United Overseas Bank Limited · SGX:U11
United Overseas Bank — Q1 2018 Earnings Presentation
24 slides from United Overseas Bank's earnings presentation, May 3, 2018
Slide 1: UOB Group Financial Highlights
UOB Group For the Three Months / First Quarter Ended 31 March 2018 Financial Highlights Lee Wai Fai Group Chief Financial Officer 3 May 2018 Disclaimer: This material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation.
Slide 2: 1Q18 Highlights
1Q18 Highlights Strong business performance and balance sheet position 1Q18 NPAT of $978m 21% YoY; 14% QoQ • Double-digit growth in net interest income driven by margin expansion in tandem with rates increase and loan growth • Strong momentum in fee and commission income • Assets quality remaine
Slide 3: Net earnings increased 21% YoY
Net earnings increased 21% YoY 1Q18 1Q17 YoY 1Q18 vs 1Q17: Profit up $170m $m $m $m +/(-) % • Net interest income up 13% supported by Net interest income 1,470 1,303 167 13 margin expansion from higher rates and loan growth. Net fee income 517 439 78 18 • Higher net fee income from strong growth
Slide 4: Net earnings improved 14% QoQ
Net earnings improved 14% QoQ 1Q18 4Q17 QoQ 1Q18 vs 4Q17: Profit up $122m $m $m $m +/(-) % • Higher net interest income from continued Net interest income 1,470 1,461 10 1 loan growth and higher net interest margin. Net fee income 517 509 8 2 • Higher fee income from improved wealth and fund man
Slide 5: Higher NII driven by higher interest margin and loan growth
Higher NII driven by higher interest margin and loan growth Net Interest Income (NII) and Margin 2.20% 2.14% 2.14% 2.14% 2.15% 2.14% 2.18% 1.71% 1.77% 1.73% 1.75% 1.79% 1.81% 1.84% 0.77% 0.38% 0.71% 0.82% 0.93% 0.94% 5,528 0.60% 4,991 651 1,461 1,470 303 1,408 1,303 1,356 176 207 209 120 149 4,688 4
Slide 6: Higher fee supported by strong momentum in wealth management and fund management
Higher fee supported by strong momentum in wealth management and fund management, and higher loan- related fee Non-Interest Income (Non-NII) 3,035 2,799 260 263 771 749 758 756 761 70 58 63 57 902 68 877 198 187 221 243 240 1,873 1,659 509 517 448 477 439 2016 2017 1Q17 2Q17 3Q17 4Q17 1Q18 1 Net Fee
Slide 7: Expense/Income ratio improved QoQ to 44.2%
Expense/Income ratio improved QoQ to 44.2% Operating Expenses and Expense / Income Ratio 44.0% 43.7% 46.0% 43.2% 43.8% 44.2% 41.6% 3,739 3,425 1,027 987 1,515 925 900 887 1,375 419 381 360 379 357 2,050 2,224 608 606 526 547 543 2016 2017 1Q17 2Q17 3Q17 4Q17 1Q18 Staff costs ($m) Other operating exp
Slide 8: Lower credit costs on the back of benign credit environment
Lower credit costs on the back of benign credit environment Expected Credit Loss (ECL) on Loans 125bp 61bp 45bp 49bp 37bp 32bp 12bp 32bp 28bp 32bp 30bp 32bp 693 17bp 11bp 660 184 184 188 104 65 2016 2017 1Q17 2Q17 3Q17 4Q17 1Q18 Total ECL on Loans Stage 3 ECL on Loans / Average Gross Loans (basis po
Slide 9: New NPA formation back to normalised level
New NPA formation back to normalised level 1Q17 2Q17 3Q17 4Q17 1Q18 $m $m $m $m $m NPA at start of period 3,480 3,543 3,587 3,919 4,389 New NPA 424 537 799 1,167 416 Upgrades, recoveries and translations (293) (255) (369) (354) (310) Write-offs (68) (238) (98) (343) (172) NPA at end of period 3,543
Slide 10: NPL ratio decreased to 1.7%
NPL ratio decreased to 1.7% NPL ($m) 3,399 3,466 3,748 4,211 4,138 NPL Ratio 1.5% 1.5% 1.6% 1.8% 1.7% 303 NPL ($m) 132 290 150 272 244 694 692 257 285 304 261 608 439 485 623 641 386 585 603 370 392 563 487 518 2,058 1,918 1,675 1,358 1,369 Mar‐17 Jun‐17 Sep‐17 Dec‐17 Mar‐18 Singapore Malaysia Thail
Slide 11: Adequate NPA coverage
Adequate NPA coverage Total ECL ($m) 4,132 4,062 4,190 3,990 3,913 NPA coverage (%) 117 113 107 91 91 Unsecured NPA coverage (%) 232 232 223 187 190 ECL Allowance ($m) 2,619 2,635 2,610 1,976 2,014 1,978 1,935 1,580 1,513 1,427 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Stage 1 & 2 ECL / General Allowance (
Slide 12: Loans up 5% YoY and 2% QoQ to $241b
