United Overseas Bank Limited · SGX:U11
United Overseas Bank — 3Q 2023 Earnings Presentation
23 slides from United Overseas Bank's earnings presentation, November 2023
Slide 1: UOB Group Financial Updates
UOB Group Financial Updates Lee Wai Fai Group Chief Financial Officer For the Nine Months / Third Quarter Ended 30 September 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 pre
Slide 2: Financial Highlights
Financial Highlights 3Q23 Core Net Profit at $1.5b, Sustained momentum in fees 3Q23 key financial indicators and treasury customer flows Core operating profit (1) Core net profit after tax (1) $2.0b $1.5b • Core net profit at $1.5b, with Core return on equity at 13.9% - 3% QoQ - 2% QoQ + 12% YoY + 5
Slide 3: Performance by Segment
Performance by Segment 9M23 9M22 YoY 3Q23 2Q23 QoQ (1) +/(-) % +/(-) % • Retail augmented by Citi, Operating Profit $m $m $m $m (1) alongside higher rates, record Group Retail 2,287 1,393 64 758 735 3 card fees and wealth rebound Group Wholesale Banking 4,167 3,454 21 1,379 1,368 1 • Wholesale drive
Slide 4: Tapping on rising consumer affluence and digitalisation in Southeast Asia
Consumers Scale Acquisition with Digital Scale UOB TMRW across ASEAN to digitally acquire at >7.5m +28% • Tapping on rising low cost Retail customers, 77% are Year-on-year increase of new-to-bank customers affluence and growing digitally enabled acquired vs 9M22, 54% digitally acquired digitalisatio
Slide 5: Growing regional franchise, capturing cross-border opportunities
Strengthening +14% Wholesale Cross border income1; Connectivity Formed 24% of GWB income customers +35% Across our ASEAN Suppliers and distributors2 within footprint and global • Growing regional network Financial Supply Chain Management (FSCM) solution franchise, capturing cross-border Sector +21%
Slide 6: Financial Highlights: 9M23 and 3Q23 income statement
Financial Highlights 9M23 9M22 YoY 3Q23 2Q23 QoQ 3Q22 YoY $m $m +/(-)% $m $m +/(-)% $m +/(-)% • 9M23 Core net profit up Net interest income Net fee income 7,275 1,666 5,783 1,658 26 0 2,429 591 2,437 524 (0) 13 2,234 519 14 9 33%, driven by strong NII Other non-interest income 1,581 804 97 436 581 (
Slide 7: Net Interest Income and Margin
2.62 2.75 2.64 Net Interest Income 2.09 2.34 2.61 2.62 and Margin 2.12 2.22 2.14 2.12 2.09 1.74 1.95 • Higher NII and NIM YoY 0.87 1.04 1.02 1.02 1.11 1.10 0.93 from higher interest rate 7,275 environment 1,154 5,783 • 3Q23 core franchise loan 832 2,234 2,560 372 2,409 2,437 2,429 margin expanded to
Slide 8: Fee Income
20 Fee Income 16 16 16 17 15 15 • 3Q23 Net fee income 1,658 1,666 near all-time high 239 232 • Credit card fees hit new 157 257 record while loan-related 591 552 fees rebounded 448 519 485 524 72 444 77 78 83 104 78 • Modest wealth fees 55 74 81 72 146 recovery amid cautious 131 156 142 125 investor
Slide 9: Trading & Investment Income
84 87 Trading & Investment 52 53 44 43 Income 38 • Customer-related treasury 1,328 income sustained 474 478 momentum 746 375 • Trading and liquidity 370 272 296 management activities 627 177 178 continued to deliver good 102 203 performance 26 525 582 • Other T&I income affected 191 177 202 182 198
Slide 10: Core Expenses and Cost / Income Ratio
43.6 Core Expenses and 40.9 42.6 45.2 43.3 44.1 44.4 Cost / Income Ratio (1) 42.6 4,305 40.9 40.9 41.0 • CIR stable at 41.0%, as 3,598 462 + 5% expenses kept pace with 439 684 + 23% income growth 554 556 + 23% 1,418 1,440 1,448 1,416 1,357 130 157 167 137 • Continued discipline in 453 170 197 215 23
Slide 11: Non-Performing Assets
