United Bank For Africa Plc · NSENG:UBA
United Bank For Africa — FY2010 Earnings Presentation
50 slides from United Bank For Africa's earnings presentation, Apr 15, 2011
Slide 1: Full Year 2010 & First Qtr 2011 Results Investor/Analyst Briefing
Full Year 2010 & First Qtr 2011 Results Investor/Analyst Briefing By United Bank for Africa (UBA) PLC April 15, 2011 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 of the results for the Year Ended December 2010 and 1Q, 2011 • The comparable period for P&L is annualized (2009 performance adjusted to 12-mths) • Balance Sheet items represent positions at the end of each reporting period • FY means “Full Year” • FY09 A
Slide 4: Outline
OUTLINE • OVERVIEW OF UBA • RISK MANAGEMENT OVERVIEW • REVIEW OF OPERATING ENVIRONMENT • ANALYSIS OF FULL YEAR FINANCIAL RESULTS • FINANCIAL HIGHLIGHTS • KEY FACTORS THAT IMPACTED 2010 RESULTS • REVENUE ANALYSIS AND PERFORMANCE OF UBA AFRICA OPERATIONS • PROFITABILITY Presentation of Group Performan
Slide 5: Overview of UBA
OVERVIEW OF UBA Presence and business model Strategic Thrust • Operations in 18 African countries (including • Dominance in Nigeria Nigeria) and 3 global financial centres. 2 countries (Mali & Congo Brazz.) have not commenced • Leading bank in Africa (to rank 6th in market share) operations and thei
Slide 6: Current UBA Group Structure
CURRENT UBA GROUP STRUCTURE SHAREHOLDERS UBA is currently organized as a bank holding company UBA PLC UBA ASSET UBA UBA CAPITAL UBA PENSION UBA FX UBA UBA CAPITAL MANAGEMENT INSURANCE AFRICA CUSTODIAN MART METLIFE EUROPE BROKERS UBA UBA UBA UBA TRUSTEES PROPERTIES STOCK REGISTRARS BROKERS UBA NOMINE
Slide 7: Proposed UBA Group Structure (HoldCo)
PROPOSED UBA GROUP STRUCTURE (HOLDCO) Africa’s global bank 7
Slide 8: Our Global Footprint
OUR GLOBAL FOOTPRINT Burkina Faso Mali Senegal Chad Guinea Conakry Nigeria Sierra Leone Liberia Cote Ghana d’Ivoire Uganda DR Congo Tanzania Benin Rep Kenya Cameroon Gabon Tanzania Angola Zambia Angola USA UK FRANCE Countries in operation Yet to commence operation Africa’s global bank 8
Slide 9: Risk Management Overview
RISK MANAGEMENT OVERVIEW Regular Internal Capital Adequacy Assessment Process (ICAAP) conducted Ongoing implementation of Basel II and COSO enterprise risk management framework Stress Testing (Internal/CBN) driving risk appetite decisions. We have now commenced self regulated stress testing which ca
Slide 10: Review of Operating Environment
REVIEW OF OPERATING ENVIRONMENT Africa’s global bank 10
Slide 11: Nigeria's Macro Posture
NIGERIA’S MACRO POSTURE! Key Macro Indicators Indicator FY10 FY09 Comments • Recovery in oil price/output GDP Growth (%) 7.8 6.9 • Increased government spending • Growth in Agriculture output • Slow credit growth and stability in food inflation Inflation (%) 11.8 12.0 • Decline in core inflation • R
Slide 12: Overview of Operating Environment
OVERVIEW OF OPERATING ENVIRONMENT • Continuing strong growth in Nigeria’s economy with robust oil prices and government spending • Oil prices have remained in excess of $100/barrel on Middle East/North Africa crises • Inflation rates now 11.1%, down from 11.8% in Dec-10 • Political disturbances in L
Slide 13: Developments in the Banking Industry
