United Overseas Bank Limited · SGX:U11
United Overseas Bank — 9M17 Earnings Presentation
28 slides from United Overseas Bank's earnings presentation, Nov 3, 2017
Slide 1: UOB Group Financial Highlights
UOB Group For the Nine Months / Third Quarter Ended 30 September 2017 Financial Highlights Lee Wai Fai Group Chief Financial Officer 3 November 2017 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 pre
Slide 2: 9M17 and 3Q17 Highlights
9M17 and 3Q17 Highlights Steady growth in client franchise income, supported by balance sheet growth 9M17 NPAT of $2.54b ↑8% YoY 3Q17 NPAT of $883m, ↑12% YoY; ↑5% QoQ Steady top lines growth • Higher NIM on improved margins mainly contributed by active balance sheet management • Strong growth in wea
Slide 3: Steady growth in the client franchise income, supported by balance sheet growth
Steady growth in the client franchise income, supported by balance sheet growth 9M17 9M16 YoY $m $m $m +/(-) % Net interest income 4,067 3,715 352 9 p Fee and commission income 1,577 1,400 177 13 p Other non-interest income 900 918 (18) (2) q Total income 6,544 6,033 511 8 p Less: Total expenses 2,9
Slide 4: Steady contribution from client franchise income
Steady contribution from client franchise income 3Q17 3Q16 YoY $m $m $m +/(-) % Net interest income 1,408 1,230 179 15 p Fee and commission income 551 492 59 12 p Other non-interest income 279 318 (39) (12) q Total income 2,238 2,040 199 10 p Less: Total expenses 973 918 55 6 p Operating profit 1,26
Slide 5: Robust quarterly performance, driven by higher NIM, revenue momentum and cost discipline
Robust quarterly performance, driven by higher NIM, client franchise’s revenue momentum and cost discipline 3Q17 2Q17 QoQ $m $m $m +/(-) % Net interest income 1,408 1,356 53 4 p Fee and commission income 551 517 34 7 p Other non-interest income 279 310 (31) (10) q Total income 2,238 2,183 56 3 p Les
Slide 6: NII rose 9% YoY supported by improved margins and loan growth
NII rose 9% YoY supported by improved margins from active balance sheet management and loan growth Net Interest Income (NII) and Margin 2.26% 2.20% 2.14% 2.06% 2.13% 2.09% 2.14% 2.14% 2.15% 1.71% 1.77% 1.71% 1.76% 1.69% 1.69% 1.73% 1.75% 1.79% 0.82% 0.71% 0.50% 0.38% 0.71% 0.82% 0.43% 0.55% 0.60% 4,
Slide 7: Strong growth in wealth management, fund management and credit card businesses
Strong growth in wealth management, fund management and credit card businesses Non-Interest Income (Non-NII) and Non-NII Ratio 38.9% 38.8% 38.1% 37.8% 39.7% 38.6% 37.9% 37.1% 37.1% 23.5% 23.4% 23.9% 24.1% 24.1% 26.2% 24.6% 24.0% 23.7% 3,122 3,071 2,900 284 263 334 2,477 810 819 828 830 954 877 197 7
Slide 8: Expense/income ratio improved with disciplined cost management
Expense/income ratio improved with disciplined cost management on the back of healthy income growth Operating Expenses and Expense / Income Ratio 44.7% 45.9% 44.7% 43.1% 47.2% 45.0% 45.1% 45.6% 43.5% 42.2% 43.4% 3,696 3,597 ^ 3,146 ^ 995 973 957 957 2,925 918 1,533 1,646 1,321 448 430 1,309 409 443
Slide 9: Higher specific allowance mainly from a large oil & gas account
