Presentation to Media and Analysts Second Quarter 2007 Results 8 August 2007
Agenda • Results Overview • Performance Trends • Results of Key Subsidiaries • Interim Report Card 2
Second Quarter Core Net Profit up 65% YoY 2Q07 2Q06 YoY 1Q07 QoQ S$m S$m +/(-)% S$m +/(-)% Net Interest Income 558 435 28 508 10 Non-Interest Income 493 329 50 506 (3) Total Income 1,050 764 37 1,014 4 Operating Expenses (416) (349) 19 (352) 18 Operating Profit 634 416 53 662 (4) Amortisation of Intangibles (12) (11) 10 (12) - (Allowances)/Write-back 16 5 203 (0.3) n.m. Associates & JVs 4 1 419 16 (73) Tax & Minority Interests (125) (98) 28 (156) (19) Core Net Profit 518 314 65 510 2 Divestment Gains/Tax Refunds 1 15 482 (97) 137 (89) Reported Net Profit 532 795 (33) 647 (18) 1/ Net divestment gains of S$90m in 1Q07 and S$482m in 2Q06; tax refunds of S$15m in 2Q07 and S$47m in 1Q07. 3
First Half Core Net Profit up 63% YoY 1H07 1H06 YoY 2H06 HoH S$m S$m +/(-)% S$m +/(-)% Net Interest Income 1,065 830 28 964 11 Non-Interest Income 999 677 47 770 30 Total Income 2,064 1,507 37 1,734 19 Operating Expenses (768) (657) 17 (675) 14 Operating Profit 1,296 851 52 1,060 22 Amortisation of Intangibles (23) (21) 11 (23) 2 (Allowances)/Write-back 15 12 29 (14) n.m. Associates & JVs 20 5 338 9 123 Tax & Minority Interests (281) (215) 31 (220) 28 Core Net Profit 1,028 632 63 812 27 Divestment Gains/Tax Refunds 151 482 (68) 77 97 Reported Net Profit 1,179 1,113 6 889 33 4
Key Financial Ratios – Based on Core Earnings 1H07 1H06 2Q07 1Q07 2Q06 % % % % % Net Interest Margin 2.09 1.94 2.13 2.04 2.00 Non-Interest Income/ 48.4 44.9 46.9 49.9 43.1 Total Income Cost-to-Income Ratio 37.2 43.6 39.6 34.7 45.6 Loans-to-Deposits Ratio 77.4 81.7 77.4 78.9 81.7 NPL Ratio 2.4 3.6 2.4 2.7 3.6 Allowances/NPLs 104.0 94.0 104.0 101.6 94.0 ROE 15.6 10.6 15.4 15.9 10.4 Cash ROE 16.0 10.9 15.7 16.3 10.7 5
Agenda • Results Overview • Performance Trends • Results of Key Subsidiaries • Interim Report Card 6
Strong Net Interest Income Trends, Improved Interest Margin 2.13% 2.09% 2.06% 2.04% 2.03% 2.00% 2.00% 1.89% Net 1.84% interest margin 1,794 558 1,597 508 491 473 435 1,065 395 Net interest income (S$m) 2005 2006 1H07 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 7
Strong Non-interest Income in 2Q07 despite Lower Gains from Investment Securities 49.9% 48.4% 46.8% 46.9% Non- 45.7% 44.7% 44.7% interest 43.1% 43.0% income/ Total income 2,045 845 598 598 1,289 1,448 92 493 515 1,091 495 Non- 506 92 interest 83 income 357 412 (S$m) 348 999 329 2005 2006 1H07 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 Divestment gains Excluding divestment gains 8
Record Fee Income 20.7% 19.1% 18.9% Fee 18.7% 18.5% 18.4% 17.8% income/ 17.6% 17.5% Total 217 income 597 178 507 161 155 141 395 140 Fee income (S$m) 2005 2006 1H07 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 Excluding divestment gains 9
Higher Expenses from Increased Staff Costs and Higher Business Volumes 45.6% Cost-to- 41.5% 41.1% Income 40.0% 39.6% 39.6% Ratio 37.9% 37.2% 34.7% 1,331 416 1,145 332 352 349 342 333 98 308 278 83 768 87 87 277 89 Operating 68 87 233 Expenses 69 181 62 83 (S$m) 64 69 156 722 231 634 200 193 179 179 170 431 2005 2006 1H07 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 Staff Cost Property & Equipment Others Excluding divestment gains 10
2Q07 Core Operating Profit up 53% YoY Operating Profit before allowances (S$m) 2,508 931 754 598 92 644 1,742 634 1,910 515 662 83 1,389 498 561 92 435 416 1,296 2005 2006 1H07 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 Divestment gains 11
Net Write-back of Allowances due to Loan Recoveries Allowances for loans and other 12 12 assets (S$m) 3 2 0.3 (5) (7) (15) (16) 2005 2006 1H07 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 12
Core Net Profit Sustained; ROE Remains Above 15% 15.9% 15.6% 15.4% 13.8% ROE 12.3% (%) 11.8% 11.4% 10.8% 647 10.4% 47 2,002 532 90 795 510 559 518 510 482 77 1,298 1,443 Net Profit 1,179 379 432 (S$m) 90 318 1,028 314 2005 2006 1H07 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 13 Divestment gains Tax Refunds Excluding divestment gains/ tax refunds
