Firstrand Limited · JSE:FSR
Firstrand — FirstRand Bank — Debt Investor Presentation (May 2007)
34 slides from Firstrand's debt investor presentation, May 2007
Slide 1: FirstRand Bank Limited
FirstRand Bank Limited May 2007
Slide 2: Important Notice
Important Notice FirstRand Bank Limited (“FRB”) has obtained the information in this presentation from sources it believes to be reliable. Although FRB has taken all reasonable care to ensure that the information herein is accurate and correct, FRB makes no representation or warranty, express or i
Slide 3: Presentation Team
Presentation Team Mr Johan Burger, Chief Financial Officer, FirstRand Group Mr Andries du Toit Toit, Head of Funding and Capital Management Management, FirstRand Banking Group Ms Gill Raine, Debt Capital Markets, Rand Merchant Bank, a division of FirstRand Bank Limited 3
Slide 4: Agenda
Agenda g Investment Highlights Operating Environment: South Africa – Economy – Banking Sector – Competitive Map Overview O i off FirstRand Fi tR d Bank B k Limited Li it d – Corporate Structure of FirstRand Bank Limited – Strategy – Business Overview Financial Overview of FirstRand Bank Limi
Slide 5: Investment Highlights
Investment Highlights Key Performance Indicators – FirstRand Bank Limited Summary 30 June FirstRand Bank Limited is one of the four leading banks in South Africa EUR Millions 30 June 2006 30 June 2005 2004³ Offering g a universal p product range g ((retail,, corporate p and merchant Net Interest
Slide 6: Operating Environment: South Africa
Operating Environment: South Africa
Slide 7: Economy
Economy Positive Environment Facts and Figures Key Growth Drivers Nominal GDP: US$254.0 billion GDP per head: US$5,364 Debt to GDP has declined sharply since 1994 reflecting sound fiscal GDP Growth: 5.0% policy CPI Inflation: 6.2% YY Credibility of monetary policy involving 200bps increase in th
Slide 8: Economy
Economy Positive Environment Headline CPIX Inflation (Yr.-Yr.) – 3-6% target Trends 12 Steady growth around 5% a year should be sustained in 2007-08 with long term target trend growth of 6% 10 Inflation will climb near top of 3%-6% range but will fall back by the end 8 of 2008 % 6 External def
Slide 9: Banking Sector
Banking Sector Sophisticated, p , Competitive, p , Expanding p g 2,000 1,500 Landmarks 1,000 500 Robust banking system 0 Regulated by the South African Reserve Bank 2002 2003 2004 2005 2006 32 registered banks and 44 representative offices of foreign banks Total A ssets, ZA R Bn Mortgage Loa
Slide 10: Competitive Map
Competitive Map FirstRand Bank Limited is One of the Market Leaders Total assets * EUR Millions Total deposits * EUR Millions Mortgages * EUR Millions (incl Commercial properties) 80 70 60 35 70 60 50 49 29 54 50 0 44 30 60 51 38 23 25 50 40 19 38 29 40 20 15 30 30 15 20 20 10 4 10 10 5 0 0 0 FirstR
Slide 11: South Africa growth opportunities
South Africa growth opportunities Black Economic Empowerment Value of BEE deals South Africa growth opportunities 25,000 Positive economic environment US$ million 20 000 20,000 Bl k economic Black i empowermentt 15,000 Projected infrastructure expenditure 10,000 Emerging black consumer/SME m
Slide 12: FirstRand Bank's brands well positioned
FirstRand Bank’s brands well positioned E Economic i environment i t Emerging Black consumer BEE transactions t ti M k t position Market iti iin PPP Deals in which Infrastructure finance Total number of deals Deals led by RMB RMB has participated Corporate re-leveraging Toll
Slide 13: Overview of FirstRand Bank Limited
Overview of FirstRand Bank Limited
Slide 14: Corporate Structure
Corporate Structure Part of a Renowned Holding g Company p y Composition Normalised earnings for the year ended 30 June 2006 FirstRand Limited (JSE Listed) Holding Company 17% FirstRand Limited (JSE Listed) Holding Company 5% 65.6% 100% 100% Discovery Holdings FirstRand Bank Momentum Limited Holding
Slide 15: FirstRand strategy and business philosophy
FirstRand strategy and business philosophy Owner-manager culture Financial targets Summary The bank’s overall strategy is underpinned by four key focus areas: 10% Real growth in earnings – product and channel innovation ROE of WACC plus 10% – collaboration across businesses to create new reven
Slide 16: Business Overview
Business Overview Segment g Information Total Bank (excl Group EUR Millions FNB RMB WesBank Support) Operates through different branded divisions First National Bank ("FNB"), Rand Merchant Bank ("RMB") and WesBank Total Assets² 14,422 12,529 8,547 35,498 as separate and distinct profit centre with
Slide 17: First National Bank
First National Bank Retail,, commercial banking g division Key Performance Indicators Summary EUR Millions 30 June 2006 30 June 2005 Strong balance sheet growth in both advances and deposits Net Interest Income¹ 728 615 Significant investment in infrastructure and processes Non Interest Income¹
