United Bank Limited · PSX:UBL
United Bank — Q1 2017 Earnings Presentation
37 slides from United Bank's earnings presentation, Apr 20, 2017
Slide 1: Performance Highlights - 31 Mar 2017
Performance Highlights - 31 Mar 2017 Investor Relations Conference Call April 20th, 2017 Speakers: Mr. Aameer Karachiwalla - Chief Financial Officer Mr. Arif Saifie, CFA - Financial Controller and Head of Investor Relations Investor Relations Release UBL Performance Overview – Q1’17
Slide 2: Table of Contents
Table of Contents PAGE Key Highlights 3 Execution and Delivery 7 Key Ratios 24 Quarterly Trend Analysis 26 UBL Performance Overview – Q1’17
Slide 3: Key Performance Highlights
Key Performance Highlights Standalone Results Profit before tax up closes at Rs. 11.2 bln (Q1’16: Rs. 11.3 bln) Profit after tax up flat at Rs. 7.3 bln Return on equity (RoE) of 24.9% in Q1’17 (Q1’16: 27.4%) Average balance sheet expansion of 8% in Q1’17 vs Q1’16 Deposits have closed at Rs
Slide 4: Revenue fall in Q1'17 mainly on account of lesser capital gains
Revenue fall in Q1’17 mainly on account of lesser capital gains Net interest income up 1% over Q1’16, closes at Rs. 13.7 bln Overall cost of deposits reduced by 14 bps to close at 2.7% in Q1’17 (Q1’16: 2.8%) Average loan growth of 9% in Q1’17, with yields maintained at 6.4% Average earning inv
Slide 5: Provisions down 96%, effective management restricts expense growth
Provisions down 96%, effective management restricts expense growth Total provisions down Rs. 1.9 bln over Q1’16, close at Rs. 80 mln Strong cash recoveries within both domestic and international operations Overall NPLs closed at Rs. 44.5 bln at Mar’17 (Dec’16: Rs. 44.6 bln) Asset quality at 8.
Slide 6: 3% growth in balance sheet size over Dec'16
3% growth in balance sheet size over Dec’16 Growth in non-core deposits drives balance sheet expansion Domestic deposits stood at Rs. 951 bln (Dec’16: Rs. 946 bln). Domestic current accounts grew by 2% over Dec’16, with average current account growing by 17% in Q1’17 Net advances close at Rs. 49
Slide 7: Execution and Delivery
Execution and Delivery UBL Performance Overview – Q1’17 7
Slide 8: 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 280 Max Q1'16:Rs. 256.35 31 Mar’17: Rs. 227.63 55.00 Rs in bln Cons . Equity Mar’17 - Rs. 167 bln 260 19 Apr 2017: Rs. 235.13 Cons . Book value Mar’17 - Rs. 137 per s hare 50.00 1
Slide 9: Income Statement - Standalone
Income Statement - Standalone Rs in bln Rs in bln Q1'17 Q1'16 Var % Q4'16 Var % Interest Earned 23.9 23.4 2.0% 24.9 -3.9% Interest Expensed (10.2) (9.8) -3.5% (10.8) 6.0% Net Interest Income 13.7 13.6 0.9% 14.0 -2.4% Non Interest Income 6.3 8.4 -24.9% 5.2 20.9% Total Revenue 20.0 21.9 -8.9% 19.2 3.9
Slide 10: Balance Sheet - Standalone
Balance Sheet - Standalone Rs in bln Mar'17 Dec'16 Var % Advances 498 510 -2.3% Investments 867 807 7.5% Lendings to Financial Institutions 52 34 52.2% Others 214 227 -5.5% Total Assets 1,632 1,578 3.4% Deposits 1,183 1,180 0.2% Borrowings 249 202 23.7% Others 45 44 2.3% Total Liabilities 1,477 1,42
Slide 11: Income Statement - Consolidated
Income Statement - Consolidated Rs in bln Rs in bln Q1'17 Q1'16 Var % Q4'16 Var % Interest Earned 24.7 24.3 1.7% 25.9 -4.6% Interest Expensed (10.6) (10.2) -3.8% (11.4) 7.6% Net Interest Income 14.1 14.1 0.1% 14.4 -2.2% Non Interest Income 7.2 9.2 -22.0% 5.8 23.2% Total Revenue 21.3 23.3 -8.6% 20.2
