The City Bank Limited L o o k i n g A h e a d
Tuesday, 01 August 2017 Q2 2017 Earnings Disclosure
03 Forward Looking Statements This presentation may contain statements that constitute forward-looking statements about the Company, within the general meaning of the term and within the meaning of applicable securities laws, including financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations. These statements may appear in a number of places in this document and may include statements regarding our intent, belief or current expectations regarding our customer base, estimates regarding future growth in our different business segments, market share, financial results and other aspects of our activity and situation relating to the Company or its subsidiary companies. The forward looking statements in this document can be identified, in some instances, by the use of words such as expects, anticipates, intends, believes, and similar language or the negative thereof or by the forward-looking nature of discussions of strategy, plans or intentions. Such forward-looking statements, by their nature, are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors. Neither this presentation nor any of the information contained herein constitutes an offer of purchase, sale or exchange, nor a request for an offer of purchase, sale or exchange of securities, or any advice or recommendation with respect to such securities. Finally, be advised that this document may contain summarized information or information that has not been audited. In this sense, this information is subject to, and must be read in conjunction with, all other publicly available information.
04 Accomplishment in last Decade One of The Oldest Private Commercial Banks in Bangladesh Voyage began on 27 th March 1983 Transformation Begins 2007-2009 Decentralized to Centralized (2008) Launch Retail Business (2008) ATMs 310 New Logo (2008) Full fledge online Banking (2009) Brokerage Business (2009) Sole Franchisee of American Express (2009) Permission For Off-Shore Banking (2009)
Accomplishment in last Decade cont d Embracing New Challenges Amex Corporate Card (2010) Islamic Bank Rebranding City Manarah (2011) CityMaxx American Express (2012) Relationship starts with FMO USD 20 million (2012) City Bank Amex Lounge @ Inter. Airport (2010) City Bank Capital Resources Ltd (2010) Master Card (2011) Relationship starts with IFC USD 25 million Funded and USD 30 million Non- Funded (2012) AMEX Customer Service Center (2012) 05
Accomplishment in last Decade cont d Embracing New Challenges Citygem Priority Banking (2013) AMEX Domestic Lounge (2013) 1st Time in BD, GCPF Collaborates with City Bank USD 30 million (2013) Internet Banking: City Touch (2013) CDMS 30 Commercial Banking (2013) Launching of AMEX Platinum Card (2013) CBL Money Transfer Sdn. Bhd., Malaysia (CMTS) (2013) 06
Accomplishment in last Decade cont d Embracing New Challenges Country s 1st ever Walk Up ATM (2014) Rated Ba3 by Moody International (2016) Relationship starts with ADB (2016) 120 Branches Country s 1st ever Drive Through ATM (2014) Acquired ISO Certification 9000 PCI DSS Certification (2015) AMEX Credit Cards 201,384 VISA Credit Card 85,104 nos. 07
Subsidiary and Strategic Investment Subsidiaries 1. International standard brokerage service 2. Member of both Dhaka & Chittagong Stock Exchange 3. 7 th largest brokerage house in terms of trading out of 250 4. Market share 1/3 rd in Foreign Trading 1. Offers Merchant banking services, advisory services 2. In 2015, Market ranking in terms of profitability (ROE) stood 3 rd position out of 45 1. CMTS is a private company limited by shares incorporated under the laws of Malaysia. 2. Engaged as inbound and outbound remittance service provider Strategic Investment VIPBL - Venture Capital Investment for SME IIDFC Specialized in long term infrastructure project IDLC The largest NBFI 08
1H 2017 in Numbers
