Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — FY2019 Earnings Presentation
36 slides from Oversea-chinese Banking's earnings presentation, Feb 21, 2020
Slide 1: Full Year 2019 Results Presentation
Full Year 2019 Results Presentation 21 February 2020 OCBC Financial Results 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. The
Slide 2: Agenda
Agenda Financial Highlights Group Performance Trends Appendices: Major Subsidiaries’ Results Note: - Certain comparative figures have been restated to conform with the current period’s presentation. - Amounts less than S$0.5m are shown as “0”; - “nm” denotes not meaningful; - “na” denotes not applic
Slide 3: Robust 2019 Performance
Performance review Robust 2019 Performance ❑ Third consecutive year of record profits ❑ Banking, wealth management and insurance business all performed strongly ❑ Average loan balances up, net interest margin higher YoY ❑ CASA deposits and CASA ratio up in all key markets ❑ Expenses well-managed, co
Slide 4: FY19 Financial Highlights
Group Performance FY19 Financial Highlights FY19 net profit climbed to a new high, driven by record earnings from banking operations Core Net Profit Sustainable Earnings Total Income (S$b) Net Interest Margin 10% (S$b) 9.70 10.87 12% 1.77% 7bps 1.70% 4.96 FY18 FY19 FY18 FY19 4.49 0.83 Cost-to-Income
Slide 5: Diversified Business Franchise
Diversified Business Diversified Business Franchise Strong growth across the Group’s banking, wealth management and insurance business Operating Profit by Business 1/ Banking OCBC Wing Customer Deposits (S$b) Hang Customer Loans (S$b) Global Corporate / Investment Banking and CASA ratio 8% 48.4% Ins
Slide 6: FY19 Group Performance
Group performance FY19 Group Performance Core net profit up 10% to a record S$4.96b FY19 FY18 YoY OCBC Group S$m S$m +/(-)% Net interest income 6,331 5,890 7 Non-interest income 4,540 3,811 19 Total income 10,871 9,701 12 Operating expenses (4,644) (4,214) 10 Operating profit 6,227 5,487 13 Associat
Slide 7: FY19 Banking Operations Performance
Banking Ops performance FY19 Banking Operations Performance Banking Operations’ core net profit rose 6% YoY to a new high of S$4.13b FY19 FY18 YoY Banking Operations S$m S$m +/(-)% Net interest income 6,219 5,811 7 Non-interest income 3,182 2,818 13 Total income 9,401 8,629 9 Operating expenses (4,2
Slide 8: 4Q19 Group Performance
Group performance 4Q19 Group Performance Net profit up 34% YoY and 6% QoQ from broad-based income growth 4Q19 4Q18 YoY 3Q19 QoQ OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 1,610 1,520 6 1,600 1 Non-interest income 1,312 830 58 1,055 24 Total income 2,922 2,350 24 2,655 10 Operating expe
Slide 9: 4Q19 Banking Operations Performance
Banking Ops performance 4Q19 Banking Operations Performance Core net profit from Banking Operations rose 23% YoY to S$1.01b 4Q19 4Q18 YoY 3Q19 QoQ Banking Operations S$m S$m +/(-)% S$m +/(-)% Net interest income 1,580 1,499 5 1,570 1 Non-interest income 903 639 41 792 14 Total income 2,482 2,138 16
Slide 10: Agenda
Agenda Financial Highlights Group Performance Trends Appendices: Major Subsidiaries’ Results 10
Slide 11: Net interest income
Net interest income Net interest income FY19 net interest income rose 7% YoY driven by asset growth and higher margins; 4Q19 NIM stable QoQ at 1.77% 1.77% 1.79% 1.76% 1.77% 1.77% 1.70% 1.72% NIM 6,331 5,890 1,588 1,600 1,610 1,520 1,534 S$m FY18 FY19 4Q18 1Q19 2Q19 3Q19 4Q19 11
Slide 12: Non-interest income
Non-interest income Non-interest income FY19 non-interest income rose 19% YoY to S$4.54b As % of 44.9% Group 41.8% 42.7% 39.3% 39.3% 39.7% income 35.3% 4,540 1,312 3,811 976 1,142 1,030 1,055 308 911 292 276 79 188 204 154 977 830 S$m 52 72 508 90 316 207 172 247 285 182 193 65 53 9 37 47 35 34 2,03
Slide 13: Wealth Management Franchise
