United Overseas Bank Limited · SGX:U11

United Overseas Bank — FY2008 Earnings Presentation

31 slides from United Overseas Bank's earnings presentation, Feb 27, 2009

  1. Slide 1: UOB Group Full Year 2008 Briefing Financial Highlights

    UOB Group Full Year 2008 Briefing Financial Highlights Lee Wai Fai Chief Financial Officer 27 February 2009 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 summ

  2. Slide 2: Operating Profit Grew 12.1%

    Operating Profit Grew 12.1% 2008 2007 + / (-) $m $m % Net interest income 3,576 2,980 20.0 Non-interest income 1,675 1,892 (11.5) Total income 5,250 4,872 7.8 Less: Total expenses 2,050 2,018 1.6 Operating profit 3,200 2,854 12.1 Less: Intangible assets amortised 11 11 (4.8) Individual impairment -

  3. Slide 3: Strong Operating Profit Growth

    Strong Operating Profit Growth 4Q08 3Q08 + / (-) 4Q07 + / (-) $m $m % $m % Net interest income 957 893 7.2 743 28.8 Non-interest income 391 319 22.3 532 (26.5) Total income 1,348 1,213 11.2 1,275 5.7 Less: Total expenses 532 504 5.5 556 (4.4) Operating profit 817 709 15.2 719 13.5 Less: Intangible a

  4. Slide 4: Strong Growth in Net Interest Income and Margin

    Strong Growth in Net Interest Income and Margin Net Interest Income and Margin 3.18% 3.25% 3.21% 3.05% 3.15% 3.08% 3.02% 3.19% 3.09% 2.45% 2.20% 2.23% 2.21% 2.27% 1.94% 1.99% 1.99% 2.04% 0.93% 1.09% 0.66% 0.79% 0.93% 0.88% 0.58% 0.56% 0.47% 957 852 873 893 150 743 123 143 134 3,576 76 2,710 2,980 2,

  5. Slide 5: Higher Non-Interest Income Quarter-on-Quarter

    Higher Non-Interest Income Quarter-on-Quarter Non-Interest Income (Non-NII) and Non-NII Ratio 37.6% 38.8% 41.7% 38.7% 35.8% 32.7% 31.9% 26.3% 29.0% 23.9% 23.7% 26.2% 20.8% 29.0% 24.0% 20.3% 22.6% 1,892 17.0% 1,675 1,514 532 550 1,414 614 580 162 414 391 261 319 514 511 111 46 162 1,278 370 1,003 1,0

  6. Slide 6: Disciplined Cost Management

    Disciplined Cost Management Operating Expenses and Expense / Income Ratio 41.1% 41.4% 39.0% 43.6% 37.9% 41.6% 39.2% 39.4% 36.4% 2,018 2,050 1,736 272 285 556 496 518 504 532 1,424 256 67 76 67 71 71 222 2005 2006 2007 2008 4Q07 1Q08 2Q08 3Q08 4Q08 Operating OperatingExpenses Expenses($m) ($m) IT ITE

  7. Slide 7: Prudent Provisioning Policy

    Prudent Provisioning Policy Impairment Charges on Loans 47 bp 75 bp 31 bp 33 bp 57 bp 71 bp 19 bp 41 bp 18 bp 29 bp 13 bp 27 bp 27 bp 324 182 215 4 bp 142 155 67 65 67 10 2005 2006 2007 2008 4Q07 1Q08 2Q08 3Q08 4Q08 Individual IndividualImpairment ImpairmentCharges Chargeson onLoans Loans($m) ($m) I

  8. Slide 8: Performance By Business Segments

    Performance By Business Segments 2006 2008 2006 2008 2008 2007 + / (-) PFS : 29% Segment Operating Profit * $m $m % Other : 1% Personal Financial Services (PFS) 922 879 4.9 GMIM : 26% Institutional Financial Services (IFS) 1,408 1,415 (0.5) IFS : 44% Global Markets & Investment Mgt (GMIM) 852 712 19

  9. Slide 9: Strong Contribution From Singapore

    Strong Contribution From Singapore 2008 2008 At constant 2008 2007 + / (-) FX rate Singapore : 70% Operating Profit * $m $m % % Malaysia : 10% Thailand : 5% Singapore (including ACU) 2,230 1,834 21.6 21.6 Indonesia : 4% Greater China : 2% Total Overseas 970 1,020 (4.9) - Other : 9% Malaysia 330 368

  10. Slide 10: NPA on the rise

    NPA on the rise NPA ($m) 1,715 1,886 1,839 1,943 2,305 NPA Ratio 1.0% 1.0% 1.0% 1.0% 1.2% 243 2 284 314 292 2,062 1,713 1,602 1,547 1,629 Dec'07 Mar'08 Jun'08 Sep'08 Dec'08 Loans Loans($m) ($m) Debt Debtsecurities securities($m) ($m) 10

