Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — H1 2020 Earnings Presentation
34 slides from Oversea-chinese Banking's earnings presentation, Aug 7, 2020
Slide 1: First Half 2020 Results Presentation
First Half 2020 Results Presentation 7 August 2020 OCBC Financial Results Disclaimer: This presentation should be read as an overview of OCBC’s current business activities and operating environment which may contain statements relating to OCBC’s growth strategy and future business aspirations. These
Slide 2: Agenda
Agenda Financial Highlights Group Performance Trends Appendices: Major Subsidiaries’ Results Note: - Certain comparative figures have been restated to conform with the current period’s presentation. - Amounts less than S$0.5m are shown as “0”; - “nm” denotes not meaningful; - “na” denotes not applic
Slide 3: First Half 2020 Performance
Performance review First Half 2020 Performance Focused on strengthening balance sheet against the challenging market environment ❑ Banking franchise operating profit before allowances up slightly YoY • Net interest income lower as margin compression offset asset growth • Non-interest income up, led
Slide 4: 1H20 Financial Highlights
Group Performance 1H20 Financial Highlights Group net profit at S$1.43b Group Net Profit Operating Profit by Geography (S$m) 42% Others 5% Singapore 2,454 Greater China 1H20 5% 24% 1H19 1,223 19% 1,428 Second Quarter 6% 57% First Quarter 730 13% 45% 8% 5% QoQ Indonesia 1,231 698 18% 1H19 1H20 Malays
Slide 5: 1H20 Financial Highlights
Group Performance 1H20 Financial Highlights Well-diversified business franchise driving long-term growth Banking Wealth Management Operating Profit Coverage Ratios Group Wealth Management Bank of Singapore’s AUM before Allowances Income (S$m) (US$b) (S$m) Total NPAs 101% 23ppt 78% Jun 19 Jun 20 1% 1
Slide 6: Strong Balance Sheet Fundamentals
Balance sheet Strong Balance Sheet Fundamentals Well-placed to weather the crisis with strong funding, liquidity and capital position Funding Liquidity Capital • Nearly 80% from customer deposits • Sound liquidity position • Strong capital base • NSFR at 119% • LCR well above minimum required • Leve
Slide 7: 1H20 Group Performance
Group performance 1H20 Group Performance Net profit lower YoY largely driven by increased allowances 1H20 1H19 YoY OCBC Group S$m S$m +/(-)% Net interest income 3,109 3,122 – Non-interest income 2,006 2,172 (8) Total income 5,115 5,294 (3) Operating expenses (2,216) (2,246) (1) Operating profit 2,89
Slide 8: 1H20 Banking Operations Performance
Banking Ops performance 1H20 Banking Operations Performance Operating profit before allowances up 1% YoY to S$2.81b, allowances increased to S$1.40b 1H20 1H19 YoY Banking Operations S$m S$m +/(-)% Net interest income 3,051 3,070 (1) Non-interest income 1,513 1,487 2 Total income 4,564 4,557 – Operat
Slide 9: 2Q20 Group Performance
Group performance 2Q20 Group Performance Net profit up 5% QoQ driven by increased operating profit 2Q20 1Q20 QoQ OCBC Group S$m S$m +/(-)% Net interest income 1,483 1,626 (9) Non-interest income 1,142 864 32 Total income 2,625 2,490 5 Operating expenses (1,107) (1,109) – Operating profit 1,518 1,381
Slide 10: 2Q20 Banking Operations Performance
Banking Ops performance 2Q20 Banking Operations Performance 2Q20 net profit from Banking Operations was S$480m 2Q20 1Q20 QoQ Banking Operations S$m S$m +/(-)% Net interest income 1,456 1,595 (9) Non-interest income 735 778 (5) Total income 2,191 2,373 (8) Operating expenses (1,026) (1,061) (3) Opera
Slide 11: Agenda
Agenda Financial Highlights Group Performance Trends Appendices: Major Subsidiaries’ Results 11
