Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — FY2003 Earnings Presentation
28 slides from Oversea-chinese Banking's earnings presentation, Feb 11, 2004
Slide 1: 2003 Final Results
Presentation to Media and Analysts 2003 Final Results 11 February 2004
Slide 2: Agenda
Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Conclusion 2
Slide 3: Results at a Glance : Full Year
Results at a Glance : Full Year FY2003 FY2002 YoY S$m S$m +/(-)% Net Interest Income 1,435 1,509 (5) Non-interest income 758 712 6 - Fee Income 373 374 (0) Total Income 2,193 2,222 (1) Operating Expenses 855 849 1 Operating Profit 1,338 1,372 (2) Goodwill 127 127 (0) Provisions 225 501 (55) Associat
Slide 4: Results at a Glance - Quarterly
Results at a Glance - Quarterly 4Q03 4Q02 YoY 3Q03 QoQ S$m S$m +/(-)% S$m +/(-)% Net Interest Income 369 376 (2) 359 3 Non-interest income 206 192 7 230 (11) - Fee Income 103 91 13 100 4 Total Income 575 569 1 589 (3) Operating Expenses 216 217 (0) 214 1 Operating Profit 358 352 2 375 (4) Goodwill 3
Slide 5: Results Adjusted for Non-Core Asset Divestment
Results Adjusted for Non-Core Asset Divestment Quarterly 4Q03 4Q02 YoY 3Q03 QoQ S$m S$m +/(-)% S$m +/(-)% Adjusted Operating Profit 308 352 (12) 297 4 Adjusted Net Profit 224 169 33 220 2 2003 / Full Year 2003 2002 2002 S$m S$m +/(-)% Adjusted Operating Profit 1,211 1,372 (12) Adjusted Net Profit 82
Slide 6: Dividend Payout
Dividend Payout 2003 2002 Gross Dividend per Share (cents) 23* 20 Net Dividends (S$m) 231 201 Net Profit (S$m) 954 667 Less: Gain on non-core assets 126 0 Adjusted Net Profit (S$m) 828 667 Payout based on Adjusted Net Profit 28% 30% * Excluding Special Dividend of 63.78 cents (49.75 cents net of tax
Slide 7: Agenda
Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Conclusion 7
Slide 8: Positive Quarterly Trends in Net Interest Income & Margins
Positive Quarterly Trends in Net Interest Income & Margins Net interest margin 2.17% 2.02% 1.99% 1.90% 1.90% 1.94% 1.89% 1.88% 1,509 1,392 1,435 376 369 352 356 359 Net interest income (S$m) 2001 2002 2003 4Q02 1Q03 2Q03 3Q03 4Q03 8
Slide 9: Non-Interest Income Buoyed by Non-Core Asset Divestment
Non-Interest Income Buoyed by Non-Core Asset Divestment Non-interest income/ Total income 39.1% 37.1% 35.8% 34.6% 33.8% 32.1% 32.9% 29.6% 30.5% 822 29.8% 29.7% 758 712 260 128 230 206 Non-interest 192 174 income 78 50 148 (S$m) 630 562 153 156 2001* 2002 2003 4Q02 1Q03 2Q03 3Q03 4Q03 Gains from dive
Slide 10: Steady Rise in Fee Income Contribution
Steady Rise in Fee Income Contribution 19.5% 19.7% 18.1% Fee income/ Total income 18.0% 16.8% 17.0% 16.9% 16.5% 16.5% 16.1% 13.2% 374 373 292 100 103 91 88 Fee income 82 (S$m) 2001 2002 2003 4Q02 1Q03 2Q03 3Q03 4Q03 Excluding gains from divestment of non-core assets 10
Slide 11: Wealth Management Sales by Product
Wealth Management Sales by Product (S$m) 5,210 3,856 3,006 2,478 1,473 1,162 1,221 1,212 1,040 992 826 612 2001* 2002 2003 Bancassurance Unit Trusts Treasury & structured products Total * 2001 figure for treasury & structured products is estimated 11
Slide 12: Operating Expenses Stable
Operating Expenses Stable Cost-to-Income Ratio 41.9% 41.4% 42.1% 41.2% 40.3% 39.1% 39.0% 38.2% 38.1% 37.6% 36.4% 867 849 855 157 164 178 217 223 216 214 194 225 201 Operating 192 33 expenses 52 36 41 47 (S$m) 72 51 52 50 51 476 465 478 113 119 119 121 119 2001 2002 2003 0 4Q02 1Q03 2Q03 3Q03 4Q03 St
Slide 13: Operating Profit before Provisions and Goodwill
Operating Profit before Provisions and Goodwill (S$m) 1,347 1,372 1,338 128 260 375 352 358 298 307 78 50 1,211 1,087 297 308 2001* 2002 2003 4Q02 1Q03 2Q03 3Q03 4Q03 Gains from divestment of non-core assets * 2001 operating profit includes S$260m gain from disposal of OUB shares 13
Slide 14: Substantial Reduction in Provisions
Substantial Reduction in Provisions (S$m) Specific Provisions for Loans Provisions for Diminution in Investments and Other Assets General Provisions 518 501 68 163 130 225 64 74 70 448 57 24 365 54 22 37 194 70 55 47 47 0 30 (27) (26) (31) 2001 2002 2003 4Q02 1Q03 2Q03 3Q03 4Q03 14
