Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — FY2011 Earnings Presentation
49 slides from Oversea-chinese Banking's earnings presentation, Feb 20, 2012
Slide 1: 2011 Final Results Presentation
2011 Final Results Presentation 20 February 2012
Slide 2: Agenda
Agenda Results Overview Performance Trends Appendix: Financial Highlights of Malaysia and Indonesia Subsidiaries Notes: Amounts less than S$0.5 million are shown as “0”; NM denotes not meaningful; Figures may not sum to stated totals because of rounding 2
Slide 3: FY11 Highlights
FY11 Highlights Net profit underpinned by solid growth in customer-related businesses: • Robust, broad-based loan growth more than offset the compression in net interest margins, resulting in record net interest income • Strong growth in wealth management, loan and trade-related revenues contributed
Slide 4: Full year core net profit of $2,280m, up 1% YoY
Full year core net profit of $2,280m, up 1% YoY FY11 FY10 YoY OCBC Group S$m S$m +/(-)% Net interest income 3,410 2,947 16 Non-interest income 2,212 2,378 (7) Total income 5,622 5,325 6 Operating expenses (2,430) (2,254)2/ 8 Operating profit 3,192 3,071 4 Amortisation of intangibles (61) (55) 12 All
Slide 5: 4Q11 core net profit of $594m, up 18% YoY and 16% QoQ
4Q11 core net profit of $594m, up 18% YoY and 16% QoQ 4Q11 4Q10 YoY 3Q11 QoQ OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 925 769 20 874 6 Non-interest income 572 560 2 436 31 Total income 1,497 1,329 13 1,310 14 Operating expenses (620) (620)1/ - (611) 1 Operating profit 877 709 24 699
Slide 6: Key ratios
Key ratios FY11 FY10 4Q11 3Q11 4Q10 Based on core earnings % % % % % Net interest margin 1.86 1.98 1.85 1.85 1.96 Non-interest income / Total income 39.3 44.7 38.2 33.3 42.1 Costs / Income 43.2 42.3 41.4 46.6 46.6 Loans / Deposits 86.4 85.1 86.4 88.0 85.1 NPL Ratio 0.9 0.9 0.9 0.7 0.9 Allowances / N
Slide 7: Full-year core net profit of $2,280m, with ROE of 11.1%
Full-year core net profit of $2,280m, with ROE of 11.1% 15.3% 12.2% 12.1% 12.0% 12.2% Core ROE* 11.1% 10.9% 11.4% 11.2% 10.3% 9.8% 2,253 2,280 676 1,962 596 594 570 577 Core net 513 503 505 profit (S$m) 2009 2010 2011 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 * Quarterly figures annualised 7
Slide 8: Profit contribution by business and geography
Profit contribution by business and geography FY11 PBT FY11 PBT by Business* by Geography Other Asia Rest of the Others Greater Pacific World China 6% Rest of 3%1% Insurance 7% Southeast Asia 4% 13% Global Corporate 44% Banking Malaysia 59% 26% Singapore 23% Global Treasury 14% Global Consumer Finan
Slide 9: GEH: Full year net profit contribution down 27%
GEH: Full year net profit contribution down 27% on lower income as a result of the volatile financial markets FY11 FY10 YoY GEH Contribution S$m S$m +/(-)% Total income 6721/ 774 (13) Operating expenses (184) (159) 16 Operating profit 488 615 (21) Amortisation of intangibles (47) (47) - Allowances (
Slide 10: GEH: 4Q11 net profit contribution down 23% YoY
GEH: 4Q11 net profit contribution down 23% YoY 4Q11 4Q10 YoY 3Q11 QoQ GEH Contribution S$m S$m +/(-)% S$m +/(-)% Total income 143 160 (11) 1131/ 27 Operating expenses (43) (45) (4) (49) (12) Operating profit 100 116 (13) 64 56 Amortisation of intangibles (12) (12) - (12) - Allowances (3) 0 NM (0) 62
