Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q3 2013 Earnings Presentation
43 slides from Oversea-chinese Banking's earnings presentation, Nov 1, 2013
Slide 1: Third Quarter 2013 Results Presentation
Third Quarter 2013 Results Presentation 1 November 2013 Disclaimer: This material should be read as an overview of OCBC’s current business activities and operating environment. It should not be solely relied upon by investors or potential investors when making an investment decision. OCBC Bank accep
Slide 2: Agenda
Agenda Results Overview 3Q13 Performance Trends Appendix: Financial Highlights of Malaysian and Indonesian Subsidiaries Note: 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: 3Q13 Highlights
3Q13 Highlights Strong customer-related business growth drove core net profit higher by 5% YoY and 27% QoQ • Net interest income achieved a new quarterly high from loan growth while net interest margin remained stable QoQ • Fee and commission income surpassed last quarter’s record high • Malaysian a
Slide 4: 3Q13 core net profit of S$759m, up 5% YoY & 27% QoQ
3Q13 core net profit of S$759m, up 5% YoY & 27% QoQ 3Q13 3Q12 YoY 2Q13 QoQ OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 978 944 4 961 2 Non-interest income 779 754 3 606 29 Total income 1,757 1,698 3 1,567 12 Operating expenses (681) (685) (1) (718) (5) Operating profit 1,076 1,013 6 849
Slide 5: 9M13 core net profit of S$2.05b down 5% YoY
9M13 core net profit of S$2.05b down 5% YoY 9M13 9M12 YoY OCBC Group S$m S$m +/(-)% Net interest income 2,851 2,827 1 Non-interest income 2,061 2,140 (4) Total income 4,912 4,967 (1) Operating expenses (2,071) (1,971) 5 Operating profit 2,841 2,996 (5) Amortisation of intangibles (44) (45) (3) Allow
Slide 6: Key ratios remained sound
Key ratios remained sound Based on core earnings (%) 3Q13 3Q12 2Q13 9M13 9M12 Net interest margin 1.63 1.75 1.64 1.63 1.79 Non-interest income / Total income 44.3 44.4 38.6 41.9 43.1 Cost / Income 38.8 40.3 45.8 42.2 39.7 Loans / Deposits 88.4 87.7 89.2 88.4 87.7 NPL Ratio 0.8 0.8 0.7 0.8 0.8 Allowa
Slide 7: 9M13 core ROE healthy at 11.5%
9M13 core ROE healthy at 11.5% 14.7% 12.5% 12.8% 12.7% 11.1% 11.5% 11.6% 11.2% 11.7% Core ROE 1/ 9.9% 2,825 790 724 759 696 648 663 Core net 2,280 profit (S$m) 597 2,053 2,162 9M 1,686 2011 2012 9M13 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 1/ Quarterly and 9M figures annualised 7
Slide 8: PBT breakdown at a glance
PBT breakdown at a glance 9M13 PBT 9M13 PBT by Business1/ by Geography PBT Other Rest of Group Asia the World S$2,648m Pacific 2% YoY: -4% Greater Insurance Global Corporate / China 3% Singapore Indonesia 5% S$1,566m 21% Investment YoY: -9% Banking 5% Malaysia 49% S$677m Global YoY: +11% Treasury an
Slide 9: Agenda
Agenda Results Overview 3Q13 Performance Trends Appendix: Financial Highlights of Malaysian and Indonesian Subsidiaries 9
Slide 10: Net interest income at a new quarterly record, up 4% YoY. NIM stable QoQ
Net interest income at a new quarterly record, up 4% YoY. NIM stable QoQ Net interest margin 1.86% 1.77% 1.86% 1.77% 1.75% 1.63% 1.70% 1.64% 1.64% 1.63% 3,748 951 961 978 Net interest 931 944 921 income 3,410 912 (S$m) 2,851 2,827 9M 2,486 2011 2012 9M13 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 10
Slide 11: Non-interest income increased 3% YoY & 29% QoQ, despite lower trading income
Non-interest income increased 3% YoY & 29% QoQ, despite lower trading income Non- interest 45.4% 45.1% 43.6% 44.4% 42.6% 44.3% income / 39.3% 41.9% 39.0% Total 38.6% income 2,897 790 754 757 779 838 2,212 676 2,061 253 606 596 226 250 280 Non- 508 215 56 interest 551 108 income 701 (S$m) 149 403 113
