Union Bank Of India Limited · NSE:UNIONBANK
Union Bank Of India — Q3 FY2011 Earnings Presentation
42 slides from Union Bank Of India's earnings presentation, January 2011
Slide 1: Presentation Q3-11 Financial Results
Presentation Q3 11 Q3-11 Financial Results st t 31 Dec., 2010 1
Slide 2: Performance Highlights
PERFORMANCE HIGHLIGHTS Q3 FY 11 9M FY11 OPERATING 37 96% 37.96% 36 80% 36.80% PROFIT NET INTEREST 48.30% 60.91% INCOME NET INTEREST 3.44% 67bps 3.29% 83bps MARGIN 2
Slide 3: Highlights of Business Growth Q3 11 over Q3 10
HIGHLIGHTS OF BUSINESS GROWTH Q3 11 over Q3 10 Global Business of the Bank increased from `. 257619 cr. to ` 320442 cr. an increase of 24.39% Global Deposits grew by 23.54% to ` 186655 crs from ` 151085 crs in the previous year. CASA Deposits grew by an impressive 27.11% to ` 62106 crs from ` 48861
Slide 4: Market Share
MARKET SHARE 27.03.09* 26.03.10* 31.12.10* DEPOSITS 3.44 3.53 3.64 CREDIT 3.32 3.34 3.41 TOTAL BUSINESS 3.39 3.45 3.54 GROWTH OF UNION BANK AND SCBs (YoY) (DEC 2010) DEPOSITS ADVANCES UNION BANK 25.20 24.70 SCB SCBs 16 50 16.50 24 04 24.04 *based on RBI fortnightly data on SCBs The Bank has been con
Slide 5: Net Interest Income and NIM (Quarterly)
Net Interest Income and NIM (Quarterly) 4 2000 3.55 1800 1615 3.44 1600 1400 1200 1128 1089 3 2.77 1000 800 600 400 200 2 Dec'08 Dec'09 Dec'10 Dec'08 Dec'09 Dec'10 Net Interest Margin Net Interest Income 5
Slide 6: Growing Net Interest Income
Growing Net Interest Income Growth 48.30% 1615 1800 1600 Net Interest Income 1400 1089 grew by b 48.30% t ` 48 30% to 1200 1615 crs as of 1000 Dec’10 from ` 1089 800 crs in the previous 600 year mainly due to 400 increase in interest 200 DEC 09 DEC 10 income. Net Interest Income 6
Slide 7: Non-Interest Income (Quarterly)
Non-Interest Income- (Qty) (` in crore) DEC 09 DEC 10 Growth (Q3)) (Q (Q3)) (Q % Profit on Sale of 105 108 2.86 Investments Exchange on Forex 83 124 49.40 Transactions Recovery in Write off 37 31 -16.22 Accounts Core Income 215 230 6.98 Total 440 493 12 05 12.05 7
Slide 8: Operating Profits (Quarterly)
Operating Profits (Quarterly) Growth 37.96% 1261 1400 • Operating Profit of 1200 1000 914 the Bank grew by 800 37.96% t ` 1261 crs 37 96% to 600 as of Dec’10 from ` 400 914 Crs in the 200 previous year. year 0 DEC 09 DEC. DEC 10 8
Slide 9: Provisions (Quarterly)
