United Overseas Bank Limited · SGX:U11
United Overseas Bank — Investor Presentation (November 2024)
46 slides from United Overseas Bank's investor presentation, November 2024
Slide 1: UOB Group: Record quarterly profit with resilient balance sheet
UOB Group Record quarterly profit with resilient balance sheet Nov 2024 Discla imer: The mater ial in th is presentat ion conta ins gener al b ackgro un d informat ion a bout Un ite d Oversea s Bank L im ite d (“UOB”) and its act ivit ies as at the d ate of the pre sentat ion. The informat ion is g
Slide 2: Agenda
Agenda 1 Overview of UOB Group 2 Macroeconomic Outlook 3 Strong UOB Fundamentals 4 Our Growth Drivers 5 Latest Financials Private and Confidential. Disclaimer: This material that follows is a presentation of general background information about UOB’s activities current at the date of the presentatio
Slide 3: Overview of UOB Group
Overview of UOB Group 3
Slide 4: UOB Overview
UOB Overview Founding Key Statistics for 9M24 Founded in August 1935 by a group of Chinese ■ Gross loans : SGD334b (USD261b1) businessmen and Datuk Wee Kheng Chiang, ■ Customer deposits : SGD401b (USD313b1) grandfather of the present UOB Group CEO, Mr. Wee ■ Loan / Deposit ratio : 82.3% Ee Cheong. ■
Slide 5: A leading Singapore bank; Established franchise in core market segments
A leading Singapore bank; Established franchise in core market segments Group Retail Group Wholesale Banking Global Markets ▪ Best Retail Bank in Singapore ▪ Best SME Bank in Singapore ▪ Strong player in Singapore dollar ▪ Strong player in credit cards and ▪ Seamless access to regional treasury inst
Slide 6: Proven track record of execution
Proven track record of execution ▪ UOB Group’s management has a proven track record in steering the Group through various global events and crises ▪ Stability of management team ensures consistent execution of strategies ▪ Disciplined management style which underpins the Group’s overall resilience a
Slide 7: Comprehensive regional banking franchise
Comprehensive regional banking franchise Extensive Regional Footprint 9M24 performance by segment Myanmar Greater China1 Group Income 1 branch 20 branches Retail SGD185b2 Assets under Thailand 147 branches Vietnam 5 branches SGD4.1b management +9% YoY Malaysia Philippines Flat YoY 55 branches 1 bran
Slide 8: Why UOB?
Why UOB? Stable Integrated regional Strong Balance growth management platform fundamentals with stability • Proven track record • Truly regional bank • Strong Common Equity • More than half of Group’s in steering the bank with full ownership and Tier 1 capital adequacy earnings from home through var
Slide 9: Macroeconomic Outlook
Macroeconomic Outlook 9
Slide 10: ASEAN economies to remain resilient in 2025
ASEAN economies to remain resilient in 2025 External trade stays on positive trajectory 2023 GDP growth ASEAN6: Trade Performance (12-month moving average) 2024F GDP growth +5.2 40 +4.9 2025F GDP growth +4.6 20 0 China -20 +6.4 +6.6 Sep-10 Sep-12 Sep-14 Sep-16 Sep-18 Sep-20 Sep-22 Sep-24 +5.0 ASEAN
Slide 11: Maintaining 2x 25-bps Fed Rate Cuts in 4Q
Maintaining 2x 25-bps Fed Rate Cuts in 4Q 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24F 1Q25F 2Q25F 3Q25F US 10-Year Treasury 3.87 3.47 3.84 4.57 3.88 4.20 4.40 3.78 3.70 3.60 3.60 3.50 US Fed Funds 4.50 5.00 5.25 5.50 5.50 5.50 5.50 5.00 4.50 4.25 4.00 3.75 SG 3M SORA 3.10 3.54 3.64 3.71 3.71 3.68
Slide 12: Macro resilience across key Southeast Asian markets
Macro resilience across key Southeast Asian markets Significantly Higher Foreign Reserves (USD billion) Improved Current Account Balances (% of GDP) 390 19.8 15.6 243 150 120 75 30 24 26 1.2 1.3 Singapore Thailand Indonesia Malaysia –2.0 –1.5 –0.1 –5.4 Singapore Malaysia Thailand Indonesia Dec 1998
