United Bank Limited · PSX:UBL

United Bank — 9M 2019 Earnings Presentation

48 slides from United Bank's earnings presentation, Oct 18, 2019

  1. Slide 1: Performance Highlights - 9M 2019

    UNITED BANK LIMITED Performance Highlights - 9M 2019 Investor Relations Conference Call and Analyst’s Briefing October 18th, 2019 Speakers: Ms. Sima Kamil - President & CEO Mr. Aameer Karachiwalla - Chief Financial Officer Mr. Arif Saifie, FCA, CFA - Financial Controller and Head of Investor Relatio

  2. Slide 2: Agenda – Review of performance and business outlook

    Agenda – Review of performance and business outlook Sr. No Description Slide 1 UBL - A strong legacy 3 2 Market Landscape in 2019 8 3 Customer Acquisition - build outreach to serve wider economy 10 4 Digital - Revolution in the making, UBL in the forefront 13 5 Credit Cycle - a word of caution with

  3. Slide 3: UBL - A strong legacy

    UBL - A strong legacy UBL Performance Overview - 9M 2019 3 3

  4. Slide 4: UBL - A dominant brand

    UBL - A dominant brand A Look into the Past Our Current Positioning 1959 - UBL sets up with first branch in Karachi  Second largest private sector bank in Pakistan with 1,360 branches 1963 - First Pakistani bank with a branch in  Market share of 8.3%, 5.5 million customers London  Highest credit

  5. Slide 5: UBL's Principal Sponsors – Bestway Group

    UBL’s Principal Sponsors – Bestway Group Our Shareholding Structure - Sep’19 18.1% Bestway Group Foreign investors 20.4% 61.5% Domestic investors About the Bestway Group  One of UK’s top 10 privately owned companies  Investments in diverse industries including cement, banking, wholesale cash and c

  6. Slide 6: UBL Innovation and Awards - continues to be acknowledged by the market

    UBL Innovation and Awards - continues to be acknowledged by the market UBL “Firsts” – Initiatives to stay ahead of the market Market recognition and awards  First Commercial Bank in Pakistan to launch Branchless  Declared ‘Bank of the Year 2018 – Pakistan’ by The Banker, Banking (UBL OMNI) an affi

  7. Slide 7: 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 300 55 Max 2019: Rs. 158.82 280 Rs in bln Cons. Equity Sep’19 - Rs. 185 bln 50 Cons. Book value Sep’19 - Rs. 151 per share 260 240 159 165 45 152 151 220 142 200 40 126 180 92 101

  8. Slide 8: Market Landscape in 2019

    Market Landscape in 2019 UBL Performance Overview - 9M 2019 8 8

  9. Slide 9: Key Economic Trends - 9M'19

    Key Economic Trends - 9M’19  Deposits mobilization - Market deposits at Rs 14.0 tln, growth of 5% over Dec’18  Credit offtake - Banking sector advances at Rs 8.0 tln Sep’19, up 7% over Dec’18 levels  NPLs up 13% over Dec’18 to Rs. 768 bln at Jun’19  Home Remittance volumes for 3MFY’20 USD 5.5 bl

  10. Slide 10: Customer Acquisition - build outreach to serve wider economy

    Customer Acquisition - build outreach to serve wider economy UBL Performance Overview - 9M 2019 10 10

  11. Slide 11: Areas where we have done well in 2019

    Areas where we have done well in 2019  Strong Build up maintained - avg. domestic current deposits at Rs. 476 bln, up 10% vs. 9M’18, incremental vol. of Rs. 41 bln  Domestic cost of deposits at 5.2% (9M’18 : 2.8%) - despite rate hike of 475 bps since Sep’18  Average CASA for the period was 86.8%

  12. Slide 12: Deposits performance - Focus remains on growing low cost deposits

    Deposits performance - Focus remains on growing low cost deposits Bank Deposits Period End Average Cost of Deposits Sep'19 Dec'18 9M'19 9M'18 9M'19 9M'18 Domestic deposits - Rs in bln 1,155 1,106 1,089 996 5.2% 2.8% International deposits - Rs in bln 264 260 260 251 2.2% 2.2% Total Bank - Rs in bln

  13. Slide 13: Digital - Revolution in the making, UBL in the forefront

    Digital - Revolution in the making, UBL in the forefront UBL Performance Overview - 9M 2019 13 13

