United Overseas Bank Limited · SGX:U11
United Overseas Bank — Q3 2021 Earnings Presentation
23 slides from United Overseas Bank's earnings presentation, November 2021
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 2021 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 3Q21 key financial indicators 3Q21 profits maintained at $1b with ROE improved to Operating profit Net profit after tax 10.4%. Credit outlook stable and balance sheet $1.38b $1.05b remained resilient + 2% QoQ + 4% QoQ + 10% YoY + 57% YoY • NII grew 2% QoQ from steady loan growth
Slide 3: Performance by Segment
Performance by Segment 9M21 9M20 YoY 3Q21 2Q21 QoQ Operating Profit $m $m +/(-) % $m $m +/(-) % ▪ Retail driven by strong growth in wealth & cards, Group Retail 1,593 1,566 2 523 502 4 moderating impact from margin compression Group Wholesale Banking 2,506 2,368 6 855 848 1 ▪ Wholesale growth led by
Slide 4: Wholesale customers
+6%1 Strengthening Cross border income; Connectivity Formed 30%2 of GWB income Wholesale Across our ASEAN footprint and global network 2x1 Suppliers and distributors within customers Financial Supply Chain Management (FSCM) solution ▪ Growing regional Sector +25%3 franchise, capturing Specialisation
Slide 5: Digital Transformation
Digital Transformation Scale UOB TMRW across >2x1 ~5ppt1 ASEAN, reduce cost to serve Consumers and deepen engagement to Target income from Target decline in digitally-engaged2 cost-to-income ratio for drive customer lifetime value customers digitally-engaged2 customers ▪ Tapping on rising Growing Ec
Slide 6: Performance by Geography
9M21 9M20 YoY 3Q21 2Q21 QoQ Performance by Operating Profit $m $m +/(-)% $m $m +/(-)% Geography Singapore 2,115 1,941 9 686 705 (3) Rest of Southeast Asia 1,029 995 3 351 335 5 Malaysia 541 512 6 185 173 7 ▪ YTD performance Thailand 301 299 1 99 101 (1) recovering in most markets Indonesia 181 160 1
Slide 7: Financial Highlights
Financial Highlights 9M21 9M20 YoY 3Q21 2Q21 QoQ 9M21 $m $m +/(-)% $m $m +/(-)% Net interest income 4,711 4,524 4 1,604 1,578 2 ▪ NPAT jumped 37% YoY Net fee income 1,823 1,475 24 589 595 (1) supported by robust loan Others 822 929 (12) 259 243 7 growth, record fees and lower credit costs Total inco
Slide 8: Gross Loans
Sep-21 Jun-21 Sep-20 QoQ YoY Gross Loans $b $b $b +/(-)% +/(-)% Singapore 158 153 144 4 10 ▪ Steady growth of 3% QoQ Rest of Southeast Asia 62 62 63 1 (1) mainly from term and trade Malaysia 29 29 30 1 (3) loans in Singapore and Thailand 20 20 19 (1) 1 Greater China Indonesia 11 11 11 (0) (2) Vietna
Slide 9: Fee Income
25 26 21 23 25 24 23 Fee Income 1,823 ▪ Record fees in 9M21 296 particularly wealth and 1,475 133 638 loan-related as investment 263 595 589 103 and trade activities pick 85 514 522 96 97 639 40 up 86 104 41 52 522 46 49 239 201 ▪ 3Q21 credit card fees 199 188 188 higher, while wealth and fund manag
Slide 10: Non-Performing Assets
2020 2021 ($m) 3Q 4Q 1Q 2Q 3Q Non-Performing Assets NPAs at start of period 4,628 4,301 4,608 4,544 4,547 Non-individuals New NPAs _ 74 622 145 360 251 Less: ▪ Asset quality remained Upgrades and recoveries 216 175 250 158 73 resilient and portfolio Write-offs 63 179 26 202 42 well-collateralised 4,
Slide 11: Total Allowance on Loans
68 57 55 23 Total Allowance on 29 Loans 21 17 34 20 20 1,188 19 19 20 10 ▪ Steady credit costs at 476 20bps this quarter 750 391 504 150 342 140 207 144 153 438 364 241 136 6 134 138 155 71 -2 9M20 9M21 3Q 4Q 1Q 2Q 3Q 2020 2021 Credit costs on loans - Specific (basis points) General allowance on loa
