United Overseas Bank Limited

Good morning everyone and welcome to UOB's third quarter 2024 results media briefing. Today we have with us our Deputy Chairman and CEO Mr Wee Yee Cheong and our CFO Mr Lee Wai Fong. After both presentations, we'll be taking questions from the media. For media who are joining us online, please use the raise hand function if you have a question. I'll now like to invite our CEO to get us started. Mr Wee please.

Okay, thank you. Now, good morning. Thank you for joining us today. As all of you know, globally, there are renewed uncertainties, and we are watching development closely. As an ASEAN-focused player, we see the region being resilient. Supply chain shifts, new FDIs, this could accelerate. Regional economies are growing strongly. Easing global interest rate allowed central banks to further boost domestic economy. China's recent stimulus should have a positive spillover effect across our markets. I'm pleased to report that UOP has achieved a record high quarter. Net profit was up 15% year on year, $1.6 billion. driven by broad-based growth across all business segments and in our key markets in ASEAN. And I can feel, I can see the momentum is quite strong, the whole ASEAN market. You can see cut across healthy demand across sectors and geographies boosted our loan books, driven by ASEAN role as a trade hub and related financing opportunities. Rise of the digital economy with companies upgrading their systems and growth of the green economy with rising demand in sectors such as electric vehicles and renewable energy. Following the US factory cut in September, we see positive consumer sentiment in ASEAN markets. Our cuts and wealth fees continue to grow double-digit. year-on-year for the first nine months. Synergies from our city acquisition have kicked in. Our customer base in the region continues to grow. Cross-sell synergies are bearing fruit, notably in CASA penetration across all four markets. And we will focus on this. On the balance sheet front, Our asset quality is resilient with strong provisioning. Specific provisions were higher, mainly due to one-off factor during integration of the Thai city portfolio. Delinquencies of the Thailand unsecured book have peaked and we are normalizing. Business is intact and revenues are picking up. Our full-year credit costs remain within our guidance of 35 to 30 basis points. We will continue to maintain healthy level of capital and funding. Now, in short, we are confident of where we are today and how we can capture opportunities ahead. ASEAN is a bright spot amid global uncertainties. Our clients are expanding, investments are flowing, and digital innovation driving demand for services. As an ASEAN-focused bank, ASEAN's growth story is our growth story. We are uniquely positioned to capitalise on the tailwinds of strong megatrends with our extensive regional network and capabilities. Our multi-year investment in standardising regional IT platforms are now dealing benefits. Our FDI advisory unit set up in 2011 has supported more than 4,500 companies to expand into ASEAN. And we are the only bank to have signed MOU with government investment agencies across key ASEAN markets. We expect sustained revenue growth across our businesses and will continue to invest in building capabilities in our key ASEAN markets. So for guidance, we expect high single loan digit, double digit fee increase led by cards, wealth trade debited fees, higher total income, cost to income ratio between 41 to 42% and total credit costs at 25 to 30 basis point. Our strong capital position also allow us to consider capital management initiatives. So thank you for your support. Now I will pass over to Wi-Fi to elaborate on our financials and performance of our retail and wholesale business. Thank you.

