Oversea-chinese Banking Corporation Limited · SGX:O39

Oversea-chinese Banking — Q3 2004 Earnings Presentation

26 slides from Oversea-chinese Banking's earnings presentation, Nov 10, 2004

1. Slide 1: Third Quarter 2004 Results Presentation

   Third Quarter 2004 Results Presentation 10 November 2004

2. Slide 2: Agenda

   Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Divestment of Non-Core Assets • Conclusion 2

3. Slide 3: Results at a Glance - Quarterly

   Results at a Glance - Quarterly 3Q04 3Q03 YoY 2Q04 QoQ S$m S$m +/(-)% S$m +/(-)% Net Interest Income 384 359 7 380 1 Non-Interest Income 384 230 67 267 44 - Fee Income 118 100 18 117 - Total Income 768 589 30 647 19 Operating Expenses 251 214 17 236 6 Operating Profit 517 375 38 411 26 Goodwill 45 3

4. Slide 4: Results at a Glance – Year-to-Date

   Results at a Glance – Year-to-Date 9 Months 9 Months YoY 2004 2003 S$m S$m +/(-)% Net Interest Income 1,129 1,066 6 Non-Interest Income 812 552 47 - Fee Income 350 270 30 Total Income 1,941 1,618 20 Operating Expenses 692 638 8 Operating Profit 1,248 980 27 Goodwill 113 95 19 Provisions 79 171 (54)

5. Slide 5: Results Adjusted to Exclude Divestment Gains

   Results Adjusted to Exclude Divestment Gains Quarterly 3Q04 3Q03 YoY 2Q04 QoQ S$m S$m +/(-)% S$m +/(-)% Adjusted Operating Profit 385 297 30 411 (6) Adjusted Net Profit 227 220 3 303 (25) 9 Months 9 Months Year-to-Date YoY 2004 2003 S$m S$m +/(-)% Adjusted Operating Profit 1,116 902 24 Adjusted Net

6. Slide 6: Agenda

   Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Divestment of Non-Core Assets • Conclusion 6

7. Slide 7: Growth in Net Interest Income, Margins Remained Stable

   Growth in Net Interest Income, Margins Remained Stable Net 1.90% 1.89% 1.94% 1.90% 1.92% 1.89% interest 1.88% • Net interest income margin continued its rising trend 384 380 • 3Q04 net interest income up 7% YoY and 1% QoQ, 369 365 due to higher interest- 356 359 earning assets 352 Net interest • 3Q0

8. Slide 8: Non-Interest Income Boosted by Divestment Gains

   Non-Interest Income Boosted by Divestment Gains 50.0% Non- interest income/ 41.2% Total • 3Q04 non-interest income 39.1% 39.6% income boosted by divestment 35.8% 32.9% gains of S$132m and 29.6% 29.8% 29.7% 30.6% 384 insurance income contribution of S$85m from GEH 132 267 • Partly offset by S$20m net

9. Slide 9: Fee Income Maintained

   Fee Income Maintained Fee 19.5% 19.7% income/ 21.9% 18.5% Total 18.1% income • Fee income up 18% 18.0% 15.3% from 3Q03, led by 16.9% 16.5% 16.5% growth in wealth 115 117 118 management, fund 103 management, 100 investment banking and 88 82 trade-related income Fee income (S$m) • Fee income accounted

10. Slide 10: Cost Ratio Remains Comfortable - Investing to Support Business Growth

    Cost Ratio Remains Comfortable - Investing to Support Business Growth 42.1% 41.9% 41.2% Cost-to- 40.3% 39.1% 39.5% income • Expenses rose 6% QoQ, ratio 36.4% 36.4% largely due to inclusion of 3 months of GEH’s 37.6% 32.7% expenses in 3Q04 vs 1 month in 2Q04 251 236 223 214 216 • Excluding GEH, 3Q04

11. Slide 11: Operating Profit Before Provisions & Goodwill Amortisation

    Operating Profit Before Provisions & Goodwill Amortisation Operating Profit 517 (S$m) 411 132 375 358 320 385 298 307 78 50 297 308 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 Gains from divestment of non-core assets 11

12. Slide 12: Provisions Remain Low

    Provisions Remain Low Specific Provisions for Loans Total Provisions Provisions for Diminution in Investments (S$m) and Other Assets 64 General Provisions 24 70 54 22 37 36 - 70 20 22 47 47 7 37 30 10 9 16 (31) 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 12

