Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — FY2012 Earnings Presentation
44 slides from Oversea-chinese Banking's earnings presentation, Feb 15, 2013
Slide 1: 2012 Final Results Presentation
2012 Final Results Presentation 15 February 2013
Slide 2: Agenda
Agenda Results Overview FY12 Performance Trends Appendix: Financial Highlights of Malaysia and Indonesia Subsidiaries Notes: Amounts less than S$0.5 million are shown as “0”; “nm” denotes not meaningful; 2 Figures may not sum to stated totals because of rounding
Slide 3: FY12 Highlights
FY12 Highlights 2012 reported net profit up 73% to S$3.99b. Broad-based income growth across all businesses and key geographies contributed to record core earnings • Record high net interest income, driven by loan growth which more than offset a narrowing in net interest margin • Fee income reached
Slide 4: Full year core earnings driven by broad-based income growth, up 24% YoY
Full year core earnings driven by broad-based income growth, up 24% YoY FY12 FY11 YoY OCBC Group S$m S$m +/(-)% Net interest income 3,748 3,410 10 Non-interest income 2,897 2,212 31 Total income 6,645 5,622 18 Operating expenses (2,695) (2,430) 11 Operating profit 3,950 3,192 24 Amortisation of inta
Slide 5: 4Q12 core net profit up 12% YoY and 8% lower QoQ
4Q12 core net profit up 12% YoY and 8% lower QoQ 4Q12 4Q11 YoY 3Q12 QoQ OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 921 925 - 944 (2) Non-interest income 757 572 32 754 - Total income 1,678 1,497 12 1,698 (1) Operating expenses (724) (620) 17 (685) 6 Operating profit 954 877 9 1,013 (6)
Slide 6: Key ratios
Key ratios FY12 FY11 4Q12 4Q11 3Q12 Based on core earnings % % % % % Net interest margin 1.77 1.86 1.70 1.85 1.75 Non-interest income / Total income 43.6 39.3 45.1 38.2 44.4 Cost / Income 40.6 43.2 43.1 41.4 40.3 Loans / Deposits 86.2 86.4 86.2 86.4 87.7 NPL Ratio 0.8 0.9 0.8 0.9 0.8 Allowances / NP
Slide 7: Record full year net profit, with ROE of 12.5%
Record full year net profit, with ROE of 12.5% 14.7% 12.1% 12.5% 12.2% 11.4% 12.8% 11.1% 11.2% 11.6% 11.2% Core ROE* 9.8% 2,825 790 724 2,253 2,280 648 663 Core net 596 577 594 profit (S$m) 513 2010 2011 2012 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 * Quarterly figures annualised 7
Slide 8: Profit contribution by business and geography
Profit contribution by business and geography FY12 PBT FY12 PBT by Business* by Geography PBT Other Group Asia Rest of S$3,646m Pacific the World YoY: +25% Greater Insurance China Singapore Global Corporate / 7% 3% 2% S$2,264m 22% Investment Indonesia 4% YoY: +32% 46% Banking Malaysia S$812m YoY: +5
Slide 9: Agenda
Agenda Results Overview FY12 Performance Trends Appendix: Financial Highlights of Malaysia and Indonesia Subsidiaries 9
Slide 10: Net interest income up 10% for the year driven by asset growth, moderated by narrower margins
Net interest income up 10% for the year driven by asset growth, moderated by narrower margins 1.98% Net interest margin 1.86% 1.90% 1.87% 1.77% 1.85% 1.85% 1.86% 1.77% 1.75% 1.70% 3,748 951 931 944 925 921 3,410 874 Net interest income 827 2,947 784 (S$m) 2010 2011 2012 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12
Slide 11: Net interest income less specific allowances up 9% YoY
Net interest income less specific allowances up 9% YoY Adjusted net1.94% interest 1.82% 1.87% 1.86% 1.82% 1/ 1.72% 1.75% 1.78% 1.75% 1.70% margin 1.64% 908 918 920 Adjusted 3,633 877 886 858 net interest 3,331 824 income1/ 2,890 772 (S$m) 2010 2011 2012 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1/ Net
Slide 12: Non-interest income up 31% YoY; driven by growth across all key components
Non-interest income up 31% YoY; driven by growth across all key components Non- interest 44.7% 43.6% 45.4% 44.4% 45.1% income / 44.1% 41.4% 39.3% 33.3% 38.2% 39.0% Total income 2,897 790 754 757 2,378 838 2,212 618 253 586 596 226 250 Non- 586 572 interest 508 179 85 108 income 137 701 436 (S$m) 669
Slide 13: Fee income up 5% YoY to a new record
Fee income up 5% YoY to a new record; sustained growth momentum from wealth management fees and higher loan-related income 1,198 1,137 317 157 307 303 304 299 983 175 274 274 41 91 49 39 39 48 257 133 95 36 39 42 14 21 27 27 80 41 Fees and 29 15 commissions 482 12 (S$m) 445 124 125 115 120 108 125 4
