Firstrand Limited · JSE:FSR
Firstrand — Debt Investor Presentation (November 2024)
29 slides from Firstrand's debt investor presentation, November 2024
Slide 1: FRB Social Bond Investor Presentation
FRB SOCIAL BOND INVESTOR PRESENTATION November 2024
Slide 2: Meet the team
Meet the team 2 • Sam Moss Head: FirstRand Investor Relations • Cameron Gough Head: Structuring, FirstRand Group Treasury • Melanie Kleinhans Head: Debt Office, FirstRand Group Treasury • Briguette Basson Structurer, FirstRand Group Treasury • Delia Patterson RMB Debt Capital Markets (Distribution)
Slide 3: Agenda
Agenda 3 • Overview of FirstRand’s shared prosperity approach • Operating businesses’ value propositions • FirstRand sustainable finance framework • FRB’s inaugural social bond issuance • Term sheet
Slide 4: Overview of the Group's Shared Prosperity Approach
OVERVIEW OF THE GROUP’S SHARED PROSPERITY APPROACH
Slide 5: FirstRand's role in society
FirstRand’s role in society 5 • South Africa remains one of the most unequal countries with economic growth, unemployment and poverty constraints • As a systemic integrated financial services group, FirstRand can support inclusive economic activity and positive societal outcomes through its business
Slide 6: Shared prosperity – inclusive value creation
Shared prosperity – inclusive value creation 6 Underlying business strategies deliver a blend of financial and social outcomes TRUSTED CUSTODIAN OF THE HOME OWNERSHIP SUSTAINABLE FINANCE FACILITATION NATION’S SAVINGS • R153 billion to date • Mortgage book: R272 billion • Deposits: R2 trillion (group
Slide 7: Nexus of business activities and development needs of SA
Nexus of business activities and development needs of SA 7 Group activities contributing positively towards financial inclusion Home Transformational Student ownership agriculture financing MSME development Infrastructure Public and financing development services
Slide 8: FirstRand's response to societal challenges
FirstRand’s response to societal challenges 8 • Utilising core business resources and activities to intentionally achieve positive, scalable and high- impact societal outcomes whilst delivering superior financial returns • Ensuring accountability through remuneration practices with integration into
Slide 9: Societal objectives enabled through financial resource allocation
Societal objectives enabled through financial resource allocation 9 Partnering with Differentiated pricing Bond issuances developmental finance Structures and platforms for positive impact institutions (DFIs) • Disciplined capital • FRM policy embedded • Robust partnerships • Established a holdco al
Slide 10: Operating Businesses' Value Propositions
OPERATING BUSINESSES’ VALUE PROPOSITIONS
Slide 11: FNB retail's approach to financial inclusion
FNB retail’s approach to financial inclusion 11 Ensure low-income consumers can access appropriate financial services enabling economic growth and financial inclusion Financial wellness Leveraging platforms Funding solutions and literacy • Providing payment channels • Targeted solution for low- • Co
Slide 12: FNB commercial's approach to social impact
FNB commercial’s approach to social impact 12 Micro, small and medium sized entities (MSMEs) are the backbone of the economy – contribute to growth, job creation and economic development • Provide safe, affordable and accessible transactional accounts • MSME development – offer a broad range of solu
Slide 13: RMB's approach to inclusive growth
RMB’s approach to inclusive growth 13 RMB prioritises solutions that promote positive social outcomes for marginalised or underserved communities RMB has facilitated over R9 billion worth of inclusive growth transactions since 2022 1 Financial solutions 2 Structuring/advisory 3 Market development •
Slide 14: Sustainable Finance Framework
SUSTAINABLE FINANCE FRAMEWORK
Slide 15: FirstRand's sustainable finance framework
FirstRand’s sustainable finance framework 15 • Previous thematic issuances were done under FirstRand’s sustainability bond framework • Framework has now been updated to a more comprehensive sustainable finance framework • FirstRand’s sustainable finance framework will be used for future issuances of
