Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q3 2012 Earnings Presentation
43 slides from Oversea-chinese Banking's earnings presentation, Nov 9, 2012
Slide 1: Third Quarter 2012 Results Presentation
Third Quarter 2012 Results Presentation 9 November 2012
Slide 2: Agenda
Agenda Results Overview 3Q12 Performance Trends Appendix: Financial Highlights of Malaysia and Indonesia Subsidiaries Notes: Amounts less than S$0.5 million are shown as “0”; “nm” denotes not meaningful; 2 Figures may not sum to stated totals because of rounding
Slide 3: 3Q12 Highlights
3Q12 Highlights Reported net profit of S$1.85b, boosted by divestment gains. Core earnings grew 41% to S$724m; increased contributions across all key markets. • Higher net interest income driven by loan growth despite NIM compression; QoQ NIM compression slowed; • Robust growth in wealth management
Slide 4: 3Q12 core net profit up 41% YoY and 12% QoQ
3Q12 core net profit up 41% YoY and 12% QoQ 3Q12 3Q11 YoY 2Q12 QoQ OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 944 874 8 931 1 Non-interest income 754 436 73 596 27 Total income 1,698 1,310 30 1,527 11 Operating expenses (685) (611) 12 (661) 4 Operating profit 1,013 699 45 866 17 Amorti
Slide 5: 9M12 core earnings driven by broad-based revenue growth, up 28% YoY
9M12 core earnings driven by broad-based revenue growth, up 28% YoY 9M12 9M11 YoY OCBC Group S$m S$m +/(-)% Net interest income 2,827 2,486 14 Non-interest income 2,140 1,639 31 Total income 4,967 4,125 20 Operating expenses (1,971) (1,810) 9 Operating profit 2,996 2,315 29 Amortisation of intangibl
Slide 6: Key ratios
Key ratios 3Q12 3Q11 2Q12 9M12 9M11 Based on core earnings % % % % % Net interest margin 1.75 1.85 1.77 1.79 1.87 Non-interest income / Total income 44.4 33.3 39.0 43.1 39.7 Costs / Income 40.3 46.6 43.3 39.7 43.9 Loans / Deposits 87.7 88.0 85.3 87.7 88.0 NPL Ratio 0.8 0.7 0.9 0.8 0.7 Allowances / N
Slide 7: ROE of 13.0% for 9M12
ROE of 13.0% for 9M12 14.7% 13.0% 12.2% 12.8% 12.1% 11.4% 11.6% 11.1% 11.2% Core ROE* 9.8% 2,253 2,280 790 2,162 724 648 Core net 596 594 profit (S$m) 577 513 9M 1,749 1,686 2010 2011 9M12 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 * Quarterly and 9M figures annualised 7
Slide 8: Profit contribution by business and geography
Profit contribution by business and geography 9M12 PBT 9M12 PBT by Business* by Geography Other Asia Rest of Pacific the World Greater Insurance China Global Corporate / 3% 1% 21% Investment 8% Indonesia 4% 47% Banking Global Malaysia 21% Treasury and 17% Markets 63% Singapore 15% Global Consumer /
Slide 9: Agenda
Agenda Results Overview 3Q12 Performance Trends Appendix: Financial Highlights of Malaysia and Indonesia Subsidiaries 9
Slide 10: Net interest income up 8% YoY driven by asset growth; QoQ margin compression slowed
Net interest income up 8% YoY driven by asset growth; QoQ margin compression slowed 1.98% Net interest margin 1.86% 1.90% 1.79% 1.87% 1.85% 1.85% 1.86% 1.77% 1.75% 3,410 951 931 944 925 Net interest 2,947 874 2,827 827 income (S$m) 784 2,486 9M 2,178 2010 2011 9M12 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
Slide 11: Net interest income less specific allowances up 7% YoY
Net interest income less specific allowances up 7% YoY; reflecting effective credit risk management Adjusted net 1.94% interest 1.82% 1.87% 1.86% 1.82% 1.74% 1.75% 1.78% 1.75% margin1/ 1.70% 3,331 908 918 920 Adjusted 858 877 net interest 2,890 824 income1/ 2,747 772 (S$m) 2,455 9M 2,146 2010 2011 9
Slide 12: Non-interest income up 73% YoY
