Performance Highlights - 31 Mar 2016 - United Bank Limited · 2016-04-29 · UBL Performance Overview – Q1’16 5 Provisions are up by Rs. 1.2 bln over Q1’15, reach Rs. 1.96 bln

UBL Performance Overview – Q1’16

Performance Highlights - 31 Mar 2016 Investor Relations Conference Call April 29th, 2016 Speakers: Mr. Asif Saeed Sindhu - Chief Financial Officer Mr. Arif Saifie, CFA - Financial Controller and Head of Investor Relations

Investor Relations Release


Table of Contents

3

7

24

PAGE

Key Highlights

Key Ratios

Execution and Delivery

Quarterly Trend Analysis

22

UBL Performance Overview – Q1’16 3

Key Highlights

Standalone results

Consolidated results

Pre-provisions profit up by 13% over Q1’15 to Rs. 13.2 bln Profit before tax up by 3% to Rs. 11.3 bln Highest ever quarterly profit after tax of Rs. 7.3 bln, up 2% over Q1’15 UBL increased its domestic market share of deposits to 8.95% from 8.60% at Dec’15 Return on equity of 27.4% in Q1’16 (Q1’15: 30.1%) Average balance sheet expansion of 23% over Q1’15 Deposits grew 2% over Dec’15, now stand at Rs. 1.07 trillion Domestic deposits have grown by 3% over Dec’15 Cost of deposits down to 2.79 % in Q1’16 from 3.65% in Q1’15 Revenue growth of 13% over the corresponding period - strong growth in NFI Cost to income ratio is 38.5% for Q1’16 (Q1’15: 37.9%)

Consolidated profit before tax up by 3% over Q1’15, at Rs. 11.8 billion Consolidated profit after tax at Rs. 7.6 billion (Q1’15: Rs. 7.7 billion)


We continue to grow our core revenue streams

Overall cost of deposits reduced by 86 bps to close at 2.79% in the Q1’16 (Q1’15: 3.65%)

Average loan growth of 8% over Q1’15, with yields at 6.4% in Q1’16

Average earning investments grew by 41% over Q1’15 with yields at 9.3% in Q1’16

Fees and Commissions have grown by 10% to reach Rs. 3.2 bln (Q1’15 : Rs. 2.9 bln). Home remittances, Omni and trade major contributors, investment banking fee continues to grow

Dividend income closed at Rs. 0.4 bln (Q1’15: Rs. 0.5 bln)

Capital gains stood at Rs. 3.8 bln (Q1’15: Rs. 1.9 bln , growth of Rs. 1.9 bln). Strong trading performance across the bond portfolio

FX income at Rs. 0.6 bln (Q1’15: Rs. 0.7 bln), as the exchange rate remains relatively stable

Net interest income up 4% over Q1’15, reaches Rs. 13.6 bln

Non interest income reaches Rs. 8.4 bln, up by 34% over Q1’15


Provisions are up by Rs. 1.2 bln over Q1’15, reach Rs. 1.96 bln

Administrative expenses were up by 15% Q1’15, reach Rs. 8.4 bln

Cost to income ratio is at 38.5% in Q1’16, compared with 37.9% in Q1’15.

Personnel costs up by 12% over Q1’15 to close at Rs. 3.3 bln for Q1’16

Premises related expense are up by 5% over Q1’15, primarily due to increases in rent

renewals and related costs

Strong cash recoveries within domestic and international

Overall non performing loans are at Rs. 47.2 bln (Dec’15: Rs. 46.8 bln)

Asset quality is at 9.6% (Dec’15: 9.4%)

Coverage ratio based on specific provision at Mar’16 stands at 79.2% (Dec’15: 80.2%) while the coverage ratio based on total provision at Mar’16 is 91.7% (Dec’15: 88.9%)

Asset quality has key focus as lending remains prudent


Balance sheet continues to grow in Q1’16

Retail Bank remains the cornerstone of balance sheet expansion

Domestic market share grows to 8.95% at Mar’16, up from 8.60% at Dec’15

Domestic deposits grew by 3% over Dec’15, at Rs. 855.9 bln (Dec’15: Rs. 831.9 Bn)

Average domestic current accounts grew by 16% over Q1’15

Domestic cost of deposits fell to 3.0% in Q1’16 against 4.1% in Q1’15

Net Advances are at Rs. 446.9 bln from Rs. 455.4 bln at Dec’15

Corporate loan book closed at Rs. 257.4 bln (Dec’15: Rs. 263.8 bln)

