Oversea-chinese Banking Corporation Limited · SGX:O39

Oversea-chinese Banking — Q3 2003 Earnings Presentation

23 slides from Oversea-chinese Banking's earnings presentation, Nov 14, 2003

  1. Slide 1: Third Quarter 2003 Results Presentation

    Third Quarter 2003 Results Presentation 14 November 2003

  2. Slide 2: Agenda

    Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Conclusion 2

  3. Slide 3: Results at a Glance - Quarterly

    Results at a Glance - Quarterly 3Q03 3Q02 YoY 2Q03 QoQ S$m S$m +/(-)% S$m +/(-)% Net Interest Income 359 388 (8) 356 1 Non-interest income 230 157 46 174 32 - Fee Income 100 99 1 88 14 Total Income 589 545 8 530 11 Operating Expenses 214 204 5 223 (4) Operating Profit 375 341 10 307 22 Goodwill 32 3

  4. Slide 4: Results at a Glance: Year-to-Date

    Results at a Glance : Year-to-Date 9 Months 9 Months 2003 / 2003 2002 2002 S$m S$m +/(-)% Interest Income 1,066 1,133 (6) Non-interest income 552 520 6 - Fee Income 270 283 (5) Total Income 1,618 1,653 (2) Operating Expenses 638 633 1 Operating Profit 980 1,020 (4) Goodwill 95 95 (0) Provisions 171

  5. Slide 5: Results Adjusted for Non-Core Asset Divestment

    Results Adjusted for Non-Core Asset Divestment Quarterly 3Q03 3Q02 YoY 2Q03 QoQ S$m S$m +/(-)% S$m +/(-)% Adjusted Operating Profit 297 341 (13) 307 (3) Adjusted Net Profit 220 181 22 224 (2) Year-to-Date 9 Months 9 Months 2003 / 2003 2002 2002 S$m S$m +/(-)% Adjusted Operating Profit 902 1,020 (12)

  6. Slide 6: Agenda

    Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Conclusion 6

  7. Slide 7: Net Interest Income and Margin Stable Compared to 2Q03

    Net Interest Income and Margin Stable Compared to 2Q03 Net Interest Margin 2.02% 2.07% 2.01% 1.99% 1.90% 1.89% 1.88% 388 370 375 376 352 356 359 (S$m) 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 7

  8. Slide 8: Non-Interest Income Buoyed by Non-Core Asset Divestment

    Non-Interest Income Buoyed by Non-Core Asset Divestment Non-interest income/ 39.1% Total income 34.6% 33.8% 32.9% 30.7% 29.8% 28.8% 29.6% 230 199 192 174 78 164 157 (S$m) 148 153 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 Gain from divestment of non-core assets Excluding gain from divestment of non-core ass

  9. Slide 9: Steady Rise in Fee Income Since 1Q03

    Steady Rise in Fee Income Since 1Q03 Fee income/ Total income 17.7% 18.1% 16.5% 16.5% 16.9% 15.6% 16.1% 99 100 94 91 89 88 82 (S$m) 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 9

  10. Slide 10: Cost Discipline Continues

    Cost Discipline Continues Cost-to-Income Ratio 42.1% 41.9% 40.3% 38.6% 38.8% 38.1% 37.4% 36.4% 223 217 223 214 206 204 201 33 46 52 36 41 (S$m) 38 42 72 45 49 51 52 48 51 119 121 112 113 119 119 121 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 Staff Cost Premises & Equipment Others Restructuring Expenses Excl

  11. Slide 11: Operating Profit before Provisions and Goodwill

    Operating Profit before Provisions and Goodwill (S$m) 375 351 352 341 328 307 78 298 297 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 Gain from divestment of non-core assets 11

  12. Slide 12: Provision Charges Continue to Decline

    Provision Charges Continue to Decline (S$m) Specific Provisions for Loans Provisions for Diminution in 205 Investments and Other Assets General Provisions 74 130 91 64 75 74 70 163 24 22 22 37 91 70 54 55 47 30 (5) (32) (31) 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 12