Non-interest income up 73% YoY Non- interest 43.1% 45.4% 44.4% 44.7% 44.1% 41.4% income / 39.3% 33.3% 38.2% 39.0% Total income 2,378 790 2,212 754 2,140 586 508 618 253 587 586 596 226 Non- 572 interest 108 403 179 137 85 income 669 (S$m) 436 521 216 113 193 164 86 121 107 204 140 58 138 64 31 32 44
Slide 13: Fee income flat YoY; steady growth from wealth management activities
Fee income flat YoY; steady growth from wealth management activities 1,137 983 175 317 307 303 894 299 133 95 274 274 41 119 49 39 80 48 257 36 39 42 21 77 27 27 41 Fees and 29 15 445 12 commissions (S$m) 401 124 357 115 120 108 125 99 111 170 169 109 37 42 45 46 38 33 37 252 232 68 74 76 82 200 64
Slide 14: Profit from life assurance rose 150%
Profit from life assurance rose 150%, as a result of stronger investment and underwriting performance 481 221 437 94 25 383 190 94 35 150 127 Profit from life 27 assurance 283 106 (S$m) 160 240 134 29 121 76 71 92 51 47 38 35 33 9 2 104 122 105 31 30 29 32 36 35 34 2010 2011 9M12 1Q11 2Q11 3Q11 4Q11
Slide 15: Other non-interest income rebounded YoY; driven by better trading performance
Other non-interest income rebounded YoY; driven by better trading performance 669 54 521 204 216 213 46 12 193 17 403 96 44 18 Other non- 24 interest 61 31 income (S$m) 121 125 113 15 86 16 25 402 379 163 22 13 160 (9) 144 32 15 217 81 75 41 44 2010 2011 9M12 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Net g
Slide 16: Wealth management revenue up 75% YoY
Wealth management revenue up 75% YoY 30.3% As % of 26.9% 27.0% 28.0% 24.7% 24.8% Group 22.9% 20.8% 21.8% revenue 19.0% 1,317 1,285 1,336 527 476 Wealth management 378 revenue 350 (S$m) 333 272 285 1,005 1,000 9M 2010 2011 9M12 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Note: Comprises the consolidated reven
Slide 17: Cost remained well managed, resulting in better cost-to-income ratio
Cost remained well managed, resulting in better cost-to-income ratio Cost / 42.3% 43.2% 46.6% Income 39.7% 41.5% 43.7% 43.3% 41.4% 40.3% 35.9% 2,430 2,254 685 661 531 618 611 620 625 1,971 581 563 130 144 136 138 124 398 137 451 120 122 Operating 407 119 116 expenses 357 109 112 120 110 (S$m) 1,448
Slide 18: Core operating profit up 45% YoY
Core operating profit up 45% YoY 3,192 1,116 3,071 2,996 1,013 Core 877 866 operating 821 795 profit before allowances 699 and amortisation (S$m) 9M 2,362 2,315 2010 2011 9M12 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 18
Slide 19: 3Q12 net profit before GEH contribution up 16% YoY
3Q12 net profit before GEH contribution up 16% YoY 3Q12 3Q11 YoY 2Q12 QoQ OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 928 860 8 918 1 Non-interest income 496 336 47 455 9 Total income 1,424 1,196 19 1,373 4 Operating expenses (636) (561) 13 (608) 5 Operating profit 788 635 24 765 3 Allo
Slide 20: 9M12 net profit before GEH contribution up 20% YoY
9M12 net profit before GEH contribution up 20% YoY 9M12 9M11 YoY OCBC Group S$m S$m +/(-)% Net interest income 2,781 2,447 14 Non-interest income 1,421 1,149 24 Total income 4,203 3,596 17 Operating expenses (1,825) (1,669) 9 Operating profit 2,378 1,927 23 Allowances (203) (142) 43 Associates & JVs
Slide 21: Net allowances higher YoY; credit quality remains strong
Net allowances higher YoY; credit quality remains strong Net allowances for loans and other assets (S$m) 221 204 15 20 96 134 79 78 8 80 70 57 56 9 49 43 15 3 38 38 7 48 24 127 12 13 98 104 54 16 45 30 23 21 29 31 (1) (1) (4) 2010 2011 9M12 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 (21) Specific loan 6 7 8
Slide 22: Movement in specific allowances for loans