International net advances up by 3% over Dec’15, Bahrain up 14%, Qatar up 2%


Execution and Delivery - Strong earnings growth in Q1’16


25.00

27.00

29.00

31.00

33.00

35.00

37.00

100

120

140

160

180

200

220

UBL's share price KSE 100 Index

Max Q1'16:Rs. 158.45 31 Mar’16: Rs. 151.2228 Apr 2016: Rs. 160.31

50%75% 85%

100%115%

130%

30%

54.8%59.2% 58.2%

65.8% 64.2% 61.9%

50.3%

0%

10%

20%

30%

40%

50%

60%

70%

0%

20%

40%

60%

80%

100%

120%

140%

2010 2011 2012 2013 2014 2015 Q1'16

Cash Stock Dividend Payout Ratio

68 79 92

101

126 142 146

56 65 75 82

103 116 119

2010 2011 2012 2013 2014 2015 Mar'16

Total Equity - St. BV Per share - St.

Rs in bln Cons . Equity Mar’16 - Rs. 160 bln

Cons . Book va lue Mar’16 - Rs. 130.7 per share

8

Consistent earnings performance

Equity and Book Values

Cash and Stock Payout EPS & Price Earnings Ratio *

Trends - KSE 100 Index and UBL’s share price

Dec'08 Dec'09 Dec'10 Dec'11 Dec'12 Dec'13 Dec'14 Dec'15 Q1'16

EPS 8.3 8.3 9.1 12.7 14.7 15.2 17.9 21.0 23.9

PE 4.5 7.1 7.5 4.1 5.7 8.7 9.9 7.4 6.3

0.7

5.6

10.4

15.3

20.1

25.0

2.0

5.6

9.2

12.8

16.4

20.0

* EPS for Q1’16 is annualised


Income Statement - Standalone

9

Rs in bln

Q1'16 Q1'15 Var % Q4'15 Var %

Interest Earned 23.4 22.9 2.2% 24.2 -3.3%

Interest Expensed (9.8) (9.8) -0.4% (9.5) -3.4%

Net Interest Income 13.6 13.1 3.6% 14.7 -7.6%

Non Interest Income 8.4 6.2 34.3% 4.8 72.6%

Total Revenue 21.9 19.3 13.5% 19.5 12.3%

Admin. Expenses (8.4) (7.3) -15.4% (8.6) 1.5%

Operating Expenses (8.7) (7.6) -14.6% (8.8) 0.3%

Pre Prov. Operating Profit 13.2 11.7 12.8% 10.8 22.5%

Provision Exp./Other writeoffs (2.0) (0.8) -144.6% (0.9) -118.8%

Profit Before Tax 11.3 10.9 3.1% 9.9 13.8%

Profit After Tax 7.3 7.1 2.4% 6.5 13.1%

Rs in bln


Income Statement - Consolidated

Rs in bln

Q1'16 Q1'15 Var % Q4'15 Var %

Interest Earned 24.3 23.6 2.6% 25.1 -3.2%

Interest Expensed (10.2) (10.1) -1.2% (9.8) -3.7%

Net Interest Income 14.1 13.6 3.7% 15.2 -7.7%

Non Interest Income 9.2 7.1 29.6% 5.4 71.5%

Total Revenue 23.3 20.7 12.6% 20.6 12.9%

Admin. Expenses (9.2) (8.0) -14.5% (9.5) 2.8%

Operating Expenses (9.5) (8.3) -13.9% (9.6) 1.7%

Pre Prov. Operating Profit 13.8 12.4 11.7% 11.0 25.8%

Provision Exp./Other writeoffs (2.0) (0.8) -135.7% (1.2) -69.5%

Profit Before Tax 11.8 11.5 2.7% 9.8 20.7%

Profit After Tax 7.6 7.7 -1.9% 6.6 15.2%

Rs in bln


Deposits – Bank

Deposits continue to grow over the trillion mark, along-with low cost of deposits

