United Overseas Bank Limited · SGX:U11
United Overseas Bank — H1 2010 Earnings Presentation
29 slides from United Overseas Bank's earnings presentation, Aug 10, 2010
Slide 1: UOB Group First Half 2010 Briefing: Financial Highlights
UOB Group First Half 2010 Briefing Financial Highlights Lee Wai Fai Chief Financial Officer 10 August 2010 Disclaimer : This material that follows is a presentation of general background information about the Bank’s activities current at the date of the presentation. It is information given in summa
Slide 2: First Half Net Profit Increased 48% to $1.3 billion
First Half Net Profit Increased 48% to $1.3 billion 1H10 1H09 + / (-) $m $m % Net interest income 1,784 1,857 (3.9) Non-interest income 984 985 (0.1) Total income 2,768 2,842 (2.6) Less: Total expenses 1,082 1,011 7.1 Operating profit 1,686 1,831 (7.9) Less: Intangible assets amortised 6 5 12.4 Indi
Slide 3: YoY Profit Rose 27.9%; QoQ Profit Dipped 2.7%
YoY Profit Rose 27.9%; QoQ Profit Dipped 2.7% 2Q10 1Q10 + / (-) 2Q09 + / (-) $m $m % $m % Net interest income 884 900 (1.8) 908 (2.6) Non-interest income 382 602 (36.6) 551 (30.7) Total income 1,266 1,502 (15.7) 1,458 (13.2) Less: Total expenses 540 542 (0.3) 520 3.8 Operating profit 725 960 (24.4)
Slide 4: Net Interest Income Stable, Trending Lower with Overall Market
Net Interest Income Stable, Trending Lower with Overall Market Net Interest Income and Margin 3.21% 3.04% 3.03% 3.04% 2.99% 3.09% 3.02% 3.01% 2.92% 2.35% 2.39% 2.28% 2.25% 2.27% 2.36% 2.19% 2.14% 2.04% 1.13% 1.26% 1.18% 1.21% 1.04% 0.86% 0.93% 0.95% 0.56% 1,850 1,817 908 925 892 900 884 2nd Half 1,4
Slide 5: Fee and Commission Income Record High since Last Crisis
Fee and Commission Income Record High since Last Crisis Non-Interest Income (Non-NII) and Non-NII Ratio 38.8% 40.1% 35.5% 37.8% 30.0% 31.9% 32.0% 30.2% 28.2% 26.2% 1400 20.8% 18.1% 20.6% 20.0% 19.9% 22.6% 15.4% 18.9% 1200 1000 968 924 964 985 984 602 551 747 800 379 236 372 710 414 520 396 318 382 6
Slide 6: Cost Continued To Be Under Control
Cost Continued To Be Under Control Operating Expenses and Expense / Income Ratio 41.4% 44.6% 39.0% 38.4% 39.1% 42.7% 38.6% 35.7% 36.1% 2nd Half 1,043 1,035 1,063 520 554 542 540 510 66 75 74 70 68 1st Half 976 1,015 1,011 1,082 2007 2008 2009 1H10 2Q09 3Q09 4Q09 1Q10 2Q10 Operating OperatingExpenses
Slide 7: Adequate Provisioning
Adequate Provisioning Impairment Charges on Loans 76bp 90bp 90bp 47bp 50bp 18bp 59bp 21bp 60bp 63bp 24bp 18bp 33bp 43bp 18bp 284 4bp 4bp 3bp 151 157 2nd 127 249 Half 36 320 1st 119 75 10 Half 18 8 2007 2008 2009 1H10 2Q09 3Q09 4Q09 1Q10 2Q10 Individual IndividualImpairment ImpairmentCharges Chargeso
Slide 8: Performance by Business Segment
Performance by Business Segment 1H10 2006 1H10 2006 1H10 1H09 + / (-) $m $m % GR : 31% Segment Operating Profit * Group Retail (GR) 527 498 5.8 Other : 10% GMIM : 17% Group Institutional Financial Svc (GIFS) 704 696 1.1 GIFS : 42% Global Markets & Investment Mgt (GMIM) 279 759 (63.2) Other 176 (122)
