United Overseas Bank Limited · SGX:U11
United Overseas Bank — Q1 2024 Earnings Presentation
23 slides from United Overseas Bank's earnings presentation, May 2024
Slide 1: UOB Group Financial Updates
UOB Group Financial Updates Lee Wai Fai Group Chief Financial Officer For the First Quarter Ended 31 March 2024 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 presentation. It is i
Slide 2: Financial Highlights
Financial Highlights 1Q24 Core net profit at $1.6b, resilient earnings supported by 1Q24 key financial indicators healthy balance sheet and franchise growth Core operating profit (1) Core net profit after tax (1) • Core net profit at $1.6b, with core return on equity at 14.0% $2.0b $1.6b + 6% QoQ +
Slide 3: Financial Highlights
1Q24 4Q23 QoQ 1Q23 YoY Financial Highlights $m $m +/(-)% $m +/(-)% Net interest income 2,362 2,404 (2) 2,409 (2) • 1Q24 core profit up 5% QoQ Net fee income 580 569 2 552 5 to $1.6 billion, contributed Other non-interest income 581 438 32 563 3 by record trading and Total income 3,523 3,410 3 3,524
Slide 4: Performance by Segment
Performance by Segment 1Q24 1Q23 YoY • Retail registered healthy Total Income $m $m +/(-) % growth in cards and wealth across the region, while CASA Group Retail 1,354 1,364 (1) expansion helped to relieve competition pressure on margin Group Wholesale Banking 1,692 1,817 (7) • Wholesale spurred by
Slide 5: Consumers: Scale Acquisition with Digital
Consumers Scale Acquisition with Digital Boost UOB TMRW’s capabilities to target quality 8.1m >200k • Tapping on rising customers and drive synergies Retail customers, 78% are New-to-bank customers acquired in 1Q24 affluence and growing digitally enabled >50% digitally acquired digitalisation in Sou
Slide 6: Strengthening Wholesale Connectivity
Strengthening 25% Wholesale Cross border income as % of Connectivity GWB income customers +5% Across our ASEAN Anchor customers within Financial footprint and global • Growing regional network Supply Chain Management solution1 franchise, capturing cross-border Sector +9% Specialisation Hospitality i
Slide 7: Performance by Geography
Performance by QoQ YoY (Constant (Constant Geography 1Q24 4Q23 QoQ Rate) 1Q23 YoY Rate) Total Income $m $m +/(-)% +/(-)% $m +/(-)% +/(-)% • Broad based growth Singapore 1,958 1,891 4 4 2,052 (5) (5) across Singapore, ASEAN-4 928 934 (1) 1 948 (2) 3 ASEAN-4 and North Asia Malaysia 364 366 (0) 1 388 (
Slide 8: Net Interest Income and Margin
2.60 2.61 2.62 2.64 2.55 Net Interest Income 2.26 2.47 and Margin 2.09 2.14 2.12 2.09 1.86 2.02 2.02 • 1Q24 NII eased 2% mainly 0.91 1.02 1.11 1.10 1.11 0.93 0.94 due to a shorter quarter 9,679 • NIM stabilised at 2.02%, 8,343 1,529 with active balance sheet 1,203 management 2,409 2,437 2,429 2,404
Slide 9: Fee Income
19 Fee Income 16 16 17 17 16 15 • Good performance in loan-related fees and 2,235 2,143 pickup in wealth 307 318 • Credit card fees 231 382 591 569 580 552 normalised from last 524 72 74 82 573 77 quarter’s seasonal high 595 83 104 90 81 125 72 146 164 156 142 151 1,021 951 237 227 269 244 218 2022
Slide 10: Trading & Investment Income
85 Trading & Investment 53 51 43 42 38 Income 45 • Record customer-related 1,690 treasury income from increased retail bond sales and strong hedging 924 521 demands 474 478 829 375 362 • Robust performance from 128 272 296 303 trading and liquidity 177 178 management activities 701 766 202 182 198 1
Slide 11: Core Expenses and Cost / Income Ratio
