Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q3 2022 Earnings Presentation
26 slides from Oversea-chinese Banking's earnings presentation, Nov 4, 2022
Slide 1: Third Quarter 2022 Results Highlights
Third Quarter 2022 Results Highlights 4 November 2022 Disclaimer: This presentation should be read as an overview of OCBC’s current business activities and operating environment which may contain statements relating to OCBC’s growth strategy and future business aspirations. These statements involve
Slide 2: Agenda
Agenda Financial Highlights Group Net Profit Group Performance Trends Notes: - Certain comparative figures have been restated to conform with the current period’s presentation. - Amounts less than S$0.5m are shown as “0”; - “nm” denotes not meaningful; - “na” denotes not applicable; - Figures may no
Slide 3: Financial Highlights
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Slide 4: 3Q22 Performance
Performance review 3Q22 Performance ■ Group 3Q net profit at new Total Income +9% +23% high; ROE at 12.4% S$3.15b QoQ YoY ■ Net interest income Net Interest Income +23% +44% surpassed S$2b for the first Non-Interest Income -11% -4% Group Net Profit QoQ YoY time Operating Expenses ■ Non-II lower YoY
Slide 5: Financial Highlights
Performance review Financial Highlights Banking Wealth Management ■ Record quarterly banking Net Profit (S$m) NII and Fee Income (S$m) WM Income (S$m) 1/ WM AUM (S$b) operations net profit +31% +27% 36% 36% 35% +10% +17% -1% ■ WM income up YoY and QoQ +21% unchanged ■ WM AUM steady QoQ +8% 1,033 1,1
Slide 6: Earnings Well-Diversified Across Business and Geography
Performance review Earnings Well-Diversified Across Business and Geography Operating Profit by Business Operating Profit by Geography Others Others 2% 6% 9M22 Insurance 9M22 4% 9M21 Global 7% 18% Wholesale Greater China 23% 9M21 37% 46% Banking 22% 22% 48% 49% Singapore 11% 7% 15% 7% Global Treasury
Slide 7: Robust Balance Sheet Position
Balance sheet Robust Balance Sheet Position Loans-to-Deposits Ratio Funding ■ Aa1 credit rating from Composition as at Sep 22 Moody’s and AA- from both Group LDR (%) Fitch and S&P 12% Customer deposits ■ Strong funding, liquidity and 5% Bank deposits 3% S$441b capital position provide 85.0 Debts iss
Slide 8: Group Net Profit
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Slide 9: 3Q22 Group Net Profit
Net Profit 3Q22 Group Net Profit YoY Movement YoY +31% Positive on net profit 3Q22 (S$m) Negative on net profit QoQ +8% YoY ■ Increase in net profit underpinned by strong rise 3Q21 Net Interest Non-interest Operating Associates Total Amortisation, 3Q22 in NII from higher NIM and Net Profit Income (N
Slide 10: 9M22 Group Net Profit
Net Profit 9M22 Group Net Profit YoY Movement 9M22 YoY +14% (S$m) Positive on net profit Negative on net profit ■ NII increased 22% driven by NIM improvement and higher volumes ■ Non-II lower as weaker fee and investment performance offset higher trading and insurance income ■ Higher expenses to sup
Slide 11: Group Performance
Group performance Group Performance 9M22 9M21 YoY 3Q22 3Q21 YoY 2Q22 QoQ OCBC Group S$m S$m +/(-)% S$m S$m +/(-)% S$m +/(-)% Net interest income 5,302 4,363 22 2,099 1,461 44 1,700 23 Non-interest income 3,372 3,683 (8) 1,053 1,099 (4) 1,179 (11) Total income 8,674 8,046 8 3,152 2,560 23 2,879 9 Ope
Slide 12: Banking Operations Performance
Banking Ops performance Banking Operations Performance 9M22 9M21 YoY 3Q22 3Q21 YoY 2Q22 QoQ Banking Operations S$m S$m +/(-)% S$m S$m +/(-)% S$m +/(-)% Net interest income 5,221 4,290 22 2,070 1,437 44 1,674 24 Non-interest income 2,295 2,512 (9) 675 806 (16) 794 (15) Total income 7,516 6,802 10 2,7
Slide 13: Group Performance Trends
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Slide 14: Net Interest Income
