Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Q3 2019 Earnings Presentation
37 slides from Oversea-chinese Banking's earnings presentation, Nov 5, 2019
Slide 1: Third Quarter 2019 Results Presentation
Third Quarter 2019 Results Presentation 5 November 2019 Disclaimer: This presentation should be read as an overview of OCBC’s current business activities and operating environment which may contain statements relating to OCBC’s growth strategy and future business aspirations. These statements involv
Slide 2: Agenda
Agenda Results Overview 3Q19 & 9M19 Group Performance Trends Appendix: Performance of Major Subsidiaries - Great Eastern Holdings - OCBC Wing Hang - OCBC Malaysia - Bank OCBC NISP Note: - Certain comparative figures have been restated to conform with the current period’s presentation. - Amounts less
Slide 3: 3Q19 Highlights
Group performance 3Q19 Highlights Core net profit rose 1% YoY and 3% QoQ to S$1.26b; 9M19 net profit rose to a record high Sustainable Earnings Key Highlights Total income Net interest margin ➢ Core net profit from banking operations up 2% YoY to S$1.10b S$2,655m 1.77% +4% YoY +5bps YoY ➢ Net intere
Slide 4: 3Q19 Group Performance
Group performance 3Q19 Group Performance Core net profit grew 1% YoY and 3% QoQ to S$1.26b 3Q19 3Q18 YoY 2Q19 QoQ OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 1,600 1,505 6 1,588 1 Non-interest income 1,055 1,039 2 1,030 2 Total income 2,655 2,544 4 2,618 1 Operating expenses (1,132) (1,
Slide 5: 3Q19 Banking Operations Performance
Banking Ops performance 3Q19 Banking Operations Performance Core net profit from Banking Operations rose 2% YoY and 1% QoQ to S$1.10b 3Q19 3Q18 YoY 2Q19 QoQ Banking Operations S$m S$m +/(-)% S$m +/(-)% Net interest income 1,570 1,485 6 1,560 1 Non-interest income 792 744 6 788 ̶ Total income 2,362 2
Slide 6: 9M19 Group Performance
Group performance 9M19 Group Performance Net profit increased 2% YoY to a record S$3.63b, driven by earnings growth from the banking, wealth management and insurance franchise 9M19 9M18 YoY OCBC Group S$m S$m +/(-)% Net interest income 4,722 4,370 8 Non-interest income 3,227 2,981 8 Total income 7,9
Slide 7: 9M19 Banking Operations Performance
Banking Ops performance 9M19 Banking Operations Performance Banking Operations’ core net profit rose 2% YoY to S$3.12b 9M19 9M18 YoY Banking Operations S$m S$m +/(-)% Net interest income 4,640 4,312 8 Non-interest income 2,279 2,179 5 Total income 6,918 6,490 7 Operating expenses (3,145) (2,978) 6 O
Slide 8: Agenda
Agenda Results Overview 3Q19 & 9M19 Group Performance Trends Appendix: Performance of Major Subsidiaries - Great Eastern Holdings - OCBC Wing Hang - OCBC Malaysia - Bank OCBC NISP 8
Slide 9: Performance by business and geography
Earnings Performance by business and geography Earnings well-diversified across key business segments and geographies 9M19 Operating Profit 9M19 Core Profit before Tax by Business 1/ by Geography 2/ OCBC Wing Hang Others Global 9% 9M19 Corporate / 6% Greater 9M19 Investment Insurance China Banking 5
