Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q1 2013 Earnings Presentation
39 slides from Oversea-chinese Banking's earnings presentation, Apr 30, 2013
Slide 1: First Quarter 2013 Results Presentation
First Quarter 2013 Results Presentation 30 April 2013
Slide 2: Agenda
Agenda Results Overview 1Q13 Performance Trends Appendix: Financial Highlights of Malaysia and Indonesia 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: 1Q13 Highlights
1Q13 Highlights Core net profit of S$696m, 12% lower YoY, and 5% higher QoQ • Net interest income 4% lower YoY as robust asset growth was offset by a reduction in net interest margin • Fee and commission income grew 15% from a year ago, boosted by strong growth in wealth management, loan-related and
Slide 4: 1Q13 core net profit of S$696m, 12% lower YoY and 5% higher QoQ
1Q13 core net profit of S$696m, 12% lower YoY and 5% higher QoQ 1Q13 1Q12 YoY 4Q12 QoQ OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 912 951 (4) 921 (1) Non-interest income 676 790 (14) 757 (11) Total income 1,588 1,741 (9) 1,678 (5) Operating expenses (672) (625) 8 (724) (7) Operating pr
Slide 5: Key ratios
Key ratios 1Q13 1Q12 4Q12 Based on core earnings % % % Net interest margin 1.64 1.86 1.70 Non-interest income / Total income 42.6 45.4 45.1 Cost / Income 42.3 35.9 43.1 Loans / Deposits 87.0 84.4 86.2 NPL Ratio 0.7 1.0 0.8 Allowances / NPAs 149.0 106.0 141.8 ROE 11.7 14.7 11.2 Cash ROE 12.0 15.0 11.
Slide 6: 1Q13 ROE of 11.7%
1Q13 ROE of 11.7% 14.7% 12.5% 12.8% 11.1% 11.6% 11.2% 11.7% Core ROE* 2,825 790 724 696 648 663 2,280 Core net profit (S$m) 790 1Q 596 2011 2012 1Q12 2Q12 3Q12 4Q12 1Q13 * Quarterly figures annualised 6
Slide 7: Profit contribution by business and geography
Profit contribution by business and geography 1Q13 PBT 1Q13 PBT by Business* by Geography PBT Other Group Asia Rest of S$894m Pacific the World YoY: -12% Greater Insurance China Singapore Global Corporate / 5% 4%1% Indonesia 5% S$531m Investment YoY: -19% 25% 46% Banking Malaysia S$226m YoY: +6% 25%
Slide 8: Agenda
Agenda Results Overview 1Q13 Performance Trends Appendix: Financial Highlights of Malaysia and Indonesia Subsidiaries 8
Slide 9: Net interest income declined 4% YoY; asset growth more than offset by lower margin
Net interest income declined 4% YoY; asset growth was more than offset by a decline in net interest margin Net interest margin 1.86% 1.77% 1.86% 1.77% 1.75% 1.70% 1.64% 3,748 951 931 944 921 912 3,410 Net interest income (S$m) 1Q 784 951 2011 2012 1Q12 2Q12 3Q12 4Q12 1Q13 9
Slide 10: Net interest income less specific allowances rose YoY and QoQ
Net interest income less specific allowances rose YoY and QoQ Adjusted net interest 1.82% 1.78% 1.72% 1.75% margin 1/ 1.70% 1.64% 1.63% 908 918 920 910 Adjusted 3,633 886 net interest 3,331 income1/ (S$m) 772 908 1Q 2011 2012 1Q12 2Q12 3Q12 4Q12 1Q13 1/ Net interest income adjusted for specific allo
Slide 11: Non-interest income 14% lower YoY
Non-interest income 14% lower YoY; as fee income growth was offset by lower trading and insurance profit Non- interest 45.4% 44.4% 45.1% income / 43.6% 42.6% 39.3% 39.0% Total income 2,897 790 754 757 838 676 2,212 253 596 226 250 Non- interest 508 215 108 income 701 (S$m) 403 216 113 193 179 120 16
