UOB released its financial results for 2008 today, the last of the three local banks to do so.
UOB results are compared with DBS and OCBC results below.
UOB DBS OCBC
Net Profit $1,937m $1,929m $1,749m
(-8.2%) (-15%) (-16%)
Shareholders’ Funds $15,573m $24,003m $18,560m
No. of ord shares 1,505m 2,281m1 3,126m
Net Assets per share $8.90 $10.14 $5.18
Share price $9.99 $7.84 $4.48
at 27 Feb
Off-balance sheet items:
Financial derivatives $368b $1,704b $365b
UOB DBS OCBC
Net Interest Margin 2.45 2.04 2.47
Non-interest/total income 31.9 28.7 34.4
Cost/income ratio 39.0 43.3 43.7
Loans/deposit 84.5 74.5 84.8
NPL2 ratio 2.0 1.5 1.5
Returns on assets 1.07% 0.84% 1.05%
Returns on equity 12.2% 10.1% 9.9%
Tier 1 CAR3 10.9 12.2 4 14.9
Total CAR 15.3 16.2 4 15.1
Figures in brackets are changes over previous year.
1 DBS shares after rights issued on 30 January 2009
2 Non-performing loans
3 Capital Adequacy Ratio
4 CAR of DBS after rights issued on 30 January 2009
Based on the financial indicators highlighted above, UOB fared better than the other two. Net profit for 2008 for UOB only dropped 8.2% compared with 15% and 16% decline for DBS and OCBC respectively. The Returns on Assets ratio was strongest for UOB at 1.07% versus OCBC’s 1.05% and DBS’ 0.84%. Using Returns on Equity (ROE), UOB’s was highest at 12.2%. DBS’ was 10.1% and OCBC’s was 9.9%. UOB managed expenses best at 39% Cost to Income ratio against 43.3% for DBS and 43.7% for OCBC.
Net Interest Margin (interest spread between interest earned over interest paid) was highest for OCBC at 2.47% with UOB at 2.45% and lowest for DBS at 2.04%. OCBC earned the highest non-interest income relative to total income of 34.4%, UOB’s was 31.9% and DBS’was 28.7%.
In the case of Non-performing loans (NPL), UOB was the worst perfomer at ratio of 2.0%; higher than OCBC and DBS at 1.5% each. On capital adequacy, UOB was the weakest, but by no means a concern as all the 3 banks were well capitalised based on the stipulations laid down by the Monetary Authority of Singapore.
DBS had the highest off-balance sheet item with regard to exposure to financial derivatives at $1.7 trilion versus $368b for UOB and $365b for OCBC.
In terms of trading these stocks on SGX as at 27 February 2009, UOB was trading at 1.12 Price to Book; OCBC was 0.86 and DBS was 0.77.
Written on 2/27/2009 10:23 PM
Copyright © 2009, the author known as LKT in Singapore.
The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.