Union Bank Of India Limited · NSE:UNIONBANK
Union Bank Of India — Q1 FY2011 Earnings Presentation
41 slides from Union Bank Of India's earnings presentation, Jul 26, 2010
Slide 1: Financial Results Q1 – 2011 Analyst Presentation
Financial Results Q1 – 2011 Analyst Presentation 26th July, 2010
Slide 2: Q1 FY 11 Performance Highlights
Q1 FY 11 Performance Highlights Head %Increase YoY Total Business 23.47 Total Deposits 19.18 CASA 27.67 Total Advances 29.90 Operating Profit 32.53 Net Profit 35.97 2
Slide 3: Market Share
MARKET SHARE AS ON AS ON AS ON June 08 June 09 18 June 10* OUR MARKET SHARE 3.13 3.37 3.49 IN DEPOSITS OUR MARKET SHARE 3.11 3.27 3.42 IN CREDIT *based on RBI fortnightly data on SCBs The Bank has been consistently outperforming the industry growth by more than 5% in the past 3 years. 3
Slide 4: Operating Profits (Q1)
Operating Profits (Q1) .75% 1043 R 25 1000 C AG 32.53% • Operating Profits 787 28.41% 800 17.33% 616 for the quarter 600 525 ended Jun’10 400 improved by 32.53% 200 to Rs. 1043 crs from Rs. 787 crs in the 0 June 07 June 08 June 09 Jun-10 previous year. 4
Slide 5: Provisions
PROVISIONS (Rs.in crore) June’09 June’10 (Q1) (Q1) Taxation 155 245 NPAs 241 100 Standard Assets 15 9 Depreciation on Investment -135 21 Shifting Loss 28 83 Others (Frauds / Suspense Etc.) 11 3 Restructured Advances 30 -19 Total 345 442 5
Slide 6: Net Profits (Q1)
Net Profits (Q1) • Net Profit for Q1-11 has % 35.97 601 grown by 35.97% on YoY 600 8 .75 % GR 3 basis from Rs. 442 crore CA 500 93.86% 442 to Rs. 601 crore. 400 • The growth is over a 1.33% growth of 93.86% 300 225 228 recorded last year. Net 200 Interest income growth of 64.87% is the main 100 June
Slide 7: Net Interest Income (Q1)
NET INTEREST INCOME (Q1) 1 4 0 0 1347 2 2.46% 1 2 0 0 CA GR Growth 64.87% 1 0 0 0 789 817 8 0 0 734 6 0 0 4 0 0 2 0 0 0 J u n e 0 7 J u n e 0 8 J u n e 0 9 J u n e 1 0 NET INTEREST INCOME 7
Slide 8: Non-Interest Income- Q1 Comparison
Non-Interest Income- Q1 Comparison (Rs.in crore) Jun’08 Jun’09 Jun’10 % CAGR Growth % Core Fee based Income 133 182 200 9.89 22.63 Treasury Income 56 251 155 -38.25 66.37 W/w Profit on Sale of 29 194 113 -41.75 97.40 Investment Exchange on Foreign 27 57 42 -26.32 24.72 Currencies Income from Forex T
Slide 9: Net Interest Margin (NIM)
Net Interest Margin (NIM) 8.09 7.80 8 6.02 Yield on Funds 6 4.95 Cost of funds 4 3.03 Net Interest Margin 2.32 on earning assets 2 0 2009 2010 Observations: • The cost of Funds has come down from 6.02 in June 09 to 4.95 in June 2010 reduction of 107 bps • Yield on Funds has come down from 8.09 in Ju
Slide 10: Deposits
Deposits 1 8 0 0 0 0 171484 19.18% Total Deposits grew by 1 5 0 0 0 0 143889 19.18% to Rs. 171484 crs. 34.16% CASA Deposits have 1 2 0 0 0 0 23.29% 107248 increased by 27.67% to 86984 Rs 55845 crs. 9 0 0 0 0 CASA as % of Total Deposits has improved 6 0 0 0 0 55845 37280 43742 from 30.40% to 32
Slide 11: Liability Management-CASA
Liability Management-CASA CASA Share (%) 29% Mar 2006 Mar 2009 Mar 2010 PSBs 39.95 32.66 33.96 Union Bank of India 32.36 30.07 31.73 Peer (Nat’l Group) 39.15 31.34 32.11 9 While CASA % of PSBs have declined by 599 bps, CASA % share of the Bank has declined marginally by 63 bps as of Mar’10 vis-à-vis
Slide 12: Advances
124743 Advances 1 2 0 0 0 0 29.90% Global advances of the Bank registered 96026 26.67% growth of 29.90% YoY to Rs. 124743 crs. 9 0 0 0 0 75810 Bank’s advances grew by 30.72% YoY as 19.00% against Industry (SCBs) growth of 63708 21.7%* as on 2.07.2010. 6 0 0 0 0 Retail advances grew at 36.05% and for
Slide 13: Sector-wise Advances
SECTOR-WISE ADVANCES Across Large & Mid Corporates, SME and Corporate Agri Business Rank Sectors Outstanding (As on 30TH JUNE 2010) % Amount (Rs. in Crore) 1 Retail Advances 11.51 14359 2 Infrastructure 10.11 12606 3 Trade 6.50 8103 4 Iron & Steel 3.72 4635 5 Textile 3.16 3939 6 Commercial Real Esta
Slide 14: Composition of Retail Assets
