United Overseas Bank Limited · SGX:U11
United Overseas Bank — FY2023 Earnings Presentation
24 slides from United Overseas Bank's earnings presentation, February 2024
Slide 1: UOB Group Financial Updates
UOB Group Financial Updates Lee Wai Fai Group Chief Financial Officer For the Financial Year / Fourth Quarter Ended 31 December 2023 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
Slide 2: Financial Highlights
Financial Highlights FY23 4Q23 Full-year Core Net Profit rose 26% to record $6.1 billion (1) Core net profit • Core net profit sustained at $1.5b for 4Q23. FY23 rose 26% to $6.1b, $6.1b $1.5b with core return on equity at 14.2% + 26% YoY + 1% QoQ Core return on equity(1) • Including one-off expenses
Slide 3: FY23 Performance by Segment
FY23 Performance by Segment 2023 2022 YoY 4Q23 3Q23 QoQ • Retail accelerated by enlarged (1) +/(-) % +/(-) % Operating Profit $m $m $m $m regional franchise, proactive Group Retail (1) 3,104 2,085 49 817 758 8 marketing campaigns, record card fees and higher rates Group Wholesale Banking 5,393 4,672
Slide 4: Scale Acquisition with Digital Consumers
Scale Acquisition with Digital Consumers Scale UOB TMRW across ASEAN to digitally acquire at >8m Close to 1m • Tapping on rising low cost Retail customers, 76% are New-to-bank customers acquired in 2023 affluence and growing digitally enabled 514% YoY 53% digitally acquired digitalisation in Southea
Slide 5: Growing regional Wholesale Banking franchise
Strengthening +9% Wholesale Cross border income 1; Connectivity Formed 25% of GWB income customers +43% Across our ASEAN Suppliers and distributors within footprint and global • Growing regional network Financial Supply Chain Management (FSCM) solution 1 franchise, capturing cross-border Sector +13%
Slide 6: Financial Highlights
Financial Highlights 2023 2022 YoY 4Q23 3Q23 QoQ 4Q22 YoY $m $m +/(-)% $m $m +/(-)% $m +/(-)% • Core FY net profit rose 26% Net interest income Net fee income 9,679 2,235 8,343 2,143 16 4 2,404 569 2,429 591 (1) (4) 2,560 485 (6) 17 to a new high of $6.1b, Other non-interest income 2,018 1,089 85 43
Slide 7: Net Interest Income and Margin
2.60 2.75 2.64 Net Interest Income 2.26 2.61 2.62 2.55 and Margin 2.09 2.22 2.14 1.86 2.12 2.09 2.02 • Higher NII and NIM YoY from 0.91 1.02 1.11 1.02 1.10 0.93 0.94 higher interest rate environment 9,679 • 4Q23 NIM moderated to 2.02% 8,343 1,529 mainly from loan margin 1,203 compression due to 2,56
Slide 8: Fee Income
19 Fee Income 16 16 17 17 15 15 • 4Q23 credit card fees continued strong 2,235 2,143 momentum to register a 307 318 new high, boosted by higher card spending on 231 382 591 569 552 an enlarged regional 485 524 72 74 573 77 franchise 595 78 83 104 81 125 72 74 • Wealth fees saw modest 125 156 142 146
Slide 9: Trading & Investment Income
85 87 Trading & Investment 53 51 45 43 Income 38 • Customer-related treasury 1,690 income sustained momentum 924 • Trading and liquidity 474 478 management activities 829 375 362 continued to deliver good 128 272 296 performance 177 178 203 701 766 26 177 202 182 198 184 2022 2023 4Q 1Q 2Q 3Q 4Q 202
Slide 10: Core Expenses and Cost / Income Ratio
43.3 41.5 Core Expenses and 45.2 44.1 44.4 46.8 43.3 Cost / Income Ratio (1) 5,778 42.6 43.2 40.9 40.9 41.0 • FY23 CIR improved to 5,016 + 9% 1,365 41.5% on the back of 1,255 + 18% strong income growth 905 1,440 1,448 1,473 1,418 1,416 and disciplined spending 770 347 363 357 351 310 • Broad-based e
Slide 11: Non-Performing Assets
2022 2023 Non-Performing ($m) 4Q 1Q 2Q 3Q 4Q Assets NPAs at start of period 5,037 5,127 5,150 5,192 5,011 Non-individuals • Stable asset quality New NPAs _ 395 301 364 267 389 with NPL ratio at 1.5%. Less: New NPA formation Upgrades and recoveries 322 80 137 298 288 more than offset by Write-offs 12
