United Bank LimitedPerformance Review

March 2012

April 26, 2012Abu Dhabi

1

Key Highlights

2

• Standalone PAT up 49% YoY to Rs 4.9 Bn. Consolidated PAT up 43% YoY to Rs

4.9 Bn

• Net interest income up by 5% to Rs 9.6 Bn YoY

o NIM reduced by 45 bps to 6.7% YoY due to the lower rate environment

o Yield on earning assets reduced by 76 bps YoY

o Cost of funds reduced by 31 bps YoY

• Non markup income up 35% to Rs 4.1 Bn YoY

o Core banking fees increased by 17% to Rs 1.9 Bn mainly due to higher

corporate service charges, FI commissions, increased income on remittances

and improved general banking service charges.

o Capital gains more than doubled to Rs 415 Mn YoY, primarily due to gains on

equity securities

o Dividend income grew by Rs 0.7 Bn mainly emanating from increased

investments in mutual funds.

Key Highlights

3

• Provisions down by 67% YoY to Rs 0.8 Bn

o NCL ratio improved by 195 bps YoY to 0.9% in Q1’12

• Administrative expenses up by 17% YoY mainly due to the full impact of an

additional 108 branches and certain one offs. Excluding this impact,

administrative expenses increased by 11% YoY

• Net advances increased by 6% to Rs 345 Bn in Mar’12

• Domestic deposits maintained at Dec ‘11 levels for the first time

o Domestic CASA stands at 79% in Mar’12 vs 80% in Dec’11

• Total CAR reduced from 14.3% in Dec ‘11 to 13.2% in Mar’ 12 due to the dividend

payout. Tier I CAR reduced from 10.5% in Dec ‘11 to 9.5% in Mar’12

• ROE improved from 23.7% in FY’11 to 28.1% in Q1’12

Income Statement (Standalone)

