Union Bank Of India Limited · NSE:UNIONBANK
Union Bank Of India — H1 FY2009-10 Earnings Presentation
42 slides from Union Bank Of India's earnings presentation, Sep 30, 2009
Slide 1: Financial Results 30th Sept., 2009
Presentation Financial Results th 30 Sept., 2009 HY 09-10 1
Slide 2: Increasing Shareholders' Value
Increasing Shareholders’ Value Q2 10 over Q2 09 Earning per Share has increased from Rs.28.62 to Rs. 40.00. Book Value per Share has increased from Rs.122.80 to Rs. 156.72. Return on Equity (RoE) has improved from 23.31% to 25.52%. ROE is consistent with previous two years i.e. 24.70% as of Ma
Slide 3: Key Ratios – Efficiency
Key Ratios – Efficiency Ratios (in %age) SEPT 08 SEPT 09 SEPT 08 SEPT 09 (Q2) (Q2) (6 M) (6 M) Efficiency Ratios Cost to Income Ratio 44.40 42.90 42.55 41.89 Operating Exp. To 1.73 1.51 1.54 1.44 AWF Continuous cost containment measures restricted operating expenses 3
Slide 4: Improved Productivity
Improved Productivity (Rs. In lacs) Ratios* SEPT 08 SEPT 09 (6 M) (6 M) Productivity Ratios Business per Employee 764 884 Business per Branch 8329 9159 Net Profit per Employee 4.45 6.74 Net Profit per Branch 48.52 69.83 Gross Profit per Employee 9.93 11.36 Gross Profit per Branch 108.25 117.77 * Ann
Slide 5: Operating Profits (Quarterly)
Growth 15.71 % Operating Profits (Quarterly) 900 810 700 800 700 • Operating Profit of 600 the Bank grew by 500 400 110Crs.from Rs.700 300 Crs. to Rs.810 crs, 200 (QoQ), a growth of 100 15.71% 0 SEPT 08 SEPT 09 OPERATING PROFIT 5
Slide 6: Provisions (Quarterly)
Provisions (Quarterly) (Rs.in crore) SEPT 08 SEPT 09 (Q2) (Q2) Taxation 135 170 NPA (excluding adhoc provision 160 102 for Standard Assets) Standard Assets 80 2 Depreciation on Investment - 54 -4 Others (Frauds / Restructured 17 35 Adv.Etc.) Total 338 305 6
Slide 7: Net Profits (Quarterly)
600 Net Profits (Quarterly) CAGR Growth 36.60% 505 500 • The overall improvement 400 362 in financial parameters is 276 reflected in Net Profit of 300 Rs 505 crs as on 30th 200 September’09 as against Rs. 362 crs in the previous 100 year, an impressive 0 growth of 39.50%. Sep-07 SEPT 08 SEPT 09 NET
Slide 8: Net Interest Income (Qty)
Growth (-11.31%) Net Interest Income(NII) (Qty) 973 • Accretion of deposits outpacing 1000 864 credit offtake during Q2-10 with incremental CD ratio of 65.75% for 800 the quarter as against incremental CD ratio of 123.56% in Q2-09 and 600 deploying of surplus funds in low 400 yielding liquid assets
Slide 9: Net Interest Margin (Qty)
Net Interest Margin (Qty) 8.75 7.95 8 Yield on funds stood at 6 5.74 5.81 7.95 % compared to 8.75% as on Sept.’08. 4 3.01 3.51 Cost of Funds stood at 5.81% compared to 2.34 2.14 2 5.74% as on Sept’08. Net Interest Margin (on 0 SEPT 08 SEPT 09 earning assets) is 2.34%. Yield on Funds Cost of funds Sp
Slide 10: Improving NIM
Improving NIM ¾ High cost deposits is being shed. High Cost Deposits has come down from Rs. 14600 Cr. as on 31.03.09 to Rs. 7900 Cr. as on 30.09.2009. ¾ WAR on Average Term Deposits declined from 8.60% as on 31.03.09 to 8.09% as on 30.06.2009 and further to 7.52% as on 30.09.2009. ¾ Estimated WAR on
