United Overseas Bank Limited · SGX:U11
United Overseas Bank — FY2010 Earnings Presentation
27 slides from United Overseas Bank's earnings presentation, Feb 25, 2011
Slide 1: UOB Group Full Year 2010 Financial Highlights
UOB Group Full Year 2010 Financial Highlights Lee Wai Fai Chief Financial Officer 25 February 2011 Disclaimer : This material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation. It is information given in summary form
Slide 2: Record Profit of $2.7 billion
Record Profit of $2.7 billion Strong Fee Income Offset Pressure on NII 2010 2009 +/(-) $m $m % Net interest income 3,532 3,674 (3.9) Fee and commission income 1,163 976 19.1 Other non-interest income 1,105 755 46.3 Total income 5,800 5,405 7.3 Less: Total expenses 2,258 2,074 8.8 Operating profit 3,
Slide 3: Quarter Profit Higher at $706 million
Quarter Profit Higher at $706 million 4Q10 3Q10 +/(-) 4Q09 +/(-) $m $m % $m % Net interest income 865 883 (2.1) 892 (3.0) Fee and commission income 310 284 9.2 247 25.5 Other non-interest income 390 301 29.7 103 >100.0 Total income 1,565 1,468 6.6 1,242 26.0 Less: Total expenses 620 555 11.6 554 12.
Slide 4: Lower Net Interest Margin
Lower Net Interest Margin Liquidity and Competition Contributing Factors Net Interest Income and Margin 3.21% 3.09% 3.02% 2.88% 2.27% 2.36% 2.92% 3.04% 2.99% 2.04% 2.09% 2.84% 2.68% 2.28% 2.25% 1.21% 2.14% 2.07% 0.93% 0.88% 1.91% 0.56% 3,674 1.18% 1.04% 3,576 3,532 0.86% 0.87% 0.76% 2,980 555 686 58
Slide 5: Strong Non-Interest Income Delivered Robust Fee Income
Strong Non-Interest Income Delivered Robust Fee Income Non-Interest Income (Non-NII) and Non-NII Ratio 38.8% 39.1% 40.1% 44.7% 31.9% 32.0% 39.8% 30.2% 28.2% 26.2% 20.8% 20.1% 18.1% 19.9% 22.6% 2,268 18.9% 19.3% 19.8% 700 1,892 602 1,732 585 1,675 1,105 614 390 318 382 301 580 755 350 96 103 1,278 1,
Slide 6: Improving Return on Risk-weighted Assets
Improving Return on Risk-weighted Assets 2010 2009 2008 2010 / 2008 $m $m $m % Gross Loans 115,122 101,744 102,033 12.8 Total RWA 106,889 100,908 114,712 (6.8) Loan margin (%) 2.88 3.02 3.09 (0.21)%pt As a % of average total RWA: • NII from loans + loan fee income (%) 3.1 3.0 2.7 0.4%pt • NII from l
Slide 7: Expenses Well Paced
Expenses Well Paced Operating Expenses and Expense / Income Ratio 41.4% 42.7% 39.0% 38.4% 38.9% 44.6% 39.6% 36.1% 37.8% 2,258 620 2,018 2,050 2,074 144 554 555 542 540 58 133 108 173 135 24 26 30 41 162 160 220 44 30 160 51 40 41 57 200 206 53 170 53 54 55 479 133 508 472 485 125 114 120 112 1,116 1
Slide 8: Lower Provisions from Improving Asset Quality
Lower Provisions from Improving Asset Quality Impairment Charges on Loans 76 bp 62bp 50bp 47 bp 59 bp 35bp 24bp 35 bp 43bp 18bp 46bp 18 bp 33 bp 16bp 18 bp 18 bp 4bp 3bp 604 127 128 324 155 190 44 10 8 2007 2008 2009 2010 4Q09 1Q10 2Q10 3Q10 4Q10 Individual IndividualImpairment ImpairmentCharges Cha
Slide 9: NPL Ratio Improved to 1.8%
NPL Ratio Improved to 1.8% NPL ($m) 2,260 2,153 2,075 2,120 2,155 NPL Ratio * 2.2% 2.0% 1.9% 1.9% 1.8% 282 270 318 387 105 258 106 85 83 106 78 61 99 91 80 409 419 413 415 409 435 442 373 418 402 923 831 804 816 845 Dec'09 Mar'10 Jun'10 Sep'10 Dec'10 Singapore Malaysia Thailand Indonesia Greater Chi
