United Bank Limited · PSX:UBL
United Bank — Q3 2016 Earnings Presentation
34 slides from United Bank's earnings presentation, Oct 20, 2016
Slide 1: Performance Highlights - 30 Sep 2016
Performance Highlights - 30 Sep 2016 Investor Relations Conference Call October 20th, 2016 Speakers: Mr. Aameer Karachiwalla - Chief Financial Officer Mr. Arif Saifie, CFA - Financial Controller and Head of Investor Relations “Top companies of the year” for 2015 Award by Pakistan Stock Exchange “Inn
Slide 2: Table of Contents
Table of Contents PAGE Key Highlights 3 Execution and Delivery 7 Key Ratios 21 Quarterly Trend Analysis 23 UBL Performance Overview – 9M’16
Slide 3: Key Highlights
Key Highlights Standalone results Profit before tax up by 10% to Rs. 35.6 bln Profit after tax up by 11% to Rs. 21.3 bln UBL increased its domestic market share of deposits to 8.79% as at Sep’16 (8.60% as at Dec’15) Return on equity of 25.9% in 9M’16 (9M’15: 26.1%) Average balance sheet ex
Slide 4: Revenue growth of 5% in 9M'16
Revenue growth of 5% in 9M’16 Net interest income up 5% over 9M’15, reaches Rs. 43.0 bln Overall cost of deposits reduced by 70 bps to close at 2.7% in 9M’16 (9M’15: 3.6%) Average loan growth of 11% in 9M’16 vs 9M’15, with yields at 6.6% in 9M’16 (9M’15: 8.4%) Average earning investments grew
Slide 5: Provisions down by 50%, Effective expense management
Provisions down by 50%, Effective expense management Provisions down by Rs. 1.4 bln over 9M’15, recorded at Rs. 1.4 bln Strong cash recoveries within domestic and international General provisions of Rs. 0.6 bln (9M’15: Rs. 2.7 bln) taken against the advances portfolio Impairment charge of Rs.
Slide 6: Balance sheet size growth of 14% over Dec'15
Balance sheet size growth of 14% over Dec’15 Retail deposits growth driving balance sheet expansion Domestic deposits grew by 11% over Dec’15, at Rs. 924 bln (Dec’15: Rs. 832 bln) Domestic current accounts grew by 16% over Dec’15, Average current account growth of 17% in 9M’16 vs 9M’15 Net Advan
Slide 7: Execution and Delivery - Strong earnings growth in 9M'16
Execution and Delivery - Strong earnings growth in 9M’16 UBL Performance Overview – 9M’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 9M'16:Rs. 202.56 30 Sep’16: Rs. 198.78 43.00 19 Oct 2016: Rs. 203.69 41.00 Cons . Equity Sep’16 - Rs. 167 bln 200 Rs in bln 39.00 Cons . Book value Sep’16 - Rs. 136 per s hare 153 180 37.00 14
Slide 9: Income Statement - Standalone
Income Statement - Standalone Rs in bln Rs in bln 9M'16 9M'15 Var % Q3'16 Q2'16 Var % Interest Earned 73.4 70.1 4.6% 23.8 26.1 -8.7% Interest Expensed (30.4) (29.0) -4.7% (10.2) (10.4) 1.9% Net Interest Income 43.0 41.1 4.5% 13.7 15.7 -13.2% Non Interest Income 18.4 17.1 7.4% 4.5 5.6 -20.2% Total Re
Slide 10: Income Statement - Consolidated
Income Statement - Consolidated Rs in bln Rs in bln 9M'16 9M'15 Var % Q3'16 Q2'16 Var % Interest Earned 75.9 72.5 4.7% 24.5 27.1 -9.4% Interest Expensed (31.5) (29.9) -5.4% (10.5) (10.8) 3.1% Net Interest Income 44.4 42.6 4.2% 14.1 16.3 -13.6% Non Interest Income 20.4 19.2 6.2% 5.1 6.1 -17.3% Total
Slide 11: Deposits growth with enhanced market share - Focus remain of low cost deposits
Deposits growth with enhanced market share - Focus remain of low cost deposits Deposits – Bank Sep'16 Dec'15 PE CoF % PE CoF % Domestic deposits - Rs in bln 924 2.9% 832 3.4% International deposits - Rs in bln 223 2.0% 219 1.9% Total Bank - Rs in bln 1,147 2.7% 1,051 3.1% International - USD in mln
Slide 12: Advances portfolio registers 12% growth over Dec'15
Advances portfolio registers 12% growth over Dec’15 Net Advances Rs in bln Sep'16 Dec'15 Var % Corporate Bank 224 221 2% Commodity 74 43 71% Commercial 24 25 -4% Consumer 9 9 5% Others 14 13 12% Total Domestic 345 310 11% International 164 145 13% Bank 509 455 12% International USD mln 1,569 1,384 1
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 Qatar, 13% Yemen, 3% NewYork, Bahrain, 4% 11% Corporate, EPZ, 0% 68% Others, 27% UAE, 69% Consumer, 5% Others, 2% Personal loan, 2% Abu Dhabi, 23% Sharjah, 3% Dubai, 74% Baitna, 96% UBL Performa
Slide 14: 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 11.08% Rs in bln 5 34 27 18 47 6 10.42% 30 10.36% 32 19 9.15% 572 2013 2014 2015 9M'16 487 Non Funded revenue streams continue to grow Rs in mln 144 5,156 98 2,
