Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q2 2013 Earnings Presentation
45 slides from Oversea-chinese Banking's earnings presentation, Aug 2, 2013
Slide 1: Second Quarter 2013 Results Presentation
Second Quarter 2013 Results Presentation 2 August 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 accept
Slide 2: Agenda
Agenda Results Overview 2Q13 Performance Trends Appendix: Financial Highlights of Malaysian and Indonesian Subsidiaries Notes: 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: 2Q13 Highlights
2Q13 Highlights Continued strong performance of our customer businesses: • Net interest income grew, underpinned by broad-based loan expansion. Net interest margin stabilised quarter-on-quarter • Fees and commissions achieved a new quarterly record • Trading and investment income up year-on-year • I
Slide 4: 2Q13 net profit of S$597m, 8% lower YoY
2Q13 net profit of S$597m, 8% lower YoY 2Q13 2Q12 YoY 1Q13 QoQ OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 961 931 3 912 5 Non-interest income 606 596 2 676 (11) Total income 1,567 1,527 3 1,588 (1) Operating expenses (718) (661) 9 (672) 7 Operating profit 849 866 (2) 916 (7) Amortisati
Slide 5: 2Q13 core net profit before GEH contribution up 12% QoQ and 1% YoY
2Q13 core net profit before GEH contribution up 12% QoQ and 1% YoY 2Q13 2Q12 YoY 1Q13 QoQ S$m S$m +/(-)% S$m +/(-)% Net interest income 944 918 3 895 5 Non-interest income 518 455 14 405 28 Total income 1,462 1,373 7 1,300 12 Operating expenses (660) (608) 9 (622) 6 Operating profit 802 765 5 678 18
Slide 6: GEH: 2Q13 core earnings contribution
GEH: 2Q13 core earnings contribution 2Q13 2Q12 YoY 1Q13 QoQ GEH Contribution S$m S$m +/(-)% S$m +/(-)% Profit from insurance business 18 77 (77) 187 (91) - Operating profit 1/ 155 117 32 131 18 - Non-operating profit/(loss) 2/ (156) (57) (173) 38 (506) - Others 3/ 19 17 13 18 6 Profit from Sharehold
Slide 7: 1H13 core net profit of S$1.29b down 10% YoY
1H13 core net profit of S$1.29b down 10% YoY 1H13 1H12 YoY 2H12 HoH OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 1,873 1,882 (1) 1,866 - Non-interest income 1,282 1,386 (7) 1,511 (15) Total income 3,155 3,268 (3) 3,377 (7) Operating expenses (1,390) (1,286) 8 (1,409) (1) Operating profit
Slide 8: 1H13 core net profit before GEH contribution up 7% HoH and 4% lower YoY
1H13 core net profit before GEH contribution up 7% HoH and 4% lower YoY 1H13 1H12 YoY 2H12 HoH S$m S$m +/(-)% S$m +/(-)% Net interest income 1,839 1,854 (1) 1,830 - Non-interest income 923 925 - 973 (5) Total income 2,762 2,779 (1) 2,803 (1) Operating expenses (1,282) (1,189) 8 (1,315) (3) Operating
Slide 9: GEH: 1H13 core earnings contribution
GEH: 1H13 core earnings contribution 1H13 1H12 YoY 2H12 HoH GEH Contribution S$m S$m +/(-)% S$m +/(-)% Profit from insurance business 205 306 (33) 426 (52) - Operating profit 1/ 286 222 29 279 2 - Non-operating profit/(loss) 2/ (117) 51 (332) 111 (206) - Others 3/ 36 33 10 36 - Profit from Sharehold
Slide 10: Key ratios