Net interest income Net Interest Income 1Q22 2.06% 1.71% 1.78% 3Q22 1.52% 1.52% 1.55% 1.55% 9M22 Net Interest Margin YoY +44% 5,302 YoY +22% QoQ +23% 4,363 2,099 ■ 3Q22 and 9M22 NII at new 1,700 high, driven by NIM 1,461 1,492 1,503 expansion and asset Net Interest Income (S$m) growth ■ NIM increase
Slide 15: Non-interest Income
Non-interest income Non-interest Income 9M22 3Q22 YoY -4% 45.8% YoY -8% 42.9% 41.5% 43.1% 40.9% QoQ -11% 38.9% % of Group Income 33.4% 3,683 3,372 ■ 3Q22 non-II declined YoY from lower fee income and 1,035 from disposal of 1,123 investment securities, 193 partly offset by higher Non-interest Income
Slide 16: Net Fees & Commissions
Non-interest income Net Fees & Commissions 9M22 3Q22 YoY -20% YoY -15% QoQ -5% ■ Fee income in 3Q22 lower 1,718 YoY from decline in WM 569 204 fees as a result of subdued 1,453 528 522 80 customer activities amid 67 Net Fees & Commissions (S$m) 23 69 68 477 215 global risk-off investment 453 350 27
Slide 17: Trading Income
Non-interest income Trading Income 9M22 3Q22 YoY +134% YoY +12% QoQ -27% 685 ■ 3Q22 trading income higher 611 121 YoY 31 267 Trading Income (S$m) ■ Trading income declined 225 83 QoQ as the rise in customer 32 194 flow treasury income was Non-Customer Flow 83 152 7 offset by decrease in non- Custome
Slide 18: Operating Expenses
Operating Expenses Operating Expenses 9M22 3Q22 50.5% YoY +7% 46.4% YoY +7% 45.6% 43.5% 43.2% 43.0% QoQ +1% Cost-to-income 40.3% 3,727 ■ 3Q22 expenses increased 3,476 YoY largely from higher staff 1,289 1,269 620 costs associated with 1,253 1,188 1,205 588 headcount growth to 280 218 215 206 187 664
Slide 19: Allowances
Allowances Allowances 9M22 3Q22 YoY -6% YoY -51% Credit costs (bps) 1/ 41 QoQ +112% 21 25 6 8 14 9 Total 50 24 21 ■ 9M22 credit costs on loans Impaired 4 0 4 3 at 9bps on an annualised basis 555 317 88 ■ Allowances for impaired assets in 3Q22 included Allowances (S$m) S$47m in impairment for the Gro
Slide 20: Total Cumulative Allowances
Allowances Total Cumulative Allowances YoY -3% 108% Sep 22 97% 99% QoQ +2% Total NPA coverage 90% 91% 4,127 ■ NPA coverage ratio rose to 3,904 3,905 3,909 4,001 108% 444 444 444 444 449 Cumulative allowances (S$m) 1,998 Regulatory Loss Allowance Reserve 1,923 1,932 1,990 2,066 (“RLAR”) Allowances fo
Slide 21: Asset Quality
Asset quality Asset Quality YoY -13% Sep 22 1.5% 1.5% QoQ -7% 1.4% NPL ratio 1.3% 1.2% ■ NPL ratio continued to 4,338 4,307 trend lower 4,243 95 123 118 3,969 378 403 372 120 3,688 ■ QoQ increase in Greater Non-performing Assets (S$m) 243 299 110 China NPLs largely related 586 604 402 to one network
Slide 22: Asset Quality
Asset quality Asset Quality S$m 3Q21 2Q22 3Q22 9M21 9M22 At start of period 4,082 4,307 3,969 4,005 4,338 ■ 3Q22 NPAs down QoQ, driven by higher recoveries/ New NPAs upgrades Corporate/ Commercial Banking and Others 435 102 304 1,035 495 Consumer Banking/ Private Banking 369 80 164 803 379 ■ Recover
Slide 23: Customer Loans
Loans Customer Loans YoY +6% +7% in constant ccy terms Sep 22 QoQ +2% 294 298 303 +1% in constant ccy terms 285 290 Loans by Geography (S$b) 49 53 56 57 59 76 76 ■ Loans up YoY from Singapore, Rest of the world 73 74 74 Indonesia, Greater China, Greater China 19 19 19 19 20 28 28 27 26 26 USA, Austr
Slide 24: Customer Deposits
Deposits Customer Deposits YoY +6% 84.5% 84.4% 85.0% Sep 22 Group LDR 83.6% 83.3% QoQ +1% 79.3% 79.3% 82.5% 76.7% 76.6% SGD LDR ■ Customer deposits higher 67.0% 66.5% 65.8% 66.9% 64.2% YoY and QoQ, driven by USD LDR growth in fixed deposits 342 348 349 353 333 34 33 36 35 36 Customer Deposits (S$b)
Slide 25: Capital
Capital Capital YoY -1.1ppt Sep 22 QoQ -0.5ppt 15.5 15.5 15.2 14.9 ■ CET1 ratio of 14.4% CET1 CAR (%) 14.4 ■ RWA up QoQ largely from loan growth Sep 21 Dec 21 Mar 22 Jun 22 Sep 22 CET1 Capital (S$b) RWA (S$b) 232 238 35.0 34.8 35.1 34.6 34.2 226 225 231 Sep 21 Dec 21 Mar 22 Jun 22 Sep 22 Sep 21 Dec
Slide 26: Thank you
&) ocBc Bank Thank you 26
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