Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q3 2005 Earnings Presentation
27 slides from Oversea-chinese Banking's earnings presentation, Nov 9, 2005
Slide 1: Third Quarter 2005 Results Presentation
Third Quarter 2005 Results Presentation 9 November 2005
Slide 2: Agenda
Agenda • Results Overview • Performance Trends • Results of Key Subsidiaries • Conclusion 2
Slide 3: Results at a Glance - Quarterly
Results at a Glance - Quarterly 3Q05 3Q04* YoY 2Q05 QoQ S$m S$m +/(-)% S$m +/(-)% Net Interest Income 413 384 8 407 2 Non-Interest Income 332 384 (14) 298 11 - Fee Income 130 118 10 125 4 Total Income 745 768 (3) 704 6 Operating Expenses (297) (256) 16 (282) 5 Operating Profit 449 513 (12) 423 6 Amo
Slide 4: Results at a Glance – Year to Date
Results at a Glance – Year to Date 9M05 9M04* YoY S$m S$m +/(-)% Net Interest Income 1,183 1,129 5 Non-Interest Income 948 812 17 - Fee Income 375 350 7 Total Income 2,131 1,941 10 Operating Expenses (829) (702) 18 Operating Profit 1,302 1,239 5 Amortisation of Intangibles/ (30) (113) (74) Goodwill
Slide 5: Results Adjusted for Divestment Gains - Show Stronger YoY Growth
Results Adjusted for Divestment Gains - Show Stronger YoY Growth 9M05 9M04* YoY Year-to-Date S$m S$m +/(-)% Adjusted Operating Profit 1,302 1,107 18 Adjusted Net Profit 957 776 23 3Q05 3Q04* YoY 2Q05 QoQ Quarterly S$m S$m +/(-)% S$m +/(-)% Adjusted Operating Profit 449 381 18 423 6 Adjusted Net Prof
Slide 6: Key Financial Ratios
Key Financial Ratios 9M05 9M04 3Q05 2Q05 3Q04 % % % % % Net Interest Margin 1.81 1.90 1.83 1.82 1.89 Non-Interest Income/ 44.5 41.8 44.5 42.3 50.0 Total Income Cost-to-Income Ratio 38.9 36.2 39.8 40.0 33.3 Loans-to-Deposits Ratio 87.4 91.8 87.4 85.6 91.8 NPL Ratio 4.2 5.5 4.2 4.3 5.5 Allowances/NPLs
Slide 7: Agenda
Agenda • Results Overview • Performance Trends • Results of Key Subsidiaries • Conclusion 7
Slide 8: Higher Net Interest Income in 3Q05 as Net Interest Margin Stabilised
Higher Net Interest Income in 3Q05 as Net Interest Margin Stabilised Net interest 1.90% 1.91% 1.90% 1.92% 1.89% 1.93% 1.83% margin 1.81% 1.78% 1.82% 1,518 1,435 1,183 407 413 380 384 389 Net 365 363 interest income (S$m) 2003 2004 9M05 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 8
Slide 9: Improved Asset Yields Offset by Higher Cost of Funds
Improved Asset Yields Offset by Higher Cost of Funds Interest Interest Rate Ave Bal Third Quarter 2005 Inc / Exp Ave Rate YoY QoQ S$bn S$m % bps bps Customer loans 54.1 629 4.62 + 94 + 13 Placements with Banks 17.2 128 2.95 + 58 + 14 Securities/ Others 18.2 159 3.46 + 103 + 10 Interest Earning Asset
Slide 10: Non-Interest Income up 11% over 2Q05
Non-Interest Income up 11% over 2Q05 50.0% Non- 46.8% 44.5% 44.6% 44.5% interest 42.6% 41.2% 42.3% income/ Total income 34.6% 39.6% 30.6% 39.6% 1,126 30.5% 132 948 994 384 Non- 758 319 332 interest 313 298 income 128 267 132 (S$m) 630 252 161 2003 2004 9M05 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 Gains f
Slide 11: Steady Growth in Fee Income
Steady Growth in Fee Income Fee 21.9% income/ 18.5% 18.5% 18.1% Total income 17.5% 17.6% 18.1% 17.7% 17.7% 17.0% 17.4% 464 16.1% 15.3% 373 375 125 130 115 117 118 121 Fee 113 income (S$m) 2003 2004 9M05 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 Excluding divestment gains 11
Slide 12: Adjusted for Consolidation Effects, Underlying Expenses Grew 6% YoY in 9M05
Adjusted for Consolidation Effects, Underlying Expenses Grew 6% YoY in 9M05 41.4% 40.2% 40.6% 40.0% Cost-to- 39.3% 39.4% Income 38.9% 37.0% 36.8% Ratio 39.8% 39.0% 37.4% 33.3% 988 855 829 227 152 286 282 297 193 256 251 Operating 216 239 225 70 Expenses 167 207 77 66 51 62 57 (S$m) 61 37 60 56 53 53
Slide 13: Core Operating Profit Up 18% YoY in 9M05
Core Operating Profit Up 18% YoY in 9M05 Operating Profit 1,655 before allowances (S$m) 132 1,338 1,523 1,302 128 513 1,210 431 449 408 416 423 132 319 381 2003 2004 9M05 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 Gains from divestment of non-core assets 13
Slide 14: Recoveries More Than Offset Allowances in 3Q05
