FY 2017 and Q1 2018 Performance May 14, 2018
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
Union Bank: Over 100 Years of Heritage and Service 2013 2016 1917 1999 2 nd largest branch Strategy redefined Received most Established as network with ~280 Colonial Bank Transformation improved retail branches began bank award 1925 2009 2014 2004 1971 Brand awards Became Barclays Banking crisis / Huge investments Listed on the Established UK received e.g. Bank DCO, 2 nd CBN in people, process Nigerian Stock subsidiary Transform commercial bank intervention & technology Exchange Awards MENA in Nigeria 1917 - 1970 1971 - 1990 1991 - 2008 2009 - 2012 2013 - 2015 2016 - 2018 1969 1979 2012 2015 2017 2000-8 Became Union Received Recapitalization Launched Bank of Nigeria Nigeria’s Best Became Barclays with new re-energized brand Plc. Bank Awards in Bank of Nigeria investors 2000-2, 2004, Ltd. 1983 2018 2006 Opened full- Vision to be Nigeria’s most fledged branch in London reliable & trusted banking partner 3
Union Bank at a Glance ₦ ₦1,381bn 1 ₦286bn 1 Total Assets Total Equity 300 4.3million 2,700 Sales and Service Centres Total Customers Employees Fitch: B- Long Term IDR 950 ATMs (Stable Outlook) 7k POS Moody’s: B3 Foreign Currency 1m Mobile Users Rating (Stable Outlook) 250k Online Users Ratings Channels 4 1 As of March 31, 2018
1 The Operating Environment Union Bank Update 2 FY 2017 Financial Performance 3 Q1 2018 Financial Performance 4 Key Performance Highlights 5 Looking Ahead 6
The Operating 1 Environment Emeka Emuwa Chief Executive Officer
Overview of the Nigerian Economy Macro-Economic Conditions Regulatory Actions • Economy started recovering from recession in • Additional FX windows in Apr 2017 restored 2017 stability and liquidity • Rising oil prices and external reserves • Tight monetary policy stance maintained, with MPC retaining rates for CRR, MPR and liquidity ratio • Steadily declining inflation • IFRS 9 adoption effective in Jan 2018 • Lower interest rate environment in 2018 with increasing liquidity National Priorities Consumer Trends • ERGP 1 launched and yielding results e.g. Ease of • Increasing digital penetration (i.e. mobile, THE OPERATING ENVIRONMENT Doing Business ranking up 24 places to 145th internet, smart phones) • Increasing policies to support economy • Consumer shift towards “Made in Nigeria” – diversification with focus on agric, SME products and services • Foreign debt raising to fund capital projects e.g. • More tech savvy consumers , driving rise of more >$7bn raised in Eurobond since 2017 efficient & service-oriented start-ups • Elections to hold in 2019 1 ERGP – Economic Recovery and Growth Plan 7
Current macroeconomic trends in Nigeria are positive Mar-17 Jun-17 Sep-17 Dec-17 Mar- 18 Nigeria exited recession in Q2’17. FY’17 growth rate was 1.9% Real 1.4% GDP 0.7% 0.8% (vs. - 1.6% in 2016). FY ’18 projection is 2 - 2.5% GDP (IMF, World Bank) Growth -1.3% Rate Reserves 46.3 Reserves currently stand at a four-year high of $47.9bn 38.7 (as of May 14) vs. $38.8bn in Dec’17, and $30.3bn in External 32.5 30.3 30.3 Mar’17 Reserves ($’ bn) Oil Price Crude oil (Bonny Light) price continues to rise, now at 68.0 70.1 58.3 $78.67pb as of May 14, from $67.1 in Dec’17 and from 51.9 Crude Oil 46.9 $51.9pb in Mar ’17. Recent geopolitical risks likely to drive (Bonny Light) $/barrel prices up further 366.4 360.1 360.3 360.2 As of May 11, the IEFX window closed at ₦360.3/$. THE OPERATING ENVIRONMENT 325.0 328.9 FX 336.2 Exchange 314.6 CBN’s reference FX rate has remained flat at ₦305.8/$ 331.2 Rate N/$ while the NIFEX rate was ₦339.1/$ as at May 14 306.4 305.9 305.8 306.0 306.0 IEFX Rate NIFEX Rate CBN Rate Inflation Headline inflation declined further to 13.3% in Mar’18, (vs. 17.3% Inflation 16.1% 16.0% 17.3% a year ago), due to a decline in food prices and the 15.4% stability of the exchange rate 13.3% 8 Source: CBN, NBS , FDC,OPEC, IMF, World Bank, other research
Union Bank 2 Update Emeka Emuwa Chief Executive Officer
Our transformation journey has positioned us well for the future • Nigeria's most reliable and Our transformation enters 2019 & a new phase… trusted banking partner • Deeper focus on digital and Beyond Innovation • Simpler, smarter bank • Productivity and profitability focus 2018 • Balance sheet and portfolio optimization • Digital penetration Repositioned as a solid mid-tier • UBN @ 100 – Celebrate. Impact. Lead. • Enhanced customer engagement and service delivery bank 2017 • Launch of Union Mobile and Union Online 2.0 • Leader in citizenship, sustainability and innovation • Enhance technology platform • Strategy redefined UNION BANK UPDATE • Refocus as a commercial bank • Improved processes 2013 – 2016 • Right-sized UBN • Alternative channels push • Modern distribution network • Brand relaunch 10
Our Ambitions 1 2 3 Growth Nigeria’s Most Leader in Leader in Retail Reliable and Citizenship, and Transaction Trusted Banking Sustainability Banking Partner and Innovation • • • Service predictability & consistency Well recognized brand and Leading driver of change and benchmark for high customer sustainable development • Efficient and reliable platforms satisfaction and innovative • Next 100 fund – fund for good • Energized & productive workforce products and solutions focused on Nigeria • Strong governance and controls with • Market leader in domestic trade; international-standard compliance payments and collections across value chains for corporates • Leader in innovation – customer experience and social innovation UNION BANK UPDATE 11
Achievements in 2017 and Q1 2018 reflect our focus on retail and transaction banking Retail • 90% increase in new-to-bank accounts • 35% growth in new customers • Customer deposits up by 22% • Over 100% growth in users on our UnionMobile • Ranked #1 in the industry for not-on-us ATM transactions • “Fastest Growing Retail Bank” - International Finance Magazine Transaction Banking • 50% growth in volume of our transactions on UnionOne • 80% growth in transaction value • Introduction of local letter of credit to streamline customer trades and receivables • Continued integration of businesses on our collection platform People, Risk, Systems/Processes • “4th Best Company to Work in Nigeria” – Jobberman UNION BANK UPDATE • “Best Commercial Agriculture Bank” - Nigerian Agriculture Awards • “Most Efficient Bank on E-Reference O perations” - CBN/NIBSS e- payment efficiency awards • Leveraging artificial intelligence to drive operational efficiency 12
Our omni-channel network is increasing digital penetration N130bn in monthly 1m active mobile banking 250k active online transactions on users banking users UnionOne UNION BANK UPDATE 3m active debit cards 950 active ATMs 7K active POS terminals 13
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