Slide 1: Q1 2023 Investor Briefing
Q1 2023 Investor Briefing May 2023 ncbagroup.com Go for it
Slide 2: Contents
CONTENTS WHO WE ARE < OPERATING ENVIRONMENT< UPDATE ON STRATEGY< FINANCIAL PERFORMANCE Q1 2023 < 2023 PRIORITIES & GUIDANCE <
Slide 3: Contents
CONTENTS WHO WE ARE < OPERATING ENVIRONMENT< UPDATE ON STRATEGY< FINANCIAL PERFORMANCE Q1 2023 < 2023 PRIORITIES & GUIDANCE <
Slide 4: Our Group Structure
WHO WE ARE Our Group Structure NCBA BANK KENYA PLC NCBA BANK RWANDA PLC BANKING NCBA BANK UGANDA LTD SUBSIDIARIES NCBA BANK TANZANIA LTD NCBA DIGITAL BANKING GROUP PLC NCBA LEASING LLP NON NCBA INVESTMENT BANK LTD BANKING SUBSIDIARIES NCBA INSURANCE AGENCY 4
Slide 5: Our Purpose and Values
WHO WE ARE Our Purpose and Values OUR OUR OUR PURPOSE VALUES CUSTOMER Welcome to the PROMISE bank that says go At NCBA, our customers for it. are at the heart of everything we do – we are To be the DRIVEN driven by our promise to Welcome to the offer exceptional Financial Services OPEN innovative pr
Slide 6: Our Regional Footprint
WHO WE ARE Our Regional Footprint KEY GROUP HIGHLIGHTS CUSTOMERS UGANDA > 60M Branches 4 Customers 9M STAFF 3,152 BRANCHES IVORY COAST KENYA Purely Digital Customers 4.3M Branches 85 103 Customers 34M ATMs TANZANIA RWANDA Branches 9 93 Branches 5 Customers 6.8M CASH DEPOSIT MACHINES Customers 3.4M 8
Slide 7: Awards & Accolades
WHO WE ARE Awards & Accolades Best Bank in Kenya 2022 - Global Finance Magazine & Abojani Investments Among Top 10 Most Valuable Brands in Kenya - Brand Finance Best Digital Bank in Tanzania - Global Banking and Finance Review 3rd Best in Customer Experience (Tier 1) - Kenya Bankers Associat
Slide 8: We are led by an exceptional team
WHO WE ARE We are led by an exceptional team which has ensured we deliver on post-merger promises and has demonstrated resilience in managing our business 8
Slide 9: Contents
CONTENTS WHO WE ARE < OPERATING ENVIRONMENT< UPDATE ON STRATEGY< FINANCIAL PERFORMANCE Q1 2023 < 2023 PRIORITIES & GUIDANCE <
Slide 10: Growth forecast revisions globally and some Sub-Saharan economies point to uncertainty
OPERATING ENVIRONMENT Growth forecast revisions globally and some Sub-Saharan economies points to uncertainty GDP: Growth forecasted to fall in Central Banks stay the course on Regional currencies in sustained weakness– KES Kenya while the rest of EAC to remain rates – quantum of raises however lead
Slide 11: Contents
CONTENTS WHO WE ARE < OPERATING ENVIRONMENT< UPDATE ON STRATEGY< FINANCIAL PERFORMANCE Q1 2023 < 2023 PRIORITIES & GUIDANCE <
Slide 12: Positive performance across key financial metrics as we execute our 2020-2024 strategy
OUR STRATEGY Positive performance across key financial metrics for the Group as we execute our 2020 – 2024 strategy Q1 2022 Q1 2023 6,395 Become a Distinguished Brand 4,848 CUSTOMER Known For Customer PBT REGIONAL BUSINESS CONTROLS PERFORMANCE EXPERIENCE Experience (Amount in KES M) Become a Scale R
Slide 13: Our diversified business model is demonstrating growth and resilience
BUSINESS MODEL Our diversified business model is demonstrating growth and resilience PBT (KES M) Core Banking Segment Digital Banking Q1-22 Y-o-Y Q1-23 Q1-22 Y-o-Y Q1-23 +28% -45% Kenya 3,891 4,976 Digital Business (KE) 878 483 +>100% Tanzania (139) 161 Loop DFS 0 (2) PBT +72% n/m Uganda 139 239 +>1
Slide 14: Expanding our footprint across Kenya
OUR STRATEGY Our focus on expanding our footprint across Kenya is delivering both on customer numbers and balance sheet growth KE Retail Banking Balance sheet (KES B) Branches 103 118 Growing (2022) (2023) Gross Loans Branch 94 Network 81 22 36 16% Counties Present (2022) (2023) 33% Q1 2022 Q1 2023
Slide 15: Enhanced sectoral approach to relationship management