PE CoF % PE CoF %

Domestic deposits - Rs in bln 856 3.0% 832 3.4%

International deposits - Rs in bln 214 2.0% 219 1.9%

Total Bank - Rs in bln 1,070 2.8% 1,051 3.1%

International - USD in mln 2,045 2.0% 2,094 1.9%

Domestic CASA 81.9% 83.6%

Dec'15Mar'16

Cost of Deposits

2.0%

2.8%

3.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

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 Q1'16

Domestic International Bank


Asset quality considerations drive lending strategy

Net Advances

Mar'16 Dec'15 Var %

Corporate Bank 230 221 4%

Commodity 27 43 -36%

Commercial 21 25 -16%

Consumer 9 9 0%

Others 12 13 -7%

Total Domestic 299 310 -4%

International 148 145 3%

Bank 447 455 -2%

International - USD mln 1,419 1,384 3%

Rs in bln

230

221

27

43

21

25

9

9

148

145

12

13

Mar'16

Dec'15

Corporate Bank Commodity Commercial Bank Consumer Bank International Others


International Advances - Corporate loan book remains the largest component

13

By Business - UAE By Geography

UAE, 72%

Bahrain, 12%

Qatar, 10%Yemen, 4% NewYork, 2%

EPZ, 1%

Dubai, 75%

Abu Dhabi, 22% Sharjah,

2%

Corporate,

70%

Consumer,6%

Others, 24%

Baitna, 96%

Personal

loan, 2%

Others, 2%


Concentration of Advances as at March 31, 2016 - Standalone

Energy Sector22%

Agribusiness5%

Individuals9%

Food industries4%

Textile9%

Wholesale traders4%

Construction6%

Financial8%

Telecom3%

Pharmaceuticals2%

Contractors1%

Airline2%

Others 25%


494 431

705 596

1,851

3,835

Mar'15 Mar'16

Capital gains

FX income

Dividend

Rs in bln

130 98

524

487

20

19

29

32

33

30

5

6

48

47

Mar'16 Dec'15

T Bills PIBs

Listed shares GoP Sukuks / Eurobonds

Foreign bonds Mutual funds

Others

Rs in bln

Diversified investment portfolio with strong market risk management

Investments’ yields stable

Non Funded revenue streams continue to grow

Portfolio concentrated in long terms treasury bonds

12.36%

11.78%

10.42%

11.08%

10.36%

9.34%

2011 2012 2013 2014 2015 Mar'16

15


PAKISTAN BRANCHES 1,313

OVERSEAS BRANCHES 18

ASSOCIATED COMPANIES 3

SUBSIDIARIES 4

Our international outreach - serving in 4 continents under the single “UBL” brand

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%

EPZ 0.1%

16


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 Banking (UBL OMNI)

First Bank in the world to issue VISA Debit Cards for G2P assistance to affectees

First Bank to provide Instantaneous ATM/Debit cards to branchless banking customers at the time of account opening (UBL Omni)

First Pakistani Bank to be granted status of Authorized Derivative Dealer (ADD) in Pakistan and First institution from Pakistan and third in South Asia to be accredited with Primary Membership of International Swaps and Derivatives Association

First Bank in Pakistan to offer Prepaid VISA Debit Card

First Bank in Pakistan to offer Verified by Visa Service

First Bank in Pakistan where customer’s inward remittances are deposited automatically on an ATM and VISA enabled debit card (UBL Tezraftaar Pardes Card)

2012 & 2013 Bank of the Year in Pakistan Award, awarded by The Banker Magazine, an affiliate of the Financial Times, UK

Recognized globally in 2013 as one of the 14 “Sprinters” by the GSMA’s Mobile Money for the Unbanked (MMU) program, the only Bank out of the 150 worldwide branchless implementations surveyed

GSMA Global Mobile Award 2012 for “Best Use of Mobile in Emergency or Humanitarian Situations” and Financial Insights Innovation Award for “Innovation in Cash Disbursements (G2P)”

“Pakistani Deal of the Year”, 2012, award from Acquisition International Magazine for the acquisition of majority stake in Khushhali Bank Limited

ASIAMONEY Best Domestic Bank Award for 2011 and 2012

Top 25 Companies award by the Karachi Stock Exchange for 2010 to 2012

Recognized by CFA Pakistan Society for the “Best Investor Relations” function in 2013 and 2014