P Provisions i i (Quarterly) (Q t l ) (` in crore) DEC 09 DEC 10 (Q3) (Q3) Taxation 219 282 NPA (excluding adhoc provision for 43 361 Standard Assets) Standard Assets Shifting Loss 7 35 - 14 Depreciation p on Investment 40 6 Others (Frauds / Restructured 71 -16 Adv.Etc.) Total 380 682 9
Slide 10: Net Profits (Quarterly)
Net Profits (Quarterly) 800 534 579 Despite higher 600 provisions by 79.47%, Net Profit 400 grew by b 8.43% 8 43% tot 200 ` 579 crore Sequentially the 0 Net Profit has DEC 09 DEC 10 risen by 90.46% from Q2-11. Q2-11 10
Slide 11: Net Interest Margin (Quarterly)
Net Interest Margin (Qty) Yield Yi ld on f d funds h has increased from 8.02% as on Dec Dec’09 09 to 8.39% 8 39% as on Dec’10. Cost of Funds has reduced from 5.39% in Dec’09 to 5.16% in Dec’10 Net Interest Margin (on Earning Assets) has i improved d from f 2 77% IN 2.77% Dec 09 to 3.44% in Dec’10 De
Slide 12: Nine Monthly Comparisons
Nine Monthly Comparisons p 12
Slide 13: Shareholders' Returns
SHAREHOLDERS’ RETURNS 205.09 210 39.10 39.18 41.00 33.30 167 34 167.34 160 31.00 135.89 110 21.00 11.00 60 1.00 10 2008 2009 2010 2008 2009 2010 Earning per Share Book Value 13
Slide 14: Growing Operating Profit (9 Months)
Growing Operating Profit (9 Months) 3435 3600 3200 2800 2511 2170 2400 1690 2000 1600 1200 800 400 0 DEC 07 DEC 08 DEC 09 DEC 10 14
Slide 15: Provisions (9 Months)
Provisions (9 Months) (` in crore) DEC 09 DEC 10 (9M) (9M) Taxation 544 755 NPA (excluding adhoc provision for 386 1090 St d d Assets) Standard A t ) Standard Assets 24 57 Shifting Loss 47 103 Depreciation p on Investment -99 -7 Others (Frauds / Restructured 128 -47 Adv.Etc.) Total 1030 1951 15
Slide 16: Growing Net Profits (9 Months)
Growing Net Profits (9 Months) 1481 1484 1600 1400 1261 1200 866 1000 800 600 400 200 0 DEC 07 DEC 08 DEC 09 DEC 10 16
Slide 17: Deposits
11111 65320976431 50505050505 00000000000 151085 186655 Deposits 00 0 00 Total Deposits grew at 0000 23 54% YoY. 23.54% YoY 000000000 62106 CASA deposits have 00000 48861 increased by y 27.11% YoY to ` 62106 crs. CASA share has improved D E C 0 9 D E C 1 0 TOTAL DEPOSITS CASA b 93 bps by b to t 33.2
Slide 18: CASA Deposits
CASA Deposits (` in crore) DEC DEC DEC DEC % 07 08 09 10 Growth YoY Current Deposits 8623 11968 14073 15690 11.49 Savings Deposits 20763 27410 34788 46416 33.43 Demand Deposits 29386 39378 48861 62106 27 11 27.11 (CASA) Total Deposits 85180 129647 151085 186655 23.54 Cost of Deposits(%) 6.15 6.34 6.
