Union Bank Of India Limited · NSE:UNIONBANK
Union Bank Of India — FY2010 Earnings Presentation
41 slides from Union Bank Of India's earnings presentation, May 6, 2010
Slide 1: Financial Results Q4-10 & FY 2010 Analyst Presentation
Financial Results Q4 - 10 & FY 2010 Analyst Presentation 6th May, 2010
Slide 2: Highlights of Business Growth
HIGHLIGHTS OF BUSINESS GROWTH Total Business increased from Rs.236968 Cr. to Rs .291289 Cr. an increase of 22.92% Total Deposits registered impressive growth of 22.59 % and progressed from Rs.138703 Cr . to Rs.170040 cr. CASA Deposits have increased substantially from Rs. 41711 Cr. To Rs. 53957 Cr.
Slide 3: Increasing Shareholders' Returns (YoY)
Increasing Shareholders’ Returns (YoY)2 30 24.70 24.79 1.5 23.69 25 1.26 1.27 1.25 20 17.88 0.92 1 15 10 0.5 5 0 0 2007 2008 2009 2010 2007 2008 2009 2010 Return on Equity Return on Average Assets 60 200 173.38 50 180 41.08 160 40 140 137.87 34.18 120 111.19 27.46 30 93.60 100 80 16.74 20 60 40 10 2
Slide 4: Yearly and Quarterly Results
Financial Results – FY 2010 Yearly and Quarterly Results 4
Slide 5: Operating Profits (YoY) and (Q4)
Operating Profits (YoY) Operating Profits (Q4) 1200 Growth 25.88 % 1148 4000 Growth 18.72% 3659 Growth 2.36 % 3500 Growth 19.46 % 3082 1000 912 891 3000 2580 800 2500 3 2000 3 600 1500 400 1000 500 200 Mar 08 Mar-09 Mar-10 Mar 08 Mar-09 Mar-10 • Bank is showing continuous growth year after year and
Slide 6: Provisions as on 31.3.10 (YoY)
Provisions as on 31.3.10 (YoY) (Rs.in crore) Mar’09 Mar’10 Taxation 618 758 NPA (excluding adhoc provision for 546 699 Standard Assets) Standard Assets 80 21 Depreciation on Investment -39 -117 Shifting Loss 14 47 Others 136 176 (Provisions for Restructured Adv., Gtees. Invoked, FITL, Suspense Etc.)
Slide 7: Net Profits (YoY) and (Q4)
Net Profits (YoY) Net Profits (Q4) 2200 2075 594 Growth 20.15% 600 Growth 27.47% 2000 521 1727 1800 466 Growth 24.51% 500 1600 1387 Growth -10.55% 1400 400 1200 1000 300 800 600 200 400 200 100 2008 2009 2010 2008 2009 2010 • The bank has been making continuous steady growth under Net Profit. 7
Slide 8: Net Interest Income
NET INTEREST INCOME YoY Comparison Quarterly (Sequential ) Comparison 1500 1396 4800 Growth 9.94% Growth 28.19% 3813 4192 4000 1200 Growth 22.35% 1089 3200 890 900 817 2400 Growth 8.94% 600 1600 300 800 0 0 JUN 09 SEP 09 DEC 09 MAR 10 MAR 09 MAR 10 Net Interest Income Net Interest Income 8
Slide 9: Improving NIM
Improving NIM ¾ Due to reduction in cost of Term Deposits coupled with higher growth in CASA. cost of Deposits has gone down sequentially during the last 4 quarters as under: Q4 Mar 09 6.87% Q1 June 09 6.47% Q2 Sep 09 6.29% Q3 Dec. 09 5.77% Q4 Mar 10 5.32% 9
Slide 10: Net Interest Margin (NIM) [YoY]
Net Interest Margin (NIM) [YoY] 10 8.35 8.78 8.04 8 5.76 5.96 5.51 6 4 3.24 2.71 2.93 2 0 Mar-08 Ma r-09 Mar-10 Yield on Funds Cost of funds NIM Cost of Funds stood at 5.51%. Yield on funds is at 8.04% Increase in CASA has allowed positive leverage to rising rates and Bank has been able to contain c
Slide 11: Non-Interest Income - YoY Comparison
Non-Interest Income- YoY Comparison (Rs.in crore) Mar’07 Mar’08 Mar’09 Mar’10 % CAGR Growth % Core Fee based Income 279 505 675 896 32.74 46.80 Treasury Income 199 510 517 730 41.20 53.56 W/w Profit on Sale of 109 377 321 573 78.50 72.92 Investment Exchange on Foreign 90 133 196 157 -19.90 20.16 Cur
Slide 12: Major Components – Core Non Interest Income
Major Components – Core Non Interest Income YoY Comparison (Rs.in crore) Mar’09 Mar’10 Growth % Credit Related 393 556 41.4 Payment System Related 94 148 57.45 Others 188 192 2.12 Total 675 896 32.74 12
Slide 13: Deposits
