1Q 12 Results - United Bank Limited

United Bank Limited
Performance Review
March 2012
April 26, 2012
Abu Dhabi
1
Key Highlights
• Standalone PAT up 49% YoY to Rs 4.9 Bn. Consolidated PAT up 43% YoY to Rs
4.9 Bn
• Net interest income up by 5% to Rs 9.6 Bn YoY
o NIM reduced by 45 bps to 6.7% YoY due to the lower rate environment
o Yield on earning assets reduced by 76 bps YoY
o Cost of funds reduced by 31 bps YoY
• Non markup income up 35% to Rs 4.1 Bn YoY
o Core banking fees increased by 17% to Rs 1.9 Bn mainly due to higher
corporate service charges, FI commissions, increased income on remittances
and improved general banking service charges.
o Capital gains more than doubled to Rs 415 Mn YoY, primarily due to gains on
equity securities
o Dividend income grew by Rs
investments in mutual funds.
0.7 Bn mainly emanating from increased
2
Key Highlights
• Provisions down by 67% YoY to Rs 0.8 Bn
o NCL ratio improved by 195 bps YoY to 0.9% in Q1’12
• Administrative expenses up by 17% YoY mainly due to the full impact of an
additional 108 branches and certain one offs.
Excluding this impact,
administrative expenses increased by 11% YoY
• Net advances increased by 6% to Rs 345 Bn in Mar’12
• Domestic deposits maintained at Dec ‘11 levels for the first time
o Domestic CASA stands at 79% in Mar’12 vs 80% in Dec’11
• Total CAR reduced from 14.3% in Dec ‘11 to 13.2% in Mar’ 12 due to the dividend
payout. Tier I CAR reduced from 10.5% in Dec ‘11 to 9.5% in Mar’12
• ROE improved from 23.7% in FY’11 to 28.1% in Q1’12
3
Income Statement (Standalone)
PKR Bn
Q1'12
Q1'11
Interest Earned
17.70
16.71
6%
17.92
-1%
Interest Expensed
(8.10)
(7.55)
-7%
(8.13)
0%
9.60
9.16
5%
9.79
-2%
Non Interest Income
4.09
3.03
35%
3.78
8%
Total Revenue
13.69
12.18
12%
13.57
1%
(5.53)
(4.71) -17%
(5.03) -10%
(5.70)
(4.84) -18%
(5.10) -12%
Net Interest Income
Admin. Expenses
Operating Expenses
Var %
Q4'11
Var %
Pre Prov. Operating Profit
7.99
7.35
9%
8.48
-6%
Provision Exp./Other writeoffs
(0.76)
(2.33)
67%
(1.01)
24%
Profit Before Tax
7.23
5.01
44%
7.47
-3%
Profit After Tax
4.87
3.27
49%
4.55
7%
4
Income Statement - Consolidated
PKR Bn
Q1'12
Q1'11
Var %
Q4'11
Var %
Interest Earned
18.01
16.92
6%
18.18
-1%
Interest Expensed
(8.21)
(7.60)
-8%
(8.27)
1%
9.80
9.32
5%
9.91
-1%
Non Interest Income
4.37
3.35
31%
3.73
17%
Total Revenue
14.18
12.67
12%
13.64
4%
(5.99)
(5.07)
-18%
(5.34)
-12%
(6.17)
(5.20) -19%
Net Interest Income
Admin. Expenses
Operating Expenses
(5.41) -14%
Pre Prov. Operating Profit
8.01
7.48
7%
8.23
-3%
Provision Exp./Other writeoffs
(0.76)
(2.34)
67%
(1.01)
24%
Profit Before Tax
7.24
5.14
41%
7.23
0%
Profit After Tax
4.86
3.40
43%
4.29
13%
5
Share Info
Standalone
Consolidated
Mar 2012 Dec 2011 Mar 2012 Dec 2011
EPS (Rs/share-annual.)
