United Overseas Bank Limited · SGX:U11
United Overseas Bank — H1 2004 Earnings Presentation
20 slides from United Overseas Bank's earnings presentation, Jul 30, 2004
Slide 1: UOB - Premier Regional Bank: First Half / Second Quarter 2004 Group Results Briefing
UOB - Premier Regional Bank First Half / Second Quarter 2004 Group Results Briefing Address by Mr Kuek Tong Au Executive Vice President Corporate Services 30 July 2004 Disclaimer : This material that follows is a presentation of general background information about the Bank’s activities current at t
Slide 2: Higher Profit Recorded in 1st Half 2004
Higher Profit Recorded in 1st Half 2004 1H04 1H03 Incr / (Decr) $m $m $m % Net Interest Income 1,056 1,028 28 2.7 Non-Interest Income 515 547 (32) (5.7) Total Income 1,571 1,575 (4) (0.2) Less: Operating Expenses 548 537 11 2.1 Operating Profit before Goodwill and Provisions 1,023 1,038 (15) (1.4) L
Slide 3: Profit Growth in 2nd Quarter 2004
Profit Growth in 2nd Quarter 2004 2Q04 2Q03 Incr / (Decr) $m $m $m % Net Interest Income 533 510 23 4.3 Non-Interest Income 222 278 (56) (20.1) Total Income 755 789 (34) (4.3) Less: Operating Expenses 280 271 9 3.4 Operating Profit before Goodwill and Provisions 474 517 (43) (8.3) Less: Goodwill amo
Slide 4: Higher Net Interest Income despite Lower Margin
Higher Net Interest Income despite Lower Margin Net Net Interest Interest Income Income & & Margin Margin ($m) (%) 600 2.50 540 523 533 518 510 503 500 2.30 2.25% 2.29% 400 2.19% 2.20% 2.10 2.16% 2.14% 300 1.90 200 1.70 100 1.50 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 Net Interest Income Net Interest Margin 4
Slide 5: Improved Fee-based Income overshadowed by Lower Contributions from Securities and FX Dealings
Improved Fee-based Income overshadowed by Lower Contributions from Securities and FX Dealings Non -Interest Income Non-Interest Income (Non -NII) & (Non-NII) & Non-NII Ratio Non-NII Ratio ($m) (%) 400 40.0 35.3% 35.1% 35.9% 34.2% 33.3% 29.5% 300 278 291 293 30.0 268 251 222 120 123 200 138 140 20.0
Slide 6: Continue Disciplined Costs Management
Continue Disciplined Costs Management Operating Operating Expenses Expenses & & Expense -to-Income Ratio Expense-to-Income Ratio ($m) (%) 400 37.2% 40.0 34.4% 35.7% 34.8% 33.8% 32.8% 300 290 280 30.0 266 271 269 268 148 145 200 134 141 141 138 20.0 100 10.0 132 142 135 130 128 130 0 0.0 1Q03 2Q03 3Q
Slide 7: Reduced Provision Charges
Reduced Provision Charges Provisions Provisions Charged Charged to to Income Income Statement Statement ($m) 200 171 150 109 100 60 50 40 41 16 0 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 7
Slide 8: Higher YTD Cash ROE from Profit Growth
Higher YTD Cash ROE from Profit Growth ($m) (%) 500 14.0 12.1% 12.0% 10.9% 12.0 400 10.3% 9.8% 9.4% 10.0 366 357 300 335 347 8.0 263 239 6.0 200 4.0 100 2.0 0 0.0 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 Net Profit After Tax YTD Cash ROE 8
Slide 9: Improved Earnings Per Share
Improved Earnings Per Share Earnings Earnings Per Per Share Share (EPS) (EPS) (¢) 120.0 105.7 103.7 101.2 98.0 100.0 Cash EPS 79.8 EPS 73.7 93.1 90.9 80.0 85.3 88.4 60.0 66.9 60.7 40.0 20.0 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 9
Slide 10: Loans Demand Relatively Stable
Loans Demand Relatively Stable Gross Gross Customer Customer Loans Loans ($b) 70.0 63.2 62.6 62.6 62.5 63.1 60.0 50.0 39.4 38.5 38.1 38.1 39.1 40.0 30.0 20.0 23.8 24.2 24.4 24.3 24.0 10.0 0.0 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Individual Institutional 10
