2017 Full Year Results Presentation 14 February 2018 Disclaimer: This material should be read as an overview of OCBC’s current business activities and operating environment. It should not be solely relied upon by investors or potential investors when making an investment decision. OCBC Bank accepts no liability whatsoever with respect to the use of this document or its content.
Agenda Results Overview FY17 & 4Q17 Group Performance Trends Appendix: Performance of Major Subsidiaries - Great Eastern Holdings - OCBC Wing Hang - OCBC Malaysia - OCBC NISP Note: - Certain comparative figures have been restated to conform with the current period’s presentation. - Amounts less than S$0.5m are shown as “0”; - “nm” denotes not meaningful; 2 - “ na ” denotes not applicable; - Figures may not sum to stated totals because of rounding.
Group performance FY17 Highlights Net profit rose 19% to a new high of S$4.15b; final dividend of 19 cents per share Strong momentum across the Group’s key businesses and Earnings Net Interest Income: S$5.42b markets (FY16 : S$5.05b; +7%) • NII up 7%; NIM improved over each successive quarter in 2017 Net profit (S$m) Non-interest Income: S$4.21b +19% YoY (FY16 : S$3.44b; +23%) • Wealth management income up 43% 4,146 1/ 3,903 Operating Expenses: S$4.03b • GEH’s TWNS and NBEV rose 23% and 17% respectively GEH 105 (FY16 : S$3.79b; +6%) 3,798 968 3,473 • Private banking AUM grew 25% YoY and 4% QoQ to US$99b 534 470 Allowances: S$0.67b • All major subsidiaries reported higher local earnings Banking operations (FY16 : S$0.73b; -7%) • Costs remained well-managed, with cost-to-income lowered to Net Profit: S$4.15b 3,264 3,178 41.9% 3,003 (FY16 : S$3.47b; +19%) • Sufficient portfolio allowances to meet existing and new ROE: 11.2% requirements FY15 FY16 FY17 (FY16 : 10.0%) Customer loans and deposits both up 8% YoY; LDR at 82.5% Customer Loans: S$237b (Dec 16 : S$220b; +8%) Assets and Stable funding base, 78% derived from customer deposits liabilities Customer Deposits: S$284b Overall credit quality healthy; NPL ratio at 1.5% (Dec 16 : S$261b; +8%) CET1 ratio: 13.9% Fully-loaded CET1 ratio improved YoY and QoQ (Dec 16 : 14.7%) Liquidity and funding position remained strong Capital and Leverage ratio: 7.3% Proposed final dividend increased to 19 cents per share liquidity (Dec 16 : 8.2%) All-currency LCR: 159% (4Q16 : 145%) 1/ FY15 included a realised gain of S$136m from the sale of an investment in GEH’s equity portfolio. OCBC Group’s share of net profit after tax and NCI amounted to S$105m 3
Group performance FY17 Group Performance Full year net profit grew 19% YoY to S$4.15b FY17 FY16 YoY OCBC Group S$m S$m +/(-)% Net interest income 5,423 5,052 7 Non-interest income 4,213 3,437 23 Total income 9,636 8,489 14 Operating expenses (4,034) (3,788) 6 Operating profit 5,602 4,701 19 Amortisation of intangibles (104) (96) 8 Allowances (671) (726) (7) Associates 389 396 (2) Tax & non-controlling interests (“NCI”) (1,070) (802) 33 Net profit 4,146 3,473 19 4
Group performance 4Q17 Group Performance 4Q17 net profit rose 31% YoY to S$1.03b 4Q17 3Q17 QoQ 4Q16 YoY OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 1,382 3 1,251 14 1,424 Non-interest income 1,205 978 23 926 30 Total income 2,360 11 2,177 21 2,629 Operating expenses (1,067) (1,001) 7 (981) 9 Operating profit 1,562 1,359 15 1,196 31 – Amortisation of intangibles (26) (26) (24) 5 Allowances (156) 15 (305) (41) (178) Associates 28 127 (78) 82 (66) Tax & NCI (247) 43 (160) 120 (353) Net profit 1,033 1,057 (2) 789 31 5 5
Banking Ops performance FY17 Banking Operations Performance Net profit before GEH contribution (“Banking Operations”) increased 6% YoY to S$3.18b FY17 FY16 YoY Banking Operations S$m S$m +/(-)% Net interest income 5,333 4,955 8 Non-interest income 2,590 5 2,712 Total income 8,045 7,545 7 Operating expenses (3,771) (3,570) 6 Operating profit 4,274 3,975 8 Allowances (710) (8) (655) Associates 402 410 (2) Amortisation, tax & NCI (673) 25 (843) Net profit from banking operations 3,178 3,003 6 GEH net profit contribution 968 470 106 OCBC Group net profit 4,146 3,473 19 6