Slide 12: Balance Sheet - Consolidated
Balance Sheet - Consolidated Rs in bln Mar'17 Dec'16 Var % Advances 527 538 -2.0% Investments 901 838 7.5% Lendings to Financial Institutions 54 35 52.0% Others 237 250 -5.4% Total Assets 1,719 1,662 3.4% Deposits 1,250 1,246 0.4% Borrowings 254 206 23.5% Others 47 46 1.2% Total Liabilities 1,552 1,
Slide 13: Deposits performance - Focus remains on growing low cost deposits
Deposits performance - Focus remains on growing low cost deposits Deposits - Bank Mar'17 Dec'16 PE CoF % PE CoF % Domestic deposits - Rs in bln 951 2.8% 946 2.9% International deposits - Rs in bln 232 2.2% 234 2.0% Total Bank - Rs in bln 1,183 2.7% 1,180 2.7% International - USD in mln 2,208 2.2% 2,
Slide 14: Advances portfolio decline by 2% over Dec'16
Advances portfolio decline by 2% over Dec’16 Net Advances Rs in bln Mar'17 Dec'16 Var % Corporate Bank 250 236 6% Commodity 36 53 -32% Commercial 21 28 -23% Consumer 9 9 0% Others 15 15 -5% Total Domestic 332 342 -3% International 166 168 -1% Bank 498 510 -2% International USD mln 1,586 1,608 -1% De
Slide 15: International Advances - Corporate advances remains the largest component
International Advances - Corporate advances remains the largest component By Geography By Business - UAE Qatar, 12% Yemen, 2% NewYork, Bahrain, 5% 13% EPZ, 0% Corporate, 69% Others, 26% UAE, 67% Consumer, 5% Others, 2% Personal loan, 2% Abu Dhabi, 25% Sharjah, 3% Dubai, 72% Baitna, 96% UBL Performan
Slide 16: Concentration of Advances as at December 31, 2016 - Standalone
Concentration of Advances as at December 31, 2016 - Standalone Energy Sector Others 19% 23% Airline Agribusiness 2% 10% Contractors 1% Pharmaceuticals 2% Telecom Individuals 3% 8% Financial 7% Construction Food industries 5% 4% Wholesale traders Textile 4% 12% UBL Performance Overview – Q1’17 16
Slide 17: Diversified investment portfolio with strong market risk management
Diversified investment portfolio with strong market risk management Portfolio concentrated in long terms treasury bonds Investments’ yields Total 867 11.1% Total 807 Rs in bln 42 2 39 30 43 16 5 36 29 10.4% 10.4% 16 8.9% 8.3% 545 2013 2014 2015 2016 Q1'17 571 Non Funded revenue streams continue to g
Slide 18: Our international outreach - serving in 4 continents under the single UBL brand
Our international outreach - serving in 4 continents under the single “UBL” brand ASSOCIATED COMPANIES 3 OVERSEAS BRANCHES 18 PAKISTAN BRANCHES 1,344 SUBSIDIARIES 4 Asset mix by region - 2016 Domestic Operations 76.4% International Operations 23.6% Middle East 17.5% USA 0.7% Europe 5.0% Africa 0.3%
Slide 19: 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 Awarded “Innovation Award” at the Mastercard Innovation Banking (UBL OMNI) Forum for ‘Launch of UBL MasterPass QR’ Declared the
Slide 20: Review of Non Interest Income & Administrative Expenses
Review of Non Interest Income & Administrative Expenses UBL Performance Overview – Q1’17 20
Slide 21: Non Fund Income Standalone Results
Non Fund Income Standalone Results Rs in mln Q1'17 Q1'16 Var % Fee, commission and brokerage income 2,787 3,175 -12% Dividend income 552 431 28% Income from dealing in foreign currencies 418 596 -30% Gain / (loss) on sale of securities 2,335 3,835 -39% Other income 183 323 -43% Total Non Fund Income
Slide 22: Fees and Commissions performance Standalone Results