Key ratios 2Q13 2Q12 1Q13 1H13 1H12 Based on core earnings % % % % % Net interest margin 1.64 1.77 1.64 1.64 1.82 Non-interest income / Total income 38.6 39.0 42.6 40.6 42.4 Cost / Income 45.8 43.3 42.3 44.1 39.4 Loans / Deposits 89.2 85.3 87.0 89.2 85.3 NPL Ratio 0.7 0.9 0.7 0.7 0.9 Allowances / NP
Slide 11: 1H13 ROE at 10.9%
1H13 ROE at 10.9% 14.7% 12.5% 12.8% 11.1% 10.9% 11.6% 11.2% 11.7% Core ROE* 9.9% 2,825 790 724 696 648 663 2,280 597 Core net profit (S$m) 1,293 1,438 1H 1,173 2011 2012 1H13 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 * Quarterly and half-yearly figures annualised 11
Slide 12: Profit contribution by business and geography
Profit contribution by business and geography 1H13 PBT 1H13 PBT by Business* by Geography PBT Other Rest of Group Asia the World S$1,668m Insurance Pacific 2% YoY: -9% Greater Global Corporate / China Singapore 15% 4% 5% S$934m Investment Indonesia YoY: -17% Banking 6% Global Malaysia 52% S$455m Tre
Slide 13: Agenda
Agenda Results Overview 2Q13 Performance Trends Appendix: Financial Highlights of Malaysian and Indonesian Subsidiaries 13
Slide 14: Net interest income rose 3% YoY, driven by broad-based loan growth; NIM unchanged QoQ
Net interest income rose 3% YoY, driven by broad- based loan growth; NIM unchanged QoQ Net interest margin 1.86% 1.77% 1.86% 1.77% 1.64% 1.75% 1.70% 1.64% 1.64% 3,748 951 931 944 961 921 912 3,410 Net interest income (S$m) 1,873 1,882 1H 1,611 2011 2012 1H13 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 14
Slide 15: Net interest income less specific allowances increased 3% YoY
Net interest income less specific allowances increased 3% YoY Adjusted net interest 1.82% 1.78% 1.72% 1.63% 1.75% margin 1/ 1.70% 1.64% 1.63% 1.62% 3,633 950 908 918 920 910 Adjusted 3,331 886 net interest income1/ (S$m) 1,860 1,826 1H 1,596 2011 2012 1H13 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 1/ Net intere
Slide 16: Non-interest income up 2% YoY, driven by higher fee & commission income
Non-interest income up 2% YoY, driven by higher fee & commission income, partially offset by lower insurance income Non- interest 43.6% 45.4% 44.4% 45.1% 42.6% 39.3% 40.6% 38.6% income / 39.0% Total income 2,897 790 754 757 838 2,212 676 253 606 596 226 250 Non- 508 215 56 interest 108 income 701 (S
Slide 17: Fee income up 9% YoY to S$347m
Fee income up 9% YoY to S$347m; led by higher wealth management, loan-related, brokerage and fund management fees 347 1,198 1,137 317 316 303 304 42 157 175 274 41 39 24 39 39 91 17 95 39 42 21 14 15 128 Fees and 663 112 482 commissions 125 445 124 (S$m) 81 108 125 41 43 44 240 146 37 37 170 38 33 8
Slide 18: Profit from life assurance decreased 78% YoY
Profit from life assurance decreased 78% YoY, as a result of unrealised mark-to-market losses in the Non-Participating Fund 692 125 221 210 25 190 31 178 Profit from 35 life 42 423 assurance (S$m) 160 139 194 121 16 71 102 80 38 34 38 2 144 76 36 35 34 40 34 41 2012 1H13 1Q12 2Q12 3Q12 4Q12 1Q13 2Q1
Slide 19: Other non-interest income grew 33% YoY, led by higher trading income
