United Bank Limited · PSX:UBL
United Bank — FY2017 Earnings Presentation
39 slides from United Bank's earnings presentation, Feb 26, 2018
Slide 1: Performance Highlights – 2017
Performance Highlights – 2017 | Investor Relations Conference Call February 26th, 2018 Speakers: Mr. Aameer Karachiwalla - Chief Financial Officer Mr. Arif Saifie, CFA - Financial Controller and Head of Investor Relations UBL Performance Overview – 2017 Investor Relations Release
Slide 2: Table of Contents
Table of Contents PAGE Key Highlights 3 Execution and Delivery 7 Growth at a Glance 24 Quarterly Trend Analysis 28 UBL Performance Overview – 2017
Slide 3: Key Performance Highlights
Key Performance Highlights Standalone Results Profit before tax closes at Rs. 40.2 bln (2016: Rs. 46.0 bln) Profit after tax closes at Rs. 25.4 bln (2016: Rs. 27.7 bln) Return on equity (RoE) of 20.8% in 2017 (2016: 24.9%) Average balance sheet expansion of 17% in 2017 vs 2016 Deposits hav
Slide 4: Strong growth in balance sheet maintains NII despite repricing impact
Strong growth in balance sheet maintains NII despite repricing impact Net interest income 1% lower than 2016, closes at Rs. 56.4 bln Overall cost of deposits reduced to close at 2.6% in 2017 (2016: 2.7%) Domestic cost of deposits at 2.73% in 2017 (2016: 2.87%) International cost of deposits at
Slide 5: Recoveries within domestic book, prudent classification within International
Recoveries within domestic book, prudent classification within International Net provision charge of Rs. 2.2 bln in 2017 vs Rs. 1.7 bln in 2016 Strong cash recoveries within domestic operations Overall NPLs closed at Rs. 51.1 bln at Dec’17 (Dec’16: Rs. 44.6 bln) Asset quality at 7.9% at Dec’17
Slide 6: 27% growth in balance sheet size over Dec’16
27% growth in balance sheet size over Dec’16 Growth in core deposits drives balance sheet expansion The Bank’s domestic deposits closed at Rs. 1.03 trillion at Dec’17 end (Dec’16: Rs. 946 billion) Domestic current account portfolio grew by 17% over Dec’16, with average current account growing by
Slide 7: Execution and Delivery
Execution and Delivery UBL Performance Overview – 2017 7
Slide 8: 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 Rs in bln Cons . Equity Dec’17 - Rs. 174 bln Max 2017:Rs. 275.38 29 Dec’17: Rs. 187.97 280 22 Feb'18: Rs. 198.07 Cons . Book va lue Dec’17 - Rs. 143 per s hare 50 260 152 1
Slide 9: Income Statement - Standalone
Income Statement - Standalone Rs in bln Rs in bln 2017 2016 Var % Q4'17 Q3'17 Var % Interest Earned 107.2 98.2 9.1% 29.0 28.5 2.0% Interest Expensed (50.8) (41.2) -23.3% (14.8) (14.3) -3.5% Net Interest Income 56.4 57.0 -1.1% 14.2 14.2 0.5% Non Interest Income 22.2 23.6 -6.1% 6.0 3.8 60.5% Total Rev
Slide 10: Balance Sheet - Standalone
Balance Sheet - Standalone Rs in bln Dec'17 Dec'16 Var % Advances 605 510 18.5% Investments 1,092 807 35.4% Lendings to Financial Institutions 34 34 -1.5% Others 277 227 22.3% Total Assets 2,007 1,578 27.2% Deposits 1,289 1,180 9.3% Borrowings 513 202 154.4% Others 46 44 4.2% Total Liabilities 1,848
Slide 11: Income Statement - Consolidated
Income Statement - Consolidated Rs in bln Rs in bln 2017 2016 Var % Q4'17 Q3'17 Var % Interest Earned 110.6 101.8 8.7% 30.0 29.3 2.2% Interest Expensed (52.5) (42.9) -22.3% (15.2) (14.8) -3.3% Net Interest Income 58.1 58.8 -1.2% 14.7 14.6 1.1% Non Interest Income 24.8 26.2 -5.5% 6.5 4.7 38.7% Total
Slide 12: Balance Sheet - Consolidated
Balance Sheet - Consolidated Rs in bln Dec'17 Dec'16 Var % Advances 643 538 19.5% Investments 1,125 838 34.2% Lendings to Financial Institutions 36 35 1.2% Others 302 250 20.7% Total Assets 2,105 1,662 26.7% Deposits 1,366 1,246 9.7% Borrowings 517 206 151.2% Others 48 46 2.7% Total Liabilities 1,93
