United Overseas Bank Limited · SGX:U11
United Overseas Bank — Q1 2023 Earnings Presentation
23 slides from United Overseas Bank's earnings presentation, May 2023
Slide 1: UOB Group Financial Updates
UOB Group Financial Updates Lee Wai Fai Group Chief Financial Officer For the First Quarter Ended 31 March 2023 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 presentation. It is i
Slide 2: Financial Highlights: 1Q23 Core Net Profit at another New High of $1.6b
Financial Highlights 1Q23 Core Net Profit at another New High of $1.6b 1Q23 key financial indicators • NIM moderated to 2.14% from liquidity surplus placed into high quality assets Core operating profit (1) Core net profit after tax (1) and increase in funding costs. $2.1b $1.6b + 9% QoQ + 13% QoQ •
Slide 3: Performance by Segment
Performance by Segment 1Q23 1Q22 YoY • Retail benefitted from strong Operating Profit (1) $m $m +/(-) % growth in deposits and margins, pickup in cards and (1) Group Retail 795 376 >100 augmented by Citi consumer business Group Wholesale Banking 1,420 1,033 38 • Wholesale performance driven by margi
Slide 4: Retail strategy: consumer scale and digital acquisition
Consumers Scale Acquisition with Digital Scale UOB TMRW across ASEAN to digitally acquire at >7m >225k • Tapping on rising low cost Retail customers 77% are New to bank customers acquired in 1Q23, affluence and growing digitally enabled 59% digitally acquired digitalisation in Southeast Asia Deepen
Slide 5: Wholesale banking: strengthening regional connectivity
Strengthening +19% Wholesale Cross border income1; Connectivity Formed 24% of GWB income customers +30% Across our ASEAN Suppliers and distributors2 within footprint and global • Growing regional network Financial Supply Chain Management (FSCM) solution franchise, capturing cross-border Sector +41%
Slide 6: Performance by Geography
Performance by 1Q23 4Q22 QoQ 1Q22 YoY Geography Core operating profit (1) $m $m +/(-)% $m +/(-)% Singapore 1,233 1,204 2 697 77 • Continued momentum in ASEAN-4 465 401 16 319 46 quarterly growth across Malaysia 224 195 15 171 31 Singapore, ASEAN-4 and Thailand 171 135 27 100 72 the developed markets
Slide 7: Financial Highlights
1Q23 4Q22 QoQ 1Q22 YoY Financial Highlights $m $m +/(-)% $m +/(-)% Net interest income 2,409 2,560 (6) 1,686 43 • 1Q23 core profits rose Net fee income 552 485 14 572 (4) 13% QoQ to reach Other non-interest income 563 285 98 101 >100 another record at $1.6 Total income 3,524 3,330 6 2,359 49 billion
Slide 8: Net Interest Income and Margin
2.26 2.75 Net Interest Income 1.89 2.34 2.61 1.90 2.02 and Margin 1.86 1.56 2.22 2.14 1.95 1.67 • 1Q23 NII eased 6%, partly 0.72 0.91 1.58 1.02 1.02 1.11 due to a shorter quarter, as 8,343 0.75 0.80 well as lower net interest 1,203 margin 6,388 2,560 2,409 835 2,234 372 393 • NIM moderated to 2.14%
Slide 9: Fee Income
24 19 24 Fee Income 21 16 16 15 • Net fee income rose 14% 2,357 QoQ 2,143 395 • Wealth management 185 355 fees recovered from 231 572 567 552 improved investor 768 519 94 87 485 86 sentiments 536 42 59 86 87 81 55 74 • Loan-related fees 160 137 123 116 147 rebounded while credit 1,008 1,021 card fee
Slide 10: Trading & Investment Income
85 368 74 Trading & Investment Income 81 87 829 52 43 785 • Customer-related treasury 128 203 income at new high, 474 supported by hedging demand 370 272 • Good performance from 583 701 214 178 203 trading and liquidity 44 41 26 management activities 173 191 177 202 161 (117) 2021 2022 1Q 2Q 3Q 4Q 1
Slide 11: Core Expenses and Cost / Income Ratio
