UOB Group First Half 2009 Briefing Financial Highlights Lee Wai Fai Chief Financial Officer 5 August 2009 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
Strong Operating Profit Growth Net interest income 1,857 Non-interest income 985 Total income 2,842 Less: Total expenses 1,011 Operating profit 1,831 Less: Intangible assets amortised 5 Individual impairment - loans 320 Individual impairment - other assets 27 Collective impairment 495 1,725 964 2,690 1,015 1,675 5 75 82 112 + / (-) 7.6 2.1 5.7 (0.4) 9.3 (8.2) 326.7 (67.5) 343.3 Add: Share of profit of associates 42 56 (26.1) Less: Tax & minority interests 146 327 (55.4) Net Profit After Tax (NPAT) 880 1,130 (22.1) NPAT growth at constant FX rate (21.4) 2
Profit Up 15.0 QoQ 2Q09 1Q09 + / (-) 2Q08 + / (-) Net interest income 908 949 (4.4) 873 3.9 Non-interest income 551 434 26.8 550 0.1 Total income 1,458 1,384 5.4 1,424 2.4 Less: Total expenses 520 491 6.1 518 0.4 Operating profit 938 893 5.0 905 3.6 Less: Intangible assets amortised 3 2 7.7 3 (3.4) Individual impairment loans 151 169 (11.1) 65 131.0 Individual impairment other assets (7) 34 (121.5) 51 (114.5) Collective impairment 321 174 84.7 64 401.1 Add: Share of profit of associates 32 10 214.4 34 (7.6) Less: Tax & minority interests 32 114 (72.2) 156 (79.7) NPAT 470 409 15.0 601 (21.7) NPAT growth at constant FX rate 15.0 (21.3) 3
Higher Net Interest Income and Margin YoY Net Interest Income and Margin 3.25 3.21 3.09 3.06 3.08 3.02 3.19 3.07 3.04 1.99 2.04 2.27 2.38 2.23 2.21 2.45 2.41 2.35 0.66 0.56 0.93 1.21 0.93 0.88 1.09 1.29 1.13 2 nd Half 1,386 1,458 1,850 873 143 893 134 957 949 908 150 188 157 1 st Half 1,324 1,523 1,725 1,857 731 759 807 762 751 2006 2007 2008 2Q08 3Q08 4Q08 1Q09 2Q09 Net Net Interest Income (NII) (NII)() () NII NII from from Loans () () NII NII from from Interbank & Securities () () Net Net Interest Margin () () Loan Margin () () Interbank & Securities Margin () () 4
Strong Non-Interest Income Non-Interest Income (Non-NII) and Non-NII Ratio 35.8 23.7 38.8 26.2 31.9 20.8 34.7 16.4 38.7 26.3 29.0 31.4 37.8 20.3 22.6 968 964 985 17.0 17.3 15.4 924 854 372 710 550 660 301 379 236 520 551 434 210 208 391 261 319 326 689 552 589 592 46 162 194 450 502 465 289 274 229 240 225 1H 2H 2006 1H 2H 2007 1H 2H 2008 1H 2009 2Q08 3Q08 4Q08 1Q09 2Q09 Fee Fee Income Income () () Other Other Non-Interest Income Income () () Fee Fee Income Income // Total Total Income Income Ratio Ratio () () Non-NII Non-NII // Total Total Income Income Ratio Ratio () () 5
Disciplined Cost Management Operating Expenses and Expense / Income Ratio 41.1 41.4 39.0 35.6 36.4 41.6 39.4 35.5 35.7 2 nd Half 921 1,043 1,035 518 504 532 71 71 76 491 71 520 66 1 st Half 815 976 1,015 1,011 2006 2007 2008 2Q08 3Q08 4Q08 1Q09 2Q09 Operating Expenses () IT IT Expenses () Expense // Income Ratio () () 6
Prudent Provisioning Policy Impairment Charges on Loans 19 bp 18 bp 47 bp 33 bp 87 bp 63 bp 57 bp 41 bp 84 bp 75 bp 66 bp 71 bp 90 bp 60 bp 2 nd Half 1 st Half 56 36 86 119 249 75 320 27 bp 65 27 bp 67 182 169 151 2006 2007 2008 2Q08 3Q08 4Q08 1Q09 2Q09 Individual Impairment Charges on on Loans () Individual Impairment Charges on on Loans // Average Gross Customer Loans (basis points) ** Total Impairment Charges on on Loans // Average Gross Customer Loans (basis points) ** 7 * On annualised basis
Performance By Business Segment Segment Operating Profit * + / (-) 2006 PFS 25 Other (3) Personal Financial Services (PFS) 451 496 (9.1) GMIM 36 Institutional Financial Services (IFS) 764 716 6.7 Global Markets & Investment Mgt (GMIM) 670 355 88.7 IFS 42 Other (54) 108 (150.0) Total 1,831 1,675 9.3 PFS 30 Other 6 GMIM 21 IFS 43 * Before amortisation and impairment charges 8
Strong Contribution From Singapore At constant + / (-) FX rate Singapore 70 Operating Profit * Malaysia 11 Thailand 4 Singapore 1,274 1,181 7.9 7.9 Indonesia 5 Overseas 557 494 12.7 16.7 Greater China 3 Malaysia 198 176 12.4 15.8 Other 7 Thailand Indonesia 73 94 85 52 (13.5) 81.0 (12.8) 99.4 Greater China 55 24 132.0 114.3 Singapore 71 Other 137 158 (13.3) (8.4) Malaysia 11 Total 1,831 1,675 9.3 10.4 Thailand 5 Indonesia 3 Greater China 1 Other 9 * Before amortisation and impairment charges 9
Increased NPA amid Global Economic Downturn NPA () 1,839 1,943 2,305 2,449 2,755 NPA Ratio 1.0 1.0 1.2 1.3 1.5 279 243 264 292 314 1,547 1,629 2,062 2,185 2,476 Jun'08 Sep'08 Dec'08 Mar'09 Jun'09 Loans () () Debt Debt securities () () 10
Higher NPL Reflecting Difficult Economic Conditions NPL () 1,547 NPL Ratio * 1.5 1,629 1.5 2,062 2.0 2,185 2.1 2,476 2.4 67 113 20 27 63 70 367 367 495 480 239 287 101 119 60 89 391 430 512 438 415 109 95 431 495 535 572 759 822 931 Jun'08 Sep'08 Dec'08 Mar'09 Jun'09 Singapore Malaysia Thailand Indonesia Greater China Other 11 * Debt securities and contingent assets are excluded from the computation.
