United Bank Limited (UBL) Earnings Call Transcript & Summary

[Technical Difficulty] 2023 Results Conference Call. My name is Murad Ansari from EFG Hermes, and I'm the host for the call today. On the call with us today, Mr. Arif Saifie, Group CFO for UBL; Ms. Saira Shah, Financial Controller and Head of Investor Relations; and Mr. Imran Sarwar, Group Chief Risk Officer. As usual, with these calls, we'll start with a brief presentation Akmal Arif and Saira will discuss the performance of the bank during the quarter. We'll then open the floor for questions. With that, I would want to transfer the call to Arif to discuss the performance of the bank over the past quarter.

Thank you so much. I would like to welcome everybody who joined this call from the UBL side. Murad, you could just go to Slide 3. We'd just like to cover very briefly that next slide. Yes, the overall macro environment, I think that's always important to sort of keep that in mind versus the performance of the bank in terms of market deposits. Cost has been higher with the higher level of inflation and currency circulation, of course, continues to remain high for the parts market. Generally, advances have been up. Of course, that is a function of credit demand as well within the economy. And lastly, of course, the high level of inflation and the high interest rates. I think that is just a brief overview of the context of where we are in the market. I think so the foreign shareholders would obviously be following that as well along with the local shareholders. In terms of UBL performance, PBT for the bank was INR 24.4 billion, which is up by 54% versus last year. And that, of course, is a function of interest rate performance and, of course, the very strong current account of the bank. The PAT or the profit after tax is up by 46%, slightly lower because of the lower tax rate last year. In terms of cost-to-income ratio, which is something we track closely, we're tracking about 35% in the first quarter versus 42% last year. And obviously, we will continue to work on improving that. ROE levels are back to the high 28%, which is a more stable and going for the bank. Our CAR remains quite resilient at 17.6%. We have a buffer of close to 6% above the minimum levels. The EPS for the year for the quarter was 11.4%, which is obviously up versus last year, and we had a INR 11 dividend payout. So essentially, this is just a quick summary. I think we've had a good quarter with stable performance and stable results from all those segments. And obviously, we will be more than happy to run you through some of the P&L performance and the key balance sheet areas. So I request Ms. Saira Shah, Investor Relations head just run us through that. Slide 4. Thank you.

Okay. So Arif have explained, the profit after tax was up 46% and PBT at 24.4% was up 54%. So the 2 main contributors to this was our net interest income up by 55% year-on-year, coming in at INR 33 billion and our NFI coming into noninterest income at 8.8%, up by 30%. The NII is supported by a bank NIMs, which widened from 4.3% to 5.2% in Q1 2023. Our net -- our noninterest income is a function of our strong decommission income, branch banking fees at $636 million, up by 13%. Our trade and guarantee income doubling at $766 million. Our corporate service fees up by 42%. Same commission on commission and FI rebate up 17%. Our ATM and credit card-related fees, a big contributor to the portfolio at $770 million with our HRC commissions up at 9% at 6.53%. So both of this is what contributed to our revenue going up by 49% year-on-year, supported ably by our cost-saving initiatives and our vigilance on our costs, which meant that despite the high inflation environment, operating expenses were up by 24%. And then that is also a function of our continued investment in our technology and our people. Consequently, our cost-to-income ratio improved from 42% to 35% year-on-year. As far as provisions are concerned, we have a reversal on our loan portfolio in international of about INR 946 million. domestic NPLs were reduced by INR 370 million. The increase in NPLs that you're seeing, I've explained -- increase in NPL that we've seen are a function of exchange rate devaluation. So you see the increase in NPLs in our international portfolio. There is no increase in the dollar in the NPLs of the international portfolio. So asset quality remains a key focus for the bank and continues to be so. Next slide, please. As far as the balance sheet performance is concerned, our average deposits are up 7% year-on-year at INR 1.6 billion. Current account, up 12%, our savings accounts up 6%. Period end and deposits are current to increase -- improved our current to deposit ratio to 50%, 48% and CASA levels going up to 91% from 89% in December. In spite of the rate hike, cost of deposits was contained at 7.5%, even though you can see the jump up from last -- from year-on-year at 4.5%. As far as the domestic portfolio, domestic performing advances portfolio is concerned, you can see that domestic -- average performing advances are up 36% due to the high period-end deposits for the domestic bank, which we close to INR 759 billion at December. That has since then been tapered. However, average performing advance is up 36%. International portfolio coming down to INR 500 million from INR 715 million. Our investment portfolio position is -- and our mix at March 31 is we have a well-diversified portfolio of fixed and floating rate investments. And our NII performance is also a function of time lead repositioning of our investments, which the results which is supported by our results. Our overall investment portfolio increased by 21% to INR 1.7 trillion. And we can see the repricing of that portfolio within our NII increase and NIMs expanding.

