United Bank Limited · PSX:UBL
United Bank — FY2015 Earnings Presentation
38 slides from United Bank's earnings presentation, Feb 19, 2016
Slide 1: Consistent Profitability and Growth
Consistent Profitability and Growth Key Performance Highlights - 31 Dec 2015 Investor Relations Conference Call February 19th, 2016 Speakers: Mr Asif Saeed Sindhu – Chief Financial Officer Mr Arif Saifie, CFA – Financial Controller and Head of Investor Relations UBL Performance Overview - December 2
Slide 2: Table of Contents
Table of Contents PAGE Key Highlights 3 Execution and Delivery 7 Growth at a Glance 23 Quarterly Trend Analysis 27 UBL Performance Overview - December 2015
Slide 3: Key Highlights
Key Highlights Standalone results Pre-provisions profit up by 33% to Rs. 45.9 bln Profit before tax up by 26% to Rs. 42.2 bln Profit after tax up 17% YoY to Rs. 25.7 bln Return on Equity of 26% in 2015 - improves from 24% in 2014 Average balance sheet expansion of 23% in 2015 Deposits cr
Slide 4: We continue to grow our core revenue streams
We continue to grow our core revenue streams Net interest income has increased by 24% YoY to reach Rs. 55.8 bln Margins largely maintained at 5.62% (2014: 5.75%), despite a 300 bps reduction in interest rates Overall cost of deposits reduced by 82 bps to close at 3.1% in the year 2015(2014: 3.9%
Slide 5: Improved asset quality with cost discipline
Improved asset quality with cost discipline Provisions are up by Rs. 2.5 bln YoY to reach Rs. 3.7 bln in 2015 General provisions of Rs. 1.96 billion taken this year Strong cash recoveries within domestic and international Overall NPLs stood at Rs. 46.7 bln (2014: Rs. 53.9 bln) Asset quality
Slide 6: Strong balance sheet growth in 2015
Strong balance sheet growth in 2015 Retail Banking continues to drive balance sheet expansion Domestic deposits grew by 19% YoY, well ahead of the market Current accounts and ‘new to bank’ customers continue to drive distribution (15% avg. growth) Domestic cost of deposits down to 3.4% in 2015
Slide 7: Execution and Delivery
Execution and Delivery Consistent earnings performance in 2015 UBL Performance Overview - December 2015 7
Slide 8: Consistent earnings performance
Consistent earnings performance Trends – KSE 100 Index and UBL’s share price Growth in Book Value per Share by 13% in 2015 220 Max 2015 :186.00 31Dec’15: 154.95 37.00 Rs in bln Cons . Equity Dec’15 - Rs. 156 bln 142 18' Feb 2016: 152.43 200 35.00 Cons o. book value Dec’15 - Rs. 125.6 per s hare 126
Slide 9: Income Statement - Standalone
Income Statement - Standalone Rs in bln 2015 2014 Var % Interest Earned 94.4 82.7 14% Interest Expensed (38.5) (37.8) -2% Net Interest Income 55.8 45.0 24% Non Interest Income 22.0 19.3 14% Total Revenue 77.8 64.3 21% Admin. Expenses (30.9) (29.0) -6% Operating Expenses (31.9) (29.7) -8% Pre Prov. O
Slide 10: Income Statement - Consolidated
Income Statement - Consolidated Rs in bln 2015 2014 Var % Interest Earned 97.6 85.8 14% Interest Expensed (39.7) (38.8) -2% Net Interest Income 57.9 46.9 23% Non Interest Income 24.5 22.8 8% Total Revenue 82.4 69.7 18% Admin. Expenses (34.0) (31.8) -7% Operating Expenses (35.1) (32.4) -8% Pre Prov.
Slide 11: Deposits have crossed the trillion landmark, along-with declining cost of deposits
Deposits have crossed the trillion landmark, along-with declining cost of deposits Deposits – Bank Dec'14 Dec'15 PE CoF % PE CoF % Domestic deposits 697 4.4% 832 3.4% International deposits 198 2.4% 219 1.9% Total Bank 895 3.9% 1,051 3.1% International - USD in mln 1,967 2.4% 2,094 1.9% Domestic CAS
Slide 12: Corporate Bank maintaining focus on asset quality - some build up in 2015
Corporate Bank maintaining focus on asset quality - some build up in 2015 Net Advances Rs in bln 2014 2015 Var % Corporate Bank 208 221 6% Commodity 50 43 -13% Commercial 22 25 14% Consumer 9 9 4% Others 13 13 -2% Total Domestic 300 310 3% International 134 145 8% Bank 434 455 5% International USD m
Slide 13: International Advances – Corporate loan book remains our largest component
International Advances – Corporate loan book remains our largest component By Geography By Business - UAE Bahrain, Qatar, 10% Yemen, 4% NewYork, 11% 2% Corporate, EPZ, 1% 70% Others, 24% Consumer,6 UAE, 72% % Others, 2% Personal Abu Dhabi, loan, 2% 21% Sharjah, 3% Dubai, 76% Baitna, 96% UBL Performa
Slide 14: Concentration of Advances as at Dec 31, 2015 – Standalone
Concentration of Advances as at Dec 31, 2015 – Standalone Others Energy Sector 18% 23% Airline 3% Contractors 3% Pharmaceuticals Agribusiness 2% 10% Telecom 3% Financial 6% Individuals 8% Construction 4% Wholesale Food industries traders Textile 4% 5% 11% UBL Performance Overview - December 2015 14
Slide 15: Diversified investment portfolio with strong market risk management
Diversified investment portfolio with strong market risk management Portfolio shift towards long terms bonds…. Strong investment yields maintained Rs in bln 42 12.36% 11.78% 6 30 32 19 11.08% 10.36% 31 10.42% 7 26 26 17 487 2011 2012 2013 2014 2015 Non Funded revenue streams continue to grow 312 Rs
