United Overseas Bank Limited · SGX:U11
United Overseas Bank — Q2 2017 Earnings Presentation
28 slides from United Overseas Bank's earnings presentation, Jul 28, 2017
Slide 1: 1st Half 2017 and 2nd Quarter 2017 Financial Highlights
UOB Group 1st Half 2017 and 2nd Quarter 2017 Financial Highlights Lee Wai Fai Group Chief Financial Officer 28 July 2017 Disclai me r: This material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation . It is informatio
Slide 2: 1H17 and 2Q17 Highlights
1H17 and 2Q17 Highlights Sound operating performance and healthy balance sheet 1H17 NPAT of $1.65b ↑5.5% YoY 2Q17 NPAT of $845m ↑4.6% QoQ Stable top lines growth • NIM pick up from active balance sheet management and stable funding costs • Strong growth in fee income from wealth management, fund man
Slide 3: Healthy contribution from client franchise, driven by fees and balance sheet growth
Healthy contribution from client franchise, driven by fees and balance sheet growth 1H17 1H16 +/(-) $m $m % Net interest income 2,659 2,485 7.0 p Fee and commission income 1,026 907 13.1 p Other non-interest income 621 600 3.5 p Total income 4,306 3,993 7.8 p Less: Total expenses 1,952 1,821 7.2 p O
Slide 4: Sound operating performance, with stable contribution from client franchise
Sound operating performance, with stable contribution from client franchise 2Q17 2Q16 +/(-) 1Q17 +/(-) $m $m % $m % Net interest income 1,356 1,211 12.0 p 1,303 4.0 p Fee and commission income 517 475 9.0 p 508 1.7 p Other non-interest income 310 338 (8.3) q 311 (0.1) q Total income 2,183 2,024 7.9
Slide 5: NII rose 7% YoY supported by loan growth and improved margin
NII rose 7% YoY supported by loan growth and improved margin Net Interest Income (NII) and Margin 2.26% 2.20% 2.13% 2.06% 2.23% 2.13% 2.09% 2.14% 2.14% 1.71% 1.77% 1.71% 1.74% 1.68% 1.69% 1.69% 1.73% 1.75% 0.82% 0.66% 0.50% 0.38% 0.55% 0.60% 0.71% 0.25% 0.43% 4,926 4,991 4,558 391 303 620 1,356 1,21
Slide 6: Fee income up 13% YoY and 2% QoQ
Fee income up 13% YoY and 2% QoQ from credit card, fund management and wealth management products Non-Interest Income (Non-NII) and Non-NII Ratio 38.9% 38.8% 38.1% 38.2% 40.2% 39.7% 38.6% 37.9% 37.1% 23.5% 23.4% 23.9% 23.8% 24.1% 26.2% 23.4% 24.0% 23.7% 3,122 3,071 2,900 284 263 334 813 810 819 828
Slide 7: Disciplined cost management maintained expense/income ratio
Disciplined cost management maintained expense/income ratio as investment in technology and infrastructure continues Operating Expenses and Expense / Income Ratio 44.7% 45.9% 45.3% 43.1% 47.2% 45.8% 45.0% 45.1% 45.6% 42.2% 43.4% 3,696 3,597 ^ 3,146 ^ 995 927 957 957 918 1,533 1,646 1,321 448 405 409
Slide 8: Lower specific allowance in 2Q17; general allowance increased
Lower specific allowance in 2Q17. General allowance increased to build up reserves while total credit costs on loans were kept at 32bps Allowance on Loans 45bp 39bp 32bp 32bp 76bp 32bp 32bp 53bp 49bp 19bp 969 12bp 32bp 32bp 32bp 32bp 32bp 428 30bp 15bp from 23bp existing NPLs 288 277 449 392 172 238
Slide 9: Movements in non-performing assets