Slide 13: Singapore mortgages remain a low-risk asset class
Singapore mortgages remain a low-risk asset class Low risk of housing bubbles due to cooling measures High national savings rate (% of GDP) (3Q14 = 100) US , 194.6 CA , 188.5 AU , 168.1 SG, 40 AU, 24 SG, 137.1 CA, 24 HK, 113.6 HK, 24 US, 17 1Q14 3Q15 4Q16 1Q18 2Q19 3Q20 4Q21 1Q23 2Q24 2019 2020 2021
Slide 14: Singapore has implemented Basel IV
Singapore has implemented Basel IV5 Year ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’23 ’24 ’25 ’26 ’27 Basel III capital ratios Phased-in Full IFRS 9 | Start LCR1 Phased-in Full NSFR2 | Start SACCR3 | Start date (pending) TLAC4 Phased-in Full Basel IV5 Phased-in -- MCRMR6 | Start -- Leverage ratio Dis
Slide 15: Capital adequacy rules across the region
Capital adequacy rules across the region BCBS Singapore Malaysia Thailand Indonesia Minimum CET1 CAR 4.5% 6.5%1 4.5% 4.5% 4.5% Minimum Tier 1 CAR 6.0% 8.0%1 6.0% 6.0% 6.0% Minimum Total CAR 8.0% 10.0%1 8.0% 8.5% 8.0% Capital Conservation Buffer 2.5% 2.5% 2.5% 2.5% 2.5% Countercyclical Buffer 2 n/a 0
Slide 16: Strong UOB Fundamentals
Strong UOB Fundamentals 16
Slide 17: Disciplined balance sheet management
Disciplined balance sheet management Return on risk-weighted assets Focus on 1.83% 2.29%1 2.32%1 Healthy 1.27% 1.68% balance portfolio FY20 FY21 FY22 FY23 9M24 sheet quality efficiency Current Account Saving Account Balances (SGD b) 5.8% CAGR2 174 198 175 189 215 FY20 FY21 FY22 FY23 9M24 Proactive R
Slide 18: Loans grew 2% QoQ from broad-based wholesale growth and mortgages
Loans grew 2% QoQ from broad-based wholesale growth and mortgages By Industry By Geography +5% +2% 5% 4% 318 321 323 328 334 Rest of the world 45 45 47 49 49 24% 27% Greater China 51 49 51 53 49 67 69 69 69 73 $334b ASEAN-4 Sep-24 Singapore 155 158 157 158 163 9% Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 8
Slide 19: UOB's responsible financing journey: pragmatic and progressive
UOB’s responsible financing journey: pragmatic and progressive Establishing Improving Strengthening 2015 – 2016 2017 – 2018 2019 – 2022 2023 – 2024 • Launched the Group • Enhanced ESG • Announced our net zero commitment. • Developed a net zero Responsible Financing monitoring and Strengthened due di
Slide 20: TCFD Implementation - Climate Scenario Analysis
TCFD Implementation - Climate Scenario Analysis Qualitative Transition Risk Transition Risk Scenario Physical Risk Pilot Analysis Improved Methodology Assessment Analysis Pilot 2019 2020 2021 2022-2024 • Completed qualitative • Partnered an • Conducted a pilot physical risk analysis • Developed an i
Slide 21: Net zero by 2050 commitment with focus on 6 priority sectors
In October 2022, we announced our commitment to achieving net zero by 2050, with a focus on 6 priority sectors Energy Built environment Net zero targets and commitments for six sectors We focused on two significant, high-emitting ecosystems, energy and built environment, spanning 6 sectors based on:
Slide 22: 2 years on, progressing across all priority sectors
2 years on, we are progressing across all priority sectors, and are trending below the reference pathways 22
Slide 23: Comparison against peers
Comparison against peers Standalone Cost Returns Liquidity Strength Management Moody’s baseline Costs/income Return on average Loan/deposit Moody’s S&P Fitch credit assessment ratio assets (annualised) ratio Aa1 AA– AA– UOB a1 42%1 1.2%1 82% Aa1 AA– AA– OCBC a1 38% 1.6% 82% 1 1 Aa1 AA– AA– DBS a1 39
Slide 24: Capital and leverage ratios