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 1,312 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 2012 & 2013 Bank of the Year in Pakistan Award, awarded Banking (UBL OMNI) by The Banker Magazine, an affiliate of the Financial T
Slide 18: Review of Non Interest Income & Administrative Expenses
Review of Non Interest Income & Administrative Expenses UBL Performance Overview - December 2015 18
Slide 19: Non interest income forms core component of earnings, strong trading performance in 2015
Non interest income forms core component of earnings, strong trading performance in 2015 Stand Alone results Rs in mln 2015 2014 Var % Fee, commission and brokerage income 12,203 11,402 7% Dividend income 3,205 2,001 60% Income from dealing in foreign currencies 2,271 3,017 -25% Gain / (loss) on sal
Slide 20: Fees and Commissions performance in 2015
Fees and Commissions performance in 2015 Stand Alone results Rs in mln 2015 2014 Var % Commission on trade 1,804 1,685 7% Commission on consumer loan 731 700 4% Commission on remittance / uniremote 2,101 2,023 4% Corporate service chgs/finance fee/FIG inc. 1,777 1,257 41% General banking service cha
Slide 21: Administrative Expenses - well controlled across manpower and premises costs
Administrative Expenses - well controlled across manpower and premises costs Stand Alone results Rs in mln 2015 2014 Var % Personnel Cost 12,013 11,265 -7% Premises Cost 3,984 3,925 -1% Outsourced service charges 4,320 3,806 -14% including sales commission Advertisement and publicity 823 982 16% Com
Slide 22: UBL OMNI - The success story continues…
UBL OMNI - The success story continues… UBL OMNI ■ Leader in providing basic banking services to the unbanked and in increasing financial inclusion in Pakistan. Commercial launch April 2010 ■ Launched mobile merchants payments in 2015 via which customers No. of accounts Over 2.0 mln and merchants ca
Slide 23: Growth at a Glance
Growth at a Glance UBL Performance Overview - December 2015 23
Slide 24: Balance Sheet
Balance Sheet Rs in mln 2015 2014 2013 2012 2011 2010 Assets Cash and balances with treasury and other banks 128,870 87,573 114,388 109,396 100,602 86,104 Lending to financial institutions 29,486 21,872 28,835 21,953 11,890 11,935 Investments- gross 716,260 499,060 425,253 351,002 297,137 227,237 Ad
Slide 25: Profit & loss
Profit & loss Rs in mln 2015 2014 2013 2012 2011 2010 Markup / rerurn / interest earned 94,353 82,735 72,846 73,507 70,451 59,277 Markup / rerurn / interest expensed (38,511) (37,769) (34,910) (34,948) (31,026) (24,997) Net Markup / Interest income 55,842 44,967 37,936 38,560 39,425 34,280 Fee, comm
Slide 26: Key Financial Ratios & Share Information
Key Financial Ratios & Share Information Key Financial Ratios 2015 2014 2013 2012 2011 2010 Return on equity (RoE) 25.7% 23.9% 22.3% 23.8% 23.5% 19.8% Return on assets (RoA) 2.0% 2.1% 2.0% 2.1% 2.1% 1.7% Profit before tax ratio 54.2% 52.0% 49.6% 48.2% 46.5% 40.0% Return on capital employed (RoCE) 25
Slide 27: Quarterly Trend Analysis 2015
Quarterly Trend Analysis 2015 Bank Level - Standalone UBL Performance Overview - December 2015 27
Slide 28: Profit before tax
Profit before tax Rs in bln 11.2 10.9 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 UBL Performance Overview - December 2015
Slide 29: Profit after tax
Profit after tax Rs in bln 7.1 6.5 6.5 6.1 5.7 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 UBL Performance Overview - December 2015
Slide 30: Deposits
Deposits Rs in bln 1051 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 UBL Performance Overview - December 2015 30
Slide 31: Net Advances
Net Advances Rs in bln 459 455 430 434 420 417 408 391 377 369 364 363 358 355 352 345 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 UBL Performance Overview - December 2015 31
Slide 32: Revenue
Revenue Rs in bln 20.3 19.5 19.3 17.6 18.6 16.3 15.4 15.4 13.8 14.9 15.5 13.7 13.2 13.4 14.1 12.6 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 UBL Performance Overview - December 2015 32
Slide 33: Net Interest Income
Net Interest Income Rs in bln 14.7 14.2 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 UBL Performance Overview - December 2015 33
Slide 34: Non Funded Income
Non Funded Income Rs in bln 6.2 6.2 5.5 5.1 5.0 4.8 4.8 4.8 4.6 4.9 4.8 4.1 4.0 4.5 3.6 3.9 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 UBL Performance Overview - December 2015 34
Slide 35: Provisions
Provisions Rs in bln 1.9 1.3 1.1 0.9 0.9 0.8 0.8 0.8 0.7 0.7 0.5 0.3 0.2 0.2 -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 UBL Performance Overview - December 2015 35
Slide 36: Administrative Expenses
Administrative Expenses Rs in bln 8.6 8.0 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 UBL Performance Overview - December 2015 36
Slide 37: Important Information
Important Information The information contained herein reflects our latest business statement as at December 31, 2015. 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 38: Thank You
Thank You UBL Performance Overview - December 2015 38