Slide 12: Total Allowance on Loans
22 25 31 30 29 25 26 Total Allowance on 25 20 26 Loans 21 21 25 19 • FY23 credit costs at 25bps 784 were within expectation 628 173 238 151 202 807 192 36 694 28 253 229 212 164 202 (66) (24) (9) (80) (78) 2022 2023 4Q 1Q 2Q 3Q 4Q 2022 2023 Credit costs on loans - Specific (basis points) General all
Slide 13: Allowance Coverage
34 34 33 32 32 Allowance Coverage 0.9 1.0 1.0 0.9 0.9 • Reserve buffer remained adequate with prudent 5,002 4,931 5,134 5,109 4,976 379 379 379 coverage for performing 379 379 loans at 0.9% 2,868 2,905 3,058 3,042 3,007 • Sound NPA coverage at 101% or 209% taking 1,755 1,647 1,697 1,688 1,590 collat
Slide 14: FY23 Performance by Geography
FY23 Performance by Geography (1) 2023 2022 YoY 4Q23 3Q23 QoQ Core operating profit $m $m +/(-)% $m $m +/(-)% • Performance improved Singapore 4,657 3,824 22 1,052 1,188 (11) ASEAN-4 1,770 1,419 25 470 389 21 across most markets Malaysia 873 744 17 277 184 51 Thailand 700 425 64 163 173 (6) • ASEAN-
Slide 15: Gross Loans
Gross Loans Dec-23 Sep-23 Dec-22 QoQ YoY $b $b $b +/(-)% +/(-)% • Loans grew 1% QoQ and Singapore 158 155 160 2 (2) 2% YoY on constant ASEAN-4 69 67 69 3 1 currency basis Malaysia 32 32 33 (1) (5) Thailand 25 24 23 7 8 Indonesia 10 10 10 2 (4) Vietnam 2 2 2 7 31 North Asia 54 56 52 (3) 4 Greater Chi
Slide 16: Total Funding
Total Funding Dec-23 Sep-23 Dec-22 QoQ YoY $b $b $b +/(-)% +/(-)% Singapore 264 262 249 1 6 • Customer deposits up ASEAN-4 73 72 71 2 3 1% QoQ and 5% YoY, Malaysia 34 34 34 0 1 alongside improved Thailand 27 26 26 5 4 CASA ratio at 48.9% Indonesia 10 10 10 3 4 Vietnam 2 2 1 (8) 49 North Asia 24 25 2
Slide 17: Liquidity Ratios
167 Liquidity Ratios 147 154 153 157 • Liquidity remained ample with LCR at 157% and NSFR at 121 121 121 120 116 120% 85.6 83.3 83.5 82.3 82.2 Dec Mar Jun Sep Dec 2022 2023 USD LDR (%) 60.0 60.7 62.9 60.7 56.5 All-currency LCR (%) Loan/Deposit Ratio (LDR) (%) Net Stable Fund Ratio (NSFR) (%) 17
Slide 18: Capital
Capital 13.3 14.0 13.6 13.0 13.4 • Healthy CET1 ratio at 13.4% 259 258 263 272 276 Dec Mar Jun Sep Dec 2022 2023 Leverage ratio (%) 6.6 7.0 7.0 6.8 6.9 RWA ($b) CET1 ratio (%) 18
Slide 19: Dividends
170 Dividends 135 120 85 • Committed to consistent and Net dividend 75 Per ordinary share (¢) 60 sustainable returns 78 to shareholders Interim Final 39 • 85 Proposed final 60 60 dividend of 85 cents 39 per share 2020 2021 2022 2023 Payout amount ($m) 1,304 2,011 2,263 2,844 Payout ratio (%) 45 ^ 49
Slide 20: Appendix
▪ Loan Portfolio Appendix ▪ Exposure to Greater China ▪ Exposure to Commercial Real Estate - Office 20
Slide 21: Diversified loan portfolio
Professionals and Housing loans private individuals 24% Others 9% 6% Diversified loan General Industry Transport, storage and communication commerce portfolio 10% 4% FIs, investment and holding companies Building & 13% Manufacturing construction 7% 27% Large corporates Others and institutions 15% 55
Slide 22: Exposure to Greater China
Exposure to Greater China 69.2 70.5 71.6 71.7 72.5 9.7 9.4 10.5 11.3 10.7 Debt ($b) ▪ ~$2.2b in loans to Chinese Non Bank ($b) 49.8 49.2 48.6 51.6 51.2 developers (1% of group loans) Bank ($b) 10.9 11.3 9.5 9.2 12.6 Dec Mar Jun Sep Dec 2022 2023 As at 31 Dec 2023: Bank exposure ($9.0b) • ~35% of tot
Slide 23: Exposure to Commercial Real Estate - Office
Exposure to Commercial Real Commercial Real Estate - Office exposure is 7.5% of loans Estate - Office By geography as % of loans 0.3% • Almost half of office 0.8% Others exposure is in Singapore 0.8% 0.8% United Kingdom 0.8% 0.8% • Overseas exposure Dec-23 1.5% 1.3% United States backed by strong 7.
Slide 24: Thank You
Thank You & Right By You