Overview Presentation - United Bank Limited

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Overview Presentation - United Bank Limited

HK000MSI_Roadshow

United Bank Limited


Investment Highlights

1 2

Attractive Sector

Broad and Unique

Fundamentals

Distribution Network

Support Growth

6

High Calibre and

Experienced

Management Team

3

Leading Consumer

Finance Franchise

5

Strong Asset Quality

Position

4

Strong Revenue

Diversification

Drivers

2


1

Attractive Sector Fundamentals Support Growth


Macroeconomic Highlights

Robust GDP growth and increasing income

levels

Industry Growth

Assets (PKR bn) Loans (PKR bn) Deposits (PKR bn)


Strong regulatory framework, focus on asset

quality

CAGR: 18%

CAGR: 15%

CAGR: 15%


Low consumer loan penetration presents

significant opportunities

4952

3,682


Favorable demographics and consumption

trend

3,043

2,484

2,393

Loan Growth (1)

15.0%

2007 GDP

7.0%

1,630

2004 Jun'07

2004 Jun'07

2004 Jun'07

Bank Sector ROAE (2)

20.6%

Banks Sector ROAA (2)

2.0%

Source: Company reports; SBP, Banking System Review

(1) Represents 2004 –June 2007 CAGR

(2) Represents June 2007 figures

3


2

Broad and Unique Distribution Network

Most Internationally Focused Bank in Pakistan

Domestic and International Reach

Branch Network Upgrade

Domestic Branches

1,078

Business Process Reengineering

Baluchistan

41

NWFP

153

Peshawar

Quetta

Faisalabad

Islamabad

Multan

Sialkot

Lahore

Azad Kashmir

71

Punjab

593

Proxima



Transform branches from deposit focus

to sales and customer service oriented

– 170 branches already restructured

Leverage branch networks as a

distribution channel to increase cross

selling opportunities

ATMs

326

Karachi

Hyderabad

Sindh

220



Synergize with core banking

application

Implementation of new core banking

system

UK

Switzerland

US

Oman

International Branches

Bahrain

UAE

17

Qatar

Republic

Source: Company reports, as of December 31, 2007

of Yemen

Genesis



Provide and negotiate real-time

customer and product data to all

branches

Robust, intelligent control and risk

management

4


3

Leading Consumer Finance Franchise

First Among the Big 5 Domestic Banks to Launch Consumer Banking

Consumer Loans -

Products yield –

Market Share (Jun’07)

(Dec’07)

Credit Card

21%

25%

Key Highlights


Over 200,000 credit cards issued

12%

9%

10%

13%

13%

13%

17%

16%



Introduced first ever Smart Chip

credit card

First ever chip picture card in

Pakistan

Auto Credit Card Housing *Personal Total

Consumer

Auto

Credit

Card

Housing *Personal Total

consumer

13% Market Share within

3 Years of Launch (2004)

Rs 47bn Total Consumer portfolio

* Personal loan includes Cashline, Businessline & Money

5


4

Strong Revenue Diversification Drivers

Implementing Universal Banking Model

Non Interest Income (PKR mm)

Expansion into Non-Banking Revenue

2004 – 2007 CAGR: 27%

9,931

7,262

5,372

4,819

5,899

4,799

3,909

2,888

2004 2005 2006 2007

Investment Banking



Biggest investment bank in Pakistan

First authorized derivative dealer in

the country

UBL Fund Managers



PKR33 bn of assets under

management

5 different funds, including 2 Shariahcompliant

fund

UBL Insurers

● Launched in Dec 2006



Set-up as a non life insurance

company

Synergies expected from UBL retail &

corporate banking products

Source: UBL Consolidated

Fee and Commission Income

6


4

Strong Revenue Diversification Drivers

Recognized Expertise in Investment Banking

#1

Largest Investment Bank (FY2003

(FY2003-FY2005) FY2005)

#1

Key Highlights

Transaction Volume (PKR mm)

