United Overseas Bank Limited · SGX:U11
United Overseas Bank — FY2004 Earnings Presentation
21 slides from United Overseas Bank's earnings presentation, Feb 24, 2005
Slide 1: UOB - Premier Regional Bank 2004 Group Results Briefing
UOB - Premier Regional Bank 2004 Group Results Briefing Address by Kuek Tong Au Executive Vice President Corporate Services 24 February 2005 Disclaimer : This material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation
Slide 2: Agenda
Agenda 11 Review Review Of Of Financial Financial Performance Performance 22 Business Business & & Geographical Geographical Segments Segments 33 Loans, Loans, Deposits Deposits & & Asset Asset Quality Quality 44 Performance Performance of of Key Key Regions Regions 55 Capital Capital Position Posit
Slide 3: Another Year of Record Profit
Another Year of Record Profit 2004 2003 Incr / (Decr) $m $m $m % Net Interest Income 2,155 2,071 84 4 Non-Interest Income 1,104 1,089 15 1 Total Income 3,259 3,160 99 3 Less: Operating Expenses 1,227 1,095 132 12 Operating Profit before Goodwill and Provisions 2,032 2,064 (32) (2) Less: Goodwill Amo
Slide 4: Higher Profit in 4th Quarter 2004
Higher Profit in 4th Quarter 2004 4Q 04 4Q 03 Incr / 3Q 04 Incr / (D ecr) (D ecr) $m $m $m % % N et Interest Incom e 562 540 4 537 5 N on-Interest Incom e 298 291 2 270 10 Total Incom e 860 831 3 807 7 Less: O perating Expenses 364 290 26 315 16 O perating Profit before G oodw ill and Provisions 496
Slide 5: Higher Net Interest Income despite Lower Margin
Higher Net Interest Income despite Lower Margin Net Net Interest Interest Income Income and and Margin Margin 2.29% 2.22% 2.25% 2.16% 2.14% 2.10% 2.05% 2.05% 2,128 2,155 2,071 562 540 533 537 523 2002 2003 2004 4Q03 1Q04 2Q04 3Q04 4Q04 Net Interest Income ($m) Net Interest Margin (%) 5
Slide 6: Higher Non-Interest Income mainly from Fee Income
Higher Non-Interest Income mainly from Fee Income Non -Interest Income Non-Interest Income (Non -NII) and (Non-NII) and Non-NII Ratio Non-NII Ratio 34.5% 33.9% 29.9% 35.1% 35.9% 33.5% 34.6% 1,089 1,104 31.3% 906 398 501 291 293 298 270 405 243 93 120 123 91 91 706 588 204 501 170 152 180 171 2002 20
Slide 7: Fee Income Continues to Grow
Fee Income Continues to Grow Fee Fee Income Income and and Fee Fee Income Income Ratio Ratio 21.7% 23.7% 22.3% 18.6% 20.6% 20.8% 19.6% 16.5% 706 204 588 171 180 170 501 152 2002 2003 2004 4Q03 1Q04 2Q04 3Q04 4Q04 Fee Income ($m) Fee Income / Total Income Ratio (%) 7
Slide 8: Operating Expenses Increased mainly due to acquisition of BOA
Operating Expenses Increased mainly due to acquisition of BOA Operating Operating Expenses Expenses and and Expense Expense // Income Income Ratio Ratio 37.6% 42.3% 35.4% 34.7% 39.0% 36.6% 34.8% 36.2% 32.8% 40.1% 1,227 37.4% 1,074 1,095 78 364 315 290 49 280 268 29 1,149 285 315 2002 2003 2004 4Q03
Slide 9: Year-on-Year Provision Charges Reduced
Year-on-Year Provision Charges Reduced Provisions Provisions Charged Charged to to Profit Profit & & Loss Loss Account Account 75bp 58bp 113 36 465 31bp 10 362 60 41 (1) 99 103 48 209 (63) (49) 2002 2003 2004 4Q03 1Q04 2Q04 3Q04 4Q04 Provision Charges ($m) Specific Provisions ($m) General Provisions
Slide 10: Higher ROE Achieved
Higher ROE Achieved NPAT NPAT and and ROE ROE (excluding (excluding goodwill) goodwill) 12.4% 12.7% 12.7% 12.8% 10.9% 12.1% 11.9% 9.5% 1,452 1,202 366 371 376 1,006 357 347 2002 2003 2004 4Q03 1Q04 2Q04 3Q04 4Q04 Net Profit After Tax ($m) ROE (excluding goodwill) (%) 10
Slide 11: Profit Contribution by Business Segment
