performance highlights - 31 mar 2016 - united bank limited · 2016-04-29 · ubl performance...
TRANSCRIPT
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
UBL Performance Overview – Q1’16
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)
UBL Performance Overview – Q1’16 4
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
UBL Performance Overview – Q1’16 5
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
UBL Performance Overview – Q1’16 6
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%
UBL Performance Overview – Q1’16 7
Execution and Delivery - Strong earnings growth in Q1’16
UBL Performance Overview – 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
UBL Performance Overview – Q1’16
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
UBL Performance Overview – Q1’16 10
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
UBL Performance Overview – Q1’16 11
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
UBL Performance Overview – Q1’16 12
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
UBL Performance Overview – Q1’16
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%
UBL Performance Overview – Q1’16 14
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%
UBL Performance Overview – Q1’16
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
UBL Performance Overview – Q1’16
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 Performance Overview – Q1’16
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
UBL Performance Overview – Q1’16 18
Review of Non Interest Income & Administrative Expenses
UBL Performance Overview – Q1’16 19
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
UBL Performance Overview – Q1’16 20
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
UBL Performance Overview – Q1’16 21
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
UBL Performance Overview – Q1’16 22
Key Ratios
UBL Performance Overview – Q1’16
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
UBL Performance Overview – Q1’16 24
Quarterly Trend Analysis March 2016 Bank Level - Standalone
UBL Performance Overview – Q1’16
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
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
Profit before tax Rs in bln
25
UBL Performance Overview – Q1’16
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
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
Profit after tax Rs in bln
26
UBL Performance Overview – Q1’16 27
614
685653
698 703
752773
828847 858 866
895
945
992 994
1,0511,070
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
Deposits Rs in bln
UBL Performance Overview – Q1’16 28
Net Advances Rs in bln
345
358 355
364
352
363
369
391
377
408
417
434
420
430
459455
447
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
UBL Performance Overview – Q1’16 29
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
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
Revenue Rs in bln
UBL Performance Overview – Q1’16 30
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
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
Net Interest Income Rs in bln
UBL Performance Overview – Q1’16 31
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
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
Non Funded Income Rs in bln
UBL Performance Overview – Q1’16 32
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
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
Provisions Rs in bln
UBL Performance Overview – Q1’16 33
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
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
Administrative Expenses Rs in bln
UBL Performance Overview – Q1’16 34
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
UBL Performance Overview – Q1’16 35
Thank You