United Overseas Bank Limited · SGX:U11

United Overseas Bank — Investor Presentation (November 2014)

41 slides from United Overseas Bank's investor presentation, November 2014

  1. Slide 1: UOB Group: Strong Earnings Led by Rebound in Fees

    UOB Group Strong Earnings Led by Rebound in Fees, Stable Funding Base for Sustainable Assets Growth November 2014 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 information given i

  2. Slide 2: Agenda

    Agenda 1 Overview of UOB Group 2 Macroeconomic Outlook 3 Strong UOB Fundamentals 4 Our Growth Drivers 5 Latest Financials 2

  3. Slide 3: UOB Overview

    UOB Overview Founding Key Statistics for 9M14 Founded in August 1935 by a group of Chinese businessmen ■ Total assets : SGD302.7b (USD237.8b) and Datuk Wee Kheng Chiang, grandfather of the present ■ Shareholder’s equity : SGD28.6b (USD22.5b) UOB Group CEO, Mr. Wee Ee Cheong ■ Gross loans : SGD195.9b

  4. Slide 4: A Leading Singapore Bank With Established Franchise In Core Market Segments

    A Leading Singapore Bank With Established Franchise In Core Market Segments Group Retail Group Wholesale Banking Global Markets and Investment Management (GMIM)  Best Retail Bank in Singapore1  Best SME Banking1  Strong player in Singapore dollar treasury instruments  Strong player in credit car

  5. Slide 5: Proven Track Record Of Execution

    Proven Track Record Of Execution  UOB Group’s management has demonstrated strong track record in steering the Group through various global events and crises. Achieved record NPAT of SGD3,008 million in 2013  Stability of management team ensures consistent execution of strategies  Disciplined mana

  6. Slide 6: Expanding Regional Banking Franchise

    Expanding Regional Banking Franchise Extensive Regional Footprint with 500+ Offices Profit before Tax and Intangibles by Region (SGD m) MYANMAR 2 offices 252 GREATER CHINA 21 24 offices1 222 272 38% of THAILAND 157 offices 184 178 Group PBT 31% of 156 118 146 204 105 180 VIETNAM Group PBT 147 244 17

  7. Slide 7: Agenda

    Agenda 1 Overview of UOB Group 2 Macroeconomic Outlook 3 Strong UOB Fundamentals 4 Our Growth Drivers 5 Latest Financials 7

  8. Slide 8: Southeast Asia − Resilient Key Markets

    Southeast Asia − Resilient Key Markets  The long-term fundamentals and prospects of key Southeast Asian markets have greatly improved since the Asian Financial Crisis in 1997.  Compared with 1997, they have: ‒ Significantly higher levels of foreign reserves ‒ Healthier current account and balance

  9. Slide 9: Singapore to Grow 3.2% in 2014, Amidst Current Economic Restructuring

    Singapore to Grow 3.2% in 2014, Amidst Current Economic Restructuring  Singapore’s electronics manufacturing sector expected to face considerable headwinds in 2014, although transport engineering, Slower-Than-Expected Pickup In External Sectors chemicals and biomedical manufacturing sectors are lik

  10. Slide 10: SEA Banking Sector: Strong Fundamentals Remain Intact

    SEA Banking Sector: Strong Fundamentals Remain Intact Key Banking Trends Robust Capital Positions  There has been a resurgence in loan demand after the deleveraging of (Tier 1 CAR, in %) ASEAN banks during the Global Financial Crisis — Singapore banks have stable loan-to-deposit ratios and healthy

  11. Slide 11: Agenda

    Agenda 1 Overview of UOB Group 2 Macroeconomic Outlook 3 Strong UOB Fundamentals 4 Our Growth Drivers 5 Latest Financials 11

  12. Slide 12: Strong UOB Fundamentals

    Strong UOB Fundamentals Strong Management  Proven track record in steering the bank through various global events and crises with Proven Track Record  Stability of management team ensures consistent execution of strategies  Delivered record NPAT of SGD2,463m in 9M14, driven by healthy loans growt

