United Overseas Bank Limited · SGX:U11
United Overseas Bank — H1 2008 Earnings Presentation
24 slides from United Overseas Bank's earnings presentation, Aug 5, 2008
Slide 1: United Overseas Bank Group First Half 2008 Briefing: Financial Highlights
United Overseas Bank Group First Half 2008 Briefing Financial Highlights Lee Wai Fai Chief Financial Officer 5 August 2008 Disclaimer : This material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation. It is informatio
Slide 2: Profit Growth 2.5% in 1st Half 2008
Profit Growth 2.5% in 1st Half 2008 1H08 1H07 + / (-) $m $m % Net interest income 1,725 1,523 13.3 Non-interest income 964 968 (0.3) Total income 2,690 2,490 8.0 Less: Total expenses 1,015 976 4.0 Operating profit 1,675 1,515 10.6 Less: Intangible assets amortised 5 6 (13.0) Individual impairment -
Slide 3: Quarter-on-Quarter Profit Up 13.5%
Quarter-on-Quarter Profit Up 13.5% 2Q08 1Q08 + / (-) 2Q07 + / (-) $m $m % $m % Net interest income 873 852 2.5 761 14.7 Non-interest income 550 414 32.9 536 2.7 Total income 1,424 1,266 12.4 1,297 9.8 Less: Total expenses 518 496 4.4 504 2.9 Operating profit 905 770 17.6 793 14.2 Less: Intangible as
Slide 4: Strong Growth in Net Interest Income and Margin
Strong Growth in Net Interest Income and Margin Net Interest Income and Margin 3.18% 3.25% 3.21% 3.10% 3.28% 3.15% 3.12% 3.05% 3.08% 2.04% 2.22% 1.99% 1.99% 2.20% 2.23% 2.04% 1.93% 1.94% 0.58% 0.66% 0.56% 0.88% 0.93% 0.62% 0.79% 0.43% 0.47% 1,458 852 873 1,386 761 143 2nd 1,191 714 743 123 Half 106
Slide 5: Higher Non Interest Income Quarter-on-Quarter
Higher Non Interest Income Quarter-on-Quarter Non-Interest Income (Non-NII) and Non-NII Ratio 37.6% 38.8% 35.8% 35.9% 41.3% 41.7% 26.2% 38.7% 23.9% 23.7% 22.0% 35.5% 32.7% 25.4% 28.8% 29.0% 968 964 24.0% 924 20.3% 854 764 379 236 372 650 660 301 550 236 536 532 210 206 393 162 414 279 261 74 111 528
Slide 6: Disciplined Cost Management
Disciplined Cost Management Operating Expenses and Expense / Income Ratio 41.1% 41.4% 37.9% 37.7% 44.0% 43.6% 38.9% 39.2% 36.4% 1,043 921 2nd 556 Half 757 504 487 496 518 71 67 67 71 64 1st 976 1,015 667 815 Half 2005 2006 2007 1H08 2Q07 3Q07 4Q07 1Q08 2Q08 Operating OperatingExpenses Expenses($m) (
Slide 7: Prudent Provisioning Policy
Prudent Provisioning Policy Individual Impairment Charges on Loans 31 bp 35 bp 57 bp 19 bp 15 bp 18 bp 29bp 27bp 2nd 85 16bp 13 bp Half 36 56 67 65 1st 33 4bp 10 Half 130 119 86 (30) 75 (14)bp 2005 2006 2007 1H08 2Q07 3Q07 4Q07 1Q08 2Q08 Individual IndividualImpairment ImpairmentCharges Chargeson on
Slide 8: Performance By Business Segment
Performance By Business Segment 1H08 2006 1H08 2006 1H08 1H07 + / (-) PFS : 30% Segment Operating Profit * $m $m % Other : 6% Personal Financial Services (PFS) 496 456 8.8 GMIM : 21% Institutional Financial Services (IFS) 714 741 (3.6) IFS : 43% Global Markets & Investment Mgt (GMIM) 351 452 (22.3)
