Union Bank Of India Limited · NSE:UNIONBANK
Union Bank Of India — Q1 FY2010 Earnings Presentation
38 slides from Union Bank Of India's earnings presentation, Jul 23, 2009
Slide 1: Financial Results Q1-2010
Financial Results Q1-2010 23rd July, 2009
Slide 2: Q1 FY 10 Performance Highlights
Q1 FY 10 Performance Highlights Head %Increase YoY Total Business 31.06 Total Deposits 34.16 Total Advances 26.67 Operating Profit 27.76 Net Profit 93.86 Other Income 117.70 Capital Adequacy Ratio 13.73% from 12.22% 2
Slide 3: Market Share
MARKET SHARE AS ON AS ON June 08 June 09 OUR MARKET SHARE IN DEPOSITS 3.13 3.37 OUR MARKET SHARE IN CREDIT 3.11 3.27 3
Slide 4: Operating Profits (YoY)
Operating Profits (YoY) CAGR Growth of 26.69% 1000 Operating Profits for 787 800 27.76% the quarter ended 17.33% 600 525 616 Jun’09 improved by 35.65% 387 27.76% to Rs. 787crs 400 from Rs. 616 crs in 200 the previous year. 0 June 06 June 07 June 08 Jun-09 Operating Profit 4
Slide 5: Provisions
PROVISIONS (Rs.in crore) June’08 June’09 (Q1) (Q1) I Taxation 92 155 NPAs -51 241 Standard Assets 1 15 Depreciation on Investment 339 -135 Others (Frauds / Suspense Etc.) 13 39 Restructured Advances -6 30 Total 388 345 5
Slide 6: Net Profits (YoY)
Net Profits (YoY) CAGR Growth of 38.33% Net Profit has grown 500 442 by 93.86% on YoY basis from Rs. 228 400 93.86% crore to Rs. 442 crore mainly on 300 1.33% account of increase 225 228 34.73% in other income 200 167 which has risen from Rs. 243 crore to Rs. 100 June 06 June 07 June 08 Jun-09 529
Slide 7: Net Interest Income (YoY)
Net Interest Income (YoY) The Bank’s transformation process “Nav Nirman” enabled higher level of client acquisition and resultant growth. CAGR Growth of 10.42% The NII of the Bank was flat mainly due to 3 reasons:- 900 1.52% 1. Deposit growth during the past 3 years have progressively 801 increased
Slide 8: Non-Interest Income - Quarterly Comparison
Non-Interest Income- Quarterly Comparison (Rs.in crore) June’08 June’09 Growth (Q1) (Q1) % Trading Profit – Treasury 29 209 620.69 Recovery in write-off accounts 22 46 109.10 Forex Income 59 91 54.24 Other Income 133 183 37.59 Total 243 529 117.70 Fee Income from Core operations went up from Rs 192
Slide 9: Net Interest Margin (NIM)
Net Interest Margin (NIM) 8.37 8.16 Estimate of Average Rate on Term Deposits 7.71 8.05 8 The estimated month wise weighted average rate of interest (WaR) on term deposits up to Dec 2009 is as under: 5.41 5.60 6.02 6 4.77 Month Estimated 3.64 WaR* 4 3.37 2.92 July 09 8.33 2.94 2.96 256 2.29 2 2.03 A
Slide 10: Deposits
Deposits 1 5 0 0 0 0 143889 34.16% Total Deposits grew by 34.16% to Rs. 143889 1 2 0 0 0 0 107248 23.29% crs as against Industry 86984 (SCBs) deposit growth 9 0 0 0 0 13.67% 76517 of 21.60%*. 6 0 0 0 0 The Bank has shed 3 0 0 0 0 17850 19080 16468 13032 high cost deposits by 20.86% to Rs 13032 c
Slide 11: CASA Deposits
CASA Deposits CAGR GROWTH OF 19.36% (Rs. in Crore) June’06 June’07 June’08 June’09 % Growth Current Deposits 6708 8340 11617 14334 23.39 Savings Deposits 19018 20587 25663 29408 14.59 Demand Deposits 25726 28927 37280 43742 17.33 (CASA) % to total deposits 33.62 33.26 34.76 30.40 Cost of Deposits (%
Slide 12: Liability Management-CASA
Liability Management-CASA CASA % Share of PSBs vis-à-vis Union Bank of India 31st March 31st March 2006 2009 Public Sector Banks 39.95% 32.66% Union Bank of India 32.36% 30.13% Source of Data – RBI annual policies, IBA Publication, Annual Reports 9 While CASA % of PSBs have declined by 729 bps, CASA
Slide 13: Advances
