Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q3 2020 Earnings Presentation
25 slides from Oversea-chinese Banking's earnings presentation, Nov 5, 2020
Slide 1: Third Quarter 2020 Results Highlights
Third Quarter 2020 Results Highlights 5 November 2020 OCBC Financial Results 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. Th
Slide 2: Agenda
Agenda Financial Highlights Group Performance Trends Note: - 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 not sum to stated to
Slide 3: 3Q20 Performance
Performance review 3Q20 Performance Performance reflects robust franchise and strong balance sheet ❑ Group net profit up 41% QoQ to S$1.03b ❑ Net interest income declined 4% QoQ from lower rates ❑ Customer activities rose in 3Q20 from the previous quarter ▪ Strong fee income growth of 14% ▪ Customer
Slide 4: 3Q20 Financial Highlights
Group performance 3Q20 Financial Highlights Group net profit rose 41% QoQ to S$1.03b from lower allowances Group Net Profit Operating Profit by Geography (S$m) Others 41% 6% Singapore Greater China 3Q20 6% 22% 2Q20 23% 49% 1,028 7% 8% 50% 730 Indonesia 15% 14% 2Q20 3Q20 Malaysia ROE 6.2% 8.7% ROTE 7
Slide 5: 3Q20 Financial Highlights
Group performance 3Q20 Financial Highlights Performance reflected strong and diversified business franchise Banking Wealth Management Net Profit Total NPA Coverage Group Wealth Management Bank of Singapore’s AUM (S$m) Income (S$m) (US$b) 64% QoQ 8ppt QoQ 4% QoQ 3% QoQ 1,004 900 938 116 786 101% 109%
Slide 6: Strong Balance Sheet Fundamentals
Balance sheet Strong Balance Sheet Fundamentals Well-placed to weather the crisis with strong funding, liquidity and capital positions Funding Liquidity Capital • Nearly 80% from customer deposits • Sound liquidity position • Strong capital base • NSFR at 122% • LCR well above minimum required • Lev
Slide 7: 3Q20 Group Performance
Group performance 3Q20 Group Performance Net profit up 41% QoQ due to lower allowances 3Q20 2Q20 QoQ 3Q19 YoY OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 1,421 1,483 (4) 1,600 (11) Non-interest income 1,118 1,142 (2) 1,055 6 Total income 2,539 2,625 (3) 2,655 (4) Operating expenses (1,0
Slide 8: 3Q20 Banking Operations Performance
Banking Ops performance 3Q20 Banking Operations Performance 3Q20 net profit from Banking Operations increased 64% QoQ to S$786m 3Q20 2Q20 QoQ 3Q19 YoY Banking Operations S$m S$m +/(-)% S$m +/(-)% Net interest income 1,395 1,456 (4) 1,570 (11) Non-interest income 744 735 1 792 (6) Total income 2,139
Slide 9: 9M20 Group Performance
Group performance 9M20 Group Performance Net profit lower YoY from higher allowances 9M20 9M19 YoY OCBC Group S$m S$m +/(-)% Net interest income 4,530 4,722 (4) Non-interest income 3,124 3,227 (3) Total income 7,654 7,949 (4) Operating expenses (3,314) (3,378) (2) Operating profit 4,340 4,571 (5) As
Slide 10: 9M20 Banking Operations Performance
Banking Ops performance 9M20 Banking Operations Performance Net profit from Banking Operations at S$1.95b 9M20 9M19 YoY Banking Operations S$m S$m +/(-)% Net interest income 4,446 4,640 (4) Non-interest income 2,257 2,279 (1) Total income 6,704 6,918 (3) Operating expenses (3,098) (3,145) (1) Operat
Slide 11: Agenda
Agenda Financial Highlights Group Performance Trends 11
Slide 12: Net interest income
Net interest income Net interest income 3Q20 NII lower QoQ in a sustained low interest rate environment 1.77% 1.77% 1.76% 1.77% NIM 1.60% 1.63% 1.54% 4,722 4,530 1,600 1,610 1,626 1,483 1,421 S$m 3Q19 4Q19 1Q20 2Q20 3Q20 9M19 9M20 12
Slide 13: Non-interest income
Non-interest income Non-interest income 3Q20 non-interest income at S$1.12b; fee income up 14% QoQ 44.9% 43.5% 44.0% As % of 40.6% 40.8% 39.7% Group 34.7% income 3,227 3,124 1,312 668 1,142 703 1,118 1,055 308 213 282 238 S$m 204 79 864 264 660 72 63 57 598 316 157 182 118 255 119 98 18 325 47 53 25