  11. Slide 11: Higher NPL Reflecting Difficult Economic Conditions

    Higher NPL Reflecting Difficult Economic Conditions NPL ($m) * 1,713 1,602 1,547 1,629 2,062 NPL Ratio 1.8% 1.6% 1.5% 1.5% 2.0% 251 63 97 18 66 66 121 72 73 16 16 24 68 64 79 391 436 393 367 367 547 495 504 522 511 628 555 512 527 704 Dec'07 Mar'08 Jun'08 Sep'08 Dec'08 Singapore Malaysia Thailand In

  12. Slide 12: Movement in NPL

    Movement in NPL 2008 2007 4Q08 3Q08 $m $m $m $m Opening Balance 1,713 3,163 1,629 1,547 New / Existing 982 766 626 237 Sale of NPL / Write-off (172) (1,065) (66) (41) Payment / Declassification (461) (1,151) (127) (114) Closing Balance 2,062 1,713 2,062 1,629 12

  13. Slide 13: NPL by Industry

    NPL by Industry Dec’08 Sep’08 Dec’07 NPL NPL NPL $m ratio $m ratio $m ratio Transport, Storage & Communications 18 0.3 17 0.3 20 0.4 Building & Construction 152 1.0 114 0.7 145 1.3 Manufacturing 539 5.0 398 3.6 418 4.2 Financial Institutions 290 1.8 176 1.1 179 1.1 General Commerce 411 3.1 307 2.0 3

  14. Slide 14: Adequate Impairment Coverage

    Adequate Impairment Coverage Total Impairment 1,917 2,144 2,247 2,415 2,548 ($m) 268.5% 223.8% 227.7% 224.7% 203.7% 111.8% 113.7% 122.2% 124.3% 110.5% 973 1,008 832 881 647 1,270 1,312 1,366 1,442 1,540 Dec'07 M ar'08 Jun'08 Sep'08 Dec'08 Collective CollectiveImpairment Impairment($m) ($m) Individua

  15. Slide 15: Singapore (including ACU) – Summarised P/L

    Singapore (including ACU) – Summarised P/L 2008 2007 +/(-) 4Q08 3Q08 +/(-) $’m $’m % $’m $’m % Net interest income 2,156 1,794 20.1 619 521 18.7 Non-interest income 1,225 1,186 3.2 271 229 18.3 Total income 3,380 2,980 13.4 890 751 18.5 Less: Total expenses 1,150 1,146 0.3 307 285 7.8 Operating prof

  16. Slide 16: Singapore (including ACU) – Key Financial Indicators

    Singapore (including ACU) – Key Financial Indicators 2008 2007 +/(-) 4Q08 3Q08 +/(-) % % % pt % % % pt Net interest margin 1.93 1.84 0.09 2.09 1.83 0.26 Non-NII / Total income 36.2 39.8 (3.6) 30.5 30.6 (0.1) Expense / Total income 34.0 38.5 (4.5) 34.5 37.9 (3.4) Customer loans (net) – $’m 63,451 57,

  17. Slide 17: Malaysia – Summarised P/L

    Malaysia – Summarised P/L 2008 2007 +/(-) 4Q08 3Q08 +/(-) RM’m RM’m % RM’m RM’m % Net interest income 987 874 12.9 252 253 (0.4) Non-interest income 310 433 (28.4) 83 53 56.6 Total income 1,297 1,307 (0.8) 335 306 9.5 Less: Total expenses 516 461 11.9 135 136 (0.7) Operating profit 781 846 (7.7) 200

  18. Slide 18: Malaysia – Key Financial Indicators

    Malaysia – Key Financial Indicators 2008 2007 +/(-) 4Q08 3Q08 +/(-) % % % pt % % % pt Net interest margin 2.89 3.00 (0.11) 3.05 2.84 0.21 Non-NII / Total income 23.9 33.1 (9.2) 24.8 17.3 7.5 Expense / Total income 39.8 35.3 4.5 40.3 44.4 (4.1) Customer loans (net) – RM’m 28,313 25,868 9.5% 28,313 28

  19. Slide 19: Thailand – Summarised P/L

    Thailand – Summarised P/L 2008 2007 +/(-) 4Q08 3Q08 +/(-) THB’m THB’m % THB’m THB’m % Net interest income 7,578 6,645 14.0 2,001 1,929 3.7 Non-interest income 3,292 2,598 26.7 754 813 (7.3) Total income 10,870 9,243 17.6 2,755 2,742 0.5 Less: Total expenses 6,977 6,535 6.8 1,801 1,781 1.1 Operating

  20. Slide 20: Thailand – Key Financial Indicators

    Thailand – Key Financial Indicators 2008 2007 +/(-) 4Q08 3Q08 +/(-) % % % pt % % % pt Net interest margin 4.06 3.49 0.57 4.35 4.10 0.25 Non-NII / Total income 30.3 28.1 2.2 27.4 29.6 (2.2) Expense / Total income 64.2 70.7 (6.5) 65.4 65.0 0.4 Customer loans (net) – THB’m 153,971 143,830 7.1% 153,971