Slide 9: Overseas Operating Profit
Overseas Operating Profit 1H10 1H10 At constant Singapore : 67% 1H10 1H09 + / (-) FX rate Malaysia : 14% Operating Profit * $m $m % % Thailand : 4% Singapore (including ACU) 1,124 1,274 (11.8) (11.8) Indonesia : 5% Total Overseas 562 557 0.9 (1.4) Greater China : 3% Malaysia 232 198 17.2 15.8 Other
Slide 10: Growth From Regional Franchise
Growth From Regional Franchise 1H10 1H09 +/(-) 2Q10 1Q10 +/(-) Gross Loans $m $m % $m $m % Singapore 69,170 65,239 6.0 69,170 67,161 3.0 Malaysia 13,716 11,636 17.9 13,716 13,170 4.2 Thailand 6,352 6,030 5.3 6,352 6,398 (0.7) Indonesia 3,842 3,240 18.6 3,842 3,594 6.9 Greater China 4,795 4,059 18.1
Slide 11: Improved Asset Quality
Improved Asset Quality NPA ($m) 2,755 2,737 2,722 2,623 2,493 279 254 462 470 418 2,476 2,483 2,260 2,153 2,075 Jun'09 Sep'09 Dec'09 Mar'10 Jun'10 Loans Loans($m) ($m) Debt Debtsecurities securities($m) ($m) 11
Slide 12: NPL Continued To Decline As Economy Recovers
NPL Continued To Decline As Economy Recovers NPL ($m) 2,476 2,483 2,260 2,153 2,075 NPL Ratio * 2.4% 2.4% 2.2% 2.0% 1.9% 415 472 282 109 111 270 258 95 105 85 107 106 83 106 99 431 416 409 419 413 495 483 435 442 418 931 923 894 831 804 Jun'09 Sep'09 Dec'09 Mar'10 Jun'10 Singapore Malaysia Thailand
Slide 13: NPL Movement
NPL Movement 1H10 1H09 2Q10 1Q10 $m $m $m $m Opening Balance 2,260 2,062 2,153 2,260 New / Existing 320 924 152 224 Write-off (92) (203) (44) (65) Payment / Declassification (413) (307) (186) (266) Closing Balance 2,075 2,476 2,075 2,153 13
Slide 14: Adequate Impairment Coverage
Adequate Impairment Coverage Total Impairment 2,813 2,901 2,857 2,922 2,925 ($m) 192.1% 194.0% 209.5% 185.9% 185.3% 102.1% 106.0% 105.0% 111.4% 117.3% 1,165 1,186 1,200 1,178 1,123 1,648 1,715 1,657 1,744 1,802 Jun'09 Sep'09 Dec'09 M ar'10 Jun'10 Collective CollectiveImpairment Impairment($m) ($m) I
Slide 15: Growth in Customer Loans and Deposits Well Paced
Growth in Customer Loans and Deposits Well Paced Customer Loans, Deposits and L/D Ratio 83.6% 84.4% 81.6% 81.5% 82.5% 125.6 125.7 117.0 116.5 121.5 97.8 98.3 99.2 100.6 103.8 Jun'09 Sep'09 Dec'09 Mar'10 Jun'10 Net NetCustomer CustomerLoans Loans($b) ($b) Customer CustomerDeposits Deposits($b) ($b) L
Slide 16: Singapore (incl ACU) – Summarised P/L
Singapore (incl ACU) – Summarised P/L 1H10 1H09 +/(-) 2Q10 1Q10 +/(-) $m $m % $m $m % Net interest income 1,062 1,176 (9.7) 525 537 (2.2) Non-interest income 690 702 (1.7) 249 442 (43.7) Total income 1,753 1,879 (6.7) 774 979 (20.9) Less: Total expenses 629 605 4.0 308 321 (4.1) Operating profit 1,1
Slide 17: Singapore (incl ACU) – Key Financial Indicators
Singapore (incl ACU) – Key Financial Indicators 1H10 1H09 +/(-) 2Q10 1Q10 +/(-) % % % pt % % % pt Net interest margin 1.79 2.09 (0.30) 1.72 1.87 (0.15) Non-NII / Total income 39.4 37.4 2.0 32.1 45.1 (13.0) Expense / Total income 35.9 32.2 3.7 39.8 32.8 7.0 Customer loans (net) – $’m 67,441 63,678 5.
