United Bank Limited · PSX:UBL
United Bank — H1 2021 Earnings Presentation
45 slides from United Bank's earnings presentation, Aug 9, 2021
Slide 1: UBL Results H1 2021 Performance Highlights
UBL Results H1 2021 Performance Highlights Corporate Analyst Briefing & Investor Relations Conference Call August 9, 2021 Speakers: Mr. Shazad Dada - President & CEO Mr. Aameer Karachiwalla - Chief Financial Officer Mr. Arif Saifie, CFA - Financial Controller & Head of Investor Relations
Slide 2: Index
Index 1 Executive Summary 2 Core Business Segment Performance & Key Highlights 3 Financial Summaries for BS and P&L 4 Consolidated Results for H1’21 5 A Historical Perspective - 6 Years Review 6 Quarterly Trends 2
Slide 3: Executive Summary
Executive Summary where YOU come first
Slide 4: The Big Picture on Macros – UBL delivers strong results
The Big Picture on Macros – UBL delivers strong results with improving EPS and CAR levels Economy signals signs of stability but larger recovery depends on sustaining momentum GDP growth rate in FY’21 at 3.9%, expected to improve further next year CA Deficit in FY’21 stood at USD 1.9 bln (FY’20:
Slide 5: Balance Sheet Review – Growth in Deposit Market Share Builds Core Earnings
Balance Sheet Review – Growth in Deposit Market Share Builds Core Earnings Rs in bln Deposits Performance - Led by Branch Banking Group Balance Sheet Var% Jun’21 Dec’20 Advances 557 530 5.1% Avg Dom deposits at Rs 1.4 tln, up 20% YoY – inc vol of Rs 235 bln Investments 1,457 1,129 29.1% Avg Dome
Slide 6: H1'21 Results - Growth supported by strong NFI with cost control
H1’21 Results - Growth supported by strong NFI with cost control and provision reversals Rs in bln Rs in bln Revenue Performance – stable margins building up momentum Standalone P&L Var% Var% H1’21 H1’20 Q2’21 Q1’21 Bank NII levels expand by 8% QoQ despite flat interest rates Bank NIMs remain at
Slide 7: UBL poised for growth - Capital Base strengthens
UBL poised for growth - Capital Base strengthens with conservation, de-risking Capital Adequacy Ratio Risk Weighted Assets -93 bps 158 158 24.4% 23.5% Dec'20: Jun'21: 6.1% 54 68 538 5.8% Rs 745 bln 533 Rs 764 bln 1.3% 1.3% Credit Market Operational Credit Market Operational 17.0% 16.4% UBL seeks t
Slide 8: Key Ratios for the quarter – ROE crosses 20% in Q2'21
Key Ratios for the quarter – ROE crosses 20% in Q2’21 with steady buildup in revenue Gross Revenues Cost to Income Ratio Net Interest Margins Rs in bln +5.5% Rs in bln 52.9% 4.4% -5 bps 26.0 23.2 23.9 43.5% 3.9% 22.0 20.8 22.6 43.0% 42.6% 43.3% 3.8% 3.5% 3.4% 3.3% 4.3 37.2% 4.7 4.1 5.8 5.6 4.1 21.8
Slide 9: Strong Dividend Payouts maintained while UBL repositions
Strong Dividend Payouts maintained while UBL repositions to achieve larger aspirations 320 Trends - KSE 100 Index and UBL’s share price 55 Equity and Book Values Max Price in 2021: Rs. 143.68 Rs in bln Cons. Equity Jun’21 - Rs. 205 bln Price as at 06-Aug'21: Rs. 127.21 270 50 Cons. Book value Jun’21
Slide 10: Key Drivers of Performance and Strategic Priorities
Key Drivers of Performance and Strategic Priorities Key Drivers of Performance Strategic Priorities Strong Deposits Growth Estate: Improve Branch profitability with cost 1 Domestic Average Deposits growth of 20% lead by build up 1 in CASA - one of the lowest Cost of Deposits synergies Prudent Asset
Slide 11: Core Business Segment Performance & Key Highlights
