United Bank Limited · PSX:UBL
United Bank — Q1 2016 Earnings Presentation
35 slides from United Bank's earnings presentation, Apr 29, 2016
Slide 1: Performance Highlights - 31 Mar 2016
Performance Highlights - 31 Mar 2016 Investor Relations Conference Call April 29th, 2016 Speakers: Mr. Asif Saeed Sindhu - Chief Financial Officer Mr. Arif Saifie, CFA - Financial Controller and Head of Investor Relations Investor Relations Release UBL Performance Overview – Q1’16
Slide 2: Table of Contents
Table of Contents PAGE Key Highlights 3 Execution and Delivery 7 Key Ratios 22 Quarterly Trend Analysis 24 UBL Performance Overview – Q1’16
Slide 3: Key Highlights
Key Highlights Standalone results Pre-provisions profit up by 13% over Q1’15 to Rs. 13.2 bln Profit before tax up by 3% to Rs. 11.3 bln Highest ever quarterly profit after tax of Rs. 7.3 bln, up 2% over Q1’15 UBL increased its domestic market share of deposits to 8.95% from 8.60% at Dec’15
Slide 4: We continue to grow our core revenue streams
We continue to grow our core revenue streams Net interest income up 4% over Q1’15, reaches Rs. 13.6 bln Overall cost of deposits reduced by 86 bps to close at 2.79% in the Q1’16 (Q1’15: 3.65%) Average loan growth of 8% over Q1’15, with yields at 6.4% in Q1’16 Average earning investments grew b
Slide 5: Asset quality has key focus as lending remains prudent
Asset quality has key focus as lending remains prudent Provisions are up by Rs. 1.2 bln over Q1’15, reach Rs. 1.96 bln Strong cash recoveries within domestic and international Overall non performing loans are at Rs. 47.2 bln (Dec’15: Rs. 46.8 bln) Asset quality is at 9.6% (Dec’15: 9.4%) Cove
Slide 6: Balance sheet continues to grow in Q1'16
Balance sheet continues to grow in Q1’16 Retail Bank remains the cornerstone of balance sheet expansion Domestic market share grows to 8.95% at Mar’16, up from 8.60% at Dec’15 Domestic deposits grew by 3% over Dec’15, at Rs. 855.9 bln (Dec’15: Rs. 831.9 Bn) Average domestic current accounts gr
Slide 7: Execution and Delivery - Strong earnings growth in Q1'16
Execution and Delivery - Strong earnings growth in Q1’16 UBL Performance Overview – Q1’16 7
Slide 8: Consistent earnings performance
Consistent earnings performance Trends - KSE 100 Index and UBL’s share price Equity and Book Values 220 Max Q1'16:Rs. 158.45 31 Mar’16: Rs. 151.22 37.00 Rs in bln Cons . Equity Mar’16 - Rs. 160 bln 28 Apr 2016: Rs. 160.31 200 35.00 Cons . Book value Mar’16 - Rs. 130.7 per s hare 142 146 180 33.00 12
Slide 9: Income Statement - Standalone
Income Statement - Standalone Rs in bln Rs in bln Q1'16 Q1'15 Var % Q4'15 Var % Interest Earned 23.4 22.9 2.2% 24.2 -3.3% Interest Expensed (9.8) (9.8) -0.4% (9.5) -3.4% Net Interest Income 13.6 13.1 3.6% 14.7 -7.6% Non Interest Income 8.4 6.2 34.3% 4.8 72.6% Total Revenue 21.9 19.3 13.5% 19.5 12.3%
Slide 10: Income Statement - Consolidated
Income Statement - Consolidated Rs in bln Rs in bln Q1'16 Q1'15 Var % Q4'15 Var % Interest Earned 24.3 23.6 2.6% 25.1 -3.2% Interest Expensed (10.2) (10.1) -1.2% (9.8) -3.7% Net Interest Income 14.1 13.6 3.7% 15.2 -7.7% Non Interest Income 9.2 7.1 29.6% 5.4 71.5% Total Revenue 23.3 20.7 12.6% 20.6 1
Slide 11: Deposits continue to grow over the trillion mark, along-with low cost of deposits
