United Overseas Bank Limited · SGX:U11
United Overseas Bank — FY2020 Earnings Presentation
26 slides from United Overseas Bank's earnings presentation, February 2021
Slide 1: UOB Group Financial Updates
UOB Group Financial Updates Lee Wai Fai Group Chief Financial Officer For the Financial Year / Fourth Quarter Ended 31 December 2020 Private and Confidential. Disclaimer: This material that follows is a presentation of general background information about UOB’s activities current at the date of the
Slide 2: Financial Highlights
Financial Highlights FY20 4Q20 4Q20 NPAT up 3% QoQ as business momentum gradually improved Operating profit $5.0b $1.2b Balance sheet remained resilient supported by strong - 10% YoY - 4% QoQ Net profit liquidity, capital and pre-emptive provisioning $2.9b $0.7b -33% YoY +3% QoQ • NIM improved 4 bas
Slide 3: Performance by Segment
Performance by Segment 2020 2019 YoY Operating Profit $m $m +/(-) % Client franchise affected by lower rates; business +6% YoY momentum remains healthy Group Retail 2,064 2,200 (6) Assets under & on track to delivering our management at $134b, of which ~60% from strategic priorities. overseas custom
Slide 4: Wholesale customers
Strengthening 29%1 Connectivity Cross-border income’s contribution to Group Wholesale Banking income Wholesale Across our ASEAN footprint and global network +2%2 customers Non-Singapore income Growing regional Sector +17%2 franchise, capturing Specialisation Financial Institutions sector income cros
Slide 5: Consumers
Omni-channel 67%1 Experience Digitally-engaged customers1 Consumers Serving affluent customers across various touchpoints S$134b1,2 Assets under management (AUM) 56% YoY3 Tapping on rising affluence in Southeast Digital Bank:TMRW + 3x3 Increase in TMRW customers in Asia Thailand and Indonesia Specia
Slide 6: Performance by Geography
2020 2019 YoY Operating Profit $m $m +/(-)% Performance by Singapore 2,592 3,276 (21) Geography Rest of Southeast Asia 1,302 1,220 7 Malaysia 675 649 4 Overseas franchise Thailand 392 405 (3) provided diversification Indonesia 211 137 54 and cross border Vietnam 16 21 (26) connectivity; contribution
Slide 7: Financial Highlights
Financial Highlights 2020 2019 YoY 4Q20 3Q20 QoQ 4Q19 YoY $m $m +/(-)% $m $m +/(-)% $m +/(-)% Net interest income 6,035 6,563 (8) 1,512 1,474 3 1,635 (8) Net fee income 1,997 2,032 (2) 522 514 2 476 10 Others 1,144 1,435 (20) 214 272 (21) 321 (33) Quarter earnings up 3% Total income 9,176 10,030 (9)
Slide 8: Net Interest Income (NII) and Margin (NIM)
2.16 1.91 2.12 2.08 1.87 1.83 1.87 Net Interest Income 1.78 1.57 1.76 1.71 (NII) and Margin (NIM) 1.48 1.53 1.57 0.78 0.71 0.78 0.76 0.76 0.78 0.56 6,563 NIM rose 4bps supported 784 6,035 by significant 778 improvement in deposit 1,635 1,593 1,512 repricing and CASA mix 198 196 1,456 1,474 164 206 2
Slide 9: Fee Income
Fee Income 20 22 20 21 20 23 23 Fee up 2% QoQ driven by fund and cards income 522 2,032 1,997 515 514 while wealth remains 476 stable. 366 367 97 445 86 104 96 170 134 15 80 46 49 Amid global pandemic, 51 24 fees remained resilient 641 710 201 188 188 133 supported by good 162 momentum from wealth m
Slide 10: Trading & Investment Income
55 46 72 63 56 57 Trading & Investment 37 1,116 Income 294 880 T&I income down QoQ from 605 trading and bond sales amid 224 224 210 relatively low/ flat rates. 400 185 99 83 90 152 Lower trading income on the 42 back of volatile markets in 2020, partially offset by 511 480 140 gains from investment
Slide 11: Expenses and Cost / Income Ratio
Expenses and 44.6 45.6 45.9 45.1 46.0 44.6 46.7 Cost / Income Ratio 13% 13% Continue to invest in people 11% 14% 15% 12% 13% and technology to enhance 14% 11% 12% 12% 13% 12% 14% 15% digital and product 16% 13% 14% 15% 14% 14% capabilities. 61% 60% 60% 62% 60% 59% 58% IT-related cost mix increased t
Slide 12: Loans under relief
Book under relief measures Loans under ~90% collateralised relief $25b Gradual reopening of Outlook economies will help to cushion future NPA $18b Government relief $11b ~$2b formation. programmes $3b Potential new NPA Bottom-up analysis of our book to proactively engage customers for support UOB re
Slide 13: Non-Performing Assets (NPA)