13. Slide 13: Net Profit Excluding Divestment Gains in First Nine Months Up 30%

    Net Profit Excluding Divestment Gains in First Nine Months Up 30% Net Profit (S$m) 883 97 676 72 324 292 303 279 256 786 224 97 72 54 604 159 220 224 227 0 9M03 9M04 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 Gains from divestment of non-core assets 13

14. Slide 14: Contribution of GEH

    Contribution of GEH GEH’s Contribution to OCBC’s Results 9M 9M (S$m) 3Q041/ 2Q041/ 3Q03 2004 2003 Total Income 104 38 - 142 - Operating Expenses 22 5 - 27 - Operating Profit 83 32 - 115 - Goodwill Amortisation 13 5 - 18 - Tax 18 7 - 26 - Minority Interests 12 8 - 19 - Net Profit contribution as a su

15. Slide 15: Contribution of Bank NISP

    Contribution of Bank NISP 9 Months 9 Months YoY 2004 2003 Bank NISP’s reported results Rp mil Rp mil +/(-)% Net Interest Income 472,259 308,373 53 Non-Interest Income 111,645 112,516 (1) Net Profit 201,545 118,736 70 Gross Loans 9,451,507 7,983,369 18 Net Interest Margin 4.70% 3.56% + 114 bps ROE 25

16. Slide 16: EPS and ROE

    EPS and ROE 12.6% 12.2% 11.8% 12.1% ROE 10.7% 9.5% 9.5% 9.1% 8.4% 6.8% 96 90 89 81 80 67 22 28 16 EPS¢ 50 68 68 64 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 Non-core assets divestment gains Excluding divestment gains Note: Quarterly ROE and EPS are annualised; ROE refers to return on ordinary shareholders’

17. Slide 17: Agenda

    Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Divestment of Non-Core Assets • Conclusion 17

18. Slide 18: Continued Loans Expansion

    Continued Loans Expansion Loans (S$bn) • Group loans up 5% over 54.7 55.0 Dec 03, led by housing 52.6 53.0 51.2 51.4 loans (+10% to S$17bn), 49.7 7.0 6.8 6.4 6.2 general commerce, 6.6 6.3 manufacturing and financial 6.7 7.9 8.3 8.4 institutions / investment 7.8 8.0 7.5 holding companies 7.1 • OCBC M

19. Slide 19: Deposits and Loans-to-Deposits Ratio

    Deposits and Loans-to-Deposits Ratio Loans- • Customer deposits grew 93.8% 93.2% 93.9% to- 85.0 90.9% 91.5% deposits 5% from Dec 03 from 89.1% higher fixed deposits and 90.0% 75.0 85.3% 92.2% current account balances 90.1% 65.0 • Issued US$500m 3-year 55.3 57.2 56.2 80.0% 54.8 53.9 53.5 54.3 Floatin

20. Slide 20: Agenda

    Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Divestment of Non-Core Assets • Conclusion 20

21. Slide 21: NPL Ratio Continues to Improve

    NPL Ratio Continues to Improve NPL Ratio 8.0% 7.5% 7.1% 6.9% 6.6% 6.1% 4,290 5.4% 4,115 3,890 3,834 3,644 3,512 NPLs 3,129 (S$m) 1,250 1,219 1,105 1,068 1,040 1,028 970 2,559 2,480 2,388 2,389 2,266 2,150 1,909 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Singapore Malaysia International 21

22. Slide 22: Provision Coverage Remains Strong

    Provision Coverage Remains Strong SPs / Unsecured NPLs 105% 103% 105% 105% 100% 100% 99% (SPs+GPs) / NPLs 77% 70% 70% 66% 67% 63% 63% SPs / NPLs 37% 37% 39% 35% 35% 36% 36% Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 22

23. Slide 23: Agenda

    Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Divestment of Non-Core Assets • Conclusion 23

24. Slide 24: Divestment of Non-Core Assets Continues

    Divestment of Non-Core Assets Continues Non-Core Assets Divested Completion Sales Amount Net Gain Divestment Date (S$m) (S$m) Sep 03 4.4% stake in Fraser & Neave 88 72 Dec 03 2.2% stake in WBL Corporation 9 4 Dec 03 43.3% stake in Raffles Hotel 53 14 (held by associated company) Dec 03 Residential l

25. Slide 25: Conclusion

    Conclusion • Core revenue streams remained steady in the third quarter • Year-to-date performance shows across-the-board improvement in net interest income, fee income, cost/income ratio, provisions and asset quality • Share buybacks: Purchased 13.5m shares (1% of share capital) to-date, for S$185m

26. Slide 26: Third Quarter 2004 Results – Thank You

    Third Quarter 2004 Results Thank You

Oversea-Chinese Banking — Q3 2004 Earnings Presentation on 6ix