Movement in specific allowances for loans 3Q12 3Q11 2Q12 9M12 9M11 S$m S$m S$m S$m S$m Allowances for new and 57 48 67 203 144 existing NPLs Write-backs1/ (24) (22) (44) (92) (76) Recoveries2/ (9) (10) (11) (31) (37) Net specific allowances 24 16 13 80 31 1/ Write-backs of specific allowances for ex
Slide 23: Loans grew 8% YoY and 1% QoQ
Loans grew 8% YoY and 1% QoQ Loan growth Group YoY: +8% QoQ: +1% 140 Rest of the World 138 135 135 YoY: +8% 129 QoQ: +1% 17 17 121 16 17 Greater China 16 YoY: -6% 111 15 17 16 QoQ: -6% 20 18 13 17 Indonesia 15 10 10 YoY: +35% 9 9 QoQ: -1% 12 8 7 6 21 23 Malaysia Customer 20 21 21 YoY: +12% 19 QoQ: +
Slide 24: Loan book remained diversified across geographies and sectors
Loan book remained diversified across geographies and sectors Customer Loans by Geography Customer Loans by Industry As of 30 September 2012 As of 30 September 2012 Rest of the World Agriculture, mining & Others Other Asia quarrying Pacific 6% 6% Housing Loans Transport, storage 3% 6% Singapore & co
Slide 25: Customer deposits up 8% YoY; CASA ratio improved to 47.2%
Customer deposits up 8% YoY; CASA ratio improved to 47.2% 89.1% 88.0% 87.7% Loans / 86.8% 86.4% Deposits 84.4% 85.3% 158 160 158 155 145 13 15 13 12 134 12 126 11 8 Deposits 71 73 72 71 (S$b) 65 59 57 29 29 29 30 27 27 26 CASA 46.4% 45.6% 46.0% ratio: 48.5% 47.6% 46.9% 47.2% 37 41 43 43 45 45 35 Mar
Slide 26: Total NPAs declined 2% QoQ; NPL ratio further improved to 0.8%
Total NPAs declined 2% QoQ; NPL ratio further improved to 0.8% 1.0% 0.9% 0.9% 0.9% NPL ratio 0.8% 0.8% 0.7% 1,513 1,437 144 1,280 1,256 1,191 1,201 265 1,158 91 87 215 489 NPAs 288 (S$m) 258 356 426 418 243 229 218 486 560 463 456 438 444 423 270 259 330 320 307 313 240 Mar11 Jun11 Sep11 Dec11 Mar12
Slide 27: NPAs declined 2% QoQ, driven by lower new NPAs
NPAs declined 2% QoQ, driven by lower new NPAs 3Q12 3Q11 2Q12 9M12 9M11 S$m S$m S$m S$m S$m NPAs – Opening balance 1,280 1,201 1,513 1,437 1,208 New NPAs 142 116 156 601 474 New recoveries/upgrades (116) (122) (349) (669) (422) Write-offs (50) (37) (40) (113) (102) NPAs – Closing balance 1,256 1,158
Slide 28: Allowance coverage ratios of 128% of total NPAs and 370% of unsecured NPAs
Allowance coverage ratios of 128% of total NPAs and 370% of unsecured NPAs 450% 400% 373% 365% 370% Total 353% allowances/ 350% 326% Unsecured 311% NPAs 300% 272% 250% 200% 150% Total allowances/ 130% NPAs 100% 123% 123% 125% 128% 107% 106% 50% 0% Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 28
Slide 29: Capital position remained strong
Capital position remained strong: Tier 1 ratio of 15.9% and Core Tier 1 ratio of 12.1% 18.0 17.3 17.0 15.9 15.7 16.1 2.1 CAR 1.8 1.6 15.5 (% of RWA) 1.5 1.3 1.4 1.4 3.5 3.5 3.8 3.2 3.0 3.1 Tier 2 capital 3.0 15.9 15.5 15.4 14.4 14.4 14.7 14.1 Tier 1 preference shares Core Tier 1 (common equity) 12.0
Slide 30: GEH: Third quarter core earnings contribution
GEH: Third quarter core earnings contribution driven by strong investment and underwriting performance 3Q12 3Q11 YoY 2Q12 QoQ GEH Contribution S$m S$m +/(-)% S$m +/(-)% Total income 275 113 142 154 78 Operating expenses (50) (49) - (53) (6) Operating profit 225 64 252 101 122 Amortisation of intangi
Slide 31: GEH: 9M12 core net profit up 77% YoY
GEH: 9M12 core net profit up 77% YoY; accounting for 20% of Group core net profit 9M12 9M11 YoY GEH Contribution S$m S$m +/(-)% Total income 764 529 44 Operating expenses (146) (141) 4 Operating profit 618 388 59 Amortisation of intangibles (35) (35) - Allowances (1) (1) (26) Associates & JVs 0 (4)
Slide 32: GEH: Underlying insurance business remained healthy
GEH: Underlying insurance business remained healthy; total weighted new sales stable YoY 229 798 7 724 36 205 203 197 190 7 8 50 9 175 10 175 302 575 96 8 12 23 78 72 Weighted 72 290 73 new 55 55 business 200 premiums (S$m) 461 120 126 123 384 108 113 116 352 107 2010 2011 9M12 1Q11 2Q11 3Q11 4Q11 1