Slide 10: Strong Impairment Coverage
Strong Impairment Coverage Total Loan Impairment 2,543 2,568 2,580 2,616 2,682 ($m) 239.1% 246.4% 234.8% 250.7% 226.9% 112.5% 119.3% 124.3% 123.4% 124.5% 973 935 909 900 930 1,570 1,633 1,671 1,716 1,752 Dec'09 Mar'10 Jun'10 Sep'10 Dec'10 Collective CollectiveImpairment Impairment($m) ($m) Individua
Slide 11: Loan Growth Escalates, Deposits to Keep Pace
Loan Growth Escalates, Deposits to Keep Pace Customer Loans, Deposits and L/D Ratio 81.6% 81.5% 82.5% 81.1% 79.0% 142.3 125.6 132.5 121.5 125.7 107.1 112.4 99.2 100.6 103.8 Dec'09 Mar'10 Jun'10 Sep'10 Dec'10 Net NetCustomer CustomerLoans Loans($b) ($b) Customer CustomerDeposits Deposits($b) ($b) Loa
Slide 12: Loan Growth Accelerates, Regional Growth Showing Good Momentum
Loan Growth Accelerates, Regional Growth Showing Good Momentum 2010 2009 +/(-) 4Q10 3Q10 +/(-) Gross Loans $m $m % $m $m % Singapore 75,534 67,350 12.2 75,534 71,938 5.0 Regional: 31,598 25,707 22.9 31,598 29,193 8.2 Malaysia 15,278 12,120 26.1 15,278 14,425 5.9 Thailand 7,050 6,077 16.0 7,050 6,473
Slide 13: Regional Franchise Showing Results, Growth More than Doubled
Regional Franchise Showing Results, Growth More than Doubled Singapore At constant 2010 2010 2010 2009 +/(-) FX rate Singapore : 68% +/(-) Malaysia : 13% Operating profit $m $m % % Thailand : 4% Singapore 2,419 2,308 4.8 4.8 Indonesia : 5% Regional: 883 772 14.4 12.1 Greater China : 3% Other : 7% Ma
Slide 14: Performance by Business Segment
Performance by Business Segment 2006 2010 2010 2006 2010 2009 +/(-) GR : 30% Segment Operating profit $m $m % Other : 9% Group Retail (GR) 1,047 1,068 (2.0) GMIM : 21% Group Institutional Financial Svc (GIFS) 1,414 1,356 4.3 GIFS : 40% Global Markets & Investment Mgt (GMIM) 755 1,093 (30.9) 2009 200
Slide 15: Singapore – Summarised P/L
Singapore – Summarised P/L 2010 2009 +/(-) 4Q10 3Q10 +/(-) $m $m % $m $m % Net interest income 2,077 2,300 (9.7) 500 515 (2.9) Fee and commission income 715 619 15.5 186 171 9.0 Other non-interest income 938 604 55.1 349 257 35.9 Total income 3,730 3,522 5.9 1,035 942 9.8 Less: Total expenses 1,310
Slide 16: Singapore – Key Financial Indicators
Singapore – Key Financial Indicators 2010 2009 +/(-) 4Q10 3Q10 +/(-) % % % pt % % % pt Net interest margin 1.68 2.06 (0.38) 1.52 1.63 (0.11) Non-NII / Total income 44.3 34.7 9.6 51.7 45.4 6.3 Expense / Total income 35.1 34.5 0.6 34.4 34.6 (0.2) Customer loans (net) – $’m 73,729 65,637 12.3% 73,729 7
Slide 17: Malaysia – Summarised P/L
Malaysia – Summarised P/L 2010 2009 +/(-) 4Q10 3Q10 +/(-) RM’m RM’m % RM’m RM’m % Net interest income 1,163 961 21.0 298 297 0.3 Fee and commission income 363 272 33.5 102 98 4.1 Other non-interest income 147 154 (4.5) 26 26 - Total income 1,673 1,387 20.6 426 421 1.2 Less: Total expenses 599 511 17
Slide 18: Malaysia – Key Financial Indicators
Malaysia – Key Financial Indicators 2010 2009 +/(-) 4Q10 3Q10 +/(-) % % % pt % % % pt Net interest margin 2.87 2.37 0.50 2.58 3.13 (0.55) Non-NII / Total income 30.5 30.7 (0.2) 30.0 29.5 0.5 Expense / Total income 35.8 36.8 (1.0) 42.7 33.7 9.0 Customer loans (net) – RM’m 35,901 28,851 24.4% 35,901 3
