Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q1 2017 Earnings Presentation
42 slides from Oversea-chinese Banking's earnings presentation, May 9, 2017
Slide 1: First Quarter 2017 Results Presentation
First Quarter 2017 Results Presentation 09 May 2017 Disclaimer: This material should be read as an overview of OCBC’s current business activities and operating environment. It should not be solely relied upon by investors or potential investors when making an investment decision. OCBC Bank accepts n
Slide 2: Agenda
Agenda Results Overview 1Q17 Group Performance Trends Appendix: Performance of Major Subsidiaries - Great Eastern Holdings - OCBC Wing Hang - OCBC Malaysia - OCBC NISP Note: - Certain comparative figures have been restated to conform with the current period’s presentation. - Amounts less than S$0.5m
Slide 3: 1Q17 Highlights
Group performance 1Q17 Highlights Earnings up 14% YoY and 23% QoQ Earnings Net Interest Income: S$1.3b Results underscored the strength of our well-diversified franchise (1Q16 : S$1.3b) Core net profit (S$m) • Strong fee income growth +14% YoY Non-interest Income: S$1.0b • Private banking AUM grew
Slide 4: 1Q17 Group Performance
Group performance 1Q17 Group Performance Net profit for the first quarter climbed 23% QoQ and 14% YoY to S$973m 1Q17 4Q16 QoQ 1Q16 YoY OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 1,272 1,251 2 1,307 (3) Non-interest income 977 926 5 753 30 Total income 2,249 2,177 3 2,060 9 1/ 1/ 1/ 1/
Slide 5: 1Q17 Banking Operations Performance
Banking Ops performance 1Q17 Banking Operations Performance 1Q17 net profit before GEH contribution rose 26% QoQ and 1% YoY to S$793m 1Q17 4Q16 QoQ 1Q16 YoY Banking Operations S$m S$m +/(-)% S$m +/(-)% Net interest income 1,248 1,227 2 1,284 (3) Non-interest income 687 660 4 599 15 Total income 1,93
Slide 6: Subsidiaries' Performance
Major subsidiaries Subsidiaries’ Performance Major subsidiaries contributed to 39% of the Group’s first quarter net profit and highlights strength of a well-diversified franchise Key metrics 1Q17 1Q16 YoY TWNS S$280m +29% S$217m NBEV S$102m Great S$82m +24% Eastern Holdings NBEV margin 36.5% 37.8% -
Slide 7: Agenda
Agenda Results Overview 1Q17 Group Performance Trends Appendix: Performance of Major Subsidiaries - Great Eastern Holdings - OCBC Wing Hang - OCBC Malaysia - OCBC NISP 7
Slide 8: Profit before tax
Earnings Profit before tax Earnings well-diversified across key geographies and main businesses 1Q17 PBT 1Q17 PBT by Business1/ by Geography Others Singapore OCBC Wing2/ (1Q16: 0.4%) S$629m Hang Global YoY: +9% 1Q17 Corporate / 4% 8% 1Q17 Investment Banking Greater Malaysia China 19% S$199m 22% 7% 1
Slide 9: Net interest income
Net interest income Net interest income 1Q17 net interest income fell 3% YoY as strong asset growth was offset by a decline in NIM from compression in loan yields and lower LDR 1.75% 1/ Net interest 1.67% 1.67% 1.68% 1.62% 1.63% 1.62% margin 5,189 5,052 1,307 1,260 1,251 1,272 1,234 Net interest inc
Slide 10: Non-interest income
Non-interest income Non-interest income Broad-based growth across most income categories drove 30% YoY increase Non- 44.0% 43.4% interest 42.5% 40.5% 40.5% income / 36.6% 38.5% Total income 3,533 970 977 3,437 926 136 649 788 199 211 781 753 182 146 112 91 228 429 122 162 53 158 552 529 101 163 123
Slide 11: Wealth Management
