Union Bank Of Colombo Plc · CSELK:UBC.N0000

Union Bank Of Colombo — Investor Presentation (July 2019)

27 slides from Union Bank Of Colombo's investor presentation, July 2019

  1. Slide 1: Building Stronger Bonds - Investor Forum July 2019

    Us UNION BANK BUILDING STRONGER BONDS INVESTOR FORUM - JULY 2019

  2. Slide 2: Overview

    Overview  Strong foundation built over 24+ years  Robust financial and operational performance  H1 PBT up 52% YoY; Adjusted* ROE of 15%  Improved performance despite challenging operating environment for the banking sector  Received “Best Cash Management Bank Sri Lanka” at Global Business Outlo

  3. Slide 3: Corporate profile

    » Corporate profile US UNION BANK

  4. Slide 4: A strong foundation

    A strong foundation 24 Years Robust risk framework Superior Asset quality • 67 Branches Strong • 121 ATMs Capitalisation • Sales Force • 24Hr Contact Center BBB - Rating upgrade • Digital Banking lka in 2019 by Fitch • Competitive product Experienced board & range management team Corporate Governanc

  5. Slide 5: Range of new products

    Range of new products 2015-2017  Home loans 2018-2019  Loan against property  Personal loans  Salary select /  Biz partner Salary power (SME)  Debit cards  Pay & go  Elite Circle kiosks  Kidz Saver  Credit cards  Invest plus  Gold Circle  Biz Direct ( Cash management )  Online banking

  6. Slide 6: Technology & convenience

    Technology & convenience Mobile App 4000+ ATMS Online Banking 24hr Call Center POS Pay & Go Web & VISA Kiosks Social Media Pay Wave Best Cash Management Bank Sri Lanka Global Business Outlook Awards 2019

  7. Slide 7: Subsidiaries

    Subsidiaries  Estb.1961  Registered Finance company, licensed under CBSL  16 branches  Financial inclusion & focus on segments not covered by the Bank  Deposits, Savings  Leasing, Vehicle loans, Factoring, Hire Purchase  Mortgages, Real estate & Pawning  Estb. 1991  Pioneer fund management

  8. Slide 8: Ownership & Business structure

    Ownership & Business structure US based $ 104 Bn Assets 1% 17 Countries Amongst 9% 70% the highest capitalised 8% banks Culture Financial Holdings Ltd Corporates 13% Full service Individuals commercial Other shareholders bank 70% Retail 73% 51% SME Corporate Treasury 8

  9. Slide 9: Business Environment

    » Business Environment US UNION BANK

  10. Slide 10: Banking sector

    Banking sector Net Loans Gross NPA & NPL ratio 4.2% 8,000 21.2% 25.00% 350 4.2% 4.50% 17.7% 19.4% 20.00% 300 4.00% 7,000 13.8% 16.2% 3.4% 3.2% 15.00% 250 3.50% 6,000 10.00% 200 2.6% 2.5% 3.00% 5,000 5.00% 150 2.50% 4,000 0.00% 100 2.00% -0.5% 3,000 -5.00% 50 1.50% 2014 2015 2016 2017 2018 1Q 2019 20

  11. Slide 11: Banking sector contd.

    Banking sector Contd…. NII Non Interest Income 40 31% 120 39% 100 15% 30 8% 80 60 11% 18% 20 -5% -6% 40 13% 12% 20 -4% 10 - -20% - 1Q 2014 1Q 2015 1Q 2016 1Q 2017 1Q 2018 1Q 2019 1Q 2014 1Q 2015 1Q 2016 1Q 2017 1Q 2018 1Q 2019 NII (Rs.Bn) NII Growth (%) Non Interest Income Non Interest Income G (%)

  12. Slide 12: Challenges

    Challenges Increased Increased Regulations Volatility  Introduction of SLFRS 9  Changed customer behavior  Changes in Tax regulations  Intensity in competition  Deposit rate cap  Political turbulence  Lending rate pressure  21st April tragedy Banking sector challenges have resulted in muted

  13. Slide 13: Financial Performance

    » Financial Performance US UNION BANK

  14. Slide 14: Key highlights

    Key highlights Profit Before Deposits Loans all Taxes Growth YoY Growth YoY Growth YoY (Avg) (Avg) 52.0% 11.3% 7.5% CASA Profit After Growth YoY Tax (Avg) Growth YoY 23.3% 17.5% First ever Total Capital share buy Adequacy Fitch upgrade back in the Ratio to BBB- banking 17.2% sector 14

  15. Slide 15: Increase in profitability

    Increase in profitability C Operating improvement largely driven by NII growth 15

