Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — FY2023 Earnings Presentation
22 slides from Oversea-chinese Banking's earnings presentation, Feb 28, 2024
Slide 1: Full Year 2023 Results Presentation
Full Year 2023 Results Presentation Goh Chin Yee, Group Chief Financial Officer 28 February 2024 OCBC Financial Results
Slide 2: Agenda
Agenda 01 Financial Highlights 02 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 not sum to stated t
Slide 3: Performance highlights
Performance highlights Record FY23 profit; dividend raised 21% to 82 cents Total Income YoY ■ Robust full year profit drove Group S$13.5b +20% ROE higher to 13.7% FY23: S$7.02b +27% YoY Net Profit Net Interest Income +25% ■ Income rose 20% to a new +18% YoY Non-Interest Income +7% high Operating Exp
Slide 4: FY23 Group profit crossed S$7b mark to a new high
Performance overview FY23 Group profit crossed S$7b mark to a new high Group Performance 1/ Banking Operations Performance (S$m) FY23 YoY 4Q23 YoY QoQ FY23 YoY 4Q23 YoY QoQ Net Interest Income 9,645 +25% 2,462 +3% – 9,500 +25% 2,416 +3% – Non-Interest Income 3,862 +7% 811 +25% -17% 2,880 +2% 692 +34
Slide 5: Resilient and well-diversified business franchise
Performance highlights Resilient and well-diversified business franchise Banking Wealth Management Net Profit (S$m) NII and Fee Income (S$m) WM Income (S$m) 1/ WM AUM (S$b) 30% 32% ■ Record Banking Operations +27% +20% +2% profit driven by strong NII +26% growth 4,325 3,419 6,385 899 1,126 258 263 ■
Slide 6: Strong capital, funding and liquidity positions to support growth
Balance sheet Strong capital, funding and liquidity positions to support growth Loans-to-Deposits Ratio Funding Composition (%) Group LDR (%) ■ Stable funding base, Customer deposits 12% comprising 80% from Bank deposits customer deposits Debts issued 6% S$455b Capital and reserves 2% 83.3 80.5 Dec
Slide 7: Agenda
Agenda 01 Financial Highlights 02 Performance Trends Notes: - Certain comparative figures have been restated to conform with the current period’s presentation; - Amounts less than S$0.5m are shown as “0”; - “nm” denotes not meaningful; - “na” denotes not applicable; - Figures may not sum to stated t
Slide 8: Record FY23 and 4Q23 NII; FY23 NIM up 37bps to 2.28%
Net interest income Record FY23 and 4Q23 NII; FY23 NIM up 37bps to 2.28% 1Q22 FY23 YoY 4Q23 +44% 2Q23 YoY +3% 2.31% 2.30% 2.26% 2.27% 2.29% 2.28% YoY +25% QoQ QoQ +44% +0.3% Net Interest Margin 1.91% 9,645 ■ Record FY23 NII driven by 5% asset growth and 7,688 substantial increase in NIM across all k
Slide 9: FY23 Non-II stronger YoY
Non-interest income FY23 Non-II stronger YoY FY23 YoY 4Q23 +44% 2Q23 YoY +25% YoY +7% QoQ QoQ +44% -17% 30.2% 30.8% 28.4% 31.9% 28.6% % of Group Income 21.3% 24.8% ■ Higher FY23 Non-II largely driven by improved trading 3,862 and investment income 3,598 1,066 808 ■ FY23 included net gains 1,012 803
Slide 10: FY23 fees softer YoY; trended higher in 2H vs 1H
Non-interest income FY23 fees softer YoY; trended higher in 2H vs 1H FY23 YoY 4Q23 +44% 2Q23 YoY +16% YoY -3% QoQ QoQ +44% unchanged ■ Fee income higher in 2H23 1,851 compared to 1H23, led by 1,804 improved wealth 285 management, credit card, Net Fees & Commissions (S$m) 304 99 loan and trade-relate
Slide 11: FY23 trading income up 8% YoY
Non-interest income FY23 trading income up 8% YoY FY23 YoY 4Q23 +44% 2Q23 YoY +22% YoY +8% QoQ QoQ +44% +2% 1,004 ■ Higher FY23 trading 929 income driven by record 196 customer flow treasury 311 171 Trading Income (S$m) income 255 Non-Customer Flow 111 216 222 60 Customer Flow 7 18 180 19 758 808 19
