Performance Highlights - Q1 2019 Investor Relations Earnings Call - PowerPoint PPT Presentation

Performance Highlights - Q1 2019 Investor Relations Earnings Call April 29th, 2019 Speakers: Mr. Aameer Karachiwalla - Chief Financial Officer Mr. Arif Saifie, FCA, CFA - Financial Controller and Head of Investor Relations During the quarter, the Bank completed the Initial Public Offering (IPO) of its Additional Tier-1 TFCs amounting to Rs. 1 billion, thus closing the total issue size of Rs. 10 billion. 1 UBL Performance Overview – Q1 2019

Agenda for the call PAGE 3 Key Highlights for Q1’ 2019 10 Execution and Delivery – A consistent performance 26 Our Investment, focus and results in the last 5 years 30 Quarterly Trend Analysis – Performance through the cycle UBL Performance Overview – Q1 2019

Key Performance Highlights UBL Standalone Results  PBT at Rs. 9.2 bln , up 126% vs. Q1’18 (Pension charge of Rs 6.4 bln in Q1’18) Major upsides building core earnings in Q1’19  Maintained build up - Average domestic current deposits at Rs. 468 bln , up 13% vs. Q1’18  Average CASA for the period was 86.8% (Q1’18: 85.6%)  Domestic cost of deposits at 4.7% ( Q1’18 : 2.6%) – despite rate hike of 500bps since Dec’17  Strong build up in Domestic fees - up by 17% YoY to reach Rs. 2.9 bln in Q1’19  FX income increased by 70% to Rs 908 mln in Q1’19  Overall Bank NII up by 6%, closing at Rs. 14.7 bln in Q1’19  Overall expenses growth well contained at 4% - Q1’19 vs Q1’18  Net Provision charge down to Rs. 1.3 bln in Q1’19 from Rs. 1.9 bln in Q1’18  CAR has remained strong at 17.6% at Mar’19 (Dec’18: 17.7%) UBL Performance Overview – Q1 2019 3

Avg. Total Assets of Rs. 1.69 tln in Q1’19 vs Rs. 1.91 tln in Q1’18 Branch Banking builds deposit base in cost efficient manner  Net Interest Income of Rs. 14.7 bln in Q1’19 (Q1’18: Rs. 13.9 bln)  128,000 NTB current accounts mobilized in Q1’19 (Q1’18: 149,000)  Growth led by current deposits – average growth of 13%, incremental vol. of Rs. 53 bln  Current to total deposits ratio at 47.1% (Dec’18: 45.9%).  Average domestic deposits grew by 12% year on year  Average performing advances growth of 3% - Domestic up 9%, International down 29%  Growth led by Corporate – average loan book expansion of 10%  Average Consumer portfolio grew 33% to Rs. 16 bln, SME lending up 24% to Rs. 35 bln  PIBs portfolio at Rs 421 bln (Dec’18: Rs 410 bln)  Repo book reduced from Rs. 131 bln at Dec’18 to Rs. 60 bln at Mar’19 end UBL Performance Overview – Q1 2019 4

Overall NFI closed at Rs. 5.0 bln in Q1’19 vs Rs. 7.3 bln in Q1’18 Fee income stood at Rs. 3.6 bln , up 23% from Q1’18  Domestic fees grew by 17% YoY to reach Rs. 2.9 bln in Q1’19:–  Branch banking customer fees up by 10% to reach Rs. 419 mln (Q1’18: Rs. 380 mln)  Debit & Credit Cards fees up by 2% to reach Rs. 388 mln (Q1’18: Rs. 378 mln)  Remittances including home remittances revenues grew by 13% to reach Rs. 671 mln - Home remittances market share 28.5% in Q1’19 (Q1’18: 31.4%)  Guarantee commission up to Rs. 180 mln from 87 mln in Q1’18  Banca revenues up 20% to reach Rs. 333 mln (Q1’18: Rs. 277 mln)  Cash management commissions grew by 6% over Q1’18 to reach Rs. 175 mln Dividend income of Rs. 226 mln (Q1’18: 571 mln) – yield of 4.7% (Q1’18: 12.9%) Higher Capital gains last year in Q1’18: Rs. 3.1 bln – mainly on the PIBs FX income increased by 70% to Rs. 908 mln in Q1’19  DOM FX revenue up by 32% to reach 787 mln in Q1‘19 UBL Performance Overview – Q1 2019 5

Provisions and Admin Expenses Net provision charge of Rs. 1.3 bln in Q1’19 vs. Rs. 1.9 bln in Q1’18  DOM net provision charge of Rs. 0.1 bln in Q1’19 (Q1’18: net reversal of Rs. 0.8 bln)  DOM asset quality stood at 5.3% at the end of Mar’19 (Dec’18: 4.9%)  International provisions of USD 8.9 mln taken in Q1’19 (Q1’18: USD 24.5 mln)  Overall NPLs closed at Rs. 69.5 bln at Mar’19 (Dec’18: Rs. 68.6 bln)  International NPLs at USD 302 mln at Mar’19 (Dec’18: USD 293 mln)  International coverage with FSV Benefit stood at 92% at Mar’19 (Dec’18: 92%)  Overall asset quality maintained at 10.0% (Dec’18: 8.8%)  At Bank level specific coverage at 82% (Dec’18: 82%) – DOM coverage at 94% (Dec’18: 93%) Administrative expenses stood at Rs. 9.0 bln, excluding DPC flat YoY  Total staff costs down 5% in Q1’19 recorded at Rs. 3.4 bln (DOM: Rs. 2.7 bln flat YoY)  Property expenses down 3% in Q1’19 to reach Rs. 1.5 bln (DOM: Rs. 1.3 bln down 6% YoY)  IT expenses up 19% in Q1’19 reported at Rs. 0.8 bln (DOM: Rs. 0.7 bln up 19% YoY)  Other opex (excluding DPC) up 4% in Q1’19 to reach Rs. 2.9 bln (DOM: Rs. 2.4 bln up 8% YoY) UBL Performance Overview – Q1 2019 6

