Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Investor Presentation (February 2007)
35 slides from Oversea-chinese Banking's investor presentation, Feb 22, 2007
Slide 1: New Horizons II Report Card
Presentation to Media and Analysts New Horizons II Report Card 22 February 2007
Slide 2: Agenda
Agenda • Recap - New Horizons II • Highlights of Our Achievements in 2006 Customers Products Risk Management Productivity People Shareholder Value Overseas Expansion • Appendix: Details of Report Card
Slide 3: New Horizons II: Recap - Focused Overseas Expansion
New Horizons II: Recap 1. Focused Overseas Expansion • Shift emphasis from adding more country flags to deepening market penetration in Malaysia, Indonesia, China • Selectively explore opportunities to establish strategic partnerships in Indochina • Grow market share in the consumer and SME segments
Slide 4: New Horizons II: Recap - Balanced Business Scorecard
New Horizons II: Recap 2. Improving our performance through a Balanced Business Scorecard Customers Products Risk Management Productivity People Shareholder Value 4
Slide 5: Agenda
Agenda • Recap - New Horizons II • Highlights of Our Achievements in 2006 Customers Products Risk Management Productivity People Shareholder Value Overseas Expansion • Appendix: Details of Report Card
Slide 6: Customers – Consumers
Customers – Consumers • Healthy growth in customer base and average assets per customer • Deploying insights from extensive customer surveys => full-service Sunday banking, Express Cash within an hour • Strong partnership with GEH: #1 bancassurance, higher EV products; accounted for half of the incr
Slide 7: Customers – Businesses
Customers – Businesses • Healthy growth in SME customers, higher cross-sell • Improving customer satisfaction, providing differentiated offerings: – Faster credit approval – Collateral-free Business Term Loan – eAlerts@ocbc – Quick Cheque Deposit for SMEs at selected Shell petrol stations • Aiming f
Slide 8: Product Innovation
Product Innovation • New products accounted for 13.5% of revenues • Strong growth in velocity@ocbc customers and transaction volumes • New trade/cash mgmt products to better meet SME customers’ needs • Lion Capital continues to garner awards and new fund mandates • Credit cards in S’pore and Malaysi
Slide 9: Risk Management
Risk Management • On track to implement Basel II in 2008 – parallel run for credit risk in 2007 – Advanced IRB Approach for major retail portfolios – Foundation IRB Approach for major corporate portfolios • New team set up to undertake active portfolio management strategies • Maintained our strong c
Slide 10: Productivity
Productivity • Unit processing costs reduced by 9% across 7 operations factories • Completed cross-border hubbing for 4 work streams, with up to 70% of Singapore transactions now being processed in Malaysia • Quality training – more than 7,600 employees trained to-date • 10 process improvement proje
Slide 11: People
People • Employee engagement score up • Employee shareholding of 39%, up from 29%; higher participation rate in 2nd ESPP • More opportunities for cross-border assignments for employees • OCBC Learning-3 management development programme • Average training man-days up 16% +5% 39% +5% +8% 29% +4% 10% 1
Slide 12: Shareholder Value
Shareholder Value • Core ROE exceeded 12% for 2H06 • Core EPS growth of 13% vs 10% target • Raised minimum payout to 45%, actual payout 49% => including share buybacks, returning 84% of 2006 core earnings • S$559m divestment gains, invested S$449m in GEH, NCB and VP Bank • Ranked 16th among global l
Slide 13: Overseas Expansion
Overseas Expansion Indonesia • Support Bank NISP’s network expansion • Healthy sign-ups for velocity@nisp; bancassurance fees up 40%; customer services programme and SME business model launched China • Launched joint initiatives with NCB, co-developing various products • GEH’s insurance JV in Chongq
Slide 14: In a Nutshell
In a Nutshell • Good progress in our score-card • Deeper penetration in overseas markets • Strategy delivering healthy results and business momentum => stay the course 14
Slide 15: Agenda
Agenda • Recap - New Horizons II • Highlights of Our Achievements in 2006 Customers Products Risk Management Productivity People Shareholder Value Overseas Expansion • Appendix: Details of Report Card
Slide 16: Our Achievements – Consumers
Appendix Our Achievements – Consumers OUR ACTION PLANS PROGRESS 1. Focus on new customer acquisitions in • 4% growth in number of consumer the Mass Consumer, Premier and customers Private Banking segments • 33% growth in Premier Banking customer base 2. Survey customers to understand their • Intervi
Slide 17: Our Achievements – Consumers (continued)
Our Achievements – Consumers (continued) OUR ACTION PLANS PROGRESS 3. Leverage our Great Eastern / Lion • Maintained #1 position in Bancassurance Capital partnership to cross sell more sales in Singapore products • Launched 8 new products with GE, including: ÖMaxHealth Vantage - first-in-market plan
Slide 18: Our Achievements – Consumers (continued)
Our Achievements – Consumers (continued) OUR ACTION PLANS PROGRESS 4. Differentiate through service excellence • Rolled out 20 new customer experience grounded on Quality programmes initiatives after successful pilot-runs • Introduced convenience banking through Sunday Banking (5 branches) and Mobil
Slide 19: Our Achievements – Businesses
