UOB Group Fixed Income Investor Presentation Sound Operating Performance, supported by Healthy Balance Sheet September 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 Private & Confidential 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 accepts no liability whatsoever with respect to the use of this document or its content.
Agenda 1. Overview of UOB Group 2. Strong UOB Fundamentals 3. Regulatory Developments 4. Macroeconomic Outlook Appendix: a. Latest Financials b. Our Growth Drivers c. Resilience of the Singapore Housing Market d. Overview of our Covered Bond Programme
Overview of UOB Group 3
UOB Overview Founding Key Statistics for 1H17 ■ Total assets : SGD344b (USD250.1b 1 ) Founded in August 1935 by a group of Chinese businessmen and Datuk Wee Kheng Chiang, ■ Shareholder’s equity : SGD35b (USD25.2b 1 ) grandfather of the present UOB Group CEO, Mr. ■ Gross loans (USD165.4b 1 ) : SGD228b Wee Ee Cheong ■ Customer deposits : SGD260b (USD188.8b 1 ) ■ Fully-loaded Common : 13.3% Equity Tier 1 CAR 2 ■ Leverage ratio 3 : 7.8% Expansion ■ ROA 4 : 0.97% UOB has grown over the decades organically and ■ ROE 4 5 : 10.2% through a series of strategic acquisitions. It is today a ■ NIM 4 : 1.74% leading bank in Asia with an established presence in ■ Non-interest income/ the Southeast Asia region. The Group has a global : 38.2% Total income network of more than 500 branches and offices in 19 ■ NPL ratio countries and territories. : 1.5% ■ Loan/Deposit ratio : 86.1% ■ Average all-currency : 157% 6 liquidity coverage ratio ■ Cost / Income : 45.3% Note: Financial statistics as at 30 June 2017. 1. USD1 = SGD1.3769 as at 30 June 2017. ■ Credit Ratings : 2. Based on final rules effective 1 January 2018. 3. Leverage ratio is calculated based on the revised MAS Moody’s S&P Fitch Notice 637. Issuer Rating AA – AA – 4. Computed on an annualised basis. Aa1 (Senior Unsecured) 5. Calculated based on profit attributable to equity holders Outlook Stable Stable Stable of the Bank net of capital securities distributions. 6. Average for 2Q17. 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 Higher 1H17 loan margin than local peers 2.13% 2.03% 1.96% 1.74% 1.74% 1.64% 41% Best Retail Bank 1 40% Bank of the Year, Excellence in Mobile SME Bank of the Singapore, Banking – Overall, 33% 58% Year 1 UOB DBS OCBC 2015 2017 NIM Loan margin Source: Company reports. 1. The Asian Banker “Excellence in Retail Financial Service Awards”: 2016 Loan margin is the difference between the rate of return from & 2017 (SME Bank of the Year), 2014 (Best Retail Bank in Asia Pacific customer loans and costs of deposits. and Singapore). Source: Company reports. 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 Acquired 2014; $3,249m Acquired ICB Buana in 2005 in 1987 2010; $2,696m 2016; $3,096m Acquired BOA Acquired FEB in 2004 in 1984 2007; $2,109m Acquired OUB Acquired LWB in 2001 in 1973 2005; $1,709m Acquired Acquired CKB UOBR in 1999 in 1971 2000; $913m 1980; $92m 1995; $633m 1990; $226m 1985; $99m 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 (“ICB”), Lee Wah Bank Limited (“LWB”), Overseas Union Bank Limited (“OUB”), Radanasin Bank Thail and “UOBR”. 6