4

PKR Bn Q1'12 Q1'11 Var % Q4'11 Var %

Interest Earned 17.70 16.71 6% 17.92 -1%

Interest Expensed (8.10) (7.55) -7% (8.13) 0%

Net Interest Income 9.60 9.16 5% 9.79 -2%

Non Interest Income 4.09 3.03 35% 3.78 8%

Total Revenue 13.69 12.18 12% 13.57 1%

Admin. Expenses (5.53) (4.71) -17% (5.03) -10%

Operating Expenses (5.70) (4.84) -18% (5.10) -12%

Pre Prov. Operating Profit 7.99 7.35 9% 8.48 -6%

Provision Exp./Other writeoffs (0.76) (2.33) 67% (1.01) 24%

Profit Before Tax 7.23 5.01 44% 7.47 -3%

Profit After Tax 4.87 3.27 49% 4.55 7%

Income Statement - Consolidated

5

PKR Bn Q1'12 Q1'11 Var % Q4'11 Var %

Interest Earned 18.01 16.92 6% 18.18 -1%

Interest Expensed (8.21) (7.60) -8% (8.27) 1%

Net Interest Income 9.80 9.32 5% 9.91 -1%

Non Interest Income 4.37 3.35 31% 3.73 17%

Total Revenue 14.18 12.67 12% 13.64 4%

Admin. Expenses (5.99) (5.07) -18% (5.34) -12%

Operating Expenses (6.17) (5.20) -19% (5.41) -14%

Pre Prov. Operating Profit 8.01 7.48 7% 8.23 -3%

Provision Exp./Other writeoffs (0.76) (2.34) 67% (1.01) 24%

Profit Before Tax 7.24 5.14 41% 7.23 0%

Profit After Tax 4.86 3.40 43% 4.29 13%

Standalone Consolidated

Mar 2012 Dec 2011 Mar 2012 Dec 2011

EPS (Rs/share-annual.) 15.9 12.7 15.9 12.1

BV/share (Rs/share) 63.2 64.7 69.2 70.2

Price* - (Rs /share) 84.6 76.7 84.6 76.7

P/E 5.3x 6.1x 5.3x 6.3x

P/BV 1.3x 1.2x 1.2x 1.1x

# of shares 1,224M 1,224M 1,224M 1,224M* Mar-12 Price dat ed April 27, 2012 & Dec -11 Price dat ed March 31, 2012

Share Info

6

30% 25% 25%

50%

75%

10%

25%

10% 10%

2007 2008 2009 2010 2011 Mar'12

Dividend Payout as a % of par value of shares

Cash Stock

7

Key Ratios - Bank

Balance Sheet Ratios Dec-11 Mar'12

Advances / Depos its 56% 60%

Asset Qual i ty 14.2% 15.6%

Coverage 80% 70%

Financial Ratios Q1'12 Q1'11 Q4 11

Yield on P. Advances 12.1% 13.2% 13.0%

Cost of Depos its 4.3% 4.3% 4.2%

Net Interest Margin 6.7% 7.1% 7.0%

NCL Ratio 0.9% 2.9% 0.8%

Return on Avg Assets 2.45% 1.93% 2.40%

Return on Shareholders ' Equity 28.1% 22.4% 26.5%

P/L Ratios Q1'12 Q1'11 Q4 11

Cost to Income Ratio 40.4% 38.6% 37.0%

Non Fund Inc. / Tota l Revenue 30% 25% 28%

8

Deposits Structure (Bank level)

Cost of Deposits Deposits - Bank

2.0%

3.1%

4.2%

5.3%

6.4%

Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12

Cost of Deposits

Domestic International Bank

Dec'11 Mar'12

Bank

PE -

Rs.Bn COF%

PE -

Rs.Bn COF%

Domestic deposits 495 4.8% 493 4.7%

International deposits 118 2.3% 121 2.9%

Total Bank 613 4.3% 614 4.3%

International $ 1,313 2.3% 1,337 2.9%

Domestic CASA 80% 79%

• Deposits have marginally grown from Rs 613 bn as at 31 Dec 11 to Rs 614 bn as at 31 Mar 12.

• The bank has been able to reduce its domestic cost of deposits by 13 bps QoQ to 4.7% in Mar’12.

• Average deposits increased by 14% YoY, whilst they grew by 9% as compared to the previous quarter.

• SBP in its MPS for Apr’12 has increased the minimum return on PLS saving deposits to 6%. This is going to increase the bank’s cost of deposits.

• Domestic market share of deposits stands at 8.3% as on 31st

March 2012.

Net Advances - Rs. Bn Dec'11 Mar'12

%

Change

Corporate Bank 155.2 180.9 +17%

Commercial ** 69.0 64.4 -7%

Consumer 11.3 10.4 -8%

Others 6.0 6.3 4%

Total Domestic 241.4 262.0 9%

International 83.9 83.5 -1%

Bank 325.3 345.4 6%

Subsidiaries 15.8 14.9 -6%

Bank - Consolidated 341.1 360.3 6%

International US$ Mn 933.0 921.0 -1%

** of which commodity advances of Rs. 44Bn (Dec'11: 46Bn)

9

Net Advances

149

81

16

82

15

155

69

11

84

22

181

64

10

83

21

-

37

74

111

148

185

Corporate Bank Commercial Bank Consumer Bank International Others (incl subsidiaries)