Slide 16: Summary of changes/updates to framework
Summary of changes/updates to framework 16 • Framework now also aligned to ICMA’s Green Loan Principles and Social Loan Principles • Group framework • FRB and other group subsidiaries • Can also be used for thematic securitisations • Use of proceeds • Changes to FirstRand’s social and green investme
Slide 17: FRB's Inaugural Social Bond Issuance
FRB’S INAUGURAL SOCIAL BOND ISSUANCE
Slide 18: FRB's inaugural social bond
FRB’s inaugural social bond 18 Bond proceeds will be fully allocated to eligible loan/asset portfolio within two years from the date of each issuance Existing loans are those which have reached 50% of the total bond issuance will be financial close, up to 24 months prior to the allocated to existing
Slide 19: Use of proceeds – FNB social assets
Use of proceeds – FNB social assets 19 Indicative portfolio – FNB retail Indicative portfolio – FNB commercial • Affordable housing • MSME** finance • Low-income home buyers (household monthly income <R32 000*) R billion 2024 2023 2022 Metric 2024 2023 2022 FNB commercial book 129.8 116.4 107.8 Tota
Slide 20: Use of proceeds – RMB social assets
Use of proceeds – RMB social assets 20 Indicative portfolio – RMB • Information and communication technology (ICT) • SA faces a particular need: assets – aligned to sustainable finance framework, including: • c. 80% of homes do not have fast • Data centre construction or refurbishment and affordable
Slide 21: Monitoring and reporting
Monitoring and reporting 21 • FRB will publish an annual allocation and impact report on the FirstRand website: • https://www.firstrand.co.za/investors/debt-investor-centre/sustainable-finance/ • Supported by a limited assurance report on the allocation provided by external auditors on an annual bas
Slide 22: Term Sheet and Timelines
TERM SHEET AND TIMELINES
Slide 23: Indicative term sheet
Indicative term sheet 23 Issuer FirstRand Bank Limited National scale credit rating Moody’s Aaa.za & S&P Global zaAA Nominal target R2 billion, with the ability to increase to R2.5 billion, subject to volume and bid spreads Note tenors 3, 5 and 7 years Instrument type Floating Pricing reference rate
Slide 24: Indicative timeline
Indicative timeline 24 • Investor roadshow (virtual meetings): 13 – 14 November 2024 • Term sheet circulated: 11 November 2024 • Price guidance: 3yr: [90 – 100 bps] | 5yr: [110 – 120 bps] | 7yr: [120 – 130 bps] • Target issuance size: R2 billion with the ability to increase to R2.5 billion • Auction
Slide 25: Relevant links
Relevant links 25 • Sustainable finance page on group website: https://www.firstrand.co.za/investors/debt-investor-centre/sustainable-finance/ • FirstRand sustainable finance framework: https://www.firstrand.co.za/media/investors/policies-and-practice/pdf/firstrand-sustainable-finance- framework.pdf
Slide 26: Annexures
ANNEXURES Summary of changes to investment categories and eligibility criteria in FirstRand’s sustainable finance framework
Slide 27: Changes to FirstRand's social investment categories and eligibility criteria
Changes to FirstRand’s social investment categories and eligibility criteria 27 Investment category Material changes compared to previous framework Affordable basic infrastructure Restructured the section to highlight the specific areas of investment Included energy, transportation and telecommu
Slide 28: Changes to FirstRand's green investment categories and eligibility criteria
Changes to FirstRand’s green investment categories and eligibility criteria 28 Investment category Material changes compared to previous framework Renewable energy Hydropower Removed differentiation between large scale and small scale Revised power density threshold to ≥10 W/m2 Revised lifecyc
Slide 29: Changes to FirstRand's green investment categories and eligibility criteria
Changes to FirstRand’s green investment categories and eligibility criteria 29 Investment category Material changes compared to previous framework Circular economy Separate investment category Revised eligibility criteria – changed “reduce the amount of water produced or sent to landfill” to “pr
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