Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q1 2015 Earnings Presentation
45 slides from Oversea-chinese Banking's earnings presentation, Apr 30, 2015
Slide 1: First Quarter 2015 Results Presentation
First Quarter 2015 Results Presentation 30 April 2015 Disclaimer: This material should be read as an overview of OCBC’s current business activities and operating environment. It should not be solely relied upon by investors or potential investors when making an investment decision. OCBC Bank accepts
Slide 2: Agenda
Agenda Results Overview 1Q15 Group Performance Trends Performance of Major Subsidiaries – OCBC Wing Hang – Great Eastern Holdings – OCBC Malaysia – OCBC NISP Appendix: Financial Highlights of Malaysian and Indonesian Subsidiaries Note: - Certain comparative figures have been restated to conform with
Slide 3: 1Q15 Highlights
1Q15 Highlights Net profit of S$993 million at new high, lifted by diversified earnings growth across our key markets of Singapore, Malaysia, Indonesia and Greater China • Record total income up 12% YoY, on broad-based growth • Net interest income 15% higher YoY, from robust asset growth. Singapore
Slide 4: 1Q15 net profit grew 11% YoY to S$993m – a new quarterly record
1Q15 net profit grew 11% YoY to S$993m – a new quarterly record 1Q15 1Q14 YoY 4Q14 QoQ OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 1,249 1,087 15 1,277 (2) Non-interest income 859 800 7 762 13 Total income 2,108 1,887 12 2,039 3 Operating expenses (873) (706) 24 (922) (5) Operating prof
Slide 5: 1Q15 net profit before GEH contribution rose 15% YoY to S$813m
1Q15 net profit before GEH contribution (“banking operations”) rose 15% YoY to S$813m 1Q15 1Q14 YoY 4Q14 QoQ Banking Operations S$m S$m +/(-)% S$m +/(-)% Net interest income 1,230 1,072 15 1,259 (2) Non-interest income 578 507 14 482 20 Total income 1,808 1,579 15 1,741 4 Operating expenses (819) (6
Slide 6: Key ratios remained strong
Key ratios remained strong % 1Q15 1Q14 4Q14 Net interest margin 1.62 1.70 1.67 Non-interest income / Total income 40.7 42.4 37.4 Cost / Income 41.4 37.4 45.2 Loans / Deposits 83.0 87.0 84.5 NPL Ratio 0.6 0.7 0.6 Allowances / NPAs 165.7 145.0 170.6 ROE 13.2 1/ 14.9 10.6 Cash ROE 13.5 1/ 15.2 11.1 1/
Slide 7: 1Q15 ROE at 13.2%
1Q15 ROE at 13.2% – Higher QoQ, but lower YoY due to the dilutive impact of rights issue in 3Q14 14.9% 14.8% 13.2% 13.1% 13.2% 11.6% Core ROE1/ 10.6% 993 3,451 921 899 Core 841 net profit 2,768 791 (S$m) 2013 2014 1Q14 2Q14 3Q14 4Q14 1Q15 1/ Quarterly figures annualised 7
Slide 8: 1Q15 PBT breakdown at a glance
1Q15 PBT breakdown at a glance 1Q15 PBT 1Q15 PBT by Business1/ by Geography PBT Rest of the Group Other Asia S$1,236m OCBC Greater Pacific World YoY: +8% Wing Hang 8% China 2% 1% 19% Singapore S$698m (within which OCBC YoY: +2% Wing Hang: 8%) Malaysia Insurance 19% S$210m YoY: +3% 49% Indonesia Indo
Slide 9: Earnings base well-diversified
Earnings base well-diversified + 8% YoY 4,372 FY14 PBT 11% CAGR PBT by 1,236 6% S$251m geography 1,143 3% (S$m) 3,646 12% S$524m 3,567 5% 5% 19% 4% 4% S$185m 12% 7% 6% FY10 PBT 2,880 2,917 4% 5% 4% 2% 19% S$833m 5% 1% 4% S$62m 2% S$34m 7% 22% 18% 17% S$58m 4% 26% S$792m 28% 26% 60% 57% 62% 59% S$2,5
