United Bank : Q1’23 Investor Presentation

Investor Presentation

1st Quarter 2023

Performance Highlights

and Business Outlook

Speakers:

Mr. Arif Saifie, FCA, CFA

Chief Financial Officer

Ms. Saira Shah - Financial Controller & Head of Investor Relations

Overview of the UBL Group | We are one of the largest and most profitable banks in Pakistan

Over 60 years of successful operational history

Market leading positions in core segments

Delivered consistent ROE in last few years with strong dividend yields

One of the largest networks with 1,335 branches, including 150 Islamic branches and over 500 windows

Leader in Digital Banking in Pakistan with over 3.2 mln customers served through a state of the art Mobile App

Highly experienced senior management team with diversified experience of large local and global banking institutions

Strong international presence based in UAE, Bahrain and Qatar and the UK

Market leader in Home Remittances with over USD 6 bln + inflows each year, over USD 800+ mln RDA flows

Full service financial house with Asset Management, Insurance and Microfinance services

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The Big Picture on Macros - UBL delivers strong results with improving EPS

Overview of Key Macros in Q1'2023

• Avg Market deposits for YTD Mar'23 at Rs. 22.4 tln, up 14% YoY
• Currency in Circulation remains high at Rs. 8.3 tln up 8% over Dec'22 (Rs 7.7 tln)
• Avg Market Advances for up by 19% YoY in Mar'23 at Rs. 11.7 tln.
• Inflation level hits high in Mar'23 stood at 35.4% (YoY), (Feb 23: 31.5%, Dec'22: 24.5%)
• Interest rates at very steep levels - (20 Apr'23 vs Dec'22) 3M: 21.9% +521bps, 1Y: 21.81% +481ps, 3Y: 18.1% +246bps

UBL recorded strong performance in 1Q'2023

RS	Rs	35%		28.0%		17.6%	Rs	Rs
24.4B	13.9B			11.4	11.0
PBT	PAT	Cost to		ROE		CAR	EPS	Dividend
Income ratio
up 54% YoY	up 46% YoY				5.6% above		Dividend Payout
vs 42% in 1Q'22		vs 23% in 1Q'22		vs Rs. 7.78 in 1Q'22
		minimum levels
							97%

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1Q'23 Results | Solid growth supported by strong NFI with cost control

	Rs in bln		Rs in bln
Income Statement	1Q'23	1Q'22	Var %	Q4'22	Var %

Margin expansion grows earnings with strong fee buildup

▪ Bank NIMs at 5.2% in 1Q'23 (1Q'22: 4.3%), with higher asset yields

Interest Earned	89.8	48.0	87%
Interest Expensed	(56.6)	(26.5)	-114%
Net Interest Income	33.3	21.5	55%
Non Interest Income	8.8	6.8	30%
Total Revenue	42.0	28.3	49%
Operating expenses	(14.5)	(11.7)	-24%
Total Expenses	(15.0)	(12.1)	-25%
Pre Prov. Operating Profit	27.0	16.2	67%
Provision Exp./Other writeoffs	(2.6)	(0.3)	-653%
Profit Before Extra Ordinary / Unus	24.4	15.8	54%
Profit After Tax	13.9	9.5	46%
Earnings Per Share (EPS)	11.4	7.8	46%

74.4 21%

(43.9) -29%

30.4 9%

12.3 -29%

42.8 -2%

(14.5) 0%

(14.8) -1%

27.9 -3%

(10.3) 74%

17.7 38%

13.3 5%

10.9 5%

▪ Branch banking fees at Rs. 636 mln (up 13%)
▪ Corporate service charges up 42% & FI rebate / commission up 17%
▪	Trade & guarantee income more than doubled at Rs. 766 mln
▪	ATM & card related fee at Rs. 770 mln; HRC comm. up 9% at Rs. 653 mln

Inflation impacts costs-reinvestments in technology and people continues

• Admin. expenses of Rs. 14.5 bln for 1Q'23, up 24% YoY
• Cost to income ratio improved to 35% in 1Q'23 from 42% in 1Q'22

Provisions

• Provision reversal of Rs. 946 mln in International loan portfolio
• Domestic NPLs reduced by Rs. 370 million since Dec'22
• Asset quality remains a key focus across the Bank

4

Balance Sheet Review | Building efficiencies in deposit base with well diversified investment book

	Rs in bln
Balance Sheet	Mar'23	Dec'22	Var %
Advances	711	922	-23%
Investments	1,710	1,415	21%
FI Lendings	61	85	-28%
Others	501	336	49%
Total Assets	2,984	2,759	8%
Deposits	2,138	1,838	16%
Borrowings	474	565	-16%
Subordinated Debts	10	10	0%
Others	146	137	7%
Total Liabilities	2,769	2,550	9%
Net Assets	215	209	3%
Share Capital	12	12	0%
Reserves	104	86	21%
Unappropriated Profit	93	91	2%
Surplus on reval. of Assets	5	19	-73%
Total Equity including Surplus	215	209	3%

Domestic Deposits Performance - led by Branch Banking Group

• Average deposits at Rs 1.6 tln, up 7% YoY
• Average current accounts up 12% YoY, savings up 6% YoY
• Period End current to total deposits ratio is 48% (Dec'22: 49%)
• Period End domestic CASA ratio levels at 91% (Dec'22: 89%)
• Cost of deposit contained at 7.5% (4.5% 1Q'22) - despite rate hike

Corporate Bank Lending continuing with strong asset quality

• Domestic performing advances at Rs. 569 bln (Dec'22: Rs 759 bln)
• Average performing domestic advances at Rs. 675 bln (36% up)
• International portfolio decreased to USD 494 mln (Dec'22: USD 715 mln)

Investments portfolio position and mix as at Mar 31, 2023

• Overall investments portfolio increased by 21% to Rs 1.7 tln
• Timely repositioning within investments strengthens NII
• Well diversified portfolio of fixed and floating rate investments
• BS well positioned for further repricing across asset base

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