Slide 9: Performance by Geographical Segment
Performance by Geographical Segment 1H08 1H08 At constant 1H08 1H07 + / (-) FX rate Singapore : 71 % Operating Profit * $m $m % % Malaysia : 11 % Thailand : 5 % Singapore (including ACU) 1,181 990 19.3 19.3 Indonesia : 3% Greater China : 1% Total Overseas 494 525 (5.7) 1.4 Other : 9% Malaysia 176 19
Slide 10: Strong Growth in Loans
Strong Growth in Loans Customer Loans, Deposits and L/D Ratio 89.3% 86.6% 86.1% 81.3% 78.9% 107.0 109.6 109.0 104.5 104.8 92.7 94.4 97.4 82.5 85.2 Jun'07 Sep'07 Dec'07 Mar'08 Jun'08 Net NetCustomer CustomerLoans Loans($b) ($b) Customer CustomerDeposits Deposits($b) ($b) Loans Loans//Deposits Deposit
Slide 11: NPL Ratio Continued to Improve
NPL Ratio Continued to Improve NPL ($m) * 2,380 2,030 1,713 1,602 1,547 NPL Ratio 2.8% 2.3% 1.8% 1.6% 1.5% 293 94 247 403 77 81 73 82 82 418 68 436 64 585 393 367 527 495 504 522 1,005 761 628 555 512 Jun'07 Sep'07 Dec'07 Mar'08 Jun'08 Singapore Malaysia Thailand Indonesia Other * Excluding debt sec
Slide 12: Impairment Coverage Remained Strong
Impairment Coverage Remained Strong Total Impairment * 2,110 1,970 1,915 1,883 1,975 ($m) 127.7% 111.8% 117.5% 97.0% 88.7% 834 698 645 597 625 1,276 1,272 1,270 1,286 1,350 Jun'07 Sep'07 Dec'07 M ar'08 Jun'08 Collective CollectiveImpairment Impairment($m) ($m) Individual IndividualImpairment Impairm
Slide 13: Singapore (including ACU) – Summarised P/L
Singapore (including ACU) – Summarised P/L 1H08 1H07 +/(-) 2Q08 1Q08 +/(-) $’m $’m % $’m $’m % Net interest income 1,016 919 10.5 507 509 (0.4) Non-interest income 724 621 16.5 441 283 55.8 Total income 1,739 1,540 12.9 948 792 19.7 Less: Total expenses 559 551 1.4 291 267 8.9 Operating profit 1,181
Slide 14: Singapore (including ACU) – Key Financial Indicators
Singapore (including ACU) – Key Financial Indicators 1H08 1H07 +/(-) 2Q08 1Q08 +/(-) % % % pt % % % pt Net interest margin 1.89 1.96 (0.07) 1.85 1.92 (0.07) Non-NII / Total income 41.6 40.3 1.3 46.5 35.7 10.8 Expense / Total income 32.1 35.8 (3.7) 30.7 33.8 (3.1) Customer loans (net) – $’m 62,022 49
Slide 15: Malaysia – Summarised P/L
Malaysia – Summarised P/L 1H08 1H07 +/(-) 2Q08 1Q08 +/(-) RM’m RM’m % RM’m RM’m % Net interest income 482 435 10.8 243 239 1.7 Non-interest income 174 212 (17.9) 80 94 (14.9) Total income 656 647 1.4 323 333 (3.0) Less: Total expenses 245 215 14.0 127 118 7.6 Operating profit 411 432 (4.9) 196 215 (
Slide 16: Malaysia – Key Financial Indicators