15.9
12.7
15.9
12.1
BV/share (Rs/share)
63.2
64.7
69.2
70.2
Price* - (Rs /share)
84.6
76.7
84.6
76.7
P/E
5.3x
6.1x
5.3x
6.3x
P/BV
1.3x
1.2x
1.2x
1.1x
1,224M
1,224M
1,224M
1,224M
# of shares
* Mar-12 Pric e dat e d April 27, 2012 & De c -11 Pric e dat e d Marc h 31, 2012
Dividend Payout as a % of par value of shares
25%
30%
75%
10%
10%
25%
25%
50%
10%
2007
2008
2009
Cash
2010
Stock
2011
Mar'12
6
Key Ratios - Bank
Balance Sheet Ratios
Adva nces / Depos i ts
As s et Qua l i ty
Covera ge
Financial Ratios
Yi el d on P. Adva nces
Dec-11
Mar'12
56%
60%
14.2%
15.6%
80%
70%
Q1'12
Q1'11
Q4 11
12.1%
13.2%
13.0%
Cos t of Depos i ts
4.3%
4.3%
4.2%
Net Interes t Ma rgi n
6.7%
7.1%
7.0%
NCL Ra tio
0.9%
2.9%
0.8%
Return on Avg As s ets
2.45%
1.93%
2.40%
Return on Sha rehol ders ' Equi ty
28.1%
22.4%
26.5%
P/L Ratios
Cos t to Income Ra tio
Non Fund Inc. / Tota l Revenue
Q1'12
Q1'11
Q4 11
40.4%
38.6%
37.0%
30%
25%
28%
7
Deposits Structure (Bank level)
Cost of Deposits
Deposits - Bank
Cost of Deposits
Dec'11
6.4%
Bank
PE Rs.Bn
5.3%
4.2%
3.1%
2.0%
Mar'12
COF%
PE Rs.Bn
COF%
Domestic deposits
495
4.8%
493
4.7%
International deposits
118
2.3%
121
2.9%
Total Bank
613
4.3%
614
4.3%
1,313
2.3%
1,337
2.9%
International $
Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12
Domestic
International
Bank
Domestic CASA
80%
79%
• Deposits have marginally grown from Rs 613 bn as at 31
Dec 11 to Rs 614 bn as at 31 Mar 12.
• The bank has been able to reduce its domestic cost of
deposits by 13 bps QoQ to 4.7% in Mar’12.
• Average deposits increased by 14% YoY, whilst they grew by
9% as compared to the previous quarter.
• SBP in its MPS for Apr’12 has increased the minimum
return on PLS saving deposits to 6%. This is going to
increase the bank’s cost of deposits.
• Domestic market share of deposits stands at 8.3% as on 31st
March 2012.
8
Net Advances
Net Advances - Rs. Bn
Dec'11
Mar'12
%
Change
Corporate Bank
155.2
180.9
+17%
Commercial **
69.0
64.4
-7%
Consumer
11.3
10.4
-8%
6.0
6.3
4%
241.4
262.0
9%
83.9
83.5
-1%
325.3
345.4
6%
15.8
14.9
-6%
Bank - Consolidated
341.1
360.3
6%
International US$ Mn
933.0
921.0
-1%
Others
Total Domestic
International
Bank
Subsidiaries
** of which commodity advances of Rs. 44Bn (Dec'11: 46Bn)
Dec'10
181
185
Dec'11
Mar'12
149 155
Rs Bn
148
111
81
74
69
82
84
83
64
37
16
11
15
10
22
21
Corporate Bank
Commercial Bank
Consumer Bank
International
Others (incl
subsidiaries)
9
International Advances
10
Spread Analysis – Bank Level
Bank
Rs Bn
Q1 2012
PE
AVG
Q1 2011
IE
Net Interest Margin (a-b)
Spread (A-B)
PE
AVG
IE
11.9%
Avg KIBOR - 3M
Interest Earning Assets
Performing Advances
Corporate
Commercial
Commodity
Consumer
International
Others
Investments (earning)
Corporate Bonds (TFC)
Lending to Financial Institutions
Others
Total int. earning assets (a)
Non int. earning assets
Total Assets (A)
Interest bearing liabilities
