Slide 1: FY 2009 Business and Financial Review
FY 2009 Business and Financial Review Atif Bajwa, President Salman Zafar Siddiqi, CFO Imran Zaffar, Investor Relations Karachi March 18th, 2010 Investor Presentation
Slide 2: Agenda
Agenda • Market Developments • Business and Strategy Update • Financial Review of 2009 Results 2
Slide 3: 2009 – A Year of Economic Stabilization
2009 – A Year of Economic Stabilization Economic activity slowed down markedly in FY 2009 with GDP growth of 2% - but a slow recovery appears to be underway this year Inflationary pressures reduced somewhat with CPI declining from over 20% in Jan ‘09 to 10.5% by YE (currently, back-up to 13%) Extern
Slide 4: Banking System Developments
Banking System Developments ADR ratio declined as Deposits Grew More Than Deposit Market Grew by Rs. 524 B in 2009 Advances, and Govt. Borrowed Heavily System Deposits Rs. T ADR ratio (Gross) 13.8% 83% 4.3 3.8 76% Dec '08 Dec '09 Dec '08 Dec '09 Sluggish Growth in Lending Reflecting Overall Economic
Slide 5: Agenda
Agenda • Market Developments • Business and Strategy Update • Financial Review of 2009 Results 5
Slide 6: Strategic Focus for FY 2010
Strategic Focus for FY 2010 Deliver Solid Returns to Shareholders CASA CASA Focus Focus Fee Fee Income Income Cost Cost Control Control • Increase momentum in low cost • Increase cross-sell focus • Stringent control on BAU costs liabilities generation • Expand product menu and • Efficiency from cent
Slide 7: Execution on MCB Strategy in FY 2009
Execution on MCB Strategy in FY 2009 Channels / Transaction Banking Products & services People & Infrastructure Launched in 2008 Core banking system New Branch sales / service Banca collected premium of installed in all branches model in 100 branches With a total of around 500 ATM Rs. 228 M and took
Slide 8: Agenda
Agenda • Market Developments • Business and Strategy Update • Financial Review of 2009 Results 8
Slide 9: FY 2009 Financial Highlights
FY 2009 Financial Highlights Profit & Loss (Rs. M) Unconsolidated Consolidated Over Over Over Over (Under) Rs. (Under) % (Under) Rs. (Under) % 2009 2008 2008 2009 2008 2008 Net mark-up interest income 35,775 7,291 26% 35,782 7,326 26% Non-interest income 5,643 (149) (3%) 5,755 (175) (3%) Total Reven
Slide 10: Solid Top-line Interest Income Growth
All Financial Are Presented On A Consolidated Basis, Unless Solid Top-line Interest Income Growth Otherwise Stated Earning Assets Grew By 18% in FY ‘09 and Yield Expanded Rs. B 379 448 Net Interest Income (Rs. B) Other 8 9 Investments Rs. B 98 169 Loans (Gross) 273 270 26% FY '08 FY '09 Yield (gross
Slide 11: Loan Portfolio and Credit Costs
Loan Portfolio and Credit Costs 2008 2009 Rs. B Loans (Gross) Loans (Gross) Rs. 273 B Rs. 270 B 149 170 73 54 32 18 27 19 Corporate Commercial Consumer Other Corporate Commercial Consumer Other Consumer Loans (Gross) Rs. B Rs. 32 B Rs. 27 B 16.0 12.6 7.0 6.2 3.8 3.2 2.4 3.0 2.3 2.5 Autos Home Busine
Slide 12: Supported By Strong Low Cost Liabilities Franchise
Supported By Strong Low Cost Liabilities Franchise CASA growth of 14% in FY2009 Share of CASA in Deposits at 83% Number of Branches Rs. B 268 305 176 156 81% 83% 1,047 1,081 112 129 FY '08 FY '09 FY '08 FY '09 FY '08 FY '09 CA SA % of CASA • CASA passed the Rs. 300B mark in FY2009 • Continued strong
Slide 13: Non Interest Income
Non Interest Income Non-interest Income declined 3% Fee Commission Income (Unconsolidated) up 13% Rs. B Rs. M 5.9 5.6 2,953 3,332 1.0 0.9 142 Other 0.7 0.3 161 864 Other 1.1 FX dealing 716 Consumer Products 1.2 455 Remittance Capital gains & 499 dividends Corporate & Trade 940 3.3 Fee Income 817 Ret
Slide 14: Strong Conversion of Revenues to Core Profits
Strong Conversion of Revenues to Core Profits Administrative Expenses Excluding PF and Defined Plans Cost: Income Ratio Improved to 36% Rs. B 12.9 13.7 3.2 2.9 1.1 Other 1.0 2.9 Depn & Amort. 2.4 40% Occupancy 36% Personnel 6.6 6.5 FY '08 FY '09 FY '08 FY '09 • Personnel cost marginally lower in FY
Slide 15: Strong Returns and Consistent Profitability
Strong Returns and Consistent Profitability PBT (Core) – Pre-PF increased 18% Return on Average Assets remains solidly above 3% Rs. B 3.6% 3.3% 19.4 16.5 FY '08 FY '09 FY '08 FY '09 Reported Net Income rose 2% Return on Average Equity slid through equity retention Rs. B Tax rate 30% 33% 30% 27% 15.3
Slide 16: Solid Capital Base
Solid Capital Base Shareholder Funds Strong capital adequacy Rs. B 63 54 19.1% 16.4% FY '08 FY '09 FY '08 FY '09 • Consistent increase in shareholder funds • Strongest capitalization ratio in industry 16
Slide 17: Question and Answer Session
Question and Answer Session 17
Slide 18: Appendix
Appendix 18
Slide 19: Financial Summary
Financial Summary Rs. M 1Q09 2Q09 3Q09 4Q09 Interest earned 13,004 12,849 12,352 13,328 Interest expensed 3,908 3,857 3,831 4,178 Net interest income 9,096 8,992 8,522 9,150 Provisions 1,742 2,150 1,120 2,308 Non interest income 1,706 1,104 1,200 1,745 Of which: Fee income 824 859 799 806 Capital Ma