Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q2 2010 Earnings Presentation
39 slides from Oversea-chinese Banking's earnings presentation, Aug 2, 2010
Slide 1: Second Quarter 2010 Results Presentation
Second Quarter 2010 Results Presentation 2 August 2010
Slide 2: Agenda
Agenda Results Overview Performance Trends Malaysia and Indonesia Subsidiaries In Summary 2
Slide 3: Second quarter net profit up 8% YoY
Results Overview Second quarter net profit up 8% YoY 2Q10 2Q09 YoY 1Q10 QoQ S$m S$m +/(-)% S$m +/(-)% Net Interest Income 720 710 1 704 2 Non-Interest Income 516 494 5 681 (24) Total Income 1,236 1,204 3 1,385 (11) Operating Expenses (559) (450) 24 (502) 11 Operating Profit 677 754 (10) 883 (23) Amo
Slide 4: First half net profit up 17% YoY
Results Overview First half net profit up 17% YoY 1H10 1H09 YoY 2H09 HoH S$m S$m +/(-)% S$m +/(-)% Net Interest Income 1,424 1,450 (2) 1,376 3 Non-Interest Income 1,197 1,101 9 889 35 Total Income 2,621 2,551 3 2,265 16 Operating Expenses (1,061) (863) 23 (933) 14 Operating Profit 1,560 1,688 (8) 1,
Slide 5: Key financial ratios
Results Overview Key financial ratios 1H10 1H09 2Q10 1Q10 2Q09 % % % % % Net Interest Margin (annualised) 2.00 2.35 1.96 2.03 2.29 Non-Interest Income / Total Income 45.7 43.2 41.8 49.2 41.0 Cost-to-Income Ratio 40.5 33.8 45.2 36.2 37.4 Loans-to-Deposits Ratio 83.7 80.3 83.7 81.9 80.3 NPL Ratio 1.3
Slide 6: ROE of 13.1% for first half
Results Overview ROE of 13.1% for first half ROE 14.9% 15.3% 13.1% 12.2% 12.0% 11.6% 10.8% 10.9% 9.9% 1,962 676 1,749 263 545 502 503 466 450 1,179 Net profit (S$m) 1,486 2008 2009 1H10 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Divestment Gains/Tax Refunds ROE, excluding divestment gains/tax refunds (2008) Note
Slide 7: Earnings contribution by segments
Results Overview Earnings contribution by segments 1H10 PBT 1H10 PBT By Business Segment By Geography Global Other Asia Consumer Rest of the Pacific Others Financial Other World Services ASEAN 1% 4% 3% 17% 16% Malaysia 26% 16% Insurance Global 34% Corporate 66% Singapore Banking 17% Global Treasury
Slide 8: GEH quarterly contribution declined 26% YoY
Results Overview GEH quarterly contribution declined 26% YoY due to investment market volatility, partially offset by improved underwriting profits 2Q10 2Q09 YoY 1Q10 QoQ S$m S$m +/(-)% S$m +/(-)% Total Income 132 203 (35) 247 (46) Operating Expenses (35) (50) (29) (42) (16) Operating Profit 96 153
Slide 9: GEH first half contribution declined 26% YoY
Results Overview GEH first half contribution declined 26% YoY; up 108% YoY excluding one-time gains of S$175m in 1Q09 1H10 1H09* YoY 2H09^ HoH S$m S$m +/(-)% S$m +/(-)% Total Income 379 511 (26) 247 53 Operating Expenses (78) (74) 5 (42) 82 Operating Profit 301 438 (31) 205 48 Amortisation of Intang
Slide 10: Results excluding GEH – second quarter net profit up 15% YoY
Results Overview Results excluding GEH – second quarter net profit up 15% YoY 2Q10 2Q09 YoY 1Q10 QoQ S$m S$m +/(-)% S$m +/(-)% Net Interest Income 703 694 1 686 3 Non-Interest Income 401 307 31 452 (11) Total Income 1,104 1,001 10 1,138 (3) Operating Expenses (524) (400) 31 (460) 14 Operating Profit
Slide 11: Results excluding GEH – first half net profit up 32% YoY