Slide 10: Agenda
Agenda Results Overview 1Q15 Group Performance Trends Performance of Major Subsidiaries – OCBC Wing Hang – Great Eastern Holdings – OCBC Malaysia – OCBC NISP Appendix: Financial Highlights of Malaysian and Indonesian Subsidiaries 10
Slide 11: Net interest income grew 15% YoY
Net interest income grew 15% YoY – Singapore consumer loan spreads increased, however NIM fell YoY from the effects of a lower LDR and a decline in income from money market gapping activities Net interest 1.64% 1.68% 1.70% 1.70% 1.68% 1.67% 1.62% margin 4,736 1,277 1,249 1,246 3,883 1,126 Net intere
Slide 12: Non-interest income rose 7% YoY, mainly from higher fee, trading and insurance income
Non-interest income rose 7% YoY, mainly from higher fee, trading and insurance income Non- interest income / 41.4% 42.4% 43.0% 40.7% 40.4% 39.1% 37.4% Total income 3,213 850 859 2,738 800 801 930 762 259 237 756 223 215 Non- 232 interest income 606 (S$m) 485 164 136 188 182 196 111 142 44 39 74 36 2
Slide 13: Fee income 12% higher YoY, from broad-based growth across all key categories
Fee income 12% higher YoY, from broad-based growth across all key categories + 12% YoY + 3% QoQ 406 1,495 395 383 1,355 353 353 55 212 61 62 168 43 29 86 50 19 16 92 16 25 Fees and 558 150 137 commissions 145 515 132 132 (S$m) 172 46 49 168 39 39 49 467 116 114 126 129 412 111 2013 2014 1Q14 2Q14 3Q
Slide 14: Life assurance profit increased 9% YoY due to better performance from the Non-participating Fund
Life assurance profit increased 9% YoY due to better performance from the Non-participating Fund and higher mark-to-market gains + 9% 768 YoY + 5% 207 QoQ 599 221 Profit from 199 life 183 190 174 54 174 assurance (S$m) 50 52 54 46 423 279 134 92 116 98 99 146 138 32 33 36 37 33 2013 2014 1Q14 2Q14 3
Slide 15: Other non-interest income down 4% YoY
Other non-interest income down 4% YoY – Up 70% QoQ from higher trading income - 4% YoY 606 + 70% 68 QoQ 485 196 Other non- 188 interest 65 174 1/ 13 income 164 18 (S$m) 17 136 47 158 84 1/ 14 18 111 5 21 364 133 123 262 113 72 99 18 2/ 2/ 2013 2014 1Q14 2Q14 3Q14 4Q14 1Q15 Net gains from investment
Slide 16: Wealth management income up 2% YoY to a quarterly high
Wealth management income up 2% YoY to a quarterly high As % of 29.1% 30.3% 27.9% 29.0% 27.6% Group 26.1% 26.3% income 2,216 573 583 572 535 536 1,927 Wealth management income (S$m) 2013 2014 1Q14 2Q14 3Q14 4Q14 1Q15 Note: Comprises the consolidated income from insurance, asset management, stockbroki
Slide 17: Operating expenses 24% higher YoY; excluding OCBC Wing Hang, up 9%
Operating expenses 24% higher YoY; excluding the consolidation of OCBC Wing Hang, expenses were up 9% YoY 42.0% 45.2% Cost / 41.0% 42.5% Income 41.4% 37.4% 38.5% 3,258 922 870 873 2,784 636 188 760 157 164 706 539 147 619 137 158 193 172 Operating 530 137 expenses 132 (S$m) 2,003 548 541 544 1,715 4
Slide 18: Net allowances up YoY but lower QoQ; credit quality remained sound
Net allowances up YoY but lower QoQ; credit quality remained sound Net 357 allowances for loans and other 266 2 assets 196 (S$m) 81 154 10 97 66 71 183 163 64 41 36 66 1 45 23 73 42 31 20 17 (2) (1) (12) 2013 2014 1Q14 2Q14 3Q14 4Q14 1Q15 Specific loan 5 10 5 8 13 14 9 allowances/ avg. loans Specifi
