United Overseas Bank Limited · SGX:U11
United Overseas Bank — Q3 2022 Earnings Presentation
23 slides from United Overseas Bank's earnings presentation, November 2022
Slide 1: UOB Group Financial Updates
UOB Group Financial Updates Lee Wai Fai Group Chief Financial Officer For the Nine Months / Third Quarter Ended 30 September 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 pre
Slide 2: Financial Highlights
Financial Highlights 3Q22 net profit at Record of $1.4b supported by strong NII 3Q22 key financial indicators and lower credit cost Operating profit Net profit after tax • 3Q22 net interest income continued to register double digit growth to $1.8b $1.4b cross the $2b mark, as NIM expanded 28bps to 1
Slide 3: Performance by Segment
Performance by Segment • Retail benefited from stronger 9M22 9M21 YoY 3Q22 2Q22 QoQ margin and volume growth, +/(-) % +/(-) % Operating Profit $m $m $m $m moderated by softer wealth income Group Retail 1,393 1,347 3 572 444 29 • Wholesale supported by expansion in margin and Group Wholesale Banking
Slide 4: Strengthening Wholesale customers
Strengthening +16% Wholesale Cross border income1; Connectivity Formed 29%2 of GWB income customers +52% Across our ASEAN footprint and global Suppliers and distributors3 within • Growing regional network Financial Supply Chain Management (FSCM) solution franchise, capturing cross- border opportunit
Slide 5: Consumers Building Scale & Deepening Engagement
Consumers Building Scale & Deepening Engagement Scale UOB TMRW across ASEAN, reduce cost to serve 500k 2.4x • Tapping on rising affluence and deepen engagement to New customers to be digitally acquired across Year on year growth1 in UOB TMRW and growing digitalisation drive customer lifetime value t
Slide 6: Performance by Geography
Performance by 9M22 9M21 YoY 3Q22 2Q22 QoQ Geography Operating Profit $m $m +/(-)% $m $m +/(-)% Singapore 2,621 2,101 25 1,078 845 28 • Continued momentum in Rest of Southeast Asia 1,023 1,029 (1) 386 318 21 quarterly growth across Malaysia 549 541 2 216 162 34 Singapore, ASEAN, North Asia and the d
Slide 7: Financial Highlights
Financial Highlights 9M22 9M21 YoY 3Q22 2Q22 QoQ 3Q21 YoY • 3Q22 profits rose to new high $m $m +/(-)% $m $m +/(-)% $m +/(-)% of $1.4b, driven by record Net interest income 5,783 4,711 23 2,234 1,863 20 1,604 39 quarter NII from NIM Net fee income 1,658 1,776 (7) 519 567 (8) 576 (10) expansion, high
Slide 8: Net Interest Income and Margin
2.09 2.34 Net Interest Income 1.89 1.87 1.89 1.90 2.02 and Margin 1.74 1.56 1.95 1.55 1.56 1.58 1.67 • 3Q22 NII crossed $2b, up 20% 0.72 0.87 1.02 QoQ driven by strong NIM 0.70 0.72 0.75 0.80 expansion (+28bps) amid 5,783 accelerated rate hikes 832 4,711 614 2,234 • YTD NII grew 23% YoY, 1,863 352 b
Slide 9: Fee Income
24 20 24 23 24 Fee Income 21 16 • 9M22 loan fees grew to a 1,776 new high spurred by trade 1,658 and investment growth. 296 267 Credit card fees were also 133 higher as customer spends 157 rebounded with borders 576 580 572 567 reopening 592 420 519 97 99 94 87 53 42 86 • Wealth fees were muted as 5
Slide 10: Trading & Investment Income
84 368 Trading & Investment 67 Income 115 69 81 • Continued momentum for 667 627 52 customer-related income 220 102 from increased hedging 370 demand 178 205 214 • Others surged on 525 64 118 44 41 447 improved performance 173 191 from trading and liquidity 141 136 161 management activities (17) ami
Slide 11: Expenses and Cost / Income Ratio