Rs

Bn

Dec'10 Dec'11 Mar'12

International Advances

10

Spread Analysis – Bank Level

11

Bank Q1 2012 Q1 2011

Rs Bn PE AVG IE

Avg.Yiel

d /Cost PE AVG IE

Avg.Yiel

d /Cost

Avg KIBOR - 3M 11.9% 13.6%

Interest Earning Assets

Performing Advances 310 299 9.0 12.1% 305 297 9.7 13.2%

Corporate 157 146 4.8 13.2% 144 132 4.7 14.5%

Commercial 19 20 0.7 14.3% 20 21 0.8 15.5%

Commodity 44 45 1.6 14.7% 46 50 2.0 16.3%

Consumer 10 10 0.5 18.1% 13 13 0.6 18.6%

International 81 78 1.4 7.1% 81 80 1.5 7.6%

Others 0 0 0.0 12.8% 1 1 0.0 8.3%

Investments (earning) 299 277 8.2 11.9% 185 191 5.6 11.9%

Corporate Bonds (TFC) 4 4 0.1 14.2% 29 27 1.1 16.0%

Lending to Financial Institutions 16 13 0.2 4.9% 13 11 0.2 7.4%

Others 16 21 0.2 3.6% 18 23 0.1 2.4%

Total int. earning assets (a) 645 614 17.7 11.6% 550 549 16.7 12.3%

Non int. earning assets 173 159 0.1 0.2% 127 128 0.0 0.1%

Total Assets (A) 818 773 17.7 9.2% 677 677 16.7 10.0%

Interest bearing liabilities

Total deposits 614 611 (6.6) 4.3% 529 535 (5.7) 4.3%

Low Cost Deposits 375 365 (1.5) 1.6% 327 320 (1.3) 1.7%

Expensive Deposits 239 246 (5.1) 8.3% 202 215 (4.3) 8.2%

Subordinated Debts - TFC 10 11 (0.3) 12.6% 12 12 (0.4) 12.5%

Swap cost (net) - - (0.2) 0.0% - - (0.5) 0.0%

Borrowings 83 46 (1.0) 9.1% 44 41 (1.0) 10.3%

Total interest bearing liab (b) 707 667 (8.1) 4.9% 585 588 (7.5) 5.2%

Non int. bearing liab ilities & equity 111 106 - 0.0% 92 89 - 0.0%

Total Liabilities+Equity (B) 818 773 (8.1) 4.2% 677 677 (7.5) 4.5%

Net Interest Margin (a-b) - - 9.6 6.7% - - 9.2 7.1%

Spread (A-B) 5.0% 5.5%

Agribusiness, 11%

Airlines, 1%

Automobile & Trans. Equip., 1%

Cement, 1%

Chemical and pharmaceuticals, 2%

Contractor / Constructor, 6% Fertilizer dealers, 2%

Financials, 3%

Food, 4%

Individuals, 13%Others, 14%

Prod. & Transmission

Energy, 18%

Sugar, 3%

Telecom, 2%Textile, 16%

Trading, 3%

12

Concentration of Advances - Standalone

13

Non Markup / Return / Interest Income

Non Fund Income - Rs. Mn Q1'12 Q1'11 Var % Q4'11 Var %

Fee, commission and brokerage income 1,866 1,599 17% 1,958 -5%

Dividend income 810 101 701% 357 127%

Income from dealing in foreign currencies 568 749 -24% 561 1%

Gain / (loss) on sale of securities 415 180 130% 175 137%

Other income 434 397 10% 730 -41%

Total Non Fund Income 4,094 3,026 35% 3,781 8%

14

Fee Commission and Brokerage Income

Fee Commission Income - Rs. Mn Q1'12 Q1'11 Var % Q4'11 Var %

Commission on trade 430 406 6% 407 6%

Commission on consumer loan 217 231 -6% 299 -28%

Commission on remittance / uniremote 246 225 9% 211 16%

Corporate service chgs/Finance fee/FI inc. 287 178 62% 314 -8%

Commission on ATM / utility / cheque books 234 153 52% 232 1%

Minimum balance charges 53 83 -36% 66 -21%

Commission on home remittance 155 89 74% 142 9%

Commission on cash management 63 54 17% 65 -3%

Commission income - Bancassurance 56 44 28% 67 -16%

Commission others 126 137 -8% 154 -18%

Total 1,866 1,599 17% 1,958 -5%

15

Administrative ExpensesRs. Mn Q1'12 Q1'11 Var % Q4'11 Var %

Personnel cost 2,429 2,084 -17% 2,251 -8%

Premises cost 764 729 -5% 519 -47%

Outsourced service charges

including sales commission468 341 -38% 496 6%

Advertisement and publicity 134 128 -4% 169 21%