Slide 19: Net specific allowances were higher YoY but declined QoQ
Net specific allowances were higher YoY but declined QoQ 1Q15 1Q14 4Q14 S$m S$m S$m Allowances for new and 78 54 112 existing NPLs Write-backs1/ (23) (20) (27) Recoveries2/ (10) (11) (14) Net specific allowances 45 23 71 1/ Write-backs of specific allowances for existing NPLs due to settlements and
Slide 20: Customer loans grew 20% YoY across all customer segments and key markets
Customer loans grew 20% YoY across all customer segments and key markets Loan growth Group YoY: +20% 210 210 1/ QoQ: unchanged 205 25 24 Rest of the 26 175 177 World YoY: +5% 24 QoQ: -1% 23 56 57 Greater China 52 YoY: +94% 30 27 QoQ: +3% Customer 14 13 13 14 Indonesia Loans (S$b) 13 YoY: +11% 29 29
Slide 21: Customer loan book remained diversified
Customer loan book remained diversified Customer Loans by Geography Customer Loans by Industry As of 31 March 2015 As of 31 March 2015 As of As of Rest of the 31 Mar 2015 31 Mar 2014 Industry World Other Asia S$b % S$b % Pacific 7% Housing loans 55 26 43 24 4% (within which OCBC Singapore Wing Hang:
Slide 22: Customer deposits up 26% YoY and 2% QoQ
Customer deposits up 26% YoY and 2% QoQ – CASA deposits grew 21% YoY, CASA ratio at 46% Loans / 87.0% 87.2% Deposits 85.5% 84.5% 83.0% 246 250 237 24 27 27 199 201 25 26 113 Customer 109 105 Deposits (S$b) 80 80 S$114b 42 +S$19b YoY 39 40 +S$4b QoQ 33 34 CASA ratio: S$106b S$110b 45.5% S$94b S$95b C
Slide 23: Asset quality strong; NPL ratio improved to 0.6%
Asset quality strong; NPL ratio improved to 0.6% NPL ratio 0.7% 0.7% 0.7% 0.6% 0.6% 1,373 1,379 1,317 1,230 1,215 35 33 38 NPAs 39 43 (S$m) 499 484 498 448 430 474 572 507 536 535 388 207 207 267 274 Mar14 Jun14 Sep14 1/ Dec14 1/ Mar15 1/ Singapore Malaysia International Debt securities / NPLs NPLs
Slide 24: NPAs higher YoY, mainly from the consolidation of OCBC Wing Hang
NPAs higher YoY, mainly from the consolidation of OCBC Wing Hang 1Q15 1Q14 4Q14 S$m S$m S$m NPAs – Opening balance 1,317 1,304 1,373 New NPAs 236 185 230 New recoveries/upgrades (139) (228) (240) Write-offs (35) (31) (46) NPAs – Closing balance 1,379 1,230 1,317 24
Slide 25: Allowance coverage ratios remained healthy
Allowance coverage ratios remained healthy 600.00% 559% 539% Total allowances/ 500.00% 480% 523% Unsecured Excl. NPAs 503% 423% OCBC WH Excl. 396% 429% OCBC WH 400.00% Excl. OCBC WH 300.00% Total 200.00% allowances/ NPAs 171% 166% 145% 149% 155% 100.00% 0.00% Mar14 Jun14 Sep14 Dec14 Mar15 25
Slide 26: Capital adequacy ratios comfortably above regulatory requirements
Capital adequacy ratios comfortably above regulatory requirements 17.4 CAR (% of RWA) 15.6 15.5 15.9 15.5 2.7 1.2 2.1 2.0 2.3 Tier 2 capital Common Equity Tier 1 / Tier 1 capital 14.4 14.7 13.8 13.2 13.5 Mar14 Jun14 Sep14 1/ Dec14 1/ Mar15 1/ CET1 capital (S$m) 22,765 23,541 24,766 25,979 26,656 Tie
Slide 27: Agenda
Agenda Results Overview 1Q15 Group Performance Trends Performance of Major Subsidiaries – OCBC Wing Hang – Great Eastern Holdings – OCBC Malaysia – OCBC NISP Appendix: Financial Highlights of Malaysian and Indonesian Subsidiaries 27
