United Bank Limited · PSX:UBL
United Bank — 9M 2018 Earnings Presentation
40 slides from United Bank's earnings presentation, Oct 19, 2018
Slide 1: Performance Highlights – 9M 2018 Investor Relations Conference Call
Performance Highlights – 9M 2018 Investor Relations Conference Call October 19th, 2018 Speakers: Mr. Aameer Karachiwalla - Chief Financial Officer UBLArif Mr. Performance Saifie, FCA,Overview – 9M 2018 CFA - Financial Controller and Head of Investor Relations Investor Relations Release
Slide 2: Table of Contents
Table of Contents PAGE Key Highlights 3 Execution and Delivery 7 Growth at a Glance 25 Quarterly Trend Analysis 29 UBL Performance Overview – 9M 2018
Slide 3: Key Performance Highlights
Key Performance Highlights UBL Standalone Results PBT before extraordinary items at Rs. 25.2 bln, down 20% vs. 9M’17 PBT at Rs. 16.5 bln, down 47% vs. 9M’17 Major downsides impacting results in 9M’18: Rs 8.7 bln recorded as pension liability (Q1’18: Rs 6.4 bln; Q2’18: Rs 2.0 bln; Q3’18: Rs 0.3
Slide 4: Avg. Total Assets of Rs 1.83 tln in 9M'18, growth of 8%
Avg. Total Assets of Rs 1.83 tln in 9M’18, a growth of 8% over 9M’17 Branch Banking builds deposit base in cost efficient manner Net Interest Income of Rs. 41.9 bln in 9M’18 (9M’17: Rs. 42.2 bln) 446,000 NTB current accounts mobilized in 9M’18 (9M’17: 405,000) Growth led by current deposits –
Slide 5: Overall NFI closed at Rs 19.4 bln in 9M'18
Overall NFI closed at Rs 19.4 bln in 9M’18, a 21% growth over 9M’17 1 Fee income stood at Rs 10.0 bln, up 14% from 9M’17 Domestic fees grew by 26% YoY to reach Rs 8.5 bln in 9M’18:– Home remittances revenues grew by 42% - market share up to 30% (9M’17: 25%) Trade commissions growth of 5% to re
Slide 6: Provisions and Loan Losses
Provisions and Loan Losses Net provision charge of Rs. 7.4 bln in 9M’18 vs. Rs. 0.1 bln in 9M’17 DOM net provision charge of Rs 0.5 bln in 9M’18 (9M’17: net reversal of Rs 2.2 bln) DOM asset quality stood at 5.2% at the end of Sep’18 (Dec’17: 6.2%) International provisions of USD 58.7 mln take
Slide 7: Execution and Delivery
Execution and Delivery UBL Performance Overview – 9M 2018 7
Slide 8: Consistent earnings performance throughout the years
Consistent earnings performance throughout the years Trends - KSE 100 Index and UBL’s share price Equity and Book Values 300 55 Max 9M'18: Rs. 215.16 28 Sep’18: Rs. 154.00 280 18 Oct'18: Rs. 137.57 Rs in bln Cons. Equity Sep’18 - Rs. 166 bln 50 Cons. Book value Sep’18 - Rs. 136 per share 260 240 152
Slide 9: Income Statement - Standalone
Income Statement - Standalone Rs in bln Rs in bln 9M'18 9M'17 Var % Q3'18 Q2'18 Var % Interest Earned 83.9 78.2 7.3% 29.7 26.0 14.2% Interest Expensed (42.0) (36.0) -16.7% (15.9) (11.8) -34.5% Net Interest Income 41.9 42.2 -0.7% 13.8 14.2 -2.6% Non Interest Income 19.4 16.1 20.5% 5.1 7.0 -26.4% Tota
Slide 10: Income Statement - Domestic
Income Statement - Domestic Rs in bln Rs in bln 9M'18 9M'17 Var % Q2'18 Q2'18 Var % Interest Earned 73.0 67.6 8.1% 25.9 22.4 15.3% Interest Expensed (37.4) (31.9) -17.5% (14.3) (10.3) -38.8% Net Interest Income 35.6 35.7 -0.2% 11.6 12.1 -4.6% Non Interest Income 17.4 13.5 29.1% 4.4 6.3 -30.9% Total
Slide 11: Balance Sheet - Standalone
Balance Sheet - Standalone Rs in bln Sep'18 Dec'17 Var % Advances 673 605 11.4% Investments 860 1,092 -21.3% Lendings to Financial Institutions 59 34 75.2% Others 265 277 -4.4% Total Assets 1,857 2,007 -7.5% Deposits 1,335 1,289 3.5% Borrowings 304 513 -40.7% Subordinated Loans 6 - 100.0% Others 62
Slide 12: Income Statement - Consolidated
Income Statement - Consolidated Rs in bln Rs in bln 9M'18 9M'17 Var % Q3'18 Q2'18 Var % Interest Earned 87.0 80.6 7.9% 30.8 27.1 13.8% Interest Expensed (43.6) (37.2) -16.9% (16.5) (12.3) -33.3% Net Interest Income 43.4 43.4 0.1% 14.4 14.8 -2.6% Non Interest Income 21.2 18.3 16.2% 5.8 7.3 -21.0% Tot
Slide 13: Balance Sheet - Consolidated