156,462



Offers the full spectrum of services; most

specialized domestic player with dedicated desks for

DCM/Syndications, Equity & Corporate Advisory

and Project Finance

Prominent project financier for the domestic power

sector, with projects of over US$ 1.1b closed over

the last 2 years

58,611

53,307

45,060


Awarded “The Largest Corporate Finance House” by

the CFA Association of Pakistan for 3 consecutive

years (2003-2005)


Executed Pakistan’s largest domestic project

finance facility, largest syndicated loan and largest

leveraged buyout transaction to-date

No. of

Transactions

2004 2005 2006 2007

18 19 13 23


Only domestic bank that is an Authorized

Derivatives Dealer and has primary membership on

the International Swaps and Derivatives Association

Source: Company reports

7


4

Strong Revenue Diversification Drivers

International Capabilities and Core Competency

Deposits

Advances

Profit (PBT)

Rs B

80

64

48

32

13%

30

13%

39

18%

64

17%

71

20%

16%

12%

8%

Rs B

70

56

42

28

14%

21

12%

26

15%

39

21%

64

22%

18%

13%

9%

3.5

2.8

2.1

1.4

24%

1.2

20%

1.9

17%

2.5

24%

3.3

25%

20%

15%

10%

16

4%

14

4%

0.7

5%

-

2004 2005 2006 2007

0%

-

2004 2005 2006 2007

0%

-

2004 2005 2006 2007

0%

Deposits

Contribution to Bank

Advances

Contribution to Bank

Profit (PBT)

Contribution to Bank

2004 – 2007 CAGR: 33%

2004 – 2007 CAGR: 45%

2004 – 2007 CAGR: 40%

UBL - Consolidated

8


5

Asset Quality Position

Improving Asset Quality Dynamics, Better than Industry Average Position

Low Gross NPL Ratio

High Coverage Ratio

Adequate Capitalization

11.6%

12.5%

70%

79%

85%

77% 78%

83%

75%

78%

12.1%

12.2% 12.4%

8.3%

7.7%

6.9%

6.2%

7.1%

6.9%

7.9%

10.7%

7.7%

8.9% 8.8%

2004 2005 2006 2007

2004 2005 2006 2007

2004 2005 2006 2007

Industry Average UBL Industry Average UBL

CAR ratio Tier 1

Source: Company reports, SBP

Note: 2007 industry average as of 1H07 (SBP Banking System Review)

9


Deposit Structure

Deposit Mix

Fixed Deposits (1)

Other Deposits

Current Deposits

Contribution 2%

Cost 0.4%

Fixed Deposits

Contribution 32%

72

80

Contribution 28%

Cost 0.0%

Cost 7.4%

59

44

47

26

28

Savings Deposits

Contribution 38%

Cost 2.8%

13

0

6

Total Deposits = PKR 412 bn

Cost of Deposits = 3.6%

CASA = 66%

2003 2004 2005 2006 2007

Consumer Loans

Fixed Deposits

Source: Company reports

(1) Includes domestic fixed deposits only

10


6

High Calibre and Experienced Management Team

Management Team Has Delivered Outstanding Results

Name

Atif R. Bokhari

Aameer

Karachiwalla

Ali Sameer

Mohammad

Asghar

Core Management Team

Position

President & Chief

Executive Officer

CFO & Group

Executive Global

Shared Services

Group Executive,

Risk & Credit Policy

Group Executive

Retail Bank

Global Bank

Experience

Years of

Bank

Experience

Bank of America 23

Citibank 19

Robert Fleming 22

- 39

1.51%

21.2%

Sustained Profitability

1.93%

28.3%

Superior Growth (PKR bn)

2.44% 2.45%

33.7% 29.6%

2004 2005 2006 2007

ROAE

(1)

ROAA

(1)

