United Bank For Africa Plc · NSENG:UBA
United Bank For Africa — Q1 2019 Earnings Presentation
27 slides from United Bank For Africa's earnings presentation, May 2019
Slide 1: Investor Presentation: Unaudited 2019 First Quarter Results
Investor Presentation Unaudited 2019 First Quarter Results 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 13 4. Outlook and Key Takeaway 21 5. Appendix 24 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 20 key African markets, London, New York and Paris Third largest bank in Nigeria, Funding, Liquidity & Capital (2019Q1) Over 20,000 direct and support staff at Group Level 3rd with an estimated c.10% market share • Strong, stab
Slide 6: Evolution of UBA
Evolution of UBA With a 70 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 – 2018 London London London Paris Paris Paris New York New York New York Chad Chad Burkina Burkina Mali Faso Fa
Slide 8: A Leading Full Service Pan-African Business
A Leading Full Service Pan-African Business UBA has successfully established its African franchise and now has growing operations in 20 African countries Burkina Faso Benin Chad Headline2 UBA’s Market Total Total (Audited 2018H1 numbers) % Interest Share Assets Deposits UBA Nigeria 100% Top Tier ₦3,
Slide 9: UBA's Credit Ratings
UBA’s Credit Ratings All rating agencies have “Stable Outlook” on UBA Plc Fitch GCR Agusto & Co S&P National National National National Scale •Short term F1+ (nga) • Short-term A1+ (NG) • Long term Aa- • ngA/ngA-1 •Long term AA- (nga) • Long term AA - NG) • Short term Aa- International Foreign Curre
Slide 10: Operating Environment
Section 2 Operating Environment
Slide 11: Nigerian macros gaining strength
Nigerian macros gaining strength GDP Growth: Nigeria's economy is recovering but at very slow pace, particularly as population outgrows real GDP, leading to lower GDP Oil and Non-Oil GDP; The recovery has been driven by market events per capita 10.0% (oil price and FX availability) and less of polic
Slide 12: Nigeria's Interest rate policy remains stable, as Naira stabilizes and inflation moderates
Nigeria’s Interest rate policy remains stable, as Naira stabilizes and inflation moderates • The MPC reduced policy rate by 50bps in March, the first accommodative posture since July 2016, as it hopes to stimulate credit flow and broader economic activities. • The CBN has adopted liquidity managemen
Slide 13: Financial Overview
Section 3 Financial Overview
Slide 14: Unaudited 2019 First Quarter Results Snapshot
Unaudited 2019 First Quarter Results Snapshot 31-Mar-19 31-Mar-18 YoY % Change Gross Earnings 131,668 119,366 +10.3% COMPREHENSIVE Net Interest Income 58,075 53,553 +8.4% INCOME & PROFIT Net Operating Income 81,999 76,100 +7.8% TREND (N’million) Operating Expenses (51,944) (49,679) +4.6% Profit Befo
Slide 15: Earnings Show Strong Start to the Year
Earnings Show Strong Start to the Year 131.7 Non-Interest Income Interest Income 119.4 101.2 24% 24% 25% Gross Breakdown Earnings of Gross Trend Earnings 76% 76% 75% (N’billion) 2017 Q1 2018 Q1 2019 Q1 2017 Q1 2018 Q1 2019 Q1 82.0 28.7 76.1 23.8 Net 68.5 Profit Before Operating 69.5 Tax Income (N’bi
Slide 16: Efficiency Gains To Drive Margin Improvements
