Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q2 2005 Earnings Presentation
28 slides from Oversea-chinese Banking's earnings presentation, Aug 10, 2005
Slide 1: Second Quarter 2005 Results
Presentation to Media and Analysts Second Quarter 2005 Results 10 August 2005
Slide 2: Agenda
Agenda • Results Overview • Performance Trends • Results of Key Subsidiaries • Conclusion 2
Slide 3: Results at a Glance - Quarterly
Results at a Glance - Quarterly 2Q05 2Q04 YoY 1Q05 QoQ S$m S$m +/(-)% S$m +/(-)% Net Interest Income 407 380 7 363 12 Non-Interest Income 298 267 12 319 (7) - Fee Income 125 117 7 121 3 Total Income 704 647 9 682 3 Operating Expenses (282) (239) 18 (251) 12 Operating Profit 423 408 4 431 (2) Amortis
Slide 4: Results at a Glance – Half Year
Results at a Glance – Half Year 1H05 1H04 YoY 2H04 HoH S$m S$m +/(-)% S$m +/(-)% Net Interest Income 770 745 3 773 (0) Non-Interest Income 617 428 44 698 (12) - Fee Income 246 232 6 231 6 Total Income 1,386 1,172 18 1,471 (6) Operating Expenses (532) (446) 19 (541) (2) Operating Profit 854 726 18 92
Slide 5: Key Financial Ratios
Key Financial Ratios 1H05 1H04 2Q05 1Q05 % % % % Net Interest Margin 1.80 1.91 1.82 1.78 Non-Interest Income/ 44.5 36.5 42.3 46.8 Total Income Cost-to-Income Ratio 38.4 38.1 40.0 36.8 Loans-to-Deposits Ratio 85.6 89.4 85.6 86.1 NPL Ratio 4.3 6.3 4.3 4.8 Allowances/NPLs 86.9 70.4 86.9 84.1 ROE 10.6 1
Slide 6: Agenda
Agenda • Results Overview • Performance Trends • Results of Key Subsidiaries • Conclusion 6
Slide 7: Net Interest Income up 12% over 1Q05, Net Interest Margin up 4 bps
Net Interest Income up 12% over 1Q05 Net Interest Margin up 4 bps Net interest 1.92% 1.93% margin 1.90% 1.89% 1.78% 1.82% 407 380 384 389 365 363 Net interest income (S$m) 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 7
Slide 8: Net Interest Margin Breakdown
Net Interest Margin Breakdown Interest Interest Rate Ave Bal Second Quarter 2005 Inc / Exp Ave Rate YoY QoQ S$bn S$m % bps bps Customer loans 53.7 601 4.49 + 78 + 58 Placements with Banks 17.7 124 2.81 + 83 +5 Securities/ Others 18.1 152 3.36 + 105 + 50 Interest Earning Assets 89.5 877 3.93 + 80 + 4
Slide 9: Non-Interest Income in 2Q05 Affected by Lower Dealing Income
Non-Interest Income in 2Q05 Affected by Lower Dealing Income 50.0% 46.8% 44.6% Non-interest income/ 41.2% 42.3% Total income 39.6% 30.6% 384 313 319 298 132 267 Non-interest income 252 (S$m) 161 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 Gains from divestment of non-core assets Excluding gains from divestment of
Slide 10: Fee Income Grew 7% YoY
Fee Income Grew 7% YoY Fee income/ 21.9% Total income 18.1% 18.5% 17.7% 17.7% 16.1% 15.3% 125 117 118 121 115 113 Fee income (S$m) 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 Excluding gains from divestment of non-core assets from total income 10
Slide 11: Higher Expenses from Enlarged Operations
Higher Expenses from Enlarged Operations 40.2% 40.7% 40.0% Cost-to-income ratio 37.0% 36.8% 39.4% 33.2% 286 282 256 251 239 77 66 207 51 62 57 Operating Expenses 37 60 56 (S$m) 53 53 51 48 141 149 143 160 121 135 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 Staff Cost Premises & Equipment Others Excluding gains fr
Slide 12: Operating Profit Up 4% YoY
Operating Profit Up 4% YoY Operating Profit before 513 allowances (S$m) 431 423 408 132 416 319 381 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 Gains from divestment of non-core assets 12
Slide 13: Allowances Remain Low as Recoveries Continue
Allowances Remain Low as Recoveries Continue Allowances & Impairment Charges (S$m) 36 24 22 20 (2) (2) 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 13
Slide 14: Net Profit
Net Profit Net Profit 319 (S$m) 304 300 298 275 255 97 223 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 Gains from divestment of non-core assets 14
Slide 15: EPS and ROE
EPS and ROE 12.4% 11.9% 10.6% 10.6% 10.7% ROE 10.2% 8.2% 40 37 38 36 33 32 12 EPS¢ 28 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 Non-core assets divestment gains Excluding divestment gains Note: Quarterly ROE and EPS are annualised; ROE refers to return on ordinary shareholders’ funds 15
