00000000000000000000000000000 000 1 Vision We are geared to - PowerPoint PPT Presentation

Investor Presentation 3Q 16 00000000000000000000000000000 00000000000000000000000000000 000 1

Vision We are geared to deliver a bold new world Our Vision is to be the innovator of banking solutions to the wider Corporate, SME and Retail segments and to be their Bank of choice, through professional and empowered people 2

Mission To our customers we provide the means of economic upliftment through customized banking and financial services. To our shareholders we provide a return on their investment above industry norm. To our staff we are a learning and innovative organization providing opportunities for faster career progression within a pleasant work environment. We adhere to the practice of good Corporate Governance in the eyes of the regulatory authorities. We are conscious of the need to be a responsible corporate citizen for the betterment of our society. 3

Key Company Milestones 1995-2000 2001-2010 2011-2013 2014-2016 Established as the 8th Restructuring of the bank Listed in the CSE, TPG through its affiliate through a Sampath Bank indigenous Commercial Highest oversubscribed Culture Finance Holding led consortium Bank IPO strikes landmark deal with Union Bank First bank to launch Landmark investment Acquisition of NAMAL New Core-Banking system Internet banking from Middle East - Royal and UB Finance Implementation Family of Saudi Arabia CFI award for Best SME First bank in Sri Lanka to Bank implement Microsoft cloud technology BBB (Stable) rating from ICRA 65 branches with access to over 2,700 ATM’S Introduction of Transaction Banking 4

2016 Key Milestones Fitch changed outlook from BB+ BBB (Stable) rating from ICRA (Stable) to BB+ (Positive) Cash Management System Re-Launched an improved Online Implemented Banking platform Personal Loan portfolio crossed the Re- launched “ Kidz Saver Account” LKR 2,000Mn mark Recognition at Global Excellence 65 Branches,119 ATMs of which 54 are awards 2016 Offsite ATMs and Employees 1,171 Launched “Investment Plus” investment plan 5

Financial Overview - Bank “Union Bank’s first 9 months’ results are impressive, given the changes taking place in the market place. The growth achieved despite macro-economic challenges can be attributed to the operational excellence and the renewed strategic business focus of the Bank. With the backing of a strong capital base, a focused business plan and a dynamic team geared for performance; Union Bank will continue to build on this success, while taking on the challenges and opportunities that would emerge within the final quarter of 2016 and beyond.” - CEO 6

Snapshot 3Q 16 Group • Net Profit grows 148% Year on Year (YoY) to Rs.415Mn • Operating Income grows 34% YoY to Rs.3,346Mn • Total Assets increased 22% YTD to Rs.93,577Mn Bank • Net Profit grows 125% YoY to Rs.262Mn • Operating Income grows by 30% YoY to Rs.2,685Mn • NPL ratio reduced to 2% reflecting further improvement in asset quality. • Net Loans and advances grew 31% YTD to Rs.52,418Mn • Customer Deposits grew 32% YTD to Rs.49,589Mn • Total Assets increased 22% YTD to Rs.86,783Mn 7

Financial Performance (Quarter) – Bank Growth LKR Mn 3Q 16 3Q 15 Net Interest Income 672 498 174 34.9% Net Fee and commission income 67 66 1 2.1% Net Trading and other operating income 290 158 132 83.3% Total Operating income 1,030 722 307 42.6% Operating Cost 793 597 (196) (32.7%) Impairment Charges 20 30 9 33.3% Net profit before taxes and VAT on FS 216 95 121 128.4% Taxes including VAT on FS 108 39 (69) (176.9%) Net Profit for the period 108 57 52 91.9% 91% growth in Profit After Tax 8

Financial Performance (YTD) – Bank Growth LKR Mn YTD 16 YTD 15 Net Interest Income 1,651 1,538 113 7.3% Net Fee and commission income 188 120 68 56.7% Net Trading and other operating income 846 414 432 104.3% Total Operating income 2,685 2,072 613 29.6% Operating Cost 2,226 1,706 (520) (30.5%) Impairment Charges 38 137 99 72.2% Net profit before taxes and VAT on FS 420 230 190 82.6% Taxes including VAT on FS 158 113 (45) (39.8%) Net Profit for the period 262 117 145 125.0% 125% growth in Profit After Tax 9

Revenue Generation (Quarterly) – Bank Net Fees and Commission Net Interest Income 67 LKR Mn LKR Mn 672 66 62 60 59 535 528 511 498 484 30 444 25 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 Other Non-Interest Income LKR Mn 295 290 261 223 158 147 Significant increase in NII as a result of 109 portfolio growth and improvement in NIM. 10 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16

