United Bank For Africa Plc · NSENG:UBA
United Bank For Africa — Q3 2010 Earnings Presentation
40 slides from United Bank For Africa's earnings presentation, Oct 29, 2010
Slide 1: 2010 Third Quarter Results Investor/Analyst Briefing
2010 Third Quarter Results Investor/Analyst Briefing Investor/Analyst Briefing At the By CSL Stockbrokers | 2nd Int’l Investor Conference 28 September 2010 United Bank for Africa (UBA) PLC Lagos 29 October 2010 United Bank for Africa (UBA) PLC Africa’s global bank 1
Slide 2: Forward Looking Statements & Restatement of Prior Years
FORWARD LOOKING STATEMENTS & RESTATEMENT OF PRIOR YEARS Presentation and subsequent discussion may contain certain forward-looking statements with respect to the financial condition, results of operations and business of the Group. These forward-looking statements represent the Group’s expectations
Slide 3: Important Disclosures
IMPORTANT DISCLOSURES • This presentation is based mainly on the results for Third Qtr ended September 2010 • The comparable period is September 2009 for P&L and December 2009 for Balance Sheet items • Sept 2009 figures are derived from 9-mths (January – Sept) results for P&L only • FY means “Full Y
Slide 4: Outline
OUTLINE • OVERVIEW OF UBA • REVIEW OF OPERATING ENVIRONMENT • ANALYSIS OF THIRD QUARTER FINANCIAL RESULTS • FINANCIAL HIGHLIGHTS • KEY FACTORS THAT IMPACTED THIRD QUARTER RESULTS • REVENUE ANALYSIS • PROFITABILITY • PERFORMANCE OF UBA AFRICA OPERATIONS Presentation of Group Performance • BALANCE SHE
Slide 5: Overview of UBA
OVERVIEW OF UBA Presence and business model Strategic Thrust • Operations in 19 African countries (including • Dominance in Nigeria Nigeria) and 3 global financial centres. 3 countries have not commenced operations and their • Leading bank in Africa (to rank 6th in market share) financials are not p
Slide 6: Our Global Footprint
OUR GLOBAL FOOTPRINT Burkina Faso Mali Senegal Chad Guinea Conakry Nigeria Sierra Leone Liberia Uganda Cote Ghana d’Ivoire Benin Rep Congo DR Congo Tanzania Kenya Cameroon Gabon Tanzania Angola Zambia USA UK FRANCE Countries in operation Yet to commence operation Africa’s global bank 6
Slide 7: Review of Operating Environment
REVIEW OF OPERATING ENVIRONMENT • Nigeria’s GDP stays above 7% in the last few qtrs Key Economic Indicators Dec-09 Sep-10 • Inflation for Sept-10 slips to 13.6% (13.7% in Aug) GDP growth (%) 7.44% 7.45% • Bank of Tanzania gives banks 3yrs to recapitalize Inflation Rate (%) 12.0% 13.6% • Ghana’s Augu
Slide 8: Analysis of 3Q 2010 Results
ANALYSIS OF 3Q 2010 RESULTS Africa’s global bank 8
Slide 9: Financial Highlights
FINANCIAL HIGHLIGHTS PARAMETERS 9MTHS (SEP-10) 9MTHS (SEP-09) % Change ACTUAL (N'BN) ACTUAL (N'BN) GROSS EARNINGS 136.4 146.6 -7% PROFITS B/F TAX & EX ITEMS 16.9 (13.5) 226% EXCEPTIONAL ITEMS (5.3) (3.9) 38% PBT AFTER EX ITEMS 11.6 (17.3) 167% 30-Sep-10 31-Dec-09 % Change BALANCE SHEET SIZE 2,481 2,
Slide 10: Key Factors That Impacted Third Quarter Results
KEY FACTORS THAT IMPACTED THIRD QUARTER RESULTS • The economic situation in the industry continues to improve. • However, some unfavorable factors affected the actual performance for the quarter: • Excessive liquidity in the system remained for a significant part of the quarter with O/N investment r
Slide 11: Revenues Analysis
REVENUES ANALYSIS Africa’s global bank 11
Slide 12: Revenue Analysis
REVENUE ANALYSIS Revenues (N’bn) Composition of Fee Based Income 23% in 3Q09 146..4 136.4 5.0 , 12% Fees 42.6 41.6 Forex 8.4 , 21% Comm & Chgs 103.8 94.8 27.7 19% in 3Q09 , 67% 3Q09 3Q10 58% in 3Q09 Fee Based Income Fund Based Income • Gross Earnings strong at N136bn despite the Presentation of Grou
