United Overseas Bank Limited · SGX:U11
United Overseas Bank — Q1 2019 Earnings Presentation
24 slides from United Overseas Bank's earnings presentation, May 3, 2019
Slide 1: UOB Group Financial Highlights 1Q 2019
UOB Group For the Three Months / First Quarter Ended 31 March 2019 Financial Highlights Lee Wai Fai Group Chief Financial Officer 3 May 2019 Disclaimer: This material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation.
Slide 2: 1Q19 Highlights
1Q19 Highlights 1Q19 earnings of $1.05 billion 15% QoQ; 8% YoY Earnings lifted by income growth, maintained balance sheet strength • Total income rose 9% QoQ to $2.41 billion led by recovery in net fee income and trading and investment income as the financial markets rebounded • Sound funding positi
Slide 3: First quarter earnings grew 8% from a year ago
First quarter earnings grew 8% from a year ago 1Q19 1Q18 YoY +/(-) $m $m $m % Net interest income 1,587 1,470 117 8 p • Higher net interest income (NII) as strong loan growth of 12% offset NIM compression of 5bps. Net fee income 479 517 (39) (7) q • Lower net fee income due to lower Other Non-NII 34
Slide 4: QoQ earnings driven by higher trading and investment income
QoQ earnings driven by higher trading and investment income 1Q19 4Q18 QoQ +/(-) $m $m $m % • NII declined as loan growth of 3% was Net interest income 1,587 1,608 (21) (1) q moderated by a shorter day count this quarter and 1bp dip in NIM. Net fee income 479 467 12 2 p • Increase in net fee income d
Slide 5: Higher YoY operating profit mainly contributed by Singapore Operations
Higher YoY operating profit mainly contributed by Singapore Operations 1Q19 At 9% constant 10% FX rate 3% Operating 1Q19 1Q18 +/(-) +/(-) 7% Profit $m $m % % 59% 12% Singapore 792 697 14 14 Regional: 421 425 (1) (1) 1Q18 Malaysia 156 171 (9) (7) 10% Thailand 94 101 (6) (8) 9% Indonesia 36 35 5 6 3%
Slide 6: Segment performance in Group Wholesale Banking and Global Markets improved
Segment performance in Group Wholesale Banking and Global Markets improved 1Q19 -3% 7% 1Q19 1Q18 +/(-) 38% Segment Operating Profit $m $m % Group Retail (GR) 507 510 (1) 58% Group Wholesale Banking (GWB) 777 699 11 Global Markets (GM) 84 80 6 1Q18 -4% 7% Others * (35) (44) 21 41% Total 1,333 1,244 7
Slide 7: QoQ marginal decline in NII as loan growth was moderated
QoQ marginal decline in NII as loan growth was moderated by shorter quarter and a slight dip in margin Net Interest Income (NII) and Margin 2.14% 2.19% 2.18% 2.22% 2.19% 2.15% 2.16% 1.77% 1.82% 1.84% 1.83% 1.81% 1.80% 1.79% 0.77% 0.89% 0.94% 0.87% 0.90% 0.87% 0.81% 6,220 5,528 866 651 1,599 1,608 1,
Slide 8: QoQ higher fees and trading and investment income driven by market recovery
QoQ higher fees and trading and investment income driven by market recovery Non-Net Interest Income 3,035 2,896 260 282 800 819 761 70 86 728 57 902 647 58 607 187 216 271 186 82 59 1,873 1,967 517 498 484 479 467 2017 2018 1Q 2Q 3Q 4Q 1Q 2018 2019 Net Fee income ($m) Other Non-Net Interest Income (
Slide 9: Cost/Income ratio stable at 44.6%
Cost/Income ratio stable at 44.6% Operating Expenses and Cost / Income Ratio 43.7% 43.9% 44.2% 43.6% 43.4% 44.4% 44.6% 4,003 3,739 1,073 1,022 1,011 1,556 987 984 1,515 413 381 403 384 387 2,447 2,224 660 606 619 626 597 2017 2018 1Q 2Q 3Q 4Q 1Q 2018 2019 Staff costs ($m) Other operating expenses ($
Slide 10: Total credit costs stable at 19 bps
Total credit costs stable at 19 bps Total Allowances on Loans 22bp 61bp 19bp 18bp 16bp 20bp 28bp 12bp 13bp 15bp 15bp 660 13bp 11bp 11bp 390 131 122 113 81 65 2017 2018 1Q 2Q 3Q 4Q 1Q 2018 2019 Total Allowances on Loans Allowances for Impaired Loans / Average Gross Loans (basis points) Total Allowanc
Slide 11: Steady new NPA formation
Steady new NPA formation 2018 2019 1Q 2Q 3Q 4Q 1Q $m $m $m $m $m NPAs at start of period 4,389 4,323 4,404 4,374 4,166 New NPAs 235 252 275 370 230 Upgrades, recoveries and translations (206) (88) (229) (257) (139) Write-offs (129) (101) (29) (392) (17) 4,289 4,386 4,421 4,095 4,240 (1) Group Retail
Slide 12: NPL ratio stable at 1.5%