  16. Slide 16: Growth in assets

    Growth in assets Bank realigned its loan portfolio amidst volatility in the market 16

  17. Slide 17: Substantial growth in profits over the years

    Substantial growth in profits over the years Profit Before all Taxes (Rs.Mn) Total Assets (Rs.Mn) 849 121,748 CAGR 114,353 CAGR 27% 103,246 90% 558 82,301 393 55,825 36,588 204 135 34 1H 14 1H 15 1H 16 1H 17 1H 18 1H 19 1H 14 1H 15 1H 16 1H 17 1H 18 1H 19 • YoY growth was 6% • YoY growth was 52% • I

  18. Slide 18: Increasing Operating Margin

    Increasing Operating Margin Operating Margin (Rs.Mn) Total Revenue (Rs.Mn) 1,000 CAGR 2,900 900 24% 2,575 2,115 1,655 800 1,350 985 700 600 1H 14 1H 15 1H 16 1H 17 1H 18 1H 19 500 400 Exponential growth in revenue 300 200 100 Total Cost (Rs.Mn) - CAGR 1,974 1,899 1H 14 1H 15 1H 16 1H 17 1H 18 1H 19

  19. Slide 19: Above industry growth continues

    Above industry growth continues CASA (Rs.Mn) Deposits (Rs.Mn) 17,371 74,609 CAGR CAGR 69,824 15,798 25% 21% 14,516 62,719 10,583 45,803 8,202 5,687 30,398 28,506 1H 14 1H 15 1H 16 1H 17 1H 18 1H 19 1H 14 1H 15 1H 16 1H 17 1H 18 1H 19 • YoY growth was 7% • Industry* CAGR is 15% • YoY growth was 10% •

  20. Slide 20: Credit Growth & NPL

    Credit Growth & NPL Net Loans (Rs.Mn) Gross NPL Ratio (%) 12.4% 74,222 CAGR 72,241 25% 64,048 48,513 33,093 5.4% 4.9% 23,922 2.9% 2.6% 3.2% 1H 14 1H 15 1H 16 1H 17 1H 18 1H 19 1H 14 1H 15 1H 16 1H 17 1H 18 1H 19 • YoY growth was 3% • Composition of the incremental • Industry* CAGR was 18% NPLs are m

  21. Slide 21: Significant improvement in ROE

    Significant improvement in ROE ROE (PB all taxes) 10.00% 6.25% 4.57% 2.42% 1.60% 1.27% 1H 14 1H 15 1H 16 1H 17 1H 18 1H 19 Adjusted* ROE of 15%; improving ROE is a key focus area 21 * Adjusted for excess capital and legacy non core investment

  22. Slide 22: One of the highest capitalised banks in Sri Lanka

    One of the highest capitalised banks in Sri Lanka Total CAR (%) • Ample opportunity for organic & inorganic Growth. 41.47% • On track to comfortably meet minimum capital requirement of Rs. 20Bn. • Current excess capital is approximately Rs. 23.96% 4.1Bn. 22.24% 18.85% 17.41% 17.21% • Rs.3,274Mn wort

  23. Slide 23: Strategic Direction

    » Strategic Direction US UNION BANK

  24. Slide 24: Near term outlook

    Near term outlook Delivered Goals to date for 2019 Profit Before Tax (Rs.Mn)  Profit before all taxes growth 70% plus 849 558  ROE (Pre all taxes) 11% - 13% CAGR (Adjusted* 16% - 18%) 90% 393 204 34 135  Exit Cost to Income 55% - 57% 1H 14 1H 15 1H 16 1H 17 1H 18 1H 19  NPL ratio to be below ind

  25. Slide 25: Competitive advantage

    Competitive advantage People Capital Operating & Execution Leverage Robust Capital Adequacy Highest standards in ethics Alternate Channels and governance Internal accruals Digital Banking Performance driven culture Rs 3.5bn worth of warrants Key focus on productivity Robust Analytics issued to TPG P

  26. Slide 26: Future outlook

    Future outlook Our strategy  Focus on business segments Our aspirations  Profit before all taxes 4.5X in 3 that are profitable and scalable. years  Credit cards to be a significant  ROE (Pre all taxes) 30% - 35% business proposition.  Exit Cost to Income below 45%  Market leadership in Transac

  27. Slide 27: Increased returns on equity to shareholders

    Increased returns on equity to Superior shareholders customer satisfaction Increased employee satisfaction Strategic CSR with focus on Governance & children and Regulatory youth compliance at the highest level 27

Union Bank of Colombo — Investor Presentation (July 2019) on 6ix