Oversea-chinese Banking Corporation Limited · SGX:O39

Oversea-chinese Banking — Q1 2005 Earnings Presentation

28 slides from Oversea-chinese Banking's earnings presentation, May 11, 2005

  1. Slide 1: First Quarter 2005 Results Presentation

    First Quarter 2005 Results Presentation 11 May 2005

  2. Slide 2: Agenda

    Agenda • Results Overview • Performance Trends • Results of Key Subsidiaries • Conclusion 2

  3. Slide 3: Net Profit Grew 17% YoY and 8% QoQ

    Net Profit Grew 17% YoY and 8% QoQ 1Q05 1Q04 YoY 4Q04 QoQ S$m S$m +/(-)% S$m +/(-)% Net Interest Income 363 365 (0.5) 389 (7) Non-Interest Income 319 161 98 313 2 - Fee Income 121 115 5 113 6 Total Income 682 526 30 702 (3) Operating Expenses (251) (207) 21 (285) (12) Operating Profit 431 319 35 417

  4. Slide 4: Key Financial Ratios

    Key Financial Ratios 1Q05 4Q04 1Q04 % % % Net Interest Margin 1.78 1.93 1.90 Non-Interest Income/ 46.8 44.6 30.6 Total Income Cost-to-Income Ratio 36.8 40.6 39.4 Loans-to-Deposits Ratio 86.1 90.5 91.1 NPL Ratio 4.8 5.0 6.7 Provision Coverage 84.1 82.9 69.5 ROE 10.6 10.2 10.6 Cash ROE 11.0 12.0 12.0

  5. Slide 5: Accounting Changes Boosted Equity by S$0.7bn on 1 Jan 05

    Accounting Changes Boosted Equity by S$0.7bn on 1 Jan 05 Before Effect of Effect of Effect of As at Changes* FRS 102 INT FRS 12 FRS 39 1 Jan 05 S$m S$m S$m S$m S$m Share Capital 1,321 - - - 1,321 Capital Reserves 3,136 16 (12) - 3,140 Statutory Reserves 1,934 - - - 1,934 Fair Value Reserves - - - 64

  6. Slide 6: Impact of Accounting Changes on 1Q2005 Income Statement

    Impact of Accounting Changes on 1Q2005 Income Statement Effect of Effect of Effect of Total FRS 102 FRS 103 FRS 39 Effects Impact on Profit S$m S$m S$m S$m Total Income - - (7) (7) Operating Expenses (4) - - (4) Operating Profit before Provisions (4) - (7) (11) Goodwill Amortisation - 35 - 35 Profit

  7. Slide 7: Agenda

    Agenda • Results Overview • Performance Trends • Results of Key Subsidiaries • Conclusion 7

  8. Slide 8: Net Interest Income Affected by Higher Cost of Funds and Limited Gapping Opportunities

    Net Interest Income Affected by Higher Cost of Funds and Limited Gapping Opportunities Net interest 1.93% 1.90% 1.92% 1.89% margin 1.78% 380 384 389 365 363 Net interest income (S$m) 1Q04 2Q04 3Q04 4Q04 1Q05 8

  9. Slide 9: Net Interest Margin Breakdown

    Net Interest Margin Breakdown Interest Interest Rate Ave Bal First Quarter 2005 Inc / Exp Ave Rate YoY QoQ S$bn S$m % bps bps Customer loans 51.5 496 3.91 + 22 +6 Placements with Banks 13.9 94 2.76 + 68 + 24 Securities/ Others 17.3 122 2.86 + 70 + 17 Interest Earning Assets 82.6 712 3.50 + 39 +8 Cus

  10. Slide 10: Non-Interest Income on Steady Upward Trend

    Non-Interest Income on Steady Upward Trend 50.0% 46.8% 44.6% Non-interest income/ 41.2% Total income 39.6% 30.6% 384 313 319 132 267 Non-interest income 252 (S$m) 161 1Q04 2Q04 3Q04 4Q04 1Q05 Gains from divestment of non-core assets Excluding gains from divestment of non-core assets 10

  11. Slide 11: Steady Fee Income Driven by Strong Wealth Management Sales

    Steady Fee Income Driven by Strong Wealth Management Sales Fee income/ 21.9% Total income 18.1% 18.5% 17.7% 16.1% 15.3% 117 118 121 115 113 Fee income (S$m) 1Q04 2Q04 3Q04 4Q04 1Q05 Excluding gains from divestment of non-core assets from total income 11

  12. Slide 12: Expenses Moderated from 4Q04, Cost-Income Ratio Improved

    Expenses Moderated from 4Q04, Cost-Income Ratio Improved 40.1% 40.6% Cost-to-income ratio 36.9% 36.8% 39.4% 33.2% 285 255 251 239 207 77 51 62 57 Operating Expenses 37 60 (S$m) 54 53 50 48 134 140 149 143 121 1Q04 2Q04 3Q04 4Q04 1Q05 Staff Cost Premises & Equipment Others Excluding gains from divest

  13. Slide 13: Operating Profit Up 35% YoY, 3% QoQ

    Operating Profit Up 35% YoY, 3% QoQ Operating Profit before provisions 513 (S$m) 417 431 408 132 319 381 1Q04 2Q04 3Q04 4Q04 1Q05 Gains from divestment of non-core assets 13

  14. Slide 14: Provision Charges Remain Low

    Provision Charges Remain Low Provisions (S$m) 36 24 22 20 (2) 1Q04 2Q04 3Q04 4Q04 1Q05 14