Yes. Thank you, Murad. That completes the overview on the overall performance. I think we can then now jump into the Q&A side. And people are on the call directly or you could really the question whatever we explain. Sure.

Thank you, Arif and Saira . We will now open the floor for questions. If you have a question, you can either raise your hand and ask your questions directly or you can push your questions in the Q&A box, and I can repeat that to the management. Our first question is on the micro finance bank. The question is, UBM has a 30% stake in Khushhali Microfinance Bank. What is the profitability of the Khushhali Bank in first quarter as it is not mentioned in the published results also what is the management view on the microfinance industry in context of for Khushhali Bank. Lastly, in case of deterioration of Khushhali Bank balance sheet due to rising NPLs would UBL be willing to inject more capital at that?

So I'll take that. I'm also on the board of Khushhali. So let me start by saying that UBL owns slightly less than 30% in Khushhali Bank. So I'll try and answer this multiple questions in sequence. Let's first tackle the microfinance industry. It has been going through a little bit of stress for the last -- since the last year. And Khushhali is no exception. It is the largest microfinance bank, and it is facing problems, precipitated by the floods last year in South of Punjab and north of Sind, which was very consistent pattern amongst all banks, whether they were commercial banks or microfinance banks who had exposure to agriculture in this part of the country. So yes, I mean, the microfinance sector has been in stresses. We are a minority owner for Khushhali Bank, albeit, we are the largest shareholder. So as such, we are discussing with the remaining 70%, how best to handle this situation in case there's a need to inject further equity into the bank. We do have a board meeting later this month. And I think all of this will come up for discussion at that point in time.

Thank you. Next question from Sara Remon and Hasson, common question. Can you shed light on your dividend payout policy going forward?

Yes. Thank you, Sara, for the question. So I think bias stepped up as dividend payout policy a little bit more aggressive. But I think the one thing I'd like to just mention here, we have a lab when it comes to network, digital technology and obviously, lending in the right place within domestic and selectively international. So we will continue to build our overall balance sheet size. And as a function of that, we will maintain what would be a relevant dividend policy. So obviously, where we can see that there is a need for certain conservation of capital. We may obviously hold back some of our dividends. And where we see that we are comfortable over the next months and beyond, we will maintain a healthy dividend payout.

Thank you, Arif. So next question is on Silkbank. If you could shed some on the merger...

Yes, I'll take that, Murad. So I mean, thank you for the question. But as you may have noticed, we just sent our intention to conduct due diligence to the stock exchange what about even less than a week ago. As part of the process, we now await Silkbank of Pakistan's approval, allowing us to do so. Once that is done, then we will be in contact with the current management of Silkbank to agree a time line and all the other modalities. So in short, the answer is we are not in a position to tell you any time line at this point in time. We haven't even started looking at it. So once we conduct the due diligence, we will then internally decide whether it is a go area for us or not a go area. So slightly premature question at this point in time.

Thank you, Imran. If I could add on, I mean, what -- your interest in Silkbank, obviously, I mean, a lot of the details would come out, but you're obviously -- it's a peer much smaller peer bank in the same industry, so not a complete stranger to you. But what -- I mean from UBL's perspective, what is the key attraction here to look at in setback?