  13. Slide 13: Net Profit Excluding Non-Core Asset Divestment Gains Remained Healthy

    Net Profit Excluding Non-Core Asset Divestment Gains Remained Healthy (S$m) 292 72 224 215 181 169 159 102 220 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 Gain from divestment of non-core assets 13

  14. Slide 14: EPS and ROE

    EPS and ROE 12.2% ROE 9.8% 9.4% 9.2% 7.9% 7.3% 6.8% 4.5% 90 68 67 22 56 52 50 EPS¢ 32 68 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 Gain from divestment of Note: ROE and EPS are annualised non-core assets ROE refers to return on ordinary shareholders’ funds Excluding gain from divestment of non-core assets

  15. Slide 15: Agenda

    Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Conclusion 15

  16. Slide 16: Loan Growth Driven by Consumer Loans

    Loan Growth Driven by Consumer Loans Loans (S$bn) 52.1 50.9 50.4 51.2 51.4 49.9 49.7 5.7 6.3 6.7 5.9 6.8 6.6 6.7 7.3 7.1 7.2 7.5 7.8 7.0 7.1 39.1 37.0 37.3 37.2 37.3 36.1 35.8 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Singapore Malaysia International 16

  17. Slide 17: Loans-to-Deposit Ratio Increased Slightly

    Loans-to-Deposit Ratio Increased Slightly Loans-to-deposits 89.1% 90.9% 87.3% 86.8% 88.1% 87.8% 85.3% 55.6 54.9 53.5 53.9 55.3 54.8 53.9 Deposits (S$bn) 11.3 11.2 11.1 10.8 10.8 11.3 11.2 36.9 37.2 35.9 36.2 36.9 35.9 34.4 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Fixed Deposits Savings Depos

  18. Slide 18: Agenda

    Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Conclusion 18

  19. Slide 19: NPLs Trending Down

    NPLs Trending Down NPL Ratio 10.0% 9.6% 9.6% 8.1% 8.0% 7.5% 7.1% 5,050 4,979 5,148 4,356 4,290 4,115 3,890 NPLs 1,115 1,137 1,115 (S$m) 1,199 1,250 1,219 1,105 3,373 3,306 3,498 2,646 2,559 2,480 2,388 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Singapore Malaysia International 19

  20. Slide 20: NPL Ratio has Halved from the Peak

    NPL Ratio has Halved from the Peak 14.2% 13.3% 11.5% NPL Ratio 10.7% 9.7% 9.6% 8.1% 7.5% 7.1% 5,183 4,979 4,335 4,550 4,356 4,092 3,921 4,115 3,890 NPLs (S$m) Dec-99 Jun-00 Dec-00 Jun-01 Dec-01* Jun-02 Dec-02 Jun-03 Sep-03 * Increase in absolute NPLs was due to acquisition of of Keppel Capital Holdi

  21. Slide 21: Cumulative Provisions

    Cumulative Provisions (S$m) 3,346 3,373 3,405 2,717 2,695 2,603 1,215 1,215 2,574 1,248 1,211 1,183 1,184 1,183 2,098 2,158 2,190 1,506 1,513 1,419 1,391 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 General Provisions Specific Provisions 21

  22. Slide 22: Provision Coverage Ratios Remain Adequate

    Provision Coverage Ratios Remain Adequate SPs / Unsecured NPLs 107% 105% 105% 105% 105% 103% 100% (SPs+GPs) / NPLs 66% 68% 66% 66% 62% 63% 63% SPs / NPLs 42% 43% 43% 35% 35% 35% 36% Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 22

  23. Slide 23: Conclusion

    Conclusion • Robust quarter-on-quarter recovery in fee income; interest margins and interest income remain challenging • Cost discipline continues • Strengthening of credit processes and asset quality has helped to reduce NPLs and provisions • Progressive divestment of non-core assets – F&N, WBL, Ro

Oversea-Chinese Banking — Q3 2003 Earnings Presentation on 6ix