Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q1 2023 Earnings Presentation
24 slides from Oversea-chinese Banking's earnings presentation, May 10, 2023
Slide 1: First Quarter 2023 Results Highlights
First Quarter 2023 Results Highlights Goh Chin Yee, Group Chief Financial Officer 10 May 2023 OCBC Financial Results
Slide 2: Agenda
Agenda Financial Highlights Group Net Profit Group Performance Trends Notes: - 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 applicable; - Figures may no
Slide 3: Financial Highlights
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Slide 4: Record 1Q23 performance
Performance highlights Record 1Q23 performance Total Income YoY QoQ ■ Record quarterly net profit, S$3.35b +27% +12% ROE improved to 14.7% +39% YoY Net Interest Income (NII) +56% -2% ■ Broad-based growth drove Group S$1.88b Non-Interest Income (Non-II) -11% +65% total income to new high Net Profit +
Slide 5: Financial highlights
Performance highlights Financial highlights Banking Wealth Management Net Profit (S$m) NII and Fee Income (S$m) WM Income (S$m) 1/ WM AUM (S$b) ■ Banking Operations net +43% +38% 34% 28% 33% profit at new high +28% unchanged +7% +21% +4% ■ Group WM income up +33% 1,102 QoQ and YoY, driven by 911 827
Slide 6: Healthy balance sheet position
Balance sheet Healthy balance sheet position Loans-to-Deposits Ratio Funding ■ Strong credit ratings of Aa1 Group LDR (%) Composition (%) from Moody’s and AA- from 12% both Fitch and S&P Customer deposits 4% 2% S$447b Bank deposits ■ Stable funding mix, more 83.3 83.3 Debts issued 79.2 Mar 23 82% th
Slide 7: Group Net Profit
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Slide 8: Group and Banking Operations Profit reached new highs
Performance overview Group and Banking Operations Profit reached new highs Group Performance Banking Operations Performance (S$m) 1Q23 YoY QoQ (S$m) 1Q23 YoY QoQ Total income 3,350 +27% +12% Total income 3,022 +31% +5% Operating Operating 1,244 +3% -4% 1,202 +6% – Expenses Expenses Operating Operati
Slide 9: 1Q23 Net Profit up QoQ and YoY to record S$1.88b
Net profit 1Q23 Net Profit up QoQ and YoY to record S$1.88b YoY +39% YoY Movement 1Q23 QoQ +44% Positive on net profit (S$m) Negative on net profit YoY ■ Net profit higher mainly due to 56% rise in NII, underpinned by asset 1Q22 Net Interest Non-II Profit from Operating Associates Total Amortisation
Slide 10: Group Performance Trends
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Slide 11: Net interest income at S$2.34b, NIM at 2.30%
Net interest income Net interest income at S$2.34b, NIM 1Q22at 2.30% YoY +56% 2.31% 2.30% 2.06% 1Q23 1.55% 1.71% QoQ -2% Net Interest Margin 2,386 2,338 2,099 1,700 Net Interest Income 1,503 ■ NII higher YoY, from 5% (S$m) growth in average assets and strong NIM expansion of 75bps 1Q22 2Q22 3Q22 4Q2
Slide 12: Non-interest income up 65% QoQ
Non-interest income Non-interest income up 65% QoQ YoY -11% 1Q23 QoQ +65% 43.1% 40.9% % of Group Income 33.4% 30.2% 20.5% ■ Non-II rose QoQ, supported by higher fee and trading income, as well as net realised gains from sale of 1,179 investment securities 1,140 1,053 Non-interest Income (S$m) 1,012
Slide 13: Higher wealth management fees drove QoQ increase in fee income
Non-interest income Higher wealth management fees drove QoQ increase in fee income YoY -13% 1Q23 QoQ +14% ■ Fee income rebounded 14% QoQ from stronger WM fees 522 Net Fees & Commissions (S$m) 477 68 453 453 ■ Sustained net new money Others 2/ 27 69 399 inflows during quarter 23 78 78 Investment Bank
Slide 14: Trading income rose QoQ and YoY
