Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q1 2003 Earnings Presentation
24 slides from Oversea-chinese Banking's earnings presentation, May 14, 2003
Slide 1: First Quarter 2003 Results Presentation
First Quarter 2003 Results Presentation 14 May 2003 1
Slide 2: Agenda
Agenda ■ Results at a Glance ■ Income Statement Trends ■ Loans and Deposits ■ Asset Quality and Provisions ■ Impact of SARS 2
Slide 3: Results at a Glance
Results at a Glance ■ First Quarter 2003 operating profit down due to a difficult macro environment which affected both net interest income and fee income ■ Expenses remained tightly managed ■ Net profit was further impacted by the effect of a sharp drop in associates’ contributions ■ Asset quality
Slide 4: Results at a Glance
Results at a Glance 1Q03 4Q02 QoQ 1Q02 YoY S$m S$m % S$m % Net Interest Income 352 376 (7) 370 (5) Non-interest Income 148 192 (23) 164 (10) - Fee Income 82 91 (10) 94 (13) Total Income 499 569 (12) 534 (6) Operating Expenses 201 217 (7) 206 (2) Operating Profit 298 352 (15) 328 (9) Goodwill 32 32 0
Slide 5: Agenda
Agenda ■ Results at a Glance ■ Income Statement Trends ■ Loans and Deposits ■ Asset Quality and Provisions ■ Impact of SARS 5
Slide 6: Net Interest Margin Affected by Lower Spreads and Low Interbank Rates
Net Interest Margin Affected by Lower Spreads and Low Interbank Rates ↓ 7% Q-o-Q Net Interest Margin ↓ 5% Y-o-Y 1.98% 1.93% 1.93% 1.91% 1.84% 388 370 375 376 352 (S$m) 1Q02 2Q02 3Q02 4Q02 1Q03 6
Slide 7: Non-Interest Income
Non-Interest Income ↓ 23% Q-o-Q Non-interest income/ Total income ↓ 10% Y-o-Y 34.6% 33.8% 30.7% 28.8% 29.6% 199 192 164 157 (S$m) 148 1Q02 2Q02 3Q02 4Q02 1Q03 7
Slide 8: Fee Income Hit by Poor Investment Sentiment
Fee Income Hit by Poor Investment Sentiment Fee income/ ↓ 10% Q-o-Q Total income ↓ 13% Y-o-Y 17.7% 18.1% 16.1% 16.5% 15.6% 99 94 91 89 82 (S$m) 1Q02 2Q02 3Q02 4Q02 1Q03 8
Slide 9: Costs Continued to be Managed Tightly
Costs Continued to be Managed Tightly ↓ 7% Q-o-Q Cost-to-Income Ratio ↓ 2% Y-o-Y 40.3% 38.6% 38.8% 38.1% 37.4% 223 217 206 204 201 46 52 36 (S$m) 38 42 45 49 51 48 51 119 121 112 113 119 1Q02 2Q02 3Q02 4Q02 1Q03 Staff Cost Premises & Equipment Others Restructuring Expenses 9
Slide 10: Operating Profit Affected by Lower Revenue
Operating Profit Affected by Lower Revenue (S$m) ↓ 15% Q-o-Q ↓ 9% Y-o-Y 351 352 341 328 298 1Q02 2Q02 3Q02 4Q02 1Q03 10
Slide 11: Net Profit Further Hurt by Lower Associates' Contributions
Net Profit Further Hurt by Lower Associates’ Contributions (S$m) ↓ 6% Q-o-Q ↓ 26% Y-o-Y 215 181 169 159 102 1Q02 2Q02 3Q02 4Q02 1Q03 11
Slide 12: EPS and ROE
EPS and ROE ROE 9.8% 7.9% 7.3% 6.8% 5.5% 68 56 52 50 EPS¢ 32 1Q02 2Q02 3Q02 4Q02 1Q03 Note: ROE and EPS are annualised ROE refers to return on ordinary shareholders’ funds 12
Slide 13: Agenda
Agenda ■ Results at a Glance ■ Income Statement Trends ■ Loans and Deposits ■ Asset Quality and Provisions ■ Impact of SARS 13
Slide 14: Loan Demand Generally Weak
Loan Demand Generally Weak (S$bn) ↓ 0.3% Q-o-Q ↓ 4% Y-o-Y 51.9 50.7 50.3 49.8 49.6 5.7 6.7 5.9 6.8 6.7 7.3 7.1 7.2 7.0 7.1 38.9 36.9 37.2 36.0 35.8 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Singapore Malaysia International 14
Slide 15: Slight Increase in Non-Bank Deposits
Slight Increase in Non-Bank Deposits ↑ 3% Q-o-Q Loans-to-deposits ↓ 1% Y-o-Y 87.3% 86.2% 86.3% 87.6% 85.2% 55.8 55.1 53.5 53.9 55.3 (S$bn) 11.3 11.2 10.8 10.8 11.1 36.9 37.2 35.9 36.2 36.9 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Fixed Deposits Savings Deposits Current Account Others 15
Slide 16: Agenda
Agenda ■ Results at a Glance ■ Income Statement Trends ■ Loans and Deposits ■ Asset Quality and Provisions ■ Impact of SARS 16
Slide 17: On-going Resolution of NPLs
On-going Resolution of NPLs NPL Ratio 9.6% 9.9% ↓ 2% Q-o-Q 9.6% ↓ 15% Y-o-Y 8.1% 8.0% 5,050 4,979 5,149 4,356 4,290 1,115 1,115 1,137 (S$bn) 1,199 1,250 3,373 3,306 3,498 2,646 2,559 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Singapore Malaysia International 17
Slide 18: Provision Charge down from 4Q2002
Provision Charge down from 4Q2002 (S$m) Specific Provisions for Loans Provisions for Diminution in 205 Investments and Other Assets General Provisions 74 130 91 64 75 74 163 24 20 91 70 54 55 (33) (30) 1Q02 2Q02 3Q02 4Q02 1Q03 18
Slide 19: Cumulative Loan Provisions
Cumulative Loan Provisions (S$m) 3,346 3,368 3,401 2,713 2,692 1,248 1,210 1,211 1,206 1,179 2,098 2,158 2,190 1,506 1,513 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 General Provision Specific Provision 19
Slide 20: Provision Coverage Ratios Remain Adequate
Provision Coverage Ratios Remain Adequate SPs / Unsecured NPLs 107% 105% 105% 100% 105% (SPs+GPs) / NPLs 66% 68% 66% 62% 63% SPs / NPLs 42% 43% 43% 35% 35% Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 20
Slide 21: Agenda
Agenda ■ Results at a Glance ■ Income Statement Trends ■ Loans and Deposits ■ Asset Quality and Provisions ■ Impact of SARS 21
Slide 22: Managing SARS
Managing SARS ■ Activation of Business Continuity Plan with deployment of workforce to multiple operating sites ■ Fully operational SARS monitoring centre, monitoring trigger events and staff updates from individual business units ■ Suspended travel to and from SARS infected countries ■ Greater use
Slide 23: Impact of SARS on Business
Impact of SARS on Business Consumer Banking ■ Drop in branch traffic initially but situation has gradually improved ■ A shift has been observed in customers’ use of interactive channels -- Internet banking transactions for April rose 19% over February & March ■ So far no significant impact on consum
Slide 24: First Quarter 2003 Results – Thank You
First Quarter 2003 Results Thank You 24
Oversea-Chinese Banking — Q1 2003 Earnings Presentation on 6ix