First Quarter 2018 Results Presentation 7 May 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 1Q18 Group Performance Trends Major Accounting Policies Effective 1 January 2018 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 1Q18 Highlights Net profit rose 29% YoY to S$1.11b; return on equity higher at 11.8% ➢ Robust YoY performance across the Group’s franchise Earnings Net Interest Income: S$1.42b (1Q17 : S$1.27b; +11%) • Net interest income grew 11% YoY from sustained asset growth Net profit (S$m) and improved margins Non-interest Income: S$0.92b +29% YoY (1Q17 1/ : S$0.85b; +8%) 1,112 • Wealth management income up 22% YoY 123 Operating Expenses: S$1.03b • Private banking AUM grew 19% YoY to US$102b Banking operations GEH 861 (1Q17 1/ : S$0.97b; +6%) 68 • All major banking subsidiaries performed strongly Allowances: S$0.01b (1Q17 : S$0.17b; -93%) ➢ Expenses down 4% QoQ and up 6% YoY 990 793 Net Profit: S$1.11b ➢ Overall asset quality healthy; new NPA formation eased, with NPL (1Q17 1/ : S$0.86b; +29%) ratio lower QoQ at 1.4% ROE: 11.8% (1Q17 1/ : 9.6%) 1/ 1Q17 1Q18 ➢ Customer loans and deposits grew 10% and 9% YoY respectively Customer Loans: S$247b (loans and deposits grew 12% each on a constant currency basis); (Mar 17 : S$225b; +10%) Assets and LDR at 84.4%. liabilities Customer Deposits: S$289b ➢ Stable funding base, 79% derived from customer deposits (Mar 17 : S$265b; +9%) CET1 ratio: 13.1% ➢ Capital, liquidity and funding position remained strong (Mar 17 : 12.2% 2/ ) Net stable funding ratio 3/ at 106% ➢ Capital and Leverage ratio: 7.0% liquidity (Mar 17 : 7.7%) All-currency LCR: 149% (1Q17 : 143%) 1/ Figures for 1Q17 were restated in accordance with SFRS(I) and change in accounting policy for Great Eastern Holdings (“GEH”) . 3 Please refer to section on “Major Accounting Policies effective 1 January 2018” for details. 2/ Based on Basel III rules which came into full effect from 1 January 2018. 3/ Net stable funding ratio is computed based on MAS Notice 652 effective 1 January 2018.
Group performance 1Q18 Group Performance Net profit of S$1.11b was up 29% YoY and 8% QoQ 1Q18 4Q17 QoQ 1Q17 YoY OCBC Group S$m S$m +/(-)% S$m +/(-)% Net interest income 1,415 1,424 (1) 1,272 11 Non-interest income 918 1,214 (24) 850 8 Total income 2,333 2,638 (12) 2,122 10 Operating expenses (1,032) (1,075) (4) (973) 6 Operating profit 1,301 1,563 (17) 1,149 13 Amortisation of intangibles (25) (26) (1) (26) (4) Allowances (178) (93) (168) (93) (12) Associates 125 28 340 114 9 Tax & NCI (353) (22) (208) 33 (277) Net profit 1,112 1,034 8 861 29 Note: Figures for 4Q17 and 1Q17 were restated in accordance with SFRS(I) and change in accounting 4 4 policy for GEH.
Banking Ops performance 1Q18 Banking Operations Performance Net profit before GEH contribution (“Banking Operations”) 25% higher YoY at S$990m 1Q18 4Q17 QoQ 1Q17 YoY Banking Operations S$m S$m +/(-)% S$m +/(-)% Net interest income 1,403 - 1,248 12 1,397 Non-interest income 703 648 8 687 2 Total income 2,051 2 1,935 9 2,100 Operating expenses (972) (985) (1) (911) 7 Operating profit 1,128 1,067 6 1,024 10 Allowances (12) (176) (93) (164) (92) Associates 31 306 117 9 127 Amortisation, tax & NCI (253) (251) 1 (184) 38 Net profit from banking operations 990 671 48 793 25 363 (66) 68 80 GEH net profit contribution 123 OCBC Group net profit 1,112 1,034 8 861 29 Note: Figures for 4Q17 and 1Q17 were restated in accordance with SFRS(I) and change in accounting 5 5 policy for GEH.
