Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q1 2012 Earnings Presentation
39 slides from Oversea-chinese Banking's earnings presentation, May 11, 2012
Slide 1: First Quarter 2012 Results Presentation
First Quarter 2012 Results Presentation 11 May 2012
Slide 2: Agenda
Agenda Results Overview Performance Trends Appendix: Financial Highlights of Malaysia and Indonesia Subsidiaries Notes: Amounts less than S$0.5 million are shown as “0”; NM denotes not meaningful; Figures may not sum to stated totals because of rounding 2
Slide 3: 1Q12 Highlights
1Q12 Highlights Strong QoQ performance, underpinned by • Robust customer-related businesses • Strong trading and investment performance • Significantly increased contribution from Great Eastern Holdings (“GEH”) Operating expenses were well-managed Asset quality remained sound; net allowances increas
Slide 4: 1Q12 core net profit of $790m, up 33% YoY and 33% QoQ
1Q12 core net profit of $790m, up 33% YoY and 33% QoQ 1Q12 1Q11 YoY 4Q11 QoQ OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 951 784 21 925 3 Non-interest income 790 618 28 572 38 Total income 1,741 1,402 24 1,497 16 Operating expenses (625) (581) 8 (620) 1 Operating profit 1,116 821 36 877
Slide 5: Key ratios
Key ratios 1Q12 1Q11 4Q11 Based on core earnings % % % Net interest margin 1.86 1.90 1.85 Non-interest income / Total income 45.4 44.1 38.2 Costs / Income 35.9 41.5 41.4 Loans / Deposits 84.4 86.8 86.4 NPL Ratio 1.0 0.9 0.9 Allowances / NPAs 106.0 123.2 106.6 ROE 14.7 12.2 11.2 Cash ROE 15.0 12.5 11
Slide 6: ROE improved to 14.7%
ROE improved to 14.7% 14.7% 12.1% 12.2% 11.1% 11.4% 11.2% Core ROE* 9.8% 2,253 2,280 790 596 594 Core net 577 profit (S$m) 513 1Q 676 596 2010 2011 1Q11 2Q11 3Q11 4Q11 1Q12 * Quarterly figures annualised 6
Slide 7: Profit contribution by business and geography
Profit contribution by business and geography 1Q12 PBT 1Q12 PBT by Business* by Geography Other Asia Rest of the Pacific World Global Corporate / Greater Investment Rest of China Banking 3%1% Insurance Southeast 7% 28% Asia 3% 41% Malaysia 21% 18% 65% Global Singapore Treasury and 15% Markets Global
Slide 8: GEH: 1Q12 net profit contribution up 70% YoY
GEH: 1Q12 net profit contribution up 70% YoY 1Q12 1Q11 YoY 4Q11 QoQ GEH Contribution S$m S$m +/(-)% S$m +/(-)% Total income 335 221 52 143 134 Operating expenses (44) (40) 9 (43) 1 Operating profit 291 180 62 100 191 Amortisation of intangibles (12) (12) - (12) - Allowances (1) (0) 123 (3) (83) Asso
Slide 9: Results excluding GEH: Banking business grew strongly
Results excluding GEH: Banking business grew strongly, 1Q12 core net profit up 22% YoY and 5% QoQ 1Q12 1Q11 YoY 4Q11 QoQ OCBC excluding GEH S$m S$m +/(-)% S$m +/(-)% Net interest income 936 773 21 911 3 Non-interest income 470 409 15 443 6 Total income 1,406 1,182 19 1,354 4 Operating expenses (581)
Slide 10: Agenda
Agenda Results Overview Performance Trends Appendix: Financial Highlights of Malaysia and Indonesia Subsidiaries 10
Slide 11: Net interest income up 21% YoY; NIM up 1bp QoQ