Slide 12: FY23 expenses up YoY; CIR lower at 38.7%
Operating expenses FY23 expenses up YoY; CIR lower at 38.7% FY23 YoY 4Q23 +44% 2Q23 YoY +19% 42.9% YoY +8% QoQ QoQ +44% -2% 38.5% 39.1% 40.0% 38.7% 36.3% 37.1% Cost-to-income (CIR) ■ FY23 expenses reflected continued investments in 5,223 talent and technology to 4,838 756 support growth 686 1,329 1,
Slide 13: Resilient asset quality
Asset quality Resilient asset quality YoY +44% YoY -17% Dec 23 2Q23 1.2% QoQ +44% QoQ -6% NPL ratio 1.1% 1.1% 1.0% 1.0% ■ NPLs declined YoY and QoQ across all key markets Non-performing Assets (S$m) 3,486 ■ NPL ratio on downward 3,329 3,275 103 3,095 trend over last two years 380 95 94 2,901 Debt se
Slide 14: NPAs lower YoY for both corporate and consumer segments
Asset quality NPAs lower YoY for both corporate and consumer segments S$m 4Q22 3Q23 4Q23 FY22 FY23 At start of period 3,688 3,275 3,095 4,338 3,486 ■ FY23 new NPA formation lower for both consumer Corporate/ Commercial Banking and Others and corporate segments New NPAs 242 146 54 717 404 Net recover
Slide 15: FY23 total credit costs at 20bps
Allowances FY23 total credit costs at 20bps FY23 YoY 4Q23 +44% 2Q23 YoY -41% 35 31 YoY +25% QoQ QoQ +44% +1% Credit costs (bps) 1/ 17 21 16 20 12 Total 21 8 5 6 8 ■ FY23 allowances higher YoY (0) 4 Impaired for both impaired and non- impaired assets 733 314 ■ Credit costs for impaired 584 loans at 8
Slide 16: NPA coverage ratio raised to 151%
Allowances NPA coverage ratio raised to 151% YoY YoY +10% +44% 151% Dec 23 2Q23 131% 139% QoQ QoQ +2% +44% Total NPA coverage 114% 121% ■ NPA coverage ratio higher, 4,299 4,296 4,382 largely driven by increase in 3,991 4,037 allowances for non-impaired 455 455 455 assets, while NPAs continued 455 45
Slide 17: Loans rose YoY and QoQ in constant currency terms
Loans Loans rose YoY and QoQ in constant currency terms Loans by Geography Loans by Industry YoY +44% YoY +1% Dec 23 2Q23 +2% QoQ +44% QoQ -1% (S$b) in constant ccy terms +1% in constant ccy terms 9% 295 294 297 298 297 5% 22% ■ Corporate, SME and Rest of the world 5% Consumer/Private Banking 59 58
Slide 18: Commercial Real Estate ("CRE") Office Sector loans
Loans Commercial Real Estate (“CRE”) Office Sector loans ■ Loans to CRE Office sector accounted for 12% of Group 0.2% loans 0.9% 0.7% ■ Portfolio remained sound; 2.3% mostly secured with average Singapore Malaysia and Indonesia LTV between 50% and 60% Hong Kong Mainland China 1/ & Offshore 2/ Dec 23
Slide 19: Deposits lower QoQ; CASA ratio higher at 48.7%
Deposits Deposits lower QoQ; CASA ratio higher at 48.7% YoY +44% YoY +4% 83.3% 80.5% Dec 23 2Q23 Group LDR 79.2% 78.8% 79.7% QoQ +44% QoQ -2% 82.4% 81.6% SGD LDR 76.5% 76.1% 76.4% ■ Continued proactive balance sheet management 59.3% USD LDR 53.3% 51.6% 53.3% 49.2% ■ Deposits lower QoQ from run-down
Slide 20: Robust capital to support growth
Capital Robust capital to support growth CET1 CAR after adjusting for FY23 final dividend YoY +0.7ppt YoY +44% declared Dec 23 2Q23 QoQ QoQ +1.1ppt +44% ■ CET1 ratio higher QoQ from CET1 CAR (%) profit accretion, and lower 15.2 15.9 15.4 15.9 RWA in part due to release of 14.8 15.1 the additional ca
Slide 21: FY23 dividend up 21% to 82 cents
Dividend FY23 dividend up 21% to 82 cents YoY +44% FY23 2Q23 YoY +21% QoQ +44% 53% 53% 47% 49% 39% ■ Higher 2023 full year Dividend payout ratio dividend supported by 82.0 resilient earnings and strong capital position 68.0 42.0 53.0 53.0 DPS (cents) 40.0 Final dividend 28.0 28.0 31.8 Interim divide
Slide 22: 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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