Advances & Yield on Advances Advances 96026 Bank registered growth of 26.67% YoY in 100000 12 26.67% advances to Rs. 96026 crs. This is 90000 80000 75810 11 against Industry (SCBs) growth of 70000 63708 10.13 15.10%*. Improvement in yield is by 10.03 10.30 60000 55802 10 17bps to 10.30% as of June’0
Slide 14: Top Sector Exposures
TOP SECTOR EXPOSURES Across Large & Mid Corporates, SME and Corporate Agri Business Rank Sectors Exposures (As on 30TH JUNE 2009) % Amount (Rs. in Crore) 1 Retail Advances 11.01 10572 2 Trade 8.57 8225 3 Infrastructure 9.74 9349 4 Iron & Steel 4.47 4296 5 Electricity 4.68 4489 6 Commercial Real Esta
Slide 15: Sectoral Deployment of Credit June 09
Sectoral Deployment of Credit June 09 Sector % Share in Gross Credit Agriculture 15.54 Large Corporates 38.35 Retail 11.01 MSME 16.18 Trade 8.57 15
Slide 16: Composition of Retail Assets
COMPOSITION OF RETAIL ASSETS Product-wise composition of Retail assets Portfolio JUNE 09 12.10 Housing Loans Personal Loans 9.93 Education Loans Auto Loans Other Retail 9.89 2.97 65.11 16
Slide 17: Distribution of Ratings Large & Mid Corporates
DISTRIBUTION OF RATINGS LARGE & MID CORPORATES The Bank is having a portfolio of Rs.49159 crore (No. of Accounts 337) of more than Rs. 50 crore, out of which 236 Accounts with exposure of Rs. 28544 crore are rated. Rating of the Accounts is as under: Rating No of Borrowers Exposure % OF RATED (Rs. i
Slide 18: Investments
60000 55000 52302 Investments 50000 Investments grew by 47.97% to 45000 40000 Rs. 52302 crs as of June’09. 35347 35000 29832 30000 27342 25000 Return on investments was at 20000 15000 7.94%* for Q1-10 as against 7.68% 10000 in the corresponding period of the June 06 June 07 June 08 Jun-09 previo
Slide 19: Investment Duration
Investment Duration June 06 June 07 June 08 June 09 HTM 4.88 4.15 4.09 5.53 AFS 2.81 2.78 2.72 2.70 HFT - 3.82 - 4.00 Total 4.42 3.79 3.66 4.86 The Bank had taken a conscious decision to invest in high yielding State Developments Loans(SDLs) / Govt. securities of 10 year tenor in the HTM category wh
Slide 20: Improved Efficiency
IMPROVED EFFICIENCY 1000 Productivity measured 800 805 by Business per 664 employee increased 600 493 552 from Rs. 664 lacs to Rs. 805 lacs. 400 Gross Profit per 200 employee has increased from Rs. 0 June 06 June 07 June 08 Jun-09 9.46 lacs to Rs.11.31 BUSINESS PER EMPLOYEE lacs. 20
Slide 21: Cost to Income Ratio
Cost to Income ratio 50.00 49.01 The Cost to Income 44.68 ratio which reflects the operating 40.31 40.81 40.00 efficiency of the bank was at 40.81% 820 bps reduction in last 3 yrs and is one of the 30.00 June 06 June 07 June 08 Jun-09 lowest among peer banks. Cost to Income ratio 21
Slide 22: NPA Management
NPA MANAGEMENT GROSS NPAs NET NPAs 4 1.4 3.5 3.55 1.22 1.2 3 2.78 1 2.5 0.78 2.08 0.8 0.72 %2 1.95 % 0.6 1.5 0.4 1 0.5 0.2 50 bps reduction in last 3 yrs 0.15 160 bps reduction in last 3 yrs 0 0 June 06 June 07 June 08 Jun-09 June 06 June 07 June 08 Jun-09 GROSS NPA % NET NPA AS % During the curre
Slide 23: Movement of NPAs
Movement of NPAs (Rs.in crore) June 07 June 08 June 09 Gross NPAs – Opening 1873 1657 1923 Add : Additions 201 158 189 Less : Deductions 305 240 238 1. Due to Write Off 118 13 97 2. Due to upgradation/ Recoveries 187 227 141 Gross NPAs 1769 1575 1874 Gross Credit 63708 75810 96026 Gross NPA as a % a
Slide 24: Net NPAs With and Without Floating Provisions
Scenario - I NET NPAs (With Floating Provisions) (Rs.in crore) (Q1) June’08 (Q1)June’09 Net NPAs 109 137 Net NPAs 0.15 0.15 NPA Coverage 93.05 92.67 Scenario - II NET NPAs (Without Floating Provisions) (Q1) June’08 (Q1)June’09 Net NPAs 598 677 Net NPAs 0.80 0.72 NPA Coverage 62.00 63.88 As can be ob
Slide 25: Improved Asset Quality