Adequate Impairment Coverage Total Impairment () 2,247 2,415 2,548 2,577 2,813 227.7 224.7 122.2 124.3 203.7 191.5 110.5 105.2 185.9 102.1 881 973 1,008 1,068 1,165 1,366 1,442 1,540 1,509 1,648 Jun'08 Sep'08 Dec'08 Mar'09 Jun'09 Collective Impairment () () Individual Impairment () () Cumulative Impairment // Total NPA NPA () () Cumulative Impairment // Unsecured NPA NPA () () 12
Liquidity Preserved Customer Loans, Deposits and L/D Ratio 89.3 88.8 84.5 83.5 83.6 97.4 109.0 100.4 113.1 99.8 118.2 99.7 119.4 97.8 117.0 Jun'08 Sep'08 Dec'08 Mar'09 Jun'09 Net Net Customer Loans ($b) ($b) Customer Deposits ($b) ($b) Loans // Deposits (L/D) (L/D) Ratio () () 13
Balanced Investment Portfolio Dec 08 Mar 09 Jun 09 Jun 09 QoQ mix Singapore government securities * 8,733 12,509 13,118 41 609 Other government securities * 1,596 1,496 2,189 7 692 Investment securities 15,674 15,758 16,395 52 637 Debt 13,453 13,627 13,876 44 248 Equity 2,221 2,131 2,520 8 389 Total 26,003 29,763 31,702 100 1,939 * Excluding held for trading securities. 14
Singapore Summarised P/L 2Q09 1Q09 $ m $ m $ m $ m Net interest income 1,176 1,016 15.8 574 602 (4.8) Non-interest income 702 724 (2.9) 405 297 36.3 Total income 1,879 1,739 8.0 979 900 8.8 Less: Total expenses 605 559 8.3 328 277 18.4 Operating profit 1,274 1,181 7.9 651 623 4.6 Less: Total impairment charges 675 148 356.9 398 276 44.1 Add: Share of profit of associates 37 54 (32.1) 30 7 335.0 Net profit before tax 636 1,087 (41.5) 283 353 (20.0) 15
Singapore Key Financial Indicators 2Q09 1Q09 pt pt Net interest margin 2.09 1.99 0.10 2.07 2.11 (0.04) Non-NII / Total income 37.4 41.6 (4.2) 41.4 33.0 8.4 Expense / Total income 32.2 32.1 0.1 33.5 30.8 2.7 Customer loans (net) $ m 63,678 62,022 2.7 63,678 63,928 (0.4) Loans / Deposits 73.4 74.0 (0.6) 73.4 71.9 1.5 NPL ratio 1.4 0.8 0.6 1.4 1.2 0.2 16
Malaysia Summarised P/L 2Q09 1Q09 RM m RM m RM m RM m Net interest income 478 482 (0.8) 234 244 (4.1) Non-interest income 235 174 35.1 110 125 (12.0) Total income 713 656 8.7 344 369 (6.8) Less: Total expenses 237 245 (3.3) 116 121 (4.1) Operating profit 476 411 15.8 228 248 (8.1) Less: Total impairment charges 116 158 (26.6) 63 53 18.9 Add: Share of profit of associates 3 3 - - 3 (100.0) Net profit before tax 363 256 41.8 165 198 (16.7) Net profit before tax (S) 151 109 38.5 68 83 (17.1) 17
Malaysia Key Financial Indicators 2Q09 1Q09 pt pt Net interest margin 2.47 2.54 (0.07) 2.37 2.57 (0.20) Non-NII / Total income 33.0 26.5 6.5 32.0 33.9 (1.9) Expense / Total income 33.2 37.3 (4.1) 33.7 32.8 0.9 Customer loans (net) RM m 27,578 27,404 0.6 27,578 27,640 (0.2) Loans / Deposits 96.6 106.6 (10.0) 96.6 93.7 2.9 NPL ratio 4.2 4.1 0.1 4.2 3.6 0.6 18
Thailand Summarised P/L 2Q09 1Q09 THB m THB m THB m THB m Net interest income 3,454 3,647 (5.3) 1,666 1,788 (6.8) Non-interest income 1,477 1,725 (14.4) 703 774 (9.2) Total income 4,931 5,372 (8.2) 2,369 2,562 (7.5) Less: Total expenses 3,207 3,395 (5.5) 1,526 1,681 (9.2) Operating profit 1,724 1,977 (12.8) 843 881 (4.3) Less: Total impairment charges 627 1,069 (41.3) 223 404 (44.8) Add: Share of profit of associates (2) 10 (120.0) (3) 1 (400.0) Net profit before tax 1,095 918 19.3 617 478 29.1 Net profit before tax (S) 47 41 15.0 26 21 27.3 19
