Ncba Group Plc · NSEKE:NCBA
Ncba — Q3 2024 Earnings Presentation
39 slides from Ncba's earnings presentation, Sep 27, 2024
Slide 1: Q3 2024 Investor Pack
1 Q3 2024 Investor Pack December 2024
Slide 2: Contents
2 CONTENTS WHO WE ARE < OPERATING ENVIRONMENT < UPDATE ON STRATEGY < FINANCIAL PERFORMANCE Q3 2024<
Slide 3: Q3 2024 Key Messages
Q3 2024 KEY MESSAGES 1 2 3 Resilient fundamentals across Steady balance sheet outcomes We have delivered on our our business with well controlled risks 2020-2024 strategic ambitions ✓ We have seen a +6% CAGR in Total ✓ Reoriented funding mix ensuring a ✓ A bigger branch network (118 Assets over the
Slide 4: Contents
4 CONTENTS WHO WE ARE < OPERATING ENVIRONMENT < UPDATE ON STRATEGY < FINANCIAL PERFORMANCE Q3 2024<
Slide 5: Our Group Structure
PG 5 WHO WE ARE Our Group Structure : We have expanded beyond our banking roots to provide non-banking services to our customers NCBA GROUP PLC BANKING SUBSIDIARIES NON BANKING SUBSIDIARIES NCBA NCBA NCBA NCBA AIG KENYA NCBA NCBA BANK BANK BANK BANK INSURANCE NCBA LOOP DFS BANCASSURANCE INVESTMENT K
Slide 6: Welcome to NCBA
PG 6 WHO WE ARE Welcome to the bank that says Go For It, Welcome to the bank that banks on your ambition, Welcome to NCBA Our Values • Driven • Open Our Purpose • Responsive • Trusted To be the Financial Partner that Inspires your Growth Our Customer Promise • We Know You • We Back You • We Wow You
Slide 7: Our Regional Footprint
PG 7 WHO WE ARE Our Regional Footprint Banking Business KES KES KES 100Bn 515Bn 335Bn UGANDA Capital Deposits Lending Branches 5 Customers 11.8Mn +3,000 Staff ~USD 775Mn ~USD 4Bn ~USD 3Bn KES 751Bn Digital Disbursements+ KENYA ~USD 6Bn IVORY COAST Branches 98 Purely Digital Customers 37.2Mn Customer
Slide 8: Distinguished Brand Known for Customer Experience
PG 8 WHO WE ARE We have received distinguished awards and accolades for our renowned customer experience and sustainability initiatives Brand Top 10 Most Valuable Kenyan Brands 2024 : Brand Finance 85th Most Valuable Brand in Africa : Brand Finance Best Performing Thematic Campaign : Mdundo Aw
Slide 9: We are led by an exceptional team
WHO WE ARE We are led by an exceptional team which has demonstrated resilience in managing our business
Slide 10: Contents
10 CONTENTS WHO WE ARE < OPERATING ENVIRONMENT < UPDATE ON STRATEGY < FINANCIAL PERFORMANCE H1 2024 <
Slide 11: Global economic growth to remain moderate in 2025
PG 11 OUR OPERATING ENVIRONMENT Global economic growth to remain moderate in 2025. Inflation expectations continue to edge down providing a path for gradual monetary easing Gradual decline in interest rates Global growth is projected to Inflation expected to edge down 1 remain moderate, divergence 2
Slide 12: Growth expectations are well anchored across the region
PG 12 OUR OPERATING ENVIRONMENT Growth expectations are well anchored across the region KENYA UGANDA RWANDA TANZANIA • Growth expectations revised down • Growth remains supported by • Strong growth outturn in Jun-24 • Economic expansion has to 5.0% reflecting weak aggregate steady flows of FDI & for
Slide 13: Contents
CONTENTS WHO WE ARE < OPERATING ENVIRONMENT < UPDATE ON STRATEGY < FINANCIAL PERFORMANCE H1 2024 <
Slide 14: Strategy delivering a resilient set of results
PG 14 OUR STRATEGY Despite macroeconomic headwinds, our strategy is delivering a resilient set of results with bottom line growth and our Group ROAE registering at 20.4% Q3 23 Q3 24 Become a Distinguished Brand 15.1 Known For Customer Experience 14.6 PAT (KES Bn) 22.3% Scale Retail 20.4% Banking: Ex
Slide 15: Always on Media campaigns reinforcing Go For IT positioning
PG 15 OUR STRATEGY We have leveraged on Always on Media campaigns, brands assets & targeted customer engagements to Reinforce the “Go For IT” Positioning and support business outcomes Increased loyalty and satisfaction Key investments made… …to drive our Brand Positioning across key customer touch p