Statement of financial position – Bank Total Assets (LKR Mn) LKR Mn Sep 16 Dec 15 Growth 25,592 24,490 1,102 4.5% Treasury Assets 52,418 40,095 12,323 30.7% Loans & Advances 3,959 3,609 350 9.7% Non Earning assets Dec 15 Sep 16 4,813 2,811 2,002 71.2% Cash & Balance with CB Loans (LKR Mn) 86,783 71,005 15,777 22.2% Total Assets 18,003 15,188 2,816 18.5% Borrowings 49,589 37,653 11,937 31.7% Customer Deposits 2,121 1,243 878 70.6% Non Interest Bearing Liabilities Dec 15 Sep 16 17,070 16,922 147 0.9% Equity 86,783 71,005 15,777 22.2% Deposits (LKR Mn) Total Equity & Liabilities Strong growth of 22.2% YTD in Total Dec 15 Sep 16 Assets. 11

Composition of the Balance Sheet Assets Composition Segmental dispersion of Loans Loans – 60.4 % 10% 48% Assets 42% Treasury Assets – 29.4 % Corporate SME Retail Funding Composition Product composition of Deposits 6% 17% Deposits – 57.1% 77% Funding Treasury Borrowings – 20.7% CA SA FD 12

Loan Growth & Capital Adequacy Loans and Receivables Net NPL LKR Mn 52,418 7.8% 7.4% 48,513 43,259 40,095 4.5% 25,945 23,462 20,024 3.0% 16,902 2.7% 2.3% 2.0% 1.9% 2011 2012 2013 2014 2015 1Q 16 2Q 16 3Q 16 2011 2012 2013 2014 2015 1Q 16 2Q 16 3Q 16 Capital Adequacy 45% 40% 35% Significant progress in NPL reduction 30% 25% despite the aggressive loan growth. 20% 15% 10% Strong Capitalisation to support the 5% growth. 0% 2011 2012 2013 2014 2015 1Q16 2Q16 3Q 16 13 Core Capital Total Capital

Deposit Growth & CASA Customer Deposits LKR MN 49,589 45,803 42,598 37,653 28,340 27,809 23,642 19,345 2011 2012 2013 2014 2015 1Q16 2Q16 3Q16 CASA LKR Mn 11,703 10,583 9,809 9,039 6,924 CASA grows by 29.5% to Rs.11,703Mn 5,441 5,262 4,752 YTD. 2011 2012 2013 2014 2015 1Q16 2Q16 3Q16 14

Key Indicators - Bank Sep YTD Dec YTD Performance Indicators 16 15 2.1% 1.1% Return on Equity 0.4% 0.3% Return on Assets 2.8% 3.4% Net Interest Margin 2.7% 3.5% Gross - Non Performing Loans 1.9% 2.7% Net - Non Performing Loans 23.0% 24.4% Core Capital Adequacy Ratio 22.4% 24.0% Total Capital Adequacy 15

Financial Performance (Quarter) – Group Growth LKR Mn 3Q 16 3Q 15 Net Interest Income 806 604 202 33.4% Net Fee and commission income 106 111 (5) (4.1%) Net Trading and other operating income 314 167 148 88.6% Total Operating income 1,226 881 345 39.2% Operating Cost 913 700 (213) (30.4%) Impairment Charges 50 48 (2) (4.1%) Net profit before taxes and VAT on FS 262 133 129 97.0% Taxes including VAT on FS 122 49 (74) (151.8%) Net Profit for the period 140 85 55 65.6% 65% growth in Profit After Tax 16

Financial Performance (YTD) – Group Growth LKR Mn Sep YTD 16 Sep YTD 15 Net Interest Income 2,035 1,833 202 11.0% Net Fee and commission income 311 241 70 29.0% Net Trading and other operating income 999 424 575 135.6% Total Operating income 3,346 2,499 847 33.9% Operating Cost 2,586 1,999 (587) (29.4%) Impairment Charges 110 187 77 41.3% Net profit before taxes and VAT on FS 650 314 337 107.2% Taxes including VAT on FS 235 146 (89) (61.0%) Net Profit for the period 415 167 248 148.7% 148% growth in Profit After Tax 17

Statement of financial position – Group Total Assets (LKR Mn) Growth LKR Mn Sep 16 Dec 15 24,876 24,034 842 3.5% Treasury Assets 59,172 45,450 13,722 30.2% Loans & Advances 4,411 4,042 369 9.1% Non Earning assets Dec 15 Sep 16 5,117 3,015 2,102 69.7% Cash & Balance with CB 93,577 76,542 17,035 22.3% Total Assets Loans (LKR Mn) 19,384 16,432 2,952 18.0% Borrowings 54,486 41,624 12,862 30.9% Customer Deposits 2,711 1,771 940 53.1% Non Interest Bearing Liabilities 16,995 16,715 280 1.7% Equity Dec 15 Sep 16 93,577 76,542 17,035 22.3% Total Equity & Liabilities Deposits (LKR Mn) Dec 15 Sep 16 18