United Overseas Bank Limited · SGX:U11

United Overseas Bank — FY2007 Earnings Presentation

26 slides from United Overseas Bank's earnings presentation, Feb 27, 2008

  1. Slide 1: Full Year 2007 Briefing - Financial Highlights

    United Overseas Bank Group Full Year 2007 Briefing Financial Highlights Lee Wai Fai Chief Financial Officer 27 February 2008 Disclaimer : This material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation. It is informat

  2. Slide 2: Agenda

    Agenda 11 Performance Performance Review Review 22 Business Business & & Geographical Geographical Segments Segments 33 Loans, Loans, Deposits Deposits & & Asset Asset Quality Quality 44 Review Review of of Key Key Territories Territories 55 Capital Capital Management Management 2

  3. Slide 3: Profit Growth 12.1% in FY2007

    Profit Growth 12.1% in FY2007 2007 2006 + / (-) $m $m % Net interest income 2,980 2,710 10.0 Non-interest income 1,892 1,514 25.0 Total income 4,872 4,224 15.3 Less: Total expenses 2,018 1,736 16.3 Operating profit 2,854 2,488 14.7 Less: Intangible assets amortised 11 13 (10.3) Impairment charges on

  4. Slide 4: Quarter Performance Review

    Quarter Performance Review 4Q07 3Q07 + / (-) 4Q06 + / (-) $m $m % $m % Net interest income 743 714 4.1 702 5.9 Non-interest income 532 393 35.5 517 2.9 Total income 1,275 1,107 15.2 1,219 4.7 Less: Total expenses 556 487 14.1 497 11.9 Operating profit 719 620 16.1 722 (0.3) Less: Intangible assets a

  5. Slide 5: Improvement in Net Interest Income and Margin

    Improvement in Net Interest Income and Margin Net Interest Income and Margin 3.18% 3.25% 3.21% 3.25% ^ 3.28% 3.01% 3.22% 3.12% 3.05% 2.10% 1.99% 1.99% 2.04% ^ 1.99% 2.10% 2.04% 1.93% 1.94% 0.78% 0.58% 0.66% 0.56% 0.72% 0.55% 0.62% 0.43% 0.47% 702 762 761 714 743 2,980 114 106 69 76 2,710 89 2,155 2,

  6. Slide 6: Strong Growth in Fee and Commission Income

    Strong Growth in Fee and Commission Income Non-Interest Income (Non-NII) and Non-NII Ratio 37.6% 35.8% 38.8% 33.9% 42.4% 41.3% 41.7% 36.2% 35.5% 21.7% 23.9% 23.7% 26.2% 27.2% 25.4% 28.8% 29.0% 1,892 21.7% 517 536 532 1,514 614 1,414 432 206 162 185 393 1,104 514 511 173 74 398 1,003 1,278 370 900 33

  7. Slide 7: Continued Infrastructure Investments

    Continued Infrastructure Investments Operating Expenses and Expense / Income Ratio 41.1% 41.4% 37.6% 37.9% 2,018 44.0% 43.6% 40.8% 39.5% 1,736 272 38.9% 256 1,424 1,227 222 188 556 497 472 504 487 74 71 67 70 64 2004 2005 2006 2007 4Q06 1Q07 2Q07 3Q07 4Q07 Operating OperatingExpenses Expenses($m) ($

  8. Slide 8: Impairment Charges on Loans Remained Benign

    Impairment Charges on Loans Remained Benign Individual Impairment on Loans Charged to Profit & Loss Account 36 bp 43 bp 31 bp 29 bp 19 bp 18 bp 21 bp 16 bp ^ 86 67 235 215 41 33 142 155 (30) (14) bp 2004 2005 2006 2007 4Q06 1Q07 2Q07 3Q07 4Q07 Individual IndividualImpairment ImpairmentCharges Charge

  9. Slide 9: Strong Growth in Key Business Segments

    Strong Growth in Key Business Segments Business Segment 2006 2007 2006 2007 2007 2006 + / (-) PFS : 32% Segment Operating Profit * $m $m % Other : (4)% Personal Financial Services (PFS) 924 707 30.7 GMIM : 24% Institutional Financial Services (IFS) 1,375 1,194 15.2 677 493 37.3 IFS : 48% Global Mark

