Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q1 2009 Earnings Presentation
34 slides from Oversea-chinese Banking's earnings presentation, May 6, 2009
Slide 1: First Quarter 2009 Results Presentation
First Quarter 2009 Results Presentation 6 May 2009 1
Slide 2: Agenda
Agenda • Results Overview • Performance Trends • Results of Key Subsidiaries • In Summary 22
Slide 3: First quarter net profit of S$545m
First quarter net profit of S$545m 1Q09 1Q08 YoY 4Q08 QoQ S$m S$m +/(-)% S$m +/(-)% Net Interest Income 740 638 16 783 (6) Non-Interest Income 607 377 61 259 134 Total Income 1,347 1,015 33 1,042 29 Operating Expenses (413) (426) (3) (463) (11) Operating Profit 934 589 59 579 61 Amortisation of Inta
Slide 4: Excluding GEH – strong performance from banking operations
Excluding GEH – strong performance from banking operations Excluding GEH 1Q09 1Q08 YoY 4Q08 QoQ S$m S$m +/(-)% S$m +/(-)% Net Interest Income 725 618 17 765 (5) Non-Interest Income 314 331 (5) 130 144 Total Income 1,039 949 9 895 16 Operating Expenses (389) (397) (2) (415) (6) Operating Profit 650 5
Slide 5: Key Financial Ratios - based on core earnings
Key Financial Ratios - based on core earnings 1Q09 4Q08 1Q08 % % % Net Interest Margin 2.42 2.47 2.17 Non-Interest Income/ Total Income 45.1 24.9 37.1 Cost-to-Income Ratio 30.7 44.5 42.0 Loans-to-Deposits Ratio 85.3 84.8 79.7 NPL Ratio 1.8 1.5 1.6 Allowances/NPAs 109.5 125.0 115.3 ROE 14.9 6.7 12.2
Slide 6: Agenda
Agenda • Results Overview • Performance Trends • Results of Key Subsidiaries • In Summary 66
Slide 7: Year-on-year growth in net interest income and margins
Year-on-year growth in net interest income and margins 2.42% 2.47% 2.42% 2.27% 2.24% Net 2.17% 2.18% interest 2.10% margin 2,783 783 740 2,244 678 684 638 Net interest 740 income (S$m) 2007 2008 1Q09 1Q08 2Q08 3Q08 4Q08 1Q09 77
Slide 8: Rebound in non-interest income from higher insurance and trading income
Rebound in non-interest income from higher insurance and trading income 46.4% 45.1% 45.1% 40.3% 34.4% 37.1% Non-interest 34.6% income/ 2,037 Total income 24.9% 93 1,644 607 186 544 462 167 378 Non-interest 1,944 income 18 377 360 (S$m) 1,458 607 259 2007 2008 1Q09 1Q08 2Q08 3Q08 4Q08 1Q09 Divestment
Slide 9: Fee income down 3% QoQ and 27% YoY due to the global recession
Fee income down 3% QoQ and 27% YoY due to the global recession 20.9% 19.3% 19.5% 18.2% 17.4% Fee income/ 15.3% Total income 11.5% 11.5% 808 774 212 202 199 159 155 Fee income (S$m) 155 2007 2008 1Q09 1Q08 2Q08 3Q08 4Q08 1Q09 Excluding divestment gains 99
Slide 10: GEH's life assurance profits boosted by adoption of RBC framework in Malaysia
GEH’s life assurance profits boosted by adoption of RBC framework in Malaysia 1Q09 4Q08 1Q08 FY08 FY07 Life assurance profit from: S$m S$m S$m S$m S$m - Participating Fund 29 27 26 102 143 - Non-participating Fund 195 67 (30) 130 302 - Investment-linked Fund 42 21 11 68 64 Total life assurance profi
Slide 11: Expenses lower due to cost containment measures, including reduced staff costs
Expenses lower due to cost containment measures, including reduced staff costs 45.5% 44.5% 43.7% 43.0% 42.0% 40.1% Cost-to- Income Ratio 1,854 30.7% 30.7% 1,680 492 473 463 469 426 433 413 122 132 117 340 99 88 301 86 81 94 78 85 Operating Expenses (S$m) 1,045 413 946 270 274 249 252 240 88 85 240 2
Slide 12: Operating profit up 61% QoQ
Operating profit up 61% QoQ Operating Profit before allowances 2,601 (S$m) 2,573 93 186 934 756 167 654 584 579 19 2,508 2,387 589 565 934 2007 2008 1Q09 1Q08 2Q08 3Q08 4Q08 1Q09 Divestment gains 12 12