Profit Contribution by Business Segment Business Business Segment Segment 2004 Institutional 2004 2003 Incr / (Decr) 42% Segment Profit Before Tax $m $m % 12% Global Individual Financial Services 504 421 20 27% Treasury 7% 12% Institutional Financial Services 794 682 16 Individual Asset Management O
Slide 12: Profit Contribution by Geographical Segment
Profit Contribution by Geographical Segment Geographical Geographical Segment Segment 2004 2004 2003 Incr / (Decr) Singapore Profit Before Tax $m $m % 79% 4% Rest of the world Singapore (including ACU) 1,680 1,367 23 4% Asia Pacific 13% Other ASEAN countries 278 263 6 ASEAN Other Asia-Pacific countr
Slide 13: Loans and Deposits Expansion largely from acquisition of BOA
Loans and Deposits Expansion largely from acquisition of BOA Net Net Customer Customer Loans Loans Customer Customer Deposits Deposits and and L/D L/D Ratio Ratio ($b) ($b) 86.7% 84.9% 64.3 81.8% 81.4% 60.9 58.9 59.3 4.4 79.0 59.9 74.5 67.9 69.9 5.8 73.2 8.4 % 1% 13. Dec-01 Dec-02 Dec-03 Dec-04 Dec-
Slide 14: Increase in NPLs attributed to acquisition of BOA
Increase in NPLs attributed to acquisition of BOA Total NPLs ($m) 5,968 5,679 5,160 5,484 2,149 1,744 1,030 1,630 1,505 3,819 3,935 3,530 2,949 Dec-01 Dec-02 Dec-03 Dec-04 Singapore Overseas BOA 14
Slide 15: NPL Ratio Continued to Improve
NPL Ratio Continued to Improve Total NPLs ($m) 5,968 5,679 5,160 5,484 4,454 9.3% 9.0% 8.1% 8.0% 6.9% 3,851 3,619 3,306 3,347 2,760 497 447 350 396 332 1,620 1,613 1,458 1,787 1,362 Dec-01 Dec-02 Dec-03 Dec-04 Dec-04 (excl. BOA) Loss Doubtful Substandard NPL (excluding debt securities) / Gross Custo
Slide 16: Increase in Cumulative Provisions in Tandem with Higher NPLs
Increase in Cumulative Provisions in Tandem with Higher NPLs Total 3,334 3,504 3,332 3,724 3,136 Provisions ($m) 2.4% 2.3% 2.3% 2.1% 2.1% 2,079 2,354 1,899 1,910 1,826 1,435 1,425 1,422 1,370 1,310 Dec-01 Dec-02 Dec-03 Dec-04 Dec-04 (excl. BOA) General Provisions Specific Provisions GP / Customer Lo
Slide 17: Higher Provision Coverage against Total NPLs
Higher Provision Coverage against Total NPLs Cumulative Cumulative Provisions Provisions // Cumulative Cumulative Provisions Provisions // Total Total NPLs NPLs Ratio Ratio Unsecured Unsecured NPLs NPLs Ratio Ratio 146.3% 141.4% 138.3% 138.6% 136.6% 70.4% 61.7% 64.6% 67.9% 55.9% Dec-01 Dec-02 Dec-03
Slide 18: UOBM Group: Key Indicators
UOBM Group: Key Indicators (MYR’m) (S$’m) Incr/(Decr) 2004 2003 % 2004 2003 Profit after Tax 377 358 5 162 160 ROE - % 21.3 22.7 (1.4)% pt 21.3 22.7 Expense / Income Ratio - % 33.4 29.7 3.7% pt 33.4 29.7 Customer Loans (Net) 16,221 14,657 11 6,974 6,560 Customer Deposits 15,930 13,636 17 6,849 6,103
Slide 19: Thailand: Key Indicators
Thailand: Key Indicators (THB’m) (S$’m) Incr/(Decr) 2004 2003 % 2004 2003 Profit after Tax 822 167 391 34 7 ROE - % 6.0 4.4 1.6% pt 6.0 4.4 Expense / Income Ratio - % 70.9 77.9 (7.0)% pt 70.9 77.9 Customer Loans (Net) 147,180 36,649 302 6,178 1,574 Customer Deposits 172,091 45,824 276 7,224 1,968 Lo
Slide 20: Strong Capital Position
Strong Capital Position Capital Capital Adequacy Adequacy Ratio Ratio (CAR) (CAR) ** 18.5% 15.3% 15.2% 15.6% 13.2% 11.8% 12.2% 11.0% Dec-01 Dec-02 Dec-03 Dec-04 Total CAR Tier 1 CAR * Computed based on revised MAS guidelines for 2003 and 2004, and BIS guidelines for 2001 and 2002. 20
Slide 21: In Summary...
In Summary... NPAT grew 21% to reach $1,452 million in 2004 ROE (excluding goodwill) increased to 12.4% from 10.9% in 2003 Expense-to-income ratio increased 2.9% points to 37.6% in 2004 NPL ratio declined to 8.0% in 2004 from 8.1% in 2003 21