Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — H1 2002 Earnings Presentation
27 slides from Oversea-chinese Banking's earnings presentation, Aug 5, 2002
Slide 1: First Half 2002 Results
First Half 2002 Results Presentation to Media and Analysts 5 August 2002 1
Slide 2: Agenda
Agenda n Income Statement Trends n Comparison of 1H 2002 vs 1H 2001 n Comparison of 1H 2002 vs 2H 2001 n Balance Sheet, Asset Quality Trends n Integration Update and Revenue Synergies n Conclusion 2
Slide 3: Operating Profit on an Uptrend
Operating Profit on an Uptrend ↑ 22% HoH 811 ↑ 25% YoY (S$m) 672 557 551 514 536 1H 00 2H 00 1H 01 2H 01 1H 02 Pre-tax gain of S$260m from sale of OUB shares 3
Slide 4: Net Interest Income
Net Interest Income 2.36% 2.31% 2.24% 1.96% 1.93% Net Interest Margin 748 745 (S$m) 624 636 644 1H 00 2H 00 1H 01 2H 01 1H 02 4
Slide 5: Non-interest Income Improving, Led by Fee Income
Non-interest Income Improving, Led by Fee Income 32.2% Non-interest income/ Total income 29.0% * 27.8% 28.2% 26.2% 565 353 305 * (S$m) 246 252 221 1H 00 2H 00 1H 01 2H 01 1H 02 One-off gain of S$260m from sale of OUB shares * Excluding one-off gain of S$260m from sale of OUB shares 5
Slide 6: Fee Income Contribution Rising
Fee Income Contribution Rising 16.2% 16.5% 15.2% Fee Income/ 14.4% * Total Income 13.4% 181 (S$m) 152 137 136 +19% 119 +14% +12% +6% -13% 1H 00 2H 00 1H 01 2H 01 1H 02 Fee Income Fee Income Growth (HoH) 6 * Excluding one-off gain from sale of OUB shares
Slide 7: Expenses and Cost-Income Ratio Down
Expenses and Cost-Income Ratio Down 47.7% * Cost-Income Ratio 41.7% 40.1% 38.8% 34.1% 502 426 (S$m) 368 360 288 1H 00 2H 00 1H 01 2H 01 1H 02 Staff Cost Premises & Equipment Others Restructuring Expenses * Excluding one-off gain from sale of OUB shares 7
Slide 8: Provision Charge Remains High But Below 2H01
Provision Charge Remains High But Below 2H01 SP for Singapore Loans 392 SP for Malaysia Loans SP for Loans - Other Countries 289 Other Provisions * (S$m) 85 125 54 1H 00 2H 00 1H 01 2H 01 1H 02 * Other provisions comprise general provision for loans and specific provision for diminution in value of
Slide 9: Net Profit Rebounded from 2H 2001
Net Profit Rebounded from 2H 2001 * (S$m) 445 433 395 352 302 100 * 1H 00 2H 00 1H 01 2H 01 1H 02 One-off gain of S$252m (after tax) from sale of OUB shares * Excluding one-off gain from sale of OUB shares 9
Slide 10: Similar Trend for EPS and ROE
Similar Trend for EPS and ROE 11.7% 10.2% 10.5% 10.4% 8.2% EPS (¢) 69¢ 67¢ 61¢ 6.8% 55¢ 3.5%* 47¢ 2.4%* 16¢ * 1H 00 2H 00 1H 01 2H 01 1H 02 ROE ROE (Cash basis) Gain from sale of OUB shares * Excluding one-off gain from sale of OUB shares 10 Note: ROE and EPS are annualised
Slide 11: Agenda
Agenda n Income Statement Trends n Comparison of 1H 2002 vs 1H 2001 n Comparison of 1H 2002 vs 2H 2001 n Balance Sheet, Asset Quality Trends n Integration Update and Revenue Synergies n Conclusion 11
Slide 12: Comparison of 1H 2002 vs 1H 2001
Comparison of 1H 2002 vs 1H 2001 1H02 1H01 * YoY S$m S$m +/(-) Net Interest Income 745 644 16% Non-interest Income 353 252 40% Total Income 1,098 896 23% Operating Expenses 426 360 18% Operating Profit 672 536 25% Goodwill 62 2 n.m. Provisions 289 125 131% Associates 103 158 -34% Net Profit 302 433
Slide 13: Comparison of 1H 2002 vs 2H 2001
Comparison of 1H 2002 vs 2H 2001 * 1H02 2H01 * HoH S$m S$m +/(-) Net interest income 745 748 0% Non-interest income 353 305 16% Total Income 1,098 1,053 4% Operating Expenses 426 502 -15% Operating Profit 672 551 22% Goodwill 62 47 32% Provisions 289 392 -26% Associates 103 41 153% Net Profit 302 10
Slide 14: Agenda