Higher specific allowance mainly from a large account in the oil & gas sector. Total credit costs on loans were kept at 32bps with a release in general allowance made in the past Allowance on Loans 45bp 38bp 32bp 32bp 76bp 32bp 32bp 53bp 49bp 19bp 969 37bp 12bp 32bp 32bp 32bp 32bp 15bp from existing
Slide 10: New formation of NPL mainly from a large account in the oil and gas sector
New formation of NPL was mainly from a large account in the oil and gas sector, which remained under stress 3Q16 4Q16 1Q17 2Q17 3Q17 $m $m $m $m $m NPA at start of period 3,164 3,632 3,480 3,543 3,587 New NPA 780 387 424 537 799 Upgrades, recoveries and translations (201) (320) (293) (255) (369) Wri
Slide 11: NPL ratio rose to 1.6% driven by a new NPL from oil & gas sector
NPL ratio rose to 1.6% mainly driven by a new NPL from oil & gas sector NPL ($m) 3,496 3,328 3,399 3,466 3,748 NPL Ratio 1.6% 1.5% 1.5% 1.5% 1.6% 272 255 285 244 245 257 303 304 261 307 608 565 641 638 623 386 293 370 392 360 563 466 487 518 487 1,614 1,675 1,291 1,358 1,369 NPL ($m) Sep-16 Dec-16 M
Slide 12: New NPLs mainly from transport, storage and communication industry
New NPLs mainly from transport, storage and communication industry 3,748 3,496 3,466 251 3,328 3,399 408 323 440 622 484 601 666 283 637 618 304 283 587 276 284 643 594 451 513 434 298 316 321 358 317 179 210 216 242 1,254 1,063 965 996 1,000 NPL ($m) Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Transport, st
Slide 13: Exposure to commodities
Exposure to commodities Oil and gas Other Sep 17 Traders/ commodity Total Upstream downstream segments industries² industries Total exposure1 SGD4.3b SGD12.1b SGD9.9b SGD26.3b Outstanding SGD3.7b SGD7.2b SGD6.9b SGD17.8b loans 5% of total loans 8% of total loans Total exposure, including off-balan
Slide 14: Loan allowance coverage remains adequate
Loan allowance coverage remains adequate 266% 262% 244% 241% 236% 112% 118% 118% 114% 108% 1.4% 1.2% 1.1% 1.2% 1.1% 4,013 4,047 3,929 3,928 3,947 2,604 2,595 2,709 2,620 2,954 1,409 1,327 1,452 1,219 975 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Specific Allowance ($m) Total Allowance/Total NPL (%) General
Slide 15: Stable liquidity position
Stable liquidity position Customer Loans and Deposits; LDR and LCR 85.0% 86.8% 86.7% 86.1% 85.8% 260 260 268 251 255 222 225 224 230 213 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Net Customer Loans ($b) Customer Deposits ($b) Loan/Deposit Ratio (LDR) (%) SGD LDR (%) 89.7 89.7 87.8 89.9 91.9 USD LDR (%) 68.
Slide 16: Loans up 8% YoY and 3% QoQ to $234b
Loans up 8% YoY and 3% QoQ to $234b Sep-17 Sep-16 +/(-) Jun-17 +/(-) Sep-17 18% Gross Loans $b $b % $b % 36% 8% 43% Singapore 127 120 6 125 1 57% Regional: 84 76 10 79 5 Malaysia 26 26 2 26 0 4% 3% 31% Thailand 14 12 17 14 4 Indonesia 11 12 (3) 12 (2) Sep-16 Greater China 32 26 21 28 13 Others 23 21
Slide 17: Funding increased by 8% or $23b YoY
Funding increased by 8% or $23b YoY with proactive liquidity and balance sheet management Sep-17 14% Sep-17 Sep-16 +/(-) Jun-17 +/(-) Customer Deposits $b $b % $b % 43% Singapore 184 179 3 180 2 Regional: 67 60 11 65 3 43% Malaysia 28 27 3 27 2 Thailand 15 13 22 14 8 Indonesia 7 7 6 8 (3) Sep-16 13%
Slide 18: Performance by business segment
