United Overseas Bank Group Full Year 2007 Briefing Financial Highlights Lee Wai Fai Chief Financial Officer 27 February 2008 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 Bank accepts no liability whatsoever with respect to the use of this document or its content. 1 Singapore Company Reg No. 193500026Z
Agenda 11 Performance Review 22 Business & Geographical Segments 33 Loans, Deposits & Asset Quality 44 Review of Key Territories 55 Capital Management 2
Profit Growth 12.1 in FY2007 2007 2006 + / (-) Net interest income Non-interest income $m 2,980 1,892 $m 2,710 1,514 10.0 25.0 Total income 4,872 Less: Total expenses 2,018 Operating profit 2,854 Less: Intangible assets amortised 11 Impairment charges on loans 155 4,224 1,736 2,488 13 142 15.3 16.3 14.7 (10.3) 8.9 Other impairment charges 145 38 278.7 Add: Share of profit of associates 207 152 36.8 Less: Tax & minority interests 641 564 13.5 Net Profit After Tax (NPAT) 2,109 1,882 12.1 NPAT Growth at constant FX rate 13.2 ^ 3 ^ Excluding one-time gain of $689m.
Quarter Performance Review 4Q07 3Q07 + / (-) 4Q06 + / (-) $m $m $m Net interest income Non-interest income Total income Less: Total expenses Operating profit Less: Intangible assets amortised Impairment charges on loans 743 532 1,275 556 719 2 67 714 393 1,107 487 620 3 (30) 4.1 35.5 15.2 14.1 16.1 (18.1) NM 702 517 1,219 497 722 3 41 5.9 2.9 4.7 11.9 (0.3) (25.9) 62.6 Other impairment charges 61 34 80.2 24 160.1 Add: Share of profit of associates 48 47 1.6 50 (4.2) Less: Tax & minority interests 131 159 (17.7) 167 (21.5) Net Profit After Tax (NPAT) 506 501 1.1 537 (5.7) NPAT Growth at constant FX rate 3.6-4 NM: Not Meaningful
Improvement in Net Interest Income and Margin Net Interest Income and Margin 3.18 3.25 3.21 3.01 3.25 3.22^ 3.28 3.12 3.05 2.10 0.78 1.99 0.58 1.99 2.04 0.66 0.56 1.99 0.55 2.10^ 0.72 2.04 0.62 1.93 0.43 1.94 0.47 2,155 2,348 2,710 2,980 702 762 761 714 743 114 106 89 69 76 613 648 655 645 667 2004 2005 2006 2007 4Q06 1Q07 2Q07 3Q07 4Q07 Net Net Interest Income (NII) (NII)($m) ($m) NII NII from from Loans ($m) ($m) NII NII from from Interbank /Securities ($m) ($m) Net Net Interest Margin () () Loan Margin () () Interbank // Securities Margin () () ^ Excluding interest recovery 5
Strong Growth in Fee and Commission Income Non-Interest Income (Non-NII) and Non-NII Ratio 33.9 37.6 35.8 38.8 42.4 36.2 41.3 35.5 41.7 21.7 23.9 23.7 26.2 1,892 27.2 21.7 25.4 28.8 29.0 1,104 1,414 514 1,514 511 614 517 185 432 173 536 206 393 74 532 162 398 706 900 1,003 1,278 332 259 330 319 370 2004 2005 2006 2007 4Q06 1Q07 2Q07 3Q07 4Q07 Fee Fee Income Income ($m) ($m) Other Other Income Income **($m) ($m) Fee Fee Income Income // Total Total Income Income Ratio Ratio **() () Non-NII Non-NII // Total Total Income Income Ratio Ratio **() () * Excluding one-time income of $613m in 2006. 6
Continued Infrastructure Investments Operating Expenses and Expense / Income Ratio 37.6 1,227 188 37.9 1,424 222 41.1 1,736 256 41.4 2,018 272 44.0 43.6 40.8 39.5 38.9 556 497 472 504 487 74 70 71 67 64 2004 2005 2006 2007 4Q06 1Q07 2Q07 3Q07 4Q07 Operating Expenses ($m) IT IT Expenses ($m) Expense // Income Ratio **() () * Excluding one-time income of $613m in 2006. 7
Impairment Charges on Loans Remained Benign Individual Impairment on Loans Charged to Profit & Loss Account 36 bp 31 bp 19 bp 18 bp 235 215 142 155 2004 2005 2006 2007 43 bp 29 bp 21 bp 16 bp ^ 86 67 41 33 (30) (14) bp 4Q06 1Q07 2Q07 3Q07 4Q07 Individual Impairment Charges Individual Impairment Charges on on Loans // on on Loans ($m) Average Gross Customer Loans (basis points) ** 8 * On annualised basis for quarters