Slide 13: Profitability
PROFITABILITY PROFITABILITY Africa’s global bank 13
Slide 14: Profits Analysis
PROFITS ANALYSIS Operating Income (N’bn) Strong Recovery in PBT (N’bn) 16.9 +225% 102.2 96.2 Before EI After EI 11.6 +167% -13.5 -17.3 3Q09 3Q10 3Q09 3Q10 Presentation of Group Performance Contributions to Operating Income • Operating income slightly down but efficiency improved Commisions /Chgs 29%
Slide 15: Performance Review of UBA Africa
PERFORMANCE REVIEW OF UBA AFRICA (for the third quarter ended 30 Sept, 2010) Country Start Date Age (Yrs) Gross Earnings (N’mn) PBT (N’mn) Burkina Faso Jul-08 2.25 5,032 1,363 Ghana Jan-05 5.75 4,393 1,156 Benin Dec-08 1.83 1,859 642 Guinea Feb-10 0.67 391 98 Cameroon Dec-07 2.83 1,411 67 Tanzania O
Slide 16: UBA Africa – Already contributing to profitability
UBA AFRICA – Already contributing to profitability Aggregate PBT from Africa countries was positive for the first time in Q3. Better times are ahead! 6 Countries (excluding Nigeria) already making profits Another 6 countries are already making month-on-month profit and expected to accelerate on perf
Slide 17: Balance Sheet Analysis
BALANCE BALANCE SHEET SHEET ANALYSIS ANALYSIS Africa’s global bank 17
Slide 18: Total Asset and Contingents
TOTAL ASSET AND CONTINGENTS Growth in Balance Sheet Size (N’trn) Growth in Total Assets (N’trn) 2.48 1.66 2.24 1.55 FY09 3Q10 FY09 3Q10 Presentation of Group Performance • Significant growth recorded in Balance Total Assets Grow in Other African Subs (N’bn) Sheet size… • … up by almost 11% 205 174 •
Slide 19: Deposit Base
DEPOSIT BASE Growing Deposits (N’trn) Qtrly Trend in Group Deposits (N’trn) 1.34 1.36 1.36 1.34 1.25 1.25 FY09 3Q10 FY09 1Q10 2Q10 3Q10 • Strong deposit base of N1.34bn, up 7.2% since Dec-09 Presentation of Group Performance Qtrly Trend in UBA Africa Deposits (N’bn) • Deliberate management decision
Slide 20: Deposit Mix
DEPOSIT MIX Deposit Mix, By Type Deposit Mix, By Geography Excl-Nigeria Nigeria FCY 21% 11% 12% (16% in FY09) Demand 44% Time 19% (41% in FY09) 89% 88% (29% in FY09) Savings 16% (14% in FY09) FY09 3Q10 Deposit Mix, By Class Presentation of Group Performance Commercial • Low cost deposit account for
Slide 21: Loans
LOANS Net Loans (N’bn) Net Loans, Qtrly Trend (N’bn) 636 664 636 607 607 590 FY09 3Q10 FY09 1Q10 2Q10 3Q10 • Lending grew by 4.8% since Dec-09 due to strict Presentation of Group Performance adherence to lending standards – more lending to Qtrly Trend in Loans, UBA Africa (N’bn) high-end corporate n
Slide 22: Analysis of Loan Portfolio
ANALYSIS OF LOAN PORTFOLIO DISTRIBUTION OF LOANS: By Sector NPL Ratio 9.9% Sector Loan (N'bn) Proportion 8.3% 7.9% Personal & Professional 103.7 15.2% Financial Institutions 90.6 13.2% Oil & Gas 90.4 13.2% Government 66.8 9.8% Telecommunications 61.5 9.0% FY09 (Group) 3Q10 (Group) 3Q10 (Bank) Manufa
Slide 23: Efficiency
EFFICIENCY EFFICIENCY Africa’s global bank 23
Slide 24: Quality of Earning Assets
QUALITY OF EARNING ASSETS… Yield on Earning Assets Cost of Funds 11.1% 10.8% 3.8% 2.8% FY09 3Q10 FY09 3Q10 Presentation of Group Performance • Drop in yield on earning assets reflects the Net Interest Margins high level of liquidity in the system that has 7.5% significantly affected yields across al
Slide 25: Cost Analysis
COST ANALYSIS Staff Cost to Total OPEX Cost Income Ratio (Group) Staff Costs Opex 77% 76% 31.8% 36.2% 68.2% 63.8% FY09 3Q10 3Q09 3Q10 • Staff cost to total cost increases slightly as Opex Presentation of Group Performance reduced Ratio of Africa’s Cost to Group Cost • Cost-to-Income ratio improves t
