United Overseas Bank Limited · SGX:U11
United Overseas Bank — FY2016 Earnings Presentation
30 slides from United Overseas Bank's earnings presentation, Feb 17, 2017
Slide 1: UOB Group Full Year 2016 Financial Highlights
UOB Group 3rd Quarter 2016 UOB Group Full Year 2016 Financial Highlights Financial Highlights Lee Wai Fai Lee Wai Fai Group Chief Financial Officer Group Chief Financial Officer 28 October 2016 17 February 2017 Disclaimer : This material that follows is a presentation of general background informati
Slide 2: 2016 Highlights
2016 Highlights FY16 NPAT of $3.1b ↓4% YoY; 4Q16 NPAT of $739m ↓7% vs 3Q16 and ↓6% vs 4Q15 • Full year total income remained stable at $8.1b. • Operating expenses increased due to higher IT investments while staff expenses were tightly managed • Higher specific allowance for loans offset by a releas
Slide 3: 2016 NPAT of $3.1 billion, down 4% YoY
2016 NPAT of $3.1 billion, down 4% YoY 2016 2015 +/(-) $m $m % Net interest income 4,991 4,926 1.3 p Fee and commission income 1,931 1,883 2.5 p Other non-interest income 1,140 1,238 (7.9) q Total income 8,061 8,048 0.2 p Less: Total expenses 1 3,696 3,597 2.8 p Operating profit 4,365 4,451 (1.9) q
Slide 4: 4Q16 NPAT of $739 million, down 7% QoQ
4Q16 NPAT of $739 million, down 7% QoQ 4Q16 4Q15 +/(-) 3Q16 +/(-) $m $m % $m % Net interest income 1,276 1,277 (0.1) q 1,230 3.7 p Fee and commission income 531 480 10.6 p 492 7.8 p Other non-interest income 222 323 (31.3) q 318 (30.2) q Total income 2,028 2,081 (2.5) q 2,040 (0.6) q Less: Total exp
Slide 5: Higher NII supported by loan growth
Higher NII supported by loan growth Net Interest Income (NII) and Margin 2.12% 2.26% 2.20% 2.06% 2.34% 2.36% 2.23% 2.13% 2.09% 1.72% 1.71% 1.77% 1.71% 1.79% 1.78% 1.68% 1.69% 1.69% 0.76% 0.82% 0.50% 0.38% 0.40% 0.43% 0.55% 0.30% 0.25% 4,926 4,991 4,558 391 303 4,120 620 537 1,277 1,275 1,211 1,230 1
Slide 6: Fee income up 8% QoQ from credit card, loan-related and wealth management fees
Fee income up 8% QoQ from credit card, loan-related and wealth management fees Non-Interest Income (Non-NII) and Non-NII Ratio 38.7% 38.9% 38.8% 38.1% 38.6% 40.2% 39.7% 35.3% 37.1% 25.8% 23.9% 23.5% 23.4% 24.1% 26.2% 23.1% 22.0% 23.4% 3,122 3,071 2,900 284 263 2,600 334 325 954 877 817 803 813 810 5
Slide 7: Staff costs tightly managed as IT investments continue
Staff costs tightly managed as IT investments continue Operating Expenses and Expense / Income Ratio 44.7% 45.9% 43.1% 43.1% 46.3% 47.2% 45.4% 45.8% 45.0% 42.2% 43.4% 44.3% 3,696 3,597 ^ 3,146 ^ 2,898 1,533 1,646 964^ 957 894 927 918 1,321 1,186 442 405 409 443 389 2,064 2,050 1,712 1,825 522 506 52
Slide 8: IT investments geared towards products and digital capabilities
IT investments geared towards products and digital capabilities IT investments over 2014-2016 (~$0.7b) Security Regulatory 4% 17% Product Capabilities Data Mobility/Connectivity 20% Increase in fee and trading 59% capabilities Global Market Cash Platform Management Digital Transformation Cust flow i
Slide 9: Higher specific allowance in 4Q16 largely from oil & gas and shipping sectors
Higher specific allowance in 4Q16 largely from oil & gas and shipping sectors; total credit cost kept stable at 32 bps Allowance on Loans 45bp 30bp 32bp 32bp 76bp 57bp from 32bp existing 53bp NPLs 19bp 969 12bp 32bp 32bp 32bp 32bp 32bp 8bp 428 22bp 25bp 23bp 288 392 133 121 238 115 136 2013 2014 201
Slide 10: Movements in non-performing assets
