Standard Bank Group Limited · JSE:SBK
Standard Bank — FY2010 Earnings Presentation
25 slides from Standard Bank's earnings presentation, Mar 15, 2011
Slide 1: SBSA: The short and medium term
SBSA: The short and medium term Media briefing: 15 March 2011 Sim Tshabalala : CEO Standard Bank of South Africa Ltd 1. Refining the Group’s strategy 2
Slide 2: Refinement of strategy / Africa is at our core
Refinement of strategy Previous vision We aspire to be a leading emerging markets financial services organisation Refined strategy • To build the leading African financial services organisation using all our competitive advantages to the full • We will focus on delivering superior sustainable shareh
Slide 3: South Africa: Our springboard for growth
South Africa: Our springboard for growth o South Africa is an emerging market with well developed, leading edge and highly competitive financial markets p o We have a successful business with exportable and replicable: p • Cost effective and efficient systems and infrastructure • Products and soluti
Slide 4: South African banking operations
South African banking operations FY10 change FY09 Rm % Rm Total income 39 215 (2) 40 207 Headline earnings 9 271 (1) 9 327 Restructuring costs included above 304 ROE 19.0% 21.4% 7 7 3. Regulatory environment 8
Slide 5: Wave of new international regulations
Wave of new international regulations o Dodd-Frank Act increases regulatory oversight in USA: o Volcker rule is part of the Dodd-Frank Act o It stops US commercial banks from proprietary trading, owning hedge funds or private equity entities o European Banking Authority formed, with ability to overr
Slide 6: A Safer Financial Sector to Serve SA better
‘A Safer Financial Sector to Serve SA better’ o Released with the National Budget on 23 Feb 2011 o Focused on five policy priorities: 1. Financial stability 2. Improved market conduct 3. Consumer protection 4. Financial inclusion 5. Combating financial crime o To strengthen financial stability, we’r
Slide 7: It's a competitive world out there
4. The competitive environment 13 It’s a competitive world out there o Outside South Africa • Africa and emerging markets becoming more crowded • Growing g number of multi-nationals cherry-picking yp g deals • Range of good domestic banks • Full-service banks in-country – VTB, Garanti, Bradesco, Ban
Slide 8: Regional dynamics; SA market also becoming crowded
Regional dynamics • Standard Bank’s strategy of being an African based regional player is no longer unique (South Africans, Nigerians and even Malians are doing the same) West Africa Northern Africa • Dominated by the French banking • NorthAfrica dominated by large state- groups owned banks • Ni
Slide 9: Total loan growth in South Africa by bank
Total loan growth in South Africa by bank % 35 30 25 20 15 10 5 0 (5) (10) Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Standard Bank ABSA Nedbank FirstRand Total Market Source: SARB (BA900s) NOTE: Nedbank’s loan growth is negatively impacted by a R48bn decline in inter-bank lending in the year to December 20
Slide 10: Banking is a scale and scope business
Banking is a scale and scope business o One basis for our competitiveness is our sheer size in South Africa: o Should allow us to extract economies of scale and scope o A major way to defend against international competition o Some vital signs in South Africa: o Total assets of R840.4bn (loans of R5
Slide 11: Macroeconomic forecasts: South Africa
5. SBSA’s focus in the short and medium term 21 Macroeconomic forecasts: South Africa 2004 2005 2006 2007 2008 2009 2010F 2011F 2012F 2013F Real GDP growth 4.9% 5.3% 5.6% 5.5% 3.7% ‐1.8% 2.8% 3.7% 4.0% 4.6% Gross fixed capital formation growth 8.9% 11.0% 12.1% 14.2% 11.7% 2.3% ‐3.6% 6.1% 7.0% 8.4% C
Slide 12: South Africa: The growth story
South Africa: The growth story o Global Insight predicts long-term average real GDP growth of 4.5% to 5% through to 2040 o Government and SOEs budgeting for infrastructure spend of more than R800b over nextt 3 years R800bn • SA companies should benefit, stimulating corporate lending o 14% of our exp