Slide 11: Results excluding GEH: Full year core net profit up 7%
Results excluding GEH: Full year core net profit up 7% FY11 FY10 YoY OCBC excluding GEH S$m S$m +/(-)% Net interest income 3,358 2,875 17 Non-interest income 1,592 1,676 (5) Total income 4,950 4,551 9 Operating expenses (2,246) (2,095) 7 Operating profit 2,704 2,456 10 Amortisation of intangibles (1
Slide 12: Results excluding GEH: Core banking business grew strongly
Results excluding GEH: Core banking business grew strongly, 4Q11 core net profit up 24% YoY and 11% QoQ 4Q11 4Q10 YoY 3Q11 QoQ OCBC excluding GEH S$m S$m +/(-)% S$m +/(-)% Net interest income 911 752 21 860 6 Non-interest income 443 417 6 337 31 Total income 1,354 1,168 16 1,197 13 Operating expense
Slide 13: Agenda
Agenda Results Overview Performance Trends Appendix: Financial Highlights of Malaysia and Indonesia Subsidiaries 13
Slide 14: Net interest income up 16% YoY; NIM stable in 4Q11
Net interest income up 16% YoY; NIM remained stable in 4Q11 Net interest 2.23% margin 2.03% 1.98% 1.98% 1.96% 1.96% 1.86% 1.90% 1.87% 1.85% 1.85% 3,410 925 874 2,947 827 2,825 769 784 754 Net interest 704 720 income (S$m) 2009 2010 2011 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 14
Slide 15: Net interest income less allowances up 13% YoY
Net interest income less allowances up 13% YoY 1.96% 1.91% 1.89% 1.89% 1.86% 1.83% Adjusted 1.74% 1.78% 1.74% 1.77% net interest 1.69% margin* 3,189 836 847 2,813 771 2,396 735 711 721 Adjusted 702 679 net interest income* (S$m) 2009 2010 2011 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 * Allowances for
Slide 16: Non-interest income down 7% YoY
Non-interest income down 7% YoY, impacted by volatile financial markets in 3Q11 and 4Q11 49.2% Non- 44.7% 45.1% 44.1% interest 41.8% 42.1% 41.4% 41.3% income / 39.3% Total 38.2% income 2,378 33.3% 2,212 681 1,990 621 618 669 403 586 572 560 236 516 144 121 489 86 Non- 508 176 436 204 interest 114 58
Slide 17: Full year fee income grew by 16%
Full year fee income grew by 16%, led by wealth management sales and loan/trade-related fees 1,137 983 175 307 299 133 95 274 257 49 257 80 254 48 730 248 36 224 32 33 27 27 33 41 126 29 445 26 12 12 36 26 Fees and 54 401 commissions 16 115 120 (S$m) 103 99 106 111 97 319 95 170 169 42 46 46 45 42 4
Slide 18: GEH: Participating and Investment-linked fund profits increased 26%
GEH: Participating and Investment-linked fund profits increased 26% YoY, offset by weaker investment performance of the Non-participating fund 514 437 125 383 156 94 146 150 26 127 24 27 Profit from life 106 assurance 292 * (S$m) 240 29 76 134 69 66 105 92 99 51 26 18 47 38 33 16 19 9 104 122 96 25
Slide 19: GEH: Underlying insurance business remained healthy
GEH: Underlying insurance business remained healthy, with total weighted new sales for FY11 up 10% 798 238 229 724 36 19 7 205 50 190 190 7 601 174 302 14 10 13 163 96 95 12 290 10 78 133 73 70 258 55 Weighted 7 new 80 business 45 premiums (S$m) 461 123 120 126 384 106 108 107 330 81 73 2009 2010 20
Slide 20: GEH: New business embedded value rose 20%
