United Bank Limited · PSX:UBL
United Bank — FY2019 Earnings Presentation
39 slides from United Bank's earnings presentation, Feb 21, 2020
Slide 1: Performance Highlights Full Year Results 2019
Performance Highlights Full year results 2019 Investor Relations Conference Call February 21st, 2020 Winner of Pakistan Stock Exchange (PSX) “Top Companies of the Year” Award for three consecutive years (2016-18) Speakers: Mr. Aameer Karachiwalla - Chief Financial Officer Mr. Arif Saifie, FCA, CFA -
Slide 2: Agenda
Agenda Sr. No Description Slide 1 Key Highlights for 2019 – build up in profitability 3 2 UBL - A strong legacy – market leading positions in core segments 7 3 Core Business Driving Growth – led by branch banking business 11 4 Overview of Financial Performance – key number and ratios 15 UBL Performa
Slide 3: Key Performance Highlights
Key Performance Highlights UBL Standalone Results Overview PBT at Rs. 34.2 bln, up 37% vs. FY’18 Major upsides building core earnings in FY’19 Maintained build up - Average domestic current deposits at Rs. 475 bln, up 8% vs. FY’18 Average CASA for the period was 86.2% (FY’18: 86.8%) Domestic
Slide 4: Net Interest Income and Branch Banking Deposit Growth
Avg. Total Assets of Rs. 1.89 tln in FY’19 vs Rs. 1.87 tln in FY’18 Branch Banking builds deposit base in cost efficient manner - strong network performance Net Interest Income of Rs. 61.8 bln in FY’19 (FY’18: Rs. 56.2 bln) up 10% YoY Average domestic deposits grew by 10% year on year – with Rs
Slide 5: Non-Funded Income Overview
Overall NFI closed at Rs. 21.7 bln in FY’19 vs Rs. 25.0 bln in FY’18 Fee income stood at Rs. 13.7 bln, down 2% from FY’18 Domestic fees at Rs. 11.4 bln in FY’19, down 5% vs FY’18 Branch banking customer fees up by 4% to reach Rs. 1.62 bln (FY’18: Rs. 1.56 bln) Debit & Credit Cards fees at Rs.
Slide 6: Provisions and Admin Expenses
Provisions and Admin Expenses Net provision charge of Rs. 8.2 bln in FY’19 vs. Rs. 12.9 bln in FY’18 DOM net provision charge of Rs. 2.2 bln in FY’19 (FY’18: Rs. 1.3 bln) DOM asset quality stood at 5.2% at the end of Dec’19 (Dec’18: 4.9%) International provisions of USD 40.1 mln taken in FY’19
Slide 7: UBL - A strong legacy
UBL - A strong legacy UBL Performance Overview – 2019 7 7
Slide 8: UBL - A dominant Pakistani brand
UBL - A dominant Pakistani brand A Look into the Past Our Current Positioning 1959 - UBL set up with first branch in Karachi Second largest private sector bank in Pakistan with 1,362 branches 1963 - First Pakistani bank with a branch in Market share of 8.3%, 5.5 million customers London Highes
Slide 9: UBL Innovation and Awards
UBL Innovation and Awards - continues to be acknowledged by the market UBL “Firsts” – Initiatives to stay ahead of the market Market recognition and awards First Commercial Bank in Pakistan to launch Branchless Declared ‘Bank of the Year 2018 – Pakistan’ by The Banker, Banking (UBL OMNI) an affi
Slide 10: 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 300 55 Max 2019: Rs. 173.53 280 Rs in bln Cons. Equity Dec’19 - Rs. 191 bln 50 Cons. Book value Sep’19 - Rs. 156 per share 260 240 169 45 220 152 159 151 142 200 40 126 180 92 101
Slide 11: Core Business Driving Growth
Core Business Driving Growth UBL Performance Overview – 2019 11 11
Slide 12: Deposits performance - Focus on growing low cost deposits
Deposits performance - Focus remains on growing low cost deposits Bank Deposits Period End Average Cost of Deposits Dec'19 Dec'18 FY'19 FY'18 FY'19 FY'18 Domestic deposits - Rs in bln 1,217 1,106 1,101 1,004 5.5% 3.1% International deposits - Rs in bln 250 260 260 254 2.2% 2.2% Total Bank - Rs in bl
Slide 13: Advances portfolio down 11% from Dec'19
