United Bank For Africa Plc · NSENG:UBA
United Bank For Africa — FY2014 and Q1 2015 Earnings Presentation
27 slides from United Bank For Africa's earnings presentation, April 2015
Slide 1: 2014 Full Year & 2015 First Quarter Results Presentation
Burkina Faso Senegal Benin Chad Guinea Nigeria 2014 Full Year Ivory Sierra Leone Coast Uganda & Liberia Ghana Cameroon Gabon Kenya 2015 First Quarter Results Presentation DR Congo Tanzania Congo Zambia Mozambique April 2015
Slide 2: Disclaimer and Note of Caution
Disclaimer and Note of Caution From time to time, the Bank makes written and/or oral forward-looking statements, including in this presentation and in other communications. In addition, representatives of the Bank may make forward-looking statements orally to analysts, investors, the media and other
Slide 3: Presentation Outline
Presentation Outline Macroeconomic and operating environment Review of 2014 Full Year Results A Synopsis of UBA Africa (Ex-Nigeria) Review of 2015Q1 Results Questions & Answers 2014FY and 2015Q1 Results Presentation 3
Slide 4: Presentation Outline
Presentation Outline Macroeconomic and operating environment Review of 2014 Full Year Results A Synopsis of UBA Africa (Ex-Nigeria) Review of 2015Q1 Results Questions & Answers 2014FY and 2015Q1 Results Presentation 4
Slide 5: Operating Environment…a mix of global and domestic challenges
Operating Environment…a mix of global and domestic challenges Sub-Saharan Africa GDP Growth Economic Growth: most African economies took a breather 5.2% 4.9% 4.8% o The plunge in commodities’ prices weakened fiscal revenue and slowed down economic activities in most African economies – prices of cru
Slide 6: Policy and regulatory environment in FY 2014 and Q1 2015
Policy and regulatory environment in FY 2014 and Q1 2015 Nigeria Implications o An 100bps increase in the Monetary Policy Rate to 13% o Impacted cost of funds, particularly for wholesale funds o Increased cash reserve requirement (CRR) on private sector o Sterilized system liquidity and technically
Slide 7: Presentation Outline
Presentation Outline Macroeconomic and operating environment Review of 2014 Full Year Results A Synopsis of UBA Africa (Ex-Nigeria) Review of 2015Q1 Results Questions & Answers 2014FY and 2015Q1 Results Presentation 7
Slide 8: 2014FY Financial Highlights
2014FY Financial Highlights 31-Dec-14 31-Dec-13 % Change Gross Earnings 290,019 264,687 +9.57% COMPREHENSIVE Net Interest Income 106,133 103,231 +2.81% INCOME & PROFIT Operating Income 192,455 176,993 +8.74% TREND (N’million) Operating Expenses (129,686) (107,851) +20.25% Profit Before Tax 56,200 56
Slide 9: Income Analysis
Income Analysis Gross earnings by source Gross earnings trend (N’bn) 290.0 264.7 Non Interest 31.6% 29.9% 32.1% 220.1 Income Interest Income 68.4% 70.1% 67.9% FY'12 FY'13 FY'14 FY'12 FY'13 FY'14 Earnings split by geography • Gross earnings grew by 10% YoY, defying the regulatory and macroeconomic pr
Slide 10: Profitability
Profitability Operating Income (N’bn) Profit Before Tax (N’bn) 192.5 56.1 56.2 177.0 159.2 52.0 FY'12 FY'13 FY'14 FY'12 FY'13 FY'14 Return on Avg. Assets Return on Avg. Equity • Steady growth trajectory in operating income; a 31.9% reflection of improving balance sheet optimization, 2.6% cross selli
Slide 11: Profit Drivers
Profit Drivers Net Interest Margin Cost of Funds 6.0% 3.8% 5.9% 3.6% 5.8% 3.2% FY'12 FY'13 FY'14 FY'12 FY'13 FY'14 Cost-to-Income Ratio 67.4% 64.4% 60.9% • Modest improvement in Net Interest Margin, as better yields on assets compensated for regulatory-induced rise in funding cost. • Recent cost man
Slide 12: Financial Position
Financial Position Total Assets (N’trillion) Total Assets plus Contingents (N’trillion) 2.76 2.64 3.35 3.13 2.27 2.67 FY'12 FY'13 FY'14 FY'12 FY'13 FY'14 Composition of Total Asset Portfolio PPE Other 3% Assets 3% Cash and Cash Equivalent • Responsibly growing balance sheet, with focus on 29% qualit
Slide 13: Loan Portfolio
Loan Portfolio Loan Book, by Customer Type Loan Book (N’bn) 1,120 964 Corporate 687 60.6% 63.9% Retail Public Sector Commercial 9.6% 14.1% Financial Sector 9.0% 8.8% 11.0% 7.6% 5.5% 9.8% FY'12 FY'13 FY'14 2013FY 2014FY Loan Distribution, by Sector • Moderate loan growth NPL Ratio (%) (partly driven
Slide 14: Deposits Portfolio
