United Overseas Bank Limited · SGX:U11
United Overseas Bank — Non-Deal Roadshow (January 2008)
36 slides from United Overseas Bank's roadshow presentation, January 2008
Slide 1: United Overseas Bank Investor Roadshow
United Overseas Bank Investor Roadshow January 2008 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 and does not purport to be complete. It is not
Slide 2: Agenda
Agenda 11 Overview Overview of of UOB UOB Group Group 22 Macroeconomic Macroeconomic Outlook Outlook 33 Growth Growth and and Regional Regional Strategy Strategy 44 Infrastructure, Infrastructure, Systems Systems & & Operations Operations 55 Financial Financial Overview Overview 66 Conclusion Conclu
Slide 3: UOB Overview
UOB Overview Founding Key Statistics Founded in August 1935 by a Total Assets: S$172.2 billion group of Chinese businessmen Shareholder’s Equity: S$17.2 billion and Datuk Wee Kheng Chiang, Gross Loans: S$87.1 billion grandfather of the present UOB Group CEO, Mr Wee Ee Cheong Customer Deposits: S$104
Slide 4: One Of The World's Leading Credits
One Of The World’s Leading Credits Bank Financial Strength Foreign Long-Term Bank Deposit Rating Rating B+ B+ B+ Aaa B B B Aa1 Aa1 Aa1 B Aa1 B- Aa2 Aa2 B- Aa2 C+ Aa3 Aa3 C+ Aa3 C C C C A1 A2 A2 C- A2 D+ A3 D+ A3 Baa1 D Baa1 D- Baa2 HSBC HSBC OCBC OCBC Hang Seng Shinhan Hang Seng Shinhan UOB DBS DBS
Slide 5: The UOB Difference
The UOB Difference Well-Established Regional Network Strong Management Well-Diversified Team Portfolio Focus on Proven Long-Term Execution Track Returns Record Keen Understanding of Markets & Customers 5
Slide 6: Execution Track Record
Execution Track Record Profit (S$ m) 2,000 9M07: S$1,603m 2006*: S$1,882m 1,800 2005: S$1,709m 1,600 Acquired Bank Buana in 2005 1,400 2004:S$1,452m Acquired Bank 1,200 of Asia in 2004 1,000 Acquired OUB in 2001 2000:S$913m Acquired ICB in 800 1987 Acquired FEB in 1995:S$633m Acquired UOBR 600 1984
Slide 7: Strategic Focus
Strategic Focus Information Technology Treasury Risk Consumers SMEs Management & Compliance Investment Operational Banking Excellence Human Resources To To be be recognized recognized as as aa leader leader in in consumer consumer and and SME SME banking banking services services in in the the regio
Slide 8: Awards & Accolades
Awards & Accolades “Best SME Bank in Asia “Best Local Private “Best Domestic Bank – Pacific” Bank – Singapore (2nd)” Singapore” 2007 2007 2006 “Top 10 Best Managed “Best Bank - Singapore” “Most Valuable Singapore Companies – Singapore” “Best Sub-Custodian Bank Brand – 2nd position” “Top 10 Best Inve
Slide 9: Agenda
Agenda 11 Overview Overview of of UOB UOB Group Group 22 Macroeconomic Macroeconomic Outlook Outlook 33 Growth Growth and and Regional Regional Strategy Strategy 44 Infrastructure, Infrastructure, Systems Systems & & Operations Operations 55 Financial Financial Overview Overview 66 Conclusion Conclu
Slide 10: Singapore Outlook Promising
Singapore Outlook Promising Singapore enjoys economic leadership status within ASEAN • As a key Asian financial services hub, Singapore has continued drawing a multitude of global multinational banks and corporations, thereby contributing to a strong across-the-board economic boom • Positive governm
Slide 11: SE Asia: Positive Macroeconomic Indicators
SE Asia: Positive Macroeconomic Indicators Real GDP Growth Private Consumption Growth Foreign Direct Investments (In %) (In %) (In US$ bn) Singapore Malaysia Thailand Indonesia Singapore Malaysia Thailand Indonesia Singapore Malaysia Thailand Indonesia 10 10 8.9 20 17.9 7.9 7.4 7.4 14.7 14.6 8 8 7.1
Slide 12: Strong Fundamentals Driven Growth
Strong Fundamentals Driven Growth Economic fundaments across the region are much more robust than the pre-1997 period • Strong GDP outlook across all economies • High levels of foreign exchange reserves • FDI inflows strong and improving Economic activity is more broad-based with less dependence on
Slide 13: Some Macro Risks But UOB Remains Insulated