Slide 12: Net interest income
Net interest income Net interest income 1H20 NII lower YoY; decline in NIM reflective of low interest rate environment 1.79% 1.77% 1.77% 1.76% 1.78% NIM 1.68% 1.60% 3,122 3,109 1,600 1,610 1,626 1,588 1,483 S$m 2Q19 3Q19 4Q19 1Q20 2Q20 1H19 1H20 12
Slide 13: Non-interest income
Non-interest income Non-interest income 1H20 non-interest income lower YoY; 2Q20 up QoQ 44.9% 43.5% As % of 41.0% 39.3% 39.7% 39.2% Group 34.7% income 2,172 1,312 2,006 1,142 464 1,030 1,055 308 439 142 S$m 79 864 282 181 188 204 63 478 90 72 157 343 316 193 182 118 71 18 325 57 47 53 37 25 32 1,017
Slide 14: Net Fees & Commissions
Non-interest income Net Fees & Commissions 1H20 fee income lower YoY mainly from reduced customer activity in the second quarter 1,017 986 556 151 129 550 546 522 52 46 82 89 69 78 440 32 21 23 211 27 272 111 60 S$m 155 23 137 150 104 52 100 82 41 43 44 52 291 460 496 239 243 247 205 2Q19 3Q19 4Q19
Slide 15: Trading income
Non-interest income Trading income Strong customer flow income in 1H20 offset by mark-to-market losses at GEH YoY decline 478 primarily due to unrealised MTM losses reported by 325 GEH in 1Q20, 316 which have 188 substantially 343 recovered in 2Q20 due to more 20 favourable market 159 conditions. 16
Slide 16: Wealth Management Franchise
Wealth management Wealth Management Franchise 2Q20 WM income grew 30% QoQ and 20% YoY; BOS’ AUM rose 8% QoQ to US$113b Total Wealth Management Income Bank of Singapore’s Assets Under Management 34% As % of 32% 32% 31% Group income 29% 30% 28% 117 1,672 113 1,592 111 935 900 110 789 751 692 104 S$m U
Slide 17: Operating expenses
Operating expenses Operating expenses 1H20 and 2Q20 operating expenses lower from continued cost discipline 44.0% 42.6% 43.3% 44.5% 42.2% 42.4% 43.3% CIR 2,246 2,216 1,266 1,151 1,132 1,109 1,107 441 389 272 227 233 191 198 415 424 230 211 213 208 216 S$m 764 1,390 1,403 713 686 710 693 2Q19 3Q19 4Q
Slide 18: Allowances
Allowances Allowances Continued to shore up ECL stage 1 and 2 allowances 86 97 91 Credit costs on total loans 15 24 27 25 (bps) 1/ 66 51 35 36 36 13 22 Credit costs on impaired 1,407 1H20 included loans (bps) 1/ allowances set 750 aside for: • Management 657 overlays: S$300m 614 • MEV adjustments: 2
Slide 19: Total Cumulative Allowances
Allowances Total Cumulative Allowances Substantially increased total NPA coverage to 101% from 78% a year ago 284% Unsecured NPA 252% 242% 250% 234% coverage 101% 86% 90% Total NPA 78% 78% coverage 4,384 3,953 874 3,263 3,321 874 3,046 875 876 S$m 675 1,668 1,440 1,049 1,114 1,048 1,639 1,842 1,322
Slide 20: Customer loans
Loans Customer loans Loans 2% higher YoY at S$268b but fell 1% QoQ due to low demand from consumers and trade Loans by Geography (S$b) +2% YoY (+1% in constant ccy terms) Greater China Loans (S$b) -1% QoQ (-1% in constant ccy terms) 0.4% 0.4% 0.4% 0.4% 0.4% NPL 271 ratio 263 263 265 268 68 67 64 65
Slide 21: Customer loans
Loans Customer loans Loan portfolio remained well-diversified with limited sector concentration Loans by Industry (S$b) 271 268 13% 14% 7% 7% Corporate, SME and Consumer comprise 49%, 12% and 39% of loan book respectively 12% 11% O&G sector comprise 5% of loan book (within which, 2% for OSV, 11% 11%
Slide 22: Asset quality
Asset quality Asset quality Total NPAs down QoQ from higher upgrades, write-offs and recoveries NPAs by Geography NPAs movement 1.6% 1.6% S$m 1H19 1H20 Total 1.5% 1.5% 1.5% NPL ratio At start of period 3,938 3,883 of which: 0.8% 0.9% 0.8% 0.8% 0.8% O&G NPL ratio Corporate/ Commercial Banking and Oth
Slide 23: Customer deposits
