United Overseas Bank Limited · SGX:U11
United Overseas Bank — H1 2011 Earnings Presentation
28 slides from United Overseas Bank's earnings presentation, Aug 12, 2011
Slide 1: UOB Group First Half 2011 Financial Highlights
UOB Group First Half 2011 Financial Highlights Lee Wai Fai Group Chief Financial Officer 12 August 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
Slide 2: 1H11 Core Earnings Improved 2.3% to $1.2 billion
1H11 Core Earnings Improved 2.3% to $1.2 billion 1H11 1H10 +/(-) $m $m % Net interest income 1,785 1,784 - Fee and commission income 668 570 17.3 Other non-interest income 407 332 22.6 Total income 2,860 2,686 6.5 Less: Total expenses 1,195 1,082 10.4 Operating profit 1,665 1,604 3.8 Less: Intangibl
Slide 3: Quarter Profit Up 4% QoQ and 6% YoY to $636 million
Quarter Profit Up 4% QoQ and 6% YoY to $636 million 2Q11 1Q11 +/(-) 2Q10 +/(-) $m $m % $m % Net interest income 913 871 4.8 884 3.3 Fee and commission income 338 330 2.2 285 18.3 Other non-interest income 186 221 (15.6) 96 93.5 Total income 1,437 1,423 1.0 1,266 13.6 Less: Total expenses 612 583 4.9
Slide 4: NII Improved for the Quarter on Loan Growth, NIM Stabilised
NII Improved for the Quarter on Loan Growth, NIM Stabilised Net Interest Income (NII) and Margin 3.09% 2.99% 2.84% 3.02% 2.88% 2.68% 2.57% 2.51% 2.47% 2.27% 2.36% 2.09% 1.91% 2.14% 2.07% 1.91% 1.90% 1.92% 0.93% 1.21% 0.88% 0.89% 0.86% 0.87% 0.85% 0.94% 0.76% 3,576 3,674 3,532 555 686 587 884 883 865
Slide 5: Continued Uptrend on Fee Income
Continued Uptrend on Fee Income Non-Interest Income (Non-NII) and Non-NII Ratio 44.7% 39.1% 37.6% 39.8% 38.7% 36.5% 31.9% 32.0% 30.2% 35.9% 38.3% 37.7% 22.3% 23.4% 19.8% 20.8% 21.1% 18.1% 22.6% 23.2% 23.5% 19.3% 19.8% 20.1% 1,975 1,675 1,732 811 549 524 551 524 580 755 1,075 382 221 186 265 214 407
Slide 6: Expenses Well Managed, Paced for Growth
Expenses Well Managed, Paced for Growth Operating Expenses and Expense / Income Ratio 41.0% 41.8% 39.0% 38.4% 42.7% 44.6% 42.6% 41.0% 38.9% 38.8% 37.8% 39.6% 2,258 2,050 2,074 1,016 968 959 620 583 612 1,195 540 555 290 244 257 501 238 247 1,082 1,116 1,242 693 302 308 330 339 355 2008 2009 2010 1H1
Slide 7: Adequate Provisioning
Adequate Provisioning Impairment Charges on Loans 76bp 62bp 47bp 35bp 31bp 35bp 31bp 30bp 59bp 18bp 46bp 33bp 18bp 9bp 16bp 11bp 3bp 7bp 604 128 324 190 44 34 56 22 8 2008 2009 2010 1H11 2Q10 3Q10 4Q10 1Q11 2Q11 Individual Impairment Charges on Loans ($m) Individual Impairment Charges on Loans / Ave
Slide 8: Performance by Business Segment
Performance by Business Segment 1H11 5% 1H11 1H10 +/(-) 15% 33% Core Segment Operating Profit $m $m % Group Retail (GR) 544 551 (1.3) 51% Group Wholesale (GW) 846 714 18.5 Elim (4)% Global Markets & Investment Mgt (GMIM) 247 319 (22.6) 1H10 Others 81 64 26.6 4% Elimination (53) (44) (20.5) 20% 34% T
Slide 9: Double-digit Regional Profit Growth
Double-digit Regional Profit Growth 1H11 At 8% 36% constant 4% 6% Core FX rate 3% Operating 1H11 1H10 +/(-) +/(-) 15% 64% Profit $m $m % % Singapore 1,061 1,042 1.8 1.8 Regional: 474 435 9.0 13.1 1H10 Malaysia 248 232 6.9 8.7 Thailand 57 72 (20.1) (16.8) 8% 35% 3% Indonesia 95 88 8.2 14.3 6% Greater
Slide 10: Robust Loan Growth Across Geographies