Slide 14: Profit from life assurance rose 81%
Profit from life assurance rose 81%, as a result of continued underwriting growth and strong investment performance 692 221 210 125 25 190 31 35 437 150 Profit from life 383 27 assurance 94 (S$m) 423 106 160 127 139 29 121 76 71 240 92 51 134 47 38 35 33 9 2 122 144 40 104 31 30 29 32 36 35 34 2010
Slide 15: Other non-interest income rose 74% YoY; led by higher trading income
Other non-interest income rose 74% YoY; led by higher trading income 701 669 70 54 116 204 216 213 12 193 17 179 Other non- 403 44 18 24 interest 24 61 31 income 19 (S$m) 121 125 113 515 15 86 16 25 402 163 22 13 160 (9) 144 136 32 15 217 81 75 41 44 2010 2011 2012 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
Slide 16: Wealth management revenue up 43% YoY
Wealth management revenue up 43% YoY, contributing 28% of total group revenue As % of 27.6% 27.0% 30.3% 28.0% 29.8% 24.7% 24.8% Group 22.9% 20.8% 19.0% 21.8% revenue 1,836 527 500 476 Wealth management 1,317 1,285 revenue 378 350 (S$m) 333 272 285 2010 2011 2012 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q
Slide 17: Cost remained well-controlled, cost-to-income ratio improved
Cost remained well-controlled, cost-to-income ratio improved Cost / 42.3% 43.2% 46.6% Income 40.6% 41.5% 43.7% 43.3% 43.1% 41.4% 40.3% 35.9% 2,695 724 2,430 685 2,254 554 661 618 611 620 625 156 531 581 130 144 563 136 138 124 491 137 120 122 134 451 Operating 119 116 expenses 407 109 112 120 110 (S
Slide 18: Core operating profit up 24% YoY
Core operating profit up 24% YoY, driven by positive operating leverage as income growth outpaced expenses 3,950 1,116 1,013 954 3,192 Core 3,071 877 866 operating 821 795 profit before allowances 699 and amortisation (S$m) 2010 2011 2012 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 18
Slide 19: Full year core net profit before GEH contribution up 11% YoY
Full year core net profit before GEH contribution up 11% YoY FY12 FY11 YoY OCBC Group S$m S$m +/(-)% Net interest income 3,684 3,358 10 Non-interest income 1,898 1,592 19 Total income 5,582 4,950 13 Operating expenses (2,504) (2,246) 12 Operating profit 3,078 2,704 14 Allowances (271) (218) 24 Assoc
Slide 20: 4Q12 core net profit before GEH contribution fell 12% YoY
4Q12 core net profit before GEH contribution fell 12% YoY 4Q12 4Q11 YoY 3Q12 QoQ OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 903 911 (1) 928 (3) Non-interest income 477 443 8 496 (4) Total income 1,379 1,354 2 1,424 (3) Operating expenses (679) (577) 18 (636) 7 Operating profit 700 777
Slide 21: Net allowances higher YoY; credit quality remains strong
Net allowances higher YoY; credit quality remains strong Net allowances for loans and other assets 271 (S$m) 8 221 15 115 96 134 79 78 8 68 57 70 56 9 49 43 15 3 35 38 38 148 7 48 24 127 12 13 98 54 16 45 43 30 23 21 29 31 (1) (1) (4) 2010 2011 2012 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 (10) (21)
Slide 22: Movement in specific allowances for loans
Movement in specific allowances for loans FY12 FY11 4Q12 4Q11 3Q12 S$m S$m S$m S$m S$m Allowances for new and 273 231 71 85 57 existing NPLs Write-backs1/ (117) (104) (25) (27) (24) Recoveries2/ (41) (48) (11) (10) (9) Net specific allowances 115 79 35 48 24 1/ Write-backs of specific allowances for
Slide 23: Loans increased 7% YoY and 3% QoQ
Loans increased 7% YoY and 3% QoQ Loan growth Group YoY: +7% QoQ: +3% 138 140 144 Rest of the World 135 135 YoY: +7% 129 18 QoQ: +1% 17 17 121 16 17 Greater China 16 YoY: -13% 111 17 15 17 16 QoQ: +8% 20 18 13 17 11 Indonesia 15 10 10 YoY: +14% 9 9 QoQ: +5% 12 8 7 23 6 21 23 Malaysia Customer 20 21
Slide 24: Loan book remained diversified
Loan book remained diversified Customer Loans by Geography Customer Loans by Industry As of 31 December 2012 As of 31 December 2012 Rest of the World Agriculture, mining & Others Other Asia quarrying Pacific 7% 5% Housing Loans Transport, storage 3% 6% Singapore & comm. 6% 26% Greater Manufacturing
Slide 25: Customer deposits grew 7% YoY; CASA ratio improved to 50.6%
Customer deposits grew 7% YoY, led by current and savings deposits; CASA ratio improved to 50.6% 89.1% 88.0% 87.7% Loans / 86.8% 86.4% 86.2% Deposits 84.4% 85.3% 165 158 160 158 155 145 14 13 15 13 12 134 126 12 11 8 67 Deposits 71 73 72 71 (S$b) 65 59 57 31 29 29 29 30 27 27 26 CASA 46.4% 45.6% 46.
