H1 2019 Results Presentation July 2019 1 1 Disclaimer laimer - PowerPoint PPT Presentation

H1 2019 Results Presentation July 2019 1 1

Disclaimer laimer This presentation contains or incorporates by reference ‘forward -looking statements’ regarding the belief or current expectations of Union Bank Plc, the Directors and other members of its senior management about the Group’s businesses and the transactions described in this presentation. Generally, words such as ‘‘could’’, ‘‘will’’, ‘‘expect’’, ‘‘intend’’, ‘‘anticipate’’, ‘‘believe’’, ‘‘plan’’, ‘‘seek’’ or similar expressions identify forward-looking statements. These forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Company and/or its Group and are difficult to predict, that may cause actual results to differ materially from any future results or developments expressed or implied from the forward-looking statements. Such risks and uncertainties include, but are not limited to, regulatory developments, competitive conditions, technological developments and general economic conditions. The Bank assumes no responsibility to update any of the forward looking statements contained in this presentation. Any forward-looking statement contained in this presentation based on past or current trends and/or activities of Union Bank should not be taken as a representation that such trends or activities will continue in the future. No statement in this presentation is intended to be a profit forecast or to imply that the earnings of the Company for the current year or future years will necessarily match or exceed the historical or published earnings of the Company. Each forward-looking statement speaks only as of the date of the particular statement. Union Bank expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward- looking statements contained herein to reflect any change in Union Bank’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. 2

1 2 3 4 The Union H1’19 Looking Operating Bank Financial Ahead Environment Update Performance 3

1 The Operating Environment 4

Macroec econ onomic omic Update tes GDP NIBOR NIBOR overnight Rate is at 5% (Mar ’19 – 11.4%) GDP grew by 2.01%(year-on-year), in real terms, in Q1 2019 (1.89% in Q1 2018). Inflation Oil Price Inflation rate down to 11.22% in June 2019. (Mar ’19 – Bonny light is currently trading at $66.7/barrel (Mar ’19 - $68.66) 11.25%) Reserves Oil Production Nigeria’s external reserves at $45.1billion (Mar ‘19 - Oil Production is at 1.85mbd ( Mar ’19 – 1.64mbd) $44.4 billion) Money Supply Exchange Rate Parallel market rate flat at N360/$ (vs Mar ‘19) , I&E FX Money Supply was N27.8tn in June 2019 . (Mar ’19 - N26.8tn) rate averaged at N360.59 . Monetary Policy Rate Credit To The Private Sector Credit to the private sector is at N24.9tn (Mar ’19 – N23.9tn) Monetary Policy Rate was maintained at 13.50% (vs Mar ’19) . 5 Sources Thisday, Businessday, NBS, FMDQ, CBN, OPEC Monthly Oil Report, AbokiFX , UBN research 1. Q2 2019 Growth 2. as at May’19 3. As at 12 Jul 2019

2 Union Bank Update 6

Our Ambition tions s & P Prior orities ities Ambitions 2019 Priorities 1 Digital & Automation Growth Nigeria’s Most Reliable and Trusted Banking Partner Portfolio Diversification 2 Leader in Retail and Operational Efficiency Transaction Banking Ecosystems for Value Chain & Growth 3 Leader in Citizenship, Enabling Nigeria’s success: Sustainability and Education, Technology, Innovation Women, SMEs 7

Union n Bank at a G Glan ance ce as at June 2019 19 Our People Assets / Equity Awards ₦ 239bn Total Equity 4.9m Customers Best Branch Digitisation Initiative, Total Assets ₦ 1.7tn Application or Programme in West 2,500 Employees Africa - The Asian Banker Award (2019) Our Channels Ratings Advertiser of the Year and Recipient of the Bronze award for Integrated Marketing Campaign 1,009 ATM A- (Stable Outlook) - Pitcher Awards (2019) B3 (Stable Outlook) Debit Cards 4.1m Excellence in Banking Innovation B- (Stable Outlook) - New Age Banking Awards (2018) POS Terminals 6.7k BBB+ (Stable Outlook) Best Company in Environmental Excellence and Most Outstanding 616k Online Banking Company in CSR/Sustainability - Sustainability, Enterprise and Social Engagement Responsibility Awards (SERAs) 1.7m Mobile Banking (2018) Branches / Cash 151k 822k 295 The Fastest Growing Retail Bank Centers - International Finance Magazine 60k 29k (2017) 8

Growth th Driven en By Digita tal l Evolut olution on +28% +12% +10% Gross Loans ( N’bn ) Deposits ( N’bn ) Customers (millions) 889 858 561 563 4.9 802 536 520 4.5 658 3.6 570 389 3.2 1.8 2018 H1’ 19 2018 H1’ 19 H1’ 19 2015 2016 2017 2015 2016 2017 2015 2016 2017 2018 +111% Active Online Banking Active Debit Cards +95% +37% Active Mobile Banking Customers (thousands) (millions) Customers (millions) 616 1.7 4.1 3.5 1.3 452 3 1.0 253 1.72 1.16 0.4 66 0.1 43 H1’ 19 H1’ 19 H1’ 19 2015 2016 2017 2018 2015 2016 2017 2018 2015 2016 2017 2018 9 Compound Annual Growth Rate (CAGR)

