United Overseas Bank Limited · SGX:U11
United Overseas Bank — FY2019 Earnings Presentation
24 slides from United Overseas Bank's earnings presentation, Feb 21, 2020
Slide 1: UOB Group Financial Highlights
UOB Group For the Financial Year / Fourth Quarter Ended 31 December 2019 Financial Highlights Lee Wai Fai Group Chief Financial Officer 21 February 2020 Disclaimer: This material that follows is a presentation of general background information about the Bank’s activities current at the date of the p
Slide 2: Financial Highlights: Record full year profit
Financial Highlights Record full year Strong client franchise; solid balance sheet position profit • Total income for FY19 up 10% to cross $10 billion mark, led by healthy client franchise growth and higher trading and investment income NPAT (FY19) • Stable funding with loan-to-deposit ratio at 85.4
Slide 3: Full year earnings up 8% to a new high of $4.34 billion
Full year earnings up 8% to a new high of $4.34 billion 2019 2018 YoY +/(-) • Higher net interest income (NII) as $m $m $m % loans grew 3%. Net interest income 6,562 6,220 342 6 • Steady fee growth particularly wealth management and credit Net fee income 2,032 1,967 65 3 card. Others 1,435 930 5
Slide 4: Fourth quarter earnings grew 10% from a year ago
Fourth quarter earnings grew 10% from a year ago 4Q19 4Q18 YoY +/(-) $m $m $m % • Higher NII driven by loan growth. Net interest income 1,635 1,608 27 2 • Fees increased from strong Net fee income 476 467 9 2 wealth management flows and credit card fees. Others 321 140 180 >100 • Other income
Slide 5: QoQ earnings 10% down due to seasonally slower 4th quarter
QoQ earnings 10% down due to seasonally slower 4th quarter 4Q19 3Q19 QoQ +/(-) $m $m $m % Net interest income 1,635 1,687 (51) (3) • NII decreased 3% from lower loan origination and lower interest rates. Net fee income 476 551 (76) (14) Others 321 371 (50) (14) • Seasonally lower fees and trad
Slide 6: QoQ NIM down 1 bp on lower interest rates and increased competition
QoQ NIM down 1 bp on lower interest rates and increased competition Net Interest Income (NII) and Margin 2.14 2.19 2.16 2.18 2.22 2.19 2.15 2.16 2.19 2.18 2.12 1.77 1.82 1.78 1.84 1.83 1.81 1.80 1.79 1.81 1.77 1.76 0.77 0.89 0.78 0.94 0.87 0.90 0.87 0.81 0.77 0.73 0.78 6,562 6,220 783 5,528 866 651
Slide 7: Non-interest income rose 20% YoY; but seasonally lower QoQ
Non-interest income rose 20% YoY; but seasonally lower QoQ Non-Interest Income +20% Non-NII grew significantly in 2019, particularly wealth management and credit card fees, coupled with strong trading and investment income. 3,467 Lower 4Q19 on the back of seasonality and lower loan origination.
Slide 8: Cost/Income ratio for 2019 at 44.6% with continued investment in people and technology
Cost/Income ratio for 2019 at 44.6% with continued investment in people and technology Expenses and Cost / Income Ratio 43.7 43.9 44.6 44.6 45.9 44.2 43.6 43.4 44.4 43.7 44.2 4,472 4,003 1,154 1,129 1,116 3,739 1,073 1,757 1,022 1,011 987 984 1,556 446 455 443 1,515 413 381 403 384 387 2,716 2,447 6
Slide 9: NPA formation increased this quarter, no widespread concern
NPA formation increased this quarter, no widespread concern 2018 2019 ($m) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q NPAs at start of period 4,389 4,323 4,404 4,374 4,166 4,215 4,185 4,350 Group wholesale and small enterprises New NPAs _ 235 252 275 370 230 357 180 437 Upgrades, recoveries and translations (206) (88)
Slide 10: Total credit costs stable at 18 bps for 2019 with healthy allowance coverage
Total credit costs stable at 18 bps for 2019 with healthy allowance coverage Total Allowances on Loans 61 23 24 22 18 19 23 16 18 21 20 28 12 13 15 17 11 15 660 13 11 11 503 8 390 160 166 113 131 122 65 81 55 2017 2018 2019 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2018 2019 Total Allowances on Loans ($m) Allowances
Slide 11: North Asia loan exposure reduced amid uncertainty in 2H19
North Asia loan exposure reduced amid uncertainty in 2H19 Jun19 vs Dec19 vs Dec-19 Jun-19 Dec-18 YoY Dec18 Jun19 Gross Loans $b $b $b +/(-)% +/(-)% +/(-)% 139 142 137 3 (2) 1 Singapore South East Asia 63 61 59 2 4 6 Malaysia 30 29 29 (1) 2 1 Thailand 20 18 17 8 8 16 Indonesia 11 11 11 1 1 2 Others 2
