Union Bank Of India Limited · NSE:UNIONBANK
Union Bank Of India — 9M FY2009-10 Earnings Presentation
47 slides from Union Bank Of India's earnings presentation, January 2010
Slide 1: Financial Results 31st Dec 2009
Presentation Financial Results 31st Dec., 2009 Nine Months 09-10 1
Slide 2: Overcoming Challenges
Overcoming Challenges 4 3 2.71 2.28 2.34 2 1 0 Q1 FY 10 Q2 FY 10 Q3 FY 10 Net Interest Margin 1200 1064 1000 864 801 800 600 400 200 Q1 FY 10 Q2 FY 10 Q3 FY 10 Net Interest Income 2
Slide 3: Increasing Shareholders' Returns
Increasing Shareholders’ Returns Q3 10 over Q2 10 (Sequential Basis) Earning per Share is at Rs. 42.30 as compared to Rs.40.00 as of Sept.2009 on sequential basis. Book Value per Share has increased from Rs.156.72 as of Sept. 09 to Rs.167.34 Return on Equity (RoE) is at 25.28% vis-à-vis 25.52%
Slide 4: Nine Months Comparisons
Financial Results – 31st Dec. 2009 Nine Months Comparisons 4
Slide 5: Operating Profits (9 months)
Operating Profits (9months) Growth 15.71 % 2800 2511 2170 • Operating Profit 2400 grew by 15.71% to 2000 1600 Rs.2511 Crs. as of 1200 31st Dec.09 as 800 against Rs.2170 400 crs in the previous 0 year. DEC 08 DEC 09 DEC 08 DEC 09 5
Slide 6: Net Profits (9 Months)
Net Profits (9 Months) Growth 17.45% 1600 1481 • The overall improvement 1400 1261 in financial parameters is 1200 reflected in Net Profit 1000 increasing to the level of 800 Rs. 1481 crs as on 31st 600 December’09 as against 400 Rs. 1261 crs in the 200 corresponding period of 0 DEC 08 DEC 09 previo
Slide 7: Net Interest Income & NIM (9 Months)
NET INTEREST INCOME & NIM (9Months) 4 2887 3.32 3000 2729 2700 2400 3 2100 2.40 1800 2 1500 1200 900 1 600 300 0 0 DEC 08 DEC 09 DEC 08 DEC 09 NET INTEREST MARGIN Net Interest Income Net Interest Income is at Rs. 2729 crore and NIM is at 2.40 for the Nine Months ended Dec. 09 7
Slide 8: Net Interest Income
NET INTEREST INCOME Sequential quarter-wise comparison 8
Slide 9: Improving NIM
Improving NIM ¾ Deposits (9% p.a. and above) has come down from Rs. 45400 Cr.Approx as on 31.03.09 to Rs. 13000 Cr. Approx as on 31.12.2009. ¾ WAR on Average Term Deposits declined from 8.60% as on 31.03.09 to 7.52% as on 30.09.2009 and further to 6.81% as on 31.12.2009. ¾ Estimated WAR on Term Depo
Slide 10: Improving NIM on Earning Assets
Improving NIM on Earning Assets (Rs.in crore) June 09 SEP 09 DEC 09 DEC 09 (3M) (3 M) (3M) (9M) Net Interest Income 801 864 1064 2729 NIM (Earning Assets) 2.28 2.34 2.71 2.40 ¾ NII shows consistent growth since June 2009. ¾ NIM for the 3rd quarter has improved to 2.71% from 2.34% 10
Slide 11: Non-Interest Income (9 Months)
Non-Interest Income- (9 Months) (Rs.in crore) DEC DEC DEC DEC Growth 06 07 08 09 % Profit on Sale of 96 250 94 558 493.62 Investments Exchange on Forex 131 185 265 252 -4.91 Transactions Recovery in Write off 64 115 113 125 10.62 Accounts Other Non - Interest 271 336 451 614 36.14 Income Total 562 8
Slide 12: Growing Operating Profit (9 Mths)
Growing Operating Profit (9 Mths) CAGR Growth of 26.41% 2511 2800 2400 2170 2000 1690 1243 1600 1200 800 400 0 DEC 06 DEC 07 DEC 08 DEC 09 Operating Profit 12
Slide 13: Growing Net Profit (9 Mths)