Slide 12: Allowance Coverage
39 37 37 35 34 1.0 1.0 1.0 1.0 1.0 Allowance Coverage 4,944 5,075 5,007 5,052 4,755 379 379 379 379 ▪ Strong reserve buffer with 379 coverage for performing 2,712 2,873 3,003 3,040 3,046 loans maintained at 1% ▪ Strong NPA coverage at 1,664 1,692 1,693 1,588 1,627 106% or 265% taking Sep Dec Mar Jun
Slide 13: Liquidity ratios
Liquidity ratios 139 139 138 127 131 ▪ Ample liquidity with 125 125 122 121 123 LCR at 138% and NSFR at 125% 86.7 85.4 87.0 86.9 85.1 Sep Dec Mar Jun Sep 2020 2021 USD LDR (%) 58.0 58.2 62.5 62.6 60.4 All-currency LCR (%) Loan/Deposit Ratio (LDR) (%) Net Stable Fund Ratio (NSFR) (%) 13
Slide 14: Capital
Capital 14.0 14.7 14.3 14.2 13.5 ▪ CET1 ratio eased to 13.5% largely due to 236 241 253 231 225 strong asset growth and interim dividend paid Sep Dec Mar Jun Sep 2020 2021 Leverage ratio (%) 7.4 7.4 7.5 7.4 7.1 RWA ($b) CET1 ratio (%) 14
Slide 15: Appendix
▪ Net Interest Income and Margin ▪ Trading & Investment Income Appendix ▪ Expense and Cost/Income Ratio ▪ Total Funding ▪ Loan portfolio ▪ Exposure to Greater China ▪ Exposure to Oil & Gas sector 15
Slide 16: Net Interest Income and Margin
1.93 1.89 1.83 1.87 1.90 1.90 1.87 Net Interest Income 1.57 1.56 1.53 1.57 1.57 1.56 1.55 and Margin 0.69 0.72 0.76 0.78 0.75 0.71 0.70 4,711 4,524 ▪ Higher NII led by healthy 614 567 loan growth of 9% YoY 1,529 1,578 1,604 1,474 1,512 ▪ Broadly stable net interest 206 208 207 203 204 margin amid lo
Slide 17: Trading & Investment Income
72 73 65 67 51 57 57 Trading & Investment Income 728 246 ▪ 9M21 customer-related 620 210 T&I increased 8% as 358 192 market activities picked- 218 105 182 up this year 90 152 50 63 42 ▪ T&I income from customer-related contribution at 67% for 370 402 141 121 133 129 110 3Q21 9M20 9M21 3Q 4Q 1Q 2Q 3Q
Slide 18: Expenses and Cost / Income Ratio
45.3 46.7 Expenses and 43.8 44.6 43.8 43.7 43.7 Cost / Income Ratio 12% 11% 14% 15% ▪ Stable CIR on the back of 13% 14% 12% 11% strong income growth 12% 13% 14% 11% 15% 14% 15% and disciplined spend 15% 12% 13% 13% 14% 14% 60% 61% 59% 58% 62% 62% 61% ▪ Continue to prioritise strategic investments in
Slide 19: Total Funding
Sep-21 Jun-21 Sep-20 QoQ YoY Total Funding $b $b $b +/(-)% +/(-)% Singapore 241 230 217 5 11 Rest of Southeast Asia 64 64 64 1 (0) Malaysia 32 31 32 2 2 ▪ Continue to focus on Thailand 20 20 21 (1) (6) building stable funding Indonesia 9 9 8 4 11 Vietnam 3 3 3 (14) (9) Others 0 0 0 (4) (10) ▪ CASA r
Slide 20: Diversified Loan portfolio
Professionals and Housing loans private individuals 23% Others 9% 4% Transport, storage General commerce and 13% communication Industry 4% Diversified FIs, investment and Loan portfolio holding companies Building & construction 12% 27% Manufacturing 8% Large corporates Others and institutions 13% 55
Slide 21: Exposure to Greater China
Exposure to Greater China 74.8 76.1 69.2 68.3 71.8 7.3 7.6 10.2 6.1 6.5 Debt ($b) Non Bank ($b) 44.1 44.2 47.2 48.2 49.5 Bank ($b) 19.0 17.6 17.3 19.0 16.4 Sep Dec Mar Jun Sep 2020 2021 As at 30 Sep 2021: Mainland China exposure ($26.4b or 6% of total assets) Hong Kong SAR exposure ($40.9b or 9% of
Slide 22: Exposure to Oil and Gas (O&G) Sector
Exposure to Oil and Gas (O&G) Sector Total Outstanding O&G Loans ($b) As of 30 September 2021, outstanding O&G loans represented 4% of total 11.8 12.1 loans as compared with 5% at 30 June 2018 3.7 5.1 Approximately 80% of O&G exposure is to downstream players and traders, which are mainly national o
Slide 23: Thank You
tit VOB Thank You BRA RIGHT BY YOU