COMPOSITION OF RETAIL ASSETS Product-wise composition of Retail assets Portfolio JUNE 10 Housing Loans 19.98 Personal Loans Education Loans Auto Loans Other Retail 8.27 9.51 58.94 3.30 14
Slide 15: Assets Restructured
Assets Restructured . Rs. in Crs Nature of Total Upto March 2010 During June – 10 Total Advance Quarter No of Amt. No of Amt. No of Amt. Accts Accts Accts MSME W/w 30008 833.96 7 7.28 30015 841.24 Micro Enterprises 21210 267.40 3 0.05 21213 267.45 Small Enterprises 8703 371.01 3 1.63 8706 372.64 Med
Slide 16: Assets Restructured
Assets Restructured Restructured Accounts Closed / Fully Adjusted (More than Rs. 1.00 crore) Details of Restructured Accounts Accounts Amount (Rs. in cr.) April 09 –March 10 20 237.90 April 10 - June 10 3 32.53 Restructured Accounts turned to NPAs (for more than Rs. 1.00 crore) Details of Restructur
Slide 17: Distribution of Ratings Large & Mid Corporates
Distribution of Ratings Large & Mid Corporates The Bank is having a portfolio of Rs.90227 crore (No. of Accounts 2492) of more than Rs. 5 crore, out of which 496 Accounts with exposure of Rs. 38146 crore are rated. Rating of the Accounts is as under: Rating No of Borrowers Exposure % OF RATED (Rs. i
Slide 18: Investments
60000 52302 54840 10 Investments 50000 Growth in investments and yield 40000 8 on investments were in line with 30000 market trends. 20000 Out of Total AFS portfolio of Rs. 6.4 10000 6.12 6 13511 Cr. Rs. 5585 Cr (41.33%) is Jun-09 Jun-10 interest sensitive. Investments Yield on Inv JUN 09 % Duration
Slide 19: Cost to Income Ratio
COST TO INCOME RATIO 60 • Cost to Income ratio had moderated upto 40.31% as of June 2008 from 49.01 50 peak of 49.01% on implementation of 44.68 41.45 operational efficiency measures. 40.31 40.81 40 • The ratio was among the best in Industry as also among peer banks • The ratio of 41.45% as of June’
Slide 20: Movement of NPAs
Movement of NPAs (Rs.in crore) June 09 Mar 10 June 10 Gross NPAs – Opening 1923 1923 2671 Add : Additions 189 1785 623 Less : Deductions 238 1037 558 1. Due to Write Off 97 513 261 2. Due to upgradation/ Recoveries 141 524 297 Gross NPAs 1874 2671 2736 Gross Credit 96026 121249 124743 Gross NPA as a
Slide 21: Capital Adequacy
Capital Adequacy 16.00 • As per Basel II Capital Adequacy 13.73 14.00 12.66 12.59 Ratio is at 12.59% as of 30th June, 12.22 12.00 2010 as against 13.73% as of June 2009. 10.00 7.95 8.18 7.88 • Tier-I Core Capital Ratio is at 7.88 8.00 7.51 % as of June 2010 6.00 4.71 5.55 • The Bank has received an
Slide 22: Distribution Channels
DISTRIBUTION CHANNELS BRANCH MIX Including The Bank added 26 Hong Kong branch branches and 42 ATMs 604 807 during Q1-11. 664 SERVICE OUTLETS 756 Jun’07 Jun’08 Jun’09 Jun’10 Branches 2235 2373 2638 2831 Metro Urban Semi-Urban Rural Ext. Counters 135 118 110 56 Service 31 35 43 46 branches South Nor
Slide 23: Delivery Channel Reach & Alternate Channel
Delivery Channel Reach & Alternate Channel Branch I- Banking User No. of ATMs 3000 2830 500000 481862 2500 2369 2637 450000 2235 2373 373809 1995 2500 400000 2000 350000 2000 300000 1500 1273 227297 1500 250000 200000 1000 830 1000 150000 100000 51566 500 500 50000 0 0 0 Jun 07 Jun 08 Jun 09 Jun 10
Slide 24: Growth Across Key Parameters
GROWTH ACROSS KEY PARAMETERS Daily ATM Hits Turnover from Cards Daily Outward (lakhs) (Rs. Cr/ month) Electronic 4 50 Remittances 278% 3.5 72% 13430 44% 15000 3 40 2.5 30 10000 2 3.41 20 38.5 1.5 2.37 5000 1 22.4 3550 10 0.5 0 0 0 Jun 2009 Jun 2010 Jun 2009 Jun 2010 Jun 2009 Jun 2010 In the past one
Slide 25: Key Initiatives in Last One Year
3 KEY INITIATIVES IN LAST ONE YEAR MERCHANT ACQUIRING Launched PoS terminals and installed more than 2000 terminals all over the country MOBILE BANKING Over 6000 active Mobile Banking Users performing about 1000 transactions per day Launched SMS based mobile banking to cater to the needs of customer
Slide 26: Shareholding Pattern (30th June, 2010)
