United Overseas Bank Limited · SGX:U11
United Overseas Bank — 1H 2023 Earnings Presentation
24 slides from United Overseas Bank's earnings presentation, August 2023
Slide 1: UOB Group Financial Updates
UOB Group Financial Updates Lee Wai Fai Group Chief Financial Officer For the First Half / Second Quarter Ended 30 June 2023 Private and Confidential. Disclaimer: This material that follows is a presentation of general background information about UOB’s activities current at the date of the presenta
Slide 2: Financial Highlights: Strong Core Net Profit at $1.5b for 2Q23
Financial Highlights Strong Core Net Profit at $1.5b for 2Q23 2Q23 key financial indicators Core operating profit (1) Core net profit after tax (1) • Another quarter of strong core net profit at $1.5b and core ROE at 14.1% $2.1b $1.5b no change QoQ - 4% QoQ • 2Q23 NIM moderated to 2.12% as liquidity
Slide 3: Performance by Segment
Performance by Segment 1H23 1H22 YoY 2Q23 1Q23 QoQ ▪ Retail performance buoyed Operating Profit (1) $m $m +/(-) % $m $m +/(-) % by Citi franchise, wider (1) Group Retail 1,529 820 86 735 795 (8) margin and deposit growth, coupled with lift in card and Group Wholesale Banking 2,788 2,181 28 1,368 1,4
Slide 4: Consumers: Scale Acquisition with Digital
Consumers Scale Acquisition with Digital Scale UOB TMRW across ASEAN to digitally acquire at >7m +47% • Tapping on rising low cost Retail customers, Year on year increase of affluence and growing 78% are new-to-bank customers digitally enabled acquired vs 1H22, digitalisation in Southeast 56% digita
Slide 5: Strengthening Wholesale customers
Strengthening +17% Wholesale Cross border income1; Connectivity Formed 23% of GWB income customers +35% Across our ASEAN Suppliers and distributors2 within footprint and global • Growing regional network Financial Supply Chain Management (FSCM) solution franchise, capturing cross-border opportunitie
Slide 6: Financial Highlights
Financial Highlights 1H23 1H22 YoY 2Q23 1Q23 QoQ 2Q22 YoY $m $m +/(-)% $m $m +/(-)% $m +/(-)% • Record 1H23 core net profit Net interest income 4,846 3,549 37 2,437 2,409 1 1,863 31 at $3.1b, driven by strong NII Net fee income 1,075 1,139 (6) 524 552 (5) 567 (8) and T&I Other non-interest income 1,
Slide 7: Net Interest Income and Margin
2.61 2.75 Net Interest Income 1.96 2.34 2.61 2.62 2.02 and Margin 2.13 2.22 2.14 2.12 1.63 1.95 1.67 • NII rose 1% QoQ from longer 0.78 1.11 1.11 1.02 1.02 1.10 calendar quarter 0.80 4,846 • Slight moderation in 2Q23 NIM 2,560 803 2,409 2,437 due to excess liquidity 2,234 3,549 372 deployed to high
Slide 8: Fee Income
22 Fee Income 15 21 • Net fee income eased 16 15 16 15 5% QoQ • Loan / trade related fees declined on softer 1,139 1,075 lending activities 162 160 567 552 101 519 524 77 485 77 • Wealth fees recovery 317 153 59 78 78 81 83 55 72 hampered by cautious 298 147 74 131 156 investor sentiments 125 142 55
Slide 9: Trading & Investment Income
130 87 81 Trading & Investment 52 43 Income 40 38 • Another record quarter for 953 T&I 474 478 • Resilient customer-related 568 370 treasury income, 272 296 supported by hedging 178 257 214 203 demands 41 26 334 384 173 191 177 202 182 • Good performance from trading and liquidity (76) management ac
Slide 10: Core Expenses and Cost / Income Ratio
44.3 Core Expenses and 40.9 43.8 42.6 45.2 43.3 44.1 Cost / Income Ratio (1) 2,889 42.6 40.9 40.9 325 + 21% • CIR unchanged at 40.9% 2,241 464 + 30% 1,418 1,440 1,448 on the back of disciplined 1,357 269 130 157 167 1,184 170 spending 383 + 31% 215 230 233 357 151 197 • Continued focus on 293 183 16
Slide 11: Non-Performing Assets
2022 2023 Non-Performing ($m) 2Q 3Q 4Q 1Q 2Q Assets NPAs at start of period 5,289 5,422 5,037 5,127 5,150 Non-individuals • Asset quality New NPAs _ 661 214 395 301 364 remained resilient and Less: portfolio well- Upgrades and recoveries 363 448 322 80 137 collateralized with Write-offs 123 60 121 2