Movements in non-performing assets 2Q16 3Q16 4Q16 1Q17 2Q17 $m $m $m $m $m NPA at start of period 3,016 3,164 3,632 3,480 3,543 New NPA 802 780 387 424 537 Upgrades, recoveries and translations (548) (201) (320) (293) (255) Write-offs (106) (111) (219) (68) (238) NPA at end of period 3,164 3,632 3,4
Slide 10: NPL ratio remained stable 1.5%
NPL ratio remained stable 1.5% NPL ($m) 3,056 3,496 3,328 3,399 3,466 NPL Ratio 1.4% 1.6% 1.5% 1.5% 1.5% 255 285 245 257 303 261 206 307 304 176 565 641 638 623 564 293 370 392 264 360 466 451 487 487 518 1,614 1,395 1,291 1,358 1,369 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Singapore Malaysia Thailand In
Slide 11: New NPLs mainly from general commerce and manufacturing industries
New NPLs mainly from general commerce and manufacturing industries 3,496 3,466 3,328 3,399 408 323 3,056 440 484 183 601 666 563 637 618 304 283 286 276 284 643 594 610 451 513 298 321 358 288 316 179 216 242 209 210 917 1,063 965 996 1,000 NPL ($m) Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Transport, stor
Slide 12: Exposure to commodities
Exposure to commodities Oil and gas Other Jun 17 Traders/ commodity Total Upstream downstream segments industries² industries Total exposure1 SGD4.3b SGD10.1b SGD9.2b SGD23.6b Outstanding SGD3.7b SGD5.8b SGD7.0b SGD16.5b loans 4% of total loans 7% of total loans Total exposure, including off-balan
Slide 13: Loan allowance coverage remains adequate
Loan allowance coverage remains adequate 332.5% 266.0% 262.4% 244.2% 241.1% 125.6% 112.4% 118.0% 118.1% 113.9% 1.5% 1.4% 1.2% 1.1% 1.2% 3,929 3,928 4,013 3,947 3,837 2,604 2,620 2,709 2,954 3,067 1,219 1,409 1,327 975 770 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Specific Allowance ($m) Total Allowance/Tot
Slide 14: Stable liquidity position
Stable liquidity position Customer Loans and Deposits; LDR and LCR 84.0% 85.0% 86.8% 86.7% 86.1% 251 255 260 260 248 222 225 224 208 213 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Net Customer Loans ($b) Customer Deposits ($b) Loan/Deposit Ratio (LDR) (%) SGD LDR (%) 91.9 89.7 89.7 87.8 89.9 USD LDR (%) 63.
Slide 15: Loans up 7% YoY to $228b across all key countries
Loans up 7% YoY to $228b across all key countries Jun-17 Jun-17 Jun-16 +/(-) Mar-17 +/(-) 18% Gross Loans $b $b % $b % 36% 8% 44% Singapore 125 120 4.6 125 0.3 56% Regional: 79 73 9.2 81 (1.4) Malaysia 26 25 2.9 26 2.2 4% 3% 31% Thailand 14 12 19.3 14 1.6 Indonesia 12 11 1.3 11 1.0 Jun-16 Greater Ch
Slide 16: Funding increased by 8% or $21b YoY
Funding increased by 8% or $21b YoY with proactive liquidity and balance sheet management Jun-17 14% Jun-17 Jun-16 +/(-) Mar-17 +/(-) Customer Deposits $b $b % $b % 43% Singapore 180 177 1.5 182 (1.3) Regional: 65 58 11.4 63 2.4 43% Malaysia 27 27 1.4 27 1.8 Thailand 14 12 14.9 14 3.8 Jun-16 Indones
Slide 17: Performance by business segment
Performance by business segment 1H17 1H17 1H16 +/(-) -5% 6% Segment Operating Profit $m $m % 42% Group Retail (GR) 992 883 12.4 Group Wholesale Banking (GWB) 1,337 1,353 (1.2) 57% Global Markets (GM) 132 148 (10.6) Others (106) (212) 49.8 1H16 -10% Total 2,355 2,172 8.4 7% 41% 62% GR GWB GM Others 1
Slide 18: Regional operating profit rose 14% YoY in constant currency terms