Total deposits
Low Cost Deposits
Expensive Deposits
Subordinated Debts - TFC
Swap cost (net)
Borrowings
Total interest bearing liab (b)
Non int. b earing liab ilities & equity
Total Liabilities+Equity (B)
Avg.Yiel
d /Cost
Avg.Yiel
d /Cost
13.6%
310
157
19
44
10
81
0
299
4
16
16
645
173
818
299
146
20
45
10
78
0
277
4
13
21
614
159
773
9.0
4.8
0.7
1.6
0.5
1.4
0.0
8.2
0.1
0.2
0.2
17.7
0.1
17.7
12.1%
13.2%
14.3%
14.7%
18.1%
7.1%
12.8%
11.9%
14.2%
4.9%
3.6%
11.6%
0.2%
9.2%
305
144
20
46
13
81
1
185
29
13
18
550
127
677
297
132
21
50
13
80
1
191
27
11
23
549
128
677
9.7
4.7
0.8
2.0
0.6
1.5
0.0
5.6
1.1
0.2
0.1
16.7
0.0
16.7
13.2%
14.5%
15.5%
16.3%
18.6%
7.6%
8.3%
11.9%
16.0%
7.4%
2.4%
12.3%
0.1%
10.0%
614
375
239
10
83
707
111
818
-
611
365
246
11
46
667
106
773
-
(6.6)
(1.5)
(5.1)
(0.3)
(0.2)
(1.0)
(8.1)
(8.1)
9.6
4.3%
1.6%
8.3%
12.6%
0.0%
9.1%
4.9%
0.0%
4.2%
6.7%
5.0%
529
327
202
12
44
585
92
677
-
535
320
215
12
41
588
89
677
-
(5.7)
(1.3)
(4.3)
(0.4)
(0.5)
(1.0)
(7.5)
(7.5)
9.2
4.3%
1.7%
8.2%
12.5%
0.0%
10.3%
5.2%
0.0%
4.5%
7.1%
5.5%
11
Concentration of Advances - Standalone
Airlines, 1%
Trading,
3%
Telecom, 2%
Agribusiness, 11%
Automobile & Trans.
Equip., 1%
Cement, 1%
Textile, 16%
Chemical and
pharmaceuticals, 2%
Contractor /
Constructor, 6%
Fertilizer dealers, 2%
Sugar, 3%
Financials, 3%
Prod. & Transmission
Energy, 18%
Food, 4%
Others, 14%
Individuals, 13%
12
Non Markup / Return / Interest Income
Non Fund Income - Rs. Mn
Fee, commission and brokerage income
Q1'12
1,866
Q1'11
1,599
Var %
17%
Q4'11
1,958
Var %
-5%
Dividend income
810
101
701%
357
127%
Income from dealing in foreign currencies
568
749
-24%
561
1%
Gain / (loss) on sale of securities
415
180
130%
175
137%
Other income
434
397
10%
730
-41%
4,094
3,026
35%
3,781
8%
Total Non Fund Income
13
Fee Commission and Brokerage Income
Fee Commission Income - Rs. Mn
Q1'12
Q1'11
Var %
Q4'11
Var %
Commission on trade
430
406
6%
407
6%
Commission on consumer loan
217
231
-6%
299
-28%
Commission on remittance / uniremote
246
225
9%
211
16%
Corporate service chgs/Finance fee/FI inc.
287
178
62%
314
-8%
Commission on ATM / utility / cheque books
234
153
52%
232
1%
53
83
-36%
66
-21%
Commission on home remittance
155
89
74%
142
9%
Commission on cash management
63
54
17%
65
-3%
Commission income - Bancassurance
56
44
28%
67
-16%
126
137
-8%
154
-18%
1,866
1,599
17%
1,958
-5%
Minimum balance charges
Commission others
Total
14
Administrative Expenses
Rs. Mn
Q1'12
Q1'11
Var %
Q4'11
Var %
2,429
2,084
-17%
2,251
-8%
Premises cost
Outsourced service charges
including sales commission
Advertisement and publicity
764
729
-5%
519
-47%
468
341
-38%
496
6%
134
128
-4%
169
21%
Communications
220
198
-11%
218
-1%
Depreciation
346
301
-15%
333
-4%
71
38
-90%
59
-21%
Banking service charges
197
169
-16%
167
-18%
Stationery and printing
102
99
-3%
110
7%
Travelling
62
60
-5%
66
6%
