United Overseas Bank Limited · SGX:U11
United Overseas Bank — FY2022 Earnings Presentation
26 slides from United Overseas Bank's earnings presentation, February 2023
Slide 1: UOB Group Financial Updates
UOB Group Financial Updates Lee Wai Fai Group Chief Financial Officer For the Financial Year / Fourth Quarter Ended 31 December 2022 Private and Confidential. Disclaimer: This material that follows is a presentation of general background information about UOB’s activities current at the date of the
Slide 2: Financial Highlights
Financial Highlights FY22 4Q22 Full year core earnings up 18% to a new high of $4.8b boosted (1) by strong NII and stable asset quality Core operating profit $6.6b $1.9b • Including one-off expenses, net profit was $4.6b for FY22 and $1.2b + 20% YoY + 5% QoQ (1) for 4Q22 Core net profit $4.8b $1.4b
Slide 3: Well-timed acquisition complementing the ASEAN strategy
Well-timed acquisition complementing the ASEAN strategy Financial impact so far Our 2026 Promise ▪ Group to remain well capitalised ▪ ROE > 13% ▪ RoRWA > 2% ▪ Maintain dividend payout ratio Positive boost to Costs(1) in tandem Asset quality of 50% income drivers with income stable ~10bps Mid-40% Mid
Slide 4: Income and ASEAN franchise augmented by Citi
Integration progress Income and ASEAN franchise augmented by Citi • Completed the acquisition of Citigroup's consumer portfolio in Malaysia and Thailand on 1 Nov 2022 Accelerate growth Digitally-enabled Strong cards Augment wealth • Indonesia and Vietnam to in customer base customers player in regio
Slide 5: Consumers scale acquisition with digital
Consumers Scale Acquisition with Digital Scale UOB TMRW across ASEAN to digitally acquire at ~7m >800k • Tapping on rising low cost Retail customers New to bank affluence and growing >70% are customers acquired, digitally enabled 55% are digitally digitalisation in Southeast acquired Asia Deepen Eng
Slide 6: Strengthening wholesale customers
Strengthening +12% Wholesale Cross border income1; Connectivity Formed 28% of GWB income customers +29% Across our ASEAN Suppliers and distributors2 within footprint and global • Growing regional network Financial Supply Chain Management (FSCM) solution franchise, capturing cross-border opportunitie
Slide 7: Performance by Segment
Performance by Segment • Retail supported by campaign- led deposit growth and wider 2022 2021 YoY 4Q22 3Q22 QoQ margin, alongside stronger Operating Profit (1) $m $m +/(-) % $m $m +/(-) % credit card activities, partly moderated by softer wealth Group Retail (1) 2,085 1,698 23 692 572 21 income • Wh
Slide 8: Performance by Geography
Performance by Geography (1) 2022 2021 YoY 4Q22 3Q22 QoQ Core operating profit $m $m +/(-)% $m $m +/(-)% • FY22 performance improved Singapore 3,824 2,805 36 1,204 1,078 12 across most markets Rest of Southeast Asia 1,427 1,327 8 404 386 5 Malaysia 744 689 8 195 216 (10) • Continued momentum in QoQ
Slide 9: Financial Highlights
Financial Highlights 2022 2021 YoY 4Q22 3Q22 QoQ 4Q21 YoY $m $m +/(-)% $m $m +/(-)% $m +/(-)% • Core FY profits rose 18% to a Net interest income 8,343 6,388 31 2,560 2,234 15 1,677 53 new high of $4.8b, boosted by Net fee income 2,143 2,357 (9) 485 519 (7) 580 (16) record NII from strong margin Oth
Slide 10: Net Interest Income and Margin
2.26 2.75 Net Interest Income 1.89 2.34 1.89 1.90 2.02 and Margin 1.86 1.56 2.22 1.95 1.67 • 4Q22 NII reached new 0.72 0.91 1.56 1.58 1.02 1.02 high, up 15% QoQ 8,343 0.72 0.75 0.80 boosted by continued NIM 1,203 expansion (+27bps) 6,388 2,560 835 2,234 372 • FY NII grew 31% YoY as 1,863 352 1,677 1
Slide 11: Fee Income
24 19 24 24 Fee Income 21 16 15 • Stellar performance in 2,357 credit card activities in 2,143 FY22 and 4Q22 from 395 higher customer spends 355 185 and boosted by Citi 231 580 572 567 consolidation 768 99 519 94 87 485 536 86 53 42 59 • Wealth and fund 160 137 55 87 74 175 management fees eased 123
Slide 12: Trading & Investment Income
85 368 74 Trading & Investment Income 829 785 115 128 81 87 • Customer related treasury 203 52 income grew 20% year on year driven by hedging 370 demands 178 701 214 203 • Others affected by 583 118 44 41 26 valuation headwinds 161 173 191 177 136 (17) (117) 2021 2022 4Q 1Q 2Q 3Q 4Q 2021 2022 Custom