Deposits continue to grow over the trillion mark, along-with low cost of deposits Deposits – Bank Mar'16 Dec'15 PE CoF % PE CoF % Domestic deposits - Rs in bln 856 3.0% 832 3.4% International deposits - Rs in bln 214 2.0% 219 1.9% Total Bank - Rs in bln 1,070 2.8% 1,051 3.1% International - USD in m
Slide 12: Asset quality considerations drive lending strategy
Asset quality considerations drive lending strategy Net Advances Rs in bln Mar'16 Dec'15 Var % Corporate Bank 230 221 4% Commodity 27 43 -36% Commercial 21 25 -16% Consumer 9 9 0% Others 12 13 -7% Total Domestic 299 310 -4% International 148 145 3% Bank 447 455 -2% International - USD mln 1,419 1,38
Slide 13: International Advances - Corporate loan book remains the largest component
International Advances - Corporate loan book remains the largest component By Geography By Business - UAE Bahrain, Qatar, 10%Yemen, 4% NewYork, 12% 2% EPZ, 1% Corporate, 70% Others, 24% Consumer,6 UAE, 72% % Others, 2% Personal loan, 2% Abu Dhabi, 22% Sharjah, 2% Dubai, 75% Baitna, 96% UBL Performan
Slide 14: Concentration of Advances as at March 31, 2016 - Standalone
Concentration of Advances as at March 31, 2016 - Standalone Energy Sector Others 22% 25% Airline Agribusiness 2% 5% Contractors 1% Pharmaceuticals 2% Individuals Telecom 9% 3% Financial Food industries 8% 4% Construction Wholesale traders Textile 6% 4% 9% UBL Performance Overview – Q1’16 14
Slide 15: Diversified investment portfolio with strong market risk management
Diversified investment portfolio with strong market risk management Portfolio concentrated in long terms treasury bonds Investments’ yields stable Rs in bln 11.78% 48 5 12.36% 33 29 47 20 6 10.36% 30 32 11.08% 19 9.34% 10.42% 524 2011 2012 2013 2014 2015 Mar'16 487 Non Funded revenue streams continu
Slide 16: Our international outreach - serving in 4 continents under the single UBL brand
Our international outreach - serving in 4 continents under the single “UBL” brand ASSOCIATED COMPANIES 3 OVERSEAS BRANCHES 18 PAKISTAN BRANCHES 1,313 SUBSIDIARIES 4 Asset mix by region - 2015 Pakistani operations 74.8% International operations 25.2% Middle East 18.6% USA 0.5% Europe 5.8% Africa 0.3%
Slide 17: UBL Innovation and Awards
UBL Innovation and Awards UBL “Firsts” – Initiatives to stay ahead of the market Market recognition and awards First Commercial Bank in Pakistan to launch Branchless 2012 & 2013 Bank of the Year in Pakistan Award, awarded Banking (UBL OMNI) by The Banker Magazine, an affiliate of the Financial T
Slide 18: Review of Non Interest Income & Administrative Expenses
Review of Non Interest Income & Administrative Expenses UBL Performance Overview – Q1’16 18
Slide 19: Fee income & capital gains drive NFI growth
Fee income & capital gains drive NFI growth Standalone Results Rs in mln Rs in mln Q1'16 Q1'15 Var % Q4'15 Var % Fee, commission and brokerage income 3,175 2,879 10% 3,033 5% Dividend income 431 494 -13% 794 -46% Income from dealing in foreign currencies 596 705 -15% 515 16% Gain / (loss) on sale of
Slide 20: Fees and Commissions performance in Q1'16
Fees and Commissions performance in Q1’16 Standalone Results Rs in mln Rs in mln Q1'16 Q1'15 Var % Q4'15 Var % Commission on trade 589 399 48% 527 12% Commission on consumer loan 156 173 -10% 152 3% Commission on remittance / uniremote 576 490 18% 513 12% Corporate service chgs/finance fee/FIG inc.
