United Overseas Bank · United Overseas Bank ... Foreign Exchange Reserves Inflation ......

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







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


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


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


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


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


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







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







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







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


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%


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







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

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