Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q3 2023 Earnings Presentation
25 slides from Oversea-chinese Banking's earnings presentation, Nov 10, 2023
Slide 1: Third Quarter 2023 Results Highlights
Third Quarter 2023 Results Highlights Goh Chin Yee, Group Chief Financial Officer 10 November 2023 OCBC Financial Results
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
— = (0)41 Financial Highlights S)ocsc
Slide 4: Robust 3Q23 performance
Performance highlights Robust 3Q23 performance ■ Higher Group net profit lifted YoY QoQ ROE to 14.0% Total Income S$3.43b +13% -1% ■ Total income up 13% YoY Group +21% YoY S$1.81b Net Interest Income (NII) +17% +3% Net Profit +18% YoY +6% QoQ ■ NII rose YoY from asset Non-Interest Income (Non-II) +4
Slide 5: 3Q23 Financial highlights
Performance highlights 3Q23 Financial highlights Banking Wealth Management Net Profit (S$m) NII and Fee Income (S$m) WM Income (S$m) 1/ WM AUM (S$b) +21% +14% 32% 33% 33% ■ Robust operating +7% +4% +8% performance across key +16% -2% business pillars -2% 965 1,139 1,119 ■ Banking operations results
Slide 6: Strong balance sheet position
Balance sheet Strong balance sheet position Loans-to-Deposits Ratio Funding Group LDR (%) Composition (%) ■ Strong credit ratings of Aa1 from Moody’s and AA- from 12% both Fitch and S&P Customer deposits 4% Bank deposits 3% S$454b ■ Diversified and stable 85.0 Sep 23 81% Debts issued 78.8 79.7 fundi
Slide 7: Group Net Profit
O72 Group Net Profit S)OcBc
Slide 8: Record Group net profit of S$5.40b for 9M23
Performance overview Record Group net profit of S$5.40b for 9M23 Group Performance1/ Banking Operations Performance (S$m) 9M23 YoY 3Q23 YoY QoQ 9M23 YoY 3Q23 YoY QoQ Total Income 10,234 +24% 3,429 +13% -1% 9,272 +23% 3,149 +15% +2% Operating 3,913 +5% 1,340 +5% +1% 3,733 +8% 1,280 +9% +2% Expenses O
Slide 9: 9M23 net profit crossed S$5b mark for the first time
Net profit 9M23 net profit crossed S$5b mark for the first time YoY +44% YoY Movement 9M23 2Q23 YoY +32% QoQ +44% Positive on net profit (S$m) Negative on net profit ■ Total income at record high, surpassed S$10b mark ■ NII up 35% from asset growth and NIM expansion ■ Non-II up 3% mainly from higher
Slide 10: 3Q23 net profit up 21% YoY and 6% QoQ to S$1.81b
Net profit 3Q23 net profit up 21% YoY and 6% QoQ to S$1.81b YoY +44% YoY +21% YoY Movement 3Q23 2Q23 QoQ +44% QoQ +6% Positive on net profit (S$m) Negative on net profit YoY ■ Total income rose 13% from record NII and 3Q22 Net Interest Non-II Profit from Operating Associates Total Amortisation, 3Q23
Slide 11: Group Performance Trends
OS Group Performance Trends 4 S)OCBC
Slide 12: 3Q23 and 9M23 NII at new high
Net interest income 3Q23 and 9M23 NII at new high 1Q22 2.31% 2.30% 2.27% 2.28% 2.06% 2.26% 9M23 YoY 3Q23 +44% 1.78% 2Q23 YoY +17% Net Interest Margin 7,183 YoY +35% QoQ QoQ +44% +3% 5,302 2,386 2,338 2,389 2,456 ■ 9M23 NII up YoY and 2,099 Net Interest Income crossed S$7b for the first (S$m) time, l
Slide 13: 3Q23 and 9M23 non-II up YoY
Non-interest income 3Q23 and 9M23 non-II up YoY 9M23 YoY 3Q23 +44% 2Q23 YoY +4% YoY +3% QoQ QoQ +44% -9% 35.8% % of Group Income 30.8% 30.2% 30.8% 28.4% 29.8% 20.5% ■ 9M23 non-II higher as the 3,051 increase in trading income, 2,952 net gains from disposal of 719 investment securities and 703 rise i
Slide 14: 3Q23 fee income highest in last four quarters
Non-interest income 3Q23 fee income highest in last four quarters 9M23 YoY 3Q23 +44% 2Q23 YoY +2% YoY -7% QoQ QoQ +44% +7% 1,453 1,344 ■ 3Q23 fee income above last 215 quarter, lifted by higher 75 225 wealth, credit card and Net Fees & Commissions (S$m) trade-related fees 71 367 Others 2/ ■ QoQ rise