Advances portfolio down 11% from Dec’18 Bank’s advances yield up to 10.5% FY’19 (FY’18: 7.0%) – repricing in line with benchmark rate Rs in bln Description Var % Dec'19 Dec'18 Corporate Bank 373 404 -8% Commodity 66 68 -3% Small Enterprises 10 12 -22% Consumer 17 16 10% Others 33 44 -25% Total Domes
Slide 14: Deployment in GoP papers, RWA efficient
Deployment in GoP papers, RWA efficient Change in mix to shorter tenor instruments Investments’ yields – repricing upwards in 2019 Rs in bln 11.1% 54 34 9.8% 71 10.4% 10.4% 57 40 13 41 17 8.9% 7.6% 7.8% 405 396 2013 2014 2015 2016 2017 2018 2019 Non Funded income down as lower capital gains in FY’19
Slide 15: Overview of Financial Performance
Overview of Financial Performance UBL Performance Overview – 2019 15 15
Slide 16: Balance Sheet - Standalone
Balance Sheet - Standalone Rs in bln Description Var % Dec'19 Dec'18 Advances 636 716 -11.1% Investments 840 786 6.9% Lendings to Financial Institutions 20 34 -40.3% Others 397 353 12.3% Total Assets 1,894 1,890 0.2% Deposits 1,467 1,366 7.4% Borrowings 154 268 -42.4% Subordinated Debts 10 9 11.1% O
Slide 17: Income Statement - Standalone
Income Statement - Standalone Rs in bln Rs in bln Description Var % Var % FY'19 FY'18 Q4'19 Q3'19 Interest Earned 153.7 113.2 35.8% 41.7 45.4 32.8% Interest Expensed (91.9) (57.0) -61.3% (25.3) (30.0) -50.9% Net Interest Income 61.8 56.2 9.9% 16.4 15.4 12.1% Non Interest Income 21.7 25.0 -13.3% 4.5
Slide 18: Non Fund Income Standalone Results
Non Fund Income Standalone Results Rs in mln Rs in mln Description Var % Var % FY'19 FY'18 Q4'19 Q3'19 Fee, commission and brokerage income 11,382 11,926 -5% 2,659 2,947 -10% Dividend income 1,531 2,079 -26% 619 145 328% Income from dealing in foreign currencies 4,001 3,633 10% 986 1,052 -6% Gain /
Slide 19: Fees and Commissions performance
Fees and Commissions performance Standalone Results Rs in mln Description Var % FY'19 FY'18 Branch banking customer fees 1,617 1,556 4% Consumer finance related fees 914 812 13% Card related fees (debit and credit cards) 1,579 1,590 -1% Investment banking fees 304 704 -57% Financial Institution reba
Slide 20: Administrative Expenses (1/2)
Administrative Expenses (1/2) Standalone Results Rs in mln Description Var % FY'19 FY'18 Total compensation expenses 11,823 11,589 -2% Rent and taxes 635 2,452 74% Utilities cost 1,700 1,562 -9% Security 930 1,081 14% Depreciation 751 643 -17% Depreciation - Right of Use Assets 1,959 - -100% Others
Slide 21: Administrative Expenses (2/2)
Administrative Expenses (2/2) Standalone Results Rs in mln Description Var % FY'19 FY'18 Legal and professional charges 715 389 -84% Outsourced service costs including sales commission 3,424 3,281 -4% Banking service charges 1,553 1,163 -34% Cash transportation and sorting charges 788 1,019 23% Depr
Slide 22: Balance Sheet Review
Balance Sheet Review Rs. in mlns 2019 2018 2017 2016 2015 2014 2013 Assets Cash and balances with treasury and other banks 256,591 206,813 177,099 146,428 128,870 87,573 114,388 Lending to financial institutions 20,247 33,942 10,868 25,711 24,095 21,872 28,835 Investments- gross 849,441 792,857 1,09
Slide 23: Profit & Loss
Profit & Loss Rs. in mlns 2019 2018 2017 2016 2015 2014 2013 Markup / return / interest earned 153,676 113,198 107,206 98,219 94,353 82,735 72,846 Markup / return / interest expensed (91,902) (56,964) (50,781) (41,177) (38,511) (37,769) (34,910) Net Markup / Interest income 61,774 56,234 56,425 57,0
Slide 24: Key Financial Ratios & Share Information
Key Financial Ratios & Share Information Description 2019 2018 2017 2016 2015 2014 2013 Key Financial Ratios Return on equity (RoE) 13.8% 11.6% 20.6% 24.9% 25.7% 23.9% 22.3% Return on assets (RoA) 1.0% 0.8% 1.4% 1.8% 2.0% 2.1% 2.0% Profit before tax ratio 41.0% 30.7% 50.8% 57.1% 54.2% 52.0% 49.6% Ad
Slide 25: Income Statement - Domestic
