United Bank Limited · PSX:UBL
United Bank — Q3 2015 Earnings Presentation
37 slides from United Bank's earnings presentation, Oct 29, 2015
Slide 1: Delivering Consistent Returns with Growth – Key Performance Highlights Q3 2015
Delivering Consistent Returns with Growth Key Performance Highlights – Q3 2015 Investor Relations Conference Call October 29th 2015 Speakers: Mr Asif Saeed Sindhu – Chief Financial Officer Mr Arif Saifie, CFA – Financial Controller and Head of Investor Relations UBL Performance Overview - Sep 2015 I
Slide 2: Table of Contents
Table of Contents PAGE Key Highlights 3 Execution and Delivery in 2015 7 Key Performance Ratios 21 Quarterly Trend Analysis 26 UBL Performance Overview - Sep 2015
Slide 3: Key Highlights
Key Highlights Standalone PBT up 34% to Rs. 32.3Bn, PAT up 22% YoY to Rs. 19.3Bn Consolidated PAT up 19% YoY to Rs. 20.4Bn EPS up 22%, Break up value per share is Rs. 115.3/- UBL Performance Overview - Sep 2015 3
Slide 4: We have continued to deliver strong revenue growth
We have continued to deliver strong revenue growth Net Interest Income has increased by 28% to reach Rs. 41.1Bn Overall margins expand by 20bps to 5.7% despite 254bps decline in average KIBOR Overall COD reduced by 73bps to 3.2% in 9M’15 Average loan growth of 9% with yield on advances having
Slide 5: Improved asset quality with cost discipline
Improved asset quality with cost discipline Provisions up by Rs. 1.8Bn YoY to Rs. 2.8Bn in 9M’15 Cash recoveries of Rs. 2.7Bn within domestic and Rs. 0.6Bn within International Overall NPLs decreased by 1% over Dec’14 to Rs. 53.6Bn Asset quality has improved to 10.6% in Sep‘15 (11.2% as at Dec
Slide 6: Healthy balance sheet growth
Healthy balance sheet growth Retail Bank channeling the balance sheet expansion 13% growth in the total deposits within the domestic bank, ahead of market growth of 8.1% in 9M’15 Current Accounts remains core focus for retail distribution – with 15% YoY average growth Domestic cost of deposits
Slide 7: Execution and Delivery
Execution and Delivery Consistent earnings performance in 2015 UBL Performance Overview - Sep 2015 7
Slide 8: We maintain consistent pay outs as earnings continue to grow
We maintain consistent pay outs as earnings continue to grow Trends – KSE 100 Index and UBL’s share price Growth in Book Value Per Share by 12% in 9M’15 210.00 37.00 160 Cons. Equity Sep’15 – Rs. 154 Bn 200.00 145 Cons. BV Sep’15 -Rs. 125.6 per share 141 130 35.00 133 135 120 190.00 130 126 110 180.
Slide 9: Income Statement - Standalone
Income Statement - Standalone Rs in bln Rs in bln 9M'15 9M'14 Var% Q3'15 Q2'15 Var % Interest Earned 70.14 60.39 +16% 23.72 23.51 +1% Interest Expensed (29.00) (28.26) -3% (9.87) (9.33) -6% Net Interest Income 41.14 32.14 +28% 13.85 14.18 -2% Non Interest Income 17.14 14.53 +18% 4.75 6.16 -23% Total
Slide 10: Income Statement - Consolidated
Income Statement - Consolidated Rs in bln Rs in bln 9M'15 9M'14 Var% Q3'15 Q2'15 Var % Interest Earned 72.50 62.64 +16% 24.57 24.29 +1% Interest Expensed (29.89) (29.07) -3% (10.20) (9.62) -6% Net Interest Income 42.61 33.57 +27% 14.37 14.66 -2% Non Interest Income 19.18 16.89 +14% 5.37 6.71 -20% To
Slide 11: Major segments growing the Balance Sheet
Major segments growing the Balance Sheet UBL Performance Overview - Sep 2015 11
Slide 12: Deposits build up gaining momentum… with low cost of deposits