Growing Net Profit (9 Mths) CAGR Growth of 33.89% 1600 1481 1400 1261 1200 1000 866 617 800 600 400 200 0 DEC 06 DEC 07 DEC08 DEC09 Net Profit 13
Slide 14: Quarterly Comparisons
Quarterly Comparisons 14
Slide 15: Operating Profits (Quarterly)
Operating Profits (Quarterly) Growth 12.84% • Operating Profit of the Bank grew by 104 Crs. from Rs.810 Crs. as of Sept. to Rs.914 crs, a growth of 12.84%. 15
Slide 16: Provisions (Quarterly) (Sequential)
Provisions (Quarterly) (Sequential) (Rs.in crore) DEC 08 DEC 09 (Q3 (Q3) Taxation 228 219 NPA (excluding adhoc provision for 160 43 Standard Assets) Standard Assets 6 7 Depreciation on Investment -291 40 Others (Frauds / Restructured 80 71 Adv.Etc.) Total 183 380 16
Slide 17: Net Interest Income (Qty) (Sequential)
Net Interest Income(NII) (Qty) (Sequential) Growth 23.15 %) Net Interest Income has improved sequentially from Rs. 864 Cr. as of Sept. 09 to Rs. 1064 Cr. as on Dec. 09 an increase of 23.15% 17
Slide 18: Net Profits (Quarterly)
Net Profits (Quarterly) • The overall improvement in financial parameters is reflected in Net Profit of Rs. 534 crs. as on 31st Dec’09 as against Rs. 505 Cr. as on Sept. 09. • YoY Profit is lower, mainly due to write-back of Depreciation in Investment of Rs. 291 crore in quarter ended Dec.’08 • Excl
Slide 19: Net Interest Margin (Qty) (Sequential)
Net Interest Margin (Qty) 10 (Sequential) 8.05 7.95 7.96 8 Yield on funds stood at same level of 7.96% as 6.02 6 5.81 5.39 on Dec. 09. Cost of Funds stood at 5.39% as compared to 2.03 2.14 4 7 2.57 2.71 2.28 2.34 5.81% as on Sep. 09. 2 Net Interest Margin (on Earning Assets) has 0 JUNE 09 SEPT. 09 D
Slide 20: Non-Interest Income (Qty)
Non-Interest Income- (Qty) (Rs.in crore) DEC 08 DEC 09 Growth (Q3) (Q3) % Profit on Sale of 101 131 29.70 Investments Exchange on Forex 105 83 -20.95 Transactions Recovery in Write off 27 37 37.03 Accounts Core Income 162 214 32.10 Total 395 465 17.72 20
Slide 21: Major Components of Core Income (Qty)
Major Components of Core Income- (Qty) (Rs.in crore) DEC 08 DEC 09 Growth (Q3) (Q3) % L/C & L/G Commission 41 49 19.51 Comm. On Inland 12 11 -8.33 Remittances Insurance Comm. 5 6 20 Processing Charges 60 78 30.00 ATM / Debit Card Income 9 23 155.56 Misc. Income 10 22 120.00 21
Slide 22: Core Fee Income (Qty)
Core Fee Income- (Qty) (Rs.in crore) DEC DEC % DEC % DEC % 06 07 Growth 08 Growth 09 growth 98 116 18.36 162 39.66 214 32.10 CAGR GROWTH : 29.74% for the three years 22
Slide 23: Deposits
Deposits Total Deposits grew at 16.54% YoY. Deposits (9% and above) reduced from Rs.45397 Cr. In March 09 To Rs.13084 Cr. In Dec. 09. (Rs.in crore) DEC 08 MAR 09 DEC 09 Growth %YoY Total Deposits 129647 138703 151085 16.54 Demand Deposits 39378 41711 48861 24.08 (CASA) CASA SHARE % 30.37 30.07 32.34
Slide 24: Growth of Deposits
Growth of Deposits (Rs.in crore) MAR 09 DEC 09 Absolute % Growth Growth Over MAR 09 Total Deposits 138703 151085 12382 8.93 Demand Deposits 41711 48861 7150 17.14 (CASA) CASA accounted for 57.75% of the incremental deposits amount since 31.03.09. 2.67 million new Accounts were added during the 9
Slide 25: CASA Deposits