Results Overview Results excluding GEH – first half net profit up 32% YoY 1H10 1H09 YoY 2H09 HoH S$m S$m +/(-)% S$m +/(-)% Net Interest Income 1,389 1,419 (2) 1,341 4 Non-Interest Income 853 621 37 676 26 Total Income 2,242 2,040 10 2,017 11 Operating Expenses (983) (789) 25 (891) 10 Operating Profi
Slide 12: Net interest income supported by robust loans growth
Performance Trends Net interest income supported by robust loans growth 2.42% 2.27% 2.29% 2.23% Net 2.16% interest 2.08% margin 2.00% 2.03% 1.96% 2,783 2,825 740 720 710 704 689 687 1,424 Net interest income (S$m) 2008 2009 1H10 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 12
Slide 13: Net interest income adjusted for allowances – continued improving trend
Performance Trends Net interest income adjusted for allowances – continued improving trend 1.95% 2.01% 1.90% 1.89% 1.92% 1.94% 1.90% 1.86% Adjusted 1.75% net interest margin* 2,336 2,396 702 679 637 606 610 543 1,381 Adjusted net interest income* (S$m) 2008 2009 1H10 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 *
Slide 14: Non-interest income up 5% YoY
Performance Trends Non-interest income up 5% YoY 49.2% 45.7% 45.1% 41.3% 41.0% 42.0% 41.8% 34.4% 36.3% 1,990 681 607 1,644 624 155 497 273 516 186 494 275 1,197 158 143 392 152 Non-interest 636^ income 409 431 297* 174 182 106 (S$m) 157 153 288 29^ 774 730 252 194 226 478 189 192 155 2008 2009 1H10
Slide 15: Fee and commission income up 30% YoY
Performance Trends Fee and commission income up 30% YoY 774 730 252 129 126 226 39 51 54 194 192 39 26 189 478 30 31 35 16 Fee and 155 commission 309 78 22 9 11 income 319 30 97 42 (S$m) 13 95 79 79 88 192 153 72 42 166 39 81 45 51 40 132 29 48 85 37 65 11 18 19 18 2008 2009 1H10 1Q09 2Q09 3Q09 4Q09
Slide 16: Other non-interest income up 11% YoY
Performance Trends Other non-interest income up 11% YoY 624 273 10 87 431 155* 174 157 27 43 14 152 158 Other non- 344 143 interest 15 17 income 275 196 15 39 (S$m) 94 66 61 78 112 43 54 58 67 26 121 23 36 35 140 135 48 87 36 44 39 30 24 2008 2009 1H10 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Dividends & Net g
Slide 17: GEH: 2Q10 total weighted new sales up 30% YoY
Performance Trends GEH: 2Q10 total weighted new sales up 30% YoY 749 189 601 248 172 166 48 83 135 258 128 112 82 Total 47 weighted 301 68 new sales 59 (S$m) 492 129 119 330 103 81 73 51 57 155 2008 2009 1H10 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Singapore Malaysia Other Asia 17
Slide 18: GEH: 2Q10 new business embedded value up 29% YoY
Performance Trends GEH: 2Q10 new business embedded value up 29% YoY 42% 43% New business 42% 42% 41% embedded 39% value/Total 38% weighted new 35% 35% sales 264 78 235 69 60 59 109 54 34 New business 104 embedded 43 23 35 value 23 128 25 (S$m) 21 58 153 43 128 36 34 28 31 65 21 2008 2009 1H10 1Q09 2
Slide 19: Operating expenses increased due to renewed investments in regional expansion
Performance Trends Operating expenses increased due to renewed investments in regional expansion, consolidation of Bank of Singapore and higher business volumes 45.2% 43.7% 43.2% Cost-to-income Ratio 40.5% 39.4% 37.3% 37.4% 36.2% 1,854 30.7% 559 1,796 Operating 502 expenses 467 466 132 469 452 450 (
Slide 20: Second quarter operating profit down 10% YoY
Performance Trends Second quarter operating profit down 10% YoY Operating profit before allowances (S$m) 3,019 934* 883 2,573 186 754 718 677 614^ 1,560 2,387 2008 2009 1H10 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Divestment gains * Includes S$201m non-recurring gains from GEH ^ Includes GLC loss of S$213m fr