All right. I mean, Murad, that the detailed answer will come out of our in-depth due diligence when we do that. However, at the very high level, every asset has some kind of value, and that is something which we are going to be exploring. I mean, for example, Silkbank has a fairly decent branch network, 200 branches. And what we see from the outside their locations are pretty good. So that could come in complementary to UBL's 1,400 branches. So 200 branches without having to construct them, equip them, outfit them, literally overnight change the brand and you're going from 1,400 to 1,600. So that is a very clear cut advantage. We, in the past, have seen the consumer business has been fairly decent. So there can be and there always are some value in every asset, and that's why we are looking at it with a very, very open mind.

I think just to complement what Ivan said, I think over the last 12 to 15 months, you may have noticed, I mean, you have looked at other potential assets that have come to the market as well. And obviously, after going after reviewing the opportunity, we have already taken an informed decision of what needs to be done, and that has happened with at least 2 entities before this point. I think this is just another potential opportunity, as Iran highlighted, where we will evaluate the pros and cons and what is the best fit to the UBS Group.

A question from a Ayesha and Aserani, common question on the NPL increase in the international book. How much is this driven by the foreign currency movements?

I'll take that, Murad. I think the answer to this question is extremely simple. This was the first quarter NPL formation within the entire UBS Group was absolutely nil, categorically 0, no new NPLs, whether it was domestic and or international. The way we represent international NPL is in PKR and what despite you talk about is purely on FX translation. If we were to compare it dollar to dollar, it is 0.

And actually, even in the financials, you have the NPL exchange rate impact disclosure well, I think it's about INR 15 million. But just to that point, so the coverage still remains at 87%. And like Imran mentioned, there's no increase, and there's no provision as well.

Actually, there has been a reversal in domestic provisions.

All right. Another question from Amin and there was a big jump in semis deposit contrary to recent trends. What would the deposit mix strategy be for the near future?

Well, I think the depot mix strategy over the last 5 years, the UBL and that's how we've actually maintained our NII level has been have current account focus. So even if you look at the numbers, we still have one of the highest current total deposits, and that will continue to remain the key focus. Obviously, while we have that, we will also ensure that we do build the right mix with savings as well. So CASA is close to about 89%, 90%. I think that's a pretty high and a very solid number. We would aim to at least maintain that level. But to your specific answer, the main focus will continue to remain on current accounts, both within conventional and historic.

Sure. Question from Timur Mumtaz. I think this is on the euro bonds. Do you need to make further provisions in terms of investments held by UBL? If so, can you share the total amount of provisions needed and the amount of provisions already made?

Okay. I think no major change from our strategy, which was in February, which was, of course, to build coverage against Eurobond exposure. We have close to about 30% coverage right now. We have disclosed that earlier as well in scope. I think we're still adequately provided in terms of the Euro bond exposure. Of course, we will continue to monitor the situation very closely. And this provision is driven out of our IFRS 9 models. As you know, all of these exposures are within the international book.

Question from Sara Aman. IFRS 9 implementation has been delayed by a year, but there's obviously -- there's also Central Bank Director of allowing an early adoption. Is there something that you will consider? Or you will go along with the rest?

I think there are 2 things to keep in mind here. One is, of course, the changing macros. And obviously, IFRS 9 has a lot of ECL provisions and moving scenarios there. I think it will only be appropriate for us to sort of run in parallel at least during this year. And only then we will take a decision of any potential early adoption. But I think the key here is obviously to review the portfolio position in terms of changing macros and the impact on our models. And this is something that is there for the industry. But of course, we will sort of align ourselves to the market in terms of any such adoption.

Question from Raza Inam.

Just a couple of questions. My first question is regarding your payout. As we noted, we have been following an aggressive payout policy. And as a result, the capital has reduced from around 19.2% to 17.6%. So what sort of car level do you think is appropriate that your capital will be optimized and you will be able to follow your growth strategy? And a follow-up question to that is, obviously, everybody was quite surprised at the play out in this quarter. Historically, you have followed a payout around 70%, and we have always indicated that this will be the number to look forward. But in the March, the payout for 100%. So can you give us some flavor of what would be -- should be our expectation going forward? It should be 70% or the new number would be the new normal?