Some Macro Risks But UOB Remains Insulated Concerns Comments Challenging macro environment with Macro fundamentals remain strong in Risk of US Inflationary pressure, real estate Asia with buoyant consumer demand Economic deflation and tightening credit and ample liquidity Slowdown Risk of a US econo
Slide 14: Agenda
Agenda 11 Overview Overview of of UOB UOB Group Group 22 Macroeconomic Macroeconomic Outlook Outlook 33 Growth Growth and and Regional Regional Strategy Strategy 44 Infrastructure, Infrastructure, Systems Systems & & Operations Operations 55 Financial Financial Overview Overview 66 Conclusion Conclu
Slide 15: Strategic Directions
Strategic Directions Strengthen Domestic Market Further Grow Established Leadership in Core Segments Regional Franchise Establish Strategic Partnerships Invest In Infrastructure & Talent – Focused in High Growth for the Future Regions Our Our Mission: Mission: To To Be A Premier Bank in Be A Premier
Slide 16: Expand Southeast Asia Franchise
Expand Southeast Asia Franchise Malaysia – Poised for accelerated growth Thailand – Committed to Thailand • Long-established history with good local • Raise UOB brand awareness to enhance knowledge and understanding of customers competitiveness and market (2nd home market) • Strong distribution netw
Slide 17: Next Growth Phase – Beyond the Four Pillars
Next Growth Phase – Beyond the Four Pillars China • Local incorporation status and stronger capitalization to support organic growth targeting affluent consumer and institutional segments • Strategic investments and alliances to gain access to distribution network – potential investment in China’s E
Slide 18: Overseas Expansion On Track
Overseas Expansion On Track Global portfolio diversification Pre-Tax Profit by Geography • Overseas operating profit up 10% yoy (S$ m) 2,460 2,500 • Pre-tax offshore profit contribution in 2,264 189 9M07 accounts for 29% 2,131 134 115 2,122 78 108 Established strong regional distribution 2,000 95 18
Slide 19: Agenda
Agenda 11 Overview Overview of of UOB UOB Group Group 22 Macroeconomic Macroeconomic Outlook Outlook 33 Growth Growth and and Regional Regional Strategy Strategy 44 Infrastructure, Infrastructure, Systems Systems & & Operations Operations 55 Financial Financial Overview Overview 66 Conclusion Conclu
Slide 20: IT Management Philosophy
IT Management Philosophy Differentiation through customer segmentation and service Leveraging volume to create infrastructure scale Fast and measurable benefits 20
Slide 21: 2007 – A Year of Investment
2007 – A Year of Investment Malaysia – Call centre strengthened with customer relationship management system – Consumer credit management process enhanced Thailand – Basel related infrastructure completed – Overhauled entire suite of credit management process, strengthened & harmonised to the Group
Slide 22: 2008 – IT Strategy Moving Forward
2008 – IT Strategy Moving Forward Consultative review of our IT strategy, architecture and business alignment for the next 5 years Re-affirmed the strategy of consolidating shared IT infrastructure for core businesses • Singapore as the primary IT service centre • Build secondary IT centre outside o
Slide 23: Agenda
Agenda 11 Overview Overview of of UOB UOB Group Group 22 Macroeconomic Macroeconomic Outlook Outlook 33 Growth Growth and and Regional Regional Strategy Strategy 44 Infrastructure, Infrastructure, Systems Systems & & Operations Operations 55 Financial Financial Overview Overview 66 Conclusion Conclu
Slide 24: Strong Operating Performance
Strong Operating Performance 2002-2006 ‘02-‘06 2002 2006(1) (1) 9M07 CAGR Operating Profit (S$ m)(2) 1,960 2,488 6.1% 2,134 Net Profit After Tax (S$ m) 1,006 1,882 17.0% 1,603 Earnings Per Share (S$)(3) 0.64 1.20 17.0% 1.38 Cash ROE(3) 9.5% 12.4% 6.9% 12.8% Non-Interest Income / Total Income 29.9% 3
Slide 25: Higher Net Interest Income & Loan Margin