DEVELOPMENTS IN THE BANKING INDUSTRY • CBN implements tight monetary policy measures. • Raises MPR to 7.5% • To withdraw guarantee on interbank placements with rescued banks by September 2011- cost of funds expected to rise • Raises liquidity ratio by 500 basis points to 30%, putting downward pressu
Slide 14: Analysis of FY 2010 Results
ANALYSIS OF FY 2010 RESULTS Africa’s global bank 14
Slide 15: Financial Highlights
FINANCIAL HIGHLIGHTS PARAMETERS FY10 (12-MTHS) FY09 (12-MTHS) FY09 (15-MTHS) % Change ACTUAL (N'BN) ACTUAL (N'BN) ACTUAL (N'BN) 12MTHS/12MTHS GROSS EARNINGS 185.2 195.3 244.1 -5% PROFITS B/F TAX & EX ITEMS 15.9 10.9 13.7 45% EXCEPTIONAL ITEMS (12.7) (5.6) (7.0) 125% PBT AFTER EX ITEMS 3.2 5.3 6.6 -3
Slide 16: Key Factors That Impacted Full Year 2010 Results
KEY FACTORS THAT IMPACTED FULL YEAR 2010 RESULTS • The operating conditions in the industry remained difficult in 2010 but are now improving. • The unfavorable factors impacted on our overall performance during the period include: • Excessive liquidity in the system remained for a significant part o
Slide 17: Revenues Analysis
REVENUES ANALYSIS Africa’s global bank 17
Slide 18: Revenue Analysis
REVENUE ANALYSIS Revenues (N’bn) Composition of Fee Based Income 24% in FY09 244.1 66.3 195.3 185.2 COT 53.0 33% 67.4 Forex 177.8 52% 142.3 117.7 Fees & Other Charges 15% FY09 FY09 Annualized FY10 16% in FY09 60% in FY09 Fee Based Income Fund Based Income • Gross Earnings of N185bn were achieved in
Slide 19: Performance Review of UBA Africa
PERFORMANCE REVIEW OF UBA AFRICA (for the Full Year ended 31 Dec, 2010) Country Start Date Age (Yrs) Gross Earnings (N’mn) Ghana Jan-05 6.0 6,068 Cameroon Dec-07 3.0 2,231 Benin Dec-08 2.0 2,459 Guinea Feb-10 10 months 537 Liberia Jul-08 2.5 585 Sierra Leone Jul-08 2.5 340 Tanzania Oct-09 1.25 357 K
Slide 20: Profitability
PROFITABILITY PROFITABILITY Africa’s global bank 20
Slide 21: Profits Analysis
PROFITS ANALYSIS Operating Income (N’bn) Profits Before Tax (N’bn) 183.2 Before EI 15.9 146.6 13.7 138.2 6.6 3.2 FY09 FY09 Annualized FY10 FY09 Annualized FY10 Contributions to Operating Income • Operating income slipped by 5.7% • Decline in topline Presentation of Group Performance Fees & • Increas
Slide 22: UBA Africa – Now Contributing to Group Bottom-Line
UBA AFRICA – NOW CONTRIBUTING TO GROUP BOTTOM-LINE Our bank subsidiaries in some African countries contributed to group bottom-line. Strong sign of potential in the region Four African countries making profits Another six countries already delivering month-on-month profits – they are expected to acc
Slide 23: Balance Sheet Analysis
BALANCE BALANCE SHEET SHEET ANALYSIS ANALYSIS Africa’s global bank 23
Slide 24: Total Asset and Contingents
TOTAL ASSET AND CONTINGENTS Growth in Balance Sheet Size (N’trn) Growth in Total Assets (N’trn) 2.24 2.27 1.62 1.55 FY09 FY10 FY09 FY10 Presentation of Group Performance Total Assets Grow in Other African Subs (N’bn) • Growth recorded in Balance Sheet size… 220 • … up by almost 2% • Growth driven by
Slide 25: Deposit Base
DEPOSIT BASE Growing Deposits (N’trn) Qtrly Trend in Group Deposits (N’trn) 1.36 1.36 1.34 1.27 1.25 1.27 FY09 FY10 1Q10 2Q10 3Q10 FY10 • Deposit base up by 2% to N1.27tn, Presentation of Group Performance • Deliberate management decision not to Qtrly Trend in UBA Africa Deposits (N’bn) grow deposit
Slide 26: Deposit Mix