Deposits 1 8 0 0 0 0 170040 1 6 0 0 0 0 138703 Total Deposits grew at 1 4 0 0 0 0 22.59% YoY. 1 2 0 0 0 0 1 0 0 0 0 0 8 0 0 0 0 53957 Demand Deposits(CASA) 6 0 0 0 0 41711 grew by 29.36%. CASA 4 0 0 0 0 share increased by 166 bps 2 0 0 0 0 YoY. 0 2 0 0 9 2 0 1 0 TOTAL DEPOSITS CASA (Rs.in crore) MAR
Slide 14: CASA Deposits
CASA Deposits (Rs.in crore) MAR 09 MAR 10 % Growth Over MAR 09 Current Deposits 13166 16229 23.26 Savings Deposits 28545 37728 32.17 Demand Deposits (CASA) 41711 53957 29.36 Total Deposits 138703 170040 22.59 CASA % to total deposits 30.07 31.73 - Cost of Deposits(%) 6.50 5.94 - CASA accounted for
Slide 15: Advances
Advances & Yield on Advances Advances Bank registered growth 12 130000 11.06 121249 110000 98265 90000 70000 9.94 10 of 23.39% YoY in 50000 30000 8 advances. Yield on 10000 Mar-09 Mar-10 6 advances is at 9.94 %. Advances Yield on Advances (Rs. in Crore) MAR 09 MAR 10 YoY Growth% Agriculture 13519 18
Slide 16: Assets Robust – Retail Growth
Assets Robust – Retail Growth + 34%YOY +23% YOY 16
Slide 17: Market Share: Business Performance (%)
MARKET SHARE : BUSINESS PERFORMANCE (%) Bank has increased market share during the FY 2009-10 in terms of overall business performance indicators i.e., deposits, credit and total business. Market Share 27-Mar-08 27-Mar-09 26-Mar-10 Aggregate Deposit 3.12 3.44 3.53 Credit 3.12 3.32 3.34 Business 3.12
Slide 18: Business of Hong Kong Branch
BUSINESS OF HONG KONG BRANCH Rs in Crs (Growth) Business March 09 March 10 % DEPOSITS 287 370 28.92 ADVANCES 1305 2977 128.12 TOTAL BUSINESS 1592 3347 110.24 PROFIT 23 58 152.17 18
Slide 19: Assets Restructured during FY 10
Assets Restructured during FY 10 Rs. in Crs. Nature of UPTO MAR 09 DURING During FY 10 Total Upto March 2010 Advance MAR 10 QTR. No of Amt. No of Amt. No of Amt. No of Amt. Accts. Accts. Accts Accts MSME W/w 28272 647.42 1557 29.58 1736 186.54 30008 833.96 Micro Enterprises 20620 249.18 480 8.30 590
Slide 20: Assets Restructured during FY 10
Assets Restructured during FY 10 Restructured Accounts Closed / Fully Adjusted (More than Rs. 1.00 crore) Details of Restructured Accounts Accounts Amount (Rs. in cr.) April 09 –March 10 20 237.90 Restructured Accounts turned to NPAs (for more than Rs. 1.00 crore) Details of Restructured Accounts Ac
Slide 21: Top Sector Exposures
TOP SECTOR EXPOSURES Across Large & Mid Corporates, SME and Corporate Agri Business Rank Sectors Exposures (As on 31st March 2010) % Amount (Rs. in Crore) 1 Retail Advances 11.14 13506 2 Trade 7.10 8612 3 Infrastructure 9.94 12052 4 Metal & Metal Products 3.85 4664 5 Electricity 1.51 1832 6 Commerci
Slide 22: Distribution of Ratings Large & Mid Corporates
DISTRIBUTION OF RATINGS LARGE & MID CORPORATES The Bank is having a portfolio of Rs.81129 crore of more than Rs. 5 crore, out of which 416 Accounts with exposure of Rs. 32509 Crore are rated. Rating of the Accounts is as under: Rating No of Borrowers Exposure % OF RATED EXPOSURE AAA 47 9871 30.36 AA
Slide 23: Investments
60000 54483 10 Investments 50000 43194 Growth in investments and yield 40000 on investments were in line with 8 30000 market trends. 7.24 20000 Out of Total AFS portfolio of 6.32 10000 6 Rs.17065 Cr. Rs. 7903 Cr Mar-09 Mar-10 (46.31%) is interest sensitive. Investments Yield on Inv MAR 09 % Duration
Slide 24: Movement of NPAs
Movement of NPAs (Rs.in crore) Mar’09 Mar’10 Gross NPAs - Opening 1657 1923 Add : Additions 1177 1785 Less : Deductions 911 1037 1. Due to Write Off 366 513 2. Due to upgradation/ Recoveries 545 524 Gross NPAs 1923 2671 Gross Credit 98265 121249 Gross NPA as a %age of GBC 1.96 2.20 Net NPA 326 965 N
Slide 25: Improved Productivity
Improved Productivity (Rs. In lacs) Ratios* MAR 09 MAR10 (12 M) (12 M) Productivity Ratios Business per Employee 861 1049 Business per Branch 9264 10385 Net Profit per Employee 6.28 7.47 Net Profit per Branch 67.50 73.97 Gross Profit per Employee 11.20 13.18 Gross Profit per Branch 120.48 130.46 Bus
