Financial Highlights Lee Wai Fai Lee Wai Fai Group Chief Financial - PowerPoint PPT Presentation

UOB Group 3 rd Quarter 2016 UOB Group Full Year 2016 Financial Highlights Financial Highlights Lee Wai Fai Lee Wai Fai Group Chief Financial Officer Group Chief Financial Officer 28 October 2016 17 February 2017 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 summary form and does not purport to be complete. It is not to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. This material should be considered with professional advice when deciding if an investment is appropriate. UOB Bank accepts no liability whatsoever with respect to the use of this document or its content. 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 summary form and does not purport to be complete. It is not to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. This material should be considered with professional advice when deciding if an investment is appropriate. UOB Private & Confidential Singapore Company Reg No. 193500026Z Bank accepts no liability whatsoever with respect to the use of this document or its content. Singapore Company Reg No. 193500026Z

2016 Highlights FY16 NPAT of $ 3.1b ↓ 4% YoY; 4Q16 NPAT of $739m ↓ 7 % vs 3Q16 and ↓6% vs 4Q15 • Full year total income remained stable at $8.1b. • Operating expenses increased due to higher IT investments while staff expenses were tightly managed • Higher specific allowance for loans offset by a release in general allowance in line with counter-cyclical approach Strong balance sheet • Gross customer loans increased 9% YoY • Deposits grew 6% YoY • Asset quality remains stable with new NPA formation slowing down this quarter • NPL ratio at 1.5%; NPL coverage remained high at 118% Capital and liquidity positions • Capital position remained strong with fully-loaded CET1 at 12.1%. • Leverage ratio of 7.4%, well above Basel’s minimum requirement • Average SGD and all-currency liquidity coverage ratios of 275% and 162% in 4Q16 2

2016 NPAT of $3.1 billion, down 4% YoY 2016 2015 +/(-) $m $m % p Net interest income 4,991 4,926 1.3 p Fee and commission income 1,931 1,883 2.5 (7.9) q Other non-interest income 1,140 1,238 p Total income 8,061 8,048 0.2 Less: Total expenses 1 p 3,696 3,597 2.8 (1.9) q Operating profit 4,365 4,451 >100.0 p Less: Specific allowance 991 476 (>100.0) q General allowance (398) 196 (93.4) q Add: Associates & joint ventures 6 90 (2.4) q Net profit before tax 3,777 3,869 p Less: Tax & non-controlling interests 681 660 3.2 (3.5) q Net profit after tax 3,096 3,209 1. One-off expenses of $67m were relating to Singapore's Golden Jubilee ("SG50") and UOB's 80 th anniversary ("UOB80") commemorative events and brand campaign in 2015. unfavourable variance to earnings favourable variance to earnings 3

4Q16 NPAT of $739 million, down 7% QoQ 4Q16 4Q15 +/(-) 3Q16 +/(-) $m $m % $m % (0.1) q p Net interest income 1,276 1,277 1,230 3.7 p p Fee and commission income 531 480 10.6 492 7.8 (31.3) q (30.2) q Other non-interest income 222 323 318 (2.5) q (0.6) q Total income 2,028 2,081 2,040 Less: Total expenses 1 (0.7) q p 957 964 918 4.2 (4.0) q (4.5) q Operating profit 1,071 1,116 1,122 >100.0 p p Less: Specific allowance 441 152 299 47.6 (>100.0) q (>100.0) q General allowance (310) 38 (113) (>100.0) q (>100.0) q Add: Associates & joint ventures (21) 18 25 (2.6) q (4.4) q Net profit before tax 920 944 962 p p Less: Tax & non-controlling interests 181 156 16.0 171 5.4 (6.2) q (6.6) q Net profit after tax 739 788 791 1. One-off expenses of $43m in 4Q15 were relating to UOB80 commemorative events and brand campaign. unfavourable variance to earnings favourable variance to earnings 4

Higher NII supported by loan growth Net Interest Income (NII) and Margin 2.26% 2.20% 2.12% 2.06% 2.36% 2.34% 2.23% 2.13% 2.09% 1.77% 1.72% 1.71% 1.71% 1.79% 1.78% 1.68% 1.69% 1.69% 0.82% 0.76% 0.50% 0.38% 0.55% 0.43% 0.40% 0.30% 0.25% 4,991 4,926 303 4,558 391 4,120 620 1,277 1,275 1,276 537 1,211 1,230 60 81 109 82 50 4,688 4,535 3,938 3,583 1,214 1,196 1,161 1,148 1,166 2013 2014 2015 2016 4Q15 1Q16 2Q16 3Q16 4Q16 NII from Loans ($m) Loan Margin (%) Net Interest Margin (%) NII from Interbank & Securities ($m) Interbank & Securities Margin (%) 5