Slide 12: Fee income at new quarterly record, up 16% YoY
Fee income at new quarterly record, up 16% YoY + 16% YoY + 1% QoQ 1,198 347 352 1,137 157 317 316 42 303 304 42 175 1,014 91 274 41 39 24 37 123 39 39 95 17 39 42 21 14 77 15 128 Fees and 482 112 136 commissions 445 125 (S$m) 376 124 108 125 43 44 146 41 128 37 170 37 38 33 105 109 96 322 310 82 89
Slide 13: Profit from life assurance up 26% YoY
Profit from life assurance up 26% YoY from continued underwriting growth and higher unrealised mark-to- market gains in the Non-Participating Fund + 26% YoY 692 125 240 221 210 40 25 190 434 31 178 35 Profit from 120 42 423 life assurance (S$m) 160 153 139 102 191 71 121 16 34 38 144 2 123 40 41 47
Slide 14: Other non-interest income down 44% YoY
Other non-interest income down 44% YoY as lower trading income offset higher investment securities gains 701 70 - 44% YoY 116 216 - 27% 12 193 QoQ 179 403 44 18 Other non- 379 24 31 149 interest 61 49 19 income 16 120 (S$m) 113 109 125 14 43 515 137 16 19 22 50 160 144 136 43 217 193 90 75 56 47 201
Slide 15: Wealth management income up 19% YoY to a quarterly high
Wealth management income up 19% YoY to a quarterly high 32.7% 32.1% 29.3% 30.3% 29.8% As % of 27.6% 28.0% Group 22.9% 21.8% 22.8% revenue 1,836 564 527 520 500 476 1,441 Wealth 1,285 357 management 333 income (S$m) 1,336 1,000 9M 2011 2012 9M13 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 Note: Comprises the
Slide 16: Operating expenses down
Operating expenses down Cost / 43.2% 42.2% 45.8% Income 40.6% 43.3% 43.1% 42.3% 40.3% 38.8% 35.9% 2,695 724 718 2,430 685 681 661 672 554 625 156 140 531 2,071 130 112 126 144 124 491 377 134 133 136 451 122 125 116 Operating 394 119 expenses (S$m) 1,650 445 1,448 433 434 421 433 1,300 382 401 2011
Slide 17: 3Q13 core net profit of S$524m before GEH contribution
3Q13 core net profit of S$524m before GEH contribution 3Q13 3Q12 YoY 2Q13 QoQ S$m S$m +/(-)% S$m +/(-)% Net interest income 962 928 4 944 2 Non-interest income 459 496 (7) 518 (11) Total income 1,421 1,424 - 1,462 (3) Operating expenses (663) (636) 4 (660) - Operating profit 758 788 (4) 802 (6) Allo
Slide 18: 9M13 core net profit of S$1.64b before GEH contribution
9M13 core net profit of S$1.64b before GEH contribution 9M13 9M12 YoY S$m S$m +/(-)% Net interest income 2,800 2,781 1 Non-interest income 1,382 1,421 (3) Total income 4,183 4,203 - Operating expenses (1,945) (1,825) 7 Operating profit 2,237 2,378 (6) Allowances (198) (203) (3) Associates & JVs 57 2
Slide 19: Net allowances up 35% YoY, credit cost remained low
Net allowances up 35% YoY, credit cost remained low at 10 bps of loans Net 271 allowances 8 for loans + 35% and other 221 YoY assets 15 198 (S$m) 115 5 + 13% 79 55 QoQ 96 94 83 8 70 3 68 11 148 43 42 138 15 35 127 38 24 21 72 13 45 43 2 49 29 31 2 17 (4) 2011 2012 9M13 1Q12 2Q12 3Q12 4Q12 (10)1Q13 2
Slide 20: Net specific allowances for 9M13 down YoY
Net specific allowances for 9M13 down YoY 3Q13 3Q12 2Q13 9M13 9M12 S$m S$m S$m S$m S$m Allowances for new and 72 57 51 171 203 existing NPLs Write-backs1/ (19) (24) (28) (72) (92) Recoveries2/ (11) (9) (12) (44) (31) Net specific allowances 42 24 11 55 80 1/ Write-backs of specific allowances for ex
Slide 21: Loans increased 16% YoY and 2% QoQ
Loans increased 16% YoY and 2% QoQ Loan growth Group YoY: +16% 159 162 QoQ: +2% 149 Rest of the 144 19 21 World 138 140 135 19 YoY: +20% 18 QoQ: +8% 17 17 20 24 17 17 Greater China 17 17 16 12 12 YoY: +47% 18 11 QoQ: +18% 10 11 10 9 25 24 Indonesia 1/ 23 24 21 23 YoY: +14% 21 QoQ: -3% Customer Loans
Slide 22: Loan book remained diversified across geographies and sectors