Slide 18: Malaysia – Summarised P/L
Malaysia – Summarised P/L 1H10 1H09 +/(-) 2Q10 1Q10 +/(-) RM’m RM’m % RM’m RM’m % Net interest income 568 478 18.8 289 279 3.6 Non-interest income 258 235 9.8 112 146 (23.3) Total income 826 713 15.8 401 425 (5.6) Less: Total expenses 275 237 16.0 140 135 3.7 Operating profit 551 476 15.8 261 290 (1
Slide 19: Malaysia – Key Financial Indicators
Malaysia – Key Financial Indicators 1H10 1H09 +/(-) 2Q10 1Q10 +/(-) % % % pt % % % pt Net interest margin 2.92 2.47 0.45 3.05 2.80 0.25 Non-NII / Total income 31.2 33.0 (1.8) 27.9 34.4 (6.5) Expense / Total income 33.3 33.2 0.1 34.9 31.8 3.1 Customer loans (net) – RM’m 31,076 27,578 12.7% 31,076 29,
Slide 20: Thailand – Summarised P/L
Thailand – Summarised P/L 1H10 1H09 +/(-) 2Q10 1Q10 +/(-) THB’m THB’m % THB’m THB’m % Net interest income 3,435 3,454 (0.6) 1,700 1,735 (2.0) Non-interest income 1,341 1,477 (9.2) 539 802 (32.8) Total income 4,776 4,931 (3.1) 2,239 2,537 (11.7) Less: Total expenses 3,101 3,207 (3.3) 1,509 1,592 (5.2
Slide 21: Thailand – Key Financial Indicators
Thailand – Key Financial Indicators 1H10 1H09 +/(-) 2Q10 1Q10 +/(-) % % % pt % % % pt Net interest margin 3.50 3.69 (0.19) 3.59 3.42 0.17 Non-NII / Total income 28.1 30.0 (1.9) 24.1 31.6 (7.5) Expense / Total income 64.9 65.0 (0.1) 67.4 62.8 4.6 Customer loans (net) – THB’m 140,496 135,084 4.0% 140,
Slide 22: Indonesia – Summarised P/L
Indonesia – Summarised P/L 1H10 1H09 +/(-) 2Q10 1Q10 +/(-) IDR’b IDR’b % IDR’b IDR’b % Net interest income 963 962 0.1 487 476 2.3 Non-interest income 302 375 (19.5) 136 166 (18.1) Total income 1,265 1,337 (5.4) 623 642 (3.0) Less: Total expenses 686 639 7.4 382 304 25.7 Operating profit 579 698 (17
Slide 23: Indonesia – Key Financial Indicators
Indonesia – Key Financial Indicators 1H10 1H09 +/(-) 2Q10 1Q10 +/(-) % % % pt % % % pt Net interest margin 6.49 6.34 0.15 6.49 6.49 - Non-NII / Total income 23.9 28.0 (4.1) 21.8 25.9 (4.1) Expense / Total income 54.2 47.8 6.4 61.3 47.4 13.9 Customer loans (net) – IDR’b 24,485 22,448 9.1% 24,485 22,8
Slide 24: China – Summarised P/L
China – Summarised P/L 1H10 1H09 +/(-) 2Q10 1Q10 +/(-) CNY’m CNY’m % CNY’m CNY’m % Net interest income 172 199 (13.6) 86 86 - Non-interest income 39 15 >100.0 22 17 29.4 Total income 211 214 (1.4) 108 103 4.9 Less: Total expenses 145 114 27.2 73 72 1.4 Operating profit 66 100 (34.0) 35 31 12.9 Less:
Slide 25: China – Key Financial Indicators
China – Key Financial Indicators 1H10 1H09 +/(-) 2Q10 1Q10 +/(-) % % % pt % % % pt Net interest margin 2.38 2.84 (0.46) 2.27 2.50 (0.23) Non-NII / Total income 18.5 7.0 11.5 20.4 16.5 3.9 Expense / Total income 68.7 53.3 15.4 67.6 69.9 (2.3) Customer loans (net) – CNY’m 9,280 9,950 (6.7)% 9,280 9,23
Slide 26: Capital Position Strengthened
Capital Position Strengthened Capital Adequacy Ratios 20.0% 20.1% 18.5% 19.0% 17.5% Total CAR 14.9% 15.1% 14.0% 13.5% Tier 1 CAR 12.6% ` Core Tier 1 12.8% 13.0% 11.9% CAR 11.3% 10.6% Jun'09 Sep'09 Dec'09 Mar'10 Jun'10 $m Core Tier 1 Capital 11,074 11,462 11,978 12,942 13,175 Tier 1 Capital 13,223 13
Slide 27: Maintain Interim Dividend
Maintain Interim Dividend 12.3 45.0 40.0 40.0 16.4 20.0 20.0 20.0 2007 2008 2009 1H10 Net Netdividend dividend per perordinary ordinaryshare share(¢) (¢) Interim Interim Final Final Special Special Interim dividend Payout amount ($m) 249 301 301 306 Payout ratio (%) 23 27 34 24 27
Slide 28: Investment Securities
Investment Securities Jun-10 Dec-09 + / (-) $m $m $m Debt securities – bank Tier 1 1,639 1,933 (294) Tier 2 864 1,098 (234) Senior/Other 3,547 4,253 (706) 6,050 7,284 (1,234) Debt securities – non bank 6,454 6,330 124 12,504 13,614 (1,110) Equity securities 2,838 2,563 275 Total 15,342 16,177 (835)
Slide 29: In Summary …
In Summary … First half net profit increased 48% to $1.3 billion Strong ASEAN franchise Core income from NII and fee and commission income remained strong Expenses under control Loans and deposits growth well paced Asset quality sound, NPL ratio low at 1.9% Tier 1 and total CAR strengthened to 15.1%