Slide 11: Improving NIM on Earning Assets
Improving NIM on Earning Assets (Rs.in crore) JUN 09 AUG 09 SEPT 09 (3 M) (1 M) (1M) Int. on Advances 2353 768 810 Net Interest Income 801 290 339 NIM 2.28 2.38 2.75 ¾ The NIM has improved in 2nd quarter to 2.34% from 2.28% which is likely to improve further at around 2.60% for Dec quarter and 2.80%
Slide 12: Non-Interest Income (Qty)
Non-Interest Income- (Qty) (Rs.in crore) SEPT 08 SEPT 09 Growth (Q2) (Q2) % Profit on Sale of - 36 218 - Investments Exchange on Forex 101 78 - 22.77 Transactions Recovery in Write off 64 42 - 34.38 Accounts Other Non - Interest Income 156 217 39.10 Total 285 555 94.74 12
Slide 13: Core Non-Interest Income vertical wise
Core Non-Interest Income vertical wise- Qty (Rs.in crore) SEPT 08 SEPT 09 Growth (Q2) (Q2) % Corporate Credit 103 147 42.72 Personal Banking Division 35 32 - 8.57 New Initiative 5 8 60 Transaction Banking 13 30 130.77 Total 156 217 39.10 13
Slide 14: Core Fee Income (Qty)
Core Fee Income- (Qty) (Rs.in crore) SEPT 07 SEPT 08 % Growth SEPT 09 % growth 113 156 38.05 217 39.10 CAGR GROWTH : 38.58% 14
Slide 15: Half-Year Comparisons
Financial Results – 30th SEPT’2009 Half-Year Comparisons 15
Slide 16: Operating Profits (HY)
Operating Profits (HY) Growth 21.35 % 1600 1597 1316 1400 • Operating Profit 1200 grew by 21.35 % to 1000 Rs.1597 as of 30th 800 Sept’09 as against 600 400 Rs.1316 crs in the 200 previous year. 0 SEPT 07 SEPT 09 OPERATING PROFIT 16
Slide 17: Net Profits (HY)
Net Profits (HY) Growth 60.51% 947 1000 • The overall improvement 800 in financial parameters is 590 600 reflected in Net Profit of Rs. 947 crs as on 30th 400 September’09 as against 200 Rs. 590 crs in the corresponding period of 0 SEPT 08 SEPT 09 previous year, an NET PROFIT impressive growth of 60
Slide 18: Cost to Income Ratio (HY)
Cost to Income Ratio (HY) 50 ¾ The Cost to Income 42.55 ratio which reflects 40 41.89 the operating 66 bps reduction in last one yr efficiency of the bank was at healthy 30 41.89%. SEPT 08 SEPT 09 Cost to Income ratio 18
Slide 19: Non-Interest Income (HY)
Non-Interest Income- (HY) (Rs.in crore) SEPT 08 SEPT 09 Growth (H1) (H1) % Recovery in Write off 87 88 1.14 Accounts Profit on Sale of -7 427 - Investments Exchange on Forex 159 169 6.29 Transactions Other Non - Interest Income 289 400 38.41 Total 528 1084 105.30 19
Slide 20: Deposits
149066 Deposits 1 5 0 0 0 0 0 1 3 5 0 0 0 115939 Total Deposits grew at 1 2 0 0 0 0 1 0 5 0 0 0 28.57%. 7 9 0 0 9 0 0 0 0 1 9 2 5 2 7 5 0 0 0 49142 6 0 0 0 0 38372 High Cost deposits to 4 5 0 0 0 3 0 0 0 0 total deposits reduced 1 5 0 0 0 from 16.61% to 5.30%. S E P T 0 8 S E P T 0 9 TOTAL DEPOSITS
Slide 21: CASA deposits have grown significantly
CASA deposits have grown significantly 49,142 (CASA) Rs cr. 41,711 43,742 38,372 39,378 'Sep 08 'Dec 08 'Mar 09 'June 09 'Sep 09 QoQ growth (Rs cr.) 1006 2333 2031 5400 QoQ growth (%) 2.6% 5.9% 4.9% 12.3% CASA as % 33.1% 30.73% 30.07% 30.4% 32.97% of deposits
