Slide 1: Q1 2024 Investor Briefing
Q1 2024 Investor Briefing May 2024 ncbagroup.com Go for it
Slide 2: Contents
CONTENTS WHO WE ARE < OPERATING ENVIRONMENT < UPDATE ON STRATEGY < FINANCIAL PERFORMANCE Q1 2024 < 2024 GUIDANCE <
Slide 3: Contents
CONTENTS WHO WE ARE < OPERATING ENVIRONMENT < UPDATE ON STRATEGY < FINANCIAL PERFORMANCE Q1 2024 < 2024 GUIDANCE <
Slide 4: Our Group Structure
PG 4 WHO WE ARE Our Group Structure NCBA BANK KENYA PLC NCBA BANK RWANDA PLC BANKING NCBA BANK UGANDA LTD SUBSIDIARIES NCBA BANK TANZANIA LTD NCBA GROUP PLC DIGITAL BUSINESS NCBA LEASING LLP NON BANKING SUBSIDIARIES NCBA INVESTMENT BANK LTD NCBA BANCASSURANCE INTERMEDIARY LTD
Slide 5: Welcome to the bank that says go for it
PG 5 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 Purpose To be the Financial Partner that • At NCBA, our customers are at the heart Inspires your Growth of everything we do; • We are driven by our promise to offer Our Value
Slide 6: Our Regional Footprint
PG 6 WHO WE ARE Our Regional Footprint Banking Business UGANDA KES KES Branches 4 Customers 10.9M 548Bn 350Bn +3,000 Staff Deposits Lending ~USD 4.2B ~USD 2.6B KES 233Bn Q1-24 Digital Disbursements IVORY COAST KENYA 112 Branches ~USD 1.8B Branches 94 Purely Digital Customers 30.9M Customers 9.0M Non
Slide 7: Awards & Accolades
PG 7 WHO WE ARE Awards & Accolades Brand and Customer ESG Business Units Recognition Experience • Top 25, Most Influential CEOs • Best Bank Corporate • Winner, Private Sector Legal Impacting Business, John Governance - Institute of Department of the Year - Gachora – Business Monthly Corporate Govern
Slide 8: We are led by an exceptional team
PG 8 WHO WE ARE We are led by an exceptional team which has demonstrated resilience in managing our business
Slide 9: Contents
CONTENTS WHO WE ARE < OPERATING ENVIRONMENT < UPDATE ON STRATEGY < FINANCIAL PERFORMANCE Q1 2024 < 2024 GUIDANCE <
Slide 10: Our Operating Environment: Global economy
PG 10 OUR OPERATING ENVIRONMENT Global economic growth is forecast at 3.2% in 2024- similar to growth rate recorded in 2023. Key risks include geopolitical tensions, sticky inflation and uncertain monetary policy outlook Flat growth expected albeit 1 increasing leading 2 Inflation pressures continue
Slide 11: Kenya's economic growth outlook remains moderate
PG 11 OUR OPERATING ENVIRONMENT Kenya’s economic growth outlook remains moderate, with inflation expected to remain target bound offering fixed income investors decent real returns Notable appreciation of KES Kenya’s real GDP expected to Overall inflation is expected to against the USD by 16% 1 expa
Slide 12: Macroeconomic environment diverges marginally across the region
PG 12 OUR OPERATING ENVIRONMENT Macroeconomic environment diverges marginally across the region Uganda's economy remained Rwanda’s declining inflation Tanzania FX inflows are crucial 1 robust with its currency 2 boosted household 3 in the remainder of the year boosted by higher export flows consumpt
Slide 13: Contents
CONTENTS WHO WE ARE < OPERATING ENVIRONMENT < UPDATE ON STRATEGY < FINANCIAL PERFORMANCE Q1 2024 < 2024 GUIDANCE <
Slide 14: Our strategy continues to deliver with all our metrics in line with targets
PG 14 OUR STRATEGY Our strategy continues to deliver with all our metrics in line with targets, with our Group ROAE registering at 21.9% Q1 23 Q1 24 Become a Distinguished Brand 6.5 Known For Customer Experience 6.4 PBT (KES B) Scale Retail 17.4% 22.7% Banking: Expand Distribution ROAE Deepen Leader
Slide 15: Contents
CONTENTS WHO WE ARE < OPERATING ENVIRONMENT < UPDATE ON STRATEGY < FINANCIAL PERFORMANCE Q1 2024 < 2024 GUIDANCE <
Slide 16: Our diversified business model continues to demonstrate growth and resilience
PG 16 NCBA GROUP FINANCIAL PERFORMANCE Our diversified business model continues to demonstrate growth and resilience, with our digital business leading the charge delivering a 52% bottom line growth in Q1 2024 Amount in KES Millions (PBT) Amount in KES Millions (PBT) Core Banking Subsidiaries Digita
Slide 17: All our subsidiaries are showing demonstrable success in performance delivery
PG 17 NCBA GROUP FINANCIAL PERFORMANCE All our subsidiaries are showing demonstrable success in performance delivery and are now contributing 15% of PBT as at Q1 2024 Contribution to Group PBT in Q1 23 Contribution to Group PBT in Q1 24 Regional Regional Subsidiaries Subsidiaries 11% Other 12% Other
Slide 18: Banking Subsidiaries
PG 18 NCBA GROUP FINANCIAL PERFORMANCE All subsidiaries across our operating markets contributed positively to growth and returns REVENUE % CONTRIBUTION EFFICIENCY RETURNS TOTAL INCOME COST TO INCOME RATIO RETURN ON AVERAGE EQUITY KES 13Bn NCBAK 82% 48.9% ▲20.4% Banking Subsidiaries ▼(-1%) KES 0.8Bn
