Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q2 2012 Earnings Presentation
44 slides from Oversea-chinese Banking's earnings presentation, Aug 2, 2012
Slide 1: Second Quarter 2012 Results Presentation
Second Quarter 2012 Results Presentation 2 August 2012
Slide 2: Agenda
Agenda Results Overview Performance Trends Appendix: Financial Highlights of Malaysia and Indonesia Subsidiaries Notes: Amounts less than S$0.5 million are shown as “0”; NM denotes not meaningful; 2 Figures may not sum to stated totals because of rounding
Slide 3: 2Q12 Highlights
2Q12 Highlights • Strong YoY growth, led by robust customer-related earnings • Net interest income growth driven by broad-based loan growth • Fee income growth led by increased wealth management income and loan-related activities • Insurance new sales and new business embedded value growth remained
Slide 4: 2Q12 core net profit of S$648m, up 12% YoY
2Q12 core net profit of S$648m, up 12% YoY 2Q12 2Q11 YoY 1Q12 QoQ OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 931 827 13 951 (2) Non-interest income 596 586 2 790 (25) Total income 1,527 1,413 8 1,741 (12) Operating expenses (661) (618) 7 (625) 6 Operating profit 866 795 9 1,116 (22) Am
Slide 5: 1H12 core net profit of S$1,438m, up 23% YoY
1H12 core net profit of S$1,438m, up 23% YoY 1H12 1H11 YoY 2H11 HoH OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 1,882 1,611 17 1,799 5 Non-interest income 1,386 1,204 15 1,008 38 Total income 3,268 2,815 16 2,807 16 Operating expenses (1,286) (1,199) 7 (1,231) 5 Operating profit 1,982 1
Slide 6: Key ratios
Key ratios 2Q12 2Q11 1Q12 1H12 1H11 Based on core earnings % % % % % Net interest margin 1.77 1.87 1.86 1.82 1.88 Non-interest income / Total income 39.0 41.4 45.4 42.4 42.8 Costs / Income 43.3 43.7 35.9 39.4 42.6 Loans / Deposits 85.3 89.1 84.4 85.3 89.1 NPL Ratio 0.9 0.8 1.0 0.9 0.8 Allowances / N
Slide 7: ROE of 13.1% for 1H12
ROE of 13.1% for 1H12 14.7% 13.1% 12.1% 12.2% 11.4% 11.6% 11.1% 11.2% Core ROE* 9.8% 2,253 2,280 790 648 Core net 596 577 594 profit (S$m) 1,438 513 1H 1,179 1,173 2010 2011 1H12 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 * Quarterly and half-yearly figures annualised 7
Slide 8: Profit contribution by business and geography
Profit contribution by business and geography 1H12 PBT 1H12 PBT by Business* by Geography Other Asia Rest of Pacific the World Greater Insurance China Global Corporate / 2% 2% 20% Investment 8% Indonesia 4% Banking 48% Global Malaysia 22% Treasury and 17% Markets 62% Singapore 15% Global Consumer /
Slide 9: Agenda
Agenda Results Overview Performance Trends Appendix: Financial Highlights of Malaysia and Indonesia Subsidiaries 9
Slide 10: Net interest income up 13% YoY; asset growth partially offset by margin compression
Net interest income up 13% YoY; asset growth partially offset by margin compression 1.98% Net interest margin 1.86% 1.82% 1.90% 1.87% 1.85% 1.85% 1.86% 1.77% 3,410 951 931 925 Net interest 2,947 874 income 827 (S$m) 784 1,882 1H 1,424 1,611 2010 2011 1H12 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 10
Slide 11: Net interest income less specific allowances up 11% YoY
Net interest income less specific allowances up 11% YoY Adjusted net 1.94% interest 1.82% 1.87% 1.86% 1.82% 1.76% 1.75% 1.78% 1.75% margin1/ 3,331 908 918 858 877 Adjusted 2,890 824 net interest 772 income1/ (S$m) 1,826 1H 1,408 1,596 2010 2011 1H12 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 1/ Net interest inco
Slide 12: Non-interest income up 2% YoY, driven by increases in fees and trading income
Non-interest income up 2% YoY, driven by increases in fees and trading income Non- interest 45.4% 44.7% 42.4% 44.1% 41.4% income / 39.3% 33.3% 38.2% 39.0% Total income 2,378 790 2,212 586 508 618 253 586 596 Non- 572 interest 108 403 179 137 85 income 669 1,386 (S$m) 436 164 361 216 113 86 107 121 2
