Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — 1H 2003 Earnings Presentation
22 slides from Oversea-chinese Banking's earnings presentation, Aug 5, 2003
Slide 1: First Half 2003 Results
Presentation to Media and Analysts First Half 2003 Results 5 August 2003
Slide 2: Agenda
Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Conclusion
Slide 3: Results at a Glance: Half-Yearly
Results at a Glance : Half-Yearly 1H03 1H02 YoY 2H02 S$m S$m +/(-)% S$m Net Interest Income 707 745 (5) 764 Non-interest income 322 363 (11) 350 - Fee Income 170 184 (8) 190 Total Income 1,029 1,108 (7) 1,114 Operating Expenses 424 429 (1) 420 Operating Profit 605 679 (11) 694 Goodwill 63 65 (2) 62
Slide 4: Results at a Glance - Quarterly
Results at a Glance - Quarterly 2Q03 1Q03 QoQ 2Q02 S$m S$m +/(-)% S$m Net Interest Income 356 352 1 375 Non-interest income 174 148 18 199 - Fee Income 88 82 7 89 Total Income 530 499 6 574 Operating Expenses 223 201 11 223 Operating Profit 307 298 3 351 Goodwill 32 32 0 32 Provisions 70 64 10 205 A
Slide 5: Agenda
Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Conclusion
Slide 6: Net Interest Income Affected by Margin Pressure
Net Interest Income Affected by Margin Pressure Net Interest Margin 2.02% 2.07% 2.01% 1.99% 1.90% 1.89% 388 370 375 376 352 356 (S$m) 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 6
Slide 7: Non-Interest Income Rebounded in 2Q
Non-Interest Income Rebounded in 2Q Non-interest income/ Total income 34.6% 33.8% 32.9% 30.7% 28.8% 29.6% 199 192 174 164 27 157 148 19 (S$m) 171 183 171 145 156 149 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 Dealing Income and Others Disposal of Investment Securities & Associates 7
Slide 8: Fee Income Improved in 2Q, Led by Brokerage and Wealth Management
Fee Income Improved in 2Q, Led by Brokerage and Wealth Management Fee income/ Total income 17.7% 18.1% 16.1% 16.5% 16.5% 15.6% 99 94 91 89 88 82 (S$m) 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 8
Slide 9: Expenses Rose in 2Q due to Fixed Assets Write-Off
Expenses Rose in 2Q due to Fixed Assets Write-Off Cost-to-Income Ratio 42.1% 40.3% 38.6% 38.8% 37.4% 38.1% 223 217 223 206 204 201 33 46 52 36 (S$m) 38 42 72 45 49 51 48 51 119 121 112 113 119 119 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 Staff Cost Premises & Equipment Others Restructuring Expenses 9
Slide 10: Operating Profit before Provisions and Goodwill
Operating Profit before Provisions and Goodwill (S$m) 351 352 341 328 307 298 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 10
Slide 11: Provision Charges Improving
Provision Charges Improving (S$m) Specific Provisions for Loans Provisions for Diminution in 205 Investments and Other Assets General Provisions 74 130 91 64 75 74 70 163 24 22 22 91 70 54 55 47 (5) (32) (31) 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 11
Slide 12: Provision Charges Improving
Provision Charges Improving 1H03 over 1H02 • High base effect in 1H02 - well above peers • Lower level of new NPLs in 1H03 compared to 1H02 • Lower provisions for shortfall in collateral value of existing NPLs • Lower provisions for diminution in value of investments: Significant provisions were mad
Slide 13: 1H03 Net Profit Up 21% as Provisions Fell
1H03 Net Profit Up 21% as Provisions Fell (S$m) 224 215 181 169 159 102 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 13
Slide 14: EPS and ROE
EPS and ROE 9.8% 9.4% ROE 7.9% 7.3% 6.8% 4.5% 68 67 56 52 50 EPS¢ 32 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 Note: ROE and EPS are annualised ROE refers to return on ordinary shareholders’ funds 14
Slide 15: Agenda
Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Conclusion
Slide 16: Loan Growth in 2Q Led by Consumer Loans
Loan Growth in 2Q Led by Consumer Loans Loans (S$bn) 52.1 50.9 51.2 50.4 49.9 49.7 5.7 6.7 5.9 6.8 6.6 6.7 7.3 7.1 7.2 7.0 7.1 7.5 39.1 37.0 37.3 36.1 35.8 37.2 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Singapore Malaysia International 16
Slide 17: Slight Decline in Non-Bank Deposits in 2Q
Slight Decline in Non-Bank Deposits in 2Q Loans-to-deposits 87.3% 86.8% 87.8% 87.8% 89.1% 85.3% 55.6 54.9 53.5 53.9 55.3 54.8 Deposits (S$bn) 11.3 11.2 10.8 10.8 11.1 11.3 36.9 37.2 35.9 36.2 36.9 35.9 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Fixed Deposits Savings Deposits Current Account Others 1
Slide 18: Agenda
Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Conclusion
Slide 19: Active NPL Management Showing Results
Active NPL Management Showing Results NPL Ratio 9.9% 9.6% 9.6% 8.1% 8.0% 7.5% 5,050 4,979 5,149 4,356 4,290 4,115 NPLs 1,115 1,137 1,115 (S$m) 1,199 1,250 1,219 3,373 3,306 3,498 2,646 2,559 2,480 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Singapore Malaysia International 19
Slide 20: Cumulative Provisions
Cumulative Provisions (S$m) 3,346 3,373 3,405 2,717 2,695 2,603 1,248 1,215 1,215 1,211 1,183 1,184 2,098 2,158 2,190 1,506 1,513 1,419 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 General Provisions Specific Provisions 20
Slide 21: Provision Coverage Ratios Remain Adequate
Provision Coverage Ratios Remain Adequate SPs / Unsecured NPLs 107% 105% 105% 105% 103% 100% (SPs+GPs) / NPLs 66% 68% 66% 62% 63% 63% SPs / NPLs 42% 43% 43% 35% 35% 35% Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 21
Slide 22: Conclusion
Conclusion • Improvement in 2Q performance despite difficult business conditions • Costs well managed • Measures taken to improve credit process and NPL management are showing traction • New Horizons initiatives continuing • More uniform dividend payment policy implemented, with 11 cents interim div
Oversea-Chinese Banking — 1H 2003 Earnings Presentation on 6ix