Shareholding Pattern (30th June, 2010) 18.45 Govt. of India • Share Capital Rs 505 crore Banks, Fis, Ins. Cos. •No. of Shares 505.12 million Others • Net worth Rs 9358 crore 13.90 FIIs and Foreign Mutual Funds • B. V. per share Rs 185.25 55.43 •Return on Equity: 25.71% 12.22 •Market Cap (30.06.2010)
Slide 27: Increasing Shareholders' Returns (in %)
Increasing Shareholders’ Returns (in %) 30 25.71 1.4 1.26 1.27 1.27 24.70 24.79 1.25 25 23.69 1.2 20 1 0.8 15 0.6 10 0.4 5 0.2 0 0 Mar-08 Mar-09 Mar-10 Jun 10 Mar-08 Mar-09 Mar-10 Jun 10 Return on Equity Return on Avg. Assets Return on Equity Return on Avg. Assets Bank has been consistent in maintai
Slide 28: Increasing Shareholders' Returns (YoY)
200.00 Increasing Shareholders’ Returns (YoY) 185.25 173.38 60 180.00 47.63 160.00 137.87 50 140.00 41.08 111.19 40 34.18 120.00 100.00 30 27.46 80.00 20 60.00 40.00 10 20.00 0 0.00 Mar 08 Mar 09 Mar 10 Jun 10 Mar 08 Mar 09 Mar 10 Jun 10 Earning Per Share BOOK VALUE Book Value Earning per Share 28
Slide 29: Improved Efficiency
IMPROVED EFFICIENCY 1100 1004 Productivity measured 1000 900 805 by Business per 800 664 employee increased 700 552 from Rs. 805 lacs to 600 500 Rs. 1004 lacs. 400 Gross Profit per 300 200 employee has 100 increased from Rs. 0 June 07 June 08 Jun-09 Jun-10 11.31 lacs to Rs.15.12 BUSINESS PER EMP
Slide 30: Business of Hong Kong Branch
BUSINESS OF HONG KONG BRANCH Rs in Crs Business March 10 June 09 June 10 (Growth) % DEPOSITS 370 391 404 3.32 ADVANCES 2977 2018 3885 92.52 TOTAL BUSINESS 3347 2409 4289 78.04 PROFIT 58 16.14 18.19 12.70 30
Slide 31: Why Investing in Union Bank Share is Good Investment
WHY INVESTING IN UNION BANK SHARE IS GOOD INVESTMENT MAR MAR %Growth JUNE %Growth 2007 2010 over 2007 2010 over Mar 2010 SHARE PRICE UNION BANK 104 292 180.76 311 6.50 BANKEX 6542 10652 62.82 10765 1.06 SENSEX 13072 17528 34.09 17701 0.10 Bank’s share price has outperformed the Bankex & Sensex durin
Slide 32: Major highlights of last quarter
Major highlights of last quarter 32
Slide 33: Major Highlights Q1-11
Major Highlights Q1-11 • The Bank was awarded special prize in Banking Technology Awards 2009, instituted by Institute for Development and Research in Banking Technology (IDRBT) for excellence in Banking Technology implementations. The award was given away by Dr. K.C.Chakrabarty, Deputy Governor, Re
Slide 34: Major Highlights Q1-11
Major Highlights Q1-11 • The Bank under tie-up with BSNL launched Bill Payments and Mobile Recharge facilities for BSNL mobile subscribers through Union Bank ATMs and UMobile service. The tie-up was formalised on 22nd July, 2010. • The Bank was awarded two first prizes under Reserve Bank Rajbhasha S
Slide 35: Major Highlights Q1-11
Major Highlights Q1-11 Bank is the only Bank in India to implement Cash@PoS since 31st March’10. 10 such units are installed in Indore and Agra regions. Cash@PoS facilitates cash withdrawals through PoS machines without the need to accompany a purchase transaction. Cash @ Pos or scheme “Union Instan
Slide 36: Road Ahead
) Union Bank ROAD AHEAD
Slide 37: Bank proposes differentiation through following strategies
Bank proposes differentiation through following strategies 1 Customer service excellence: Unique and a standardized customer experience across all channels Wealth management: Offer the best in class wealth management products and services to 2 HNI customers 3 Financial inclusion: Use of innovative t
Slide 38: Guidance 2010-11
Guidance 2010-11 38
Slide 39: Guidance 2010-11
Guidance 2010-11 The Bank aims for a deposits growth of approx. 22% and advances growth of 25% for 2010-11. Bank targets CASA Ratio of 35% by March 2012. Return on Equity to be 25.00% and Return on Average Assets to be 1.25% by March 2011. Transaction through electronic mode to reach 50% of total tr
Slide 40: 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 41: Aim, Act and Achieve
Aim, Act and Achieve Your dreams are not yours alone
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