United Bank Limited · PSX:UBL
United Bank — Q1 2018 Earnings Presentation
40 slides from United Bank's earnings presentation, Apr 20, 2018
Slide 1: Performance Highlights – Q1 2018 Investor Relations Conference Call
Performance Highlights – Q1 2018 Investor Relations Conference Call April 20th, 2018 Speakers: Mr. Aameer Karachiwalla - Chief Financial Officer UBLArif Mr. Performance Saifie, FCA,Overview – Q1 2018 CFA - Financial Controller and Head of Investor Relations Investor Relations Release
Slide 2: Table of Contents
Table of Contents PAGE Key Highlights 3 Execution and Delivery 8 Growth at a Glance 25 Quarterly Trend Analysis 29 UBL Performance Overview – Q1 2018
Slide 3: Key Performance Highlights
Key Performance Highlights Standalone Results PBT before extraordinary items at Rs. 10.5 bln, down 6% vs. Q1’17 PAT at Rs. 2.6 bln (Q1’17: Rs. 7.3 bln) – Q1’18 PAT Rs. 6.7 bln on normalized basis Normalized EPS at Rs. 5.60 (Q1’17: Rs. 5.93) Normalized return on equity (RoE) of 21.5% in Q1’18
Slide 4: Avg. Total Assets of Rs 1.91 tln in Q1'18, growth of 26%
Avg. Total Assets of Rs 1.91 tln in Q1’18, a growth of 26% over Q1’17 Average domestic current deposits growth of 19% YoY; average performing advances up 25% Growth led by current deposits – average growth of 19%, incremental vol. of Rs. 68 bln 149K NTB current accounts mobilized in Q1’18 (Q1’17
Slide 5: Overall revenues grow by 6% YoY to Rs 21.2 bln in Q1'18
Overall revenues grow by 6% YoY to Rs 21.2 bln in Q1’18 - Domestic up 11% to Rs 18.6 bln Net Interest Income up to Rs. 13.9 bln in Q1’18 (Q1’17: Rs. 13.7 bln) Average earning assets grew by Rs 352 bln YoY to Rs 1,647 bln in Q1’18 Average 3 months KIBOR up from 6.1% in Q1’17 to 6.3% in Q1’18 – ra
Slide 6: Overall NFI closed at Rs 7.3 bln in Q1'18, 16% growth
Overall NFI closed at Rs 7.3 bln in Q1’18, a 16% growth over Q1’17 1 Fee income stood at Rs 2.9 bln, up 6% from Q1’17 Domestic fees grew by 21% YoY to reach Rs 2.5. bln in Q1’18:– Home remittances revenues grew by 27% - market share up to over 30% (Q1’17:25.6%) Trade commissions growth of 11%
Slide 7: Strong recoveries in Domestic, coverage buildup in International
Strong recoveries in Domestic, coverage buildup in International Net provision charge of Rs. 1.9 bln in Q1’18 vs. Rs. 0.1 bln in Q1’17 DOM net provision reversal of Rs 813 mln in Q1’18 (Q1’17: Rs 95 mln reversal) International provisions of USD 24.5 mln taken in Q1’18 (Q1’17: USD 1.7 mln) Over
Slide 8: Execution and Delivery
Execution and Delivery UBL Performance Overview – Q1 2018 8
Slide 9: 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 Q1'18: Rs. 215.16 30 Mar’18: Rs. 208.89 280 18 Apr'18: Rs. 201.30 Rs in bln Cons . Equity Ma r’18 - Rs. 172 bln 50 Cons . Book va lue Ma r’18 - Rs. 141 per s hare 260 2
Slide 10: Income Statement - Standalone
Income Statement - Standalone Rs in bln Rs in bln Q1'18 Q1'17 Var % Q4'17 Var % Interest Earned 28.1 23.9 17.8% 29.0 -3.1% Interest Expensed (14.3) (10.2) -40.4% (14.8) 3.5% Net Interest Income 13.9 13.7 1.0% 14.2 -2.7% Non Interest Income 7.3 6.3 16.5% 6.0 20.9% Total Revenue 21.2 20.0 5.9% 20.3 4.
