Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q1 2019 Earnings Presentation
41 slides from Oversea-chinese Banking's earnings presentation, May 10, 2019
Slide 1: First Quarter 2019 Results Presentation
First Quarter 2019 Results Presentation 10 May 2019 Disclaimer: This presentation should be read as an overview of OCBC’s current business activities and operating environment which may contain statements relating to OCBC’s growth strategy and future business aspirations. These statements involve ri
Slide 2: Agenda
Agenda Results Overview 1Q19 Group Performance Trends Appendix: Performance of Major Subsidiaries - Great Eastern Holdings - OCBC Wing Hang - OCBC Malaysia - Bank OCBC NISP Note: - Certain comparative figures have been restated to conform with the current period’s presentation. - Amounts less than S
Slide 3: 1Q19 Highlights
Group performance 1Q19 Highlights Net profit up 11% YoY to S$1.23b, underpinned by record operating profit; ROE higher at 12.0% Summary Financial Performance Resilient and Sustainable Business Momentum Net Interest Income : S$1.53b; +8% (1Q18 : S$1.42b) ➢ Operating profit before allowances up 23% Yo
Slide 4: 1Q19 Group Performance
Group performance 1Q19 Group Performance Net profit rose 11% YoY and 33% QoQ to S$1.23b, driven by strong income growth 1Q19 1Q18 YoY 4Q18 QoQ OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 1,534 1,415 8 1,520 1 Non-interest income 1,142 918 24 830 38 Total income 2,676 2,333 15 2,350 14 O
Slide 5: 1Q19 Banking Operations Performance
Banking Ops performance 1Q19 Banking Operations Performance Net profit for Banking Operations rose 15% QoQ to S$942m 1Q19 1Q18 YoY 4Q18 QoQ Banking Operations S$m S$m +/(-)% S$m +/(-)% Net interest income 1,510 1,397 8 1,499 1 Non-interest income 699 703 (1) 639 9 Total income 2,208 2,100 5 2,138 3
Slide 6: Agenda
Agenda Results Overview 1Q19 Group Performance Trends Appendix: Performance of Major Subsidiaries - Great Eastern Holdings - OCBC Wing Hang - OCBC Malaysia - Bank OCBC NISP 6
Slide 7: Performance by business and geography
Earnings Performance by business and geography Earnings well-diversified across key business segments and geographies 1Q19 Operating Profit 1Q19 Profit before Tax by Business1/ by Geography OCBC Wing Others Hang Global Corporate / 8% 1Q19 Investment Greater 4% 1Q19 Banking China Insurance 19% 6% 9%
Slide 8: Net interest income
Net interest income Net interest income Net interest income increased 8% YoY, from both loan growth and higher NIM; NIM rose 4bps QoQ to 1.76% underpinned by loan repricing in Singapore 1.76% 1.72% 1.72% 1.70% Net interest 1.67% 1.67% 1.65% margin (“NIM”) 5,890 5,423 1,505 1,520 1,534 1,415 1,450 Ne
Slide 9: Non-interest income
Non-interest income Non-interest income Non-interest income up 38% QoQ, led by higher fees and commissions, trading income and insurance profit Non- 43.1% 41.4% 42.7% 39.3% 39.3% 40.8% interest 35.3% income / Total income 4,105 1,142 3,811 1,024 1,039 918 918 276 911 234 225 830 560 154 206 52 Life
Slide 10: Wealth Management (“WM”) Franchise
Wealth management Wealth Management (“WM”) Franchise WM income up 52% QoQ, driven by higher insurance and private banking income; BOS’ AUM rose 6% QoQ to a new high of US$108b Wealth Management Income1/ 2/ (S$m) Bank of Singapore’s Earning Asset Base (US$b) As % of Group income Dec 15 – Dec 18 CAGR
