United Overseas Bank Limited · SGX:U11
United Overseas Bank — Q2 2006 Earnings Presentation
22 slides from United Overseas Bank's earnings presentation, Aug 1, 2006
Slide 1: UOB Group First Half / Second Quarter 2006 Results Briefing
UOB Group First Half / Second Quarter 2006 Results Briefing FINANCIAL HIGHLIGHTS Lee Wai Fai Chief Financial Officer 1 August 2006 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 in
Slide 2: Agenda
Agenda 11 Review Review of of Financial Financial Performance Performance 22 Business Business & & Geographical Geographical Segments Segments 33 Loans, Loans, Deposits Deposits & & Asset Asset Quality Quality 44 Review Review of of Key Key Territories Territories 55 Capital Capital Management Manag
Slide 3: Profit Surged 92.8% in 1st Half 2006 from Divestment Gain
Profit Surged 92.8% in 1st Half 2006 from Divestment Gain 1H06 1H05 + / (-) $m $m % Net interest income 1,324 1,156 14.5 Non-interest income 660 650 1.5 Total income 1,984 1,807 9.8 Less: Total expenses 815 667 22.2 Operating profit 1,169 1,140 2.6 Less: Intangible assets amortised / impaired 6 58 (
Slide 4: Higher Profit in 2nd Quarter 2006
Higher Profit in 2nd Quarter 2006 2Q06 1Q06 + / (-) 2Q05 + / (-) $m $m % $m % Net interest income 671 653 2.7 574 17.0 Non-interest income 310 350 (11.4) 334 (7.1) Total income 981 1,003 (2.2) 908 8.1 Less: Total expenses 419 396 5.7 347 20.5 Operating profit 562 607 (7.4) 560 0.4 Less: Intangible a
Slide 5: Higher Net Interest Income and Loan Margin
Higher Net Interest Income and Loan Margin Net Interest Income and Margin 3.13% 3.18% 3.24% 3.29% 3.01% 3.21% 3.24% 3.19% 3.08% 2.25% 2.10% 1.99% 2.01% 1.97% 1.93% 2.04% 1.97% 1.96% 2nd 1,191 Half 1,043 1,099 653 671 574 614 1st 1,324 578 Half 1,028 1,056 1,156 2003 2004 2005 1H06 2Q05 3Q05 4Q05 1Q0
Slide 6: Higher Fee and Commission Income
Higher Fee and Commission Income Non-Interest Income (Non-NII) and Non-NII Ratio * 37.6% 40.3% 34.5% 36.8% 37.7% 33.9% 33.3% 34.9% 414 31.6% 372 764 350 350 334 121 650 660 310 568 236 547 542 536 115 127 210 82 148 184 279 278 223 214 528 293 450 234 222 228 319 384 372 186 269 322 1H 2H 1H 2H 1H 2
Slide 7: Continue Infrastructure Investments
Continue Infrastructure Investments Operating Expenses and Expense / Income Ratio * 42.7% 41.1% 39.3% 39.5% 38.3% 38.1% 37.6% 37.9% 34.7% 404 396 419 2nd 347 353 60 59 Half 56 757 56 55 678 559 1st 815 Half 667 537 548 2003 2004 2005 1H06 2Q05 3Q05 4Q05 1Q06 2Q06 Operating OperatingExpenses Expenses
Slide 8: Lower Impairment Charges on Loans
Lower Impairment Charges on Loans Individual Impairment on Loans Charged to Profit & Loss Account 41 bp 40 bp 55 bp 34 bp 35 bp 31 bp 24 bp 2nd 100 Half 15 bp 122 85 9 bp 1st Half 245 70 70 59 113 130 86 27 16 2003 2004 2005 1H06 2Q05 3Q05 4Q05 1Q06 2Q06 Individual IndividualImpairment ImpairmentCha
Slide 9: Profit Contribution by Business Segment
Profit Contribution by Business Segment Business Segment 1H06 1H05 + / (-) 1H06 1H06 Segment Pre-tax Profit * $m $m % Individual : 17 % Other : 40 % Asset Management : 5 % Individual Financial Services 299 254 17.7 Global Treasury : 7 % Institutional Financial Services 529 446 18.6 Institutional : 3
Slide 10: Higher Operating Profit Contribution From Overseas Operations
Higher Operating Profit Contribution From Overseas Operations Geographical Segment 1H06 1H06 1H06 1H05 +/(-) Operating Profit * $m $m % Singapore : 66% Singapore (including ACU) ** 771 817 (5.6) ASEAN : 24% Other ASEAN countries 280 200 40.0 Asia-Pacific : 3% Rest of the world : 7% Other Asia-Pacifi
Slide 11: Higher Loans Growth in 2nd Quarter 2006