Slide 16: Growth in retail customer base and branch network
PG 16 OUR STRATEGY Significant growth in our retail customer base and overall contribution of retail banking as we scale up our branch network Significant contribution to KE business: Our increasing footprint continues to Retail Deposits account for 31% of the 18/27 branches have broken even with su
Slide 17: #3 Corporate Bank in East Africa
PG 17 OUR STRATEGY Market dynamics notwithstanding we are the #3 Corporate Bank in East Africa with a deposit base of KES 211Bn (Q3'24) Enablers Deposits(KES B) Gross Loans (KES B) Q3 2024: Impacted by aggressive deposit repricing and FX Q3 2024: Impacted by KES appreciation (from 157 (Dec-23) to 12
Slide 18: Leadership in Asset Finance
PG 18 OUR STRATEGY We have continued to reinforce our leadership in Asset Finance by leveraging on our strategic partnerships and being first to market with innovative solutions Enablers Market Dominance Controlled Risks 15 Sec Market Share Gross Lending (KES B) CoR Conditional Approval (1st to Mark
Slide 19: Enhancements to mobile banking app
PG 19 OUR STRATEGY We have undertaken major enhancement on our mobile banking App and target campaigns to drive adoption and utilization among our customers Benefits accruing from targeted mobile loans NCBA Now Utilization campaigns aimed at driving uptake 6.8 146 Mobile App 6 Active 130 Customers (
Slide 20: KES 751B digital loans disbursed in 9 months
PG 20 OUR STRATEGY Our investment in digital financial services enabled us to disburse KES 751B in digital loans over 9 months in 2024 supporting our financial inclusion agenda & diversifying our customer base across Sub Saharan Africa Evolution of digital disbursements (KES Bns) Group Fuliza (KE) M
Slide 21: Staff retention stabilized
PG 21 OUR STRATEGY Staff retention has stabilized with current focus around boosting productivity at the same time being recognized as a great workplace Relatively Stable Employee Turnover, HC increase to support growth Industry Recognition Head count Staff Retention 94% 93% 90% 90% 92% HR Directo
Slide 22: Contents
22 CONTENTS WHO WE ARE < OPERATING ENVIRONMENT < UPDATE ON STRATEGY < FINANCIAL PERFORMANCE Q3 2024 <
Slide 23: NCBA Group Financial Performance: PBT by subsidiary
PG 23 NCBA GROUP FINANCIAL PERFORMANCE Our diversified business model continues to demonstrate strength, with strong contribution from our non banking and digital banking subsidiaries PBT Amount in KES Mns PBT Amount in KES Mns Core Banking Subsidiaries Digital Banking Q3 23 Q3 24 Q3 23 Q3 24 %∆ %∆
Slide 24: Banking subsidiaries contribution and returns
PG 24 NCBA GROUP FINANCIAL PERFORMANCE Our focus on enhancing the contribution from subsidiaries has demonstrated success with our Group deriving 18% of top line outside of Kenya bank with strong profitability outcomes across REVENUE % CONTRIBUTION EFFICIENCY RETURNS* TOTAL INCOME COST TO INCOME RAT
Slide 25: Resilient asset base and income lines
PG 25 NCBA GROUP FINANCIAL PERFORMANCE Our Group continues to demonstrate strong fundamentals with a resilient asset base which is delivering resilience in our income lines Amounts in KES Bns Balance Sheet Income Statement Total Assets Customer Deposits Gross Loans Total Income PBT CAGR +6.0% CAGR +
Slide 26: Reoriented funding mix strengthens CASA deposit base
PG 26 NCBA GROUP FINANCIAL PERFORMANCE Following successful capital raising efforts & to limit cost of funding pressures, we reoriented our funding mix to strengthen the CASA deposit base Amounts in KES Bns Drop in deposit reflecting reorientation to higher CASA and …CASA is now 52% of our deposit m
Slide 27: Improving loan quality and NPL ratio
