United Overseas Bank Limited · SGX:U11
United Overseas Bank — 2Q 2022 Earnings Presentation
24 slides from United Overseas Bank's earnings presentation, August 2022
Slide 1: UOB Group Financial Updates
UOB Group Financial Updates Lee Wai Fai Group Chief Financial Officer For the First Half / Second Quarter Ended 30 June 2022 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 presenta
Slide 2: Financial Highlights
Financial Highlights 2Q22 key financial indicators First half earnings sustained above $2bn Operating profit Net profit after tax supported by strong NII growth as NIM expanded $1.5b $1.1b and lower credit cost + 17% QoQ + 23% QoQ + 12% YoY + 11% YoY • QoQ net interest income recorded double digit g
Slide 3: Performance by Segment
Performance by Segment ▪ Retail impacted by slower 1H22 1H21 YoY 2Q22 1Q22 QoQ wealth activities from cautious investor appetite, Operating Profit $m $m +/(-) % $m $m +/(-) % partially offset by sustained deposit growth and higher Group Retail 820 909 (10) 444 376 18 margin Group Wholesale Banking 2
Slide 4: Wholesale customers
+13%1 Strengthening Cross border income; Connectivity Formed 29%2 of GWB income Wholesale Across our ASEAN footprint +69%2 and global network Suppliers and distributors within customers Financial Supply Chain Management (FSCM) solution ▪ Growing regional Sector +8%3 Specialisation Loan-related fees
Slide 5: Consumers
Building Scale & Deepening Engagement Scale UOB TMRW across 500k ~S$3b1 Consumers ASEAN, reduce cost to serve New customers to be Deposits from digitally- and deepen engagement to digitally acquired across acquired customers in the drive customer lifetime value the region by UOB region TMRW by end o
Slide 6: Performance by Geography
Performance by 1H22 1H21 YoY 2Q22 1Q22 QoQ Operating Profit $m $m +/(-)% $m $m +/(-)% Geography Singapore 1,542 1,422 9 845 697 21 ▪ Steady YoY and QoQ Rest of Southeast Asia 638 678 (6) 318 320 (1) growth across Singapore Malaysia 333 355 (6) 162 171 (6) and North Asia franchise Thailand 193 201 (4
Slide 7: Financial Highlights
Financial Highlights 1H22 1H21 YoY 2Q22 1Q22 QoQ 2Q21 YoY ▪ 2Q22 profits rose 23% $m $m +/(-)% $m $m +/(-)% $m +/(-)% driven by NIM expansion Net interest income 3,549 3,107 14 1,863 1,686 11 1,578 18 with trading and Net fee income 1,139 1,200 (5) 567 572 (1) 581 (3) investment income (T&I) Others
Slide 8: Net Interest Income and Margin
1.90 1.96 1.90 1.90 2.02 1.87 1.89 Net Interest Income 1.63 1.56 1.56 1.56 1.58 1.67 1.55 and Margin 0.73 0.78 ▪ NII improved by 11% QoQ as 0.71 0.70 0.72 0.75 0.80 NIM expanded 9bps 3,549 alongside rising interest rates 3,107 480 with loan sustaining steady 410 growth 1,863 1,604 1,677 1,686 1,578
Slide 9: Fee Income
24 22 24 23 24 24 21 Fee Income ▪ Fee income largely flat in 2Q22 1,200 ▪ Loan fees at record 1,139 199 levels, as we continued 181 581 576 580 572 567 81 to support and advise 101 96 97 99 94 87 customers on financing 407 41 52 53 42 59 297 and investment 187 160 137 186 175 opportunities. Credit c
Slide 10: Trading & Investment Income
368 130 Trading & Investment 66 115 Income 73 69 81 461 ▪ Strong momentum for 156 customer-related income 257 205 214 196 as hedging demand rose 44 41 53 64 118 ▪ Others normalised from 306 334 173 last quarter’s short-term 143 141 136 161 impact on hedges and unrealised mark-to-market (17) (76) on
Slide 11: Expenses and Cost / Income Ratio
43.8 44.3 Expenses and 43.7 43.7 45.0 44.8 43.8 Cost / Income Ratio 2,241 2,146 12% ▪ 2Q22 CIR improved to 11% 43.8% on the back of 16% 1,184 14% 1,095 1,057 1,072 1,058 13% strong income growth 13% 11% 13% 13% 11% 11% 15% 14% 15% 16% 16% ▪ Prioritisation of strategic 13% 13% 14% 14% 12% investments
Slide 12: Non-Performing Assets
