2008/ 09 T hir d Qtr Re sults Inve stor Br ie fing Vic tor Osadolor E xe c utive Dir e c tor / Gr oup CF O UBA PL C August 7, 2009
3Q- Jun 2009 financ ials at a glanc e Jun- 09 Jun- 08 % PARAME T E RS GROWT H ACT UAL (N’ bn) ACT UAL (N’ bn) GROSS E ARNINGS 160.6 120.3 34% PBT & E XCE PTIONAL ITE MS 33.7 34.9 -3% E XCE PTIONAL ITE MS 21.3 1.7 1123% PROFIT BE FORE TAX 12.4 33.1 -63% BAL ANCE SHE E T SIZE 1,979 1,586 25% TOTAL ASSE TS 1,452 1,146 27% DE POSITS 1,154 865 33% SHARE HOL DE RS' FUNDS 208 185 13% ROa E 9.7% 18.8% ROa A 1.5% 2.8% COST/ INCOME RATIO 67.2% 59.2% Pe rforma nc e impa c te d by c ha lle ng ing ope ra ting e nvironme nt www.ubagr oup.com 2
Outline � E xe c utive Summa ry � De ta ile d Ana lysis o f re sults � K e y mile sto ne s � Ope ra ting e nviro nme nt � Outlo o k fo r the re ma ining q ua rte rs � Q & A www.ubagr oup.com 3
E xe c utive Summa ry 1) UBA – Ove rvie w of 3Q09 pe rforma nc e � Ste a dy Growth in ma rke t sha re � 46% CAGR in Gro ss E a rning s � 35% CAGR in Ba la nc e She e t; I ndustry le a de r � 31% CAGR in De po sits; I ndustry le a de r � 12% Yo Y g ro wth in b ra nc he s. Curre nt le ve ls: 694 b ra nc he s � 32% Yo Y g ro wth in AT Ms to 1,592 � 6% g ro wth in Custo me r b a se to 6.9m � Pr ofitability and e ffic ie nc y impac te d by e xc e ptional c har ge of N21.3bn � E xc e ptio na l Cha rg e o f N21.3b n pre c ipita te s a de c line in PBT to N12.4b n (N1.7b n in 3Q08) • Cha rg e c o mprise s o f Spe c ia l Asse t o f N4.1b n, ML N11.7b n, Othe rs N5.5b n � PBT b e fo re e xc e ptio na l ite ms sta b le a t N33.7b n � …a nd la rg e ly d rive n b y impro ving fund-b a se d inc o me � F e e b a se d inc o me fla t � E nha nc e d c o ntrib utio n fro m e x Nig e ria o pe ra tio ns (11%) � ROa A a nd C/ I dippe d due to I nte re st ra te pe g a nd inc re a se d le ve ls o f pro visio ns www.ubagr oup.com 4
E xe c utive Summa ry � Sta ble F unding mix a nd Robust c a pita l a de qua c y � L o w c o st funds ste a dy a t 61% � Ca pita l Ade q ua c y Ra tio (CAR) o f 19.3; 9% a b o ve re g ula to ry minimum � Strong liquidity � L iq uid a sse t/ to ta l a sse t a t 34% � L iq uid ity Ra tio o f 41% (16% b uffe r o n re g ula to ry minimum) � Hug e ne t pla c e r o f funds in the I nte rb a nk ma rke t � Stable F itc h Rating, de spite c halle nging landsc ape � B+/ Sta ble Outlook � Mor e Conse r vative Risk Manage me nt postur e � NPL r atio dips to 8.9% • F ull pro visio ning fo r Ma rg in lo a ns, de spite CBN’ s re spite till De c ’ 09 • Co nve rg e nc e b e twe e n lo c a l GAAP a nd I F RS pro visio ning sta nda rds • Spe e dy imple me nta tio n o f Ba se l I I , COSO a nd I F RS • Re g ula r I nte rna l Ca pita l Ade q ua c y Asse ssme nt Pro c e ss (I CAAP) � Ne t c ove ra g e ra tio - 82% � L oa n/ de posit ra tio a t 46.4% c onsiste nt with g roup ta rg e ts www.ubagr oup.com 5