Net interest income up 21% YoY; NIM up 1bp QoQ 1.90% 1.98% Net interest 1.86% margin 1.87% 1.86% 1.85% 1.85% 3,410 951 925 2,947 874 827 784 Net interest income (S$m) 1Q 704 784 2010 2011 1Q11 2Q11 3Q11 4Q11 1Q12 11
Slide 12: Net interest income less specific allowances up 18% YoY
Net interest income less specific allowances up 18% YoY 1.94% 1.87% 1.86% Adjusted net interest margin1/ 1.82% 1.82% 1.78% 1.75% 3,331 908 877 858 2,890 824 772 Adjusted net interest income1/ (S$m) 1Q 699 772 2010 2011 1Q11 2Q11 3Q11 4Q11 1Q12 1/ Net interest income adjusted for specific allowances
Slide 13: Non-interest income up 28% YoY, driven by life assurance and trading
Non-interest income (ex. divestment gains) up 28% YoY, driven by strong increases in life assurance profits and trading income 45.4% Non- 44.7% 44.1% interest 41.4% income / 39.3% 38.2% Total income 2,378 33.3% 790 2,212 669 403 618 216 586 572 Non- 508 121 86 interest 586 436 income 204 137 253 (S$
Slide 14: Fee income flat YoY and up 7% QoQ
Fee income flat YoY and up 7% QoQ, led by growth in wealth management fees 1,137 983 175 307 299 133 95 274 274 48 49 257 80 36 39 27 27 41 29 15 445 12 Fees and 401 commissions 120 115 108 (S$m) 99 111 170 169 42 38 45 46 37 252 74 200 68 64 65 56 2010 2011 1Q11 2Q11 3Q11 4Q11 1Q12 Wealth Brokerage
Slide 15: GEH: Profit from life assurance increased 47% YoY
GEH: Profit from life assurance increased 47% YoY on improved investment performance 221 25 437 383 94 150 127 27 Profit from life 106 160 assurance (S$m) 240 29 76 134 92 51 47 38 33 9 122 104 36 31 30 29 32 2010 2011 1Q11 2Q11 3Q11 4Q11 (14) 1Q12 Participating fund Non-participating fund Investmen
Slide 16: GEH: Underlying insurance business remained healthy
GEH: Underlying insurance business remained healthy, total weighted new sales up 4% YoY in key markets 798 229 724 36 7 205 50 190 7 175 177 302 10 96 8 12 290 78 73 57 55 Weighted new business premiums (S$m) 461 120 126 384 108 107 113 2010 2011 1Q11 2Q11 3Q11 4Q11 1Q12 Singapore Malaysia Emerging
Slide 17: GEH: NBEV up 14% YoY
GEH: NBEV up 14% YoY, resulting from the improvement in product mix towards regular premium and protection-based products 52.4% NBEV / Total 47.4% weighted 45.7% new sales 44.3% 42.1% 42.2% 42.5% 365 120 8 2 305 13 39 146 87 84 84 1 74 3 2 129 NBEV 3 (S$m) 38 31 38 32 79 210 164 51 43 48 40 2010 201
Slide 18: Other non-interest income up 79% YoY
Other non-interest income up 79% YoY, driven by higher trading income and investment gains from securities 669 54 216 213 204 12 17 403 44 24 Other non- 61 interest income 121 (S$m) 125 15 86 25 402 13 163 160 (9) 32 15 217 81 41 44 2010 2011 1Q11 2Q11 3Q11 4Q11 1Q12 Net gains from investment (68) T
Slide 19: Wealth management revenue up 39% YoY
Wealth management revenue up 39% YoY, contributing 30% of Group revenue 30.3% As % of 27.0% Group 24.7% 24.8% revenue 22.9% 20.8% 19.0% 527 1,317 1,285 378 350 Wealth management revenue 285 (S$m) 272 1Q 361 378 2010 2011 1Q11 2Q11 3Q11 4Q11 1Q12 Note: Comprises the consolidated revenue from insuranc
Slide 20: Expenses remained well managed and largely flat QoQ