Slide 15: 3Q23 trading income steady YoY
Non-interest income 3Q23 trading income steady YoY 9M23 3Q23+44% YoY 2Q23 YoY unchanged YoY +5% QoQ +44% QoQ -30% 783 748 ■ 9M23 trading income higher 179 YoY from increase in both 151 customer and non-customer Trading Income (S$m) 311 flow income Non-Customer Flow 255 ■ 3Q23 trading income mainly 1
Slide 16: Expenses well controlled
Operating expenses Expenses well controlled 9M23 YoY 3Q23 +44% 2Q23 YoY +5% 45.3% YoY +5% QoQ +44% QoQ +1% 42.2% 43.3% Cost-to-income (CIR) 37.1% 38.5% 39.1% 38.2% ■ 9M23 operating expenses rose YoY mainly due to 3,913 deepening investments in 3,737 585 our franchise across talent 630 and technology
Slide 17: 3Q23 allowances up 20% YoY, down 27% QoQ
Allowances 3Q23 allowances up 20% YoY, down 27% QoQ 9M23 YoY 3Q23 +44% 35 2Q23 YoY +20% 31 20 YoY +103% QoQ QoQ+44% -27% Credit costs (bps) 1/ 14 17 12 9 Total 21 11 ■ 9M23 credit costs at an 4 8 5 6 3 Impaired annualised 20bps 546 ■ 3Q23 allowances lower QoQ, from S$36m write-back in allowances for
Slide 18: NPA coverage ratio higher at 139%
Allowances NPA coverage ratio higher at 139% YoY YoY +7% +44% Sep 23 2Q23 131% 139% QoQ QoQunchanged +44% Total NPA coverage 114% 121% 108% ■ NPA coverage ratio 4,299 4,296 continued to rise higher, 4,001 3,991 4,037 attributed to lower NPAs 455 455 449 455 455 Cumulative allowances (S$m) Regulatory
Slide 19: Portfolio quality resilient, NPL ratio at 1.0%
Asset quality Portfolio quality resilient, NPL ratio at 1.0% YoY +44% YoY -16% Sep 23 2Q23 1.2% 1.2% 1.1% 1.1% QoQ +44% QoQ -6% NPL ratio 1.0% ■ NPL ratio of 1.0% at pre- pandemic levels 3,688 ■ YoY and QoQ decrease in 110 3,486 NPAs driven by declines Non-performing Assets (S$m) 3,329 3,275 402 103
Slide 20: NPAs lower YoY and QoQ
Asset quality NPAs lower YoY and QoQ S$m 3Q22 2Q23 3Q23 9M22 9M23 At start of period 3,969 3,329 3,275 4,338 3,486 ■ 9M23 NPAs down YTD, mainly due to higher Corporate/ Commercial Banking and Others recoveries/ upgrades New NPAs 304 184 146 495 371 Net recoveries/ upgrades (310) (159) (197) (614) (5
Slide 21: Loans up YoY and QoQ to S$298b
Loans Loans up YoY and QoQ to S$298b Loans by Geography1/ Loans by Industry YoY +44% YoY -2% Sep 23 2Q23 +1% QoQ +44% QoQ +0.3% (S$b) in constant ccy terms +1% in constant ccy terms 303 295 294 297 298 14% Rest of the world 21% ■ Corporate, SME and Greater China 59 59 60 5% 59 58 Consumer/Private Ba
Slide 22: Commercial Real Estate ("CRE") Office Sector loans
Loans Commercial Real Estate (“CRE”) Office Sector loans Loans to CRE Office sector accounted for 13% of Group loans ■ Resilient portfolio, largely Singapore Malaysia and Indonesia secured with average LTV Hong Kong between 50% and 60% 0.3% Mainland 1/ & Offshore 2/ China 1.0% 0.8% ■ Two-thirds of C
Slide 23: Deposits lower QoQ from decline in fixed deposits
Deposits Deposits lower QoQ from decline in fixed deposits YoY +44% YoY +5% 85.0% 83.3% Sep 23 2Q23 Group LDR 79.2% 78.8% 79.7% QoQ +44% QoQ -1% 82.5% 82.4% SGD LDR 76.5% 76.1% 76.4% ■ Group continued to proactively manage balance sheet 64.2% 59.3% USD LDR 53.3% 51.6% 53.3% ■ CASA balances rose 1% Q
Slide 24: Strong capital position
Capital Strong capital position YoY +0.4ppt YoY +44% Sep 23 2Q23 QoQ QoQ -0.6ppt +44% ■ CET1 CAR reduced QoQ as CET1 CAR (%) 3Q23 profit accretion was 15.2 15.9 15.4 offset by payment of 1H23 14.4 14.8 interim dividend and higher RWA Sep 22 1/ Dec 221/ Mar 23 Jun 23 Sep 23 ■ Robust capital position
Slide 25: Thank you
Thank you 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. This presentation contains “forward-looking statements”, which are ba
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