FirstRand Limited · JSE:FSR
FirstRand — Investor Presentation (2004)
16 slides from FirstRand's investor presentation, 2004
Slide 1: HomeLoans
Wd First National Bank A division of FirstRand Bank Limited HomeLoans Ed Grondel
Slide 2: Key Highlights … Dec '03
HomeLoans Key Highlights … Dec ’03 FNB HomeLoans Share of Retail Cluster NPBT 13% ¾ New business up 37% ¾ New business market share up from 15.3% to 16.1% ¾ Advances up 5.9% FNB HomeLoans Share of Retail Cluster Advances ¾ Re-advances up 70% 39% ¾ Gross margins down from 3.87% to 3.03%
Slide 3: Market Share
Doing the right things, Doing things right. Decline Turnaround Acquisition Profitable Growth +20% M/S +17% NB 8% 21% M/S Market Share Book Market Share 16% NB PWC (M/S) 6% Best Mortgage Share of New Provider JP Morgan Business (NB) Best Home Loan 11% M/S 15% NB Operation Time 1999 2000 2001 2002 200
Slide 4: Growing Profitably
Growing Profitably HomeLoans Profits R 600 R532m R343m R272m R334m R 400 R196m R269m R132m R 200 R0 1999 2000 2001 2002 2003 2004 R -200 ½ Year R -400 -R271m -R333m Rural HomeLoans New acquisitions Pips once-off profits HomeLoans
Slide 5: Profit Leader
Profit Leader Individual Mortgages Financial Year Rand Profit / Bank (R’M) Profit (2003) R’Billion FNB HomeLoans R39,610 R532m R13m Standard * R56,270 R563m R10m ABSA * R73,860 R447m R6m * Source: DI900 line 122
Slide 6: Collections Excellence
Collections Excellence NPL % of Gross advances 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- 99 99 00 00 01 01 02 02 03 03
Slide 7: Volume Growth
Volume Growth Loan Book Growth in no. of Registrations 45,000 60,000 40,000 50,000 35,000 45,000 30,000 40,000 R‘ Million 25,000 35,000 20,000 30,000 15,000 25,000 10,000 20,000 5,000 15,000 - 5,000 98/99 99/00 00/01 01/02 02/03 1/2 Year 2003/4
Slide 8: Greater Efficiencies
Greater Efficiencies Registrations per operational staff member 250 202 200 162 150 137 127 No. 100 74 50 0 99/00 00/01 01/02 02/03 03/04
Slide 9: First from FNB HomeLoans
First from FNB HomeLoans ¾ Bottom-line driven home loan focused unit ¾ Centralization of processing ¾ 2 Hrs reply times ¾ Individual pricing ¾ Outsourcing model for valuations ¾ Revolutionary Pips solution – HomeTraders ¾ Embraced Mortgage Origination ¾ Pioneered electronic origination
Slide 10: South African Residential Mortgage Market 2004
South African Residential Mortgage Market 2004 ¾ Boom not bubble ¾ Strong and growing competition ¾ Continued influence by market intermediaries
Slide 11: Where do we get our business?
Where do we get our business? 2001/2 2003/4 Estate Agents Estate Agents Mortgage 22% 13% Originators 46% Mortgage Branches & Originators other Direct Branches & 55% 23% other Direct 41%
Slide 12: Obtaining Value from Originators
Obtaining Value from Originators ¾ Volume ¾ Efficiencies ¾ Variable commissions
Slide 13: Risk Exposure
Quality of Book Risk Exposure of New Business Dec ‘03 40% 35% 30% Risk Exposure 25% 20% 15% 10% 5% 0% Low Low-Med Medium High Very High
Slide 14: Meeting Customers' Needs
Meeting Customers’ Needs Segment Offer Life Stage Offer Foreign Choice Repayment Choice Investment O Wealthy n Offer e A Education c Upper c Choice o u n t Middle Maternity Choice Affordable Housing BondPlus Mass Upper Single/Newly Full Nest Empty Nest Retirement Weds Generic Offer Future Choice, Fl
Slide 15: Where Will Growth Come From?
Where Will Growth Come From? ¾ Leverage Product and Marketing innovation ¾ Process and Technology efficiency ¾ Building embedded value o Focus on customer retention and re-advancing o New business and profitable market share growth
Slide 16: Where will growth come from?
Where will growth come from? ¾ Branch Network ¾ Group Collaboration ¾ Innovation in Service ¾ Non-interest Income