Slide 33: GEH: 3Q12 new business embedded value up 1% YoY
GEH: 3Q12 new business embedded value up 1% YoY; and grew 6% YoY in 9M12 52.4% NBEV / 47.4% Total 45.7% 45.0% weighted 44.3% 44.3% 42.1% 42.2% 42.5% 43.6% new sales 120 365 2 8 305 39 88 13 84 87 87 146 83 NBEV 259 1 2 2 74 3 2 (S$m) 6 129 3 38 38 34 31 103 39 32 79 210 164 150 48 51 47 52 40 43 201
Slide 34: OCBC Malaysia: Net interest income and non-interest income
OCBC Malaysia: Total net interest income and Islamic financing income up 4% YoY; non-interest income up 41% YoY Net interest income and Non-interest income (RM m) Islamic financing Income (RM m) Net Interest/ Non-int. income/ financing margin Total income 33.3% 2.42% 2.32% 2.39%2.29%2.27% 2.34% 2.21
Slide 35: OCBC Malaysia: Loans grew 12% YoY and 5% QoQ
OCBC Malaysia: Loans grew 12% YoY and 5% QoQ; NPL ratio further improved Gross Loans (RM b) Deposits (RM b) NPL Ratio Loans / Deposits 87.7% 87.2% 3.0% 84.2% 81.6% 80.8% 82.1% 2.6% 2.6% 77.4% 2.4% 2.3% 2.1% 2.2% 56 55 57 47 47 47 49 43 43 45 43 42 39 37 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Mar1
Slide 36: OCBC NISP: Net interest income up 16% YoY
OCBC NISP: Net interest income up 16% YoY; non- interest income up 10% YoY Net interest income (Rp b) Non-interest income (Rp b) Net interest Non-int. income/ margin Total income 5.04% 4.80% 5.05%4.68%4.81% 4.71% 26.5% 4.24% 4.37% 4.32% 22.0% 22.4%24.1% 23.1% 22.8%24.1%24.1% 21.8% 4.04% 19.1% 673 2,
Slide 37: OCBC NISP: Loans grew 40% YoY and 6% QoQ
OCBC NISP: Loans grew 40% YoY and 6% QoQ; NPL ratio lower at 1.0% Gross Loans (Rp t) Deposits (Rp t) NPL Ratio Loans / 1.9% 1.8% Deposits 93.9% 1.5% 91.8% 1.3% 1.2% 1.1% 1.0% 85.7% 87.0% 85.5% 83.5% 83.7% 51 54 48 52 50 41 42 47 43 36 40 34 37 31 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Mar11 Jun11
Slide 38: Agenda
Agenda Results Overview 3Q12 Performance Trends Appendix: Financial Highlights of Malaysia and Indonesia Subsidiaries 38
Slide 39: OCBC Malaysia: 3Q12 net profit up 13% YoY
OCBC Malaysia: 3Q12 net profit up 13% YoY 3Q12 3Q11 YoY 2Q12 QoQ OCBC Malaysia RM m RM m +/(-)% RM m +/(-)% Net interest income 311 311 - 303 2 Islamic Financing Income 59 44 34 52 13 Non-interest income 118 84 41 177 (34) Total income 488 439 11 533 (9) Operating expenses (222) (198) 12 (202) 10 Op
Slide 40: OCBC Malaysia: 9M12 net profit up 12% YoY
OCBC Malaysia: 9M12 net profit up 12% YoY 9M12 9M11 YoY OCBC Malaysia RM m RM m +/(-)% Net interest income 922 910 1 Islamic Financing Income 162 120 35 Non-interest income 430 344 25 Total income 1,514 1,373 10 Operating expenses (616) (545) 13 Operating profit 898 828 8 Allowances (62) (87) (28) T
Slide 41: OCBC NISP: 3Q12 net profit up 19% YoY
OCBC NISP: 3Q12 net profit up 19% YoY 3Q12 3Q11 YoY 2Q12 QoQ OCBC NISP RP b RP b +/(-)% RP b +/(-)% Net interest income 673 579 16 605 11 Non-interest income 188 171 10 219 (14) Total income 861 750 15 824 4 Operating expenses (484) (432) 12 (487) (1) Operating profit 377 318 19 337 12 Allowances (4
Slide 42: OCBC NISP: 9M12 net profit up 26% YoY
OCBC NISP: 9M12 net profit up 26% YoY 9M12 9M11 YoY OCBC NISP RP b RP b +/(-)% Net interest income 1,879 1,647 14 Non-interest income 597 458 30 Total income 2,476 2,105 18 Operating expenses (1,442) (1,276) 13 Operating profit 1,034 829 25 Allowances (164) (147) 12 Non Op Income / (Expenses) 6 15 (
Slide 43: Third Quarter 2012 Results Thank You
Third Quarter 2012 Results Thank You
Oversea-Chinese Banking — Q3 2012 Earnings Presentation on 6ix