E xe c utive Summa ry 2) Ke y Mile stone s with the Qua rte r � Ma jor de a ls/ Pa n Afric a n a spira tions � Re c e ive d $150m, 5-ye a r tra de fina nc e fa c ility fro m AfDB � Re c e ive d $200m, 3-ye a r c le a n line fro m Sta ndc ha rt � L e d a $265mn upstre a m fina nc ing de a l fo r E xxo n Mo b il/ NNPC � L mo Sta te g o vt . e d a n N18.5b n Bo nd fo r I � Co mme nc e d o pe ra tio ns in Se ne g a l • UBA Group now ha s 694 bra nc he s in14 c ountrie s � L ic e nse re c e ive d to o pe ra te in Za mb ia � T owar ds Se r vic e E xc e lle nc e … . � L a unc he d Nig e ria ’ s first c a sh a nd c he q ue de po sit AT M � Custo me r Co mpla int Ma na g e me nt Syste m (CCMS) la unc he d � F e ma le L e a de rship Gro up (F L G) e sta b lishe d fo r se rvic e e xc e lle nc e � GSS no w fully o pe ra tio na l in 140 b ra nc he s � Commitme nt to e nha nc e d sta ke holde r va lue � A. J. Be llo a ppo inte d to the Bo a rd a s E xe c utive Dire c to r � Pa rtne rship with CNBC fo r live b ro a dc a st o f Nig e ria n c a pita l ma rke t upda te s � L a unc he d ‘ UBA DNA pro g ra m’ to re invig o ra te o ur Co re Va lue s, H.E .I .R www.ubagr oup.com 6
E xe c utive Summa ry 3) Ope ra ting e nvironme nt L oc al � F itc h a ffirms Nig e ria ’ s BB- ra ting with sta b le o utlo o k – July’ 09 � E xte rna l re se rve s a t $43.2b n a s CBN pursue s me a sure s to stre ng the n it � GDP g ro wth a t 4.85% a s infla tio n ra te e a se s to 11.2% � Ne w CBN Go ve rno r a ppo inte d • Pursue s Risk Ma na g e me nt, Re g ula tio n a nd Re po rting • F X ra te s re ma ins fa irly sta b le a t N146/ $1 • L iq uidity sq ue e ze e a se s � Ne w DG a ppo inte d a t the SE C to re sume la te r in the ye a r � E q uity ma rke t g a ine d 35% in 2Q09, b ut vo la tility re ma ins � I nc re a se d c a pita l flo ws • Wo rld Ba nk re le a se d $1b n fo r infra struc ture a nd $500mn a s b udg e ta ry suppo rt • ADB $200m e xpe c te d Globa l � Re c e ssio n e a se s? ? • Ra te o f GDP de c line a nd jo b lo sse s slo w do wn • Ra lly in o il pric e s, up 35% in 2Q09; no w $71pb l • Glo b a l e q uity inde x re b o unds fro m Ma rc h lo ws • Ma ssive I nje c tio n o f fisc a l stimulus suppo rts liq uidity • US/ UK c o mpa nie s sta rt to re po rt q ua rte rly pro fits www.ubagr oup.com 7
Outline � E xe c utive Summa ry � De ta ile d Ana lysis of re sults � Growth in ma rke t sha re � Pro fita b ility � E ffic ie nc y � Ba la nc e She e t Gro wth � Risk ma na g e me nt – Ca pita l Ade q ua c y, L iq uidity & Asse t Qua lity � K e y Mile sto ne s � Ope ra ting e nviro nme nt � Outlo o k fo r the re ma ining q ua rte rs � Q & A www.ubagr oup.com 8
