United Bank Limited · PSX:UBL
United Bank — Q1 2019 Earnings Presentation
41 slides from United Bank's earnings presentation, Apr 29, 2019
Slide 1: Performance Highlights - Q1 2019 Investor Relations Earnings Call
Performance Highlights - Q1 2019 Investor Relations Earnings Call April 29th, 2019 Speakers: Mr. Aameer Karachiwalla - Chief Financial Officer Mr. Arif Saifie, FCA, CFA - Financial Controller and Head of Investor Relations During the quarter, the Bank completed the Initial Public Offering (IPO) of i
Slide 2: Agenda for the call
Agenda for the call PAGE Key Highlights for Q1’ 2019 3 Execution and Delivery – A consistent performance 10 Our Investment, focus and results in the last 5 years 26 Quarterly Trend Analysis – Performance through the cycle 30 UBL Performance Overview – Q1 2019
Slide 3: Key Performance Highlights
Key Performance Highlights UBL Standalone Results PBT at Rs. 9.2 bln, up 126% vs. Q1’18 (Pension charge of Rs 6.4 bln in Q1’18) Major upsides building core earnings in Q1’19 Maintained build up - Average domestic current deposits at Rs. 468 bln, up 13% vs. Q1’18 Average CASA for the period was
Slide 4: Avg. Total Assets of Rs. 1.69 tln in Q1'19 vs Rs. 1.91 tln in Q1'18
Avg. Total Assets of Rs. 1.69 tln in Q1’19 vs Rs. 1.91 tln in Q1’18 Branch Banking builds deposit base in cost efficient manner Net Interest Income of Rs. 14.7 bln in Q1’19 (Q1’18: Rs. 13.9 bln) 128,000 NTB current accounts mobilized in Q1’19 (Q1’18: 149,000) Growth led by current deposits – a
Slide 5: Overall NFI closed at Rs. 5.0 bln in Q1'19 vs Rs. 7.3 bln in Q1'18
Overall NFI closed at Rs. 5.0 bln in Q1’19 vs Rs. 7.3 bln in Q1’18 Fee income stood at Rs. 3.6 bln, up 23% from Q1’18 Domestic fees grew by 17% YoY to reach Rs. 2.9 bln in Q1’19:– Branch banking customer fees up by 10% to reach Rs. 419 mln (Q1’18: Rs. 380 mln) Debit & Credit Cards fees up by 2
Slide 6: Provisions and Admin Expenses
Provisions and Admin Expenses Net provision charge of Rs. 1.3 bln in Q1’19 vs. Rs. 1.9 bln in Q1’18 DOM net provision charge of Rs. 0.1 bln in Q1’19 (Q1’18: net reversal of Rs. 0.8 bln) DOM asset quality stood at 5.3% at the end of Mar’19 (Dec’18: 4.9%) International provisions of USD 8.9 mln
Slide 7: UBL Innovation and Awards
UBL Innovation and Awards UBL “Firsts” – Initiatives to stay ahead of the market Market recognition and awards Declared ‘Bank of the Year 2018 – Pakistan’ by The Banker, an First Commercial Bank in Pakistan to launch Branchless affiliate of the Financial Times UK. Banking (UBL OMNI) “Best Bank
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 2019: Rs. 157.59 29 Mar’19: Rs. 139.53 Cons. Equity Mar’19 - Rs. 173 bln 280 Rs in bln 26 Apr'19: Rs. 147.09 260 50 Cons. Book value Mar’19 - Rs. 142 per share 240 45 1
Slide 9: Our international outreach - serving in 4 continents under the single UBL brand
Our international outreach - serving in 4 continents under the single “UBL” brand OVERSEAS BRANCHES ASSOCIATED COMPANIES 16 3 PAKISTAN BRANCHES 1,359 SUBSIDIARIES 4 Asset mix by region 2018 2017 Domestic Operations 77.3% 79.9% International Operations 22.7% 20.1% Middle East 16.4% 14.9% USA 0.1% 0.3
Slide 10: Execution and Delivery in Q1'19
Execution and Delivery in Q1’19 Being one of the largest financial institutions in Pakistan, UBL continues to maintain a sound capital base to support future growth and expansion. The Bank’s Capital Adequacy Ratio stood at 17.6% at Mar’19 (Dec’18: 17.7%) 10 UBL Performance Overview – Q1 2019
Slide 11: Income Statement - Standalone
Income Statement - Standalone Rs in bln Rs in bln Q1'19 Q1'18 Var % Q4'18 Var % Interest Earned 31.4 28.1 11.6% 29.3 7.1% Interest Expensed (16.7) (14.3) -17.1% (15.0) -11.9% Net Interest Income 14.7 13.9 5.8% 14.4 2.1% Non Interest Income 5.0 7.3 -31.9% 5.7 -12.0% Total Revenue 19.6 21.2 -7.2% 20.0
Slide 12: Income Statement - Domestic
Income Statement - Domestic Rs in bln Rs in bln Q1'19 Q1'18 Var % Q4'18 Var % Interest Earned 27.7 24.8 11.7% 25.4 9.0% Interest Expensed (15.2) (12.9) -18.6% (13.3) -14.6% Net Interest Income 12.4 11.9 4.2% 12.1 2.7% Non Interest Income 4.1 6.7 -38.7% 5.6 -27.6% Total Revenue 16.5 18.6 -11.2% 17.7
Slide 13: Balance Sheet - Standalone
Balance Sheet - Standalone Rs in bln Mar'19 Dec'18 Var % Advances 636 716 -11.2% Investments 759 786 -3.5% Lendings to Financial Institutions 44 34 30.6% Others 315 353 -10.8% Total Assets 1,754 1,890 -7.2% Deposits 1,344 1,366 -1.6% Borrowings 140 268 -47.8% Subordinated Debts 10 9 11.1% Others 105
Slide 14: Income Statement - Consolidated
Income Statement - Consolidated Rs in bln Rs in bln Q1'19 Q1'18 Var % Q4'18 Var % Interest Earned 32.1 29.1 10.6% 30.4 5.8% Interest Expensed (17.2) (14.7) -16.4% (15.6) -10.3% Net Interest Income 15.0 14.3 4.6% 14.8 1.1% Non Interest Income 5.8 8.2 -29.6% 6.1 -6.0% Total Revenue 20.7 22.5 -7.8% 20.