NPL ratio stable at 1.5% NPL ($m) 4,138 4,208 4,185 3,994 4,055 NPL Ratio 1.7% 1.7% 1.6% 1.5% 1.5% NPL ($m) 290 300 290 230 223 150 139 138 107 120 721 749 545 531 692 456 485 485 482 416 558 571 603 623 629 1,963 2,085 2,138 1,918 1,943 Mar Jun Sep Dec Mar 2018 2019 Singapore Malaysia Thailand Indo
Slide 13: NPA coverage remained adequate
NPA coverage remained adequate Total Allowances ($m) 3,913 3,935 3,935 3,636 3,732 NPA coverage (%) 1 91 89 90 87 89 Unsecured NPA coverage (%) 1 190 190 189 202 203 Total Allowances ($m) 2,048 1,978 1,935 1,998 1,937 1,991 1,944 1,984 47 1,651 1,684 2,001 Mar Jun Sep Dec Mar 2018 2019 Regulatory lo
Slide 14: Strong capital and funding supported broad-based loan growth
Strong capital and funding supported broad-based loan growth across the Group Mar-19 18% Mar-19 Mar-18 +/(-) Dec-18 +/(-) 36% Gross Loans $b $b % $b % 8% 40% Singapore 139 129 8 137 1 60% 4% 3% Regional: 101 89 14 97 4 31% Malaysia 29 29 2 29 (0) Thailand 18 16 12 17 5 Mar-18 Indonesia 11 10 8 11 1
Slide 15: YoY deposits growth mainly from Singapore and Greater China
YoY deposits growth mainly from Singapore and Greater China Mar-19 13% Mar-19 Mar-18 +/(-) Dec-18 +/(-) Customer Deposits $b $b % $b % 41% Singapore 206 184 12 195 6 Regional: 76 71 7 76 0 46% Malaysia 30 30 1 30 1 Thailand 18 17 5 17 2 Indonesia 7 7 9 7 2 Mar-18 14% Greater China 21 18 16 22 (4) Ot
Slide 16: Stable liquidity position with LCR at 146% and NSFR at 109%
Stable liquidity position with LCR at 146% and NSFR at 109% Customer Loans and Deposits; LDR, LCR and NSFR 142% 142% 146% 128% 127% 86.7% 85.7% 85.7% 88.2% 86.6% 308 288 294 293 274 267 252 259 237 246 Mar Jun Sep Dec Mar 2018 2019 Net Customer Loans ($b) Customer Deposits ($b) All-currency LCR (%)
Slide 17: Strong capital and leverage ratio
Strong capital and leverage ratio Capital Adequacy Ratios (CAR) and RoRWA 2.13% 1.95% 1.99% 1.88% 1.68% 18.8% 18.4% 17.4% 17.0% 17.0% 14.9% 14.5% 14.1% 13.9% 13.9% Mar Jun Sep Dec Mar 2018 2019 Tier 2 CAR Tier 1 CAR CET1 (%) RoRWA RWA ($b) 202 206 213 221 230 Leverage ratio (%) 8.2 7.7 7.4 7.6 7.6 1
Slide 18: Appendix: Performance of Major Territories
Appendix : Performance of Major Territories - Singapore - Malaysia - Thailand - Indonesia - Greater China China exposure
Slide 19: Singapore – Key Financials
Singapore – Key Financials 1Q19 1Q18 +/(-) 4Q18 +/(-) $m $m % $m % Net interest income 918 832 10 921 (0) Net fee income 283 317 (11) 267 6 Other non-interest income 198 104 91 24 >100 Total income 1,399 1,254 12 1,212 15 Less: Expenses 607 557 9 478 27 Operating profit 792 697 14 733 8 Less: Total
Slide 20: Malaysia – Key Financials
Malaysia – Key Financials 1Q19 1Q18 +/(-) 4Q18 +/(-) RM'm RM'm % RM'm % Net interest income 546 526 4 575 (5) Net fee income 128 169 (24) 205 (38) Other non-interest income 101 104 (3) 68 49 Total income 775 799 (3) 848 (9) Less: Expenses 302 291 4 338 (11) Operating profit 473 508 (7) 510 (7) Less:
Slide 21: Thailand – Key Financials
Thailand – Key Financials 1Q19 1Q18 +/(-) 4Q18 +/(-) THB'm THB'm % THB'm % Net interest income 4,308 4,069 6 4,376 (2) Net fee income 1,239 1,234 0 1,336 (7) Other non-interest income 311 256 21 332 (6) Total income 5,858 5,559 5 6,044 (3) Less: Expenses 3,651 3,152 16 3,754 (3) Operating profit 2,2
Slide 22: Indonesia – Key Financials
Indonesia – Key Financials 1Q19 1Q18 +/(-) 4Q18 +/(-) IDR'b IDR'b % IDR'b % Net interest income 860 803 7 877 (2) Net fee income 193 178 8 223 (13) Other non-interest income 180 129 40 136 32 Total income 1,233 1,110 11 1,236 (0) Less: Expenses 854 751 14 949 (10) Operating profit 379 359 6 287 32 L
Slide 23: Greater China – Key Financials
Greater China – Key Financials 1Q19 1Q18 +/(-) 4Q18 +/(-) $m $m % $m % Net interest income 92 104 (12) 101 (9) Net fee income 49 46 7 36 36 Other non-interest income 85 62 38 67 26 Total income 226 212 7 204 10 Less: Expenses 92 93 (1) 108 (15) Operating profit 133 118 13 96 39 Less: Total allowance
Slide 24: Exposure to China
Exposure to China Bank exposure as of 31 March 2019 Non-bank exposure as of 31 March 2019 • Bank exposure accounted for 56% of total • Target customers include top-tier state-owned exposure to China enterprises, large local corporates and foreign • Top 5 domestic banks and 3 policy banks investment