United Bank Limited · PSX:UBL
United Bank — H1 2019 Earnings Presentation
41 slides from United Bank's earnings presentation, Aug 8, 2019
Slide 1: Performance Highlights - H1 2019 Investor Relations Conference Call
Performance Highlights - H1 2019 Investor Relations Conference Call August 8th, 2019 Speaker: Mr. Aameer Karachiwalla - Chief Financial Officer During the quarter, the Bank completed the Initial Public Offering (IPO) of its Additional Tier-1 TFCs amounting to Rs. 1 billion, thus closing the total is
Slide 2: Agenda for the call
Agenda for the call PAGE Key Highlights for H1’ 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 – H1 2019
Slide 3: Key Performance Highlights
Key Performance Highlights UBL Standalone Results PBT at Rs. 18.0 bln, up 70% vs. H1’18 (Pension charge of Rs 8.4 bln in H1’18) Major upsides building core earnings in H1’19 Maintained build up - Average domestic current deposits at Rs. 475 bln, up 12% vs. H1’18 Average CASA for the period was
Slide 4: Branch Banking builds deposit base in cost efficient manner
Avg. Total Assets of Rs. 1.74 tln in H1’19 vs Rs. 1.82 tln in H1’18 Branch Banking builds deposit base in cost efficient manner Net Interest Income of Rs. 29.9 bln in H1’19 (H1’18: Rs. 28.1 bln) 219,000 NTB current accounts mobilized in H1’19 (H1’18: 277,000) Growth led by current deposits – a
Slide 5: Overall NFI closed at Rs. 12.1 bln in H1'19
Overall NFI closed at Rs. 12.1 bln in H1’19 vs Rs. 14.3 bln in H1’18 Fee income stood at Rs. 7.1 bln, up 5% from H1’18 Domestic fees remained at last year levels at Rs. 5.8 bln in H1’19 Branch banking customer fees up by 14% to reach Rs. 982 mln (H1’18: Rs. 863 mln) Debit & Credit Cards fees u
Slide 6: Provisions and Admin Expenses
Provisions and Admin Expenses Net provision charge of Rs. 4.5 bln in H1’19 vs. Rs. 4.5 bln in H1’18 DOM net provision charge of Rs. 2.2 bln in H1’19 (H1’18: net reversal of Rs. 0.5 bln) DOM asset quality stood at 5.3% at the end of Jun’19 (Dec’18: 4.9%) International provisions of USD 16.3 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. 158.82 07 Aug'19: Rs. 127.99 280 Rs in bln Cons. Equity Jun’19 - Rs. 183 bln 260 50 Cons. Book value Jun’19 - Rs. 149 per share 240 45 152 159 151 162 220 142
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 H1'19
Execution and Delivery in H1’19 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 18.1% at Jun’19 (Dec’18: 17.7%) 10 UBL Performance Overview – H1 2019
Slide 11: Income Statement - Standalone
Income Statement - Standalone Rs in bln Rs in bln H1'19 H1'18 Var % Q2'19 Q1'19 Var % Interest Earned 66.6 54.2 22.9% 35.2 31.4 12.0% Interest Expensed (36.6) (26.1) -40.3% (19.9) (16.7) -18.9% Net Interest Income 29.9 28.1 6.7% 15.3 14.7 4.1% Non Interest Income 12.1 14.3 -15.0% 7.2 5.0 44.1% Total
Slide 12: Income Statement - Domestic
Income Statement - Domestic Rs in bln Rs in bln H1'19 H1'18 Var % Q2'19 Q1'19 Var % Interest Earned 59.0 47.2 25.1% 31.4 27.7 13.4% Interest Expensed (33.6) (23.1) -45.1% (18.3) (15.2) -20.4% Net Interest Income 25.4 24.0 5.8% 13.0 12.4 4.8% Non Interest Income 10.5 13.0 -19.2% 6.4 4.1 57.3% Total R
Slide 13: Balance Sheet - Standalone
Balance Sheet - Standalone Rs in bln Jun'19 Dec'18 Var % Advances 642 716 -10.4% Investments 858 786 9.1% Lendings to Financial Institutions 20 34 -39.9% Others 428 353 21.1% Total Assets 1,948 1,890 3.1% Deposits 1,448 1,366 6.0% Borrowings 224 268 -16.5% Subordinated Debts 10 9 11.1% Others 104 95
Slide 14: Income Statement - Consolidated
Income Statement - Consolidated Rs in bln Rs in bln H1'19 H1'18 Var % Q2'19 Q1'19 Var % Interest Earned 68.2 56.2 21.5% 36.1 32.1 12.3% Interest Expensed (37.7) (27.1) -39.0% (20.5) (17.2) -19.3% Net Interest Income 30.6 29.1 5.2% 15.6 15.0 4.4% Non Interest Income 13.5 15.5 -12.7% 7.7 5.8 34.5% Tot
Slide 15: Balance Sheet - Consolidated
Balance Sheet - Consolidated Rs in bln Jun'19 Dec'18 Var % Advances 681 755 -9.8% Investments 902 831 8.6% Lendings to Financial Institutions 23 35 -36.1% Assets held for sale 4 - 100.0% Others 460 381 20.7% Total Assets 2,071 2,002 3.4% Deposits 1,534 1,448 5.9% Borrowings 234 280 -16.5% Subordinat
Slide 16: Core Business Driving Growth
Core Business Driving Growth 16 UBL Performance Overview – H1 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 Jun'19 Dec'18 H1'19 H1'18 H1'19 H1'18 Domestic deposits - Rs in bln 1,162 1,106 1,079 980 4.8% 2.6% International deposits - Rs in bln 286 260 254 248 2.2% 2.2% Total Bank - Rs in bl
Slide 18: Advances portfolio down 10% from Dec'18
Advances portfolio down 10% from Dec’18 Net Advances Rs in bln Jun'19 Dec'18 Var % Corporate Bank 356 404 -12% Commodity 66 68 -3% Small Enterprises 11 12 -15% Consumer 17 16 9% Others 32 44 -28% Total Domestic 482 545 -12% International 160 171 -6% Bank 642 716 -10% International USD mln 1,000 1,23