Slide 13: Unsecured lending under-penetrated; unbanked opportunity
…but unsecured lending remains under-penetrated Credit card penetration (% of working population) 80% 70% 60% 50% 40% 30% 20% 10% 0% Source: UBS Research 25 25 Unbanked opportunity still prevalent Banking habits of SA adult population Gross debtors book proportion (based to 100) 130 Secured credit N
Slide 14: Transformation becoming more important
Transformation becoming more important o We aspire to be a national champion in transformation o Our philosophy towards transformation is not limited only to meeting compliance targets o We aim to embed in the culture of the bank a real sense of why transformation is important o Transformation is ce
Slide 15: What will keep SBSA busy in 2011
What will keep SBSA busy in 2011 o Implementing new business architecture and refined strategy o Big focus on cost-to-income ratio and ROE: • Helping Group attain the goal of keeping costs flat, while actively seeking revenue opportunities • More optimal use of capital in South Africa o Attitude tow
Slide 16: Abridged income statement and key ratios – FY2010
Abridged income statement and key ratios – FY2010 o Income and headline earnings were down 8% and 15% respectively from FY10 change FY09 prior year. Slowdown in client activity (especially trading) and negative Rm % Rm endowment effect primarily to blame T t l income Total i 10 595 (8) 11 545 o Cred
Slide 17: Landmark transactions completed last year
Some of the landmark transactions completed last year demonstrate the strength of our domestic franchise….. Standard Bank, in its capacity as Joint Lead Manager successfully raised a US$2bn bond for the National Treasury of South Africa. This transaction constitutes the largest global bond offering
Slide 18: Recognised as a leading African Investment Bank; Conclusion
Standard Bank continues to be recognised as a leading African Investment Bank….. National Treasury of South Africa – Emerging Market Deal of the Year Best Investment Bank in Africa Best Bank in South Africa Best Investment Bank in Nigeria Best Bank in Africa Best Bank in South Africa, Lesotho, Malaw
Slide 19: Personal and Business Banking
Personal and Business Banking Movingg forward... Media briefing: 15 March 2011 Peter Schlebusch : CEO PBB SA PBB SA Abridged Income Statement FY10 Change FY09 Rm % Rm Total income 28 068 0 28 160 Headline earnings 4 644 35 3 448 ROE (%) 21.5 16.5 Loans and advances 356 846 3 345 842 Retail deposits
Slide 20: PBB achievements in 2010
PBB achievements in 2010 PBB was rated as the #1 bank for customer service in SA 2 years running (2009 and 2010) PBB achievements in 2010 SBSA was recognised as the # 1 business bank in South Africa in 2010
Slide 21: Customers: New origination in 2010
New origination in 2010... Customers ‘Core’ Secured lending Unsecured lending Insurance and Asset relationship management products o VAF +34% o Business +9% o Multi-product Multi product +19% o Current o HL +70% o Personal +52% o HLP+89% Account Customers +26% Evolving customer needs leads to greate
Slide 22: Improving convenience, accessibility and people engagement
Improving convenience, accessibility and relevance to customers... o Growth in distribution footprint o > 1 000 new ATM’s o 45 new physical points of representation o > 7 000 bank shops o ATM & systems uptime exceeding 97% o Launched a BEE Agri fund of R500m o Launch of Inclusive Banking Improving p
Slide 23: Inclusive Banking
Inclusive Banking Making banking accessible to all o Financial inclusion and increasing participation in the economy is a key responsibility of SBSA o Specific use of technology to reduce costs for customers and for the bank o Almost 8 000 bankshops deployed o >1 000 full service o >6 000 value adde
Slide 24: Prospects; Concluding Remarks
Prospects 2011 for PBB o Determined, enthusiastic and committed management team o We are budgeting for good growth and ROE’s o Continued improvement in impairments o Well positioned to meet customer needs off excellent service platform and main bank sales o Improving risk appetite o Continued growth
Slide 25: Questions?
Questions ?