Slide 22: CASA Deposits
CASA Deposits (Rs.in crore) SEPT 08 MAR 09 JUN 09 SEPT 09 % Growth Over MAR 09 Current Deposits 11905 13166 14334 16588 25.99 Savings Deposits 26467 28545 29408 32554 14.04 Demand Deposits (CASA) 38372 41711 43742 49142 17.82 Total Deposits 115939 138703 143889 149066 7.47 % to total deposits 33.10
Slide 23: Advances & Yield on Advances
Advances & Yield on Advances 110000 100000 10.66 99430 11 Advances 86549 10.5 90000 80000 70000 10.21 10 Bank registered growth 60000 50000 9.5 9 of 14.88% YoY in 40000 30000 20000 8.5 advances. Yield on 10000 SEPT 08 SEPT 09 8 advances is at 10.21 %. Advances Yield on Advances (Rs. in Crore) SEPT 0
Slide 24: Investments
60000 54015 Investments 55000 9 50000 7.31 Growth in investments and yield 45000 40000 6.05 7 on investments were in line with 34674 35000 30000 5 market trends. 25000 20000 3 Out of Total AFS portfolio of 15000 Rs.16745 Cr. Rs. 9844 Cr 10000 1 SEPT 08 SEPT 09 (58.79%) is interest sensitive. Investm
Slide 25: NPA Management
NPA Management (Rs.in crore) SEPT 08 SEPT 09 Gross NPAs – Opening on 1st April 1657 1923 Add : Additions 431 496 Less : Deductions 413 500 1. Due to Write Off 47 246 2. Due to upgradation 95 82 3. Due to Recoveries 271 172 Gross NPAs 1675 1919 Gross Credit 86549 99430 Gross NPA as a % age of GBC 1.9
Slide 26: NPA Management
NPA Management GROSS NPAs NET NPAs 3.00 0.7 0.65 2.50 2.42 0.6 1.93 1.93 0.5 2.00 0.4 %1.50 % 0.3 0.23 1.00 0.2 0.14 0.50 0.1 49 bps reduction in last 2 yrs 42 bps reduction in last 2 yrs 0.00 0 SEPT 07 SEPT 08 SEPT 09 SEPT 07 SEPT 08 SEPT 09 GROSS NPA % NET NPA AS % Net NPA% of the Bank, one of t
Slide 27: Improved Asset Quality
Improved Asset Quality Improved asset quality is reflected in declining trend in delinquency ratio as under:- SEPT 08 SEPT 09 (6 M) (6 M) Delinquency Ratio 1.16% 1.03% 27
Slide 28: Cost of Credit
Cost of Credit Cost of Credit of since March 08 has improved substantially. (Rs in Crs) Particulars MAR 08 MAR 09 SEPT 09 Gross Advances 75878 98265 99430 Average Advances 69768 87072 98848 (Opening + Closing / 2 ) NPA Provision 585 546 343 Credit Cost % 0.84 0.63 0.69 Note : Sept.2009 Credit Cost %
Slide 29: Assets Restructured during H1-FY 10
Assets Restructured during H1-FY 10 Nature of UPTO MAR 09 UPTO JUNE 09 DURING SEPT 09 Advance QTR. No of Amt. No of Amt. No of Amt. Accts Accts Accts (Rs in Crs) (Rs in Crs) (Rs in Crs) MSME W/w 28272 647.42 28307 894.38 115 55.05 Micro Enterprises 20620 249.18 20620 249.18 110 2.73 Small Enterprise
Slide 30: Assets Restructured during H1-FY 10
Assets Restructured during H1-FY 10 Restructured Accounts Closed / Fully Adjusted Sr. No. Details of Restructured Accounts Accounts Amount (Rs. in cr. 1 April – June 2009 1624 14.99 2 July – Sept. 09 1585 164.23 Total 3209 179.22 Restructured Accounts turned to NPAs (for more than Rs. 1.00 crore) Sr
Slide 31: Capital Adequacy Ratio (Basel II)