Movements in non-performing assets 4Q16 3Q16 4Q15 $m $m $m NPA at start of period 3,632 3,164 2,737 New NPA 387 780 626 Upgrades, recoveries and translations (320) (201) (233) Write-offs (219) (111) (64) NPA at end of period 3,480 3,632 3,066 10
Slide 11: NPL ratio at 1.5% with NPLs mainly from Singapore and Indonesia
NPL ratio at 1.5% with NPLs mainly from Singapore and Indonesia NPL ($m) 2,882 2,841 3,056 3,496 3,328 NPL Ratio 1.4% 1.4% 1.4% 1.6% 1.5% 255 245 303 206 307 344 176 401 565 218 564 638 158 293 569 564 264 360 466 249 250 451 487 386 401 1,614 1,395 1,291 1,116 1,067 Dec-15 Mar-16 Jun-16 Sep-16 Dec-
Slide 12: New NPLs mainly from oil and gas and shipping industries
New NPLs mainly from oil and gas and shipping industries 3,496 3,328 408 3,056 2,882 484 2,841 183 143 203 601 563 618 550 542 304 286 287 284 294 643 388 610 451 383 287 298 316 264 288 250 179 274 209 210 977 917 1,063 965 881 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Transport, storage and communication
Slide 13: Exposure to Commodities
Exposure to Commodities Oil and gas Traders/ Other commodity Dec 16 Upstream Total downstream segments industries² industries Total exposure1 SGD6.2b SGD11.5b SGD9.9b SGD27.6b Outstanding loans SGD5.3b SGD5.7b SGD7.0b SGD18.0b 5% of total loans 8% of total loans Total exposure, including off-balan
Slide 14: Loan allowance coverage continues to be adequate
Loan allowance coverage continues to be adequate High general allowance driven by countercyclical approach to provisioning 315.7% 325.3% 332.5% 266.0% 262.4% 130.5% 133.2% 125.6% 112.4% 118.0% 1.4% 1.5% 1.5% 1.4% 1.2% 3,929 3,928 3,760 3,783 3,837 2,709 2,954 2,987 3,032 3,067 1,219 975 773 751 770
Slide 15: Stable liquidity position
Stable liquidity position Customer Loans and Deposits; LDR and LCR 84.7% 80.7% 84.0% 85.0% 86.8% 254.8 248.2 251.0 255.3 240.5 213.5 221.7 203.6 205.6 208.4 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Net Customer Loans ($b) Customer Deposits ($b) Loan/Deposit Ratio (LDR) (%) SGD LDR (%) 91.7 88.1 91.9 89.7
Slide 16: Loans up 9% YoY and 4% QoQ to $226b
Loans up 9% YoY and 4% QoQ to $226b Dec-16 Dec-16 Dec-15 +/(-) Sep-16 +/(-) 18% Gross Loans $b $b % $b % 36% 8% 43% Singapore 125.5 116.1 8.1 120.4 4.3 57% Regional: 78.1 72.8 7.2 75.8 3.1 Malaysia 25.8 24.6 4.7 25.7 0.4 31% 4% 3% Thailand 13.2 11.5 15.2 12.4 7.0 Dec-15 Indonesia 11.9 11.5 2.7 11.6
Slide 17: Funding increased by 7% YoY and 3% QoQ with proactive liquidity management
Funding increased by 7% YoY and 3% QoQ with proactive liquidity management Dec-16 Dec-16 Dec-15 +/(-) Sep-16 +/(-) 14% $b $b % $b % 43% Singapore 178.7 168.6 6.0 178.6 0.0 Regional: 63.1 56.6 11.4 60.3 4.6 43% Malaysia 27.2 25.4 7.3 26.7 1.9 Thailand 13.4 12.1 10.1 12.6 6.0 Dec-15 Indonesia 7.9 6.6
Slide 18: Performance by business segment
Performance by business segment 2016 2016 2015 +/(-) -10% 5% Segment Operating Profit $m $m % 42% Group Retail (GR) 1,821 1,573 15.8 Group Wholesale Banking (GWB) 2,747 2,661 3.2 63% Global Markets (GM) 228 280 (18.4) Others¹ (431) (62) (>100.0) 2015 6% Total 4,365 4,451 (1.9) -1% 35% 60% GR GWB GM
Slide 19: Regional operating profit increased 2% YoY in constant currency terms
Regional operating profit increased 2% YoY in constant currency terms 2016 9% At 7% constant 4% FX rate +/(-) 7% Operating 2016 2015 +/(-) Profit $m $m % % 59% 14% Singapore 2,568 2,694 (4.7) (4.7) 2015 Regional: 1,400 1,407 (0.5) 2.0 Malaysia 603 616 (2.1) 3.0 8% 8% Thailand 316 283 11.4 13.7 3% In
