United Overseas Bank Limited · SGX:U11
United Overseas Bank — 1H21 Earnings Presentation
24 slides from United Overseas Bank's earnings presentation, August 2021
Slide 1: UOB Group Financial Updates
UOB Group Financial Updates Lee Wai Fai Group Chief Financial Officer For the First Half / Second Quarter Ended 30 June 2021 Private and Confidential. Disclaimer: This material that follows is a presentation of general background information about UOB’s activities current at the date of the presenta
Slide 2: Financial Highlights
Financial Highlights 2Q21 key financial indicators Strong first half earnings of $2b well supported by stable Operating profit Net profit after tax NIM, record fees and lower credit cost. Balance sheet $1.4b $1.0b remained resilient - 3% QoQ No change QoQ + 11% YoY + 43% YoY • Business momentum cont
Slide 3: Performance by Segment
Performance by Segment 1H21 1H20 YoY 2Q21 1Q21 QoQ ▪ Strong Retail performance Operating Profit $m $m +/(-) % $m $m +/(-) % in wealth management, Group Retail 1,070 1,036 3 502 568 (12) credit cards and franchise volume growth Group Wholesale Banking 1,651 1,559 6 848 803 6 ▪ Wholesale saw record in
Slide 4: Wholesale customers
+5%1 Strengthening Cross border income; Connectivity Formed 29%2 of GWB income Wholesale Across our ASEAN footprint and global network +78%1 Suppliers and distributors within customers Financial Supply Chain Management (FSCM) solution ▪ Growing regional Sector +25%3 franchise, capturing Specialisati
Slide 5: Consumers
Omni-channel S$137b1,2 Assets under management (AUM) Experience 57% YoY3 Serving affluent customers Consumers across various touchpoints +20%3 Mortgage sales4 ▪ Tapping on rising >355k1 affluence in Digital Bank: Customers in Thailand and Indonesia Southeast Asia TMRW Specially for mobile-first and
Slide 6: Performance by Geography
1H21 1H20 YoY 2Q21 1Q21 QoQ Performance by Operating Profit $m $m +/(-)% $m $m +/(-)% Geography Singapore 1,429 1,316 9 705 724 (3) Rest of Southeast Asia 678 663 2 335 342 (2) Malaysia 355 351 1 173 182 (5) ▪ Steady growth across Thailand 201 189 6 101 101 (0) Singapore, North Asia Indonesia 118 10
Slide 7: Financial Highlights
Financial Highlights 1H21 1H20 YoY 2Q21 1Q21 QoQ 2Q20 YoY 1H21 $m $m +/(-)% $m $m +/(-)% $m +/(-)% ▪ NPAT jumped 29% YoY Net interest income 3,107 3,050 2 1,578 1,529 3 1,456 8 supported by stable NIM, Net fee income 1,234 960 28 595 638 (7) 445 34 robust loan growth, record Others 563 657 (14) 243
Slide 8: Net Interest Income and Margin
1.98 1.90 1.87 1.83 1.87 1.90 1.90 Net Interest Income 1.60 1.56 1.48 1.53 1.57 1.57 1.56 and Margin 0.65 0.73 0.76 0.78 0.75 0.71 3,049 3,107 0.56 ▪ NII increased 3% QoQ 410 358 led by steady loan growth 1,512 1,529 1,578 1,456 1,474 ▪ NIM stable for the 3 164 206 208 207 203 consecutive quarters 2
Slide 9: Fee Income
25 26 21 23 25 23 20 Fee Income ▪ Broad-based fee increase of 1,234 28% for 1H21 199 960 81 638 ▪ Loan-related fees 595 177 103 maintained strong 514 522 96 39 440 40 momentum from 1Q with 445 86 104 41 continued opportunities for 335 80 46 49 239 201 refinancing or 24 188 188 merger/acquisition dea
Slide 10: Trading & Investment Income
72 73 64 48 57 57 Trading & Investment 37 517 Income 294 428 ▪ T&I income from customer- 246 268 related contribution held 155 210 steady 185 105 182 90 152 ▪ Trading income normalised 50 from last quarter’s 42 exceptional trading 250 273 performance 141 133 109 121 110 1H20 1H21 2Q 3Q 4Q 1Q 2Q 2020
Slide 11: Expenses and Cost / Income Ratio
45.6 46.0 46.7 Expenses and 43.8 44.6 43.8 43.7 Cost / Income Ratio 12% 11% 14% ▪ Disciplined spending and 13% investments aligned 14% 13% 12% 13% 12% 11% 12% 14% 14% 14% ▪ Lowest quarter CIR of 15% 15% 12% 13% 14% 14% 14% 43.7% 62% 61% 60% 59% 58% 62% 62% ▪ Continue to focus on strategic investment