Robust Loan Growth Across Geographies 1H11 7% 1H11 1H10 +/(-) 2Q11 1Q11 +/(-) 6% 4% 5% Gross Loans $m $m % $m $m % 13% 65% Singapore 85,619 69,170 23.8 85,619 80,153 6.8 Regional: 36,527 28,705 27.3 36,527 34,074 7.2 Malaysia 17,332 13,716 26.4 17,332 16,495 5.1 Thailand 7,006 6,352 10.3 7,006 7,064
Slide 11: Strong Deposit Franchise in the Regions
Strong Deposit Franchise in the Regions 1H11 1H11 1H10 +/(-) 2Q11 1Q11 +/(-) 5% 3% 5% $m $m % $m $m % 4% 12% Singapore 105,166 91,944 14.4 105,166 105,885 (0.7) 71% Regional: 35,728 27,591 29.5 35,728 33,419 6.9 Malaysia 17,963 13,430 33.8 17,963 17,277 4.0 Thailand * 5,655 6,366 (11.2) 5,655 5,764
Slide 12: NPL Trending Down with Ratio Improved Further to 1.5%
NPL Trending Down with Ratio Improved Further to 1.5% NPL ($m) 2,075 2,120 2,155 2,002 1,930 NPL Ratio 1.9% 1.9% 1.8% 1.6% 1.5% 258 318 387 83 78 61 354 356 99 91 80 60 106 30 413 415 409 98 311 293 418 402 373 355 336 804 816 845 816 817 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Singapore Malaysia Thailan
Slide 13: Strong Impairment Coverage
Strong Impairment Coverage Total Loan Impairment 2,580 2,616 2,682 2,675 2,711 ($m) 246.4% 234.8% 250.7% 235.3% 247.6% 124.3% 123.4% 124.5% 133.6% 140.5% 900 930 866 837 909 1,671 1,716 1,752 1,809 1,874 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Collective Impairment ($m) Individual impairment ($m) Cumulat
Slide 14: Loans / Deposits Ratio Managed at Comfortable Level
Loans / Deposits Ratio Managed at Comfortable Level Customer Loans, Deposits and L/D Ratio 82.5% 82.1% 86.6% 81.1% 79.0% 142.3 146.6 148.4 125.7 132.5 128.5 112.4 120.2 103.8 107.1 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Net Customer Loans ($b) Customer Deposits ($b) Loans / Deposits (L/D) Ratio (%) 14
Slide 15: Singapore – Summarised P/L
Singapore – Summarised P/L 1H11 1H10 +/(-) 2Q11 1Q11 +/(-) $'m $'m % $'m $'m % Net interest income 1,013 1,062 (4.7) 513 500 2.6 Fee and commission income 412 358 15.1 203 210 (3.4) Other non-interest income 297 250 19.0 141 156 (9.3) Total income 1,722 1,670 3.1 857 866 (1.0) Less: Total expenses 6
Slide 16: Singapore – Key Financial Indicators
Singapore – Key Financial Indicators 1H11 1H10 +/(-) 2Q11 1Q11 +/(-) % % % pt % % % pt Net interest margin 1.51 1.79 (0.28) 1.52 1.50 0.02 Non-NII / Total income 41.2 36.4 4.8 40.2 42.2 (2.0) Expense / Total income 38.4 37.6 0.8 39.6 37.2 2.4 Customer loans (net) - $'m 83,742 67,441 24.2% 83,742 78,
Slide 17: Malaysia – Summarised P/L
Malaysia – Summarised P/L 1H11 1H10 +/(-) 2Q11 1Q11 +/(-) RM'm RM'm % RM'm RM'm % Net interest income 643 568 13.2 333 310 7.4 Fee and commission income 199 163 22.1 107 92 16.3 Other non-interest income 96 95 1.1 44 52 (15.4) Total income 938 826 13.6 484 454 6.6 Less: Total expenses 339 275 23.3 1
Slide 18: Malaysia – Key Financial Indicators
Malaysia – Key Financial Indicators 1H11 1H10 +/(-) 2Q11 1Q11 +/(-) % % % pt % % % pt Net interest margin 2.68 2.92 (0.24) 2.67 2.69 (0.02) Non-NII / Total income 31.4 31.2 0.2 31.2 31.7 (0.5) Expense / Total income 36.1 33.3 2.8 38.2 33.9 4.3 Customer loans (net) - RM'm 41,671 31,076 34.1% 41,671 3
Slide 19: Thailand – Summarised P/L