Hasan Raza

Group Executive,

Corporate Bank

Bank of America 18

38%

37%

Wajahat

Husain

Saeed Iqbal

Najeeb

Agrawalla

Source: Company reports

(1) Business as usual ratios

Head Of Middle East

Head of Investment

Banking

Group Head

Marketing - Retail

Bank

Union National

Bank,Mashreq

Bank

ANZ

Grindlays

Amercian

Express

23

16

12

27%

25%

22%

25%

21%

547

19%

436

358

282

326

268

225

164

2004 2005 2006 2007

Assets

Gross Loans

Assets Growth

Gross Loans Growth

11


HK000MSI_Roadshow

Financial Highlights


Superior Balance Sheet Growth

Assets (PKR bn)

Gross Loans (PKR bn)

Deposits (PKR bn)

Top 4

Average

CAGR: 14%

Top 4

Average

CAGR: 15%

Top 4

Average

CAGR: 11%

2004 – 2007 CAGR: 25%

436

547

268

2004 – 2007 CAGR: 26%

326

344

2004 – 2007 CAGR: 20%

412

358

225

296

282

164

237

2004 2005 2006 2007

2004 2005 2006 2007

2004 2005 2006 2007

Source: Company reports

13


High Margins

Interest Income (PKR bn)

Loan Yield and Net Interest Margin

Total Interest Income CAGR: 63%

(2004– 2007)

Loan Interest Income CAGR: 69%

(2004 – 2007)

20.7

33.6

42.0

5.5%

7.9%

5.3%

11.0% 11.1%

6.5%

6.0%

9.7

25.7

31.3

3.6%

15.5

6.5

2004 2005 2006 2007

2004 2005 2006 2007

Interest Income from Loans

Net Interest Margin

Loan Yield

14


Strong Fee Income Growth and Contribution

Net Interest Income Growth

Total Revenue (1) (PKR bn)

85%

47%

2004 – 2007 CAGR: 40%

34.7

7%

16%

28.6

2004 2005 2006 2007

19.9

Non Interest Income Growth

12.7

35%

37%

11%

-3%

2004 2005 2006 2007

2004 2005 2006 2007

Source: Company reports

(1) Defined as net interest income plus non interest income

15


Sustained Profitability

Earnings Trend

Profitability Ratios

Net Profit (PKR mm)

2004 – 2007 CAGR: 34%

20.3%

21.2%

ROAE (1)

28.3%

25.0% 23.8%

33.7%

20.6%

22.8%

9,667

9,237

2004 2005 2006 2007

6,168

ROAA

2.4%

3,821

1.2%

1.5%

1.8%

1.9%

2.1% 2.0%

1.9%

2004 2005 2006 2007

* 2007 results impacted by change in prudential regulations

Source: Company reports

(1) Includes minority interest and surplus on revaluation of assets

(2) Source: SBP (Banking System Review June 2007)

2004 2005 2006 2007

Industry average (2)

UBL

16


HK000MSI_Roadshow

Appendix


Income Statement

(PKR mm)

2004 2005 2006 2007 ’04-’07 CAGR

Net Interest Income (1) 7,860 14,531 21,367 24,799 47%

Non Interest Income 4,818 5,372 7,262 9,930 27%

Operating Revenue (1) 12,679 19,903 28,629 34,729 40%

Operating Expense 7,346 8,727 12,328 14,734 26%

Pre-Provision Operating Profit 5,332 11,176 16,301 19,995 55%

Provision Expenses 357 1,434 2,240 6,423 162%

Others 35 (32) 439 224 86%

Net Income 3,821 6,168 9,667 9,237 34%

(1) Before provision expenses

18


Balance Sheet

(PKR mm)

2004 2005 2006 2007 ’04-’07 CAGR

Cash and Bank Balances

48,119 52,832 68,442 68,605 13%

Investments – Net

52,708 61,559 65,735 114,026 29%

Loans and Advances – Net

148,225 210,153 254,670 308,271 28%

Total Assets

282,248 358,056 435,835 546,796 25%

Customer Deposits

Borrowings

Total Liabilities

237,054 296,499 343,805 412,138 20%

12.637 22.751 38.625 59.491 68%

262,869 333,783 402,658 498,905 24%

Equity (1) 19,379 24,274 33,177 47,891 35%

(1) Includes minority interest and surplus on revaluation of assets

19

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