Earnings Contribution by Segments PBT by Business Segment PBT by Geography Other Asia Pacific Others Insurance 4% 1% & Others Other 25% ASEAN 5% Consumer Banking 24% Malaysia 25% Singapore Business 65% Treasury Banking 13% 38% 1H2007 Profit Before Tax: S$1,309m 1H2007 Profit Before Tax: S$1,309m (excluding divestment gains) (excluding divestment gains) 14
Loans Growth of 12% YoY, 3% QoQ Loans (S$bn) 65.3 63.3 61.1 59.4 58.1 56.6 13.0 11.9 11.2 10.3 9.6 8.8 11.0 10.9 10.4 10.1 9.8 9.6 41.3 40.5 39.5 38.9 38.6 38.1 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Singapore Malaysia International 15
Deposits Up 20% YoY, 5% QoQ 84.6% 82.6% 81.7% 85.0% 79.0% 78.9% Loans-to-deposits 77.4% 83.2% 81.2% 80.0% 75.0% 77.8% 77.8% 76.8% 65.0% 82.2 78.0 75.1 55.0% 68.7 69.6 11.6 64.5 9.9 10.0 9.2 9.5 13.0 11.7 9.0 45.0% 11.2 10.6 10.8 Deposits 53.2 11.0 51.8 50.2 46.7 (S$bn) 45.4 35.0% 41.1 25.0% 15.0% Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Fixed Deposits Savings Deposits Current Account Others Including FRNs and ECPs 16
NPL Ratio at 2.4% NPL Ratio 4.1% 3.6% 3.3% 3.0% 2.7% 2,346 2.4% 2,096 258 1,966 1,829 1,766 NPLs 290 1,614 262 (S$m) 701 226 239 244 683 673 652 658 621 1,387 1,123 1,031 951 869 749 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Singapore Malaysia International 17
Allowances Coverage at 104% 104% 102% 101% 97% 94% 88% Total Allowances / NPLs 48% 48% 48% 47% 46% 44% Specific Allowances / NPLs Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 18
Strong Capital Position (%) 17.9 Total CAR 17.0 15.8 15.8 15.4 14.6 4.2 3.9 2.7 Tier 2 CAR 2.9 2.3 2.1 13.7 13.1 13.1 13.1 12.9 Tier 1 CAR 12.5 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 (S$m) Tier-1 Capital 9,268 9,881 9,575 10,057 10,738 11,049 Risk Weighted 70,545 72,136 74,024 76,514 81,878 87,846 Assets 19
Interim Net Dividend of 14 cents – up 27% over 1H06 23.0 18.4 Net DPS (cents) 12.0 12.6 9.6 7.7 6.3 14.0 Final Net Dividend 4.0 11.0 8.8 6.3 Interim Net Dividend 3.7 2003* 2004 2005* 2006 1H07 (S$m) Net Dividends 234 403 574 709 432 Core Net Profit 828 1,051 1,298 1,443 1,028 Dividend Payout 28% 38% 44% 49% 42% Ratio * Excludes Special Dividend of S$0.6378 per share in 2003 and Bonus Dividend of S$1.25 per share in 2005 (unadjusted) 20
Agenda • Results Overview • Performance Trends • Results of Key Subsidiaries • Interim Report Card 21
OCBC Malaysia: Quarterly Results 2Q07 2Q06 YoY 1Q07 QoQ Unaudited Results* RM m RM m +/(-)% RM m +/(-)% Net Interest Income 216 186 16 202 7 Islamic Banking Income 20 13 54 18 7 Non Interest Income 78 65 20 96 (18) Total Income 314 264 19 316 (1) Operating Expenses (131) (99) 32 (109) 20 Operating Profit 183 165 11 207 (12) (Allowances)/Write-back 8 (33) n.m. (24) n.m. Tax (54) (38) 42 (55) (2) Net Profit 138 94 46 128 7 * Based on Bank Negara Malaysia’s guidelines and Malaysia accounting standards. 22
OCBC Malaysia: Half-Year Results 1H07 1H06 YoY 2H06 HoH Unaudited Results* RM m RM m +/(-)% RM m +/(-)% Net Interest Income 418 352 18 396 5 Islamic Banking Income 38 25 49 26 43 Non Interest Income 174 138 26 145 21 Total Income 630 516 22 567 11 Operating Expenses (240) (190) 26 (227) 5 Operating Profit 390 326 20 340 15 Allowances (16) (26) (41) (37) (58) Tax (108) (86) 26 (86) 27 Net Profit 266 214 24 217 23 * Based on Bank Negara Malaysia’s guidelines and Malaysia accounting standards 23
OCBC Malaysia: Financial Ratios 1H07 1H06 2Q07 1Q07 2Q06 Unaudited Results* % % % % % Net Interest Margin 2.53 2.56 2.50 2.56 2.60 Non-Interest Income / 27.6 26.7 25.0 30.4 24.6 Total Income Cost-to-Income Ratio 38.0 36.8 41.7 34.5 37.5 RM Loans-to-Deposits Ratio 78.0 82.7 78.0 78.1 82.7 Gross NPL Ratio 5.0 6.0 5.0 5.3 6.0 Loans Growth (YoY) 9.0 10.8 9.0 11.5 10.8 ROE 23.9 21.0 24.6 23.1 18.7 * Based on Bank Negara Malaysia’s guidelines and Malaysia accounting standards. 24
GEH: Quarterly Contribution GEH’s Contribution to 2Q07 2Q06 ^ YoY 1Q07 QoQ OCBC’s Results S$m S$m % S$m % Total Income 204 149 37 192 6 Operating Expenses (28) (31) (9) (29) (1) Operating Profit 175 118 48 163 7 Amortisation of Intangibles (12) (11) 10 (12) - - - n.m. 11 (97) Associates & JVs Tax (27) (26) 5 (27) 1 Minority Interests (20) (16) 29 (19) 6 Net Profit contribution 117 65 79 117 (1) ^ 2Q06 include S$24m (S$16m net of tax) divestment gains 25
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