Communications 220 198 -11% 218 -1%

Depreciation 346 301 -15% 333 -4%

Legal and professional charges 71 38 -90% 59 -21%

Banking service charges 197 169 -16% 167 -18%

Stationery and printing 102 99 -3% 110 7%

Travelling 62 60 -5% 66 6%

Cash transportation charges 83 76 -10% 80 -4%

Repairs and maintenance 41 43 6% 64 37%

Maintenance contracts 227 137 -66% 158 -44%

Vehicle expenses 45 34 -32% 42 -7%

Office running expenses 97 88 -10% 53 -81%

Others 240 183 -31% 239 0%

Total 5,526 4,708 -17% 5,027 -10%

16

E-banking StatisticsE-Banking Mar'12 Mar'11 % Change 2011 2010

# of ATMs 484 462 5% 476 436

# of Transactions (Mn) 6.2 4.5 38% 19.5 16.4

Average transactions per day 68k 50k 36% 53k 45k

Total transaction amount (Rs Bn) 48 28 70% 125 101

Average transaction size (Rs 000) 7.8 6.3 24% 6.4 6.1

Average monthly trans.per ATM (Rs Mn) 33 21 62% 22 19

Internet Banking

Users 94,298 85,026 11% 93,102 82,082

Total # of transactions (000) 249 192 30% 884 615

Total transaction amount (Rs 000) 40,989 23,080 78% 133,521 67,895

Average transaction size (Rs 000) 164 120 37% 151 110

Click N Remit

Users 35,363 33,128 7% 34,783 32,607

Total # of transactions (000) 17 18 -2% 73 76

Total transaction amount (US$ Mn) 13 14 -5% 57 58

Average transaction size (US$) 751 773 -3% 773 767

17

Financial ratios – Consolidated (1/3)

Full Year QTD (A nnua lize d)

2008 2009 2010 2011 Dec-11 Mar-12

Spread (St) 1

5.1% 5.5% 5.5% 5.6% 5.3% 5.0%

Net Interest Margin (St) 2

6.1% 6.9% 7.0% 7.2% 6.9% 6.7%

Non Interest Yield 3

1.9% 2.1% 1.6% 1.7% 1.9% 2.1%

Admin Exp./Avg Assets 2.9% 2.8% 2.8% 2.8% 2.7% 2.9%

Cost Income Ratio 42.1% 38.5% 41.7% 40.1% 39.1% 42.3%

Loan Loss / Assets 1.0% 1.9% 1.1% 0.9% 0.3% 0.4%

Loan Loss / RWA 4

1.2% 2.4% 1.5% 1.2% 0.4% 0.5%

Effective Tax Rate 39.9% 34.2% 37.7% 37.0% 40.7% 32.9%

Pre-Provision ROA 5

2.3% 2.9% 2.4% 2.5% 2.4% 2.6%

ROA 1.4% 1.5% 1.6% 1.9% 2.2% 2.3%

Return on RWA 1.8% 2.0% 2.1% 2.7% 3.1% 3.2%

Pre-Provision ROE 6

31.3% 34.9% 26.0% 27.6% 26.5% 28.5%

ROE 19.7% 18.0% 17.7% 20.9% 23.3% 25.8%

DuPont

Formulas

1. Net interest income / average assets 4. Risk weighted assets

2. Net interest income / average earning assets 5. Return on avg. assets (before net provisions)

3. Non interest income / average assets 6. Return on average equity (before net provisions)

18

Financial ratios – Consolidated (2/3)

Full YearQTD

(A nnua lize d)

2008 2009 2010 2011 Dec-11 Mar-12

Gross NPLs / Gross Loan 7.2% 10.3% 12.9% 13.4% 13.4% 14.9%

Net NPLs / Gross Loan 2.2% 3.0% 3.6% 2.7% 2.7% 4.5%

Coverage Ratio 69.3% 70.9% 71.9% 80.1% 80.1% 69.8%

Prov. held / Gross loan 5.0% 7.3% 8.9% 10.5% 10.5% 10.1%

Net Credit Loss ratio 1.9% 3.3% 2.2% 2.1% 1.0% 0.9%

Full Year QTD

2008 2009 2010 2011 Dec-11 Mar-12

Growth in Loan Book 22.6% -4.3% -5.7% -0.1% 0.9% 5.6%

Growth in Deposits 19.6% 2.3% 12.7% 11.7% 10.0% 0.4%

Operating Revenue 14.0% 16.6% -1.4% 16.3% -0.3% 3.9%

Operating Expense 17.0% 6.7% 6.6% 12.0% -1.1% 12.1%

Pre-provision Oper.Profit 11.9% 23.8% -7.2% 20.3% 2.1% -2.8%

Provision exp.+ Other prov. 23.5% 64.5% -39.2% -8.5% -37.2% -24.0%

Profit After Tax -8.6% 12.3% 16.1% 35.1% 2.4% 13.4%

Asset Quality

Growth

19

Financial ratios – Consolidated (3/3)

Yearly QTD (A nnua lize d)