No, I think, Raza, thank you once again for that question. So essentially, see, for us, CAR levels are always -- it's not about the past. It is always about the future. So 19% was obviously at a certain level. But the decline in the CAR is not because of the dividend payout because of ROE expansion on the international portfolio. So that in itself does not have a material impact on CAR levels, right? So for the future, we would like to maintain a reasonable buckle over the minimum, which allows us both -- as long as we can meet our growth ambitions on the corporate side, on the digital side or on the branch network and on the people side because we need to continue to grow the business, which we will, right? Because that is the driver of ROE. As long as we are comfortable with that, we will be paying out what is a reasonable level of dividends. I don't think I can completely explain or spell out a number or a payout ratio level. But obviously, this will be a story that will build in itself over the course of the year. Of course, while we do this, we will remain extremely conservative on the level of provisioning that we need to take on any of the riskier assets. And that's why I think that all of these things will be considered at the time of any payout declaration decisions.

We have a question from Amzad Hussein.

My question is regarding the forward-looking stress level of the banks, right? Because right now, the [indiscernible] is at 22%, but our ADRs are the lending qualities are way better if we compare it to the levels of 2007 or '08 or '09, right? Everything is good, but the [indiscernible] like -- I mean in those times, the [indiscernible] around 15%, not it's around 22%. So what should be the expectations regarding the provisions? Should we expect something on the lines of 2007, '08, '09? I mean 20% of those levels or 30% of dose level or it is something that is too subjective right now?

I'll take that, thank you for the question. You see, I think it's very difficult to compare current situation with 2007 or the time frame that you're referring to. Well, listen, as I just mentioned, this quarter, our NPL position, new NPL formation has been met, which is contrary to what common sense would suggest considering where the interest rates are, where the overall macro stress in ROS.

We are very woeful of our portfolio. We are undertaking almost a monthly stress test and review of our portfolio across all segments. We are also undertaking a derisking exercise, trying to preempt any unpleasant news coming forward. So we are taking all those measures. At the moment, the portfolio resilience is very obvious. However, that does not mean that we don't think there could be a problem. If the current macro stress and the interest rates remain at this elevated level. It's difficult for me to give you a number on what those provisions will be because we don't know exactly where they'll come from. Conventional wisdom tells us that there will be some. There could be most probably in the smaller segments, such as consumer, we think will be fairly okay. It could be SC or mid-market. Our corporate portfolio is fairly resilient. It has shown itself. But what I do want to suggest to you is that we are a very well-capitalized bank, robust profitability. So we have the position and the capability to absorb provisions if that situation arises.

Could I ask another follow-up question, right? Do you think -- I mean its too early to ask, do you think that we may see some systematic risk 12 months down the line or 4 months down the -- I mean…

Yes. The thing is... It all depends on so many factors are at play here. The IMF, yes or no, upon which it will depend how the interest rates will perform, will they continue to remain at this level over a prolonged period of time or alternately, if the IMF happens and they start tapering off. Now if the interest rates start to taper off and they come back down, let's say, 4%, 5%, 6% by June next year, I think a lot will be better than where we are today. So unfortunately, where we are in this country's macro situation in 2023 to say anything is very difficult. I mean this is -- so many things are contributing to where we are right now. I mean even if 1 or 2 things get sorted out, political risk, for example, if we speak to our investors outside band if we speak to our correspondent or our other associates, they tell us that your political risk is the most crucial element at the moment. So it's political risk, it's economic risk, et cetera, et cetera. So I'd much rather not have it, I guess, at this point in time, but it will depend. I think the first figure will be the IMF, then follow on will be the interest rates.

Yes. And just to connect to that. So the bank will continue to remain conservative given the scenario that is there in front of everyone, we will continue to remain conservative in terms of our liquidity buffer, in terms of our lending and in terms of provisioning. And that is how we would maintain our position in this scenario.

Thank you, Questions on the chat window from marine. What is your view on interest rates for the calendar year? Second, what is the reversal on the domestic provision pertains to? And third, how much of the provision was made on Eurobonds in first quarter and outlook on the same going ahead?

