UOB Annual Report 2002 - United Overseas Bank

Risk Management
A restructured account is one where the original terms and conditions of the facilities have been
modified significantly to assist the borrower to overcome financial difficulties where the longerterm
prospect of the business or project is still deemed to be viable. A restructuring exercise could
encompass a change in the credit facility type, or in the repayment schedule including moratorium,
or extension of interest and/or principal payments and reduction of accrued interest, including
forgiveness of interest and/or reduction in interest rate charged.
When an account has been restructured based on financial consideration, the account will be
graded as 'Non-Performing'. It can only be upgraded to 'Pass' after six months when all payments
are current in terms of the restructured terms and conditions and there is no reasonable doubt
as to the ultimate collectability of principal and interest.
Loans that were restructured during the year were as follows:
Full Year 2002 First Half 2002 Full Year 2001 Full Year 2000
Specific Specific Specific Specific
$ million Amount Provision Amount Provision Amount Provision Amount Provision
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Substandard 292 9 63 2 176 8 17 1
Doubtful 29 13 10 5 115 42 – –
Loss 37 36 16 16 65 57 4 4
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Total 358 58 89 23 356 107 21 5
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Ageing of NPLs
The full outstanding balance of an account is deemed non-current and aged when there are arrears
in interest servicing or principal repayment. As at 31 December 2002, the ageing of NPLs was
as follows:
31.12.02 30.6.02 31.12.01 31.12.00
Ageing Amount % of Amount % of Amount % of Amount % of
(Days) ($ million) Total NPLs ($ million) Total NPLs ($ million) Total NPLs ($ million) Total NPLs
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Current 774 13.6 618 10.3 925 15.5 177 7.2
≤ 90 473 8.3 505 8.5 874 14.6 280 11.4
91 to 180 789 13.9 774 13.0 547 9.2 220 8.9
≥ 181 3,643 64.2 4,074 68.2 3,622 60.7 1,785 72.5
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Total 5,679 100.0 5,971 100.0 5,968 100.0 2,462 100.0
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