Slide 19: Advances
Advances Advances 133787 140000 120000 106534 Bank a registered eg ste ed 100000 80000 growth of 25.58% YoY 60000 40000 in advances. advances Yield 20000 DEC 09 DEC 10 on advances is at 9 63% 9.63% (` in Crore) DEC 09 DEC 10 YoY Growth% TOTAL ADVANCES 106534 133787 25.58 25 58 RETAIL ADVANCES w/w 11
Slide 20: Top Sector Exposures
TOP SECTOR EXPOSURES Across Large & Mid Corporates, SME and Corporate Agri Business Rank Sectors Exposures (As on 31st December 2010) Amount (` (`. in Crore) % 1 Trade 16565 12.38 2 Retail Advances 15219 11.37 3 Infrastructure 14515 10.84 4 Electricity 8237 6 15 6.15 5 Iron & Steel 6055 4.52 6 Texti
Slide 21: Assets Restructured during 9M FY 10-11
Assets Restructured during 9M-FY 10-11 Nature of UPTO MAR 10 UPTO SEP 10 DURING DEC 10 Advance QTR. No of Amt. No of Amt. No of Amt. Accts Accts Accts (` in Crs) (` in Crs) (` in Crs) MSME W/w 30008 833.96 30063 870.03 51 28.12 Micro Enterprises 21210 267.40 21249 269.37 39 3.53 Small Enterprises 87
Slide 22: Assets Restructured during 9M FY 10-11
Assets Restructured during 9M-FY 10-11 Restructured Accounts Closed / Fully Adjusted Details of Restructured Accounts Accounts Amount (` in cr (`. cr.)) April 10 – Sep. 10 8 103.75 Oct-10 – Dec-10 20 192 19 192.19 Restructured Accounts turned to NPAs (f more th (for than R Rs. 1 1.00 00 crore)) Deta
Slide 23: Investments
IInvestments t t Investments has increased from ` 52123 crore to ` 59030 cr. i.e. increase of 13.25%. Yield on Investments has shown i improvement t from f 6 08% to 6.08% t 6.50% 6 50% Out of Total AFS portfolio of ` 15125.77 cr. ` 8223.61 cr ((54.36%)) is interest sensitive. DEC 09 % Duration DEC 1
Slide 24: NPA Management
NPA Management (`.in crore) DEC 09 SEP 10 DEC 10 Gross NPAs – Opening on 1st April 1923 2671 2671 Add : Additions 968 1753 2518 Less : Deductions 799 900 1608 1. Due to Write Off 414 414 866 2. Due to upgradation / Recovery 385 486 742 Gross NPAs 2092 3524 3581 G Gross Credit C dit 106534 126423 133
Slide 25: Cost of Credit
Cost of Credit (` in Crs) Particulars FY MAR 09 FY MAR 10 DEC 10 (9 M) Gross Advances 98265 121249 133787 Average Advances 87072 109757 127518 (Opening + Closing / 2 ) NPA Provision 546 699 1090 Credit Cost % 0.63 0.64 1.14 Note : Dec.2010 Dec 2010 Credit Cost % Annualised Annualised. 25
Slide 26: Capital Adequacy Ratio (Basel II)
C it l Adequacy Capital Ad R Ratio ti (B (Basell II) 16 13.46 Capital Adequacy Ratio is at 14 11.88% as on 31st Dec. 2010 11.88 12 against 13.46% as on 31st 10 Dec 2009 due to increase in Dec. 8.70 volume of business. 7.44 8 Tier-I Ti I capital it l funds f d h have 6 4.76 4.44 increased by 4.18
Slide 27: Distribution Channels
Distribution Channels DEC. DEC Add- 09 10 ition Branches 2768 2993 225 ATMs 2249 2516 267 Total Outlets 5017 5509 492 Transactions through Electronic mode has increased from 31.71% of total transactions as of Dec’09 to 45.49% as of Dec.’10. 27
Slide 28: Shareholders' Returns (Sequential)
SHAREHOLDERS’ RETURNS (Sequential) 1.16 45.85 225 1.2 50 220 45 215 205.09 1 210 40 193.49 205 35 0.8 200 0.64 30 195 24 03 24.03 190 0.6 25 185 20 180 0.4 175 15 170 10 165 02 0.2 160 5 155 0 0 150 SEP 10 DEC 10 SEP 10 DEC 10 SEP 10 DEC 10 Earning per Share Book Value Return on Average Assets 28
Slide 29: Key Ratios – Efficiency
Key Ratios – Efficiency Ratios (in %age) DEC09 DEC10 (Q3) (Q3) Efficiency Ratios Cost to Income Ratio 40.23 40.21 Operating Exp. To AWF 1.49 1.69 29
Slide 30: Improved Productivity
