United Bank Limited · PSX:UBL
United Bank — FY2016 Earnings Presentation
37 slides from United Bank's earnings presentation, Feb 28, 2017
Slide 1: Performance Highlights - 31 Dec 2016
Performance Highlights - 31 Dec 2016 Investor Relations Conference Call February 28th, 2017 Speakers: Mr. Aameer Karachiwalla - Chief Financial Officer Mr. Arif Saifie, CFA - Financial Controller and Head of Investor Relations Investor Relations Release UBL Performance Overview – 2016
Slide 2: Table of Contents
Table of Contents PAGE Key Highlights 3 Execution and Delivery 7 Growth at a Glance 22 Quarterly Trend Analysis 26 UBL Performance Overview – 2016
Slide 3: Key Performance Highlights
Key Performance Highlights Standalone Results Profit before tax up by 9% over 2015, closes at Rs. 46.0 bln. Profit after tax up by 8% to Rs. 27.7 bln. Return on equity (RoE) of 24.9% in 2016 (2015: 25.7%). Average balance sheet expansion of 18% in 2016 vs 2015. Domestic deposits have grown
Slide 4: Revenue growth of 4% in 2016
Revenue growth of 4% in 2016 Net interest income up 2% over 2015, closes at Rs. 57.0 bln Overall cost of deposits reduced by 42 bps to close at 2.7% in 2016 (2015: 3.1%). Average loan growth of 11% in 2016, with yields closing at 6.6% (2015: 8.1%). Average earning investments grew by 30% over
Slide 5: Provisions down 53%, effective management restricts expense growth
Provisions down 53%, effective management restricts expense growth Total provisions down Rs. 2.0 bln over 2015, close at Rs. 1.7 bln Strong cash recoveries within both domestic and international operations. General provision reversal of Rs. 0.8 bln against a charge of Rs. 2.0 bln last year. Im
Slide 6: 13% growth in balance sheet size in 2016
13% growth in balance sheet size in 2016 Growth in non-core deposits drives balance sheet expansion Domestic deposits grew by 14% over Dec’15, close at Rs. 946 bln (Dec’15: Rs. 832 bln). Domestic current accounts grew by 21% over Dec’15, with average current account growing by 18% in 2016. Net a
Slide 7: Execution and Delivery
Execution and Delivery UBL Performance Overview – 2016 7
Slide 8: 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 260 Max 2016:Rs. 240.17 30 Dec’16: Rs. 238.90 50.00 Rs in bln Cons . Equity Dec’16 - Rs. 164 bln 240 24 Feb 2017: Rs. 248.50 Cons . Book value Dec’16 - Rs. 134 per s hare 152 45.0
Slide 9: Income Statement - Standalone
Income Statement - Standalone Rs in bln Rs in bln 2016 2015 Var % Q4'16 Q3'16 Var % Interest Earned 98.2 94.4 4.1% 24.9 23.8 4.3% Interest Expensed (41.2) (38.5) -6.9% (10.8) (10.2) -6.5% Net Interest Income 57.0 55.8 2.2% 14.0 13.7 2.8% Non Interest Income 23.6 22.0 7.4% 5.2 4.5 16.3% Total Revenue
Slide 10: Income Statement - Consolidated
Income Statement - Consolidated Rs in bln Rs in bln 2016 2015 Var % Q4'16 Q3'16 Var % Interest Earned 101.8 97.6 4.3% 25.9 24.5 5.3% Interest Expensed (42.9) (39.7) -8.1% (11.4) (10.5) -9.0% Net Interest Income 58.8 57.9 1.7% 14.4 14.1 2.6% Non Interest Income 26.2 24.5 6.7% 5.8 5.1 15.1% Total Reve
Slide 11: Deposits performance - Focus remains on growing low cost deposits
Deposits performance - Focus remains on growing low cost deposits Deposits - Bank Dec'16 Dec'15 PE CoF % PE CoF % Domestic deposits - Rs in bln 946 2.9% 832 3.4% International deposits - Rs in bln 234 2.0% 219 1.9% Total Bank - Rs in bln 1,180 2.7% 1,051 3.1% International - USD in mln 2,237 2.0% 2,
Slide 12: Advances portfolio records 12% growth over Dec'15
