Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — H1 2023 Earnings Presentation
26 slides from Oversea-chinese Banking's earnings presentation, Aug 4, 2023
Slide 1: First Half 2023 Results Presentation
First Half 2023 Results Presentation Goh Chin Yee, Group Chief Financial Officer 4 August 2023 OCBC Financial Results
Slide 2: Agenda
Agenda Financial Highlights Group Net Profit Group Performance Trends Notes: - 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 applicable; - Figures may no
Slide 3: Financial Highlights
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Slide 4: Record 1H23 profit drove ROE above 14%
Performance highlights Record 1H23 profit drove ROE above 14% Total Income YoY ■ NII up 48% on asset growth S$6.80b +30% and strong NIM expansion Group S$3.59b +38% YoY Net Interest Income (NII) +48% ■ Non-II up, driven by trading, Net Profit +18% YoY Non-Interest Income (Non-II) +3% investment and
Slide 5: 1H23 Financial highlights
Performance highlights 1H23 Financial highlights Banking Wealth Management Net Profit (S$m) NII and Fee Income (S$m) WM Income (S$m) 1/ WM AUM (S$b) 33% ■ Resilient performance +33% +34% 31% +10% across three key business +36% +2% pillars 2,240 1,645 682 ■ Record WM income drove 451 270 274 3,228 5,
Slide 6: Healthy balance sheet position
Balance sheet Healthy balance sheet position Loans-to-Deposits Ratio Funding Group LDR (%) Composition (%) ■ Strong credit ratings of Aa1 from Moody’s and AA- from 12% both Fitch and S&P Customer deposits 3% Bank deposits 84.4 3% S$454b Debts issued ■ Solid funding, liquidity and Jun 23 79.2 78.8 82
Slide 7: Group Net Profit
O72 Group Net Profit S)OcBc
Slide 8: 1H23 Group and Banking Operations profits at record high
Performance overview 1H23 Group and Banking Operations profits at record high Group Performance 1/ Banking Operations Performance (S$m) 1H23 YoY 2Q23 YoY QoQ 1H23 YoY 2Q23 YoY QoQ Total Income 6,805 +30% 3,455 +30% +3% 6,123 +28% 3,101 +26% +3% Operating Expenses 2,573 +5% 1,329 +2% +7% 2,453 +7% 1,
Slide 9: 1H23 net profit up YoY to S$3.59b driven by NII growth
Net profit 1H23 net profit up YoY to S$3.59b driven by NII growth YoY +44% YoY Movement 1H23 2Q23 YoY +38% QoQ +44% Positive on net profit (S$m) Negative on net profit ■ Total income up 30% to a new high of S$6.80b ■ Increase in expenses mainly from higher staff costs associated with salary adjustme
Slide 10: 2Q23 net profit rose 34% YoY to S$1.71b
Net profit 2Q23 net profit rose 34% YoY to S$1.71b YoY +44% YoY +34% YoY Movement 2Q23 QoQ +44% QoQ -9% Positive on net profit (S$m) Negative on net profit YoY ■ Net profit driven by record NII, partly offset by higher 2Q22 Net Interest Non-II Profit from Operating Associates Total Amortisation, 2Q2
Slide 11: Group Performance Trends
OS Group Performance Trends 4 S)OCBC
Slide 12: 1H23 net interest income at record S$4.73b, NIM at 2.28%
Net interest income 1H23 net interest income at record S$4.73b, 1Q22 NIM at 2.28% 2.31% 2.30% 2.26% 2.28% 2Q23 2.06% 1H23 YoY +44% Net Interest Margin 1.71% 1.63% 2Q23 YoY +40% 4,727 YoY +48% QoQ QoQ +44% +2% 2,386 2,338 2,389 2,099 3,203 1,700 ■ 1H23 NII driven by 6% Net Interest Income average ass
Slide 13: 1H23 non-interest income grew 3% YoY to S$2.08b
Non-interest income 1H23 non-interest income grew 3% YoY to S$2.08b 1H23 YoY 2Q23 +44% 2Q23 YoY +11% YoY +3% QoQ QoQ +44% +5% 36.2% 38.7% % of Group Income 33.4% 30.2% 30.8% 30.5% 20.5% ■ 1H23 non-II up, led by higher trading income, net gains from sale of investment securities and 2,020 2,078 incre
Slide 14: 1H23 fee income lower YoY as wealth management activities remained subdued
Non-interest income 1H23 fee income lower YoY as wealth management activities remained subdued 1H23 2Q23 YoY +44% 2Q23 YoY -10% YoY -12% QoQ QoQ +44% -5% 999 ■ 1H23 fee income lower YoY largely due to weaker 136 883 wealth, brokerage and fund Net Fees & Commissions (S$m) 50 management fees amid 141
Slide 15: 1H23 trading income higher YoY
