United Overseas Bank
Investor Roadshow
January 2008
Disclaimer : This material that follows is a presentation of general background information about the
Banks 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.
Singapore Company Reg No. 193500026Z
2
Agenda
Overview of UOB GroupOverview of UOB Group11
Macroeconomic OutlookMacroeconomic Outlook22
Infrastructure, Systems & OperationsInfrastructure, Systems & Operations44
Growth and Regional StrategyGrowth and Regional Strategy33
Financial OverviewFinancial Overview55
ConclusionConclusion66
3
UOB Overview
Founded in August 1935 by a group of Chinese businessmen and Datuk Wee Kheng Chiang, grandfather of the present UOB Group CEO, Mr Wee Ee Cheong
UOB has grown over the decades through organic means and a series of acquisitions. It is today a leading bank in Singapore with an established presence in ASEAN. The Group has a total network of 525 offices over 18 countries and territories
Total Assets: S$172.2 billion
Shareholders Equity: S$17.2 billion
Gross Loans: S$87.1 billion
Customer Deposits: S$104.8 billion
ROAA: 1.27%
ROAE: 12.8%
NIM: 2.05%
Non-interest / Total Income: 37.8%
Cost / Income: 40.7%
Tier 1 CAR: 10.2%
Total CAR: 14.8%
Moodys: Aa1 LT Bank Deposits
S&Ps: A+ LT Counterparty Credit
Founding
Expansion
Key Statistics
Note: Financial statistics for the nine months ended 30 September 2007
4
One Of The Worlds Leading Credits
UOB is one of the highest rated banks globally UOB is one of the highest rated banks globally
Source: Moodys as of November 2007
Rating
HS
BC
Hang S
eng
UO
B
OC
BC
Westp
ac
Sta
nC
hart
DB
S
Maybank
Kookm
in B
ank
Shin
han
Bangkok B
ank
B+
B
B-
C C
BB
B+
C+
B+
D-
D
D+
C-
C+
B
B-
C
Rating
UO
B
OC
BC
Westp
ac
HS
BC
Hang S
eng
DB
S
Sta
nC
hart
Kookm
in B
ank
Shin
han
Maybank
Bangkok B
ank
Aaa
Baa2
Baa1
A3
A2
Aa3
Aa1
Aa2
A1
Aa1
Aa2
Aa3
A2
A3
Baa1
Aa1
Aa2
Aa3
Aa1
A2
C
D+
Bank Financial Strength Foreign Long-Term Bank Deposit
5
The UOB Difference
Proven
Execution Track
RecordKeen
Understanding of
Markets &
Customers
Strong
Management
Team
Well-Established
Regional Network
Well-Diversified
Portfolio
Focus on
Long-Term
Returns
6
9M07: S$1,603m
2006*: S$1,882m
2005: S$1,709m
1980:S$92m 1985:S$99m
1990:S$226m
1995:S$633m
2000:S$913m
2004:S$1,452m
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1935 1945 1955 1965 1975 1985 1995 2005 2010
Execution Track RecordProfit (S$ m)
Acquired OUB in 2001
Acquired CKB in 1971
Acquired LWB in 1973
Acquired FEB in 1984
Acquired UOBR & UOBP in 1999
Acquired ICB in 1987
* 2006 net profit after tax was S$2,570 million including one-time gain
Acquired Bank of Asia in 2004
Acquired Bank Buana in 2005
7
Strategic Focus
To be recognized as a leader in consumer and SME banking services in the region with
investment banking and treasury products in support
To be recognized as a leader in consumer and SME banking services in the region with
investment banking and treasury products in support
Consumers SMEsTreasury
InvestmentBanking
OperationalExcellence
Risk Management
&Compliance
InformationTechnology
HumanResources
8
Awards & Accolades
Locally and overseas, with the Banks strong financial performance and regional reputation, it
continues to receive strong endorsement with numerous accolades from leading publications,
trade organisations and the investment community
Locally and overseas, with the Banks strong financial performance and regional reputation, it
continues to receive strong endorsement with numerous accolades from leading publications,
trade organisations and the investment community
