United Bank For Africa Plc · NSENG:UBA
United Bank For Africa — Q3 2017 Earnings Presentation
29 slides from United Bank For Africa's earnings presentation, October 2017
Slide 1: Unaudited 2017 Third Quarter Results Presentation
Unaudited 2017 Third Quarter Results Presentation OCTOBER 2017 1 Africa’s Global Bank
Slide 2: Disclaimer and Note of Caution
Disclaimer and Note of Caution • IMPORTANT: From time to time, the Bank makes written and/or oral forward-looking statements. These are included in this presentation and in other communications. In addition, representatives of the Bank may make forward-looking statements orally to analysts, investor
Slide 3: Table of Contents
Table of Contents Section Page 1. Introduction to UBA 4 2. Operating Environment 10 3. Financial Overview 15 4. Outlook and Key Takeaway 24 5. Appendix 27 3
Slide 4: Introduction to UBA
Section 1 Introduction to UBA
Slide 5: UBA Profile at a Glance
UBA Profile at a Glance A truly Pan-African Bank, with operations across 19 key African markets, London, New York and Paris Third largest bank in Nigeria, Funding, Liquidity & Capital (2017Q3) Over 20,000 direct and support staff at Group Level 3rd by total assets, deposits and profits with an estim
Slide 6: Evolution of UBA
Evolution of UBA With a 67 year history, UBA is one of the strongest and most recognised banking brands to originate from Sub-Sahara Africa Acquired majority interest in two Won Financial Times’ banks based in B/Faso and Benin Bankers’ Awards for Best Overall Bank in Africa, Successfully raised ₦20b
Slide 7: Evolution of UBA - Building a Pan African Platform
Evolution of UBA - Building a Pan African Platform Over the last 10 years, UBA has established a pan African platform on the back of a successful Nigerian bank 1949 – 2008 2009 – 2011 2012 – 2017 London London London Paris Paris Paris New York New York New York Chad Chad Burkina Burkina Burkina Faso
Slide 8: A Leading Full Service Pan-African Business
A Leading Full Service Pan-African Business UBA has successfully grown its African franchise and now has growing operations in 19 African countries Burkina Faso Benin Chad UBA’s Market Total Total Headline2 % Interest Share Assets Deposits UBA Nigeria 100% Top Tier ₦2,689bn ₦1,678bn UBA Ghana Limite
Slide 9: Business Strategy - Leveraging the African Platform
Business Strategy - Leveraging the African Platform UBA’s next growth phase will focus on deepening Nigerian play and consolidating its African businesses • Deepen our value chain play to embed UBA with major • Replicate our value chain success in Nigeria across Africa corporates Leverage and • Depl
Slide 10: Operating Environment
Section 2 Operating Environment
Slide 11: Nigeria’s Path to Recovery
Nigeria’s Path to Recovery Operating Environment Oil & External Reserves FG launches private sector led Nigerian Nigeria’s foreign reserves Economic Recovery and Growth Plan (NERGP) increased to $33b from $26b in aimed at boosting the economy by addressing Dec-16 following increased crude infras
Slide 12: Interest rate to ease, as Naira stabilizes and inflation moderates
Interest rate to ease, as Naira stabilizes and inflation moderates • The MPC maintained the policy rate (MPR) at 14% up till September 2017, noting that higher MPR will have less transmission effect on relevant economic Monetary policy has been stable - tight variables. posture aimed at stemming exc
Slide 13: Nigerian Naira gaining strength and inflation easing
Nigerian Naira gaining strength and inflation easing • The Federal Government has appeased the Niger Delta, leading to relative calm and recovery of oil output, which now hovers 1.8mbpd. • Following modest oil price recovery, stronger output and improving capital importation, the external reserve ha
Slide 14: Selected African Markets – Key developments
Selected African Markets – Key developments Ghana Southern Africa – Mozambique and Zambia • Higher oil production, rising cocoa output and stronger gold production help to • Fiscal constraint remains the downside risk to economic growth in jump-start Ghana GDP in the first quarter of the year, growi
Slide 15: 2018 Outlook
