Performance Highlights Q1 2020 Investor Relations Conference Call - PowerPoint PPT Presentation

Performance Highlights Q1 2020 Investor Relations Conference Call April 27 th , 2020 Winner of Pakistan Stock Exchange (PSX) “Top Companies of the Year” Award for three consecutive years (2016-18) Declared ‘Best Digital Bank in Pakistan for 2020’ by Asiamoney Speakers: Mr. Aameer Karachiwalla - Chief Financial Officer Mr. Arif Saifie, FCA, CFA - Financial Controller and Head of Investor Relations UBL Performance Overview – Q1 2020 1

Agenda Sr. No Description Slide 1 Key Highlights for Q1 2020 – build up in profitability 3 2 UBL - A strong legacy – market leading positions in core segments 7 3 Core Business Driving Growth – led by branch banking business 11 4 Overview of Financial Performance – key number and ratios 15 UBL Performance Overview – Q1 2020 2

Key Performance Highlights for Q1’2020 Drivers of Performance in Q1’ 2020 while maintaining sound capital  Standalone PAT at Rs. 5.1 bln, up 21.5% vs. Q1’19 – (PAT is up 7% over Q4’19)  Pre Provisions PBT of Rs 12.1Bln up 16% vs Q1’19 and up 26% vs Q4’19  Domestic PBT at Rs 10.8 Bln up 22% YoY – led by 16% revenue growth  Dom Deposits lead the way as Total - Avg Dom Deposits at Rs 1,174 bln - growth of 8% vs Q1’19  Domestic NII (which is 70% of Bank wide revenue) is up 23% Q1’20 vs Q1’19  Provisions in Q1’20 of Rs 3.7 Bln (INT charge of Rs 3.76Bln – including IFRS 9 General Provision of Rs 1.6 Bln). Domestic Bank has posted a net reversal of Rs 62 mln in the first quarter.  Admin Expenses well below inflation - up by 6% YoY and 14% below last quarter  Cost to income ratio stood at 43.0% for Q1’20, improving from 45.6% in Q1’19  CAR has remained strong at 19.5% at Mar’20 (Dec’19: 18.9%)  No increase in Risk Weighted Assets : Mar’20 at Rs 837 billion in line with Dec’19  International De-Risking continues - average loan book was reduced by 27% over Q1’19, stood at USD 799 million in Q1’20 . UBL Performance Overview – Q1 2020 3

Avg. Total Assets of Rs. 1.86 tln in Q1’20 vs Rs. 1.69 tln in Q1’19 Branch Banking builds deposit base in cost efficient manner - strong network performance Overall Revenues  Net Interest Income of Rs. 17.3 bln in Q1’20 (Q1’19: Rs. 14.7 bln) strong growth up 18% YoY  Interest earning asset base at Rs . 1.6 trillion for Q1’20, a growth of 10% year on year  Net interest margins (NIMs) improved to 4.6% in Q1’20 to 4.3% in Q1’19 Deposits  Average domestic deposits grew by 8% year on year – with Rs 85 Bln incremental volume  Growth led by CASA – average growth of 5% YoY, incremental vol. of Rs. 48 bln  Average Current to total deposits ratio at 41.6% (Dec’19: 43.0%)  Average Domestic current deposits at Rs. 488 bln , up 4% vs. Q1’19  Average CASA for the period was 84.7% (Q1’19: 86.8%)  Domestic cost of deposits at 6.4% ( Q1’19 : 4.7%) – impact of higher rates Advances – Maintain Domestic, with major reduction within International  Domestic Advances stood at Rs 483 bln in Mar’20 (Dec’19: Rs 500 bln)  International Advances at USD 838 mln in Mar’20,(Dec’19: USD 882 mln , Dec’18: USD 1,232 mln) down 32% in last 15months Investments portfolio position and mix as at March 31 st 2020  Fixed Income PIBs at Rs 256 bln in Mar’20 yielding 9.4% (Dec’19; Rs 315bln)  Floating rate PIBs portfolio at Rs 190 bln in Mar’20 (Dec’19: Rs 97 bln) – yielding 14.0%  T.Bill Portfolio at Rs 359 bln in Mar’20 (Dec’19: 254bln) – yielding 12.6% UBL Performance Overview – Q1 2020 4

Avg. Total Assets of Rs. 1.86 tln in Q1’20 vs Rs. 1.69 tln in Q1’19 Fees recorded at Rs. 3.0 billion in Q1 ’ 20, down 17% year on year Domestic - Fee income stood at Rs. 2.4 bln, 15% below Q1 ’ 19  Trade Commission at Rs 224 mln, down 21% YoY  Banca Commission at Rs 314 mln, 6% down YoY  Net UBL Omni at Rs 105 mln, down 57% YoY due to BISP impact  Home Remittances Commission Rs 322 mln, 2% down YoY International Fees  Fee income stood at USD 3.5 mln, 35% down YoY in line with de-risking strategy Capital Gain of Rs 342 mln vs Rs 5 mln in Q1 ’ 19 Dividend Income of Rs 394 mln, 74% up YoY Exchange Income of Rs 732 mln, 19% down YoY  Domestic FX Income of Rs 863 mln, up Rs 76 mln YoY,  International FX Loss of USD 0.83 mln & FX Income of USD 0.87 mln in Q1’19 UBL Performance Overview – Q1 2020 5