Deposits Portfolio Total Deposits (N’billion) Deposit Mix, by Cost 2,220 2,229 20.2% 24.2% 1,780 27.6% Expensive Cheap 79.8% 75.8% 72.4% FY'12 FY'13 FY'14 FY'12 FY'13 FY'14 Deposit Split by Geography 17.0% 21.2% 20.2% Africa • Strategic mobilization of the stable low cost deposits Nigeria & ROW shou
Slide 15: Funding, Liquidity and Capital Adequacy
Funding, Liquidity and Capital Adequacy Funding Mix Capital Adequacy Ratio 23.5% 20.0% 8.5% 9.2% 9.6% 5.9% 4.8% 2.5% 17.0% Equity 1.7% 7.2% 7.4% Other Liabilities Borrowings Deposits 84.3% 78.2% 80.7% FY'12 FY'13 FY'14 FY'12 FY'13 FY'14 Liquidity Ratio • Funding continues to be predominantly deposit
Slide 16: Presentation Outline
Presentation Outline Macroeconomic and operating environment Review of 2014 Full Year Results A Synopsis of UBA Africa (Ex-Nigeria) Review of 2015Q1 Results Questions & Answers 2014FY and 2015Q1 Results Presentation 16
Slide 17: UBA Africa: Earnings profile
UBA Africa ::: Earnings profile (figures and ratios are prior intra-group eliminations) Gross Earnings Trend (N’bn) Operating Income (N’bn) 64.0 56.8 46.0 49.1 38.7 33.4 2012FY 2013FY 2014FY 2012FY 2013FY 2014FY Profit Before Tax (N’bn) 15.9 • UBA Africa (Ex-Nigeria) recorded 14% CAGR in earnings ov
Slide 18: UBA Africa: Operating efficiency
UBA Africa ::: Operating efficiency (figures and ratios are prior intra-group eliminations) Cost-to-Income Ratio (%) Pre-Tax Return on Equity (%) 79.8% 26.5% 69.7% 63.3% 21.1% 12.4% 2012FY 2013FY 2014FY 2012FY 2013FY 2014FY Post-Tax Return on Assets (%) 2.7% • Consistent moderation in cost-to-income
Slide 19: UBA Africa: Balance Sheet Growth
UBA Africa ::: Balance Sheet Growth (figures and ratios are prior intra-group eliminations) Customer Deposits (N’bn) Loan Books (N’bn) 330 183 297 225 133 102 2012FY 2013FY 2014FY 2012FY 2013FY 2014FY Total Assets (N’bn) 530 473 • Steady growth in customer deposits (21% CAGR), with improving mix of
Slide 20: UBA Africa: Our Benchmark Subsidiaries
UBA Africa ::: Our Benchmark Subsidiaries (figures and ratios are prior intra-group eliminations) Return on Equity (%) Cost-to-Income Ratio (%) 47.1% 69.0% 55.5% 52.7% 24.5% 18.5% Cameroon Senegal Ghana Ghana Senegal Cameroon Return on Assets (%) 5.4% • Our benchmark subsidiaries are frontrunners in
Slide 21: Presentation Outline
Presentation Outline Macroeconomic and operating environment Review of 2014 Full Year Results A Synopsis of UBA Africa (Ex-Nigeria) Review of 2015Q1 Results Questions & Answers 2014FY and 2015Q1 Results Presentation 21
Slide 22: 2015Q1 Group Results Snapshot: Consolidating Gains
2015Q1 Group Results Snapshot ::: Consolidating Gains 31-Mar-15 31-Mar-14 % Change Gross Earnings 83,098 68,079 +22.06% COMPREHENSIVE Net Interest Income 30,783 29,272 +5.16% INCOME & PROFIT Operating Income 53,247 45,512 +17.00% TREND (N’million) Operating Expenses (32,530) (31,427) +3.51% Profit B
Slide 23: 2015Q1 Group Results Snapshot: Consolidating Gains
2015Q1 Group Results Snapshot ::: Consolidating Gains Gross earnings (N’billion) Operating Income (N’billion) 83.1 53.2 68.1 45.5 2014Q1 2015Q1 2014Q1 2015Q1 Profit Before Tax (N’billion) 18.4 • Strong 22% YoY growth in gross earnings reflect the 13.5 benefit of higher yield on assets, stable accret
Slide 24: 2015Q1 Group Results Snapshot: Consolidating Gains
2015Q1 Group Results Snapshot ::: Consolidating Gains Return on Average Equity (%) Cost-to-Income Ratio (%) 69.1% 63.9% 24.8% 22.1% 2014Q1 2015Q1 2014Q1 2015Q1 Net Interest Margin (%) • Better yield on assets and expected moderation in funding cost will help sustain the modest improvement 6.2% in ne
Slide 25: 2015Q1 Group Results Snapshot: Consolidating Gains
2015Q1 Group Results Snapshot ::: Consolidating Gains Total Assets (N’trillion) Loan book (N’billion) 1,142 2.96 1,072 2.76 2014FY 2015Q1 2014FY 2015Q1 Customer Deposits (N’billion) 2,295 2,170 • Increasing deposit and new capital will support our responsible drive for balance sheet growth in 2015;
Slide 26: 2015FY Guidance: Broad Expectations for the Year
2015FY Guidance ::: Broad Expectations for the Year Headlines 2014FY Actual 2015Q1 2015FY Target Net Interest Margin (NIM) 5.9% 6.2% >6% Cost-to-Income Ratio 69.8% 63.9% <65% Cost of Risk 0.7% 0.8% ≈1% NPL Ratio 1.6% 1.6% ≈2% Loan Growth 14% 7% 15% - 20% Deposit Growth 0.4% 6% 15% - 20% Return on Av
Slide 27: Questions & Answers
Conclusion Questions & Answers 2014FY and 2015Q1 Results Presentation 27
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