Pillar 3 Quantitative Disclosure Report For the First Half of 2015

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1 Pillr 3 Quntittive Disclosure Report For the First Hlf of 2015 United Overses Bnk Limited Incorported in the Republic of Singpore Compny Registrtion Number: Z

2 INTRODUCTION This Pillr 3 quntittive report is prepred in ccordnce to the Monetry Authority of Singpore ( MAS ) Notice 637 on Risk Bsed Cpitl Adequcy Requirements for bnks incorported in Singpore. The disclosures re to fcilitte the understnding of the UOB Group s risk profile nd ssessment of the Group s cpitl dequcy. SUMMARY OF EXPOSURE AT DEFAULT () AND RISK WEIGHTED ASSETS (RWA) RWA Credit Risk Internl Rtings-Bsed (IRB) Approch Corporte 127,329 91,086 Sovereign 49,150 1,144 Bnk 32,645 6,647 Residentil Mortgge 65,047 9,182 Qulifying Revolving Retil 6,217 2,246 Other Retil 18,996 3,814 Equity 2,048 7,445 Securitistion Totl IRB Approch 301, ,649 Stndrdised Approch b Corporte 9,023 8,452 Sovereign 1, Bnk 1, Regultory Retil 1, Residentil Mortgge 1, Commercil Rel Estte 2,428 2,446 Fixed Assets 2,905 2,905 Other Exposures 5,521 2,918 Totl Stndrdised Approch 26,151 18,943 Credit Vlution Adjustment 1,809 Centrl Counterprties 380 Investments pproved under section 32 of the Bnking Act (below 6,601 threshold for deduction) Totl Credit Risk 149,382 Mrket Risk Stndrdised Approch 19,935 Opertionl Risk Stndrdised Approch 12,235 Totl 181,552 b Credit exposures under Advnced IRB Approch. Amount under Stndrdised Approch refers to credit exposure where IRB Approch is not pplicble, or portfolios tht will eventully dopt IRB Approch. Bsed on the Group s Totl RWA, the Group s minimum cpitl requirement s t 30 June 2015 is $18,155 million. 2 of 14

3 CREDIT RISK Credit risk is defined s the risk of loss rising from ny filure by borrower or counterprty to fulfil its finncil obligtions s nd when they fll due. The Group Credit Committee is delegted the uthority by the Bord of Directors to oversee ll credit mtters. It mintins oversight on the effectiveness of the Group s credit nd country risk mngement structure including frmework, people, processes, informtion, infrstructure, methodologies nd systems. Credit risk exposures re mnged through robust credit underwriting, structuring nd monitoring process. The process includes monthly review of ll non-performing nd specil mention lons, ensuring credit qulity nd the timely recognition of sset impirment. In ddition, credit review nd udit re performed regulrly to proctively mnge ny delinquency, minimise undesirble concentrtions, mximise recoveries, nd ensure tht credit policies nd procedures re complied with. Pst dues nd credit limit excesses re trcked nd nlysed by business nd product lines. Country risk rises where the Group is unble to receive pyments from customers s result of politicl or economic events in the country. These events include politicl nd socil unrest, ntionlistion nd exproprition of ssets, government repudition of externl indebtedness, nd currency deprecition or devlution. Credit exposure The Group s mximum exposure to credit risk of on-blnce sheet nd off-blnce sheet finncil instruments, before tking into ccount ny collterl held, other credit enhncements nd netting rrngements, is shown in the tble below: Averge 1 End Blnces nd plcements with centrl bnks 35,806 37,107 Singpore Government tresury bills nd securities 7,362 7,017 Other government tresury bills nd securities 9,465 9,808 Trding debt securities 941 1,436 Plcements nd blnces with bnks 27,684 25,658 Lons to non-bnk customers 196, ,798 Derivtive finncil ssets 6,180 5,745 Investment debt securities 7,993 7,250 Others 1,717 1, , ,718 Contingent libilities 19,305 19,800 Commitments (excluding operting lese nd cpitl commitments) 97,493 98,813 1 Averge blnces re computed bsed on qurter-end exposure. 3 of , ,331 As fundmentl credit principle, the Group generlly does not grnt credit fcilities solely on the bsis of the collterl provided. All credit fcilities re grnted bsed on the credit stnding of the borrower, source of repyment nd debt servicing bility. Collterl is tken whenever possible to mitigte the credit risk ssumed. The vlue of the collterl is monitored periodiclly. The frequency of vlution depends on the type, liquidity nd voltility of the collterl vlue. The min types of collterl tken by the Group re csh, mrketble securities, rel estte, equipment, inventory nd receivbles. Policies nd processes re in plce to monitor collterl concentrtion. In extending credit fcilities to smll nd medium enterprises, personl gurntees re often tken s form of morl support to ensure morl commitment from the principl shreholders nd directors.