Slide 15: Balance Sheet - Consolidated
Balance Sheet - Consolidated Rs in bln Mar'19 Dec'18 Var % Advances 670 755 -11.2% Investments 805 831 -3.2% Lendings to Financial Institutions 47 35 33.6% Assets held for sale 4 - 100.0% Others 343 381 -10.2% Total Assets 1,869 2,002 -6.7% Deposits 1,429 1,448 -1.4% Borrowings 147 280 -47.3% Subord
Slide 16: Core Business Driving Growth
Core Business Driving Growth 16 UBL Performance Overview – Q1 2019
Slide 17: 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 Dec'18 Dec'18 Q1'19 Q1'18 Q1'19 Q1'18 Domestic deposits - Rs in bln 1,089 1,106 1,089 969 4.7% 2.6% International deposits - Rs in bln 256 260 249 250 2.2% 2.2% Total Bank - Rs in bl
Slide 18: Advances portfolio down 11% from Dec'18
Advances portfolio down 11% from Dec’18 Net Advances Rs in bln Mar'19 Dec'18 Var % Corporate Bank 344 374 -8% Commodity 60 68 -12% Commercial 29 43 -31% Consumer 17 16 5% Others 30 44 -31% Total Domestic 480 545 -12% International 156 171 -9% Bank 636 716 -11% International USD mln 1,105 1,232 -10%
Slide 19: International Performing Advances - Corporate remains the largest component
International Performing Advances - Corporate remains the largest component By Geography By Business - UAE Bahrain, 13% Qatar, 8% EPZ, 1% Others, 35% Corporate, 61% UAE, 78% Consumer, 4% Personal Abu Dhabi, loan, 1% 33% Sharjah, 6% Dubai, 61% Baitna, 99% UBL Performance Overview – Q1 2019 19
Slide 20: Concentration of Advances as at March 31, 2019 - Standalone
Concentration of Advances as at March 31, 2019 - Standalone 2% 10% 29% 11% 1% 1% 2% 8% 8% 2% 26% Chemical & Pharma Agribusiness Textile Cement Sugar Autos & Transport Financial Electronics Power & Energy Individuals Others UBL Performance Overview – Q1 2019 20
Slide 21: 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 Rs in bln 11.1% Total 786 Total 759 34 54 57 10.4% 10.4% 60 41 36 17 8.3% 16 8.9% 7.6% 7.8% 396 2013 2014 2015 2016 2017 2018 Q1'19 408 Non Funded income down as
Slide 22: Diversification in earnings
Diversification in earnings Review of Non Interest Income & Administrative Expenses 22 UBL Performance Overview – Q1 2019
Slide 23: Non Fund Income Standalone Results
Non Fund Income Standalone Results Rs in mln Q1'19 Q1'18 Var % Fee, commission and brokerage income 2,864 2,450 17% Dividend income 226 571 -60% Income from dealing in foreign currencies 787 596 32% Gain / (loss) on sale of securities 14 2,881 -100% Other income 192 163 17% Domestic Total 4,083 6,66
Slide 24: Fees and Commissions performance Standalone Results
Fees and Commissions performance Standalone Results Rs in mln Q1'19 Q1'18 Var % Branch banking customer fees 419 380 10% Consumer finance related fees 216 172 25% Card related fees (debit and credit cards) 388 378 2% Investment banking fees 19 34 -44% Financial Institution rebate / commission 59 57
Slide 25: Administrative Expenses Standalone Results
Administrative Expenses Standalone Results Rs in mln Q1'19 Q1'18 Var % Total compensation expenses 2,732 2,736 0% Rent and taxes 18 526 97% Utilities cost 282 257 -9% Security 224 291 23% Depreciation 173 141 -23% Depreciation - Right of Use Assets 467 - -100% Others 137 163 16% Property expenses 1,
Slide 26: Our Investment, focus and results in the last 5 years
Our Investment, focus and results in the last 5 years 26 UBL Performance Overview – Q1 2019
Slide 27: Balance Sheet