17


Review of Non Interest Income & Administrative Expenses


Fee income & capital gains drive NFI growth Standalone Results

Q1'16 Q1'15 Var % Q4'15 Var %

Fee, commission and brokerage income 3,175 2,879 10% 3,033 5%

Dividend income 431 494 -13% 794 -46%

Income from dealing in foreign currencies 596 705 -15% 515 16%

Gain / (loss) on sale of securities 3,835 1,851 107% 266 1341%

Other income 323 297 9% 235 38%

Total Non Fund Income 8,360 6,226 34% 4,843 73%

Rs in mln Rs in mln


Fees and Commissions performance in Q1’16 Standalone Results

Q1'16 Q1'15 Var % Q4'15 Var %

Commission on trade 589 399 48% 527 12%

Commission on consumer loan 156 173 -10% 152 3%

Commission on remittance / uniremote 576 490 18% 513 12%

Corporate service chgs/finance fee/FIG inc. 428 270 58% 613 -30%

General banking service charges 488 447 9% 284 72%

Commission on cash management 128 101 26% 135 -5%

Commission on home remittance 244 480 -49% 232 5%

Commission income - Bancassurance 163 174 -7% 230 -29%

Commission others 402 343 17% 346 16%

Total 3,175 2,879 10% 3,033 5%

Rs in mln Rs in mln


Administrative Expenses Standalone Results

Rs in mln

Q1'16 Q1'15 Var % Q4'15 Var %

Personnel Cost 3,307 2,956 -12% 3,129 -6%

Premises Cost 979 930 -5% 988 1%

Outsourced service charges

including sales commission1,240 981 -26% 1,094 -13%

Advertisement and publicity 522 145 -260% 473 -10%

Communications 280 297 6% 278 -1%

Depreciation / Amortization 524 522 0% 538 3%

Legal and professional charges 92 66 -41% 214 57%

Banking service charges 251 248 -1% 281 11%

Stationery and printing 133 133 -1% 148 10%

Travelling 78 64 -22% 86 10%

Cash transportation charges 147 134 -9% 150 2%

Repairs and maintenance 377 411 8% 452 17%

Vehicle expenses 41 44 8% 46 11%

Office running expenses 167 140 -19% 180 7%

Insurance expense 28 9 -226% 58 52%

Others 285 245 -16% 462 38%

Total 8,450 7,325 -15% 8,578 1%

Rs in mln


Key Ratios


Key Financial Ratios

Mar'16 Mar'15

Return on Equity 27.4% 30.1%

Return on Assets 2.1% 2.5%

Non Fund Income to Gross Revenue 38.1% 32.2%

Cost to Revenue Ratio 38.5% 37.9%

Mar'16 Dec'15

Advances to Deposits Ratio 39.5% 41.3%

Asset Quality 9.6% 9.4%

Coverage (Specific provisions) 79.2% 80.2%

Coverage (Total provisions) 91.7% 88.9%

CAR - Tier I 10.4% 10.4%

CAR 14.6% 14.6%

23


Quarterly Trend Analysis March 2016 Bank Level - Standalone


7.2

6.5

7.2

6.0 5.96.4

7.1

8.4

7.8 8.08.3

9.3

10.911.2

10.29.9

11.3


Profit before tax Rs in bln

25


4.9

4.44.7

3.9 4.0

4.34.7

5.7

5.2 5.35.3

6.1

7.1

5.6

6.5 6.5

7.3


Profit after tax Rs in bln

26


614

685653

698 703

752773

828847 858 866

895

945

992 994

1,0511,070


Deposits Rs in bln


Net Advances Rs in bln

345

358 355

364

352

363

369

391

377

408

417

434

420

430

459455

447



13.7 13.2

15.4

13.412.6

13.8

14.1

15.4

14.9

16.3

15.5

17.6

19.3

20.3

18.6

19.5

21.9


Revenue Rs in bln


9.6 9.6 9.9

9.4

8.8 9.0

9.5

10.6

9.8

11.3

11.0

12.813.1

14.2

13.9

14.7

13.6


Net Interest Income Rs in bln


4.1 3.6

5.5

4.03.9

4.8 4.64.9

5.1 5.0

4.5

4.8

6.2 6.2

4.84.8

8.4


Non Funded Income Rs in bln


0.8

0.7

1.9

1.10.5

0.8

0.3

-0.1

0.2

0.9

-0.1

0.2

0.8

1.3

0.7

0.9

2.0


Provisions Rs in bln


5.55.8

6.1 6.2 6.26.5 6.5

6.9 6.97.2 7.1

8.0

7.37.6

7.4

8.6 8.4


Administrative Expenses Rs in bln


The information contained herein reflects our latest business statement as at March 31, 2016. 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 expressions or variations of such expressions may constitute ‘forward-looking statements’. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to our ability to successfully implement our strategy, future levels of non-performing loans, our growth and expansion in business, the impact of any acquisitions, the adequacy of our allowance for credit losses, technological, implementation and changes, the actual growth in demand for banking products and services, investment income, cash flow projections, our exposure to market risks as well as other risks detailed in the reports filed by us with various regulatory authorities as per applicable laws and regulations. UBL undertakes no obligations to update forward-looking statements to reflect event or circumstances after the date thereof.

Important Information


Thank You

Documents

Performance Highlights - 31 Mar 2016 - United Bank Limited · 2016-04-29 · UBL Performance Overview – Q1’16 5 Provisions are up by Rs. 1.2 bln over Q1’15, reach Rs. 1.96 bln