Absa Group Limited · JSE:ABG
Absa — UBS Financial Services Conference 2022
15 slides from Absa's conference presentation, October 2022
Slide 1: Absa Group
Absa Group UBS financial services conference Jason Quinn: Financial Director October 2022
Slide 2: Completed Barclays separation
Completed Barclays separation Issuing (Credit Card) Migration (ARO) FX Signing of the Trading Transitional Services ATM Debit Re- (CIB) Agreement Card branding Replacement 31 May 2017 Migration (ARO) of the Risk (ARO) Trading Stack Core Corporate ServiceNow & Credit Risk Core FinCrime Channels IT Mn
Slide 3: Strong CIB performance creates foundation for growth
Strong CIB performance creates foundation for growth Revenue (Rbn) Pre-provision profits (Rbn) 12% 14% 12.5 6.7 11.6 6.3 10.2 5.5 8.9 4.5 1H19 1H20 1H21 1H22 1H19 1H20 1H21 1H22 RoRC (%) Headline earnings (Rbn) 24.1 13% 22.8 4.3 4.1 18.9 2.9 9.1 1.7 1H19 1H20 1H21 1H22 1H19 1H20 1H21 1H22 3 |
Slide 4: Second phase of strategy to regain RBB SA leadership
Second phase of strategy to regain RBB SA leadership Revenue growth (%) 4 |
Slide 5: Resulting in meaningful market shares in targeted areas
Resulting in meaningful market shares in targeted areas Retail market shares – July 2022 (%) 26 24 23 22 10 Credit cards Mortgages Vehicle finance Personal loans Deposits Rank: 1st 2nd 3rd 6th 2nd 5 |
Slide 6: Key metrics improving
Key metrics improving Digitally active customers (m) Product per retail customer (number) 2.2 14% 2.40 2.0 2.37 1.7 2.31 1.5 2.27 1H19 1H20 1H21 1H22 1H19 1H20 1H21 1H22 6 |
Slide 7: Group generated positive momentum
Group generated positive momentum Pre-provision profit (Rbn) Diluted normalised HEPS (c) 23% 27% 9% 1% 22.8 487% 1296 7% 3% 18.5 18.6 1018 16.9 976 (82%) 173 1H19 1H20 1H21 1H22 1H19 1H20 1H21 1H22 RoE (%) Dividend per share (c) 110% 17.7 16.4 3% 650 15.3 505 310 2.6 nil 0 1H19 1H20 1H21 1H22 1H19 1
Slide 8: Costs well managed while continue to invest
Costs well managed while continue to invest Group cost-to-income ratio (%) Systems incidents (number) 56.7 56.7 1 8 29 Severity 2 Severity 1 54.9 53.9 24 1 51.4 21 3 9 1 6 2 1 2 2 0 1H18 1H19 1H20 1H21 1H22 2015 2016 2017 2018 2019 2020 2021 2022 YTD 8 |
Slide 9: Sluggish SA GDP growth, with ARO far stronger
Sluggish SA GDP growth, with ARO far stronger GDP (Rtn) 1.7% 4.2% 5.7 -0.1% 1.1% 5.5 5.2 5.1 3.9% 4.9 4.9 4.8% 4.2 3.5 South Africa Absa Regional Operations 2013 2017 2021 2025E Source: Absa research 9 |
Slide 10: ARO portfolio diversified, with low market shares
ARO portfolio diversified, with low market shares Absa Regional Operations revenue mix (%) ARO revenue market share by country 1H22 (%) 30 25 25 35 20 15 10 19 10 11 5 0 Uganda Mauritius * Seychelles Kenya Zambia Botswana * Mozambique Tanzania ** Ghana Kenya Ghana Zambia Botswana Other countries Not
Slide 11: Loadshedding creates renewables funding opportunity
Loadshedding creates renewables funding opportunity South Africa loadshedding (thousand GWh) Absa REIPPP funding (Rbn) 11 5.9 10 9 8 7 6 5 2.5 4 1.7 3 1.3 2 1 0.2 0 2018 2019 2020 2021 2022 YTD Round 1 Round 2 Round 3 Round 4 Source: Eskom, Absa research 11 |
Slide 12: Resilient posture against tough macro backdrop
Resilient posture against tough macro backdrop Group capital ratios (%) Total loan coverage (%) 16.9 17.0 16.0 4.5 4.5 4.5 14.9 2.7 2.2 2.7 4.1 1.7 4.0 3.0 1.8 0.8 0.9 3.3 12.5 12.4 13.1 11.0 1H19 1H20 1H21 1H22 FY19 1H20 FY20 1H21 FY21 1H22 CET1 Other tier 1 Tier 2 12 |
Slide 13: Executing our consistent strategy well
Executing our consistent strategy well 13 |
Slide 14: Medium-term targets
Medium-term targets Cost-to-income ratio (%) RoE (%) 55.2 Sustainably Bottom half > 17.0 75-100bp 15.8 Low 50s FY21 … FY24 FY21 … FY24 14 |
Slide 15: Disclaimer
Disclaimer Certain statements (words such as ‘anticipates’, ‘estimates’, ‘expects’, ‘projects’, ‘believes’, ‘intends’, ‘plans’, ‘may’, ‘will’ and ‘should’ and similar expressions in this document are forward looking. These relate to, among other things, the plans, objectives, goals, strategies, futu