Slide 12: Total Allowance on Loans
27 31 20 30 25 Total Allowance on 23 22 17 20 26 Loans 21 21 21 16 • Specific allowance higher 430 64 this quarter largely due to 319 a major Thailand 5 corporate account 173 238 366 173 192 36 314 135 28 • Pre-emptive general 7 8 253 202 166 164 allowance set aside to 127 maintain prudent (80) prov
Slide 13: Allowance Coverage
33 34 32 33 Allowance Coverage 30 0.9 0.9 0.9 1.0 1.0 • Adequate reserve buffer with prudent coverage for 4,934 4,931 5,002 4,931 5,134 performing loans at 1.0% 379 379 379 379 379 • NPA coverage stable at 2,912 2,865 2,868 2,905 3,058 99% or 209% taking collateral into account 1,643 1,687 1,755 1,6
Slide 14: Performance by Geography
Performance by (1) 1H23 1H22 YoY 2Q23 1Q23 QoQ Core operating profit $m $m +/(-)% $m $m +/(-)% Geography Singapore 2,418 1,542 57 1,184 1,233 (4) ASEAN-4 911 635 43 446 465 (4) • 1H23 Core operating Malaysia 412 333 24 188 224 (16) profit surged to $4.2b Thailand 364 193 89 193 171 13 Indonesia 122
Slide 15: Gross Loans
Gross Loans Jun-23 Mar-23 Jun-22 QoQ YoY $b $b $b +/(-)% +/(-)% • Loans grew 1% QoQ Singapore 156 155 163 1 (4) driven by Singapore, ASEAN-4 68 68 63 (1) 7 North Asia and Malaysia 32 33 30 (3) 8 developed markets Thailand 24 24 21 (0) 15 Indonesia 10 10 11 0 (14) • YoY growth of 1% on Vietnam 2 2 2
Slide 16: Total Funding
Total Funding Jun-23 Mar-23 Jun-22 QoQ YoY $b $b $b +/(-)% +/(-)% • Customer deposits up Singapore 261 254 245 3 7 1% QoQ, alongside ASEAN-4 70 73 66 (4) 7 stable CASA ratio at Malaysia 34 34 31 1 8 Thailand 25 26 22 (6) 11 47.6% Indonesia 10 11 11 (12) (8) Vietnam 2 2 2 (3) 18 North Asia 22 22 22 (
Slide 17: Liquidity Ratios
167 Liquidity Ratios 154 147 141 142 • Funding and liquidity positions remained strong with LCR at 121 121 114 116 111 167% and NSFR at 121% 88.7 85.2 85.6 83.3 83.5 Jun Sep Dec Mar Jun 2022 2023 USD LDR (%) 72.3 64.2 60.0 60.7 62.9 All-currency LCR (%) Loan/Deposit Ratio (LDR) (%) (1) Net Stable Fu
Slide 18: Capital
Capital 13.1 12.8 13.3 14.0 13.6 • CET1 ratio steady at 13.6% 266 263 259 258 263 Jun Sep Dec Mar Jun 2022 2023 Leverage ratio (%) 6.6 6.4 6.6 7.0 7.0 RWA ($b) CET1 ratio (%) 18
Slide 19: Dividends
135 120 Dividends 75 • 60 85 Committed to Net dividend 78 consistent and Per ordinary share (¢) sustainable returns 39 Interim Final to shareholders 60 60 • Interim dividend of 39 85 cents per share 2020 2021 2022 1H23 Payout amount ($m) 1,304 2,011 2,263 1,424 Payout ratio (%) 45 ^ 49 49 49 ^ Divid
Slide 20: Appendix
▪ Loan Portfolio Appendix ▪ Exposure to Greater China ▪ Exposure to Commercial Real Estate - Office 20
Slide 21: Diversified Loan Portfolio
Professionals and Housing loans private individuals 24% Others 9% Diversified Loan 5% Transport, storage General Portfolio commerce Industry and communication 11% 4% FIs, investment and holding companies Building & 12% Manufacturing construction 8% 27% Large corporates Others and institutions 15% Si
Slide 22: Exposure to Greater China
Exposure to Greater China 77.1 75.8 69.2 70.5 71.6 11.8 10.6 9.7 9.4 10.5 Debt ($b) ▪ ~$2.8b in loans to Chinese developers (1% of group loans) Non Bank ($b) 52.5 53.8 49.8 51.6 48.6 Bank ($b) 12.8 11.4 10.9 11.3 9.5 Jun Sep Dec Mar Jun As at 30 Jun 2023: 2022 2023 Bank exposure ($7.7b) • ~35% of to
Slide 23: Exposure to Commercial Real Estate - Office
Exposure to Commercial Real Commercial Real Estate - Office exposure is ~8% of loans Estate - Office By geography as % of loans 0.3% • Almost half of office 0.7% Others exposure is in Singapore 0.8% 0.8% United Kingdom 0.8% 0.8% • Overseas exposure Jun 23 1.5% 1.5% United States backed by strong 8%
Slide 24: Thank You
Thank You & Right By You