United Bank Limited · PSX:UBL
United Bank — H1 2016 Earnings Presentation
35 slides from United Bank's earnings presentation, Jul 28, 2016
Slide 1: Performance Highlights - 30 Jun 2016
Performance Highlights - 30 Jun 2016 Investor Relations Conference Call July 28th, 2016 Speakers: Mr. Aameer Karachiwalla - Chief Financial Officer Mr. Arif Saifie, CFA - Financial Controller and Head of Investor Relations Awarded “Best Bank 2016” – Pakistan Banking Awards Credit Ratings upgraded to
Slide 2: Table of Contents
Table of Contents PAGE Key Highlights 3 Execution and Delivery 7 Key Ratios 22 Quarterly Trend Analysis 24 UBL Performance Overview – H1’16
Slide 3: Key Highlights
Key Highlights Standalone results Profit before tax up by 12% to Rs. 24.8 bln Profit after tax up by 12% to Rs. 14.3 bln UBL increased its domestic market share of deposits to 8.76% as at Jun’16 (8.60% as at Dec’15) Return on equity of 26.5% in H1’16 (H1’15: 26.4%) Average balance sheet ex
Slide 4: Revenue growth of 9% in H1'16
Revenue growth of 9% in H1’16 Net interest income up 7% over H1’15, reaches Rs. 29.3 bln Overall cost of deposits reduced by 66 bps to close at 2.71% in the H1’16 (H1’15: 3.37%) Average loan growth of 10% in H1’16 vs H1’15, with yields at 6.8% in H1’16 (H1’15: 9.0%) Average earning investments
Slide 5: Provision down by 19%, Expenses well managed
Provision down by 19%, Expenses well managed Provisions down by Rs. 0.4 bln over H1’15, reach Rs. 1.7 bln Strong cash recoveries within domestic and international General provisions of Rs. 0.5 bln (H1’15: Rs. 2.0 bln) taken against the advances portfolio Impairment charge of Rs. 0.7 bln (H1’15
Slide 6: Balance sheet continues to grow in H1'16
Balance sheet continues to grow in H1’16 Retail deposits growth driving balance sheet expansion Domestic deposits grew by 10% over Dec’15, at Rs. 917 bln (Dec’15: Rs. 832 bln) Domestic current accounts grew by 16% over Dec’15, Average current account growth of 15% in H1’16 vs H1’15 Net Advances
Slide 7: Execution and Delivery - Strong earnings growth in H1'16
Execution and Delivery - Strong earnings growth in H1’16 UBL Performance Overview – H1’16 7
Slide 8: Consistent earnings performance
Consistent earnings performance Trends - KSE 100 Index and UBL’s share price Equity and Book Values 220 Max H1'16:Rs. 184.53 30 Jun’16: Rs. 176.92 41.00 27 Jul 2016: Rs. 186.65 39.00 Rs in bln Cons . Equity Jun’16 - Rs. 165 bln 200 Cons . Book value Jun’16 - Rs. 134.8 per s hare 152 37.00 142 180 12
Slide 9: Income Statement - Standalone
Income Statement - Standalone Rs in bln Rs in bln H1'16 H1'15 Var % Q2'16 Q1'16 Var % Interest Earned 49.5 46.4 6.7% 26.1 23.4 11.4% Interest Expensed (20.2) (19.1) -5.6% (10.4) (9.8) -5.3% Net Interest Income 29.3 27.3 7.5% 15.7 13.6 15.9% Non Interest Income 14.0 12.4 12.6% 5.6 8.4 -33.1% Total Re
Slide 10: Income Statement - Consolidated
Income Statement - Consolidated Rs in bln Rs in bln H1'16 H1'15 Var % Q2'16 Q1'16 Var % Interest Earned 51.4 47.9 7.2% 27.1 24.3 11.7% Interest Expensed (21.0) (19.7) -6.7% (10.8) (10.2) -6.3% Net Interest Income 30.4 28.2 7.5% 16.3 14.1 15.6% Non Interest Income 15.3 13.8 10.9% 6.1 9.2 -33.6% Total
Slide 11: Deposits continue to grow over the trillion mark, along-with low cost of deposits
Deposits continue to grow over the trillion mark, along-with low cost of deposits Deposits – Bank Jun'16 Dec'15 PE CoF % PE CoF % Domestic deposits - Rs in bln 917 2.9% 832 3.4% International deposits - Rs in bln 225 2.0% 219 1.9% Total Bank - Rs in bln 1,142 2.7% 1,051 3.1% International - USD in m
Slide 12: Advances portfolio registers 9% growth over Dec'15
Advances portfolio registers 9% growth overt Dec’15 Net Advances Rs in bln Jun'16 Dec'15 Var % Corporate Bank 227 221 3% Commodity 65 43 51% Commercial 25 25 2% Consumer 9 9 3% Others 12 13 -5% Total Domestic 338 310 9% International 158 145 9% Bank 496 455 9% International USD mln 1,507 1,384 9% De
Slide 13: International Advances - Corporate loan book remains the largest component
International Advances - Corporate loan book remains the largest component By Geography By Business - UAE Bahrain, Qatar, 12% Yemen, 3% NewYork, 12% 3% Corporate, EPZ, 0% 68% Others, 27% UAE, 70% Consumer, 5% Others, 2% Personal loan, 2% Abu Dhabi, 22% Sharjah, 3% Dubai, 75% Baitna, 96% UBL Performa
Slide 14: Concentration of Advances as at June 30, 2016 - Standalone