Income Statement - Domestic Rs in bln Rs in bln Description Var % Var % FY'19 FY'18 Q4'19 Q3'19 Interest Earned 138.7 98.4 41% 38.1 41.6 -9% Interest Expensed (85.7) (50.7) -69% (23.8) (28.4) 16% Net Interest Income 53.0 47.7 11% 14.3 13.3 8% Non Interest Income 18.6 23.0 -19% 3.8 4.4 -13% Total Rev
Slide 26: Income Statement - Consolidated
Income Statement - Consolidated Rs in bln Rs in bln Description Var % Var % FY'19 FY'18 Q4'19 Q3'19 Interest Earned 157.3 116.8 34.6% 42.7 46.4 32.7% Interest Expensed (93.9) (58.9) -59.5% (25.8) (30.5) -50.1% Net Interest Income 63.3 57.9 9.3% 16.9 15.9 12.8% Non Interest Income 24.3 26.7 -8.9% 3.7
Slide 27: Balance Sheet - Consolidated
Balance Sheet - Consolidated Rs in bln Description Var % Dec'19 Dec'18 Advances 695 755 -7.9% Investments 875 831 5.2% Lendings to Financial Institutions 22 35 -38.4% Assets held for sale 0 - 100.0% Others 432 381 13.3% Total Assets 2,024 2,002 1.1% Deposits 1,558 1,448 7.6% Borrowings 170 280 -39.1
Slide 28: Quarterly Trends
Quarterly Trends UBL Performance Overview – 2019 28
Slide 29: Profit before tax (PBT)
Profit before tax (PBT) Rs in bln 13.5 11.8 10.9 11.2 11.3 10.8 11.2 +8% 10.29.9 10.4 9.3 9.2 8.8 8.4 8.3 8.8 8.5 8.3 7.9 7.8 8.0 7.1 8.4 -4% 6.4 6.5 5.9 -6% 5.9 -4% 4.1 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'19Q2'19
Slide 30: Profit after tax (PAT)
Profit after tax (PAT) Rs in bln 7.1 7.3 7.3 6.5 7.0 6.5 6.4 6.1 7.0 6.3 +29% 5.7 6.0 5.6 5.5 5.2 5.3 5.3 5.4 5.9 4.9 4.7 4.7 4.3 4.2 4.0 -10% 3.6 -3% 3.5 -24% 2.6 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'19Q2'19Q3'19Q
Slide 31: Deposits
Deposits Rs in bln +3% +8% 1448 1467 1419 1,3661344 1,2731,3011,3151,335 -2% 1,256 1,254 1,147 1,1671,183 -2% 1,142 1,0511,070 992 994 945 895 858 866 828 847 752 773 703 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'19Q2'1
Slide 32: Net Advances
Net Advances Rs in bln 716 675 673 +1% +2% 636 642 627 624 636 626 -11% 565 567 -3% 509 519 496 498 459 455 417 434 420 430 408 391 447 377 363 369 352 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 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'1
Slide 33: Gross Revenue
Gross Revenue Rs in bln +14% 22.4 21.9 +4% +0% +1% 21.3 21.2 21.2 20.6 +5% 20.9 20.3 20.4 20.3 20.0 20.0 19.5 19.2 19.6 19.3 -8% -2% 17.6 -10% 19.0 18.6 18.1 17.9 16.3 15.4 14.9 13.8 14.1 15.5 12.6 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1
Slide 34: Net Interest Income (NII)
Net Interest Income (NII) Rs in bln +6% +4% 16.4 +1% 15.7 +2% 15.3 15.4 +2% +4% 14.7 14.7 14.2 14.3 14.2 14.2 14.4 14.0 13.6 13.1 12.8 14.2 13.8 13.9 13.7 13.9 13.7 -3% -3% 11.3 11.0 10.6 9.8 9.5 9.0 8.8 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q
Slide 35: Non Funded Income (NFI)
Non Funded Income (NFI) Rs in bln 8.4 +21% +44% 7.3 -5% 7.2 7.0 6.2 6.2 6.3 +10% 6.1 6.0 5.7 -28% 5.6 4.9 5.1 5.0 5.0 5.2 4.8 4.8 4.84.8 4.6 5.2 4.5 5.1 4.5 -26% -12% 3.9 4.5 -14% 3.8 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q
Slide 36: Provisions
Provisions Rs in bln +88% 5.5 +140% 2.9 3.2 +37% 2.6 -34% 2.0 2.1 +11% 2.1 1.7 1.3 1.9 0.9 0.9 0.8 0.7 -8% -17% 0.5 1.3 0.3 0.3 0.6 0.2 0.2 0.1 -76% 0.8 -0.1 -0.3 -0.3 -0.1 -0.5 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1
Slide 37: Administrative Expenses
Administrative Expenses Rs in bln +9% +11% 11.0 10.7 +15% +14% 10.3 10.0 9.9 9.2 -2% 9.6 9.0 8.8 8.8 -2% 8.6 8.4 8.5 8.2 -16% 8.0 8.7 7.8 -6% 7.6 7.3 7.4 7.4 7.2 7.1 6.9 6.9 6.5 6.5 6.2 Q1'13Q2'13Q3'13Q4'13Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Q3'15Q4'15Q1'16Q2'16Q3'16Q4'16Q1'17Q2'17Q3'17Q4'17Q1'18Q2'18Q3'1
Slide 38: Important Information
Important Information The information contained herein reflects our latest business statement as at December 31, 2019. 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 39: Thank You
Thank You UBL Performance Overview – 2019 39