Wealth management Wealth Management Franchise FY19 WM income grew 20% YoY to a new high; BOS’ AUM rose 15% YoY to US$117b Total Wealth Management Income 31% 34% 32% 29% 26% 29% 30% As % of Group income 3,397 2,842 921 935 751 789 607 S$m FY18 FY19 4Q18 1Q19 2Q19 3Q19 4Q19 Bank of Singapore’s Assets
Slide 14: Net Fees & Commissions
Non-interest income Net Fees & Commissions Record fee income in FY19 and 4Q19, up 5% YoY and 17% YoY respectively 2,123 2,031 322 310 550 556 105 522 95 495 474 82 89 78 577 73 32 21 557 79 27 25 S$m 23 155 137 150 170 135 180 138 41 43 44 41 41 889 949 221 239 243 247 193 FY18 FY19 4Q18 1Q19 2Q19 3
Slide 15: Operating expenses
Operating expenses Operating expenses FY19 operating expenses increased 10% YoY; CIR lower at 42.7% 43.4% 45.9% 44.0% 42.7% 40.9% 42.6% 43.3% CIR 4,644 4,214 1,266 946 1,151 1,132 796 1,078 1,095 272 858 227 233 202 214 S$m 812 230 211 213 216 204 2,840 2,606 764 660 677 713 686 FY18 FY19 4Q18 1Q19
Slide 16: Allowances
Allowances Allowances FY19 allowances higher YoY, with total credit costs at 25bps 35 25 27 24 27 Total credit 11 15 costs (bps) 1/ 746 179 207 205 249 17 S$m 288 858 250 111 263 271 232 18 402 93 (114) (112) (45) (84) (64) FY18 FY19 2/ 4Q18 1Q19 2Q19 3Q19 2/ 4Q19 Allowances for impaired assets Allo
Slide 17: Total Cumulative Allowances
Allowances Total Cumulative Allowances Total NPA coverage higher YoY and QoQ at 86% 252% 250% 242% 233% Unsecured NPA 211% coverage 86% 78% 78% 78% 70% Total NPA coverage 3,263 3,321 3,067 3,046 2,769 875 876 674 675 534 S$m 1,034 1,049 1,114 1,048 1,014 1,221 1,359 1,322 1,274 1,397 Dec 18 Mar 19 J
Slide 18: Customer loans
Loans Customer loans Loans grew 3% YoY to S$265b Loans by Geography (S$b) +3% YoY (+3% in constant ccy terms) Greater China Loans (S$b) +1% QoQ (+1% in constant ccy terms) 0.6% 0.4% 0.4% 0.4% 0.4% NPL 258 259 263 263 265 ratio 64 64 65 65 63 36 38 41 40 42 4 4 4 4 3 4 3 2 2 2 64 63 64 65 65 33 33 34
Slide 19: Customer loans
Loans Customer loans Loan portfolio remained well-diversified Customer Loans by Geography Customer Loans by Industry Rest of the World Others 1/ Other Asia Housing loans Pacific 10% Dec 19 13% Dec 19 6% Singapore 9% Manufacturing 23% 5% Dec 18 7% 14% Dec 18 41% 6% 25% 25% S$265b 42% S$265b Greater 2
Slide 20: Asset quality
Asset quality Asset quality Portfolio quality remained sound; total NPAs lower YoY and QoQ NPAs by Geography NPAs movement 1.5% 1.5% 1.6% 1.5% S$m FY19 FY18 4Q19 3Q19 Total 1.5% NPL ratio At start of period 3,938 3,468 4,190 3,914 O&G 0.9% 0.9% 0.8% 0.9% 0.8% NPL ratio Corporate/ Commercial Banking
Slide 21: Customer deposits
Deposits Customer deposits Customer deposits rose 3% YoY to S$303b; led by higher CASA deposits 86.4% 87.1% 87.6% 86.8% 86.5% Group LDR 295 297 300 303 294 27 25 23 25 27 132 131 131 133 129 S$b 47.9% 48.4% 46.8% 47.1% 46.4% 137 138 142 141 147 Dec 18 Mar 19 Jun 19 Sep 19 Dec 19 CASA Fixed Deposits
Slide 22: Strong Balance Sheet Fundamentals
Funding Strong Balance Sheet Fundamentals Robust funding, liquidity and capital position to withstand market volatility Funding Liquidity Capital • Nearly 80% from customer deposits • Sound liquidity position • Strong capital base • Stable NSFR at 111% • LCR well above minimum required • Healthy lev
Slide 23: Progressive and Sustainable Dividends
Dividends Progressive and Sustainable Dividends FY19 dividend up 10 cents or 23% to 53 cents per share; payout ratio raised to 47% 47% 43% 40% 38% 37% Dividend payout ratio 53.0 43.0 36.0 36.0 37.0 28.0 DPS (cents) 23.0 18.0 18.0 19.0 Final dividend Interim dividend 25.0 18.0 18.0 18.0 20.0 2015 201
Slide 24: Agenda
Agenda Financial Highlights Group Performance Trends Appendices: Major Subsidiaries’ Results 24
Slide 25: Great Eastern Holdings' performance