Growth in market share – Gross Income YoY Gross Earnings 2007 – 09 (N’ bn) Qua rte rly Gross E a rning s (N’ bn) % 6 4 57.2 f 160.6 180 o R 51.7 51.7 60 G 49.3 A C 42.1 39.1 120.3 39.0 40 120 75.2 20 60 0 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 0 3Q07 3Q08 3Q09 Composition of Gross Earnings � 46% CAGR in Gross Earnings (GE) FX I nc ome Ot he r s 4 % � Steady growth in GE QoQ 2 % Fe e s & � Fund-Based Income is the key driver Comm 18 % � accounts for 76% (68% in 3Q08) I nt r � Fueled by wide branch network, low I nc ome cost deposit and strong liquidity 7 6 % www.ubagr oup.com 9
Growth in market share – Balance Sheet Strong Balance Sheet Size (N’trillion) Net Loans (N’billion) CAGR of 35.4 % % 3 . 8 2 600 f o 535 1.98 R G 2 A 1.59 C 455 1.08 400 325 1 0 200 3Q07 3Q08 3Q09 3Q07 3Q08 3Q09 � Strong balance sheet evolution Solid Deposit Base (N’trillion) 2 � Wider network in Nigeria CAGR of 31.2 % 1.15 � Pan African expansion � 1 0.87 IT/GSS Enablement 0.67 � enhanced risk management framework 1 3Q07 3Q08 3Q09 www.ubagr oup.com 10
Growth in market share – footprints Largest Branch Network Strong growth in ATM Channels +12% +32 % 1,592 694 1600 700 621 1,205 1200 600 800 500 3Q08 3Q09 3Q08 3Q09 � Market leader in distribution Solid Customer Base ( in million) network % 6 + � Market share in excess of 20% 6.9 7 6.5 � Easy access to cheap customer deposits 6 � Convenient banking for customers � 5 Supported by state of the art IT 3Q08 3Q09 platform www.ubagr oup.com 11
Outline � E xe c utive Summa ry � De ta ile d Ana lysis of re sults � Gro wth in ma rke t sha re � Profita bility � E ffic ie nc y � Ba la nc e She e t � Risk ma na g e me nt – Ca pita l Ade q ua c y, L iq uidity & Asse t Qua lity � K e y Mile sto ne s � Ope ra ting e nviro nme nt � Outlo o k fo r the re ma ining q ua rte rs � Q & A www.ubagr oup.com 12
E a rning s drive n L a rg e ly by fund- ba se d Inc ome Fund based income drive gross earnings Fee Based income flat (N’bn) Fee- 38.9 38.2 based 40 Income Fund- 24% based 20 (32% in 3Q08) Income 76% 0 (68% in 3Q08) 3Q08 3Q09 � Interest & discount contribute 76% to GE Composition of fund based income � Driven by investment in Govt securities, placement, Loans and advances Overdrafts Others � Fee based Income relatively flat 21% 4% Loans � Reduced investment banking income D-House 33% Placements � Open Position Limits (OPL) reduced from 20% to 6% 5% of Shareholder funds BAs, CPs & FGN Bonds � Reduced spreads, holding period and tradable FX Bank GCPs 4% T-Bills volumes Placements 18% 4% 10% www.ubagr oup.com 13
Improving dive rsific a tion of E a rning s Gross Earnings by Geography Analysis of Ex-Nigeria Gross Earnings 1.6% Others 100% N/York & 11% 6% GCI Cameroun 75% n 32% 7% 50% 98.4% 89.0% 25% B/Faso Benin 28% Ghana 9% 0% 18% 3Q08 3Q09 N igeria Outside N igeria � E x Nig e ria ope ra tions a re 11% of Gross E a rning s (1.6% in 3Q08) � N/ Yor k and B/ F aso ac c ount for 60% � Contribution from Non Ba nk Subs dippe d to 2.5% (9% in 3Q08) � L ow c a pita l ma rke t a c tivitie s � Inc r e ase in numbe r of Bank subs www.ubagr oup.com 14
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