Fees and Commissions performance Standalone Results Rs in mln Q1'17 Q1'16 Var % Commission on trade 488 589 -17% Commission on consumer loan 160 156 2% Commission on remittance / uniremote 416 576 -28% Corporate service chgs/finance fee/FIG inc. 376 428 -12% General banking service charges 389 488 -
Slide 23: Administrative Expenses Standalone Results
Administrative Expenses Standalone Results Rs in mln Q1'17 Q1'16 Var % Personnel Cost 3,523 3,307 -7% Rent taxes insurance etc. 1,128 979 -15% Outsourced service charges 1,105 1,240 11% including sales commission Advertisement and publicity 210 522 60% Communications 280 280 0% Depreciation / Amorti
Slide 24: Key Ratios
Key Ratios UBL Performance Overview – Q1’17 24
Slide 25: Key Financial Ratios Standalone Results
Key Financial Ratios Standalone Results Mar'17 Mar'16 Return on Equity 24.9% 27.4% Return on Assets 1.9% 2.1% Non Fund Income to Gross Revenue 31.4% 38.1% Cost to Revenue Ratio 42.6% 38.5% Mar'17 Dec'16 Advances to Deposits Ratio - gross 43.3% 44.4% Asset Quality 8.3% 8.1% Coverage (Specific provisi
Slide 26: Quarterly Trend Analysis
Quarterly Trend Analysis Bank Level - Standalone UBL Performance Overview – Q1’17 26
Slide 27: Profit before tax
Profit before tax Rs in bln 13.5 +20% +14% 10.9 11.2 11.3 -20% 10.8 +7% 11.2 10.2 9.9 10.4 9.3 -3% 8.4 8.3 7.8 8.0 7.1 6.4 5.9 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 UBL Performance Overview – Q1’17 27
Slide 28: Profit after tax
Profit after tax Rs in bln 7.3 7.3 7.1 +0% 7.0 +13% +13% 6.5 6.5 -4% 6.4 7.0 -8% 6.1 5.7 5.6 5.2 5.3 5.3 4.7 4.3 4.0 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 UBL Performance Overview – Q1’17 28
Slide 29: Deposits
Deposits Rs in bln +0% +0% +3% 1,180 1,183 +7% 1142 1147 +2% 1051 1070 992 994 945 895 858 866 847 828 773 752 703 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 UBL Performance Overview – Q1’17 29
Slide 30: Net Advances
Net Advances Rs in bln +0% +2% 509 510 496 498 -2% +11% 459 455 434 430 -2% 417 420 447 408 391 377 369 363 352 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 UBL Performance Overview – Q1’17 30
Slide 31: Revenue
Revenue Rs in bln 21.9 -3% 21.3 +12% 20.3 -15% +6% 20.0 19.3 19.5 19.2 +6% 17.6 18.6 18.1 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 UBL Performance Overview – Q1’17 31
Slide 32: Net Interest Income
Net Interest Income Rs in bln 15.7 +16% 14.7 14.2 +3% 14.0 13.6 -13% 13.1 -8% 12.8 -2% 13.9 13.7 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 UBL Performance Overview – Q1’17 32
Slide 33: Non Funded Income
Non Funded Income Rs in bln 8.4 +73% -33% 6.2 6.2 6.3 +21% 5.6 4.9 5.1 5.0 4.8 4.8 4.8 4.8 4.6 +16% 5.2 4.5 -20% 3.9 4.5 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 UBL Performance Overview – Q1’17 33
Slide 34: Provisions
Provisions Rs in bln 2.0 +119% 1.3 0.9 0.9 0.8 0.7 -114% 0.5 0.8 0.3 0.3 -76% 0.2 0.2 +220% 0.1 -0.1 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 -0.1 -0.3 -0% -0.3 UBL Performance Overview – Q1’17 34
Slide 35: Administrative Expenses
Administrative Expenses Rs in bln 8.6 +3% 8.5 8.4 -1% 8.2 8.0 +12% -7% 7.8 7.6 7.3 7.4 7.4 7.2 7.1 -6% 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 UBL Performance Overview – Q1’17 35
Slide 36: Important Information
Important Information The information contained herein reflects our latest business statement as at March 31, 2017. 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 37: Thank You
Thank You UBL Performance Overview – Q1’17 37