Stanbic Holdings Plc · NSEKE:SBIC
Stanbic — H1 2020 Earnings Presentation
39 slides from Stanbic's earnings presentation, Aug 17, 2020
Slide 1: Financial Results Presentation 1H20
STANBIC HOLDINGS PLC FINANCIAL RESULTS PRESENTATION 1H20 17 August 2020 PAGE 1
Slide 2: Table of Contents
TABLE OF CONTENTS FINANCIAL RESULTS H120 Section Page 1. Operating environment 3 2. Recap of our strategy 5 3. Measuring our strategic progress 7 4. Financial outcome 17 ❑ Corporate and Investment Banking (CIB) 27 ❑ Personal and Business Banking (PBB) 30 ❑ Wealth 33 ❑ SBG Securities (SBGS) 36 Q &A P
Slide 3: Operating Environment
OPERATING ENVIRONMENT 01 PAGE 3
Slide 4: Complex Operating Environment
COMPLEX OPERATING ENVIRONMENT MACRO-ECONOMIC ENVIRONMENT REGULATORY ENVIRONMENT MARKET THREATS MARKET OPPORTUNITIES Inflation ❑ Directive on fee waivers on Locusts ❑ Technological innovations ❑ June 2020 4.59% vs. June digital channel transactions 2019 5.7% ❑ Diverse economy ❑ New tax measures 91-da
Slide 5: Recap of Our Strategy
RECAP OF OUR STRATEGY 02 PAGE 5
Slide 6: Recap of Our Strategy
RECAP OF OUR STRATEGY FINANCIAL RESULTS H120 OUR PURPOSE the reason we exist Kenya is our home, we drive her growth OUR VISION To be the leading financial services organisation in Kenya, delivering exceptional what we aspire to be client experiences and superior value IN EXECUTING OUR STRATEGY OUR K
Slide 7: Measuring Our Strategic Progress
MEASURING OUR STRATEGIC PROGRESS 03 PAGE 7
Slide 8: Measuring Our Strategic Progress: Client Focus
MEASURING OUR STRATEGIC PROGRESS CLIENT FOCUS PAGE 8
Slide 9: Measuring Our Progress on Client Focus
MEASURING OUR PROGRESS ON CLIENT FOCUS FINANCIAL RESULTS H120 “Standing strong with our clients in the face of Covid-19 as we deliver on our purpose” D.A.D.A. 31st July20 vs Dec19 Over100% 65% 79.6M50% disbursed to 1,729 Digitized Lending MVP0 Liabilities by Dadas customers generating Loans revenue
Slide 10: Measuring Our Progress on Client Focus
MEASURING OUR PROGRESS ON CLIENT FOCUS FINANCIAL RESULTS H120 “Standing strong with our clients in the face of Covid-19 as we deliver on our purpose” New Insurance Product: eFFA: Roll out of Online Repayment Education Protector Financial Fitness Holidays Academies Best Investment Bank in Kenya #GoCa
Slide 11: Measuring Our Strategic Progress: Employee Engagement
MEASURING OUR EMPLOYEE STRATEGIC PROGRESS ENGAGEMENT PAGE 11
Slide 12: Measuring Our Progress on Employee Engagement
MEASURING OUR PROGRESS ON EMPLOYEE ENGAGEMENT FINANCIAL RESULTS H120 “Keeping our employees safe as we deliver on our purpose” Productivity People Development Journey Connect , wellness and safety sessions Future skills learning Webinars #working pathway from home Signature Programs CE’s Sessions an
Slide 13: Measuring Our Strategic Progress: Risk and Conduct
MEASURING OUR RISK AND STRATEGIC PROGRESS CONDUCT PAGE 13
Slide 14: Measuring Our Progress on Risk and Conduct
MEASURING OUR PROGRESS ON RISK AND CONDUCT FINANCIAL RESULTS H120 “Doing the right business the right way, cognisant of increased risks” 8% 35% Restructures 33% 30% 25% 20% KES 38b 51% 15% 11% 13% 42% 9% 11% 10% 7% 5% 5% 5% 3% 1% 1% 1% 1% 0% 0% 0% 0% 0% PBB CIB Wealth Digitization in Assets & Sniffe
Slide 15: Social, Economic & Environmental Impact (SEE)