Slide 26: Controlled Expenditure
OPERATING EXPENSES TO COST TO INCOME RATIO AVERAGE WORKING FUNDS 2 41.81 45 40.66 1.63 1.52 35 1 25 15 0 5 2009 2010 2009 2010 Mar-09 Mar-10 Mar-09 Mar-10 CONTROLLED EXPENDITURE 26
Slide 27: Capital Adequacy
14.00 Capital Adequacy 13.27 12.80 12.51 12.51 12.00 •Capital Adequacy Ratio is at 12.51% as of 31.03.2010 as 10.00 per Basel II. 8.19 7.91 8.00 7.79 7.45 •Tier-I capital funds have increased by 24.41% from 6.00 5.01 5.06 5.08 Rs.7794 crore as on March, 4.60 2009 to Rs.9697 crore mainly 4.00 due to
Slide 28: Delivery Channel Reach & Alternate Channel
Delivery Channel Reach & Alternate Channel +444 in 2 Yrs +2.75lac New User in 2 Yrs +1181 New ATM in 2Yrs 28
Slide 29: Distribution Channels
DISTRIBUTION CHANNELS Transactions through electronic BRANCH MIX mode have increased to 35.01% Including Hong Kong branch from 21% in March 09 601 804 SERVICE OUTLETS 657 Mar’07 Mar’08 Mar’09 Mar’10 742 Branches / EC / 2373 2514 2661 2910 Service Brs ATMs 769 1146 1790 2327 Total Outlets 3142 3660 4
Slide 30: What Makes Union Bank Different
WHAT MAKES UNION BANK DIFFERENT ¾First major bank to complete 100% Core Baking Solution ¾Offer all five channels for Banking Transactions i.e. Branch ,ATM, Internet , Phone and Mobile Banking ¾Continuous Profit making Bank. ¾Introduction of “Nav Nirman” transformation process which could enable the
Slide 31: Shareholding Pattern (31st March, 2010)
Shareholding Pattern (31st March,2010) 17.42 • Share Capital Rs 550 crore •No. of Shares 505.12 million 14.47 • Net worth Rs 8758 crore 55.43 • B. V. per share Rs 173.38 •Return on Equity: 23.69% 12.68 •Market Cap (3rd May’10) : Rs 15355 crs Govt. of India Banks, Fis, Ins. Cos. Others FIIs and Forei
Slide 32: Why Investing in Union Bank Share is Good Investment
WHY INVESTING IN UNION BANK SHARE IS GOOD INVESTMENT MAR 2007 MAR 2010 Growth over 2007 % SHARE PRICE 104 292 180.76 UNION BANK BANKEX 6542 10652 62.82 SENSEX 13072 17528 34.09 Bank’s share price has outperformed the Bankex & Sensex during FY07 & FY10 32
Slide 33: Major Highlights of Last Quarter
Major highlights of last quarter 33
Slide 34: Major Highlights Q4-10: Awards & Accolades
Major Highlights Q4-10 Awards & Accolades • The Bank was awarded the Gold Trophy and a certificate in the Elite Class for Excellence in Marketing & Brand Communication by Association of Business Communicators of India (ABCI) in March 2010. The award was given away by the Hon’ble Governor of Maharast
Slide 35: Major Highlights Q4-10: Global Expansion
Major Highlights Q4-10 •As part of its global expansion initiatives, the Bank opened its 5th overseas representative office in London, U.K. in April 2010. •The Bank already has 4 representative Offices in Shanghai, Beijing in PRC, Abu Dhabi in UAE and Sydney, Australia. Besides the Bank has a full f
Slide 36: Going Forward: Key Initiatives
Going Forward: Key Initiatives 36
Slide 37: Bank Proposes Differentiation Through Following Strategies
Bank proposes differentiation through following strategies 1 Customer service excellence: Unique and a standardized customer experience across all channels Wealth management: Offer the best in class wealth management products and services to 2 HNI customers 3 Financial inclusion: Use of innovative t
Slide 38: Guidance 2010-11
Guidance 2010-11 38
Slide 39: Guidance 2010-11
Guidance 2010-11 The Bank aims for a deposits growth of approx. 22% and advances growth of 25% for 2010-11. 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 2011. Transaction through electronic mode to reach 50% of total tr
Slide 40: 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 41: Thank you
Thank you Your dreams are not yours alone