Slide 26: Total NPAs fell 7% QoQ; NPL ratio remained low at 0.8%
Total NPAs fell 7% QoQ; NPL ratio remained low at 0.8% 1.0% 0.9% 0.9% 0.9% NPL ratio 0.8% 0.8% 0.8% 0.7% 1,513 1,437 144 1,280 1,256 1,191 1,201 265 1,172 1,158 91 87 215 489 27 NPAs 288 (S$m) 258 356 426 418 478 243 229 218 486 560 463 456 438 444 423 409 270 259 330 320 307 313 258 240 Mar11 Jun11
Slide 27: NPAs declined 7% QoQ, driven by higher recoveries and upgrades
NPAs declined 7% QoQ, driven mainly by higher recoveries and upgrades FY12 FY11 4Q12 4Q11 3Q12 S$m S$m S$m S$m S$m NPAs – Opening balance 1,437 1,208 1,256 1,158 1,280 New NPAs 888 946 289 475 142 New recoveries/upgrades (1,005) (564) (338) (145) (116) Write-offs (148) (153) (35) (51) (50) NPAs – Cl
Slide 28: Allowance coverage ratios of 142% of total NPAs
Allowance coverage ratios of 142% of total NPAs and 333% of unsecured NPAs 450% 400% 373% 365% 370% Total 353% allowances/ 350% 333% 326% Unsecured 311% NPAs 300% 272% 250% 200% 150% Total allowances/ 130% 142% NPAs 100% 123% 123% 125% 128% 107% 106% 50% 0% Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12
Slide 29: Capital position remained strong
Capital position remained strong: Tier 1 ratio of 16.6% and Core Tier 1 ratio of 12.8% 18.0 18.5 17.3 17.0 CAR 16.1 1.9 15.9 15.7 2.1 (% of RWA) 1.8 1.6 15.5 1.5 1.3 1.4 1.4 3.8 3.5 3.5 3.8 Tier 2 capital 3.2 3.0 3.1 3.0 16.6 15.5 15.9 15.4 14.7 14.4 14.4 14.1 Tier 1 preference shares Core Tier 1 12
Slide 30: Dividend increased to 33 cents per share
Dividend increased to 33 cents per share Net DPS 33.0 (cents) 30.0 30.0 28.0 28.0 28.0 17.0 15.0 15.0 14.0 14.0 14.0 Final net dividend Interim net dividend 15.0 15.0 16.0 14.0 14.0 14.0 2007 2008 2009 2010 2011 2012 Net Dividends (S$m) 864 868 898 994 1,024 1,133 Core Net Profit (S$m) 1,878 1,486 1
Slide 31: GEH: Full year core net profit up 109% YoY
GEH: Full year core net profit up 109% YoY; accounting for 22% of Group core net profit FY12 FY11 YoY GEH Contribution S$m S$m +/(-)% Total income 1,063 672 58 Operating expenses (190) (184) 3 Operating profit 872 488 79 Amortisation of intangibles (47) (47) - Allowances (0) (4) - Associates & JVs (
Slide 32: GEH: 4Q12 core earnings contribution driven by strong underwriting
GEH: 4Q12 core earnings contribution driven by strong underwriting and investment performance 4Q12 4Q11 YoY 3Q12 QoQ GEH Contribution S$m S$m +/(-)% S$m +/(-)% Total income 299 143 108 275 9 Operating expenses (44) (43) 2 (50) (11) Operating profit 255 100 154 225 13 Amortisation of intangibles (12)
Slide 33: GEH: Total weighted new sales up 5% YoY
GEH: Underlying insurance business remained sound; total weighted new sales up 5% YoY 837 798 262 32 724 36 9 229 50 7 303 205 202 197 302 190 7 8 104 175 175 9 10 Weighted 290 96 8 new 12 78 72 business 72 73 55 premiums 55 (S$m) 502 461 150 384 120 126 116 123 108 107 113 2010 2011 2012 1Q11 2Q11
Slide 34: GEH: New business embedded value of S$353m
GEH: New business embedded value of S$353m for the full year 52.4% NBEV / 47.4% Total 45.7% weighted 44.3% 44.3% 42.1% 42.2% 42.2% 42.5% 43.6% new sales 120 365 36.0% 353 2 8 7 305 94 39 88 13 84 87 87 1 146 83 NBEV 138 1 2 2 74 3 2 (S$m) 35 129 3 38 38 34 31 39 32 79 210 208 58 164 48 51 47 52 40 4
Slide 35: OCBC Malaysia: Net interest income and Islamic financing income up 6% YoY
OCBC Malaysia: Total net interest income and Islamic financing income up 6% YoY; non-interest income up 12% YoY Net interest income and Non-interest income (RM m) Islamic financing Income (RM m) Net Interest/ Non-int. income/ financing margin Total income 2.42% 2.32% 33.3% 2.39% 2.29% 2.27% 2.34% 2.