Banking Ops performance 4Q17 Banking Operations Performance 4Q17 net profit for Banking Operations up 7% YoY to S$673m 4Q17 3Q17 QoQ 4Q16 YoY Banking Operations S$m S$m +/(-)% S$m +/(-)% Net interest income 1,403 1,360 3 1,227 14 Non-interest income 674 (4) 660 (1) 650 Total income 2,053 2,034 1 1,887 9 Operating expenses (985) (946) 4 (927) 6 Operating profit 1,069 1,088 (2) 959 11 Allowances (149) 18 (301) (41) (176) Associates 31 131 (76) 86 (63) Amortisation, tax & NCI (207) 21 (115) 118 (251) Net profit from banking operations 673 863 (22) 630 7 GEH net profit contribution 361 194 86 160 126 OCBC Group net profit 1,033 1,057 (2) 789 31 7 7
Agenda Results Overview FY17 & 4Q17 Group Performance Trends Appendix: Performance of Major Subsidiaries - Great Eastern Holdings - OCBC Wing Hang - OCBC Malaysia - OCBC NISP 8
Earnings Performance by geography and business Earnings well-diversified across key geographical and business segments FY17 PBT FY17 Operating Profit by Geography by Business 1/ Singapore OCBC Wing Others Hang 2/ S$2.88b YoY: +34% 4% 7% Greater FY17 FY17 China Malaysia Global within which 19% 4% S$705m 9% OCBC Wing Corporate / 24% Hang 2/ : 7% Insurance YoY: -12% FY16 Investment FY16 36% 22% (FY16: 9%) 16% Banking 43% Indonesia Indonesia 10% 5% 8% S$449m 50% YoY: +98% 22% 19% 9% 14% Global Greater 55% Malaysia China Treasury 24% S$978m and Markets YoY: +5% Singapore Global Consumer / Others Private S$206m Banking YoY: +30% 1/ Operating profit before allowances and amortisation. Excludes the Others segment, which comprises 9 mainly property holding, investment holding, items not attributable to the business segments, as well as the offset of China operations which is reported in both the business segments and OCBC Wing Hang. 2/ This included OCBC Bank (China) from mid July 2016.
Net interest income Net interest income FY17 NII rose 7% YoY, driven by robust asset growth; NIM steadily improved over each successive quarter in FY17 1.75% 1.67% 1.67% 1.68% 1.67% 1.66% 1.65% Net interest 1.63% 1.65% 1.62% 1.62% margin (“NIM”) 5,423 5,189 1,424 5,052 1,382 1,345 1,307 1,272 1,260 1,251 1,234 Net interest income (S$m) FY15 FY16 FY17 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 10
Non-interest income Non-interest income FY17 non-interest income increased 23% YoY from broad-based growth, led by higher fee and insurance income 45.8% Non- 44.0% 43.7% 43.9% 43.4% 42.5% 41.4% 40.5% 40.5% interest 38.5% 36.6% income / Total income 4,213 1,205 1,053 3,533 3,437 1,027 978 977 299 970 926 136 278 649 199 211 781 788 238 559 182 753 284 429 96 228 91 146 112 89 122 515 162 Non- 53 552 140 529 158 118 159 101 163 interest 99 122 123 47 45 32 income 193 192 36 122 68 49 (S$m) 40 34 1,953 492 488 491 481 1,643 1,638 428 417 420 374 FY15 FY16 FY17 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Realised gain from the Net gains from Fees & Dividends & Trading Life & General sale of an investment in investment securities and commissions rental income income Insurance GEH’s equity portfolio others 11
Wealth management Wealth Management FY17 wealth management income rose 43% from robust growth across key customer segments; BOS’ AUM rose 25% YoY to US$99b Wealth Management Income 1/ (S$m) Bank of Singapore Earning Asset Base (US$b) As % of Group income Dec 13 – Dec 17 121 38% CAGR 21% 97 34% 32% 33% 31% 22 28% 30% 68 18 65 27% 27% 57 23% 25% 13 14 11 99 79 55 994 51 46 3,247 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 789 Loans AUM 2/ 741 724 2,354 2,273 627 644 Great Eastern Embedded Value 3/ (S$m) 520 Dec 13 – Dec 17 482 CAGR 10% 13,389 11,694 11,001 10,436 9,214 FY15 FY16 FY17 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 1/ Wealth management income comprises the consolidated income from insurance, asset management, stockbroking and private banking subsidiaries, plus the Group's income from the sales of unit trusts, bancassurance products, structured deposits and other treasury products to consumer customers. 12 2/ FY15 included a realised gain of S$136m from the sale of an investment in GEH’s equity portfolio. 3/ An actuarial embedded value is a commonly used technique to estimate the economic value of the existing business of a life insurance company.
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