Slide 12: Fee income up 15% YoY
Fee income up 15% YoY; driven by growth in wealth management, loan-related and fund management income 1,198 1,137 317 316 157 303 304 175 274 41 39 91 39 39 95 17 39 42 21 14 Fees and 15 commissions 482 112 (S$m) 445 124 125 108 125 43 146 37 170 38 37 33 322 105 76 82 89 252 74 2011 2012 1Q12 2Q12
Slide 13: Profit from life assurance down 19% YoY on lower mark-to-market gains
Profit from life assurance down 19% YoY on lower mark-to-market investment gains 692 221 210 125 25 190 31 178 35 43 Profit from life 383 assurance (S$m) 423 160 127 139 121 71 102 134 35 2 122 144 40 36 35 34 34 2011 2012 1Q12 2Q12 3Q12 4Q12 1Q13 Participating fund Non-participating fund Investment
Slide 14: Other non-interest income fell 44% YoY, mainly from lower trading income
Other non-interest income fell 44% YoY, mainly from lower trading income 701 70 116 216 12 193 403 18 179 Other non- 44 interest 24 61 31 income 19 (S$m) 120 113 125 14 515 16 22 50 160 144 136 217 75 56 2011 2012 1Q12 2Q12 3Q12 4Q12 1Q13 Net gains from investment Trading income securities and dispo
Slide 15: Wealth management revenue contributed 33% of total group revenue in 1Q13
Wealth management revenue contributed 33% of total group revenue in 1Q13 32.7% 27.6% 30.3% 29.8% As % of 28.0% Group 22.9% 21.8% revenue 1,836 527 520 500 476 Wealth management 1,285 revenue (S$m) 333 1Q 527 378 2011 2012 1Q12 2Q12 3Q12 4Q12 1Q13 Note: Comprises the consolidated revenue from insuran
Slide 16: Cost remained well-managed
Cost remained well-managed Cost / 43.2% Income 40.6% 43.3% 43.1% 42.3% 40.3% 35.9% 2,695 724 2,430 685 661 672 554 625 156 531 130 126 144 124 491 122 134 451 125 Operating 119 116 expenses (S$m) 1,650 1,448 401 433 434 421 382 2011 2012 1Q12 2Q12 3Q12 4Q12 1Q13 Staff costs Property & equipment Othe
Slide 17: 1Q13 core net profit before GEH contribution fell 8% YoY but rose 10% QoQ
1Q13 core net profit before GEH contribution fell 8% YoY but rose 10% QoQ 1Q13 1Q12 YoY 4Q12 QoQ OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 895 936 (4) 903 (1) Non-interest income 405 470 (14) 477 (15) Total income 1,300 1,406 (8) 1,379 (6) Operating expenses (622) (581) 7 (679) (8) Op
Slide 18: Net allowances declined YoY and QoQ
Net allowances declined YoY and QoQ, reflecting effective credit risk management Net allowances for loans and other 271 assets (S$m) 8 221 15 115 96 79 8 68 70 43 15 35 38 148 24 21 127 13 45 43 2 29 31 2 17 (4) 2011 2012 1Q12 2Q12 3Q12 4Q12 (10) 1Q13 Specific loan 7 8 13 4 7 10 1 allowances/ avg. l
Slide 19: Movement in specific allowances for loans
Movement in specific allowances for loans 1Q13 1Q12 4Q12 S$m S$m S$m Allowances for new and 49 79 71 existing NPLs Write-backs1/ (26) (25) (25) Recoveries2/ (21) (11) (11) Net specific allowances 2 43 35 1/ Write-backs of specific allowances for existing NPLs due to settlements and repayments 2/ Rec
Slide 20: Loans increased 10% YoY and 3% QoQ across corporate and consumer segments
Loans increased 10% YoY and 3% QoQ across corporate and consumer segments Loan growth Group YoY: +10% QoQ: +3% 144 149 Rest of the World 138 140 YoY: +11% 135 19 QoQ: +5% 18 17 17 Greater China 17 YoY: -5% 17 17 QoQ: -2% 17 16 18 11 Indonesia 10 11 YoY: +18% 10 QoQ: +3% 9 24 23 23 Malaysia 21 YoY: +