Slide 15: 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 1,319 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 16: 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 Awarded “Innovation Award” by Mastercard Innovation Forum Banking (UBL OMNI) for ‘Launch of UBL MasterPass QR’ Declared the “Bes
Slide 17: Review of Non Interest Income & Administrative Expenses
Review of Non Interest Income & Administrative Expenses UBL Performance Overview – 9M’16 17
Slide 18: Non Fund Income Standalone Results
Non Fund Income Standalone Results Rs in mln 9M'16 9M'15 Var % Fee, commission and brokerage income 9,145 9,170 0% Dividend income 2,027 2,411 -16% Income from dealing in foreign currencies 1,394 1,756 -21% Gain / (loss) on sale of securities 5,156 2,971 74% Other income 696 835 -17% Total Non Fund
Slide 19: Fees and Commissions performance in 9M'16
Fees and Commissions performance in 9M’16 Standalone Results Rs in mln 9M'16 9M'15 Var % Commission on trade 1,526 1,277 19% Commission on consumer loan 547 579 -6% Commission on remittance / uniremote 1,629 1,588 3% Corporate service chgs/finance fee/FIG inc. 1,376 1,164 18% General banking service
Slide 20: Administrative Expenses Standalone Results
Administrative Expenses Standalone Results Rs in mln 9M'16 9M'15 Var % Personnel Cost 9,325 8,885 -5% Premises Cost 3,057 2,996 -2% Outsourced service charges 3,586 3,226 -11% including sales commission Advertisement and publicity 367 350 -5% Communications 846 870 3% Depreciation / Amortization 1,5
Slide 21: Key Ratios
Key Ratios UBL Performance Overview – 9M’16 21
Slide 22: Key Financial Ratios
Key Financial Ratios 9M'16 9M'15 Q3'16 Q2'16 Return on Equity 25.9% 26.1% 24.8% 25.7% Return on Assets 1.9% 2.1% 1.8% 1.9% Non Fund Income to Gross Revenue 30.0% 29.4% 24.6% 26.2% Cost to Revenue Ratio 38.5% 38.3% 40.7% 36.8% Sep'16 Jun'16 Dec'15 Sep'15 Advances to Deposits Ratio 42.3% 41.6% 41.3% 4
Slide 23: Quarterly Trend Analysis
Quarterly Trend Analysis Bank Level - Standalone UBL Performance Overview – 9M’16 23
Slide 24: Profit before tax
Profit before tax Rs in bln 13.5 +20% -20% 10.9 11.2 11.3 +14% 10.2 9.9 9.3 10.8 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 Q2'16 Q3'16 UBL Performance Overview – 9M’16 24
Slide 25: Profit after tax
Profit after tax Rs in bln 7.3 7.1 7.0 7.0 +13% 6.5 6.5 -4% +0% 6.1 5.7 5.3 5.2 5.3 4.9 5.6 4.7 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 Q2'16 Q3'16 UBL Performance Overview – 9M’16 25
Slide 26: Deposits
Deposits Rs in bln 1,142 1,147 1,070 +0% 1,051 +7% 992 994 +2% 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 Q2'16 Q3'16 UBL Performance Overview – 9M’16 26
Slide 27: Net Advances
Net Advances Rs in bln 509 496 +2% 459 455 +11% 447 434 430 -2% 417 408 420 391 369 377 364 363 358 355 352 345 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 Q2'16 Q3'16 UBL Performance Overview – 9M’16 27
Slide 28: Revenue
Revenue Rs in bln 21.9 -3% +12% 21.3 20.3 19.5 -15% 19.3 17.6 18.6 18.1 16.3 15.4 15.4 15.5 13.7 13.2 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 Q2'16 Q3'16 UBL Performance Overview – 9M’16 28
Slide 29: Net Interest Income
Net Interest Income Rs in bln 15.7 +16% 14.7 -13% 14.2 -8% 13.1 13.7 12.8 13.9 13.6 11.3 10.6 9.9 9.8 11.0 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 Q2'16 Q3'16 UBL Performance Overview – 9M’16 29
Slide 30: Non Funded Income
Non Funded Income Rs in bln 8.4 +73% -33% 6.2 6.2 5.5 5.6 5.1 5.0 4.8 4.9 4.8 -20% 4.6 4.8 4.1 3.6 4.0 4.8 3.9 4.5 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 Q2'16 Q3'16 UBL Performance Overview – 9M’16 30
Slide 31: Provisions
Provisions Rs in bln 1.9 2.0 +119% 1.3 0.9 0.9 -114% 0.8 0.8 0.8 1.1 0.5 0.3 0.2 0.7 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 Q2'16 Q3'16 -0.3 -0.3 -0% UBL Performance Overview – 9M’16 31
Slide 32: Administrative Expenses
Administrative Expenses Rs in bln -1% 8.6 8.4 -7% 8.0 7.8 7.6 -6% 7.3 7.4 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 Q2'16 Q3'16 UBL Performance Overview – 9M’16 32
Slide 33: Important Information
Important Information The information contained herein reflects our latest business statement as at September 30, 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 e
Slide 34: Thank You
Thank You UBL Performance Overview – 9M’16 34