Cash transportation charges
83
76
-10%
80
-4%
Repairs and maintenance
41
43
6%
64
37%
227
137
-66%
158
-44%
Vehicle expenses
45
34
-32%
42
-7%
Office running expenses
97
88
-10%
53
-81%
240
183
-31%
239
0%
5,526
4,708
-17%
5,027
-10%
Personnel cost
Legal and professional charges
Maintenance contracts
Others
Total
15
E-banking Statistics
E-Banking
# of ATMs
Mar'12
Mar'11 % Change
2011
2010
484
462
5%
476
436
# of Transactions (Mn)
6.2
4.5
38%
19.5
16.4
Average transactions per day
68k
50k
36%
53k
45k
Total transaction amount (Rs Bn)
48
28
70%
125
101
Average transaction size (Rs 000)
7.8
6.3
24%
6.4
6.1
Average monthly trans.per ATM (Rs Mn)
33
21
62%
22
19
94,298
85,026
11%
93,102
82,082
249
192
30%
884
615
Total transaction amount (Rs 000)
40,989
23,080
78%
133,521
67,895
Average transaction size (Rs 000)
164
120
37%
151
110
35,363
33,128
7%
34,783
32,607
Total # of transactions (000)
17
18
-2%
73
76
Total transaction amount (US$ Mn)
13
14
-5%
57
58
751
773
-3%
773
767
Internet Banking
Users
Total # of transactions (000)
Click N Remit
Users
Average transaction size (US$)
16
Financial ratios – Consolidated (1/3)
DuPont
Full Year
2008
2009
2010
Q T D ( A n n u a liz e d )
2011
Dec-11
Mar-12
Spread (St) 1
5.1%
5.5%
5.5%
5.6%
5.3%
5.0%
Net Interest Margin (St) 2
6.1%
6.9%
7.0%
7.2%
6.9%
6.7%
Non Interest Yield 3
1.9%
2.1%
1.6%
1.7%
1.9%
2.1%
2.9% 2.8% 2.8% 2.8%
42.1% 38.5% 41.7% 40.1%
2.7%
39.1%
2.9%
42.3%
0.9%
0.3%
0.4%
1.2% 2.4% 1.5% 1.2%
39.9% 34.2% 37.7% 37.0%
0.4%
40.7%
0.5%
32.9%
Admin Exp./Avg Assets
Cost Income Ratio
Loan Loss / Assets
Loan Loss / RWA 4
Effective Tax Rate
1.0%
1.9%
1.1%
Pre-Provision ROA 5
2.3%
2.9%
2.4%
2.5%
2.4%
2.6%
ROA
1.4%
1.5%
1.6%
1.9%
2.2%
2.3%
Return on RWA
Pre-Provision ROE 6
1.8%
2.0%
2.1%
2.7%
3.1%
3.2%
31.3% 34.9% 26.0% 27.6%
19.7% 18.0% 17.7% 20.9%
26.5%
23.3%
28.5%
25.8%
ROE
Formulas
1. Net interest income / average assets
4. Risk weighted assets
2. Net interest income / average earning assets 5. Return on avg. assets (before net provisions)
3. Non interest income / average assets
6. Return on average equity (before net provisions)
17
Financial ratios – Consolidated (2/3)
Asset Quality
2008
QTD
( A n n u a liz e d )
Full Year
2009
2010
2011
Dec-11
Mar-12
Gross NPLs / Gross Loan
7.2%
10.3%
12.9%
13.4%
13.4%
14.9%
Net NPLs / Gross Loan
2.2%
3.0%
3.6%
2.7%
2.7%
4.5%
69.3%
70.9%
71.9%
80.1%
80.1%
69.8%
5.0%
1.9%
7.3%
3.3%
8.9%
2.2%
10.5%
2.1%
10.5%
1.0%
10.1%
0.9%
Coverage Ratio
Prov. held / Gross loan
Net Credit Loss ratio
Growth
Full Year
2008
2009
2010
QTD
2011
Dec-11
Mar-12
Growth in Loan Book
22.6%
-4.3%
-5.7%
-0.1%
0.9%
5.6%
Growth in Deposits
19.6%
2.3%
12.7%
11.7%
10.0%
0.4%
Operating Revenue
Operating Expense
14.0%
17.0%
16.6%
6.7%
-1.4%
6.6%
16.3%
12.0%
-0.3%
-1.1%
3.9%
12.1%
Pre-provision Oper.Profit
11.9%
23.8%
-7.2%
20.3%
2.1%
-2.8%
Provision exp.+ Other prov. 23.5%
