United Overseas Bank Limited · SGX:U11
United Overseas Bank — H1 2002 Earnings Presentation
15 slides from United Overseas Bank's earnings presentation, Aug 7, 2002
Slide 1: Building a Premier Regional Bank: Analysts' Briefing First Half 2002 Results
Building a Premier Regional Bank Analysts’ Briefing First Half 2002 Results Address by Kuek Tong Au Executive Vice President 7 August 2002
Slide 2: Performance at a glance
Performance at a glance Inc / (Dec) Inc / (Dec) 1H2002 2H2001 1H2001 1H02/1H01 1H02/2H01 Net Profit After Tax (NPAT) - $m 591 470 455 30.0% 25.8% NPAT (excluding goodwill) - $m 684 518 455 50.5% 32.1% Net Customer Loans - $m 59,289 60,892 31,249 89.7% (2.6%) Non-Performing Loans - $m 5,971 5,968 2,3
Slide 3: Continuing our steady Financial Performance
Continuing our steady Financial Performance (($$m m)) Inc/(Dec)% Inc/(Dec)% Inc/(Dec)% Inc/(Dec)% 1H2002 1H2002 2H2001 2H2001 1H2001 1H2001 1H02/1H01 1H02/1H01 1H02/2H01 1H02/2H01 Net Net Interest Interest Income Income 1,089 1,089 884411 588 588 85.1 85.1 29.5 29.5 Non-Interest Non-Interest Income
Slide 4: Higher Net Interest Income from expanded book size and improved margin
Higher Net Interest Income from expanded book size and improved margin Net Net Interest Interest Income Income Net NetInterest InterestMargin Margin ($m) (%) 1,200 2.5 1,089 2.26 2.31 1,000 2.22 2.3 800 608 583 588 543 600 2.0 2.06 1.98 400 1.8 200 0 1.5 1H98 1H99 1H00 1H01 1H02 1H00 2000 1H01 2001
Slide 5: Modest growth in Non-Interest Income
Modest growth in Non-Interest Income Non Non--Interest Income Non-Interest Income Composition Compositionof ofNon- Non-Interest Income Non-Interest Income ($m) 386 400 364 362 Inc/(Dec) 350 304 ($m) 1H02 1H01 Amt % 300 243 Fee & Comm 247 145 102 70.4 250 Dividend & Rental 58 45 13 30.3 200 Dealing I
Slide 6: Effectively managing our Costs
Effectively managing our Costs ($m) Inc/(Dec) 1H2002 1H2001 % Staff Costs 271 186 45.7 Other Operating Expenses 256 174 47.1 Total 527 360 46.4 Expense Expense to to Income Income Ratio Ratio Cost Cost Savings Savings ($m) (%) 250 40 38.6 250 37.9 200 38 35.7 150 190 36 33.2 34 100 32 50 31.3 70 30
Slide 7: Higher investment in IT
Higher investment in IT IT IT Operating Operating Expenses Expenses 1H2002 1H2001 Inc/(Dec) ($m) % IT Operating Expenses 102 60 70.0 Non IT Operating Expenses 425 300 41.7 Total Operating Expenses 527 360 46.4 IT Operating Expenses / Total Operating Expenses (%) 19.4 16.7 2.7% pt The Group’s increas
Slide 8: Respectable Net Profit growth amidst uncertain market conditions
Respectable Net Profit growth amidst uncertain market conditions ($m) Net Net Profit Profit After After Tax Tax 1H01 Profit 455 ($m) 591 Positive Factors 600 Net interest income 501 500 455 Non-interest income 24 408 Pre-tax Associates’ 69 profit 400 320 257 Negative Factors 300 Operating expenses (
Slide 9: Slight decline in Loans and Deposits
Slight decline in Loans and Deposits Customer CustomerLoans Loans Customer Customer Deposits Deposits ($b) ($b) 70.3 73.3 74.5 70.0 70.0 65.3 68.1 61.0 60.9 58.6 59.3 60.0 52.3 60.0 26.9 29.2 50.0 24.6 50.0 28.6 29.8 40.0 25.0 40.0 30.0 30.0 43.4 44.1 30.0 31.2 40.7 20.0 27.3 20.0 10.0 10.0 0.0 0.0
Slide 10: Increase in L/D ratio
Increase in L/D ratio Loans Loans // Deposits Deposits Ratio Ratio (%) 110 106.2 101.8 101.7 100 90 87.1 81.8 80 70.9 69.2 66.9 70 60 Dec 99 Dec 00 Jun 01 Dec 01 Jun 02 UOB OUB L/D ratio increased by 5.3% point to 87.1%, reflecting synergy from better utilisation of surplus funds
Slide 11: Improved NPL profile
Improved NPL profile Total NPLs 2,834 2,462 2,358 5,968 5,971 ($m) ($m) (%) 1,620 1,548 9.8 6,000 10 9.3 9.5 7.8 384 7.2 497 8 4,000 750 751 6 659 229 3,851 4,039 2,000 174 126 4 1,855 1,537 1,573 0 2 Dec 99 Dec 00 Jun 01 Dec 01 Jun 02 Substandard Doubtful Loss NPL/Gross Customer Loans
Slide 12: Increase in Provision Coverage
Increase in Provision Coverage Total Provisions ($m) 1,774 1,664 1,526 3,334 3,403 (%) ($m) 3,500 3.5 3,000 2.9 1,435 1,428 3 2.5 2.4 2,500 2.4 2.3 2.5 2,000 2 1,500 1.5 819 768 756 1,000 1,899 1,975 1 500 955 896 770 0.5 0 0 Dec 99 Dec 00 Jun 01 Dec 01 Jun 02 Prov / NPLs 62.6% 67.6% 64.7% 55.9% 57.
Slide 13: Strong Capital Position
Strong Capital Position Capital Capital Adequacy Adequacy Ratio Ratio ($b) (%) 105 25 21.7 20.1 19.8 18.5 20 85 17.2 18.6 17.1 17.2 15 65 11.8 10 11.8 45 5 Risk Weighted Assets 25 0 Dec 99 Dec 00 Jun 01 Dec 01 Jun 02 Risk Weighted Assets Total CAR (BIS) Tier 1 CAR (BIS) Group CAR at 17.2% is still w
Slide 14: Maintaining High Dividend payout to reward shareholders
Maintaining High Dividend payout to reward shareholders (%) 50 40 25% 30 25% 25% 20 10% 12% 10 15% 15% 15% 8% 8% 0 1998 1999 2000 2001 1H2002 Dividend $133m $416m $316m $426m $184m Amount Interim Final Special Tax Exempt
Slide 15: In summary …
In summary … Variance 1H2002 2H2001 1H2001 1H02/1H01 1H02/2H01 Net Profit After Tax $591m $470m $455m +30.0% +25.8% ROE (excluding goodwill) 10.7% 10.2% 12.8% -2.1% pt +0.5% pt Expense to Income Ratio 35.7% 40.3% 37.9% -2.2% pt -4.6% pt NPL/Gross Customer Loans 9.5% 9.3% 7.2% +2.3% pt +0.2% pt Divid