Union Bank Of India Limited · NSE:UNIONBANK
Union Bank Of India — Q1 FY2009 Earnings Presentation
29 slides from Union Bank Of India's earnings presentation, June 2008
Slide 1: Presentation: Financials – 30th June, 2008
PRESENTATION FINANCIALS – 3Oth JUNE, 2008
Slide 2: Performance Highlights
PERFORMANCE HIGHLIGHTS Q1 FY 09 Total Business 21.48% yoy Core Deposits 33.69% yoy CASA Growth 28.88% yoy SME Advances 40.93% yoy Gross NPAs 2.08% Net NPAs 0.15% 2
Slide 3: Deposits
Deposits 107248 Total Deposits grew by 23.30% 90780 86984 23.30% to Rs. 107248 crs, 13.68% 76517 however through technology 67904 and process intervention, 58667 33.69% Retail Deposit growth of the 15.74% Bank at 33.69%, exceeded the industry trend. 17850 19080 The Bank has shed high 16468 cost
Slide 4: CASA Deposits
CASA Deposits (Rs. in Crore) June’06 June’07 June’08 % Growth Current Deposits 6708 8340 11617 39.29 Savings Deposits 19018 20587 25663 24.66 Demand Deposits 25726 28927 37280 28.88 (CASA) % to total 33.62 33.26 34.76 - deposits Cost of Deposits 4.96 5.72 6.06 (%) CASA deposits have shown an impre
Slide 5: Advances
Advances Advances & Yield on Advances Bank registered growth of 19.00% 80000 75810 12 YoY in advances to Rs.75810 crs. 19.00% 70000 63708 Emphasis was on qualitative shift in 60000 55802 11 credit portfolio resulting in 14.17% 10.03 10.13 10 impressive improvement in yield by 50000 10 bps to 10.13%
Slide 6: Investments
Investments 35347 10 34000 31000 29832 Yield on investments maintained 28000 27342 at 7.37% which is comparable 25000 22000 8 with industry average. However 19000 7.03 7.06 7.37 investments grew by 18.48% to 16000 Rs 35347 crs as of June’08. 13000 10000 6 June 06 June 07 June 08 Investments Yield
Slide 7: Investment Duration
Investment Duration June 06 June 07 June 08 HTM 4.88 4.15 4.09 AFS 2.81 2.78 2.72 HFT - 3.82 - Total 4.42 3.79 3.66 7
Slide 8: Net Interest Income (YoY)
Net Interest Income (YoY) 900 10.35% 810 800 734 Despite adverse market 700 23.36% conditions, Net Interest 595 Income (NII) is 600 continuously showing a 500 healthy growth. It has 400 moved up from Rs.734 crore to Rs.810 crore 300 June 06 June 07 June 08 (10.35%). Net Interest Income 8
Slide 9: Non-Interest Income - Quarterly Comparison
Non-Interest Income- Quarterly Comparison (Rs.in crore) June’07 June’08 Growth (Q1) (Q1) % Commission , Exchange 123 137 11.38 and Brokerage Treasury 34 8 -76.47 Recovery in write-off 21 22 4.76 accounts Others 37 55 48.65 Total 215 222 3.26 9
Slide 10: Operating Profits (YoY)
Operating Profits (YoY) 800 Operating Profits for the quarter ended Jun’08 improved by 17.33% 17.33% to Rs.616 crs from Rs.525 crs in 616 600 525 the previous year. 35.65% Exceptional items such as CRR 387 hike (Impact – Rs 40 crs), 400 Reduction in BPLR (Impact – Rs 60 crs), Agricultural debt w
Slide 11: Net Interest Margin (NIM) [YoY]
Net Interest Margin (NIM) [YoY] 8.37 8.23 7.52 8 Cost of Funds 6 5.41 5.60 stood at 5.60%. 4.77 Yield on funds 4 2.75 2.96 2.63 stood at 8.23%. 2 Net Interest Margin (NIM) is at 2.63%. 0 June 06 June 07 June 08 Yield on Funds Cost of funds Net Interest Margin 11
Slide 12: Improved Efficiency
IMPROVED EFFICIENCY 664 700 Productivity measured 600 552 by Business per 493 500 employee increased 400 from Rs. 552 lacs to 300 Rs. 664 lacs. Gross Profit per 200 employee has 100 increased from Rs.8.10 0 June 06 June 07 June 08 lacs to Rs. 9.46 lacs. BUSINESS PER EMPLOYEE 12
Slide 13: Net Profits (YoY)
Net Profits (YoY) Due to adverse financial 250 1.33% 225 228 market conditions, the Mark-to-Market(MTM) 200 34.73% depreciation on 167 investment portfolio of the Bank amounted to 150 Rs 339 crs, which had to be provided by the Bank, severely impacting the 100 June 06 June 07 June 08 Q1-09 Net Pro
Slide 14: Cost to Income Ratio