Other non-interest income grew 33% YoY, led by higher trading income from customer flows and investment income 701 70 116 216 12 193 179 403 44 18 Other non- 24 61 31 149 interest 19 16 income 120 (S$m) 269 113 125 14 43 515 30 16 93 22 50 160 144 136 217 90 75 146 56 2011 2012 1H13 1Q12 2Q12 3Q12 4
Slide 20: Wealth management income up 7% YoY
Wealth management income up 7% YoY 32.7% 27.6% 27.8% 30.3% 29.8% As % of 28.0% Group 22.9% 21.8% 22.8% revenue 1,836 527 520 500 476 Wealth 1,285 management 357 333 income (S$m) 877 860 1H 728 2011 2012 1H13 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Note: Comprises the consolidated income from insurance, asset
Slide 21: Cost-to-income ratio impacted by unrealised mark-to-market losses in GEH’s Non-Participating Fund
Cost-to-income ratio impacted by unrealised mark- to-market losses in GEH’s Non-Participating Fund 43.2% 44.1% Cost / 45.8% Income 40.6% 43.3% 43.1% 40.3% 42.3% 35.9% 2,695 724 718 2,430 685 661 672 554 625 156 140 531 130 126 144 124 491 134 133 451 122 125 116 Operating 1,390 119 expenses (S$m) 26
Slide 22: Net allowances up YoY: Specific allowances down 11%
Net allowances up YoY: Specific allowances down 11%. Portfolio allowances up 151% in line with strong loan growth Net allowances for loans 271 and other 8 assets 221 (S$m) 15 115 96 79 83 8 70 68 104 11 2 43 15 35 13 38 148 24 21 127 13 72 89 45 43 2 29 31 2 17 (4) (10) 2011 2012 1H13 1Q12 2Q12 3Q12
Slide 23: Net specific allowances
Net specific allowances 2Q13 2Q12 1Q13 1H13 1H12 S$m S$m S$m S$m S$m Allowances for new and 51 67 49 100 146 existing NPLs Write-backs1/ (28) (44) (26) (54) (69) Recoveries2/ (12) (11) (21) (33) (21) Net specific allowances 11 13 2 13 56 1/ Write-backs of specific allowances for existing NPLs due to
Slide 24: Loans increased 15% YoY & 7% QoQ
Loans increased 15% YoY & 7% QoQ Loan growth Group YoY: +15% 159 QoQ: +7% 149 144 19 Rest of the 138 140 135 World 19 YoY: +12% 18 17 17 20 QoQ: +3% 17 17 17 Greater China 17 16 12 18 11 YoY: +18% 10 11 QoQ: +19% 10 9 25 24 Indonesia 23 23 21 21 YoY: +17% Customer QoQ: +9% Loans (S$b) Malaysia YoY:
Slide 25: Loan book remained diversified across geographies and sectors
Loan book remained diversified across geographies and sectors Customer Loans by Geography Customer Loans by Industry As of 30 June 2013 As of 30 June 2013 Rest of the World Agriculture, mining & Others Other Asia quarrying Pacific 7% 5% Housing Loans Transport, storage 3% 5% Singapore & comm. 7% 25%
Slide 26: Deposits up 10% YoY & 4% QoQ; CASA deposits more than half of total
Deposits up 10% YoY & 4% QoQ; CASA deposits represent more than half of total deposits 87.7% 89.2% Loans / 86.2% 87.0% Deposits 84.4% 85.3% 176 165 169 158 160 158 17 14 15 13 15 13 67 71 Deposits 67 73 72 71 (S$b) 32 32 31 29 29 30 S$84b S$86b S$89b S$72b S$74b S$75b 53 50.6% 54 51.1% 57 CASA 43 45
Slide 27: NPL ratio improved YoY; NPAs remained low
NPL ratio improved YoY; NPAs remained low 1.0% 0.9% NPL ratio 0.8% 0.8% 0.7% 0.7% 1,513 144 1,280 1,256 91 1,172 1,177 87 1,119 27 26 489 28 426 418 NPAs 478 449 420 (S$m) 560 456 438 409 407 472 320 307 313 258 264 230 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Singapore Malaysia International Debt securi