  14. Slide 14: UBL – Uniquely positioned to cater to all market segments

    UBL – Uniquely positioned to cater to all market segments UBL Performance Overview - 9M 2019 14

  15. Slide 15: UBL Digital - Key Performance Indicators 9M'19

    UBL Digital - Key Performance Indictors 9M’19 Digital KPI's 9M'19 9M'18 Var % Downloads in millions 1.6 0.6 178% Registered Customers 762,978 264,923 188% Active Customers 377,400 131,498 187% No of Transactions (in millions) 7.0 4.9 44% App Rating (IOS and Andriod) 4.7 3.6 31% POS Volumes - Rs in b

  16. Slide 16: Credit Cycle - a word of caution with consolidation

    Credit Cycle - a word of caution with consolidation UBL Performance Overview - 9M 2019 16 16

  17. Slide 17: Advances portfolio down 12% from Dec'18

    Advances portfolio down 12% from Dec’18 Bank’s advances yield up to 10.2% 9M’19 (9M’18: 6.5%) – repricing in line with benchmark rate Rs in bln Description Var % Sep'19 Dec'18 Corporate Bank 356 404 -12% Commodity 66 68 -3% Small Enterprises 11 12 -15% Consumer 17 16 9% Others 32 44 -28% Total Domes

  18. Slide 18: Risk Mitigation and reserving

    Risk Mitigation and reserving UBL Performance Overview - 9M 2019 18 18

  19. Slide 19: NPLs and Provisioning - 9M'19

    NPLs and Provisioning - 9M’19 Key highlights Domestic NPLs and Asset Quality * 83.8%  Bank level NPLs at Rs 79.0 bln (Dec’18: Rs 68.6 35.0 Rs in bln * 92.5% 9.0% 30.0 bln) 30.0 27.9 8.0% 7.0%  Bank’s asset quality at 11.4% at Sep’19 25.0 6.0% 5.9% 20.0 (Dec’8.8%) 5.0% 4.9% 4.0% 15.0  Bank’s Speci

  20. Slide 20: Deployment in GoP papers, RWA efficient

    Deployment in GoP papers, RWA efficient Portfolio declines in line with reduced leveraging Investments’ yields – inching up Rs in bln 11.1% 57 69 10.4% 9.6% 10.4% 38 13 34 8.9% 57 41 7.6% 17 7.8% 458 2013 2014 2015 2016 2017 2018 9M'19 396 Non Funded income down as no capital gains in 9M’19 Rs in ml

  21. Slide 21: Cost discipline through synergies across business and support functions

    Cost discipline through synergies across business and support functions  Admin Expense of Rs 29.2 bln - YoY growth restricted to 4%  Cost to income ratio measured at 46.6% for 9M’19 (9M’18: 45.9%)  Salaries expense for 9M’19 at Rs 11.0 bln, flat YoY  IT expenses of Rs 2.6 bln, up 18% YoY - inves

  22. Slide 22: Overview of Financial Performance

    Overview of Financial Performance UBL Performance Overview - 9M 2019 22 22

  23. Slide 23: Our Results for the nine months ended Sep 30th 2019

    Our Results for the nine months ended Sep 30th 2019 Consistent performance positioned to grow  PAT of Rs 14.4 bln, up 48% YoY  PBT of Rs 26.3 bln, up 59%  Cost to Income Ratio of 46.6% in Sep’19 vs 45.9% in Sep’18  RoE of 13.8% 9M’19 (9M’18: 10.3%)  Dividend payout ratio of 68% YTD Sep’19  CAR

  24. Slide 24: Balance Sheet - Standalone

    Balance Sheet - Standalone Rs in bln Description Var % Sep'19 Dec'18 Advances 626 716 -12.6% Investments 1,008 786 28.2% Lendings to Financial Institutions 20 34 -40.7% Others 355 353 0.6% Total Assets 2,010 1,890 6.4% Deposits 1,419 1,366 3.9% Borrowings 325 268 21.3% Subordinated Debts 10 9 11.1%

  25. Slide 25: Income Statement - Standalone

    Income Statement - Standalone Rs in bln Rs in bln Description Var % Var % 9M'19 9M'18 Q3'19 Q2'19 Interest Earned 112.0 83.9 33.5% 45.4 35.2 44.7% Interest Expensed (66.6) (42.0) -58.7% (30.0) (19.9) -79.2% Net Interest Income 45.3 41.9 8.3% 15.4 15.3 5.2% Non Interest Income 17.4 19.4 -10.3% 5.3 7.