Balance Sheet Rs. in mlns 2018 2017 2016 2015 2014 2013 2012 Assets Cash and balances with treasury and other banks 206,813 177,099 146,428 128,870 87,573 114,388 109,396 Lending to financial institutions 33,942 10,868 25,711 24,095 21,872 28,835 21,953 Investments- gross 792,857 1,095,555 808,959 7
Slide 28: Profit & Loss
Profit & Loss Rs. in mlns 2018 2017 2016 2015 2014 2013 2012 Markup / return / interest earned 113,198 107,206 98,219 94,353 82,735 72,846 73,507 Markup / return / interest expensed (56,964) (50,781) (41,177) (38,511) (37,769) (34,910) (34,948) Net Markup / Interest income 56,234 56,425 57,042 55,84
Slide 29: Key Financial Ratios & Share Information
Key Financial Ratios & Share Information 2018 2017 2016 2015 2014 2013 2012 Key Financial Ratios Return on equity (RoE) 11.6% 20.6% 24.9% 25.7% 23.9% 22.3% 23.8% Return on assets (RoA) 0.8% 1.4% 1.8% 2.0% 2.1% 2.0% 2.1% Profit before tax ratio 30.7% 50.8% 57.1% 54.2% 52.0% 49.6% 48.2% Return on capi
Slide 30: Quarterly Trend Analysis Bank Level - Standalone
Quarterly Trend Analysis Bank Level - Standalone UBL Performance Overview – Q1 2019 30
Slide 31: 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 +8% 10.4 9.3 +44% 9.2 8.4 8.3 8.8 8.5 7.8 8.0 7.1 8.4 +61% 6.4 6.5 5.9 -54% 5.9 -10% 4.1 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 Q
Slide 32: Profit after tax
Profit after tax Rs in bln 7.1 7.3 7.3 7.0 6.5 6.5 6.4 6.1 7.0 6.3 5.7 6.0 5.6 5.5 5.2 5.3 5.3 5.9 +59% +59% 4.7 4.3 -58% 4.2 4.0 +37% 3.6 3.5 -24% -5% 2.6 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 Q4'18
Slide 33: Deposits
Deposits Rs in bln +2% +1% +1% -2% +2% 1,366 1344 1,3151,335 1,273 1,301 1,256 1,254 1,147 1,167 1,183 1,142 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'
Slide 34: Net Advances
Net Advances Rs in bln +6% +8% -0% 716 675 673 -11% -0% 627 624 636 565 567 509 519 496 498 459 455 417 434 420 430 408 391 447 377 363 369 352 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 Q4'18 Q1'19 UBL Pe
Slide 35: Revenue
Revenue Rs in bln 21.9 +4% +0% 21.3 21.2 21.2 +5% 20.3 20.4 20.3 20.0 20.0 19.5 19.2 19.6 19.3 -10% -2% 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 Q3'1
Slide 36: Net Interest Income
Net Interest Income Rs in bln 15.7 +2% +2% +4% 14.7 14.7 14.2 14.3 14.2 14.4 14.0 14.2 13.6 13.1 12.8 14.2 13.8 13.9 13.7 13.9 13.7 -3% -3% 11.3 11.0 10.6 9.8 9.5 9.0 8.8 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'
Slide 37: Non Funded Income
Non Funded Income Rs in bln 8.4 7.3 +21% 7.0 -5% 6.2 6.2 6.3 +10% 6.1 6.0 5.7 5.6 -26% 4.9 5.1 5.0 5.0 4.8 4.8 4.84.8 4.6 5.2 4.5 5.1 -12% 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 Q4'18 Q1'19
Slide 38: Provisions
Provisions Rs in bln 5.5 +88% +11% +37% 2.9 2.6 2.0 2.1 -76% 1.3 1.9 0.9 0.9 -8% 0.8 0.7 0.5 1.3 0.3 0.3 0.6 0.2 0.2 0.1 0.8 -0.1 -0.3 -0.3 -0.1 -0.5 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'19 UBL Performance Overview
Slide 39: Administrative Expenses
Administrative Expenses Rs in bln 10.7 +11% 9.9 9.2 +14% 9.6 9.0 8.8 8.8 -2% 8.6 8.4 8.5 -6% 8.2 8.0 8.7 -16% 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 Q4'1
Slide 40: Important Information
Important Information The information contained herein reflects our latest business statement as at March 31, 2019. 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 41: Thank You
Thank You UBL Performance Overview – Q1 2019 41