UOB Group Fixed Income Investor Presentation Strong Business - PowerPoint PPT Presentation

UOB Group Fixed Income Investor Presentation Strong Business Performance and Balance Sheet Position September 2018 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. Our Growth Drivers 4. Resilience of the Singapore Housing Market & UOB’s Cover Pool Appendix: A. Latest Financials B. Additional Information on UOB’s Covered Bond Program C. Macroeconomic Outlook and Banking Regulations 2

Overview of UOB Group 3

UOB Overview Founding Key Statistics for 1H18 Founded in August 1935 by a group of Chinese ■ Total assets : SGD384b (USD282b 1 ) businessmen and Datuk Wee Kheng Chiang, ■ Shareholder’s equity : SGD38b (USD28b 1 ) grandfather of the present UOB Group CEO, Mr. ■ (USD183b 1 ) Gross loans : SGD250b Wee Ee Cheong ■ Customer deposits : SGD287b (USD211b 1 ) ■ Loan/Deposit ratio : 85.7% ■ Net stable funding ratio : 110% ■ Expansion Average all-currency : 142% 2 liquidity coverage ratio UOB has grown over the decades organically and ■ Common Equity Tier 1 CAR : 14.5% through a series of strategic acquisitions. It is today a ■ Leverage ratio : 7.7% leading bank in Asia with an established presence in ■ ROE 3, 4 : 11.6% the Southeast Asia region. The Group has a global network of more than 500 branches and offices in 19 ■ ROA 4 : 1.12% countries and territories. ■ RORWA 4 : 2.04% ■ NIM 4 : 1.83% ■ Non-interest income/ : 34.1% Total income ■ Cost / Income : 43.9% ■ NPL ratio : 1.7% Note: Financial statistics as at 30 June 2018. ■ Credit Ratings Moody’s 1. USD1 = SGD 1.3637 as at 30 June 2018. S&P Fitch 2. Average for 2Q18. 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 Higher 1H18 margin than peers 2.20% 2.15% 1.84% 1.84% 1.83% 1.67% 41% Best Retail Bank 1 Bank of the Year, Excellence in Mobile SME Bank of the Singapore, Banking – Overall, 33% 58% Year 1 UOB DBS OCBC 2015 2018 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 2017; $3,390m Acquired Acquired ICB Buana in 2005 2014; $3,249m in 1987 2010; $2,696m Acquired BOA Acquired FEB 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 (“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 28 offices 1 39% of VIETNAM Group PBT 469 THAILAND 1 office 324 367 301 154 offices 419 PHILIPPINES 305 366 300 29 218 99 1 office 71 61 159 193 175 MALAYSIA 41% of 581 48 offices INDONESIA 593 548 Group PBT 537 180 offices 292 242 SINGAPORE AUSTRALIA 51 137 69 offices 4 offices 304 2,491 2,363 2,364 2,345  Most diverse regional franchise among Singapore banks; effectively full control of regional subsidiaries 1,449  Integrated regional platform improves operational efficiencies, enhances risk management and provides faster time-to-market and seamless customer service 2014 2015 2016 2017 1H18  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 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 business 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

Strong UOB Fundamentals 9

Strong UOB Fundamentals Strong  Proven track record in steering the bank through various global events and Management with crises Proven Track  Stability of management team ensures consistent execution of strategies Record  Healthy revenue growth, with new highs in both net interest income and fees Consistent and  Continue to invest in building long-term capabilities in a disciplined manner Focused Financial  Total credit costs expected to be below long-term trend of 28bp Management  Higher profit supports an increase in interim dividend to 50 cents per share  Strong capital base; Common Equity Tier 1 capital adequacy ratio of 14.5% Disciplined as at 30 June 2018 Management of  Liquid and well diversified funding mix with loan/deposits ratio at 85.7% Balance Sheet  Stable asset quality, with a diversified loan portfolio  Holistic regional bank with effectively full control of subsidiaries in key markets Delivering on  Focus on profitable niche segments and intra-regional needs of customers Regional  Entrenched local presence: ground resources and integrated regional network Strategy to better address the needs of our targeted segments UOB is focused on the basics of banking; Stable management team with proven execution capabilities Source: Company’s reports. 10

Managing Risks for Stable Growth  Prudent approach has been key to delivering sustainable returns over the years Manage concentration risk  Institutionalised framework through Group Risk Appetite Maintain Statement (GRAS): Nurture core balance talent sheet – Outlines risk and return strength objectives to guide strategic decision-making UOB’s – Comprises 6 dimensions and GRAS 14 metrics – Entails instilling prudent Build sound reputation culture as well as establishing Optimise and capital usage policies and guidelines operating environment – Invests in capabilities, leverage integrated regional Limit network to ensure effective earnings volatility implementation across key markets and businesses 11