WIP Q1 2017 Financial Results Presentation 3 rd May 2017 1 Q1 2017 Unaudited Results
Disclaimer 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 Q1 2017 Unaudited Results
UBN – Celebrating 100 Years of Strength, Reliability and Growth 1917 1999 2013 2017 2 nd largest Strategy Received most branch network redefined with Established as improved retail with ~280 new Colonial Bank bank award branches management 1925 1971 2004 2009 2014 2017 Became Barclays Sale of Banking crisis / Bank DCO, 2 nd Listed on the subsidiaries Simpler, Established UK CBN commercial bank Nigerian Stock with focus on Smarter Bank subsidiary intervention in Nigeria Exchange core banking 1917 - 1970 1971 - 1990 1991 - 2008 2009 - 2012 2013 - 2017 2017 - 2017 1969 1979 2005 2012 2016 2017 3 rd largest Acquired Huge Became Barclays Became Union Universal Trust branch network investments in Bank of Nigeria Bank of Nigeria Bank & Broad with ~350 people, process Ltd. Plc. Bank branches & technology 1983 2012 2016 1970 Received Nigeria’s Best Launched re- Opened full- Recapitalization energized Grew branch fledged branch Bank Awards in with UGPL as brand. Awards network to 59 in London 2000-2, 2004, core investors received 2006 3 Q1 2017 Unaudited Results
Union Bank at a Glance Dec-2016 Mar-2017 ₦1,123.5Bn ₦ 251.3Bn ₦277.5Bn ₦1,298.0Bn Total Assets Total Equity Total Equity Total Assets ~350 ~3.2Mn ~3.4Mn Sales & 2,700+ ~ 350 ~2,700+ Customers Customers Employees Service Sales & Service Employees Centres Centres Alt. Channels Alt. Channels Fitch Fitch ~800 ATMs BBB+ National Rating ~800 ATMs BBB+ National Rating ~3,700 POS Stable Outlook ~ 3,100 POS Stable Outlook Union Mobile and Union Mobile and GCR GCR Online Online A2 Short Term A2 Short Term UnionOne UnionOne 4 Q1 2017 Unaudited Results
1 The Operating Environment Union Bank Update 2 Q1 2017 Financial Performance 3 Our 100 th Year Celebration 4
The Operating 1 Environment Emeka Emuwa Chief Executive Officer
Overview of the Nigerian Macro Environment Mar-16 Jun-16 Sep-16 Dec-16 Mar-17E Real Nigeria’s GDP is projected to expand 0.8 1 -1% 2 in 2017. GDP * Analysts forecast decline of -0.6% in Q1 2017 Growth -1.3% -0.4% -0.6% -2.1% -2.2% Rate 30.3 Increase in oil prices and production has shored up the reserves to $30.1bn as at Mar’ 17, an increase of 17% 27.9 26.4 External 25.8 from $25.7bn in Dec’ 16. Reserves 24.5 53.9 Crude oil prices declined ~4% to $51.9 in Mar’ 17, from 50.6 Crude Oil $53.9 in Dec ’ 16 due to a n oversupply of crude oil in the 51.9 48.5 (Bonny Light) market as speculators closed out long positions $/barrel 32.2 THE OPERATING ENVIRONMENT BDC Rate N/$ 482 At the official window the FX rate remained relatively flat 470 395 320 283 at ₦306 /$.Yet the closing parallel market varied over the Exchange period 305 Rate N/$ 352 306 305 197 Inflation rate eased to 17.3% in March 2017, having 17.9% 18.6% 17.3% 16.5% reached an all year high of 18.6% in Dec’ 16 driven by Inflation 12.8% increased price of general consumer goods. Source: CBN, NBS , FDC,OPEC, other research Notes: 1 IMF GDP forecasts; 2 World bank GDP growth forecasts * GDP figures yet to be released 7 Q1 2017 Unaudited Results
Q1 2017 Regulatory Highlights 2016 2017 H1 H2 Q1 Feb CBN issues flexible FX Dec rules including: CBN issues Removal of the 60/40 Jun policy FX allocation to allowing Flexible FX policy, manufacturers and BDCs to buy Futures & Forwards improving access to at N381/$ market introduced retail FX needs and sell <N400/$ Mar Jul Jan Monetary Policy MPR increased from Committee maintained MPR increased 12% to 14%; CRR and the liquidity ratio, from 11% to 12%; liquidity ratio monetary policy rate CRR increased maintained at 22.5% and cash reserve ratio from 20% to 22.5%; and 30% respectively at 30%, 14% and FX Sales to BDCs 22.5%, respectively stopped Aug CBN signs agreement with Travelex to sell $15,000 weekly to >3,000 BDCs; Nine banks barred from FX market for non- remittance of over $2bn TSA funds; ban subsequently lifted 8 Q1 2017 Unaudited Results
Recent Developments • CBN introduced additional windows to improve FX liquidity in the market - Opened a special FX window for SMEs for importation of eligible finished and semi- CBN Introduces finished items, not exceeding $20,000 per quarter per SME Additional FX Windows - Established FX window for investors and exporters. Permitted transactions include invisible transactions (excluding airline ticket sales), bills for collections and other trade related payment obligations • Key objectives include: − Restoring growth : the implementation of its monetary policies with the aim of achieving a market- Government unveils determined exchange rate regime to build confidence and encourage foreign exchange inflows Economic Recovery − Investing in people via: focus on Healthcare, Education, Social Inclusion, Job Creation & Youth and Growth Plan Empowerment amongst others. − Building a competitive economy: focusing on agriculture, and agro-businesses, manufacturing construction and solid minerals Federal Government • FG had previously sold $1bn Eurobonds at 7.875% with a tenure of 15 years (FG) raises $1.5bn via Eurobonds to fund • Received approval in Mar to raise additional $500m, at 7.5% with a tenure of 15 years budget deficit • CBN suspended the nationwide implementation of the cashless policy effective Apr 1 2017. CBN Suspends Nationwide - Banks were directed to revert to old charges and refund customers that they had debited Implementation of - However, existing policy before the announcement of the new policy would remain in place Cashless Policy in Lagos, Ogun, Kano, Abia, Anambra, Rivers and Abuja 9 Q1 2017 Unaudited Results
Overview 2 of Union Bank
Union Bank – A Simpler, Smarter Bank Solid and Iconic brand with experienced rich heritage leadership team Robust risk Strengthened management and talent pool with compliance improving standards productivity Strong reputation Sustained positive for ethical financial standards (trust, performance professionalism) trajectory Improving State of the art Extensive operational core banking Steadily growing distribution with efficiency platform and resilient ~350 branches with customer base omni-channel (3.4m customers) network 11 Q1 2017 Unaudited Results
Awards / Recognition Reinforce Transformation Success “Best Bank to Support Nigeria’s “Best Participating Bank in “Most Improved Bank in “Best Commercial Agriculture Nigeria” – CBN Agricultural Bank” – Nigeria Agriculture Retail Banking” Small And Medium Scale Enterprises” – Business Day – Business Day Credit Guarantee Scheme Fund Awards OVERVIEW OF UNION BANK “Best Brand Development to Reflect Latest PCIDSS (ver. 3.2) “Top 10 Best Company “Most Efficient Bank on e - Changed Positioning”; “Best Visual certification – Payment Card to Work for in Nigeria” – Reference Operations” – 2017 Identity from the Financial Services Industry Data Security Jobberman CBN/NIBSS e-Payment Sector” – Transform Awards MENA Standard (PCIDSS) Efficiency Awards 12 Q1 2017 Unaudited Results
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