United Bank For Africa Plc · NSENG:UBA
United Bank For Africa — H1 2017 Earnings Presentation
29 slides from United Bank For Africa's earnings presentation, August 2017
Slide 1: Audited 2017 Half Year Results Presentation
Audited 2017 Half Year Results Presentation AUGUST 2017 1 Africa’s Global Bank
Slide 2: Disclaimer and Note of Caution
Disclaimer and Note of Caution • IMPORTANT: From time to time, the Bank makes written and/or oral forward-looking statements. These are included in this presentation and in other communications. In addition, representatives of the Bank may make forward-looking statements orally to analysts, investor
Slide 3: Table of Contents
Table of Contents Section Page 1. Introduction to UBA 4 2. Operating Environment 10 3. Financial Overview 15 4. Outlook and Key Takeaway 24 5. Appendix 27 3
Slide 4: Introduction to UBA
Section 1 Introduction to UBA
Slide 5: UBA Profile at a Glance
UBA Profile at a Glance A truly Pan-African Bank, with operations across 19 key African markets, London, New York and Paris Third largest bank in Nigeria, Funding, Liquidity & Capital (2017H1) Over 20,000 direct and support staff at Group Level 3rd by total assets, deposits and profits with an estim
Slide 6: Evolution of UBA
Evolution of UBA With a 67 year history, UBA is one of the strongest and most recognised banking brands to originate from Sub-Sahara Africa Acquired majority interest in two banks based in B/Faso and Benin Successfully raised ₦20bn debt capital UBA merged with Standard Trust Bank Commenced operation
Slide 7: Evolution of UBA - Building a Pan African Platform
Evolution of UBA - Building a Pan African Platform Over the last 10 years, UBA has established a pan African platform on the back of a successful Nigerian bank 1949 – 2008 2009 – 2011 2012 – 2017 London London London Paris Paris Paris New York New York New York Chad Chad Burkina Burkina Burkina Faso
Slide 8: A Leading Full Service Pan-African Business
A Leading Full Service Pan-African Business UBA has successfully grown its African franchise and now has growing operations in 19 African countries Burkina Faso Benin Chad UBA’s Market Total Total Headline % Interest Share Assets Deposits UBA Nigeria 100% Top Tier ₦2,689bn ₦1,678bn UBA Ghana Limited
Slide 9: Business Strategy - Leveraging the African Platform
Business Strategy - Leveraging the African Platform UBA’s next growth phase will focus on deepening Nigerian play and consolidating its African businesses • Deepen our value chain play to embed UBA with major • Replicate our value chain success in Nigeria across Africa corporates Leverage and • Depl
Slide 10: Operating Environment
Section 2 Operating Environment
Slide 11: Nigerian Economy: A Slow But Steady Recovery
Nigerian Economy ::: A Slow But Steady Recovery • Slow recovery: Following its 1.5% contraction in 2016, Nigeria’s GDP 9.0% shrunk further by 0.5% in 2017Q1, reflecting low oil production and price. We expect the economy to close the year at +0.6% GDP growth. 6.2% 6.0% 5.5% • Nonetheless, increased
Slide 12: Nigerian Macros Gradually Improving
Nigerian Macros Gradually Improving • The Federal Government has appeased the Niger Delta, leading to relative calm and recovery of oil output, which now hovers 1.9mbpd. 31 31 30 31 32 30 30 28 28 28 28 27 26 26 26 25 25 26 • Following modest oil price recovery, stronger output and improving capital
Slide 13: Nigerian Market and Regulatory Development
Nigerian Market and Regulatory Development Monetary policy remain stable - tight • The MPC maintained the policy rate 14% through the first half of the year, noting posture aimed at stemming exchange that higher MPR will have less transmission effect at current rate. rate and inflationary pressures
Slide 14: Selected African Markets – Key developments
Selected African Markets – Key developments Ghana Southern Africa – Mozambique and Zambia • Higher oil production, rising cocoa output and stronger gold production help to • Fiscal constraint remains the downside risk to economic growth in jump-start Ghana GDP in the first quarter of the year, growi
Slide 15: Financial Overview
Section 3 Financial Overview
Slide 16: 2017 Half Year Results Snapshot