Higher Net Interest Income & Loan Margin Net Interest Income and Margin (S$ m) (S$ m) 5,000 3.3% 3.5% 1,500 4% 3.1% 3.1% 3.2% 3.0% 3.3% 3.3% 3.2% 3.3% 3.0% 3.1% 4,000 2.3% 3% 2.2% 2.5% 2.1% 1,000 2.0% 2.0% 3,000 2.0% 2.1% 2.0% 2.0% 2.0% 1.9% 2% 1.5% 2,000 500 2,710 1.0% 2,348 702 762 761 714 1% 2,12
Slide 26: Significant Non-Interest Income Contribution
Significant Non-Interest Income Contribution Non-Interest Income and Non-Interest Income Ratio (S$ m) (S$ m) 2,500 37.6% 40% 800 50% 34.5% 35.8% 33.9% 42.4% 41.3% 2,000 29.9% 36.2% 40% 600 35.5% 30% 33.0% 517 536 1,514 1,500 1,414 432 30% 185 206 393 1,089 1,104 511 20% 400 514 337 74 906 173 1,000
Slide 27: Continued Infrastructure Investment
Continued Infrastructure Investment Operating Expenses and Expense / Income Ratio (S$ m) (S$ m) 2,500 45% 800 50% 41.1% 44.0% 37.6% 37.9% 40% 41.6% 40.8% 35.4% 34.7% 39.5% 38.9% 2,000 40% 35% 1,736 600 30% 497 504 244 472 487 1,500 1,424 30% 424 70 68 60 1,227 25% 67 222 400 1,095 59 1,074 188 20% 1
Slide 28: Sustainable Profit Contribution From Overseas Operations
Sustainable Profit Contribution From Overseas Operations Geographical Segment 9M07 9M07 9M06 9M07 Incr/(Decr) Singapore : 71% Profit Before Tax(1) S$ m S$ m % ASEAN : 15% Singapore (Including ACU) 1,200 1,516 26.3 Asia-Pacific : 5% Other ASEAN Countries 370 321 (13.2) Rest of the World : 9% Other As
Slide 29: Growth In Loans & Deposits
Growth In Loans & Deposits Customer Loans, Deposits and L/D Ratio (S$ bn) 140 90% 81.4% 80.5% 81.3% 78.5% 79.3% 78.9% 80% 120 70% 100 60% 80 50% 60 40% 99.7 104.5 104.8 95.6 30% 40 85.5 82.5 85.2 79.0 76.9 79.0 64.3 67.1 20% 20 10% 0 0% Dec-04 Dec-05 Dec-06 Mar-07 Jun-07 Sep-07 Net Customer Loans (S
Slide 30: Improved Asset Quality Across Major Countries
Improved Asset Quality Across Major Countries Coverage Ratio, NPL Ratio and Total NPLs by Country 97.0% 84.5% 88.7% 79.2% 67.9% 69.0% Coverage Ratio: 8.0% NPL Ratio: 5.6% NPLs: 5,484 4.0% 3.7% 3,931 2.8% 2.3% 3,165 2,986 2,382 2,032 2,949 1,955 1,346 1,166 1,007 763 Dec-04 Dec-05 Dec-06 Mar-07 Jun-0
Slide 31: Approach To Capital Management
Approach To Capital Management Review mix of capital structure Seek Capital Option of share buyback and/or special dividend for any Efficiency excess capital Keep buffer above regulatory CAR to maintain high credit Strong Capital ratings for Strategic Reserve capital as we see opportunities in Singa
Slide 32: Strong Capital Position
Strong Capital Position Capital Adequacy Ratio 16.1% 16.3% 16.2% 15.6% 15.7% 14.8% 11.0% 11.0% 11.0% 11.1% 10.8% 10.2% Dec-04 Dec-05 Dec-06 Mar-07 Jun-07 Sep-07 Total CAR Tier 1 CAR 32
Slide 33: Consistently High Dividend Payouts
Consistently High Dividend Payouts Dividend Payout Dividend Payout Ratio 72% 62% 64% 51% 48% 40% 30.0cts 28.5cts 18.8cts 50.0cts 40.0cts 40.0cts 40.0cts 25.0cts 15.0cts 15.0cts 20.0cts 20.0cts 20.0cts 20.0cts 20.0cts 2002 2003 2004 2005 2006 1H07 Interim Final Dividend in Specie Special Dividend Pay
Slide 34: UOB's CDO Investment Update
UOB’s CDO Investment Update United Overseas Bank Total CDO investments as at end-Sep 2007 was S$388m; of which S$90m are in ABS CDOs Of the remaining S$298m Corporate CDOs, S$101m are due to mature by Mar 2008 None of our S$388m CDOs held as investment is in default Provisions Took a S$20m P/L charg
Slide 35: Agenda
Agenda 11 Overview Overview of of UOB UOB Group Group 22 Macroeconomic Macroeconomic Outlook Outlook 33 Growth Growth and and Regional Regional Strategy Strategy 44 Infrastructure, Infrastructure, Systems Systems & & Operations Operations 55 Financial Financial Overview Overview 66 Conclusion Conclu
Slide 36: In Conclusion
In Conclusion Singapore a new growth paradigm – UOB well-positioned to capture upside Prized distribution network in region. Regional franchise value to further enhance with Asia’s growth. Best SEA proxy Regional growth potential supported by strong Singapore risk management culture Discipline in ba
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