Wealth management Wealth Management 1Q17 wealth management income surged 50% YoY; BOS’ AUM rose 49% to US$85b, partly attributable to the acquisition of Barclays WIM Wealth Management Income1/ (S$m) Bank of Singapore Earning Asset Base (US$b) Dec12 – Dec16 105 As % of Group income 97 CAGR 17% 20 68
Slide 12: Fees & Commissions
Non-interest income Fees & Commissions Wealth management fees up 70% and investment banking fee income doubled YoY Fee income / 18.8% 19.3% 20.3% 19.4% 19.3% 21.4% 18.2% Total income 481 1,643 1,638 428 420 71 257 417 290 374 74 29 86 63 77 71 68 21 13 15 123 556 533 14 Fees and 135 135 commissions
Slide 13: Profit from life assurance
Non-interest income Profit from life assurance 1Q17 profit from life assurance more than doubled from the previous year +111% YoY +22% -21% QoQ YoY 630 Profit from life 164 499 176 assurance 164 (S$m) 172 144 47 45 108 34 331 83 183 46 94 84 71 47 27 1 135 144 38 35 35 35 35 2015 2016 1Q16 2Q16 3Q16
Slide 14: Operating expenses
Operating expenses Operating expenses 1Q17 expenses tightly-managed; down 1% QoQ and up 5% from the previous year Cost / 44.6% 44.8% 45.5% 43.2% 45.1% 43.3% 42.0% Income 3,788 3,664 1/ 1/ 678 953 981 973 673 923 932 166 191 179 162 160 763 737 Operating 186 205 192 183 189 expenses (S$m) 2,254 2,347
Slide 15: Allowances
Allowances Allowances 1Q17 net allowances fell 45% QoQ and were stable YoY; SP credit cost at 20 bps 726 305 70 27 Net allowances 488 for loans and other assets 79 167 166 168 484 (S$m) 12 3 235 21 232 99 88 99 108 28 177 172 56 52 64 43 39 8 2015 2016 1Q16 2Q16 3Q16 4Q16 1Q17 Net specific allowance
Slide 16: Customer loans
Loans Customer loans Broad-based YoY growth of 8% across most industry segments and key markets Loan growth Group QoQ: +2%; YoY: +8% 220 225 In constant currency terms QoQ: +4%; YoY: +8% 208 205 209 26 28 22 22 24 Rest of the world QoQ: +6% 1/ 54 YoY: +29% 54 52 49 49 Greater China Customer QoQ: Fla
Slide 17: Customer loans
Loans Customer loans Loans portfolio well-diversified across geographies and industries Customer Loans by Geography Customer Loans by Industry (S$b) As27% of As of Rest of the Industry 31 Mar 2017 31 Mar 2016 World 28% Other Asia S$b 16% % S$b % Pacific Singapore Housing loans 60 27 57 28 7% 17% 6%
Slide 18: Oil & Gas exposure
Loans Oil & Gas exposure 0.43% 0.45% 0.53% 0.61% 0.62% NPL QoQ movement driven by short term trade-related ratio 1/ loans and lending to Singapore conglomerates. 17.1 15.8 14.1 14.3 14.1 2.1 (S$b) 2.4 18 1.7 1.7 1.9 1.3 17 0.9 -0.4 16 (S$b) 7% of 15 -0.5 15.0 total 13.4 customer 14 12.4 12.6 12.2 lo
Slide 19: Commodities exposure
Loans Commodities exposure NPL 0.10% 0.16% 0.13% 0.13% 0.12% QoQ decline mainly due to decrease in trade ratio 1/ exposures to commodities traders and FX impact 17.1 16.4 15.3 (S$b) 14.2 13.6 3.4 2.8 18 2.4 2.3 17 0.3 2.1 0.2 16 -0.5 (S$b) -0.7 15 6% of total 14 13.7 13.6 customer 17.1 11.9 12.9 13
Slide 20: Asset quality
Asset quality Asset quality Absolute NPA balances slightly lower than previous quarter; NPL ratio unchanged at 1.3%; healthy coverage ratios maintained 1.1% 1.2% 1.3% 1.3% 1.0% NPL ratio 2,886 2,870 103 60 2,585 2,488 388 374 108 131 2,221 376 307 67 372 354 187 185 340 355 621 689 NPAs 461 622 (S$m
Slide 21: NPL Ratio & Non-Performing Assets
Asset quality NPL Ratio & Non-Performing Assets Excluding oil and gas NPLs, the NPL ratio continued to be stable over the past quarters; new NPA formation lower QoQ and YoY NPL ratio NPAs 1.26% 1.25% 1.19% 1Q17 4Q16 1Q16 1.14% S$m S$m S$m 1.04% 0.61% 0.62% 0.45% 0.53% Opening balance 2,886 2,585 2,0