Advances portfolio records 12% growth over Dec’15 Net Advances Rs in bln Dec'16 Dec'15 Var % Corporate Bank 236 221 7% Commodity 53 43 24% Commercial 28 25 15% Consumer 9 9 5% Others 15 13 18% Total Domestic 342 310 10% International 168 145 16% Bank 510 455 12% International USD mln 1,608 1,384 16%
Slide 13: International Advances - Corporate advances remains the largest component
International Advances - Corporate advances remains the largest component By Geography By Business - UAE Bahrain, Qatar, 12% Yemen, 3% NewYork, 12% 4% EPZ, 0% Corporate, 72% Others, 23% UAE, 69% Consumer, 5% Others, 2% Personal loan, 2% Abu Dhabi, 25% Sharjah, 3% Dubai, 72% Baitna, 96% UBL Performan
Slide 14: Concentration of Advances as at December 31, 2016 - Standalone
Concentration of Advances as at December 31, 2016 - Standalone Energy Sector Others 19% 23% Airline Agribusiness 2% 10% Contractors 1% Pharmaceuticals 2% Telecom Individuals 3% 8% Financial 7% Construction Food industries 5% 4% Wholesale traders Textile 4% 12% UBL Performance Overview – 2016 14
Slide 15: Diversified investment portfolio with strong market risk management
Diversified investment portfolio with strong market risk management Portfolio concentrated in long terms treasury bonds Investments’ yields 11.1% Rs in bln 43 5 36 29 47 16 6 10.4% 30 10.4% 32 19 8.9% 571 2013 2014 2015 2016 487 Non Funded revenue streams continue to grow Rs in mln 5,362 108 98 3,23
Slide 16: Our international outreach - serving in 4 continents under the single UBL brand
Our international outreach - serving in 4 continents under the single “UBL” brand ASSOCIATED COMPANIES 3 OVERSEAS BRANCHES 18 PAKISTAN BRANCHES 1,341 SUBSIDIARIES 4 Asset mix by region - 2016 Domestic Operations 76.4% International Operations 23.6% Middle East 17.5% USA 0.7% Europe 5.0% Africa 0.3%
Slide 17: UBL Innovation and Awards
UBL Innovation and Awards UBL “Firsts” – Initiatives to stay ahead of the market Market recognition and awards First Commercial Bank in Pakistan to launch Branchless Awarded “Innovation Award” at the Mastercard Innovation Banking (UBL OMNI) Forum for ‘Launch of UBL MasterPass QR’ Declared the
Slide 18: Review of Non Interest Income & Administrative Expenses
Review of Non Interest Income & Administrative Expenses UBL Performance Overview – 2016 18
Slide 19: Non Fund Income Standalone Results
Non Fund Income Standalone Results Rs in mln 2016 2015 Var % Fee, commission and brokerage income 12,319 12,203 1% Dividend income 3,267 3,205 2% Income from dealing in foreign currencies 1,701 2,271 -25% Gain / (loss) on sale of securities 5,362 3,238 66% Other income 960 1,070 -10% Total Non Fund
Slide 20: Fees and Commissions performance in 2016
Fees and Commissions performance in 2016 Standalone Results Rs in mln 2016 2015 Var % Commission on trade 2,057 1,804 14% Commission on consumer loan 733 731 0% Commission on remittance / uniremote 2,040 2,101 -3% Corporate service chgs/finance fee/FIG inc. 1,894 1,777 7% General banking service cha
Slide 21: Administrative Expenses Standalone Results
Administrative Expenses Standalone Results Rs in mln 2016 2015 Var % Personnel Cost 12,453 12,013 -4% Rent taxes insurance etc. 4,203 3,984 -6% Outsourced service charges 4,565 4,320 -6% including sales commission Advertisement and publicity 704 823 14% Communications 1,095 1,148 5% Depreciation / A
Slide 22: Growth at a Glance
Growth at a Glance UBL Performance Overview – 2016 22
Slide 23: Balance Sheet
Balance Sheet Rs in mln 2016 2015 2014 2013 2012 2011 Assets Cash and balances with treasury and other banks 146,428 128,870 87,573 114,388 109,396 100,602 Lending to financial institutions 34,168 24,095 21,872 28,835 21,953 11,890 Investments- gross 808,959 721,651 499,060 425,253 351,002 297,137 A