CASA Deposits (Rs.in crore) DEC 08 MAR 09 DEC 09 % Growth Over MAR 09 Current Deposits 11968 13166 14073 6.89 Savings Deposits 27410 28545 34788 21.87 Demand Deposits 39378 41711 48861 17.14 (CASA) Total Deposits 129647 138703 151085 8.93 % to total deposits 30.37 30.07 32.34 - Cost of Deposits(%) 6
Slide 26: Advances & Yield on Advances
Advances & Yield on Advances 110000 100000 92978 106534 Advances 90000 80000 70000 Bank registered growth 60000 50000 of 14.58% YoY in 40000 30000 20000 advances. Yield on 10000 DEC 08 DEC 09 advances is at 10.15 %. Advances (Rs. in Crore) DEC 08 DEC 09 YoY Growth% AGRICULTURE 13854 17535 26.57 MSME
Slide 27: Assets Restructured during 9M-FY10
Assets Restructured during 9M-FY 10 Nature of UPTO MAR 09 UPTO SEP 09 DURING DEC 09 Advance QTR. No of Amt. No of Amt. No of Amt. Accts Accts Accts (Rs in Crs) (Rs in Crs) (Rs in Crs) MSME W/w 28272 647.42 28422 949.43 45 45.78 Micro Enterprises 20620 249.18 20730 251.91 38 14.04 Small Enterprises 7
Slide 28: Assets Restructured during 9M-FY10
Assets Restructured during 9M-FY 10 Restructured Accounts Closed / Fully Adjusted Details of Restructured Accounts Accounts Amount (Rs. in cr. April 09 – Dec. 2009 4232 238.63 Restructured Accounts turned to NPAs (for more than Rs. 1.00 crore) Details of Restructured Accounts Accounts Amount (Rs. in
Slide 29: Top Sector Exposures
TOP SECTOR EXPOSURES Across Large & Mid Corporates, SME and Corporate Agri Business Rank Sectors Exposures (As on 31st December 2009) % Amount (Rs. in Crore) 1 Retail Advances 11.13 11843 2 Infrastructure 8.87 9431 3 Construction 5.38 5717 4 Iron & Steel 3.35 3563 5 Electricity 1.79 1899 6 Commercia
Slide 30: Distribution of Ratings Large & Mid Corporates
DISTRIBUTION OF RATINGS LARGE & MID CORPORATES The Bank is having a portfolio of Rs.51063 crore (No. of Accounts 363) of more than Rs. 50 crore, out of which 317 Accounts with exposure of Rs.32321Crore are rated. Rating of the Accounts is as under: Rating No of Borrowers Exposure % OF RATED EXPOSURE
Slide 31: Investments
Investments Growth in investments and yield on investments were in line with market trends. Out of Total AFS portfolio of Rs.14678 Cr. Rs. 6894 Cr (46.97%) is interest sensitive. DEC 08 % Duration DEC 09 % Duration (Rs in crs) (Rs in crs) Held to Maturity 26041 63.13 4.46 37269 71.50 5.58 Held for T
Slide 32: NPA Management
NPA Management (Rs.in crore) DEC 08 MAR 09 DEC 09 Gross NPAs – Opening on 1st April 1657 1657 1923 Add : Additions 614 1177 968 Less : Deductions 707 911 799 1. Due to Write Off 270 366 414 2. Due to upgradation / Recovery 437 545 385 Gross NPAs 1564 1923 2092 Gross Credit 92978 98265 106534 Gross N
Slide 33: Asset Quality
Asset Quality Asset quality is reflected in delinquency ratio being at a low level as under:- DEC 08 DEC 09 (9 M) (9 M) Delinquency Ratio 1.10% 1.34% 33
Slide 34: Cost of Credit
Cost of Credit Cost of Credit of since March 08 has improved substantially. (Rs in Crs) Particulars F Y MAR 08 F Y MAR 09 DEC 09 (9 M) Gross Advances 75878 98265 106367 Average Advances 69768 87072 102291 (Opening + Closing / 2 ) NPA Provision 585 546 386 Credit Cost % 0.84 0.63 0.50 Note : Dec.2009
Slide 35: Key Ratios – Efficiency
