United Bank Limited · PSX:UBL
United Bank — Q1 2020 Earnings Presentation
40 slides from United Bank's earnings presentation, Apr 27, 2020
Slide 1: Performance Highlights Q1 2020 Investor Relations Conference Call
Performance Highlights Q1 2020 Investor Relations Conference Call April 27th, 2020 Winner of Pakistan Stock Exchange (PSX) “Top Companies of the Year” Award for three consecutive years (2016-18) Declared ‘Best Digital Bank in Pakistan for 2020’ by Asiamoney Speakers: Mr. Aameer Karachiwalla - Chief
Slide 2: Agenda
Agenda Sr. No Description Slide 1 Key Highlights for Q1 2020 – build up in profitability 3 2 UBL - A strong legacy – market leading positions in core segments 7 3 Core Business Driving Growth – led by branch banking business 11 4 Overview of Financial Performance – key number and ratios 15 UBL Perfo
Slide 3: Key Performance Highlights for Q1'2020
Key Performance Highlights for Q1’2020 Drivers of Performance in Q1’ 2020 while maintaining sound capital Standalone PAT at Rs. 5.1 bln, up 21.5% vs. Q1’19 – (PAT is up 7% over Q4’19) Pre Provisions PBT of Rs 12.1Bln up 16% vs Q1’19 and up 26% vs Q4’19 Domestic PBT at Rs 10.8 Bln up 22% YoY –
Slide 4: Avg. Total Assets of Rs. 1.86 tln in Q1'20 vs Rs. 1.69 tln in Q1'19
Avg. Total Assets of Rs. 1.86 tln in Q1’20 vs Rs. 1.69 tln in Q1’19 Branch Banking builds deposit base in cost efficient manner - strong network performance Overall Revenues Net Interest Income of Rs. 17.3 bln in Q1’20 (Q1’19: Rs. 14.7 bln) strong growth up 18% YoY Interest earning asset base at
Slide 5: Fees recorded at Rs. 3.0 billion in Q1'20, down 17% year on year
Avg. Total Assets of Rs. 1.86 tln in Q1’20 vs Rs. 1.69 tln in Q1’19 Fees recorded at Rs. 3.0 billion in Q1’20, down 17% year on year Domestic - Fee income stood at Rs. 2.4 bln, 15% below Q1’19 Trade Commission at Rs 224 mln, down 21% YoY Banca Commission at Rs 314 mln, 6% down YoY Net UBL Omni
Slide 6: Provisions and Admin Expenses
Provisions and Admin Expenses Net provision charge of Rs. 3.7 bln in Q1’20 vs. Rs. 1.3 bln in Q1’19 DOM net provision Reversal of Rs. 62 mln in Q1’20 (Q1’19: Net charge of Rs. 79 mln) DOM asset quality stood at 6.1% at the end of Mar’20 (Dec’19: 5.2%) International provisions of USD 24.1 mln t
Slide 7: UBL - A strong legacy
UBL - A strong legacy UBL Performance Overview – Q1 2020 7 7
Slide 8: UBL - A dominant Pakistani brand
UBL - A dominant Pakistani brand A Look into the Past Our Current Positioning 1959 - UBL set up with first branch in Karachi Second largest private sector bank in Pakistan with 1,363 branches 1963 - First Pakistani bank with a branch in Market share of 8.2%, 5.5 million customers London Highes
Slide 9: UBL Innovation and Awards - continues to be acknowledged by the market
UBL Innovation and Awards - continues to be acknowledged by the market UBL “Firsts” – Initiatives to stay ahead of the market Market recognition and awards First Commercial Bank in Pakistan to launch Branchless Declared ‘Best Digital Bank in Pakistan for 2020’ by Banking (UBL OMNI) Asiamoney F
Slide 10: Consistent earnings performance throughout the years
Consistent earnings performance throughout the years Trends - KSE 100 Index and UBL’s share price Equity and Book Values 300 55 Max 2020: Rs. 181.96 Cons. Equity Mar’20 - Rs. 186 bln 280 Rs in bln 260 50 Cons. Book value Mar’20 - Rs. 152 per share 240 45 159 169 165 220 142 152 151 200 40 126 180 92
Slide 11: Core Business Driving Growth
Core Business Driving Growth UBL Performance Overview – Q1 2020 11 11
Slide 12: Deposits performance - Focus remains on growing low cost deposits
Deposits performance - Focus remains on growing low cost deposits Bank Deposits Period End Average Cost of Deposits Rs in bln Mar'20 Dec'19 Q1'20 Q1'19 Var % Q1'20 Q1'19 Current deposits 521 520 488 468 4.3% 0.0% 0.0% Saving deposits 553 505 506 477 6.0% 10.8% 8.0% CASA 1,074 1,025 994 945 5.1% 5.5%
Slide 13: Advances portfolio down 2% from Dec'19