Great Eastern Great Eastern Holdings’ performance FY19 net profit contribution to the Group rose 38% YoY to S$832m YoY YoY QoQ S$m FY19 FY18 4Q19 4Q18 3Q19 +/(-)% +/(-)% +/(-)% Profit from insurance business 815 761 7 260 204 27 160 62 - Operating profit 1/ 664 636 4 174 172 1 179 (3) - Non-operatin
Slide 26: GEH: Profit from insurance business
Great Eastern GEH: Profit from insurance business FY19 profit from insurance business up 10% YoY to S$744m +10% YoY +29% YoY +61% QoQ 744 674 237 80 225 38 183 147 63 75 11 136 S$m 636 664 172 162 179 174 150 (26) (32) FY18 FY19 4Q18 1Q19 2Q19 3Q19 4Q19 Operating profit Non-operating profit/(loss) 2
Slide 27: GEH: Profit from Shareholders' Fund
Great Eastern GEH: Profit from Shareholders’ Fund FY19 Shareholders’ Fund profit up YoY, led by higher mark-to-market gains from the investment portfolio 304 S$m 148 92 56 62 38 (55) FY18 FY19 4Q18 1Q19 2Q19 3Q19 4Q19 27
Slide 28: GEH: Total weighted new sales
Great Eastern GEH: Total weighted new sales TWNS up 1% YoY in FY19 and 19% YoY in 4Q19 +1% YoY 1,247 1,262 +19% YoY 26 23 +24% QoQ 395 382 455 6 331 318 7 300 137 6 S$m 7 249 122 108 7 118 92 842 781 252 202 204 175 150 FY18 FY19 4Q18 1Q19 2Q19 3Q19 4Q19 Singapore Malaysia Emerging markets Note: For
Slide 29: GEH: New business embedded value
Great Eastern GEH: New business embedded value FY19 NBEV grew 15% YoY, driven by improvement in NBEV margin as a result of GEH’s product and distribution strategy to optimise its product mix 48.8% 49.3% 51.3% 50.6% NBEV 46.1% 43.0% 42.3% margin +31% YoY +15% YoY 616 +22% QoQ 9 536 200 7 2 163 306 15
Slide 30: OCBC Wing Hang Hong Kong & Macau's performance
OCBC Wing Hang OCBC Wing Hang Hong Kong & Macau’s performance FY19 profit before tax 7% higher YoY before one-time item YoY YoY QoQ HKD m FY19 FY18 4Q19 4Q18 3Q19 +/(-)% +/(-)% +/(-)% Net interest income 3,945 3,583 10 1,036 909 14 1,017 2 Non-interest income 1,099 1,077 2 267 242 10 303 (12) Total
Slide 31: OCBC Wing Hang Hong Kong & Macau Key Financial Highlights
OCBC Wing Hang OCBC Wing Hang Hong Kong & Macau Key Financial Highlights Key Financial Highlights Net Interest Margin Cost-to-Income (exclude one-time item in FY18 and 4Q18) 1.2ppt 25bps 0.5ppt 0.7ppt 8bps 11bps 47.8% 46.2% 1.84% 45.0% 45.5% 45.0% 44.5% 43.8% 1.73% 1.73% 1.76% 1.62% 1.59% 1.60% FY18
Slide 32: OCBC Malaysia's performance
OCBC Malaysia OCBC Malaysia’s performance FY19 net profit rose 17% YoY, underpinned by strong income growth YoY YoY QoQ RM m FY19 FY18 4Q19 4Q18 3Q19 +/(-)% +/(-)% +/(-)% Net interest income 1,507 1,506 − 382 382 − 369 4 Islamic banking income 1/ 448 436 3 118 108 9 108 9 Non-interest / finance inco
Slide 33: OCBC Malaysia Key Financial Highlights
OCBC Malaysia OCBC Malaysia Key Financial Highlights Key Financial Highlights Net Interest Margin Cost-to-Income 4bps 7.4ppt 2bps 0.5ppt 5.5ppt 9bps 50.7% 2.07% 2.05% 2.04% 2.09% 2.05% 1.99% 2.08% 46.5% 46.0% 46.5% 45.7% 48.8% 43.3% FY18 FY19 4Q18 1Q19 2Q19 3Q19 4Q19 FY18 FY19 4Q18 1Q19 2Q19 3Q19 4Q
Slide 34: Bank OCBC NISP's performance
Bank OCBC NISP Bank OCBC NISP’s performance FY19 net profit rose 11% YoY to a record IDR2.94t YoY YoY QoQ IDR b FY19 FY18 4Q19 4Q18 3Q19 +/(-)% +/(-)% +/(-)% Net interest income 6,439 6,378 1 1,672 1,603 4 1,557 7 Non-interest income 1,913 1,411 36 483 440 10 475 2 Total income 8,352 7,789 7 2,155 2
Slide 35: Bank OCBC NISP Key Financial Highlights
Bank OCBC NISP Bank OCBC NISP Key Financial Highlights Key Financial Highlights Net Interest Margin Cost-to-Income 1.2ppt 1bp flat 19bps 2.1ppt 29bps 46.7% 44.6% 4.15% 3.96% 4.05% 3.89% 4.09% 4.06% 45.1% 45.1% 43.4% 45.3% 44.0% 3.77% FY18 FY19 4Q18 1Q19 2Q19 3Q19 4Q19 FY18 FY19 4Q18 1Q19 2Q19 3Q19 4
Slide 36: Full Year 2019 Results Thank You
Full Year 2019 Results Thank You
Oversea-Chinese Banking — FY2019 Earnings Presentation on 6ix