Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — FY2022 Earnings Presentation
32 slides from Oversea-chinese Banking's earnings presentation, Feb 24, 2023
Slide 1: Full Year 2022 Results Presentation
Full Year 2022 Results Presentation Goh Chin Yee, Group Chief Financial Officer 24 February 2023 OCBC Financial Results
Slide 2: Agenda
Agenda Financial Highlights Group Net Profit Group Performance Trends Appendices: Major Subsidiaries’ Results Notes: - Certain comparative figures have been restated to conform with the current period’s presentation; - Amounts less than S$0.5m are shown as “0”; - “nm” denotes not meaningful; - “na”
Slide 3: Financial Highlights
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Slide 4: Record 2022 full year profit, dividend raised 28%
Performance highlights Record 2022 full year profit, dividend raised 28% YoY Total Income ■ Total income at new high, Group S$11.7b +10% driven by strong Banking FY22: S$5.75b +18% YoY Net Profit Net Interest Income +31% Operations performance +18% YoY Non-Interest Income -16% ■ Record NII benefitti
Slide 5: Strong momentum across all key business pillars
Performance highlights Strong momentum across all key business pillars Banking: Profits at record high Wealth Management: Positive NNM inflows Net Profit (S$m) NII and Fee Income (S$m) WM Income (S$m) 1/ WM AUM (S$b) ■ Banking Operations net +30% +18% 36% 38% 33% profit exceeded S$5b mark +0.5% for
Slide 6: Earnings well-diversified across Business and Geography
Performance highlights Earnings well-diversified across Business and Geography Operating Profit by Business Operating Profit by Geography Others Others 3% 6% FY22 FY22 Insurance Global 14% 4% FY21 Wholesale 7% FY21 Greater China Banking 22% 22% 22% 39% 50% Global 10% 47% 50% Singapore Treasury and M
Slide 7: Solid balance sheet position to support growth
Balance sheet Solid balance sheet position to support growth Loans-to-Deposits Ratio Funding ■ Strong credit ratings Group LDR (%) Composition (%) affirmed with Aa1 rating 12% from Moody’s and AA- Customer deposits from both Fitch and S&P 5% Bank deposits 2% S$435b 83.6 83.3 Dec 22 81% Debts issued
Slide 8: Group Net Profit
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Slide 9: Record Group and Banking Operations Profit
Performance overview Record Group and Banking Operations Profit Group Performance Banking Operations Performance (S$m) FY22 YoY 4Q22 YoY QoQ (S$m) FY22 YoY 4Q22 YoY QoQ Total Income 11,675 +10% 3,001 +18% -5% Total Income 10,387 +15% 2,871 +31% +5% Operating 5,026 +5% 1,299 +1% +2% Operating 4,671 +
Slide 10: Record FY22 earnings driven by net interest income and lower allowances
Net Profit Record FY22 earnings driven by net interest income and lower allowances YoY Movement FY22 YoY +18% Positive on net profit Negative on net profit (S$m) ■ NII up 31% driven by consecutive quarters of NIM expansion and asset growth ■ Non-II lower led by drop in WM fee income from reduced cus
Slide 11: 4Q22 earnings up 34% YoY as net interest income hit a new quarterly high
Net Profit 4Q22 earnings up 34% YoY as net interest income hit a new quarterly high YoY +34% YoY Movement 4Q22 QoQ -19% Positive on net profit (S$m) Negative on net profit YoY ■ NII rose 60% driven by a 79bps rise in NIM ■ Non-II lower mainly due to 4Q21 Net Interest Non-II Profit from Operating Ass
Slide 12: Group Performance Trends
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Slide 13: Record full year and quarterly net interest income
