United Bank Limited United Bank Limited Performance Review ( - PowerPoint PPT Presentation

United Bank Limited United Bank Limited Performance Review ( Consolidated ) Performance Review ( Consolidated ) Annual 2007 Annual 2007 February 14, 2008

Key Highlights Key Highlights Profitability • PBT down 5% y-o-y at Rs.13.8B • Profitability impacted due a change in Prudential Regulations by State Bank of Pakistan due to which benefit of collateral (FSV) was withdrawal resulting in incremental provisioning charge of Rs. 3.8B • Introduction of Early Retirement Scheme (ERS); impact of Rs 345M • PBT up 24% y-o-y before FSV and ERS • Non Interest Income up 37%; strong fee income and capital gains • Net Interest income up 16%; significant increase in advances Balance Sheet • Advances up 21% to Rs. 308B; domestic growth outperformed the market • Deposits up 20% to Rs 412B; maintained market share 2 15-Feb-2008 12:43:11

Key Developments Key Developments • Business process restructuring initiative launched • 170 branches re-branded on retail banking concept; increased focus on customer service and cross selling • Upgrade in credit rating from AA to AA+ by JCR-VIS Credit Rating Company Ltd. • Awarded “Best Domestic Bank in Pakistan 2007” by "Asiamoney" • 34 new branches opened under branch expansion program • International operations showing solid growth; profitability up 31%; contributed 25% to bank profits and 20% to bank assets • Launch of the first equity based compensation scheme in the Pakistani banking sector • UBL Fund Managers crossed Rs. 33b; second largest private sector fund manager • First bank to introduce “UBL Orion,” a comprehensive mobile payment solution 3 15-Feb-2008 12:43:11

Summary Summary Dec 2007 Dec 2006 Change Assets (PKR bn) 547 436 +25% Advances (PKR bn) 308 255 +21% Market Share-Adv- DOM 9.4% 9.2% Deposits (PKR bn) +20% 412 344 Market Share-Deposits- DOM 9.1% 9.1% Branches 1,095 1,059 36 ATMs 326 210 116 1 ROAA 2.4% 2.4% 1 ROAE 30% 34% Credit Rating (JCR-VIS) AA+/A-1+ AA/A-1+ upgrade 1- These ratios have been calculated before the incremental provision charge and early retirement scheme explained in slide 2; For actual ratios see slide 8 4 15-Feb-2008 12:43:11

Share Info Share Info Dec 2007 Dec 2006 EPS (Rs/share) 11.1 11.8 BV/share (Rs/share) 59.2 41.0 Price* - (Rs /share) 178.0 153.2* P/E 16.0x 13.0x P/BV 3.0x 3.7x # of shares 809M 809M * Share price (Dec'06) after announcement of results Dec'07 price at 08 Feb'08 Dec'06 price at 1 9 Feb'07 - adjus ted fo r bo nus s hares 5 15-Feb-2008 12:43:11

Income Statement (PKR bn) Income Statement (PKR bn) QTD QTD % FY FY % Dec'07 Sep'07 change Dec'07 Dec'06 change Net Interest Income 6.23 6.36 -2% 24.80 21.37 +16% Non Interest Income 3.07 2.40 +28% 9.93 7.26 +37% Operating Revenue 9.29 8.76 +6% 34.73 28.63 +21% Operating Expense (3.66) (3.59) +2% (13.93) (11.66) +19% Pre-Provision Oper.Profit 5.63 5.17 +9% 20.80 16.97 +23% Provision Exp./Other Prov. (2.93) (2.87) +2% (6.66) (2.47) +170% Early Retirement Scheme (ERS) (0.31) (0.04) +708% (0.35) - +100% Profit before Tax 2.40 2.26 +6% 13.80 14.50 -5% Profit after Tax 1.86 1.60 +16% 9.24 9.67 -4% Note: An incremental provisioning of Rs. 3.8bn was recognized this year due to withdrawal of collateral (Forced Sales Valuation – FSV) while calculating the provisioning requirements against non performing loans which was advised by State Bank of Pakistan on October 17, 2007 PBT (before FSV/ERS) 4.53 4.28 +6% 17.95 14.50 +24% PAT (before FSV/ERS) 3.51 3.03 +16% 12.02 9.67 +24% 6 15-Feb-2008 12:43:11