Best Local Private Bank Singapore (2nd)
2007
Best Domestic Bank Singapore
2006
Best SME Bank in Asia Pacific
2007
Top 10 Best Managed Companies Singapore
Top 10 Best Investor Relations Singapore
2006
Best Bank - SingaporeBest Sub-Custodian Bank
Singapore
2006
Most Valuable Singapore Brand 2nd position
2003, 2004, 2005, 2006
9
Agenda
Overview of UOB GroupOverview of UOB Group11
Macroeconomic OutlookMacroeconomic Outlook22
Infrastructure, Systems & OperationsInfrastructure, Systems & Operations44
Growth and Regional StrategyGrowth and Regional Strategy33
Financial OverviewFinancial Overview55
ConclusionConclusion66
10
Singapore Outlook Promising
Source: Wall Street Research
Singapore enjoys economic leadership status within ASEAN
As a key Asian financial services hub, Singapore has continued drawing a multitude of global multinational banks and corporations, thereby contributing to a strong across-the-board economic boom
Positive governmental policies have enabled smooth transformation from a manufacturing to a knowledge and service-based economy
Reduced dependence on the US consumer with export exposure to the US having more than halved from 25% in 1999 to just over 11%
Leisure and infrastructure expansion through domestic mega projects (two new integrated casino resorts on the verge of completion and debut of the Formula One Grand Prix street race slated for 2008)
Declining Exports to US Singapore and US Growth Decoupled
0
5
10
15
20
25
30
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Singapore Exports to US
% of Total
-6.0
0.0
6.0
12.0
2001 2002 2003 2004 2005 2006 2007
0.0
2.0
4.0
6.0Singapore Growth (LHS) US Growth (RHS)
%YoY %YoY
11
2.5
5.1 4.9
8.9
3.12.4
4.9
3.2
4.9 4.8
7.47.1
0
2
4
6
8
10
2006 2007E 2008E
Singapore Malaysia Thailand Indonesia
7.9 7.4
4.86.0
5.0 4.5 4.95.5
6.2 6.15.9 5.8
0
2
4
6
8
10
2006 2007E 2008E
Singapore Malaysia Thailand Indonesia
17.9
14.7 14.6
0.9
10.0 10.0 10.3
0.01.6
3.33.23.4
0
5
10
15
20
2006 2007E 2008E
Singapore Malaysia Thailand Indonesia
155.3172.1
136.3104.9
82.1
116.3
65.374.0 80.2
59.351.6
41.1
0
50
100
150
200
2006 2007E 2008E
Singapore Malaysia Thailand Indonesia
2.6 2.6 2.53.3 3.1 3.1
1.5 1.7 1.6
10.28 9.7 9
0
2
4
6
8
10
12
2006 2007E 2008E
Singapore Malaysia Thailand Indonesia
1.0 1.82.2
3.62.0 2.5
4.6
2.0 2.1
13.1
6.3 5.9
0
5
10
15
2006 2007E 2008E
Singapore Malaysia Thailand Indonesia
SE Asia: Positive Macroeconomic Indicators
Source: EIU, as of 27 November 2007
Real GDP Growth Private Consumption Growth
Foreign Exchange Reserves Inflation
Foreign Direct Investments
Unemployment Rate
(In US$ bn)
(In US$ bn)
(In %)
(In %)(In %)
(In %)
12
Strong Fundamentals Driven Growth
Economic fundaments across the region are much more robust than the pre-1997
period
Strong GDP outlook across all economies
High levels of foreign exchange reserves
FDI inflows strong and improving
Economic activity is more broad-based with less dependence on the US economy
Asian currencies have strengthened vis--vis the US dollar
Key structural issues related to weak financial systems and poor governance have
been addressed
The banking sector remains strong with high levels of capitalization and low NPL
levels across the region
More stable socio-political environment across the key Southeast Asian economies
13
Some Macro Risks But UOB Remains Insulated
UOB is largely insulated from any US recessionary downturn. Importantly, the Bank will continue
to benefit from the strong domestic demand in its core markets of Singapore and ASEAN
