Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — FY2013 Earnings Presentation
44 slides from Oversea-chinese Banking's earnings presentation, Feb 14, 2014
Slide 1: 2013 Full Year Results Presentation
2013 Full Year Results Presentation 14 February 2014 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 accepts
Slide 2: Agenda
Agenda Results Overview FY13 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: FY13 Highlights
FY13 Highlights Core earnings underpinned by strong customer-related business growth – Net profit from banking operations in 4Q13 rose 22% YoY and 11% QoQ • Net interest income at a record, driven by robust loan and deposit growth. Net interest margin stable throughout the four quarters of 2013 • Fe
Slide 4: Full year core net profit of S$2.77b
Full year core net profit of S$2.77b FY13 FY12 YoY OCBC Group S$m S$m +/(-)% Net interest income 3,883 3,748 4 Non-interest income 2,738 2,897 (5) Total income 6,621 6,645 - Operating expenses (2,784) (2,695) 3 Operating profit 3,837 3,950 (3) Amortisation of intangibles (58) (60) (3) Allowances (26
Slide 5: Full year core net profit before GEH contribution higher at S$2.23b
Full year core net profit before GEH contribution (“banking operations”) higher at S$2.23b FY13 FY12 YoY S$m S$m +/(-)% Net interest income 3,818 3,684 4 Non-interest income 1,816 1,898 (4) Total income 5,634 5,582 1 Operating expenses (2,604) (2,504) 4 Operating profit 3,030 3,078 (2) Allowances (2
Slide 6: 4Q13 core net profit up 8% YoY to S$715m
4Q13 core net profit up 8% YoY to S$715m 4Q13 4Q12 YoY 3Q13 QoQ OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 1,031 921 12 978 5 Non-interest income 679 757 (10) 779 (13) Total income 1,710 1,678 2 1,757 (3) Operating expenses (713) (724) (1) (681) 5 Operating profit 997 954 4 1,076 (7) A
Slide 7: 4Q13 core net profit before GEH contribution grew 22% YoY to S$582m
4Q13 core net profit before GEH contribution (“banking operations”) grew 22% YoY to S$582m 4Q13 4Q12 YoY 3Q13 QoQ S$m S$m +/(-)% S$m +/(-)% Net interest income 1,017 903 13 962 6 Non-interest income 434 477 (9) 459 (6) Total income 1,451 1,379 5 1,421 2 Operating expenses (659) (679) (3) (663) (1) O
Slide 8: Key ratios remained healthy
Key ratios remained healthy Based on core earnings (%) FY13 FY12 4Q13 4Q12 3Q13 Net interest margin 1.64 1.77 1.64 1.70 1.63 Non-interest income / Total income 41.4 43.6 39.7 45.1 44.3 Cost / Income 42.0 40.6 41.7 43.1 38.8 Loans / Deposits 85.7 86.2 85.7 86.2 88.4 NPL Ratio 0.7 0.8 0.7 0.8 0.8 Allo
Slide 9: FY13 core ROE of 11.6%
FY13 core ROE of 11.6% 14.7% 12.5% 12.8% 12.7% 11.9% 11.1% 11.6% 11.6% 11.2% 11.7% Core ROE 1/ 9.9% 2,825 790 2,768 759 724 696 715 648 663 Core net 2,280 profit (S$m) 597 2011 2012 2013 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1/ Quarterly figures annualised 9
Slide 10: PBT breakdown at a glance
