United Bank Limited · PSX:UBL
United Bank — H1 2022 Earnings Presentation
23 slides from United Bank's earnings presentation, June 2022
Slide 1: United Bank Limited Investor Presentation H1 2022
United Bank Limited Investor Presentation H1 2022 Performance Highlights and Business Outlook Presented by: Mr. Shazad G. Dada President & CEO Mr. Arif Saifie, CFA, FCA Chief Financial Officer
Slide 2: Agenda
AGENDA Pages Executive Summary – Overview of performance in HI’22 3-9 Our Core Segments in 2022 - are maintaining a strong momentum 10-18 Branch Banking leads earnings growth with strong current deposits Digital Banking - laying the foundations for a wider eco system CIBG–serving a niche market and
Slide 3: Overview of the UBL Group
Overview of the UBL Group One of the largest and most profitable Banks in Pakistan One of the largest branch Largest Pakistani Bank based in Strongest Credit Rating networks in Pakistan the Middle East, branches in Over 60 years of successful with 1,338 branches, UAE, Bahrain and Qatar, Entity Ratin
Slide 4: The Big Picture on Macros and UBL's performance in H1'22
The Big Picture on Macros and UBL’s performance in HI’22 Strong revenue buildup driven by core deposits and aggressive investment strategy Overall economy impacted by global inflation, pressure on UBL announces Historic Results in H1’22 currency…transition to stability is key Key challenges for the
Slide 5: Balance Sheet Overview for the half year ended June 30, 2022
Balance Sheet Overview for the half year ended June 30, 2022 Strong current deposits growth with steady build up in advances Rs in bln Deposits Performance - Led by Branch Banking Group Balance Sheet Var % Jun'22 Dec'21 Avg Dom deposits at Rs 1.5 tln, up 7% YoY – inc vol of Rs 94 bln Advances 658
Slide 6: H1'22 P&L Overview
H1’22 P&L Overview Higher revenues across both domestic and international support PBT growth of 32% Rs in bln Rs in bln Revenue Performance – stable margins building up momentum Income Statement Var % Var % H1'22 H1'21 Q2'22 Q1'22 Bank NIMs at 4.5% in H1’22 (H1’21: 4.0%) Interest Earned 102.8 67.8
Slide 7: UBL delivers higher returns to shareholders as franchise continues to grow
UBL delivers higher returns to shareholders as franchise continues to grow….. PSX index vs UBL – valuations impacted by market sentiment Equity and Book Values – conservation and growth since 2019 320 55 Max Price in 2022: Rs. 149.81 Price as at 04-Aug'22: Rs. 115.49 Rs in bln Cons. Equity Jun’22 -
Slide 8: Key Ratios for the quarter – ROE at 24% in H1'22
* Key Ratios for the quarter – ROE at 24% in H1’22 with steady buildup in revenue Gross Revenues up 12% in Q2 vs Q1 Cost to Income Ratio – with steady decline NIMs expand by 43 bps as asset book reprices Rs in bln 28.3 31.6 Rs in bln +43 bps 4.6% 24.5 47.8% 4.3% 23.9 24.2 43.5% 43.3% 45.0% 41.5% 3.9
Slide 9: UBL maintains strong capital levels to support future investment and growth
UBL maintains strong capital levels to support future investment and growth Capital Base strengthens with conservation CAR well above the minimum 12.5% Risk Weighted Assets – increase in line with PKR devaluation -278 bps 167 167 21.5% 76 Dec'21: 85 Jun'22: 622 18.8% Rs 865 bln Rs 947 bln 695 5.3% 4
Slide 10: Branch Banking leads earnings growth with strong current deposits
Branch Banking leads earnings growth with strong current deposits Growth momentum maintained in H1’22 with focus on NTBs Strategic Improve Branch Stronger compliance, Better people Upskill and retain Empowerment and profitability with cost conduct and control Actions engagement quality talent accoun
Slide 11: Digital Banking - laying the foundations for a wider eco system
Digital Banking - laying the foundations for a wider eco system Penetration levels continue to improve as our award winning app gains further ground App Registrations up +28% YoY Transacting Customers up 34% (Jun’22 vs Jun’21) Registered Customers # in mln +28% ( '000s) +34% YoY 2.3 677 694 643 655
Slide 12: CIBG – serving a niche market and maintaining strong asset quality