Loans up 5% YoY and 2% QoQ to $241b Mar-18 Mar-18 Mar-17 +/(-) Dec-17 +/(-) 18% Gross Loans $b $b % $b % 36% 8% 44% Singapore 129 125 3 128 1 56% Regional: 89 81 10 85 4 4% 3% 31% Malaysia 29 26 12 27 7 Thailand 16 14 14 15 4 Mar-17 Indonesia 10 11 (8) 11 (2) Greater China 34 30 13 32 5 43% Others 2
Slide 13: Stable liquidity position
Stable liquidity position Customer Loans and Deposits; LDR and LCR 154% 157% 142% 135% 128% 86.7% 86.1% 85.8% 85.1% 86.7% 268 273 274 260 260 230 232 237 225 224 Mar‐17 Jun‐17 Sep‐17 Dec‐17 Mar‐18 Net Customer Loans ($b) Customer Deposits ($b) Total LCR (%) Loan/Deposit Ratio (LDR) (%) 13
Slide 14: Strong funding position with customer deposits increased $14b or 5% YoY
Strong funding position with customer deposits increased $14b or 5% YoY Mar-18 14% Mar-18 Mar-17 +/(-) Dec-17 +/(-) Customer Deposits $b $b % $b % 43% Singapore 184 182 1 185 (1) Regional: 71 63 12 69 4 43% Malaysia 30 27 11 28 5 Thailand 17 14 24 16 9 Indonesia 7 8 (13) 7 (8) Mar-17 14% Greater Chi
Slide 15: All business segments delivered good performance
All business segments delivered good performance 1Q18 6% ‐4% 1Q18 1Q17 +/(-) Segment Operating Profit $m $m % 41% Group Retail (GR) 510 492 4 57% Group Wholesale Banking (GWB) 710 690 3 Global Markets (GM) 80 64 24 1Q17 ‐7% 6% Others * (55) (81) 31 42% Total 1,244 1,166 7 59% * Comprises Investment
Slide 16: Regional operating profit up 12% YoY in constant currency terms
Regional operating profit up 12% YoY in constant currency terms contributed from Thailand and Greater China 1Q18 10% At constant 9% FX rate 3% Operating 1Q18 1Q17 +/(-) +/(-) 8% 56% Profit $m $m % % 14% Singapore 697 672 4 4 Regional: 425 377 13 12 1Q17 171 10% Malaysia 159 8 1 Thailand 101 68 49 43
Slide 17: Strong capital position with improving RoRWA
Strong capital position with improving RoRWA Capital Adequacy Ratios (CAR) and RoRWA 1.95% 1.69% 1.69% 1.61% 1.51% 18.7% 18.8% 17.3% 17.8% 17.8% Total Tier 2 14.7% 14.9% 13.3% 13.8% 12.8% Tier 1 Mar‐17 Jun‐17 Sep‐17 Dec‐17 Mar‐18 RoRWA (%) Tier 2 CAR Tier 1 CAR Fully‐loaded CET1 (%) RWA ($b) 211 209
Slide 18: Appendix: Performance of Major Territories
Appendix : Performance of Major Territories ‐ Singapore ‐ Malaysia ‐ Thailand ‐ Indonesia ‐ Greater China
Slide 19: Singapore – Key Financials
Singapore – Key Financials 1Q18 1Q17 +/(-) 4Q17 +/(-) $m $m % $m % Net interest income 832 704 18 832 0 Net fee income 317 271 17 302 5 Other non-interest income 104 184 (43) 143 (27) Total income 1,254 1,158 8 1,276 (2) Less: Expenses 557 486 15 581 (4) Operating profit 697 672 4 695 0 Less: Total
Slide 20: Malaysia – Key Financials
Malaysia – Key Financials 1Q18 1Q17 +/(-) 4Q17 +/(-) RM'm RM'm % RM'm % Net interest income 526 522 1 523 1 Net fee income 169 153 10 189 (11) Other non-interest income 104 80 30 88 18 Total income 799 755 6 800 (0) Less: Expenses 291 254 14 328 (11) Operating profit 508 501 1 472 8 Less: Total allo
Slide 21: Thailand – Key Financials
Thailand – Key Financials 1Q18 1Q17 +/(-) 4Q17 +/(-) THB'm THB'm % THB'm % Net interest income 4,069 3,699 10 4,055 0 Net fee income 1,234 1,084 14 1,316 (6) Other non-interest income 256 126 >100 271 (5) Total income 5,559 4,909 13 5,641 (1) Less: Expenses 3,152 3,224 (2) 3,315 (5) Operating profit
Slide 22: Indonesia – Key Financials
Indonesia – Key Financials 1Q18 1Q17 +/(-) 4Q17 +/(-) IDR'b IDR'b % IDR'b % Net interest income 803 828 (3) 836 (4) Net fee income 178 172 3 186 (4) Other non-interest income 129 100 29 107 21 Total income 1,110 1,100 1 1,129 (2) Less: Expenses 751 725 4 778 (3) Operating profit 359 375 (4) 350 2 Le
Slide 23: Greater China – Key Financials
Greater China – Key Financials 1Q18 1Q17 +/(-) 4Q17 +/(-) $m $m % $m % Net interest income 104 99 5 103 1 Net fee income 46 25 86 38 22 Other non-interest income 62 72 (15) 57 7 Total income 212 196 8 198 7 Less: Expenses 93 85 9 94 (0) Operating profit 118 111 7 104 14 Less: Total allowances 11 7 4
Slide 24: Thank You
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