Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — FY2001 Earnings Presentation
14 slides from Oversea-chinese Banking's earnings presentation, Feb 27, 2002
Slide 1: Review of 2001 Results
Review of 2001 Results by Chris Matten CFO 27 February 2002 1
Slide 2: Results At A Glance
Results At A Glance 2001 2000 OCBC Acquisition KCH OCBC OCBC Group Effects Proforma Group +/(-) * S$m S$m S$m S$m S$m % Income 2,209 (74) 243 2,040 1,727 18.1% Expenses 862 32 89 741 656 13.0% Goodwill amortisation 49 45 - 4 - n.m. Provisions 518 - 67 451 139 224.1% Net Profit 785 (134) 81 838 840 -
Slide 3: Resilient Operating Income
Resilient Operating Income 2000 2001 * YoY S$m S$m % Net Interest Income 1,260 1,271 +0.9 Fees & Commissions 256 259 +1.5 - Brokerage 64 45 -29.5 - Non-Brokerage 192 214 +11.8 Ave Loan Balances 32,334 36,368 +12.5 Net Interest Margin 2.33% 2.16% -17bps * OCBC proforma (excluding acquisition effects
Slide 4: Expenses Under Control
Expenses Under Control $368m $360m $381m $75m Total $288m $98m $69m Others $65m $83m $88m $78m Premises & $65m Equipment $192m $208m $218m Staff Cost $158m 1H 00 2H 00 1H 01 2H 01 * * OCBC proforma (excluding acquisition effects and KCH contribution) 4
Slide 5: Operating Profit
Operating Profit 1H 2H* 2001 * 2000 YoY S$m S$m S$m S$m % Net Interest Income 653 618 1,271 1,260 0.9 Fee & Other Income 243 526 769 467 64.8 Expenses 360 381 741 656 13.0 Operating Profit 536 763 1,299 1,071 21.3 Cost/Income Ratio 40.1% 33.3% 36.3% 38.0% - * OCBC proforma (excluding acquisition eff
Slide 6: Provision Charge
Provision Charge +$33m $451m +$136m Others +$27m +$116m Lower GP Regional-5 writeback SP $139m Singapore SP 2000 2001 * * OCBC proforma (excluding KCH) 6
Slide 7: Improving Asset Quality
Improving Asset Quality NPLs, OCBC Proforma NPLs, OCBC + KCH $5,183m $668m $4,092m $3,921m Loss $340m $3,575m $1,061m $366m $324m Doubtful $1,031m $960m $931m Sub- $3,454m Standard $2,721m $2,595m $2,320m Dec 00 Jun 01 Dec 01 Dec 01 Total Loans $35.2bn $36.3bn $38.1bn $52.8bn NPLs % of 11.5% 10.7% 9
Slide 8: Higher Provisioning Coverage
Higher Provisioning Coverage OCBC Proforma OCBC + KCH Cumulative Provisions / NPL (%) 4,000 65 Cumulative Provisions (S$m) 3,500 $3,355m 63 3,000 $ 1,246m 2,500 $2,405m $2,306m $2,247m 61 2,000 $ 818m $ 811m $823m 1,500 59 1,000 $2,109m $1,587m $1,495m $1,424m 57 500 - 55 Dec 00 Jun 01 Dec 01 Dec 01
Slide 9: Loan Growth Remains Robust
Loan Growth Remains Robust Loans (S$bn) Loan Growth HoH (%) 39 15 38 37 10 36 35 5 34 33 0 32 31 30 -5 29 28 -10 Jun 99 Dec 99 Jun 00 Dec 00 Jun 01 Dec 01 Loans Loan Growth 9
Slide 10: Integration Effects: Funding Cost
Integration Effects (1) FUNDING COST • S$3.88bn Upper Tier 2 subordinated debt issued in July 2001 • 10-year maturity, denominated in S$, US$ and Euros • Fixed-rate coupon swapped into floating rate • Currency risk hedged by swapping proceeds into S$ • For 2H2001, funding cost was S$74m Average fund
Slide 11: Integration Effects: Goodwill
Integration Effects (2) GOODWILL S$m Net tangible assets as at 31 July 2001 3,020 Fair value adjustments 33 Pre-acquisition profits (1 Aug to 16 Aug 2001) 10 Fair value as at date of acquisition 3,063 [B] Total purchase consideration 1/ 5,287 [A] Goodwill [A - B] 2,224 2001 2002-2005 2006 2007+ S$11
Slide 12: Integration Effects: Integration Costs
Integration Effects (3) INTEGRATION COSTS 14%, $16m 21%, $24m Restructuring Provision Fair Value Adjustments 3%, $3m Acquisition Cost 38%, $42m 24%, $26m Capital Expenditure Operating Expenses 2001 2002 2003 2004 2005 Total Cash Outlay $12m $95m $4m - - $111m P/L Impact $32m $26m $11m $10m $6m - 12
Slide 13: Integration Effects: Projected Cost Synergies
Integration Effects (4) PROJECTED COST SYNERGIES [in today’s dollars, S$m] 2001 2002 2003 2004+ Personnel cost (including Training) 0 33 53 57 Premises & Equipment 1 13 25 25 IT Cost (Hardware & Software) (1) 3 11 12 Communication Equipment 0 1 1 1 Professional Fees & Others 1 5 6 7 Total 1 55 96 10
Slide 14: Thank You
Thank You 14
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