Deposits build up gaining momentum… with low cost of deposits Deposits - Bank Dec'14 Sep'15 Bank Rs Bn PE COF % PE COF % Dome s ti c de pos i ts 697 4.4% 785 3.6% I nte rna ti ona l de pos i ts 198 2.4% 209 1.9% Tota l Ba nk 895 3.9% 994 3.2% I nte rna ti ona l $ Mn 1,967 2.4% 1,995 1.9% Dome s ti c
Slide 13: Corporate Bank maintaining focus on asset quality – some build up in 2015
Corporate Bank maintaining focus on asset quality – some build up in 2015 Net Advances - Bank Rs. In bln Sep'15 vs Dec'14 Sep'15 Dec'15 Corpora te Ba nk 208 227 9% Commodi ty 50 56 12% Commerci a l 22 20 -8% Cons umer 9 9 5% Others 13 12 -3% Total Domestic 300 324 8% Interna ti ona l 134 136 1% Bank
Slide 14: International Advances – Corporate loan book remains largest component
International Advances – Corporate loan book remains largest component By Geography By Business - UAE New York 1% EPZ Yemen 1% Qatar 4% 14% Corporate Bahrain 67% 10% Others 26% UAE 70% Consumer 7% Sharjah 3% Baitna Abu Dhabi 91% 19% Dubai 78% Others Personal Loan 7% 2% UBL Performance Overview - Sep
Slide 15: Concentration of Advances – Consolidated (Sep '15)
Concentration of Advances – Consolidated (Sep ’15) Energy Sector 21% Others 26% Airline 2% Agribusiness Contractors 12% 2% Pharmaceuticals 1% Telecom Individuals 2% 5% Financial 6% Food industries Construction 3% 4% Textile Wholesale traders 10% 6% UBL Performance Overview - Sep 2015 15
Slide 16: Review of Non Funded Income & Admin Expenses
Review of Non Funded Income & Admin Expenses UBL Performance Overview - Sep 2015 16
Slide 17: Non Funded Income diversifying earnings well
Non Funded Income diversifying earnings well – strong trading performance in 2015 Stand Alone results Rs in mln Rs in mln 9M'15 9M'14 Var % Q3'15 Q2'15 Var % Fee, commission and brokerage income 9,170 8,611 6% 2,875 3,416 -16% Dividend income 2,411 1,395 73% 387 1,529 -75% Income from dealing in for
Slide 18: Fees and Commissions performance in 2015
Fees and Commissions performance in 2015 Stand Alone results Rs. in mln Rs. in mln 9M'15 9M'14 Var % Q3'15 Q2'15 Var % Commission on trade 1,277 1,275 0% 452 426 6% Commission on consumer loan 579 536 8% 239 167 43% Commission on remittance / uniremote 1,588 1,505 6% 560 538 4% Corporate service chg
Slide 19: Administrative Expenses – well controlled across manpower and premises costs
Administrative Expenses – well controlled across manpower and premises costs Stand Alone results Rs. In mln Rs. In mln 9M'15 9M'14 Var % Q3'15 Q2'15 Var % Personnel Cost 8,885 8,403 -6% 2,956 2,973 1% Premises Cost 2,996 2,888 -4% 1,048 1,017 -3% Outsourced service charges 3,226 2,699 -20% 1,097 1,1
Slide 20: UBL OMNI – The success story continues…
UBL OMNI – The success story continues… UBL OMNI ■ Leader in providing basic banking services to the unbanked and in increasing financial inclusion in Pakistan. Commercial launch April 2010 No. of accounts 1.90 mln ■ Successfully initiated implementation of a ‘franchisee’ based agent network distrib
Slide 21: Key Performance Ratios
Key Performance Ratios “ UBL Performance Overview - Sep 2015 21
Slide 22: Strong Return on Equity, improved efficiency and asset quality
Strong Return on Equity, improved efficiency and asset quality Balance Sheet Ratios Sep-15 Dec-14 Advances / Deposi ts 48.9% 51.3% Asset Qual i ty 10.6% 11.2% Coverage 82.6% 81.2% Financial Ratios 9M'15 9M'14 Q3'15 Q2'15 Yi el d on P. Advances 8.4% 9.3% 7.3% 8.4% Cost of Deposi ts - Bank 3.2% 4.0% 2