So the provision -- I mean, instead of these are normal standard accounts which are restructured and their provisions keep coming. So there is nothing -- no big chunky items that I can highlight where these came from. So this is just normal BAU business provision reversals. I think they stand out because we did not end up taking a whole lot of new provisions. So that's why they probably ended up looking obvious. I think interest rate discussions we've already had -- and side...

I think -- and on the Eurobond coverage, we've obviously maintained it by and large. Our position is very similar to what it was before. And interest rate also, I mean, that's still out there in terms of -- but I think just from the perspective of the earnings performance, we have 70% of the portfolio is floating rate, and a lot of that portfolio is yet to reprice and even on the loan side, while obviously, most of the savings account would be required in second quarter. So that in itself is also going to sort of support the earnings profile during the course of the year.

And just to answer your question, I mean, it's disclosed in our accounts, also the diminution in varying investments, the provisions taken is about $4 billion. So that's also has been disclosed in our part.

Question from Etiasa. Can we expect foreign income growth going forward? Also, will there be NIM expansion in this quarter?

I think on the NIM expansion, so you see the NIM expansion. There is still a little bit of a get to go, like I mentioned. So the loans, noting rate assets are yet to fully repriced because most of the rate hike was 300 basis points in March and 100 basis points in April. So that NIM expansion does have a little bit more to go. And along with that, with the higher rate environment, of course, there is current account buildup as well for the bank, right? So that will also continue to support NIMs during the course of the year. Of course, we have to maintain our momentum within the branch network, et cetera, on the growth over there. I think the second part of the question was more around the FX income. The FX income is always -- well, definitely driven by volatility within the market itself. One advantage that Joe will have is are typically a long-only bank because of a very huge home remittance base that comes to us with a lot more opportunities. But obviously, there has to be a lot more volatility for a larger and more sustainable FX income stream.

Just one thing to add here, Murad, about the FX income. One of our large FX income stream is coming from trade and with the import under some restrictions that can have an impact.

Yes. Yes. I think when I was having this discussion earlier on as well. And I think I was surprised that the strength of -- even on the fee side, the trade incomes generally have been good for banks. So it appears that the devaluation impact is coming through, the volume may be lower, but the PKR term cost is high. A question from Sabah. There's new circulating that UPL has announced a very healthy payout to shed its capital adequacy in order to service local had debt -- can you please...

I'm not sure exactly what the question is, Murad? I think you've spoken a lot about the dividend.

We can move on to the next Mahil Sebah, you can repost your question because we are able to understand this. Ayesha Asir answer asking, are there any fixed PIB maturities falling within this year, please, can you give some -- shed some light on that? How much material...

Yes. So there are about -- so I'm using about 10% to 15% of the borrowing book that we have is maturing during the course of the year. Obviously, the investment decision on that will depend on how we view the balance sheet and our overall position. That is on the PIB fixed now. Yes. And quotes obviously, will continue to reprice during the course of the year.

Sure. Question from Ayesha Asir, there was a significant drop in advances this quarter and the ADR has subsequently fallen below 40%. What kind of ADR levels can we foresee during the year?

So the first part of your question is the advances levels have dropped. I mean that they have dropped because we decided to reprice some of the assets, and if some clients didn't like it, they repaid us. So that's what is coming through. The second part of the question is what kind of ADR. Listen, we're not following ADR as a benchmark or a KPI. We will lend where it is -- risk is manageable and we understand this, but also it is profitable. So whenever the ADR ends up as a result of that, it will be a byproduct. We will not be chasing ADR as a certain KPI.

Yes. I think that's very right. And same goes in deposits. Again, it's that deposit base will be a function of profitable deposits. And obviously, there's rate volatility. So we would have to be extremely sensible about how we build the deposit side as well. And that is how we will essentially look to optimize the NIMs with the right ADR level as final resultant.

Question again on the Q&A box. As you mentioned that much of the increase in ROE was due to PKR, ADR, can we expect CAR to improve in case PKR remains stable over the next 2 quarters?