Slide 24: Profit & Loss
Profit & Loss Rs in mln 2016 2015 2014 2013 2012 2011 Markup / rerurn / interest earned 98,219 94,353 82,735 72,846 73,507 70,451 Markup / rerurn / interest expensed (41,177) (38,511) (37,769) (34,910) (34,948) (31,026) Net Markup / Interest income 57,042 55,842 44,967 37,936 38,560 39,425 Fee, comm
Slide 25: Key Financial Ratios & Share Information
Key Financial Ratios & Share Information Key Financial Ratios 2016 2015 2014 2013 2012 2011 Return on equity (RoE) 24.9% 25.7% 23.9% 22.3% 23.8% 23.5% Return on assets (RoA) 1.9% 2.0% 2.1% 2.0% 2.1% 2.1% Profit before tax ratio 57.1% 54.2% 52.0% 49.6% 48.2% 46.5% Return on capital employed (RoCE) 24
Slide 26: Quarterly Trend Analysis
Quarterly Trend Analysis Bank Level - Standalone UBL Performance Overview – 2016 26
Slide 27: Profit before tax
Profit before tax Rs in bln 13.5 +20% -20% 10.9 11.2 11.3 10.8 +14% 10.2 9.9 9.3 -3% 10.4 8.4 8.3 7.8 8.0 7.2 7.2 7.1 6.5 6.4 6.0 5.9 Q1'12 Q2'12 Q3'12 Q4'12 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 UBL Performance Overview – 2016 27
Slide 28: Profit after tax
Profit after tax Rs in bln 7.3 +0% 7.1 7.0 7.0 +13% 6.5 6.5 -8% -4% 6.1 5.7 6.4 5.3 5.2 5.3 4.9 5.6 4.7 4.7 4.4 4.3 3.9 4.0 Q1'12 Q2'12 Q3'12 Q4'12 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 UBL Performance Overview – 2016 28
Slide 29: Deposits
Deposits Rs in bln 1180 1,142 1,147 +3% 1,070 +0% 1,051 +7% 992 994 +2% 945 895 858 866 847 828 773 752 685 698 703 653 614 Q1'12 Q2'12 Q3'12 Q4'12 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 UBL Performance Overview – 2016 29
Slide 30: Net Advances
Net Advances Rs in bln +0% +2% 509 510 496 +11% 459 455 447 434 430 -2% 417 408 420 391 369 377 364 363 358 355 352 345 Q1'12 Q2'12 Q3'12 Q4'12 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 UBL Performance Overview – 2016 30
Slide 31: Revenue
Revenue Rs in bln 21.9 -3% +12% 21.3 20.3 -15% 19.5 19.3 19.2 17.6 18.6 +6% 18.1 16.3 15.4 15.4 15.5 13.7 13.2 13.8 14.9 12.6 14.1 13.4 Q1'12 Q2'12 Q3'12 Q4'12 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 UBL Performance Overview – 2016 31
Slide 32: Net Interest Income
Net Interest Income Rs in bln 15.7 +16% 14.7 -13% 14.2 -8% +3% 14.0 13.1 13.7 12.8 13.9 13.6 11.3 10.6 9.9 9.8 11.0 9.6 9.6 9.4 9.5 9.0 8.8 Q1'12 Q2'12 Q3'12 Q4'12 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 UBL Performance Overview – 2016 32
Slide 33: Non Funded Income
Non Funded Income Rs in bln 8.4 -33% +73% 6.2 6.2 5.5 5.6 5.2 5.1 5.0 4.8 4.9 4.8 -20% 4.6 4.8 +16% 4.1 3.6 4.0 4.8 3.9 4.5 4.5 Q1'12 Q2'12 Q3'12 Q4'12 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 UBL Performance Overview – 2016 33
Slide 34: Provisions
Provisions Rs in bln 1.9 2.0 +119% 1.3 -114% 0.9 0.9 0.8 0.8 0.8 1.1 0.5 0.3 0.2 0.7 0.3 0.7 0.2 +220% -0.1 -0.1 Q1'12 Q2'12 Q3'12 Q4'12 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 -0.3 -0.3 -0% UBL Performance Overview – 2016 34
Slide 35: Administrative Expenses
Administrative Expenses Rs in bln -1% 8.6 8.4 -7% 8.2 8.0 7.8 7.6 -6% 7.3 7.4 7.4 +12% 7.2 7.1 6.9 6.9 6.5 6.5 6.2 6.2 6.1 5.8 5.5 Q1'12 Q2'12 Q3'12 Q4'12 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 UBL Performance Overview – 2016 35
Slide 36: Important Information
Important Information The information contained herein reflects our latest business statement as at December 31, 2016. 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 ex
Slide 37: Thank You
Thank You UBL Performance Overview – 2016 37