Thailand Key Financial Indicators 2Q09 1Q09 pt pt Net interest margin 3.69 3.91 (0.22) 3.55 3.84 (0.29) Non-NII / Total income 30.0 32.1 (2.1) 29.7 30.2 (0.5) Expense / Total income 65.0 63.2 1.8 64.4 65.6 (1.2) Customer loans (net) THB m 135,084 152,349 (11.3) 135,084 140,202 (3.7) Loans / Deposits 89.3 101.3 (12.0) 89.3 87.7 1.6 NPL ratio 6.5 5.0 1.5 6.5 6.2 0.3 20
Indonesia Summarised P/L 2Q09 1Q09 IDR b IDR b IDR b IDR b Net interest income 962 721 33.4 472 490 (3.7) Non-interest income 375 166 125.9 187 188 (0.5) Total income 1,337 887 50.7 659 678 (2.8) Less: Total expenses 639 537 19.0 341 298 14.4 Operating profit 698 350 99.4 318 380 (16.3) Less: Total impairment charges 78 20 290.0 12 66 (81.8) Net profit before tax 620 330 87.9 306 314 (2.5) Net profit before tax (S) 84 49 70.9 43 41 4.7 21
Indonesia Key Financial Indicators 2Q09 1Q09 pt pt Net interest margin 6.34 5.89 0.45 6.29 6.39 (0.10) Non-NII / Total income 28.0 18.7 9.3 28.4 27.7 0.7 Expense / Total income 47.8 60.5 (12.7) 51.7 44.0 7.7 Customer loans (net) IDR b 22,448 20,753 8.2 22,448 23,311 (3.7) Loans / Deposits 85.0 104.7 (19.7) 85.0 87.1 (2.1) NPL ratio 2.9 2.0 0.9 2.9 2.9-22
China Summarised P/L 2Q09 1Q09 CNY m CNY m CNY m CNY m Net interest income 199 250 (20.4) 94 105 (10.5) Non-interest income * 15 56 (73.2) 11 4 175.0 Total income 214 306 (30.1) 105 109 (3.7) Less: Total expenses 114 131 (13.0) 57 57 - Operating profit 100 175 (42.9) 48 52 (7.7) Less: Total impairment charges 6 31 (80.6) - 6 (100.0) Add: Share of profit of associates 2 - NM 2 - NM Net profit before tax 96 144 (33.3) 50 46 8.7 Net profit before tax (S) 21 28 (25.2) 11 10 3.7 * Excluding revaluation gain/loss on the USD capital injection 23
China Key Financial Indicators 2Q09 1Q09 pt pt Net interest margin 2.84 3.89 (1.05) 2.79 2.89 (0.10) Non-NII / Total income 7.0 18.3 (11.3) 10.5 3.7 6.8 Expense / Total income 53.3 42.8 10.5 54.3 52.3 2.0 Customer loans (net) CNY m 9,950 10,399 (4.3) 9,950 10,412 (4.4) Loans / Deposits 210.1 379.7 (169.6) 210.1 188.3 21.8 NPL ratio 3.8 0.8 3.0 3.8 3.7 0.1 24
Strong Capital Position Capital Adequacy Ratios Total CAR Tier 1 CAR 14.4 10.2 15.5 11.2 15.3 ` 10.9 17.3 12.3 17.5 12.6 Jun'08 Sep'08 Dec'08 Mar'09 Jun'09 Tier 1 Capital 11,630 13,177 12,456 13,127 13,223 RWA 114,368 118,044 114,712 106,634 104,821 25
High Dividend Payout Ratio 24.2 12.3 41.0 45.0 40.0 16.0 16.4 20.0 20.0 2006 2007 2008 Net Net dividend per per ordinary share ( ) ( ) Interim Final Special Interim dividend Payout amount () 244 249 301 301 Payout ratio () 28 23 27 34 26
In Summary Strong operating profit growth Higher NIM YoY Disciplined cost management Key Singapore market remains stable Increased NPA amid economic downturn, adequate provisioning Full provision for CDO portfolio Strong CAR and improved AFS reserve High dividend payout ratio 27