Slide 12: Non-Performing Assets
2020 2021 ($m) 2Q 3Q 4Q 1Q 2Q Non-Performing Assets NPAs at start of period 4,590 4,628 4,301 4,608 4,544 Non-individuals New NPAs _ 131 74 622 145 360 ▪ NPL ratio stable at 1.5% Less: Upgrades and recoveries 126 216 175 250 158 ▪ Higher NPA formation Write-offs 42 63 179 26 202 this quarter due to
Slide 13: Total Allowance on Loans
67 68 52 55 24 Total Allowance on 29 Loans 22 15 34 20 712 19 19 13 10 ▪ Credit costs eased to 20bps this quarter with stabilising 468 476 macroeconomic conditions, 408 391 albeit unevenly, across the 351 150 region 378 342 142 207 ▪ As such no further build-up 144 304 136 6 of general allowance is
Slide 14: Allowance Coverage
39 37 37 36 35 1.0 1.0 1.0 1.0 Allowance Coverage 0.9 4,944 5,075 5,007 4,755 379 4,434 379 379 379 ▪ Strong reserve buffer with 379 coverage for performing 2,712 2,873 3,003 3,040 loans maintained at 1% 2,391 ▪ Strong NPA coverage at 110% or 265% taking 1,664 1,664 1,692 1,693 1,588 collateral into
Slide 15: Gross Loans
Jun-21 Mar-21 Jun-20 QoQ YoY Gross Loans $b $b $b +/(-)% +/(-)% Singapore 153 151 142 1 8 ▪ Steady growth of 2% QoQ mainly from term Rest of Southeast Asia 62 63 64 (1) (4) and trade loans in Malaysia 29 30 30 (2) (2) Singapore, North Asia Thailand 20 20 21 (3) (5) and Rest of the World Indonesia 11
Slide 16: Total Funding
Jun-21 Mar-21 Jun-20 QoQ YoY Total Funding $b $b $b +/(-)% +/(-)% Singapore 230 226 217 2 6 Rest of Southeast Asia 64 64 65 (0) (1) Malaysia 31 30 30 4 3 ▪ Continue to focus on Thailand 20 21 23 (5) (12) stable funding Indonesia 9 9 8 (2) 8 Vietnam 3 3 3 (7) 4 ▪ Healthy CASA ratio of Others 0 0 0 0
Slide 17: Liquidity ratios
Liquidity ratios 136 139 139 131 127 122 125 123 119 121 ▪ Ample liquidity with LCR at 131% and 85.8 86.7 85.4 87.0 86.9 NSFR at 123% Jun Sep Dec Mar Jun 2020 2021 USD LDR (%) 59.6 58.0 58.2 62.5 62.6 All-currency LCR (%) Loan/Deposit Ratio (LDR) (%) Net Stable Fund Ratio (NSFR) (%) 17
Slide 18: Capital
Capital 14.0 14.0 14.7 14.3 14.2 ▪ Strong capital position with CET1 ratio at 232 231 236 241 14.2% 225 ▪ Higher RWA alongside loan growth Jun Sep Dec Mar Jun 2020 2021 Leverage ratio (%) 7.3 7.4 7.4 7.5 7.4 RWA ($b) CET1 ratio (%) 18
Slide 19: Dividends
130 120 20 Dividends 20 55 78 50 ▪ MAS dividend cap 39 60 lifted Net dividend Per ordinary share (¢) ▪ Resuming 50% payout 50 55 Interim Special 39 Final 2018 2019 2020 1H21 2018 2019 2020 1H21 Payout amount ($m) 2,000 2,171 1,304 1,006 Payout ratio (%) 50 50 45 ^ 50 Payout ratio (excl special divid
Slide 20: Appendix
▪ Loan portfolio Appendix ▪ Exposure to Greater China ▪ Exposure to Oil & Gas sector 20
Slide 21: Diversified Loan portfolio
Professionals and Housing loans private individuals 23% Others 9% 6% Transport, storage General commerce and 12% Industry communication 4% Diversified Loan portfolio FIs, investment and holding companies Building & construction 12% 26% Manufacturing 8% Others Large corporates 12% and institutions 53
Slide 22: Exposure to Greater China
Exposure to Greater China 73.5 71.8 74.8 69.2 68.3 6.2 7.3 7.6 6.1 6.5 Debt ($b) 44.1 44.1 47.2 48.2 44.2 Non Bank ($b) Bank ($b) 23.2 19.0 17.6 19.0 17.3 Jun Sep Dec Mar Jun 2020 2021 As at 30 Jun 2021: Mainland China exposure ($27.3b or 6% of total assets) Hong Kong SAR exposure ($38.2b or 9% of t
Slide 23: Exposure to Oil and Gas (O&G) Sector
Exposure to Oil and Gas (O&G) Sector Total Outstanding O&G Loans ($b) As of 30 June 2021, outstanding O&G loans represented 4% of total loans as compared with 5% at 30 June 2018 11.8 11.3 3.7 Approximately 80% of O&G exposure is to downstream players and 4.4 traders, which are mainly national oil co
Slide 24: Thank You
tit VOB Thank You BRA RIGHT BY YOU