Slide 28: NPAs
NPAs 2Q13 2Q12 1Q13 1H13 1H12 S$m S$m S$m S$m S$m NPAs – Opening balance 1,119 1,513 1,172 1,172 1,437 New NPAs 253 156 122 375 459 New recoveries/upgrades (140) (349) (144) (284) (552) Write-offs (55) (40) (31) (86) (64) NPAs – Closing balance 1,177 1,280 1,119 1,177 1,280 28
Slide 29: Allowance coverage ratios remained healthy
Allowance coverage ratios remained healthy 450.00% 400.00% 373% 370% Total 353% 350% allowances/ 350.00% 333% 329% Unsecured NPAs 300.00% 250.00% 200.00% 150.00% Total 142% 149% allowances/ 144% 125% 128% 100.00% NPAs 106% 50.00% 0.00% Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 29
Slide 30: Capital adequacy ratios
Capital adequacy ratios Basel II Basel III 18.0 18.5 18.1 CAR 1.9 16.8 16.1 2.1 1.9 (% of RWA) 15.5 1.4 1.9 1.4 3.8 3.8 Tier 2 capital 3.1 3.0 15.9 16.6 14.7 14.1 Tier 1 preference shares 16.2 14.9 Core Tier 1 capital 12.1 12.8 11.6 11.1 Common Equity Tier 1 / Tier 1 capital Mar12 Jun12 Sep12 Dec12
Slide 31: Interim dividend increased to 17 cents per share
Interim dividend increased to 17 cents per share Net DPS (cents) 33.0 30.0 30.0 28.0 28.0 17.0 15.0 15.0 14.0 14.0 Final net dividend Interim net dividend 16.0 17.0 14.0 14.0 15.0 15.0 2008 2009 2010 2011 2012 1H13 Net Dividends (S$m) 868 898 994 1,024 1,133 583 Core Net Profit (S$m) 1,486 1,962 2,2
Slide 32: GEH: Operating profit from insurance business rose 32% YoY
GEH: Operating profit from insurance business rose 32% YoY 502 169 20 11 155 23 100 131 31 4 117 2 110 105 35 4 286 3 27 Operating profit from 4 21 28 insurance 263 66 103 89 business (S$m) 59 63 51 50 152 119 32 35 30 29 28 29 64 (0.2) 2012 1H13 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Participating Non-parti
Slide 33: GEH: Non-operating losses in 2Q13 caused by unrealised mark-to-market losses
GEH: Non-operating losses in 2Q13 caused by unrealised mark-to-market losses as investment market sentiments weakened at the end of the quarter 161 Non- operating profit from 108 insurance business 72 (S$m) 39 38 1H 51 2012 1H13 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 (57) (117) (156) Note: Non-operating prof
Slide 34: GEH: Total weighted new sales grew by 34% YoY
GEH: Total weighted new sales grew by 34% YoY, supported by healthy growth in both Singapore and Malaysia 836 32 262 264 9 9 302 202 205 82 197 7 103 11 175 9 Weighted 7 469 new 72 60 business 20 72 premiums 55 (S$m) 143 502 173 150 123 134 113 116 306 2012 1H13 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Singapo
Slide 35: GEH: New business embedded value increased 20% YoY
GEH: New business embedded value increased 20% YoY on strong sales performance NBEV / Total 42.2% 43.7% 42.9% 42.7% weighted 38.1% 40.2% 37.6% 38.5% new sales 105 102 2 352 2 6 84 86 2 1 41 77 76 40 NBEV 138 1 2 (S$m) 32 35 28 31 179 5 70 62 60 208 53 47 47 44 104 2012 1H13 1Q12 2Q12 3Q12 4Q12 1Q13