PG 27 NCBA GROUP FINANCIAL PERFORMANCE Our credit outcomes continue to show improvement in loan quality albeit on the back of some softness in lending y-o-y… Slight softness in lending given mixed economic conditions… …however we continue to deliver a better quality loan book compared to similarly s
Slide 28: Provisioning and coverage across loan buckets
PG 28 NCBA GROUP FINANCIAL PERFORMANCE …with adequate provisioning and coverage across loan classification buckets Stage 1 Stage 2 Stage 3 1.1% 15.3% 65.3% Coverage 1.0% 0.9% 10.1% 59.7% Ratio (%) 8.1% 57.7% 262 249 45 43 40 37 41 219 36 Gross Loans & Advances (KES Bns) Q3 22 Q3 23 Q3 24 Q3 22 Q3 23
Slide 29: Protecting bottom line and NIM
PG 29 NCBA GROUP FINANCIAL PERFORMANCE On the back of interest rate pressures, we focused on protecting our bottom line by tightening deposit costs and improving pricing across all lending ensuring margin protection Our efforts on protecting our margins enabled us to largely … delivering resilient n
Slide 30: Non funded income streams
PG 30 NCBA GROUP FINANCIAL PERFORMANCE Our non funded income streams received a healthy boost from fees derived from varied solutions we offer our clients Y-o-Y we have seen a drop in our FCY deposit book due …we nonetheless continue see solid performance in fees derived from to translation effects
Slide 31: Strategic investments pressure efficiency metrics
PG 31 NCBA GROUP FINANCIAL PERFORMANCE Our strategic investments, notably in our distribution network & digital platforms, have put pressure on our near term efficiency metrics. We remain focused on driving to break even OPEX Increased by 11% in Q3 24 as we continued to book …notwithstanding the inc
Slide 32: Capital across core markets
PG 32 NCBA GROUP FINANCIAL PERFORMANCE The Group efforts on reorienting the balance sheet to protect its bottom line is delivering capital across our core markets providing ample room to invest for growth…. Total Capital/RWA across our Markets Minimum Buffer Q3 24 H1 24 Requirements 5.2% 19.7% 19.9%
Slide 33: Stable returns to shareholders
PG 33 NCBA GROUP FINANCIAL PERFORMANCE …and delivering stable returns to our shareholders over the last 3 years Our Group is showing resilience on ROAE… …while matching similar sized peers on ROAA…. 22.3% 3.0% 21.2% 2.9% 20.4% 20.4% 2.8% Q3 22 Q3 23 Q3 24 Q3 22 Q3 23 Q3 24
Slide 34: Contents
34 CONTENTS WHO WE ARE < OPERATING ENVIRONMENT < UPDATE ON STRATEGY < FINANCIAL PERFORMANCE Q3 2024 <
Slide 35: Q3 2024 Key Messages
Q3 2024 KEY MESSAGES 1 2 3 Resilient fundamentals across Steady balance sheet outcomes We have delivered on our our business with well controlled risks 2020-2024 strategic ambitions ✓ We have seen a +6% CAGR in Total ✓ Reoriented funding mix ensuring a ✓ A bigger branch network (118 Assets over the
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Slide 37: Statement of Profit & Loss
APPENDIX I Statement of Profit & Loss Amounts in KES Millions NCBA Bank Kenya NCBA Group Consolidated Q3 23 Q3 24 ∆% Q3 23 Q3 24 ∆% Interest Income 41,661 51,199 23% 46,968 57,424 22% Interest Expenses (19703) (29,550) 55% (21,011) (32,284) 54% Net Interest Income 22,588 21,649 (4%) 25,957 25,141 (3
Slide 38: Statement of Financial Position
APPENDIX II Statement of Financial Position Amounts in KES Millions NCBA Bank Kenya NCBA Group Consolidated Q3 23 Q3 24 ∆% Q3 23 Q3 24 ∆% Assets Net Loans and Advances 270,633 268,281 (1%) 308,701 303,453 (2%) Investments 206,542 188,510 (9%) 230,645 217,511 (6%) Cash and Balances with Banks 73,387
Slide 39: Our loan book is well diversified
APPENDIX III Our loan book is well diversified across product, currency and industry Q3 24 Loan Book Loan Book by Sector Loan Book by Segment Loan Book by Currency Q3 24 Manufacturing 23% Personal 20% SME Trade 15% 13% FCY Transport 13% 28% Financial Services 8% Consumer Building, Mortgage, 27% Corp