Efficiency Gains To Drive Margin Improvements 7.0% 6.5% 4.2% 6.2% 3.8% 3.7% Net Interest Cost of Margin (%) Funds (COF) (%) 2017 FY 2018 FY 2019 Q1 2017 FY 2018 FY 2019 Q1 2018 FY 2019 Q1 (annualized) • Reflecting improving deposit mix and easing rate environment, funding cost eased 40bps to 3.8% in
Slide 17: Well Diversified Asset Book Supported By Stable Funding Structure
Well Diversified Asset Book Supported By Stable Funding Structure Deposits Debt Equity Other 5.11 2.6% 2.7% 3.3% 4.87 13.0% 10.3% 10.6% 4.07 14.6% 13.9% 14.0% Total Assets Funding (N’trillion) Structure 70.5% 72.4% 72.2% 2017 FY 2018 FY 2019 Q1 2017 FY 2018 FY 2019 Q1 Mandatory Other cash and reserv
Slide 18: Stable and Well Diversified Loan Portfolio
Stable and Well Diversified Loan Portfolio... 1.73 1.71 3.89% 1.67 6.72% 6.45% Total Loan NPL Ratio Book (%) (N’trillion) 2017 FY 2018 FY 2019 Q1 2017 FY 2018 FY 2019 Q1 Others Power 12% Manufacturing 2% Agriculture 3% Others Commerce 5% 7% 14% Oil & Gas* Government 21% Non - 9% General Loan Book Ma
Slide 19: Supported by Solid Capital and Liquidity
...Supported by Solid Capital and Liquidity... UBA Liquidity Ratio (Year-end) Regulatory Requirement (30%) 60% 61% 40% 50% 51% 40% Loan-to- Average Deposit Liquidity Ratio (%) Ratio (%) 2017 FY 2018 FY 2019 Q1 2017 FY 2018 FY 2019 Q1 UBA (Nigeria) Basel II Capital Ratio UBA Group CAR (%) Regulatory
Slide 20: Plus an Intense Focus on Asset Quality and Cost Efficiency
...Plus an Intense Focus on Asset Quality and Cost Efficiency 2.0% 90% 79% 78% 6.7% 6.5% 5.3% Cost of Risk NPL Ratio (%) (%) 0.3% 0.3% 2017 FY 2018 FY 2019 Q1 (annualized) 2017 FY 2018 FY 2019 Q1 • Improving asset quality; 120bps YTD moderation in NPL ratio, following the resolution of 9mobile expos
Slide 21: Outlook
Section 4 Outlook
Slide 22: 2019FY Guidance
2019FY Guidance 1 Net Interest Margin ≈ 6.5% 2 Cost-to-Income Ratio (ex-impairment) <60% 3 Cost of Risk ≈ 1% 4 NPL Ratio ≈ 5% 5 Loan Growth 12% 6 Deposit Growth 18% 7 Return on Average Assets ≈2.2% 8 Return on Average Equity ≈18% 22
Slide 23: 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 15 mi
Slide 24: Appendix
Appendix
Slide 25: Audited 2018 Full Year Results Snapshot
Audited 2018 Full Year Results Snapshot 31-Dec-18 31-Dec-17 % Change Gross Earnings 494,045 461,557 +7.0% COMPREHENSIVE Net Interest Income 205,646 207,632 -1.0% INCOME & PROFIT Net Operating Income 303,689 293,670 +3.4% TREND (N’million) Operating Expenses (197,342) (189,652) +4.1% Profit Before Ta
Slide 26: Summary Financials: Audited Results
Summary Financials ::: Audited Results Statements of Financial Position As at 31 December 2018 31 December 2017 31 December 2016 ASSETS (₦ millions) (₦ millions) (₦ millions) Cash and bank balances 1,220,596 898,083 760,930 Financial assets held for trading 19,439 31,898 52,295 Derivative assets 34,
Slide 27: Summary Financials: Audited Results
Summary Financials ::: Audited Results Statements of Comprehensive Income For the year ended 31 December 2018 2017 2016 2015 (₦ millions) Interest income 362,922 325,657 263,970 229,629 Interest expense (157,276) (118,025) (98,770) (96,030) Net interest income 205,646 207,632 165,200 133,599 Fee and
United Bank for Africa — Q1 2019 Earnings Presentation on 6ix