United Bank Limited · PSX:UBL
United Bank — Q1 2021 Earnings Presentation
48 slides from United Bank's earnings presentation, Apr 26, 2021
Slide 1: UBL Results Q1 2021 Performance Highlights
UBL Results Q1 2021 Performance Highlights Investor Relations Conference Call April 26, 2021 Speakers: Mr. Aameer Karachiwalla - Chief Financial Officer Mr. Arif Saifie, CFA - Financial Controller & Head of Investor Relations
Slide 2: Table of Contents
Table of Contents 1 Overview of Performance for Q1 2021 2 Our Segments are poised to grow as economy opens up 3 Financial Summaries for BS and P&L 4 A Historical Perspective - 6 Years Review 5 Quarterly Trends 2
Slide 3: Overview of Performance for Q1 2021
Overview of Performance for Q1 2021 3
Slide 4: The Big Picture so far on Macros – UBL Delivers consistent ROE
The Big Picture so far on Macros – UBL Delivers consistent ROE Economy signals signs of stability… Market deposits in line with Dec’20 at Rs. 17.9 tln Currency in Circulation up 4.3% in Q1’21 … 37% of Market Deposits Market Advances increase by 1% at Rs. 8.6 tln Inflation at 9.1% in Mar’21,
Slide 5: Balance Sheet Review - Deposit led build up supports core earnings
Balance Sheet Review - Deposit led build up supports core earnings Rs in bln Var % Deposits Performance - Led by Branch Banking Group Balance Sheet Mar'21 vs Mar'21 Dec'20 Avg Dom deposits at Rs 1.4 tln, up 19% YoY - inc vols of Rs 219 bln Dec'20 Advances 541 530 2.0% Avg Domestic current accoun
Slide 6: Q1'21 Results - Overall revenues remain stable with cost control and lower provisions
Q1’21 Results - Overall revenues remain stable with cost control and lower provisions Rs in bln Rs in bln Revenue Performance – stable margins building up momentum Income Statement Var % Var % Dom NII (over 65% of Bank’s revenue) down 2% YoY due to lower rates Q1'21 Q1'20 Q4'20 Bank NIMs at 4.0%
Slide 7: Key Conclusions and strategic priorities
Key Conclusions and strategic priorities Digital Improve Branch profitability with cost synergies Deepening and entering new markets, segments, quality credits Building Digital strategy aiming at creating a wider Payments system Create a more sustainable business model for International Stronger com
Slide 8: Key Highlights Capital Base strengthens with conservation and de-risking
Key Highlights Capital Base strengthens with conservation and de-risking Capital Adequacy Ratio Risk Weighted Assets -62 bps 158 158 24.4% 23.8% Dec'20: Mar'21: 6.1% 54 56 525 5.9% Rs 745 bln 533 Rs 739 bln 1.3% 1.3% Credit Market Operational Credit Market Operational 17.0% 16.6% UBL seeks to main
Slide 9: Key Ratios for the quarter – NIM compression but with controlled expense base
Key Ratios for the quarter – NIM compression but with controlled expense base Gross Revenues Cost to Income Ratio Net Interest Margins Rs in bln +8.8% Rs in bln 52.9% 23.2 5.3% -14 bps 26.0 20.8 43.5% 4.7% 22.0 22.6 43.0% 42.6% 4.6% 4.1% 4.3 4.0% 37.2% 4.7 4.1 5.8 4.1 21.8 19.1 21.8 17.3 16.7 16.9 1
Slide 10: Drivers for earnings – core KPIs review for Q1'21 vs Q1'20
Drivers for earnings – core KPIs review for Q1’21 vs Q1’20 Key Metric Q1’21 Q1’20 YoY Delta BUSINESS VOLUMES AND REVENUE DRIVERS 1 Average Current Account Growth – YoY 25.1% 4.1% 21.1% 2 NTB run rate - C/A per branch per day 2.0 1.6 0.4 3 Aggregate number of NTB C/As in '000s 159 127 32 4 Domestic C
Slide 11: Summary of Results for the quarter ended March 2021
Summary of Results for the quarter ended March 2021 Key Metric Q1’21 Q1’20 YoY Delta RETURN ON EQUITY 1 Profit Before Tax - Rs in bln 12.2 8.4 44% 2 PAT - Rs in bln 7.4 5.1 46% 3 RoE 19.6% 14.1% 548 bps 4 EPS – Rs 6.05 4.13 46% 5 Capital Adequacy Ratio 23.8% 19.5% 430 bps 6 Risk Weighted Assets - Rs
