United Overseas Bank Limited · SGX:U11
United Overseas Bank — 1H 2018 Earnings Presentation
28 slides from United Overseas Bank's earnings presentation, Aug 3, 2018
Slide 1: UOB Group Financial Highlights
UOB Group For the First Half / Second Quarter Ended 30 June 2018 Financial Highlights Lee Wai Fai Group Chief Financial Officer 3 August 2018 Disclai me r: This material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentati
Slide 2: Highlights
Highlights New first half earnings high of $2.05 billion in 2018 ↑ 24% YoY Record second quarter earnings exceeding $1 billion ↑ 28% YoY; ↑ 10% QoQ • Increase in net interest income supported by broad-based loan growth and an uplift in loan margin • Strong performance in net fee and commission incom
Slide 3: New high first half earnings surpassing $2 billion
New high first half earnings surpassing $2 billion 1H18 1H17 YoY $m $m $m +/(-) % Net interest income 3,012 2,659 353 13 • Net interest income up 13% supported by uplift in net interest Net fee income 1,015 887 129 15 margin and broad-based loan growth. Other Non-NII 546 621 (76) (12) • Higher
Slide 4: Second quarter earnings exceeding $1 billion
Second quarter earnings exceeding $1 billion 2Q18 2Q17 YoY $m $m $m +/(-) % Net interest income 1,542 1,356 186 14 • Higher net interest income driven by strong loan growth and higher net interest margin. Net fee income 498 448 50 11 • Higher net fee income due to Other Non-NII 302 310 (8) (3)
Slide 5: Net earnings improved 10% QoQ
Net earnings improved 10% QoQ 2Q18 1Q18 QoQ $m $m $m +/(-) % Net interest income 1,542 1,470 72 5 • Higher net interest income due to loan growth, partially offset by 1bp drop in net interest margin. Net fee income 498 517 (19) (4) • Lower wealth management fees, Other Non-NII 302 244 58 24 pa
Slide 6: Higher NII driven by an uplift in loan margin and volume growth
Higher NII driven by an uplift in loan margin and volume growth Net Interest Income (NII) and Margin 2.20% 2.14% 2.20% 2.14% 2.14% 2.15% 2.14% 2.18% 2.22% 1.71% 1.77% 1.83% 1.73% 1.75% 1.79% 1.81% 1.84% 1.83% 0.77% 0.90% 0.38% 0.71% 0.82% 0.93% 0.94% 0.87% 5,528 0.60% 4,991 1,542 651 1,461 1,470 303
Slide 7: Leverage strong capital position to drive volume growth
Leverage strong capital position to drive volume growth on the back of the rising rate environment Well positioned to tap on opportunities for NII growth Strong capital base and improvement in RoRWA Steady loan momentum and healthy NIM 1.84 1.83 1.81 1.79 2.13 1.75 1.95 1.73 1.61 1.69 1.69 1.51 +4%
Slide 8: Loan-related, fund management and credit cards fees continued to perform well
Loan-related, fund management and credit cards fees continued to perform well Non-Interest Income (Non-NII) 3,035 2,799 260 263 800 758 756 771 761 749 86 70 58 63 57 902 68 877 198 187 216 221 243 240 1,561 143 403 1,873 1,659 477 509 517 498 439 448 1,015 2016 2017 1H18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q
Slide 9: Cost/Income ratio improved QoQ to 43.6%
Cost/Income ratio improved QoQ to 43.6% Operating Expenses and Cost / Income Ratio 44.0% 43.7% 43.9% 46.0% 43.2% 43.8% 44.2% 43.6% 41.6% 3,739 3,425 1,027 1,022 987 1,515 925 900 887 1,375 419 381 403 360 379 357 2,009 785 2,050 2,224 608 606 619 526 547 543 1,224 2016 2017 1H18 1Q17 2Q17 3Q17 4Q17
Slide 10: Stable total allowances
Stable total allowances Total Allowances on Loans 125bp 61bp 45bp 49bp 37bp 12bp 32bp 12bp 13bp 32bp 28bp 11bp 32bp 30bp 32bp 693 17bp 11bp 11bp 660 184 184 188 104 146 81 65 2016 2017 1H18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Total Allowances on Loans Allowanes for Impaired Loans / Average Gross Loans (ba
Slide 11: New NPA formation stayed at normalised level
New NPA formation stayed at normalised level 11
Slide 12: NPL ratio remained stable
NPL ratio remained stable NPL ($m) 3,399 3,466 3,748 4,211 4,138 4,208 NPL Ratio 1.5% 1.5% 1.6% 1.8% 1.7% 1.7% 303 300 NPL ($m) 132 290 139 150 272 244 694 692 721 257 285 304 261 608 439 485 482 623 641 386 585 603 623 370 392 563 487 518 2,058 1,918 1,943 1,675 1,358 1,369 Mar-17 Jun-17 Sep-17 Dec
Slide 13: Adequate NPA coverage
Adequate NPA coverage Total Allowances ($m) 4,132 4,062 4,190 3,990 3,913 3,935 NPA coverage (%) 117 113 107 91 91 89 Unsecured NPA coverage (%) 232 232 223 187 190 190 Total Allowances ($m) 2,619 2,635 2,610 1,976 2,014 1,978 1,935 1,998 1,937 1,513 1,580 1,427 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Ju
Slide 14: Strong capital used to support broad-based loan growth across the Group