43.3 41.5 Core Expenses and 44.1 44.4 46.8 44.6 43.3 Cost / Income Ratio (1) 5,778 43.2 41.9 40.9 40.9 41.0 5,016 1,365 • 1Q24 core CIR improved 1,255 to 41.9% on the back of 905 enlarged income base 1,440 1,448 1,416 1,473 1,475 770 357 351 310 347 353 • Expense growth mainly to 230 233 220 221 231
Slide 12: Non-Performing Assets
2023 2024 Non-Performing ($m) 1Q 2Q 3Q 4Q 1Q Assets NPAs at start of period 5,127 5,150 5,192 5,011 4,946 Non-individuals • Stable asset quality New NPAs _ 301 364 267 389 249 with lower new NPA Less: formation. NPL ratio Upgrades and recoveries 80 137 298 288 183 unchanged at 1.5% Write-offs 218 65
Slide 13: Total Allowance on Loans
30 29 22 25 25 26 23 Total Allowance on 26 25 25 Loans 20 21 19 20 • Total credit costs improved 784 to 23bps from decline in 628 specific allowance on lower NPL formation 238 151 202 807 192 36 186 694 28 28 202 229 212 164 158 (66) (24) (9) (78) 2022 2023 1Q 2Q 3Q 4Q 1Q 2023 2024 Credit costs on l
Slide 14: Allowance Coverage
34 33 32 32 32 Allowance Coverage 1.0 1.0 0.9 0.9 0.9 • Reserve buffer remained 4,931 5,134 5,109 4,976 4,993 adequate with prudent 379 379 379 379 379 coverage for performing loans at 0.9% 2,905 3,058 3,042 3,007 3,000 • Healthy NPA coverage at 99% or 204% taking 1,647 1,697 1,688 1,590 1,614 colla
Slide 15: Gross Loans
Gross Loans Mar-24 Dec-23 Mar-23 QoQ YoY $b $b $b +/(-)% +/(-)% • Loans grew 1% QoQ and Singapore 157 158 155 (1) 1 3% YoY on constant ASEAN-4 69 69 68 (1) 0 currency basis Malaysia 31 32 33 (1) (5) Thailand 25 25 24 (3) 4 • Loans growth largely Indonesia 10 10 10 4 4 Vietnam 2 2 2 2 8 from selectiv
Slide 16: Total Funding
Total Funding Mar-24 Dec-23 Mar-23 QoQ YoY $b $b $b +/(-)% +/(-)% • Customer deposits up Singapore ASEAN-4 267 74 264 73 254 73 1 1 5 1 1% QoQ and 4% YoY Malaysia 34 34 34 0 2 Thailand 27 27 26 1 3 • Healthy growth in Indonesia 10 10 11 3 (4) CASA and CASA ratio Vietnam 2 2 2 8 4 surpassed 50% mark
Slide 17: Liquidity Ratios
167 Liquidity Ratios 154 153 157 160 • Liquidity and funding positions remained comfortably above 121 121 121 120 121 regulatory requirements 83.5 82.3 82.2 82.0 83.3 Mar Jun Sep Dec Mar 2023 2024 USD LDR (%) 60.7 62.9 60.7 56.5 59.7 All-currency LCR (%) Loan/Deposit Ratio (LDR) (%) Net Stable Fund
Slide 18: Capital
Capital 14.0 13.6 13.0 13.4 13.9 • CET1 ratio rose to 13.9% from profit accretion 263 272 276 276 258 while RWA remained stable Mar Jun Sep Dec Mar 2023 2024 Leverage ratio (%) 7.0 7.0 6.8 6.9 7.0 RWA ($b) CET1 ratio (%) 18
Slide 19: Appendix
▪ Loan Portfolio Appendix ▪ Exposure to Greater China ▪ Exposure to Commercial Real Estate - Office 19
Slide 20: Diversified loan portfolio
Professionals and Housing loans private individuals 24% Others 9% 5% Diversified loan General Transport, storage portfolio commerce Industry and communication 4% 11% FIs, investment and holding companies Building & 13% Manufacturing construction 7% 27% Large corporates Others and institutions 14% 56
Slide 21: Exposure to Greater China
Exposure to Greater China 71.7 72.5 75.4 70.5 71.6 10.7 9.1 9.4 10.5 11.3 Debt ($b) ▪ ~$2.0b in loans to Chinese 49.2 50.7 developers (1% of group loans) Non Bank ($b) 49.8 51.6 51.2 Bank ($b) 11.3 9.5 9.2 12.6 15.6 Mar Jun Sep Dec Mar 2023 2024 As at 31 Mar 2024: Bank exposure ($12.2b) • ~ 45% of t
Slide 22: Exposure to Commercial Real Estate - Office
Exposure to Commercial Real Commercial Real Estate - Office exposure is 7.4% of loans Estate - Office By geography as % of loans 0.3% • Almost half of office 0.7% Others exposure is in Singapore 0.8% 0.8% United Kingdom 0.8% 0.8% • Overseas exposure Mar-24 1.5% 1.3% United States 7.4% backed by stro
Slide 23: Thank You
Thank You & Right By You