WIP 9M 2017 Financial Results Presentation November 7, 2017 1 9M 2017 Unaudited Results
Disclaimer This presentation contains or incorporates by reference ‘forward -looking statements’ regarding the belief or current expectations of Union Bank Plc, the Directors and other members of its senior management about the Group’s businesses and the transactions described in this presentation. Generally, words such as ‘‘could’’, ‘‘will’’, ‘‘expect’’, ‘‘intend’’, ‘‘anticipate’’, ‘‘believe’’, ‘‘plan’’, ‘‘seek’’ or similar expressions identify forward-looking statements. These forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Company and/or its Group and are difficult to predict, that may cause actual results to differ materially from any future results or developments expressed or implied from the forward-looking statements. Such risks and uncertainties include, but are not limited to, regulatory developments, competitive conditions, technological developments and general economic conditions. The Bank assumes no responsibility to update any of the forward looking statements contained in this presentation. Any forward-looking statement contained in this presentation based on past or current trends and/or activities of Union Bank should not be taken as a representation that such trends or activities will continue in the future. No statement in this presentation is intended to be a profit forecast or to imply that the earnings of the Company for the current year or future years will necessarily match or exceed the historical or published earnings of the Company. Each forward-looking statement speaks only as of the date of the particular statement. Union Bank expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Union Bank’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. 2 9M 2017 Unaudited Results
UBN – Celebrating 100 Years of Strength, Reliability and Growth 1917 1999 2013 2016 2 nd largest Strategy Received most branch network redefined with Established as improved retail with ~280 new Colonial Bank bank award branches management 1925 1971 2004 2009 2014 2016 Became Barclays Sale of Banking crisis / Bank DCO, 2 nd Listed on the subsidiaries Simpler, Established UK CBN commercial bank Nigerian Stock with focus on Smarter Bank subsidiary intervention in Nigeria Exchange core banking 1917 - 1970 1971 - 1990 1991 - 2008 2009 - 2012 2013 - 2015 2016 - 2017 1969 1979 2005 2012 2015 2017 3 rd largest Acquired Huge Became Barclays Became Union Universal Trust branch network investments in Bank of Nigeria Bank of Nigeria Bank & Broad with ~350 people, process Ltd. Plc. Bank branches & technology 1983 1970 2012 2015 Received Nigeria’s Best Launched re- Opened full- Recapitalization energized Grew branch fledged branch Bank Awards in with UGPL as brand. Awards network to 59 in London 2000-2, 2004, core investors received 2006 3 9M 2017 Unaudited Results
Union @ 100 – Celebrate. Impact. Lead. Drive change in our community: • Continue to create sustainable impact in our communities Impact • Establish a standard for sustainable citizenship for the private sector. Sustainability Innovation Heritage Celebrate Lead We have a rich, long heritage made possible How we will lead in the future: by key stakeholders in our journey and we • Be at the leading edge of innovation, must celebrate them: placing emphasis on enhancing • Employees, Customers, Alumni, Other customer experience and driving social innovation stakeholders 4 9M 2017 Unaudited Results
Union Bank at a Glance (as of September 2017) ₦ 264.1bn ₦ 1,248.0bn Total Equity Total Assets ~350 ~3.7m ~2,700 Sales & Service Centres Customers Employees Fitch Alt. Channels 5 BBB+ National Rating ~900 ATMs GCR A2 Short Term ~6,000 POS Moody’s ~700K Mobile Users Aa3 National LCY Rating ~150K Online Users Stable Outlook 5 9M 2017 Unaudited Results
1 The Operating Environment Union Bank Update 2 9M 2017 Financial Performance 3 Looking Ahead 4
The Operating 1 Environment Emeka Emuwa Chief Executive Officer