DEPOSIT MIX Deposit Mix, By Type Deposit Mix, By Geography Excl-Nigeria Nigeria FCY 20% 11% 14% (16% in FY09) Demand 40% Time 23% (41% in FY09) 89% 86% (29% in FY09) Savings 17% (16% in FY09) (14% in FY09) FY09 FY10 Deposit Mix, By Class Presentation of Group Performance • Low cost funding base; che
Slide 27: Loans
LOANS Net Loans (N’bn) Net Loans, Qtrly Trend (N’bn) 664 636 629 643 629 590 FY09 FY10 1Q10 2Q10 3Q10 FY10 • Loan book showed a 2% decline in 2010 for the Presentation of Group Performance following reasons; Qtrly Trend in Loans, UBA Africa (N’bn) • Sell down of loans to AMCON 64 • There were pay do
Slide 28: Analysis of Loan Portfolio
ANALYSIS OF LOAN PORTFOLIO DISTRIBUTION OF LOANS: By Sector NPL Ratio Sector Amount (N'bn) % of Grand Total 8.8% Oil & Gas 110,721 16.4% 7.9% Consumer 91,631 13.6% Government 65,477 9.7% Banking/financial services 64,111 9.5% Manufacturing 61,926 9.2% Telecommunications 54,037 8.0% Real Estate & Con
Slide 29: Efficiency
EFFICIENCY EFFICIENCY Africa’s global bank 29
Slide 30: Quality of Earning Assets
QUALITY OF EARNING ASSETS… Yield on Earning Assets Cost of Funds 3.8% 11.1% 3.5% 10.0% FY09 FY10 FY09 FY10 Presentation of Group Performance Net Interest Margins • Low interest rate regime causes a decline in yield on earning assets. 7.4% • Our cautious and selective lending 6.0% strategy partly acc
Slide 31: Cost Analysis
COST ANALYSIS Staff Cost to Total OPEX Cost Income Ratio (Group) Staff Costs Opex 75% 70% 31.8% 36.5% 68.2% 63.5% FY09 FY10 FY09 FY10 • Improvement in other OPEX, indicating that Presentation of Group Performance operating costs are being streamlined across the Ratio of Africa’s Cost to Group Cost g
Slide 32: Liquidity, Funding & Capital Adequacy
LIQUIDITY LIQUIDITY, & ASSET FUNDING & QUALITY CAPITAL ADEQUACY Africa’s global bank 32
Slide 33: Liquidity
LIQUIDITY Liquid Assets Liquidity Ratio Deposit with CBN 47% 2% 39% Cash/ST Funds 11% Treasury Interbank bills Plcmts 25% 62% FY09 FY10 Presentation of Group Performance • Strong liquidity position Loan to Deposit Ratio • Liquidity Ratio was 39% 51.6% • Higher than new regulatory minimum of 49.6% 30
Slide 34: Funding and Capital Adequacy
FUNDING AND CAPITAL ADEQUACY Shareholders’ Funds (N’bn) Improved Capital Adequacy Ratio 187 18.0% 179 16.3% FY09 FY10 FY09 FY10 • Shareholders’ funds dropped to N179bn due to Presentation of Group Performance Funding Mix decline in minority interests, dividend payout for FY09 and some prior year adj
Slide 35: First Quarter 2011 Results
FIRSTOUTLOOK QUARTER 2011 RESULTS Africa’s global bank 35
Slide 36: Financial Highlights
FINANCIAL HIGHLIGHTS PARAMETERS 3MTHS (MAR-11) 3MTHS (MAR-10) % Change ACTUAL (N'BN) ACTUAL (N'BN) FY09/FY08 GROSS EARNINGS 40.5 48.2 -16% PROFITS B/F TAX & EX ITEMS 4.8 5.3 -8% EXCEPTIONAL ITEMS - (1.8) -100% PBT AFTER EX ITEMS 4.8 3.5 38% 31-Mar-11 31-Dec-10 % Change Presentation of Group Performa
Slide 37: Revenue Analysis
REVENUE ANALYSIS Revenues (N’bn) Composition of Fee Based Income 48.2 68% in 1Q10 16% in 1Q10 11.2 40.5 Fees 31% 13.7 Comms 37.0 & 26.8 others Forex 56% 13% 16% in 1Q10 1Q10 1Q11 • Revenues down compared to 1Q10 due to; Presentation of Group Performance • Low yield on financial securities in the Rev
Slide 38: Profits Analysis
PROFITS ANALYSIS Operating Income (N’bn) 30 29 • Stable operating income • PBT after Exceptional items up by 37% in 1Q11 • Further recovery in profit expected in 1Q10 1Q11 subsequent quarters Profits Before Tax (N’bn) Presentation of Group Performance 5.3 4.8 4.8 3.5 58% in 3Q09 1Q10 1Q11 Before EI
