performance highlights - 30 sep 2016 · alance sheet size growth of 14% over dec15 retail deposits...

UBL Performance Overview – 9M’16

Performance Highlights - 30 Sep 2016 Investor Relations Conference Call October 20th, 2016 Speakers: Mr. Aameer Karachiwalla - Chief Financial Officer Mr. Arif Saifie, CFA - Financial Controller and Head of Investor Relations

Investor Relations Release

“Top companies of the year” for 2015 Award by Pakistan Stock Exchange

“Innovation Award” by Mastercard Innovation Forum for ‘Launch of UBL MasterPass QR’


Table of Contents

3

7

23

PAGE

Key Highlights

Key Ratios

Execution and Delivery

Quarterly Trend Analysis

21

UBL Performance Overview – 9M’16 3

Key Highlights

Standalone results

Consolidated results

Profit before tax up by 10% to Rs. 35.6 bln Profit after tax up by 11% to Rs. 21.3 bln UBL increased its domestic market share of deposits to 8.79% as at Sep’16 (8.60% as at

Dec’15) Return on equity of 25.9% in 9M’16 (9M’15: 26.1%) Average balance sheet expansion of 19% in 9M’16 vs 9M’15 Domestic deposits have grown by 11% over Dec’15 Revenue growth of 5% over the corresponding period Cost to income ratio is 38.5% for 9M’16 (9M’15: 38.3%) Provision expense down by 50% to Rs. 1.4 bln

Consolidated profit before tax up by 8% over 9M’15, at Rs. 36.5 bln Consolidated profit after tax up by 6% over 9M’15, at Rs. 21.8 bln

Consolidated results Awarded “Top Companies of the Year” Award for 2015 by Pakistan Stock Exchange Awarded “Innovation Award” by Mastercard Innovation Forum – ‘Launch of UBL

MasterPass QR’

Other Updates


Revenue growth of 5% in 9M’16

Overall cost of deposits reduced by 70 bps to close at 2.7% in 9M’16 (9M’15: 3.6%)

Average loan growth of 11% in 9M’16 vs 9M’15, with yields at 6.6% in 9M’16 (9M’15: 8.4%)

Average earning investments grew by 32% in 9M’16 vs 9M’15, with yields at 9.1% in 9M’16 (9M’15: 10.5%)

Fee and Commissions for 9M’16 recorded at Rs. 9.1 bln (9M’15: Rs. 9.2 bln)

Capital gains stood at Rs. 5.2 bln (9M’15: Rs. 3.0 bln)

Dividend income closed at Rs. 2.0 bln (9M’15: Rs. 2.4 bln)

FX income at Rs. 1.4 bln (9M’15: Rs. 1.8 bln), as the exchange rate remains relatively stable in 2016

Net interest income up 5% over 9M’15, reaches Rs. 43.0 bln

Non interest income up by 7% over 9M’15, reaches Rs. 18.4 bln


Provisions down by Rs. 1.4 bln over 9M’15, recorded at Rs. 1.4 bln

Administrative expenses well controlled with 6% growth over 9M’15, reached Rs. 23.7 bln

Personnel costs for 9M’16 at Rs. 9.3 bln, up by 5% (9M’15: Rs. 8.9 bln)

Premises costs remained almost flat with the increase restricted to 2% in 9M’16 vs 9M’15

Variable expenses and sales related commissions up by 11% to reach Rs. 3.6 bln

Advertising and marketing spend has been enhanced with further investment in the

corporate brand

Strong cash recoveries within domestic and international

General provisions of Rs. 0.6 bln (9M’15: Rs. 2.7 bln) taken against the advances portfolio

Impairment charge of Rs. 0.9 bln (9M’15: Rs. 38.4 mln) taken against the investment portfolio

Provisions down by 50%, Effective expense management


Balance sheet size growth of 14% over Dec’15

Retail deposits growth driving balance sheet expansion

Domestic deposits grew by 11% over Dec’15, at Rs. 924 bln (Dec’15: Rs. 832 bln)

Domestic current accounts grew by 16% over Dec’15, Average current account growth of 17% in 9M’16 vs 9M’15

Net Advances stood at Rs. 509 bln, up by 12% from Rs. 455 bln as at Dec’15

Corporate loan book stood at Rs. 224 bln (Dec’15: Rs. 221 bln)

Commodity advances portfolio increased at Sep’16 to Rs. 74 bln (Dec’15: Rs. 43 bln)

International portfolio up by 13% at Sep’16 to Rs. 164 bln (Dec’15: Rs. 145 bln)

Overall NPLs have decreased by Rs. 1.4 bln to Rs. 45.4 bln at Sep’16 (Dec’15: Rs. 46.8 bln)

Asset quality has improved to 8.2% as at Sep’16.(Dec’15: 9.4%)

Coverage ratio based on specific provision at Sep’16 is 81.5% (Dec’15: 80.2%)


Execution and Delivery - Strong earnings growth in 9M’16


25.00

27.00

29.00

31.00

33.00

35.00

37.00

39.00

41.00

43.00

100

120

140

160

180

200

220

UBL's share price KSE 100 Index

Max 9M'16:Rs. 202.56 30 Sep’16: Rs. 198.7819 Oct 2016: Rs. 203.69

50%75% 85%

100%115%

130%

90%

54.8%59.2% 58.2%

65.8% 64.2% 61.9%

51.7%

0%

10%

20%

30%

40%

50%

60%

70%

0%

20%

40%

60%

80%

100%

120%

140%

2010 2011 2012 2013 2014 2015 9M'16

Cash Stock Dividend Payout Ratio

68 79 92 101

126 142

153

56 65 75 82

103 116 125

2010 2011 2012 2013 2014 2015 Sep'16Total Equity - St. BV Per share - St.