Slide 23: Financial Ratios – Consolidated (1 of 3)
Financial Ratios – Consolidated (1 of 3) Full Year QTD (Annualized) DuPont 2010 2011 2012 2013 2014 Mar-15 Jun-15 Sep-15 Spread (Standalone) 1 5.5% 5.6% 4.7% 4.0% 4.4% 4.6% 4.6% 4.2% 2 Net Interest Margin (Standalone) 7.0% 7.2% 6.4% 5.4% 5.7% 5.9% 5.9% 5.2% Non Interest Yield 3 1.6% 1.7% 2.2% 2.0% 2
Slide 24: Financial Ratios – Consolidated (2 of 3)
Financial Ratios – Consolidated (2 of 3) Full Year QTD (Annualized) Asset Quality 2010 2011 2012 2013 2014 Mar-15 Jun-15 Sep-15 Gross NPLs / Gross Loan 12.9% 13.4% 13.6% 11.9% 11.1% 11.4% 10.9% 10.1% Net NPLs / Gross Loan 3.6% 2.9% 3.4% 2.2% 2.4% 2.3% 2.2% 1.8% Coverage Ratio 69.0% 78.1% 74.6% 81.1%
Slide 25: Financial Ratios – Consolidated (3 of 3)
Financial Ratios – Consolidated (3 of 3) Full Year QTD (Annualized) Other Metrics 2010 2011 2012 2013 2014 Mar-15 Jun-15 Sep-15 Capital Adequacy Ratio 15.0% 14.9% 14.8% 13.3% 14.3% 14.6% 14.8% 15.1% Loan / Deposits 62.8% 57.5% 55.0% 50.0% 51.8% 47.6% 46.5% 49.4% Net Loans / Assets 47.1% 42.2% 40.1%
Slide 26: Quarterly Trend Analysis
Quarterly Trend Analysis Bank Level - Standalone UBL Performance Overview - Sep 2015 26
Slide 27: Profit before Tax
Profit before Tax 10.9 11.2 10.2 Rs Bn 9.3 8.4 8.3 7.8 8.0 7.2 7.2 7.1 6.5 6.4 6.0 5.9 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 UBL Performance Overview - Sep 2015 27
Slide 28: Profit after Tax
Profit after Tax 7.1 6.5 Rs Bn 6.1 5.7 5.3 5.3 5.2 4.9 4.7 4.7 5.6 4.4 4.3 3.9 4.0 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 UBL Performance Overview - Sep 2015 28
Slide 29: Deposits
992 994 Deposits 945 Rs Bn 895 828 847 858 866 773 752 685 698 703 653 614 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 UBL Performance Overview - Sep 2015 29
Slide 30: Net Advances
459 Net Advances 430 434 Rs Bn 417 420 408 391 369 377 364 363 358 355 352 345 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 UBL Performance Overview - Sep 2015 30
Slide 31: Net Interest Income
Net Interest Income 14.2 13.9 13.1 12.8 Rs Bn 11.3 10.6 11.0 9.9 9.8 9.6 9.6 9.4 9.5 9.0 8.8 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 UBL Performance Overview - Sep 2015 31
Slide 32: Provisions
Provisions 1.9 Rs Bn 1.3 1.1 0.9 0.8 0.8 0.7 0.8 0.5 0.7 0.3 0.2 0.2 -0.1 -0.1 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 UBL Performance Overview - Sep 2015 32
Slide 33: Non Funded Income
Non Funded Income 6.2 6.2 Rs Bn 5.5 5.1 5.0 4.8 4.6 4.8 4.8 4.5 4.1 3.6 4.0 4.9 3.9 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 UBL Performance Overview - Sep 2015 33
Slide 34: Revenue
Revenue 20.3 19.3 18.6 Rs Bn 17.6 16.3 15.5 15.4 15.4 13.8 14.9 13.7 13.2 13.4 12.6 14.1 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 UBL Performance Overview - Sep 2015 34
Slide 35: Administrative Expenses
Administrative Expenses 8.0 7.6 7.3 7.4 7.2 7.1 Rs Bn 6.9 6.9 6.5 6.5 6.1 6.2 6.2 5.8 5.5 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 UBL Performance Overview - Sep 2015 35
Slide 36: Forward-looking statements disclaimer
The information contained herein reflects our latest business statement as at Sep 30, 2015. 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 expressions or variations of
Slide 37: Thank You
Thank You UBL Performance Overview - Sep 2015 37