First Half 2016 Results Steady Performance Amidst Market Volatilities Wee Ee Cheong Deputy Chairman and Chief Executive Officer 28 July 2016 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 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. Singapore Company Reg No. 193500026Z 1
Stable Performance Amidst Cyclical Slowdown 1H16 profit: S$1.6bn, relatively unchanged YoY – Higher net interest income and trading income partially offset by higher expenses Net interest income higher, led by steady loan growth – Loans: +4.9% YoY growth across industries and countries – NIM: -3bps to 1.73% Non-interest income boosted by – Higher trading & investment income (+20% YoY); fee income dipped (-1.2% YoY) Cost-to- income (“CIR”) – CIR at 45.6%, due to investments in infrastructure and technology to strengthen the Group’s franchise Dividend – Interim dividend of 35 cents per share; scrip dividend scheme applied 2
Disciplined Balance Sheet Management Resilient balance sheet – Stable NPL ratio: 1.4% – High general allowances-to-loans ratio of 1.5% – Strong NPL coverage: 125.6% Strong funding and capital base – Liquidity Coverage Ratios: SGD (224%) and all-currency (167%) – Healthy fully-loaded CET1 ratio 1 of 12.2% Positive affirmation from markets – Issuance of Basel III perpetual capital securities (S$750m) in May: 3 times subscribed – Upgrade of UOB’s standalone rating by Standard & Poor’s 1. Proforma CET1 ratio (based on final rules effective 1 January 2018). 3
Wholesale Banking: Steady Performance Wholesale banking’s loans and income Wholesale Banking Business up in 1H16 despite weaker macro Gross Loans ($bn) Total Income ($m) environment +13% +5% 4000 4.00% +6% YoY YoY YoY 3500 3.50% +6% 3000 3.00% Financial Institutions segment doing YoY 2500 2.50% ROA 1 2000 2.00% well 1500 1.50% 1.80% 1.83% 1.75% – Supporting property funds and 1000 1.00% 500 0.50% sovereign funds in overseas asset 0 0.00% 2015 1H15 1H16 2015 1H15 1H16 acquisitions – Attracting quality deposits; enhancing Higher Income Supported by Strong Liability Management liability profile Income ($m) +12% YoY Capturing regional opportunities 1H15 1H16 – Cross-border income: 20% 2 of Group +20% YoY wholesale banking income +5% YoY Transaction banking Financial Treasury ROA: Ratio of “Profit before tax” to “Average Assets” 1. Institutions Group 2. Data for year-to-date May 2016 4
Group Transaction Banking Continues to Grow Trade Loans Deposits One of main pillars for 23% CAGR 15% CAGR wholesale banking +4% YoY 36% 38% +1% YoY 35% Cash management grows 37% 30% 33% 39% 42% 39% with significant mandates 41% 64% 62% 70% 67% 65% 63% 61% 58% 61% 59% Good traction from trade 2013 2014 2015 1H15 1H16 2013 2014 2015 1H15 1H16 due to focus on new Singapore Overseas clients and industries Transaction Banking Income Made significant Breakdown by Cash / Trade Breakdown by Geography investments to provide 20% CAGR 20% CAGR innovative solutions 37% 44% +11% YoY +11% YoY 48% 49% Strong industry 48% 48% 39% 33% 45% 43% recognition for cash and 52% 51% 63% 52% 52% 56% 61% 67% 55% 57% trade achievements 2013 2014 2015 1H15 1H16 2013 2014 2015 1H15 1H16 Singapore Overseas Cash Trade 5
Retail Banking: Growing Income with Stable Asset Quality Group Retail Business Growth in retail banking 1 income Gross Loans ($bn) Total Income ($m) outpaced loan growth in 1H16 +11% 4000 4.00% +5% YoY +3% 3500 YoY Singapore housing loan portfolio’s YoY 3000 3.00% +8% 2500 YoY growth improved YoY in 1H16 ROA 3 2000 2.00% 1500 1.75% – Overall asset quality remains stable 1.56% 1.51% 1000 1.00% 500 – Lower credit costs yoy in 1H16 0 0.00% 2015 1H15 1H16 2015 1H15 1H16 Wealth Management 4 Business Wealth management income +6% YoY AUM ($bn) Total Income ($m) in 1H16 despite market volatilities +6% YoY 88 – $88bn AUM as at end-Jun 2016 83 +10% – High Net Worth 2 segment trending +12% YoY YoY higher +4% +4% YoY YoY Jun 15 Jun 16 Jun 15 Jun 16 Privilege Banking High Net Worth 2 1. Retail Banking comprises Personal Financial Services, Private Banking and Business Banking. 2. High Net Worth segment comprises Privilege Reserve and Private Bank segments. ROA: Ratio of “Profit before tax” to “Average Assets”. 3. 4. Wealth Management comprises Privilege Banking, Privilege Reserve and Private Bank segments. 6
Looking Ahead Uncertain outlook; low interest rates globally even as pick-up in credit costs expected Banking industry being reshaped through digital connectivity These cyclical and structural factors present opportunities, especially in Asia – Reinforced by government initiatives towards tighter regional connectivity Also present opportunities for long-term players such as UOB – Well-positioned with strong balance sheet and integrated network – Continue to selectively grow and sharpen capabilities in target areas; investing for the future 7
Thank you 8
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