Slide 13: Net allowances significantly higher YoY due to provisions for loans and CDOs
Net allowances significantly higher YoY due to provisions for loans and CDOs Allowances for loans and other 447 assets (S$m) 243 197 197 156 36 55 (8) 2007 2008 1Q09 1Q08 2Q08 3Q08 4Q08 1Q09 13 13
Slide 14: Breakdown of allowances
Breakdown of allowances 1Q09 4Q08 1Q08 S$m S$m S$m Specific allowances/ 88 159 (7) (write-back) for loans Portfolio allowances for loans 2 11 - Allowances for CDOs 94 15 - Allowances/(write-back) for other 13 58 (1) assets Total net allowances 197 243 (8) 14 14
Slide 15: Movement in specific allowances for loans
Movement in specific allowances for loans 1Q09 4Q08 1Q08 S$m S$m S$m Allowances for new and existing NPLs 138 222 72 Write-backs 1/ (42) (51) (64) Recoveries 2/ (9) (12) (14) Net Specific Allowances/ 88 159 (6) (Write-backs) 1/ Write-backs of specific allowances for existing NPLs due to settlements
Slide 16: Bank's CDO portfolio now fully provided for
Bank’s CDO portfolio now fully provided for As at 31 Mar 2009 As at 31 Dec 2008 (S$m) Exposure Cumulative Cumulative Fair Value Exposure Cumulative Cumulative Fair Value Allowances MTM Adj. in Allowances MTM Adj. in Losses 3/ Equity Losses 3/ Equity ABS CDOs 1/ 100 (100) - - 252 (252) - - Corporate
Slide 17: Improvement in ROE
Improvement in ROE 14.9% 14.9% 13.4% ROE 12.2% 9.9% 11.3% 10.3% 2,071 6.7% 193 1,749 622 1,878 263 545 162 1,486 425 402 44 6 Net Profit 460 (S$m) 381 396 301 545 51 250 2007 2008 1Q09 1Q08 2Q08 3Q08 4Q08 1Q09 Divestment Gains/Tax Refunds Excluding divestment gains/tax refunds 17 17
Slide 18: Earnings contribution by segments
Earnings contribution by segments 1Q09 PBT by Business Segment 1Q09 PBT by Geography Global Other Consumer ASEAN Financial 4% Services 20% Insurance Global 37% Singapore Corporate Banking 45% 23% Malaysia 52% Global Treasury 33% “Others” segment (not shown) accounted for -13%, mainly joint income el
Slide 19: Loans grew 7% YoY, declined 1% from previous quarter
Loans grew 7% YoY, declined 1% from previous quarter 81.3 81.3 80.4 78.4 75.4 18.5 17.7 18.0 Loans 17.2 (S$bn) 16.2 13.6 14.3 14.7 12.7 12.3 46.9 48.4 49.2 49.3 47.7 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Singapore Malaysia International Note: Loans by geography are based on where the credit risks resid
Slide 20: Diversified loans
Diversified loans Loans by Geography* Loans by Sector Agriculture, mining & Transport, quarrying Others Others storage & 2% Comm Greater 9% 7% 7% China Building & 9% Construction 21% Indonesia Housing 5% Loans 24% Singapore Malaysia 59% 18% Manufacturing 8% Professionals & Individuals Non-Bank Finan
Slide 21: NPL ratio rising due to weak economic conditions; Singapore and Malaysia portfolios relatively resilient
NPL ratio rising due to weak economic conditions; Singapore and Malaysia portfolios relatively resilient 1.8% NPL Ratio 1.6% 1.5% 1.4% 1.3% 1,633 209 1,325 1,348 1,232 1,204 113 166 150 479 262 162 201 314 232 NPAs 495 450 521 (S$m) 434 474 455 431 376 394 424 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Sing
Slide 22: Movement in NPAs
Movement in NPAs 1Q09 4Q08 1Q08 2008 S$m S$m S$m S$m Opening Balance (excluding CDOs) 1,239 1,089 1,268 1,268 New NPAs 423 343 200 873 Net Recoveries/Upgrades (123) (169) (185) (779) Write-offs (77) (24) (41) (123) Closing Balance (excl CDOs) 1,462 1,239 1,242 1,239 Add: Classified CDOs 171 109 83 1
Slide 23: Allowance coverage of 109% over total NPAs and 212% over unsecured NPAs
