Standard Bank Group Limited · JSE:SBK
Standard Bank — FY2021 Earnings Presentation
54 slides from Standard Bank's earnings presentation, 2022
Slide 1: Standard Bank Group Financial Results Presentation
Standard Bank Group FINANCIAL RESULTS PRESENTATION
Slide 2: FY21 Overview
WV FY21 OVERVIEW Standard Bank ITCANBE..
Slide 3: 2021 operating environment
y Ses Standard Bank ITCANBE. 2021 operating environment A recovery year — pandemic-related restrictions were rolled back, activity recovered, and demand drove growth Globally * Global recovery, +5.9% real GDP growth! * Recovery growth rates differed — impacted by differing levels of stimulus and vac
Slide 4: FY21 Highlights
y FY21 Highlights A strong rebound in earnings driven by continued franchise growth, 2025 targets on track weathered the pandemic a the group’s recovery is well underway Strategic progress — delive t we set out to do is Record pre-provision operating profit in 2H21 Core franchise growth — across all
Slide 5: Client franchise growth
y Client franchise growth Strong client acquisition, strong market share positions and improving client experience ratings Client franchise Market positions Client satisfaction® CHNW 16m active customers BCC © 761k active customers © Client revenue, CCY * Attracting clients through our holistic, rel
Slide 6: Client-driven balance sheet growth
Client-driven balance sheet growth We have consciously managed our risk appetite in order to continue to support our clients through the pandemic Key takeouts Customer deposits, Rbn! Gross customer loans, Rbn! mRetail-priced (+27%) = Corporate (+7%) Customer deposits, +25%! mWholesale-priced (+23%)
Slide 7: Franchise momentum driving top line growth
Franchise momentum driving top line growth Record performance across NII, NIR and PPOP in 2H21 Net interest income, Rbn 31.2 317 32.4 : 312 302 300 | ROM 419 2HI9. 1H20 2H20 1H21 2H21 Consistent credit appetite providing a strong average asset base Margin expansion, driven by favourable loan and dep
Slide 8: Modernising and digitising payments
y Modernising and digi ig payments * Weare a significant player in payments on the continent — we facilitate the full range of transactions from large corporate payments, bulk settlements to individual wallet transfers * Payments is evolving, driven by regulation and competition; including rapid pay
Slide 9: Simplifying the group
Simplifying the group * Continued progress on increasing process automation, Al and cloud migration * Liberty buyout completed, next step integration * ICBCS's improved performance provides the basis for exit discussions Diligent resource prioritisation Focused on operational excellence, including s
Slide 10: Delivering what we set out to do
y Delivering what we set out to do & Core franchise growth Across all client segments and solutions underpinned by an expanded digital offering and excellent service New business opportunities Focused on scaling digital payments, platforms and partnerships Diligent resource prioritisation Simplifyin
Slide 11: Group Financial Performance
GROUP FINANCIAL PERFORMANCE Standard Bank ITCANBE..