Expanding Regional Banking Franchise Extensive Regional Footprint with c.500 Offices Profit Before Tax by Region (SGD m) MYANMAR GREATER CHINA 2 offices 27 offices 1 39% of VIETNAM THAILAND Group PBT 1 office 367 324 155 offices 301 252 PHILIPPINES 305 366 300 272 99 71 1 office 61 159 193 175 178 MALAYSIA 146 44% of 47 offices INDONESIA 593 548 537 Group PBT 555 180 offices SINGAPORE AUSTRALIA 235 74 offices 4 offices 44 214 97 308 2,363 2,364 2,345 Most diverse regional franchise among Singapore 2,181 banks; effectively full control of regional subsidiaries 1,148 Integrated regional platform improves operational efficiencies, enhances risk management and provides faster time-to-market and seamless customer service 2013 2014 2015 2016 1H17 Organic growth strategies in emerging/new markets of Singapore Malaysia Thailand China and Indo-China Indonesia Greater China Others Established regional network with key South East Asian pillars, supporting fast-growing trade, capital and wealth flows 1. UOB owns c13% in Evergrowing Bank in China. 7
Strong Capital and Leverage Ratios Reported Common Equity Tier 1 CAR, Tier 1 CAR, Total CAR 21.6 22.5 21.6 21.3 21.0 18.9 (Common Equity 18.1 17.8 17.4 16.9 16.5 16.4 16.4 16.3 16.1 16.4 15.2 15.1 15.0 14.7 14.7 14.4 14.7 14.3 14.2 13.8 13.8 13.9 Tier 1 CAR; 13.4 13.0 13.0 13.2 13.0 12.5 12.1 11.6 11.5 10.1 10.1 Tier 1 CAR; and Total CAR in %) 1 1 BCA BBL HSBC DBS UOB SCB MBB OCBC Citi BOA CIMB NAB CBA Return on Average 18.3% 8.6% 8.8% 10.6% 10.2% 4.5% 10.2% 11.4% 7.1% 7.6% 10.3% 10.6% 16.1% Equity 2 Reported Leverage Ratio 3 15.1% 7.9% 7.8% 7.8% 7.2% 7.0% 6.0% 5.7% 5.5% 5.1% 1 1 BCA DBS UOB OCBC Citi BOA SCB HSBC NAB CBA UOB is among the most well-capitalised banks, with capital ratios comfortably above regulatory requirements and high compared with some of the most renowned banks globally Source: Company reports. The financials of banks were as of 30 June 2017, except for those of CIMB, MBB and NAB (which were as of 31 March 2017). NAB’s and CBA’s CARs are based on APRA’s standards. Their internationally comparable CET1 CAR was 14.5% and 15.6%, respectively. 1. 2. Computed on an annualised basis. 3. BBL, MBB and CIMB do not disclose their leverage ratio. 8
Competitive Against Peers Standalone Efficient Cost Competitive Well-Maintained ROAA 1 Strength Management Liquidity Moody’s baseline Costs/income Return on average Loan/deposit Moody’s S&P Fitch credit assessment ratio assets 1 ratio AA – AA – UOB Aa1 a1 45.3% 0.97% 86.1% AA – AA – OCBC a1 42.3% 1.16% Aa1 85.2% AA – AA – DBS a1 43.3% 0.99% Aa1 88.4% AA – 62.8% 0.66% A1 A HSBC a3 70.1% SCB 67.4% 0.37% A2 BBB+ A+ baa1 67.5% A – CIMB 52.6% 0.95% 91.7% Baa1 n.r. baa2 50.3% 0.94% A – A – MBB 94.7% A3 a3 43.3% 1.10% BBL baa2 86.1% Baa1 BBB+ BBB+ BBB – 48.6% 3.70% 74.5% BCA baa3 Baa3 n.r. 62.8% 0.91% BOA 71.7% baa2 Baa1 BBB+ A 58.0% 0.87% Citi 66.0% baa2 Baa1 BBB+ A 42.7% 1.00% 116.8% AA – AA – CBA Aa3 a2 42.7% 0.65% 138.9% AA – AA – NAB a2 Aa3 Source: Company reports, Credit rating agencies (updated as of 10 August 2017). The financials of banks were as of 30 June 2017, except for those of CIMB, MBB and NAB (which were as of 31 March 2017). 9 1. Computed on an annualised YTD basis.
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