Oversea-chinese Banking Corporation Limited · SGX:O39

Oversea-chinese Banking — Q1 2008 Earnings Presentation

29 slides from Oversea-chinese Banking's earnings presentation, May 7, 2008

  1. Slide 1: First Quarter 2008 Results Presentation

    First Quarter 2008 Results Presentation 7 May 2008 1

  2. Slide 2: Agenda

    Agenda • Results Overview • Performance Trends • Results of Key Subsidiaries • In Summary Appendix: Update on CDOs 22

  3. Slide 3: Core Net Profit Fell 10% YoY, Grew 8% QoQ

    Core Net Profit Fell 10% YoY, Grew 8% QoQ 1Q08 1Q07 YoY 4Q07 QoQ S$m S$m +/(-)% S$m +/(-)% Net Interest Income 638 508 26 613 4 Non-Interest Income 377 506 (26) 464 (19) Total Income 1,015 1,014 - 1,077 (6) Operating Expenses (426) (352) 21 (485) (12) Operating Profit 589 662 (11) 593 (1) Amortisati

  4. Slide 4: Key Financial Ratios - Based on Core Earnings

    Key Financial Ratios - Based on Core Earnings 1Q08 4Q07 1Q07 % % % Net Interest Margin 2.17 2.14 2.04 Non-Interest Income/ Total Income 37.1 43.0 49.9 Cost-to-Income Ratio 42.0 45.0 34.7 Loans-to-Deposits Ratio 79.7 80.3 78.9 NPL Ratio 1.6 1.7 2.7 Allowances/NPLs 115.3 116.1 101.6 ROE 12.2 11.2 15.9

  5. Slide 5: Agenda

    Agenda • Results Overview • Performance Trends • Results of Key Subsidiaries • In Summary Appendix: Update on CDOs 55

  6. Slide 6: Continued Uptrend in Net Interest Income and Margins

    Continued Uptrend in Net Interest Income and Margins 2.17% 2.13% 2.14% 2.17% 2.10% 2.07% 2.00% 2.04% Net interest margin 2,244 638 613 558 565 1,794 508 Net 638 interest income (S$m) 2006 2007 1Q08 1Q07 2Q07 3Q07 4Q07 1Q08 66

  7. Slide 7: Non-Interest Income Impacted by Lower Insurance Profits and Trading Losses

    Non-Interest Income Impacted by Lower Insurance Profits and Trading Losses 49.9% 46.4% 46.9% 46.0% 44.7% 43.0% Non-interest income/ 37.1% 37.1% Total income 2,045 2,036 92 598 598 544 1,944 92 493 481 1,448 464 506 167 Non-interest income 1,944 377 (S$m) 544 167 377 2006 2007 1Q08 1Q07 2Q07 3Q07 4Q0

  8. Slide 8: Life Assurance Profits Impacted by MTM Investment Losses and Lower Discount Rate

    Life Assurance Profits Impacted by MTM Investment Losses and Lower Discount Rate on Insurance Liabilities 1Q08 4Q07 1Q07 2007 2006 Life assurance profit from: S$m S$m S$m S$m S$m - Participating Fund 26 71 26 143 103 - Non-participating Fund (30) 94 53 302 218 - Investment-linked Fund 11 15 20 64 55

  9. Slide 9: Fee Income Increased 19% YoY, 5% QoQ

    Fee Income Increased 19% YoY, 5% QoQ 20.9% 20.7% 20.2% 20.9% 19.3% 18.4% 18.8% Fee income/ 17.5% Total income 808 217 211 212 202 597 178 Fee income (S$m) 212 2006 2007 1Q08 1Q07 2Q07 3Q07 4Q07 1Q08 Excluding divestment gains 99

  10. Slide 10: Operating Expenses Fell by 12% QoQ

    Operating Expenses Fell by 12% QoQ 45.0% 42.0% 41.1% 42.0% 40.8% 40.1% 39.6% Cost-to- Income Ratio 34.7% 1,680 485 416 427 426 1,331 433 143 352 108 99 98 332 301 83 74 87 71 78 277 69 Operating Expenses (S$m) 426 946 267 99 231 247 249 722 200 78 249 2006 2007 1Q08 1Q07 2Q07 3Q07 4Q07 1Q08 Staff Co