Provisions and Admin Expenses Net provision charge of Rs. 3.7 bln in Q1’20 vs. Rs. 1.3 bln in Q1’19  DOM net provision Reversal of Rs. 62 mln in Q1’20 (Q1’19: Net charge of Rs. 79 mln)  DOM asset quality stood at 6.1% at the end of Mar’20 (Dec’19: 5.2%)  International provisions of USD 24.1 mln taken in Q1’20 (Q1’19: USD 8.9 mln)  Overall NPLs closed at Rs. 86.3 bln at Mar’20 (Dec’19: Rs. 76.6 bln)  International NPLs at USD 332 mln at Mar’20 (Dec’19: USD 319 mln)  International coverage stood at 75.3% at Mar’20 (Dec’19: 77.3%)  International coverage with FSV Benefit stood at 86.2% at Mar’20 (Dec’19: 90.9%)  Overall asset quality stood at 12.4% (Dec’19: 10.9%)  At Bank level specific coverage at 77.5% (Dec’19: 82.5%) – DOM coverage at 81.5% (Dec’19: 92.1%) Administrative expenses stood at Rs. 9.5 bln, up 6% YoY  Property related expenses were recorded at Rs. 1.6 billion for the current quarter, in line with Q1’19  IT expenses witnessed an increase of 13% year on year, as the bank continues to invest in technology platforms to transform banking services in line with its digital strategy  Other costs were recorded at Rs . 3.0 billion for the period under review (Q1’19: Rs. 3.2 billion) UBL Performance Overview – Q1 2020 6

UBL - A strong legacy 7 UBL Performance Overview – Q1 2020 7

UBL - A dominant Pakistani brand A Look into the Past Our Current Positioning 1959 - UBL set up with first branch in Karachi  Second largest private sector bank in Pakistan with 1,363 branches 1963 - First Pakistani bank with a branch in  Market share of 8.2%, 5.5 million customers London  Highest credit ratings of AAA / A-1+ by VIS 1967 - UBL enters the UAE  One of the most profitable banks in Pakistan - avg. RoE of 20% 2014-2019 1974 - UBL nationalized with other private Key Strategic Advantages banks  First branchless banking proposition in 2002 - Privatized with divesture of 51% stake by Pakistan i.e. UBL Omni  the GoP Cost efficient deposit mix driven by well penetrated branch network 2007 - An additional 25% of the share capital  Largest rural network - vast potential to divested by the GoP to international investors increase financial inclusion through a GDR offering 2014 - Divesture of remaining 19.8% stake, a  At the forefront of innovation – digital lab, USD 400 mln transaction, by the GoP through next gen mobile app, digital onboarding secondary public offering (SPO) UBL Performance Overview – Q1 2020 8

UBL Innovation and Awards - continues to be acknowledged by the market UBL “Firsts” – Initiatives to stay ahead of the market Market recognition and awards First Commercial Bank in Pakistan to launch Branchless   Declared ‘Best Digital Bank in Pakistan for 2020 ’ by Banking (UBL OMNI) Asiamoney  Declared ‘Bank of the Year 2018 – Pakistan’ by The Banker,  First Bank to launch QR code based payments in Pakistan an affiliate of the Financial Times UK. First Pakistani Bank to launch digital customer onboarding   “Best Bank” in the first ever Pakistan Banking Awards 2016  First Bank to provide Instantaneous ATM/Debit cards to  “Best Bank for Corporate Finance and Capital Market branchless banking customers at the time of account Development” in the Pakistan Banking Awards 2017 opening (UBL Omni)  VIS reaffirmed UBL’s entity ratings at AAA/A-1+ (Triple A / A-One Plus)  First Bank in Pakistan where customer’s inward remittances are deposited automatically on an ATM and VISA enabled  “Innovation Award” at the Mastercard Innovation Forum for ‘Launch of UBL MasterPass QR’ debit card (UBL Tezraftaar Pardes Card) “National Medal of Innovation Award” 2016 for Pioneering  First Bank in Pakistan to offer Prepaid VISA Debit Card  G2P Payments – Pakistan Innovation Foundation  First Bank in Pakistan to offer Verified by Visa Service Top 25 Companies Award by the Pakistan Stock Exchange  for 2010-2012 and 2015 -2018  First Bank in the world to issue VISA Debit Cards for G2P  “Best Bank for SMEs” by the Asia Money Pakistan Banking assistance to flood affectees Awards in 2017  First Pakistani Bank to be granted status of Authorized  2012 & 2013 Bank of the Year in Pakistan Award by The Derivative Dealer (ADD) in Pakistan Banker Magazine, an affiliate of the Financial Times, UK  Recognized globally in 2013 as one of the 14 “Sprinters” by  First institution from Pakistan and third in South Asia to be the GSMA’s Mobile Money for the Unbanked (MMU) accredited with Primary Membership of International Swaps program, being the only bank in the category and Derivatives Association UBL Performance Overview – Q1 2020 9