Recoveries More Than Offset Allowances in 3Q05 225 Allowances & Impairment Charges (S$m) 77 36 22 24 20 0 (2) (2) (23) 2003 2004 9M05 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 14
Slide 15: Higher Net Profit and Improved ROE
Higher Net Profit and Improved ROE 12.4% 11.9% 12.1% 11.3% 11.3% 10.0% 10.6% 10.2% 10.6% 10.7% ROE (%) 8.3% 10.3% 8.7% 1,148 97 954 957 1,051 126 Net Profit 355 (S$m) 828 319 304 300 298 255 275 97 222 2003 2004 9M05 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 Gains from divestment of non-core assets Excludi
Slide 16: Loans Growth Driven by Malaysia and Acquisition of Bank NISP
Loans Growth Driven by Malaysia and Acquisition of Bank NISP Loans (S$bn) 56.5 57.0 53.5 53.9 54.1 53.6 51.8 9.2 9.1 6.8 7.0 7.4 7.6 6.2 8.3 8.4 8.5 9.2 9.8 7.9 8.8 37.7 38.3 38.4 38.1 37.1 38.2 38.1 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Singapore Malaysia International 16
Slide 17: Loans-to-Deposits Ratio Increased Over 2Q05
Loans-to-Deposits Ratio Increased Over 2Q05 91.1% 91.8% 90.5% 89.4% 86.1% 87.4% 90.0% 85.6% Loans-to-deposits 90.1% 88.1% 87.7% 85.7% 80.0% 83.3% 83.7% 63.6 62.8 57.2 57.3 59.7 54.3 56.2 70.0% 8.2 8.6 6.8 7.2 7.0 6.2 6.8 11.2 11.4 11.4 Deposits 11.4 11.2 11.2 11.2 60.0% (S$bn) 38.9 40.4 40.4 50.0% 3
Slide 18: Continued Improvement in NPLs
Continued Improvement in NPLs NPL Ratio 6.7% 6.3% 5.5% 5.0% 4.8% 3,644 4.3% 4.2% 3,512 3,129 NPLs 2,866 2,705 2,592 (S$m) 1,040 2,467 1,028 970 902 886 821 745 2,266 2,150 1,909 1,735 1,596 1,485 1,454 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Singapore Malaysia International 18
Slide 19: Maintained Strong Allowances Coverage
Maintained Strong Allowances Coverage 87% 87% 83% 84% 77% 70% 70% Cumulative Allowances / NPLs Specific Allowances / NPLs 49% 50% 48% 43% 37% 39% 37% Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 19
Slide 20: Capital Position Remains Strong
Capital Position Remains Strong (%) Total CAR 18.3 17.7 17.6 17.7 17.4 16.8 5.5 4.4 14.7 5.1 5.1 5.1 4.0 4.0 12.8 12.6 12.5 12.3 13.3 12.8 Tier 1 CAR 10.7 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05* Sep-05 (S$m) Tier-1 capital 8,131 8,495 8,557 8,442 9,138 7,853* 9,187 Risk Weighted Assets 63,372 67,
Slide 21: Agenda
Agenda • Results Overview • Performance Trends • Results of Key Subsidiaries • Conclusion 21
Slide 22: OCBC Malaysia’s Net Profit Up 28% YoY
OCBC Malaysia’s Net Profit Up 28% YoY 3Q05 3Q04 YoY 2Q05 QoQ Unaudited Results* RM m RM m +/(-)% RM m +/(-)% Net Interest Income 159 135 18 155 3 Islamic Banking Income 10 5 89 11 (14) Non Interest Income 73 53 37 63 16 Total Income 241 193 25 229 5 Operating Expenses (99) (74) 34 (87) 13 Operating
Slide 23: OCBC Malaysia: Financial Ratios
OCBC Malaysia: Financial Ratios 9M05 9M04 3Q05 2Q05 3Q04 Unaudited Results* % % % % % Net Interest Margin 2.32 2.18 2.35 2.34 2.16 Non-Interest Income / 28.3 25.8 30.2 28.4 27.5 Total Income Cost-to-Income Ratio 39.7 35.1 41.0 39.6 38.3 RM Loans-to-Deposits Ratio 92 86 92 81 86 Net NPL Ratio 3.7 6.8
Slide 24: GEH Contributed 19% of Group Net Profit
GEH Contributed 19% of Group Net Profit GEH’s Contribution 9M05 9M04* 3Q05 2Q05 3Q04 to OCBC’s Results S$m S$m S$m S$m S$m Total Income 411 142 142 135 104 Operating Expenses (64) (27) (24) (20) (22) Operating Profit 346 115 118 115 83 Goodwill Amortisation (30) (18) (10) (10) (13) Tax (73) (26) (28
Slide 25: Bank NISP’s 3Q05 Results Hurt by Securities Losses
Bank NISP’s 3Q05 Results Hurt by Securities Losses 9M05 9M04 3Q05 2Q05 3Q04 Unaudited Results* RP bn RP bn RP bn RP bn RP bn Net Interest Income 534 472 177 185 169 Non-Interest Income 36 112 (39) (22) 41 Expenses (417) (298) (145) (127) (94) Operating Profit 153 286 (7) 36 117 Net Profit 84 202 (11
Slide 26: Conclusion
Conclusion Core net profit up 23% in first nine months of 2005, boosted by Great Eastern and Bank NISP acquisitions, strong Malaysia results and continued successes in loan recoveries Record nine-months earnings despite lower gapping income and intense competitive environment YTD core ROE of 1
Slide 27: Thank You
Third Quarter 2005 Results Thank You
Oversea-Chinese Banking — Q3 2005 Earnings Presentation on 6ix