Slide 12: FY21 financial performance
y 12 FY21 financial performance & Strong rebound in earnings driven by continued franchise growth, recovery in activity and a decline in credit charges Pre-provision operating profit Group headline earnings Dividend per share FY21:R47.8bn FY21:R25.0bn FY21: 871lcps FY20: R45.4bn FY20: R15.9bn FY20:
Slide 13: Group headline earnings analysis
y Group headline earnings analysis & Balance sheet growth and a recovery in client activity drove higher revenues, credit impairment charges were lower === Positive impact (2553) Negative impact Non-interest revenue, +8% Grey) = (381) 238 Net interest income, +2% 1796 | 15945 Rm FY20 NII Endowment F
Slide 14: Income statement
Income statement Revenues above 2019 levels despite considerable endowment drag, robust growth in 2H21 reflective of underlying franchise momentum FY21 FY20 Change Change FY19 Change Rbn Rbn % CCY % Rbn %! Net interest income 62.4 61.4 2 6 62.9 (65) Non-interest revenue 51.1 47.2 8 16 475 8 Total in
Slide 15: Average balance sheet
Average balance sheet Strong growth in average retail and business portfolios largely offset by lower average corporate book; targeted growth in cheaper retail liabilities Key takeouts Average interest-earning assets increased in FY21: Average interest-earning assets Average interest-bearing liabili
Slide 16: Net interest income
Net interest income Margin recovery from a low point in 2H20, driven by interest rate increases and mix benefits Net interest margin === Positive impact Key takeouts w= Negative impact + Negative endowment impact much #3 DpS ~~ ~~ --- 2 non anno nnn nnn nnn nnn nnn nnn nnn n nnn ns less in FY21 than
Slide 17: Non-interest revenue
Non-interest revenue Growth in client franchise, sales and digital activity more than offset downward pricing adjustments; strong South Africa trading performance Key takeouts : Net fee and commission revenue recovered to FY19 levels as transactional activity and values recovered, mainly in Card (de
Slide 18: Gross loans and provisions
Gross loans and provisions Total coverage and stage 3 ratio declined, but still elevated relative to pre-pandemic levels, stage 3 coverage increased as mix changed Gross loans and advances! Provisions Key takeouts Relative to 31 December 2020: sea 412% --> ee * Stage 3 ratio declined as loans mStage
Slide 19: Balance sheet provisions
y Loans?, Rbn Total coverage, % Balance sheet provisions Significant decline in net provisions raised, the write off of legacy exposures and accelerated portfolio sales resulted in increased write offs Provisions ———= Higher Lower mStage 3 mStage 2 27 31 514 m Stage 1 — a (0.7) 35.3 Decline Increase
Slide 20: Credit impairment charges — Group
20 Credit impairment charges — Group Continued downward trend Credit impairment charges CLR!|62bps| [SObps| | 76bps) | 60bps| [169bps| [132 bps| | 88bps| [58 bps | Rm 1H18 2HI18 1H19 2H19 1H20 1 Credit loss ratio based on credit impairment charges on loans and advances 2H20 1H21 2H21 Key takeouts +
Slide 21: Credit impairment charges — Group
Credit impairment charges — Group Declines across all 3 client segments Credit impairment charges Credit impairment charges, by segment! 491 Centre?, (99%) BCC, (37%) CHNW (36%) CIB Rm Fy19 FY20 FY21 Rm (311) (>100%) CLR bps FY20 FY21 Key takeouts Consumer & High Net Worth clients + Decline driven b
Slide 22: Credit impairment charges — Group
22 Credit impairment charges — Group Credit loss ratio at the lower end of the group's through-the-cycle range (70-100bps), aided by a CIB net recovery Credit impairment charges Rm Fy19 FY20 CLR 1 Through-the-cycle credit loss ratio range FY21 poate > CHNWCLR FY21 137 bps PPS 1H20 2H20.IH21_—2Hal po
Slide 23: Operating expenses
y Operating expenses Continued focus on rationalising, cost to fund expansion and investment in key development areas FY21 FY20 change ccY Key takeouts Rbn Rbn % % Staff costs Staff costs 36.6 34.4 7 n + Annual salary increases . + Higher performance-related incentives Other operating expenses 29.1
Slide 24: Operational leverage
Operational leverage In 2H21, a strong recovery in revenue more than offset adjusted costs, delivering strong positive jaws Income and cost growth and jaws y takeouts + Pre-pandemic - we achieved positive Jaws! | 11% | 12% 10% { (70%) | (3.3%) | 4.8% jaws in the three six-month periods preceding the
Slide 25: Client Segment, Solution and Regional Results
\e] CLIENT SEGMENT, SOLUTION AND REGIONAL RESULTS Standard Bank ITCANBE..