GEH: Long-term profitability continued to grow strongly, new business embedded value rose 20% in FY11 52.4% NBEV / Total weighted 45.7% 44.3% new sales 43.2% 43.0% 42.1% 41.8% 42.1% 42.4% 365 40.5% 120 39.0% 8 2 305 102 13 5 39 146 87 84 235 77 1 73 3 3 129 68 39 NBEV 4 3 (S$m) 58 3 38 104 38 2 33 3
Slide 21: Other non-interest income reflected volatile trading environment
Other non-interest income reflected the volatile trading environment 669 54 236 489 10 213 204 87 67 176 17 403 13 24 Other non- 58 61 144 interest income 15 47 121 (S$m) 114 125 15 17 44 86 25 402 163 344 159 13 (9) 54 116 32 217 15 85 81 43 41 44 2009 2010 2011 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4
Slide 22: Wealth management revenue down marginally for the year
Wealth management revenue down marginally for the year, as lower insurance income offset growth in other areas 27.1% 27.0% 26.1% 24.7% 24.8% As % of 23.5% Group 22.9% 21.9% revenue 21.3% 20.8% 19.0% 1,317 1,285 373 378 361 350 1,027 312 Wealth 272 285 271 management revenue (S$m) 2009 2010 2011 1Q10
Slide 23: Treasury income from customer flows up 48%
Treasury income from customer flows up 48% for the full year, reflecting increased success in cross-selling 44% 36% Customer 31% 31% 30% 29% 30% income as 26% % of Global 23% 18% 20% Treasury income 1,062 371 816 828 256 253 232 Global 738 Treasury 206 199 205 299 income (S$m) 609 168 629 161 211 16
Slide 24: Expenses rose modestly by 8% in FY11
Expenses rose modestly by 8% in FY11 46.6% 46.6% 45.2% 43.2% 43.7% Costs / 42.3% 41.7% 41.5% 41.4% Income 37.3% 36.2% 2,430 2,254 31 620 618 611 620 531 581 559 573 31 1,796 532 502 136 137 138 137 146 120 Operating 451 132 452 expenses 407 117 109 (S$m) 110 112 120 100 104 107 349 96 1,448 1,283 35
Slide 25: Full year core operating profit up 4%
Full year core operating profit up 4% 3,192 3,019 3,071 883 877 802 821 795 Core 709 699 677 operating profit before allowances (S$m) 2009 2010 2011 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 25
Slide 26: Net allowances reflected higher portfolio allowances
Net allowances reflected higher portfolio allowances in line with robust loan growth, and lower recoveries and write-backs 429 165 Net allowances for loans 221 and other assets 15 (S$m) 134 79 241 78 57 48 56 9 49 43 3 38 25 25 7 48 127 16 12 98 5 18 54 16 30 2 29 34 30 23 11 23 21 5 (21) (10) (2) (
Slide 27: Breakdown of allowances
Breakdown of allowances FY11 FY10 4Q11 3Q11 4Q10 S$m S$m S$m S$m S$m Specific allowances for loans 79 57 48 16 25 Portfolio allowances for loans 127 98 21 23 34 Allowances for other assets 15 (21) 9 (1) (11) (Write-back) Total net allowances 221 134 78 38 48 Specific loan allowances/average 7 6 15 5
Slide 28: Movement in specific allowances for loans
Movement in specific allowances for loans FY11 FY10 4Q11 3Q11 4Q10 S$m S$m S$m S$m S$m Allowances for new and 231 298 85 48 99 existing NPLs Write-backs1/ (104) (192) (27) (22) (56) Recoveries2/ (48) (49) (10) (10) (18) Net specific allowances 79 57 48 16 25 1/ Write-backs of specific allowances for
Slide 29: Loan growth of 27% YoY and 5% QoQ
Loan growth of 27% YoY and 5% QoQ, broad-based across key geographies Loan growth Group YoY: +27% QoQ: +5% 135 129 121 International 111 YoY: +56% 106 46 102 41 QoQ: +12% 95 37 90 31 29 28 26 Malaysia 24 20 21 YoY: +23% Customer 19 QoQ: +4% Loans (S$b) 17 18 17 16 17 Singapore YoY: +14% 62 66 68 68