PBT breakdown at a glance FY13 PBT FY13 PBT by Business1/ by Geography PBT Other Rest of Group Asia the World S$3,567m Pacific 2% YoY: -2% Greater Insurance Global Corporate / China 2% Singapore 6% S$2,091m 20% Investment Indonesia YoY: -8% Banking 5% 49% Malaysia S$916m Global YoY: +13% Treasury an
Slide 11: Agenda
Agenda Results Overview FY13 Performance Trends Appendix: Financial Highlights of Malaysian and Indonesian Subsidiaries 11
Slide 12: Net interest income at new record, up 4% YoY
Net interest income at new record, up 4% YoY – NIM stable throughout the year 1.86% 1.86% 1.77% 1.77% 1.75% Net interest 1.64% 1.70% 1.64% 1.64% 1.63% 1.64% margin 3,883 3,748 1,031 961 978 3,410 951 944 931 921 912 Net interest income (S$m) 2011 2012 2013 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 12
Slide 13: Non-interest income declined 5% YoY from lower trading and insurance income
Non-interest income declined 5% YoY from lower trading and insurance income Non- interest 45.4% 45.1% 43.6% 44.4% 42.6% 44.3% income / 39.3% 41.4% 39.0% 39.7% Total 38.6% income 2,897 2,738 790 754 757 779 838 679 2,212 756 676 253 606 596 226 250 280 Non- 508 215 56 205 interest 108 income 701 485
Slide 14: Fee income achieved new high on broad-based growth
Fee income achieved new high on broad-based growth + 12% YoY - 3% + 13% QoQ YoY 347 352 1,355 341 317 316 42 1,198 168 303 304 42 44 1,137 274 41 39 24 37 15 157 92 39 39 175 17 91 39 42 21 14 95 15 Fees and 515 128 139 112 136 commissions 125 (S$m) 482 124 108 125 445 168 43 44 41 40 37 37 146 38 3
Slide 15: Profit from life assurance lower from unrealised mark-to-market losses
Profit from life assurance lower from unrealised mark- to-market losses despite better operating performance - 13% - 22% YoY YoY 692 125 599 240 221 210 174 40 25 190 31 178 165 35 Profit from 42 life assurance 423 54 (S$m) 279 160 153 139 102 71 121 16 38 88 34 144 146 2 36 35 34 40 34 41 47 23 201
Slide 16: Other non-interest income down 31% YoY mainly from lower trading income
Other non-interest income down 31% YoY mainly from lower trading income - 31% YoY 701 70 - 41% YoY 116 216 485 12 193 65 179 403 44 18 Other non- 24 - 2% 31 149 QoQ interest 61 158 19 16 income 120 (S$m) 113 109 125 107 515 14 43 16 19 16 22 50 160 22 144 136 43 262 217 90 75 69 56 47 2011 2012 2013
Slide 17: Wealth management income achieved another high, up 5% YoY
Wealth management income achieved another high, up 5% YoY 32.7% 32.1% 29.1% 30.3% 29.8% 27.6% 28.0% 28.4% As % of Group 22.9% 21.8% 22.8% revenue 1,927 564 1,836 527 520 500 486 476 Wealth 1,285 357 management 333 income (S$m) 2011 2012 2013 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Note: Comprises th
Slide 18: Operating expenses remained well-managed, up 3% YoY
Operating expenses remained well-managed, up 3% YoY Cost / 43.2% 45.8% Income 40.6% 42.0% 43.3% 43.1% 42.3% 40.3% 41.7% 38.8% 35.9% 2,784 2,695 724 718 713 685 672 681 2,430 661 539 625 554 156 140 161 130 126 112 531 144 124 530 491 134 133 136 122 125 137 451 116 Operating 119 expenses (S$m) 1,650