Cost to Income ratio 50.00 49.01 The Cost to Income 44.68 ratio which reflects the operating 40.00 40.31 efficiency of the bank was at 40.31% 870 bps reduction in last 2 yrs and is one of the 30.00 June 06 June 07 June 08 lowest among peer banks. Cost to Income ratio 14
Slide 15: Coverage of Non Interest Expenses by Non Interest Income
COVERAGE OF NON INTEREST EXPENSES BY NON INTEREST INCOME JUNE 06 JUNE 07 JUNE 08 44 42 47 53 56 58 COVERED UNCOVERED COVERED UNCOVERED COVERED UNCOVERED Coverage of Non-Interest expenses by Non-interest income increased to 53.33% as of June’08 15
Slide 16: NPA Management
NPA MANAGEMENT GROSS NPAs NET NPAs 4 1.4 3.55 1.22 3.5 1.2 3 2.78 1 2.5 0.78 2.08 0.8 %2 % 0.6 1.5 0.4 1 0.2 0.15 0.5 147 bps reduction in last 2 yrs 107 bps reduction in last 2 yrs 0 0 June 06 June 07 June 08 June 06 June 07 June 08 GROSS NPA % NET NPA AS % Net NPA % of the Bank, one of the best
Slide 17: Movement of NPAs
Movement of NPAs (Rs.in crore) June 07 June 08 Gross NPAs – Opening 1873 1657 Add : Additions 201 158 Less : Deductions 305 240 1. Due to Write Off 118 13 2. Due to upgradation/ Recoveries 187 227 Gross NPAs 1769 1575 Gross Credit 63708 75810 Gross NPA as a % age of GBC 2.78 2.08 Net NPA 486 109 Net
Slide 18: Improved Asset Quality
IMPROVED ASSET QUALITY Improved asset quality is reflected in declining trend in delinquency Ratio June 07 June 08 Delinquency Ratio 1.30 0.85 18
Slide 19: Capital Adequacy
Capital Adequacy 14 12.66 12.22 12 11.25 • Capital Adequacy Ratio is 10 at 12.22% as of 30th June, 2008 as against 12.66% as 8 7.95 7.51 7.20 on 30th June, 2007. 6 4.71 4.71 • Tier-I Core Capital Ratio is 4.05 4 at 7.51% as of June 2008. 2 • Basel II–CAR at 11.28%, 0 June 06 June 07 June 08 of which
Slide 20: Key Ratios – Profitability
Key Ratios – Profitability Ratios June’06 June’07 June’08 Earning Ratios* Return on Avg. Assets (%) 0.82 0.91 0.74 Return on Equity (NP/NW %) 15.70 18.18 15.62 Earning Per Share (Rs.) 13.21 17.83 18.08 Book Value Per Share (Rs.) 84.12 98.07 115.70 * Annualised 20
Slide 21: Distribution Channels
DISTRIBUTION CHANNELS BRANCH MIX The Bank added 138 branches and 442 ATMs since June 2007. 514 755 SERVICE OUTLETS 544 30.06.06 30.06.07 30.06.08 560 Branches 2085 2235 2373 Ext. Counters 144 135 118 Service branches 28 31 35 ATMs 522 831 1273 Metro Urban Semi-Urban Rural 21
Slide 22: Shareholding Pattern (30th June, 2008)
Shareholding Pattern (30th June, 2008) 18.69 Govt. of India Banks, Fis, Ins. Cos. Others 14.53 FIIs and Foreign Mutual Funds 55.43 11.35 JUNE 04 JUNE 05 JUNE 06 JUNE 07 JUNE 08 GOVT. 60.85% 60.85% 55.43% 55.43% 55.43% FIIs & FMFs 13.88% 18.17% 20.00% 19.72% 18.69% BANKS, INST./ 4.64% 4.91% 6.57% 8.9
Slide 23: Major highlights of last quarter
Major highlights of last quarter 23
Slide 24: Major Highlights Q1-09
Major Highlights Q1-09 As part of Business process change “Nav Nirman” initiated by the Bank, a Centralised back office hub has been opened at Darukhana on 12th April, 2008. This hub caters to Inward / Outward clearing of cheques, Issuance of Statement of Accounts, Cheque books of Mumbai zone. Thi
Slide 25: Major Highlights
Major Highlights Due to adoption of technology, transactions through electronic mode moved up from 6% to 12% of the total transactions of the bank in the last 3 months and is expected to touch 25% by March 2009. This will significantly bring down the transaction costs. Bank will open its first o
Slide 26: Road Ahead
ROAD AHEAD 26
Slide 27: Road Ahead
ROAD AHEAD The Bank aims to reach a business mix of Rs 220000 crore by the end of March 2009, a growth of approx. 22%. Of this, Rs 127500 crore will be Deposits (growth of 23%YoY) and Rs 92500 crore will be Advances (growth of 22%YoY). Bank will continue to focus on a four-pronged strategy for g
Slide 28: 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 29: Thank You
THANK YOU 29
Union Bank of India — Q1 FY2009 Earnings Presentation on 6ix