United Overseas Bank Limited · SGX:U11
United Overseas Bank — FY2002 Earnings Presentation
16 slides from United Overseas Bank's earnings presentation, Feb 28, 2003
Slide 1: Building a Premier Regional Bank: Analysts' Briefing Full Year 2002 Results
Building a Premier Regional Bank Analysts’ Briefing Full Year 2002 Results Address by Mr Kuek Tong Au Executive Vice President 28 February 2003 Disclaimer : This material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentat
Slide 2: Performance at a glance
Performance at a glance Increase / (Decrease) 2002 2001 Amount % Net Profit After Tax (NPAT) - $m 1,064 925 139 15.1 NPAT (excluding goodwill) - $m 1,260 972 288 29.6 Net Customer Loans - $m 58,884 60,892 (2,008) (3.3) Non-Performing Loans - $m 5,679 5,968 (289) (4.8) Cumulative Provisions - $m 3,50
Slide 3: Continuing our steady Financial Performance
Continuing our steady Financial Performance 2002 2001 Inc / (Dec) $m $m $m % Net Interest Incom e 2,169 1,429 740 51.8 Non-Interest Incom e 910 795 115 14.5 Total Incom e 3,079 2,224 855 38.4 Less: Operating Expenses 1,074 874 200 22.9 Operating Profit before Goodw ill and Provisions 2,005 1,350 655
Slide 4: Higher Net Interest Income from expanded loan base and improved margin
Higher Net Interest Income from expanded loan base and improved margin Net Net Interest Interest Income Income Net Net Interest Interest Margin Margin ($m) (%) 2,500 2.8 2.65 2,169 2,000 2.5 bp 2.34 20 1,429 2.26 1,500 1,201 1,198 2.3 1,133 2.22 1,000 2.0 2.06 1.8% 5 500 1.8 0 1.5 1998 1999 2000 200
Slide 5: Moderate growth in Non-Interest Income
Moderate growth in Non-Interest Income Non-Interest Income Non-Interest Income (Non -NII) (Non-NII) Composition Composition of of Non-Interest Income Non-Interest Income ($m) % .5 1,000 14 910 Inc/(Dec) 795 800 ($m) 2002 2001 Amt % 704 655 409 Fee & Comm 501 355 146 40.9 40.9 600 514 440 374 Dividen
Slide 6: Effectively managing our Costs
Effectively managing our Costs 2002 2001 Inc/(Dec) $m $m $m % Staff Costs 536 443 93 21.2 Other Operating Expenses 538 431 107 24.7 Total 1,074 874 200 22.9 Expense Expense to to Income Income Ratio Ratio Cost Cost Savings Savings -- Integration Integration ($m) (%) 250 39.5 4. 40 39.3 4% 250 200 pt
Slide 7: Continue to invest in IT for strategic advantage
Continue to invest in IT for strategic advantage IT IT Operating Operating Expenses Expenses 2002 2001 Increase $m $m $m % IT Operating Expenses 199 153 46 30.1 Non IT Operating Expenses 875 721 154 21.4 Total Operating Expenses 1,074 874 200 22.9 IT Operating Expenses / 18.6 17.5 1.1% pt 1.1% pt To
Slide 8: Respectable Net Profit growth amidst uncertain market conditions
Respectable Net Profit growth amidst uncertain market conditions ($m) Net Net Profit Profit After After Tax Tax 2001 Profit 925 Positive Factors ($m) 1,064 Net interest income 740 1,100 1,000 913 925 Non-interest income 115 900 760 Pre-tax Associates’ profits 51 800 700 Negative Factors 600 Operatin
Slide 9: Slight decline in Loans and Deposits
Slight decline in Loans and Deposits Customer Customer Loans Loans Customer Customer Deposits Deposits ($b) ($b) 70.0 60.9 80.0 70.3 74.5 58.6 58.9 67.9 52.3 65.3 60.0 51.7 70.0 62.3 50.0 60.0 26.9 28.6 50.0 25.8 24.6 40.0 24.0 25.0 8. 8 3. 3 40.0 % 30.0 % 30.0 30.0 40.7 43.4 20.0 27.7 27.3 36.5 20.
Slide 10: Better utilisation of surplus funds
Better utilisation of surplus funds Loans Loans // Deposits Deposits Ratio Ratio (%) 110 106.2 101.8 100 92.9 90 86.7 81.8 80 75.8 69.2 66.9 70 60 50 1998 1999 2000 2001 2002 UOB OUB
Slide 11: Improved Non-Performing Loans (NPL) ratio
Improved Non-Performing Loans (NPL) ratio Total NPL ($m) 2,834 2,462 5,968 5,971 5,679 (%) ($m) 6,000 12 3,851 4,039 3,619 9.8 10 9.5 9.0 4,000 7.8 9.3 8 1,855 6 2,000 1,537 497 384 447 229 174 1,548 1,613 4 1,620 750 751 0 2 Dec 99 Dec 00 Dec 01 Jun 02 Dec 02 Loss Doubtful Substandard NPL/Gross Cus
Slide 12: Increase in Provision Coverage
Increase in Provision Coverage Total Provisions ($m) 1,774 1,664 3,334 3,403 3,504 ($m) (%) 3,500 80 1,428 1,425 67.6 1,435 70 3,000 61.7 62.6 55.9 57.0 60 2,500 50 2,000 40 1,500 819 768 30 1,000 1,899 1,975 2,079 20 500 955 896 10 0 0 Dec 99 Dec 00 Dec 01 Jun 02 Dec 02 GP/Customer loans(net of SP)
Slide 13: Strong Capital Position
Strong Capital Position Capital Capital Adequacy Adequacy Ratio Ratio ($b) (%) 105 25 21.7 21.4 19.8 18.5 20 85 18.6 15.3 18.6 17.1 15 65 11.8 10 12.2 45 Risk Weighted Assets 5 25 0 1998 1999 2000 2001 2002 Risk Weighted Assets Total CAR (BIS) Tier 1 CAR (BIS)
Slide 14: Higher Dividend payout to reward shareholders
Higher Dividend payout to reward shareholders (%) 60 50 25% 40 25% 30 25% 25% 18.8% 20 10% 12% 10 15% 15% 15% 8% 8% 0 1998 1999 2000 2001 2002 Dividend Amount $133m $416m $316m $426m $720m Dividend Payout Ratio 40.1% 54.7% 34.6% 46.1% 67.7% Interim Dividend in Specie Final Special
Slide 15: In summary …
In summary … Variance 2002 2001 2002/2001 Net Profit After Tax $1,064m $925m + 15.1% ROE (excluding goodwill) 9.8% 11.3% - 1.5% pt Expense to Income Ratio 34.9% 39.3% - 4.4% pt NPL/Gross Customer Loans 9.0% 9.3% - 0.3% pt Dividend Rate 58.8% 40.0% +18.8% pt
Slide 16: Q&A Session
Building a Premier Regional Bank Analysts’ Briefing Full Year 2002 Results Q&A Session 28 February 2003 Disclaimer : This material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation. It is information given in summary