  11. Slide 11: Core Operating Profit down 11% YoY

    Core Operating Profit down 11% YoY Operating Profit before allowances (S$m) 2,601 2,508 92 754 756 598 2,509 92 634 620 167 662 593 1,911 589 756 167 589 2006 2007 1Q08 1Q07 2Q07 3Q07 4Q07 1Q08 Divestment gains 11 11

  12. Slide 12: Net Write-Back on Allowance from Loan Recoveries, Repayments and Upgrades

    Net Write-Back on Allowance from Loan Recoveries, Repayments and Upgrades Allowances for loans and other 39 assets (S$m) 36 13 2 0.3 (8) (8) (16) 2006 2007 1Q08 1Q07 2Q07 3Q07 4Q07 1Q08 12 12

  13. Slide 13: No Further Allowances for CDOs in 1Q08

    No Further Allowances for CDOs in 1Q08 1Q08 4Q07 1Q07 S$m S$m S$m Specific allowances/ (6) (5) (3) (write-back) for loans Allowances for CDOs - 10 - Allowances/(write-back) for other (1) 8 3 assets Total net allowances/ (8) 13 0.3 (write-back) 13 13

  14. Slide 14: ROE Improved QoQ to 12.2%

    ROE Improved QoQ to 12.2% 13.8% 13.0% 15.9% 13.0% 11.8% 15.4% 12.2% 12.1% ROE 12.2% (%) 13.4% 11.5% 12.2% 11.2% 2,071 2,002 104 647 622 47 6 559 532 90 156 1,878 518 463 1,443 510 428 38 460 Net Profit 425 425 (S$m) 460 622 156 460 2006 2007 1Q08 1Q07 2Q07 3Q07 4Q07 1Q08 Divestment gains Excluding d

  15. Slide 15: Earnings Contribution by Segments

    Earnings Contribution by Segments 1Q08 PBT by Business Segment 1Q08 PBT by Geography Insurance Other Asia & Others Pacific Other 6% 5% ASEAN 2% Treasury 21% Consumer Banking 31% Malaysia 27% Singapore Business 65% Banking 43% 1Q08 Profit Before Tax & MI : S$586m 1Q08 Profit Before Tax & MI : S$586m

  16. Slide 16: Broad-based Loans Growth of 19% YoY, 4% QoQ

    Broad-based Loans Growth of 19% YoY, 4% QoQ 75.4 72.8 68.0 Loans 65.3 63.3 16.2 (S$bn) 15.4 13.7 11.9 13.0 12.1 12.3 11.0 11.5 10.9 45.3 46.9 40.5 41.3 42.8 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Singapore Malaysia International Note: Loans by geography are based on where the credit exposure resides 16

  17. Slide 17: Deposits up 19% YoY, 5% QoQ

    Deposits up 19% YoY, 5% QoQ 78.9% 80.3% 79.7% 85.0% 77.4% 77.6% Loans-to- 79.8% 79.1% 75.0% 77.8% 76.8% 76.7% deposits 92.9 65.0% 88.8 82.2 85.7 78.0 13.3 12.5 55.0% 11.6 11.6 9.9 14.1 12.9 13.0 45.0% 11.7 13.0 35.0% Deposits 57.2 58.8 60.5 25.0% 51.8 53.3 (S$bn) 15.0% Mar-07 Jun-07 Sep-07 Dec-07 Ma

  18. Slide 18: NPL Ratio Improves to 1.6%

    NPL Ratio Improves to 1.6% 2.7% 2.4% 2.1% NPL Ratio 1.7% 1.6% 1,766 1,614 239 1,484 244 1,354 1,325 286 658 294 349 621 581 NPLs 548 519 (S$m) 869 749 617 512 456 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Singapore Malaysia International 18 18

  19. Slide 19: Allowance Coverage of 115%

    Allowance Coverage of 115% 116% 115% 107% 102% 104% Total Allowances / NPLs 47% 45% 44% 43% 43% Specific Allowances / NPLs Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 19 19