Slide 36: OCBC Malaysia: Loans grew 12% YoY; NPL ratio improved to 2.1%
OCBC Malaysia: Loans grew 12% YoY and 2% QoQ; NPL ratio further improved to 2.1% Gross Loans (RM b) Deposits (RM b) NPL Ratio Loans / Deposits 87.7% 87.2% 86.3% 3.0% 84.2% 81.6% 80.8% 82.1% 2.6% 2.6% 77.4% 2.4% 2.3% 2.2% 2.1% 2.1% 56 55 57 56 47 48 47 47 49 43 45 43 42 43 39 37 Mar11 Jun11 Sep11 Dec
Slide 37: OCBC NISP: Net interest income up 14% YoY
OCBC NISP: Net interest income up 14% YoY; non- interest income up 28% YoY Net interest income (Rp b) Non-interest income (Rp b) Net interest Non-int. income/ margin Total income 5.04% 4.80% 5.05% 4.68% 4.81%4.71% 24.1% 26.5% 25.8% 4.17% 4.37% 4.32% 22.0% 22.4% 24.6% 23.1% 22.8% 24.1% 21.8% 4.04% 3.
Slide 38: OCBC NISP: Loans grew 28% YoY; NPL ratio lower at 0.9%
OCBC NISP: Loans grew 28% YoY and 5% QoQ; NPL ratio lower at 0.9% Gross Loans (Rp t) Deposits (Rp t) NPL Ratio Loans / 1.9% 1.8% Deposits 93.9% 1.5% 91.8% 1.3% 1.2% 1.1% 1.0% 85.7% 87.0% 85.5% 86.8% 0.9% 83.5% 83.7% 53 61 51 48 52 54 41 42 50 47 36 43 34 40 31 37 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12
Slide 39: Agenda
Agenda Results Overview FY12 Performance Trends Appendix: Financial Highlights of Malaysia and Indonesia Subsidiaries 39
Slide 40: OCBC Malaysia: Full year net profit up 4% YoY
OCBC Malaysia: Full year net profit up 4% YoY FY12 FY11 YoY OCBC Malaysia RM m RM m +/(-)% Net interest income 1,246 1,220 2 Islamic Financing Income 243 182 34 Non-interest income 531 475 12 Total income 2,020 1,877 8 Operating expenses (851) (746) 14 Operating profit 1,169 1,131 3 Allowances (84)
Slide 41: OCBC Malaysia: 4Q12 net profit down 16% YoY
OCBC Malaysia: 4Q12 net profit down 16% YoY 4Q12 4Q11 YoY 3Q12 QoQ OCBC Malaysia RM m RM m +/(-)% RM m +/(-)% Net interest income 324 310 5 311 4 Islamic Financing Income 81 62 31 59 37 Non-interest income 101 132 (24) 117 (14) Total income 506 504 0 487 4 Operating expenses (235) (201) 17 (222) 6 O
Slide 42: OCBC NISP: Full year net profit up 22% YoY
OCBC NISP: Full year net profit up 22% YoY FY12 FY11 YoY OCBC NISP RP b RP b +/(-)% Net interest income 2,566 2,255 14 Non-interest income 836 651 28 Total income 3,402 2,906 17 Operating expenses (1,941) (1,703) 14 Operating profit 1,461 1,203 21 Allowances (247) (210) 17 Non Op Income / (Expenses)
Slide 43: OCBC NISP: 4Q12 net profit up 13% YoY
OCBC NISP: 4Q12 net profit up 13% YoY 4Q12 4Q11 YoY 3Q12 QoQ OCBC NISP RP b RP b +/(-)% RP b +/(-)% Net interest income 687 608 13 673 2 Non-interest income 239 193 24 188 27 Total income 926 801 15 861 7 Operating expenses (499) (427) 17 (484) 3 Operating profit 427 374 14 377 13 Allowances (83) (6
Slide 44: 2012 Final Results Thank You
2012 Final Results Thank You &) ocBc Bank
Oversea-Chinese Banking — FY2012 Earnings Presentation on 6ix