Slide 10: Net interest income
Net interest income Net interest income 3Q19 net interest income increased 6% YoY; NIM rose 5bps YoY in 3Q19 to 1.77% while 9M19 NIM grew 8bps YoY to 1.77% 1.77% 1.79% 1.76% 1.77% Net interest 1.72% 1.72% margin 1.69% 1.67% 1.67% (“NIM”) 4,722 4,370 1,588 1,600 1,520 1,534 1,505 1,415 1,450 Net inte
Slide 11: Non-interest income
Non-interest income Non-interest income 3Q19 non-interest income up 2% YoY and QoQ Non- 41.4% 40.8% 42.7% interest 40.6% 40.6% 39.3% 39.3% 39.7% income / 35.3% Total income 3,227 1,142 2,981 1,024 1,039 1,030 1,055 668 664 918 276 225 188 204 213 234 830 88 206 52 72 Life & General 26 19 90 Insuranc
Slide 12: Wealth Management (“WM”) Franchise
Wealth management Wealth Management (“WM”) Franchise 9M19 WM income rose 10% YoY to a record high; BOS’ AUM grew 5% YoY to US$110b from sustained net new money inflows 31% 31% 31% 34% 30% 29% 29% 30% 26% As % of Group income 2,461 2,235 921 761 789 727 748 751 Wealth management 607 income1/ (S$m) 9M
Slide 13: Net Fees & Commissions
Non-interest income Net Fees & Commissions 3Q19 net fee income rose 10% YoY and 6% QoQ to a new high 1,557 1,567 231 233 536 550 72 83 518 522 502 495 74 474 82 79 78 418 423 22 78 73 32 79 27 Others 2/ Net fees and 31 19 25 commissions 130 23 Investment Banking (S$m) 3/ 137 150 139 126 140 148 135
Slide 14: Operating expenses
Operating expenses Operating expenses 3Q19 expenses declined 2% QoQ; CIR lower at 42.6% 44.2% 45.9% 44.0% Cost-to- 42.7% 42.5% 41.9% 42.0% 40.9% 42.6% income ratio (“CIR”) 3,378 1,151 1,132 3,136 1,078 1,095 1,069 1,032 1,035 674 227 233 594 202 214 Others 176 200 218 628 211 Property & Operating 59
Slide 15: Total cumulative allowances
Allowances Total cumulative allowances RLAR and cumulative allowances for non-impaired assets (ECL 3,263 stage 1 and 2) were higher QoQ, 3,067 reflecting allowances set aside 3,046 against the global economic 2,800 2,798 2,769 slowdown and heightened geo- 2,695 875 674 675 political risks, as well a
Slide 16: Allowances
Allowances Allowances Total allowances for 3Q19 were S$179m; total credit costs at 24bps 35 25 27 24 15 5 4 8 3 Total credit costs (bps) 1/ 539 249 205 179 Allowances for loans and other assets (S$m) 2/ 111 83 49 12 21 9M18 9M19 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Allowances for loans and other asset
Slide 17: Customer loans
Loans Customer loans Loans grew 2% YoY to S$263b but flat QoQ In constant ccy terms +2% YoY +2% YoY unchanged QoQ -1% QoQ 257 258 259 263 263 247 252 1/ Rest of the world 35 36 38 41 40 YoY: +14% 32 33 QoQ: -2% Greater China Customer 66 64 63 64 65 loans (S$b) 63 65 YoY: -2% QoQ: +2% 20 20 20 20 20
Slide 18: Customer loans
Loans Customer loans Loan portfolio remained well-diversified Customer Loans by Geography Customer Loans by Industry Rest of the World Others 1/ Other Asia Pacific 9% Housing loans Sep 19 14% Sep 19 6% Singapore 9% Manufacturing 24% Jun 19 13% Jun 19 6% 6% 42% 7% 24% 42% Greater 24% 24% S$263b Gener
Slide 19: Greater China Customer Loans