Slide 11: Balance Sheet - Standalone
Balance Sheet - Standalone Rs in bln Mar'18 Dec'17 Var % Advances 624 605 3.3% Investments 826 1,092 -24.4% Lendings to Financial Institutions 53 34 56.5% Others 268 277 -3.4% Total Assets 1,771 2,007 -11.8% Deposits 1,301 1,289 0.9% Borrowings 264 513 -48.6% Others 51 46 9.4% Total Liabilities 1,61
Slide 12: Income Statement - Consolidated
Income Statement - Consolidated Rs in bln Rs in bln Q1'18 Q1'17 Var % Q4'17 Var % Interest Earned 29.1 24.7 17.8% 30.0 -3.0% Interest Expensed (14.7) (10.6) -39.5% (15.2) 3.2% Net Interest Income 14.3 14.1 1.5% 14.7 -2.8% Non Interest Income 8.2 7.2 14.0% 6.5 25.8% Total Revenue 22.5 21.3 5.7% 21.2
Slide 13: Balance Sheet - Consolidated
Balance Sheet - Consolidated Rs in bln Mar'18 Dec'17 Var % Advances 664 643 3.3% Investments 864 1,125 -23.2% Lendings to Financial Institutions 53 36 48.7% Others 295 302 -2.4% Total Assets 1,876 2,105 -10.9% Deposits 1,380 1,366 1.0% Borrowings 272 517 -47.4% Others 52 48 9.5% Total Liabilities 1,
Slide 14: Deposits performance - Focus remains on growing low cost deposits
Deposits performance - Focus remains on growing low cost deposits Deposits - Bank Mar'18 Dec'17 PE CoF % PE CoF % Domestic deposits - Rs in bln 1,053 2.6% 1,033 2.7% International deposits - Rs in bln 249 2.2% 256 2.2% Total Bank - Rs in bln 1,301 2.5% 1,289 2.6% International - USD in mln 2,154 2.2
Slide 15: Advances portfolio up 3% over Dec'17
Advances portfolio up 3% over Dec’17 Net Advances Rs in bln Mar'18 Dec'17 Var % Corporate Bank 333 303 10% Commodity 57 47 21% Commercial 30 35 -14% Consumer 13 12 8% Others 32 34 -4% Total Domestic 465 431 8% International 160 173 -8% Bank 624 605 3% International USD mln 1,383 1,569 -12% Dec'17 30
Slide 16: International Advances - Corporate advances remains the largest component
International Advances - Corporate advances remains the largest component By Geography By Business - UAE Bahrain, Qatar, 11% Yemen, 0% 15% NewYork, 2% Corporate, 66% EPZ, 0% Others, 30% Consumer, UAE, 72% 4% Personal Others, 2% loan, 2% Abu Dhabi, 29% Sharjah, 4% Dubai, 67% Baitna, 96% UBL Performan
Slide 17: Concentration of Advances as at March 31, 2018 - Standalone
Concentration of Advances as at March 31, 2018 - Standalone 2% 11% 30% 11% 1% 2% 2% 6% 7% 2% 26% Chemical & Pharma Agribusiness Textile Cement Sugar Autos & Transport Financial Electronics Power & Energy Individuals Others UBL Performance Overview – Q1 2018 17
Slide 18: Diversified investment portfolio with strong market risk management
Diversified investment portfolio with strong market risk management Portfolio declines in line with reduced leveraging Investments’ yields Total 1,092 Rs in bln 11.1% 31 1 47 39 Total 826 18 10.4% 10.4% 25 1 48 8.9% 40 17 542 7.8% 7.4% 2013 2014 2015 2016 2017 Q1'18 463 Non Funded revenue streams co
Slide 19: Our international outreach - serving in 4 continents under UBL brand
Our international outreach - serving in 4 continents under the single “UBL” brand ASSOCIATED COMPANIES OVERSEAS BRANCHES 3 20 PAKISTAN BRANCHES 1,360 SUBSIDIARIES 4 Asset mix by region 2017 2016 Domestic Operations 79.9% 76.4% International Operations 20.1% 23.6% Middle East 14.8% 17.5% USA 0.2% 0.7
Slide 20: 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 “Best Bank” in the first ever Pakistan Banking Awards 2016 Banking (UBL OMNI) “Best Bank for Corporate Finance and Capital Marke
Slide 21: Review of Non Interest Income & Administrative Expenses
Review of Non Interest Income & Administrative Expenses UBL Performance Overview – Q1 2018 21
Slide 22: Non Fund Income Standalone Results
Non Fund Income Standalone Results Rs in mln Q1'18 Q1'17 Var % Fee, commission and brokerage income 2,450 2,030 21% Dividend income 571 552 3% Income from dealing in foreign currencies 596 260 130% Gain / (loss) on sale of securities 2,881 2,160 33% Other income 163 152 8% Domestic Total 6,662 5,154
Slide 23: Fees and Commissions performance
Fees and Commissions performance Standalone Results Rs in mln Q1'18 Q1'17 Var % OMNI fee & commissions 307 277 11% Commission on trade 242 218 11% Corporate service charges/ Facility fee 52 34 54% Corporate finance fee 34 20 68% FIG commission 57 21 176% Commission on ATM/ Debit cards 378 281 35% Co
Slide 24: Administrative Expenses Standalone Results