Advances portfolio down 2% from Dec’19 DOM advances yield up to 13.0% Q1’20 (Q1’19: 10.6%) – repricing in line with benchmark rate Rs in bln Description Var % Mar'20 Dec'19 Corporate Bank 365 373 -2% Commodity 53 66 -20% Small Enterprises 8 10 -18% Consumer 17 17 -2% Others 40 33 20% Total Domestic
Slide 14: Deployment in GoP papers, RWA efficient
Deployment in GoP papers, RWA efficient Change in mix to shorter tenor instruments DOM Investments’ yields – repricing upwards in 2020 Rs in bln 11.4% 11.6% 55 10.6% 10.4% 10.3% 64 33 54 10 9.0% 71 40 7.8% 7.8% 13 446 2013 2014 2015 2016 2017 2018 2019 Q1'20 405 Non Funded income up as lower capital
Slide 15: Overview of Financial Performance
Overview of Financial Performance UBL Performance Overview – Q1 2020 15 15
Slide 16: Balance Sheet - Standalone
Balance Sheet - Standalone Rs in bln Description Var % Mar'20 Dec'19 Advances 623 636 -2.1% Investments 970 840 15.5% Lendings to Financial Institutions 19 20 -6.6% Others 332 397 -16.2% Total Assets 1,944 1,894 2.7% Deposits 1,493 1,467 1.7% Borrowings 186 154 20.3% Subordinated Debts 10 10 0.0% Ot
Slide 17: Income Statement - Standalone
Income Statement - Standalone Rs in bln Description Var % Q1'20 Q1'19 Interest Earned 43.4 31.4 38.2% Interest Expensed (26.0) (16.7) -55.5% Net Interest Income 17.3 14.7 18.3% Non Interest Income 4.7 5.0 -6.2% Total Revenue 22.0 19.6 12.1% Admin. Expenses (9.5) (9.0) -5.8% Total Expenses (9.9) (9.1
Slide 18: Non Fund Income Standalone Results
Non Fund Income Standalone Results Rs in mln Description Var % Q1'20 Q1'19 Fee, commission and brokerage income 2,440 2,864 -15% Dividend income 387 226 71% Income from dealing in foreign currencies 863 787 10% Gain / (loss) on sale of securities (62) 14 -555% Other income 219 192 14% Domestic Total
Slide 19: Fees and Commissions performance Standalone Results
Fees and Commissions performance Standalone Results Rs in mln Description Var % Q1'20 Q1'19 Branch banking customer fees 382 419 -9% Consumer finance related fees 212 216 -2% Card related fees (debit and credit cards) 409 415 -1% Investment banking fees 11 19 -43% Financial Institution rebate / comm
Slide 20: Administrative Expenses (1/2) Standalone Results
Administrative Expenses (1/2) Standalone Results Rs in mln Description Var % Q1'20 Q1'19 Total compensation expenses 3,316 2,728 -22% Rent and taxes 94 18 -434% Utilities cost 312 282 -11% Security 242 224 -8% Depreciation 188 173 -8% Depreciation - Right of Use Assets 443 467 5% Others 87 137 36% P
Slide 21: Administrative Expenses (2/2) Standalone Results
Administrative Expenses (2/2) Standalone Results Rs in mln Description Var % Q1'20 Q1'19 Legal and professional charges 45 59 23% Outsourced service costs including sales commission 635 868 27% Banking service charges 346 309 -12% Cash transportation and sorting charges 197 248 20% Depreciation 282
Slide 22: Income Statement - Domestic
Income Statement - Domestic Rs in bln Description Var % Q1'20 Q1'19 Interest Earned 40.1 27.7 45% Interest Expensed (24.8) (15.2) -63% Net Interest Income 15.2 12.4 23% Non Interest Income 3.8 4.1 -6% Total Revenue 19.1 16.5 16% Admin. Expenses (7.9) (7.4) -7% Total Expenses (8.4) (7.6) -11% Pre Pro
Slide 23: Income Statement - Consolidated
Income Statement - Consolidated Rs in bln Description Var % Q1'20 Q1'19 Interest Earned 44.4 32.1 38.1% Interest Expensed (26.6) (17.2) -54.8% Net Interest Income 17.8 15.0 18.9% Non Interest Income 4.9 5.8 -14.3% Total Revenue 22.7 20.7 9.7% Admin. Expenses (10.3) (9.8) -5.7% Total Expenses (10.7)
Slide 24: Balance Sheet - Consolidated
Balance Sheet - Consolidated Rs in bln Description Var % Mar'20 Dec'19 Advances 683 695 -1.8% Investments 1,010 875 15.4% Lendings to Financial Institutions 21 22 -3.4% Assets held for sale 0 0 2.9% Others 364 432 -15.7% Total Assets 2,078 2,024 2.7% Deposits 1,592 1,558 2.2% Borrowings 197 170 15.5
Slide 25: Our Investment, focus and results in the last 6 years
Our Investment, focus and results in the last 6 years UBL Performance Overview – Q1 2020 25
