Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q1 2010 Earnings Presentation
34 slides from Oversea-chinese Banking's earnings presentation, May 5, 2010
Slide 1: First Quarter 2010 Results Presentation
First Quarter 2010 Results Presentation 5 May 2010 1
Slide 2: Agenda
Agenda • Results Overview • Performance Trends • Malaysia & Indonesia Subsidiaries • In Summary 2
Slide 3: First quarter net profit up 24% YoY, 35% QoQ
First quarter net profit up 24% YoY (83% excluding non- recurring gains in 1Q09), 35% QoQ 1Q10 1Q09 YoY 4Q09 QoQ S$m S$m +/(-)% S$m +/(-)% Net Interest Income 704 740 (5) 687 2 Non-Interest Income 681 607 12 497 37 Total Income 1,385 1,347 3 1,184 17 Operating Expenses (502) (413) 21 (466) 8 Operati
Slide 4: Key financial ratios
Key financial ratios 1Q10 4Q09 1Q09 % % % Net Interest Margin 2.03 2.08 2.42 Non-Interest Income/ Total Income 49.2 42.0 45.1 Cost-to-Income Ratio 36.2 39.4 30.7 Loans-to-Deposits Ratio 81.9 80.4 85.3 NPL Ratio 1.5 1.7 1.8 Allowances/NPAs 107.3 102.4 109.5 ROE 15.3 11.6 14.9 Cash ROE 15.6 11.8 15.3
Slide 5: ROE improved to 15.3%
ROE improved to 15.3% 15.3% 14.9% 15.3% ROE 12.2% 12.0% 11.6% 10.8% 9.9% 1,962 676 1,749 263 545 502 466 450 Net Profit (S$m) 1,486 676 2008 2009 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10 Divestment Gains/Tax Refunds Excluding divestment gains/tax refunds (2008) Note: 1Q09 includes net non-recurring gains of S$
Slide 6: Earnings contribution by segments
Earnings contribution by segments 1Q10 PBT by Business Segment 1Q10 PBT by Geography Global Other Asia Rest of the Consumer Pacific Others World Financial Other 13% 4% 1% Services ASEAN 15% 3% Insurance Global Malaysia 20% Corporate 23% Banking Singapore 31% 69% Global Treasury 21% Note: Pretax prof
Slide 7: GEH net profit contribution up 23% QoQ
GEH net profit contribution up 23% QoQ, accounting for 22% of Group net profit GEH’s Contribution to 1Q10 1Q09* YoY 4Q09 QoQ OCBC’s Results S$m S$m +/(-)% S$m +/(-)% Total Income 247 308 (20) 190 30 Operating Expenses (42) (24) 72 (6) 606 Operating Profit 205 284 (28) 184 12 Amortisation of Intangib
Slide 8: Results excluding GEH – Net profit up 52% YoY and 38% QoQ
Results excluding GEH – Net profit up 52% YoY and 38% QoQ Excluding GEH 1Q10 1Q09 YoY 4Q09 QoQ S$m S$m +/(-)% S$m +/(-)% Net Interest Income 686 725 (5) 668 3 Non-Interest Income 452 314 44 327 38 Total Income 1,138 1,039 10 995 14 Operating Expenses (460) (389) 18 (460) - Operating Profit 678 650 4
Slide 9: Agenda
Agenda • Results Overview • Performance Trends • Malaysia & Indonesia Subsidiaries • In Summary 9
Slide 10: Net interest income up 2% QoQ, net interest margin declined QoQ
Net interest income up 2% QoQ, net interest margin declined QoQ due to Bank of Singapore consolidation 2.42% 2.29% 2.27% 2.23% Net 2.16% interest 2.08% 2.03% 2.03% margin 2,783 2,825 740 710 704 689 687 Net interest income 704 (S$m) 2008 2009 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10 10
Slide 11: Net interest income and margin adjusted for allowances
Net interest income and margin adjusted for allowances – improving trend 1.95% 2.01% 1.94% 1.90% 1.89% 1.94% 1.86% Adjusted 1.75% net interest margin* 2,336 2,396 679 637 606 610 543 Adjusted net interest 679 income* (S$m) 2008 2009 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10 * Allowances for loans and other asse
Slide 12: Broad-based growth in non-interest income
Broad-based growth in non-interest income, up 12% YoY (68% excluding non-recurring gains in 1Q09) and 37% QoQ 49.2% 49.2% 45.1% 42.0% 41.3% 41.0% Non-interest 34.4% 36.3% income/ Total income 1,990 681 607 411^ 1,644 186 155 497 273 494 392^ 275 143 152 849* Non-interest 409 182 297* 242 income 681