SOCIAL, ECONOMIC & ENVIRONMENTAL IMPACT(SEE) 04 PAGE 15
Slide 16: Measuring Our Progress on SEE
MEASURING OUR PROGRESS ON SEE FINANCIAL RESULTS H120 “Standing with the community in the face of Covid-19” Donated192 Ventilators to 1,000 protective suits, the Ministry of Health in partnership 500 gloves & 5,000 with key partners masks which will be donated through our doctors proposition in partn
Slide 17: Delivering Sustainable Returns (Financial Outcome)
DELIVERING SUSTAINABLE RETURNS (FINANCIAL OUTCOME) 05 PAGE 17
Slide 18: Impact of Covid-19 in the Numbers
IMPACT OF COVID-19 IN THE NUMBERS FINANCIAL RESULTS H120 Market volatility and proactive positioning of the GM book - Margin compression resilient GM performance Reduced costs YoY Increase in credit impairments Slow economic activity Adequate capital and liquidity Positives Challenges Global travel
Slide 19: Summary Performance
SUMMARY PERFORMANCE FINANCIAL RESULTS H120 1H20 1H19 change KES m KES m % KEY TAKEOUTS Net interest income 6,304 6,702 (6) The Group (Kenya Bank, South Sudan Non-interest revenue 4,960 6,135 (19) branch, SBG Securities and Stanbic Insurance Agency Limited) reported a profit Total income 11,264 12,83
Slide 20: Revenue
REVENUE FINANCIAL RESULTS H120 7 000 KES millions 12 000 KES millions 6 000 10 000 5 000 8 000 4 000 Trading and other income Interest income 6 000 3 000 Interest expense Net fees and commissions 4 000 Net interest income 2 000 2 000 1 000 - - 1H20 1H19 1H20 1H19 ◼ Net interest income decreased year
Slide 21: Credit Impairment and Operating Expenses
CREDIT IMPAIRMENT AND OPERATING EXPENSES FINANCIAL RESULTS H120 KES millions KES millions 2,500 3% 7 000 47.5% 2.5% 6 000 3% 47% 47.0% 2,000 5 000 2% Other operating General debt 46.5% 1,500 4 000 expenses provision 1.5% 2% Specific debt Staff costs provision 3 000 1,000 46.0% CLR CTI 1% 46% 2 000 5
Slide 22: Summarised Group Balance Sheet
SUMMARISED GROUP BALANCE SHEET FINANCIAL RESULTS H120 1H20 1H19 change KES m KES m % Assets Financial investments 84,532 94,099 (10) Loans and advances to banks 74,179 15,172 >100 Loans and advances to customers 160,970 161,912 (1) Other assets 27,893 28,287 (1) Property and equipment 3,654 3,306 11
Slide 23: Customer Loans and Advances
CUSTOMER LOANS AND ADVANCES FINANCIAL RESULTS H120 164 000 KES millions Loans and advances by business unit 161 912 100% 162 000 160 970 88% 87% 84% 1H20 1H19 160 000 80% 158 000 Wealth 60% Wealth 5% 156 000 5% 40% 154 000 PBB CIB PBB CIB 20% 44% 51% 43% 52% 10% 7% 9% 152 000 2% 5% 8% 150 000 0% 1H2
Slide 24: Customer Loans and Advances: Non Performing Loans (NPLs)
CUSTOMER LOANS AND ADVANCES: NON PERFORMING LOANS (NPLS) FINANCIAL RESULTS H120 18 000 41.0% Gross NPLs by business unit 40.5% 16 000 40.0% 14 000 1H20 1H19 39.0% 12 000 Loan loss provision 10 000 38.0% Discounted value of PBB PBB 8 000 37.0% security 34% 29% 6 000 CIB 36.5% Coverage ratio CIB 36.0%
Slide 25: Customer Deposits
CUSTOMER DEPOSITS FINANCIAL RESULTS H120 ◼ Customer deposits grew by 27% year on year with core Kes millions accounts accounting for 77% of total deposits 300 000 256 682 Customer deposits by business unit 250 000 201 551 1H20 1H 19 200 000 Wealth Wealth 150 000 8% 9% 100 000 PBB CIB PBB 36% CIB 39%
Slide 26: Funding, Liquidity and Capital