Strong Growth in Key Business Segments Business Segment 2007 2006 + / (-) Segment Operating Profit * $m $m Personal Financial Services (PFS) 924 707 30.7 Institutional Financial Services (IFS) 1,375 1,194 15.2 2006 2007 PFS : 32 Other : (4) GMIM : 24 Global Markets & Investment Mgt (GMIM) 677 493 37.3 IFS : 48 Other ^ (122) 94 (229.8) 2006 Total 2,854 2,488 14.7 PFS : 28 Other : 4 GMIM : 20 IFS : 48 * Before amortisation of intangible assets and impairment charges. ^ Excluding one-time income for 2006 and including unallocated expenses. 9
Strong Contribution from Singapore Geographical Segment 2007 2007 Operating Profit * $m 2006 $m + / (-) At constant FX rate Singapore : 63 Malaysia : 13 Singapore (including ACU) 1,800 1,598 ^ 12.6 12.6 Thailand : 5 Total Overseas Malaysia 1,054 368 890 324 18.4 13.6 20.6 13.3 Indonesia : 5 Greater China : 4 Other : 10 Thailand Indonesia Greater China 130 130 113 132 159 59 (1.5) (18.2) 91.5 (11.3) (9.1) 103.1 2006 Singapore : 64 Other 313 216 44.9 53.0 Malaysia : 13 Total 2,854 2,488 14.7 15.5 Thailand : 5 Indonesia : 6 * Before amortisation of intangible assets and impairment charges. ^ Excluding one-time income. Greater China : 3 Other : 9 10
Strong Growth in Loans and Deposits Customer Loans, Deposits and L/D Ratio 80.5 79.3 78.9 81.3 86.6 95.6 99.7 104.5 104.8 92.7 107.0 76.9 79.0 82.5 85.2 Dec'06 Mar'07 Jun'07 Sep'07 Dec'07 Net Net Customer Loans ($b) Customer Deposits ($b) Loans // Deposits (L/D) Ratio () () 11
NPL Ratios Continue to Improve NPLs ($m) NPL Ratio 3,165 2,986 2,382 2,032 4.0 3.7 2.8 2.3 1,715 1.8 287 115 287 115 823 594 1,346 841 293 94 403 577 585 1,166 1,007 247 77 418 527 763 81 73 436 495 630 Dec'06 Mar'07 Jun'07 Sep'07 Dec'07 Singapore Malaysia Thailand Indonesia Other 12
Impairment Coverage Remained Strong 249.0 268.5 172.6 79.2 188.6 84.5 208.1 88.7 97.0 111.8 2,508 1,237 2,523 1,250 2,112 1,972 1,917 836 700 647 1,271 1,273 1,276 1,272 1,270 Dec'06 Mar'07 Jun'07 Sep'07 Dec'07 Collective Impairment ($m) ($m) Individual Impairment ($m) ($m) Cumulative Impairment /Total NPLs () () Cumulative Impairment/Unsecured NPLs () () 13
Singapore (including ACU) A Good Year 2007 2006 * + / (-) 4Q07 3Q07 + / (-) $ m $ m $ m $ m Net interest income 1,794 1,729 3.8 449 426 5.4 Non-interest income 1,152 856 34.6 296 235 26.0 Total income 2,946 2,585 14.0 745 660 12.9 Less: Total expenses 1,146 987 16.1 321 274 17.2 Operating profit 1,800 1,598 12.6 424 386 9.8 Less: Total impairment charges 70 75 (6.7) 61 (13) NM Add: Share of profit of associates 198 137 44.5 49 43 Net profit before tax 1,928 1,660 16.2 412 442 14.0 (6.7) 14 * Excluding one-time gain
Singapore (including ACU) Improvement in All Areas 2007 2006 * + / (-) 4Q07 3Q07 + / (-) pt pt Net interest margin 1.84 1.77 0.07 1.72 1.72 - Non-NII / Total income 39.1 33.1 6.0 39.7 35.6 4.1 Expense / Total income 38.9 38.2 0.7 43.1 41.5 1.6 Customer loans (net) $ m 57,312 47,749 20.0 57,312 51,734 10.8 Loans / Deposits 72.4 68.0 4.4 72.4 67.5 4.9 NPL ratio 1.1 2.8 (1.7) 1.1 1.5 (0.4) * Excluding one-time gain 15
Malaysia Strong Momentum 2007 2006 + / (-) 4Q07 3Q07 + / (-) RM m RM m RM m RM m Net interest income 874 708 23.4 227 212 7.1 Non-interest income 433 417 3.8 128 93 37.6 Total income 1,307 1,125 16.2 355 305 16.4 Less: Total expenses 461 378 22.0 131 115 13.9 Operating profit 846 747 13.3 224 190 17.9 Less: Total impairment charges 186 58 220.7 41 22 86.4 Add: Share of profit of associates 22 33 (33.3) (3) 9 (133.3) Net profit before tax 682 722 (5.5) 180 177 1.7 Net profit before tax (S$m) 296 314 (5.5) 77 75 2.8 16
Malaysia Competitive but Growing 2007 2006 + / (-) 4Q07 3Q07 + / (-) pt pt Net interest margin 3.00 3.14 (0.14) 3.03 3.03 - Non-NII / Total income 33.1 37.1 (4.0) 36.1 30.5 5.6 Expense / Total income 35.3 33.6 1.7 36.9 37.7 (0.8) Customer loans (net) RM m 25,868 20,192 28.1 25,868 24,071 7.5 Loans / Deposits 104.2 88.8 15.4 104.2 100.0 4.2 NPL ratio 4.2 6.3 (2.1) 4.2 4.7 (0.5) 17