Loan book remained diversified across geographies and sectors Customer Loans by Geography Customer Loans by Industry As of 30 September 2013 As of 30 September 2013 Rest of the World Agriculture, mining & Others Other Asia 8% quarrying Pacific 5% Housing Loans Transport, storage 4% 5% Singapore & co
Slide 23: Customer deposits up 15% YoY & 3% QoQ
Customer deposits up 15% YoY & 3% QoQ, CASA deposits grew 20% YoY 87.7% 89.2% 88.4% Loans / 86.2% 87.0% Deposits 84.4% 85.3% 181 176 165 169 158 160 158 17 19 14 15 13 15 13 Customer 71 72 67 67 Deposits 72 71 73 (S$b) 32 32 33 31 29 29 30 S$84b S$86b S$89b S$90b S$72b S$74b S$75b +S$1b QoQ 53 50.6%
Slide 24: NPL ratio remained low at 0.8%
NPL ratio remained low at 0.8% 1.0% 0.9% NPL ratio 0.8% 0.8% 0.8% 0.7% 0.7% 1,513 144 1,338 1,280 1,256 25 91 1,172 1,177 87 1,119 27 26 489 28 525 426 418 NPAs 478 449 420 (S$m) 560 456 438 532 409 407 472 320 307 313 258 264 256 230 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Singapore Malaysia Inte
Slide 25: NPAs up slightly, credit quality sound
NPAs up slightly, credit quality sound 3Q13 3Q12 2Q13 9M13 9M12 S$m S$m S$m S$m S$m NPAs – Opening balance 1,177 1,280 1,119 1,172 1,437 New NPAs 287 142 253 662 601 New recoveries/upgrades (103) (116) (140) (387) (669) Write-offs (23) (50) (55) (109) (113) NPAs – Closing balance 1,338 1,256 1,177 1
Slide 26: Allowance coverage ratios remained healthy
Allowance coverage ratios remained healthy 450.00% 400.00% 373% 370% Total 353% 350% allowances/ 350.00% 333% 329% Unsecured NPAs 294% 300.00% 250.00% 200.00% 150.00% Total 149% 142% 144% allowances/ 128% 130% 100.00% 125% NPAs 106% 50.00% 0.00% Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 26
Slide 27: Capital adequacy ratios well above regulatory requirements
Capital adequacy ratios well above regulatory requirements Basel II Basel III 18.0 18.5 18.1 CAR 1.9 16.8 16.1 2.1 1.9 16.1 (% of RWA) 15.5 1.4 1.9 1.4 3.8 1.8 3.8 Tier 2 capital 3.1 3.0 15.9 16.6 14.7 14.1 Tier 1 preference shares 16.2 14.9 14.3 Core Tier 1 capital 12.1 12.8 11.6 11.1 Common Equity
Slide 28: GEH: 3Q13 core earnings contribution up 49% YoY to S$235m
GEH: 3Q13 core earnings contribution up 49% YoY to S$235m 3Q13 3Q12 YoY 2Q13 QoQ GEH Contribution S$m S$m +/(-)% S$m +/(-)% Profit from insurance business 253 198 28 18 nm - Operating profit 1/ 139 110 26 155 (10) - Non-operating profit/(loss) 2/ 91 72 27 (156) 159 - Others 3/ 24 17 43 19 27 Profit
Slide 29: GEH: 9M13 core earnings contribution of S$409m
GEH: 9M13 core earnings contribution of S$409m 9M13 9M12 YoY GEH Contribution S$m S$m +/(-)% Profit from insurance business 458 504 (9) - Operating profit 1/ 424 332 28 - Non-operating profit/(loss) 2/ (26) 122 (121) - Others 3/ 60 49 21 Profit from Shareholders’ Fund 146 113 29 Sub-total 604 618 (2
Slide 30: GEH: Operating profit from insurance business increased 26% YoY
GEH: Operating profit from insurance business increased 26% YoY on growth across all insurance funds + 26% YoY 501 169 11 155 19 424 23 139 99 131 31 11 7 4 117 98 2 110 105 32 4 35 3 27 Operating profit from 21 28 insurance 264 103 89 business (S$m) 213 60 59 63 51 50 119 103 32 35 39 30 29 28 29 (
Slide 31: GEH: Non-operating profit of S$91m
GEH: Non-operating profit of S$91m from higher unrealised mark-to-market gains as financial markets partially recovered during the quarter + 27% YoY Non- 162 operating profit from insurance 108 business 91 (S$m) 72 9M 122 39 38 2012 9M13 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 (26) (57) (156) Note: Non-o
Slide 32: GEH: Total weighted new sales grew by 38% YoY
