UOB Group Record Earnings Supported by Strong Balance Sheet - PowerPoint PPT Presentation

UOB Group Record Earnings Supported by Strong Balance Sheet February / March 2019 Disclaimer: The material in this presentation contains general background information about United Overseas Bank Limited (“UOB”) and its activities as at the date of the presentation. The information is given in summary form and is therefore not necessarily complete. Information in this presentation is not intended to be relied upon as advice or as a recommendation to investors or potential investors to purchase, hold or sell securities and other financial products and does not take into account the investment objectives, financial situation or needs of any particular investor. When deciding if an investment is suitable, you should consider the appropriateness of the information, any Private & Confidential relevant offer document and seek independent financial advice. All securities and financial product transactions involve risks such as the risk of adverse or unanticipated market, financial or political developments and currency risk. UOB does not accept any liability including in relation to the use of the material and its contents.

Agenda 1. Overview of UOB Group 2. Macroeconomic Outlook 3. Strong UOB Fundamentals 4. Our Growth Drivers 5. Latest Financials

Overview of UOB Group 3

UOB Overview Founding Key Statistics for FY18 Founded in August 1935 by a group of Chinese ■ Total assets : SGD388b (USD285b 1 ) businessmen and Datuk Wee Kheng Chiang, ■ Shareholders’ equity : SGD38b (USD28b 1 ) grandfather of the present UOB Group CEO, Mr. ■ : SGD262b (USD192b 1 ) Gross loans Wee Ee Cheong ■ Customer deposits : SGD293b (USD215b 1 ) ■ Loan/Deposit ratio : 88.2% ■ Net stable funding ratio : 107% ■ Expansion Average all-currency liquidity : 127% 2 coverage ratio UOB has grown over the decades organically and ■ Common Equity Tier 1 CAR : 13.9% through a series of strategic acquisitions. It is today a ■ Leverage ratio : 7.6% leading bank in Asia with an established presence in ■ Return on equity 3, 4 : 11.3% the Southeast Asia region. The Group has a global network of more than 500 branches and offices in 19 ■ Return on assets 4 : 1.07% countries and territories. ■ Return on risk-weighted assets 4 : 1.93% ■ Net interest margin 4 : 1.82% ■ Non-interest income/ : 31.8% Total income ■ Cost / Income : 43.9% ■ Non-performing loan ratio : 1.5% Note: Financial statistics as at 31 December 2018. ■ Credit Ratings Moody’s 1. USD 1 = SGD 1.36275 as at 31 December 2018. S&P Fitch 2. Average for 4Q18. Issuer Rating AA – AA – Aa1 3. Calculated based on profit attributable to equity holders (Senior Unsecured) of the Bank, net of perpetual capital securities Outlook Stable Stable Stable distributions. 4. Computed on an annualised basis. Short Term Debt P-1 A-1+ F1+ 4

A Leading Singapore Bank; Established Franchise in Core Market Segments Group Retail Group Wholesale Banking Global Markets    Best Retail Bank in Singapore 1 Best SME Banking 1 Strong player in Singapore dollar treasury instruments   Strong player in credit cards and Seamless access to regional private residential home loan network for our corporate clients business UOB Group’s recognition in the industry UOB’s sizeable market share in Singapore SGD loans SGD deposits 41% Best Retail Bank 1 Bank of the Excellence in Mobile 23% 21% Year, Banking – Overall, SME Bank of the Singapore, 2018 33% 58% Year 1 2015 Source: Company reports. 1. The Asian Banker “Excellence in Retail Financial Service Awards”: 2016 Note: The resident portion of loans and advances is used as & 2017 (SME Bank of the Year), 2014 (Best Retail Bank in Asia Pacific a proxy for total SGD loans in Singapore banking system. and Singapore). Source: UOB, MAS 5

Proven Track Record of Execution  UOB Group’s management has a proven track record in steering the Group through various global events and crises.  Stability of management team ensures consistent execution of strategies  Disciplined management style which underpins the Group’s overall resilience and sustained performance NPAT Trend 2018; $4,008m Acquired Acquired ICB Buana in 2005 in 1987 2014; $3,249m Acquired BOA Acquired FEB 2010; $2,696m in 2004 in 1984 Acquired OUB Acquired LWB in 2001 in 1973 2007; $2,109m Acquired Acquired CKB UOBR in 1999 in 1971 2000; $913m 1980; $92m 1990; $226m 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Note: Bank of Asia Public Company Limited (“BOA”), Chung Khiaw Bank Limited (“CKB”), Far Eastern Bank Limited (“FEB”), Industrial & Commercial Bank Limited (“ICB”), Lee Wah Bank Limited (“LWB”), Overseas Union Bank Limited (“OUB”), Radanasin Bank Thailand (“ UOBR ”). 6