Thailand Year of Consolidation 2007 2006 + / (-) 4Q07 3Q07 + / (-) THB m THB m THB m THB m Net interest income 6,645 6,270 6.0 1,767 1,731 2.1 Non-interest income 2,598 2,942 (11.7) 648 530 22.3 Total income 9,243 9,212 0.3 2,415 2,261 6.8 Less: Total expenses 6,535 6,160 6.1 1,699 1,644 3.3 Operating profit 2,708 3,052 (11.3) 716 617 16.0 Less: Total impairment charges 2,371 1,813 30.8 244 227 7.5 Add: Share of profit of associates (7) 18 (138.9) (2) (2) - Net profit before tax 330 1,257 (73.7) 470 388 21.1 Net profit before tax (S$m) 16 55 (71.2) 22 19 18.6 18
Thailand Growing Momentum 2007 2006 + / (-) 4Q07 3Q07 + / (-) pt pt Net interest margin 3.49 3.76 (0.27) 3.66 3.57 0.09 Non-NII / Total income 28.1 31.9 (3.8) 26.8 23.4 3.4 Expense / Total income 70.7 66.9 3.8 70.4 72.7 (2.3) Customer loans (net) THB m 143,830 146,009 (1.5) 143,830 139,761 2.9 Loans / Deposits 90.3 95.6 (5.3) 90.3 79.7 10.6 NPL ratio 6.5 12.9 (6.4) 6.5 6.6 (0.1) 19
Indonesia Good Progress 2007 2006 + / (-) 4Q07 3Q07 + / (-) IDR b IDR b IDR b IDR b Net interest income 1,384 1,346 2.8 344 338 1.8 Non-interest income 303 333 (9.0) 78 80 (2.5) Total income 1,687 1,679 0.5 422 418 1.0 Less: Total expenses 837 744 12.5 235 225 4.4 Operating profit 850 935 (9.1) 187 193 (3.1) Less: Total impairment charges (29) 113 (125.7) (2) (40) 95.0 Net profit before tax 879 822 6.9 189 233 (18.9) Net profit before tax (S$m) 134 140 (4.0) 22 35 (37.6) 20
Indonesia Competitive, but Strengthen Market Position 2007 2006 + / (-) 4Q07 3Q07 + / (-) pt pt Net interest margin 5.98 7.07 (1.09) 5.53 5.51 0.02 Non-NII / Total income 18.0 19.8 (1.8) 18.5 19.1 (0.6) Expense / Total income 49.6 44.3 5.3 55.7 53.8 1.9 Customer loans (net) IDR b 18,143 14,619 24.1 18,143 16,474 10.1 Loans / Deposits 99.0 97.0 2.0 99.0 93.0 6.0 NPL ratio 2.0 3.7 (1.7) 2.0 2.2 (0.2) 21
Strong Capital Position Capital Adequacy Ratios (CAR) Total CAR 16.3 16.2 15.7 14.8 14.5 Tier 1 CAR 11.0 11.1 10.8 ` 10.2 10.0 Dec'06 Mar'07 Jun'07 Sep'07 Dec'07 Tier 1 Capital 11,888 12,451 12,382 12,210 12,461 Risk-Weighted Assets 108,405 111,781 114,842 120,181 124,772 $m 22
Maintain High Net Dividend Rate Special Dividend in Specie Final Interim 22.8 cts 32.0 cts 32.0 cts 24.2 cts 12.3 cts 41.0 cts 45.0 cts 16.0 cts 16.0 cts 16.0 cts 16.4 cts 2004 2005 2006 2007 Special Dividend - $351m * $369m $187m Cash Dividend $744m $737m $868m $929m Dividend Payout $744m $1,088m $1,237m $1,116m Dividend Payout Ratio 51 64 48 53 * Dividend in specie of shares in United Overseas Land Limited. 23
In Summary Net profit grew 12.1 to reach $2.1 billion Growth in core business - NII and fee income Strong loan growth Continued discipline in expense control Improved asset quality High payout ratio 24
Update on CDOs Further reduction in CDO exposure with additional provision taken. 4Q07 Allowance Cumulative Allowance Dec 07 Sep 07 P/L Reserves P/L Reserves $m $m $m $m $m $m ABS 86 90 39-40 35 Corporate 229 298 6 13 59 25 Total 315 388 45 13 99 60 Overall CDO exposure remains small (less than 0.2 of our balance sheet), and will not have a material impact on our performance. Archer, the Asset-Backed Commercial Paper managed by UOB, was wound down and fully redeemed as at 31 December 2007. 25
Update on CDOs (cont d) UOB Asset Management only manages clients money and does not have any direct investment in their books. CDOs under management have declined due mainly to maturity. Dec 07 $b Sep 07 $b ABS 2.8 3.0 Corporate 5.7 8.4 Total 8.5 11.4 By March 2008, another $2.5 billion will mature. UOB Life has $43 million of corporate CDOs in Life Fund (not Shareholders Fund), of which $36 million will mature by March 2008. 26