64.5% -39.2%
-8.5%
Profit After Tax
12.3%
35.1%
-8.6%
16.1%
-37.2% -24.0%
2.4%
13.4%
18
Financial ratios – Consolidated (3/3)
Other Metrics
Capital Adequacy Ratio
2008
Yearly
2009 2010
Q T D ( A n n u a liz e d )
2011
Mar-12
14.9%
13.7%
9.5% 10.4% 10.6%
10.6%
9.6%
Loan / Deposits
77.3% 73.7% 62.8% 57.5%
57.5%
60.7%
Loan / Assets
RWA / Assets
Average Headcount 2
58.3% 53.7% 47.1% 42.3%
77.0% 75.9% 72.7% 72.9%
42.3%
72.9%
42.4%
73.6%
9,192
8,639
8,474
8,655
8,652
8,785
736.4
863.9
879.3
988.9
1,038.8
1,104.4
Yield on Earning Assets (St) 3 11.0% 12.3% 11.7% 12.3%
12.1%
11.6%
5.1%
5.1%
4.9%
12.3% 13.4% 12.4% 12.9%
4.3% 4.8% 4.0% 4.3%
12.8%
4.2%
12.1%
4.3%
Tier-I CAR
Personnel cost (St) /
Headcount (000)
Cost of Funds (St)4
Yield on Performing Adv (St)
Cost of Deposits (St)
10.4% 14.0% 15.0% 14.9%
Dec-11
6.1%
4.9%
5.4%
4.7%
Formulas
2. Permanent Staff
3. Earning assets incl bal.with other banks, lending to F.I., investments & perf adv
4. Funds includes deposits, borrowings & sub-ordinated loans
19
Quarterly Trend Analysis
Bank Level
20
Profit before Tax
8.5
7.5
7.3
6.5
Rs Bn
6.1
4.9
3.7
7.2
5.2
5.0
4.8
4.4
4.1 4.3 4.3
4.0
2.8
3.2
2.5
Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12
21
Profit after Tax
5.5
4.9
4.5
4.7
4.2
Rs Bn
3.9
3.1
2.3
2.9
2.8 2.8
2.5
3.1
3.3
3.4
2.4
2.1
1.8
1.5
Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12
22
Deposits
650
613 614
594
600
557
551
529
Rs Bn
550
509
500 491
492
500
469
452
451
450
400
Mar 09 Jun'09 Sep'09 Dec'09 Mar'10 Jun'10 Sep'10 Dec'10 Mar'11 Jun'11 Sep'11 Dec'11 Mar'12
23
Net Advances
380
364
368
355
Rs Bn
355
347 349
343
330
340
339
327
330 329 329 329
321 320
318
Mar 09 Jun'09 Sep'09 Dec'09 Mar'10 Jun'10 Sep'10 Dec'10 Mar'11 Jun'11 Sep'11 Dec'11 Mar'12
24
Net Interest Income
11.0
10.2
9.8
10.2
Rs Bn
8.1
8.2
9.6
9.1 9.2
9.1
9.4
8.6
10.3
8.2 8.4
8.6
7.8
7.8
7.0
Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12
25
Total Provision
6.0
4.7
4.8
3.6
Rs Bn
3.6
2.8
2.2
2.4
2.1
1.9
2.1 1.9
2.3
2.6
1.6
1.0
1.2
0.8
Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12
26
Non Fund Income
5.0
4.1
3.8
4.2
4.0
Rs Bn
3.4
2.6
2.2
3.2
2.4 2.4
2.6
2.8
3.0 2.9 3.0
2.0
1.8
1.0
Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12
27
Gross Revenue
14.5
13.0
Rs Bn
13.5
12.2
12.5
11.9
12.2
11.2
11.5
10.5
13.4
13.6 13.7
11.8
10.3
10.3
10.6 10.7
9.5
Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12
28
Administrative Expenses
5.8
5.5
Rs Bn
5.4
5.0
5.0
4.7
4.6
4.2
5.0 5.0
4.9
4.2 4.2
4.0
4.4 4.5
4.4
4.1
3.8
Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12
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The information contained herein reflects our latest business statement as at
March 31, 2012
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.
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Thank You
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