Slide 36: OCBC Malaysia: Total net interest income and Islamic financing income up 12% YoY
OCBC Malaysia: Total net interest income and Islamic financing income up 12% YoY; non-interest income down 3% 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% 2.32% 30.3% 2.13% 2.25% 2.22% 2.01%
Slide 37: OCBC Malaysia: Loans grew 16% YoY and 5% QoQ; NPL ratio higher at 2.1%
OCBC Malaysia: Loans grew 16% YoY and 5% QoQ; NPL ratio higher at 2.1% Gross Loans (RM b) Deposits (RM b) NPL Ratio Loans / Deposits 86.3% 86.4% 3.0% 85.6% 82.1% 80.8% 2.3% 2.2% 77.4% 2.1% 2.1% 1.8% 57 58 60 56 55 56 50 52 47 48 43 45 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Mar12 Jun12 Sep12 Dec12 Mar13
Slide 38: OCBC NISP: Net interest income up 28% YoY; non-interest income down 1% YoY
OCBC NISP: Net interest income up 28% YoY; non- interest income down 1% YoY Net interest income (Rp b) Non-interest income (Rp b) Non-int. income/ Net interest margin Total income 4.80% 4.37% 4.32% 3.98% 4.23% 4.17% 4.05% 4.04% 3.87% 26.5% 25.8% 22.4% 24.6% 24.1% 20.6% 21.8% 21.9% 19.1% 776 709 2,56
Slide 39: OCBC NISP: Loans grew 19% YoY and 6% QoQ; NPL ratio improved to 0.7%
OCBC NISP: Loans grew 19% YoY and 6% 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% 0.8% 0.7% 93.9% 91.8% 90.2% 85.5% 86.8% 57 53 54 61 59 58 51 54 48 52 50 42 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Mar12 Jun12 Sep12 Dec12 Mar13 J
Slide 40: Agenda
Agenda Results Overview 2Q13 Performance Trends Appendix: Financial Highlights of Malaysian and Indonesian Subsidiaries 40
Slide 41: OCBC Malaysia: 2Q13 net profit grew 8% YoY
OCBC Malaysia: 2Q13 net profit grew 8% YoY 2Q13 2Q12 YoY 1Q13 QoQ OCBC Malaysia RM m RM m +/(-)% RM m +/(-)% Net interest income 307 299 3 319 (4) Islamic Financing Income 89 56 59 83 7 Non-interest income 172 178 (3) 104 65 Total income 568 533 7 506 12 Operating expenses (218) (202) 8 (201) 8 Oper
Slide 42: OCBC Malaysia: 1H13 net profit up 7% YoY
OCBC Malaysia: 1H13 net profit up 7% YoY 1H13 1H12 YoY 2H12 HoH OCBC Malaysia RM m RM m +/(-)% RM m +/(-)% Net interest income 626 603 4 643 (3) Islamic Financing Income 172 111 55 132 30 Non-interest income 276 313 (12) 218 27 Total income 1,074 1,027 5 993 8 Operating expenses (419) (394) 6 (457)
Slide 43: OCBC NISP: 2Q13 net profit rose 40% YoY
OCBC NISP: 2Q13 net profit rose 40% YoY 2Q13 2Q12 YoY 1Q13 QoQ OCBC NISP RP b RP b +/(-)% RP b +/(-)% Net interest income 776 605 28 709 9 Non-interest income 217 219 (1) 168 29 Total income 993 824 21 877 13 Operating expenses (547) (487) 12 (521) 5 Operating profit 446 337 32 356 25 Allowances (60
Slide 44: OCBC NISP: 1H13 net profit up 32% YoY
OCBC NISP: 1H13 net profit up 32% YoY 1H13 1H12 YoY 2H12 HoH OCBC NISP RP b RP b +/(-)% RP b +/(-)% Net interest income 1,485 1,206 23 1,360 9 Non-interest income 385 409 (6) 427 (10) Total income 1,870 1,615 16 1,787 5 Operating expenses (1,068) (958) 11 (984) 9 Operating profit 802 657 22 803 - Al
Slide 45: Second Quarter 2013 Results Thank You
Second Quarter 2013 Results Thank You
Oversea-Chinese Banking — Q2 2013 Earnings Presentation on 6ix