Slide 20: Exposure to China
Exposure to China Dec 2016 Bank exposure in China SGD23.2b 98% with <1 year tenor Around 77% accounted for by top 5 domestic banks and or 6.8% of total assets policy banks Trade exposures mostly with bank counterparties, representing slightly more than half of bank exposure Bank, SGD13.7b Non-
Slide 21: Exposure to Europe
Exposure to Europe As a % of total Dec 2016 Non-bank Bank Debt securities Total assets Europe SGD3.3b SGD4.7b SGD1.1b SGD9.1b 3.2% of which UK SGD2.4b SGD1.0b SGD0.2b SGD3.6b 1.3% Minimal direct impact from Brexit Bulk of UK non-bank exposure is secured and denominated in GBP Consumer mortgage b
Slide 22: Capital position augmented by scrip dividend and capital issuances
Capital position augmented by scrip dividend and capital issuances Capital Adequacy Ratios (CAR) Total 16.6% 16.2% 15.6% 16.0% 15.9% Tier 2 2.7% 3.1% 3.1% 2.6% 3.2% Tier 1 13.0% 12.8% 13.2% 13.5% 13.1% Fully Loaded 12.4% 1 12.1% 12.2% 12.1% CET 1 11.7% Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 CET1 Capital
Slide 23: Final dividend maintained
Final dividend maintained 20 5 5 35 35 50 50 35 35 20 20 2013 2014 2015 2016 Net dividend Interim Final Special UOB 80th anniversary per ordinary share (¢) 2013 2014 2015 2016 Payout amount ($m) 1,182 1,201 1,444 1,135 Payout ratio (%) 39 37 45 37 23
Slide 24: Appendix: Performance of Major Territories
Appendix : Performance of Major Territories - Singapore - Malaysia - Thailand - Indonesia - Greater China
Slide 25: Singapore – Summarised income statement & key ratios
Singapore – Summarised income statement & key ratios 2016 2015 +/(-) 4Q16 3Q16 +/(-) $m $m % $m $m % Net interest income 2,683 2,728 (1.7) 673 648 3.8 Fee and commission income 1,144 1,099 4.1 317 286 11.0 Other non-interest income 763 831 (8.2) 128 214 (40.1) Total income 4,590 4,658 (1.5) 1,118 1,
Slide 26: Malaysia – Summarised income statement & key ratios
Malaysia – Summarised income statement & key ratios 2016 2015 +/(-) 4Q16 3Q16 +/(-) RM'm RM'm % RM'm RM'm % Net interest income 1,997 1,992 0.3 502 500 0.4 Fee and commission income 660 606 8.9 185 176 5.1 Other non-interest income 299 270 10.7 67 78 (14.1) Total income 2,956 2,868 3.1 754 754 - Les
Slide 27: Thailand – Summarised income statement & key ratios
Thailand – Summarised income statement & key ratios 2016 2015 +/(-) 4Q16 3Q16 +/(-) THB'm THB'm % THB'm THB'm % Net interest income 14,371 13,143 9.3 3,707 3,613 2.6 Fee and commission income 5,948 5,868 1.4 1,611 1,591 1.3 Other non-interest income 830 719 15.4 171 261 (34.5) Total income 21,149 19
Slide 28: Indonesia – Summarised income statement & key ratios
Indonesia – Summarised income statement & key ratios 2016 2015 +/(-) 4Q16 3Q16 +/(-) IDR'b IDR'b % IDR'b IDR'b % Net interest income 3,302 2,811 17.5 853 840 1.5 Fee and commission income 774 757 2.2 206 185 11.4 Other non-interest income 513 439 16.9 102 135 (24.4) Total income 4,589 4,007 14.5 1,1
Slide 29: Greater China – Summarised income statement & key ratios
Greater China – Summarised income statement & key ratios 2016 2015 +/(-) 4Q16 3Q16 +/(-) $m $m % $m $m % Net interest income 384 394 (2.6) 102 97 5.0 Fee and commission income 113 137 (17.9) 29 30 (1.2) Other non-interest income 152 175 (13.2) 41 43 (4.9) Total income 648 706 (8.2) 173 170 1.4 Less:
Slide 30: Thank You
Thank You Thank you 30