Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q1 2004 Earnings Presentation
22 slides from Oversea-chinese Banking's earnings presentation, Apr 30, 2004
Slide 1: First Quarter 2004 Results Presentation
First Quarter 2004 Results Presentation 30 April 2004
Slide 2: Agenda
Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Conclusion 2
Slide 3: Results at a Glance
Results at a Glance 1Q04 1Q03 YoY 4Q03 QoQ S$m S$m +/(-)% S$m +/(-)% Net Interest Income 365 352 4 369 (1) Non-interest income 161 148 9 206 (22) - Fee Income 115 82 40 103 12 Total Income 526 499 5 575 (9) Operating Expenses 206 201 2 216 (5) Operating Profit 320 298 7 358 (11) Goodwill 32 32 0 32
Slide 4: Results Adjusted for Non-Core Asset Divestment
Results Adjusted for Non-Core Asset Divestment 1Q04 1Q03 YoY 4Q03 QoQ S$m S$m +/(-)% S$m +/(-)% Adjusted Operating Profit 320 298 7 308 4 Adjusted Net Profit 256 159 61 224 14 Note: Adjusted to exclude the following net gains from divestment of non-core assets: 4Q03 - Mount Emily property (S$36m), W
Slide 5: Agenda
Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Conclusion 5
Slide 6: Net Interest Income and Margin Stable
Net Interest Income and Margin Stable Net interest margin 1.90% 1.94% 1.90% 1.89% 1.88% 359 369 365 352 356 Net interest income (S$m) 1Q03 2Q03 3Q03 4Q03 1Q04 6
Slide 7: Non-Interest Income
Non-Interest Income 39.1% Non-interest income/ Total income 35.8% 32.9% 29.8% 30.6% 29.6% 29.7% 230 206 174 78 161 148 50 Non-interest income (S$m) 152 156 1Q03 2Q03 3Q03 4Q03 1Q04 Gains from divestment of non-core assets Excluding gains from divestment of non-core assets 7
Slide 8: Fee Income Boosted by Strong Wealth Management Sales and Increased Cross-Selling
Fee Income Boosted by Strong Wealth Management Sales and Increased Cross-Selling 19.5% 19.7% 21.9% 20.0% Fee income/ Total income 18.0% 16.5% 16.5% 16.9% 115 100 103 88 82 10.0% Fee income (S$m) 0.0% 1Q03 2Q03 3Q03 4Q03 1Q04 Excluding gains from divestment of non-core assets 8
Slide 9: Operating Expenses Remain Stable
Operating Expenses Remain Stable Cost-to-Income Ratio 42.1% 41.9% 41.2% 40.3% 39.1% 36.4% 37.6% 223 216 214 201 206 33 36 41 47 35 Operating expenses 72 51 52 50 48 (S$m) 119 119 121 119 120 1Q03 2Q03 3Q03 4Q03 1Q04 Staff Cost Premises & Equipment Others Restructuring Expenses Excluding gains from d
Slide 10: Growth in Core Operating Profit before Provisions and Goodwill
Growth in Core Operating Profit before Provisions and Goodwill Operating Profit (S$m) 375 358 78 320 298 307 50 297 308 1Q03 2Q03 3Q03 4Q03 1Q04 Gains from divestment of non-core assets 10
Slide 11: Provision Charges Remain Stable
Provision Charges Remain Stable (S$m) Specific Provisions for Loans Provisions for Diminution in 64 70 Investments and Other Assets General Provisions 24 54 22 37 70 20 47 47 30 10 9 (31) 1Q03 2Q03 3Q03 4Q03 1Q04 11
Slide 12: Steady Growth in Net Profit Excluding Non-Core Asset Divestment Gains
Steady Growth in Net Profit Excluding Non-Core Asset Divestment Gains Net Profit (S$m) 292 279 256 72 54 224 159 220 224 1Q03 2Q03 3Q03 4Q03 1Q04 Gains from divestment of non-core assets 12
Slide 13: EPS and ROE
EPS and ROE 12.2% 11.8% ROE 10.7% 9.4% 9.1% 9.5% 6.8% 90 81 80 67 22 16 50 EPS¢ 68 64 1Q03 2Q03 3Q03 4Q03 1Q04 Gains from divestment of non-core assets Excluding divestment gains Note: Quarterly ROE and EPS are annualised; ROE refers to return on ordinary shareholders’ funds 13
Slide 14: Agenda
Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Conclusion 14
Slide 15: Loan Growth Driven by Consumer Loans
Loan Growth Driven by Consumer Loans Loans (S$bn) 51.4 52.6 53.0 49.7 51.2 6.4 6.2 6.6 6.3 6.7 8.0 7.9 7.5 7.8 7.1 37.1 37.3 38.2 38.9 35.8 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Singapore Malaysia International 15
Slide 16: Deposits and Loans-Deposits Ratio
Deposits and Loans-Deposits Ratio Loans-to-deposits 93.8% 93.2% 89.1% 90.9% 85.3% 55.3 54.8 53.9 53.5 54.3 Deposits 11.1 11.3 11.2 11.1 11.4 (S$bn) 36.9 35.9 34.4 34.3 34.6 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Fixed Deposits Savings Deposits Current Account Others 16
Slide 17: Agenda
Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Conclusion 17
Slide 18: Sustained Improvement in Asset Quality
Sustained Improvement in Asset Quality NPL Ratio 8.0% 7.5% 7.1% 6.9% 6.6% 4,290 4,115 3,890 3,834 3,644 NPLs 1,250 1,219 (S$m) 1,105 1,068 1,040 2,559 2,480 2,388 2,389 2,266 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Singapore Malaysia International 18
Slide 19: NPL Ratio Down Sharply from the Peak
NPL Ratio Down Sharply from the Peak 14.2% 13.3% NPL Ratio 11.5% 10.7% 9.7% 9.6% 8.1% 7.5% 5,183 6.9% 6.6% 4,979 4,335 4,550 4,356 4,092 3,921 4,115 NPLs 3,834 3,644 (S$m) Dec-99 Jun-00 Dec-00 Jun-01 Dec-01* Jun-02 Dec-02 Jun-03 Dec-03 Mar-04 * Increase in absolute NPLs was due to acquisition of of
Slide 20: Cumulative Provisions
Cumulative Provisions (S$m) 2,695 2,603 2,574 2,568 2,534 1,183 1,184 1,183 1,183 1,183 1,513 1,419 1,391 1,385 1,351 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 General Provisions Specific Provisions 20
Slide 21: Provision Coverage Remains Prudent
Provision Coverage Remains Prudent SPs / Unsecured NPLs 105% 103% 105% 100% 100% (SPs+GPs) / NPLs 70% 66% 67% 63% 63% SPs / NPLs 35% 36% 36% 37% 35% Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 21
Slide 22: Conclusion
Conclusion • Healthy set of results, underpinned by growth in both net interest income and fee income, and reflecting results of credit process improvement • Fee income growth driven by wealth management distribution capability and increased cross-selling • New Horizons initiatives and targets remai
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