  13. Slide 13: Diversified Loan Portfolio

    Diversified Loan Portfolio Gross Customer Loans by Geography Gross Customer Loans by Currency 5% 10% 8% 2% 3% SGD Singapore 5% 5% Malaysia USD Thailand 13% MYR Indonesia THB 14% 54% Greater China IDR 65% Others Others 16% Gross Customer Loans by Maturity Gross Customer Loans by Industry Transport, s

  14. Slide 14: Competitive Against Peers

    Competitive Against Peers Bank Financial Strength Efficient Cost Management B B B Bank Financial Strength 91.5% Cost/Income Ratio B- 62.5% 57.9% 69.0% C C C 47.4% 63.1% 64.0% 44.0% 54.7% C- C- C- C- 41.8% 39.5% 42.5% D+ Citi OCBC HSBC CIMB JPM UOB Maybank DBS SCB Bank BCA BOA Bangkok OCBC HSBC CIMB

  15. Slide 15: Strong Capitalisation Levels and Low Leverage

    Strong Capitalisation Levels and Low Leverage Total CAR, Tier 1 CAR, Common Equity Tier 1 18.315.9 17.3 17.616.5 17.0 16.2 15.8 15.6 15.5 15.9 16.5 14.0 15.9 14.7 (Total CAR, 11.8 14.0 13.2 12.9 13.413.4 13.2 12.8 12.8 12.7 12.0 13.2 11.0 11.4 11.5 Tier 1 CAR, 10.5 11.6 11.2 10.7 10.2 Common Equity

  16. Slide 16: Strong Investment Grade Credit Ratings

    Strong Investment Grade Credit Ratings Ratings Aa1 / Stable / P-1 AA-/Stable/A-1+ AA- / Stable / F1+  ‘…Strong and valuable business franchise’  Prudent management team… expect the bank to  ‘Ratings reflect its strong domestic franchise,  ‘Long experience in serving continue its emphasis on fund

  17. Slide 17: Robust Risk Management Framework

    Robust Risk Management Framework  Operate under strict regulatory regime; prudential standards in line with global best practices  Strong risk culture; do not believe in achieving short-term gains at the expense of long-term interests Robust  Focused on businesses which we understand and are well

  18. Slide 18: Managing Risks for Stable Growth

    Managing Risks for Stable Growth  Prudent approach has been key to Group Risk Appetite Statement (GRAS) delivering sustainable returns over the years Manage  Institutionalised framework through concentration GRAS risk – Outlines risk and return objectives to guide strategic decision-making Maintai

  19. Slide 19: Resilient Asset Quality; High Impairment Coverage

    Resilient Asset Quality; High Impairment Coverage Stable NPL Ratio Consistently High Impairment Coverage (In SGD m) (In SGD m) 316.3% 305.1% 311.4% 298.9% 270.6% 144.8% 150.5% 160.2% 149.2% 146.8% 1.2% 1.2% 1.2% 1.1% 1.1% 834 659 779 806 798 570 548 601 587 598 143 541 571 462 474 2,701 2,548 2,611

  20. Slide 20: Focusing on Preserving Balance Sheet Strength

    Focusing on Preserving Balance Sheet Strength  Building customer franchise Strengthening our Balance Sheet – Focusing on target segments within key markets Assets 11% 4% 5% 6% 9%  Focusing on stable funding base and optimising funding sources in 9M14 6% 10% – Increased commercial paper 8% 55% 11%

  21. Slide 21: Agenda

    Agenda 1 Overview of UOB Group 2 Macroeconomic Outlook 3 Strong UOB Fundamentals 4 Our Growth Drivers 5 Latest Financials 21

  22. Slide 22: Our Growth Drivers

    Our Growth Drivers Realise Full  Provides us with ability to serve expanding regional needs of our customers Potential of our  Improves operational efficiency, enhances risk management, seamless customer Integrated Platform experience and faster time to market  Global macro environment remains un

  23. Slide 23: Milestone in Regionalisation

    Milestone in Regionalisation ■ Harnessing potential of regional network through an integrated platform Full Rollout of Integrated Regional Platform – Completion of platform at end-2013 ■ Integrated regional platform to bring: – Improved productivity and operational efficiency – Quicker speed to mark