Slide 22: Customer deposits
Deposits Customer deposits Customer deposits rose 9% YoY with 11% growth in CASA balances; CASA made up 49.9% of total deposits 50.2% 51.1% 49.9% 49.3% 49.3% CASA ratio 261 265 242 246 247 14 18 17 17 16 114 115 106 108 108 Customer Deposits (S$b) 48 50 44 44 46 S$132b S$119b S$121b S$124b S$134b +S
Slide 23: Loans-to-Deposits Ratio
Funding Loans-to-Deposits Ratio Group LDR at 83.6%, as compared to 84.7% in the prior year 261 265 246 247 Others 242 22 23 IDR 20 19 8 225 8 22 220 8 8 RMB 7 209 7 208 6 205 7 8 20 26 9 19 27 HKD 17 23 18 24 7 7 23 17 5 5 7 7 22 22 MYR 7 6 5 6 24 23 30 24 30 28 28 28 20 Customer 21 22 21 84 Loans a
Slide 24: Funding sources
Funding Funding sources Well-diversified funding mix; customer deposits formed majority of the funding base Funding Composition as of 31 Mar 2017 Wholesale Funding by Currency as of 31 Mar 2017 EUR Others By Maturity: Customer deposits Current account & 3% 8% 77% savings deposits ≤ 1 year 77% 39% Ot
Slide 25: Capital
Capital Capital Capital position remained robust and well above regulatory requirements Capital Adequacy Ratios (%) 17.3 17.5 17.6 17.1 16.5 15.1 15.5 15.6 15.1 Total CAR 14.2 14.6 14.9 15.1 14.7 13.3 Tier 1 CAR Common Equity Tier 1 CAR Proforma 12.4 12.7 12.8 12.4 12.2 Common Equity Tier 1 CAR 1/ M
Slide 26: Agenda
Agenda Results Overview 1Q17 Group Performance Trends Appendix: Performance of Major Subsidiaries - Great Eastern Holdings - OCBC Wing Hang - OCBC Malaysia - OCBC NISP 26
Slide 27: 1Q17 Great Eastern Holdings' performance
Great Eastern 1Q17 Great Eastern Holdings’ performance Net profit contribution to the Group up QoQ and YoY at S$180m 1Q17 4Q16 QoQ 1Q16 YoY GEH S$m S$m +/(-)% S$m +/(-)% Profit from insurance business 184 151 22 91 102 - Operating profit 1/ 121 112 8 120 1 - Non-operating profit /(loss)2/ 45 13 252
Slide 28: GEH: Operating Profit
Great Eastern GEH: Operating Profit 1Q17 operating profit up 1% against last year +1% -13% YoY YoY 582 14 504 131 13 135 137 Operating 4 profit from 138 120 5 121 2 112 insurance 37 5 34 3 business (S$m) 41 26 38 323 229 65 66 48 50 49 114 124 30 31 31 33 29 2015 2016 1Q16 2Q16 3Q16 4Q16 1Q17 Partic
Slide 29: GEH: Non-operating profit
Great Eastern GEH: Non-operating profit Positive swing in non-operating profit mainly from improved investment performance due to favourable market conditions Non-operating profit/(loss) from insurance 45 business (S$m) 18 13 3 (48) (43) (36) 2015 2016 1Q16 2Q16 3Q16 4Q16 1Q17 Note: Non-operating pr
Slide 30: GEH: Total weighted new sales
Great Eastern GEH: Total weighted new sales TWNS grew 29% YoY driven by strong growth across both bancassurance and agency channels +11% YoY 1/ +29% 1,062 YoY 16 961 38 341 5 355 280 300 263 1/ 132 5 1/ 241 4 217 4 72 TWNS 3 80 (S$m) 80 63 691 624 204 203 180 151 157 2015 2016 1Q16 2Q16 3Q16 4Q16 1Q
Slide 31: GEH: New business embedded value
Great Eastern GEH: New business embedded value Robust 24% YoY growth in NBEV for 1Q17; decline in overall NBEV margin mainly attributable to very strong YoY growth in Singapore’s bancassurance sales 48.9% NBEV 43.6% 43.8% margin 42.7% 39.5% (NBEV / Total 37.8% 36.5% 1/ weighted 463 new sales) 5 380
Slide 32: 1Q17 OCBC Wing Hang's performance