Net interest income Record full year and quarterly net1Q22 interest income 2.31% FY22 4Q22 2.06% 1.91% YoY +60% 1.52% 1.55% 1.71% 1.54% YoY +31% Net Interest Margin QoQ +14% 7,688 5,855 ■ FY22 NII crossed S$7b 2,386 for the first time, driven by Net Interest Income 2,099 (S$m) 6% asset growth and NI
Slide 14: FY22 non-interest income at S$3.99b
Non-interest income FY22 non-interest income at S$3.99b FY22 4Q22 YoY -42% YoY -16% 43.1% 44.7% QoQ -42% 41.5% 40.9% 33.4% 34.1% % of Group Income 20.5% ■ FY22 declined YoY from a 4,741 drop in fee income and insurance profit while bond 3,987 portfolio rebalancing drove 1,334 investment losses 1,189
Slide 15: FY22 loan and trade fees up YoY while wealth management fees were softer
Non-interest income FY22 loan and trade fees up YoY while wealth management fees were softer FY22 4Q22 YoY -25% 2,245 YoY -18% QoQ -12% 273 1,851 ■ FY22 loan and trade fees 107 up YoY 285 Net Fees & Commissions (S$m) 479 ■ Weaker full year WM and 528 99 522 brokerage fees resulting Others 2/ 69 477
Slide 16: Full year trading income grew 9% YoY
Non-interest income Full year trading income grew 9% YoY FY22 4Q22 YoY -2% YoY +9% QoQ -23% 834 ■ FY22 trading income 763 mainly higher from 138 18 stronger non-customer flow treasury income, partly Trading Income (S$m) attributed to gains from 267 hedging activities Non-Customer Flow 225 83 Custome
Slide 17: Operating expenses well-managed
Operating Expenses Operating expenses well-managed FY22 4Q22 YoY +1% 50.5% YoY +5% 45.6% 43.5% 43.3% 45.0% 43.0% QoQ +2% Cost-to-income 40.3% ■ FY22 expenses increased 5,026 largely from higher staff 4,764 costs attributable to annual 874 salary adjustments, and 868 increased headcount to 1,289 1,26
Slide 18: FY22 allowances lower on improved credit conditions
Allowances FY22 allowances lower on improved credit conditions FY22 4Q22 YoY -1% 41 35 YoY -33% Credit costs (bps) 1/ 29 QoQ +105% 6 8 14 16 Total 50 28 8 ■ FY22 allowances for non- Impaired 4 0 4 4 impaired assets higher YoY 317 873 • MEV updates in the 18 ECL model largely to 314 reflect a prudent
Slide 19: NPA coverage ratio higher at 114%
Allowances NPA coverage ratio higher at 114% YoY +2% 108% 114% Dec 22 99% QoQ -0.3% Total NPA coverage 90% 91% ■ Cumulative allowances 3,904 3,905 3,909 4,001 3,991 higher YoY due to increases in allowances for non- 444 449 455 444 444 impaired assets Cumulative allowances (S$m) ■ Sufficient buffers
Slide 20: Resilient portfolio quality
Asset quality Resilient portfolio quality YoY -20% Dec 22 QoQ -5% 1.5% 1.4% NPL ratio 1.3% 1.2% 1.2% ■ NPAs lower YoY and QoQ 4,338 4,307 in ASEAN 123 118 3,969 403 372 120 3,688 ■ QoQ increase in Greater 299 110 3,486 China NPLs primarily due Non-performing Assets (S$m) 586 604 103 402 to downgrade
Slide 21: NPAs down YoY from lower new NPA formation & higher recoveries and upgrades
Asset quality NPAs down YoY from lower new NPA formation & higher recoveries and upgrades S$m 4Q21 3Q22 4Q22 FY21 FY22 At start of period 4,243 3,969 3,688 4,005 4,338 ■ FY22 NPA formation more than halved from a year New NPAs ago from improved Corporate/ Commercial Banking and Others 808 304 242 1,
Slide 22: Loans 4.5% higher YoY in constant currency terms
Loans Loans 4.5% higher YoY in constant currency terms +4.5% YoY +2% in constant ccy terms unchanged Dec 22 in constant ccy terms QoQ -3% 294 298 303 295 290 Loans by Geography (S$b) 53 56 57 59 59 ■ Loan growth YoY driven by Singapore, Australia, the 74 74 76 76 73 Rest of the world United States a