Capital Adequacy Ratio (Basel II) 16.00 Capital Adequacy Ratio 14.00 13.76 increased from 11.77% as on 30th Sept, 2008 to 13.76% as 11.77 12.00 on 30th Sept, 2009 despite 10.00 increase in volume of 8.71 business. 8.00 7.15 Tier-I capital funds have 6.00 4.62 5.05 increased by 29.80% from 4.00 R
Slide 32: Distribution Channels
Distribution Channels METRO 590 URBAN 791 SEMI URBAN RURAL MAR Sept Add- 09 09 ition 631 Total Outlets 2661 2821 160 ATMs 1790 2127 337 700 ¾ Transactions through Electronic mode has increased from 21% of total transactions as of March’09 to 25.18% as of Sept’09. 32
Slide 33: Shareholding Pattern (30th Sept 2009)
Shareholding Pattern (30th SEPT 2009) 17.03 Govt. of India Banks, Fis, Ins. Cos. Others 14.78 FIIs and Foreign Mutual Funds 55.43 SEPT 08 SEPT 09 % % 12.76 GOVT. 55.43 55.43 FIIs & FMFs 19.31 17.03 BANKS, INST./ 11.85 12.76 MUTUAL FUNDS OTHERS 13.41 14.78 33
Slide 34: Major highlights of last quarter
Major highlights of last quarter 34
Slide 35: Major Highlights Q2-10: Awards & Accolades
Awards & Accolades Major Highlights Q2-10 ¾The Bank was awarded the National Awards for Excellence in Lending to Micro Enterprises 2008-09. The Bank attained Second Rank based on its excellent performance in lending to micro enterprises during the year 2008-09. The Bank was also adjudged as the Best
Slide 36: Major Highlights Q2-10
Major Highlights Q2-10 Union Bank ranked 7th strongest bank in Asia-Pacific region in 2009. 9The Asian Banker has ranked Union Bank of India at number 7 amongst strongest Banks in Asia Pacific region. The bank stands at number 3 amongst Banks in India. 9The ranking has been considered covering all p
Slide 37: Major Highlights Q2-10: Awards & Accolades
Major Highlights Q2-10 Awards & Accolades ¾The Bank was adjudged the Best bank in Credit Quality in the Financial Express Best Banks Awards. The Award was given by the Hon’ble Finance Minister on 25th July, 2009 37
Slide 38: Major Highlights Q2-10
Major Highlights Q2-10 ¾The Bank on 30th September, 2009 announced that all the branches of both the Regional Rural Banks sponsored by it viz Kashi Gomti Samyut Gramin Bank and Rewa Sidhi Gramin Bank have been networked under CBS. This initiative of networking branches of Regional Rural Bank (RRB) u
Slide 39: Road Ahead
(9) Union Bank ROAD AHEAD
Slide 40: Road Ahead
Road Ahead The Bank aims for a deposits growth of approx. 20% and advances growth of 18% for 2009-10. Bank targets CASA Ratio of 35% by March 2012. Gross NPA level is targeted less than 2.00% as of March 2010. Transaction through electronic mode to reach 35% of total transactions by March 2010. The
Slide 41: Disclaimer
Disclaimer Except 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 ‘forward-looking stateme
Slide 42: Dream Big
You moved ta analhar city ‘She understood. You wen loo Deny to Call wreryetoy, Pesssiyiiesd ne jour dams ar ot your sone (J) Union Bank Whernmeer yu cilnd, sie cried with you nt A hh eli When you raid ‘Ma, this 4 lenporiant, the ateyed for you. eeu sania kab £0 41 DREAM BIG
Union Bank of India — H1 FY2009-10 Earnings Presentation on 6ix