In 2017, the Nigerian economy has seen some ups and downs Nigeria is exiting the recession Macro- Changing Socio-Political Consumer Economic Regulation Development Trends Conditions • Slow start to the • Additional FX • Launch of ERGP • Consumers are year , exiting windows restored 2017-2020 under economic recession in Q2 stability pressure therefore • Delayed release of more “Made in • Declining inflation , • Tight monetary funding, impacting Nigeria” -inclined policy – consistently though higher than progress on 2017 • More tech savvy pre-recession levels high rates plans requiring THE OPERATING ENVIRONMENT capital expenditure customers, and • Volatile oil prices – • CBN policies to are therefore driving improving reserves boost financial rise of more efficient inclusion, agric. and • Domestic & service-oriented SME commodity prices start-ups responding positively to increased harvest output 8 9M 2017 Unaudited Results
Current macroeconomic trends in Nigeria reveal some positives Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Nigeria’s GDP is projected to expand 0.8 1 -1% 2 in 2017. Real 0.6% In Q2’17, GDP grew by 0.55% year-on-year following GDP -0.9% -1.7% Growth five consecutive quarters of negative growth. Rate -2.3% 32.2 30.3 30.3 Reserves currently stand at $33.2bn (as of Nov 3), vs. $32.2bn in Sept’17, and $25.8bn in Dec’16. External 25.8 Reserves 24.5 Crude oil (Bonny Light) was $64.27 (as of Nov 6), up 53.9 Crude Oil from $54.6 in Sept’17 and $53.90 in Dec’16 (fuelled by 51.9 50.6 (Bonny Light) 54.6 46.9 higher demand and output cuts limiting supply). $/barrel 470 482 BDC Rate N/$ THE OPERATING ENVIRONMENT As at Nov 3, the IEFX window closed at ₦ 360.57/$. NAFEX Rate 362 CBN’s official FX has rate remained flat at ₦ 305.85/$. N/$ 395 368 Official 305 Rate N/$ 305 306 306 306 In Sept, inflation improved slightly to 15.98%. It reached an all year high of 18.60% in Dec’16 driven by 17.3% 16.1% 16.0% Inflation increased price of general consumer goods 17.9% 18.6% 9 9M 2017 Unaudited Results Source: CBN, NBS , FDC,OPEC, other research Notes: 1 IMF GDP forecasts; 2 World bank GDP growth forecasts
Recent regulatory developments highlight some positives Q1 Flexible FX rules were introduced by the Central Bank of Nigeria (CBN), including the removal of the 60:40 FX allocation to manufacturers 2017 The nationwide implementation of the cashless policy is suspended, with CBN directing banks to revert to old charges and refund debited customers A special FX window for SMEs is introduced, to enable operators import eligible items Q2 2017 A special FX window for investors and exporters is introduced, to improve liquidity in the forex market Bank charges were revised, effective May 1 THE OPERATING ENVIRONMENT CBN reiterated the IFRS 9 guidance that was released in December 2016, providing guidance for banks to commence the parallel run of IAS 39 and IFRS 9 by October 1, 2017 Q3 CBN announced plans to establish two new financial instruments: “Funding for Liquidity Facility (FfLF )’’ and ‘’Intra -Day Facility (IDF)’’; to provide liquidity support to licensed Non -Interest Financial 2017 Institutions (NIFI) Rates retained at 30%, 14% and 22.5% for liquidity ratio, MPR and CRR respectively, by MPC 10 9M 2017 Unaudited Results
Union Bank 2 Update
Today, Union Bank is a simpler, smarter bank Solid and Iconic brand with experienced rich heritage leadership team Robust risk Strengthened management and talent pool with compliance improving standards productivity Strong reputation Sustained positive for ethical financial performance standards (trust, professionalism) trajectory UNION BANK UPDATE Improving State of the art Extensive operational core banking Steadily growing distribution with efficiency platform and resilient ~350 branches with customer base omni-channel (~3.7m customers) network 12 9M 2017 Unaudited Results
Our focus remains retail, trade and transaction banking Areas of Focus Innovative Efficient Channels: Predictable Service Products Online & Mobile Delivery Strong Focus on Retail Enabling Customer Partnerships Acquisition Leverage Value Market Leader in Chain for Network Trade & Domestic Trade Effect Transaction Banking Deep Sector Enhanced Service Expertise Delivery Commercial Corporate e.g. Agriculture UNION BANK UPDATE Cost Efficiency & Strong Sales/Service Risk & Systems/ Productivity Capability Quality of People Compliance Processes Earnings Proactive Risk Management Quality of our talent & professional standards Quality of our banking platform 13 9M 2017 Unaudited Results
Recommend
More recommend