  26. Slide 26: Non Fund Income Standalone Results

    Non Fund Income Standalone Results Rs in mln Rs in mln Description Var % Var % 9M'19 9M'18 Q3'19 Q2'19 Fee, commission and brokerage income 8,722 8,481 3% 2,948 2,911 1% Dividend income 911 1,388 -34% 145 540 -73% Income from dealing in foreign currencies 3,015 2,466 22% 1,052 1,176 -11% Gain / (los

  27. Slide 27: Fees and Commissions performance Standalone Results

    Fees and Commissions performance Standalone Results Rs in mln Description Var % 9M'19 9M'18 Branch banking customer fees 1,209 1,143 6% Consumer finance related fees 707 626 13% Card related fees (debit and credit cards) 1,180 1,178 0% Investment banking fees 237 475 -50% Financial Institution rebat

  28. Slide 28: Administrative Expenses (1/2) Standalone Results

    Administrative Expenses (1/2) Standalone Results Rs in mln Description Var % 9M'19 9M'18 Total compensation expenses 8,898 8,656 -3% Rent and taxes 106 1,732 94% Utilities cost 1,222 1,143 -7% Security 668 843 21% Depreciation 554 464 -20% Depreciation - Right of Use Assets 1,672 - -100% Others 293

  29. Slide 29: Administrative Expenses (2/2) Standalone Results

    Administrative Expenses (2/2) Standalone Results Rs in mln Description Var % 9M'19 9M'18 Legal and professional charges 162 289 44% Outsourced service costs including sales commission 2,509 2,349 -7% Banking service charges 1,122 831 -35% Cash transportation and sorting charges 612 724 15% Depreciat

  30. Slide 30: Annexures

    Annexures UBL Performance Overview - 9M 2019 30

  31. Slide 31: Balance Sheet

    Balance Sheet Rs in mln 2018 2017 2016 2015 2014 2013 2012 Assets Cash and balances with treasury and other banks 206,813 177,099 146,428 128,870 87,573 114,388 109,396 Lending to financial institutions 33,942 10,868 25,711 24,095 21,872 28,835 21,953 Investments- gross 792,857 1,095,555 808,959 721

  32. Slide 32: Profit & Loss

    Profit & Loss Rs. in mln 2018 2017 2016 2015 2014 2013 2012 Markup / return / interest earned 113,198 107,206 98,219 94,353 82,735 72,846 73,507 Markup / return / interest expensed (56,964) (50,781) (41,177) (38,511) (37,769) (34,910) (34,948) Net Markup / Interest income 56,234 56,425 57,042 55,842

  33. Slide 33: Key Financial Ratios & Share Information

    Key Financial Ratios & Share Information Description 2018 2017 2016 2015 2014 2013 2012 Key Financial Ratios Return on equity (RoE) 11.6% 20.6% 24.9% 25.7% 23.9% 22.3% 23.8% Return on assets (RoA) 0.8% 1.4% 1.8% 2.0% 2.1% 2.0% 2.1% Profit before tax ratio 30.7% 50.8% 57.1% 54.2% 52.0% 49.6% 48.2% Re

  34. Slide 34: Income Statement - Domestic

    Income Statement - Domestic Rs in bln Rs in bln Description Var % Var % 9M'19 9M'18 Q3'19 Q2'19 Interest Earned 100.6 73.0 38% 41.6 31.4 33% Interest Expensed (61.9) (37.4) -65% (28.4) (18.3) -55% Net Interest Income 38.7 35.6 9% 13.3 13.0 2% Non Interest Income 15.0 17.4 -14% 4.5 6.4 -31% Total Rev

  35. Slide 35: Income Statement - Consolidated

    Income Statement - Consolidated Rs in bln Rs in bln Description Var % Var % 9M'19 9M'18 Q3'19 Q2'19 Interest Earned 114.6 87.0 31.8% 46.4 36.1 44.3% Interest Expensed (68.2) (43.6) -56.5% (30.5) (20.5) -77.7% Net Interest Income 46.5 43.4 7.0% 15.9 15.6 6.0% Non Interest Income 19.4 21.2 -8.3% 6.0 7