Deposits Customer deposits CASA deposits grew to a record S$175b, with the CASA ratio at a new high of 56.7% 87.6% 86.8% 86.5% Group LDR 85.1% 85.4% 314 310 297 300 303 25 27 23 25 27 129 108 131 133 129 S$b 56.7% 51.0% 47.9% 47.1% 48.4% 160 175 142 141 147 Jun 19 Sep 19 Dec 19 Mar 20 Jun 20 CASA Fi
Slide 24: Interim dividend of 15.9 cents; payout ratio at 49%
Dividends Interim dividend of 15.9 cents; payout ratio at 49% FY20 dividend capped at 31.8 cents or 60% of the 53 cents for FY19 49% 47% 43% 40% Dividend payout ratio 37% In July 2020, the MAS called on locally-incorporated 53.0 banks headquartered in Singapore to cap total dividends per share for F
Slide 25: Agenda
Agenda Financial Highlights Group Performance Trends Appendices: Major Subsidiaries’ Results 25
Slide 26: Great Eastern Holdings' performance
Great Eastern Great Eastern Holdings’ performance Higher operating profit more than offset by unrealised mark-to-market losses YoY S$m 1H20 1H19 +/(-)% Profit from insurance business 365 395 (8) - Operating profit 484 308 57 - Non-operating (loss)/ profit (188) 52 (460) - Others 69 35 98 Profit from
Slide 27: GEH: Financial Highlights
Great Eastern GEH: Financial Highlights Key Performance Trends Profit from Insurance Business (S$m) Profit from Shareholders’ Fund (S$m) 18% 69% 63% 360 296 171% 186 221 136 52 103 35 484 58 308 38 159 186 (24) 2Q19 2Q20 1H19 1H20 (188) 2Q19 2Q20 1H19 1H20 Operating profit Non-operating profit/(loss
Slide 28: OCBC Wing Hang Hong Kong & Macau's performance
OCBC Wing Hang OCBC Wing Hang Hong Kong & Macau’s performance 1H20 net profit 10% higher YoY, driven by a 24% rise in operating profit YoY HKD m 1H20 1H19 +/(-)% Net interest income 2,020 1,892 7 Non-interest income 690 530 30 Total income 2,710 2,422 12 Operating expenses (1,117) (1,138) (2) Operat
Slide 29: OCBC Wing Hang Hong Kong & Macau Financial Highlights
OCBC Wing Hang OCBC Wing Hang Hong Kong & Macau Financial Highlights Key Performance Trends Net Interest Margin Cost-to-Income 2bps 12bps 1.6ppt 5.8ppt 1.73% 1.78% 46.2% 47.0% 1.71% 1.66% 44.6% 41.2% 2Q19 2Q20 1H19 1H20 2Q19 2Q20 1H19 1H20 Customer Loans (HKD b) Customer Deposits (HKD b) 0.3% 0.5% 6
Slide 30: OCBC Malaysia's performance
OCBC Malaysia OCBC Malaysia’s performance 1H20 operating profit rose 2% YoY to RM720m, but allowances increased significantly YoY RM m 1H20 1H19 +/(-)% Net interest income 742 756 (2) Islamic banking income 1/ 222 222 − Non-interest / finance income 366 334 10 Total income 1,330 1,312 1 Operating ex
Slide 31: OCBC Malaysia Financial Highlights
OCBC Malaysia OCBC Malaysia Financial Highlights Key Performance Trends Net Interest Margin Cost-to-Income 2.3ppt 0.2ppt 12bps 4bps 2.05% 2.07% 2.03% 45.7% 48.0% 46.1% 45.9% 1.93% 2Q19 2Q20 1H19 1H20 2Q19 2Q20 1H19 1H20 Customer Loans (RM b) Customer Deposits (RM b) 2.4% 2% 1.8% NPL ratio 1% 78 77 5
Slide 32: Bank OCBC NISP's performance
Bank OCBC NISP Bank OCBC NISP’s performance 1H20 pre-tax profit rose 3% YoY to a record IDR2.1t YoY IDR b 1H20 1H19 +/(-)% Net interest income 3,325 3,210 4 Non-interest income 1,180 955 24 Total income 4,505 4,165 8 Operating expenses (1,904) (1,858) 2 Operating profit 2,601 2,307 13 Allowances (49
Slide 33: Bank OCBC NISP Financial Highlights
Bank OCBC NISP Bank OCBC NISP Financial Highlights Key Performance Trends Net Interest Margin Cost-to-Income 20bps 11bps 2.3ppt 2.3ppt 4.09% 4.00% 44.0% 44.6% 3.89% 3.89% 41.7% 42.3% 2Q19 2Q20 1H19 1H20 2Q19 2Q20 1H19 1H20 Customer Loans (IDR t) Customer Deposits (IDR t) 1.8% 1.8% 4% NPL ratio 1% 13
Slide 34: First Half 2020 Results Thank You
First Half 2020 Results Thank You
Oversea-Chinese Banking — H1 2020 Earnings Presentation on 6ix