Slide 21: Loan book remained diversified
Loan book remained diversified Customer Loans by Geography Customer Loans by Industry As of 31 March 2013 As of 31 March 2013 Rest of the World Agriculture, mining & Others Other Asia quarrying Pacific 7% 5% Housing Loans Transport, storage 3% 6% Singapore & comm. 7% 27% Greater Manufacturing China
Slide 22: Customer deposits, led by CASA, grew 7% YoY and 2% QoQ
Customer deposits, led by CASA, grew 7% YoY and 2% QoQ. CASA ratio improved to 51.1% Loans / 87.7% 86.2% 87.0% Deposits 84.4% 85.3% 165 169 158 160 158 14 15 13 15 13 67 67 Deposits 73 72 71 (S$b) 31 32 29 29 30 CASA 50.6% ratio: 45.6% 46.0% 47.2% 51.1% 53 54 43 45 45 Mar12 Jun12 Sep12 Dec12 Mar13 C
Slide 23: NPL ratio improved further to 0.7%
NPL ratio improved further to 0.7% 1.0% NPL ratio 0.9% 0.8% 0.8% 0.7% 1,513 144 1,280 1,256 91 1,172 87 1,119 489 27 NPAs 28 (S$m) 426 418 478 420 560 456 438 409 407 320 307 313 258 264 Mar12 Jun12 Sep12 Dec12 Mar13 Singapore Malaysia International Debt securities / NPLs NPLs NPLs Contingent liabil
Slide 24: NPAs fell 5% QoQ, driven mainly by lower new NPAs
NPAs fell 5% QoQ, driven mainly by lower new NPAs 1Q13 1Q12 4Q12 S$m S$m S$m NPAs – Opening balance 1,172 1,437 1,256 New NPAs 122 303 289 New recoveries/upgrades (144) (203) (338) Write-offs (31) (24) (35) NPAs – Closing balance 1,119 1,513 1,172 24
Slide 25: Strong allowance coverage ratios
Strong allowance coverage ratios of 149% of total NPAs and 350% of unsecured NPAs 450.00% 400.00% 373% 370% Total 353% 350% allowances/ 350.00% 333% Unsecured NPAs 300.00% 250.00% 200.00% 150.00% Total 142% 149% allowances/ 128% 100.00% NPAs 125% 106% 50.00% 0.00% Mar12 Jun12 Sep12 Dec12 Mar13 25
Slide 26: Capital position remained strong: Tier 1 and CET1 ratio of 16.2%
Capital position remained strong: Tier 1 and Common Equity Tier 1 ratio of 16.2% Basel II Basel III 18.0 18.5 18.1 CAR 16.1 1.9 1.9 (% of RWA) 15.5 2.1 1.4 1.4 3.8 3.8 Tier 2 capital 3.1 16.6 3.0 15.9 16.2 14.7 14.1 Tier 1 preference shares 16.2 Core Tier 1 capital 12.1 12.8 11.6 11.1 Common Equity
Slide 27: GEH: 1Q13 core earnings contribution fell due to weaker investment performance
GEH: 1Q13 core earnings contribution fell due to weaker investment performance during the quarter 1Q13 1Q12 YoY 4Q12 QoQ GEH Contribution S$m S$m +/(-)% S$m +/(-)% Profit from insurance business 187 229 (18) 227 (18) - Operating profit 1/ 131 105 25 169 (22) - Non-operating profit 2/ 38 108 (64) 39
Slide 28: GEH: Operating profit from insurance business grew 25% YoY
GEH: Operating profit from insurance business grew 25% YoY on improved performance of Non- participating Fund and Investment-linked Fund 169 501 19 11 23 99 131 117 4 Operating profit from 2 110 105 insurance 4 35 3 27 business 21 28 (S$m) 264 103 59 63 51 50 119 32 30 29 28 29 2012 1Q12 2Q12 3Q12 4
Slide 29: GEH: Non-operating profit from insurance business of S$38m lower YoY
GEH: Non-operating profit from insurance business of S$38m was lower YoY as a result of lower mark- to-market investment gains 161 Non- 108 operating profit from insurance 72 business (S$m) 108 1Q 39 38 2012 1Q12 2Q12 3Q12 4Q12 1Q13 (57) Note: Non-operating profit comprises of mark-to-market changes