GEH: Total weighted new sales grew by 38% YoY on continued growth in Singapore and Malaysia operations + 38% YoY 824 275 30 258 260 7 737 8 8 25 77 292 199 202 79 194 215 100 10 8 7 173 Weighted new 7 69 58 business 70 premiums 53 (S$m) 191 502 497 173 150 123 134 113 116 2012 9M13 1Q12 2Q12 3Q12 4Q
Slide 33: GEH: New business embedded value increased 18% YoY
GEH: New business embedded value increased 18% YoY on stronger sales performance NBEV / Total 42.2% 43.7% 42.9% 42.7% weighted 40.2% 38.5% 37.5% 37.6% 36.7% new sales 104 100 101 2 2 347 2 6 83 85 75 2 1 40 76 32 277 38 NBEV 133 6 1 2 (S$m) 31 34 99 27 30 62 67 208 60 53 172 47 47 44 2012 9M13 1Q12
Slide 34: OCBC Malaysia: Total net interest income and Islamic financing income up 14% YoY
OCBC Malaysia: Total net interest income and Islamic financing income up 14% YoY, non-interest income down 8% YoY Net interest income and Non-interest income (RM m) Islamic financing income (RM m) Net Interest/ Non-int. income/ financing margin Total income 33.3% 30.3% 2.32% 2.22% 2.01% 2.03% 2.31%
Slide 35: OCBC Malaysia: Loans grew 15% YoY and 4% QoQ
OCBC Malaysia: Loans grew 15% YoY and 4% QoQ, NPL ratio at 2.3% Gross Loans (RM b) Deposits (RM b) NPL Ratio Loans / Deposits 88.6% 86.3% 85.6% 86.4% 3.0% 82.1% 80.8% 2.3% 2.3% 77.4% 2.2% 2.1% 2.1% 1.8% 61 58 60 56 55 57 56 52 54 48 50 45 47 43 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Mar12 Jun12 S
Slide 36: OCBC NISP: Net interest income up 22% YoY
OCBC NISP: Net interest income up 22% YoY, non-interest income up 35% YoY Net interest income (Rp b) Non-interest income (Rp b) Non-int. income/ Net interest margin Total income 4.80% 4.17% 4.15% 4.37% 4.32% 4.23% 4.33% 4.04% 3.98% 3.87% 26.5% 25.8% 24.6% 24.1% 22.4% 21.7% 21.8% 21.9% 23.6% 19.1% 82
Slide 37: OCBC NISP: Loans grew 21% YoY and 8% QoQ
OCBC NISP: Loans grew 21% YoY and 8% QoQ, NPL ratio remained low at 0.7% Gross Loans (Rp t) Deposits (Rp t) NPL Ratio Loans / Deposits 1.2% 1.1% 1.0% 0.9% 98.0% 97.0% 0.8% 0.7% 0.7% 91.8% 93.9% 90.2% 85.5% 86.8% 61 63 57 61 59 58 53 54 54 51 52 48 50 42 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Mar1
Slide 38: Agenda
Agenda Results Overview 3Q13 Performance Trends Appendix: Financial Highlights of Malaysian and Indonesian Subsidiaries 38
Slide 39: OCBC Malaysia: 3Q13 net profit grew 21% YoY
OCBC Malaysia: 3Q13 net profit grew 21% YoY 3Q13 3Q12 YoY 2Q13 QoQ OCBC Malaysia RM m RM m +/(-)% RM m +/(-)% Net interest income 320 306 5 307 4 Islamic Financing Income 101 64 58 89 13 Non-interest income 108 118 (8) 172 (37) Total income 529 488 8 568 (7) Operating expenses (223) (222) - (218) 2
Slide 40: OCBC Malaysia: 9M13 net profit up 11% YoY
OCBC Malaysia: 9M13 net profit up 11% YoY 9M13 9M12 YoY OCBC Malaysia RM m RM m +/(-)% Net interest income 946 909 4 Islamic Financing Income 272 175 55 Non-interest income 384 430 (11) Total income 1,602 1,514 6 Operating expenses (642) (616) 4 Operating profit 960 898 7 Allowances (43) (63) (32) T
Slide 41: OCBC NISP: 3Q13 net profit up 21% YoY
OCBC NISP: 3Q13 net profit up 21% YoY 3Q13 3Q12 YoY 2Q13 QoQ OCBC NISP RP b RP b +/(-)% RP b +/(-)% Net interest income 820 673 22 776 6 Non-interest income 253 188 35 217 17 Total income 1,073 861 25 993 8 Operating expenses (570) (484) 18 (547) 4 Operating profit 503 377 33 446 13 Allowances (100)
Slide 42: OCBC NISP: 9M13 net profit rose 28% YoY
OCBC NISP: 9M13 net profit rose 28% YoY 9M13 9M12 YoY OCBC NISP RP b RP b +/(-)% Net interest income 2,305 1,879 23 Non-interest income 638 597 7 Total income 2,943 2,476 19 Operating expenses (1,638) (1,442) 14 Operating profit 1,305 1,034 26 Allowances (186) (164) 13 Non Op Income / (Expenses) (1)
Slide 43: Third Quarter 2013 Results Thank You
Third Quarter 2013 Results Thank You
Oversea-Chinese Banking — Q3 2013 Earnings Presentation on 6ix