OUR STRATEGY An enhanced sectoral approach to relationship management has allowed us to continue to grow and diversify our corporate client base in 2023 Changes in Corporate Corporate Customers by Sector customers # • Participation in key Institutional Banking Agriculture Industry events. 3,442 3,49
Slide 16: Leadership in asset finance
OUR STRATEGY We have maintained 60 years leadership in asset finance by relentless innovation and strategic partnerships Disbursement (KES M) Scaling Dealers Agency Network • Renewed 7 of the existing schemes 6,313 6,334 • Signed new schemes with Ashok Leyland, Sinotruck Ltd and Roam for electric bu
Slide 17: Growing digital disbursements while diversifying into new markets
OUR STRATEGY We are continuing to grow our digital disbursements while diversifying into new markets Evolution of digital disbursements (KES B) Fuliza (KE) M-Shwari (KE) Loop (KE) 0.2 24.6 191.8 20.6 +37% 138.8 0.1 Q1'22 Q1'23 Q1'22 Q1'23 Q1'22 Q1'23 223 Mo-Kash (UG) M-Pawa (TZ) Mo-Kash (RW) MoMo-Ka
Slide 18: Progress in defining our Sustainability Strategy
OUR STRATEGY We have made progress in defining our Sustainability Strategy to address our objective to inspire greatness and catalyze action towards a Greener & More Sustainable Future. For the communities that we serve and for NCBA Material Themes Environmental Social Governance • Climate Change •
Slide 19: Contents
CONTENTS WHO WE ARE < OPERATING ENVIRONMENT< UPDATE ON STRATEGY< FINANCIAL PERFORMANCE Q1 2023 < 2023 PRIORITIES & GUIDANCE <
Slide 20: Strong fundamentals with positive CAGR over the strategy period
NCBA GROUP FINANCIAL PERFORMANCE Our Group continues to demonstrate strong fundamentals with positive CAGR over the strategy period Amounts in KES B Income Statement Balance Sheet Total Income PBT Total Assets Customer Deposits Gross Loans +11% CAGR 14.6% CAGR 28.5% CAGR 7.7% CAGR 7.3% CAGR 6.1% 7.1
Slide 21: 2023 focus on subsidiaries showing demonstrable success
NCBA GROUP FINANCIAL PERFORMANCE Our 2023 focus on delivering performance from our subsidiaries is showing demonstrable success PBT (KES B) +31% +19% +77% +2.5x +251% Uganda, 324 Investment Tanzania, 180 Bank, 62 Rwanda, 270 Other, 184 Insurance, 70 Kenya, 5,459 Leasing, 52 Q1-22 Kenya Uganda Tanzan
Slide 22: Running a highly efficient business with a CIR of 47%
NCBA GROUP FINANCIAL PERFORMANCE Despite strategic investments and inflationary pressures, we continue to run a highly efficient business with a CIR of 47% Amounts in KES M OPEX Increased by 29% y-o-y in Q1-23…. …investing for the future Total Costs Operating Income 7,199 15,547 +18% 13,150 +29% 5,5
Slide 23: Customer growth visible in balance sheet expansion & NII
NCBA GROUP FINANCIAL PERFORMANCE Our customer growth efforts are visible in balance sheet expansion & NII Amounts in KES M Amounts in KES B NII driven by asset allocation and capital efficiency… …in addition to healthy growth across our core assets Held to Maturity Available For Sale Net Loans +21%
Slide 24: Market leading dollar book and currency risk management
NCBA GROUP FINANCIAL PERFORMANCE We continue to see strong results arising from our market leading dollar book and our efforts in currency risk management in the current volatile environment Amounts in KES M Amounts in KES B NFI performed strongly driven by FX in addition to strong …boosted by our m
Slide 25: Enhanced controls with results in asset quality
NCBA GROUP FINANCIAL PERFORMANCE We doubled down on our 2022 efforts to enhance controls with consequent results in our asset quality….. NCBA Group Gross Loans accelerated in Q1-23 (KES B) ….while our NPL ratio reduced to 12.5% from 15.8% Gross NPLs (KES B) NPL Coverage (%) NPL Ratio 316.4 15.8% 14.