2019 2020 ($m) 4Q 1Q 2Q 3Q 4Q Non-Performing NPAs at start of period 4,350 4,297 4,590 4,628 4,301 Assets (NPA) Non-individuals New NPAs _ 437 573 131 74 (1) 622 NPA formation rose this Less: quarter from a few Upgrades and recoveries 400 101 126 216 175 secured exposures, no Write-offs 81 208 42 63
Slide 14: Total Allowance on Loans
Total Allowance on 57 67 68 55 Loans 18 36 24 17 24 31 34 1,579 23 19 Higher credit costs in FY20 13 mainly from pre-emptive allowance for non-impaired 900 468 476 loans, to fortify reserves 391 buffers against credit risks. 503 244 342 150 378 34 166 30 679 5 469 214 241 161 134 90 2019 2020 4Q 1Q
Slide 15: Allowance Coverage
39 38 36 37 36 1.0 1.0 0.9 0.8 Allowance Coverage 0.7 4,755 4,944 4,434 379 379 3,725 4,032 379 114 374 Strong provisioning with 2,712 2,873 2,391 coverage for performing 1,985 1,988 loans at 1%. 1,626 1,670 1,664 1,664 1,692 NPA coverage strengthened to 107% or Dec Mar Jun Sep Dec 245% taking colla
Slide 16: Gross Loans
Dec-20 Sep-20 Dec-19 QoQ YoY Gross Loans $b $b $b +/(-)% +/(-)% Singapore 143 144 139 (1) 3 Rest of Southeast Asia 63 63 63 0 0 Malaysia 30 30 30 (2) 0 Thailand 21 19 20 6 5 Loan growth flat QoQ Indonesia 10 11 11 (4) (9) Vietnam 2 2 1 6 17 YoY growth of 5% mainly Others 1 1 1 (11) (27) corporate lo
Slide 17: Deposits
Group CASA (%) CASA by Region (%) 53.5 59.8 Deposits China 47.6 45.4 68.5 Thailand Strong CASA 58.0 4Q19 4Q20 growth across the 45.1 Group, providing CASA by Segment (%) Indonesia NIM support. 35.6 64.5 61.0 34.7 Malaysia 42.1 29.4 30.7 60.5 Singapore 52.4 4Q19 4Q20 Group Retail 4Q20 4Q19 Group Whol
Slide 18: Liquidity ratios
149 Liquidity ratios 139 139 136 127 111 109 122 125 119 Balance sheet remained resilient 85.4 85.4 85.8 86.7 85.4 with ample liquidity. Dec Mar Jun Sep Dec 2019 2020 USD LDR (%) 61.2 62.7 59.6 58.0 58.2 All-currency LCR (%) Loan/Deposit Ratio (LDR) (%) Net Stable Fund Ratio (NSFR) (%) 18
Slide 19: Capital
Capital 14.3 14.1 14.0 14.0 14.7 Strong capital position with CET1 226 232 232 231 225 ratio at 14.7%, 50% dividend payout ratio to resume once dividend cap is relaxed. Dec Mar Jun Sep Dec 2019 2020 Leverage ratio (%) 7.7 7.4 7.3 7.4 7.4 RWA ($b) CET1 ratio (%) 19
Slide 20: Dividends
130 120 Dividends 100 20 20 20 78 55 50 45 39 Dividends in line 50 55 with MAS guidance. 35 39 2017 2018 2019 2020 Net dividend Per ordinary share (¢) Interim Final Special 2017 2018 2019 2020 Payout amount ($m) 1,660 2,000 2,170 1,303 Payout ratio (%) 49 50 50 45 ^ Payout ratio (excl special divide
Slide 21: Appendix
Loan portfolio Appendix Total Funding Exposure to Greater China Exposure to Oil & Gas sector ESG 21
Slide 22: Diversified Loan portfolio
Housing loans Professionals and 24% Others private individuals 7% Transport, storage 10% and General commerce Industry communication 4% Diversified 12% Loan portfolio FIs, investment and Building & construction holding companies 25% 11% Manufacturing 7% Large corporates Others and 11% institutions 5
Slide 23: Total Funding
Dec-20 Sep-20 Dec-19 QoQ YoY Total Funding $b $b $b +/(-)% +/(-)% Singapore 221 217 206 2 7 Rest of Southeast Asia 67 64 61 3 9 Malaysia 31 32 30 (1) 6 Thailand 23 21 21 7 8 Continue to focus on Indonesia 9 8 8 3 10 stable funding; CASA Vietnam 3 3 2 14 63 ratio increased steadily Others 0 0 0 (12)
Slide 24: Exposure to Greater China
Exposure to Greater China 73.6 77.2 73.5 6.2 69.2 68.3 6.4 6.2 6.1 6.5 Debt ($b) 45.1 41.4 44.1 Non Bank ($b) 44.1 44.2 Bank ($b) 25.8 25.9 23.2 19.0 17.6 Dec Mar Jun Sep Dec 2019 2020 As at 31 Dec 2020: Mainland China exposure ($25.8b or 6% of total assets) Hong Kong SAR exposure ($35.2b or 8% of t
Slide 25: Exposure to Oil and Gas (O&G) Sector
Exposure to Oil and Gas (O&G) Sector Total Outstanding O&G Loans ($b) As of 31 December 2020, outstanding O&G loans represented 2% of total loans as compared with 4.7% at 30 June 2018 11.8 Approximately 60% of O&G exposure is to downstream players and 3.7 traders, of which two thirds are to national
Slide 26: ESG Highlights: Top 20 Inclusion
RATINGS #2 Among ASEAN banks in 2021 25.9 Medium Risk1, as at Sep 2020 ESG Highlights WWF Sustainable Sustainalytics Banking Assessment ESG Risk Rating RANKINGS Recognised by extra- Top 20 #2 #10 financial rating Among ASEAN companies Among Singapore companies Among Singapore companies agencies and