Administrative Expenses Standalone Results Rs in mln Q1'18 Q1'17 Var % Salaries, allowances & Staff fund 3,574 3,523 -1% charges Rent taxes insurance etc. 1,041 1,128 8% Outsourced service charges 1,176 1,105 -6% including sales commission Advertisement and publicity 128 210 39% Communications 343 2
Slide 25: Growth at a Glance
Growth at a Glance UBL Performance Overview – Q1 2018 25
Slide 26: Balance Sheet
Balance Sheet Rs. in mlns 2017 2016 2015 2014 2013 2012 Assets Cash and balances with treasury and other banks 177,099 146,428 128,870 87,573 114,388 109,396 Lending to financial institutions 33,664 34,168 24,095 21,872 28,835 21,953 Investments- gross 1,095,555 808,959 721,651 499,060 425,253 351,0
Slide 27: Profit & Loss
Profit & Loss Rs. in mlns 2017 2016 2015 2014 2013 2012 Markup / return / interest earned 107,206 98,219 94,353 82,735 72,846 73,507 Markup / return / interest expensed (50,781) (41,177) (38,511) (37,769) (34,910) (34,948) Net Markup / Interest income 56,425 57,042 55,842 44,967 37,936 38,560 Fee, c
Slide 28: Key Financial Ratios & Share Information
Key Financial Ratios & Share Information 2017 2016 2015 2014 2013 2012 Key Financial Ratios Return on equity (RoE) 20.8% 24.9% 25.7% 23.9% 22.3% 23.8% Return on assets (RoA) 1.4% 1.9% 2.0% 2.1% 2.0% 2.1% Profit before tax ratio 51.1% 57.1% 54.2% 52.0% 49.6% 48.2% Return on capital employed (RoCE) 20
Slide 29: Quarterly Trend Analysis
Quarterly Trend Analysis Bank Level - Standalone UBL Performance Overview – Q1 2018 29
Slide 30: Profit before tax
Profit before tax Rs in bln 13.5 +6% +7% 11.8 10.9 11.2 11.3 10.8 11.2 10.2 9.9 10.4 -29% 9.3 +4% 8.4 8.3 8.8 7.8 8.0 7.1 8.4 6.4 -54% 5.9 4.1 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 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 UBL Performance Overview – Q1 2
Slide 31: Profit after tax
Profit after tax Rs in bln 7.1 7.3 +13% 7.3 6.5 7.0 -17% 6.5 6.4 6.1 7.0 +8% 6.3 5.7 6.0 5.6 5.2 5.3 5.3 -2% 5.9 -58% 4.7 4.3 4.0 2.6 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18 UBL Performance Overview – Q1 2018 31
Slide 32: Deposits
Deposits Rs in bln +3% +1% +6% -0% 1,289 1,301 +0% 1,256 1,254 1,183 1,142 1,147 1,180 1,051 1,070 992 994 945 895 858 866 828 847 752 773 703 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 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 UBL Performance Overview – Q1 2
Slide 33: Net Advances
Net Advances Rs in bln +3% 624 +7% 605 +0% 565 567 +13% -2% 509 510 496 498 459 455 434 430 417 420 408 447 391 377 363 369 352 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 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 UBL Performance Overview – Q1 2018 33
Slide 34: Revenue
Revenue Rs in bln 21.9 21.3 +4% 21.2 +2% 20.3 +4% 20.4 20.3 20.0 19.3 19.5 19.2 -12% +13% 17.6 18.6 18.1 17.9 16.3 15.4 14.9 13.8 14.1 15.5 12.6 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 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 UBL Performance Overview – Q1
Slide 35: Net Interest Income
Net Interest Income Rs in bln 15.7 14.7 14.2 14.3 +1% 14.2 14.0 +4% 13.6 -3% 13.1 -1% 12.8 -2% 14.2 13.9 13.7 13.9 13.7 11.3 11.0 10.6 9.8 9.5 9.0 8.8 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 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 UBL Performance Overvie
Slide 36: Non Funded Income
Non Funded Income Rs in bln 8.4 7.3 6.2 6.2 6.3 -3% +21% +21% 6.1 6.0 5.6 4.9 5.1 5.0 -38% +60% 4.8 4.8 4.8 4.8 4.6 5.2 4.5 3.9 4.5 3.8 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 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 UBL Performance Overview – Q1 2018 36
Slide 37: Provisions
Provisions Rs in bln 2.1 -8% 2.0 1.9 1.3 +260% 0.9 0.9 0.8 0.7 0.5 0.6 0.8 0.3 0.3 -76% 0.2 0.2 0.1 +207% -0.1 -777% 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 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 -0.1 -0.3 -0.3 -0.5 UBL Performance Overview – Q1 2018 37
Slide 38: Administrative Expenses
Administrative Expenses Rs in bln +5% 9.2 -0% -6% +3% 8.8 8.8 8.6 +3% 8.5 8.4 8.2 8.7 8.0 7.8 7.6 7.3 7.4 7.4 7.2 7.1 6.9 6.9 6.5 6.5 6.2 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 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 UBL Performance Overview – Q1 2018 3
Slide 39: Important Information
Important Information The information contained herein reflects our latest business statement as at March 31, 2018. 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 2018 40