2017 Half Year Results Snapshot 30-June-17 30-June-16 % Change Gross Earnings 222,718 165,580 +34.5% COMPREHENSIVE Net Interest Income 101,379 64,132 +58.1% INCOME & PROFIT Net Operating Income 161,777 116,196 +39.2% TREND (N’million) Operating Expenses (94,804) (74,540) +27.2% Profit Before Tax 57,
Slide 17: Earnings Have Proven Strong and Resilient
Earnings Have Proven Strong and Resilient 222.7 Interest Income Non-Interest Income 165.7 165.6 30% 30% 35% Gross Breakdown Earnings of Gross Trend Earnings (N’billion) 70% 65% 70% 2015H1 2016H1 2017H1 2015H1 2016H1 2017H1 162 58 111 116 Operating Profit Before 39 Income Tax 35 (N’billion) (N’billio
Slide 18: Supported by Increased Diversification
…Supported by Increased Diversification Nigeria Africa & RoW Nigeria & RoW Africa (ex-Nigeria) 28% 30% 29% 29% 32% 32% Total Assets Deposit split split by by Geography Geography 72% 70% 71% 71% 68% 68% 2015H1 2016H1 2017H1 2015H1 2016H1 2017H1 Nigeria Africa & RoW • Rest of Africa (ex-Nigeria) opera
Slide 19: Efficiency Gains Continue To Drive Margin Improvements
Efficiency Gains Continue To Drive Margin Improvements 7.1% 7.3% 6.7% 4.0% 3.7% 3.6% Net Interest Cost of Margin (%) Funds (COF) (%) 2015FY 2016FY 2017H1 2015FY 2016FY 2017H1 2017H1 2016FY • Net interest margin (NIM) improved 20bps YTD to 7.3%, reflecting improved 19% yield on assets and stable fund
Slide 20: Well Diversified Asset Book Supported By Stable Funding Structure
Well Diversified Asset Book Supported By Stable Funding Structure 3.69 Deposits Debt Equity Other 3.50 3.0% 3.4% 3.5% 11.2% 12.7% 13.2% 2.75 7.4% 9.9% 13.2% Total Assets Funding (N’trillion) Structure 78.4% 74.0% 70.1% 2015 FY 2016 FY 2017 H1 2015 FY 2016 FY 2017 H1 Mandatory reserves- cash • In spi
Slide 21: Stable and Well Diversified Loan Portfolio
Stable and Well Diversified Loan Portfolio... 4.2% 1.6 1.6 3.9% 1.1 1.1 Total Loan NPL Ratio Book (%) 1.7% (N’trillion) 1.6% 2014 FY 2015 FY 2016 FY 2017 H1 2014 FY 2015 FY 2016 FY 2017 H1 Others 9% Communications Agriculture Real Estate and 2% Government 3% Construction Oil & Gas* 1% Others 7% 20%
Slide 22: Supported by Solid Capital and Liquidity
...Supported by Solid Capital and Liquidity... UBA Liquidity Ratio (Year Average) Regulatory Requirement (30%) 64% 61% 50% 43% 42% 42% Loan-to- Liquidity Deposit Ratio (%) Ratio (%) 2015 FY 2016 FY 2017 H1 2015 FY 2016 FY 2017 H1 UBA (Nigeria) Basel II Capital Ratio UBA Group CAR (%) Regulatory requ
Slide 23: Intense Focus on Asset Quality and Cost Efficiency
...Plus an Intense Focus on Asset Quality and Cost Efficiency Coverage Ratio (including regulatory reserves) 2.0% 163% 240% 135% 119% 3.9% 4.2% 1.2% Cost of Risk NPL Ratio (%) (%) 1.6% 1.7% 0.4% 2015 FY 2016 FY 2017 H1 2014 FY 2015 FY 2016 FY 2017 H1 • UBA’s vision and financial goals are based on c
Slide 24: Outlook and Key Takeaways
Section 4 Outlook and Key Takeaways
Slide 25: 2017FY Outlook
2017FY Outlook 1 Net Interest Margin >7% 2 Cost-to-Income Ratio (ex-impairment) <60% 3 Cost of Risk ≈ 1.5% 4 NPL Ratio ≈4% 5 Loan Growth 10% 6 Deposit Growth 10% 7 Return on Average Assets ≈2.5% 8 Return on Average Equity ≈20% 25
Slide 26: Key Takeaways
Key Takeaways o A unique pan-African franchise – diversified risk and earnings across fast growing African economies. o Sound governance, risk management and compliance culture – adherence to international best practice. o A robust digital banking platform – leveraging technology to serve over 14 mi
Slide 27: Appendix
Section 6 Appendix
Slide 28: Summary Financials
Summary Financials As at 30 June 2017 31 December 2016 31 December 2015 ASSETS (₦ millions) Cash and bank balances 763,224 760,930 655,371 Financial assets held for trading 43,878 52,295 11,249 Derivative assets 13,931 10,642 1,809 Loans and advances to banks 11,505 22,765 14,600 Loans and advances
Slide 29: Summary Financials
Summary Financials For the six months ended 30 June For the year ended 31December 2017 2016 2016 2015 2014 (₦ millions) Interest income 154,954 107,418 263,970 229,629 196,680 Interest expense (53,575) (43,286) (98,770) (96,030) (90,547) Net interest income 101,379 64,132 165,200 133,599 106,133 Fee
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