2021 2022 ($m) 2Q 3Q 4Q 1Q 2Q Non-Performing NPAs at start of period 4,544 4,547 4,772 5,077 5,289 Assets Non-individuals New NPAs _ 360 251 670 462 661 Less: ▪ Higher NPA formation Upgrades and recoveries 158 73 172 207 363 this quarter due to a Write-offs 202 42 205 36 123 major but non-systemic c
Slide 13: Total Allowance on Loans
24 20 22 22 20 20 19 Total Allowance on 15 20 19 20 19 21 Loans 12 ▪ 2Q22 credit cost was 351 319 slightly higher at 22bps 5 142 due mainly to higher specific allowance 314 144 153 94 146 173 7 210 6 170 166 ▪ Full year credit cost 138 155 148 (2) (2) outlook maintained at (76) around 25bps 1H21 1H2
Slide 14: Allowance Coverage
35 34 31 31 30 1.0 1.0 1.0 0.9 0.9 Allowance Coverage 5,007 5,052 4,876 4,986 4,934 ▪ Adequate reserve buffer 379 379 379 379 379 with coverage for performing loans 3,040 3,046 2,941 2,969 2,912 maintained prudently at 0.9% 1,588 1,627 1,556 1,638 1,643 Jun Sep Dec Mar Jun ▪ NPA coverage remained 20
Slide 15: Gross Loans
Jun-22 Mar-22 Jun-21 QoQ YoY Gross Loans $b $b $b +/(-)% +/(-)% Singapore 163 162 153 0 7 ▪ Steady growth of 1% Rest of Southeast Asia 64 64 62 1 4 QoQ mainly from term Malaysia 30 30 29 0 2 and housing loans Thailand 21 21 20 (2) 5 Indonesia 11 10 11 8 6 ▪ Broad based YoY growth Vietnam 2 2 2 (5) 1
Slide 16: Liquidity Ratios
138 141 131 133 129 Liquidity Ratios 123 125 116 113 111 ▪ LCR at 141% and NSFR at 111% remains 86.9 85.1 87.0 87.3 88.7 well above regulatory requirements Jun Sep Dec Mar Jun 2021 2022 USD LDR (%) 62.6 60.4 61.6 66.3 72.3 All-currency LCR (%) Loan/Deposit Ratio (LDR) (%) (1) Net Stable Fund Ratio (
Slide 17: Capital
14.2 13.5 13.5 13.1 13.1 Capital 259 268 263 ▪ CET1 ratio healthy at 241 253 13.1% Jun Sep Dec Mar Jun 2021 2022 Leverage ratio (%) 7.4 7.1 7.2 6.9 6.6 (1) RWA ($b) CET1 ratio (%) Note: (1) MAS required Banks to cap dividend payment from July 2020 to July 2021 17
Slide 18: Dividends
130 120 20 Dividends 60 55 78 ▪ Committed to Net dividend 39 60 consistent and Per ordinary share (¢) sustainable returns to Interim Special 60 shareholders 55 Final 39 ▪ Interim dividend of 60 2019 2020 2021 1H22 cents per share 2019 2020 2021 1H22 Payout amount ($m) 2,171 1,304 2,011 1,005 Payout
Slide 19: Appendix
▪ Total Funding ▪ Loan portfolio Appendix ▪ Exposure to Greater China ▪ Exposure to Oil & Gas sector 19
Slide 20: Total Funding
Jun-22 Mar-22 Jun-21 QoQ YoY Total Funding $b $b $b +/(-)% +/(-)% Singapore 245 248 230 (1) 7 Rest of Southeast Asia 66 65 64 1 3 ▪ Continue to focus on Malaysia 31 32 31 (1) (0) stable funding Thailand 22 23 20 (0) 12 Indonesia 11 10 9 7 18 Vietnam 2 1 3 53 (53) ▪ CASA ratio broadly Others 0 0 0 10
Slide 21: Diversified Loan Portfolio
Professionals and Housing loans private individuals 23% 8% Others 4% Transport, storage General commerce and 12% communication Industry 5% Diversified FIs, investment and Loan Portfolio holding companies Building & 13% construction Manufacturing 27% 8% Large corporates Others and institutions 14% 56
Slide 22: Exposure to Greater China
Exposure to Greater China 77.2 77.1 74.8 76.1 76.1 7.6 10.2 10.8 12.2 11.8 Debt ($b) 48.2 ▪ ~$3b in loans to Chinese 49.5 48.8 51.5 52.5 developers (1% of group loans Non Bank ($b) & low borrower concentration) Bank ($b) 19.0 16.4 16.5 13.5 12.8 Jun Sep Dec Mar Jun 2021 2022 As at 30 Jun 2022: Bank
Slide 23: Exposure to Commodities Segment
Exposure to Oil and Gas (O&G) Other Commodities Jun 22 Upstream Traders / Commodity Total downstream Segments2 Segment industries1 industries ▪ As of 30 June 2022, Outstanding S$2.5b S$9.0b S$10.3b S$21.8b loans outstanding loans to the commodities segment Percentage of 4% 3% 7% remain modest and to
Slide 24: Thank You
ttt OB Thank You BRA RIGHT BY YOU