Slide 13: GEH's life assurance profits up strongly
GEH’s life assurance profits up strongly; new business sales performed well YoY although down from a seasonally high fourth quarter 1Q10 4Q09 1Q09 FY09 FY08 S$m S$m S$m S$m S$m Total life assurance profit 146 127 266* 727* 300 - Participating Fund 23 20 29 96 102 - Non-participating Fund 99 74 195 5
Slide 14: Cost-to-income ratio remains healthy
Cost-to-income ratio remains healthy 43.7% 43.2% Cost-to- 39.4% Income 37.3% 37.4% 36.2% 36.2% Ratio 1,854 30.7% 1,796 502 467 466 469 450 452 413 117 122 114 127 340 88 349 96 88 87 85 89 Operating Expenses 502 (S$m) 1,045 995 289 117 240 257 265 234 96 289 2008 2009 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10 S
Slide 15: Operating profit rose 23% QoQ
Operating profit rose 23% QoQ. Decline YoY was due to non- recurring insurance gains in 1Q09 Operating Profit before allowances (S$m) 3,019 934* 883 2,573 186 754 718 614^ 2,387 883 2008 2009 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10 Divestment gains * Includes S$201m non-recurring gains from GEH ^ Includes GLC
Slide 16: Net allowances significantly lower
Net allowances significantly lower due to reduced specific allowances for loans and other assets Allowances for 447 loans and other 429 assets (S$m) 197 104 77 52 25 25 2008 2009 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10 16
Slide 17: Breakdown of allowances
Breakdown of allowances 1Q10 4Q09 1Q09 S$m S$m S$m Specific allowances for loans 5 61 88 Portfolio allowances for loans 30 11 2 Allowances/(write-back) for CDOs (7) (1) 94 Allowances/(write-back) for other assets (3) 6 13 Total net allowances 25 77 197 Specific loan allowances/ 2 30 43 average loans
Slide 18: Movement in specific allowances for loans
Movement in specific allowances for loans 1Q10 4Q09 1Q09 S$m S$m S$m Allowances for new and existing NPLs 68 118 138 Write-backs 1/ (54) (44) (42) Recoveries 2/ (9) (13) (9) Net Specific Allowances 5 61 88 1/ Write-backs of specific allowances for existing NPLs due to settlements and repayments 2/ R
Slide 19: Loans grew 12% YoY and 10% QoQ
Loans grew 12% YoY and 10% QoQ, with Bank of Singapore accounting for 5% of Group loans 90.4 82.3 80.4 79.2 78.7 23.5 Loans 18.5 (S$bn) 18.0 17.5 17.5 16.2 14.7 15.3 14.7 14.5 47.7 48.5 50.7 47.0 46.7 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Singapore Malaysia International Note: Loans by geography are ba
Slide 20: Diversified loans
Diversified loans Loans by Geography* Loans by Sector Agriculture, mining & Transport, quarrying storage & Others Others 2% Comm 12% 7% 6% Greater Building & China Construction 9% 17% Housing Indonesia Loans 5% Singapore 25% 56% Malaysia Manufacturing 7% 18% Non-Bank Financial Professionals Institut
Slide 21: NPL ratio continues to improve
NPL ratio continues to improve 2.0% 1.8% 1.8% 1.7% NPL Ratio 1.5% 1,785 1,633 1,583 202 210 1,448 1,402 181 64 83 467 479 395 386 323 NPAs* 568 (S$m) 521 560 582 562 548 447 434 423 416 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Singapore NPLs Malaysia NPLs International NPLs Debt securities/CDOs/Contingent
Slide 22: Majority of NPAs are in Substandard category
Majority of NPAs are in Substandard category – typically well collateralised and/or no overdues 2.1% NPL Ratio 1.8% 1.8% 1.7% 1.5% 1,785 1,633 1,583 238 1,448 1,402 283 234 241 250 676 714 610 451 NPAs 500 (S$m) 871 739 756 652 636 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Substandard NPAs Doubtful NPAs Lo
Slide 23: Significant reduction in inflow of new NPAs