Non-interest income Trading income rose QoQ and YoY YoY +12% 1Q23 QoQ +69% ■ Trading income up QoQ driven by both higher customer and non-customer Trading Income (S$m) flow income 267 251 Non-Customer Flow 225 83 194 58 Customer Flow 32 7 148 16 193 184 187 193 132 1Q22 2Q22 3Q22 4Q22 1Q23 14
Slide 15: Strong cost discipline, operating expenses lower QoQ
Operating expenses Strong cost discipline, operating expenses lower QoQ YoY +3% 1Q23 45.6% QoQ -4% 43.5% 43.3% Cost-to-income 40.3% 37.1% ■ Operating expenses lower QoQ, mainly from a decline in “other” expenses arising 1,269 1,299 from the deduction of 1,253 1,244 1,205 insurance-related expenses 2
Slide 16: Allowances declined 65% QoQ
Allowances Allowances declined 65% QoQ YoY +151% 35 1Q23 QoQ -65% Credit costs (bps) 1/ 14 6 8 12 Total 8 4 4 5 ■ Total allowances down QoQ Impaired 0 from lower allowances set aside for both non-impaired and impaired assets 314 ■ Credit costs improved QoQ to 12bps Allowances (S$m) Allowances for 21
Slide 17: NPA coverage ratio further increased to 121%
Allowances NPA coverage ratio further increased to 121% YoY +3% 114% 121% Mar 23 108% QoQ +1% Total NPA coverage 91% 99% ■ NPA coverage ratio 3,905 3,909 4,001 3,991 4,037 improved from higher cumulative allowances and 449 455 455 444 444 drop in NPAs Cumulative allowances (S$m) Regulatory Loss Allo
Slide 18: NPL ratio improved to 1.1%, asset quality resilient
Asset quality NPL ratio improved to 1.1%, asset quality resilient YoY -23% Mar 23 QoQ -5% 1.4% 1.3% NPL ratio 1.2% 1.2% 1.1% ■ NPAs down QoQ across 4,307 key markets 118 3,969 372 120 3,688 ■ NPL ratio declined 299 3,486 604 110 3,329 sequentially over last 4 Non-performing Assets (S$m) 402 103 631
Slide 19: NPAs declined QoQ and YoY
Asset quality NPAs declined QoQ and YoY S$m 1Q22 4Q22 1Q23 At start of period 4,338 3,688 3,486 ■ Higher recoveries/ New NPAs upgrades more than offset Corporate/ Commercial Banking and Others 161 242 54 new NPA formation Consumer Banking/ Private Banking 135 190 120 296 432 174 ■ New NPA formation
Slide 20: Loans rose 3% YoY in constant currency terms
Loans Loans rose 3% YoY in constant currency terms +3% YoY unchanged in constant ccy terms +0.2% Mar 23 in constant ccy terms QoQ unchanged 298 303 295 294 294 57 59 Loans by Geography (S$b) 56 59 58 ■ Corporate, SME and 74 76 76 73 72 Consumer/Private Banking Rest of the world comprise 54%, 10% and
Slide 21: Deposits grew 5% QoQ and YoY
Deposits Deposits grew 5% QoQ and YoY 83.3% 84.4% 85.0% 83.3% YoY +5% Group LDR 79.2% Mar 23 QoQ +5% 79.3% 82.5% 82.4% 76.6% 76.5% SGD LDR ■ QoQ and YoY rise in deposits underpinned by 65.8% 66.9% 64.2% 59.3% growth in fixed deposits, USD LDR 53.3% driven by new inflows and shift from CASA balances
Slide 22: Robust capital position
Capital Robust capital position CET1 CAR excluding FY22 final dividend to be paid on 19 May 2023 YoY +0.7ppt Mar 23 QoQ +0.7ppt ■ 1Q23 profit accretion CET1 CAR (%) further strengthened CET1 15.2 15.2 15.9 ratio 14.9 14.4 15.1 ■ Payment of FY22 final dividend on 19 May 2023 Mar 22 Jun 22 Sep 22 Dec
Slide 23: Government and debt securities portfolio
Government & debt securities Government and debt securities portfolio Government and Debt Securities (S$b) FVOCI Government and Debt Securities (S$b) 69 62 ■ YTD unrealised mark-to- 2% 5 8% 1 57 market gains for FVOCI 7 10% 55 6 10% government and debt securities for 1Q23 was 20 23 about S$0.2b 55 8
Slide 24: Thank you
Thank you 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. This presentation contains “forward-looking statements”, which are ba
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