Slide 15: Net Profit Excluding Non-Core Divestment Gains Remained Healthy
Net Profit Excluding Non-Core Divestment Gains Remained Healthy (S$m) 954 126 778 667 252 292 279 828 224 72 54 169 159 526 220 224 2001* 2002 2003 4Q02 1Q03 2Q03 3Q03 4Q03 Gains from divestment of non-core assets * 2001 net profit includes S$252m net gain from disposal of OUB shares 15
Slide 16: EPS and ROE
EPS and ROE ROE 12.2% 11.8% 9.3% 10.0% 9.4% 7.4% 7.3% 6.8% 8.7% 9.1% 9.5% 90 81 72 22 67 16 60 10 52 52 50 19 EPS¢ 62 68 64 41 2001 2002 2003 4Q02 1Q03 2Q03 3Q03 4Q03 Gains from divestment of non-core assets Excluding divestment gains Note: Quarterly ROE and EPS are annualised; ROE refers to return
Slide 17: Agenda
Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Conclusion 17
Slide 18: Loan Growth Driven by Consumer Loans
Loan Growth Driven by Consumer Loans Loans (S$bn) 51.2 51.4 52.6 49.9 49.7 6.6 6.3 6.4 6.8 6.7 7.5 7.8 8.0 7.0 7.1 36.1 35.8 37.1 37.3 38.2 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Singapore Malaysia International 18
Slide 19: Market Share Gains in Singapore and Malaysia
Market Share Gains in Singapore and Malaysia Loan Growth, Dec 03 / Dec 02 Singapore OCBC Industry % % DBU loans* 7.3 3.4 * Domestic Banking Unit loans, with Dec 02 base adjusted for the integration of finance companies during 2003. Malaysia OCBC Industry % % Malaysia Loans 10.7 5.3 Source: OCBC, MAS
Slide 20: Strong Expansion in Housing Loans
Strong Expansion in Housing Loans 29.2% Share of Group Loans 24.7% 21.1% 15,382 12,313 11,174 Housing Loans (S$m) Dec-01 Dec-02 Dec-03 20
Slide 21: Share of Consumer Loans has Increased Significantly
Share of Consumer Loans has Increased Significantly Loans by Sector Loans by Sector General General commerce Financial institutions commerce 6% Professionals & 18% 7% private individuals Financial institutions 15% Professionals 17% & private Manufacturing individuals 7% 14% Consumer Consumer Manufac
Slide 22: Deposits and Loans-Deposits Ratio
Deposits and Loans-Deposits Ratio Loans-to-deposits 93.8% 89.1% 90.9% 87.8% 85.3% 53.9 55.3 54.8 53.9 53.5 Deposits (S$bn) 10.8 11.1 11.3 11.2 11.1 36.2 36.9 35.9 34.4 34.3 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Fixed Deposits Savings Deposits Current Account Others 22
Slide 23: Agenda
Agenda • Results at a Glance • Income Statement Trends • Loans and Deposits • Asset Quality and Provisions • Conclusion 23
Slide 24: Steady Improvement in Asset Quality
Steady Improvement in Asset Quality NPL Ratio 8.1% 8.0% 7.5% 7.1% 6.9% 4,356 4,290 4,115 3,890 3,834 NPLs (S$m) 1,199 1,250 1,219 1,105 1,068 2,646 2,559 2,480 2,388 2,389 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Singapore Malaysia International 24
Slide 25: NPL Ratio Reduced by Half in Three Years
NPL Ratio Reduced by Half in Three Years 14.2% 13.3% NPL Ratio 11.5% 10.7% 9.7% 9.6% 8.1% 7.5% 5,183 6.9% 4,979 4,335 4,550 4,356 4,092 3,921 4,115 NPLs 3,834 (S$m) Dec-99 Jun-00 Dec-00 Jun-01 Dec-01* Jun-02 Dec-02 Jun-03 Dec-03 * Increase in absolute NPLs was due to acquisition of of Keppel Capital
Slide 26: Cumulative Provisions
Cumulative Provisions (S$m) 2,717 2,695 2,603 2,574 2,568 1,211 1,183 1,184 1,183 1,183 1,506 1,513 1,419 1,391 1,385 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 General Provisions Specific Provisions 26
Slide 27: Provision Coverage Remains Prudent
Provision Coverage Remains Prudent SPs / Unsecured NPLs 105% 103% 105% 100% 100% (SPs+GPs) / NPLs 66% 67% 62% 63% 63% SPs / NPLs 35% 35% 35% 36% 36% Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 27
Slide 28: Conclusion
Conclusion • Strong earnings growth driven by lower provisions, divestment gains and higher associates’ contribution • Net interest income and fee income improved in second half • Net interest margin largely stable over last four quarters • Gained market share in loans in Singapore and Malaysia • Su
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