Significant reduction in inflow of new NPAs NPAs 1Q10 4Q09 1Q09 S$m S$m S$m Opening Balance (excluding CDOs) 1,442 1,458 1,239 New NPAs 123 232 423 Net Recoveries/Upgrades (160) (142) (123) Write-offs (58) (106) (77) Consolidation effect of Bank of Singapore 49 - - Closing Balance (excl CDOs) 1,396
Slide 24: Allowance coverage at 107% of total NPAs
Allowance coverage at 107% of total NPAs and 266% of unsecured NPAs 266% 249% Total Allowances / Unsecured NPAs 212% 221% 188% Total Allowances / NPAs 109% 103% 102% 107% 97% Specific Allowances / NPAs 49% 42% 40% 33% 33% Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 24
Slide 25: AFS Portfolio and Fair value reserves
AFS Portfolio and Fair value reserves Mar-10 Dec-09 Mar-09 S$m S$m S$m Available-for-Sale Securities Corporate Debt Securities 7,916 7,425 6,912 Equities & investment funds 2,779 2,723 1,767 Government Securities 12,931 12,615 15,741 - Singapore 9,754 9,394 11,392 - Others 3,177 3,221 4,349 Total AF
Slide 26: Customer deposits grew 17% YoY and 8% QoQ
Customer deposits grew 17% YoY and 8% QoQ, with Bank of Singapore accounting for 5% of Group deposits 85.3% Loans-to- 80.3% 80.4% 81.9% 85.0% deposits 79.7% 75.0% 108.5 100.6 96.6 96.9 65.0% 92.4 23.6 18.4 20.8 17.4 55.0% 16.1 22.7 17.7 19.6 20.9 21.8 45.0% 35.0% Deposits 53.4 55.0 53.2 53.6 57.5 25
Slide 27: Tier 1 and core Tier 1 ratios
Tier 1 and core Tier 1 ratios (% of RWA) 16.4% Total CAR 15.8% 15.9% 0.5% 15.2% 0.5% 15.2% 0.7% 0.8% Tier 2 Capital Tier 1 preference shares 11.3% 15.4% 11.2% 15.2% 12.0% 15.9% 11.2% 15.1% 10.8% Core Tier 1 – 14.4% adjusted common equity Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 (S$m) Tier 1 Capital 14,475
Slide 28: Agenda
Agenda • Results Overview • Performance Trends • Malaysia & Indonesia Subsidiaries • In Summary 28
Slide 29: OCBC Malaysia: Quarterly results
OCBC Malaysia: Quarterly results 1Q10 1Q09 YoY 4Q09 QoQ Unaudited Results* RM m RM m +/(-)% RM m +/(-)% Net Interest Income 264 252 5 262 1 Islamic Banking Income 42 33 27 55 (25) Non-Interest Income 139 173 (20) 85 63 Total Income 445 458 (3) 402 11 Operating Expenses (144) (140) 3 (171) (16) Opera
Slide 30: OCBC Malaysia: Financial ratios
OCBC Malaysia: Financial ratios 1Q10 4Q09 1Q09 % % % Net Interest Margin 2.27 2.24 2.46 Non-Interest Income / 31.2 21.1 37.8 Total Income Cost-to-Income Ratio 32.3 42.5 30.5 Loans-to-Deposits Ratio 80.3 76.5 79.0 Gross NPL Ratio 3.6 3.8 3.6 Loans Growth (YoY) 7.0 5.0 8.8 ROE 22.3 13.9 25.8 30
Slide 31: Bank OCBC NISP: Quarterly results
Bank OCBC NISP: Quarterly results 1Q10 1Q09 YoY 4Q09 QoQ RP bn RP bn +/(-)% RP bn +/(-)% Unaudited Results Net Interest Income 445 399 12 441 1 Non Interest Income 119 119 - 108 10 Expenses (358) (335) 7 (348) 3 Operating Profit 206 183 13 201 3 Allowances (38) (79) (52) (32) 19 Net Profit 126 73 73
Slide 32: Bank OCBC NISP: Financial ratios
Bank OCBC NISP: Financial ratios 1Q10 4Q09 1Q09 % % % Net Interest Margin 5.42 5.52 5.04 Non-Interest Income / Total Income 21.2 19.7 23.0 Cost-to-Income Ratio 63.5 63.4 64.6 Loans-to-Deposits Ratio 76.6 72.4 71.0 Gross NPL Ratio 3.3 3.2 3.6 Loans Growth (YoY) 9.7 5.2 3.1 ROE 12.3 13.4 8.2 32
Slide 33: In Summary
In Summary • Record earnings driven by strong revenue momentum • Broad-based growth in non-interest income • Strong loan growth, net interest margin stable • Prudent risk management kept credit losses and NPLs low through the cycle • Positive outlook – focus is on driving sustainable growth in our k
Slide 34: First Quarter 2010 Results – Thank You
First Quarter 2010 Results Thank You 34
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