Slide 26: Standard Bank activities earnings
Standard Bank activities! earnings The strength of our franchise and resilience of our earnings is underpinned by our diversification Client segment split, Rbn Client solution split, Rbn Regional split, Rbn? Other, Investments, +>100% Insurance, +11% International, on (20%) SBSA, +159% Africa Region
Slide 27: Performance by Client Segment
y Performance by Client Segment Strong performances by all 3 segments, delivering positive pre-provision operating profit oN Change bee Change Fyn Change Rbn Rbn Rbn Net interest income 28.6 6 15.5 3 18.7 (4) Non-interest revenue 19.6 5 10.8 3 217 13 Total income 48.2 5 26.3 3 40.4 5 Operating expen
Slide 28: Performance by Client Solution
y Performance by Client Solution Strong recovery in Banking, continued positive performance in Insurance and Investments Bane Change Insurance! Change Investments! Change % % % Rbn Rbn Rbn Net interest income 62.5 2 0.1 (9) 0.2 (6) Non-interest revenue 44.4 8 43 6 3.4 2 Total income 106.9 5 44 5 3.6
Slide 29: Performance by Region
y Performance by Region! Strong performance by SBSA, Africa Regions robust revenue growth dampened by inflation and a stronger ZAR Africa SBSA Regions eeeemee Key takeouts FY21 Change FY21 Change ccy SBSA Rbn % Rbn % % + Revenue growth driven by continued Net interest income 40.8 3 20.6 1 16 momentu
Slide 30: Africa Regions performance
Africa Regions performance Remains well above 2019 levels as the South & Central and East Regions offset a softer performance from the West Region, off a high base FY21 FY20 Change Change FY19 o Rbn Rbn % CCY% Rbn 2 Africa Regions 9.0 9.2 (2) 6 8.4 < § East Africa! 17 16 10 22 16 o South and iS 3B 3
Slide 31: Liberty and ICBCS
\e] LIBERTY AND ICBCS Standard Bank ITCANBE..
Slide 32: Liberty
32 Liberty Strong rebound in normalised operating earnings (pre-pandemic impacts) driven by South Africa Insurance operations Insurance indexed new business Assets under management Solvency coverage ratio! Key takeouts FY21:R9 232m FY20: R7 302m FY21:R888bn FY20: R776bn T26% 714% Normalised operatin
Slide 33: Liberty normalised operating earnings
y Improved business performance overshadowed by additional pandemic-related charges FY21 FY20 Change South African Insurance Operations 1308 685 91 Covid-19 pandemic impact STANLIB South Africa 472 466 1 + The 2™4 and 3" waves of infection were Africa Regions (74) Al (>100) Coal aaa reswliilastin Ot
Slide 34: ICBC Standard Bank plc
ICBC Standard Bank plc Resilient performance, driven by increased client activity and favourable market conditions ICBCS FY21 performance, USDm SBG’s share of earnings Key takeouts + Franchise performance - increased FY21 FY20 client financing and activity volumes 125 ST led to improved operational
Slide 35: Capital & Returns
\e] CAPITAL & RETURNS Standard Bank ITCANBE..
Slide 36: Capital and liquidity
Capital and liquidity Strong capital generation, supported by a 13% increased in NAV, increasing AT1 and Tier II contribution, and robust liquidity position CapitaP Capital adequacy! Liquidity Net stable funding ratio Basel Ill 13.8 Bg 122% minimum 13.5 a. e@ . Os. Bao2? S26? (FY20: 125%) 100% ro we
Slide 37: Returns and dividends
Returns and dividends ROE recovering and dividend payout was restored to pre-pandemic levels Return on equity and cost of equity % FYI7 FY18 FY19 FY20 FY21 —®Group ROE Standard Bank activities ROE —e—Cost of equity Dividend per share Payout 55% Ratio [55% J 970 994 240 | cps FYI7 FYI FY19 FY20* FY21
Slide 38: Looking Forward
LOOKING FORWARD Standard Bank ITCANBE..
Slide 39: 2022 — Macro outlook
2022 — Macro outlook The beginning of the end of the pandemic and pent-up consumer demand provide a positive backdrop, however geopolitical developments are a risk Global growth to remain above trend, financing conditions to tighten and inflation to fade! * Global growth 4.4%, sub-Saharan Africa 3.7
Slide 40: FY22 — SBG guidance
FY22 — SBG guidance Growing franchise, rising interest rates and normalising credit impairment charges all positive Key drive SBG 2025 . . 1 ' +40bps — 60bps, relative to Net interest margin Endowment tailwind FY20 NIM ' Consistently positive jaws, Efficiency Positive jaws H supporting a CTI ratio 4
Slide 41: Driving Sustainable Growth and Value
WV DRIVING SUSTAINABLE GROWTH AND VALUE Standard Bank ITCANBE..