Core Business Segment Performance & Key Highlights 11
Slide 12: Branch Banking remains corner stone of UBL franchise
Branch Banking remains corner stone of UBL franchise – Business records highest growth levels in 2021 Stronger compliance, Strategic People Upskill and retain quality Empowerment and Improve Branch profitability conduct and control engagement talent accountability with cost synergies Actions environ
Slide 13: Cost of Deposits down by 200 bps to 3.4% in H1'21
Cost of Deposits down by 200 bps to 3.4% in H1’21 – Driven by aggressive CASA buildup Period End Average Cost of Deposits Rs in bln Jun'21 Dec'20 H1'21 H1'20 Var % H1'21 H1'20 Current deposits 715 615 618 506 22.1% 0.0% 0.0% Saving deposits 701 596 603 520 16.0% 5.5% 9.1% CASA 1,416 1,211 1,221 1,02
Slide 14: Advances Portfolio - buildup in quality assets
Advances Portfolio - buildup in quality assets remain top priority with improving overall relationship yields Rs in bln Advances by Segment Var % Yield on Advances (General) Jun'21 Dec'20 13.6% Corporate Bank 300 301 0% Commodity 57 59 -4% 8.5% SME 18 18 2% Consumer 18 18 2% Others 61 38 59% Total D
Slide 15: Well Diversified Investment Portfolio with stable yields
Well Diversified Investment Portfolio with stable yields Domestic Portfolio Concentration Jun’21 MTM Surplus / Deficit Yield on Investments MTM Surplus / (Deficit) - 10.2% 11.1% Dec'20 Jun'21 9.8% Rs in mln GoP Securities 7.9% Rs. 1.3 tln PIBs - Fixed 334 (78) Listed Shares PIBs - Floaters (2,569) (
Slide 16: International - Capital Gains support earnings
International - Capital Gains support earnings as we evolve leaner business model Performing Advances - PE Non Performing Loans Key Performance Highlights YTD Jun’21 vs YTD Jun’20 USD in mln USD in mln 5% +0.4% Cost of Deposits at 1.2%; down 48 bps 360 343 345 340 Avg Deposits at USD 1.31 bln, d
Slide 17: Digital Banking Group – Focus on growing digital payment services
Digital Banking Group – Focus on growing digital payment services across wider target market Active Customers up 62% YoY ( '000s) Transacting Customers up 50% Active Customers ( '000s) 755 500 517 474 475 479 491 466 345 Jun'20 Jun'21 Dec'20 Jan'21 Feb'21 Mar'21 Apr'21 May'21 Jun'21 Digital Volume u
Slide 18: 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 19: Financial Summaries
Financial Summaries where YOU come first
Slide 20: Drivers for earnings – Core KPIs review for H1'21 vs H1'20
Financial Summaries Drivers for earnings – Core KPIs review for H1’21 vs H1’20 Key Metric H1’21 H1’20 YoY Delta BUSINESS VOLUMES AND REVENUE DRIVERS 1 Average Current Account Growth – YoY 22.1% 6.7% +15.4% 2 NTB run rate - C/A per branch per day 1.8 1.4 +0.4 3 Aggregate number of NTB C/As in '000s 2
Slide 21: Results for the half-year ended June 2021
Financial Summaries Results for the half-year ended June 2021 Key Metric H1’21 H1’20 YoY Delta RETURN ON EQUITY 1 Profit Before Tax - Rs in bln 25.9 18.8 +37% 2 PAT - Rs in bln 15.0 11.4 +32% 3 RoE 19.5 15.7 +373 bps 4 EPS – Rs 12.3 9.3 +32% 5 Capital Adequacy Ratio 23.5% 21.1% +244 bps 6 Risk Weigh
Slide 22: Income Statement Domestic
Financial Summaries Income Statement Domestic Rs in bln Rs in bln Description Var % Var % H1'21 H1'20 Q2'21 Q1'21 Interest Earned 62.5 80.0 -22% 33.3 29.2 14% Interest Expensed (31.2) (44.9) 30% (17.0) (14.2) -20% Net Interest Income 31.3 35.1 -11% 16.3 15.0 9% Non Interest Income 8.6 7.7 10% 4.6 4.