Slide 21: Net allowances reflect stable overall loan credit quality
Performance Trends Net allowances reflect stable overall loan credit quality 447 Net allowances 429 for loans and other assets (S$m) 197 104 77 43 52 25 18 2008 2009 1H10 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 21
Slide 22: Breakdown of allowances
Performance Trends Breakdown of allowances 1H10 1H09 2Q10 1Q10 2Q09 S$m S$m S$m S$m S$m Specific allowances for loans 16 132 11 5 44 Portfolio allowances for loans 35 7 5 30 5 Allowances for CDOs (Write-back) (8) 92 (1) (7) (2) Allowances for other assets (Write-back) (#) 70 3 (3) 57 Total net allow
Slide 23: Movement in specific allowances for loans
Performance Trends Movement in specific allowances for loans 1H10 1H09 2Q10 1Q10 2Q09 S$m S$m S$m S$m S$m Allowances for new and existing NPLs 123 242 55 68 104 Write-backs 1/ (87) (93) (32) (54) (51) Recoveries 2/ (21) (18) (12) (9) (10) Net Specific Allowances 16 132 11 5 44 1/ Write-backs of spec
Slide 24: Loans grew 21% YoY and 6% QoQ
Performance Trends Loans grew 21% YoY and 6% QoQ Non-bank 95.5 loans (S$bn) 90.4 80.4 82.3 79.2 78.7 25.8 23.5 18.5 18.0 17.5 17.5 16.6 16.2 14.7 15.3 14.7 14.5 50.7 53.1 47.7 47.0 46.7 48.5 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Singapore Malaysia International Note: Loans by geography are based
Slide 25: Customer deposits grew 16% YoY and 3% QoQ
Performance Trends Led by current accounts / savings accounts, customer deposits grew 16% YoY and 3% QoQ 85.3% 83.7% Loans-to- 80.3% 80.4% 81.9% 79.7% 85.0% deposits 75.0% 112.3 108.5 100.6 65.0% 96.6 96.9 92.4 23.6 26.6 55.0% 17.4 18.4 20.8 16.1 45.0% 22.7 23.8 17.7 19.6 20.9 21.8 35.0% 25.0% Depos
Slide 26: Diversified loan book
Performance Trends Diversified loan book Customer Loans by Geography* Customer Loans by Sector As at 30 June 2010 As at 30 June 2010 Agriculture, mining & Transport, quarrying storage & Others Comm Others 12% 2% 7% 6% Building & Greater Construction China 10% 17% Housing Indonesia 5% Loans S$95.5bn
Slide 27: NPL ratio continues to decline
Performance Trends NPL ratio continues to decline 2.0% 1.8% 1.8% NPL ratio 1.7% 1.5% 1.3% 1,785 1,633 202 1,583 210 1,448 1,402 181 64 1,316 467 83 56 479 395 386 323 292 NPAs* 568 (S$m) 521 560 582 562 567 548 447 423 416 434 401 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Singapore NPLs Malaysia NPL
Slide 28: Largest NPA segment classified as Substandard
Performance Trends Largest NPA segment classified as “Substandard” – typically well-collateralised and / or no overdues 2.0% NPL ratio 1.8% 1.8% 1.7% 1.5% 1.3% 1,785 1,633 1,583 238 283 1,448 1,402 234 1,316 241 250 676 261 NPAs 610 714 451 (S$m) 500 414 871 636 739 756 652 641 Mar-09 Jun-09 Sep-09
Slide 29: Inflow of new NPAs remains low
Performance Trends Inflow of new NPAs remains low 1H10 1H09 2Q10 1Q10 2Q09 S$m S$m S$m S$m S$m Opening Balance (excluding CDOs) 1,442 1,239 1,396 1,442 1,462 New NPAs 247 841 124 123 417 Net Recoveries/Upgrades (266) (283) (155) (111) (160) Write-offs (114) (139) (56) (58) (61) Closing Balance (excl
Slide 30: Allowance coverage continued to improve