Slide 13: Fee income up 6% YoY and 16% QoQ, led by growth in wealth management
Fee income up 6% YoY and 16% QoQ, led by growth in wealth management and loan-related fees 1,137 983 175 317 307 299 133 95 274 274 41 48 49 257 80 36 39 42 27 27 41 Fees and 29 15 445 591 12 commissions (S$m) 401 80 115 120 108 125 57 99 111 170 233 169 42 46 38 33 45 37 71 252 74 76 200 68 64 65 5
Slide 14: Profit from life assurance declined 33% YoY
Profit from life assurance declined 33% YoY as a result of weaker investment performance 437 221 25 383 94 127 150 Profit from 292 life 27 59 assurance (S$m) 106 160 240 134 29 76 71 162 92 51 47 38 35 33 9 2 104 122 71 31 30 29 32 36 35 2010 2011 1H12 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 (14) Participatin
Slide 15: Other non-interest income up 30% YoY, driven by higher trading income
Other non-interest income up 30% YoY, driven by higher trading income 669 54 204 216 213 12 17 403 44 Other non- 24 interest 61 income 329 (S$m) 28 121 125 113 66 15 86 16 25 402 163 22 13 160 (9) 32 15 217 235 81 75 41 44 2010 2011 1H12 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Net gains from investment (68) T
Slide 16: Wealth management revenue down 5% YoY
Wealth management revenue down 5% YoY, as lower insurance income offset growth in other areas 30.3% As % of 26.3% 27.0% 24.7% 24.8% Group 22.9% 20.8% 21.8% revenue 19.0% 1,317 1,285 527 Wealth management 860 378 revenue 350 (S$m) 333 272 285 1H 728 632 2010 2011 1H12 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 No
Slide 17: Expenses rose modestly by 7% YoY
Expenses rose modestly by 7% YoY Costs / 42.3% 43.2% 46.6% Income 41.5% 43.7% 43.3% 39.4% 41.4% 35.9% 661 2,430 618 611 620 625 2,254 31 581 531 144 136 138 124 137 532 120 451 116 109 119 112 120 Operating 407 110 expenses 1,286 (S$m) 268 235 1,448 373 382 401 1,283 351 362 362 783 2010 2011 1H12 1
Slide 18: Core operating profit up 9% YoY
Core operating profit up 9% YoY 3,192 1,116 3,071 877 866 Core operating 821 795 profit before allowances 1,982 699 and amortisation (S$m) 1H 1,560 1,616 2010 2011 1H12 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 18
Slide 19: 2Q12 net profit before GEH contribution up 21% YoY
2Q12 net profit before GEH contribution up 21% YoY 2Q12 2Q11 YoY 1Q12 QoQ OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 918 815 13 936 (2) Non-interest income 455 403 13 470 (3) Total income 1,373 1,218 13 1,406 (2) Operating expenses (608) (567) 7 (581) 5 Operating profit 765 652 17 825
Slide 20: 1H12 net profit before GEH contribution up 22% YoY
1H12 net profit before GEH contribution up 22% YoY 1H12 1H11 YoY 2H11 HoH OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 1,854 1,587 17 1,771 5 Non-interest income 925 812 14 780 19 Total income 2,779 2,400 16 2,550 9 Operating expenses (1,189) (1,107) 7 (1,139) 4 Operating profit 1,589 1,
Slide 21: Net allowances declined 61% QoQ
Net allowances declined 61% QoQ Net allowances for loans and other assets (S$m) 221 15 96 134 79 134 78 8 57 4 9 49 56 43 56 3 38 38 7 48 127 12 13 98 54 16 74 45 30 23 21 29 (1) (1) (4) 2010 2011 1H12 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 (21) Specific loan 6 7 8 4 1 5 15 13 4 allowances/ avg. loans Specif
Slide 22: Net specific allowances declined 70% QoQ
Net specific allowances declined 70% QoQ 2Q12 2Q11 1Q12 1H12 1H11 S$m S$m S$m S$m S$m Allowances for new and 67 41 79 146 95 existing NPLs Write-backs1/ (44) (26) (25) (69) (54) Recoveries2/ (11) (12) (11) (21) (26) Net specific allowances 13 3 43 56 15 1/ Write-backs of specific allowances for exis
Slide 23: Loans grew 14% YoY and 3% QoQ