CIBG–serving a niche market and maintaining strong asset quality Our focus remains on growing relationships within both public sector and large business houses Domestic Loans Growth – expansion Domestic Loan Composition Dom + Int Credit Concentration by Sector Jun’22 545 500 520 514 Rs inbln 441 433
Slide 13: Advances Portfolio at Bank level June 2022 vs Dec 2021
Advances Portfolio at Bank level June 2022 vs Dec 2021 Buildup in quality assets remain top priority with improving overall relationship yields Rs in bln Yield on Advances (General) Advances by Segment Var % Jun'22 Dec'21 12.7% Corporate Bank 334 364 -8% Commodity 58 55 6% SME 23 21 13% 8.5% Consume
Slide 14: Treasury – Well Diversified Portfolio with improving yields
Treasury – Well Diversified Portfolio with improving yields across investment book in 2022 Portfolio composition in June 2022 Yield on Investments – repricing over time 10.7% 9.8% 7.9% T-Bills Rs. 484 bln (Dec'21: Rs. 532 bln) Sukuks Rs. 93 bln (Dec'21: Rs. 54 bln) FY'20 H1'21 H1'22 Fixed PIBs Rs. 4
Slide 15: International business gains ground this year as GCC outlook improves
International business gains ground this year as GCC outlook improves…. Performing Advances - PE Non Performing Loans Key Performance Highlights H1’22 vs H1’21 USD in mln USD in mln -2% -5.7% Cost of Deposits at 1.0%; down 12 bps YoY 360 340 334 Avg Deposits at USD 1.33 bln, up 1% YoY 320 315 30
Slide 16: Islamic Banking – building a stronger proposition and wider network
Islamic Banking – we are building up a stronger proposition and wider network Average Deposits and CoD –portfolio size records 80% growth Key Performance Highlights H1’22 vs H1’21 Rs in bln 6.9% 4.2% 4.0% 4.1% 150 Islamic Branches 11% of the network 3.6% 3.2% 2.8% 188 105 117 129 116 125 143 48
Slide 17: Building sustainable fee base with diversification is key
Building sustainable fee base with diversification is key Strong results in 2022 as we focus on more aggressive customer acquisition Focus on NFI with strict Deepening and entering Strategic Culture of Cross Selling and monitoring across all Building a trade ecosystem markets, segments, quality Acti
Slide 18: Major NFI lines reflect improving momentum
Major NFI lines reflect improving momentum Diversification from large businesses benefits earnings profile Trade Volumes of USD 3.5 bln, up 17% YoY Bancassurance – gaining strong momentum across major clusters Rs in mln USD in mln 4,000 450 388 822m 751 359 953m 400 3,500 Trade Volumes Rs 312 350 Rs
Slide 19: UBL Remains in the Forefront with Market Recognition
UBL Remains in the Forefront with Market Recognition UBL “Firsts” – Initiatives to stay ahead of the market Market recognition and awards ‘Best Mobile App’ and ‘Best Emerging Technology’ – Pakistan Digital Award 2021. First Commercial Bank in Pakistan to launch Branchless Banking (UBL Declared
Slide 20: We are embedding ESG into UBL's Strategy
We are embedding ESG into UBL’s Strategy…. Some key themes Recent Initiatives to build ESG awareness We are now developing a complete framework… Energy Conservation Program Defining a complete ESG Risk Management Strategy Plantation Drive Embedding ESG Risk factors into Risk Management Proce
Slide 21: Our future ambitions are clear – most Progressive and Innovative Bank of Pakistan
Our future ambitions are clear – to remain the most Progressive and Innovative Bank of Pakistan Aggressive Customer Acquisition Diversify with Investment strategy and NFI Digital Market Leadership Raising service standards across all Active ALM approach to rebuild Growing digital penetration -
Slide 22: Conclusion: A strong delivery in 2022 so far
Conclusion: A strong delivery in 2022 so far - as we target another record year We will be pivoting around our core strengths – as economy transitions to stability over time Rate Regime & High Inflation 1 We envisage a high interest rate / high inflation environment to restrict consumption and growt
Slide 23: Important Information
Important Information The information contained herein reflects our latest business statement as at June 30, 2022. 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