Slide 19: Net allowances lower YoY, credit cost improved to 5 bps of loans
Net allowances lower YoY, credit cost improved to 5 bps of loans - 2% YoY Net 271 266 allowances 8 2 for loans + 1% and other 221 YoY assets 81 15 115 (S$m) - 28% 79 QoQ 96 94 83 8 70 3 183 68 68 11 148 43 42 15 35 26 127 38 24 21 72 13 45 43 2 49 45 29 31 2 17 (4) (3) 2011 2012 2013 1Q12 2Q12 3Q12
Slide 20: Net specific allowances 29% lower YoY
Net specific allowances 29% lower YoY FY13 FY12 4Q13 4Q12 3Q13 S$m S$m S$m S$m S$m Allowances for new and 255 273 83 71 72 existing NPLs Write-backs1/ (118) (117) (45) (25) (19) Recoveries2/ (56) (41) (12) (11) (11) Net specific allowances 81 115 26 35 42 1/ Write-backs of specific allowances for ex
Slide 21: Loans up 18% YoY and 5% QoQ
Loans up 18% YoY and 5% QoQ Loan growth Group YoY: +18% 170 QoQ: +5% 159 162 Rest of the 149 21 World 144 19 21 YoY: +21% 138 140 135 QoQ: +3% 19 18 27 17 17 20 24 17 Greater China 17 YoY: +56% 17 12 17 16 12 12 QoQ: +14% 18 11 10 11 10 25 Indonesia 9 25 24 23 24 YoY: +11% 21 23 QoQ: +3% Customer 21
Slide 22: Loan book remained diversified across geographies and sectors
Loan book remained diversified across geographies and sectors Customer Loans by Geography Customer Loans by Industry As of 31 December 2013 As of 31 December 2013 Rest of the World Agriculture, mining & Others Other Asia 8% quarrying Pacific 5% Housing Loans Transport, storage 4% 5% Singapore & comm
Slide 23: Customer deposits up 19% YoY and 8% QoQ
Customer deposits up 19% YoY and 8% QoQ – CASA deposits grew 9% YoY 89.2% 88.4% Loans / 87.7% 86.2% 87.0% 85.3% 85.7% Deposits 84.4% 196 181 176 23 165 169 158 160 158 17 19 14 15 13 15 13 Customer 82 71 72 Deposits 67 67 (S$b) 73 72 71 32 33 32 31 32 S$91b 29 29 30 +S$7b YoY +S$1b QoQ S$86b S$89b S
Slide 24: NPL ratio improved to 0.7%, NPAs declined 2% QoQ
NPL ratio improved to 0.7%, NPAs declined 2% QoQ 1.0% 0.9% NPL ratio 0.8% 0.8% 0.8% 0.7% 0.7% 0.7% 1,513 144 1,338 1,280 1,304 1,256 25 91 1,172 1,177 65 87 1,119 27 26 489 28 525 426 418 516 NPAs 478 449 420 (S$m) 560 456 438 532 409 407 472 529 320 307 313 258 264 256 230 194 Mar12 Jun12 Sep12 Dec
Slide 25: Movement in NPAs, credit quality remained sound
Movement in NPAs, credit quality remained sound FY13 FY12 4Q13 4Q12 3Q13 S$m S$m S$m S$m S$m NPAs – Opening balance 1,172 1,437 1,338 1,256 1,177 New NPAs 896 888 237 289 287 New recoveries/upgrades (597) (1,005) (212) (338) (103) Write-offs (167) (148) (59) (35) (23) NPAs – Closing balance 1,304 1,
Slide 26: Allowance coverage ratios remained strong
Allowance coverage ratios remained strong 450.00% 400.00% 373% 370% Total 353% 350% allowances/ 350.00% 333% 329% Unsecured 310% NPAs 294% 300.00% 250.00% 200.00% 150.00% Total 149% 142% 144% allowances/ 128% 130% 134% 100.00% 125% NPAs 106% 50.00% 0.00% Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec
Slide 27: Capital adequacy ratios well above regulatory requirements