Rs in bln Cons . Equity Sep’16 - Rs. 167 blnCons . Book va lue Sep’16 - Rs. 136 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

* EPS for 9M’16 is annualised

Dec'08 Dec'09 Dec'10 Dec'11 Dec'12 Dec'13 Dec'14 Dec'15 9M'16

EPS 8.3 8.3 9.1 12.7 14.7 15.2 17.9 21.0 23.2

PE 4.5 7.1 7.5 4.1 5.7 8.7 9.9 7.4 8.6

0.7

5.6

10.4

15.3

20.1

25.0

2.0

5.6

9.2

12.8

16.4

20.0


Income Statement - Standalone

9

9M'16 9M'15 Var % Q3'16 Q2'16 Var %

Interest Earned 73.4 70.1 4.6% 23.8 26.1 -8.7%

Interest Expensed (30.4) (29.0) -4.7% (10.2) (10.4) 1.9%

Net Interest Income 43.0 41.1 4.5% 13.7 15.7 -13.2%

Non Interest Income 18.4 17.1 7.4% 4.5 5.6 -20.2%

Total Revenue 61.4 58.3 5.4% 18.1 21.3 -15.0%

Admin. Expenses (23.7) (22.3) -6.0% (7.4) (7.8) 6.0%

Operating Expenses (24.4) (23.2) -5.4% (7.6) (8.1) 6.2%

Pre Prov. Operating Profit 37.0 35.1 5.4% 10.5 13.2 -20.5%

Provision Exp./Other writeoffs (1.4) (2.8) 50.1% 0.3 0.3 0.3%

Profit Before Tax 35.6 32.3 10.2% 10.8 13.5 -20.0%

Profit After Tax 21.3 19.3 10.6% 7.0 7.0 0.2%

Rs in bln Rs in bln


Income Statement - Consolidated

9M'16 9M'15 Var % Q3'16 Q2'16 Var %

Interest Earned 75.9 72.5 4.7% 24.5 27.1 -9.4%

Interest Expensed (31.5) (29.9) -5.4% (10.5) (10.8) 3.1%

Net Interest Income 44.4 42.6 4.2% 14.1 16.3 -13.6%

Non Interest Income 20.4 19.2 6.2% 5.1 6.1 -17.3%

Total Revenue 64.8 61.8 4.8% 19.1 22.4 -14.6%

Admin. Expenses (26.0) (24.5) -6.0% (8.2) (8.7) 5.9%

Operating Expenses (26.8) (25.4) -5.4% (8.4) (8.9) 6.0%

Pre Prov. Operating Profit 38.0 36.4 4.4% 10.7 13.5 -20.4%

Provision Exp./Other writeoffs (1.5) (2.7) 44.3% 0.3 0.2 48.1%

Profit Before Tax 36.5 33.6 8.4% 11.0 13.6 -19.5%

Profit After Tax 21.8 20.4 6.4% 7.2 7.0 1.6%

Rs in bln Rs in bln


Deposits – Bank

Deposits growth with enhanced market share - Focus remain of low cost deposits

PE CoF % PE CoF %

Domestic deposits - Rs in bln 924 2.9% 832 3.4%

International deposits - Rs in bln 223 2.0% 219 1.9%

Total Bank - Rs in bln 1,147 2.7% 1,051 3.1%

International - USD in mln 2,136 2.0% 2,094 1.9%

Domestic CASA 82.2% 83.6%

Dec'15Sep'16

Cost of Deposits

2.7%

2.0%

2.9%

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 Q2'16 Q3'16

Domestic International Bank


Advances portfolio registers 12% growth over Dec’15

Net Advances

Sep'16 Dec'15 Var %

Corporate Bank 224 221 2%

Commodity 74 43 71%

Commercial 24 25 -4%

Consumer 9 9 5%

Others 14 13 12%

Total Domestic 345 310 11%

International 164 145 13%

Bank 509 455 12%

International USD mln 1,569 1,384 13%

Rs in bln

224

221

74

43

24

25

9

9

164

145

14

13

Sep'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

Dubai, 74%

Abu Dhabi,

23% Sharjah,

3%

Corporate,

68%

Consumer,

5%

Others, 27%

Baitna, 96%

Personal

loan, 2%

Others, 2%

UAE, 69%

Bahrain, 11%

Qatar, 13% Yemen, 3% NewYork, 4%

EPZ, 0%


2,411 2,027

1,756 1,394

2,971 5,156

9M'15 9M'16

Capital gains

FX income

Dividend

Rs in mln

Diversified investment portfolio with strong market risk management

Investments’ yields

Non Funded revenue streams continue to grow

Portfolio concentrated in long terms treasury bonds

10.42%

11.08%

10.36%

9.15%

2013 2014 2015 9M'16

14

144 98

572

487

18

19

27

32

34

30

5

6 47

Sep'16 Dec'15

T Bills PIBs

Listed shares GoP Sukuks / Eurobonds

Foreign bonds Mutual funds

Others

Rs in bln


PAKISTAN BRANCHES 1,319

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%

15


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)