Slide 12: Stable income in 2H19 despite de-risking our balance sheet
Stable income in 2H19 despite de-risking our balance sheet. Southeast Asia franchise showing results as cross border connectivity improved 1H19 vs 2H19 vs 2019 2018 2H19 1H19 2H18 YoY 2H18 1H19 Maintaining strong growth in Singapore Total Income $m $m $m $m $m +/(-)% +/(-)% +/(-)% despite competitiv
Slide 13: Business segments delivered healthy profit growth
Business segments delivered healthy profit growth 2019 2018 +/(-) Higher NII from volume growth and improvement in deposit margin; stronger Operating Profit $m $m % contribution from wealth Group Retail 2,200 2,032 8 Group Wholesale Banking 3,066 2,984 3 Income growth of 6% from +10% improvement
Slide 14: Stable liquidity position with average LCR at 149% and NSFR at 111%
Stable liquidity position with average LCR at 149% and NSFR at 111% Customer Loans and Deposits; LDR, LCR and NSFR 142 142 146 147 144 149 128 127 86.7 85.7 85.7 88.2 86.6 88.5 89.3 85.4 308 305 304 311 288 294 293 274 267 270 272 265 252 259 237 246 Mar Jun Sep Dec Mar Jun Sep Dec 2018 2019 Net Cus
Slide 15: Strong capital and leverage ratios
Strong capital and leverage ratios Capital Adequacy Ratios (CAR) and RoRWA 1.95 2.13 1.99 2.02 1.88 1.92 1.68 1.77 18.8 18.4 17.4 17.0 17.0 17.2 16.9 17.4 • Lower RWA at year end due to market uncertainty. • Strong capital allows the Group to 14.9 14.5 be well-positioned to steer through 14.1 13.9 1
Slide 16: Dividends
Dividends 20 20 20 55 50 45 35 50 55 35 35 2016 2017 2018 2019 Net dividend Interim Final Special per ordinary share (¢) 2016 2017 2018 2019 Payout amount ($m) 1,135 1,660 2,000 2,170 Payout ratio (%) 37 49 50 50 Payout ratio (%) (excluding special/one-off dividends (%) 37 39 42 42 16
Slide 17: Appendix
Appendix : Performance of Major Territories - Singapore - Malaysia - Thailand - Indonesia - Greater China Exposure to Greater China Deposits
Slide 18: Singapore – Key Financials
Singapore – Key Financials 2019 2018 +/(-) 4Q19 3Q19 +/(-) $m $m % $m $m % Net interest income 3,752 3,552 6 896 968 (7) Net fee income 1,197 1,174 2 274 336 (18) Other non-interest income 807 396 >100 179 201 (11) Total income 5,756 5,123 12 1,350 1,505 (10) Less: Expenses 2,480 2,189 13 594 635 (7
Slide 19: Malaysia – Key Financials
Malaysia – Key Financials 2019 2018 +/(-) 4Q19 3Q19 +/(-) RM'm RM'm % RM'm RM'm % Net interest income 2,242 2,210 1 594 564 5 Net fee income 632 655 (4) 192 171 12 Other non-interest income 419 333 26 104 110 (5) Total income 3,293 3,198 3 890 845 5 Less: Expenses 1,322 1,218 9 373 327 14 Operating
Slide 20: Thailand – Key Financials
Thailand – Key Financials 2019 2018 +/(-) 4Q19 3Q19 +/(-) THB'm THB'm % THB'm THB'm % Net interest income 17,277 16,944 2 4,269 4,345 (2) Net fee income 5,336 4,991 7 1,403 1,395 1 Other non-interest income 1,348 1,134 19 279 397 (30) Total income 23,961 23,069 4 5,951 6,137 (3) Less: Expenses 14,77
Slide 21: Indonesia – Key Financials
Indonesia – Key Financials 2019 2018 +/(-) 4Q19 3Q19 +/(-) IDR'b IDR'b % IDR'b IDR'b % Net interest income 3,388 3,364 1 881 820 7 Net fee income 874 799 9 257 228 13 Other non-interest income 756 529 43 129 249 (48) Total income 5,018 4,692 7 1,267 1,297 (2) Less: Expenses 3,599 3,298 9 949 930 2 O
Slide 22: Greater China – Key Financials
Greater China – Key Financials 2019 2018 +/(-) 4Q19 3Q19 +/(-) $m $m % $m $m % Net interest income 455 421 8 137 121 13 Net fee income 169 159 6 21 44 (51) Other non-interest income 313 283 10 63 70 (10) Total income 937 864 9 221 235 (6) Less: Expenses 401 381 5 105 105 (1) Operating profit 536 483
Slide 23: Exposure to Greater China
Exposure to Greater China 78.1 71.7 70.7 72.2 73.1 73.6 69.6 6.6 63.6 4.3 5.0 5.6 6.1 6.4 5.2 4.5 Debt ($b) 38.2 38.9 44.9 41.4 40.1 42.9 42.7 33.8 Non Bank ($b) Bank ($b) 25.3 29.2 26.8 24.3 23.7 24.3 26.6 25.8 Mar Jun Sep Dec Mar Jun Sep Dec 2018 2019 As at 31 Dec 2019: Hong Kong SAR exposure ($33
Slide 24: Deposits grew in tandem with loans
Deposits grew in tandem with loans Dec-19 Dec-18 +/(-) Sep-19 +/(-) 12% $b $b % $b % Customer Deposits 43% Singapore 206 195 6 199 3 Dec-19 Southeast Asia 61 56 9 62 (2) Malaysia 30 30 (0) 31 (3) 45% Thailand 21 17 21 22 (4) Indonesia 8 7 8 8 2 Others 2 2 48 2 13 14% North Asia 22 22 4 22 1 Greater