Habib Bank Limited · PSX:HBL
Habib Bank — Investor Presentation (December 2019)
30 slides from Habib Bank's investor presentation, Dec 10, 2019
Slide 1: Corporate Briefing
Doing First Class business in a First Class way Corporate Briefing 10th December, 2019
Slide 2: Habib Bank Limited: More than just a bank
Habib Bank Limited More than just a bank Shareholding Pattern 18.5%* Others - Local 18.5% 100%* 19.8%* AKFED Others - 51.0% Foreign 20.7% 20%* 16.15%* IFC 2.1% Related CDC entities 50.51%* 5.0% 100%* 2.7% 18%* * HBL holding 1
Slide 3: Pakistan's No. 1, AAA rated, Commercial Bank
Pakistan’s No. 1, AAA rated, Commercial Bank #1 ASSETS #1 ADVANCES #1 DEPOSITS #1 CUSTOMER BASE Rs 3.1 Rs 1.2 Rs 2.3 Trillion 16M + Trillion Trillion Market share of Incl.3.6M Market share 14% Konnect of 12.5% customers #1 ATMs #1 KONNECT AGENTS #1 POS TERMINALS #1 DOMESTIC 2,136 25,002 BRANCHES 51,
Slide 4: Major awards and accolades - 2019
Major awards and accolades - 2019 Major Certifications HBL is Pakistan’s Pakistan’s Best Bank Best Domestic Bank first bank to have Best Corporate and Investment Bank its Business Best Bank for CSR Continuity Best Local Bank in the Region for BRI (South Management Asia) Best Individual BRI Project o
Slide 5: An experienced Executive Committee
An experienced Executive Committee The senior team represents a good balance between continuity and fresh blood Muhammad Aurangzeb President & CEO 2 / 33 / 33 (1) * Front Office Neelofar Hameed Company Secretary * 1 / 31 / 35 (1) Amer Aziz Aamir Irshad Muhammad Afaq Khan Head Development Head Branch
Slide 6: HBL's Strategic Direction: The 6-Point Agenda
HBL’s Strategic Direction : The 6-Point Agenda Commitment to deliver on P&L n Sustainable revenue growth on the back of top league table positions n Strict cost discipline including cost initiatives 1 n Optimal deployment of Balance Sheet, with enhanced focus on cross-sell n Maintain high portfolio
Slide 7: HBL's Portfolio: A STARS Approach
HBL’s Portfolio : A STARS Approach Sustaining Success Maintain Dominant Position in Startups • Deposits • Corporate & Investment Banking Increased Emphasis on • Branchless Banking S • Treasury • Rural Banking • Digital Banking T S Turnaround Realignment Strategic rethink of • Commercial Banking • In
Slide 8: Key Financial Initiatives Underway
Key Financial Initiatives Underway Performance 7
Slide 9: Digital Solution for scaled up Financial Inclusion
Digital Solution for scaled up Financial Inclusion Pakistan Value Landscape Impact so Servicing Channels Proposition far Population: 217m HBPS* Agent Mobile App Internet QR ATMs 3.6M+ Payments Millennials: 80m Accounts Collections & Disbursement SIM subscribers: 162m 24% eCommerce Female Smartphone
Slide 10: HBL Digital
HBL Digital Mobile & Internet Banking Users ('000) 1,117 • More than 1.1 million users for Mobile & Internet • Average monthly transactions - Count: 11.7m, Value: Rs 22b 711 773 • 265+ internet merchants • First bank to introduce mVISA QR payments in Pakistan 387 • First in market to offer loan on M
Slide 11: Digital Banking – Data Strategy
Digital Banking – Data Strategy Challenges Acquire Manage Use Govern Non standardized and No centrally No Enterprise Reporting No dedicated Data time consuming managed data capability & limited Governance practice integration processes repository analytics in place Establish an authoritative Data Ar
Slide 12: Rural Banking
Rural Banking Agriculture Finance Market (Rs B) Voice of the Farmer - Kisaan Ke Awaz § Focus group platform Total Size - Rs 432B connecting HBL and the farmer Sepcialized Agriculture § Enhanced and direct HBL, Rs 32B Banks, Rs 149B communication aimed at Other understanding farmers’ needs Commercial
Slide 13: Building the nation – Corporate and Investment Banking
Building the nation – Corporate and Investment Banking The largest Corporate & Investment Bank in the country with total credit exposure of over Rs 900B to over 600 corporate customers. At the forefront of all major transactions Major Deals Power Sector ThalNova Power Siddiqsons Pak Matiari Lahore L
Slide 14: Transaction and Employee Banking (TEB)
Transaction and Employee Banking (TEB) Digitization initiatives Throughput – Cash Management & HAW Digitizing collections and payments by bringing clients to digital 300 HAW Salary Processed (Rs Bn) 3,442 platform at both sending and receiving end via internet, mobile Cash Management throughput (Rs
Slide 15: International Network
International Network International Footprint Strategy Follow domestic clients internationally and vice versa Corporate, Trade Finance and Financial Institutions (FI) • Upgrade global trade finance capability • Embed Belt and Road initiative to capture GCC and SAARC flows to and from Pakistan, China