Expenses remained well managed and were largely flat QoQ 46.6% 43.2% 43.7% Costs / 42.3% 41.5% 41.4% Income 35.9% 2,430 2,254 31 618 611 620 625 531 581 532 124 136 137 138 120 Operating 451 expenses 407 109 119 (S$m) 110 112 120 1,448 1,283 351 373 362 362 382 2010 2011 1Q11 2Q11 3Q11 4Q11 1Q12 One
Slide 21: Core operating profit up 36% YoY
Core operating profit up 36% YoY 3,192 1,116 3,071 877 821 795 Core operating 699 profit before allowances (S$m) 1Q 883 821 2010 2011 1Q11 2Q11 3Q11 4Q11 1Q12 21
Slide 22: Net allowances increased QoQ on higher portfolio allowances
Net allowances increased QoQ as a result of higher portfolio allowances Net allowances for loans 221 and other assets 15 (S$m) 134 79 96 78 8 57 9 56 43 49 3 38 7 48 127 12 98 16 54 45 30 23 21 (21) (1) (1) 2010 2011 1Q11 2Q11 3Q11 4Q11 1Q12 Specific loan 6 7 4 1 5 15 13 allowances/ avg. loans (bps)
Slide 23: Net specific allowances declined 10% QoQ
Net specific allowances declined 10% QoQ 1Q12 1Q11 4Q11 S$m S$m S$m Allowances for new and 79 54 85 existing NPLs Write-backs1/ (25) (29) (27) Recoveries2/ (11) (13) (10) Net specific allowances 43 12 48 1/ Write-backs of specific allowances for existing NPLs due to settlements and repayments 2/ Rec
Slide 24: Loans grew 21% YoY and were flat QoQ
Loans grew 21% YoY and were flat QoQ Loan growth Group YoY: +21% QoQ: - 135 135 129 121 111 International YoY: +40% 46 44 QoQ: -4% 41 37 31 Malaysia 21 YoY: +18% 20 21 QoQ: -1% Customer 19 Loans (S$b) 18 Singapore YoY: +13% 66 68 68 70 QoQ: +2% 62 Mar11 Jun11 Sep11 Dec11 Mar12 Singapore Malaysia Int
Slide 25: Loan book remained diversified across geographies and sectors
Loan book remained diversified across geographies and sectors Customer Loans by Geography Customer Loans by Industry As of 31 March 2012 As of 31 March 2012 Agriculture, mining & Others Others quarrying Transport, storage & comm. Housing Loans Rest of Singapore Southeast 11% 3% 5% Asia 7% 25% 8% 52%
Slide 26: Deposits grew 25% YoY; Loan-to-deposit ratio improved to 84%
Deposits grew 25% YoY and 2% QoQ; Loan-to-deposit ratio improved to 84% 89.1% 88.0% 86.8% 86.4% 84.4% Loans / Deposits 155 158 145 13 12 134 12 126 11 8 71 73 65 59 Deposits 57 (S$b) 27 29 29 26 27 CASA 46.9% 46.4% ratio: 48.5% 47.6% 45.6% 37 41 43 43 35 Mar11 Jun11 Sep11 Dec11 Mar12 Current Account
Slide 27: NPL ratio up marginally to 1.0%
NPL ratio up marginally to 1.0% NPL ratio 1.0% 0.9% 0.9% 0.8% 0.7% 1,513 1,437 144 1,191 1,201 265 1,158 489 215 288 258 NPAs 356 (S$m) 243 229 218 486 560 463 423 444 270 259 330 320 240 Mar11 Jun11 Sep11 Dec11 Mar12 Singapore Malaysia International Debt securities / NPLs NPLs NPLs Contingent liabi
Slide 28: 68% of NPAs in the substandard category
68% of NPAs in the “substandard” category – largely well-collateralised 1,513 1,437 155 140 1,191 1,201 1,158 330 168 305 172 136 216 NPAs 252 265 (S$m) 992 1,028 767 817 757 Mar11 Jun11 Sep11 Dec11 Mar12 Sub-standard NPAs Doubtful NPAs Loss NPAs Note: NPAs comprise NPLs and classified debt securiti
Slide 29: Movement in NPAs
Movement in NPAs 1Q12 1Q11 4Q11 S$m S$m S$m NPAs – Opening balance 1,437 1,208 1,158 New NPAs 303 135 475 New recoveries/upgrades (203) (129) (145) Write-offs (24) (23) (51) NPAs – Closing balance 1,513 1,191 1,437 29