Improved ed Digita tal l Footprin print t (Y-o-Y) Y) Mobile ATM 42% Users: 1.2m 4% 1.7m Count: 967 1009 Volume: 10m 180% 28m Volume: 50m 8% 54m Value: N151bn N344bn 128% Value: N452bn N482bn 7% Mobile 96% of transaction Online ATM volume Online POS 96% Users: 314k 616k 3% Count : 6.5k 6.7k POS Volume: 1.7m 17% 1.4m Volume: 4.6m 87% 8.6m Value: N882bn N899bn 2% Value: N27bn N51bn 89% 10

H1 2019 9 Achie ieveme ement nts Customer Portfolio Ecosystems for Operational Digitization Acquisition Diversification Value Chain & Efficiency Growth • A refocus on our Value • Diversified our loan • Continued roll-out of • Implementation of • Active customers 4.9m chain strategies have book. Increased enhanced self service Project LEAP has led to in Jun’19 from 4.3m led to: lending to: options e.g. customer a YoY drop in total (Jun ’18). – Holistic approach to – Retail – 8% vs. 6.9% complaints mgmt., loan expenses - driven by a • Intensified pursuit for pricing and (Dec ’18) request/ fulfillment) 31% Y-o-Y decline quality customers and recognition of overall – Information & • Improved efficiency across major overheads deepened relationship Communication – client revenue • Upgraded Trade T.I Plus with deployment of with existing – 14% growth in 8.9% vs. 3.2% Robotics in settlement platform with improved customers . Payroll Sign-ons YTD • Decrease in lending to and reconciliation efficiency and better (13k vs 11.4k – Dec Oil & Gas – 34.6% vs. activities (USSD, Union customer experience 2018) 38.2% Instant Pay, ATM) – 32% growth in Key Distributor conversion YTD (1200 vs 908 – Dec ’18) 11

N30bn bn Tier 2 Bond d – 100% % Subsc bscribed ibed 01 N30bn Bond Issue Size ₦30bn Series 3 Subordinated Unsecured Fixed Rate Bond 02 100% subscribed Programme Limit N100bn 03 • Largest 10 year bond ever issued by a corporate institution in Nigeria. Tenor • Largest corporate bond to be issued so far in 2019 10 Years • First bank to issue a Naira 10 year fixed rate bond (Callable after 5 years) since 2014. 12

Busines iness s Segment ments s - Strong ong Interde depende pendencies ncies 2 Commercial Bank 1 Retail Bank • Focus: Transaction Banking & Value Chain (Trade & Cash), Lending • Focus: Customer Acquisition, Innovative • Recent Achievements: Products (Savings & Lending, Payroll), Efficient − Launched Tech Ventures in Jan 2019 Channels & Service, Partnerships − Steady pipeline for bank-wide digital & • Recent Achievements: innovation partnerships − >21K average new retail loans booked − Edu 360 Fair - 3000 attendees, 30 monthly (vs 12k in FY ’18) speakers, 70 Exhibitors, 10 Partners − >100K new-to-bank accounts monthly − Upgraded Trade T.I Plus platform with − Digital loans via USSD launched in Apr ’19 . improved efficiency and better customer experience 3 4 Corporate Bank Treasury • Focus: Transaction Banking & Value • Focus: Sales, trading and investment Chain (Trade & Cash), Lending, FX management across segments • Recent Achievements: • Recent Achievements: − Deepened engagement with Anchor − Steady growth in treasury Clients to drive value chain revenues driven by sales & penetration across the Bank trading − Since launch in Oct’ 18, issued local LCs valued at ~N5bn in 2018 and ~N 5.4bn in June’19 YTD

3 H1 2019 Financial Performance 14

Group up Finan ancial cial Perfor orman mance ce Income Statement Trend H1 2019 H1 2018 Gross Earnings (₦’ bn) -9% 76.0 83.3 Net Revenue after Impairments (₦’ bn) -2% 49.6 50.9 Operating Expenses (₦’ bn) 37.5 39.6 -4% Profit Before Tax (PBT) (₦’ bn) 4% 12.1 11.7 Ratios 76.3% 77.1% Cost to Income 10.3% RoE 6.4% RoA 1.5% 1.3% Balance Sheet Dec 2018 Jun 2019 Customer Deposits (₦’ bn) 4% 857.6 889.5 Gross Loans (₦’ bn) 519.7 8% 563.0 Ratios 19.4% 16.4% CAR 8.1% NPL Ratio* 7.3% 102% Coverage 92% 63.3% 60.6% Loan to Deposit Liquidity 38% 38% 15 * Bank Figures.