Slide 42: Africa is our home we drive her growth
Africa is our home we drive her growth Driving sustainable growth and value >. ond Wi? Driving impactful Enabling a just Creating value for Delivering a innovation in Africa transition for Africa all our stakeholders positive impact Incubating new Purposefully responding to Delivering value to clien
Slide 43: Lots to be proud of and build on in 2022
vy Lots to be proud of and build on in 2022 & 2021 strategic progress 2022 focus areas Core franchise growth Delivery against our 2025 targets Scaling of new business opportunities Liberty integration Diligent resource prioritisation Leverage and capital optimisation Standard Bank wins big at the Wo
Slide 44: You don't just become Africa's most valuable bank brand
WV YOU DON’T JUST BECOME AFRICA’S MOST VALUABLE BANK BRAND. » You earn it. Standard Bank ITCANBE..
Slide 45: Appendix
‘ APPENDIX Standard Bank ITCANBE..
Slide 46: Interest rates
Interest rates Higher interest rates in SA, Mozambique and Zambia, lower interest rates in Uganda South Africa and International’ South and Central Africa 10 15 8 6 1, 10 ee ‘ 5 —— 2 —, _——_, (¢) (0) Jan20 Mar20 Jun20 Sep20 Jan21 Mar 21 Jun21 Sep21 Dec 21 Jan20 Mar20 Jun20 Sep20 Jan21 Mar21 Jun21 Se
Slide 47: Currencies
Currencies ZAR stronger on average, compared to prior year. All other currencies weaker relative to the ZAR South Africa and International South and Central Africa 190 140 zo ES) 100 106 80 Jan20 Mar20 Jun20 Sep20 Jan21 Mar21 Jun21 Sep21 Dec 21 Jan20 Mar 20 Jun20 Sep20 Jan21 Mar 21 Jun21 Sep21 Dec 2
Slide 48: Gross loans and advances
Gross loans to clients by product! FY21 R1269bn \7| (49%) 4 FY20 R1166bn =e m Home services (+9%) m VAF (+12%) = Card (+4%) = GM (-23%) u TPS (+70%) mRetail (+16%) IB (42%) 1 Excludes centre, * Based on legal entity view 48 Gross loans and advances Strong growth in CHNW and BCC driven by improved se
Slide 49: Deposits from customers
Deposits from customers Growth in deposits driven by growth in the underlying client franchise Deposits from customers by product! Deposits from customers by geography? [OBcluns Products + Strong retail-priced deposit growth supported by a larger client base and targeted deposit-gathering campaigns
Slide 50: Banking — South Africa disbursement trends
Banking — South Africa disbursement trends Mortgages, VAF and Business disbursements well above pre-pandemic levels, personal lending in line with 2019 Mortgage disbursements VAF! disbursements Key takeouts + Mortgage disbursements - averaged R6.7bn a month in 2021; considerably above 2019 levels of
Slide 51: Banking — customer activity
Banking — customer activity! Activity reflects strategy to drive transactions to digital channels, increase use of card and move cash out of branch to ATMs and other partners CHNW SA 22% Digital volumes » » 20% Card issuing? ¥ 5% ATM ¥ 36% Branch 1 Transaction volumes year on year, unless indicated
Slide 52: Insurance — South Africa trends
Insurance — South Africa trends! Expanded offering enabled strong GWP growth, claims elevated but remain in line with expectations Gross written premium (FY21, R8.8bn) Claims (FY21, R3.2bn) T 13%? T 32%? T 26%? T 63%? T 3%? T 18%? Ofy2 T 19% t 33%? Rm FY20 FY21 Rm FY20 FY21 mCredit Life? mShort-term
Slide 53: Investments
Investments Continued growth across all three businesses and geographies, rank as a top 3 asset manager on the continent Standard Bank Group AUM/A by business! Standard Bank AUM/A by geography? +9% Businesses + AUM grew across all three businesses, supported by positive market performance and positi
Slide 54: Standard Bank Group Financial Results Presentation
Standard Bank Group FINANCIAL RESULTS PRESENTATION