2022 2023 Non-Performing ($m) 3Q 4Q 1Q 2Q 3Q Assets NPAs at start of period 5,422 5,037 5,127 5,150 5,192 Non-individuals • Resilient asset quality New NPAs _ 214 395 301 364 267 with lower NPA Less: formation and NPL Upgrades and recoveries 448 322 80 137 298 unchanged at 1.6% Write-offs 60 121 218
Slide 12: Total Allowance on Loans
25 31 30 29 19 25 Total Allowance on 25 18 17 26 Loans 21 21 19 581 16 • Increase in 3Q23 net credit costs within 454 13 expectation 596 173 • Total credit costs 441 192 238 36 151 improved to 19 bps from 135 28 8 253 229 release of general 127 164 202 allowance reserves (14) (80) (78) 9M22 9M23 3Q
Slide 13: Allowance Coverage
34 33 34 33 Allowance Coverage 32 0.9 0.9 1.0 1.0 0.9 • Adequate reserve buffer with prudent coverage for 4,931 5,002 4,931 5,134 5,109 379 379 379 performing loans at 0.9% 379 379 • NPA coverage remained 2,865 2,868 2,905 3,058 3,042 adequate at 102% or 205% taking collateral 1,687 1,755 1,647 1,69
Slide 14: Performance by Geography
Performance by 9M23 9M22 YoY 3Q23 2Q23 QoQ (1) Core operating profit Geography Singapore $m 3,605 $m 2,621 +/(-)% 38 $m 1,188 $m 1,184 +/(-)% 0 ASEAN-4 1,300 1,018 28 389 446 (13) • 9M23 Core operating Malaysia 596 549 8 184 188 (2) profit surged to $6.2b Thailand 537 291 84 173 193 (10) Indonesia 1
Slide 15: Gross Loans
Gross Loans Sep-23 Jun-23 Sep-22 QoQ YoY $b $b $b +/(-)% +/(-)% • Loans relatively Singapore 155 156 165 (1) (6) unchanged QoQ and YoY ASEAN-4 67 68 62 (1) 9 on constant currency Malaysia 32 32 29 (0) 9 Thailand 24 24 20 (0) 21 basis Indonesia 10 10 11 (2) (13) Vietnam 2 2 2 (3) 14 North Asia 56 55
Slide 16: Total Funding
Total Funding Sep-23 Jun-23 Sep-22 QoQ YoY $b $b $b +/(-)% +/(-)% Singapore 262 261 256 0 2 • Customer deposits up ASEAN-4 72 70 67 2 7 1% QoQ, alongside Malaysia 34 34 31 1 9 improved CASA ratio Thailand 26 25 22 3 14 at 48.2% Indonesia 10 10 11 3 (12) Vietnam 2 2 2 8 7 North Asia 25 22 23 12 8 Gre
Slide 17: Liquidity Ratios
167 Liquidity Ratios 154 153 142 147 • Funding and liquidity positions remained strong with LCR at 121 121 121 114 116 153% and NSFR at 121% 85.2 85.6 83.3 83.5 82.3 Sep Dec Mar Jun Sep 2022 2023 USD LDR (%) 64.2 60.0 60.7 62.9 60.7 All-currency LCR (%) Loan/Deposit Ratio (LDR) (%) Net Stable Fund R
Slide 18: Capital
Capital 12.8 13.3 14.0 13.6 13.0 • Healthy CET1 ratio at 13.0%, post FY23 interim 266 259 258 263 272 dividend payout Sep Dec Mar Jun Sep 2022 2023 Leverage ratio (%) 6.4 6.6 7.0 7.0 6.8 RWA ($b) CET1 ratio (%) 18
Slide 19: Appendix
▪ Loan Portfolio Appendix ▪ Exposure to Greater China ▪ Exposure to Commercial Real Estate - Office 19
Slide 20: Diversified Loan Portfolio
Professionals and Housing loans private individuals 24% Others 9% 5% General Transport, storage Diversified Loan commerce Industry and communication 4% Portfolio 11% FIs, investment and holding companies Building & 13% Manufacturing construction 7% 27% Large corporates Others and institutions 15% 54
Slide 21: Exposure to Greater China
Exposure to Greater China 75.8 69.2 70.5 71.6 71.7 10.6 9.7 9.4 10.5 11.3 Debt ($b) Non Bank ($b) ▪ ~$2.8b in loans to Chinese real 53.8 48.6 49.8 51.6 51.2 estate developers (1% of group Bank ($b) loans) 11.4 10.9 11.3 9.5 9.2 Sep Dec Mar Jun Sep 2022 2023 As at 30 Sep 2023: Bank exposure ($6.8b) •
Slide 22: Exposure to Commercial Real Estate - Office
Exposure to Commercial Real Commercial Real Estate - Office exposure is ~8% of loans Estate - Office By geography as % of loans 0.3% • Almost half of office 0.8% Others exposure is in Singapore 0.8% 0.8% United Kingdom 0.8% 0.8% • Overseas exposure Sep-23 1.5% 1.3% United States backed by strong 8%
Slide 23: Thank You
Thank You & Right By You