Thailand – Summarised P/L 1H11 1H10 +/(-) 2Q11 1Q11 +/(-) THB'm THB'm % THB'm THB'm % Net interest income 3,868 3,435 12.6 2,006 1,862 7.7 Fee and commission income 1,083 984 10.1 565 518 9.1 Other non-interest income (19) 357 (>100.0) (130) 111 (>100.0) Total income 4,932 4,776 3.3 2,441 2,491 (2.0
Slide 20: Thailand – Key Financial Indicators
Thailand – Key Financial Indicators 1H11 1H10 +/(-) 2Q11 1Q11 +/(-) % % % pt % % % pt Net interest margin 3.27 3.50 (0.23) 3.27 3.27 - Non-NII / Total income 21.6 28.1 (6.5) 17.8 25.3 (7.5) Expense / Total income 71.8 64.9 6.9 73.9 69.7 4.2 Customer loans (net) - THB'm 169,749 140,496 20.8% 169,749
Slide 21: Indonesia – Summarised P/L
Indonesia – Summarised P/L 1H11 1H10 +/(-) 2Q11 1Q11 +/(-) IDR'b IDR'b % IDR'b IDR'b % Net interest income 1,039 963 7.9 521 518 0.6 Fee and commission income 314 196 60.2 167 147 13.6 Other non-interest income 134 106 26.4 81 53 52.8 Total income 1,487 1,265 17.5 769 718 7.1 Less: Total expenses 82
Slide 22: Indonesia – Key Financial Indicators
Indonesia – Key Financial Indicators 1H11 1H10 +/(-) 2Q11 1Q11 +/(-) % % % pt % % % pt Net interest margin 5.71 6.49 (0.78) 5.44 6.01 (0.57) Non-NII / Total income 30.1 23.9 6.2 32.2 27.9 4.3 Expense / Total income 55.5 54.2 1.3 54.9 56.1 (1.2) Customer loans (net) - IDR'b 34,029 24,485 39.0% 34,029
Slide 23: Greater China – Summarised P/L
Greater China – Summarised P/L 1H11 1H10 +/(-) 2Q11 1Q11 +/(-) S$'m S$'m % S$'m S$'m % Net interest income 67 51 30.7 39 28 39.9 Fee and commission income 31 20 54.3 19 12 57.2 Other non-interest income 53 26 >100.0 28 25 12.8 Total income 150 96 55.7 86 64 32.7 Less: Total expenses 76 53 44.6 37 39
Slide 24: Greater China – Key Financial Indicators
Greater China – Key Financial Indicators 1H11 1H10 +/(-) 2Q11 1Q11 +/(-) % % % pt % % % pt Net interest margin 1.08 1.31 (0.23) 1.16 0.98 0.18 Non-NII / Total income 55.6 47.2 8.4 54.6 57.0 (2.4) Expense / Total income 50.7 54.6 (3.9) 43.7 60.0 (16.3) Customer loans (net) - S$'m 7,204 4,724 52.5% 7,
Slide 25: Capital ratios continued to be high
Capital ratios continued to be high Capital Adequacy Ratios 20.1% 19.9% Total CAR 19.8% 19.2% 19.2% 15.1% 15.1% 15.3% Tier 1 CAR 14.9% 14.5% Core Tier 1 CAR 13.0% 13.0% 13.3% 13.0% 12.6% Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 $'m Core Tier 1 Capital 13,175 13,411 14,213 14,676 14,954 Tier 1 Capital 15,3
Slide 26: Sustainable Interim Dividends
Sustainable Interim Dividends 10.0 40.0 40.0 40.0 20.0 20.0 20.0 20.0 2008 2009 2010 1H11 Net Netdividend dividend per perordinary ordinaryshare share(¢) (¢) Interim Interim Final Final Special Special Interim dividend Payout amount ($m) 301 301 306 315 Payout ratio (%) 27 34 24 25 26
Slide 27: In Summary, 1H11 Results Showed
In Summary, 1H11 Results Showed: NPAT of $1.2 billion, 2.3% higher yoy NII showed positive growth for the second consecutive quarter NIM stabilised Fee income momentum sustained Expenses paced for future growth; Expense/income ratio managed at 41.8% Loan growth continued to be strong; Do
Slide 28: Investment Securities
Investment Securities Jun-11 Jun-09 $m $m Debt securities – bank Tier 1 1,336 1,884 Tier 2 760 1,192 Senior/Other 2,280 4,463 4,377 7,539 Debt securities – non bank 8,031 6,336 12,408 13,876 Equity securities 3,038 2,520 Total 15,446 16,395 Jun-11 Jun-09 Bank Non- Total Bank Non- Total Debt securiti