Capital adequacy ratios well above regulatory requirements Basel II Basel III 18.0 18.5 18.1 CAR 1.9 16.8 16.3 16.1 2.1 1.9 16.1 (% of RWA) 15.5 1.4 1.9 1.8 1.4 3.8 1.8 3.8 Tier 2 capital 3.1 16.6 3.0 15.9 14.7 14.1 Tier 1 preference shares 16.2 14.9 14.3 14.5 Core Tier 1 capital 12.1 12.8 11.6 11.1
Slide 28: Dividend increased to 34 cents per share
Dividend increased to 34 cents per share Net DPS 34.0 (cents) 33.0 30.0 30.0 28.0 28.0 17.0 17.0 15.0 15.0 14.0 14.0 Final net dividend Interim net dividend 16.0 17.0 14.0 14.0 15.0 15.0 2008 2009 2010 2011 2012 2013 Net Dividends (S$m) 868 898 994 1,024 1,133 1,167 Core Net Profit (S$m) 1,486 1,962
Slide 29: GEH: Full year core earnings contribution of S$542m
GEH: Full year core earnings contribution of S$542m FY13 FY12 YoY GEH Contribution S$m S$m +/(-)% Profit from insurance business 633 731 (13) - Operating profit 1/ 560 501 12 - Non-operating profit/(loss) 2/ (11) 161 (107) - Others 3/ 84 69 22 Profit from Shareholders’ Fund 175 141 25 Sub-total 808
Slide 30: GEH: 4Q13 core earnings contribution of S$133m
GEH: 4Q13 core earnings contribution of S$133m 4Q13 4Q12 YoY 3Q13 QoQ GEH Contribution S$m S$m +/(-)% S$m +/(-)% Profit from insurance business 175 227 (23) 253 (31) - Operating profit 1/ 135 169 (20) 139 (2) - Non-operating profit/(loss) 2/ 15 39 (60) 91 (83) - Others 3/ 24 20 25 24 3 Profit from S
Slide 31: GEH: Operating profit from insurance business up 12% YoY
GEH: Operating profit from insurance business up 12% YoY on growth across all life assurance funds - 20% + 12% YoY YoY 560 169 16 11 155 501 19 23 139 135 142 131 31 8 5 99 4 117 2 110 32 105 35 4 44 3 27 Operating profit from 21 28 insurance 103 280 89 business 264 (S$m) 60 59 63 51 50 67 119 122 3
Slide 32: GEH: Non-operating loss mainly due to unrealised mark-to-market losses
GEH: Non-operating loss mainly due to unrealised mark-to-market losses from Singapore Non- Participating Fund in 2Q13 - 60% YoY Non-operating 161 profit/(loss) from insurance business 108 (S$m) 91 72 39 38 15 2012 2013 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 (11) (57) (156) Note: Non-operating profi
Slide 33: GEH: Sustained sales momentum, total weighted new sales rose 27%
GEH: Sustained sales momentum in Singapore and Malaysia, total weighted new sales rose 27% YoY + 27% + 19% YoY YoY 1,043 33 307 9 275 823 258 260 330 7 29 8 7 115 77 199 202 80 Weighted 292 193 7 100 10 new 173 7 business 7 premiums 69 58 70 (S$m) 53 680 191 183 502 173 150 123 134 113 116 2012 2013
Slide 34: GEH: New business embedded value up 22% YoY
GEH: New business embedded value up 22% YoY NBEV / 47.7% Total 42.2% 43.7% 42.9% 42.7% weighted 40.5% 40.2% 37.6% 38.5% new sales 36.7% 423 146 8 2 347 6 147 47 104 101 100 NBEV 2 2 133 2 (S$m) 83 85 75 2 1 40 76 32 38 1 2 31 34 27 30 268 97 208 67 62 60 47 47 53 44 2012 2013 1Q12 2Q12 3Q12 4Q12 1Q1
Slide 35: OCBC Malaysia: Net interest income and Islamic financing income up 10% YoY