Fee income up 8% QoQ from credit card, loan-related and wealth management fees Non-Interest Income (Non-NII) and Non-NII Ratio 38.7% 38.9% 38.8% 38.1% 40.2% 39.7% 38.6% 37.1% 35.3% 25.8% 23.9% 23.5% 23.4% 26.2% 24.1% 23.1% 23.4% 22.0% 3,122 3,071 2,900 284 263 2,600 334 325 877 954 817 813 803 810 544 753 67 60 83 695 53 60 251 169 263 256 201 1,931 1,883 1,731 1,749 531 492 480 475 433 4Q15 1Q16 2Q16 3Q16 4Q16 2013 2014 2015 2016 Fee and commission income ($m) Other non-interest income ($m) Non-NII/Total Income (%) Trading & Investment income ($m) Fee Income/Total Income (%) 6

Staff costs tightly managed as IT investments continue Operating Expenses and Expense / Income Ratio 45.9% 44.7% 47.2% 43.1% 43.1% 46.3% 45.8% 45.4% 45.0% 43.4% 42.2% 44.3% 3,696 ^ 3,597 ^ 3,146 2,898 1,646 1,533 ^ 964 957 927 918 894 1,321 1,186 442 443 405 409 389 2,064 2,050 1,825 1,712 522 521 506 510 514 2013 2014 2015 2016 4Q15 1Q16 2Q16 3Q16 4Q16 Staff costs ($m) Other operating expenses ($m) Expense/Income Ratio (%) Expense/Income Ratio (%) exclude one-off ^ Included one-off expenses relating to SG50 and UOB80 commemorative events and brand campaign (2015: $67m, 4Q15: $43m) and adjustment for prior year’s bonus. 7

IT investments geared towards products and digital capabilities IT investments over 2014-2016 (~$0.7b) Security Regulatory 4% 17% Product Capabilities 20% Data Mobility/Connectivity Increase in fee and trading capabilities 59% Global Market Cash Platform Management Digital Transformation Cust flow income Transaction • Mighty App +8%¹ Banking income • Enterprise Data Architecture +12%¹ Wealth Platform AUM +8%¹ 1. CAGR computed over 2 years (2014 to 2016) 8

Higher specific allowance in 4Q16 largely from oil & gas and shipping sectors; total credit cost kept stable at 32 bps Allowance on Loans 45bp 32bp 32bp 76bp 30bp 57bp from existing 32bp 53bp NPLs 19bp 969 32bp 12bp 32bp 32bp 32bp 32bp 8bp 428 25bp 23bp 22bp 288 392 133 121 238 115 136 4Q15 1Q16 2Q16 3Q16 4Q16 2013 2014 2015 2016 Specific Allowance on Loans ($m) Specific Allowance on Loans/Average Gross Customer Loans (basis points) * Total Allowance on Loans/Average Gross Customer Loans (basis points) * * On annualised basis 9

Movements in non-performing assets 4Q16 3Q16 4Q15 $m $m $m NPA at start of period 3,632 3,164 2,737 New NPA 387 780 626 Upgrades, recoveries and translations (320) (201) (233) Write-offs (219) (111) (64) 3,480 3,632 3,066 NPA at end of period 10

NPL ratio at 1.5% with NPLs mainly from Singapore and Indonesia NPL ($m) 2,882 2,841 3,056 3,496 3,328 NPL Ratio 1.4% 1.4% 1.4% 1.6% 1.5% 255 245 303 206 307 176 344 565 401 638 218 564 158 293 569 564 264 360 466 249 451 250 487 386 401 1,614 1,395 1,291 1,116 1,067 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Singapore Malaysia Thailand Indonesia Greater China Others Note : Non-performing loans by geography are classified according to where credit risks reside, largely represented by the borrower‘s country of incorporation/operation (for non-individuals) and residence (for individuals). 11

New NPLs mainly from oil and gas and shipping industries 3,496 3,328 408 3,056 484 2,882 183 2,841 143 601 203 563 618 550 542 304 286 284 287 294 643 610 388 451 383 298 287 316 264 288 179 250 210 274 209 1,063 977 965 917 881 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Transport, storage and communication Professional and private individuals Building and construction Housing loans Manufacturing Others General commerce 12

Exposure to Commodities Oil and gas Other commodity Traders/ Dec 16 Total Upstream segments downstream industries² industries Total exposure 1 SGD6.2b SGD11.5b SGD9.9b SGD27.6b Outstanding loans SGD5.3b SGD5.7b SGD7.0b SGD18.0b 5% of total loans 8% of total loans  Total exposure, including off-balance sheet items, stood at SGD27.6b as of 31 December 2016  Mainly to traders and downstream segments  Proactive monitoring, limit management and collateral enhancement 1. Total exposure comprises outstanding loans and contingent liabilities 2. Oil and gas upstream industries include offshore service companies. 13