FUNDING, LIQUIDITY AND CAPITAL 120% 100% 20.0% 14% 15% 17.9% 17.5% 5% 6% 18.0% 80% 1% 8% 3% 16.0% 15.4% 12% 14.5% 60% 14.2% 14.5% 14.0% 40% 72% 12.0% 10.5% 64% 10.5% 20% 10.0% 8.0% 0% 1H20 1H19 6.0% Customer deposits Deposits from Banks Borrowings 4.0% Other liabilities Equity 2.0% 60% 55% 51% 0.0%
Slide 27: Corporate and Investment Banking (CIB) Financial Outcome
CORPORATE AND INVESTMENT BANKING FINANCIAL (CIB) OUTCOME PAGE 27
Slide 28: CIB Summary Performance
CIB SUMMARY PERFORMANCE FINANCIAL RESULTS H120 1H20 1H19 change KEY TAKEOUTS KES m KES m % ❑ Decline in interest income as a result of Net interest income 2,962 3,376 (12) margin squeeze Non-interest revenue 3,782 4,825 (22) ❑ Lower non-interest revenue due to lower Total income 6,745 8,201 (18) fee
Slide 29: CIB Strategic Priorities
CIB STRATEGIC PRIORITIES FINANCIAL RESULTS H120 We want to deliver value to We want to partner with our We aspire to be the our clients through our deep clients to unlock their undisputed financial services sector expertise by focusing dreams provider of choice on: Client centricity We want to do va
Slide 30: Personal and Business Banking (PBB) Financial Outcome
PERSONAL AND BUSINESS BANKING FINANCIAL (PBB) OUTCOME PAGE 30
Slide 31: PBB Summary Performance
PBB SUMMARY PERFORMANCE FINANCIAL RESULTS H120 KEY TAKEOUTS 1H20 1H19 change KES m KES m % ❑ Balance sheet growth on our focus segments driven by acquisition of new to Net interest income 3,063 3,062 0 bank customers Non-interest revenue 1,020 1,139 (10) ❑ Flat net interest income despite balance To
Slide 32: PBB Strategic Priorities
PBB STRATEGIC PRIORITIES FINANCIAL RESULTS H120 PBB focus areas 1. Accelerating our client acquisition efforts 2. Accelerating our digital play 3. Revamping our client value propositions 4. Enhancing our credit impairments rigor PAGE 32
Slide 33: Wealth Financial Outcome
FINANCIAL WEALTH OUTCOME PAGE 33
Slide 34: Wealth Summary Performance
WEALTH SUMMARY PERFORMANCE FINANCIAL RESULTS H120 1H20 1H19 change KEY TAKEOUTS KES m KES m % This performance reflects: Net interest income 278 264 5 ❑ Decent balance sheet growth driven by Non-interest revenue 158 171 (8) acquisition of new customers Total income 436 435 0 ❑ Flat net interest inco
Slide 35: Wealth Strategic Priorities
WEALTH STRATEGIC PRIORITIES FINANCIAL RESULTS H120 Client Focus Obsession to provide great service to our clients Digitization Efficiency and data usage Integration Seamless client interactions and ecosystems approach Risk and Conduct Doing the right business, the right way PAGE 35
Slide 36: SBG Securities Financial Outcome
FINANCIAL SBG SECURITIES OUTCOME PAGE 36
Slide 37: SBGS Summary Performance
SBGS SUMMARY PERFORMANCE FINANCIAL RESULTS H120 KEY TAKEOUTS 1H20 1H19 change ❑ SBG Securities posted revenues of KES KES m KES m % 171m for the half year ending 30th June 2020, indicating a 27% year-on-year Brokerage commission 131 112 17 decline ❑ This revenue performance reflects: Other revenue 4
Slide 38: SBGS Strategic Priorities
SBGS STRATEGIC PRIORITIES FINANCIAL RESULTS H120 2020 H1 market highlights ❑ The Kenyan equities market posted 6.5% y/y growth in turnover while competition for market share continued to intensify ❑ Although foreign institutional investors continue to dominate market activity, there was a notable in
Slide 39: Thank You
THANK YOU Stanbic ITCANBE.