Slide 39: Total Asset and Contingents
TOTAL ASSET AND CONTINGENTS Growth in Balance Sheet Size (N’trn) Growth in Total Assets (N’trn) 2.40 1.69 2.27 1.62 FY10 1Q11 FY10 1Q11 Presentation of Group Performance Total Assets Grow in Other African Subs (N’bn) • Growth recorded in Balance Sheet size… 242 • … up by almost 6% 220 • Growth drive
Slide 40: Deposit Base
DEPOSIT BASE Growing Deposits (N’trn) 1.31 1.27 • Deposit base up by 3% to N1.27tn, • Stable deposit mix with 11% coming from outside Nigeria • Growth in UBA Africa deposit of 5% FY10 1Q11 Presentation of Group Performance Deposit Mix by Geography UBA Africa Deposits (N’bn) 11% 11% 182 173 89% 89% F
Slide 41: Loans
LOANS Net Loans (N’bn) Net Loans, Qtrly Trend (N’bn) 629 630 664 636 629 590 FY10 1Q11 1Q10 2Q10 3Q10 FY10 Presentation of Group Performance • Stable Loan book with Loan to Deposit Net Loans, UBA Africa (N’bn) Ration at 48% 67 64 • Strong elbow room for further growth in loan book • Gradual build up
Slide 42: Liquidity
LIQUIDITY Liquid Assets Liquidity Ratio Deposit with CBN 43% 0% 39% Cash/ST Funds 14% Treasury Interbank bills Plcmts 27% 59% FY10 1Q11 Presentation of Group Performance • Solid liquidity position Loan to Deposit Ratio • Liquidity Ratio at 43% • Stronger than regulatory minimum of 50% 48% 30% • Inte
Slide 43: Funding and Capital Adequacy
FUNDING AND CAPITAL ADEQUACY Shareholders’ Funds (N’bn) Improved Capital Adequacy Ratio 179 185 18% 17% FY10 1Q11 FY10 1Q11 Presentation of Group Performance Funding Mix Other (11% in FY10) Liabilities • Shareholders’ funds improves to 12% N185bn SHF (11% in FY10) 11% • Resilient Capital Adequacy ra
Slide 44: Outlook
OUTLOOK OUTLOOK Africa’s global bank 44
Slide 45: Outlook for the Operating Environment
OUTLOOK FOR THE OPERATING ENVIRONMENT • Full year 2010 Nigeria GDP projected at 7.85%. IMF forecasts 7.4% for 2010 and 2011 • Africa to grow on the back of rising commodity prices and improving Diaspora inflows • Oil price to remain strong on the back of crises in Middle East and N/Africa • CBN expe
Slide 46: Outlook for UBA
OUTLOOK FOR UBA • Consolidate on the strong corporate governance and risk management standards across the group • Application of funds to appropriate assets classes based on existing market realities and economic or sector specific fundamentals to optimize value • Loan growth of 15-20%; increased pl
Slide 47: Corporate Action
CORPORATE ACTION 1. AGM DATE – 13th MAY, 2011 • Venue – Grand Hotel, Asaba • Time – 10 am 2. Dividend – 5k per share 3. Bonus – 1 for 4 4. Dividend Payment Date – 17th May, 2011 Presentation of Group Performance 5. Results submitted to NSE and approval received 6. Closure of Register – 27th to 29th
Slide 48: Thank You
THANK THANK YOU YOU Africa’s global bank 48
Slide 49: Appendix
APPENDIX Africa’s global bank 49
Slide 50: UBA Group Investor Relations' Contacts
UBA Group Investor Relations’ Contacts Emmanuel N. Nnorom Executive Director - Group Finance Mobile: +234 803 303 4944 eMail: emmanuel.nnorom@ubagroup.com Website: www.ubagroup.com Ugochukwu Nwaghodoh Group Financial Controller Group Finance Office MOBILE: +234 802 317 4724 eMail: ugochukwu.nwaghodo
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