4 Corporte gurntees re often obtined when the borrower s credit worthiness is not sufficient to justify n extension of credit. For internl risk mngement, greements such s Interntionl Swps nd Derivtives Assocition Mster Agreements nd Credit Support Annex hve been estblished with ctive counterprties to mnge counterprty credit risk rising from foreign exchnge nd derivtive ctivities. The greements llow the Group to settle ll outstnding trnsctions in the event of counterprty defult, resulting in single net clim ginst or in fvour of the counterprty. Mjor On-blnce sheet credit exposures Lons to nonbnk customers (gross) Government tresury bills nd securities Plcements nd blnces with bnks Debt securities Totl Anlysed by geogrphy Singpore 115,024 7, , ,972 Mlysi 25,325 1,201 2,896 1,364 30,786 Thilnd 11,003 3, ,571 Indonesi 10, , ,788 Greter Chin 23,915 1,917 12,064 1,586 39,482 Others 16,310 3,056 8,339 3,271 30,976 Totl 202,406 16,825 25,658 8, ,575 By borrower s country of incorportion / opertion (for non-individuls) nd residence (for individuls). Lons to nonbnk customers (gross) Government tresury bills nd securities Plcements nd blnces with bnks Debt securities Totl Anlysed by industry Trnsport, storge nd communiction 9, ,419 Building nd construction 40, ,871 Mnufcturing 17, ,218 18,382 Finncil institutions 15,834-25,658 3,186 44,678 Generl commerce 27, ,082 Professionls nd privte individuls 25, ,829 Housing lons 55, ,294 Government - 16, ,825 Others 10, ,698 13,195 Totl 202,406 16,825 25,658 8, ,575 4 of 14

5 Contingent libilities Anlysed by geogrphy Singpore 8,367 Mlysi 2,700 Thilnd 1,239 Indonesi 638 Greter Chin 2,555 Others 4,301 Totl 19,800 By borrower s country of incorportion / opertion (for non-individuls) nd residence (for individuls). Commitments (excluding operting lese nd cpitl commitments) Anlysed by geogrphy Singpore 57,165 Mlysi 8,097 Thilnd 6,986 Indonesi 3,210 Greter Chin 15,035 Others 8,320 Totl 98,813 By borrower s country of incorportion / opertion (for non-individuls) nd residence (for individuls). Credit exposures by residul contrctul mturity The following tble shows the Group s credit exposures by remining contrctul mturities. Up to 7 dys Over 7 dys to 1 month Over 1 to 3 months Over 3 to 12 months Over 1 to 3 yers Over 3 yers No specific mturity Totl Blnces nd plcements with centrl bnks 13,750 6,076 5,649 3, ,754 37,107 Singpore Government tresury bills nd securities ,534 1,125 2, ,017 Other government tresury bills nd securities ,392 3,082 3,132 1, ,808 Trding debt securities ,436 Plcements nd blnces with bnks 6,911 3,564 7,422 5, ,750 25,658 Lons to non-bnk customers 10,041 13,556 13,754 19,198 29, ,859 5, ,798 Derivtive finncil ssets ,745 5,745 Investment debt securities ,340 1,833 3, ,250 Others ,899 1,899 Totl 31,538 23,874 28,688 35,829 36, ,756 23, ,718 5 of 14

6 Counterprty Credit Risk Exposures Gross positive fir vlue of contrcts 11,984 Netting effects (2,909) Exposure under current exposure method 9,075 Anlysed by type: Interest rte contrcts 2,870 Foreign exchnge contrcts nd gold 3,412 Equity contrcts 2,059 Credit derivtive contrcts 108 Precious metls nd other commodity contrcts 626 Collterl held Finncil Collterl (394) Others (8) Net derivtives credit exposure 8,673 Credit Derivtive Exposures Notionl mounts bought Notionl mounts sold Own credit portfolio 1,004 - Intermedition portfolio Totl credit defult swps 1, of 14