Thank you, John. Thanks for joining us so early. And I hope you enjoyed the tour that the group called for you. Okay, back to our results itself. Our third quarter core net profit grew 10% quarter on quarter. And 11% year on year to a record 1.6 billion with core ROE at 14.3%. Net interest margin was stable at 2.05% as loans margin widened on proactive deposit cost management. Loans grew 2% or $5 billion from last quarter, contributed by broad-based wholesale and mortgage growth. Fees income was at a new high of $630 million, supported by healthy trade and wealth demand, as well as picked up in-card fees. Bidding and investment income was very strong at $709 million, boosted by all-time high customer flow, treasury income, coupled with exceptional performance from trading and the Asset quality remains stable, with NPL ratio unchanged at 1.5%. The highest specific allowance this quarter was mainly from Thailand operational merger issues, which we have addressed and will normalize in the next two quarters. Total credit costs on loans was at 34 basis points. Our capital and funding positions stayed resilient, with CET1 at 15.5%, and NSFR at 116%. A little bit more detail on the numbers. Like I said, core profit for the quarter rose 10% from last quarter and 11% from a year ago to $1.6 billion. Total income grew 10% quarter to quarter. And we are very encouraged by the momentum. And this is happening across all revenue lines. The one-off cost relating to city integration has reduced significantly, by more than 50% from last quarter, with Vietnam as the last portfolio to be completed to complete operational day one sometime next year. On the business front, Group Retail registered total income of $4.1 billion for the nine months of 2024. In constant currency term, this was 1% higher than a year ago. healthy growth in CASA, cut billings and wealth management fees helped to cushion the pressure on margin, especially in the mortgage area. Total income for group wholesale banking is 5% to 5.1 billion amid the competition for high quality assets. The competitive pricing impact was offset by strong investment banking activities along with steady growth in CASA and trade loans. Our margins. Net interest margin was stable at 2.05% this quarter, while net interest income picked up from a longer day count, but also because of loans volume growth. Loans margin improved five basis points to 2.56% as we proactively managed and brought down our deposits cost of funding. Interbank securities margin declined many due to the lower in the bank is. On our fees, net fees income of 630 million is a new quarterly record. Loans related fees remain strong backed by double digit trade growth. Card fees past 100 million level, along with the sustained wealth momentum led by strong Banka and Unitrust sales. On our treasury and trading, Customer treasury income rose to a new high at $270 million this quarter on increased hedging demands and higher business flows and market volatility. Other trade investment incomes surged above the $400 million as we captured trading opportunities and recorded exceptional gains from interest rate volatility. Core expenses for the nine months was up 5% from a year ago as we continued to build regional capabilities while maintaining tight cost discipline. Staff costs for the quarter rose in tandem with income. These are mainly in bonus provision that we set aside. While IT related expenses picked up from strategic tech investments. On a large income base, cost to income ratio improved to 41.5%. Overall, our asset quality remains stable with NPR ratio unchanged at 1.5% from last quarter. The higher MPA for individuals was largely due to a little bit of the friction that we observed in the Thai Retail Operation Day 1 in Thailand. I think we have since addressed the issues and moving forward, the MPA will be normalized. For the wholesale portfolio, new MPL formation declined. In fact, recoveries and write-off more than offset this increase. On the credit costs, net credit costs rose to 36 basis points this quarter, with total credit costs at 34 basis points. The increase in specific allowance was mainly due to delinquencies in the Thai retail unsecured portfolio following the OD1 issue that I mentioned, but these have since peaked and were normalized by the first quarter of 2025. the highest special allowance also contributed by prudent collateral markdowns on a few selected corporate NPLs in the US and Hong Kong, as we step up recovery efforts on this account. Total credit costs for the nine months was at 27 basis points, and we expect credit costs for the full year to remain within our guidance of 25 to 30. As at September, the group total allowance was 5 billion, of which 3 billion was from non-impact assets. We continue to set aside general allowance for the growth in our credit portfolio. Our over MPA coverage remains strong at 98% or 210% after taking collateral into account. Loans grew 5 billion or 2% from last quarter, given by broad-based wholesale trade loans alongside the higher retail mortgage. Year on year, we grew 5% that constant at constant currency. Customer deposits grew steadily by 3% quarter-on-quarter, with continued expansion in wholesale and retail CASA. Our overall CASA mix increased to 53.6%. Our liquidity position remains sound, with LCR at 141% and NSFR at 116%, both well above the minimum reg. rate view requirements. Our CT1 strengthened to 15.5% following the implementation of Basel III reforms in July of this year. On a fully loaded basis, our CT1 will be at 15.2%. With that, I conclude my presentation and pass it back, man.