Slide 19: Thailand – Summarised P/L
Thailand – Summarised P/L 2010 2009 +/(-) 4Q10 3Q10 +/(-) THB’m THB’m % THB’m THB’m % Net interest income 6,977 7,013 (0.5) 1,815 1,727 5.1 Fee and commission income 2,021 1,989 1.6 536 501 7.0 Other non-interest income 512 801 (36.1) 13 142 (90.8) Total income 9,510 9,803 (3.0) 2,364 2,370 (0.3) Le
Slide 20: Thailand – Key Financial Indicators
Thailand – Key Financial Indicators 2010 2009 +/(-) 4Q10 3Q10 +/(-) % % % pt % % % pt Net interest margin 3.45 3.80 (0.35) 3.32 3.51 (0.19) Non-NII / Total income 26.6 28.5 (1.9) 23.2 27.1 (3.9) Expense / Total income 67.7 65.3 2.4 73.3 67.8 5.5 Customer loans (net) – THB’m 158,439 137,547 15.2% 158
Slide 21: Indonesia – Summarised P/L
Indonesia – Summarised P/L 2010 2009 +/(-) 4Q10 3Q10 +/(-) IDR’b IDR’b % IDR’b IDR’b % Net interest income 1,963 1,918 2.3 498 502 (0.8) Fee and commission income 418 370 13.0 124 99 25.3 Other non-interest income 214 279 (23.3) 54 53 1.9 Total income 2,595 2,567 1.1 676 654 3.4 Less: Total expenses
Slide 22: Indonesia – Key Financial Indicators
Indonesia – Key Financial Indicators 2010 2009 +/(-) 4Q10 3Q10 +/(-) % % % pt % % % pt Net interest margin 6.40 6.40 - 6.05 6.60 (0.55) Non-NII / Total income 24.4 25.3 (0.9) 26.3 23.2 3.1 Expense / Total income 52.0 52.2 (0.2) 48.5 51.2 (2.7) Customer loans (net) – IDR’b 27,427 22,977 19.4% 27,427
Slide 23: Greater China – Summarised P/L
Greater China – Summarised P/L 2010 2009 +/(-) 4Q10 3Q10 +/(-) S$’m S$’m % S$’m S$’m % Net interest income 97 118 (17.7) 23 24 (4.8) Fee and commission income 42 28 51.2 13 9 45.9 Other non-interest income 88 55 59.2 32 30 6.5 Total income 227 201 12.9 68 63 7.9 Less: Total expenses 115 106 8.3 35 2
Slide 24: Greater China – Key Financial Indicators
Greater China – Key Financial Indicators 2010 2009 +/(-) 4Q10 3Q10 +/(-) % % % pt % % % pt Net interest margin 1.11 1.61 (0.50) 0.89 1.04 (0.15) Non-NII / Total income 57.1 41.2 15.9 66.6 62.2 4.4 Expense / Total income 50.5 52.7 (2.2) 51.6 43.2 8.4 Customer loans (net) – S$’m 5,231 3,922 33.4% 5,23
Slide 25: Strong Capital Position
Strong Capital Position Capital Adequacy Ratios 20.0% 20.1% 19.9% 19.0% 19.8% Total CAR 14.9% 15.1% 15.1% 15.3% 14.0% Tier 1 CAR ` 12.8% 13.0% 13.0% 13.3% Core Tier 1 11.9% CAR Dec'09 Mar'10 Jun'10 Sep'10 Dec'10 $m Core Tier 1 Capital 11,978 12,942 13,175 13,411 14,213 Tier 1 Capital 14,127 15,091 1
Slide 26: Special Dividend Recommended, in Addition to Final Dividend
Special Dividend Recommended, in Addition to Final Dividend 12.3 10.0 45.0 40.0 40.0 40.0 16.4 20.0 20.0 20.0 2007 2008 2009 2010 Net Netdividend dividend per perordinary ordinaryshare share(¢) (¢) Interim Interim Final Final Special Special Payout amount ($m) 1,113 903 903 1,077 Payout ratio (%) 53
Slide 27: In Summary, Year 2010 Results Showed
In Summary, Year 2010 Results Showed: Record NPAT of $2.7 billion Robust fee income alleviated pressure on NII Expenses well managed, continued to invest for future growth Investment in a regional franchise yielding results:- Delivered double-digit growth in Singapore and the key regions