Malaysia – Key Financial Indicators 1H08 1H07 +/(-) 2Q08 1Q08 +/(-) % % % pt % % % pt Net interest margin 2.82 2.98 (0.16) 2.82 2.81 0.01 Non-NII / Total income 26.5 32.8 (6.3) 24.8 28.2 (3.4) Expense / Total income 37.3 33.2 4.1 39.3 35.4 3.9 Customer loans (net) – RM’m 27,404 22,460 22.0% 27,404 2
Slide 17: Thailand – Summarised P/L
Thailand – Summarised P/L 1H08 1H07 +/(-) 2Q08 1Q08 +/(-) THB’m THB’m % THB’m THB’m % Net interest income 3,647 3,147 15.9 1,849 1,798 2.8 Non-interest income 1,725 1,420 21.5 919 806 14.0 Total income 5,372 4,567 17.6 2,768 2,604 6.3 Less: Total expenses 3,395 3,192 6.4 1,741 1,654 5.3 Operating pr
Slide 18: Thailand – Key Financial Indicators
Thailand – Key Financial Indicators 1H08 1H07 +/(-) 2Q08 1Q08 +/(-) % % % pt % % % pt Net interest margin 3.85 3.34 0.51 3.87 3.82 0.05 Non-NII / Total income 32.1 31.1 1.0 33.2 31.0 2.2 Expense / Total income 63.2 69.9 (6.7) 62.9 63.5 (0.6) Customer loans (net) – THB’m 152,349 137,552 10.8% 152,349
Slide 19: Indonesia – Summarised P/L
Indonesia – Summarised P/L 1H08 1H07 +/(-) 2Q08 1Q08 +/(-) IDR’b IDR’b % IDR’b IDR’b % Net interest income 721 702 2.7 375 346 8.4 Non-interest income 166 145 14.5 76 90 (15.6) Total income 887 847 4.7 451 436 3.4 Less: Total expenses 537 377 42.4 290 247 17.4 Operating profit 350 470 (25.5) 161 189
Slide 20: Indonesia – Key Financial Indicators
Indonesia – Key Financial Indicators 1H08 1H07 +/(-) 2Q08 1Q08 +/(-) % % % pt % % % pt Net interest margin 5.87 6.57 (0.70) 6.15 5.70 0.45 Non-NII / Total income 18.7 17.1 1.6 16.9 20.6 (3.7) Expense / Total income 60.5 44.5 16.0 64.3 56.7 7.6 Customer loans (net) – IDR’b 20,753 15,770 31.6% 20,753
Slide 21: Strong Capital Position
Strong Capital Position Capital Adequacy Ratios (CAR) * 15.9% 15.6% Total CAR 15.7% 14.4% 14.8% 14.5% 10.9%* ` Tier 1 CAR 10.8% 10.7% 10.2% 10.0% 10.2% Jun'07 Sep'07 Dec'07 Mar'08 * Jun'08* $m Tier 1 Capital 12,382 12,210 12,461 12,011 11,630 Risk-Weighted Assets 114,842 120,181 124,772 111,850 114,
Slide 22: Maintain High Net Dividend Rate
Maintain High Net Dividend Rate Special Dividend in Specie 24.2 cts 12.3 cts Final 22.8 cts Interim 41.0 cts 45.0 cts 32.0 cts 16.0 cts 16.0 cts 16.4 cts 20.0 cts 2005 2006 2007 1H08 Special Dividend $351m * $369m $187m - Cash Dividend $737m $868m $929m $301m Dividend Payout $1,088m $1,237m $1,116m
Slide 23: In Summary …
In Summary … Net profit grew 13.5% to reach $601 million in 2Q08 Strong net interest income growth Broad based loan growth Disciplined cost management Continued improvement in asset quality High dividend payout 23
Slide 24: CDOs
CDOs Exposure as at For 2Q08 For 1Q08 As at 30/6/08 UOB Group 30/6/08 31/3/08 Provision Reserves Provision Reserves Provision Reserves Coverage $m $m $m $m $m $m $m $m % ABS 81 82 - - 43 (35) 81 - 100 Corporate 183 186 23 (19) - 10 76 16 50 Total 264 268 23 (19) 43 (25) 157 16 66 Total CDO exposur