Well, yes, absolutely. If the PKR want to remain stable, obviously, there is a certain element of profitability that will come into the bank. And with a stable NIM and a stable earnings profile, our car will always improve quarter-on-quarter. And if yes, PKR will be stable, of course, that would be supporting the base significantly.

I mean we are not concerned about card going a little bit up and down because this change is not coming from the core operations of the bank, which remain very, very healthy and resilient. So this is basically coming from more macro than anything else.

And a stable PKR obviously, supports earnings through on all the lines of the -- on the P&L in terms of our NIMs, in terms of not taking a hit on fixed investment in terms of your dollar expenses not going up. So obviously, a stable PKR will -- in every case, help the P&L of the bank, which would then become more healthy CARs, mean more healthy CARs.

Perfect. A question on the investment book, if you can share the average repricing for the floaters and the yield on fixed income PIB book.

Yes. So the floater book is what it is in the market as well. So we are a market participant. So by and large, it's between 3 and 6 months. Like I mentioned, some of the repricing will come through in the second quarter, which obviously will refresh and we have any spread over there as well. On the bond book, again, the borrow book is slightly below 12% in the year. And that obviously is going to be a function of repricing as well as when it matures.

So equity for international branch operations has turned negative. Does this mean that the bank will have to inject further capital, please shed some light or we can develop our understanding around it.

No, the equity for the international has not turned negative. There is obviously a P&L impact that is probably being picked up by whoever was looking at the accounts. So the equity for interaction is positive overall. And I think the key point, which maybe we haven't explained earlier is the fact that there is an exchange translation benefit on that equity, which comes through our Tier 2, right? So that expansion in capital continue because if you're holding a dollar asset as a panacea institution and you are well capitalized at the end of the day, you are growing in terms of your capital as well. So the equity interaction is quite positive and quite material. Thank you.

Thank you. I think I understood the question that Sabah was trying to ask. I think there's some, obviously, news or rumors circulating about potential domestic debt restructuring, something that has been discussed in Srilanka as well and too premature though, but I mean, any thoughts around the possibility of something like that happening in Pakistan and domestic debt restructuring?

We've done a lot of work on possible outcomes of the current economic scenario that the country is facing. And domestic debt restructuring is one element of that study that we have done. It's possible. It's slightly -- I mean, if you look at the numbers, the way the government is borrowing locally, at some point, I think it may become inevitable. But we don't consider that to be something that will happen in the immediate future. But as an eventuality, yes, we have done some modeling on it.

Okay. All right. And at this point, we don't have any outstanding questions in the queue, maybe I can transfer the call back to you, Arif, for your closing remarks. Just a second, sorry. There's a question from Mustapha.

Just wanted some idea, especially the way we've seen this first quarter -- the earnings are also very good, and we're expecting a lot more repricing as well, 400 basis points, which is there to come in the coming quarters. And we also saw the kind of payout that the bank maintained. So as the management, like what are your like growth targets over for the year now on the deposit front and even on the lending side, like a couple of banks, they said that they're going to remain very cautious on the growth of their loan book, but they'll continue to build their deposits and even of borrowers need be to put into the treasuries and make a good spread on it. So if you could just shed light on the overall strategy of the bank on that front, please?

Yes, yes. So again, I think strategy for UBL is not -- I think more of the same, to be honest. So we've been very strong current account franchise. We'll continue to do that. Interest rates at this point in time are extremely high. So there is a huge spread to be made, but that's because we made a lot of investment in the 400 branch network over the last 10 years, and we keep renovating and improving that. So the main strategy is led by current account, well supported by our diet banking where we're also quite ahead. And if you look at the numbers, the transaction throughput volumes over there are also increasing. And that is one of the reasons why we are also sort of maintaining the cost-to-income ratio as well. So along with that, I think the third thing would be maintain the asset portfolio, prudent and obviously, vigilance on asset quality levels. but we will land whether this is a good opportunity to make money. And the most important thing is where there is a wider customer relationship in a lending possibility with NFI as well. That has historically been the key, and that will continue. When you talked about actual bottom line and all of that, I think the key targets are always ROE driven. So the 28% ROE that you've seen with a stable and an improving CAR, I think that is essentially what we will keep our eye on. While the -- and the other 2 elements of current account and digital. I think with that in mind, we certainly have prioritized what we will do in the year. And if we can do that well, while playing the yield curve, I don't see any reason why we can't maintain our earnings.

