Full Year 2016 Results Stable Core Earnings in Slower Operating Environment Wee Ee Cheong Deputy Chairman and Chief Executive Officer 17 February 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.
Stable Performance from Core Businesses FY16 profit: S$3.1bn, slightly lower YoY – Higher net interest income and fee income offset by lower investment income Net interest income up 1.3% to S$5bn, led by healthy loan growth – Loans: +8.8% YoY, with selective targeting of quality credits – NIM: -6bps to 1.71%, although it has stabilised over last 2 quarters Non-interest income flat at S$3.1bn – Higher fee income (+2.5% YoY) offset by lower trading & investment income ( – 8.1% YoY) Higher cost-to-income ratio – 45.9%, with continued investments in infrastructure and technology to sharpen capabilities 2
Disciplined Balance Sheet Management Portfolio quality broadly stable Countercyclical Approach to General Allowances ($m) – NPL ratio up slightly at 1.5% 80 204 460 – High general allowances-to-loans 359 358 ratio of 1.2% – 32bps total credit costs maintained 2,709 1,964 S$1.1bn Proactive liability management built up – Liquidity Coverage Ratios 1 : 2012 2013 2014 2015 1H16 2H16 2016 S$ (275%) and all-currency (162%) Healthy capital position Liability Management and Capital – 12.1% fully-loaded CET1 ratio 2 Capital Adequacy Ratios Group CASA ($bn) CAGR 16.2% Total Final dividend of 35 cents/share +10% Tier 2 3.1% – Scrip dividend scheme applied Tier 1 13.1% 114 107 97 86 Fully loaded 12.1% CET 2 2013 2014 2015 2016 Dec-16 1. Average ratios for fourth quarter of 2016. 2. Proforma CET1 ratio (based on final rules effective 1 January 2018). 3
Wholesale Banking: Steady Franchise Growth; Broader Portfolio Quality Sound Wholesale Banking Business Wholesale B anking’s loans and income up in 2016 Gross Loans ($bn) Total Income ($m) +10% +6% +10% +10% +13% +3% 4500 2.40% YoY YoY YoY YoY YoY YoY Bottom line dampened by higher 4000 3500 2.20% 2.03% allowances, largely from offshore & 3000 1.90% 1.92% ROA 1 2.00% 2500 marine sector (PPOP) 1.80% 2000 1.83% 1.81% – Broader portfolio quality remains sound 1500 1.60% 1.33% ROA 2 1000 1.40% (PBT) 500 0 1.20% Selective loans growth, despite 2014 2015 2016 2014 2015 2016 cautious business climate Transaction Banking and Financial Institutions – Transaction Banking and Financial Group Seeing Good Momentum Institutions continue to grow Income ($m) +8% YoY 2015 2016 Capturing regional opportunities – Cross-border income: 21% of Group +23% YoY Wholesale Banking income +3% YoY Transaction Banking Financial Treasury 1. ROA: Ratio of “Pre - provision profit” to “Average Assets” Institutions Group 2. ROA: Ratio of “Profit before tax” to “Average Assets” 4
Group Transaction Banking: Stable Income Contributor Trade Loans Deposits Cash management CAGR CAGR increasing in significance +16% +12% 33% 35% Healthy growth in trade 37% 40% 33% 39% 30% loans with focus on 41% increasing of client wallet 59% 63% 61% 60% 70% 67% 65% 67% share 2013 2014 2015 2016 2013 2014 2015 2016 Singapore Overseas Continue to draw high- quality deposits, supporting Transaction Banking Income our liability management Breakdown by Cash / Trade Breakdown by Geography CAGR CAGR +16% Strong industry recognition +16% for cash and trade 33% achievements 42% 37% 44% 48% 49% 48% 48% 52% 52% 56% 58% 52% 51% 63% 67% 2013 2014 2015 2016 2013 2014 2015 2016 Singapore Overseas Cash Trade 5
Retail Banking: Growing Income with Stable Asset Quality Housing loans a key driver for Retail Group Retail Business Banking’s 1 loan growth in 2016; Gross Loans ($bn) Total Income ($m) regional housing loans +11% YoY +8% +3% +7% +9% +11% +9% YoY YoY YoY YoY YoY YoY – Asset quality remains stable 4000 2.00% 3500 1.73% 1.80% 3000 1.56% ROA 3 1.45% 2500 1.60% Gaining CASA in Singapore for the past 2000 1.40% 1500 2 years 1000 1.20% 500 0 1.00% 2014 2015 2016 2014 2015 2016 Wealth management (WM) did well, across mass affluent and High Net Wealth Management 4 Business Worth 2 segments Income ($m) AUM ($bn) – WM Income +8% YoY; profit +16% YoY +8% YoY +9% YoY 93 85 – $93bn AUM as at end-2016 +11% +14% YoY YoY +9% 1. Retail Banking comprises Personal Financial +5% YoY YoY Services, Private Banking and Business Banking. 2. High Net Worth segment comprises Privilege Reserve and Private Bank segments. 2015 2016 2015 2016 3. ROA: Ratio of “Profit before tax” to “Average Assets”. High Net Worth 2 4. Wealth Management comprises Privilege Banking, Privilege Reserve and Private Bank segments. Privilege Banking 6
Looking Ahead Volatile and less predictable environment, with focus on US and China Confident of ASEAN’s fundamental strengths – Regional countries have fiscal flexibility to support domestic growth – Growing regional connectivity, within ASEAN and China-ASEAN – UOB well-placed to help support companies in trade and investments Uncertainty and disruption present opportunities for long-term players such as UOB – Tap on connectivity in the region and strategic alliances – Continue to invest in capabilities, to meet and anticipate our customers’ needs, for banking and beyond 7
Thank You
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