  24. Slide 24: Capitalising on Rising Intra-Regional Flows

    Capitalising on Rising Intra-Regional Flows ■ Robust growth in customer base and Growing Number of Intra-Regional Deals cross-border loans over last 3 years +148% ■ Strengthened in-market teams and capabilities to serve customers’ regionalisation needs +51% ■ Broadening and deepening product capabil

  25. Slide 25: Making Good Progress in Transaction Banking

    Making Good Progress in Transaction Banking ■ Offer end-to-end solutions Trade Loans Deposits ranging from cash, trade and +89% CAGR +10% supply chain financing across +14% 41% 33% our network CAGR 36% Overseas 30% 30% 33% +37% 48% 26% ■ Strong increase in trade loans, 41% 44% spurred by intra-regio

  26. Slide 26: Capturing Rising Asian Consumer Affluence

    Capturing Rising Asian Consumer Affluence  From FY2010 to June 2014, Growing Regional Wealth Management Profit Contribution — Grew wealth management AUM from $48bn to $76bn CAGR +23% 30% — Expanded customer base from +27% 100,000 to 183,000 27% 20% 26% 30% — Increased regional wealth Region 26% 31%

  27. Slide 27: Why UOB?

    Why UOB? Stable  Proven track record in steering the bank through various global events and crises Management  Stability of management team ensures consistent execution of strategies  Entrenched local presence. Ground resources and integrated regional network Integrated allow us to better address

  28. Slide 28: Agenda

    Agenda 1 Overview of UOB Group 2 Macroeconomic Outlook 3 Strong UOB Fundamentals 4 Our Growth Drivers 5 Latest Financials 28

  29. Slide 29: 9M14 Financial Overview

    9M14 Financial Overview Net Profit After Tax1 (NPAT) Movement, 9M14 vs 9M13 (SGD m) 261 364 3 54 2,463 205 2,235 179 71 +12.1% +0.2% +39.7% +9.6% +61.6% -40.0% -11.0% +10.2% 9M13 NPAT Net Interest Fee income Other non- Expenses Impairment Share of profit Tax & Minority 9M14 NPAT Income interest inco

  30. Slide 30: 3Q14 Financial Overview

    3Q14 Financial Overview Net Profit After Tax1 (NPAT) Movement, 3Q14 vs 2Q14 (SGD m) 65 11 31 866 808 9 13 12 14 +2.7% +15.8% -2.6% +1.6% +8.4% +41.2% +8.3% +7.2% 2Q14 NPAT Net Interest Fee income Other non- Expenses Impairment Share of profit Tax & Minority 3Q14 NPAT Income interest income Charges o

  31. Slide 31: Record NII driven by Healthy Loans Growth

    Record NII driven by Healthy Loans Growth Net Interest Income (NII) and Margin 2.41% 2.29% 2.10% 2.10% 2.12% 2.06% 2.06% 2.05% 2.06% 1.92% 1.87% 1.72% 1.72% 1.71% 1.74% 1.73% 1.71% 1.71% 0.97% 0.91% 0.85% 0.77% 0.85% 0.90% 0.84% 0.81% 0.76% 4,120 1,110 1,124 1,155 3,917 1,095 3,678 1,046 538 3,389 1

  32. Slide 32: Healthy Growth in Non-Interest Income

    Healthy Growth in Non-Interest Income Non-Interest Income (Non-NII) and Non-NII Ratio 39.7% 38.7% 39.6% 35.5% 40.3% 41.4% 37.1% 37.1% 36.7% 25.8% 23.1% 23.2% 23.2% 24.4% 25.0% 23.6% 24.1% 21.8% 2,578 2,600 816 2,218 760 2,021 870 647 1,070 618 642 341 703 919 350 211 212 228 1,508 1,731 1,318 1,299

  33. Slide 33: Strong Rebound in Fee Income

    Strong Rebound in Fee Income Breakdown of Fee Income (SGD m) (SGD m) 1,731 1,508 56 268 1,318 66 1,229 111 62 256 33 475 435 249 107 204 414 11 410 442 407 11 81 70 100 10 12 11 70 28 389 72 66 69 331 30 27 27 26 370 131 113 101 99 93 420 321 208 330 172 101 101 97 118 98 129 114 115 37 39 38 46 32