Slide 19: International Performing Advances - Corporate remains the largest component
International Performing Advances - Corporate remains the largest component By Geography By Business - UAE Bahrain, 14% Qatar, 8% EPZ, 0% Corporate, 64% Others, 31% UAE, 78% Consumer, 5% Personal loan, 1% Abu Dhabi, 41% Sharjah, 7% Baitna, Dubai, 52% 99% UBL Performance Overview – H1 2019 19
Slide 20: Concentration of Advances as at June 30, 2019 - Standalone
Concentration of Advances as at June 30, 2019 - Standalone 2% 12% 30% 11% 1% 1% 2% 6% 8% 2% 25% Chemical & Pharma Agribusiness Textile Cement Sugar Autos & Transport Financial Electronics Power & Energy Individuals Others UBL Performance Overview – H1 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% 53 65 34 10.4% 10.4% 40 57 14 41 8.8% 17 8.9% 7.6% 7.8% 375 396 2013 2014 2015 2016 2017 2018 H1'19 Non Funded income down as no capital gains in
Slide 22: Diversification in earnings
Diversification in earnings Review of Non Interest Income & Administrative Expenses 22 UBL Performance Overview – H1 2019
Slide 23: Non Fund Income Standalone Results
Non Fund Income Standalone Results Rs in mln Rs in mln H1'19 H1'18 Var % Q2'19 Q1'19 Var % Fee, commission and brokerage income 5,774 5,753 0% 2,911 2,864 2% Dividend income 766 1,152 -33% 540 226 138% Income from dealing in foreign currencies 1,963 1,389 41% 1,176 787 49% Gain / (loss) on sale of s
Slide 24: Fees and Commissions performance Standalone Results
Fees and Commissions performance Standalone Results Rs in mln H1'19 H1'18 Var % Branch banking customer fees 819 761 8% Consumer finance related fees 425 349 21% Card related fees (debit and credit cards) 781 764 2% Investment banking fees 110 413 -73% Financial Institution rebate / commission 124 1
Slide 25: Administrative Expenses Standalone Results
Administrative Expenses Standalone Results Rs in mln H1'19 H1'18 Var % Total compensation expenses 5,816 5,706 -2% Rent and taxes 200 1,107 82% Utilities cost 692 676 -2% Security 447 583 23% Depreciation 363 295 -23% Depreciation - Right of Use Assets 948 - -100% Others 224 302 26% Property expense
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 – H1 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
Quarterly Trend Analysis Bank Level - Standalone UBL Performance Overview – H1 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 +8% 10.29.9 10.4 +44% -4% 9.3 9.2 8.8 8.4 8.3 8.8 8.5 7.8 8.0 +61% 7.1 8.4 6.4 6.5 5.9 5.9 -10% -54% 4.1 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'19Q2'19 U
Slide 32: Profit after tax
Profit after tax Rs in bln 7.1 7.3 7.3 6.5 7.0 6.5 6.4 6.1 7.0 6.3 +59% +29% 5.7 6.0 5.6 5.5 5.2 5.3 5.3 5.4 5.9 4.7 4.3 4.2 +37% 4.0 3.6 3.5 -24% -58% -5% 2.6 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'19Q2'19 UBL Perfo
Slide 33: Deposits
Deposits Rs in bln +8% +1% +2% 1448 +1% +2% 1,3661344 1,2731,301 1,3151,335 1,256 1,254 1,183 -2% 1,147 1,167 1,142 1,051 1,070 992 994 945 895 858 866 828 847 752 773 703 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'19Q2'
Slide 34: Net Advances
Net Advances Rs in bln +6% 716 +8% -0% 675 673 -11% +1% -0% 627 624 636642 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
Slide 35: Revenue
Revenue Rs in bln +14% 22.4 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 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'19Q
Slide 36: Net Interest Income
Net Interest Income Rs in bln +4% 15.7 +2% +4% 15.3 +2% 14.7 14.7 14.2 14.3 14.2 14.4 14.0 14.2 13.6 13.1 14.2 13.8 12.8 13.9 13.7 13.9 13.7 -3% -3% 11.3 11.0 10.6 9.8 9.5 9.0 8.8 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18
Slide 37: Non Funded Income
Non Funded Income Rs in bln 8.4 +21% +44% 7.3 -5% 7.2 7.0 6.2 6.2 6.3 +10% 6.1 6.0 5.7 5.6 -26% 4.8 4.9 5.1 5.0 5.0 4.8 4.84.8 5.2 4.6 4.5 5.1 -12% 3.9 4.5 3.8 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'19Q2'19 UBL Perfo
Slide 38: Provisions
Provisions Rs in bln 5.5 +88% +140% 2.9 3.2 +37% 2.6 2.0 2.1 +11% 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 -76% 0.8 -0.1 -0.3 -0.3 -0.1 -0.5 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'19Q2'19 UBL Perfo
Slide 39: Administrative Expenses
Administrative Expenses Rs in bln 10.7 +15% +14% 10.3 +11% 9.9 9.2 -2% 9.6 9.0 8.8 8.8 8.6 8.4 8.5 8.2 -16% 8.0 -6% 8.7 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
Slide 40: Important Information
Important Information The information contained herein reflects our latest business statement as at June 30, 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 expres
Slide 41: Thank You
Thank You UBL Performance Overview – H1 2019 41