Slide 30: Healthy allowance coverage ratios
Healthy allowance coverage ratios of 106% of total NPAs and 353% of unsecured NPAs 400% 365% 353% 350% 326% 311% 300% 272% Total allowances/ Unsecured 250% NPAs 200% 150% 130% 123% 123% 107% 106% Total allowances/ 100% NPAs 50% 0% Mar11 Jun11 Sep11 Dec11 Mar12 30
Slide 31: Capital adequacy ratios remained strong
Capital adequacy ratios remained strong: Tier 1 ratio of 14.7% and Core Tier 1 of 11.6% 17.3 17.0 15.9 15.7 16.1 1.8 1.6 CAR 1.5 1.4 1.3 (% of RWA) 3.5 3.5 3.2 3.0 3.1 Tier 2 capital 15.5 15.4 14.4 14.4 14.7 Tier 1 preference shares Core Tier 1 (common equity) 12.0 11.9 11.4 11.6 11.2 Mar11 Jun11 Se
Slide 32: OCBC Malaysia: Net interest income and Islamic financing income up 8% YoY
OCBC Malaysia: Total net interest income and Islamic financing income up 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 2.42% 29.3% 27.3% 2.39% 2.34% 2.32% 2.29% 2.27% 25.8% 25.3% 26.2% 2.21% 25.3
Slide 33: OCBC Malaysia: Loan growth of 17% YoY; NPL ratio of 3.0%
OCBC Malaysia: Loan growth of 17% YoY and flat QoQ; NPL ratio of 3.0% Gross Loans (RM b) Deposits (RM b) NPL Ratio Loans / Deposits 87.1% 86.9% 83.7% 3.0% 81.5% 2.6% 2.6% 77.4% 2.4% 2.1% 56 47 47 49 42 43 43 43 39 37 Mar11 Jun11 Sep11 Dec11 Mar12 Mar11 Jun11 Sep11 Dec11 Mar12 Note: Based on Bank Neg
Slide 34: OCBC NISP: Net interest income up 12% YoY
OCBC NISP: Net interest income up 12% YoY Net interest income (Rp b) Non-interest income (Rp b) Net Non-int. income/ interest margin Total income 5.04% 5.05% 4.80% 23.1% 22.8% 24.1% 24.1% 4.68% 4.81% 4.71% 22.0% 22.4% 4.37% 19.1% 2,255 608 601 579 651 1,993 535 533 193 190 563 171 161 126 1Q 489 535
Slide 35: OCBC NISP: Loan growth of 38% YoY; NPL ratio improved to 1.2%
OCBC NISP: Loan growth of 38% YoY; NPL ratio improved to 1.2% Gross Loans (Rp t) Deposits (Rp t) NPL Ratio Loans / 87.0% Deposits 85.7% 85.5% 83.5% 83.7% 1.9% 1.8% 1.5% 1.3% 1.2% 50 47 42 43 41 40 36 37 34 31 Mar11 Jun11 Sep11 Dec11 Mar12 Mar11 Jun11 Sep11 Dec11 Mar12 CASA 60.1% 61.1% 62.7% 60.0% 58
Slide 36: Agenda
Agenda Results Overview Performance Trends Appendix: Financial Highlights of Malaysia and Indonesia Subsidiaries 36
Slide 37: OCBC Malaysia: 1Q12 net profit up 17% YoY
OCBC Malaysia: 1Q12 net profit up 17% YoY 1Q12 1Q11 YoY 4Q11 QoQ OCBC Malaysia RM m RM m +/(-)% RM m +/(-)% Net interest income 301 289 4 322 (7) Islamic Financing Income 58 44 31 50 17 Non-interest income 135 118 14 131 3 Total income 494 452 9 503 (2) Operating expenses (192) (169) 13 (201) (5) Op
Slide 38: OCBC NISP: 1Q12 net profit up 38% YoY
OCBC NISP: 1Q12 net profit up 38% YoY 1Q12 1Q11 YoY 4Q11 QoQ OCBC NISP RP b RP b +/(-)% RP b +/(-)% Net interest income 601 535 12 608 (1) Non-interest income 190 126 51 193 (2) Total income 791 661 20 801 (1) Operating expenses (471) (419) 12 (427) 10 Operating profit 320 242 32 374 (14) Allowances
Slide 39: First Quarter 2012 Results - Thank You
First Quarter 2012 Results Thank You 39
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