UOB is largely insulated from any US recessionary downturn. Importantly, the Bank will continue
to benefit from the strong domestic demand in its core markets of Singapore and ASEAN
Risk of US
Economic
Slowdown
Challenging macro environment with
Inflationary pressure, real estate
deflation and tightening credit
Risk of a US economy slowdown is now
higher
Potential risk of mortgage market
slowdown
Risk of weaker consumer confidence to
personal lending growth
Singapore Loan
Demand
Macro fundamentals remain strong in
Asia with buoyant consumer demand
and ample liquidity
Asia growth should remain resilient
despite any US slowdown
Economic growth has been broad-based
Healthy pipeline of residential
completions
Strengthened regional platform can
easily scale up for increased volume
Widening credit spreads and reduction
of risk tolerance
Appreciation of global currencies
weakens US$-based revenue flows
Challenging
Credit &
Currency Markets
Global credit markets are now more
settled
Limited UOB exposure to high risk credit
CommentsConcerns
14
Agenda
Overview of UOB GroupOverview of UOB Group11
Macroeconomic OutlookMacroeconomic Outlook22
Infrastructure, Systems & OperationsInfrastructure, Systems & Operations44
Growth and Regional StrategyGrowth and Regional Strategy33
Financial OverviewFinancial Overview55
ConclusionConclusion66
15
Strategic Directions
Our Mission:
To Be A Premier Bank in the Asia-Pacific Region
Our Mission:
To Be A Premier Bank in the Asia-Pacific Region
Strengthen Domestic Market
Leadership in Core Segments
Further Grow Established
Regional Franchise
Establish Strategic Partnerships
Focused in High Growth
Regions
Invest In Infrastructure & Talent
for the Future
16
Expand Southeast Asia Franchise
Singapore Well-placed for expansion
Leading local bank with dominance in consumer and SME markets
Robust economic expansion
Buoyant property market
Growing affluence and demand for wealth solutions
Well-entrenched with 72 branches/offices
Overall momentum expected to continue
Thailand
Malaysia
Singapore
Indonesia
Malaysia Poised for accelerated growth
Long-established history with good local knowledge and understanding of customers and market (2nd home market)
Focus on consumer and SME, and tap on increasing opportunities in treasury and investment banking for higher non-interest income
Infrastructure and extended distribution network in place for accelerated growth Largest foreign branch network with 43 branches/offices
Indonesia Entrench market position
Network expanded to 218 branches/offices
Enhancing infrastructure and processes in preparation for business expansion
Building consumer business. Strengthen foothold in lending and fee-based activities
Satisfy the capital requirement to gain "national bank" accreditation
Thailand Committed to Thailand
Raise UOB brand awareness to enhance competitiveness
Strong distribution network with 155 branches/offices
Focused on growing targeted consumer and retail SME segments
Robust credit management systems and balance sheet management for future growth
Remain positive
Continue to build on established positions in the 4 Southeast Asian PillarsContinue to build on established positions in the 4 Southeast Asian Pillars
17
Next Growth Phase Beyond the Four Pillars
China
Local incorporation status and stronger capitalization to support organic growth targeting affluent
consumer and institutional segments
Strategic investments and alliances to gain access to distribution network potential investment in
Chinas Evergrowing Bank
Capturing commodity trade financing opportunities in Greater China