Slide 30: Loan book remained diversified across geographies and sectors
Loan book remained diversified across geographies and sectors Customer Loans by Geography Customer Loans by Industry As of 31 December 2011 As of 31 December 2011 Agriculture, Others Others mining & quarrying Housing Loans Rest of Singapore Transport, Southeast 11% storage & comm. 9% Asia 3% 24% 8%
Slide 31: Deposit growth of 25% YoY; loan-to-deposit ratio 86.4%
Deposit growth of 25% YoY and 7% QoQ; Loan-to-deposit ratio improved to 86.4% 89.1% 88.0% 86.5% 86.8% 86.4% Loans / 85.1% 83.7% Deposits 81.9% 155 145 12 134 12 123 126 11 116 112 7 8 109 6 5 6 71 65 59 Deposits 59 57 (S$b) 57 58 56 27 29 26 27 CASA 26 ratio: 24 25 23 46.9% 46.4% 46.5% 48.5% 47.6% 4
Slide 32: NPL ratio remained flat YoY
NPL ratio remained flat YoY 1.5% NPL ratio 1.3% 1.1% 0.9% 0.9% 0.9% 0.8% 0.7% 1,437 1,402 1,316 83 56 1,170 1,208 1,191 1,201 265 1,158 323 55 292 213 215 288 258 NPAs 253 356 (S$m) 199 243 229 218 562 567 494 478 486 463 423 444 434 401 368 318 270 259 330 240 Mar10 Jun10 Sep10 Dec10 Mar11 Jun11 Se
Slide 33: 69% of NPAs in the substandard category
69% of NPAs in the “substandard” category – largely well-collateralised or no overdues 1,402 1,437 1,316 140 250 1,208 1,191 1,201 1,170 1,158 261 168 305 212 172 136 224 500 252 216 NPAs 217 265 414 (S$m) 292 992 779 767 817 757 652 641 654 Mar10 Jun10 Sep10 Dec10 Mar11 Jun11 Sep11 Dec11 Sub-standa
Slide 34: Movement in NPAs
Movement in NPAs FY11 FY10 4Q11 3Q11 4Q10 S$m S$m S$m S$m S$m NPAs – Opening balance 1,208 1,448 1,158 1,201 1,170 New NPAs 946 691 475 116 325 New recoveries/upgrades (564) (704) (145) (122) (211) Write-offs (153) (227) (51) (37) (76) NPAs – Closing balance 1,437 1,208 1,437 1,158 1,208 34
Slide 35: Healthy allowance coverage ratios
Healthy allowance coverage ratios of 107% of total NPAs and 326% of unsecured NPAs 400% 365% 350% 350% 326% 311% 288% 300% 271% 272% Total 266% allowances/ Unsecured 250% NPAs 200% 150% 126% 123% 130% 119% 123% 107% 112% 107% Total 100% allowances/ NPAs 50% 0% Mar10 Jun10 Sep10 Dec10 Mar11 Jun11 Sep
Slide 36: Capital adequacy ratios remained strong
Capital adequacy ratios remained strong: Tier 1 ratio of 14.4% and Core Tier 1 of 11.4% 17.6 17.3 17.0 16.3 1.3 15.9 15.7 15.2 15.5 1.8 1.6 CAR 1.0 0.3 1.5 1.3 (% of RWA) 0.8 3.7 3.7 3.7 3.5 3.5 3.7 16.3 3.2 3.0 Tier 2 capital 15.5 15.4 15.3 15.2 14.4 14.4 14.4 Tier 1 preference shares Core Tier 1 (
Slide 37: Dividend per share maintained at 30 cents
Dividend per share maintained at 30 cents 30.0 30.0 28.0 28.0 28.0 Net DPS (cents) 15.0 15.0 Final net dividend 14.0 14.0 14.0 Interim net dividend 14.0 14.0 14.0 15.0 15.0 2007 2008 2009 2010 2011 Net Dividends (S$m) 864 868 898 994 1,024 Core Net Profit (S$m) 1,878 1,486 1,962 2,253 2,280 Dividend
Slide 38: OCBC Malaysia: Total net interest income up 9%
OCBC Malaysia: Total net interest income and Islamic financing income up 9% for the year Net interest income and Non-interest income (RM m) Islamic financing Income (RM m) Net Non-int. income/ Interest/ Total income financing margin 2.42% 2.42% 2.39% 29.3% 2.35% 2.32% 2.34% 2.29% 2.27% 26.0% 25.8% 2
Slide 39: OCBC Malaysia: Loan growth of 20% YoY; NPL ratio 2.6%