IMPROVED ASSET QUALITY Improved asset quality is reflected in declining trend in delinquency Ratio June 07 June 08 June 09 Delinquency Ratio* 1.30 0.85 0.79 *Annualised 25
Slide 26: Capital Adequacy
Capital Adequacy 16 • As per Basel II Capital 13.73 14 12.66 Adequacy Ratio is at 12.22 12 11.25 13.73% as of 30th June, 10 2009 as against 11.28% 8.18 7.51 as of June 2008. 8 7.20 7.95 • Tier-I Core Capital Ratio 6 5.55 4.71 4.71 is at 8.18 % as of June 4.05 4 2009 2 • As per Basel I the CRAR 0 is
Slide 27: Distribution Channels
DISTRIBUTION CHANNELS BRANCH MIX Including Hong Kong branch 571 The Bank added 265 branches and 722 779 ATMs during the last 12 months ending June 2009, of which 80 branches and 620 205 ATMs were added in June 09 quarter. 668 SERVICE OUTLETS Jun’06 Jun’07 Jun’08 Jun’09 Metro Urban Semi-Urban Rural
Slide 28: Shareholding Pattern (30th June, 2009)
Shareholding Pattern (30th June, 2009) 17.33 Govt. of India Banks, Fis, Ins. Cos. Others 14.14 FIIs and Foreign Mutual Funds 55.43 13.1 JUNE 05 JUNE 06 JUNE 07 JUNE 08 JUNE 09 GOVT. 60.85% 55.43% 55.43% 55.43% 55.43% FIIs & FMFs 18.17% 20.00% 19.72% 18.69% 17.33% BANKS, INST./ 4.91% 6.57% 8.95% 11.3
Slide 29: Increasing Shareholders' Value
INCREASING SHAREHOLDERS’ VALUE Mar Mar June June The Bank is 2008 2009 2008 2009 (YoY) (YoY) (Qty) (Qty) consistently EPS (Rs.) 27.46 34.18 18.08 35.02 returning profits year BOOK VALUE(Rs.) 111.19 137.87 115.70 146.68 after year RETURN ON 24.70 24.79 15.62 23.87 giving value EQUITY (%) added return
Slide 30: Share Price: Union Bank vis-a-vis Bankex and Sensex
MOVEMENT OF SHARE PRICE OF UNION BANK VIS-A-VIS BANKEX AND SENSEX June June June YoY Growth% 2007 2008 2009 SHARE PRICE 132 109 241 121.10 UNION BANK BANKEX 8010 5916 8211 38.79 SENSEX 14651 13462 14494 7.66 Bank’s share price has outperformed the Bankex & Sensex during the last 2 years 30
Slide 31: Major highlights of last quarter
Major highlights of last quarter 31
Slide 32: Major Highlights Q1-10
Major Highlights Q1-10 The Bank launched on 28th May, 2009 at Mumbai, its Merchant Acquiring Business through Point of Sale (POS) Terminals, powered by Financial Technologies Ltd., a leading enterprise providing transaction automation solution for equity, forex, commodity, derivative markets and f
Slide 33: Major Highlights Q1-10
Major Highlights Q1-10 The Bank has successfully installed RAFTS(Real-time AML Filter for TurboSwift) solution making it first Bank to go live with the Real-time OFAC filter at the transaction gateway level. RAFTS is a real-time AML filter that works as an add-on TurboSwift gateway for all SWIFT t
Slide 34: Major Highlights Q1-10
Major Highlights – Q1-10 Due to adoption of technology, transactions through electronic mode moved up from 21% to 24.08% of the total transactions of the bank in the last 3 months and is expected to touch 35% by March 2010. This will significantly bring down the transaction costs. Bank has opene
Slide 35: Road Ahead
ROAD AHEAD 35
Slide 36: Road Ahead
ROAD AHEAD The Bank aims to reach a business mix of Rs 293000 crore by the end of March 2010, a growth of approx. 23%. Of this, Rs 170000 crore will be Deposits (growth of 23%YoY) and Rs 123000 crore will be Advances (growth of 25%YoY). Bank will strive to reach CASA of 35% by March 2012. Gros
Slide 37: Disclaimer
Disclaimer Except for the historical information contained herein, statements in this presentation which contain words or phrases such as “is”, “aims”, ‘will’, ‘would’, ‘indicating’, ‘expected to’ etc., and similar expressions or variations of such expressions may constitute ‘forward-looking stateme
Slide 38: Thank you
Thank you Your dreams are not yours alone
Union Bank of India — Q1 FY2010 Earnings Presentation on 6ix