Vietnam
Seeking to grow branch network first Singapore bank to establish presence in country (Full-service
branch in Ho Chi Minh City)
Fast growing market. Opportunities in consumer banking. UOB is leading credit card merchant acquirer
Developing Vietnam as another key growth pillar acquired 10% stake in Southern Commercial Joint
Stock Bank with room to increase stake further
India
Intend to be disciplined and prudent by focusing on selective segments as we build understanding of the
market
Applying to set up first branch in Mumbai
OECD
Provide risk diversification and balanced global portfolio
Will continue to be a meaningful overseas contributor
18
Note: Operating profit before intangible assets amortised, and excluding one-time gain in 2006
Overseas Expansion On Track
Global portfolio diversification
Overseas operating profit up 10% yoy
Pre-tax offshore profit contribution in 9M07 accounts for 29%
Established strong regional distribution platform Hard to duplicate network for rivals
Southeast Asia platform well-positioned for growth. ASEAN pre-tax profit accounts for 15% in 9M07
Significant infrastructure investment to position for long-term sustainable growth
New strategic initiatives in Vietnam and China
Transforming UOB into a regional player. Progress on track
1,367
1,680 1,756 1,6601,516
263
278266 496
321104
95108
115
103
78
134
189
182
76
0
500
1,000
1,500
2,000
2,500
2003 2004 2005 2006 9M07
Singapore ASEAN Asia Pacific Rest of World
1,810
2,131
2,264
2,460
2,122
Pre-Tax Profit by Geography
(S$ m)
19
Agenda
Overview of UOB GroupOverview of UOB Group11
Macroeconomic OutlookMacroeconomic Outlook22
Infrastructure, Systems & OperationsInfrastructure, Systems & Operations44
Growth and Regional StrategyGrowth and Regional Strategy33
Financial OverviewFinancial Overview55
ConclusionConclusion66
20
IT Management Philosophy
Fast and measurable benefits
Differentiation through customer segmentation and service
Leveraging volume to create infrastructure scale
21
2007 A Year of Investment
Malaysia Call centre strengthened with customer relationship management system
Consumer credit management process enhanced
Thailand Basel related infrastructure completed Overhauled entire suite of credit management
process, strengthened & harmonised to the Group
Indonesia Treasury operations capability laid Credit Cards infrastructure overhauled
Origination Cards billing/rewards Collection
China Core banking systems laid for local incorporation
Singapore Strengthened Regulatory/Compliance infrastructure Basel IRB certification obtained (in parallel run
for 2 years starting 2007) Anti-Money Laundering
Focus on core infrastructure building to manage operational risk for revenue growthFocus on core infrastructure building to manage operational risk for revenue growth
China
Indonesia
Thailand
SingaporeMalaysia
22
2008 IT Strategy Moving Forward
Consultative review of our IT strategy, architecture and business alignment for the next 5 years
Re-affirmed the strategy of consolidating shared IT infrastructure for core businesses
Singapore as the primary IT service centre Build secondary IT centre outside of
Singapore over time
Review consolidation of other operating capabilities for scale & harmonisation; for efficiency and further strengthening risk management and product capabilities
Investments needed to align the various operating platforms in the regional subsidiaries over the next 3 - 5 years
Prioritise and balance investment spend with revenue growth
China
Indonesia
Thailand
Singapore
Malaysia
23
Agenda