  34. Slide 34: Disciplined Cost Management

    Disciplined Cost Management Operating Expenses and Expense / Income Ratio 43.0% 43.8% 43.1% 43.0% 42.3% 43.1% 41.7% 41.8% 40.6% 2,898 2,747 2,450 2,341 1,186 1,151 1,047 970 762 787 800 755 715 315 301 331 339 288 1,597 1,712 1,403 1,371 427 447 454 456 461 2011 2012 2013 9M14 3Q13 4Q13 1Q14 2Q14 3Q

  35. Slide 35: Total Loans Charge-off Rate Relatively Stable

    Total Loans Charge-off Rate Relatively Stable Impairment Charges on Loans 30bps 30bps 30bps 32bps 30bps 30bps 32bps 32bps 32bps 30bps 2bps 19bps 15bps 12bps 8bps 11bps 11bps (0)bps 93 454 75 51 163 166 136 11 -2 2011 2012 2013 9M14 3Q13 4Q13 1Q14 2Q14 3Q14 Individual Impairment Charges on Loans (SGD

  36. Slide 36: Healthy Loans Growth

    Healthy Loans Growth QoQ YoY 3Q14 3Q14 2Q14 +/(-) 3Q13 +/(-) Gross Loans SGD b SGD b % SGD b % 8% 5% Singapore 126.6 126.1 0.4 116.4 8.8 3% Regional: 59.4 56.7 4.8 49.8 19.3 5% Malaysia 27.6 26.5 4.2 24.3 13.6 14% Thailand 10.4 10.0 4.0 9.5 9.5 65% Indonesia 5.8 5.7 1.8 5.4 7.4 Greater China 15.7 14

  37. Slide 37: Stable Liquidity Position

    Stable Liquidity Position Customer Loans, Deposits and L/D Ratio 93.6% 93.7% 98.2% 94.1% 90.0% 85.5% 87.8% 85.8% 84.0% 83.4% 69.4% 70.2% 70.5% 70.6% 65.2% 214.5 216.6 216.1 224.4 206.5 192.6 178.9 185.3 189.7 173.5 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Net Customer Loans (SGD b) Customer Deposits (SGD

  38. Slide 38: Robust Credit Quality; NPL Ratio Stable at 1.2%

    Robust Credit Quality; NPL Ratio Stable at 1.2% NPL ($m) 2,107 2,074 2,077 2,309 2,289 NPL Ratio 1.2% 1.1% 1.1% 1.2% 1.2% 321 524 29 589 531 537 30 203 149 29 259 30 29 124 88 105 256 203 211 417 201 431 392 411 414 1,060 919 771 812 781 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Singapore Malaysia Thailand

  39. Slide 39: Strong Impairment Coverage

    Strong Impairment Coverage Consistently High Impairment Coverage 316.3% 305.1% 311.4% 298.9% 270.6% 144.8% 150.5% 160.2% 149.2% 146.8% 779 834 659 806 798 2,548 2,611 2,701 2,244 2,323 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Collective Impairment ($m) Individual Impairment ($m) Cumulative Impairment / To

  40. Slide 40: Capital Ratios Remained Strong

    Capital Ratios Remained Strong Basel III 16.3% 16.6% 17.7% 17.8% 17.0% Total CAR 3.7% 3.9% 3.0% 3.4% 3.4% Tier 2 CAR 14.0% 13.9% 14.0% 12.9% 13.2% Tier 1 / CET1 CAR Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 SGD b Common Equity Tier 1 Capital 21 22 23 23 24 Tier 1 Capital 21 22 23 23 24 Total Capital 26 27

  41. Slide 41: Stable Dividend Payout

    Stable Dividend Payout 5 10 50 40 40 20 20 20 20 2011 2012 2013 1H14 Net dividend per ordinary share (¢) Interim Final Special Payout amount (SGD m) 944 1,102 1,182 320 Payout ratio (%) 41 39 39 20 41

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