Balance Sheet (PKR bn) Balance Sheet (PKR bn) % % Dec'07 Sep'07 Dec'07 Dec'06 change change Cash & bank balances 68.6 59.8 +15% 68.6 68.4 +0% Investments 114.0 114.5 -0% 114.0 65.7 +73% Advances 308.3 288.8 +7% 308.3 254.7 +21% Fixed assets 19.0 7.3 +163% 19.0 6.4 +199% Total Assets 546.8 498.7 +10% 546.8 435.8 +25% Deposits 412.1 391.8 +5% 412.1 343.8 +20% Borrowings 59.5 39.7 +50% 59.5 38.6 +54% Total Liabilities 498.9 460.0 +8% 498.9 402.7 +24% Equity 47.9 38.7 +24% 47.9 33.2 +44% 7 15-Feb-2008 12:43:11

Financial Ratios Financial Ratios QTD QTD FY FY Dec'07 Sep'07 Dec'07 Dec'06 Loan/Deposits 74.8% 73.7% 74.8% 74.1% ROAE 17.2% 16.9% 22.8% 33.7% ROAA 1.4% 1.3% 1.9% 2.4% Cost/Income Ratio 62.3% 61.6% 50.9% 44.6% Gross NPLs/Gross Advances 1 6.9% 7.9% 6.9% 6.2% Net NPLs/Gross Advances 2 1.9% 3.2% 1.9% 1.6% Coverage Ratio 77.9% 66.0% 77.9% 82.6% CAR Ratio 12.4% 12.1% 12.4% 12.2% Tier 1 CAR Ratio 8.8% 9.3% 8.8% 8.9% 1. Our gross NPLs at Dec 31, 2007 include Rs 3.6bn of loans which have been subjectively classified by SBP 2. Our net NPLS at Dec 31, 2007 include Rs 2.3bn of loans which have been subjectively classified by SBP 8 15-Feb-2008 12:43:11

Deposit Structure Deposit Structure Deposit Mix - Deposit Mix - Bank (Parent Company) Bank (Parent Company) Fixed Deposits Fixed Deposits (1) (1) 80 Other Deposits – PKR 8bn 72 Contribution 2% Cost 0.4% Fixed Deposits – PKR 127bn Contribution 32% 59 Cost 7.4% Current Deposits–PKR 114bn Contribution 28% 47 Cost 0% 44 28 26 13 6 0 Saving Deposits – PKR 153bn Contribution 38% Cost 2.8% Total Deposits = PKR 402 bn 2003 2004 2005 2006 2007 Cost of Deposits = 3.6% CASA = 66% Consumer Loans Fixed Deposits (1) Includes domestic fixed deposits only 9 15-Feb-2008 12:43:11

Advances by Business Advances by Business Advances by Business 2005 2006 2007 140 131 120 104 100 94 80 Rs B 64 60 55 51 49 47 44 39 40 28 27 17 20 13 10 - Corporate Bank Commercial Bank Consumer Bank Overseas Others (incl subsidiaries) % Dec'07 Dec'06 Change Yield 07 Corporate Bank 131.1 104.1 +26% 10.4% Commercial Bank 48.8 54.9 -11% 12.4% Consumer Bank 47.2 43.8 +8% 15.5% Others (COT / Staff/) 8.0 6.0 +34% 8.4% Domestic 235.1 208.8 +13% 11.9% Overseas 64.3 38.5 +67% 7.9% Bank 299.4 247.3 +21% 11.1% Subsidiaries 8.9 7.4 +21% 10 Bank-Consolidated 308.3 254.7 +21% 15-Feb-2008 12:43:11

