Standard Bank Group Limited · JSE:SBK
Standard Bank — Investor Presentation (2004)
20 slides from Standard Bank's investor presentation, 2004
Slide 1: Standard Bank Group Limited
Standard Bank Group Limited 1 Back in time • Established as Standard Bank of British South Africa Limited, and incorporated in London in 1862 • 1987 - Standard Chartered PLC of London sold its 39% shareholding in SBIC - severing a 125-year link • Forced to develop an international strategy when sold
Slide 2: Back in time
Back in time • 1987 - Deputy CE, Eddie Theron, left for London • 1988 - Standard Bank started expanding its presence in Africa (Swaziland, Botswana) • 1992 - Standard Bank London Ltd officially launched • 1992 - The branches of ANZ Grindlays Bank in Africa acquired (Kenya, Nigeria, Uganda, Zaire, Za
Slide 3: Stanbank structure
Stanbank structure After the Donald Gordon buy-out DG buy-out beginning 1999 Old Mutual 22% 43% Stanbank 55% Libhold 56% Liberty Followed by unbundling of Liberty’s stake in Stanbank (mid 1999) 5 Nedcor take-over bid 6 3
Slide 4: Nedcor take-over bid - September 1999
Nedcor take-over bid - September 1999 Finding ourselves in this vulnerable position • Slower growth than Nedcor • The circular Liberty structure • Perception of overpayment to Donald Gordon • Perception of bad debts • Cost of international diversification • Russian loss • Cost:income ratio • Consequ
Slide 5: Consequences of the Nedcor take-over bid
Consequences of the Nedcor take-over bid • Enabled rapid change • Moved away from silo approach • New team • Forced to make promises • Cost initiatives • Profit forecasts for 1999, 2000, 2001 • We delivered! 9 Leadership changes over 5 years The best of the old and the best of the new • Chairman • C
Slide 6: Financial Sector Charter Vision
Financial Sector Charter 11 Vision “ …. promoting a transformed, vibrant and globally competitive sector that reflects the demographics of SA, and contributes to the establishment of an equitable society by effectively providing accessible financial services to black people and by directing investme
Slide 7: Principles and the scorecard
Principles • A commitment that is voluntarily developed • A transformational framework that establishes mechanisms for BEE • A balanced scorecard approach to measure achievements and BEE objectives • Growth and development of the sector integral to BEE • Provisions subject to sound business practice
Slide 8: Ratings and our empowerment partners - ownership
Ratings (2008) Rating Points Weighting in tenders A >80 100% B 70 - 80 75% C 55 - 70 50% D 40 - 50 25% E <40 0% 15 Our empowerment partners - ownership % of empowerment stake The Tutuwa Consortium * 40 (Safika and MCI) Black management and staff of Standard Bank and Liberty 40 Life Regional business
Slide 9: Black management - ownership
Black management - ownership • Significant allocation to black management and staff – 40% of empowerment stake • Ensures broad-based empowerment – Meaningful wealth creation for a number of individuals • Ensures retention and attracts top black candidates • Black = African, Coloured and Indian SA ci
Slide 10: In summary… Standard Bank now
In summary… • Costs upfront • Simple structure • Broad-based (our own people) • Meets Charter requirements • Leverages Charter points across empowerment pillars • Long term commitment from strategic partners • Black staff retention and attraction • No unresolved funding issues • Alignment of stakeho
Slide 11: Standard Bank vision and values
Standard Bank vision We are committed to making a real difference to financial services in South Africa and other emerging markets. We will ensure long term sustainability by harmonising the needs of our customers, our people and our shareholders and by being relevant to the societies in which we op
Slide 12: African roots, global reach
African roots, global reach Moscow London Hong Kong Sao Paulo 23 African roots, global reach Retail Liberty / Wealth Wholesale South South South Africa Africa Africa Other Africa Africa Africa Emerging Margets 24 12
Slide 13: Top SA market values; headline earnings mix
Top 20 SA market values Rbn Rbn Anglo American plc* 199 Anglogold 53 BHP Billiton plc* 163 Absa 50 Richemont Securities* 98 Remgro 46 SAB Miller plc* 96 Anglo Platinum 45 Standard Bank 89 Sanlam 36 Sasol 82 Gold Fields 34 FirstRand 73 Liberty International plc* 34 MTN Group 72 Impala Platinum 32 Old
Slide 14: 15-year history; Return on equity
15-year history 500 450 400 350 300 cents 250 200 150 100 50 0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 DPS EPS 27 Return on equity 32 24 21 27 18 22 15 Rbn % 17 12 9 12 6 7 3 2 0 1997 1998 1999 2000 2001 2002 2003 HY 2004 Net asset value (Rbn) Headline ROE (%)
Slide 15: Cost-to-income ratio; Market share information
Cost-to-income ratio 63 62 61 60 59 58 % 57 56 55 54 53 52 1999 2000 2001 2002 2003 HY2004 29 Market share information Dec ’99 Dec ’02 Dec ’03 Nov ’04 % % % % Total home loans 16.7 20.3 22.8 25.7 Retail home loans 22.3 21.8 24.8 28.2 Total instalment finance 23.2 21.7 22.3 22.2 Retail instalment fin
Slide 16: Credit loss history; fee and commission drivers
Credit loss history 6 5 4 % of advances 3 2 1 0 1998 1999 2000 2001 2002 2003 HY 2004 Income statement charge Balance sheet provision Gross NPLs 31 Drivers of fee and commission revenue – 1H04 % increase Retail Banking + 18% Number of ATM transactions 8 Number of internet transactions 33 Teller volu
Slide 17: Fee drivers; Foreign shareholding
Drivers of fee and commission revenue – 1H04 % increase Corporate and Investment Banking + 15% Business Online transactional volumes 15 International trade services transactional volumes 7 Advisory income growth International + 45% in USD Asset management fees 33 Foreign shareholding 25 16 14 20 12
Slide 18: Looking forward
Looking forward Retail Banking • Asset growth has exceeded expectations • Benefit of asset growth to be more evident in second half of 2004 and in 2005 • Focus on customer acquisition through improved segmentation • Investment in IT and branch infrastructure Corporate and Investment Banking • Strong
Slide 19: Looking forward; Striving for long-term growth
Looking forward Liberty • Improving fundamentals Group • Domestic economic outlook remains positive • Emerging markets continue to present opportunities • Black ownership initiative not expected to have material effect on 2004 earnings due to timing • Remain committed to objectives – Headline earnin
Slide 20: Standard Bank
Standard Bank 20