Regional operating profit rose 14% YoY in constant currency terms 1H17 9% At 8% constant FX rate 4% Operating 1H17 1H16 +/(-) +/(-) 7% Profit $m $m % % 59% 13% Singapore 1,378 1,319 4.5 4.5 1H16 Regional: 756 671 12.7 13.7 Malaysia 312 302 3.3 9.8 8% 6% Thailand 161 148 8.5 4.1 4% Indonesia 82 83 (0
Slide 19: Exposure to China
Exposure to China Jun 2017 Bank exposure in China SGD28.4b Around 99% with <1 year tenor Around 80% accounted for by top 5 domestic banks or 8.3% of total assets and policy banks Trade exposures represent close to half of bank exposure Bank, SGD18.7b Non-bank exposure in China Debt, SGD1.2b
Slide 20: Capital position augmented by various capital management initiatives
Capital position augmented by various capital management initiatives Capital Adequacy Ratios (CAR) 17.8% 17.3% 16.6% 16.2% Total 15.9% 3.5% 3.5% 2.7% 3.1% 3.1% Tier 2 Tier 1 13.5% 13.8% 14.3% 13.2% 13.1% Fully Loaded 1 12.4% 12.1% CET 1 12.2% 12.8% 13.3% Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 CET1 Capit
Slide 21: Interim dividend
Interim dividend 20 5 35 35 50 35 35 35 20 2014 2015 2016 1H17 Net dividend Interim Final Special UOB 80th anniversary per ordinary share (¢) 1H14 1H15 1H16 1H17 Payout amount ($m) 320 561 563 581 Payout ratio (%) 20 36 36 35 21
Slide 22: Appendix: Performance of Major Territories
Appendix : Performance of Major Territories - Singapore - Malaysia - Thailand - Indonesia - Greater China
Slide 23: Singapore – Key Financials
Singapore – Key Financials 1H17 1H16 +/(-) 2Q17 1Q17 +/(-) $m $m % $m $m % Net interest income 1,446 1,361 6.3 743 704 5.6 Fee & commission income 638 541 17.8 322 316 1.9 Other non-interest income 392 420 (6.9) 208 184 13.0 Total income 2,476 2,323 6.6 1,272 1,203 5.7 Less: Expenses 1,097 1,004 9.3
Slide 24: Malaysia – Key Financials
Malaysia – Key Financials 1H17 1H16 +/(-) 2Q17 1Q17 +/(-) RM'm RM'm % RM'm RM'm % Net interest income 1,060 995 6.5 538 522 3.1 Fee & commission income 340 299 13.7 162 178 (9.0) Other non-interest income 151 154 (1.9) 71 80 (11.3) Total income 1,551 1,448 7.1 771 780 (1.2) Less: Expenses 575 559 2.
Slide 25: Thailand – Key Financials
Thailand – Key Financials 1H17 1H16 +/(-) 2Q17 1Q17 +/(-) THB'm THB'm % THB'm THB'm % Net interest income 7,513 7,051 6.6 3,814 3,699 3.1 Fee & commission income 2,969 2,746 8.1 1,579 1,390 13.6 Other non-interest income 427 398 7.3 301 126 >100.0 Total income 10,909 10,195 7.0 5,694 5,215 9.2 Less:
Slide 26: Indonesia – Key Financials
Indonesia – Key Financials 1H17 1H16 +/(-) 2Q17 1Q17 +/(-) IDR'b IDR'b % IDR'b IDR'b % Net interest income 1,652 1,609 2.7 824 828 (0.5) Fee & commission income 411 383 7.3 223 188 18.6 Other non-interest income 213 276 (22.8) 113 100 13.0 Total income 2,276 2,268 0.4 1,160 1,116 3.9 Less: Expenses
Slide 27: Greater China – Key Financials
Greater China – Key Financials 1H17 1H16 +/(-) 2Q17 1Q17 +/(-) $m $m % $m $m % Net interest income 196 185 6.0 97 99 (2.5) Fee & commission income 52 53 (2.1) 27 25 10.2 Other non-interest income 122 67 81.3 49 72 (31.8) Total income 370 305 21.2 173 196 (11.7) Less: Expenses 169 167 1.0 83 85 (2.2)
Slide 28: Thank You
Thank You Thank you 28