  20. Slide 20: Capital Ratios Improved Marginally Following Basel II Adoption

    Capital Ratios Improved Marginally Following Basel II Adoption (%) Total CAR 15.4 14.6 Tier 2 CAR 2.3 12.8 13.5 2.1 12.4 0.7 0.9 0.9 Tier 1 CAR 13.1 12.5 11.9 12.8 11.5 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 (S$m) Tier-1 Capital 10,738 11,049 11,051 11,431 11,530 Risk Weighted 81,878 87,846 92,849 99,38

  21. Slide 21: Agenda

    Agenda • Results Overview • Performance Trends • Results of Key Subsidiaries • In Summary Appendix: Update on CDOs 21 21

  22. Slide 22: GEH First Quarter Contribution

    GEH First Quarter Contribution GEH’s Contribution to 1Q08 ^ 1Q07 YoY 4Q07 QoQ OCBC’s Results S$m S$m +/(-)% S$m +/(-)% Total Income 105 192 (45) 236 (55) Operating Expenses (29) (29) 1 (39) (27) Operating Profit 77 164 (53) 196 (61) Amortisation of Intangibles (12) (12) 0 (12) 0 Allowances (3) 0 n.m

  23. Slide 23: OCBC Malaysia: 1Q08 Results

    OCBC Malaysia: 1Q08 Results 1Q08 1Q07 YoY 4Q07 QoQ Unaudited Results* RM m RM m +/(-)% RM m +/(-)% Net Interest Income 233 202 15 233 - Islamic Banking Income 27 18 50 23 17 Non-Interest Income 149 96 55 92 62 Total Income 409 316 29 348 18 Operating Expenses (143) (109) 31 (163) (12) Operating Prof

  24. Slide 24: OCBC Malaysia: Financial Ratios

    OCBC Malaysia: Financial Ratios 1Q08 4Q07 1Q07 % % % Net Interest Margin 2.46 2.58 2.56 Non-Interest Income / 36.3 26.4 30.4 Total Income Cost-to-Income Ratio 35.0 46.9 34.5 RM Loans-to-Deposits Ratio 83.6 84.6 78.1 Gross NPL Ratio 3.7 4.0 5.3 Loans Growth (YoY) 15.3 14.5 11.5 ROE 28.4 19.9 23.1 24

  25. Slide 25: Bank NISP: 1Q08 Results

    Bank NISP: 1Q08 Results 1Q08 1Q07 YoY 4Q07 QoQ RP bn RP bn +/(-)% RP bn +/(-)% Unaudited Results* Net Interest Income 302 263 15 306 (1) Non Interest Income 88 96 (8) 88 0 Expenses (308) (221) 39 (303) 2 Operating Profit 82 138 (41) 91 (10) Allowances (6) (23) (75) (30) (81) Net Profit 54 82 (34) 44

  26. Slide 26: Bank NISP: Financial Ratios

    Bank NISP: Financial Ratios 1Q08 4Q07 1Q07 % % % Net Interest Margin 4.99 4.97 4.40 Non-Interest Income / Total Income 22.5 22.4 26.7 Cost-to-Income Ratio 79.0 76.8 61.6 Loans-to-Deposits Ratio 91.3 89.1 80.7 Gross NPL Ratio 2.56 2.53 2.84 Loans Growth (YoY) 16.6 22.3 37.6 ROE 6.5 5.6 13.9 26 26

  27. Slide 27: In Summary

    In Summary • Resilient earnings despite significantly lower insurance contribution and volatile financial markets • Core lending, fee-based and treasury businesses remain robust • Expenses under control • Realization of growth opportunities in our key markets continues on track in spite of financial

  28. Slide 28: Appendix: Update on Bank's CDO Portfolio

    Appendix: Update on Bank’s CDO Portfolio (S$m) Investment Allowances/ MTM Adj. to Fair Value Amount as at Losses to-date Reserves to-date 31 Mar 08 (a) (taken to P&L) (taken to Equity) Total CDOs 594 (259) (55) - ABS CDOs 250 (226)(b) - - Corporate CDOs 344 (33)(c) (55) (a) Based on 31 March 2008 US

  29. Slide 29: Thank You

    First Quarter 2008 Results ________________________ Thank You 29

Oversea-Chinese Banking — Q1 2008 Earnings Presentation on 6ix