Capital and leverage ratios Reported Common Equity Tier 1 CAR 17.2% 17.2% 15.5% 15.2% 14.7% 14.5% 14.2% 13.7% 13.5% 13.0% 12.8% 12.3% 12.2% Fully-loaded 15.6% 15.2% 15.2% 2 2 2 3 3 Return on OCBC DBS UOB HSBC MBB CIMB SCB Citi BOA RBC TD CBA NAB Average Equity 1 1 (annualised) 14.4% 18.8% 13.9% 17.9
Slide 25: Strong investment grade credit ratings
Strong investment grade credit ratings Aa1 / P-1 A regular issuer in key debt capital markets globally CNY Add Tier 1 (BBB+; Baa1; SGD BBB–)1 AA– / A-1+ 12% 4% USD 12% Covered Debt Class 25% Currency (NR; 37% Aaa; 14% Tier 2 GBP 13% (A; A2; AAA)1 BBB+)1 AA– / F1+ AUD 25% 22% 37% EUR (AA–; Aa1; Senio
Slide 26: Our Growth Drivers
Our Growth Drivers 26 ## RESTRICTED ##
Slide 27: Our growth drivers
Our growth drivers Realise potential of Sharpen regional Reinforce fee Long-term growth our integrated focus income growth perspective platform • Provides us with ability • Global macro • Grow fee income to • Disciplined approach in to serve expanding environment remains offset competitive executing
Slide 28: Southeast Asia's immense long-term potential
Southeast Asia’s immense long-term potential Population GDP1 Southeast Asia’s immense … that UOB is uniquely growth prospects… placed to capture (Million persons) (USD trillion) ▪ Third largest population ▪ Most diverse regional globally, after China and franchise among Singapore India banks 685 723
Slide 29: Strong retail presence in high potential regional markets
Strong retail presence in high potential regional markets High Vietnam 8 2022 retail banking pool sizes 4 Philippines USD b Denotes UOB’s core markets in Southeast Asia Banking penetration Indonesia ✓ ✓ was launched growth potential ✓ in Thailand, 14 Indonesia, Singapore and Malaysia. ✓ 14 Thailand
Slide 30: Revenue potential from 'connecting the dots' in the region
Revenue potential from ‘connecting the dots’ in the region Industry’s potential connectivity revenue Industry’s potential connectivity revenue (2026) (SGD b) c$79b CAGR (SGD b) Thailand Vietnam c$23b c$1b c$2b c$59b +10% Singapore c$4b c$15b Malaysia c$13b +10% c$4b Hong Kong Wealth c$8b c$5b Others
Slide 31: Healthy growth across business franchise
Healthy growth across business franchise Group Retail Income by business segment Tapping on rising affluence in Southeast Asia on enlarged franchise 9M24 9M23 YoY $'m $'m +17% +12% +32% increase1 in CASA pickup1 in card growth1 in wealth Group Retail 4,119 4,102 0% balance billings across management
Slide 32: Latest Financials
Latest Financials 32 ## RESTRICTED ##
Slide 33: 3Q24 financial overview
3Q24 financial overview Core Net Profit After Tax Movement, 3Q24 vs 2Q24 1 (SGD m) 286 138 71 60 12 6 7 1 1 1,489 -5% 1,639 +2% +2% +63% +9% +31% –20% –2% 2Q24 core net Net interest Net fee and Other non- Operating Total Share of profit Tax, 3Q24 core net profit after tax income commission interest
Slide 34: 9M24 financial overview
9M24 financial overview Core Net Profit After Tax Movement, 9M24 vs 9M23 (SGD m) 1 52 162 201 211 70 10 50 1 1 4,563 4,693 -1% –1% +10% +13% +5% –9% +15% +5% 9M23 core net Net interest Net fee and Other non- Operating Total Share of profit Tax, 9M24 core net profit after tax income commission intere
Slide 35: NIM stable at 2.05%; proactive deposit cost management
NIM stable at 2.05%; proactive deposit cost management to mitigate interest rate headwinds 2.64 2.55 2.51 2.56 2.62 2.47 Loan Margin (%) 2.51 Net Interest Margin (%) 2.12 2.09 2.02 2.02 2.05 2.05 2.04 Interbank & Securities Margin (%) 1.04 1.07 1.11 1.10 0.93 0.94 0.98 -1% 7,275 7,223 NII from Inter
Slide 36: 3Q24 fees rose to a new-high