Loans grew 14% YoY and 3% QoQ Loan growth Group YoY: +14% QoQ: +3% 135 138 135 129 121 International YoY: +21% 111 45 QoQ: +1% 46 44 41 37 31 Malaysia Customer 21 YoY: +14% 20 21 21 QoQ: +3% Loans (S$b) 19 18 Singapore YoY: +10% 72 QoQ: +4% 66 68 68 70 62 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Singapor
Slide 24: Loan book remained diversified across geographies and sectors
Loan book remained diversified across geographies and sectors Customer Loans by Geography Customer Loans by Industry As of 30 June 2012 As of 30 June 2012 Agriculture, Rest of the mining & Others World quarrying Other Asia Transport, storage Pacific 7% & comm. 6% Housing Loans 4% 6% Singapore Greate
Slide 25: Deposits grew 19% YoY and 2% QoQ
Deposits grew 19% YoY and 2% QoQ 89.1% 88.0% Loans / 86.8% 86.4% Deposits 84.4% 85.3% 158 160 155 145 13 15 12 134 12 126 11 8 Deposits 71 73 72 (S$b) 65 59 57 29 29 29 27 27 26 CASA 46.4% 45.6% ratio: 48.5% 47.6% 46.9% 46.0% 37 41 43 43 45 35 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Current Account Savi
Slide 26: Total NPAs declined 15% QoQ; NPL ratio improved to 0.9%
Total NPAs declined 15% QoQ; NPL ratio improved to 0.9% 1.0% 0.9% 0.9% 0.9% NPL ratio 0.8% 0.7% 1,513 1,437 144 1,280 1,191 1,201 265 1,158 91 489 NPAs 215 288 (S$m) 258 356 426 243 229 218 486 560 463 456 444 423 270 259 330 320 307 240 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Singapore Malaysia Interna
Slide 27: NPAs declined 15% QoQ, largely driven by lower new NPAs
NPAs declined 15% QoQ, largely driven by lower new NPAs 2Q12 2Q11 1Q12 1H12 1H11 S$m S$m S$m S$m S$m NPAs – Opening balance 1,513 1,191 1,437 1,437 1,208 New NPAs 156 222 303 459 357 New recoveries/upgrades (349) (170) (203) (552) (299) Write-offs (40) (42) (24) (64) (65) NPAs – Closing balance 1,28
Slide 28: Allowance coverage ratios increased
Allowance coverage ratios increased to 125% of total NPAs and 373% of unsecured NPAs 450% 400% 373% 365% Total 353% allowances/ 350% 326% Unsecured 311% NPAs 300% 272% 250% 200% 150% Total allowances/ 130% NPAs 100% 123% 123% 125% 107% 106% 50% 0% Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 28
Slide 29: Capital adequacy ratios remained strong
Capital adequacy ratios remained strong: Tier 1 ratio of 14.1% and Core Tier 1 of 11.1% 17.3 17.0 15.9 15.7 16.1 CAR 1.8 1.6 15.5 (% of RWA) 1.5 1.3 1.4 1.4 3.5 3.5 3.2 3.0 3.1 Tier 2 capital 3.0 15.5 15.4 14.4 14.4 14.7 14.1 Tier 1 preference shares Core Tier 1 (common equity) 12.0 11.9 11.6 11.2 1
Slide 30: Interim dividend increased to 16 cents per share
Interim dividend increased to 16 cents per share Net DPS 30.0 30.0 28.0 28.0 28.0 (cents) 15.0 15.0 14.0 14.0 14.0 Final net dividend Interim net dividend 15.0 15.0 16.0 14.0 14.0 14.0 2007 2008 2009 2010 2011 1H12 Net Dividends (S$m) 864 868 898 994 1,024 550 Core Net Profit (S$m) 1,878 1,486 1,962
Slide 31: GEH: 2Q12 net profit contribution declined 35% YoY
GEH: 2Q12 net profit contribution declined 35% YoY 2Q12 2Q11 YoY 1Q12 QoQ GEH Contribution S$m S$m +/(-)% S$m +/(-)% Total income 154 194 (21) 335 (54) Operating expenses (53) (51) 3 (44) 21 Operating profit 101 144 (29) 291 (65) Amortisation of intangibles (12) (12) - (12) - Allowances 0 (0) - (1)
Slide 32: GEH: 1H12 net profit contribution up 26% YoY
GEH: 1H12 net profit contribution up 26% YoY 1H12 1H11 YoY 2H11 HoH GEH Contribution S$m S$m +/(-)% S$m +/(-)% Total income 489 415 18 257 91 Operating expenses (97) (92) 5 (92) 5 Operating profit 393 323 21 165 139 Amortisation of intangibles (23) (23) - (24) (4) Allowances (0) (0) 49 (4) (88) Asso
Slide 33: GEH: Total weighted new sales up 4% YoY