Slide 11: Growth in Customer Deposits
Growth in Customer Deposits Customer Customer Deposits Deposits ($b) 80.0 70.6 71.6 69.9 66.8 66.1 60.0 40.0 20.0 0.0 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 % of Total Deposits 78.1% 78.5% 78.8% 76.2% 76.5% 11
Slide 12: Lower Loans / Deposits Ratio
Lower Loans / Deposits Ratio Loans Loans // Deposits Deposits Ratio Ratio (%) 92.0 90.0 88.0 89.4 89.6 86.0 84.9 83.8 83.6 84.0 82.0 80.0 78.0 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 12
Slide 13: Decline in Non-Performing Loans (NPLs)
Decline in Non-Performing Loans (NPLs) Total NPLs ($m) 5,393 5,343 5,160 4,962 4,852 ($m) (%) 7,000 8.4% 8.4% 9.0 8.1% 6,000 7.8% 7.6% 8.0 5,000 7.0 4,000 3,386 3,406 3,306 3,114 3,031 6.0 3,000 5.0 2,000 1,000 2,007 4.0 1,937 1,854 1,848 1,821 0 3.0 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Doubtful & Los
Slide 14: Reduction in NPLs Mainly from Singapore
Reduction in NPLs Mainly from Singapore Total NPLs ($m) 5,393 5,343 5,160 4,962 4,852 ($m) 6,000 1,709 1,640 1,630 1,604 4,000 1,637 2,000 3,703 3,530 3,358 3,684 3,215 0 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Singapore Overseas 14
Slide 15: Improved NPLs Ratios for Most Sectors
Improved NPLs Ratios for Most Sectors NPLs NPLs Ratios Ratios By By Industry Industry Jun-04 Dec-03 Incr / (Decr) Jun-03 Incr / (Decr) % % % pts % % pts Transport, storage and communication 3.8 5.0 (1.2) 6.1 (2.3) Building and construction 10.9 10.3 0.6 9.6 1.3 Manufacturing 12.5 12.7 (0.2) 15.7 (3.
Slide 16: Decrease in Cumulative Provisions in Tandem with the Drop in NPLs
Decrease in Cumulative Provisions in Tandem with the Drop in NPLs Total Provisions ($m) 3,496 3,438 3,332 3,307 3,249 ($m) (%) 4,000 2.3% 2.3% 2.3% 2.3% 2.5 2.2% 2.0 3,000 2,069 2,013 1,910 1,886 1,888 1.5 2,000 1.0 1,000 0.5 1,427 1,425 1,422 1,421 1,361 0 0.0 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Gen
Slide 17: Higher Provision Coverage against Total NPLs
Higher Provision Coverage against Total NPLs Cumulative Cumulative Provisions Provisions // Cumulative Cumulative Provisions Provisions // Total Total NPLs NPLs Ratio Ratio Unsecured Unsecured NPLs NPLs Ratio Ratio (%) (%) 70 150 144 68 67.0 141 66.6 141 140 137 137 66 64.6 64.8 64.3 64 130 62 60 12
Slide 18: Strong Capital Position
Strong Capital Position Capital Capital Adequacy Adequacy Ratio Ratio ($b) (%) 15.0 15.2 120 14.8 * 14.7 16.0 13.6 90 13.2 12.8 12.0 12.6 12.7 12.8 60 8.0 30 4.0 Risk Weighted Assets 0 0.0 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Risk Weighted Assets Total CAR Tier 1 CAR * Including the US$1 billion 4.50%
Slide 19: Continue to Reward Shareholders with High Dividends
Continue to Reward Shareholders with High Dividends (%) 60 50 18.8% 40 40% 30 25% 25% 25% 20 10 20% 20% 15% 15% 15% 0 2000 2001 2002 2003 2004 Dividend Amount $316m $426m $720m $748m $252m Dividend 34.6% 46.0% 71.6% 62.2% 35.7% Payout Ratio Interim Final Dividend in Specie 19
Slide 20: In Summary …
In Summary … Incr / Incr / 1H04 1H03 2Q04 2Q03 (Decr) (Decr) Net Profit After Tax $705m $501m 40.5% $347m $239m 45.6% ROE (excluding goodwill) 12.0% 9.4% 2.6% pt 11.9% 9.0% 2.9% pt Expense-to-Income Ratio 34.9% 34.1% 0.8% pt 37.2% 34.4% 2.8% pt NPLs*/Gross Customer Loans 7.6% 8.4% (0.8)% pt 7.6% 8.4