Allowance coverage of 109% over total NPAs and 212% over unsecured NPAs 295% 280% 287% Total Allowances / Unsecured NPAs 240% 212% Total Allowances / NPAs 122% 128% 125% 115% 109% Specific Allowances / NPAs 43% 44% 47% 52% 49% Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 23 23
Slide 24: AFS Portfolio and Fair Value Reserves
AFS Portfolio and Fair Value Reserves Mar-09 Dec-08 Mar-08 S$m S$m S$m Available-for-Sale Securities Corporate Debt Securities 6,912 7,563 8,178 Equities 1,767 1,621 2,237 Government Securities 15,741 12,703 10,291 - Singapore 11,392 8,693 7,783 - Others 4,349 4,010 2,508 Total 24,420 21,887 20,706
Slide 25: Strong growth in savings and current deposits offset by decline in FDs
Strong growth in savings and current deposits offset by decline in FDs 84.4% 84.8% 85.3% 83.3% 79.7% 85.0% Loans-to- 75.0% deposits 92.9 92.4 94.7 94.1 92.4 65.0% 13.3 14.2 15.8 16.1 16.1 55.0% 14.1 14.7 15.1 16.1 17.7 45.0% 35.0% Deposits 60.5 59.2 59.5 57.2 53.4 (S$bn) 25.0% 15.0% Mar-08 Jun-08 Se
Slide 26: Strong Tier 1 ratio of 15.1%, core Tier 1 of 11.2%
Strong Tier 1 ratio of 15.1%, core Tier 1 of 11.2% 15.1% 15.8% 14.7% 0.7% 0.3% 0.2% (% of RWA) 13.5% 13.6% Total CAR 0.7% 1.3% Tier 2 Capital Tier 1 preference 11.4% 11.0% 10.6% 11.0% 11.2% shares 14.4% 14.9% 15.1% Core Tier 1 – 12.8% 12.3% adjusted common equity Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 (
Slide 27: Agenda
Agenda • Results Overview • Performance Trends • Results of Key Subsidiaries • In Summary 27 27
Slide 28: GEH: Quarterly contribution
GEH: Quarterly contribution GEH’s Contribution to 1Q09 1Q08 YoY 4Q08 QoQ OCBC’s Results S$m S$m +/(-)% S$m +/(-)% Total Income 308 67 368 147 110 Operating Expenses (24) (29) (15) (48) (49) Operating Profit 284 38 664 99 187 Amortisation of Intangibles (12) (12) 1 (12) 0 Allowances (3) (3) (3) (40)
Slide 29: OCBC Malaysia: 1Q09 results
OCBC Malaysia: 1Q09 results 1Q09 1Q08 YoY 4Q08 QoQ Unaudited Results* RM m RM m +/(-)% RM m +/(-)% Net Interest Income 252 233 8 262 (4) Islamic Banking Income 33 27 20 32 3 Non-Interest Income 173 149 17 120 44 Total Income 458 409 12 414 11 Operating Expenses (140) (143) (2) (158) (12) Operating P
Slide 30: OCBC Malaysia: Financial ratios
OCBC Malaysia: Financial ratios 1Q09 4Q08 1Q08 % % % Net Interest Margin 2.46 2.61 2.46 Non-Interest Income / 37.8 29.0 36.3 Total Income Cost-to-Income Ratio 30.5 38.2 35.0 Loans-to-Deposits Ratio 79.0 83.2 84.3 Gross NPL Ratio 3.6 3.4 3.7 Loans Growth (YoY) 8.8 13.3 15.3 ROE 25.8 16.5 28.4 30 30
Slide 31: Bank OCBC NISP: 1Q09 Results
Bank OCBC NISP: 1Q09 Results 1Q09 1Q08 YoY 4Q08 QoQ RP bn RP bn +/(-)% RP bn +/(-)% Unaudited Results* Net Interest Income 399 302 32 390 2 Non Interest Income 119 88 35 194 (39) Expenses (335) (308) 9 (342) (2) Operating Profit 183 82 123 242 (24) Allowances (79) (6) n.m. (112) (29) Net Profit 73 5
Slide 32: Bank OCBC NISP: Financial ratios
Bank OCBC NISP: Financial ratios 1Q09 4Q08 1Q08 % % % Net Interest Margin 5.04 5.23 4.99 Non-Interest Income / Total Income 23.0 33.2 22.5 Cost-to-Income Ratio 64.6 58.7 77.8 Loans-to-Deposits Ratio 71.0 76.7 91.3 Gross NPL Ratio 3.6 2.7 2.6 Loans Growth (YoY) 3.0 8.9 16.6 ROE 8.2 10.2 6.5 32 32
Slide 33: In Summary
In Summary • Operating profit grew strongly on higher revenues and tighter cost control • Trading income recovered following an exceptionally difficult fourth quarter • CDO portfolio written down completely • Loan and securities portfolios fairly resilient given the difficult times • Outlook however
Slide 34: First Quarter 2009 Results Thank You
First Quarter 2009 Results ________________________ Thank You 34
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