Balance Sheet - Consolidated Rs in bln Sep'18 Dec'17 Var % Advances 711 643 10.7% Investments 902 1,125 -19.8% Lendings to Financial Institutions 60 36 67.1% Others 290 302 -3.9% Total Assets 1,963 2,105 -6.7% Deposits 1,415 1,366 3.6% Borrowings 313 517 -39.5% Subordinated Loans 6 - 100.0% Others 6
Slide 14: Deposits performance - Focus remains on growing low cost deposits
Deposits performance - Focus remains on growing low cost deposits Deposits - Bank Period End Average Cost of Deposits Sep'18 Dec'17 9M'18 9M'17 9M'18 9M'17 Domestic deposits - Rs in bln 1,086 1,033 1,010 963 2.7% 2.7% International deposits - Rs in bln 248 256 251 231 2.2% 2.2% Total Bank - Rs in bl
Slide 15: Advances portfolio up 11% over Dec'17
Advances portfolio up 11% over Dec’17 Net Advances Rs in bln Sep'18 Dec'17 Var % Corporate Bank 351 303 16% Commodity 76 47 62% Commercial 34 35 -4% Consumer 15 12 25% Others 34 34 2% Total Domestic 510 431 18% International 164 173 -5% Bank 673 605 11% International USD mln 1,318 1,569 -16% Dec'17
Slide 16: International Advances - Corporate advances remains the largest component
International Advances - Corporate advances remains the largest component By Geography By Business - UAE Bahrain, Qatar, 11% 14% Yemen, 0% NewYork, 0% EPZ, 0% Corporate, 66% Others, 30% UAE, 75% Consumer, 4% Personal Others, loan, 1% 1% Abu Dhabi, 29% Sharjah, 6% Baitna, Dubai, 65% 98% UBL Performan
Slide 17: Concentration of Advances as at September 30, 2018 - Standalone
Concentration of Advances as at September 30, 2018 - Standalone 2% 12% 26% 10% 1% 1% 3% 7% 7% 2% 29% Chemical & Pharma Agribusiness Textile Cement Sugar Autos & Transport Financial Electronics Power & Energy Individuals Others UBL Performance Overview – 9M 2018 17
Slide 18: Diversified investment portfolio with strong market risk management
Diversified investment portfolio with strong market risk management Portfolio declines in line with reduced leveraging Investments’ yields Total 1,092 Rs in bln 11.1% 31 1 47 39 Total 860 18 10.4% 10.4% 18 0 54 47 8.9% 18 542 7.5% 7.8% 2013 2014 2015 2016 2017 9M'18 402 Non Funded revenue streams co
Slide 19: Our international outreach - serving in 4 continents under the single UBL brand
Our international outreach - serving in 4 continents under the single “UBL” brand ASSOCIATED COMPANIES OVERSEAS BRANCHES 3 20 PAKISTAN BRANCHES 1,362 SUBSIDIARIES 4 Asset mix by region 2017 2016 Domestic Operations 79.9% 76.4% International Operations 20.1% 23.6% Middle East 14.8% 17.5% USA 0.2% 0.7
Slide 20: UBL Innovation and Awards
UBL Innovation and Awards UBL “Firsts” – Initiatives to stay ahead of the market Market recognition and awards First Commercial Bank in Pakistan to launch Branchless “Best Bank” in the first ever Pakistan Banking Awards 2016 Banking (UBL OMNI) “Best Bank for Corporate Finance and Capital Marke
Slide 21: Review of Non Interest Income & Administrative Expenses
Review of Non Interest Income & Administrative Expenses UBL Performance Overview – 9M 2018 21
Slide 22: Non Fund Income Standalone Results
Non Fund Income Standalone Results Rs in mln 9M'18 9M'17 Var % Fee, commission and brokerage income 8,481 6,738 26% Dividend income 1,388 1,537 -10% Income from dealing in foreign currencies 2,466 1,033 139% Gain / (loss) on sale of securities 4,464 3,598 24% Other income 588 562 5% Domestic Total 1
Slide 23: Fees and Commissions performance
Fees and Commissions performance Standalone Results Rs in mln 9M'18 9M'17 Var % OMNI fee & commissions 1,377 1,280 8% Commission on trade 682 648 5% Corporate service charges/ Facility fee 144 157 -9% Corporate finance fee 475 168 182% FIG commission 202 83 144% Commission on ATM/ Debit cards 1,177
Slide 24: Administrative Expenses Standalone Results
Administrative Expenses Standalone Results Rs in mln 9M'18 9M'17 Var % Salaries, allowances & Staff fund 8,649 8,019 -8% charges Rent taxes insurance etc. 3,054 2,854 -7% Outsourced service charges 3,236 2,985 -8% including sales commission Advertisement and publicity 465 611 24% Communications 794