Slide 12: Key Highlights March 2021 Balance Sheet core positions
Key Highlights March 2021 Balance Sheet core positions Bank Level Deposits 19% Current 45% Saving Rs 1.6 tln PBT Rs. 12.2 bln Term 36% RoE 19.6% Net Advances Investments CAR 23.8% 19% T-Bills 15% Domestic Fixed PIBs 39% Rs 541 bln Rs 1.3 tln International Floaters PIBs 25% Others 81% 21% 12
Slide 13: Market Information – Build up in Book Value
Market Information – Build up in Book Value 320 Trends - KSE 100 Index and UBL’s share price 55 Equity and Book Values Max Price in 2021: Rs. 143.68 Rs in bln Cons. Equity Mar’21 - Rs. 199 bln Price as at 22-Apr'21: Rs. 124.05 270 50 Cons. Book value Mar’21 - Rs. 163 per share 184 176 45 159 169 220
Slide 14: Recognition and Awards
Recognition and Awards UBL “Firsts” – Initiatives to stay ahead of the market Market recognition and awards Declared ‘Best Digital Bank in Pakistan for the 2nd year in a row by Asiamoney (2021 & 2020) First Commercial Bank in Pakistan to launch Branchless Banking (UBL Recognized for the highes
Slide 15: Our Global Presence - Pakistan business dominates performance
Our Global Presence - Pakistan business dominates performance Globally around 19% of the asset base is overseas PAKISTAN BRANCHES 1348 Asset mix by region Mar'21 2020 OVERSEAS BRANCHES Domestic Operations 81.4% 80.3% 13 International Operations 18.6% 19.7% SUBSIDIARIES Middle East 11.7% 12.4% 4 Euro
Slide 16: Our Segments are poised to grow as economy opens up
Our Segments are poised to grow as economy opens up 16
Slide 17: Key Highlights Drivers of performance
Key Highlights Drivers of performance 1 He Strong Deposits Growth Domestic Average Deposits growth of 19% lead by build up in CASA - one of the lowest Cost of Deposits 2 Prudent Asset Lending Maintaining all large relationships – with focus on NFI and with efficient capital allocation Digital - The
Slide 18: Core Business Segments Branch Banking Group
Core Business Segments Branch Banking Group Deposit Market Share Total Customers 10 mln + 159 K new C/A opened 8.0% at Mar’21 (Dec’20: 7.9%) Branch Banking - 5.5 mln + Current Account NTB Run Rate Domestic Deposits - PE Rs in bln Omni Accounts – 2.5 mln + Per Branch Per Day – 2.0 in Q1’21 +0.7% (Q1’
Slide 19: Core Business Segments Corporate Banking Group
Core Business Segments Corporate Banking Group Rs in bln 409 Average Performing Advances 356 65 57 65 48 287 242 Q1'20 Q1'21 Advances General Commodity Refinance and Others Total Yield on Advances (General + Commodity) Trade Volumes Growth of 48% 14.0% Q1'20 Q1'21 Imports Imports 8.1% USD 776 mln US
Slide 20: Core Business Segments Digital Banking Group
Core Business Segments Digital Banking Group Digital App Registrations Transacting Customers Trend (‘000s) No of Accounts ( '000s) +39% +23% 474 475 479 1,701 1,379 345 Dec'20 Jan'21 Feb'21 Mar'21 Channel wise Transactional Mix Dec'20 Mar'21 App Rating YTD Mar'21 30% 12% 34% 15% 9% YTD 33% 10% 31% 1
Slide 21: Core Business Segments Treasury and Capital Markets
Core Business Segments Treasury and Capital Markets Domestic Portfolio Concentration Mar’21 MTM Surplus / Deficit Yield on Investments MTM Surplus / (Deficit) - 11.5% Dec'20 Mar'21 Rs in mln 10.2% 9.8% GoP Securities Rs. 1.2 tln PIBs - Fixed 334 (124) 7.8% Listed Shares PIBs - Floaters (2,569) (2,56
Slide 22: Core Business Segments UBL International
Core Business Segments UBL International Performing Advances - PE Non Performing Loans USD i n mln USD i n mln Deposits averaged USD 1.3 bln for Q1’21 (Q1’20: USD 1.5 bln) 10% -2% 360 Cost of deposits reduced from 1.9% in Q1’20 to 1.2% in Q1’21 343 340 336 320 De-risking within International -
Slide 23: Financial Summaries
Financial Summaries where YOU come first