2008 2009 2010 2011 Dec-11 Mar-12

Capital Adequacy Ratio 10.4% 14.0% 15.0% 14.9% 14.9% 13.7%

Tier-I CAR 6.1% 9.5% 10.4% 10.6% 10.6% 9.6%

Loan / Deposits 77.3% 73.7% 62.8% 57.5% 57.5% 60.7%

Loan / Assets 58.3% 53.7% 47.1% 42.3% 42.3% 42.4%

RWA / Assets 77.0% 75.9% 72.7% 72.9% 72.9% 73.6%

Average Headcount 2

9,192 8,639 8,474 8,655 8,652 8,785

Personnel cost (St) /

Headcount (000)

Yield on Earning Assets (St) 3

11.0% 12.3% 11.7% 12.3% 12.1% 11.6%

Cost of Funds (St)4

4.9% 5.4% 4.7% 5.1% 5.1% 4.9%

Yield on Performing Adv (St) 12.3% 13.4% 12.4% 12.9% 12.8% 12.1%

Cost of Deposits (St) 4.3% 4.8% 4.0% 4.3% 4.2% 4.3%

Formulas

2. Permanent Staff

3. Earning assets incl bal.with other banks, lending to F.I., investments & perf adv

4. Funds includes deposits, borrowings & sub-ordinated loans

988.9 1,038.8

Other Metrics

736.4 1,104.4 863.9 879.3

20

Quarterly Trend Analysis

Bank Level

21

Profit before Tax

4.0

2.83.2

4.1 4.3 4.3 4.44.8 5.0 5.2

6.5

7.57.2

2.5

3.7

4.9

6.1

7.3

8.5

Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12

Rs B

n

22

Profit after Tax

2.5

1.82.1

2.8 2.8

2.4

2.93.1

3.33.4

4.24.5

4.9

1.5

2.3

3.1

3.9

4.7

5.5

Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12

Rs B

n

23

Deposits

469

509

452

492

451

500491

551

529

594

557

613 614

400

450

500

550

600

650

Mar 09 Jun'09 Sep'09 Dec'09 Mar'10 Jun'10 Sep'10 Dec'10 Mar'11 Jun'11 Sep'11 Dec'11 Mar'12

Rs

Bn

24

Net Advances

355

364

347349

327

339

330 329 329 329

321 320

340

318

330

343

355

368

380

Mar 09 Jun'09 Sep'09 Dec'09 Mar'10 Jun'10 Sep'10 Dec'10 Mar'11 Jun'11 Sep'11 Dec'11 Mar'12

Rs B

n

25

Net Interest Income

8.1 7.8

8.2

9.1

8.2 8.4 8.6

9.1 9.2

10.2 10.3

9.8 9.6

7.0

7.8

8.6

9.4

10.2

11.0

Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12

Rs B

n

26

Total Provision

2.2

4.7

2.8

3.6

2.11.9

2.1 1.92.3

2.6

1.6

1.00.8

-

1.2

2.4

3.6

4.8

6.0

Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12

Rs B

n

27

Non Fund Income

2.2

4.0

2.0

3.2

2.4 2.42.6

2.83.0

2.93.0

3.84.1

1.0

1.8

2.6

3.4

4.2

5.0

Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12

Rs B

n

28

Gross Revenue

10.3

11.8

10.3

12.2

10.6 10.711.2

11.912.2

13.013.4

13.6 13.7

9.5

10.5

11.5

12.5

13.5

14.5

Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12

Rs B

n

29

Administrative Expenses

4.04.2 4.2

4.4

4.1

4.4 4.5

4.9

4.7

5.0 5.0 5.0

5.5

3.8

4.2

4.6

5.0

5.4

5.8

Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12

Rs B

n

30

The information contained herein reflects our latest business statement as at

March 31, 2012

Except the historical information contained herein, statements in this Release

which contain words or phrases such as ‘will’, ‘would’, ‘indicating’ expected to’

etc., and similar expressions or variations of such expressions may constitute

‘forward-looking statements’. These forward-looking statements involve a

number of risks, uncertainties and other factors that could cause actual results to

differ materially from those suggested by the forward-looking statements. These

risks and uncertainties include, but are not limited to our ability to successfully

implement our strategy, future levels of non-performing loans, our growth and

expansion in business, the impact of any acquisitions, the adequacy of our

allowance for credit losses, technological, implementation and changes, the

actual growth in demand for banking products and services, investment income,

cash flow projections, our exposure to market risks as well as other risks

detailed in the reports filed by us with various regulatory authorities as per

applicable laws and regulations. UBL undertakes no obligations to update

forward-looking statements to reflect event or circumstances after the date

thereof.

31

Thank You