Slide 21: Administrative Expenses
Administrative Expenses Standalone Results Rs in mln Rs in mln Q1'16 Q1'15 Var % Q4'15 Var % Personnel Cost 3,307 2,956 -12% 3,129 -6% Premises Cost 979 930 -5% 988 1% Outsourced service charges 1,240 981 -26% 1,094 -13% including sales commission Advertisement and publicity 522 145 -260% 473 -10% C
Slide 22: Key Ratios
Key Ratios UBL Performance Overview – Q1’16 22
Slide 23: Key Financial Ratios
Key Financial Ratios Mar'16 Mar'15 Return on Equity 27.4% 30.1% Return on Assets 2.1% 2.5% Non Fund Income to Gross Revenue 38.1% 32.2% Cost to Revenue Ratio 38.5% 37.9% Mar'16 Dec'15 Advances to Deposits Ratio 39.5% 41.3% Asset Quality 9.6% 9.4% Coverage (Specific provisions) 79.2% 80.2% Coverage (
Slide 24: Quarterly Trend Analysis March 2016
Quarterly Trend Analysis March 2016 Bank Level - Standalone UBL Performance Overview – Q1’16 24
Slide 25: Profit before tax
Profit before tax Rs in bln 11.2 11.3 10.9 10.2 9.9 9.3 8.4 8.3 7.8 8.0 7.2 7.2 7.1 6.5 6.4 6.0 5.9 Q1'12 Q2'12 Q3'12 Q4'12 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 UBL Performance Overview – Q1’16 25
Slide 26: Profit after tax
Profit after tax Rs in bln 7.3 7.1 6.5 6.5 6.1 5.7 5.3 5.2 5.3 4.9 4.7 5.6 4.7 4.4 4.3 3.9 4.0 Q1'12 Q2'12 Q3'12 Q4'12 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 UBL Performance Overview – Q1’16 26
Slide 27: Deposits
Deposits Rs in bln 1,070 1,051 992 994 945 895 858 866 847 828 773 752 698 703 685 653 614 Q1'12 Q2'12 Q3'12 Q4'12 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 UBL Performance Overview – Q1’16 27
Slide 28: Net Advances
Net Advances Rs in bln 459 455 447 434 430 417 408 420 391 377 369 364 363 358 355 352 345 Q1'12 Q2'12 Q3'12 Q4'12 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 UBL Performance Overview – Q1’16 28
Slide 29: Revenue
Revenue Rs in bln 21.9 20.3 19.5 19.3 17.6 18.6 16.3 15.4 15.4 13.2 15.5 13.7 13.8 14.9 12.6 14.1 13.4 Q1'12 Q2'12 Q3'12 Q4'12 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 UBL Performance Overview – Q1’16 29
Slide 30: Net Interest Income
Net Interest Income Rs in bln 14.7 14.2 13.6 13.1 12.8 13.9 11.3 10.6 11.0 9.9 9.8 9.6 9.6 9.4 9.5 9.0 8.8 Q1'12 Q2'12 Q3'12 Q4'12 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 UBL Performance Overview – Q1’16 30
Slide 31: Non Funded Income
Non Funded Income Rs in bln 8.4 6.2 6.2 5.5 5.1 5.0 4.8 4.9 4.8 4.6 4.8 4.1 3.6 4.0 4.8 3.9 4.5 Q1'12 Q2'12 Q3'12 Q4'12 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 UBL Performance Overview – Q1’16 31
Slide 32: Provisions
Provisions Rs in bln 1.9 2.0 1.3 0.9 0.9 0.8 0.8 0.8 1.1 0.5 0.7 0.3 0.2 0.7 0.2 -0.1 -0.1 Q1'12 Q2'12 Q3'12 Q4'12 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 UBL Performance Overview – Q1’16 32
Slide 33: Administrative Expenses
Administrative Expenses Rs in bln 8.6 8.4 8.0 7.6 7.3 7.4 7.2 7.1 6.9 6.9 6.5 6.5 6.2 6.2 6.1 5.8 5.5 Q1'12 Q2'12 Q3'12 Q4'12 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 UBL Performance Overview – Q1’16 33
Slide 34: Important Information
Important Information The information contained herein reflects our latest business statement as at March 31, 2016. 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 35: Thank You
Thank You UBL Performance Overview – Q1’16 35