Slide 26: Balance Sheet Review
Balance Sheet Review Rs. in mlns 2019 2018 2017 2016 2015 2014 Assets Cash and balances with treasury and other banks 256,591 206,813 177,099 146,428 128,870 87,573 Lending to financial institutions 20,247 33,942 10,868 25,711 24,095 21,872 Investments- gross 849,441 792,857 1,095,555 808,959 721,65
Slide 27: Profit & Loss
Profit & Loss Rs. in mlns 2019 2018 2017 2016 2015 2014 Markup / return / interest earned 153,676 113,198 107,206 98,219 94,353 82,735 Markup / return / interest expensed (91,902) (56,964) (50,781) (41,177) (38,511) (37,769) Net Markup / Interest income 61,774 56,234 56,425 57,042 55,842 44,967 Fee,
Slide 28: Key Financial Ratios & Share Information
Key Financial Ratios & Share Information Description 2019 2018 2017 2016 2015 2014 Key Financial Ratios Return on equity (RoE) 13.8% 11.6% 20.6% 24.9% 25.7% 23.9% Return on assets (RoA) 1.0% 0.8% 1.4% 1.8% 2.0% 2.1% Profit before tax ratio 41.0% 30.7% 50.8% 57.1% 54.2% 52.0% Advances to deposits rat
Slide 29: Quarterly Trends
Quarterly Trends UBL Performance Overview – Q1 2020 29
Slide 30: Profit before tax (PBT)
Profit before tax (PBT) Rs in bln 13.5 11.8 10.9 11.2 11.3 10.8 10.4 11.2 10.2 9.9 +8% 9.3 +6% 9.2 8.8 8.4 8.8 8.5 8.3 7.9 8.4 7.8 8.0 8.3 6.5 -4% 5.9 -6% -4% 4.1 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 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
Slide 31: Profit after tax (PAT)
Profit after tax (PAT) Rs in bln 7.1 7.3 7.3 7.0 7.0 6.5 6.5 6.4 6.3 6.1 6.0 5.9 +29% 5.6 5.5 +7% 5.2 5.3 5.3 5.4 5.1 4.9 4.7 4.2 -10% -3% 3.6 3.5 -24% 2.6 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 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
Slide 32: Deposits
Deposits Rs in bln +2% +8% +3% 1,467 1493 1,448 1,419 1,3661,344 1,2561,335 1,301 1,1421,1471,273 -2% 1142 1147 1,0511,070 -2% 1051 1070 992 994 945 895 847 858 866 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 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'
Slide 33: Net Advances
Net Advances Rs in bln 716 675 673 +1% +2% 627 624 636 642 626 636 623 -11% -3% -2% 565 567 519 509 496 459 455 447 498 434 420 430 408 417 377 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 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 UBL Pe
Slide 34: Gross Revenue
Gross Revenue Rs in bln +14% +5% 22.4 21.9 +1% 22.0 21.3 21.2 21.2 20.9 20.3 20.4 20.3 20.0 20.0 19.6 19.3 19.5 19.2 20.6 19.0 18.6 17.9 -8% 18.1 -2% 17.6 16.3 15.5 14.9 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 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 Q2'1
Slide 35: Net Interest Income (NII)
Net Interest Income (NII) Rs in bln +6% +6% 17.3 +4% +1% 16.4 15.7 +2% 15.3 15.4 14.7 14.7 14.2 14.3 14.2 14.2 14.2 14.4 13.9 14.0 13.9 13.8 13.6 13.7 13.7 12.8 13.1 11.3 11.0 9.8 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18
Slide 36: Non Funded Income (NFI)
Non Funded Income (NFI) Rs in bln 8.4 +44% 7.3 7.2 7.0 6.2 6.2 6.3 6.1 6.0 5.7 -28% 5.6 5.1 5.0 5.2 5.1 5.0 +5% 5.2 4.8 4.8 4.8 4.7 4.5 4.5 4.5 -12% 3.8 -14% Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 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 Q4'1
Slide 37: Provisions
Provisions Rs in bln 5.5 +114% +140% 3.7 3.2 2.9 2.6 2.0 2.1 1.9 2.1 1.7 1.3 1.3 -34% 0.9 0.8 0.7 0.9 -17% 0.6 0.2 0.2 0.3 -76% 0.1 -0.1 -0.3 -0.3 -0.5 Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'19Q2'19Q3'19Q4'19Q1'20 UBL Performance Overvi
Slide 38: Administrative Expenses
Administrative Expenses Rs in bln +9% 11.0 +15% 10.7 10.3 9.9 9.6 9.5 9.2 10.0 8.8 8.8 8.7 8.6 8.4 8.5 -2% -14% 8.2 9.0 8.0 7.8 -16% 7.6 7.3 7.4 7.4 7.2 7.1 6.9 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 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 Q
Slide 39: Important Information
Important Information The information contained herein reflects our latest business statement as at March 31, 2020. 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 40: Thank You
Thank You UBL Performance Overview – Q1 2020 40