Slide 28: OCBC Wing Hang: 1Q15 net profit contribution of S$77m
OCBC Wing Hang: 1Q15 net profit contribution of S$77m – Up 19% in local currency terms 1Q15 4Q14 QoQ OCBC Wing Hang HK$m HK$m +/(-)% Net interest income 910 949 (4) Non-interest income 279 183 53 Total income 1,189 1,132 5 Operating expenses (569) (638) (11) Operating profit 620 494 25 Allowances (4
Slide 29: OCBC Wing Hang Integration Updates
OCBC Wing Hang Integration Updates Execution of integration strategy progressing well OCBC Bank’s products, including overdrafts and insurance, introduced to existing customers at all OCBC Wing Hang branches in Hong Kong Commercial New Foreign Business Banking unit established to grow offshore o
Slide 30: Greater China customer loans grew 94% YoY and 3% QoQ
Greater China customer loans grew 94% YoY and 3% QoQ 57 56 52 4 4 2 3 1 1 26 29 24 30 Customer 27 Loans to 0.2 1 0.3 Macau Greater China 1 7 (S$b) 7 Taiwan Hong Kong 17 17 16 Offshore2/ 17 15 China1/ 7 8 7 4 4 Mar14 Jun14 Sep14 Dec14 Mar15 Note: Customer loans to Greater China is based on where the
Slide 31: Customer deposits continued steady growth; USD and RMB LDRs improved
Customer deposits continued steady growth; USD and RMB LDRs improved YoY and QoQ 246 250 237 25 25 24 5 5 199 201 5 14 14 13 21 22 24 21 21 5 5 6 6 4 4 26 26 26 24 26 Others Customer 62 65 IDR Deposits 55 46 48 (S$b) RMB HKD MYR USD 93 92 94 92 91 SGD Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Group LDRs by
Slide 32: Asset quality of Greater China book sound; NPL ratio remained low at 0.4%
Asset quality of Greater China book sound; NPL ratio remained low at 0.4% Total 288% 276% 267% allowances/ 191% 200% NPAs 0.3% 0.3% 0.3% 0.3% 0.4% NPL ratio 202 185 169 110 NPAs 94 76 (S$m) 107 102 OCBC Wing Hang OCBC Group 107 102 (excluding OCBC 93 91 92 Wing Hang) Mar14 Jun14 Sep14 Dec14 Mar15 32
Slide 33: GEH: 1Q15 earnings contribution of S$181m
GEH: 1Q15 earnings contribution of S$181m – lower YoY as a result of one-off divestment gains in 1Q14 1Q15 1Q14 YoY 4Q14 QoQ GEH Contribution S$m S$m +/(-)% S$m +/(-)% Profit from insurance business 207 194 7 207 - - Operating profit 1/ 151 143 5 156 (3) - Non-operating profit/(loss) 2/ 41 33 23 26
Slide 34: GEH: Operating profit was 5% higher
GEH: Operating profit was 5% higher, mainly a result of better performance from the Non-participating Fund in Singapore + 5% YoY - 3% QoQ 591 560 24 156 149 151 16 143 143 9 3 4 7 4 142 170 37 44 41 43 46 Operating profit from insurance business (S$m) 280 275 77 69 79 67 63 122 122 31 31 33 28 27 20
Slide 35: GEH: Non-operating profit increased YoY due to mark-to-market gains
GEH: Non-operating profit increased YoY due to mark-to-market gains, mainly from equity investments Non-operating profit/(loss) 145 from insurance business (S$m) 72 33 41 26 14 2013 2014 1Q14 2Q14 3Q14 4Q14 1Q15 2013 (11) Note: Non-operating profit / loss (net of tax) mainly comprises changes in the
Slide 36: GEH: Total weighted new sales was 6% lower