Slide 13: Core Expenses and Cost / Income Ratio
Core Expenses and 44.1 43.3 45.0 44.8 43.8 Cost / Income Ratio (1) 42.6 42.6 5,016 • FY22 CIR improved to 4,313 569 + 11% 1,418 43.3% on the back of 512 770 + 21% 1,357 130 strong income growth 638 1,184 170 686 + 22% 1,095 1,058 215 and disciplined spending 146 151 197 561 118 183 161 233 169 174 •
Slide 14: Non-Performing Assets
2021 2022 Non-Performing ($m) 4Q 1Q 2Q 3Q 4Q Assets NPAs at start of period 4,772 5,077 5,289 5,422 5,037 Non-individuals • Asset quality remained New NPAs _ 670 462 661 214 395 resilient with NPL ratio Less: increasing slightly to Upgrades and recoveries 172 207 363 448 322 1.6% this quarter Write-
Slide 15: Total Allowance on Loans
20 22 31 Total Allowance on 22 19 22 18 20 17 Loans 21 21 628 19 16 • FY22 credit costs at 598 64 12 20bps • 4Q22 credit costs higher 694 173 due mainly to higher 534 94 146 173 135 7 specific allowance on a 8 253 170 148 166 few non-systemic 127 accounts (2) (66) (76) (80) 2021 2022 4Q 1Q 2Q 3Q 4Q
Slide 16: Allowance Coverage
33 34 Allowance Coverage 31 31 30 1.0 • Adequate reserve buffer 0.9 0.9 0.9 0.9 with prudent coverage for 4,876 4,986 4,934 4,931 5,002 performing loans at 0.9% 379 379 379 379 379 • NPA coverage remained 2,941 2,969 2,912 2,865 2,868 adequate at 98% or 207% taking collateral 1,556 1,638 1,643 1,687
Slide 17: Gross Loans
Gross Loans Dec-22 Sep-22 Dec-21 QoQ YoY $b $b $b +/(-)% +/(-)% Singapore 160 165 158 (3) 2 • Loan relatively Rest of Southeast Asia 69 63 63 11 9 unchanged QoQ and YoY Malaysia 33 29 30 13 12 growth of 5% on constant Thailand 23 20 21 20 13 currency basis Indonesia 10 11 10 (9) (1) Vietnam 2 2 2 (8
Slide 18: Total Funding
Total Funding Dec-22 Sep-22 Dec-21 QoQ YoY $b $b $b +/(-)% +/(-)% • Continue to focus on Singapore Rest of Southeast Asia 249 71 256 67 240 67 (3) 6 4 7 stable funding Malaysia 34 31 32 8 6 Thailand 26 22 22 15 17 • CASA ratio at 47.5%, Indonesia 10 11 9 (13) 3 largely due to Vietnam 1 2 3 (34) (60)
Slide 19: Liquidity Ratios
147 141 142 133 Liquidity Ratios 129 • Liquidity and funding 116 113 114 116 111 positions strengthened with LCR at 147% and 87.0 87.3 88.7 85.2 85.6 NSFR at 116% Dec Mar Jun Sep Dec 2021 2022 USD LDR (%) 61.6 66.3 72.3 64.2 60.0 All-currency LCR (%) Loan/Deposit Ratio (LDR) (%) (1) Net Stable Fund
Slide 20: Capital
Capital 13.5 13.1 13.1 12.8 13.3 • Post Citi acquisition, CET1 ratio healthy at 268 263 266 259 259 13.3% Dec Mar Jun Sep Dec 2021 2022 Leverage ratio (%) 7.2 6.9 6.6 6.4 6.6 RWA ($b) CET1 ratio (%) 20
Slide 21: Dividends
Dividends 130 135 120 20 • Committed to 75 consistent and Net dividend 78 60 per ordinary share (¢) 55 sustainable returns to shareholders Interim Special 39 Final • Proposed final 60 60 55 dividend of 75 cents 39 per share 2019 2020 2021 2022 Payout amount ($m) 2,171 1,304 2,011 2,261 Payout ratio
Slide 22: Appendix
▪ Loan portfolio Appendix ▪ Exposure to Greater China ▪ Exposure to Oil & Gas sector 22
Slide 23: Diversified loan portfolio
Professionals and Housing loans Diversified loan private individuals 24% Others 9% 5% portfolio Transport, storage General commerce Industry and communication 11% 5% FIs, investment and holding companies Building & 12% Manufacturing construction 7% 27% Large corporates Others and institutions 15% 53
Slide 24: Exposure to Greater China
Exposure to Greater China 76.1 77.2 77.1 75.8 69.2 10.8 12.2 11.8 10.6 9.7 Debt ($b) ▪ ~$3b in loans to Chinese developers (1% of group loans Non Bank ($b) 48.8 & low borrower concentration) 51.5 52.5 53.8 Bank ($b) 48.6 16.5 13.5 12.8 11.4 10.9 Dec Mar Jun Sep Dec 2021 2022 As at 31 Dec 2022: Bank
Slide 25: Exposure to Oil and Gas and Other Commodities
Oil and Gas (O&G) Exposure to Other Traders / Commodities Dec 22 Upstream downstream Commodity Total industries1 Segments2 Segment industries Outstanding S$1.9b S$8.0b S$8.8b S$18.7b • As of 31 December 2022, loans outstanding loans to the Percentage of commodities segment total loans 3% 3% 6% remai
Slide 26: Thank You
Thank You & Right By You