United Overseas Bank Limited · SGX:U11
United Overseas Bank — Q2 2024 Earnings Presentation
19 slides from United Overseas Bank's earnings presentation, August 2024
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 2024 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: Key Highlights
Key Highlights • Second-quarter core net profit stable at $1.5b, supported by healthy customer franchise Core net profit after tax 1 in loan and fee activities while asset quality remained resilient $1.5b - 5% QoQ - 1% YoY • Net interest income rose 2% to $2.4b, led by three basis points increase in
Slide 3: 2Q24 Core net profit down 5% QoQ to $1.5 billion
2Q24 Core net profit down 5% QoQ to $1.5 billion Healthy client franchise growth while trading and investment income eased from LQ’s record high 1H24 1H23 YoY 2Q24 1Q24 QoQ 2Q23 YoY $m $m +/(-)% $m $m +/(-)% $m +/(-)% Net interest income 4,763 4,846 (2) 2,401 2,362 2 2,437 (1) Net fee income 1,198 1
Slide 4: Healthy growth across business franchise
Healthy growth across business franchise Group Retail Income by business segment Tapping on rising affluence in Southeast Asia on enlarged franchise 1H24 1H23 YoY $'m $'m +18% +11% +27% increase1 in CASA pickup1 in card growth1 in wealth balance billings across management income4, Group Retail 2,695
Slide 5: NIM improved 3bps to 2.05% as loan margin widened
NIM improved 3bps to 2.05% as loan margin widened 2.61 2.49 2.62 2.64 2.55 2.47 2.51 Loan Margin (%) Net Interest Margin (%) 2.13 2.04 2.12 2.09 2.02 2.02 2.05 Interbank & Securities Margin (%) 1.11 1.11 1.10 0.93 0.94 1.11 1.10 -2% 4,846 4,763 NII from Interbank & Securities 803 848 ($m) +2% 2,437
Slide 6: 2Q24 fees near record high, backed by strong pick up in loan and wealth
2Q24 fees near record high, backed by strong pick up in loan and wealth Fee Income 15 17 17 17 16 18 15 Fee / Total Income (%) +11% 1,198 1,075 161 Others ($m) 160 187 Credit Card (Net) ($m) 153 +7% 336 591 618 Wealth ($m) 298 569 580 524 72 78 74 82 83 104 97 125 90 72 146 164 173 142 151 Loan / Tr
Slide 7: Customer-related treasury income sustained momentum, while non-customer T&I eased
Customer-related treasury income sustained momentum, while non- customer T&I eased from last quarter all-time high 51 50 54 47 41 36 39 Customer related / T&I (%) -6% 988 927 Others ($m) 604 492 -24% 505 527 389 400 364 309 322 190 183 180 Customer Related ($m) 384 435 182 198 184 219 216 1H23 1H24
Slide 8: Marginal increase in 1H24 core expenses on tight cost discipline
Marginal increase in 1H24 core expenses on tight cost discipline Cost-to-income Ratio (%) 46.8 43.7 44.4 44.1 44.4 44.6 44.1 - incl one-off Citi - excl one-off Citi 41.8 43.2 40.9 40.9 41.0 41.9 41.8 2,889 2,926 Other expenses ($m) 708 687 - 3% IT-related expenses ($m) 464 467 + 1% 1,448 1,416 1,473
Slide 9: Asset quality broadly stable with NPL ratio unchanged at 1.5%
Asset quality broadly stable with NPL ratio unchanged at 1.5% ($m) 2Q23 3Q23 4Q23 1Q24 2Q24 NPAs at start of period 5,150 5,192 5,011 4,946 5,051 Non-individuals New NPAs _ 364 267 389 249 438 Less: Upgrades and recoveries 137 298 288 183 289 Write-offs 65 150 218 34 238 5,312 5,011 4,894 4,979 4,96
Slide 10: Prudent reserve build with total credit costs at 24bps
Prudent reserve build with total credit costs at 24bps 30 29 Total credit costs (bps) 27 24 26 23 24 Specific credit costs (bps) 23 26 20 25 20 21 19 430 General allowance on loans ($m) 64 380 53 238 151 36 202 186 194 Specific allowance on loans ($m) 366 25 328 28 229 212 202 158 169 (9) (78) 1H23
Slide 11: Provision coverage remains healthy
Provision coverage remains healthy 34 33 32 Specific allowance/NPA (%) 32 32 General allowance on loans include 1.0 0.9 0.9 0.9 0.9 RLAR/Performing loans (%) 5,134 5,109 4,976 4,993 379 4,851 RLAR ($m) 379 379 379 379 General allowance ($m) 3,058 3,042 3,007 3,000 2,901 Specific allowance ($m) 1,697
Slide 12: Continued signs of recovery in loan demand, driven by both trade and mortgages
Continued signs of recovery in loan demand, driven by both trade and mortgages By Industry By Geography +3% +2% 5% 4% 319 318 321 323 328 Rest of the world 44 45 45 47 49 24% 27% Greater China 52 51 49 51 52 68 67 69 69 69 $328b ASEAN-4 Jun-24 Singapore 156 155 158 157 158 9% Jun-23 Sep-23 Dec-23 Ma
Slide 13: Sound liquidity and funding base with CASA growth supported by successful promotional campaigns
Sound liquidity and funding base with CASA growth supported by successful promotional campaigns 167 160 All-currency LCR (%) 153 157 149 121 121 120 121 Net Stable Fund Ratio (NSFR) (%) 118 83.5 82.3 82.2 82.0 83.2 Loan/Deposit Ratio (LDR) (%) 448 457 448 450 437 61 67 71 60 61 Wholesale Funding ($b
Slide 14: CET1 ratio remains healthy at 13.4%
CET1 ratio remains healthy at 13.4% 13.6 13.0 13.4 13.9 13.4 CET1 ratio (%) 2.31 2.23 2.18 2.27 RORWA ratio (%) 2.14 272 276 276 284 263 RWA ($b) Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Leverage ratio (%) 7.0 6.8 6.9 7.0 7.1 14
Slide 15: Interim dividend increased to 88 cents per share
Interim dividend increased to 88 cents per share Net dividend Per ordinary share (¢) 170 135 120 85 Final 60 75 88 85 88 Interim 60 60 2021 2022 2023 1H24 Payout amount ($m) 2,011 2,263 2,846 1,473 Payout ratio (%) 49 49 50 51 15
Slide 16: Appendix
▪ Exposure to Greater China Appendix ▪ Exposure to Commercial Real Estate - Office 16
Slide 17: Exposure to Greater China
Exposure to Greater China 75.4 78.2 71.6 71.7 72.5 9.1 9.0 Debt ($b) 10.5 11.3 10.7 52.2 ▪ ~$2b in loans to Chinese 50.7 developers (1% of group loans) Non Bank ($b) 51.6 51.2 49.2 Bank ($b) 12.6 15.6 17.0 9.5 9.2 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Mainland China Hong Kong SAR Bank exposure ($13.1b)
Slide 18: Exposure to Commercial Real Estate - Office
Exposure to Commercial Real Estate - Office Commercial Real Estate - Office exposure is 7.1% of loans By geography as % of loans 0.2% • Almost half of office 0.7% Others exposure is in Singapore 0.8% 0.8% United Kingdom 0.8% 0.9% • Overseas exposure backed Jun-24 1.5% United States 7.1% 1.0% by stro
Slide 19: Thank You
Thank You & Right By You