Slide 14: Wealth Management Franchise
Wealth management Wealth Management Franchise 3Q20 WM income of S$938m, highest quarter since 2018 Total Wealth Management Income Bank of Singapore’s Assets Under Management 37% 34% 33% As % of 32% 31% 30% 117 Group 28% income 116 2,530 113 2,461 110 935 900 938 789 692 104 S$m US$b 3Q19 4Q19 1Q20 2
Slide 15: Net Fees & Commissions
Non-interest income Net Fees & Commissions 3Q20 fee income higher QoQ; WM and brokerage fees above 2019 levels 1,567 1,487 233 200 550 556 546 83 59 501 82 89 69 21 23 440 71 423 321 32 S$m 60 13 111 150 155 23 110 159 126 52 100 43 44 55 52 702 748 291 243 247 252 205 3Q19 4Q19 1Q20 2Q20 3Q20 9M19
Slide 16: Trading income
Non-interest income Trading income Customer flow income rose to a new high in 3Q20 QoQ decline primarily due to YoY decline lower non- 660 primarily due to customer flow lower MTM gains in treasury income 598 GEH investment and lower MTM portfolio due to gains reported unfavourable 325 by GEH. 218 1
Slide 17: Operating expenses
Operating expenses Operating expenses Operating expenses lower QoQ and YoY from disciplined cost management 42.6% 43.3% 44.5% 42.2% 43.2% 42.5% 43.3% CIR 3,378 3,314 1,266 674 601 1,132 1,109 1,107 1,098 272 233 191 198 212 628 638 230 213 208 216 214 S$m 2,076 2,075 764 710 686 693 672 3Q19 4Q19 1Q
Slide 18: Allowances
Allowances Allowances 3Q20 allowances of S$350m set aside, including Management Overlay of S$150m 86 97 77 Credit costs 47 on total loans 24 27 25 (bps) 1/ 66 35 36 36 41 Credit costs 20 27 on impaired loans (bps) 1/ 9M20 included 1,758 allowances set aside for: 750 • Management 657 Overlay: S$450m
Slide 19: Total Cumulative Allowances
Allowances Total Cumulative Allowances NPA coverage raised to 109% 101% 109% 86% 90% 78% Total NPA coverage 4,618 4,384 3,953 874 874 3,263 3,321 874 875 876 1,863 S$m 1,668 1,440 1,114 1,048 1,639 1,842 1,881 1,274 1,397 Sep 19 Dec 19 Mar 20 Jun 20 Sep 20 Allowances for impaired assets Allowances f
Slide 20: Asset quality
Asset quality Asset quality Total NPAs down QoQ; NPL ratio unchanged at 1.6% 1.6% 1.6% 1.6% Total NPL ratio 1.5% 1.5% of which: 0.9% 0.8% O&G NPL ratio 0.8% 0.8% 0.7% O&G NPL ratio 0.3% (net of ECL stage 3 0.3% 0.2% allowances) 0.2% 0.2% 4,190 4,386 4,351 4,255 42 3,883 283 122 100 636 45 546 530 49
Slide 21: Asset quality
Asset quality Asset quality New NPA formation lower QoQ across corporate and consumer businesses S$m 2Q20 3Q20 At start of period 4,386 4,351 Corporate/ Commercial Banking and Others New NPAs 400 194 Net recoveries/ upgrades (122) (117) Write-offs (274) (63) 4 14 Consumer Banking/ Private Banking Ne
Slide 22: Customer loans
Loans Customer loans Loans higher QoQ and YoY at S$269b Loans by Geography (S$b) +2% YoY (+2% in constant ccy terms) Greater China Loans (S$b) +0.3% QoQ (+1% in constant ccy terms) NPL 0.4% 0.4% 0.4% 0.4% 0.5% 271 ratio 263 265 268 269 68 67 67 65 65 40 42 45 43 44 4 4 4 4 4 2 3 2 3 2 65 65 68 67 67
Slide 23: Customer loans
Loans Customer loans Loan portfolio remained well-diversified with limited sector concentration Loans by Industry (S$b) 268 269 14% 14% Corporate, SME and Consumer/Private Banking comprise 49%, 12% and 39% of loan book respectively 7% 6% 11% 11% O&G sector comprise 5% of loan book (within which, 2%
Slide 24: Customer deposits
Deposits Customer deposits CASA deposits rose to a record S$182b with CASA ratio at a new high of 59.2% 86.8% 86.5% 85.1% 85.4% 86.2% Group LDR 314 310 307 300 303 25 27 28 25 27 129 108 97 133 129 59.2% S$b 56.7% 51.0% 47.1% 48.4% 175 182 147 160 141 Sep 19 Dec 19 Mar 20 Jun 20 Sep 20 CASA Fixed De
Slide 25: Thank You
Third Quarter 2020 Results Highlights Thank You
Oversea-Chinese Banking — Q3 2020 Earnings Presentation on 6ix