Slide 16: Embracing Diversity
Embracing Diversity Internal Initiatives HBL Nisa – Banking platform for women 600 4 • Diversity Council set-up with cross functional members Deposits (Rs B) 533 506 • Champions identified to drive the diversity agenda 500 459 483 4 Accounts ('000) 431 • HBL ‘Beacon’- engagement sessions with female
Slide 17: HBL's Environmental, Social and Governance (ESG) journey
HBL’s Environmental, Social and Governance (ESG) journey Environmental & Social (E&S) • Worked proactively with CDC to ensure that the Bank’s environmental and social risk management policies are compliant with international best practices • Product development and client workshops for E&S being pur
Slide 18: Business Transformation
Business Transformation The programme ensures that HBL is able to implement and instill global practices across its business & control processes Key Achievements Achieving Governance: Enforcement of new & • Conducted comprehensive gap analysis - Gold enhanced controls ensuring a robust mapped to dis
Slide 19: Financial Performance
Financial FinancialPerformance Performance 18
Slide 20: Positive Momentum Continues in Key Drivers
Positive Momentum Continues in Key Drivers Advances > Rs 1.0 Trillion Dom. Deposits crossed Rs Customer base > 16.0M Touchpoints 2.0 tn. CA mix at 37.1% Branches ATMS Rs B 18 Branch customers Konnect customers POS Agent 80,456 1,168 Total Deposit Current 16 In Million 8% 3.6 3 1,080 Rs Trillion 1.5
Slide 21: HBL's Fortress Balance Sheet
HBL’s Fortress Balance Sheet Net Advances – Crossed PKR 1 Trillion Deposits – Crossed PKR 2 Trillion (PKRbn) (PKRbn) Dom Intl Dom Intl .8% 18) : 8 2,287 3.9% 1,168 ( 13 – 2,137 – 18) : 1 1,080 CAGR 1,999 R (13 1,886 250 CAG 187 1,635 224 852 144 1,525 216 1,401 296 748 268 600 637 136 260 564 157 22
Slide 22: Deposits remain the growth engine
Deposits remain the growth engine Robust growth in current deposits… … Improving Deposit mix (PKRbn) 17.5% 17.7% 16.5% 17.8% 18.3% : 14.6% 844 26.7% 21.9% 3-18) 813 CA GR (1 733 698 600 46.8% 44.1% 522 43.9% 45.8% 45.3% 44.8% 411 43.9% 34.2% 36.7% 37.0% 36.7% 38.0% 36.9% 29.4% 2013 2014 2015 2016 20
Slide 23: A diversified loan portfolio…
A diversified loan portfolio… Loan portfolio composition by line of business Loan portfolio composition by industry segments Power & energy Individual 7% 8% Agriculture International Financial Chemical Others 3% 16.0% 9% 2% Food, tobacco 3.9% and beverages FMFB 4% Construction 2.4% Textile 2% Cement
Slide 24: Strategic initiatives to continue driving growth & inclusion
Strategic initiatives to continue driving growth & inclusion Agriculture Financing – Leadership in a challenging Growth in Consumer Lending market (PKRbn) 57 18): 9.8% (PKRbn) 53 CAGR (13- 34.7 2.8% 46 32.5 3- 18): 2 31.2 31.5 31.9 R( 1 CAG 41 25.2 31 19.8 19 22 0.2% 0.2% (0.1%) 0.2% 0.2% 0.1% (0.2%
Slide 25: Operating results
Operating results Total Revenue Profit before tax (PKRbn) (PKRbn) 109 7^ 97 7^ 28 60 57 23 115 113 116 102 48 7 ** 92 90 36 5** 74 29 22 18 2013 2014 2015 2016 2017 2018 9M 2013 2014 2015 2016 2017 2018 9M 2019 2019 Profit after tax Return on Equity (PKRbn) 23% 22% 21% 18% Normalized * 17 9% 35 34 8
Slide 26: Earnings and Dividends
Earnings and Dividends Book Value Per Share Cost to income ratio Equity BV per share 76.2% 76.8% 25 0.0 145 16 0.0 134 136 125 129 14 0.0 20 0.0 116 107 12 0.0 52.9% 48.6% 48.3% 10 0.0 15 0.0 44.8% 56.8% 58.3% 80 .0 42.2% 196 199 213 10 0.0 170 183 189 60 .0 142 40 .0 50 .0 Normalized * 20 .0 - - 20
Slide 27: Appendix: Financial Performance
Appendix Financial Performance 26
Slide 28: Balance Sheet
Balance Sheet 2013 2014 2015 2016 2017 2018 Sep-19 PKR Bn Assets Cash & Bank Balances 193 203 208 284 287 322 305 Lendings to financial institutions 35 34 18 34 34 51 42 Investments 826 923 1,271 1,344 1,375 1,390 1,388 Advances 564 600 637 749 852 1,080 1,168 Others 97 105 84 96 149 182 200 Total A
Slide 29: Profit / Loss
Profit / Loss PKR Mn 2013 2014 2015 2016 2017 2018 9M 2019 Interest Income 120,605 137,416 141,101 141,089 148,010 165,283 182,631 Interest Expensed 65,207 68,833 62,933 59,138 66,177 83,606 108,573 Net Interest Income 55,397 68,583 78,169 81,951 81,833 81,677 74,058 Fee and commission income 11,686
Slide 30: Key Ratios
Key Ratios 2013 2014 2015 2016 2017 2018 Sep 2019 Profitability Return on average assets (RoA) 1.4% 1.8% 1.7% 1.4% 0.3% 0.6%* 0.5%* Return on shareholders' equity (RoE) 16.8% 20.2% 19.9% 18.1% 5.2% 9.4%* 8.3%* Cost : Income ratio 48.6% 44.8% 42.2% 48.3% 52.9% 76.2% 76.8% NFI : Gross revenue 25.5% 25