GEH: Total weighted new sales was 6% lower, brought about by lower sales of Participating products in Singapore - 6% YoY 1,032 34 944 294 29 8 318 339 224 216 210 210 8 124 Weighted 6 7 9 new 59 business 78 66 premiums 78 (S$m) 680 576 157 162 132 125 135 2013 2014 1Q14 2Q14 3Q14 4Q14 1Q15 Singapore
Slide 37: GEH: New business embedded value was stable YoY
GEH: New business embedded value was stable YoY; higher NBEV margin from shift in channel and product mix NBEV 44.2% 43.7% 40.5% 41.5% 40.3% 40.7% margin 38.2% (NBEV / Total weighted new sales) 418 9 392 119 7 2 141 96 147 92 85 2 50 85 2 NBEV 1 1 (S$m) 36 26 35 32 268 238 67 58 58 55 52 2013 2014 1
Slide 38: OCBC Malaysia: Net interest and Islamic financing income climbed 12% YoY
OCBC Malaysia: Total net interest income and Islamic financing income climbed 12% YoY, non- interest income 11% lower YoY Net interest income and Non-interest income (RM m) Islamic financing income (RM m) Net Interest/ Non-int. income/ financing margin Total income 2.20% 2.11% 2.16% 2.07% 2.18% 2.12
Slide 39: OCBC Malaysia: Loans increased 11% YoY and deposits grew 12% YoY
OCBC Malaysia: Loans increased 11% YoY and deposits grew 12% YoY; NPL ratio lower at 1.9% Gross Loans (RM b) Deposits (RM b) NPL Ratio Loans / Deposits 88.0% 87.2% 88.7% 87.2% 2.3% 2.3% 86.5% 2.2% 2.0% 1.9% 70 71 72 75 67 64 65 61 62 59 Mar14 Jun14 Sep14 Dec14 Mar15 Mar14 Jun14 Sep14 Dec14 Mar15 Not
Slide 40: OCBC NISP: Net interest income rose 8% YoY, non-interest income 12% lower
OCBC NISP: Net interest income rose 8% YoY, non-interest income 12% lower YoY Net interest income (Rp b) Non-interest income (Rp b) Non-int. income/ Net interest margin Total income 4.11% 4.15% 4.13% 4.09% 4.17% 4.20% 3.82% 21.9% 20.1% 981 17.8% 18.9% 17.0% 3,745 967 973 16.6% 907 898 8.9% 3,139 879
Slide 41: OCBC NISP: Loans grew 10% YoY; deposits 31% higher YoY
OCBC NISP: Loans grew 10% YoY; deposits 31% higher YoY Gross Loans (Rp t) Deposits (Rp t) NPL Ratio Loans / Deposits 100.8% 1.3% 1.4% 93.6% 1.1% 1.1% 91.5% 0.8% 83.6% 84.6% 68 70 82 66 67 79 64 71 73 63 Mar14 Jun14 Sep14 Dec14 Mar-15 Mar14 Jun14 Sep14 Dec14 Mar15 CASA 36.1% 37.3% 30.5% 34.7% 30.0% R
Slide 42: Agenda
Agenda Results Overview 1Q15 Group Performance Trends Performance of Major Subsidiaries – OCBC Wing Hang – Great Eastern Holdings – OCBC Malaysia – OCBC NISP Appendix: Financial Highlights of Malaysian and Indonesian Subsidiaries 42
Slide 43: OCBC Malaysia: 1Q15 net profit 7% higher YoY
OCBC Malaysia: 1Q15 net profit 7% higher YoY 1Q15 1Q14 YoY 4Q14 QoQ OCBC Malaysia RM m RM m +/(-)% RM m +/(-)% Net interest income 358 328 9 359 - Islamic Financing Income 130 106 23 127 2 Non-interest income 106 119 (11) 119 (11) Total income 594 553 7 605 (2) Operating expenses (243) (215) 13 (246
Slide 44: OCBC NISP: 1Q15 net profit increased 9% YoY
OCBC NISP: 1Q15 net profit increased 9% YoY 1Q15 1Q14 YoY 4Q14 QoQ OCBC NISP RP b RP b +/(-)% RP b +/(-)% Net interest income 981 907 8 973 1 Non-interest income 201 228 (12) 226 (11) Total income 1,182 1,135 4 1,199 (1) Operating expenses (649) (613) 6 (610) 6 Operating profit 533 522 2 589 (9) All
Slide 45: First Quarter 2015 Results Thank You
First Quarter 2015 Results Thank You
Oversea-Chinese Banking — Q1 2015 Earnings Presentation on 6ix