44.1 43.3 Core Expenses and 44.8 43.8 42.6 45.2 43.3 Cost / Income Ratio (1) 42.6 5,016 40.9 • CIR improved to 40.9% 4,313 569 + 11% 1,418 1,440 on the back of strong 1,357 512 770 + 21% 130 157 1,184 170 income growth and 638 215 230 686 + 22% 1,058 151 197 disciplined spending 118 561 183 233 200
Slide 12: Non-Performing Assets
2022 2023 Non-Performing ($m) 1Q 2Q 3Q 4Q 1Q Assets NPAs at start of period 5,077 5,289 5,422 5,037 5,127 Non-individuals • Asset quality New NPAs _ 462 661 214 395 301 remained resilient and Less: portfolio well- Upgrades and recoveries 207 363 448 322 80 collateralized with Write-offs 36 123 60 12
Slide 13: Total Allowance on Loans
20 22 31 22 25 Total Allowance on 19 18 20 17 Loans 21 21 21 628 19 16 • General allowance set 598 64 aside to maintain prudent levels of provisioning 694 173 534 173 192 146 7 135 28 8 253 148 166 127 164 (2) (66) (80) 2021 2022 1Q 2Q 3Q 4Q 1Q 2022 2023 Credit costs on loans - Specific (basis point
Slide 14: Allowance Coverage
33 34 32 31 Allowance Coverage 30 1.0 • Adequate reserve buffer 0.9 0.9 0.9 0.9 with prudent coverage for 4,986 4,934 4,931 5,002 4,931 performing loans at 1.0% 379 379 379 379 379 • NPA coverage stable at 2,969 2,912 2,865 2,868 2,905 96% or 212% taking collateral into account 1,638 1,643 1,687 1,7
Slide 15: Gross Loans
Gross Loans Mar-23 Dec-22 Mar-22 QoQ YoY $b $b $b +/(-)% +/(-)% • Lower loans QoQ as Singapore 155 160 162 (3) (4) corporates pared down ASEAN-4 68 69 63 (0) 9 their borrowings while Malaysia 33 33 30 (1) 11 trade and mortgage were Thailand 24 23 21 1 13 stable Indonesia 10 10 10 (4) (8) Vietnam 2 2
Slide 16: Total Funding
Total Funding Mar-23 Dec-22 Mar-22 QoQ YoY $b $b $b +/(-)% +/(-)% • Continue to focus on Singapore 254 249 248 2 2 stable funding ASEAN-4 73 71 65 3 12 Malaysia 34 34 32 (1) 6 • Customer deposits up Thailand 26 26 23 3 17 Indonesia 11 10 10 12 11 2% QoQ, alongside Vietnam 2 1 1 56 87 improvement in
Slide 17: Liquidity Ratios
154 147 141 142 Liquidity Ratios 129 • Funding and liquidity 116 121 113 111 114 positions strengthened further with LCR at 87.3 88.7 154% and NSFR at 85.2 85.6 83.3 121% Mar Jun Sep Dec Mar 2022 2023 USD LDR (%) 66.3 72.3 64.2 60.0 60.7 All-currency LCR (%) Loan/Deposit Ratio (LDR) (%) (1) Net Stab
Slide 18: Capital
Capital 13.1 13.1 12.8 13.3 14.0 • Strong CET1 ratio at 14.0% 268 263 266 259 258 Mar Jun Sep Dec Mar 2022 2023 Leverage ratio (%) 6.9 6.6 6.4 6.6 7.0 RWA ($b) CET1 ratio (%) 18
Slide 19: Appendix
▪ Loan portfolio Appendix ▪ Exposure to Greater China ▪ Exposure to Oil & Gas sector 19
Slide 20: Diversified Loan Portfolio
Professionals and Housing loans private individuals 24% Others 9% 6% Transport, storage Diversified Industry and communication General 4% Loan portfolio commerce 11% FIs, investment and holding companies Building & 12% Manufacturing construction 7% 27% Exposure to office property in developed market
Slide 21: Exposure to Greater China
Exposure to Greater China 77.2 77.1 75.8 69.2 70.5 12.2 11.8 10.6 9.7 9.4 Debt ($b) ▪ ~$3b in loans to Chinese developers (1% of group loans) Non Bank ($b) 51.5 52.5 53.8 49.8 48.6 Bank ($b) 13.5 12.8 11.4 10.9 11.3 Mar Jun Sep Dec Mar 2022 2023 As at 31 Mar 2023: Bank exposure ($8.6b) • ~40% of tot
Slide 22: Exposure to Oil and Gas (O&G) and Other Commodities
Oil and Gas (O&G) Exposure to Other Traders / Commodities Mar 23 Upstream downstream Commodity Total industries1 Segments2 Segment industries Outstanding S$1.9b S$7.7b S$8.3b S$17.9b • As of 31 March 2023, loans outstanding loans to the Percentage of commodities segment total loans 3% 3% 6% remain m
Slide 23: Thank You
Thank You & Right By You