2018 Outlook 1 GDP Growth ≈2.5% 2 Inflation rate ≈ 13.5% 3 Exchange rate (NAFEX Fixing) N355/USD 4 Monetary Policy Rate ≈12% 5 Credit to the private sector 10%-15% 6 Budget Deficit 2.5% 7 Debt-to-GDP ratio 23% 8 Current account surplus ≈1.5% 15
Slide 16: Financial Overview
Section 3 Financial Overview
Slide 17: 2017 Third Quarter Results Snapshot
2017 Third Quarter Results Snapshot 30-Sept-17 30-Sept-16 % Change Gross Earnings 333,905 265,527 +25.8% COMPREHENSIVE Net Interest Income 152,297 112,073 +35.9% INCOME & PROFIT Net Operating Income 236,900 174,166 +36.0% TREND (N’million) Operating Expenses (145,699) (115,297) +26.4% Profit Before
Slide 18: Earnings Have Proven Strong and Resilient
Earnings Have Proven Strong and Resilient 334 Non-Interest Income Interest Income 266 31% 31% 29% 247 Gross Breakdown Earnings of Gross Trend Earnings (N’billion) 69% 69% 71% 2015Q3 2016Q3 2017Q3 2015Q3 2016Q3 2017Q3 237 78 174 166 57 59 Operating Profit Before Income Tax (N’billion) (N’billion) 201
Slide 19: Efficiency Gains Continue To Drive Margin Improvements
Efficiency Gains Continue To Drive Margin Improvements 7.1% 7.3% 6.7% 4.0% 3.7% 3.8% Net Interest Cost of Margin (%) Funds (COF) (%) 2015FY 2016FY 2017Q3 2015FY 2016FY 2017Q3 2017Q3 2016FY • Net interest margin (NIM) continues to improve, expanding 20bps YTD to 19% 7.3%, on the back of pricing gains
Slide 20: Well Diversified Asset Book Supported By Stable Funding Structure
Well Diversified Asset Book Supported By Stable Funding Structure 3.77 Deposits Debt Equity Other 3.50 3.0% 3.4% 3.2% 11.2% 12.7% 13.3% 2.75 7.4% 9.9% 12.9% Total Assets Funding (N’trillion) Structure 78.4% 74.0% 70.5% 2015 FY 2016 FY 2017 Q3 2015 FY 2016 FY 2017 Q3 Mandatory reserves- cash • In spi
Slide 21: Stable and Well Diversified Loan Portfolio
Stable and Well Diversified Loan Portfolio... 1.6 1.6 3.9% 1.1 1.1 Total Loan 4.2% NPL Ratio Book (%) 1.7% (N’trillion) 1.6% 2014 FY 2015 FY 2016 FY 2017 Q3 2014 FY 2015 FY 2016 FY 2017 Q3 Others 9% Communications Agriculture Real Estate and 2% Government 3% Construction Oil & Gas* 1% Others 7% 13%
Slide 22: Supported by Solid Capital and Liquidity
...Supported by Solid Capital and Liquidity... UBA Liquidity Ratio (Year Average) Regulatory Requirement (30%) 63% 61% 50% 43% 42% 40% Loan-to- Liquidity Deposit Ratio (%) Ratio (%) 2015 FY 2016 FY 2017 Q3 2015 FY 2016 FY 2017 Q3 UBA (Nigeria) Basel II Capital Ratio UBA Group CAR (%) Regulatory requ
Slide 23: Plus an Intense Focus on Asset Quality and Cost Efficiency
...Plus an Intense Focus on Asset Quality and Cost Efficiency Coverage Ratio (including regulatory reserves) 2.0% 163% 240% 135% 119% 3.9% 4.2% Cost of Risk 1.1% NPL Ratio (%) (%) 1.6% 1.7% 0.4% 2015 FY 2016 FY 2017 Q3 2014 FY 2015 FY 2016 FY 2017 Q3 • UBA’s vision and financial goals are based on c
Slide 24: Outlook and Key Takeaways
Section 4 Outlook and Key Takeaways
Slide 25: 2017FY Outlook
2017FY Outlook 1 Net Interest Margin >7% 2 Cost-to-Income Ratio (ex-impairment) ≈ 60% 3 Cost of Risk ≈ 1.5% 4 NPL Ratio ≈4.5% 5 Loan Growth 10% 6 Deposit Growth 10% 7 Return on Average Assets ≈2.3% 8 Return on Average Equity ≈20% 25
Slide 26: Key Takeaways
Key Takeaways o A unique pan-African franchise – diversified risk and earnings across fast growing African economies. o Sound governance, risk management and compliance culture – adherence to international best practice. o A robust digital banking platform – leveraging technology to serve over 14 mi
Slide 27: Appendix
Section 6 Appendix
Slide 28: Summary Financials ::: Audited Results
Summary Financials ::: Audited Results As at 30 June 2017 31 December 2016 31 December 2015 ASSETS (₦ millions) Cash and bank balances 763,224 760,930 655,371 Financial assets held for trading 43,878 52,295 11,249 Derivative assets 13,931 10,642 1,809 Loans and advances to banks 11,505 22,765 14,600
Slide 29: Summary Financials ::: Audited Results
Summary Financials ::: Audited Results For the six months ended 30 June For the year ended 31December 2017 2016 2016 2015 2014 (₦ millions) Interest income 154,954 107,418 263,970 229,629 196,680 Interest expense (53,575) (43,286) (98,770) (96,030) (90,547) Net interest income 101,379 64,132 165,200
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