Greater China Greater China Customer Loans Loans increased 2% QoQ to S$65b; NPL ratio unchanged QoQ at 0.4% 0.6% NPL ratio 0.4% 0.3% 0.3% 0.4% 0.4% 0.4% 65 66 64 65 63 63 64 4 4 4 4 4 4 2 3 4 2 3 2 2 3 Macau 32 33 32 33 33 34 34 Taiwan Customer loans to Greater China Hong Kong (S$b) Offshore 2/ 20 2
Slide 20: Asset quality
Asset quality Asset quality Portfolio quality remained sound; NPL ratio at 1.6%; QoQ increase in NPAs largely from the downgrade of two corporate accounts 1.5% 1.5% 1.6% 1.4% 1.4% 1.4% 1.5% NPL ratio 4,190 3,938 3,920 3,914 42 Debt securities / 47 Contingent liabilities 3,594 100 54 636 3,452 3,514
Slide 21: NPL Ratio & Non-Performing Assets
Asset quality NPL Ratio & Non-Performing Assets NPL ratio higher at 1.6%, mainly due to downgrade of two corporate accounts NPL ratio NPAs 3Q19 3Q18 2Q19 1.58% S$m S$m S$m 1.49% 1.50% 1.47% 1.38% 1.38% At start of period 3,914 3,514 3,920 Corporate/ Commercial 0.86% Banking 0.87% 0.86% 0.84% 0.86% 0
Slide 22: Customer deposits
Deposits Customer deposits Customer deposits rose 5% YoY to S$300b 88.5% 87.1% 87.6% 86.8% 85.9% 86.4% 84.4% Group LDR 290 295 294 297 300 289 287 27 27 25 23 25 29 23 132 131 131 133 Others 124 125 128 Customer deposits Fixed Deposits (S$b) 47.1% 47.7% 47.5% 46.4% 46.8% 47.9% 47.1% CASA ratio Curre
Slide 23: Funding & Liquidity
Funding Funding & Liquidity Customer deposits accounted for 79% of total funding; All-currency LCR and NSFR well above regulatory guidelines Funding Composition as of 30 Sep 2019 Wholesale Funding by Currency as of 30 Sep 2019 By Maturity: Customer deposits Current account Others 79% & savings depos
Slide 24: Capital
Capital Capital CET1 CAR rose YoY to 14.4% but unchanged QoQ Capital adequacy ratios (“CAR”) (%) 16.8 17.0 16.4 16.7 15.8 15.9 16.1 14.8 14.9 15.1 15.1 14.2 14.3 14.4 Total CAR Tier 1 CAR Common Equity 14.0 14.2 14.4 14.4 13.1 13.2 13.6 Tier 1 (“CET1”) CAR Mar 18 Jun 18 Sep 18 Dec 18 Mar 19 Jun 19 S
Slide 25: Agenda
Agenda Results Overview 3Q19 & 9M19 Group Performance Trends Appendix: Performance of Major Subsidiaries - Great Eastern Holdings - OCBC Wing Hang - OCBC Malaysia - Bank OCBC NISP 25
Slide 26: Great Eastern Holdings’ performance
Great Eastern Great Eastern Holdings’ performance Net profit contribution rose 20% YoY in 9M19 and grew 23% QoQ in 3Q19 YoY YoY QoQ S$m 9M19 9M18 3Q19 3Q18 2Q19 +/(-)% +/(-)% +/(-)% Profit from insurance business 555 557 − 160 183 (12) 154 4 - Operating profit 1/ 491 464 6 179 144 24 162 11 - Non-op
Slide 27: GEH: Profit from insurance business
Great Eastern GEH: Profit from insurance business 9M19 profit from insurance business up 3% YoY, driven by higher operating profit; 3Q19 operating profit up 24% YoY and 11% QoQ, led by improved margins +3% YoY -11% YoY 491 508 +8% QoQ 17 27 225 183 172 165 75 147 154 11 136 Profit from 15 21 insuran
Slide 28: GEH: Profit from Shareholders’ Fund
Great Eastern GEH: Profit from Shareholders’ Fund 3Q19 Shareholders’ Fund profit rose above the previous quarter to S$56m, led by improved investment income 242 Profit from Shareholders’ 146 148 Fund (S$m) 79 66 56 38 2 (55) 9M18 9M19 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 28