Slide 13: Deposits performance - Focus remains on growing low cost deposits
Deposits performance - Focus remains on growing low cost deposits Deposits - Bank Dec'17 Dec'16 PE CoF % PE CoF % Domestic deposits - Rs in bln 1,033 2.7% 946 2.9% International deposits - Rs in bln 256 2.2% 234 2.0% Total Bank - Rs in bln 1,289 2.6% 1,180 2.7% International - USD in mln 2,322 2.2%
Slide 14: Advances portfolio up 19% over Dec’16
Advances portfolio up 19% over Dec’16 Net Advances Rs in bln Dec'17 Dec'16 Var % Corporate Bank 303 236 28% Commodity 47 53 -12% Commercial 35 28 27% Consumer 12 9 26% Others 34 15 122% Total Domestic 431 342 26% International 173 168 3% Bank 605 510 19% International USD mln 1,569 1,608 -2% Dec'16
Slide 15: International Advances - Corporate advances remains the largest component
International Advances - Corporate advances remains the largest component By Geography By Business - UAE Bahrain, Qatar, 11% Yemen, 0% 15% NewYork, 2% Corporate, 66% EPZ, 0% Others, 30% Consumer, UAE, 72% 4% Personal Others, 2% loan, 2% Abu Dhabi, 29% Sharjah, 4% Dubai, 67% Baitna, 96% UBL Performan
Slide 16: Concentration of Advances as at December 31, 2017 - Standalone
Concentration of Advances as at December 31, 2017 - Standalone 2% 9% 32% 11% 1% 3% 3% 7% 8% 2% 22% Chemical & Pharma Agribusiness Textile Cement Sugar Autos & Transport Financial Electronics Power & Energy Individuals Others UBL Performance Overview – 2017 16
Slide 17: Diversified investment portfolio with strong market risk management
Diversified investment portfolio with strong market risk management Portfolio mix shifts towards T Bills Investments’ yields Total 1,092 Rs in bln 11.1% 31 1 47 39 18 Total 807 10.4% 10.4% 43 5 36 8.9% 29 542 16 7.8% 2013 2014 2015 2016 2017 Non Funded revenue streams continue to grow 571 Rs in mln
Slide 18: 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 OVERSEAS BRANCHES 3 20 PAKISTAN BRANCHES 1,359 SUBSIDIARIES 4 Asset mix by region 2017 2016 Domestic Operations 79.9% 76.4% International Operations 20.1% 23.6% Middle East 14.8% 17.5% USA 0.2% 0.7
Slide 19: 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 “Best Bank” in the first ever Pakistan Banking Awards 2016 Banking (UBL OMNI) “Best Bank for Corporate Finance and Capital Marke
Slide 20: Review of Non Interest Income & Administrative Expenses
Review of Non Interest Income & Administrative Expenses UBL Performance Overview – 2017 20
Slide 21: Non Fund Income Standalone Results
Non Fund Income Standalone Results Rs in mln 2017 2016 Var % Fee, commission and brokerage income 12,618 12,319 2% Dividend income 2,361 3,267 -28% Income from dealing in foreign currencies 1,878 1,701 10% Gain / (loss) on sale of securities 4,401 5,362 -18% Other income 905 960 -6% Total Non Fund I
Slide 22: Fees and Commissions performance Standalone Results
Fees and Commissions performance Standalone Results Rs in mln 2017 2016 Var % OMNI fee & commissions 1,757 2,171 -19% Commission on trade 1,894 2,057 -8% Corporate service charges/ Facility fee 860 936 -8% Corporate finance fee 720 682 6% FIG commission 268 277 -3% Commission on ATM/ Debit cards 1,2
Slide 23: Administrative Expenses Standalone Results
Administrative Expenses Standalone Results Rs in mln 2017 2016 Var % Salaries, allowances & Staff fund 13,965 12,453 -12% charges Rent taxes insurance etc. 4,515 4,203 -7% Outsourced service charges 4,609 4,565 -1% including sales commission Advertisement and publicity 1,071 704 -52% Communications