Slide 23: Deposits rose YoY driven by growth in fixed deposits
Deposits Deposits rose YoY driven by growth in fixed deposits 84.4% 85.0% YoY +2% 83.6% 83.3% 83.3% Dec 22 Group LDR QoQ -1% 79.3% 82.5% 82.4% 76.7% 76.6% SGD LDR ■ Shift from CASA to fixed deposits in line with rising 66.5% 65.8% 66.9% 64.2% USD LDR 59.3% rates ■ Continue to actively manage funding
Slide 24: Strong capital position to support growth and shareholder returns
Capital Strong capital position to support growth and shareholder returns YoY -0.3ppt Dec 22 QoQ +0.8ppt ■ CET1 ratio higher QoQ mainly due to profit CET1 CAR (%) 15.5 15.2 14.9 15.2 14.4 accretion and a decline in RWA ■ RWA down QoQ led by Dec 21 Mar 22 Jun 22 Sep 22 Dec 22 savings from RWA optimis
Slide 25: Rewarding shareholders with higher dividends
Dividend Capital Rewarding shareholders with higher dividends 53% 47% 49% 40% 39% ■ Dividend increase Dividend payout ratio supported by sustained 68.0 earnings growth and strong capital position 53.0 53.0 ■ 53% dividend payout ratio, 43.0 40.0 highest since 2008 DPS (cents) 28.0 28.0 31.8 ■ Final d
Slide 26: Appendices: Major Subsidiaries’ Results
Appendices: Major Subsidiaries’ Results 26
Slide 27: Great Eastern Holdings’ Financial Highlights
Great Eastern Great Eastern Holdings’ Financial Highlights Total Weighted New Sales (S$m) Profit and Loss 1/ (SGD’m) FY22 YoY 4Q22 YoY QoQ -3% -9% +11% 1,965 1,908 Insurance: 3/ 28 Operating Profit 797 +7% 224 +30% +8% Emerging markets 506 38 Malaysia 494 548 403 449 Insurance: Non- Singapore 9 10 6
Slide 28: 4Q22 profit from insurance business lower QoQ mainly due to unrealised valuation losses
Great Eastern 4Q22 profit from insurance business lower QoQ mainly due to unrealised valuation losses on insurance 3Q22 4Q22 contract liabilities from inverted SGS yield curve Insurance Operating Profit S$208m S$224m Profit from Insurance Business SGS Yield Curve ■ Up 30% YoY and 8% QoQ driven by re
Slide 29: OCBC Wing Hang Hong Kong & Macau’s Financial Highlights
OCBC Wing Hang OCBC Wing Hang Hong Kong & Macau’s Financial Highlights Profit and Loss 1/ Net Interest Margin Cost-to-Income (HKD’m) FY22 YoY 4Q22 YoY QoQ +58bps +14bps -7.9ppt +0.1ppt +29bps -4.3ppt Total Income 5,292 +15% 1,512 +23% +13% Operating 2,719 +15% 724 +6% +4% Expenses 2.04% 1.75% 55.8%
Slide 30: OCBC Malaysia’s Financial Highlights
OCBC Malaysia OCBC Malaysia’s Financial Highlights Profit and Loss 1/ Net Interest Margin Cost-to-Income (MYR’m) FY22 YoY 4Q22 YoY QoQ +35bps +14bps -3.5ppt +1.4ppt +7bps -3.0ppt Total Income 2,789 − 766 +14% +10% Operating Expenses 1,265 +3% 332 +6% +3% 2.32% 2.39% 2.25% 46.8% 46.3% 44.0% 45.4% 2.1
Slide 31: Bank OCBC NISP’s Financial Highlights
Bank OCBC NISP Bank OCBC NISP’s Financial Highlights Profit and Loss 1/ Net Interest Margin Cost-to-Income (IDR’b) FY22 YoY 4Q22 YoY QoQ +73bps +22bps +0.8ppt +0.6ppt +19bps -1.7ppt Total Income 10,604 +9% 2,944 +21% +12% Operating Expenses 4,668 +11% 1,236 +23% +8% 4.24% 4.43% 43.7% 42.0% 43.4% 44.
Slide 32: Thank you
Thank you Disclaimer: This presentation should be read as an overview of OCBC’s current business activities and operating environment which may contain statements relating to OCBC’s growth strategy and future business aspirations. This presentation contains “forward-looking statements”, which are ba
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