7 Credit Exposures Secured by Eligible Collterl, Gurntees nd Credit Derivtives Amount by which totl exposures re covered by: Eligible Collterl Credit Protection b Stndrdised Corporte 1, Bnk 9 - Retil Commercil Rel Estte 14 6 Others Stndrdised Totl 2, FIRB Corporte 17,695 b 11,405 Sovereign 1,337 - Bnk 1, FIRB Totl 20,124 11,446 Totl 22,778 11,539 The Group currently uses supervisory prescribed hircuts for eligible finncil collterl Include other eligible collterl of $11,461 million Credit Exposures Subject to Stndrdised Approch Net Exposures Risk Weights 0 to 35 6, to 75 2, nd bove 16,482 Totl 26,151 Net exposures fter credit mitigtion nd provisions RWA bsed on the ssessments of ech recognized ECAI ECAI Moody s 776 S&P 269 Fitch 24 Totl 1,069 ECAI : Externl Credit Assessment Institution RWA 7 of 14

8 Credit Exposures Subject to Supervisory Risk Weight under IRB Approch Specilised Lending Equity (SRW Method) Risk Weights 0 to 50 1, to 100 2, nd bove 807 1,663 Totl 4,841 1,663 SRW: Simple Risk Weight Securitistion Risk Weights 0 to Totl 47 Securitistion exposures purchsed CREDIT RISK PROFILE The following tbles show the brekdown of exposures by RWA nd using the respective internl rting scle for the model pplicble to the sset clsses: Lrge Corporte, SME nd Specilised Lending (IPRE) Exposures CRR Bnd PD Rnge Exposure-weighted Averge Risk Weights 1 9 Up to , , > ,776 11, Defult Totl 87, , SME : Smll nd Medium Enterprises IPRE : Income Producing Rel Estte CRR : Customer Risk Rting 8 of 14

9 Specilised Lending (CF, PF, SF nd UOB Thilnd s IPRE) Exposures CRR Bnd Exposure-weighted Averge Risk Weights Strong 1,029 1, Good 1,482 1, Stisfctory Wek Defult Totl 3,611 4, CF : Commodities Finnce PF : Project Finnce SF: Ship Finnce Sovereign Exposures CRR Bnd PD Rnge Exposure-weighted Averge Risk Weights 1 9 Up to , > Defult - - NA Totl 1,144 49,150 2 Bnk Exposures CRR Bnd PD Rnge Exposure-weighted Averge Risk Weights 1 9 Up to ,399 28, > ,248 3, Defult - - NA Totl 6,647 32, Equity (PD/LGD Method) Exposures CRR Bnd PD Rnge Exposure-weighted Averge Risk Weights 1 9 Up to > Defult - - NA Totl 1, PD: Probbility of Defult LGD : Loss Given Defult 9 of 14

10 Retil (Residentil Mortgge) Exposures PD Bnd Exposureweighted Averge Risk Weights Exposureweighted Averge LGD Undrwn Up to 1 3,940 48, ,878 >1 to 2 1,172 6, >2 3,757 9, Defult Totl 9,182 65, ,986 Retil (QRRE) Exposures PD Bnd Exposureweighted Averge Risk Weights Exposureweighted Averge LGD Undrwn Up to , ,632 >1 to , >2 1,532 1, Defult Totl 2,246 6, ,688 QRRE : Qulifying Revolving Retil Exposures Retil (Other Retil) Exposures PD Bnd Exposureweighted Averge Risk Weights Exposureweighted Averge LGD Undrwn Up to 1 1,466 12, ,597 >1 to , >2 1,641 4, Defult Totl 3,814 18, ,386 Totl lons & dvnces (by performing nd non-performing) * Figure does not dd up to the respective totls due to rounding. 10 of 14 Performing Lons - Neither pst due nor impired 195,347 - Pst due but not impired 4,555 Non-Performing Lons 2,504 Totl Gross Lons 202, 406 Specific Allownces 747 Generl Allownces 2,862 Totl Net Lons* 198,798

11 Pst due but not impired Lons < 30 dys dys dys Totl Anlysed by pst due period nd geogrphy Singpore 1, ,407 Mlysi Thilnd Indonesi Greter Chin Others Totl 3, ,555 By borrower s country of incorportion / opertion (for non-individuls) nd residence (for individuls). < 30 dys dys dys Totl Anlysed by pst due period nd industry Trnsport, storge nd communiction Building nd construction Mnufcturing Finncil institutions Generl commerce Professionls nd privte individuls Housing Lons ,363 Others Totl 3, ,555 Pst due non-performing ssets < 90 dys dys > 180 dys Totl Anlysed by pst due period nd geogrphy Singpore Mlysi Thilnd Indonesi Greter Chin Others Non-performing lon ,476 2,504 Debt Securities, contingent items nd others Totl ,624 2,705 By borrower s country of incorportion / opertion (for non-individuls) nd residence (for individuls) 11 of 14