Slide 25: Growth at a Glance
Growth at a Glance UBL Performance Overview – 9M 2018 25
Slide 26: Balance Sheet
Balance Sheet Rs. in mlns 2017 2016 2015 2014 2013 2012 Assets Cash and balances with treasury and other banks 177,099 146,428 128,870 87,573 114,388 109,396 Lending to financial institutions 33,664 34,168 24,095 21,872 28,835 21,953 Investments- gross 1,095,555 808,959 721,651 499,060 425,253 351,0
Slide 27: Profit & Loss
Profit & Loss Rs. in mlns 2017 2016 2015 2014 2013 2012 Markup / return / interest earned 107,206 98,219 94,353 82,735 72,846 73,507 Markup / return / interest expensed (50,781) (41,177) (38,511) (37,769) (34,910) (34,948) Net Markup / Interest income 56,425 57,042 55,842 44,967 37,936 38,560 Fee, c
Slide 28: Key Financial Ratios & Share Information
Key Financial Ratios & Share Information 2017 2016 2015 2014 2013 2012 Key Financial Ratios Return on equity (RoE) 20.8% 24.9% 25.7% 23.9% 22.3% 23.8% Return on assets (RoA) 1.4% 1.9% 2.0% 2.1% 2.0% 2.1% Profit before tax ratio 51.1% 57.1% 54.2% 52.0% 49.6% 48.2% Return on capital employed (RoCE) 20
Slide 29: Quarterly Trend Analysis
Quarterly Trend Analysis Bank Level - Standalone UBL Performance Overview – 9M 2018 29
Slide 30: Profit before tax
Profit before tax Rs in bln 13.5 11.8 10.9 11.2 11.3 10.8 11.2 10.2 9.9 10.4 9.3 +4% 8.4 8.3 8.8 7.8 8.0 7.1 8.4 6.4 6.5 5.9 +61% 5.9 -54% -10% 4.1 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18 UBL Performance Overview – 9M 2018 3
Slide 31: Profit after tax
Profit after tax Rs in bln 7.1 7.3 7.3 6.5 7.0 6.5 6.4 +8% 6.1 7.0 6.3 5.7 6.0 5.6 5.2 5.3 5.3 5.9 4.7 4.3 4.0 +37% 3.6 3.5 -58% -5% 2.6 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18 UBL Performance Overview – 9M 2018 31
Slide 32: Deposits
Deposits Rs in bln +1% +1% 1,3151,335 +3% +1% 1,2891,301 1,256 1,254 1,183 1,142 1,1471,180 1,051 1,070 992 994 945 895 828 847 858 866 752 773 703 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 UBL Performanc
Slide 33: Net Advances
Net Advances Rs in bln +8% 675 673 +3% -0% +7% 624 605 565 567 509 510 496 498 459 455 434 430 417 420 408 447 391 377 363 369 352 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 UBL Performance Overview – 9M 2
Slide 34: Revenue
Revenue Rs in bln 21.9 +0% 21.3 +4% 21.2 21.2 20.3 20.4 20.3 20.0 -10% 19.3 19.5 19.2 +13% 17.6 19.0 18.6 18.1 17.9 16.3 15.4 14.9 13.8 14.1 15.5 12.6 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 UBL Perform
Slide 35: Net Interest Income
Net Interest Income Rs in bln 15.7 +2% 14.7 14.2 14.3 +1% 14.2 14.2 14.0 13.6 13.8 13.1 14.2 -3% 12.8 13.9 13.7 13.9 -3% 13.7 11.3 11.0 10.6 9.8 9.5 9.0 8.8 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18 UBL Performance Overview –
Slide 36: Non Funded Income
Non Funded Income Rs in bln 8.4 7.3 -5% +21% 7.0 6.2 6.2 6.3 -26% 6.1 6.0 5.6 +60% 4.8 4.9 5.1 5.0 4.8 4.8 4.8 5.2 4.6 4.5 5.1 3.9 4.5 3.8 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 UBL Performance Overvie
Slide 37: Provisions
Provisions Rs in bln +11% 2.9 2.6 +37% 2.1 2.0 -8% 1.9 1.3 +260% 0.9 0.9 0.8 0.7 0.5 0.6 0.8 0.3 0.3 0.2 0.2 0.1 -0.1 -0.3 -0.3 -0.1 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 -0.5 UBL Performance Overview
Slide 38: Administrative Expenses
Administrative Expenses Rs in bln 9.9 +14% 9.6 +5% 9.2 -2% 8.8 8.8 8.6 8.4 8.5 8.2 -6% 8.7 8.0 7.8 7.6 7.3 7.4 7.4 7.2 7.1 6.9 6.9 6.5 6.5 6.2 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 UBL Performance Ove
Slide 39: Important Information
Important Information The information contained herein reflects our latest business statement as at September 30, 2018. Except the historical information contained herein, statements in this Release which contain words or phrases such as ‘will’, ‘would’, ‘indicating’ expected to’ etc., and similar e
Slide 40: Thank You
Thank You UBL Performance Overview – 9M 2018 40