Slide 26: Credit quality results across all banking businesses
NCBA GROUP FINANCIAL PERFORMANCE …and these credit quality results are visible across all our banking businesses and are bucking the industry trend Improved asset quality (NPL Ratio) across all our subsidiaries… …while NCBA Group continues to buck the industry trend 18.2% Q1-22 Q1-23 16.2% 15.8% 15.
Slide 27: Loan book diversified across product, currency and industry
NCBA GROUP FINANCIAL PERFORMANCE Our loan book is well diversified across product, currency and industry Q1 2023 Loan Book Loan Book by Sector Loan Book by Segment Loan Book by Currency Manufacturing 23% Personal 20% Consumer Trade 17% 26% FCY, 30% Transport 14% Financial Services 9% Construction an
Slide 28: Growth in deposit mobilization and funding mix
NCBA GROUP FINANCIAL PERFORMANCE Our increased footprint supported growth in deposit mobilization while also enhancing our funding mix Amounts in KES B NCBA Group deposit mobilization is on track ….while increasing our CASA ratio & FX mix CAGR 10% CAGR 8% 500 246 259 240 224 210 219 +7% 465 CASA Ter
Slide 29: Group effectively capitalized across core markets
NCBA GROUP FINANCIAL PERFORMANCE The Group remains effectively capitalized across our core markets providing ample room to invest in growth Core Capital/RWA across our markets Total Capital/RWA across our markets 24.69% 25.16% 18.80% 17.74% 17.44% 17.22% 18.80% 18.46% 17.80% 17.44% 14.69% 13.16% 6.3
Slide 30: Strategy delivering desired return outcomes for a Tier 1 bank
NCBA GROUP FINANCIAL PERFORMANCE Our strategy is delivering the desired return outcomes for a Tier 1 bank We are delivering on post merger promises on ROE …while matching similar sized peers on ROA 22.7% 3.3% 17.47% 2.37% 15.49% 2.13% Q1-21 Q1-22 Q1-23 Q1-21 Q1-22 Q1-23 30
Slide 31: Contents
CONTENTS WHO WE ARE < OPERATING ENVIRONMENT< UPDATE ON STRATEGY< FINANCIAL PERFORMANCE Q1 2023 < 2023 PRIORITIES <
Slide 32: 5 key areas requiring greater attention in 2023
2023 PRIORITIES We identified 5 key areas requiring greater attention in 2023 Thematic Area Objective Balance Sheet • Enhance the value generated from our substantial balance sheet Optimization Customer • Increase the number of customers we attract and retain across NCBA Growth Grow Shareholders • E
Slide 33: 2023 Guidance
2023 GUIDANCE • Return on Equity > 17% • NPL ratio < 13% Our FY 2023 • Cost to Income Ratio: 40-45%. Guidance • Capital Adequacy: Maintain a 300Bps buffer above regulatory limits • Core Bank Cost of Risk: 1.5% - 2.0% 33
Slide 34: PG |
PG | 34
Slide 35: Statement of Profit & Loss
APPENDIX I Statement of Profit & Loss Amounts in KES Millions NCBA Bank Kenya NCBA Group Consolidated 1Q’23 1Q’22 ∆% 1Q’23 1Q’22 ∆% Interest Income 13,127 10,953 20% 14,714 12,163 21% Interest Expenses (5,785) (4,556) 27% (6,346) (5,070) 25% Net Interest Income 7,342 6,398 15% 8,368 7,093 18% FX Inc
Slide 36: Statement of Financial Position
APPENDIX II Statement of Financial Position Amounts in KES Millions NCBA Bank Kenya NCBA Group Consolidated 1Q23 1Q22 ∆% 1Q23 1Q22 ∆% Assets Net Loans and Advances 254,291 218,406 16% 287,154 243,899 18% Investments 212,870 203,936 4% 234,317 223,158 5% Cash and Balances with Banks 47,149 63,925 (26