Presentation to Media and Analysts Final Results. 11 February 2004

Transcription

1 Presentation to Media and Analysts 2003 Final Results 11 February 2004

2 Agenda Results at a Glance Income Statement Trends Loans and Deposits Asset Quality and Provisions Conclusion 2

3 Results at a Glance : Full Year FY2003 FY2002 YoY S$m S$m +/(-)% Net Interest Income 1,435 1,509 (5) Non-interest income Fee Income (0) Total Income 2,193 2,222 (1) Operating Expenses Operating Profit 1,338 1,372 (2) Goodwill (0) Provisions (55) Associates Net Profit

4 Results at a Glance - Quarterly 4Q03 4Q02 YoY 3Q03 QoQ S$m S$m +/(-)% S$m +/(-)% Net Interest Income (2) Non-interest income (11) - Fee Income Total Income (3) Operating Expenses (0) Operating Profit (4) Goodwill (0) 32 (0) Provisions (58) Associates Net Profit (5) 4

5 Results Adjusted for Non-Core Asset Divestment Quarterly 4Q03 4Q02 YoY 3Q03 QoQ S$m S$m +/(-)% S$m +/(-)% Adjusted Operating Profit (12) Adjusted Net Profit / Full Year S$m S$m +/(-)% Adjusted Operating Profit 1,211 1,372 (12) Adjusted Net Profit Note: Adjusted to exclude the following net gains from divestment of non-core assets: 3Q03 - F&N (S$72m) 4Q03 - Mount Emily property (S$36m), WBL Corp (S$4m), Raffles Hotel (S$14m under associates) 5

6 Dividend Payout Gross Dividend per Share (cents) 23* 20 Net Dividends (S$m) Net Profit (S$m) Less: Gain on non-core assets Adjusted Net Profit (S$m) Payout based on Adjusted Net Profit 28% 30% * Excluding Special Dividend of cents (49.75 cents net of tax) paid in July

7 Agenda Results at a Glance Income Statement Trends Loans and Deposits Asset Quality and Provisions Conclusion 7

8 Positive Quarterly Trends in Net Interest Income & Margins Net interest margin 2.17% 2.02% 1.90% 1.99% 1.90% 1.89% 1.88% 1.94% 1,392 1,509 1,435 Net interest income (S$m) Q02 1Q03 2Q03 3Q03 4Q03 8

9 Non-Interest Income Buoyed by Non-Core Asset Divestment Non-interest income/ Total income 37.1% 32.1% 34.6% 33.8% 29.6% 32.9% 39.1% 35.8% % % 29.7% Non-interest income (S$m) * Q02 1Q03 2Q03 3Q03 4Q03 Gains from divestment of non-core assets * 2001 income was boosted by S$260m gain from disposal of OUB shares Excluding divestment gains 9

10 Steady Rise in Fee Income Contribution 19.5% 19.7% Fee income/ Total income 13.2% 16.8% 18.1% 17.0% 16.1% 16.5% 16.5% 16.9% 18.0% Fee income (S$m) Q02 1Q03 2Q03 3Q03 4Q03 Excluding gains from divestment of non-core assets 10

11 Wealth Management Sales by Product (S$m) 5,210 3,856 3,006 2, ,040 1,162 1,473 1,221 1, * Bancassurance Unit Trusts Treasury & structured products Total * 2001 figure for treasury & structured products is estimated 11

12 Operating Expenses Stable Cost-to-Income Ratio 39.1% 38.2% 41.4% 39.0% 38.1% 40.3% 42.1% 41.9% 36.4% 41.2% 37.6% Operating expenses (S$m) Q02 1Q03 2Q03 3Q03 4Q03 Staff Cost Premises & Equipment Others Restructuring Expenses Excluding gains from divestment of non-core assets 12

13 Operating Profit before Provisions and Goodwill (S$m) 1,347 1, , ,087 1, * Q02 1Q03 2Q03 3Q03 4Q03 Gains from divestment of non-core assets * 2001 operating profit includes S$260m gain from disposal of OUB shares 13

14 Substantial Reduction in Provisions (S$m) Specific Provisions for Loans Provisions for Diminution in Investments and Other Assets General Provisions (27) (26) (31) Q02 1Q03 2Q03 3Q03 4Q03 14