GEH: Total weighted new sales up 4% YoY, led by healthy growth in Singapore 229 798 7 724 36 205 197 190 7 50 9 175 10 175 302 96 8 12 78 Weighted 72 290 73 new 55 55 business premiums 373 (S$m) 17 127 461 120 126 384 108 107 113 116 229 2010 2011 1H12 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Singapore Malaysi
Slide 34: GEH: NBEV up 4% YoY
GEH: NBEV up 4% YoY, driven by continued demand for regular premium products 52.4% NBEV / 47.4% Total 45.7% 45.7% 44.3% 42.5% 44.2% weighted 42.1% 42.2% new sales 120 365 2 8 305 39 13 87 87 84 83 NBEV 146 1 2 74 3 2 (S$m) 129 3 38 31 38 39 170 4 32 69 79 210 164 48 51 47 40 43 98 2010 2011 1H12 1Q1
Slide 35: OCBC Malaysia: Total net interest income and Islamic financing income up 4% YoY
OCBC Malaysia: Total net interest income and Islamic financing income up 4% YoY Net interest income and Non-interest income (RM m) Islamic financing Income (RM m) Net Interest/ Non-int. income/ financing margin Total income 33.3% 2.42% 2.32% 2.39% 2.29%2.27% 2.34% 30.5% 2.11% 2.21% 29.3% 27.3% 2.01%
Slide 36: OCBC Malaysia: Loans grew 14% YoY; NPL ratio improved to 2.3%
OCBC Malaysia: Loans grew 14% YoY and 4% QoQ; NPL ratio improved to 2.3% Gross Loans (RM b) Deposits (RM b) NPL Ratio Loans / Deposits 87.1% 86.9% 3.0% 83.7% 81.5% 80.8% 2.6% 2.6% 2.4% 2.3% 77.4% 2.1% 56 55 47 47 49 43 43 45 43 42 39 37 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Mar11 Jun11 Sep11 Dec11 Mar
Slide 37: OCBC NISP: Net interest income up 14% YoY
OCBC NISP: Net interest income up 14% YoY Net interest income (Rp b) Non-interest income (Rp b) Net interest Non-int. income/ margin Total income 5.04% 4.80% 5.05% 4.68% 4.81% 4.71% 26.5% 25.3% 4.20% 4.37% 22.0% 22.4% 23.1% 22.8% 24.1% 24.1% 4.04% 19.1% 2,255 608 601 605 579 651 219 1,993 535 533 56
Slide 38: OCBC NISP: Loans grew 39% YoY; NPL ratio improved to 1.1%
OCBC NISP: Loans grew 39% YoY and 13% QoQ; NPL ratio improved to 1.1% Gross Loans (Rp t) Deposits (Rp t) NPL Ratio Loans / Deposits 1.9% 1.8% 91.8% 1.5% 87.0% 1.3% 1.2% 85.7% 1.1% 83.5% 83.7% 85.5% 48 42 50 52 41 47 36 43 34 40 31 37 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Mar11 Jun11 Sep11 Dec11 Mar12
Slide 39: Agenda
Agenda Results Overview Performance Trends Appendix: Financial Highlights of Malaysia and Indonesia Subsidiaries 39
Slide 40: OCBC Malaysia: 2Q12 net profit up 5% YoY
OCBC Malaysia: 2Q12 net profit up 5% YoY 2Q12 2Q11 YoY 1Q12 QoQ OCBC Malaysia RM m RM m +/(-)% RM m +/(-)% Net interest income 300 297 1 301 (0) Islamic Financing Income 55 44 25 58 (5) Non-interest income 177 141 26 135 31 Total income 533 482 11 494 8 Operating expenses (202) (178) 14 (192) 5 Oper
Slide 41: OCBC Malaysia: 1H12 net profit up 11% YoY
OCBC Malaysia: 1H12 net profit up 11% YoY 1H12 1H11 YoY 2H11 HoH OCBC Malaysia RM m RM m +/(-)% RM m +/(-)% Net interest income 601 586 3 627 (4) Islamic Financing Income 113 89 27 99 13 Non-interest income 313 260 20 216 45 Total income 1,026 934 10 942 9 Operating expenses (394) (347) 14 (400) (1)
Slide 42: OCBC NISP: 2Q12 net profit up 24% YoY
OCBC NISP: 2Q12 net profit up 24% YoY 2Q12 2Q11 YoY 1Q12 QoQ OCBC NISP RP b RP b +/(-)% RP b +/(-)% Net interest income 605 533 14 601 1 Non-interest income 219 161 36 190 15 Total income 824 694 19 791 4 Operating expenses (487) (425) 15 (471) 4 Operating profit 337 269 25 320 5 Allowances (61) (52
Slide 43: OCBC NISP: 1H12 net profit up 30% YoY
OCBC NISP: 1H12 net profit up 30% YoY 1H12 1H11 YoY 2H11 HoH OCBC NISP RP b RP b +/(-)% RP b +/(-)% Net interest income 1,206 1,068 13 1,187 2 Non-interest income 409 287 43 364 12 Total income 1,615 1,355 19 1,551 4 Operating expenses (958) (844) 14 (859) 12 Operating profit 657 511 29 692 (5) Allo
Slide 44: Second Quarter 2012 Results Thank You
Second Quarter 2012 Results Thank You
Oversea-Chinese Banking — Q2 2012 Earnings Presentation on 6ix