 252 259 237 246 225 224 230 232 Mar Jun Sep Dec Mar Jun Sep Dec 2017 2018
Slide 19: Strong capital and leverage ratio
Strong capital and leverage ratio Capital Adequacy Ratios (CAR) and RoRWA 2.13% 1.95% 1.99% 1.61% 1.69% 1.69% 1.68% 1.51% 18.7% 18.8% 18.4% 17.3% 17.8% 17.8% 17.4% 17.0% 14.7% 14.9% 14.5% 13.8% 14.1% 13.9% 12.8% 13.3% Mar Jun Sep Dec Mar Jun Sep Dec 2017 2018 Tier 2 CAR Tier 1 CAR Fully‐loaded CET1
Slide 20: Dividends increased to $1.20 per ordinary share
Dividends increased to $1.20 per ordinary share 20 20 20 50 45 35 35 50 35 35 35 2015 2016 2017 2018 Net dividend per ordinary share (¢) Interim Final Special UOB 80th anniversary 2015 2016 2017 2018 Payout amount ($m) 1,444 1,135 1,660 2,000 Payout ratio (%) 45 37 49 50 Payout ratio (%) (excluding
Slide 21: Appendix: Performance of Major Territories
Appendix : Performance of Major Territories - Singapore - Malaysia - Thailand - Indonesia - Greater China China exposure
Slide 22: Singapore – Key Financials
Singapore – Key Financials 2018 2017 +/(-) 4Q18 3Q18 +/(-) $m $m % $m $m % Net interest income 3,552 3,065 16 921 912 1 Net fee income 1,174 1,142 3 267 289 (8) Other non-interest income 396 707 (44) 24 114 (79) Total income 5,123 4,913 4 1,212 1,315 (8) Less: Expenses 2,189 2,079 5 478 572 (16) Ope
Slide 23: Malaysia – Key Financials
Malaysia – Key Financials 2018 2017 +/(-) 4Q18 3Q18 +/(-) RM'm RM'm % RM'm RM'm % Net interest income 2,210 2,125 4 575 566 2 Net fee income 655 634 3 205 136 51 Other non-interest income 333 306 9 68 83 (18) Total income 3,198 3,065 4 848 785 8 Less: Expenses 1,218 1,132 8 338 298 13 Operating prof
Slide 24: Thailand – Key Financials
Thailand – Key Financials 2018 2017 +/(-) 4Q18 3Q18 +/(-) THB'm THB'm % THB'm THB'm % Net interest income 16,944 15,587 9 4,376 4,310 2 Net fee income 4,991 4,812 4 1,336 1,263 6 Other non-interest income 1,134 982 16 332 264 26 Total income 23,069 21,380 8 6,044 5,836 4 Less: Expenses 13,661 12,778
Slide 25: Indonesia – Key Financials
Indonesia – Key Financials 2018 2017 +/(-) 4Q18 3Q18 +/(-) IDR'b IDR'b % IDR'b IDR'b % Net interest income 3,364 3,298 2 877 823 7 Net fee income 799 747 7 223 210 6 Other non-interest income 529 441 20 136 162 (16) Total income 4,692 4,486 5 1,236 1,195 3 Less: Expenses 3,298 2,965 11 949 822 15 Op
Slide 26: Greater China – Key Financials
Greater China – Key Financials 2018 2017 +/(-) 4Q18 3Q18 +/(-) $m $m % $m $m % Net interest income 421 397 6 101 113 (10) Net fee income 159 122 31 36 37 (3) Other non-interest income 283 232 22 67 67 (1) Total income 864 751 15 204 217 (6) Less: Expenses 381 342 11 108 88 22 Operating profit 483 40
Slide 27: Exposure to China
Exposure to China Bank exposure as of 31 December 2018 Non-bank exposure as of 31 December 2018 • Bank exposure accounted for 60% of total • Target customers include top-tier state-owned exposure to China enterprises, large local corporates and foreign • Top 5 domestic banks and 3 policy banks inves