15 Net Profit Excluding Non-Core Divestment Gains Remained Healthy (S$m) * Q02 1Q03 2Q03 3Q03 4Q03 Gains from divestment of non-core assets * 2001 net profit includes S$252m net gain from disposal of OUB shares 15

16 EPS and ROE ROE 9.3% 7.4% 10.0% 7.3% 6.8% 9.4% 12.2% 11.8% 8.7% 9.1% 9.5% EPS Q02 1Q03 2Q03 3Q03 4Q03 Gains from divestment of non-core assets Excluding divestment gains Note: Quarterly ROE and EPS are annualised; ROE refers to return on ordinary shareholders funds 16

17 Agenda Results at a Glance Income Statement Trends Loans and Deposits Asset Quality and Provisions Conclusion 17

18 Loan Growth Driven by Consumer Loans Loans (S$bn) Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Singapore Malaysia International 18

19 Market Share Gains in Singapore and Malaysia Loan Growth, Dec 03 / Dec 02 Singapore OCBC Industry % % DBU loans* * Domestic Banking Unit loans, with Dec 02 base adjusted for the integration of finance companies during Malaysia OCBC Industry % % Malaysia Loans Source: OCBC, MAS, Bank Negara Malaysia 19

20 Strong Expansion in Housing Loans 29.2% Share of Group Loans 24.7% 21.1% 15,382 11,174 12,313 Housing Loans (S$m) Dec-01 Dec-02 Dec-03 20

21 Share of Consumer Loans has Increased Significantly Loans by Sector Loans by Sector Manufacturing 7% Financial institutions 18% General commerce 7% Consumer Loans 35% Professionals & private individuals 14% Financial institutions 17% Manufacturing 6% General commerce 6% Professionals & private individuals 15% Consumer Loans 45% Building and construction 17% Housing Loans 21% Building and construction 14% Housing loans 29% Transport, storage & comm 5% Others 11% Total Loans: S$52.8bn Transport, storage & comm 3% Others 10% Total Loans: S$52.6bn December 2001 December

22 Deposits and Loans-Deposits Ratio Loans-to-deposits 87.8% 85.3% 89.1% 90.9% 93.8% Deposits (S$bn) Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Fixed Deposits Savings Deposits Current Account Others 22

23 Agenda Results at a Glance Income Statement Trends Loans and Deposits Asset Quality and Provisions Conclusion 23

24 Steady Improvement in Asset Quality NPL Ratio 8.1% 8.0% 7.5% 7.1% 6.9% 4,356 4,290 4,115 3,890 3,834 NPLs (S$m) 1,199 1,250 1,219 1,105 1,068 2,646 2,559 2,480 2,388 2,389 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Singapore Malaysia International 24

25 NPL Ratio Reduced by Half in Three Years 13.3% 14.2% NPL Ratio 11.5% 10.7% 9.7% 9.6% NPLs 4,335 4,550 4,092 3,921 5,183 4, % 4, % 4, % 3,834 (S$m) Dec-99 Jun-00 Dec-00 Jun-01 Dec-01* Jun-02 Dec-02 Jun-03 Dec-03 * Increase in absolute NPLs was due to acquisition of of Keppel Capital Holdings 25

26 Cumulative Provisions (S$m) 2,717 2,695 2,603 2,574 2,568 1,211 1,183 1,184 1,183 1,183 1,506 1,513 1,419 1,391 1,385 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 General Provisions Specific Provisions 26

27 Provision Coverage Remains Prudent SPs / Unsecured NPLs 100% 105% 103% 105% 100% (SPs+GPs) / NPLs 62% 63% 63% 66% 67% SPs / NPLs 35% 35% 35% 36% 36% Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 27

28 Conclusion Strong earnings growth driven by lower provisions, divestment gains and higher associates contribution Net interest income and fee income improved in second half Net interest margin largely stable over last four quarters Gained market share in loans in Singapore and Malaysia Substantial improvement in asset quality and provisions Steady progress in non-core asset divestment and capital restructuring Group is well positioned to capitalise on growth opportunities in