Slide 23: Non Fund Income
Financial Summaries Non Fund Income Rs in mln Rs in mln Description Var % Var % H1'21 H1'20 Q2'21 Q1'21 Fee, commission and brokerage income 5,854 4,429 32% 3,155 2,699 17% Dividend income 880 786 12% 627 252 149% Income from dealing in foreign currencies 1,061 1,989 -47% 599 461 30% Gain / (loss) o
Slide 24: Fee, Commission and Brokerage
Financial Summaries Fee, Commission and Brokerage Rs in mln Description Var % H1'21 H1'20 Branch banking customer fees 643 617 4% Consumer finance related fees 460 409 12% Card related fees (debit and credit cards) 1,120 675 66% Investment banking fees 337 71 376% Financial Institution rebate / comm
Slide 25: Administrative Expenses
Financial Summaries Administrative Expenses Rs in mln Description Var % H1'21 H1'20 Total compensation expenses 7,052 6,676 -6% Rent and taxes 374 271 -38% Utilities cost 652 592 -10% Security 477 481 1% Depreciation 388 378 -3% Depreciation - Right of Use Assets 876 904 3% Others 166 152 -9% Proper
Slide 26: Administrative Expenses
Financial Summaries Administrative Expenses Rs in mln Description Var % H1'21 H1'20 Legal and professional charges 120 75 -60% Outsourced service costs including sales commission 1,327 1,187 -12% Banking service charges 872 675 -29% Cash transportation and sorting charges 405 361 -12% Depreciation 6
Slide 27: Consolidated Results H1'21
Consolidated Results H1’21 27
Slide 28: Consolidated Results Income Statement
Consolidated Results Income Statement Rs in bln Rs in bln Description Var % Var % H1'21 H1'20 Q2'21 Q1'21 Interest Earned 69.8 88.4 -21.1% 36.9 32.9 112.0% Interest Expensed (33.5) (48.4) 30.8% (18.0) (15.4) 117.0% Net Interest Income 36.3 40.1 -9.3% 18.8 17.5 107.6% Non Interest Income 11.8 9.7 21.
Slide 29: Consolidated Results Balance Sheet
Consolidated Results Balance Sheet Rs in bln Description Var % Jun'21 Dec'20 Advances 656 612 7.2% Investments 1,484 1,168 27.1% Lendings to Financial Institutions 25 22 11.8% Others 383 400 -4.1% Total Assets 2,548 2,202 15.7% Deposits 1,967 1,764 11.5% Borrowings 272 132 106.2% Subordinated Debts
Slide 30: 6 Year Performance Review
6 year Performance Review where YOU come first
Slide 31: 6 Year Financial Summary
6 Year Financial Summary Rs. in mlns 2020 2019 2018 2017 2016 2015 Assets Cash and balances with treasury and other banks 264,727 256,591 206,813 177,099 146,428 128,870 Lending to financial institutions 19,959 20,183 33,942 10,868 25,711 24,095 Investments- gross 1,138,018 849,441 792,857 1,095,555
Slide 32: 6 Year Financial Summary
6 Year Financial Summary Rs. in mlns 2020 2019 2018 2017 2016 2015 Markup / return / interest earned 152,003 153,676 113,198 107,206 98,219 94,353 Markup / return / interest expensed (77,044) (91,902) (56,964) (50,781) (41,177) (38,511) Net Markup / Interest income 74,959 61,774 56,234 56,425 57,042
Slide 33: 6 Year Financial Summary
