Full Year 2018 Results Record Earnings Supported by Strong Balance Sheet Wee Ee Cheong Deputy Chairman and Chief Executive Officer 22 February 2019 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.
Record FY18 Earnings Built on Solid Growth Momentum of Core Business S$4.0b S$262b S$4.01b Net profit Gross customer 5 18% YoY 5 11% YoY Net Interest after tax loans 5 18% YoY Income S$6.2b 1.82% S$4.01b S$4.01b Net interest Net interest 5 13% YoY 5 5bp YoY Net Interest Net Interest margin income 5 18% YoY 5 18% YoY Income Income S$2.0b 43.9% S$4.01b S$4.01b Net fee Cost to Net Interest Net Interest 5 5% YoY 5 0.2%pt YoY income income ratio 5 18% YoY 5 18% YoY Income Income 2
Disciplined Balance Sheet Management Improved balance sheet efficiency Balance Sheet Efficiency a Key Priority – Stronger RoRWA 1 driven by RoRWA 1 higher profit 1.93% 1.63% 1.51% Healthy portfolio quality – NPL ratio improved to 1.5% in 2018 FY16 FY17 FY18 – 16bp credit cost on loans lower YoY RWA S$216b S$199b S$221b – Adequate non-performing assets reserve cover: 87%, or 202% including Liability Management and Capital collateral CAR 3 (%) Group CASA (S$b) Proactive liability management Total 17.0 8% CAGR 2 – Liquidity Coverage Ratios: Tier 2 2.1 S$ (209%) and all-currency (135%) – Net stable funding ratio: 107% Tier 1 14.9 107 114 124 130 Robust capital; 13.9% CET1 CAR 3 97 CET1 13.9 Total dividend / share 5 to $1.20, vs Dec-18 FY14 FY15 FY16 FY17 FY18 $1.00 in FY17 1. RoRWA: Return on average risk-weighted assets. 2. Compound annual growth rate (CAGR) computed over 4 years (2014 to 2018). 3. Capital adequacy ratio 3
Tapping Intra-Regional Flows through Diversification Strong income & RoRWA 1 growth… ... supported by diverse sources By geography By product By sector +17% +11% +11% +15% 2.4 3.9 2.2 2.1 1.9 3.5 1.8 1.7 FY17 FY18 FY17 FY17 FY18 FY18 FY17 FY18 Non-Real Estate Non-Loan Non-Singapore GWB Income (S$b) Income 4 (S$b) Income 3 (S$b) Income 2 (S$b) RoRWA 1 1.07% 1.95% 1. RoRWA : Ratio of “Profit before tax” to “Average segment RWA”. 2. Income from Hong Kong, China, Malaysia, Thailand, Indonesia, others. 3. Income from Cash, Trade, Global Markets, Investment Banking, others. 4. Income from Industrial, Financial Institutions, Oil & Gas, Consumer Goods, Construction & Infrastructures, Technology, Media & 4 Telecommunications (TMT), Healthcare, Logistics, others.
Strategic Initiatives to Tap Intra-Regional Flows 1 3 2 Strengthen Connectivity Sector Specialisation Products & Platforms Offer customised Building new capabilities Support and grow with our solutions customers in the region • New product platforms to our customers • Re-designed customer • Focused on tapping journeys • Focused sector teams Chinese / ASEAN flows • Rapid deployment across • FDI 1 advisory team, supporting RM 3 with the Group insights & solutions supporting companies' regional expansion Cross-border revenue: Non-loan income: GWB e-Banking customers +15% 2 +15% growth 2 & ~20% growth 2 25% of GWB income Non-real estate income: Targeted cost productivity FDI 3 contributed S$46b of +11% 2 improvement 5 : deposit flows 4 ~10-15% 6 Best Transaction Bank Best Cash Management Bank Best Trade Finance Bank 1. FDI: Foreign Direct Investment. 4. Deposit flows in 2018. 2. 2018 year-on-year growth. 5. 2021 target. 3. RM: Relationship Manager. 6. The Asian Banker Transaction Awards 2018, in Singapore. 5
Serving the Rising Affluent via Our Extensive In-country Presence Gross Loans (Group Retail 1 ): +4% YoY in FY18 Income 3 (Group Retail 1 ) +4% YoY in FY18 S$b S$b 4.0 108 3.8 104 3.5 98 FY16 FY17 FY18 FY16 FY17 FY18 High Affluent 2 Income: +10% YoY in FY18 Segment RoRWA 4 +0.50%pt YoY in FY18 S$b 6.22% 5.78% 5.72% 1.5 1.3 1.1 FY16 FY17 FY18 FY16 FY17 FY18 AUM S$93b S$104b S$111b 1. Includes Business Banking. 2. High Affluent comprises Privilege Banking and High Net Worth (Privilege Reserve + Private Bank) segments. 3. Income includes fee and commission income that is net of directly attributable expenses. 4. RoRWA: Ratio of “Profit before tax” to “Average segment RWA”. 6
Leveraging Digitalisation and Partnerships to Grow and Deepen Customer Franchise 3 1 2 Digital Bank Omni-Channel Experience Ecosystem Partnerships Targeting Mobile-First Deepening customer Forging collaborations to and Mobile-Only engagement widen distribution reach Generation • Strengthening customer • Digitised application & • Delivered and launched acquisition & deepen approval of consumer customer wallet share TMRW in Thailand within products 1 14 months • Improving banking • Growth in Mighty app access by plugging into usage consumers’ lifestyles • Leveraging data analytics & machine learning across customer touch points Target 5 markets UOB Mighty App: Regional bancassurance Transaction volume: +125% 2 arrangement with Prudential 3-5m customers Strategic alliance with Grab New Orchard Wealth Banking Engagement Index >7 Centre with state of the art Partnerships in property Steady-state cost-income features and car ecosystems ratio ~35% 1. Include UOB Housing Loan, Car Loan, Credit Cards and Deposits. 7 2. 2018 year-on-year growth
Looking Ahead Prudent in navigating headwinds Heightened Volatile Global geopolitical financial uncertainties risks markets UOB well positioned to ride on Southeast Asia’s immense long -term potential Growing Enhancing Building sector connectivity capabilities, specialisation across the boosting region productivity Delivering Forging Tapping rising seamless ecosystem affluence in omni-channel partnerships the region experience 8
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