  10. Slide 10: Strong Contribution from Singapore

    Strong Contribution from Singapore Geographical Segment 2007 2007 At constant Singapore : 63 % 2007 2006 + / (-) FX rate Operating Profit * $m $m % % Malaysia : 13 % ^ Thailand : 5 % Singapore (including ACU) 1,800 1,598 12.6 12.6 Indonesia : 5% Total Overseas 1,054 890 18.4 20.6 Greater China : 4%

  11. Slide 11: Strong Growth in Loans and Deposits

    Strong Growth in Loans and Deposits Customer Loans, Deposits and L/D Ratio 86.6% 80.5% 78.9% 81.3% 79.3% 107.0 104.5 104.8 99.7 95.6 92.7 85.2 82.5 79.0 76.9 Dec'06 Mar'07 Jun'07 Sep'07 Dec'07 Net NetCustomer CustomerLoans Loans($b) ($b) Customer CustomerDeposits Deposits($b) ($b) Loans Loans//Depos

  12. Slide 12: NPL Ratios Continue to Improve

    NPL Ratios Continue to Improve NPLs ($m) 3,165 2,986 2,382 2,032 1,715 NPL Ratio 4.0% 3.7% 2.8% 2.3% 1.8% 287 115 287 115 823 293 841 94 247 403 77 81 594 418 73 577 585 436 527 1,346 495 1,166 1,007 763 630 Dec'06 Mar'07 Jun'07 Sep'07 Dec'07 Singapore Malaysia Thailand Indonesia Other 12

  13. Slide 13: Impairment Coverage Remained Strong

    Impairment Coverage Remained Strong 268.5% 249.0% 208.1% 172.6% 188.6% 88.7% 97.0% 111.8% 79.2% 84.5% 2,508 2,523 2,112 1,972 1,917 1,237 1,250 836 700 647 1,271 1,273 1,276 1,272 1,270 Dec'06 Mar'07 Jun'07 Sep'07 Dec'07 Collective CollectiveImpairment Impairment($m) ($m) Individual IndividualImpair

  14. Slide 14: Singapore (including ACU) – A Good Year

    Singapore (including ACU) – A Good Year 2007 2006 * + / (-) 4Q07 3Q07 + / (-) $’m $’m % $’m $’m % Net interest income 1,794 1,729 3.8 449 426 5.4 Non-interest income 1,152 856 34.6 296 235 26.0 Total income 2,946 2,585 14.0 745 660 12.9 Less: Total expenses 1,146 987 16.1 321 274 17.2 Operating prof

  15. Slide 15: Singapore (including ACU) – Improvement in All Areas

    Singapore (including ACU) – Improvement in All Areas 2007 2006 * + / (-) 4Q07 3Q07 + / (-) % % % pt % % % pt Net interest margin 1.84 1.77 0.07 1.72 1.72 - Non-NII / Total income 39.1 33.1 6.0 39.7 35.6 4.1 Expense / Total income 38.9 38.2 0.7 43.1 41.5 1.6 Customer loans (net) – $’m 57,312 47,749 2

  16. Slide 16: Malaysia – Strong Momentum

    Malaysia – Strong Momentum 2007 2006 + / (-) 4Q07 3Q07 + / (-) RM’m RM’m % RM’m RM’m % Net interest income 874 708 23.4 227 212 7.1 Non-interest income 433 417 3.8 128 93 37.6 Total income 1,307 1,125 16.2 355 305 16.4 Less: Total expenses 461 378 22.0 131 115 13.9 Operating profit 846 747 13.3 224

  17. Slide 17: Malaysia – Competitive but Growing

    Malaysia – Competitive but Growing 2007 2006 + / (-) 4Q07 3Q07 + / (-) % % % pt % % % pt Net interest margin 3.00 3.14 (0.14) 3.03 3.03 - Non-NII / Total income 33.1 37.1 (4.0) 36.1 30.5 5.6 Expense / Total income 35.3 33.6 1.7 36.9 37.7 (0.8) Customer loans (net) – RM’m 25,868 20,192 28.1% 25,868 2