Awarded “Innovation Award” by Mastercard Innovation Forum for ‘Launch of UBL MasterPass QR’

Declared the “Best Bank” in the first ever Pakistan Banking Awards in 2016

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 and 2015

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

16


Review of Non Interest Income & Administrative Expenses


Non Fund Income Standalone Results

9M'16 9M'15 Var %

Fee, commission and brokerage income 9,145 9,170 0%

Dividend income 2,027 2,411 -16%

Income from dealing in foreign currencies 1,394 1,756 -21%

Gain / (loss) on sale of securities 5,156 2,971 74%

Other income 696 835 -17%

Total Non Fund Income 18,417 17,144 7%

Rs in mln


Fees and Commissions performance in 9M’16 Standalone Results

9M'16 9M'15 Var %

Commission on trade 1,526 1,277 19%

Commission on consumer loan 547 579 -6%

Commission on remittance / uniremote 1,629 1,588 3%

Corporate service chgs/finance fee/FIG inc. 1,376 1,164 18%

General banking service charges 1,513 1,456 4%

Commission on cash management 397 355 12%

Commission on home remittance 728 1,222 -40%

Commission income - Bancassurance 411 478 -14%

Commission others 1,019 1,052 -3%

Total 9,145 9,170 0%

Rs in mln


Administrative Expenses Standalone Results

9M'16 9M'15 Var %

Personnel Cost 9,325 8,885 -5%

Premises Cost 3,057 2,996 -2%

Outsourced service charges

including sales commission3,586 3,226 -11%

Advertisement and publicity 367 350 -5%

Communications 846 870 3%

Depreciation / Amortization 1,560 1,596 2%

Legal and professional charges 291 210 -39%

Banking service charges 787 720 -9%

Stationery and printing 438 444 1%

Travelling 184 193 5%

Cash transportation charges 467 428 -9%

Repairs and maintenance 1,101 1,155 5%

Vehicle expenses 132 133 1%

Office running expenses 561 456 -23%

Insurance expense 84 50 -67%

Others 878 609 -44%

Total 23,666 22,318 -6%

Rs in mln


Key Ratios


Key Financial Ratios

22

9M'16 9M'15 Q3'16 Q2'16

Return on Equity 25.9% 26.1% 24.8% 25.7%

Return on Assets 1.9% 2.1% 1.8% 1.9%

Non Fund Income to Gross Revenue 30.0% 29.4% 24.6% 26.2%

Cost to Revenue Ratio 38.5% 38.3% 40.7% 36.8%

Sep'16 Jun'16 Dec'15 Sep'15

Advances to Deposits Ratio 42.3% 41.6% 41.3% 44.0%

Asset Quality 8.2% 8.7% 9.4% 10.6%

Coverage (Specific provisions) 81.5% 80.6% 80.2% 82.6%

Coverage (Total provisions) 91.6% 90.3% 88.9% 89.8%

CAR - Tier I 10.8% 10.3% 10.4% 10.4%

CAR 15.1% 14.5% 14.6% 14.9%


Quarterly Trend Analysis Bank Level - Standalone


7.26.5

7.2

6.0 5.96.4

7.1

8.47.8 8.0 8.3

9.3

10.9 11.2

10.29.9

11.3

13.5

10.8


+14%

+20%-20%

Profit before tax Rs in bln

24


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

7.37.0 7.0


-4%

+13%

+0%

Profit after tax Rs in bln

25


614

685653

698 703

752773

828847 858 866

895945

992 994

1,0511,070

1,142 1,147


+2%

+7%

+0%

Deposits Rs in bln


Net Advances Rs in bln

345

358 355364

352363

369

391

377

408417

434

420

430

459 455447

496

509


+2%

-2%

+11%


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

21.3

18.1


+12%

-3%

-15%

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

15.7

13.7


-8%

+16%

-13%

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

5.6

4.5


+73%

-33%

-20%

Non Funded Income Rs in bln


0.8

0.7

1.9

1.1 0.5

0.8

0.3

-0.1

0.2

0.9

-0.1

0.2

0.8

1.3

0.7

0.9

2.0

-0.3 -0.3


+119%

-114%

-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

7.8

7.4


-1%

-7%

-6%

Administrative Expenses Rs in bln


The information contained herein reflects our latest business statement as at September 30, 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

performance highlights - 30 sep 2016 · alance sheet size growth of 14% over dec15 retail deposits...

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