Slide 24: Income Statement Domestic
Income Statement Domestic Rs in bln Rs in bln Description Var % Var % Q1'21 Q1'20 Q4'20 Interest Earned 29.2 40.1 -27% 28.3 3% Interest Expensed (14.2) (24.8) 43% (13.5) -6% Net Interest Income 15.0 15.2 -2% 14.9 1% Non Interest Income 3.9 3.8 3% 3.7 8% Total Revenue 18.9 19.1 -1% 18.5 2% Admin. Exp
Slide 25: Financial Summaries Deposits – Reduction in cost of deposits in Q1'21
Financial Summaries Deposits – Reduction in cost of deposits in Q1’21 Period End Average Cost of Deposits Rs in bln Mar'21 Dec'20 Q1'21 Q1'20 Var % Q1'21 Q1'20 Current deposits 647 615 609 487 25.1% 0.0% 0.0% Saving deposits 578 596 583 505 15.3% 5.4% 10.9% CASA 1,225 1,211 1,192 992 20.1% 2.6% 5.5%
Slide 26: Financial Summaries Net Advances
Financial Summaries Net Advances DOM advances yield at 7.6% in Q1’21 (Q1’20: 12.8%) – repricing in line with benchmark rate Rs in bln Description Var % Mar'21 Dec'20 Corporate Bank 313 301 4% Commodity 38 59 -35% SME 17 18 0% Consumer 19 18 4% Others 52 38 36% Total Domestic 440 433 1% International
Slide 27: Financial Summaries Non Fund Income
Financial Summaries Non Fund Income Rs in mln Description Var % Var % Q1'21 Q1'20 Q4'20 Fee, commission and brokerage income 2,698 2,487 8% 2,808 -4% Dividend income 252 387 -35% 364 -31% Income from dealing in foreign currencies 461 863 -47% 674 -32% Gain / (loss) on sale of securities 415 (62) 768
Slide 28: Financial Summaries Fee, Commission and Brokerage
Financial Summaries Fee, Commission and Brokerage Rs in mln Description Var % Q1'21 Q1'20 Branch banking customer fees 341 387 -12% Consumer finance related fees 239 212 13% Card related fees (debit and credit cards) 553 409 35% Investment banking fees 10 11 -5% Financial Institution rebate / commis
Slide 29: Financial Summaries Administrative Expenses
Financial Summaries Administrative Expenses Rs in mln Description Var % Q1'21 Q1'20 Total compensation expenses 3,510 3,316 -6% Rent and taxes 191 94 -104% Utilities cost 282 312 10% Security 238 242 2% Depreciation 194 188 -3% Depreciation - Right of Use Assets 426 443 4% Others 105 87 -20% Propert
Slide 30: Financial Summaries Administrative Expenses
Financial Summaries Administrative Expenses Rs in mln Description Var % Q1'21 Q1'20 Legal and professional charges 61 45 -34% Outsourced service costs including sales commission 671 634 -6% Banking service charges 420 346 -21% Cash transportation and sorting charges 193 197 2% Depreciation 325 345 6
Slide 31: Financial Summaries Consolidated Income Statement
Financial Summaries Consolidated Income Statement Rs in bln Rs in bln Description Var % Var % Q1'21 Q1'20 Q4'20 Interest Earned 32.9 44.4 -25.8% 32.1 2.4% Interest Expensed (15.4) (26.6) 42.0% (14.8) 4.2% Net Interest Income 17.5 17.8 -1.6% 17.3 0.9% Non Interest Income 6.4 4.9 29.9% 5.0 29.3% Total
Slide 32: Financial Summaries Consolidated Balance Sheet
Financial Summaries Consolidated Balance Sheet Rs in bln Description Var % Mar'21 Dec'20 Advances 627 612 2.4% Investments 1,357 1,168 16.2% Lendings to Financial Institutions 12 22 -46.5% Others 330 400 -17.4% Total Assets 2,326 2,202 5.6% Deposits 1,756 1,764 -0.5% Borrowings 260 132 97.3% Subordi
Slide 33: 6 year Performance Review
6 year Performance Review where YOU come first
Slide 34: 6 Year Financial Summary
6 Year Financial Summary Rs. in mlns 2020 2019 2018 2017 2016 2015 Assets Cash and balances with treasury and other banks 264,727 256,591 206,813 177,099 146,428 128,870 Lending to financial institutions 19,959 20,183 33,942 10,868 25,711 24,095 Investments- gross 1,138,018 849,441 792,857 1,095,555
Slide 35: 6 Year Financial Summary