Our Achievements – Businesses OUR ACTION PLANS PROGRESS 1. Grow our current strong large • 8% growth in total revenues of large corporate position corporate business 2. Expand our customer base and grow • 9% growth in number of SME customers market share in the SME Segment • No.1 LEFS (Local Enterpr
Slide 20: Our Achievements – Businesses (continued)
Our Achievements – Businesses (continued) OUR ACTION PLANS PROGRESS 4. Increase cross sell and wallet share • Cross sell ratio for SME business increased penetration of SME customers through by 35% innovative delivery methods and • Launched more than 10 innovative products differentiated package off
Slide 21: Our Achievements – Product Innovation
Our Achievements – Product Innovation OUR ACTION PLANS PROGRESS 1. Strive to build “best in class” products • Best Corporate/Institutional Internet Bank in Malaysia by Global Finance in 2006 • MasterCard 2006 Platinum Award for Best Innovative Card Product in Asia Pacific/Middle East & Africa – Tita
Slide 22: Our Achievements – Product Innovation
Our Achievements – Product Innovation (continued) OUR ACTION PLANS PROGRESS 2. Add to our SME Cash management • First local bank in Singapore to sign up for capabilities and enhance our trade the IFC (International Finance Corporation) finance services / solutions with Global Trade Finance Program,
Slide 23: Our Achievements – Product Innovation
Our Achievements – Product Innovation (continued) OUR ACTION PLANS PROGRESS 4. Expand Lion Capital to become globally • 17 local and overseas prestigious awards recognised top tier Asia-based fund for funds’ performance in 2005 manager • Majority of segregated accounts and Asian funds achieved out-p
Slide 24: Our Achievements – Product Innovation
Our Achievements – Product Innovation (continued) OUR ACTION PLANS PROGRESS 5. Be one of the top 3 banks in the • Maintained No 1 position in Bancassurance combined Singapore / Malaysia market • Combined wealth management sales fell for wealth management, credit cards 21% as the flat yield curve red
Slide 25: Our Achievements – Product Innovation
Our Achievements – Product Innovation (continued) OUR ACTION PLANS PROGRESS 6. Be the bank of choice for treasury • Ranked Top 3 in all Ringgit-denominated instruments in selected currencies categories by Asia Risk Interdealer Survey (cont’d) 2006 Ö No. 1 in MYR Forward Rate Agreements Ö No. 3 in MY
Slide 26: Our Achievements – Risk Management
Our Achievements – Risk Management OUR ACTION PLANS PROGRESS 1. Execute our Basel ll implementation Approval from MAS to conduct parallel run plan in line with regulatory guidelines for Credit Risk in 2007 On track to comply with Standardized Approach for Operational Risk Management by 2008 2. M
Slide 27: Our Achievements – Productivity
Our Achievements – Productivity OUR ACTION PLANS PROGRESS 1. Continue to drive for productivity gains • Productivity gains of 11% and unit cost and unit cost reduction while enhancing reductions of 9% across 7 product service quality processing factories for 2006 Ö Account Services, Cards and Invest
Slide 28: Our Achievements – People
Our Achievements – People OUR ACTION PLANS PROGRESS 1. Build people resources with a focus on • 79 employees moved overseas and given diversity, cross border management cross-border assignments to/from skills and competencies to support our Singapore, Malaysia, Indonesia and China overseas expansion
Slide 29: Our Achievements – People (continued)
Our Achievements – People (continued) OUR ACTION PLANS PROGRESS 4. Maintain share-ownership schemes to • 41% of eligible employees participated in enable all our employees to easily own 2nd Employee Share Purchase Plan (ESPP) OCBC Shares in 2006, up from 33% for 1st ESPP in 2004 • Deferred Share Pla
Slide 30: Our Achievements – Shareholder Value
Our Achievements – Shareholder Value OUR ACTION PLANS PROGRESS 1. Grow revenues faster than expenses • Core revenue grew 12%, versus 14% for expenses (excl one-time charges) 2. Deliver 10% EPS growth per annum • EPS growth of 58% (13% excluding divestment gains) 3. Achieve and sustain ROE of above 1
Slide 31: Our Achievements – Shareholder Value
Our Achievements – Shareholder Value (continued) OUR ACTION PLANS PROGRESS 5. Continue to divest non-core assets at • Realised S$559m gains from divestments the right time and invest the gains in ÖDivested stakes in Robinsons and Straits Trading in core financial services growth compliance with MAS
Slide 32: Our Achievements – Shareholder Value
Our Achievements – Shareholder Value (continued) OUR ACTION PLANS PROGRESS 7. Maintain Tier 1 capital (and total • Tier 1 and total CAR of 13.1% and capital) at a comfortable cushion 15.8%, well above regulatory above regulatory minimums minimums 8. Raise alternative Tier 1 / Tier 2 capital as • No
Slide 33: Our Achievements – Overseas Expansion (Indonesia)
Our Achievements – Overseas Expansion (Indonesia) OUR ACTION PLANS PROGRESS 1. Work with NISP to become a top tier • Implemented risk management framework nationwide bank focused on SMEs and • Launched customer service programme for consumers branch staff and introduced business model for small ente
Slide 34: Our Achievements – Overseas Expansion (China)
Our Achievements – Overseas Expansion (China) OUR ACTION PLANS PROGRESS 1. Leverage on strategic partnership in • Completed purchase of 12.2% stake in China as part of strategy to grow our Ningbo Commercial Bank retail and SME customer franchise • Launched joint initiatives in trade finance, investm
Slide 35: Thank You
New Horizons II Report Card Thank You
Oversea-Chinese Banking — Investor Presentation (February 2007) on 6ix