3Q24 fees rose to a new-high, bolstered by healthy trade and wealth demand and pick-up in card fees Fee Income 16 17 17 17 16 18 16 Fee / Total Income (%) +10% 1,828 1,666 239 Others ($m) 232 292 +2% Credit Card (Net) ($m) 257 618 630 519 591 569 580 Wealth ($m) 444 78 78 72 74 82 104 97 104 125 90
Slide 37: All-time high customer-related treasury
All-time high customer-related treasury supported by strong hedging demands, trading and liquidity performance more than doubled 51 50 54 42 43 41 38 Customer related / T&I (%) +19% 1,636 1,377 +77% 931 709 Others ($m) 794 527 439 389 400 364 309 190 183 180 705 Customer Related ($m) 582 219 216 270
Slide 38: Core CIR steady on enlarged income base and continued cost discipline
Core CIR steady on enlarged income base and continued cost discipline Cost-to-income Ratio (%) 43.9 43.7 46.8 - incl one-off Citi 44.4 44.6 44.1 42.4 - excl one-off Citi 40.9 41.7 43.2 41.0 41.9 41.8 41.5 4,516 4,305 1,046 + 3% Other expenses ($m) 1,018 725 + 6% IT-related expenses ($m) 684 1,590 1,
Slide 39: Asset quality stable with NPL ratio unchanged at 1.5%
Asset quality stable with NPL ratio unchanged at 1.5% ($m) 3Q23 4Q23 1Q24 2Q24 3Q24 NPAs at start of period 5,192 5,011 4,946 5,051 4,952 Non-individuals New NPAs _ 267 389 249 438 212 Less: Upgrades and recoveries 298 288 183 289 190 Write-offs 150 218 34 238 71 5,011 4,894 4,979 4,962 4,903 Indivi
Slide 40: Higher specific allowance mainly from Thailand operational merger issues
Higher specific allowance mainly from Thailand operational merger issues, expect to normalise in the next two quarters 36 29 26 Total credit costs (bps) 25 27 23 24 34 Specific credit costs (bps) 25 26 25 19 20 21 661 37 581 281 596 624 Specific allowance on loans ($m) 151 202 186 194 28 25 296 229
Slide 41: Provision coverage remains stable
Provision coverage remains stable 34 33 Specific allowance/NPA (%) 32 32 32 General allowance on loans include 0.9 0.9 0.9 0.9 0.9 RLAR/Performing loans (%) 5,109 4,976 4,993 5,026 4,851 RLAR ($m) 379 379 379 379 379 General allowance ($m) 3,042 3,007 3,000 2,901 2,963 Specific allowance ($m) 1,688
Slide 42: Exposure to Greater China
Exposure to Greater China 75.9 78.6 72.5 75.3 71.7 9.0 9.1 9.0 Debt ($b) 11.3 10.7 52.6 ▪ ~$2b in loans to Chinese 51.2 49.3 49.2 developers (1% of group loans) Non Bank ($b) 51.2 Bank ($b) 12.6 15.6 17.0 17.0 9.2 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Mainland China Hong Kong SAR Bank exposure ($13.3b)
Slide 43: Exposure to Commercial Real Estate - Office
Exposure to Commercial Real Estate - Office Commercial Real Estate - Office exposure is 7.3% of loans By geography as % of loans 0.2% • More than half of office 0.7% Others exposure is in Singapore 0.7% 0.8% United Kingdom 0.8% 0.9% • Overseas exposure backed Sep-24 United States 7.3% 1.5% 0.9% by s
Slide 44: Strong funding position, with healthy CASA growth
Strong funding position, with healthy CASA growth and improved CASA mix 157 160 153 149 All-currency LCR (%) 141 121 120 121 118 Net Stable Fund Ratio (NSFR) (%) 116 82.3 82.2 82.1 83.4 82.3 Loan/Deposit Ratio (LDR) (%) 457 470 448 448 450 Wholesale Funding ($b) 1 71 60 61 70 67 FD & others ($b) 192
Slide 45: Resilient capital position with CET1 ratio at 15.5%
Resilient capital position with CET1 ratio at 15.5% 1 15.5 15.2% 13.0 13.4 13.9 13.4 (fully loaded) CET1 ratio (%) 272 276 276 284 252 RWA ($b) Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Leverage ratio (%) 6.8 6.9 7.0 7.1 6.8 (1) Based on MAS Notice 637 issued on 20 September 2023, with effect from 1 July 2
Slide 46: Right By You
@ Right By You
United Overseas Bank — Investor Presentation (November 2024) on 6ix