10 1H (Jan Jun 2017) Performance Highlights BDT 1,907 MN NET PROFIT AFTER TAX BDT 1,907.5 MN, 5.3% YoY de-growth (BDT 2,014.3 MN in 1H 16) BDT 2,807 MN EARNINGS BEFORE TAX BDT 2,806.7 MN, 2.2% YoY growth (BDT 2,745.1 MN in 1H 2016) BDT 7,643 MN TOTAL OPERATING INCOME BDT 7,643.5 MN, 6.0% YoY de-growth (BDT 8,131.1 MN in 1H 2016) 15% CUSTOMER ADVANCES BDT 186,813.4 MN, 15.2% YoY growth Advance to Deposit Ratio: 81.4% 19% CUSTOMER DEPOSITS BDT 182,947.4 MN, 19.1% YoY growth CASA Ratio: 37.2%
Consolidated Performance Metrics: 1H (Jan-Jun) BDT in Million (unless mentioned) Total Assets Customer Advances (L&A) Customer Deposits 3.4% YTD 6.1% YTD 4.9% YTD 13.7% YoY 15.2% YoY 19.1% YoY 11
12 BDT in Million (unless mentioned) Loans & Advances (solo) SME and Retail segments are focused to drive asset growth City Bank 15.3% 24.4% 53.6% 5.4% SME Retail Corporate 6.3% 8.5% 11.1% 12.0% 23.2% 24.7% 5.0% 0.4%
13 BDT in Million (unless mentioned) Loans & Advances Concentration (solo) Moving towards Optimized Portfolio 30-Jun-16 Corporate SME Retail 30-Jun-17 43,355 34,851 21.6% 23.3% 113,178 19,179 11.9% 107,349 66.4% 29,468 15.8% 60.8%
Loans & Advances (solo) City Bank 143,088 148,203 161,379 175,025 171,812 186,001 SME BDT in Million (unless mentioned) 43,355 38,716 38,704 32,618 33,158 34,851 Dec'15 Mar'16 Jun'16 Dec'16 Mar'17 Jun'17 Dec'15 Mar'16 Jun'16 Dec'16 Mar'17 Jun'17 Retail Corporate 18,336 18,206 19,179 23,623 25,815 29,468 92,133 96,839 107,349 112,687 107,293 113,178 Dec'15 Mar'16 Jun'16 Dec'16 Mar'17 Jun'17 Dec'15 Mar'16 Jun'16 Dec'16 Mar'17 Jun'17 14
15 BDT in Million (unless mentioned) 4.6% YTD 18.4% YoY Customer Deposits (solo) Deposit base is major source of lending 23.1% YoY growth in CASA in value CASA Ratio: improving trend 3.9%
16 USD in Million (unless mentioned) Trading Business is on uptick mark 15.2% YoY growth in trading business in 1H 2017 Export Business 8.9% YoY Import Business 20.5% YoY
Loans & Advances Growth (conso) 1H (Jan Jun 2017) Performance Highlights Deposit Growth (conso) QoQ: 7.9% (1Q 17 to 2Q 17) YTD: 6.1% (4Q 16 to 2Q 17) YoY: 15.2% (2Q 16 to 2Q 17) Outstanding: BDT 186,813.4 million Asset Quality & CAR: NPL: 5.7% (against 7.1% in end-march 17) NPL: BDT 10,577.0 million (13.2% QoQ) CAR (solo): 14.53% (end-june 2017) CAR (conso): 12.94% (end-june 2017) QoQ: 3.7% (1Q 17 to 2Q 17) YTD: 4.9% (4Q 16 to 2Q 17) YoY: 19.1% (2Q 16 to 2Q 17) Outstanding: BDT 182,947.4 million ADR & NIM: ADR: 81.4% in June 17 (82.2% June 16) NIM : 4.2% in June 17 (4.7% June 16) CASA: 37.2% in June 17 (35.8% June 16) 17
18 1H (Jan Jun) Performance Metrics (conso) Net Interest Income Fee & Other Income BDT in Million (unless mentioned) Investment Income 9.1% YoY 37.3% YoY (47.5%) YoY Total Operating Income (Revenue) (6.0%) YoY 1H2016: BDT 1,592.0 million (before tax) one-off gain from IDLC share Operating Profit Net Profit After Tax (NPAT) transfer to subsidiaries (included (23.6%) YoY (5.3%) YoY in investment income).
1H (Jan Jun) Performance Metrics (conso) Normalized NPAT (after adjusting one-off events) BDT in Million (unless mentioned) Net Profit After Tax (NPAT) 13.3% YoY IDLC shares transfer to subsidiaries was a regulatory cause and this transaction yield one-off after-tax capital gain of BDT 1.53 billion (in 1H 2016). Such one-off gain was used to build-up provision for Book cleaning worth BDT 1.2 billion (in 1H 2016). 19
20 1H (Jan Jun) Performance Metrics (conso) Earnings Per Share (BDT) Q1-16 Q1-17 YoY % Q2-16 Q2-17 YoY % Jun-16 Jun-17 YoY % EPS (BDT) 0.79 0.67 1.51 1.51 2.30 2.18 (14.6%) (0.5%) NPAT (BDT million) 689.7 589.3 1,324.6 1,318.2 2,014.3 1,907.5 (5.3%)
Shareholders Equity Book Value Per share (BDT) Shareholders Equity (conso) BDT in Million (unless mentioned) 17.4% YTD 17.4% YTD 17.0% YoY 17.0% YoY Shareholders Equity increased on: - Profit of 1H 17 - Unrealized gain in capital market investment 21
