Habib Bank Limited · PSX:HBL
Habib Bank — Investor Presentation (November 2018)
28 slides from Habib Bank's investor presentation, November 2018
Slide 1: Investor Presentation November 2018
Investor Presentation November 2018 Doing First Class business in a First Class way
Slide 2: Pakistan Economy
Pakistan Economy FX reserves / FX rate Policy rate / Inflation 160 0 0 25 Avg Policy rate FX Reserves ($Bn) 4.53% 0 0 Inflation PKR / USD rate - Avg 140 0 20 0 4.16% 110.0 120 2.86% 3.92% 0 101.4 104.3 104.8 0 0 15 100 0 0 23.1 0 8.33% 10 21.4 80 0 18.7 0 6.04% 5.75% 5.96% 16.4 60 0 0 0 5 40 0 0 0 0
Slide 3: Pakistan's No. 1, AAA rated, Commercial Bank
Pakistan’s No. 1, AAA rated, Commercial Bank # 1 bank in Pakistan (1) : Shareholding Pattern #1 Advances US$ 8Bn Others - #1 Assets US$ 21Bn Local 18.2% #1 Deposits US$ 17Bn #1 Domestic AKFED Branches 1,703 51.0% Others - Foreign #1 ATMs 2,133 20.9% #1 POS Terminals 18,606 #1 Customers 12Mn + IFC 2.
Slide 4: A Seasoned Board
A Seasoned Board Chairman President & CEO Directors Sultan Ali Allana Muhammad Shaffiq Dharamshi Moez Ahamed Jamal Chairman Aurangzeb Non-Executive Director Non-Executive Director President & CEO Mr. Sultan Ali Allana has served as the Mr. Muhammad Aurangzeb joined HBL on Mr. Dharamshi joined
Slide 5: Strengthened Governance
Strengthened Governance Committee Chairman Member Secretary Audit Committee Dr. Najeeb Samie Mr. Moez Jamal Chief Internal Auditor Ms. Sadia Khan Board Compliance Mr. Moez Jamal Ms. Sadia Khan Chief Compliance and Conduct Chief Operating Officer Officer Committee (Non-voting member) Board Risk Mr. S
Slide 6: An experienced Executive Committee
An experienced Executive Committee The senior team represents a well balanced bench strength between continuity and new inductions Front Office Aamir Irshad Aamir Kureshi Faisal Lalani Neelofar Hameed Head Branch Banking 13 / 27 / 30 (1) Head Consumer Banking 11 / 28 / 28 (1) Head International Bank
Slide 7: HBL's Strategic Direction: The 6-Point Agenda
HBL’s Strategic Direction : The 6-Point Agenda Commitment to deliver on P&L Sustainable revenue growth on the back of top league table positions Strict cost discipline including cost initiatives 1 Optimal deployment of Balance Sheet, with enhanced focus on cross-sell Maintain high portfolio
Slide 8: HBL's Portfolio: A STARS Approach
HBL’s Portfolio : A STARS Approach Sustaining Success Maintain Dominant Position in • Deposits Startups • Corporate & Investment Banking Increased Emphasis on • Branchless Banking S • Treasury • Rural Banking • Digital Banking T S Turnaround Realignment Strategic rethink of • Commercial Banking • In
Slide 9: Key Initiatives Underway
Key Initiatives Underway Financial Performance 8
Slide 10: Business Transformation Programme
Business Transformation Programme Following New York, we set out to deliver a group-wide business transformation programme (BTP) covering … Governance: Enforcement of new & enhanced People: Upscaling our people via continuous controls ensuring a robust governance framework, training and development
Slide 11: Business Transformation Programme - Cont.
Business Transformation Programme - Cont…. … with key accomplishments across four pillars of the programme via several initiatives within the BTP De-risking high risk customers – MSBs (100% closed), Nominee Accounts (100% closed), Offshore/Free Zone Accounts (82% closed). Gov. Revamping KYC stan
Slide 12: Branchless Banking – HBL KONNECT
Branchless Banking – HBL KONNECT Business Model 1,250 1,082 1,050 958 Banking solutions outside the branches, leveraging agents & Mobile for mass 850 710 acquisition 650 Launched in July 2018; QR payments 462 450 launched in September 2018 250 165 Real time Sanctions Screening – Prevented 73 8
Slide 13: HBL Digital
HBL Digital Mobile & Internet Banking Mobile & Internet Banking, Internet Payment 1,209 Users ('000) Gateway 1,053 1,009 • 1 Mn users for Mobile & Internet • 200+ IPG Merchants 809 711 • Largest self-service menu 609 • Lifestyle app: Partnering with merchants to 387 409 enable in-app shopping experi
Slide 14: Farm Mobile App
Farm Mobile App Aerial View of Farms Hyderabad Region Geotagging of farms Aerial view of farms to be accessed from Google Maps Image of farmer and farm Condition of agricultural lands to be evaluated from images Centralized storage of important data points along with time and date stamp Fa