Slide 26: Our Global Shared Service (GSS) Centre
OUR GLOBAL SHARED SERVICE (GSS) CENTRE! Africa’s global bank 26
Slide 27: Liquidity & Asset Quality
LIQUIDITY LIQUIDITY && ASSET ASSET QUALITY QUALITY Africa’s global bank 27
Slide 28: Liquidity
LIQUIDITY Liquid Assets Liquidity Ratio Deposit 45% 42% with CBN 8% Cash/ST Funds 16% Interbank Plcmts Treasury 63% bills 13% 3Q09 3Q10 Presentation of Group Performance • Highly liquid balance sheet Loan to Deposit Ratio • Liquidity Ratio stood at 42% • 17% above regulatory threshold of 25% 48.7% 4
Slide 29: Funding and Capital Adequacy
FUNDING AND CAPITAL ADEQUACY Shareholders’ Funds (N’bn) Improved Capital Adequacy Ratio 190 16.3% 17.0% 187 FY09 3Q10 FY09 3Q10 Presentation of Group Performance Funding Mix • Owners’ equity risen to N190bn Other • We concluded a N20 billion 7 yrs subordinated Liabilities bond issue that further enh
Slide 30: Risk Management Overview
RISK MANAGEMENT OVERVIEW Ongoing implementation of Basel II and COSO enterprise risk management framework Regular Internal Capital Adequacy Assessment Process (ICAAP) – Commenced in 2H09 Stress Testing (Internal/CBN) driving risk appetite decisions. We have now commenced self regulated stress testin
Slide 31: Outlook
OUTLOOK OUTLOOK Africa’s global bank 31
Slide 32: Outlook for the Operating Environment
OUTLOOK FOR THE OPERATING ENVIRONMENT • Global GDP growth projected at 4.2%; Sub Saharan Africa to grow by 4.7% and Nigeria to expand by 7.4% - IMF • Political and economic conditions in Africa to improve • Lending and capital flows to improve globally: Nigeria is set to issue $500mn bond at the int
Slide 33: Outlook for UBA
OUTLOOK FOR UBA • Consolidate on the strong corporate governance and risk management standards across the group • The improvement in yields on financial assets in Q4 will significantly benefit our operations being a net surplus bank with active participation in government instruments and interbank m
Slide 34: Thank You
THANK THANK YOU YOU Africa’s global bank 34
Slide 35: Q&A
QQ&&A A Africa’s global bank 35
Slide 36: Appendix
APPENDIX APPENDIX Africa’s global bank 36
Slide 37: Consolidated Profit & Loss Account
UNITED BANK FOR AFRICA Plc Consolidated Profit & Loss Account For the Period Ended 30 September 2010 9 months to 9 months to 30-Sep-10 30-Sep-09 N'million N'million Gross earnings 136,366 146,411 Interest and similiar income 94,779 103,776 Interest and similar expense (40,167) (44,163) Net interest
Slide 38: Consolidated Balance Sheet
UNITED BANK FOR AFRICA Plc Consolidated Balance Sheet As at 30 September 2010 30-Sep-10 30-Sep-09 N'million N'million Assets Cash and balances with central banks 79,117 68,225 Treasury bills 85,144 42,035 Due from other banks 402,514 470,195 Loans and advances to customers 636,174 606,616 Investment
Slide 39: Brief History of UBA
Brief History of UBA 1949 French & British Bank Limited (“FBB”) commences business 1961 Incorporation of UBA to take over the banking business of the FBB 1970 IPO on the NSE 1984 Establishment of NY branch 1998 GDR programme established 2004 Establishment of UBA Ghana 2005 Merger with Standard Trust
Slide 40: UBA Group Investor Relations' Contacts
UBA Group Investor Relations’ Contacts Emmanuel N. Nnorom Executive Director - Group Finance and Risk Mobile:+234-8033034944 eMail: emmanuel.nnorom@ubagroup.com Website: www.ubagroup.com Abubakar A. Jimoh, CFA, FRM Divisional Head Balance Sheet Mgt, Market Risk & Investor Relations MOBILE: +234 703
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