I Improved d Productivity P d ti it (`. In lacs) Ratios* DEC 09 DEC 10 (9 M) (9 M) P d ti it R Productivity Ratios ti Business per Employee 923 1139 Business per Branch 9307 10706 Gross Profit per Employee 12.00 16.28 Gross Profit per Branch 120.99 153.04 Net Profit per Employee 7.08 7.04 Net Profit
Slide 31: Global Presence: Business of Hong Kong Branch
GLOBAL PRESENCE BUSINESS OF HONG KONG BRANCH (`. in Cr) YOY Business Dec 09 March 10 Dec., Dec., Dec 10 (Growth) % DEPOSITS 321 370 431 34 27 34.27 ADVANCES 2310 2977 5223 126 10 126.10 TOTAL BUSINESS 2631 3347 5654 114.90 PROFIT 30.71 29.74 61.04 98.76 Bank is having Representative Offices at Abu D
Slide 32: Shareholding Pattern (31st Dec 2010)
Shareholding Pattern (31st DEC 2010) • Share Capital ` 550 crore •No. of Shares 505.12 million • Net worth ` 10359 crore • B. V. per share ` 205.09 •Return on Equity: 19.11% •Market Cap (21st Jan’11) : ` 16497 crs DEC 09 DEC 10 % % GOVT. 55.43 55.43 FII & FMF FIIs FMFs 16 16 16.16 16 80 16.80 BANKS,
Slide 33: Major Highlights of Last Quarter
Major highlights of last quarter 33
Slide 34: Award for Corporate Governance
Award For Corporate Governance The Bank was bestowed with Certificate of recognition by ICSI (Institute of Company Secretaries of I di ) as National India) N ti l Award A d for f excellence ll in Corporate Governance for adopting good Corporate Governance practices. This award was instituted by the
Slide 35: Award for Human Resources Developments
Award for Human Resources Developments • The Dale Carnegie Leadership Award was conferred on the Bank byy Dale Carnegie g Training g for the Bank’s transformation initiatives undertaken through project Nav Nirman. The award was received by Mr M V Nair, CMD, Union Bank from Shri Mahan Tavakoli, Tavak
Slide 36: Award for Corporate Communications
A Award d ffor Corporate C t CCommunications i ti “Union Dhara” the Bank’s House Journal bagged the prestigious Magazine of the year Award at the ABCI Annual Awards 2010. It also won 7 trophies for its internal communication viz. i 1 gold,ld 4 silver il and d 2 bronze b under d various i categories
Slide 37: Documenting the Glorious History of The Bank
Documenting the Glorious History of The Bank The 92nd foundation day celebrations of Bank was held at the Talkatora Indoor stadium, Delhi on 11th November, 2010. The Hon’ble Finance Minister, Shri Pranab Mukherjee released the History book of the Bank as also announced two financial inclusion initia
Slide 38: New Products and Services
New Products and Services The Bank together with Nokia and Obopay have partnered to launch mobile financial services across India on 24th Nov’10. N ’10 This Thi partnership t hi will ill make mobile payment services called ‘Union Bank Money’ available to consumers across India. The Union Bank Money
Slide 39: Guidance 2010-11
Guidance 2010 2010-11 11 39
Slide 40: Guidance 2010-11
G id Guidance 2010-11 2010 11 Thee Bank a a aims s for o a depos deposits ts g growth o t oof app approx. o 20% 0% a and d ad advances a ces growth of 25% for 2010-11. Bank targets CASA Ratio of 35% by March 2012. Return on Equity q y to be 22.00% and Return on Average g Assets to be 1.17% by March
Slide 41: Disclaimer
Di l i Disclaimer Except p for the historical information contained herein,, statements in this presentation which contain words or phrases such as “is”, “aims”, ‘will’, ‘would’, ‘indicating’, ‘expected to’ etc., and similar expressions or variations of such expressions may constitute ‘forwardforwar
Slide 42: Thank you
Thank you Y Your d dreams are nott yours alone l 42
Union Bank of India — Q3 FY2011 Earnings Presentation on 6ix