UBL Innovation and Awards UBL “Firsts” – Initiatives to stay ahead of the market Market recognition and awards  Declared ‘Bank of the Year 2018 – Pakistan’ by The Banker, an  First Commercial Bank in Pakistan to launch Branchless affiliate of the Financial Times UK. Banking (UBL OMNI)  “Best Bank” in the first ever Pakistan Banking Awards 2016 “Best Bank for Corporate Finance and Capital Market   First Bank in the world to issue VISA Debit Cards for Development” in the Pakistan Banking Awards 2017 G2P assistance to affectees  JCR- VIS reaffirmed UBL’s entity ratings at AAA/A-1+ (Triple A / A- One Plus)  First Bank to provide Instantaneous ATM/Debit cards to “Innovation Award” at the Mastercard Innovation Forum for  branchless banking customers at the time of account ‘Launch of UBL MasterPass QR’ opening (UBL Omni)  “National Medal of Innovation Award” 2016 for Pioneering G2P Payments – Pakistan Innovation Foundation  First Pakistani Bank to be granted status of Authorized  Top 25 Companies Award by the Karachi Stock Exchange for 2010- Derivative Dealer (ADD) in Pakistan and First institution 2012, 2015 and 2016 from Pakistan and third in South Asia to be accredited “Best Bank for SMEs” by the Asia Money Pakistan Banking Awards  with Primary Membership of International Swaps and in 2017 Derivatives Association  2012 & 2013 Bank of the Year in Pakistan Award by The Banker Magazine, an affiliate of the Financial Times, UK  First Bank in Pakistan to offer Prepaid VISA Debit Card ASIAMONEY Best Domestic Bank Award for 2011 and 2012  Recognized globally in 2013 as one of the 14 “Sprinters” by the   First Bank in Pakistan to offer Verified by Visa Service GSMA’s Mobile Money for the Unbanked (MMU) program, being the only bank in the category  First Bank in Pakistan where customer’s inward  GSMA Global Mobile Award 2012 for “Best Use of Mobile in Emergency or Humanitarian Situations” and Financial Insights remittances are deposited automatically on an ATM Innovation Award for “Innovation in Cash Disbursements (G2P)” and VISA enabled debit card (UBL Tezraftaar Pardes  Recognized by CFA Pakistan Society for the “Best Investor Card) Relations” function in 2013 and 2014 UBL Performance Overview – Q1 2019 7

Consistent earnings performance throughout the years Trends - KSE 100 Index and UBL’s share price Equity and Book Values 300 55 Max 2019: Rs. 157.59 29 Mar’19: Rs. 139.53 Rs in bln Cons. Equity Mar’19 - Rs. 173 bln 280 26 Apr'19: Rs. 147.09 Cons. Book value Mar’19 - Rs. 142 per share 50 260 159 155 152 151 240 45 142 220 126 200 40 101 92 180 79 68 130 124 127 124 35 116 160 103 140 82 30 75 56 120 65 100 25 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 2010 2011 2012 2013 2014 2015 2016 2017 2018 Mar'19 Total Equity - St. BV Per share - St. UBL's share price KSE 100 Index Dividend Payout EPS & Price Earnings Ratio * Payout for 2018 is computed on normalized PAT excluding the effect of one-off pension cost 20.0 25.0 140% 100% 90% 120% * 16.4 20.1 57.4% 63.2% 69.3% 73.5% 80% 65.8% 64.2% 61.9% 100% 70% 54.8% 59.2% 58.2% 60% 12.8 15.3 80% 50% 130% 130% 130% 60% 115% 40% 110% 9.2 10.4 100% 85% 30% 40% 75% 20% 50% 20% 5.6 5.6 10% 25% 0% 0% 2.0 0.7 2010 2011 2012 2013 2014 2015 2016 2017 2018 Mar'19 Dec'10 Dec'11 Dec'12 Dec'13 Dec'14 Dec'15 Dec'16 Dec'17 Dec'18 EPS 9.1 12.7 14.7 15.2 17.9 21.0 22.7 20.6 12.4 Cash Dividend Dividend Payout Ratio PE 7.5 4.1 5.7 8.7 9.9 7.4 10.5 9.1 9.9 UBL Performance Overview – Q1 2019 8

Our international outreach - serving in 4 continents under the single “UBL” brand ASSOCIATED COMPANIES OVERSEAS BRANCHES 3 16 PAKISTAN BRANCHES 1,359 SUBSIDIARIES 4 Asset mix by region 2018 2017 Domestic Operations 77.3% 79.9% International Operations 22.7% 20.1% Middle East 16.4% 14.9% USA 0.1% 0.3% Europe 5.7% 4.6% Africa 0.3% 0.2% EPZ 0.2% 0.1% Globally around 23% of our asset base is located overseas UBL Performance Overview – Q1 2019 9

Execution and Delivery in Q1’19 Being one of the largest financial institutions in Pakistan, UBL continues to maintain a sound capital base to support future growth and expansion. The Bank’s Capital Adequacy Ratio stood at 17.6% at Mar’19 (Dec’18: 17.7%) 10 UBL Performance Overview – Q1 2019