Slide 24: Growth at a Glance
Growth at a Glance UBL Performance Overview – 2017 24
Slide 25: Balance Sheet
Balance Sheet Rs. in mlns 2017 2016 2015 2014 2013 2012 Assets Cash and balances with treasury and other banks 177,099 146,428 128,870 87,573 114,388 109,396 Lending to financial institutions 33,664 34,168 24,095 21,872 28,835 21,953 Investments- gross 1,095,555 808,959 721,651 499,060 425,253 351,0
Slide 26: Profit & Loss
Profit & Loss Rs. in mlns 2017 2016 2015 2014 2013 2012 Markup / return / interest earned 107,206 98,219 94,353 82,735 72,846 73,507 Markup / return / interest expensed (50,781) (41,177) (38,511) (37,769) (34,910) (34,948) Net Markup / Interest income 56,425 57,042 55,842 44,967 37,936 38,560 Fee, c
Slide 27: Key Financial Ratios & Share Information
Key Financial Ratios & Share Information 2017 2016 2015 2014 2013 2012 Key Financial Ratios Return on equity (RoE) 20.8% 24.9% 25.7% 23.9% 22.3% 23.8% Return on assets (RoA) 1.4% 1.9% 2.0% 2.1% 2.0% 2.1% Profit before tax ratio 51.1% 57.1% 54.2% 52.0% 49.6% 48.2% Return on capital employed (RoCE) 20
Slide 28: Quarterly Trend Analysis
Quarterly Trend Analysis Bank Level - Standalone UBL Performance Overview – 2017 28
Slide 29: Profit before tax
Profit before tax Rs in bln 13.5 +6% +7% 11.2 11.8 10.9 11.2 11.3 10.8 10.2 9.9 10.4 -29% 9.3 8.8 8.4 8.3 7.8 8.0 7.1 8.4 +4% 6.4 5.9 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 UBL Performance Overview – 2017 29
Slide 30: Profit after tax
Profit after tax Rs in bln 7.3 +13% 7.3 7.1 7.0 6.5 -17% +8% 6.5 6.4 7.0 6.3 6.1 5.7 6.0 5.6 5.2 5.3 5.3 -2% 5.9 4.7 4.3 4.0 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 UBL Performance Overview – 2017 30
Slide 31: Deposits
Deposits Rs in bln +3% +6% -0% 1,289 +0% 1,256 1,254 1,183 1,142 1,147 1,180 1,051 1,070 992 994 945 895 847 858 866 828 752 773 703 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 UBL Performance Overview – 2017 31
Slide 32: Net Advances
Net Advances Rs in bln +7% 605 +0% 565 567 +13% 509 510 -2% 496 498 459 455 434 430 417 420 408 447 391 377 363 369 352 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 UBL Performance Overview – 2017 32
Slide 33: Revenue
Revenue Rs in bln 21.9 21.3 +2% 20.3 +4% 20.4 20.3 20.0 19.3 19.5 19.2 -12% +13% 17.6 18.6 18.1 17.9 16.3 15.4 14.9 13.8 14.1 15.5 12.6 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 UBL Performance Overview – 2017 33
Slide 34: Net Interest Income
Net Interest Income Rs in bln 15.7 14.7 14.2 +4% 14.3 +1% 14.2 14.0 13.6 13.1 -1% 12.8 -2% 14.2 13.9 13.7 13.7 11.3 11.0 10.6 9.8 9.5 9.0 8.8 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 UBL Performance Overview – 2017 34
Slide 35: Non Funded Income
Non Funded Income Rs in bln 8.4 6.2 6.2 6.3 -3% 6.0 +21% 6.1 5.6 4.9 5.1 5.0 4.8 4.8 4.8 4.8 4.6 5.2 -38% 4.5 +60% 3.9 4.5 3.8 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 UBL Performance Overview – 2017 35
Slide 36: Provisions
Provisions Rs in bln 2.1 2.0 +260% 1.3 0.9 0.9 0.8 0.7 0.5 -76% 0.6 0.8 0.3 0.3 0.2 0.2 0.1 +207% -777% -0.1 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 -0.1 -0.3 -0.3 -0.5 UBL Performance Overview – 2017 36
Slide 37: Administrative Expenses
Administrative Expenses Rs in bln +5% 9.2 +3% -0% 8.8 8.8 +3% 8.6 8.5 8.4 8.2 8.0 7.8 7.6 7.3 7.4 7.4 7.2 7.1 6.9 6.9 6.5 6.5 6.2 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 UBL Performance Overview – 2017 37
Slide 38: Important Information
Important Information The information contained herein reflects our latest business statement as at December 31, 2017. 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 – 2017 39