6 Year Financial Summary Rs. in mlns 2020 2019 2018 2017 2016 2015 Markup / return / interest earned 152,003 153,676 113,198 107,206 98,219 94,353 Markup / return / interest expensed (77,044) (91,902) (56,964) (50,781) (41,177) (38,511) Net Markup / Interest income 74,959 61,774 56,234 56,425 57,042
Slide 36: 6 Year Financial Summary
6 Year Financial Summary Description 2020 2019 2018 2017 2016 2015 Key Financial Ratios Return on equity (RoE) 13.9% 13.8% 11.6% 20.6% 24.9% 25.7% Return on assets (RoA) 1.1% 1.0% 0.8% 1.4% 1.8% 2.0% Profit before tax ratio 37.1% 41.0% 30.7% 50.8% 57.1% 54.2% Advances to deposits ratio (ADR) - gross
Slide 37: Quarterly Trends
Quarterly Trends Gi where YOU come first
Slide 38: Quarterly Trends Profit before Tax
Quarterly Trends Profit before Tax Rs in bln 13.5 +57% 12.2 11.8 +23% 11.3 10.9 11.2 10.8 11.2 10.2 10.4 +8% 10.4 9.9 +6% 9.2 8.8 8.8 +1% 8.4 8.5 8.3 8.4 7.9 7.6 7.7 -4% 6.5 -6% 5.9 -4% -26% 4.1 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 Q4'18 Q1'19 Q2'
Slide 39: Quarterly Trends Profit after Tax
Quarterly Trends Profit after Tax Rs in bln +53% 7.3 7.4 7.1 7.3 7.0 7.0 +25% 6.5 6.5 6.4 6.3 6.3 6.0 5.9 +29% 5.6 5.5 +7% 5.4 +3% 5.1 4.9 4.7 4.8 4.7 4.2 -10% -3% -26% 3.6 3.5 -24% 2.6 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 Q4'18 Q1'19 Q2'19 Q3'19
Slide 40: Quarterly Trends Deposits
Quarterly Trends Deposits Rs in bln +4% 0% +6% 0% 1,640 1,637 +2% 1,589 1,581 +8% +3% 1,493 1,448 1,419 1,467 1,366 1,344 1,301 1,315 1,335 1,256 1,254 1,273 1,183 1,142 1,147 1,167 -2% -2% 1,051.21,070.1 992.4 993.8 945.4 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
Slide 41: Quarterly Trends Net Advances
Quarterly Trends Net Advances Rs in bln 716 675 673 +1% +2% 642 627 636 626 636 623 -11% 585 565567 624 -3% +2% -2% 541 538 530 509 519 -6% 496 498 -8% -1% 459 455 447 420 430 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 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'2
Slide 42: Quarterly Trends Revenue
Quarterly Trends Revenue Rs in bln +18% 26.0 +14% +5% +9% 22.4 22.0 22.6 21.9 +1% 21.3 21.2 21.2 23.2 20.3 20.4 20.3 20.6 20.9 20.8 20.0 20.0 19.6 -11% 19.5 19.2 19.0 19.3 -10% 18.6 -8% 18.1 17.9 -2% 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 Q4'18 Q1'1
Slide 43: Quarterly Trends Net Interest Income
Quarterly Trends Net Interest Income Rs in bln +26% 21.8 +6% 19.1 +6% +1% 17.3 +1% -12% 16.7 16.9 +4% 16.4 +2% 15.7 15.3 15.4 14.7 14.7 -12% 14.2 13.9 14.0 13.7 14.3 14.2 14.2 13.9 14.2 13.8 14.4 13.6 13.7 13.1 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
Slide 44: Quarterly Trends Non Fund Income
Quarterly Trends Non Fund Income Rs in bln 8.4 +44% 7.3 7.2 7.0 6.2 6.2 6.3 +42% 6.1 6.0 5.7 5.8 5.6 5.2 5.2 5.1 4.8 5.0 4.8 4.7 4.5 -28% 4.5 -12% 4.3 4.1 4.1 3.8 -14% -9% -4% -1% 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 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19
Slide 45: Quarterly Trends Provision Charge
Quarterly Trends Provision Charge Rs in bln +55% 5.7 5.5 5.5 +114% -5% +140% 3.7 3.2 2.9 2.6 2.0 2.1 1.9 2.1 1.7 1.9 1.3 1.3 -34% -66% 0.8 0.7 0.9 0.6 -17% 0.3 -76% -81% 0.1 -0.3 -0.3 0.4 -0.5 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 Q4'18 Q1'19 Q2'19
Slide 46: Quarterly Trends Administrative Expenses
Quarterly Trends Administrative Expenses Rs in bln +9% +11% +15% 11.0 11.0 10.7 10.3 +2% 10.0 +2% 9.9 9.9 9.7 9.6 9.2 9.0 -2% 9.9 -11% 8.8 8.8 8.7 9.5 8.6 8.4 8.5 8.2 -14% 7.8 -16% 7.6 7.3 7.4 7.4 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 Q4'18 Q1'19 Q
Slide 47: Important Information
Important Information The information contained herein reflects our latest business statement as at March 31, 2021. 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 expre
Slide 48: Thank You
Thank You