OCBC Malaysia: Total net interest income and Islamic financing income up 10% YoY, non-interest income increased 2% YoY Net interest income and Non-interest income (RM m) Islamic financing income (RM m) Net Interest/ Non-int. income/ financing margin Total income 2.32% 2.31%2.32%2.18%2.21% 33.3% 30.3
Slide 36: OCBC Malaysia: Loans grew 17% YoY, NPL ratio at 2.3%
OCBC Malaysia: Loans grew 17% YoY and 4% QoQ, NPL ratio at 2.3% Gross Loans (RM b) Deposits (RM b) NPL Ratio Loans / Deposits 88.6% 89.4% 86.3% 85.6% 86.4% 3.0% 80.8% 82.1% 77.4% 2.3% 2.2% 2.3% 2.3% 2.1% 2.1% 1.8% 63 60 61 57 56 58 54 56 56 55 50 52 47 48 43 45 Mar12 Jun12 Sep12Dec12 Mar13 Jun13 Sep
Slide 37: OCBC NISP: Net interest income up 22% YoY
OCBC NISP: Net interest income up 22% YoY, non-interest income up 5% YoY Net interest income (Rp b) Non-interest income (Rp b) Non-int. income/ Net interest margin Total income 4.80% 4.17%4.11% 4.37% 4.32% 4.23%4.33%4.00% 4.04% 3.98%3.87% 26.5% 25.8% 24.6% 24.1% 22.4% 21.9% 21.8% 21.9% 23.6% 22.4% 1
Slide 38: OCBC NISP: Loans grew 21% YoY, NPL ratio improved to 0.7%
OCBC NISP: Loans grew 21% YoY and 5% QoQ, NPL ratio improved to 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% 0.7% 91.8% 93.9% 90.2% 92.5% 85.5% 86.8% 64 69 61 57 61 63 53 54 59 58 51 54 48 50 52 42 Mar12 Jun12 Sep12Dec12 Mar13 Jun1
Slide 39: Agenda
Agenda Results Overview FY13 Performance Trends Appendix: Financial Highlights of Malaysian and Indonesian Subsidiaries 39
Slide 40: OCBC Malaysia: Record full year net profit grew 17% YoY
OCBC Malaysia: Record full year net profit grew 17% YoY FY13 FY12 YoY OCBC Malaysia RM m RM m +/(-)% Net interest income 1,273 1,246 2 Islamic Financing Income 369 243 52 Non-interest income 540 531 2 Total income 2,182 2,020 8 Operating expenses (872) (851) 3 Operating profit 1,310 1,169 12 Allowan
Slide 41: OCBC Malaysia: 4Q13 net profit rose 37% YoY
OCBC Malaysia: 4Q13 net profit rose 37% YoY 4Q13 4Q12 YoY 3Q13 QoQ OCBC Malaysia RM m RM m +/(-)% RM m +/(-)% Net interest income 327 337 (3) 320 2 Islamic Financing Income 97 68 43 101 (4) Non-interest income 155 101 53 108 44 Total income 579 506 14 529 10 Operating expenses (230) (235) (2) (223)
Slide 42: OCBC NISP: Full year net profit up 25% YoY, a record high
OCBC NISP: Full year net profit up 25% YoY, a record high FY13 FY12 YoY OCBC NISP RP b RP b +/(-)% Net interest income 3,139 2,566 22 Non-interest income 879 836 5 Total income 4,018 3,402 18 Operating expenses (2,215) (1,942) 14 Operating profit 1,803 1,460 23 Allowances (259) (247) 5 Non Op Income
Slide 43: OCBC NISP: 4Q13 net profit increased 17% YoY
OCBC NISP: 4Q13 net profit increased 17% YoY 4Q13 4Q12 YoY 3Q13 QoQ OCBC NISP RP b RP b +/(-)% RP b +/(-)% Net interest income 834 687 22 820 2 Non-interest income 241 239 1 253 (5) Total income 1,075 926 16 1,073 - Operating expenses (577) (500) 16 (570) 1 Operating profit 498 426 17 503 (1) Allowa
Slide 44: 2013 Full Year Results Thank You
2013 Full Year Results Thank You
Oversea-Chinese Banking — FY2013 Earnings Presentation on 6ix