Slide 11: Net Fees & Commissions
Non-interest income Net Fees & Commissions Net fee income grew 4% QoQ to S$495m, led by growth in wealth management fees 20.9% 23.0% 21.0% Net fee 20.5% 19.8% 20.2% 18.5% income / Total income 1/ 2,031 1,953 310 299 536 95 518 502 94 495 74 474 79 78 557 22 73 Others 3/ Net fees and 528 31 79 commis
Slide 12: Operating expenses
Operating expenses Operating expenses Expenses rose 6% YoY and 2% QoQ to S$1.10b; CIR was lower at 40.9% as income growth outpaced that of expenses Cost-to- 43.4% 44.2% 45.9% 42.4% 41.9% 42.0% 40.9% income ratio (“CIR”) 4,214 4,043 1,069 1,078 1,095 1,032 1,035 796 779 218 202 214 Others 176 200 Ope
Slide 13: Total cumulative allowances
Allowances Total cumulative allowances Total allowances set aside complied with requirements set out in SFRS(I) 9 and the revised MAS 612 3,067 2,800 2,798 2,769 2,695 674 Regulatory Loss Total 453 474 Allowance Reserve 353 534 cumulative (“RLAR”) allowances (S$m) Allowances for 1,034 1,130 1,115 1,
Slide 14: Allowances
Allowances Allowances Total allowances up QoQ, as a decline in allowances for impaired loans was offset by an increase in allowances for non-impaired loans -57% YoY nm YoY 671 +22% QoQ Allowances for 249 loans and other 205 assets (S$m) 288 49 12 21 FY17 FY18 1Q18 2Q18 3Q18 4Q18 1Q19 Allowances for
Slide 15: Customer loans
Loans Customer loans Loans rose 5% YoY to S$259b, driven by broad-based growth In constant ccy terms +5% YoY +4% YoY +0.4% QoQ +1% QoQ 257 258 259 247 252 Rest of the world 33 35 36 38 YoY: +19% 32 QoQ: +6% Greater China Customer 65 66 64 63 63 YoY: unchanged loans (S$b) QoQ: -3% 19 20 20 20 20 Indo
Slide 16: Customer loans
Loans Customer loans Loan portfolio remained well-diversified Customer Loans by Geography Customer Loans by Industry Rest of the 1/ World Others Other Asia Pacific 9% Housing loans Mar 19 14% Mar 19 6% 9% Singapore Manufacturing 14% 25% 5% Dec 18 7% Dec 18 42% 6% 25% S$259b 42% Greater 24% 25% Gener
Slide 17: Greater China Customer Loans
Loans Greater China Customer Loans Loans growth unchanged YoY but lower QoQ at S$63b 0.6% NPL ratio 0.4% 0.3% 0.3% 0.4% 65 66 64 63 63 4 4 4 4 4 2 3 2 3 2 Macau 32 33 32 33 33 Taiwan Customer Hong Kong loans to Greater China (S$b) Offshore 2/ China 1/ 20 21 22 20 19 5 6 5 5 5 Mar 18 Jun 18 Sep 18 De
Slide 18: Asset quality
Asset quality Asset quality Portfolio quality remained sound; NPAs declined slightly from the previous quarter; NPL ratio unchanged QoQ at 1.5% 1.5% 1.5% 1.4% 1.4% 1.4% NPL ratio 3,938 3,920 3,594 100 47 3,452 3,514 Debt securities / 43 61 700 653 Contingent liabilities 47 1/ 626 Rest of the 684 773
Slide 19: NPL Ratio & Non-Performing Assets
Asset quality NPL Ratio & Non-Performing Assets NPL ratio stable against the previous quarter at 1.5% NPL ratio NPAs 1.49% 1.50% 1.38% 1.38% 1.38% 1Q19 1Q18 4Q18 S$m S$m S$m 0.87% 0.86% Opening balance 3,938 3,468 3,594 0.85% 0.86% 0.84% New NPAs 298 297 881 Net recoveries/ (223) (274) (221) upgrade
Slide 20: Customer deposits
Deposits Customer deposits Customer deposits at S$294b; CASA deposits up YoY and QoQ at S$138b 47.1% 47.7% 47.5% 46.8% CASA ratio 46.4% 289 290 295 294 287 27 23 27 25 29 Others Customer 124 125 128 132 131 deposits Fixed Deposits (S$b) Savings Deposits Current Account 53 53 52 53 55 S$136b S$138b S
Slide 21: Loans-to-Deposits Ratio