Slide 15: Transaction and Employee Banking (TEB)
Transaction and Employee Banking (TEB) Throughput – Cash Management & HAW Digitization is the key! 3,000 200 180 2,419 2,500 2,268 Digitizing collections and payments by bringing clients to 160 161 140 digital platform at both sending and receiving end via 2,000 1,792 135 120 internet, mobile and br
Slide 16: Financial Performance
Financial FinancialPerformance Performance 15
Slide 17: HBL's Fortress Balance Sheet
HBL’s Fortress Balance Sheet Net Advances Deposits (PKRbn) (PKRbn) 2,059 1,999 1,886 959 1,635 852 1,525 1,401 748 1,215 637 600 564 500 2012 2013 2014 2015 2016 2017 Sep-18 2012 2013 2014 2015 2016 2017 Sep-18 Total assets Strong capital base (PKRbn) (PKRbn) 17.0% 17.0% 16.2% 15.5% 16.0% 15.3% 15.4
Slide 18: Deposits remain the growth engine
Deposits remain the growth engine Growth in current deposits Deposit composition (PKRbn) 21.9% 17.5% 17.7% 16.5% 15.0% 33.0% 26.7% 782 698 733 600 45.8% 45.3% 46.8% 47.1% 522 43.9% 43.9% 411 40.8% 317 34.2% 36.7% 37.0% 36.7% 38.0% 26.2% 29.4% 2012 2013 2014 2015 2016 2017 Sep-18 2012 2013 2014 2015
Slide 19: A diversified loan portfolio
A diversified loan portfolio… Loan portfolio composition by line of business Loan portfolio composition by industry segments Agriculture 4% Individual International 12.5% 9% Chemical Others 3% 33% Others 12.4% Power & Net loans: energy FMFB 8% Net loans: 2.1% PKR959Bn PKR959bn Corporate Financial 53
Slide 20: Strategic initiatives to continue driving growth & inclusion
Strategic initiatives to continue driving growth & inclusion Growth in Consumer Lending Renewing focus on Agricultural Financing (PKRbn) (PKRbn) 50 46 41 34.7 31.2 32.5 31.2 31 25.2 22 19.8 19 15 0.2% 15.5 0.2% (0.2%) 0.3% 0.1% 0.2% (0.1%) 2012 2013 2014 2015 2016 2017 Sep-18 Consumer NCL Ratio 2012
Slide 21: Bancassurance – Maintain leadership, 35% Market share
Bancassurance – Maintain leadership, 35% Market share Premium and Revenues (PKR bn) 7 6.5 6.45 6.5 6 5.5 5 4 2.7 2.82 2.85 3 2.4 2 1 0 2015 2016 2017 2018 Premium Fees NFI Business Summary – Lifetime to date Total Premium sold 31.2 Bn No. of Policies 514,000, 30% women Persistency 3 Years at over 83
Slide 22: Embracing Diversity
Embracing Diversity HBL Nisa – Banking platform for women 450 412 35 390 400 342 30 350 308 272 277 25 300 227 20 250 186 31 200 15 29 134 25 23 150 22 21 80 10 18 15 100 10 50 5 5 6 0 - - Deposit (PKR B) Accounts # (K) Accounts (‘000) Gender Intelligence Training • Online survey administered to all
Slide 23: Operating results
Operating results Total Revenue Pre-Provision Operating profit (PKRbn) (PKRbn) 65 115 113 116 57 53 50 92 43 74 74 77 37 20 2012 2013 2014 2015 2016 2017 9M'18 2012 2013 2014 2015 2016 2017 9M'18 Profit before tax (excl. extra ordinary item in 2017^) Return on Equity (PKRbn) 22% 23% 21% 21% * 18% 18
Slide 24: Earnings and Dividends
Earnings and Dividends Profit after taxation Cost to income ratio (PKRbn) 73.4% 32 65.7% 48.6% 48.3% 44.8% 53.4% 41.2% 42.2% 24 35 34 Excl. 31 pensions 23 23 charge, PwC Cost & Reval 8 10 Loss 2012 2013 2014 2015 2016 2017 9M'18 2012 2013 2014 2015 2016 2017 9M'18 Shaded portion represents the impac
Slide 25: Appendix: Financial Performance
Appendix Financial Performance 24
Slide 26: Balance Sheet
Balance Sheet PKR Bn 2012 2013 2014 2015 2016 2017 Sep'18 Assets Cash & Bank Balances 205 193 203 208 284 287 297 Lendings to financial institutions 25 35 34 18 34 34 29 Investments 797 826 923 1,271 1,344 1,375 1,201 Advances 500 564 600 637 749 852 959 Others 84 97 105 84 96 137 141 Total Assets 1
Slide 27: Profit / Loss
Profit / Loss PKR Mn 2012 2013 2014 2015 2016 2017 9M'18 Interest Income 116,773 120,605 137,416 141,101 141,089 148,010 117,071 Interest Expensed 59,012 65,207 68,833 62,933 59,138 64,943 55,950 Net Interest Income 57,760 55,397 68,583 78,169 81,951 83,067 61,121 Fee, commission and other income 9,
Slide 28: Key Ratios
Key Ratios 2012 2013 2014 2015 2016 2017 Sep'18 Profitability Return on average assets (RoA) 1.7% 1.4% 1.8% 1.7% 1.4% 0.3% 0.5% Return on shareholders' equity (RoE) 18.8% 16.8% 20.2% 19.9% 18.1% 4.2% 7.6% Cost : Income ratio 41.2% 48.6% 44.8% 42.2% 48.3% 53.4% 73.4% NFI : Gross revenue 21.6% 26.0% 2