UOB Group 1 st Half 2017 and 2 nd Quarter 2017 Financial Highlights - PowerPoint PPT Presentation

UOB Group 1 st Half 2017 and 2 nd Quarter 2017 Financial Highlights Lee Wai Fai Group Chief Financial Officer 28 July 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 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 Private & Confidential Bank accepts no liability whatsoever with respect to the use of this document or its content. Singapore Company Reg No. 193500026Z

1H17 and 2Q17 Highlights Sound operating performance and healthy balance sheet 1H17 NPAT of $1.65b ↑5.5% YoY 2Q17 NPAT of $845m ↑4.6% QoQ Stable top lines growth • NIM pick up from active balance sheet management and stable funding costs • Strong growth in fee income from wealth management, fund management and credit card products Asset quality remains broadly stable • Proactive management of oil & gas exposures • Broader portfolio of sound quality • Sufficient buffers and coverage Balance sheet remains strong • Continued growth in gross loans and customer deposits • Strong capital and liquidity positions 2

Healthy contribution from client franchise, driven by fees and balance sheet growth 1H17 1H16 +/(-) $m $m % p Net interest income 2,659 2,485 7.0 p Fee and commission income 1,026 907 13.1 p Other non-interest income 621 600 3.5 p Total income 4,306 3,993 7.8 p Less: Total expenses 1,952 1,821 7.2 p Operating profit 2,355 2,172 8.4 p Less: Specific allowance 447 252 77.2 (>100.0) q General allowance (81) 26 >100.0 p Add: Associates & joint ventures 59 2 p Net profit before tax 2,047 1,895 8.0 p Less: Tax & non-controlling interests 395 329 20.0 p Net profit after tax 1,652 1,566 5.5 unfavourable variance to earnings favourable variance to earnings 3

Sound operating performance, with stable contribution from client franchise 2Q17 2Q16 +/(-) 1Q17 +/(-) $m $m % $m % p p Net interest income 1,356 1,211 12.0 1,303 4.0 p p Fee and commission income 517 475 9.0 508 1.7 (8.3) q (0.1) q Other non-interest income 310 338 311 p p Total income 2,183 2,024 7.9 2,123 2.9 p p Less: Total expenses 995 927 7.3 957 4.0 p p Operating profit 1,189 1,097 8.4 1,166 2.0 p (40.0) q Less: Specific allowance 168 112 49.0 279 (74.3) q >100.0 p General allowance 12 49 (93) (24.3) q (28.9) q Add: Associates & joint ventures 24 32 34 p p Net profit before tax 1,033 968 6.7 1,014 1.9 p (8.7) q Less: Tax & non-controlling interests 188 167 12.6 206 p p Net profit after tax 845 801 5.5 807 4.6 unfavourable variance to earnings favourable variance to earnings 4

NII rose 7% YoY supported by loan growth and improved margin Net Interest Income (NII) and Margin 2.26% 2.20% 2.13% 2.06% 2.23% 2.13% 2.14% 2.14% 2.09% 1.77% 1.74% 1.71% 1.71% 1.73% 1.75% 1.68% 1.69% 1.69% 0.82% 0.66% 0.50% 0.38% 0.71% 0.60% 0.55% 0.43% 0.25% 4,991 4,926 303 4,558 391 620 1,356 1,303 1,276 1,211 1,230 149 120 109 82 50 2,659 269 4,688 4,535 3,938 1,207 1,184 1,161 1,148 1,166 2,390 2014 2015 2016 1H17 2Q16 3Q16 4Q16 1Q17 2Q17 NII from Loans ($m) Loan Margin (%) Net Interest Margin (%) NII from Interbank & Securities ($m) Interbank & Securities Margin (%) 5

Fee income up 13% YoY and 2% QoQ from credit card, fund management and wealth management products Non-Interest Income (Non-NII) and Non-NII Ratio 38.9% 38.8% 38.1% 38.2% 40.2% 39.7% 38.6% 37.9% 37.1% 23.9% 23.8% 23.5% 23.4% 26.2% 24.1% 24.0% 23.7% 23.4% 3,122 3,071 2,900 284 263 334 828 819 813 810 753 70 954 877 68 67 83 53 817 240 243 251 169 256 1,647 138 483 1,931 1,883 1,749 531 517 508 492 475 1,026 2014 2015 2016 1H17 2Q16 3Q16 4Q16 1Q17 2Q17 Fee and commission income ($m) Other non-interest income ($m) Non-NII/Total Income (%) Trading & Investment income ($m) Fee Income/Total Income (%) 6

Disciplined cost management maintained expense/income ratio as investment in technology and infrastructure continues Operating Expenses and Expense / Income Ratio 45.9% 45.3% 44.7% 47.2% 43.1% 45.8% 45.6% 45.0% 45.1% 43.4% 42.2% 3,696 ^ 3,597 ^ 995 3,146 957 957 927 918 1,646 1,533 1,321 448 430 443 405 409 1,952 878 2,064 2,050 1,825 547 526 521 510 514 1,073 2014 2015 2016 1H17 2Q16 3Q16 4Q16 1Q17 2Q17 Staff costs ($m) Other operating expenses ($m) Expense/Income Ratio (%) Expense/Income Ratio (%) exclude one-off ^ Included one-off expenses relating to SG50 and UOB80 commemorative events and brand campaign (2015: $67m) and adjustment for prior year’s bonus. 7