Overview of UOB GroupOverview of UOB Group11
Macroeconomic OutlookMacroeconomic Outlook22
Infrastructure, Systems & OperationsInfrastructure, Systems & Operations44
Growth and Regional StrategyGrowth and Regional Strategy33
Financial OverviewFinancial Overview55
ConclusionConclusion66
24
Strong Operating Performance
(1) Excluding one-time gain in 2006
(2) Before amortization and impairment charges
(3) Computed on an annualized basis
2002 2006(1)
02-06 CAGR
9M07
Operating Profit (S$ m)(2) 1,960 2,488 6.1% 2,134
Net Profit After Tax (S$ m) 1,006 1,882 17.0% 1,603
Earnings Per Share (S$)(3) 0.64 1.20 17.0% 1.38
Cash ROE(3) 9.5% 12.4% 6.9% 12.8%
Non-Interest Income / Total Income 29.9% 35.8% 4.6% 37.8%
Offshore Profit Contribution 22.0% 32.5% 10.2% 28.6%
2002-2006
CAGR2006(1) 9M072002
25
Higher Net Interest Income & Loan Margin
(1) Computed based on loan yields less cost of deposits
2,128 2,071 2,1552,348
2,710
3.1% 3.2%3.3%
3.1%3.0%
2.2%
2.0%2.0%2.1%
2.3%
0
1,000
2,000
3,000
4,000
5,000
2002 2003 2004 2005 2006
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Net Interest Income
Average Interest Margin (%)
Loan Margin (%)
Net Interest Income and Margin
684 702762 761 714
3.2%3.3%3.1%
3.3%3.3%
2.0% 2.1% 2.0% 1.9%2.0%
0
500
1,000
1,500
3Q06 4Q06 1Q07 2Q07 3Q07
0%
1%
2%
3%
4%
Net Interest Income
Average Interest Margin (%)
Loan Margin (%)(1) (1)
(S$ m) (S$ m)
26
Significant Non-Interest Income Contribution
Note: Excluding one-time gain in 2006
501 588706
900 1,002
406
514511
501398
29.9%
35.8%37.6%
33.9%34.5%
0
500
1,000
1,500
2,000
2,500
2002 2003 2004 2005 2006
0%
10%
20%
30%
40%
Other Income (S$ m)
Fee Income (S$ m)
Non-Interest Income / Total Income Ratio (%)
221
332259
330 319
173
185
74
206
116
42.4%
36.2%
41.3%
35.5%33.0%
0
200
400
600
800
3Q06 4Q06 1Q07 2Q07 3Q07
0%
10%
20%
30%
40%
50%
Other Income (S$ m)
Fee Income (S$ m)
Non-Interest Income / Total Income Ratio (%)
337
517
1,089 1,104
906
1,414 432
536
393
1,514
Non-Interest Income and Non-Interest Income Ratio
(S$ m) (S$ m)
27
Continued Infrastructure Investment
Operating Expenses and Expense / Income Ratio
875 8961,039
1,202
1,492
188199
244
222
199
34.7%37.6% 37.9%
41.1%
35.4%
0
500
1,000
1,500
2,000
2,500
2002 2003 2004 2005 2006
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
IT Exp (S$ m)
Other Operating Exp (S$ m)
Expense / Income Ratio (%)
365427 405 436 427
59
68 6070 67
41.6%44.0%
38.9%39.5%40.8%
0
200
400
600
800
3Q06 4Q06 1Q07 2Q07 3Q07
0%
10%
20%
30%
40%
50%
IT Expenses (S$ m)
Other Operating Exp (S$ m)
Expense / Income Ratio (%)
Note: Excluding one-time gain in 2006
(S$ m) (S$ m)
1,074 1,0951,227
1,424
1,736
424
497472
504487
28
Sustainable Profit Contribution From Overseas Operations
Rest of the World : 9%
Singapore : 71%
ASEAN : 15%
Asia-Pacific : 5%
9M06 9M07 Incr/(Decr)Profit Before Tax(1) S$ m S$ m %
Singapore (Including ACU) 1,200 1,516 26.3
Other ASEAN Countries 370 321 (13.2)
Other Asia-Pacific Countries 65 103 58.5
Rest of the World 117 182 55.6
Profit Before Tax 1,752 2,122 21.1
9M069M06
9M079M07
Rest of the World : 7%
Singapore : 68%
ASEAN : 21%
Asia-Pacific : 4%
Geographical Segment
Note: Excluding the one-time gain in 9M06(1) Before amortisation and impairment charges
29
64.3 67.176.9 79.0
82.5 85.2
104.8
79.0
99.7 104.5
85.595.6
81.3%81.4%78.9%79.3%80.5%78.5%
0
20
40
60
80
100
120
140
Dec-04 Dec-05 Dec-06 Mar-07 Jun-07 Sep-07
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Net Customer Loans (S$ bn) Customer Deposits (S$ bn)
Loans / Deposits (L/D) Ratio (%)
Growth In Loans & Deposits
Customer Loans, Deposits and L/D Ratio