Funding Loans-to-Deposits Ratio Group LDR higher YoY and QoQ at 87.1% 88.5% 87.1% 85.9% 86.4% Group 84.4% LDR 1/ 290 295 294 289 287 30 30 Others 27 29 257 27 258 259 247 252 10 IDR 9 9 8 9 7 8 8 8 7 29 30 30 RMB 29 28 28 27 28 29 9 28 8 8 9 HKD 8 5 5 5 24 5 23 23 5 23 23 36 36 35 35 MYR 34 Customer
Slide 22: Funding & Liquidity
Funding Funding & Liquidity Customer deposits accounted for 78% of total funding; All-currency LCR and NSFR well above regulatory guidelines Funding Composition as of 31 Mar 2019 Wholesale Funding by Currency as of 31 Mar 2019 By Maturity: Customer deposits Current account Others 78% & savings depos
Slide 23: Capital
Capital Capital CET1 CAR improved YoY and QoQ to 14.2% Capital adequacy ratios 16.4 16.7 (“CAR”) (%) 15.8 15.9 16.1 14.4 14.8 14.9 14.2 14.3 Total CAR Tier 1 CAR 14.0 14.2 Common Equity 13.1 13.2 13.6 Tier 1 (“CET1”) CAR Mar 18 Jun 18 Sep 18 Dec 18 Mar 19 CET1 capital (S$m) 26,206 26,641 27,377 28,0
Slide 24: Agenda
Agenda Results Overview 1Q19 Group Performance Trends Appendix: Performance of Major Subsidiaries - Great Eastern Holdings - OCBC Wing Hang - OCBC Malaysia - Bank OCBC NISP 24
Slide 25: Subsidiaries’ Performance
Major subsidiaries Subsidiaries’ Performance Major subsidiaries contributed 39% to the Group’s profit Key Metrics 1Q19 1Q18 YoY Net profit S$343m +124% S$153m TWNS S$249m +6% Great Eastern S$235m Holdings S$106m NBEV -3% S$109m NBEV margin 42.3% 46.4% -4.1ppt Net profit HKD625m unchanged HKD626m HKD
Slide 26: 1Q19 Great Eastern Holdings’ performance
Great Eastern 1Q19 Great Eastern Holdings’ performance Net profit contribution up YoY and QoQ to S$290m 1Q19 1Q18 YoY 4Q18 QoQ GEH S$m S$m +/(-)% S$m +/(-)% Profit from insurance business 240 172 49 204 17 - Operating profit 150 163 (8) 172 (13) - Non-operating profit/ (loss) 75 (9) 966 11 577 - Oth
Slide 27: GEH: Operating Profit
Great Eastern GEH: Operating Profit Operating profit was S$150m -8% YoY +6% YoY 636 600 172 163 157 150 144 Operating profit from insurance business (S$m) FY17 FY18 1Q18 2Q18 3Q18 4Q18 1Q19 Note: - Operating Profit (net of tax) is defined as premiums less claims, surrenders, commissions, expenses an
Slide 28: GEH: Non-operating profit
Great Eastern GEH: Non-operating profit Non-operating profit higher, mainly driven by MTM gains in the fixed income investment portfolio arising from the narrowing of credit spreads 113 Non-operating 75 profit/(loss) from insurance business (S$m) 38 21 15 11 (9) FY17 FY18 1Q18 2Q18 3Q18 4Q18 1Q19 No
Slide 29: GEH: Profit from Shareholders’ Fund
Great Eastern GEH: Profit from Shareholders’ Fund Profit from shareholders’ fund was higher at S$148m, mainly from MTM gains in the investment portfolio 412 148 Profit from Shareholders’ 79 Fund (S$m) 66 91 2 (55) FY17 FY18 1Q18 2Q18 3Q18 4Q18 1Q19 Note: Figures for FY17 were restated in accordance
Slide 30: GEH: Total weighted new sales
Great Eastern GEH: Total weighted new sales TWNS of S$249m was 6% above the prior year, underpinned by continued growth momentum in Malaysia and Indonesia -5% YoY 1,313 19 1,247 +6% YoY 23 353 382 350 331 4 331 5 7 90 TWNS 95 249 Emerging markets (S$m) 235 122 7 6 Malaysia 75 92 940 842 Singapore 25
Slide 31: GEH: New business embedded value