43.8 43.6 Expenses and 43.7 45.0 44.8 43.8 42.6 Cost / Income Ratio 3,598 3,218 439 + 20% • Higher expenses in line 366 554 + 18% 1,357 1,184 170 with income growth and 469 1,095 1,072 1,058 151 strategic investments 453 + 11% 122 146 118 197 409 183 161 164 169 174 • 3Q22 CIR improved to 139 152 14
Slide 12: Non-Performing Assets
2021 2022 Non-Performing ($m) 3Q 4Q 1Q 2Q 3Q Assets NPAs at start of period 4,547 4,772 5,077 5,289 5,422 • Asset quality stabilised Non-individuals with lower NPA New NPAs _ 251 670 462 661 214 formation this quarter Less: and NPL ratio Upgrades and recoveries 73 172 207 363 448 retreating to 1.5%
Slide 13: Total Allowance on Loans
23 22 22 19 20 19 Total Allowance on 17 17 18 21 Loans 20 19 16 12 • 3Q22 credit cost improved 504 454 to 17bps due mainly to 140 13 lower specific allowance 441 94 173 364 153 146 7 135 8 155 170 148 166 127 (2) (2) (76) 9M21 9M22 3Q 4Q 1Q 2Q 3Q 2021 2022 Credit costs on loans - Specific (basis poi
Slide 14: Allowance Coverage
34 33 Allowance Coverage 31 31 30 1.0 1.0 • Adequate reserve buffer 0.9 0.9 0.9 with prudent coverage for 5,052 4,876 4,986 4,934 4,931 performing loans at 0.9% 379 379 379 379 379 • NPA coverage remained 3,046 2,941 2,969 2,912 2,865 adequate at 98% or 207% taking collateral 1,627 1,556 1,638 1,643
Slide 15: Gross Loans
Gross Loans Sep-22 Jun-22 Sep-21 QoQ YoY $b $b $b +/(-)% +/(-)% • Continued quality growth Singapore 165 163 158 1 4 of 1% QoQ mainly from Rest of Southeast Asia 63 64 62 (2) 0 term and trade loans Malaysia 29 30 29 (1) (0) Thailand 20 21 20 (5) 0 • Broad based YoY growth Indonesia 11 11 11 (3) 3 of
Slide 16: Total Funding
Total Funding Sep-22 Jun-22 Sep-21 QoQ YoY $b $b $b +/(-)% +/(-)% • Maintained focus on Singapore Rest of Southeast Asia 256 67 245 66 241 64 5 2 7 4 stable funding Malaysia 31 31 32 (0) (3) Thailand 22 22 20 0 13 • 3Q22 CASA ratio lower Indonesia 11 11 9 7 21 at 49.8%, largely due Vietnam 2 2 3 19
Slide 17: Liquidity Ratios
141 142 138 133 Liquidity Ratios 129 • Liquidity and funding 125 116 113 114 111 positions strengthened with 3Q22 LCR at 85.1 87.0 87.3 88.7 85.2 142% and NSFR at 114% Sep Dec Mar Jun Sep 2021 2022 USD LDR (%) 60.4 61.6 66.3 72.3 64.2 All-currency LCR (%) Loan/Deposit Ratio (LDR) (%) (1) Net Stable
Slide 18: Capital
Capital 13.5 13.5 13.1 13.1 12.8 • CET1 ratio remained healthy at 12.8%, post 268 263 266 253 259 FY22 interim dividend payout • Resilient capital position despite impact from market valuation volatility Sep Dec Mar Jun Sep 2021 2022 Leverage ratio (%) 7.1 7.2 6.9 6.6 6.4 RWA ($b) CET1 ratio (%) 18
Slide 19: Appendix
▪ Loan portfolio Appendix ▪ Exposure to Greater China ▪ Exposure to Oil & Gas sector 19
Slide 20: Diversified loan portfolio
Professionals and Housing loans private individuals 23% Others Diversified loan 7% 5% General Transport, portfolio commerce storage and Industry 12% communication 5% FIs, investment and holding Building & companies Manufacturing construction 13% 8% 27% Large corporates Others and institutions 14% 56
Slide 21: Exposure to Greater China
Exposure to Greater China 76.1 76.1 77.2 77.1 75.8 10.2 10.8 12.2 11.8 10.6 Debt ($b) ▪ ~$3b in loans to Chinese Non Bank ($b) 49.5 48.8 developers (1% of group loans 51.5 52.5 53.8 Bank ($b) & low borrower concentration) 16.4 16.5 13.5 12.8 11.4 Sep Dec Mar Jun Sep 2021 2022 As at 30 Sep 2022: Bank
Slide 22: Exposure to Oil and Gas (O&G)
Oil and Gas (O&G) Exposure to Other Traders / Commodities Sep 22 Upstream downstream Commodity Total industries1 Segments2 Segment industries Outstanding S$2.4b S$9.3b S$9.4b S$21.1b • As of 30 September loans 2022, outstanding loans Percentage of to the commodities total loans 4% 3% 7% segment rema
Slide 23: Thank You
Thank You & Right By You