Performance by business segment 9M17 9M17 9M16 +/(-) -2% 4% Segment Operating Profit $m $m % 42% Group Retail (GR) 1,503 1,358 11 Group Wholesale Banking (GWB) 2,029 2,037 (0) 56% Global Markets (GM) 160 218 (26) 9M16 Others * (72) (319) 77 -10% 7% Total 3,619 3,293 10 41% 62% * Comprises Investment
Slide 19: Regional operating profit rose 11% YoY in constant currency terms
Regional operating profit rose 11% YoY in constant currency terms 9M17 9% At 8% constant FX rate 4% Operating 9M17 9M16 +/(-) +/(-) 7% Profit $m $m % % 59% 13% Singapore 2,139 1,969 9 9 9M16 Regional: 1,147 1,041 10 11 Malaysia 466 457 2 8 8% 7% Thailand 255 228 12 7 4% Indonesia 121 130 (7) (8) 7%
Slide 20: Exposure to China
Exposure to China Sep 2017 Bank exposure in China SGD29.7b Around 99% with <1 year tenor Around 80% accounted for by top 5 domestic banks or 8.4% of total assets and policy banks Trade exposures represent close to half of bank exposure Bank, SGD19.3b Non-bank exposure in China Debt, SGD1.4b
Slide 21: Strong capital position augmented by various capital management initiatives
Strong capital position augmented by various capital management initiatives Capital Adequacy Ratios (CAR) 17.8% 17.8% 17.3% 16.6% 16.2% Total 3.0% 3.5% 3.5% 3.1% 3.1% Tier 2 Tier 1 13.8% 14.3% 14.8% 13.5% 13.1% Fully Loaded 1 12.1% 12.8% CET 1 12.4% 13.3% 13.8% Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 CET
Slide 22: Appendix: Performance of Major Territories
Appendix : Performance of Major Territories - Singapore - Malaysia - Thailand - Indonesia - Greater China
Slide 23: Singapore – Key Financials
Singapore – Key Financials 9M17 9M16 +/(-) 3Q17 2Q17 +/(-) $m $m % $m $m % Net interest income 2,233 2,010 11 787 743 6 Fee & commission income 972 827 17 334 322 4 Other non-interest income 564 635 (11) 172 208 (17) Total income 3,769 3,472 9 1,293 1,272 2 Less: Expenses 1,630 1,503 8 532 567 (6) O
Slide 24: Malaysia – Key Financials
Malaysia – Key Financials 9M17 9M16 +/(-) 3Q17 2Q17 +/(-) RM'm RM'm % RM'm RM'm % Net interest income 1,602 1,495 7 542 538 1 Fee & commission income 512 475 8 172 162 6 Other non-interest income 218 232 (6) 67 71 (6) Total income 2,332 2,202 6 781 771 1 Less: Expenses 871 846 3 296 296 - Operating
Slide 25: Thailand – Key Financials
Thailand – Key Financials 9M17 9M16 +/(-) 3Q17 2Q17 +/(-) THB'm THB'm % THB'm THB'm % Net interest income 11,532 10,664 8 4,019 3,814 5 Fee & commission income 4,592 4,337 6 1,623 1,579 3 Other non-interest income 711 659 8 284 301 (6) Total income 16,835 15,660 8 5,926 5,694 4 Less: Expenses 10,560
Slide 26: Indonesia – Key Financials
Indonesia – Key Financials 9M17 9M16 +/(-) 3Q17 2Q17 +/(-) IDR'b IDR'b % IDR'b IDR'b % Net interest income 2,462 2,449 1 810 824 (2) Fee & commission income 612 568 8 201 223 (10) Other non-interest income 334 411 (19) 121 113 7 Total income 3,408 3,428 (1) 1,132 1,160 (2) Less: Expenses 2,239 2,162
Slide 27: Greater China – Key Financials
Greater China – Key Financials 9M17 9M16 +/(-) 3Q17 2Q17 +/(-) $m $m % $m $m % Net interest income 294 282 4 98 97 1 Fee & commission income 91 83 10 39 27 43 Other non-interest income 175 111 58 53 49 8 Total income 560 475 18 190 173 10 Less: Expenses 255 250 2 87 83 4 Operating profit 304 226 35
Slide 28: Thank You
Thank You Thank you 28