Expanding Regional Banking Franchise Extensive Regional Footprint with c.500 Offices Profit Before Tax by Region (SGD m) 40% of MYANMAR GREATER CHINA 2 offices 28 offices 1 Group profit before tax 39% of VIETNAM THAILAND Group profit 507 1 office 154 offices before tax 443 PHILIPPINES 469 77 1 office 367 324 282 301 MALAYSIA 419 305 366 300 29 48 offices INDONESIA 600 99 218 71 61 159 193 175 180 offices 581 593 548 537 SINGAPORE AUSTRALIA 69 offices 4 offices 2,917  Most diverse regional franchise among Singapore 2,491 2,363 2,364 2,345 banks; effectively full control of regional subsidiaries  Integrated regional platform improves operational efficiencies, enhances risk management and provides faster time-to-market and seamless customer service 2014 2015 2016 2017 2018  Organic growth strategies in emerging/new markets of Singapore Malaysia Thailand China and Indo-China Indonesia Greater China Others Established regional network with key Southeast Asian pillars, supporting fast-growing trade, capital and wealth flows 1. UOB owns c13% in Hengfeng Bank (formerly Evergrowing Bank) in China. 7

Why UOB?  Proven track record in steering the bank through various global events and Stable crises Management  Stability of management team ensures consistent execution of strategies  Entrenched local presence. Ground resources and integrated regional Integrated Regional network allow us to better address the needs of our targeted segments Platform  Truly regional bank with full ownership and control of regional subsidiaries  Sustainable revenue channels as a result of carefully-built core businesses Strong  Strong balance sheet, sound capital & liquidity position and resilient asset Fundamentals quality – testament of solid foundation built on the premise of basic banking  Continue to diversify portfolio, strengthen balance sheet, manage risks and Balance Growth build core franchise for the future with Stability  Maintain long-term perspective to growth for sustainable shareholder returns Proven track record of financial conservatism and strong management committed to the long term 8

Macroeconomic Outlook 9

Trade Tensions Cloud China’s Outlook but Low Risk of Hard Landing  The Chinese economy has its underlying momentum, supported by rebalancing reforms and steady jobs market.  Low central government debt underpins China’s fiscal capacity, which could help mitigate “black swan” events.  Our base case scenario is for 2019 GDP to moderate to around 6.3% (2018: +6.6%), with downside risks from trade tensions with the US and easing tech cycle. People's Bank of China (PBoC) has eased credit conditions and used its fiscal levers to provide targeted support. Structural Shift of China’s Economy Episodes of Market Volatility Contained (Feb’14 = 100) (Average Contribution to GDP growth rate, %) 250 200 9.9 7.6 6.7 150 4.3 3.6 100 3.9 5.2 3.7 2.5 50 Feb-14 Feb-15 Feb-16 Feb-17 Feb-18 Feb-19 2008 - 2011 2012 - 2014 2015 - 2019f SSE Index 3m SHIBOR CNY/USD Primary Secondary Tertiary Total Source: Bloomberg, UOB Global Economics & Markets Research Source: IMF, CEIC, UOB Global Economics & Markets Research New Financing Increasingly from Banking Sector Source of China Debt Risk (Rolling 12 months, CNY trn) (2017, % of GDP) 25 361 20 57 257 257 249 15 103 48 173 87 79 10 53 73 163 84 5 201 54 97 87 65 46 0 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 China Japan UK US Germany RMB loans Other financing Government debt Corporate debt Household debt Source: PBOC, UOB Global Economics & Markets Research Source: BIS, Macrobond, UOB Global Economics & Markets Research 10

Global Trade Tension Negative for Asia but Some Silver Lining May Emerge Exports growth slowed across Asian countries in Key recipients of foreign direct investments in 2018 Asia Year on year export growth in USD terms (%) Foreign direct investments* (USD billion) 24 15 Malaysia Vietnam 36 14 35 22 35 Vietnam 13 Malaysia 35 34 10 Thailand 29 7 Indonesia 32 29 16 Indonesia 7 21 Korea 23 9 27 Singapore 7 3 Thailand 8 13 13 Taiwan 6 11 Taiwan 8 16 South Korea 11 5 5 20 Philippines 2 Philippines -2 2 2017 2018 2016 2017 2018e * Based on official releases, definitions may differ across territories. Sources: CEIC, UOB Global Economics & Markets Research Sources: CEIC, UOB Global Economics & Markets Research 11