Consumer Advances by Product Consumer Advances by Product 2005 2006 2007 Yield 2007 23 30% 24 25% 21 25% 20 20% 1 9% 15 20% 1 6 1 4% 1 3% 1 3% 1 5% 1 2 1 0% 8 6 6 5 5 4 5 5 5 3 4 3 3 3 2 1 5% 4 0 0% Drive Address Credit Card Cashline Businessline Money % Dec'07 Dec'06 Change Drive 23.2 20.7 +12% Address 5.6 5.2 +6% Credit Card 5.6 5.0 +11% Cashline 4.8 4.5 +8% Businessline 4.8 5.0 -3% Money 3.2 3.4 -6% Total 47.2 43.8 +8% 11 15-Feb-2008 12:43:11

Consumer Drivers Consumer Drivers Advances (PKR mm) # of Accounts Dec-07 Dec-06 % Change Dec-07 Dec-06 % Change 23,159 20,660 +12% 66,149 52,887 +25% Drive 5,572 5,011 +11% 167,831 157,725 +6% Credit Card 4,842 4,992 -3% 1,401 1,233 +14% Businessline 5,555 5,238 +6% 1,244 1,253 -1% Address 3,201 3,397 -6% 31,918 27,378 +17% Money 4,836 4,482 +8% 69,158 61,141 +13% Cashline 47,165 43,780 +8% Total 12 15-Feb-2008 12:43:11

Spread Analysis (bank level) Spread Analysis (bank level) Full Year 2006 Full Year 2007 Interest Interest Average income / Avg.Yield Average income / Avg.Yield Balances (expense) /Cost Balances (expense) /Cost Interest Earning Assets 221,870 24,511 11.0% 266,336 29,663 11.1% Performing Advances 60,396 5,181 8.6% 92,465 8,280 9.0% Investments 23,773 2,016 8.5% 22,702 1,974 8.7% Lending to Financial Institutions Others 21,916 1,284 5.9% 22,602 1,129 5.0% Total interest earning assets (a) 327,955 32,992 10.1% 404,105 41,046 10.2% Non Interest Earning Assets Non -performing Advances 3,977 - - 5,349 - - Non- interest bearing Investments 5,561 - - 9,331 - - 4,779 - - 5,908 - - Fixed Assets 32,794 - - 40,140 - - Other Assets Total Assets (A) 375,066 32,992 8.8% 464,833 41,046 8.8% Interest bearing liabilities 127,958 (2,665) 2.1% 140,582 (3,905) 2.8% Saving deposits 78,499 - 0.0% 92,242 - 0.0% Current deposits Term deposits 89,515 (6,550) 7.3% 126,356 (9,342) 7.4% Other deposits 9,288 (83) 0.9% 9,980 (35) 0.4% 305,260 (9,298) 3.0% 369,160 (13,282) 3.6% Total deposits 4,621 (472) 10.2% 6,000 (597) 9.9% Sub-ordinated loan 26,631 (2,357) 8.9% 36,386 (3,058) 8.4% Borrowings Total interest bearing liabilities (b) 336,512 (12,127) 3.6% 411,546 (16,937) 4.1% Non Interest bearing liabilities 24,761 - 33,484 - Equity 5,385 - 5,501 - Bills Payable Other liabilities 8,408 - 14,302 - 38,554 - 53,287 - Total non interest bearing liabilities Total Liabilities (B) 375,066 (12,127) 3.2% 464,833 (16,937) 3.6% - 6.5% - 6.0% Net Interest Margin (a-b) NRFF / Spread (A-B) 20,865 5.6% 24,109 5.2% 13 15-Feb-2008 12:43:11

Concentration of Advances Concentration of Advances Chemical & Chemical and Pharmaceuticals, Automobile Pharma 1 .5% 1 .3% 1 .4% Fertilizer , 1 .5% Engineering, 0.7% Others, 21 .1 % Airline/ Aviation, 1 .3% Food industries, 1 .5% Contractors, 1 .2% Agribusiness, 4.4% Sugar, 2.5% Cement, 2.5% Wholesale traders, 4.8% Textile, 1 9.4% Production and transmission of energy, 9.3% Construction, 3.1 % Individuals, 21 .1 % 14 15-Feb-2008 12:43:11