22 Return to Shareholders (conso) Return on Equity (ROE) Return on Assets (ROA) 7.2% in 1H 2017 0.7% in 1H 2017 Returns fell on increased Book Value and Asset base in 1H 17
23 Operating Expense (conso) Opex to move towards Targeted level BDT in Million (unless mentioned) 15.6% YoY hike in Opex in 1H 2017 This is mainly due to increase number of branches and investment in Human capital Cost / Income Ratio (conso) Cost to income ratio (CIR) increased to 55.2% in 1H 17 (from 52.9% median number ) CIR is expected to move towards target level (around 50%)
NIM gets tightened on competitive Yield on Advances Low Interest Rate Scenario YOA: 8.8% COD: 4.6% NIM: 4.2% 2012 2013 2014 2015 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Yield on Advances 14.9% 15.1% 13.1% 11.3% 10.4% 10.0% 9.8% 9.6% 8.9% 8.8% Cost of Deposits 8.5% 8.4% 6.9% 6.5% 5.5% 5.3% 5.6% 5.2% 4.9% 4.6% NIM 6.3% 6.7% 6.1% 4.8% 4.9% 4.7% 4.2% 4.4% 4.0% 4.2% 24
25 BDT in Million (unless mentioned) City Bank Reducing NPL (non performing loans) NPL improvement remains a key focus area 1.6% YoY in Vol 46.0% YoY in Vol 3.6% YoY in Vol 23.1% YoY in Vol 6.5% 6.1% 5.7% SME 11.2% Retail Corporate 9.8% 9.6% 7.2% 5.6% 5.3% 4.8% 4.5% 3.9% 10,4 08 10,5 79 10,5 77 3,32 9 3,79 7 4,86 2 1,38 0 1,32 5 1,33 0 5,6 99 5,4 57 4,3 85 Jun'16 Dec'16 Jun'17 Jun'16 Dec'16 Jun'17 Jun'16 Dec'16 Jun'17 Jun'16 Dec'16 Jun'17
26 Reducing NPL (non performing loans) City Bank 7.6% 8.2% 6.5% 6.1% 7.1% 5.7% NPL improvement remains a key focus area SME 15.2% 14.0% 12.0% 11.2% 9.6% 9.8% Dec'15 Mar'16 Jun'16 Dec'16 Mar'17 Jun'17 Retail 7.9% 6.7% 7.2% 5.6% 5.5% 4.5% Dec'15 Mar'16 Jun'16 Dec'16 Mar'17 Jun'17 Corporate 5.5% 5.8% 5.3% 5.7% 4.8% 3.9% Dec'15 Mar'16 Jun'16 Dec'16 Mar'17 Jun'17 Dec'15 Mar'16 Jun'16 Dec'16 Mar'17 Jun'17
27 City Bank 8.2% 7.6% 3.6% 1.7% NPLs with SMA (special mentioned account) Portfolio NPL SMA 6.5% 6.1% 7.1% 5.7% 3.3% 3.2% 3.1% 1.9% SME NPL SMA 14.0% 15.2% 9.6% 9.8% 12.0% 11.2% 3.4% 4.8% 3.8% 4.0% 4.0% 2.1% Dec'15 Mar'16 Jun'16 Dec'16 Mar'17 Jun'17 Retail NPL SMA 7.9% 6.7% 7.2% 5.6% 5.5% 4.5% 3.2% 3.0% 2.8% 2.2% 2.0% 1.7% Dec'15 Mar'16 Jun'16 Dec'16 Mar'17 Jun'17 Dec'15 Mar'16 Jun'16 Dec'16 Mar'17 Jun'17 Corporate NPL SMA 5.5% 5.8% 5.3% 5.7% 3.9% 4.8% 3.4% 3.3% 3.2% 3.9% 0.8% 1.1% Dec'15 Mar'16 Jun'16 Dec'16 Mar'17 Jun'17
City Bank Non performing loans (NPLs): Adj. for write-offs 8.7% 8.2% 8.1% 8.0% 7.1% 6.7% NPL improvement remains a key focus area SME 15.5% 15.2% 15.2% 15.6% 12.0% 11.5% Dec'15 Mar'16 Jun'16 Dec'16 Mar'17 Jun'17 Retail 7.9% 6.7% 7.2% 5.6% 5.5% 4.9% Dec'15 Mar'16 Jun'16 Dec'16 Mar'17 Jun'17 Corporate 6.4% 6.0% 5.8% 5.8% 5.7% 5.5% Dec'15 Mar'16 Jun'16 Dec'16 Mar'17 Jun'17 Dec'15 Mar'16 Jun'16 Dec'16 Mar'17 Jun'17 28
29 BDT in Million (unless mentioned) Provision charge (for period) Provision Charge and NPL Coverage Book cleaning remains a key priority BDT 11.4 BN charged during 2012-16 period BDT 12.85 BN loan-write off during 2012-1H2017 period
Capital Adequacy Ratio (solo) Plan to raise more capital through equity share offer, which will enhance Capital Adequacy in future. 5% equity offer to IFC (of WB Group) will channelin BDT 1,304.5 million. Post share issue to IFC will enhance CAR by 0.62% to 15.15%. Tier II Capital is enhanced through Subordinated Bond issuance worth BDT 5,000.0 million. 30
31 Capital Adequacy Ratio (conso) Post share issue to IFC will enhance CAR by 0.62% to 13.56%.
Group Reporting BDT in Million (unless mentioned) Consolidated SOLO Subsidiaries Jun-16 Jun-17 Var % YoY Jun-16 Jun-17 Var % YoY Jun-16 Jun-17 Var % YoY Operating Income 8,131 7,643 (488) (6%) 7,934 7,133 (801) (10%) 197 510 313 159% Operating Profit 4,479 3,422 (1,057) (24%) 4,399 3,069 (1,330) (30%) 80 352 273 341% Profit Before Tax 2,745 2,807 62 2% 2,687 2,460 (228) (8%) 58 347 289 502% Net Profit After Tax 2,014 1,907 (107) (5%) 1,987 1,647 (341) (17%) 27 261 234 869% 32
Q & A
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