Great Eastern GEH: New business embedded value NBEV at S$106m with NBEV margin at 42.3% in 1Q19 46.4% 44.9% 46.1% NBEV 41.4% 43.0% 42.3% margin 35.9% (NBEV / Total weighted new sales) 543 536 6 7 148 153 2 2 210 262 126 109 2 67 106 2 80 2 Emerging markets 63 NBEV 51 (S$m) 53 Malaysia 327 266 Singap
Slide 32: 1Q19 OCBC Wing Hang’s performance
OCBC Wing Hang 1Q19 OCBC Wing Hang’s performance Net profit was HKD625m 1Q19 1Q18 YoY 4Q18 QoQ OCBC Wing Hang HKD m HKD m +/(-)% HKD m +/(-)% Net interest income 1,167 1,210 (4) 1,181 (1) Non-interest income 358 232 55 543 (34) Total income 1,525 1,442 6 1,724 (11) Operating expenses (781) (723) 8 (
Slide 33: OCBC Wing Hang: Revenue
OCBC Wing Hang OCBC Wing Hang: Revenue Net interest income down 4% YoY; NIM rose 1bp to 1.62%; Non-interest income up 55% YoY Net interest income (HKD m) Non-interest income (HKD m) Net interest Non-int. income/ margin Total income 1.57% 1.60% 1.61% 1.56% 1.61% 1.61% 1.62% 24.8% 27.1% 28.2% 30.8% 31
Slide 34: OCBC Wing Hang: Loans & Deposits
OCBC Wing Hang OCBC Wing Hang: Loans & Deposits Loans and deposits grew 1% YoY to HKD192b and HKD221b respectively; CASA improved to 40.4%; NPL ratio remained low at 0.6% Gross Loans (HKD b) Deposits (HKD b) NPL ratio Loans / Deposits 1/ 0.5% 0.4% 0.4% 0.6% 0.6% 74.8% 74.8% 74.1% 73.9% 74.2% 189 190
Slide 35: 1Q19 OCBC Malaysia’s Performance
OCBC Malaysia 1Q19 OCBC Malaysia’s Performance Operating profit rose 2% YoY and 21% QoQ to RM338m backed by income growth, but higher allowances drove net profit lower 1Q19 1Q18 YoY 4Q18 QoQ OCBC Malaysia RM m RM m +/(-)% RM m +/(-)% Net interest income 380 359 6 382 (1) Islamic banking income 1/ 10
Slide 36: OCBC Malaysia: Revenue
OCBC Malaysia OCBC Malaysia: Revenue Net interest/finance income up 7% YoY; NIM increased 6bps to 2.09%; Non-interest/finance income down 8% YoY, but rose 77% QoQ Net interest/finance income (RM m) Non-interest/finance income1/ (RM m) Net interest/ Non-interest/finance finance margin income/ Total i
Slide 37: OCBC Malaysia: Loans & Deposits
OCBC Malaysia OCBC Malaysia: Loans & Deposits Gross loans up 4% YoY to RM69b; NPL ratio stable at 1.9%; Deposits grew 2% YoY and 1% QoQ to RM76b; CASA ratio rose to 33.6% Gross Loans (RM b) Deposits (RM b) NPL ratio Loans / Deposits 2.2% 93.3% 94.1% 92.1% 2.0% 1.9% 1.9% 88.9% 90.3% 1.8% 75 74 76 76
Slide 38: 1Q19 Bank OCBC NISP’s performance
Bank OCBC NISP 1Q19 Bank OCBC NISP’s performance Net profit rose 15% YoY and 27% QoQ to a record IDR765b 1Q19 1Q18 YoY 4Q18 QoQ Bank OCBC NISP IDR b IDR b +/(-)% IDR b +/(-)% Net interest income 1,541 1,551 (1) 1,603 (4) Non-interest income 456 386 18 440 4 Total income 1,997 1,937 3 2,043 (2) Opera
Slide 39: Bank OCBC NISP: Revenue
Bank OCBC NISP Bank OCBC NISP: Revenue Net interest income at IDR1.54t; NIM at 3.89%; Non-interest income rose 18% YoY to IDR456b Net interest income (IDR b) Non-interest income (IDR b) Net interest Non-int. income/ margin Total income 4.47% 21.6% 22.8% 4.15% 4.24% 4.08% 4.26% 4.05% 20.0% 19.9% 19.3
Slide 40: Bank OCBC NISP: Loans & Deposits
Bank OCBC NISP Bank OCBC NISP: Loans & Deposits Loans and deposits grew 6% and 8% YoY respectively; CASA ratio rose to 38.4%; NPL ratio relatively stable at 1.8% Gross Loans (IDR t) Deposits (IDR t) NPL ratio Loans / Deposits 100.9% 96.7% 93.5% 91.1% 89.7% 1.7% 1.8% 1.8% 1.7% 1.8% 120 118 131 117 11
Slide 41: Thank You
First Quarter 2019 Results Thank You
Oversea-Chinese Banking — Q1 2019 Earnings Presentation on 6ix