Key Ratios – Efficiency Ratios (in %age) DEC 08 SEPT. DEC09 DEC 08 DEC 09 (Q3) 09 (Q3) (9 M) (9 M) (Q2) Efficiency Ratios Cost to Income 43.81 42.90 40.23 43.04 41.29 Ratio Operating Exp. To 1.90 1.51 1.49 1.67 1.46 AWF Better use of Average Working Funds has resulted in improved Cost to Income Rati
Slide 36: Improved Productivity
Improved Productivity (Rs. In lacs) Ratios* DEC 08 DEC 09 (9 M) (9 M) Productivity Ratios Business per Employee 821 923 Business per Branch 8988 9307 Net Profit per Employee 6.20 7.08 Net Profit per Branch 67.90 71.36 Gross Profit per Employee 10.67 12.00 Gross Profit per Branch 116.84 120.99 * Annu
Slide 37: Capital Adequacy Ratio (Basel II)
Capital Adequacy Ratio (Basel II) 16.00 14.00 13.41 13.46 Capital Adequacy Ratio increased from 13.41% as on 31st Dec., 2008 12.00 to 13.46% as on 31st Dec., 2009 10.00 despite increase in volume of 8.16 8.70 business. 8.00 Tier-I capital funds have increased 6.00 by 25.54% from Rs.7554 crore as
Slide 38: Distribution Channels
Distribution Channels METRO 590 URBAN 791 SEMI URBAN RURAL MAR DEC Add- 09 09 ition Total Outlets 2661 2876 215 631 ATMs 1790 2249 459 700 ¾ Transactions through Electronic mode has increased from 21% of total transactions as of March’09 to 31.71% as of Dec.’09. 38
Slide 39: Shareholding Pattern (31st Dec 2009)
Shareholding Pattern (31st DEC 2009) 16.16 Govt. of India Banks, Fis, Ins. Cos. Others 14.90 FIIs and Foreign Mutual Funds 55.43 DEC 08 DEC 09 13.51 % % GOVT. 55.43 55.43 FIIs & FMFs 17.56 16.16 BANKS, INST./ 14.13 13.51 MUTUAL FUNDS OTHERS 12.88 14.90 39
Slide 40: Major highlights of last quarter
Major highlights of last quarter 40
Slide 41: Major Highlights Q3-10: Awards & Accolades
Major Highlights Q3-10 Awards & Accolades • The Bank was awarded the Certificate of Merit by SOUTH ASIAN FEDERATION OF ACCOUNTANTS (SAFA), an apex body of SAARC, for best presented accounts and corporate governance disclosure for 2008 under the “Financial Sector – Banking” category. • The Award is b
Slide 42: Major Highlights Q3-10
Major Highlights Q3-10 • The Hon’ble Finance Minister, Shri Pranab Mukherjee dedicated the full networking of branches under Core Banking Solution of 2 RRBs of the Bank, namely Rewa Siddhi Gramin Bank in the State of Madhya Pradesh and Kashi Gomti Samyut Gramin Bank in the State of Uttar Pradesh on
Slide 43: Major Highlights Q3-10
Major Highlights Q3-10 • As part of its global expansion initiatives, the Bank set up its Representative Office in Sydney, Australia. • The Office was inaugurated on 3rd December, 2009. • The Bank is in the process of opening its 5th representative office in London, UK shortly. 43
Slide 44: Road Ahead
ROAD AHEAD 44
Slide 45: Road Ahead
Road Ahead The Bank aims for a deposits growth of approx. 20% and advances growth of 18% for 2009-10. Bank targets CASA Ratio of 35% by March 2012. Return on Equity to be 25.00% and Return on Average Assets to be 1.25% by March 2010. Transaction through electronic mode to reach 35% of total transact
Slide 46: 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 47: Thank you
Thank you Your dreams are not yours alone
Union Bank of India — 9M FY2009-10 Earnings Presentation on 6ix