Slide 30: GEH: Total weighted new sales up 17% YoY
GEH: Total weighted new sales up 17% YoY on growth across all markets 838 790 32 263 33 9 304 203 205 197 296 8 104 11 175 9 Weighted 7 new 72 61 business 73 premiums 56 (S$m) 502 461 150 123 134 113 116 2011 2012 1Q12 2Q12 3Q12 4Q12 1Q13 Singapore Malaysia Emerging markets Note: QoQ comparison not
Slide 31: GEH: New business embedded value of S$77m for 1Q13
GEH: New business embedded value of S$77m for 1Q13 NBEV / 47.4% 45.8% 44.3% Total 42.2% 43.6% weighted 35.9% 37.6% new sales 94 87 88 1 83 2 2 361 353 2 77 8 7 35 2 34 31 38 NBEV 143 138 31 (S$m) 58 51 52 210 208 47 44 2011 2012 1Q12 2Q12 3Q12 4Q12 1Q13 Singapore Malaysia Emerging markets Note: QoQ
Slide 32: OCBC Malaysia: Net interest income up 12% YoY; non-interest income down 23%
OCBC Malaysia: Total net interest income and Islamic financing income up 12% YoY; non-interest income fell 23% YoY Net interest income and Non-interest income (RM m) Islamic financing Income (RM m) Net Interest/ Non-int. income/ financing margin Total income 2.32% 33.3% 2.32% 2.31% 2.13% 2.22% 27.3%
Slide 33: OCBC Malaysia: Loans grew 15% YoY; NPL ratio improved to 1.8%
OCBC Malaysia: Loans grew 15% YoY and 3% QoQ; NPL ratio further improved to 1.8% Gross Loans (RM b) Deposits (RM b) NPL Ratio Loans / Deposits 86.3% 3.0% 85.6% 82.1% 80.8% 2.3% 2.2% 77.4% 2.1% 1.8% 58 56 55 57 56 50 47 48 43 45 Mar12 Jun12 Sep12 Dec12 Mar13 Mar12 Jun12 Sep12 Dec12 Mar13 Note: Based
Slide 34: OCBC NISP: Net interest income up 18% YoY; non-interest income down 12%
OCBC NISP: Net interest income up 18% YoY; non- interest income down 12% YoY Net interest income (Rp b) Non-interest income (Rp b) Net interest Non-int. income/ margin Total income 4.80% 4.37% 4.32% 4.17% 4.04% 3.98% 26.5% 25.8% 3.87% 24.6% 24.1% 22.4% 21.8% 19.1% 709 836 2,566 673 687 2,255 601 605
Slide 35: OCBC NISP: Loans grew 27% YoY; NPL ratio lower at 0.8%
OCBC NISP: Loans grew 27% YoY and 2% QoQ; NPL ratio lower at 0.8% Gross Loans (Rp t) Deposits (Rp t) NPL Ratio Loans / Deposits 93.9% 91.8% 90.2% 1.2% 1.1% 86.8% 1.0% 0.9% 85.5% 0.8% 53 54 51 61 59 48 52 54 42 50 Mar12 Jun12 Sep12 Dec12 Mar13 Mar12 Jun12 Sep12 Dec12 Mar13 CASA Ratio 58.3% 57.3% 50.5
Slide 36: Agenda
Agenda Results Overview 1Q13 Performance Trends Appendix: Financial Highlights of Malaysia and Indonesia Subsidiaries 36
Slide 37: OCBC Malaysia: 1Q13 net profit up 6% YoY
OCBC Malaysia: 1Q13 net profit up 6% YoY 1Q13 1Q12 YoY 4Q12 QoQ OCBC Malaysia RM m RM m +/(-)% RM m +/(-)% Net interest income 319 304 5 324 (2) Islamic Financing Income 83 54 54 81 2 Non-interest income 104 135 (23) 101 3 Total income 506 494 3 506 - Operating expenses (201) (192) 5 (235) (14) Oper
Slide 38: OCBC NISP: 1Q13 net profit up 23% YoY
OCBC NISP: 1Q13 net profit up 23% YoY 1Q13 1Q12 YoY 4Q12 QoQ OCBC NISP RP b RP b +/(-)% RP b +/(-)% Net interest income 709 601 18 687 3 Non-interest income 168 190 (12) 239 (30) Total income 877 791 11 926 (5) Operating expenses (521) (471) 11 (500) 4 Operating profit 356 320 11 426 (17) Allowances
Slide 39: First Quarter 2013 Results Thank You
First Quarter 2013 Results Thank You
Oversea-Chinese Banking — Q1 2013 Earnings Presentation on 6ix