OCBC Wing Hang 1Q17 OCBC Wing Hang’s performance Net contribution to the Group up 10% YoY 1Q17 4Q16 QoQ 1Q16 YoY OCBC Wing Hang HKD m HKD m +/(-)% HKD m +/(-)% Net interest income 972 1,016 (4) 943 3 Non-interest income 312 398 (22) 236 32 Total income 1,284 1,413 (9) 1,179 9 Operating expenses (710
Slide 33: OCBC Wing Hang: Revenue
OCBC Wing Hang OCBC Wing Hang: Revenue Net interest income up 3% YoY while non-interest income made up 24.3% of total income Net interest income (HKD m) Non-interest income (HKD m) Net interest Non-int. income/ margin Total income 1.76% 1.75% 1.83% 1.73% 1.73% 1.73% 1/ 22.2% 25.7% 25.8% 28.1% 24.3%
Slide 34: OCBC Wing Hang: Loans & Deposits
OCBC Wing Hang OCBC Wing Hang: Loans & Deposits Loans higher QoQ and YoY at HKD166b; NPL ratio at 0.8% Gross Loans (HKD b) Deposits (HKD b) Loans / Deposits 1/ NPL ratio 0.7% 0.9% 0.9% 0.8% 0.6% 80.7% 81.5% 80.6% 82.1% 83.4% 163 166 160 150 199 198 199 144 186 177 Mar 16 Jun 16 Sep 16 Dec 16 Mar 17
Slide 35: Greater China Customer Loans
Loans Greater China Customer Loans Loans flat QoQ but higher YoY; sound asset quality and coverage ratios maintained Total 260% 137% 148% 157% 184% allowances/ NPAs 0.7% 0.7% 0.7% 0.6% 0.4% NPL ratio 54 54 52 49 49 4 4 4 2 2 2 4 4 Macau 2 2 Customer Loans to Taiwan Greater China 27 29 28 Hong Kong (
Slide 36: 1Q17 OCBC Malaysia's Performance
OCBC Malaysia 1Q17 OCBC Malaysia’s Performance Net profit 41% above previous quarter and 1% higher YoY 1Q17 4Q16 QoQ 1Q16 YoY OCBC Malaysia RM m RM m +/(-)% RM m +/(-)% Net interest income 346 329 5 331 5 Islamic banking income 1/ 111 109 1 126 (13) Non-interest/finance income 128 157 (19) 138 (7) T
Slide 37: OCBC Malaysia: Revenue
OCBC Malaysia OCBC Malaysia: Revenue Net interest/finance income up 3% QoQ; Non-interest/finance income as a percentage of total income at 24.0% Net interest/finance income (RM m) Non-interest/finance income1/ (RM m) Net interest/ Non-interest/finance finance margin income/ Total income 1.99% 1.99%
Slide 38: OCBC Malaysia: Loans & Deposits
OCBC Malaysia OCBC Malaysia: Loans & Deposits Loans grew 4% QoQ and 3% YoY; NPL ratio stable at 2.1% Gross Loans (RM b) Deposits (RM b) Loans / NPL Ratio Deposits 94.2% 2.1% 2.1% 2.2% 2.1% 90.3% 89.7% 90.5% 91.5% 1.9% 74 76 74 72 73 69 69 68 69 71 Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 Mar 16 Jun 16 Sep
Slide 39: 1Q17 OCBC NISP's performance
OCBC NISP 1Q17 OCBC NISP’s performance Net profit increase 30% QoQ and 23% YoY 1Q17 4Q16 QoQ 1Q16 YoY OCBC NISP IDR b IDR b +/(-)% IDR b +/(-)% Net interest income 1,413 1,415 - 1,305 8 Non-interest income 341 316 8 336 2 Total income 1,754 1,731 1 1,641 7 Operating expenses (804) (788) 2 (767) 5 Op
Slide 40: OCBC NISP: Revenue
OCBC NISP OCBC NISP: Revenue Net interest income and non-interest income up 8% and 2% YoY respectively Net interest income (IDR b) Non-interest income (IDR b) Net interest Non-int. income/ margin 4.79% Total income 4.62% 4.62% 4.49% 4.60% 23.1% 4.07% 4.31% 20.8% 21.3% 20.5% 18.2% 19.5% 16.2% 5,393 1
Slide 41: OCBC NISP: Loans & Deposits
OCBC NISP OCBC NISP: Loans & Deposits Loans grew 11% YoY, NPL ratio at 1.9%; deposits up 22% YoY, LDR at 85.9% Gross Loans (IDR t) Deposits (IDR t) Loans / NPL Ratio Deposits 1.9% 1.9% 1.5% 94.7% 92.8% 92.1% 1.4% 1.4% 89.9% 85.9% 110 93 94 104 85 86 88 95 90 93 Mar 16 Jun 16 Sep16 Dec16 Mar 17 Mar 1
Slide 42: First Quarter 2017 Results Thank You
First Quarter 2017 Results Thank You
Oversea-Chinese Banking — Q1 2017 Earnings Presentation on 6ix