Non-interest income 1H23 trading income higher YoY 1H23 YoY 2Q23 +44% 2Q23 YoY -2% YoY +4% QoQ +44% QoQ +5% 513 492 ■ 1H23 trading income up YoY driven by higher non- 162 customer flow income 115 Trading Income (S$m) Non-Customer Flow 267 262 251 Customer Flow 83 58 194 104 7 148 377 16 351 184 187
Slide 16: 1H23 operating expenses up YoY; CIR lower at 37.8%
Operating expenses 1H23 operating expenses up YoY; CIR lower at 37.8% 1H23 YoY 2Q23 +44% 2Q23 YoY +2% 49.0% YoY +5% QoQ +44% QoQ +7% 47.1% 43.3% Cost-to-income (CIR) 40.3% 38.5% 37.8% 37.1% ■ 1H23 operating expenses up 5% YoY mainly from 2,573 higher staff costs, IT-related 2,458 and business promot
Slide 17: 1H23 allowances higher YoY, credit costs at 21bps
Allowances 1H23 allowances higher YoY, credit costs at 21bps 1H23 YoY 2Q23 +44% 35 2Q23 YoY +248% 31 21 YoY +211% QoQ QoQ+44% +128% Credit costs (bps) 1/ 14 8 12 7 Total 8 4 5 6 6 ■ 2Q23 allowances increased 2 Impaired 0 QoQ and YoY led by higher allowances for non-impaired assets 362 ■ 2Q23 allowan
Slide 18: NPA coverage ratio higher at 131%
Allowances NPA coverage ratio higher at 131% YoY +44% YoY +10% 131% Jun 23 2Q23 108% 114% 121% QoQ +44% QoQ +6% Total NPA coverage 99% ■ NPA coverage ratio raised to 4,299 131%, supported by higher 4,001 3,991 4,037 allowances for non-impaired 3,909 455 449 455 455 assets 444 Cumulative allowances (
Slide 19: NPL ratio improved YoY to 1.1%
Asset quality NPL ratio improved YoY to 1.1% YoY +44% YoY -17% Jun 23 2Q23 QoQ +44% QoQ -2% NPL ratio 1.3% 1.2% 1.2% 1.1% 1.1% ■ NPLs lower QoQ, mainly attributable to recoveries and upgrades in 3,969 120 3,688 Singapore, Malaysia and 299 3,486 Indonesia. These were Non-performing Assets (S$m) 110 3
Slide 20: NPAs declined sequentially over last 5 quarters
Asset quality NPAs declined sequentially over last 5 quarters S$m 2Q22 1Q23 2Q23 1H22 1H23 At start of period 4,307 3,486 3,329 4,338 3,486 ■ NPAs lower QoQ as New NPAs recoveries/ upgrades and Corporate/ Commercial Banking and Others 102 54 184 206 225 write-offs more than offset Consumer Banking/
Slide 21: Loans rose 2% YoY in constant currency terms
Loans Loans rose 2% YoY in constant currency terms Loans by Geography YoY +44% YoY -0.2% Jun 23 2Q23 (S$b) +2% 9% 5% QoQ +44% QoQ +1% in constant ccy terms 4% +0.3% Rest of the world in constant ccy terms 303 33% Greater China 298 295 294 297 S$73b ■ Corporate, SME and Indonesia 57 59 59 59 Jun 23 5
Slide 22: Commercial Real Estate ("CRE") Office Sector loans
Loans Commercial Real Estate (“CRE”) Office Sector loans Loans to CRE Office sector accounted for 14% of Group loans ■ Loans to CRE office sector Singapore Malaysia and Indonesia largely secured with average Hong Kong LTV between 50% and 60% 0.3% Offshore China 1/ 1.0% 0.8% ■ Two-thirds of CRE offic
Slide 23: Deposits grew 7% YoY and 2% QoQ
Deposits Deposits grew 7% YoY and 2% QoQ 84.4% 85.0% 83.3% YoY +44% YoY +7% Group LDR 79.2% 78.8% Jun 23 2Q23 QoQ +44% QoQ +2% 79.3% 82.5% 82.4% 76.5% 76.1% SGD LDR ■ Deposits rose QoQ and YoY mainly from fixed deposits 66.9% 64.2% 59.3% inflows USD LDR 53.3% 51.6% 367 372 349 353 350 38 39 Customer
Slide 24: Strong capital position
Capital Strong capital position CET1 CAR after adjusting for 1H23 interim dividend to be paid on 25 August 2023 YoY +0.5ppt YoY +44% Jun 23 2Q23 QoQ QoQ -0.5ppt +44% ■ Strong capital to support CET1 CAR (%) business growth, navigate 15.2 15.9 15.4 uncertainties and capture 14.9 14.4 14.6 opportuniti
Slide 25: Interim dividend of 40 cents, payout ratio of 50%
Capital Interim dividend of 40 cents, payout ratio of 50% YoY +44% 1H23 2Q23 YoY +43% QoQ +44% 53% 50% 47% 49% 39% ■ Interim dividend of 40 cents Dividend payout ratio 1/ declared, up 43% YoY 68.0 ■ Dividend payout ratio of 53.0 53.0 50% in line with guidance 40.0 DPS (cents) 28.0 28.0 31.8 Final di
Slide 26: Thank you
Thank you 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. This presentation contains “forward-looking statements”, which are ba
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