Slide 18: First National Bank: Strategy and Operations
First National Bank Strategy gy and Operations p FNB Mass Consumer Wealth Commercial Corporate p Public Sector FNB’s overall strategy is to optimise ROE through a customer centric relationship model rather than seeking to gain product market share To achieve this objective, FNB pursues a segment
Slide 19: First National Bank: Strategy and Operations
First National Bank Strategy gy and Operations p Strong credit card spend Focus on appropriate ROE on asset backed lending, in particular Homeloans Continuing focus on relationship building and leveraging of retail deposit franchise High base created, created but organic growth remains strong
Slide 20: Rand Merchant Bank
Rand Merchant Bank g division Investment & merchant banking Key Performance Indicators EUR Milli Millions 30 J June 2006 30 J June 2005 Non Interest Income¹ 310 175 Total Advances² 4,723 3,889 Total Assets² 12,529 9,231 Cost to Income 60.6% 87.3% NPL to Advances 0.1% 1.6% Source: Bank Annual Reports
Slide 21: Rand Merchant Bank: Strategy and Operations
Rand Merchant Bank Strategy and Operations Because of the complex, ever changing Investment Banking arena, RMB’s long term strategy is to ensure that it has the best intellectual capital provided with the tools to react to an ever-changing business environment RMB’s RMB s ability to react is a f
Slide 22: WesBank
WesBank Installment finance division Key Performance Indicators Motor division drives 75% WesBank’s growth EUR Millions 30 June 2006 30 June 2005 8.5 N t IInterest Net t t Income¹ I ¹ 283 225 85 8.5 Non Interest Income¹ 43 91 7.5 6.9 Total Advances² 8,502 6,919 23% Euro billlion Total Assets² 8,547
Slide 23: WesBank: Strategy and Operations
WesBank Strategy and Operations Dominates Point of Sale (1 in every 3) financed by WesBank, JV with 5 of 10 motor manufacturers, originates in over 30 JV brands Customer service: WesBank is committed to providing a high quality of customer service, which is measured through regular customer t sa
Slide 24: Financial Overview of FirstRand Bank Limited
Financial Overview of FirstRand Bank Limited
Slide 25: Asset Quality
Asset Quality Normalisation in arrears,, non-performing p g loans and bad debts NPLs and Provisions in Historical Perspective Impaired Advances 3.9 Adequacy of impairments are assessed on an 1.1 1.0 0.9 ongoing i b basis i 3.2 Long term run average 70bps Specific impairments created on non-perfo
Slide 26: Funding Strategy
Funding Strategy Reliance on Professional Funding 60% of incremental growth from professional market Objectives: Primary funding objective is to secure funding at an optimal costt from f diversified di ifi d and d sustainable t i bl ffunding di sources Principal source of funding for the Bank is
Slide 27: Capital Management
Capital Management Sophisticated, p , soundlyy capitalised, p , forward-looking, g, relentless focus on ROE Framework Summary The Capital Management Framework requires the Bank to be capitalized at the higher of Relentless focus on ROE, prioritise allocation and optimisation economic or regulato
Slide 28: Risk Management and Compliance
Risk Management and Compliance
Slide 29: Risk Management and Compliance
Risk Management and Compliance Prudent,, ethical,, transparent, p , responsible p Risk Management Compliance Fundamental to the Bank’s business and essential element of operations Commitment to good corporate citizenship and open corporate governance Vested as an integral part of management’s
Slide 30: Risk Management and Compliance
Risk Management and Compliance Prudent,, ethical,, transparent, p , responsible p 2006 Landmarks Focus for 2007 Successful implementation of exposure and limit management system for Continued implementation of exposure and limit management system for corporate transactional bank facilities struc
Slide 31: Global Peers
Global Peers
Slide 32: Global Peer Comparison
Global Peer Comparison FirstRand Bank Limited adds g great value Bank Marfin Popular Bank Public Co Bank FRB Piraeus Bank Alpha Bank Banca Popolare di Vicenza ICICI Arab Banking Corporation BSC Average Ltd Country South Africa Greece Greece Greece Italy India Bahrain Group / Parent Ratings Baa1/BBB+
Slide 33: Investment Summary
Investment Summary
Slide 34: Summary of the Offering
Summaryy of the Offering g Issuer FirstRand Bank Limited Offered Securities Debut Floating Rate Note Reg S Issuance [Registered] Joint Lead Managers g and Citi and Royal Bank of Scotland Bookrunners Currency/Amount EUR500 million Maturity [] Coupon [] Issuer Ratings Moody’s: Baa1/Stable S&P: BBB+/Po
FirstRand Bank — Debt Investor Presentation (May 2007) on 6ix