Lower specific allowance in 2Q17. General allowance increased to build up reserves while total credit costs on loans were kept at 32bps Allowance on Loans 45bp 39bp 76bp 32bp 32bp 32bp 32bp 53bp 49bp 19bp 969 32bp 32bp 32bp 32bp 32bp 12bp 428 30bp 15bp from 23bp existing NPLs 288 277 449 392 172 121 238 2Q16 3Q16 4Q16 1Q17 2Q17 2014 2015 2016 1H17 Specific Allowance on Loans ($m) Specific Allowance on Loans/Average Gross Customer Loans (basis points) * Total Allowance on Loans/Average Gross Customer Loans (basis points) * * On annualised basis 8

Movements in non-performing assets 2Q16 3Q16 4Q16 1Q17 2Q17 $m $m $m $m $m NPA at start of period 3,016 3,164 3,632 3,480 3,543 New NPA 802 780 387 424 537 Upgrades, recoveries and translations (548) (201) (320) (293) (255) Write-offs (106) (111) (219) (68) (238) 3,164 3,632 3,480 3,543 3,587 NPA at end of period 9

NPL ratio remained stable 1.5% NPL ($m) 3,056 3,496 3,328 3,399 3,466 NPL Ratio 1.4% 1.6% 1.5% 1.5% 1.5% 255 285 257 245 303 261 304 206 307 176 565 641 623 638 564 293 392 370 264 360 466 451 518 487 487 1,614 1,395 1,369 1,358 1,291 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Singapore Malaysia Thailand Indonesia Greater China Others Note : Non-performing loans by geography are classified according to where credit risks reside, largely represented by the borrower‘s country of incorporation/operation (for non-individuals) and residence (for individuals). 10

New NPLs mainly from general commerce and manufacturing industries 3,496 3,466 3,399 3,328 323 408 3,056 440 484 183 666 601 637 563 618 304 283 286 276 284 594 643 513 610 451 358 298 321 316 288 179 242 216 210 209 1,063 996 1,000 965 917 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 NPL ($m) Transport, storage and communication Professional and private individuals Building and construction Housing loans Manufacturing Others General commerce 11

Exposure to commodities Oil and gas Other Traders/ Jun 17 commodity Total Upstream downstream segments industries² industries Total exposure 1 SGD4.3b SGD10.1b SGD9.2b SGD23.6b Outstanding SGD3.7b SGD5.8b SGD7.0b SGD16.5b loans 4% of total loans 7% of total loans  Total exposure, including off-balance sheet items, stood at SGD23.6b as of 30 June 2017  Mainly to traders and downstream segments  Proactive monitoring, limit management and collateral enhancement Notes : 1. Total exposure comprises outstanding loans and contingent liabilities 2. Oil and gas upstream industries include offshore service companies. 12

Loan allowance coverage remains adequate 332.5% 266.0% 262.4% 244.2% 241.1% 125.6% 118.0% 118.1% 112.4% 113.9% 1.5% 1.4% 1.2% 1.1% 1.2% 4,013 3,947 3,929 3,928 3,837 2,604 2,620 2,709 2,954 3,067 1,409 1,327 1,219 975 770 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Specific Allowance ($m) Total Allowance/Total NPL (%) General Allowance/Gross loans net of specific allowance General Allowance ($m) Total Allowance/Unsecured NPL (%) 13

Stable liquidity position Customer Loans and Deposits; LDR and LCR 86.8% 86.7% 85.0% 86.1% 84.0% 260 260 255 251 248 225 224 222 213 208 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Net Customer Loans ($b) Customer Deposits ($b) Loan/Deposit Ratio (LDR) (%) SGD LDR (%) 91.9 89.7 89.7 87.8 89.9 USD LDR (%) 63.1 68.3 74.6 75.7 66.5 SGD LCR (%) 1 224 213 275 232 203 Total LCR (%) 1 167 148 162 154 157 1 Average for quarters 14

Loans up 7% YoY to $228b across all key countries Jun-17 Jun-17 Jun-16 +/(-) Mar-17 +/(-) 18% $b $b % $b % Gross Loans 36% 8% 44% Singapore 125 120 4.6 125 0.3 56% Regional: 79 73 9.2 81 (1.4) Malaysia 26 25 2.9 26 2.2 3% 4% 31% Thailand 14 12 19.3 14 1.6 Indonesia 12 11 1.3 11 1.0 Jun-16 Greater China 28 24 14.5 30 (6.6) Others 23 20 16.6 23 (2.8) 44% Total 228 212 7.3 229 (0.6) 56% Group Retail Group Wholesale Notes: 1. Loans by geography are classified according to where credit risks reside, largely represented by the borrower's country of incorporation/operation (for non-individuals) and residence (for individuals). 2. No significant currency translation impact. 15