Agenda n Income Statement Trends n Comparison of 1H 2002 vs 1H 2001 n Comparison of 1H 2002 vs 2H 2001 n Balance Sheet, Asset Quality Trends n Integration Update and Revenue Synergies n Conclusion 14
Slide 15: Loan Growth Stalled
Loan Growth Stalled (S$bn) 52.8 50.7 5.4 5.2 7.0 7.1 35.2 36.3 31.8 4.4 4.2 3.9 6.9 6.6 5.6 40.4 38.5 22.3 24.2 25.3 Jun 00 Dec 00 Jun 01 Dec 01 Jun 02 Singapore Malaysia Others 15
Slide 16: Deposits Holding Steady
Deposits Holding Steady 90.4% 86.8% 86.3% 86.1% Loans-to-deposits 76.4% 54.9 55.1 (S$bn) 38.4 37.9 39.5 Jun 00 Dec 00 Jun 01 Dec 01 Jun 02 Fixed Deposits Savings Deposits Current Account Others 16
Slide 17: NPLs Down Due to Active NPL Resolution and Recovery Efforts
NPLs Down Due to Active NPL Resolution and Recovery Efforts 14.2% NPL ratio 11.5% 10.7% 9.7% 9.6% (S$m) 5,183 4,979 4,550 668 372 4,092 985 3,921 340 1,061 1,098 366 971 1,031 960 3,454 3,080 3, 023 2,721 2,595 Jun 00 Dec 00 Jun 01 Dec 01 * Jun 02 Substandard Doubtful Loss * Increase was due to cons
Slide 18: Cumulative Loan Provisions Remain Adequate
Cumulative Loan Provisions Remain Adequate (S$m) 3,355 3,368 2,519 1,246 1,210 2,405 2,306 918 818 811 2,109 2,158 1,601 1,587 1,495 Jun 00 Dec 00 Jun 01 Dec 01 Jun 02 Specific Provisions General Provisions 18
Slide 19: Provision Coverage Increased
Provision Coverage Increased Cumulative Provisions/Unsecured NPLs 183% 157% 139% 137% 137% Cumulative Provisions/Total NPLs 65% 68% 55% 59% 59% Jun 00 Dec 00 Jun 01 Dec 01 Jun 02 19
Slide 20: Agenda
Agenda n Income Statement Trends n Comparison of 1H 2002 vs 1H 2001 n Comparison of 1H 2002 vs 2H 2001 n Balance Sheet, Asset Quality Trends n Integration Update and Revenue Synergies n Conclusion 20
Slide 21: Integration of KCH Completed
Integration of KCH Completed n Full legal and operational integration between KTB and OCBC Bank achieved on 25 February 2002, six months ahead of original plan n Branch/rep office network: Domestic: Reduced by one-third from 108 to 77 Malaysia: Maintained at 25 branches (no duplication) Internationa
Slide 22: Revenue Synergy from Enlarged Customer Base – Unit Trust Sales
Revenue Synergy from Enlarged Customer Base – Unit Trust Sales (S$m) 796 680 602 258 Full Year Full Year Full Year First Half 1999 2000 2001 2002 22
Slide 23: Revenue Synergy – Bancassurance Sales
Revenue Synergy – Bancassurance Sales (S$m) 647 477 351 231 Full Year Full Year Full Year First Half 1999 2000 2001 2002 23
Slide 24: Revenue Synergy – New Housing Loans
Revenue Synergy – New Housing Loans (S$m) 2,102 2,016 1,466 1,493 Full Year Full Year Full Year First Half 1999 2000 2001 2002 24
Slide 25: Revenue Synergy – New Car Loans
Revenue Synergy – New Car Loans 591 (S$m) 455 25 Full Year Full Year First Half 2000 2001 2002 Note: OCBC Bank introduced its car loan product in September 2000 Figures exclude OCBC Finance which provides loans for the secondary car market 25
Slide 26: Conclusion
Conclusion n Operating profit held up well under challenging economic environment n Strong fee income, better-than- expected costs savings n Integration cost and revenue synergies flowing through n Focus is on growing top line, improving asset quality, and increasing operational efficiencies n OCBC
Slide 27: Appendix 1: Comparison of 1H 2002 vs 2H 2001
Appendix 1: Comparison of 1H 2002 vs 2H 2001 1H02 2H01 HoH S$m S$m +/(-) Net interest income 745 748 0% Non-interest income 353 565 * -38% Total Income 1,098 1,313 * -16% Operating Expenses 426 502 -15% Operating Profit 672 811 * -17% Goodwill 62 47 32% Provisions 289 392 -26% Associates 103 41 153%
Oversea-Chinese Banking — H1 2002 Earnings Presentation on 6ix