Slide 29: GEH: Total weighted new sales
Great Eastern GEH: Total weighted new sales 3Q19 TWNS grew 6% QoQ to S$318m -5% YoY 916 16 867 20 -9% YoY 260 +6% QoQ 319 351 331 4 331 318 5 7 300 6 TWNS 90 7 (S$m) 95 249 Emerging markets 235 122 108 7 6 118 Malaysia 75 92 641 529 Singapore 256 230 202 204 175 154 150 9M18 9M19 1Q18 2Q18 3Q18 4Q18
Slide 30: GEH: New business embedded value
Great Eastern GEH: New business embedded value 3Q19 NBEV grew 30% YoY and 10% QoQ, driven by improvement in NBEV margin as a result of change in product mix 49.3% 51.3% NBEV 48.0% 46.4% 46.1% 44.9% margin 41.8% 42.3% (NBEV / Total 35.9% weighted new sales) +9% YoY +30% YoY 417 +10% QoQ 383 7 163 5 1
Slide 31: OCBC Wing Hang Hong Kong & Macau’s performance
OCBC Wing Hang OCBC Wing Hang Hong Kong & Macau’s performance 9M19 net profit rose 5% YoY to HKD1.73b; 3Q19 net profit up 11% YoY to HKD590m YoY YoY QoQ HKD m 9M19 9M18 3Q19 3Q18 2Q19 +/(-)% +/(-)% +/(-)% Net interest income 2,910 2,674 9 1,017 908 12 982 4 Non-interest income 832 836 − 303 300 1 27
Slide 32: OCBC Wing Hang Hong Kong & Macau: Loans & Deposits
OCBC Wing Hang OCBC Wing Hang Hong Kong & Macau: Loans & Deposits Loans and deposits declined YoY and QoQ; CASA ratio improved to 46.3% Customer Loans (HKD b) Customer Deposits (HKD b) NPL ratio Loans / Deposits 1/ 0.4% 0.3% 0.3% 0.3% 0.4% 0.3% 0.4% 74.6% 75.9% 74.4% 74.6% 74.6% 73.0% 73.4% 164 190
Slide 33: OCBC Malaysia’s performance
OCBC Malaysia OCBC Malaysia’s performance 9M19 net profit rose 11% YoY; 3Q19 net profit up 61% YoY and 15% QoQ YoY YoY QoQ RM m 9M19 9M18 3Q19 3Q18 2Q19 +/(-)% +/(-)% +/(-)% Net interest income 1,125 1,124 − 369 390 (5) 376 (2) Islamic banking income 1/ 330 328 − 108 107 1 114 (5) Non-interest / fin
Slide 34: OCBC Malaysia: Loans & Deposits
OCBC Malaysia OCBC Malaysia: Loans & Deposits Loans increased 1% YoY to RM70b and deposits up 4% YoY to RM77b; CASA ratio improved to 37.4%; NPL ratio at 2.0% Customer Loans (RM b) Customer Deposits (RM b) NPL ratio Loans / Deposits 2.2% 93.3% 94.1% 92.1% 90.3% 90.5% 91.8% 2.0% 1.9% 1.9% 2.0% 88.9%
Slide 35: Bank OCBC NISP’s performance
Bank OCBC NISP Bank OCBC NISP’s performance 9M19 net profit rose 9% YoY to a record IDR2.22t YoY YoY QoQ IDR b 9M19 9M18 3Q19 3Q18 2Q19 +/(-)% +/(-)% +/(-)% Net interest income 4,767 4,775 − 1,557 1,628 (4) 1,669 (7) Non-interest income 1,431 971 47 476 391 22 499 (5) Total income 6,198 5,746 8 2,03
Slide 36: Bank OCBC NISP: Loans & Deposits
Bank OCBC NISP Bank OCBC NISP: Loans & Deposits Loans up 1% QoQ to IDR120t, while deposits grew 1% QoQ to IDR132t; CASA ratio increased to 37.9%; NPL ratio unchanged at 1.8% Customer Loans (IDR t) Customer Deposits (IDR t) NPL ratio Loans / Deposits 100.9% 1.8% 1.8% 1.7% 1.8% 1.8% 1.8% 96.7% 93.5% 1
Slide 37: Third Quarter 2019 Results Thank You
Third Quarter 2019 Results Thank You
Oversea-Chinese Banking — Q3 2019 Earnings Presentation on 6ix