Agenda Results Overview 1Q18 Group Performance Trends Major Accounting Policies Effective 1 January 2018 Appendix: Performance of Major Subsidiaries - Great Eastern Holdings - OCBC Wing Hang - OCBC Malaysia - OCBC NISP 6
Earnings Performance by geography and business Earnings well-diversified across key geographies and business segments 1Q18 Operating Profit 1Q18 Profit before Tax by Business 1/ by Geography Singapore OCBC Wing Others S$697m Hang YoY: +38% 6% 9% Global 1Q18 1Q18 Insurance Corporate / Malaysia 13% Greater Investment S$207m 8% 21% 5% China Banking YoY: +6% 1Q17 1Q17 11% 41% 22% Global 10% 42% 2/ 47% 9% Indonesia Treasury 8% and Markets S$106m 50% 8% Indonesia YoY: +31% 29% 18% Greater China 28% 15% Malaysia S$291m YoY: +24% Singapore Global Consumer / Private Others Banking S$88m YoY: +65% Note: Figures for 1Q17 were restated in accordance with SFRS(I) and change in accounting policy for GEH. 1/ Operating profit before allowances and amortisation. Excludes the Others segment, which comprises mainly property holding, investment holding and items not attributable to the business segments. 7 2/ PBT contribution from Singapore was 53% in 1Q17 before restatements for SFRS(I) and change in accounting policy for GEH.
Net interest income Net interest income Net interest income rose 11% YoY, driven by robust asset growth and 5 bps rise in NIM Net interest 1.67% 1.67% 1.67% 1.66% margin 1.65% 1.65% (“NIM”) 1.62% 5,423 5,052 1,415 1,424 1,382 1,345 1,272 Net interest income (S$m) FY16 FY17 1Q17 2Q17 3Q17 4Q17 1Q18 8
Non-interest income Non-interest income YoY non-interest income up 8% led by strong fee growth and higher insurance income; QoQ non-interest income reduced by 24% as the increase in fees was more than offset by lower insurance and investment income Non- 46.0% 43.1% 42.8% 42.8% interest 40.5% 40.0% 39.3% income / Total income 1,214 4,105 1,036 1,006 3,437 310 917 918 Life & General 850 Insurance 649 291 233 561 Net gains from 206 84 282 investment securities 429 94 91 43 94 and others 515 Non- 94 140 529 158 118 159 Trading income interest 99 39 47 income 45 32 192 36 Dividends & rental (S$m) income Fees & commissions 1,953 536 492 488 491 481 1,638 FY16 FY17 1Q17 2Q17 3Q17 4Q17 1Q18 Note: Figures for 2017 periods were restated in accordance with SFRS(I) and change in accounting policy for GEH. Figures for FY16 were not restated. 9
Wealth management Wealth Management Wealth management income rose 22% YoY across key customer segments; BOS’ AUM grew 19% YoY to US$102b Wealth Management Income 1/ 2/ (S$m) Bank of Singapore Earning Asset Base (US$b) As % of Group income Dec 14 – Dec 17 126 121 CAGR 23% 38% 97 24 33% 33% 22 32% 31% 28% 68 18 27% 65 13 14 102 99 79 55 51 1,006 3,136 Dec 14 Dec 15 Dec 16 Dec 17 Mar 18 Loans AUM 792 741 2,273 727 Great Eastern Embedded Value 3/ (S$m) 597 Dec 13 – Dec 17 CAGR 10% 13,389 11,694 11,001 10,436 9,214 FY16 FY17 1Q17 2Q17 3Q17 4Q17 1Q18 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. 2/ Figures for 2017 periods were restated in accordance with SFRS(I) and change in accounting policy for GEH. Figures for FY16 10 were not restated. 3/ An actuarial embedded value is a commonly used technique to estimate the economic value of the existing business of a life insurance company.
Non-interest income Fees & Commissions Fee income increased 11% YoY from broad-based growth across key segments 22.7% 23.0% 20.9% 20.5% 20.2% Fee income / 19.3% 18.6% Total income 1/ 1,953 299 1,638 536 94 492 491 488 481 75 290 Others 3/ 72 72 22 71 84 63 528 Investment 24 26 29 15 Banking 130 Fees and 533 Loan, Trade & 137 131 123 137 180 commissions Guarantees 54 (S$m) Brokerage & 46 43 44 Fund 47 164 Management Wealth 852 255 Management 2/ 216 215 215 205 588 FY16 FY17 1Q17 2Q17 3Q17 4Q17 1Q18 1/ Figures for 2017 periods were restated in accordance with SFRS(I) and change in accounting policy for GEH. Figures for FY16 were not restated. 2/ Mainly comprising income from private banking, and sales of unit trusts, bancassurance products, 11 structured deposits and other treasury products to consumer customers. 3/ “Others” includes credit card fees, service charges and other fee and commission income.
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