  15. Slide 15: Net Profit

    Net Profit Net Profit 320 (S$m) 300 298 275 255 97 223 1Q04 2Q04 3Q04 4Q04 1Q05 Gains from divestment of non-core assets 15

  16. Slide 16: EPS and ROE

    EPS and ROE 12.4% 11.9% 10.6% 10.6% ROE 10.2% 8.2% 95 91 88 80 77 28 EPS¢ 67 1Q04 2Q04 3Q04 4Q04 1Q05 Non-core assets divestment gains Excluding divestment gains Note: Quarterly ROE and EPS are annualised; ROE refers to return on ordinary shareholders’ funds 16

  17. Slide 17: Subdued Domestic Loans Growth

    Subdued Domestic Loans Growth Loans (S$bn) 53.5 53.9 54.1 53.6 51.8 6.8 7.0 7.4 7.6 6.2 7.9 8.3 8.4 8.5 8.8 37.7 38.3 38.4 38.1 37.1 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Singapore Malaysia International 17

  18. Slide 18: Lower Loans-to-Deposits Ratio

    Lower Loans-to-Deposits Ratio Loans-to-deposits 95.0 91.1% 91.8% 90.5% 89.4% 85.0 86.1% 90.0% 90.1% 75.0 88.0% 87.7% 83.3% 80.0% 65.0 59.7 57.2 56.2 57.3 54.3 55.0 70.0% 6.8 7.2 7.0 6.2 6.8 45.0 11.2 11.2 11.4 11.2 11.2 60.0% Deposits (S$bn) 35.0 25.0 36.3 50.0% 33.6 34.7 33.3 34.1 15.0 5.0 40.0% Ma

  19. Slide 19: NPL Ratio Continues to Improve

    NPL Ratio Continues to Improve NPL Ratio 6.7% 6.1% 5.4% 5.0% 4.8% 3,644 3,512 3,129 NPLs 2,866 2,705 (S$m) 1,040 1,028 970 902 886 2,266 2,150 1,909 1,735 1,596 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Singapore Malaysia International 19

  20. Slide 20: Strong Provision Coverage

    Strong Provision Coverage 132% SPs / Unsecured NPLs 105% 106% 100% 99% 83% 84% 77% 70% 70% Cumulative Provisions / NPLs SPs / NPLs 49% 43% 37% 37% 39% Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 20

  21. Slide 21: Capital Position Remains Robust

    Capital Position Remains Robust (%) Total CAR 18.3 17.7 17.6 17.4 17.7 5.5 5.1 5.1 4.4 5.1 Tier 1 CAR 12.8 12.6 12.5 12.3 13.3 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 (S$m) Tier-1 capital 8,131 8,495 8,557 8,442 9,138 Risk Weighted Assets 63,372 67,483 68,672 68,737 68,546 21

  22. Slide 22: Agenda

    Agenda • Results Overview • Performance Trends • Results of Key Subsidiaries • Conclusion 22

  23. Slide 23: OCBC Malaysia's Net Profit Up 9% YoY

    OCBC Malaysia’s Net Profit Up 9% YoY 1Q05 1Q04 YoY 4Q04 QoQ Unaudited Results* RM m RM m +/(-)% RM m +/(-)% Net Interest Income 152 136 12 144 5 Islamic Banking Income 10 4 162 15 (36) Non Interest Income 57 45 26 57 (0) Total Income 218 185 18 216 1 Operating Expenses (84) (57) 48 (88) (5) Operatin

  24. Slide 24: OCBC Malaysia: Financial Ratios

    OCBC Malaysia: Financial Ratios 1Q05 4Q04 1Q04 Unaudited Results* % % % Net Interest Margin 2.44 2.36 2.21 Non-Interest Income / Total Income 26.0 26.3 24.5 Cost-to-Income Ratio 38.5 40.7 30.7 RM Loans-to-Deposits Ratio 87.1 83.1 77.7 Gross NPL Ratio 7.6 8.0 9.6 Loans Growth (QoQ) 3.0 4.5 1.3 ROE 24

  25. Slide 25: GEH Contributed 19% of Group Net Profit

    GEH Contributed 19% of Group Net Profit 1Q05 4Q04 1Q04 GEH’s Contribution to OCBC’s Results1/ S$m S$m S$m Total Income 134 162 - Operating Expenses (21) (24) - Operating Profit 113 138 - Amortisation of Intangible Assets (10) (14) - Provisions (0) 1 - Tax (21) (38) - Minority Interests (23) (17) - N

  26. Slide 26: Bank NISP Results

    Bank NISP Results 1Q05 1Q04 YoY 4Q04 QoQ Unaudited Results* RP bn RP bn +/(-)% RP bn +/(-)% Net Interest Income 172 145 19 170 1 Non Interest Income 96 41 133 66 46 Expenses (148) (107) 38 (112) 32 Operating Profit 120 79 52 124 3 Net Profit 93 55 69 89 4 Gross Loans 10,757 8,837 22 10,056 7 NPL Rat

  27. Slide 27: Conclusion

    Conclusion ‰ Earnings held up well despite higher cost of funds and keen competition ‰ More diversified earnings profile compared to a year ago ¾ Malaysia operations continued strong performance and now account for 30% of our earnings (including GEH) ¾ Insurance contribution from GEH lifted our non-

  28. Slide 28: First Quarter 2005 Results – Thank You

    First Quarter 2005 Results Thank You

Oversea-Chinese Banking — Q1 2005 Earnings Presentation on 6ix