OCBC Malaysia: Loan growth of 20% YoY and 2% QoQ; NPL ratio of 2.6% Gross Loans (RM b) Deposits (RM b) NPL Ratio Loans / 87.1% 86.9% Deposits 3.6% 3.6% 83.4% 83.9% 83.7% 3.1% 81.7% 81.5% 2.8% 80.3% 2.6% 2.6% 2.4% 2.1% 49 47 47 42 43 43 43 39 41 40 41 36 37 33 34 35 Mar10 Jun10 Sep10 Dec10 Mar11 Jun1
Slide 40: OCBC NISP: Net interest income up 13%
OCBC NISP: Net interest income up 13% for the year Net interest income (Rp b) Non-interest income (Rp b) Net Non-int. income/ interest margin Total income 5.35% 23.4% 22.7% 23.1% 22.8% 24.1% 5.04% 5.05% 22.0% 22.4% 4.80% 20.0% 4.65% 4.68% 4.81% 4.71% 2,255 608 579 1,993 651 535 533 193 1,896 504 580
Slide 41: OCBC NISP: Loan growth of 31% YoY
OCBC NISP: Loan growth of 31% YoY and 14% QoQ; NPL ratio improved to 1.3% Gross Loans (Rp t) Deposits (Rp t) NPL Ratio Loans / 87.0% 3.3% Deposits 85.7% 2.9% 2.9% 83.5% 83.7% 2.0% 1.9% 1.8% 1.5% 1.3% 80.0% 78.9% 79.7% 79.3% 47 43 41 40 39 36 36 37 34 34 32 31 30 28 27 24 Mar10 Jun10 Sep10 Dec10 Mar1
Slide 42: Agenda
Agenda Results Overview Performance Trends Appendix: Financial Highlights of Malaysia and Indonesia Subsidiaries 42
Slide 43: OCBC Malaysia: Full year net profit up 6%
OCBC Malaysia: Full year net profit up 6% FY11 FY10 YoY OCBC Malaysia RM m RM m +/(-)% Net interest income 1,213 1,131 7 Islamic Financing Income 188 158 19 Non-interest income 475 448 6 Total income 1,876 1,736 8 Operating expenses (746) (656) 14 Operating profit 1,130 1,081 5 Allowances (127) (129
Slide 44: OCBC Malaysia: 4Q11 net profit up 29% YoY
OCBC Malaysia: 4Q11 net profit up 29% YoY, up 39% QoQ 4Q11 4Q10 YoY 3Q11 QoQ OCBC Malaysia RM m RM m +/(-)% RM m +/(-)% Net interest income 322 292 10 306 5 Islamic Financing Income 50 38 31 50 - Non-interest income 131 82 60 84 56 Total income 503 412 22 440 14 Operating expenses (201) (170) 18 (19
Slide 45: OCBC Malaysia: Key ratios
OCBC Malaysia: Key ratios FY11 FY10 4Q11 3Q11 4Q10 OCBC Malaysia % % % % % Net interest margin 2.32 2.42 2.34 2.27 2.42 Non-interest income / Total income 25.3 25.8 26.0 19.2 19.9 Costs / Income 39.8 37.8 40.0 45.1 41.3 Loans / Deposits 86.9 81.7 86.9 87.1 81.7 NPL Ratio 2.6 2.8 2.6 2.1 2.8 ROE 16.6
Slide 46: Bank OCBC NISP: Full year net profit up 80%
Bank OCBC NISP: Full year net profit up 80% FY11 FY10 YoY OCBC NISP RP b RP b +/(-)% Net interest income 2,255 1,993 13 Non-interest income 651 563 16 Total income 2,906 2,556 14 Operating expenses (1,703) (1,594)1/ 7 Operating profit 1,203 962 25 Allowances (210) (206) 2 Non Op Income / (Expenses)
Slide 47: Bank OCBC NISP: 4Q11 operating profit up 36% YoY
Bank OCBC NISP: 4Q11 operating profit up 36% YoY, up 18% QoQ 4Q11 4Q10 YoY 3Q11 QoQ OCBC NISP RP b RP b +/(-)% RP b +/(-)% Net interest income 608 504 21 579 5 Non-interest income 193 148 30 171 13 Total income 801 652 23 750 7 1/ Operating expenses (427) (376) 14 (432) (1) Operating profit 374 276
Slide 48: Bank OCBC NISP: Key ratios
Bank OCBC NISP: Key ratios FY11 FY10 4Q11 3Q11 4Q10 OCBC NISP % % % % % Net interest margin 4.80 5.04 4.71 4.81 4.65 Non-interest income / Total income 22.4 22.0 24.1 22.8 22.7 Costs / Income 58.6 62.4 53.3 57.6 57.7 Loans / Deposits 87.0 80.0 87.0 83.7 80.0 NPL Ratio 1.3 2.0 1.3 1.5 2.0 ROE 12.9 8.
Slide 49: Final Results - Thank You
2011 Final Results Thank You 49
Oversea-Chinese Banking — FY2011 Earnings Presentation on 6ix