Strong capital used to support broad-based loan growth across the Group Jun-18 Jun-18 Jun-17 +/(-) Mar-18 +/(-) 18% Gross Loans $b $b % $b % 36% 8% 42% Singapore 131 125 4 129 2 58% Regional: 94 79 18 89 6 4% 3% 31% Malaysia 29 26 11 29 1 Thailand 16 14 13 16 0 Jun-17 Indonesia 11 12 (6) 10 4 Greate
Slide 15: Stable liquidity position with LCR at 142% and NSFR at 110%
Stable liquidity position with LCR at 142% and NSFR at 110% Customer Loans and Deposits; LDR, LCR and NSFR 154% 157% 142% 135% 128% 142% 86.7% 86.1% 85.8% 85.1% 86.7% 85.7% 288 268 273 274 260 260 246 230 232 237 225 224 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Net Customer Loans ($b) Customer Depo
Slide 16: Strong funding position in anticipation of further rate hikes
Strong funding position in anticipation of further rate hikes Jun-18 15% Jun-18 Jun-17 +/(-) Mar-18 +/(-) Customer Deposits $b $b % $b % 41% Singapore 192 180 7 184 5 Regional: 74 65 14 71 4 44% Malaysia 30 27 12 30 2 Thailand 17 14 17 17 (2) Indonesia 7 8 (7) 7 5 Jun-17 14% Greater China 20 16 24 1
Slide 17: Good performance by all business segments
Good performance by all business segments 1H18 6% -3% 1H18 1H17 +/(-) 39% Segment Operating Profit $m $m % Group Retail (GR) 1,016 992 2 58% Group Wholesale Banking (GWB) 1,482 1,336 11 Global Markets (GM) 145 134 8 1H17 -5% 6% Others * (79) (107) 27 42% Total 2,564 2,355 9 57% * Comprises Investmen
Slide 18: Regional operating profit up 12% YoY in constant currency
Regional operating profit up 12% YoY in constant currency 1H18 10% At constant 10% FX rate 3% Operating 1H18 1H17 +/(-) +/(-) 7% 57% Profit $m $m % % 13% Singapore 1,458 1,378 6 6 1H17 Regional: 855 756 13 12 9% Malaysia 331 312 6 1 8% Thailand 196 161 22 18 4% Indonesia 71 82 (14) (6) 7% 59% Greate
Slide 19: Strong capital position with improving RoRWA
Strong capital position with improving RoRWA Capital Adequacy Ratios (CAR) and RoRWA 2.13% 1.95% 1.69% 1.69% 1.61% 1.51% 18.7% 18.8% 18.4% 17.3% 17.8% 17.8% 14.7% 14.9% 14.5% 13.3% 13.8% 12.8% Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 RoRWA (%) Tier 2 CAR Tier 1 CAR Fully-loaded CET1 (%) RWA ($b) 21
Slide 20: Increase in interim core dividend to 50 cents at 1H18
Increase in interim core dividend to 50 cents at 1H18 20 20 45 35 35 50 35 35 35 2015 2016 2017 1H18 Net dividend Interim Final Special UOB 80th anniversary per ordinary share (¢) 2015 2016 2017 1H18 Payout amount ($m) 1,444 1,135 1,660 835 Payout ratio (%) 45 37 49 41 20
Slide 21: Appendix: Performance of Major Territories
Appendix : Performance of Major Territories - Singapore - Malaysia - Thailand - Indonesia - Greater China Exposure to China
Slide 22: Singapore – Key Financials
Singapore – Key Financials 1H18 1H17 +/(-) 2Q18 1Q18 +/(-) $m $m % $m $m % Net interest income 1,719 1,446 19 887 832 7 Net fee income 619 551 12 302 317 (5) Other non-interest income 258 392 (34) 154 104 48 Total income 2,596 2,390 9 1,342 1,254 7 Less: Expenses 1,138 1,011 13 581 557 4 Operating p
Slide 23: Malaysia – Key Financials
Malaysia – Key Financials 1H18 1H17 +/(-) 2Q18 1Q18 +/(-) RM'm RM'm % RM'm RM'm % Net interest income 1,069 1,060 1 543 526 3 Net fee income 314 293 7 145 169 (14) Other non-interest income 182 151 21 78 104 (25) Total income 1,565 1,504 4 766 799 (4) Less: Expenses 582 528 10 291 291 - Operating pr
Slide 24: Thailand – Key Financials
Thailand – Key Financials 1H18 1H17 +/(-) 2Q18 1Q18 +/(-) THB'm THB'm % THB'm THB'm % Net interest income 8,258 7,513 10 4,189 4,069 3 Net fee income 2,392 2,276 5 1,158 1,234 (6) Other non-interest income 539 427 26 283 256 11 Total income 11,189 10,216 10 5,630 5,559 1 Less: Expenses 6,503 6,229 4
Slide 25: Indonesia – Key Financials
Indonesia – Key Financials 1H18 1H17 +/(-) 2Q18 1Q18 +/(-) IDR'b IDR'b % IDR'b IDR'b % Net interest income 1,664 1,652 1 861 803 7 Net fee income 366 380 (4) 188 178 6 Other non-interest income 231 213 8 102 129 (21) Total income 2,261 2,245 1 1,151 1,110 4 Less: Expenses 1,527 1,462 4 776 751 3 Ope
Slide 26: Greater China – Key Financials
Greater China – Key Financials 1H18 1H17 +/(-) 2Q18 1Q18 +/(-) $m $m % $m $m % Net interest income 207 196 6 103 104 (1) Net fee income 86 49 78 40 46 (12) Other non-interest income 149 122 22 87 62 42 Total income 442 366 21 231 212 9 Less: Expenses 185 165 12 91 93 (2) Operating profit 258 201 28
Slide 27: Exposure to China
Exposure to China Bank exposure as of 30 June 2018 Non-bank exposure as of 30 June 2018 • Bank exposure accounted for 65% of total • Target customers include top-tier state-owned exposure to China enterprises, large local corporates and foreign • Top 5 domestic banks and 3 policy banks investment en
Slide 28: Thank You
itt UOB Thank You ue UOB RIGHT BY YOU