  18. Slide 18: Thailand – Year of Consolidation

    Thailand – Year of Consolidation 2007 2006 + / (-) 4Q07 3Q07 + / (-) THB’m THB’m % THB’m THB’m % Net interest income 6,645 6,270 6.0 1,767 1,731 2.1 Non-interest income 2,598 2,942 (11.7) 648 530 22.3 Total income 9,243 9,212 0.3 2,415 2,261 6.8 Less: Total expenses 6,535 6,160 6.1 1,699 1,644 3.3 O

  19. Slide 19: Thailand – Growing Momentum

    Thailand – Growing Momentum 2007 2006 + / (-) 4Q07 3Q07 + / (-) % % % pt % % % pt Net interest margin 3.49 3.76 (0.27) 3.66 3.57 0.09 Non-NII / Total income 28.1 31.9 (3.8) 26.8 23.4 3.4 Expense / Total income 70.7 66.9 3.8 70.4 72.7 (2.3) Customer loans (net) – THB’m 143,830 146,009 (1.5)% 143,830

  20. Slide 20: Indonesia – Good Progress

    Indonesia – Good Progress 2007 2006 + / (-) 4Q07 3Q07 + / (-) IDR’b IDR’b % IDR’b IDR’b % Net interest income 1,384 1,346 2.8 344 338 1.8 Non-interest income 303 333 (9.0) 78 80 (2.5) Total income 1,687 1,679 0.5 422 418 1.0 Less: Total expenses 837 744 12.5 235 225 4.4 Operating profit 850 935 (9.1

  21. Slide 21: Indonesia – Competitive, but Strengthen Market Position

    Indonesia – Competitive, but Strengthen Market Position 2007 2006 + / (-) 4Q07 3Q07 + / (-) % % % pt % % % pt Net interest margin 5.98 7.07 (1.09) 5.53 5.51 0.02 Non-NII / Total income 18.0 19.8 (1.8) 18.5 19.1 (0.6) Expense / Total income 49.6 44.3 5.3 55.7 53.8 1.9 Customer loans (net) – IDR’b 18,

  22. Slide 22: Strong Capital Position

    Strong Capital Position Capital Adequacy Ratios (CAR) 16.3% 16.2% Total CAR 15.7% 14.8% 14.5% Tier 1 CAR ` 11.0% 11.1% 10.8% 10.2% 10.0% Dec'06 Mar'07 Jun'07 Sep'07 Dec'07 $m Tier 1 Capital 11,888 12,451 12,382 12,210 12,461 Risk-Weighted Assets 108,405 111,781 114,842 120,181 124,772 22

  23. Slide 23: Maintain High Net Dividend Rate

    Maintain High Net Dividend Rate Special Dividend in Specie Final 24.2 cts 12.3 cts 22.8 cts Interim 41.0 cts 45.0 cts 32.0 cts 32.0 cts 16.0 cts 16.0 cts 16.0 cts 16.4 cts 2004 2005 2006 2007 Special Dividend - $351m * $369m $187m Cash Dividend $744m $737m $868m $929m Dividend Payout $744m $1,088m $

  24. Slide 24: In Summary …

    In Summary … ƒ Net profit grew 12.1% to reach $2.1 billion ƒ Growth in core business - NII and fee income ƒ Strong loan growth ƒ Continued discipline in expense control ƒ Improved asset quality ƒ High payout ratio 24

  25. Slide 25: Update on CDOs

    Update on CDOs ƒ Further reduction in CDO exposure with additional provision taken. 4Q07 Allowance Cumulative Allowance Dec’07 Sep’07 P/L Reserves P/L Reserves $m $m $m $m $m $m ABS 86 90 39 - 40 35 Corporate 229 298 6 13 59 25 Total 315 388 45 13 99 60 ƒ Overall CDO exposure remains small (less tha

  26. Slide 26: Update on CDOs (cont'd)

    Update on CDOs (cont’d) ƒ UOB Asset Management only manages clients’ money and does not have any direct investment in their books. CDOs under management have declined due mainly to maturity. Dec’07 Sep’07 $b $b ABS 2.8 3.0 Corporate 5.7 8.4 Total 8.5 11.4 ƒ By March 2008, another $2.5 billion will m

United Overseas Bank Group — FY2007 Earnings Presentation on 6ix