(S$ bn)
30
2,9491,955
1,346 1,166 1,007 763
Dec-04 Dec-05 Dec-06 Mar-07 Jun-07 Sep-07
Singapore Malaysia Thailand Indonesia Other
2.3%2.8%
3.7%4.0%
5.6%
8.0%
67.9%
97.0%88.7%84.5%
79.2%
69.0%
Improved Asset Quality Across Major Countries
3,165
3,931
5,484
2,986
2,0322,382
Coverage Ratio:
NPL Ratio:
NPLs:
Coverage Ratio, NPL Ratio and Total NPLs by Country
31
Approach To Capital Management
Seek Capital
Efficiency
Review mix of capital structure
Option of share buyback and/or special dividend for any
excess capital
Keep buffer above regulatory CAR to maintain high credit
ratings
Reserve capital as we see opportunities in Singapore and
region to strengthen franchise
Strong Capital
for Strategic
Flexibility
Special dividend of 15 cents per share in 1H07. Total
dividend of 35 cents per share for the period
Target for consistent high payout to reward shareholders
High Dividend
Policy
32
Strong Capital Position
15.6%16.1% 16.3% 16.2%
15.7%
14.8%
11.1% 10.8%11.0%11.0%11.0%10.2%
Dec-04 Dec-05 Dec-06 Mar-07 Jun-07 Sep-07
Total CAR Tier 1 CAR
Capital Adequacy Ratio
33
72%
62%
51%
64%
48%
40%
Consistently High Dividend Payouts
15.0cts 20.0cts 20.0cts 20.0cts 20.0cts 20.0cts
25.0cts
40.0cts 40.0cts 40.0cts50.0cts
18.8cts
28.5cts
30.0cts
15.0cts
2002 2003 2004 2005 2006 1H07
Interim Final Dividend in Specie Special
Dividend Payout Ratio Dividend Payout
Dividend Payout Ratio
34
UOBs CDO Investment Update United Overseas Bank
Total CDO investments as at end-Sep 2007 was S$388m; of which S$90m are in ABS CDOs
Of the remaining S$298m Corporate CDOs, S$101m are due to mature by Mar 2008
None of our S$388m CDOs held as investment is in default
Provisions
Took a S$20m P/L charge during 3Q07. Total cumulative P/L charge for CDO investments was S$55m as at 30 Sep 2007
Additional S$66m provision for mark-to-market losses had been taken at the Bank's reserves
UOB Asset Management (UOBAM)
Total CDO AUM of S$11.4bn as at end-Sep 2007; of which S$3bn are ABS CDO transactions UOBAM only manages clients money and does not have any direct investment in their own books By Mar 2008, S$5.0bn is due to mature, with a further S$1.0bn maturing in Sep 2009 CDOs under management are of investment grade and are distributed globally to institutional investors
UOB Life Assurance (UOB Life)
UOB Life has invested S$43m in corporate CDOs in Life Fund (not Shareholders Fund), of which S$37m will mature by Mar 2008
UOB is insulated from global credit issues given the lowest exposure to CDOs among Singapore
banks (
35
Agenda
Overview of UOB GroupOverview of UOB Group11
Macroeconomic OutlookMacroeconomic Outlook22
Infrastructure, Systems & OperationsInfrastructure, Systems & Operations44
Growth and Regional StrategyGrowth and Regional Strategy33
Financial OverviewFinancial Overview55
ConclusionConclusion66
36
In Conclusion
Singapore a new growth paradigm UOB well-positioned to capture upside
Prized distribution network in region. Regional franchise value to further enhance with Asias growth. Best SEA proxy
Regional growth potential supported by strong Singapore risk management culture
Discipline in balance sheet management; diversified portfolio, core lending franchise, strong liquidity
Focus on building operating infrastructure for regional differentiation and long-term sustainable growth
Positive outlook despite short-term challenges. Strategy intact, core business remains strong
UOB remains the most compelling bank investment story in Southeast Asia UOB remains the most compelling bank investment story in Southeast Asia