Slide 19: Our Group continues to demonstrate strong fundamentals
PG 19 NCBA GROUP FINANCIAL PERFORMANCE Our Group continues to demonstrate strong fundamentals with positive growth over the period Amounts in KES Bn Balance Sheet Income Statement Total Assets Customer Deposits Gross Loans Total Income PBT CAGR 8.8% CAGR 8.5% CAGR 10.8% CAGR 10.4% CAGR 16.7% 548 6.4
Slide 20: Customer growth and retention efforts are driving deposit mobilization
PG 20 NCBA GROUP FINANCIAL PERFORMANCE Customer growth and retention efforts are driving deposit mobilization (10% up YoY), while balance sheet optimization efforts are growing our CASA base Amounts in KES Bn Despite the macro economic conditions our deposits ..and we now have KES 272B in CASA, an a
Slide 21: Our customer growth agenda has seen us increase our lending substantially
PG 21 NCBA GROUP FINANCIAL PERFORMANCE Our customer growth agenda has seen us increase our lending substantially (11% up YoY) with well controlled credit risk outcomes NCBA Group Gross Loans accelerated through Q1-24 while …NCBA Group credit risk outcomes continue to buck industry our NPL ratio edge
Slide 22: 88% of our credit portfolio is performing
PG 22 NCBA GROUP FINANCIAL PERFORMANCE 88% of our credit portfolio is performing and with minimal YoY movement in NPL…. Amounts in KES Bn Amounts in KES Bn Gross Loans and Advances Stage 1 Stage 2 Stage 3 350 316 11% KES 40.2Bn 281 285 13% 10% KES 39.7 Bn 14% 16% 10% 79% 21% 16% 77 68% 65% Q1 21 Q1
Slide 23: Adequately provisioned with sufficient coverage across loan buckets
PG 23 NCBA GROUP FINANCIAL PERFORMANCE …while being adequately provisioned with sufficient coverage across our loan classification buckets Provisions Coverage Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 72.6% 33 65.0% 26 56.8% 55.7% 23 22 8 14.4% 13.6% 12.5% 12.6% 6 4 4 1.5% 1.2% 1.3% 0.8% 3 2 3
Slide 24: High interest rate environment has put pressure on our cost of funds
PG 24 NCBA GROUP FINANCIAL PERFORMANCE The high interest rate environment has put pressure on our cost of funds (2.5% YoY), however asset pricing measures have muted the NIM deterioration to 1% YoY We continue to see pressure on our pricing of our funding base, … this subsequently led to a 1% YoY dr
Slide 25: Franchise strengths deliver currency diversification on our funding
PG 25 NCBA GROUP FINANCIAL PERFORMANCE Our franchise strengths delivers currency diversification on our funding and the environment presented an opportunity for enhanced trading in 2024 We saw a slight drop on our FCY deposit book due to …however the environment presented an opportunity to enhance t
Slide 26: Business growth, strategic investments and inflation drive operating expense pressure
PG 26 NCBA GROUP FINANCIAL PERFORMANCE Business growth, strategic investments and inflation are the key contributors to operating expense pressure, expect this to mute as investments generatereturns Amounts in KES M OPEX Increased by 12% YoY... …putting pressure on our CIR Operating Income Total Cos
Slide 27: The Group remains effectively capitalized across our core markets
PG 27 NCBA GROUP FINANCIAL PERFORMANCE The Group remains effectively capitalized across our core markets providing ample room to invest in growth TOTAL CAPITAL/RWA ACROSS OUR MARKETS Minimum Buffer Total Requirements Group 14.5% 4.0% 18.5% NCBAK 14.5% 3.4% 17.9% NCBAU 12.0% 19.8% 31.8% NCBAT 14.5% 1
Slide 28: Our strategy is delivering the desired return outcomes for a Tier 1 Bank
PG 28 NCBA GROUP FINANCIAL PERFORMANCE Our strategy is delivering the desired return outcomes for a Tier 1 Bank and we are delivering consistent cash returns to our >27,000 shareholders over the last 3 years We are delivering on post merger promises on ROE …while matching similar sized peers on ROA
Slide 29: A
A 4
Slide 30: Statement of Profit & Loss
PG 30 APPENDIX I Statement of Profit & Loss Amounts in KES Millions NCB A Bank Kenya NCBA Group Consolidated Q1’23 Q1’24 ∆% Q1’23 Q1’24 ∆% Interest Income 13,127 17,031 30% 14,714 19,105 30% Interest Expenses (5,785) (9,976) 72% (6,346) (10,837) 71% Net Interest Income 7,342 7,056 (4%) 8,368 8,268 (
Slide 31: Statement of Financial Position
PG 31 APPENDIX II Statement of Financial Position Amounts in KES Millions NCBA Bank Kenya NCBA Group Consolidated Q1’23 Q1’24 ∆% Q1’23 Q1’24 ∆% Assets Net Loans and Advances 254,291 282,693 11% 287,154 320,505 12% Investments 212,870 188,519 (11%) 234,317 212,570 (9%) Cash and Balances with Banks 47