6 Year Financial Summary Description 2020 2019 2018 2017 2016 2015 Key Financial Ratios Return on equity (RoE) 13.9% 13.8% 11.6% 20.6% 24.9% 25.7% Return on assets (RoA) 1.1% 1.0% 0.8% 1.4% 1.8% 2.0% Profit before tax ratio 37.1% 41.0% 30.7% 50.8% 57.1% 54.2% Advances to deposits ratio (ADR) - gross
Slide 34: Quarterly Trends
Quarterly Trends Gi where YOU come first
Slide 35: Quarterly Trends Profit before Tax
Quarterly Trends Profit before Tax Rs in bln 13.5 +57% 13.7 11.8 12.2 +23% +12% 11.3 11.2 10.8 10.4 10.4 +6% 9.2 8.8 +1% 8.4 8.8 8.5 8.4 8.3 7.9 7.6 7.7 6.5 5.9 -26% 4.1 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'2
Slide 36: Quarterly Trends Profit after Tax
Quarterly Trends Profit after Tax Rs in bln +53% 7.6 7.3 7.4 7.3 7.0 7.0 +25% +3% 6.4 6.3 6.3 6.0 5.9 +7% 5.5 5.4 +3% 5.1 4.9 4.7 4.8 4.7 4.2 -26% 3.6 3.5 2.6 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 36
Slide 37: Quarterly Trends Deposits
Quarterly Trends Deposits Rs in bln +13% 1,850 +4% 0% +6% 0% +2% 1,640 1,637 1,589 1,581 1,493 1,448 1,419 1,467 1,366 1,344 1,301 1,315 1,335 1,256 1,254 1,273 1,183 1,142 1,147 1,167 1,070.1 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20
Slide 38: Quarterly Trends Net Advances
Quarterly Trends Net Advances Rs in bln 716 675 673 627 642 626 636 624 623 636 585 +2% +3% 565 567 -2% 557 538 530 541 509 519 -6% 496 498 -8% -1% 447 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 38
Slide 39: Quarterly Trends Revenue
Quarterly Trends Revenue Rs in bln +18% 26.0 +5% +9% +5% 23.9 23.2 22.6 22.4 22.0 21.9 21.3 21.2 21.2 20.6 -11% 20.9 20.8 20.0 20.4 20.3 20.0 19.6 19.2 19.0 -10% 18.1 17.9 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2
Slide 40: Quarterly Trends Net Interest Income
Quarterly Trends Net Interest Income Rs in bln +26% 21.8 +8% +6% 19.1 +1% 18.2 17.3 16.4 -12% 16.7 16.9 15.7 15.4 15.3 14.3 14.4 14.7 -12% 14.0 14.2 14.2 14.2 13.6 13.7 13.7 13.9 13.8 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4
Slide 41: Quarterly Trends Non Fund Income
Quarterly Trends Non Fund Income Rs in bln 8.4 7.3 7.2 7.0 6.3 +42% 6.1 6.0 5.8 5.6 5.7 5.6 5.2 5.1 5.2 +5% 5.0 -2% 4.7 4.5 4.5 4.3 4.1 4.1 3.8 -9% -4% -1% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 41
Slide 42: Quarterly Trends Provision Charge
Quarterly Trends Provision Charge Rs in bln +55% 5.7 5.5 5.5 +114% -5% 3.7 2.9 3.2 2.6 2.0 2.1 1.9 2.1 1.7 1.9 1.3 -66% -81% 0.6 0.3 0.4 0.1 -0.3 -0.3 -0.5 -0.4 -225% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 4
Slide 43: Quarterly Trends Administrative Expenses
Quarterly Trends Administrative Expenses Rs in bln +11% 11.0 11.0 +5% 10.7 10.3 +2% 10.3 9.9 10.0 9.9 9.6 9.7 9.2 9.5 9.9 8.8 8.8 9.0 +2% 8.5 8.7 -11% 8.4 -14% 8.2 7.8 7.4 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2
Slide 44: Important Information
Important Information The information contained herein reflects our latest business statement as at June 30, 2021. 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
Slide 45: Thank You
Thank You