  21. Slide 21: Indonesia – Summarised P/L

    Indonesia – Summarised P/L 2008 2007 +/(-) 4Q08 3Q08 +/(-) IDR’b IDR’b % IDR’b IDR’b % Net interest income 1,600 1,384 15.6 483 396 22.0 Non-interest income 397 303 31.0 137 94 45.7 Total income 1,997 1,687 18.4 620 490 26.5 Less: Total expenses 1,123 837 34.2 314 272 15.4 Operating profit 874 850 2

  22. Slide 22: Indonesia – Key Financial Indicators

    Indonesia – Key Financial Indicators 2008 2007 +/(-) 4Q08 3Q08 +/(-) % % % pt % % % pt Net interest margin 6.15 5.98 0.17 6.52 6.18 0.34 Non-NII / Total income 19.9 18.0 1.9 22.1 19.2 2.9 Expense / Total income 56.2 49.6 6.6 50.6 55.5 (4.9) Customer loans (net) – IDR’b 23,542 18,143 29.8% 23,542 22,

  23. Slide 23: China – Summarised P/L

    China – Summarised P/L 2008 2007 +/(-) 4Q08 3Q08 +/(-) CNY’m CNY’m % CNY’m CNY’m % Net interest income 484 253 91.3 103 131 (21.4) Non-interest income * 96 11 772.7 17 23 (26.1) Total income 580 264 119.7 120 154 (22.1) Less: Total expenses 245 101 142.6 65 49 32.7 Operating profit 335 163 105.5 55

  24. Slide 24: China – Key Financial Indicators

    China – Key Financial Indicators 2008 2007 +/(-) 4Q08 3Q08 +/(-) % % % pt % % % pt Net interest margin 5.15 4.90 0.25 4.41 4.79 (0.38) Non-NII / Total income 16.6 4.2 12.4 14.2 14.9 (0.7) Expense / Total income 42.2 38.3 3.9 54.2 31.8 22.4 Customer loans (net) – CNY’m 10,621 9,488 11.9% 10,621 10,73

  25. Slide 25: Improved Liquidity

    Improved Liquidity Customer Loans, Deposits and L/D Ratio 89.3% 88.8% 86.6% 86.1% 84.5% 113.1 118.2 107.0 109.6 109.0 97.4 100.4 99.8 92.7 94.4 Dec'07 Mar'08 Jun'08 Sep'08 Dec'08 Net NetCustomer CustomerLoans Loans($b) ($b) Customer CustomerDeposits Deposits($b) ($b) Loans Loans/ /Deposits Deposits(

  26. Slide 26: Diversified Loan Portfolio

    Diversified Loan Portfolio Dec’08 Dec’08 Sep’08 Dec’07 % mix $b $b $b Transport, Storage & Communications 6% 5.8 5.8 5.3 Building & Construction 12% 12.7 12.4 11.0 Manufacturing 10% 10.6 11.0 9.8 Financial Institutions 16% 16.5 16.2 16.3 General Commerce 13% 13.0 14.7 12.8 Professional & Private Ind

  27. Slide 27: Balanced Investment Portfolio

    Balanced Investment Portfolio Dec’08 Dec’08 Sep’08 Dec’07 % mix $m $m $m Singapore government securities * 34% 8,733 6,283 8,579 Other government securities * 6% 1,596 1,821 2,438 Investment securities Debt 52% 13,453 14,895 16,552 Equity 8% 2,221 2,676 2,864 Total 100% 26,003 25,674 30,433 * Exclud

  28. Slide 28: CDOs

    CDOs Exposure as at For 4Q08 As at 31/12/08 Net 31/12/08 30/9/08 Provision Provision Coverage Exposure $m $m $m $m $m % ABS 18 85 - 18 - 100 Corporate 189 189 29 142 47 75 Total 207 274 29 160 47 77 ƒ Net CDO exposure was only $47m ƒ 100% provision for ABS CDO ƒ Corporate CDO was 75% covered 28

  29. Slide 29: Strong Capital Position

    Strong Capital Position Capital Adequacy Ratios (CAR) * 15.9% ^ 15.6% 15.5% 15.3% Total CAR 14.4% 14.5% 10.9% ^ ` 11.2% 10.9% 10.7% 10.2% Tier 1 CAR 10.0% Dec'07 Mar'08 Jun'08 Sep'08 Dec'08 $m Tier 1 Capital 12,461 12,011 11,630 13,177 12,456 Risk-Weighted Assets 124,772 111,850 114,368 118,044 114,

  30. Slide 30: Maintain High Net Dividend Rate

    Maintain High Net Dividend Rate Special Dividend in Specie 24.2 cts 12.3 cts Final 22.8 cts Interim 41.0 cts 45.0 cts 40.0 cts 32.0 cts 16.0 cts 16.0 cts 16.4 cts 20.0 cts 2005 2006 2007 2008 Special Dividend $351m * $369m $187m - Cash Dividend $737m $868m $926m $903m Dividend Payout $1,088m $1,237m

  31. Slide 31: In Summary …

    In Summary … ƒ Strong operating profit growth ƒ Higher interest margin ƒ Key Singapore market remains stable ƒ Disciplined cost management ƒ Increased NPA amid economic downturn, adequate provisioning ƒ Strong CAR, well above regulatory minimum requirement ƒ Dividend payout maintained 31

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