Slide 16: Loans Growth Driven by Malaysia and Consolidation of Bank NISP
Loans Growth Driven by Malaysia and Consolidation of Bank NISP Loans (S$bn) 56.5 53.5 53.9 54.1 53.6 51.8 9.2 6.8 7.0 7.4 7.6 6.2 7.9 8.3 8.4 8.5 9.2 8.8 37.7 38.3 38.4 38.1 37.1 38.2 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Singapore Malaysia International 16
Slide 17: Lower Loans-to-Deposits Ratio
Lower Loans-to-Deposits Ratio 91.1% 91.8% 90.5% 89.4% 86.1% 85.6% 90.0% Loans-to-deposits 90.1% 88.1% 87.7% 83.7% 83.3% 80.0% 63.6 57.2 57.3 59.7 54.3 56.2 70.0% 7.0 8.2 6.2 6.8 6.8 7.2 Deposits 11.2 11.4 60.0% 11.4 11.2 11.2 11.2 (S$bn) 50.0% 33.6 34.7 33.3 34.1 36.3 37.6 40.0% Mar-04 Jun-04 Sep-04
Slide 18: NPL Ratio Continues to Improve
NPL Ratio Continues to Improve NPL Ratio 6.7% 6.3% 5.5% 5.0% 4.8% 3,644 4.3% 3,512 3,129 NPLs 2,866 2,705 2,592 (S$m) 1,040 1,028 970 902 886 821 2,266 2,150 1,909 1,735 1,596 1,485 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Singapore Malaysia International 18
Slide 19: Maintained Strong Coverage of NPLs
Maintained Strong Coverage of NPLs 87% 83% 84% 77% 70% 70% Cumulative Allowances / NPLs Specific Allowances / NPLs 49% 50% 43% 37% 39% 37% Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 19
Slide 20: Temporary Dip in Capital Ratios Due to Deduction of Bonus Dividends
Temporary Dip in Capital Ratios Due to Deduction of Bonus Dividends (%) Total CAR 18.3 17.7 17.6 17.7 17.4 5.5 4.4 14.7 5.1 5.1 5.1 4.0 12.8 12.6 12.5 12.3 13.3 Tier 1 CAR 10.7 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05* (S$m) Tier-1 capital 8,131 8,495 8,557 8,442 9,138 7,853* Risk Weighted Assets 6
Slide 21: Interim Dividend up 39% over 1H04, up 139% over 1H03
Interim Dividend up 39% over 1H04, up 139% over 1H03 15.8 Gross DPS (cents) 7.9 9.6 8.3 5.0 Final Dividend 6.3 11.0 7.9 4.6 Interim Dividend 2.1 2002 2003* 2004 1H2005* (S$m) Net Dividends Paid 201 234 403 276 Core Net Profit 667 828 1,051 602 Dividend Payout Ratio 30% 28% 38% 46% * Excludes Special
Slide 22: Agenda
Agenda • Results Overview • Performance Trends • Results of Key Subsidiaries • Conclusion 22
Slide 23: OCBC Malaysia’s Net Profit Up 34% YoY
OCBC Malaysia’s Net Profit Up 34% YoY 2Q05 2Q04 YoY 1Q05 QoQ Unaudited Results* RM m RM m +/(-)% RM m +/(-)% Net Interest Income 155 136 14 144 8 Islamic Banking Income 11 6 83 10 10 Non Interest Income 63 49 29 56 12 Total Income 229 191 20 210 9 Operating Expenses (88) (69) 27 (84) 5 Operating Pro
Slide 24: OCBC Malaysia: Financial Ratios
OCBC Malaysia: Financial Ratios 1H05 1H04 2Q05 1Q05 Unaudited Results* % % % % Net Interest Margin 2.34 2.19 2.34 2.32 Non-Interest Income / 27.2 24.9 28.4 26.3 Total Income Cost-to-Income Ratio 39.1 33.5 39.6 38.5 RM Loans-to-Deposits Ratio 81 79 81 83 Net NPL Ratio 4.0 6.9 4.0 4.9 Loans Growth (YT
Slide 25: GEH Contributed 20% of Group Net Profit
GEH Contributed 20% of Group Net Profit 1H05 1H04* 2Q05 1Q05 GEH’s Contribution to OCBC’s Results S$m S$m S$m S$m Total Income 268 38 135 134 Operating Expenses (41) (5) (20) (21) Operating Profit 228 32 115 113 Goodwill Amortisation (20) (5) (10) (10) Tax (45) (7) (23) (21) Minority Interests (42)
Slide 26: Bank NISP’s 2Q05 Results Hurt by Securities Losses
Bank NISP’s 2Q05 Results Hurt by Securities Losses 2Q05 2Q04 YoY 1Q05 QoQ Unaudited Results* RP bn RP bn +/(-)% RP bn +/(-)% Net Interest Income 185 159 17 172 8 Non Interest Income (17) 29 (160) 96 (118) Expenses (131) (100) 31 (145) (9) Operating Profit 36 87 (58) 123 (71) Net Profit 1 69 (98) 93
Slide 27: Conclusion
Conclusion Satisfactory results given slower economic growth, higher cost of funds, keen price competition and lack of gapping opportunities Executed several key initiatives year-to-date, including: ¾ Increased stake in Bank NISP from 22.5% to 70.6% ¾ Announced merger of OCBC AM and Straits Lion
Slide 28: Second Quarter 2005 Results – Thank You
Second Quarter 2005 Results Thank You
Oversea-Chinese Banking — Q2 2005 Earnings Presentation on 6ix