Thank you, Arif. I'm guessing that, that answers your question. We don't have any questions now are standing. I'll go back to AriF for his closing remarks before we end the call today.

Yes. I'd like to thank everybody who's come on the call and I think some very interesting questions. Murad, just on to Slide 12. I think we'd just like to leave all our investors or potential investors with a general sense that, of course, our priority will be deposit mobilization and a better network. And the most important thing for us will remain our service standard because we clearly believe that better service standards imply a much longer relationship and a much higher product per customer ratio as well. So that would be key. Our network continues to be our key strengths. I mean I'd like to reiterate that both urban and rural are important. We will obviously be trying to build our presence where we have not penetrated as much. But with a wide network, there is always a potential for some parts of the network to fall below power level. So we have certain benchmarks of performance across all the regions, and building that improvement that will be key. Apart from that, I think a key -- or a very important thing is how much of digital we see in our customers and how much of digital we see in our branches and in our employees. I think those 3 go hand-in-hand together. So digital will again be a key focus. You will see a number of products being rolled out by UBL, one after another on the digital side, and we still believe there's a lot of money to be made and margins to be improved where we continue to invest in our retain technology investment always pays back. The other thing that I'd like to mention is, of course, on our people side. People, capacity building extremely important for us, and we will continue to build and hire good people. And while we're doing that, of course, we will have technology-led transformation as well, which, over time, also pays back. And I think I'd just like to mention the branches banking proposition UBL only, which we've had in a long time, it was making a very positive bottom line. And I think there's a little bit of a transition in that business, but there is a lot of potential that we will see in the future. I think the last thing in the blocks, apart from deposits and networking people is slowing banking. I think we -- there's a lot of opportunity out there with the UBL brand, which is a very strong brand name. I don't think you flex some muscles enough so far. But there is a lot of opportunity in there. And UBL, I mean brand, I think [indiscernible] becoming a household brand now, and there are a few products that are coming out that will also support that segment. And as you may have seen over the last couple of years, we also built a lot of assets. So Silk Banking is another area where you will see the green, I mean, color along with UBL as the main brand, which has a lot of potential. And we're also building a product team over there. Apart from that, of course, attracting the right people, the best talent. I think we have a very strong, very motivated workforce. We'd like to thank them for the first quarter performance, which has been very strong. And we hope to maintain that momentum in coming years with both a strong blend of support from the front office teams, operations and our enablers. That, of course, will be the key for us. So I think there is a lot that is yet to come. But like I'll have the slide say at the top that for us, the most important thing is to be the best service bank for our customers and for all our users. So with that, I'd like to thank everybody who's been on the call and for your support and your ideas. We've taken note of some of them as well. And we look forward to this engagement in the coming months and years. And please reach out to us if you have any questions on the bank's performance, and we'll be happy to speak to you. Thank you.

Thank you, Arif. As we head towards the end of this call. I just wanted to congratulate the current management team, obviously led by Mr. Shazad. I think he Mr. Dada came in at a time and COVID was at its peak. So a difficult time to come in, and I think he leaves on UBL at a very -- at a time and the bank is on a very solid footing. So congratulations to him. I'm not sure we're going to see him on the call before the -- for the half year results, but great work we have done by him. And obviously, you'll have Mr. Jawaid Iqbal joining, a very experienced individual banker in the industry and will be supported by a very solid UBL veterans. Best of luck to the management team, to the senior management team and the change in Gap. With that, I think we can end the call for today. Thank you so much for your time and for all the participants who joined the call and the questions. Looking forward to seeing you on the next call.

Yes, absolutely. Thank you, Ian, for being on the call and all the answers and Murad for being a very good [indiscernible] and side for the presentation.

Thank you.

Thank you, everyone. This concludes the call for today. You may now disconnect. Goodbye, and have a good day.