Performance Trends Allowance coverage continued to improve 350% Total allowances/Unsecured NPAs 300% 288% 266% 249% 250% 221% 212% 188% 200% Total allowances/NPAs 150% 109% 107% 112% 97% 103% 102% 100% Specific allowances/NPAs 50% 49% 42% 40% 32% 33% 33% 0% Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10
Slide 31: Tier 1 and Core Tier 1 ratios strengthened
Performance Trends Tier 1 and Core Tier 1 ratios strengthened (% of RWA) 16.4% 16.3% Total CAR 15.9% 15.2% 0.5% 15.2% 0.5% 1.0% 0.8% Tier 2 capital Tier 1 preference shares 11.3% 11.2% 12.0% 15.4% 15.2% 15.9% 10.8% 11.6% 15.3% Core Tier 1 – 14.4% adjusted common equity Jun-09 Sep-09 Dec-09 Mar-10 Ju
Slide 32: Interim dividend increased to 15 cents per share
Performance Trends Interim dividend increased to 15 cents per share 28.0 28.0 28.0 23.0 Net DPS (cents) 14.0 14.0 14.0 18.4 12.0 9.6 Final net dividend 14.0 14.0 14.0 15.0 11.0 8.8 Interim net dividend 2005* 2006 2007 2008 2009 1H10 Net Dividends (S$m) 574 709 864 868 897 493 Core Net Profit (S$m) 1
Slide 33: OCBC Malaysia: quarterly results
Malaysia and Indonesia Subsidiaries OCBC Malaysia: quarterly results UNAUDITED RESULTS* 2Q10 2Q09 YoY 1Q10 QoQ RM m RM m +/(-)% RM m +/(-)% Net Interest Income 281 253 11 264 6 Islamic Banking Income 39 28 39 42 (6) Non-Interest Income 102 65 57 139 (27) Total Income 422 346 22 445 (5) Operating Exp
Slide 34: OCBC Malaysia: half-year results
Malaysia and Indonesia Subsidiaries OCBC Malaysia: half-year results UNAUDITED RESULTS* 1H10 1H09 YoY 2H09 HoH RM m RM m +/(-)% RM m +/(-)% Net Interest Income 545 505 8 531 3 Islamic Banking Income 81 61 33 83 (3) Non-Interest Income 241 238 1 177 36 Total Income 867 804 8 791 10 Operating Expenses
Slide 35: OCBC Malaysia: key financial ratios
Malaysia and Indonesia Subsidiaries OCBC Malaysia: key financial ratios 1H10 1H09 2Q10 1Q10 2Q09 % % % % % Net Interest Margin 2.36 2.41 2.46 2.27 2.35 Non-Interest Income / 27.8 29.6 24.2 31.2 18.8 Total Income Cost-to-Income Ratio 36.3 34.8 40.5 32.3 40.8 Loans-to-Deposits Ratio 83.4 80.3 83.4 80.
Slide 36: Bank OCBC NISP: quarterly results
Malaysia and Indonesia Subsidiaries Bank OCBC NISP: quarterly results UNAUDITED RESULTS 2Q10 2Q09 YoY 1Q10 QoQ RP bn RP bn +/(-)% RP bn +/(-)% Net Interest Income 442 430 3 445 (1) Non-Interest Income 111 159 (30) 119 (7) Total Income 553 589 (6) 564 (2) Operating Expenses (377) (347) 9 (358) 5 Oper
Slide 37: Bank OCBC NISP: half-year results
Malaysia and Indonesia Subsidiaries Bank OCBC NISP: half-year results UNAUDITED RESULTS 1H10 1H09 YoY 2H09 HoH RP bn RP bn +/(-)% RP bn +/(-)% Net Interest Income 887 829 7 897 (1) Non Interest Income 230 278 (17) 219 5 Total Income 1,117 1,107 (1) 1,116 0 Operating Expenses (735) (682) 8 (695) 6 Op
Slide 38: Bank OCBC NISP: key financial ratios
Malaysia and Indonesia Subsidiaries Bank OCBC NISP: key financial ratios 1H10 1H09 2Q10 1Q10 2Q09 % % % % % Net Interest Margin 5.31 5.22 5.21 5.42 5.41 Non-Interest Income / Total Income 20.6 25.1 20.0 21.2 27.1 Cost-to-Income Ratio 65.8 61.6 68.1 63.5 59.0 Loans-to-Deposits Ratio 77.5 69.4 77.5 76
Slide 39: In Summary
In Summary • Broad-based loans growth in our key markets drove increase in net interest income • Bank of Singapore expanding as planned, boosting wealth management income • Dealing income impacted by volatile financial markets • Great Eastern delivering robust growth in new business sales and EV • E
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