Higher Loans Growth in 2nd Quarter 2006 Customer Loans, Deposits and L/D Ratio 80.3 % 78.9 % 78.5 % 78.2 % 76.5 % 85.5 88.1 89.8 80.5 83.3 64.6 67.1 67.4 70.2 65.7 Jun'05 Sep'05 Dec'05 Mar'06 Jun'06 Net NetCustomer CustomerLoans Loans($b) ($b) Customer CustomerDeposits Deposits($b) ($b) Loans Loans/
Slide 12: Continued Decrease in NPLs
Continued Decrease in NPLs Group: NPLs ($m) 4,563 4,290 3,931 3,950 3,836 NPL Ratio 6.7% 6.2% 5.6% 5.6% 5.3% 379 372 1,045 419 452 464 973 906 926 978 679 717 651 678 620 2,460 2,228 1,955 1,894 1,774 Jun'05 Sep'05 Dec'05 Mar'06 Jun'06 Singapore Malaysia Thailand Other 12
Slide 13: Impairment Coverage Remained Adequate
Impairment Coverage Remained Adequate Total Impairment 3,110 2,946 2,714 2,736 2,652 ($m) 68.2% 68.7% 69.0% 69.3% 69.1% 1,794 1,628 1,444 1,464 1,383 1,316 1,318 1,270 1,272 1,269 Jun'05 Sep'05 Dec'05 Mar'06 Jun'06 Collective CollectiveImpairment Impairment($m) ($m) Individual IndividualImpairment I
Slide 14: Malaysia – Summarised P/L
Malaysia – Summarised P/L 1H06 1H05 + / (-) 2Q06 1Q06 + / (-) RM’m RM’m % RM’m RM’m % Net interest income 332 277 20 185 147 26 Non-interest income 174 151 15 79 95 (17) Total income 506 428 18 264 242 9 Less: Total expenses 165 142 16 87 78 12 Operating profit 341 286 19 177 164 8 Less: Total impai
Slide 15: Malaysia – Key Financial Indicators
Malaysia – Key Financial Indicators 1H06 1H05 + / (-) 2Q06 1Q06 + / (-) % % % pt % % % pt Net interest margin 2.36 2.27 0.09 2.51 2.18 0.33 Non-NII / Total income 34.4 35.3 (0.9) 29.9 39.3 (9.4) Expense / Total income 32.6 33.2 (0.6) 33.0 32.2 0.8 Customer loans (net) – RM’m 18,777 17,116 9.7% 18,77
Slide 16: Thailand – Summarised P/L
Thailand – Summarised P/L 1H06 1H05 + / (-) 2Q06 1Q06 + / (-) THB’m THB’m % THB’m THB’m % Net interest income 3,201 3,131 2 1,578 1,623 (3) Non-interest income 1,387 1,564 (11) 708 679 4 Total income 4,588 4,695 (2) 2,286 2,302 (1) Less: Total expenses 2,902 3,134 (7) 1,436 1,466 (2) Operating profi
Slide 17: Thailand – Key Financial Indicators
Thailand – Key Financial Indicators 1H06 1H05 + / (-) 2Q06 1Q06 + / (-) % % % pt % % % pt Net interest margin 3.93 3.43 0.50 3.86 3.97 (0.11) Non-NII / Total income 30.2 33.3 (3.1) 31.0 29.5 1.5 Expense / Total income 63.3 66.8 (3.5) 62.8 63.7 (0.9) Customer loans (net) – THB’m 148,305 153,197 (3.2%
Slide 18: Indonesia – Summarised P/L
Indonesia – Summarised P/L 1H06 1H05* + / (-) 2Q06 1Q06 + / (-) IDR’b IDR’b % IDR’b IDR’b % Net interest income 616 492 25 313 303 3 Non-interest income 167 152 10 77 90 (14) Total income 783 644 22 390 393 1 Less: Total expenses 346 284 22 187 159 18 Operating profit 437 360 21 203 234 (13) Less: T
Slide 19: Indonesia – Key Financial Indicators
Indonesia – Key Financial Indicators 1H06 1H05* + / (-) 2Q06 1Q06 + / (-) % % % pt % % % pt Net interest margin 6.61 6.03 0.58 6.28 6.70 (0.42) Non-NII / Total income 21.3 23.6 (2.3) 19.7 22.9 (3.2) Expense / Total income 44.2 44.1 0.1 47.9 40.5 7.4 Customer loans (net) – IDR’b 12,570 11,014 14.1% 1
Slide 20: Strong Capital Position
Strong Capital Position Capital Adequacy Ratios (CAR) 16.1% 16.0% 16.5% 15.0% 15.0% ` 11.0% 11.2% 11.2% 10.1% 9.9% Jun'05 Sep'05 Dec'05 Mar'06 Jun'06 Total TotalCAR CAR Tier Tier11CAR CAR 20
Slide 21: Special Dividend of 20 Cents Per Share
Special Dividend of 20 Cents Per Share Special Dividend in Specie 28.5 cts Final Interim 40 cts 40 cts 40 cts 20 cts 20 cts 20 cts 20 cts 20 cts 2003 2004 2005 1H06 Special Dividend - - $351m * $244m Cash Dividend $748m $744m $737m $244m Dividend Payout $748m $744m $1,088m $488m Dividend Payout Rati
Slide 22: In Summary …
In Summary … Net profit surged 92.8% to $1.6 billion One-time gain of $689m from special dividend from OUE and divestment of OUE and Hotel Negara Total income growth of 9.8% driven by net interest income increase of 14.5% Expense-to-income ratio was 41.1% Loans growth of 8.6% year-on-year