Concentration of Advances as at June 30, 2016 - Standalone Energy Sector Others 17% 21% Airline 2% Agribusiness Contractors 12% 2% Pharmaceuticals 2% Telecom 2% Individuals Financial 8% 7% Construction 5% Food industries 6% Wholesale traders Textile 3% 13% UBL Performance Overview – H1’16 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 11.08% Rs in bln 5 34 27 19 47 6 10.42% 30 10.36% 32 19 9.37% 585 2013 2014 2015 H1'16 487 Non Funded revenue streams continue to grow Rs in mln 105 98 Capital
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 1,318 SUBSIDIARIES 4 Asset mix by region - 2015 Pakistani operations 74.8% International operations 25.2% Middle East 18.6% USA 0.5% Europe 5.8% 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 Declared the “Best Bank” in the first ever Pakistan Banking Banking (UBL OMNI) Awards in 2016 2012 & 2013 Bank of the Year in Pa
Slide 18: Review of Non Interest Income & Administrative Expenses
Review of Non Interest Income & Administrative Expenses UBL Performance Overview – H1’16 18
Slide 19: Non Fund Income Standalone Results
Non Fund Income Standalone Results Rs in mln H1'16 H1'15 Var % Fee, commission and brokerage income 6,386 6,295 1% Dividend income 1,516 2,023 -25% Income from dealing in foreign currencies 977 1,233 -21% Gain / (loss) on sale of securities 4,518 2,234 102% Other income 557 604 -8% Total Non Fund In
Slide 20: Fees and Commissions performance in H1'16
Fees and Commissions performance in H1’16 Standalone Results Rs in mln H1'16 H1'15 Var % Commission on trade 1,056 825 28% Commission on consumer loan 326 341 -4% Commission on remittance / uniremote 1,161 1,028 13% Corporate service chgs/finance fee/FIG inc. 994 807 23% General banking service char
Slide 21: Administrative Expenses Standalone Results
Administrative Expenses Standalone Results Rs in mln H1'16 H1'15 Var % Personnel Cost 6,459 5,928 -9% Premises Cost 1,991 1,948 -2% Outsourced service charges 2,437 2,130 -14% including sales commission Advertisement and publicity 363 243 -49% Communications 607 591 -3% Depreciation / Amortization 1
Slide 22: Key Ratios
Key Ratios UBL Performance Overview – H1’16 22
Slide 23: Key Financial Ratios
Key Financial Ratios H1'16 H1'15 Q2'16 Q1'16 Return on Equity 26.5% 26.4% 25.7% 27.4% Return on Assets 2.0% 2.1% 1.9% 2.1% Non Fund Income to Gross Revenue 32.2% 31.2% 26.2% 38.1% Cost to Revenue Ratio 37.6% 37.6% 36.8% 38.5% Jun'16 Mar'16 Dec'15 Jun'15 Advances to Deposits Ratio 41.6% 39.5% 41.3% 4
Slide 24: Quarterly Trend Analysis
Quarterly Trend Analysis Bank Level - Standalone UBL Performance Overview – H1’16 24
Slide 25: Profit before tax
Profit before tax Rs in bln 13.5 10.9 11.2 11.3 10.2 9.9 9.3 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 UBL Performance Overview – H1’16 25
Slide 26: Profit after tax
Profit after tax Rs in bln 7.3 7.1 7.0 6.5 6.5 6.1 5.7 5.3 5.2 5.3 4.9 4.7 5.6 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 UBL Performance Overview – H1’16 26
Slide 27: Deposits
Deposits Rs in bln 1,142 1,070 1,051 992 994 945 895 858 866 847 828 773 752 698 703 685 653 614 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 UBL Performance Overview – H1’16 27
Slide 28: Net Advances
Net Advances Rs in bln 496 459 455 447 434 430 417 408 420 391 369 377 364 363 358 355 352 345 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 UBL Performance Overview – H1’16 28
Slide 29: Revenue
Revenue Rs in bln 21.9 21.3 20.3 19.5 19.3 17.6 18.6 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 UBL Performance Overview – H1’16 29
Slide 30: Net Interest Income
Net Interest Income Rs in bln 15.7 14.7 14.2 13.6 13.1 12.8 13.9 11.3 10.6 11.0 9.9 9.8 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 UBL Performance Overview – H1’16 30
Slide 31: Non Funded Income
Non Funded Income Rs in bln 8.4 6.2 6.2 5.5 5.6 5.1 5.0 4.8 4.9 4.8 4.6 4.8 4.1 3.6 4.0 4.8 3.9 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 UBL Performance Overview – H1’16 31
Slide 32: Provisions
Provisions Rs in bln 1.9 2.0 1.3 0.9 0.9 0.8 0.8 0.8 1.1 0.5 0.7 0.3 0.2 0.7 0.2 -0.1 -0.1 -0.3 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 UBL Performance Overview – H1’16 32
Slide 33: Administrative Expenses
Administrative Expenses Rs in bln 8.6 8.4 8.0 7.8 7.6 7.3 7.4 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 UBL Performance Overview – H1’16 33
Slide 34: Important Information
Important Information The information contained herein reflects our latest business statement as at June 30, 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 expres
Slide 35: Thank You
Thank You UBL Performance Overview – H1’16 35