12 < 90 dys dys > 180 dys Totl Anlysed by pst due period nd industry Trnsport, storge nd communiction Building nd construction Mnufcturing Finncil institutions Generl commerce Professionls nd privte individuls Housing Lons Others Non-performing lon ,476 2,504 Debt Securities, contingent items nd others Totl ,624 2,705 Movements in specific nd generl llownces Blnce s t 1 Jnury 2015 Net Chrge to income sttement Write-off Exchnge & other movements Blnce t 30 June 2015 Specific Allownces (58) (8) 747 Generl Allownces 2, (27) 2,862 Totl* 3, (58) (35) 3,608 Excludes direct chrge-offs nd recoveries of $64 million nd $36 million respectively. * Figure does not dd up to the respective totls due to rounding. Movement of specific llownces by industry Blnce s t 1 Jnury 2015 Net Chrge to income sttement Write-off Exchnge & other movements Blnce t 30 June 2015 Trnsport, storge nd (5) 272 communiction Building nd construction (9) - 51 Mnufcturing (12) Finncil institutions Generl commerce (14) (1) 99 Professionls nd privte 92 8 (17) (1) 82 individuls Housing Lons (1) 76 Others 13 - (6) - 7 Totl (58) (8) of 14

13 Allownces for credit nd other ssets Specific llownces on: Lons 221 Investments 36 Others 14 Generl llownces Included in the llownces re the following: Bd debts written off 64 Bd debts recovery (36) * Figure does not dd up to the respective totls due to rounding. MARKET RISK Cpitl requirements by mrket risk type under Stndrdised Approch: Anlysed by Risk Type Interest rte 641 Equity 3 Foreign Exchnge 867 Commodity 83 Totl 1,595 This comprises ll Trding Book, Non-Trding Commodity nd Non-Trding FX Exposures. Equity Exposures in the Bnking Book The following tble shows the vlue of the Equity exposures under IRB Approch in the bnking book: SRW Method Exposure-weighted Averge Risk Weights PD/LGD Method Exposure-weighted Averge Risk Weights Listed securities Other equity holdings Totl 1, Note: The equity exposures re included in the investment securities tble below. Totl equity exposures tht were deducted from cpitl mounted to $57 million. 13 of 14

14 Gins nd Losses Unrelised Gins/(Losses) Eligible s CET1 Cpitl Relised Gins/(Losses) during the Period Totl 1, Investment securities Quoted securities Debt 5,757 Equity 889 Unquoted securities Debt 1,640 Equity 2,961 Allownce for impirment (245) Investment securities* 11,003 * Figure does not dd up to the respective totls due to rounding. BANKING BOOK INTEREST RATE RISK Interest rte risk is the impct to ernings nd economic vlue of the Group due to fluctutions in interest rtes. Interest rte exposure rises from differences in the mturity nd repricing dtes of ssets, libilities nd offblnce sheet items. These mismtches re ctively monitored nd mnged s prt of the overll interest rte risk mngement process which is conducted in ccordnce with the Group s policies s pproved by the ALCO. The economic vlue of equity ( EVE ) sensitivity t 100 nd 200 bsis points prllel interest rte shocks were negtive $138 million nd $162 million respectively, computed bsed on the worst cse of upwrd nd downwrd prllel shifts of ech yield curve. EVE is the present vlue of ssets less present vlue of libilities of the Group. The repricing profile of lons is generlly bsed on the erliest possible repricing dtes, tking into ccount the notice period to be served to the customers. Lon prepyment is estimted bsed on pst sttistics nd trends where possible nd mteril. Behviourl ssumptions bsed on historicl trends re pplied where pproprite, for deposits tht do not hve mturity dtes. There my be some differences in the ssumptions cross geogrphicl loctions due to vrition in locl conditions. 14 of 14

Pillar 3 Quantitative Disclosure Report

Pillar 3 Quantitative Disclosure Report Pillr 3 Quntittive Disclosure Report For the First Hlf of 2016 United Overses Bnk Limited Incorported in the Republic of Singpore INTRODUCTION This Pillr 3 quntittive report is prepred in ccordnce to the