UOB Group Steady Growth in Client Franchise Income, supported by - PowerPoint PPT Presentation

UOB Group Steady Growth in Client Franchise Income, supported by Sound Balance Sheet November 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. Macroeconomic Outlook 3. Strong UOB Fundamentals 4. Our Growth Drivers 5. Latest Financials

Overview of UOB Group 3

UOB Overview Founding Key Statistics for 9M17 Founded in August 1935 by a group of Chinese ■ Total assets : SGD354b (USD261b 1 ) businessmen and Datuk Wee Kheng Chiang, ■ Shareholder’s equity : SGD35b (USD26b 1 ) grandfather of the present UOB Group CEO, Mr. ■ Gross loans (USD172b 1 ) : SGD234b Wee Ee Cheong ■ Customer deposits : SGD268b (USD198b 1 ) ■ Fully-loaded Common : 13.8% Equity Tier 1 CAR 2 ■ Leverage ratio 3 : 7.7% Expansion ■ ROA 4 : 0.99% UOB has grown over the decades organically and ■ ROE 4 5 : 10.3% through a series of strategic acquisitions. It is today a ■ NIM 4 : 1.76% leading bank in Asia with an established presence in ■ Non-interest income/ the Southeast Asia region. The Group has a global : 37.8% Total income network of more than 500 branches and offices in 19 ■ NPL ratio countries and territories. : 1.6% ■ Loan/Deposit ratio : 85.8% ■ Average all-currency : 142% 6 liquidity coverage ratio Note: Financial statistics as at 30 September 2017. ■ Cost / Income : 44.7% 1. USD1 = SGD1.3578 as at 30 September 2017. 2. Based on final rules effective 1 January 2018. ■ Credit Ratings : 3. Leverage ratio is calculated based on the revised MAS Notice 637. Moody’s S&P Fitch 4. Computed on an annualised basis. Issuer Rating AA – AA – 5. Calculated based on profit attributable to equity holders Aa1 (Senior Unsecured) of the Bank net of preference share dividend and Outlook Stable Stable Stable perpetual capital securities distributions. 6. Average for 3Q17. 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 9M17 loan margin than peers 2.14% 2.04% 1.94% 1.76% 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 42% of 324 155 offices 301 252 Group PBT PHILIPPINES 305 366 300 272 99 71 1 office 61 159 193 175 178 MALAYSIA 343 146 47 offices INDONESIA 593 548 32 537 316 180 offices 555 160 SINGAPORE 452 AUSTRALIA 74 offices 4 offices 2,363 2,364 2,345  Most diverse regional franchise among Singapore 2,181 1,816 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 2013 2014 2015 2016 9M17  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

Macroeconomic Outlook 8

China’s Growth Slower but Low Risk of Hard Landing  While China’s GDP growth rate is slowing, the annual increase in absolute GDP has been stable.  The Chinese economy has its underlying momentum, supported by rebalancing reforms and steady job market.  Low central government debt underpins China’s fiscal capacity, which could help mitigate “black swan” events.  Base case scenario for China: slow and unexciting growth; sideway movements in RMB; global economy continues to recover at gradual pace, led by the US. Structural Shift of China’s Economy Episodes of Market Volatility Contained (Nov’12 = 100) (Average Contribution to GDP growth rate, %) 200 9.9 150 7.6 6.8 4.3 100 3.6 3.8 5.2 3.7 2.7 50 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17 2008 - 2011 2012 - 2014 2015 - 2016 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) (% of GDP) 397 20 278 255 165 245 15 186 155 163 10 151 210 107 233 119 5 116 104 79 0 China '07 China '16 US '16 Japan '16 UK '16 Germany Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 '16 Central govt debt Local govt debt Private sector RMB loans Other financing Source: China NAO, CEIC, IMF, OECD, UOB Global Economics & Source: PBOC, UOB Global Economics & Markets Research Markets Research 9

Brexit Impact on Asian Markets via Trade and Investment Channels  It is still a challenge to quantify Brexit effects with EU & UK Export Mix of Selected Partners (2016) certainty at this stage.  The immediate impact on Asian economies is likely 19% 17% to be limited and shallow, considering the low export 16% 16% reliance. 10%  10% If adverse impact of Brexit spreads to the broader 8% European Union, however, this could have a more 4% 3% significant impact on Asia given the trade and 3% 3% 3% 2% 1% investment links. As a bloc, EU represented 11% of ASEAN’s total exports and 33% of FDIs in 2016. HK USA India China ASEAN Japan Canada To EU To UK Source: Bloomberg ASEAN’s Net FDI Flows by Key Partners ASEAN’s Trade/Export Mix by Key Partners (2016) 21% 33% 20% 18% 28% 16% 25% 13% 11% 19% 11% 18% 17% 10% 16% 12% 12% 12% 9% 10% 10% 10% 8% 10% 6% 5% 4% 4% 6% 3% 5% 3% 3% 5% 2% 2% 3% 1% ASEAN China US EU28 Japan Korea HK India Australia UK EU28 ASEAN USA Japan Hong China South Kong 2014 2015 2016 Total trade Exports Source: ASEAN Secretariat Source: ASEAN Secretariat 10