  36. Slide 36: Balance Sheet - Consolidated

    Balance Sheet - Consolidated Rs in bln Description Var % Sep'19 Dec'18 Advances 672 755 -11.0% Investments 1,043 831 25.5% Lendings to Financial Institutions 23 35 -34.5% Assets held for sale 4 - 100.0% Others 382 381 0.0% Total Assets 2,123 2,002 6.0% Deposits 1,499 1,448 3.5% Borrowings 334 280 19

  37. Slide 37: Quarterly Trends

    Quarterly Trends UBL Performance Overview - 9M 2019 37

  38. Slide 38: Profit before tax (PBT)

    Profit before tax (PBT) Rs in bln 13.5 11.8 10.9 11.2 11.3 10.8 11.2 +8% 10.29.9 10.4 9.3 +44%9.2 8.4 8.8 8.5 8.8 8.3 8.3 7.8 8.0 7.1 8.4 -4% 6.4 6.5 -6% 5.9 5.9 4.1 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'19Q2'19Q3'1

  39. Slide 39: Profit after tax (PAT)

    Profit after tax (PAT) Rs in bln 7.1 7.3 7.3 6.5 7.0 6.5 6.4 6.1 7.0 6.3 +59% +29% 5.7 6.0 5.6 5.5 5.2 5.3 5.3 5.4 5.9 4.9 4.7 4.3 4.2 4.0 -10% 3.6 3.5 -24% 2.6 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'19Q2'19Q3'19 UBL

  40. Slide 40: Deposits

    Deposits Rs in bln +8% 1448 +2% 1419 1,3661344 1,2731,301 1,3151,335 -2% 1,256 1,254 -2% 1,147 1,167 1,183 1,142 1,051 1,070 992 994 945 895 858 866 828 847 752 773 703 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'19Q2'19Q

  41. Slide 41: Net Advances

    Net Advances Rs in bln +6% 716 675 673 +1% 636 642 627 624 626 -11% -3% 565 567 509 519 496 498 459 455 417 434 420 430 408 391 447 377 363 369 352 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 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2

  42. Slide 42: Gross Revenue

    Gross Revenue Rs in bln +14% 22.4 21.9 +4% +0% 21.3 21.2 21.2 20.7 +5% 20.3 20.4 20.3 20.0 20.0 19.5 19.2 19.6 19.3 -8% -10% -2% 17.6 19.0 18.6 18.1 17.9 16.3 15.4 14.9 13.8 14.1 15.5 12.6 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q

  43. Slide 43: Net Interest Income (NII)

    Net Interest Income (NII) Rs in bln +4% 15.7 +2% 15.3 15.4 +4% +2% 14.7 14.7 14.3 14.4 +1% 14.2 14.0 14.2 14.2 13.6 13.1 12.8 14.2 13.8 13.9 13.7 13.9 13.7 -3% -3% 11.3 11.0 10.6 9.8 9.5 9.0 8.8 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18

  44. Slide 44: Non Funded Income (NFI)

    Non Funded Income (NFI) Rs in bln 8.4 +21% +44% 7.3 -5% 7.2 7.0 6.2 6.2 6.3 +10% 6.1 6.0 5.7 5.6 -26% 5.3 4.8 4.9 5.1 5.0 5.0 4.8 4.84.8 5.2 4.6 4.5 5.1 -26% -12% 3.9 4.5 3.8 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'19

  45. Slide 45: Provisions

    Provisions Rs in bln 5.5 +88% +140% 2.9 3.2 2.6+37% 2.1 2.2 2.0 +11% 1.3 1.9 0.9 0.9 0.8 0.7 +31% 0.5 1.3 0.3 0.3 0.6 -8% 0.2 0.2 0.1 0.8 -0.1 -76% -0.3 -0.3 -0.1 -0.5 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'19Q2'19Q3

  46. Slide 46: Administrative Expenses

    Administrative Expenses Rs in bln 10.7 +15% +14% 10.3 +11% 10.0 9.9 9.2 -2% 9.6 -2% 9.0 8.8 8.8 8.6 8.4 8.5 8.2 -16% 8.0 -6%8.7 7.8 7.6 7.3 7.4 7.4 7.2 7.1 6.9 6.9 6.5 6.5 6.2 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'1

  47. Slide 47: Important Information

    Important Information The information contained herein reflects our latest business statement as at September 30, 2019. 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 e

  48. Slide 48: Thank You

    Thank You UBL Performance Overview - 9M 2019 48

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