Standard Bank Oil ETN · JSE:SBOIL
Standard Bank Oil ETN — Standard Bank Group — Debt Investor Presentation (November 2006)
30 slides from Standard Bank Oil ETN's debt investor presentation, November 2006
Slide 1: Standard Bank Tier I Capital Preference Share Issue: Increase of SBPP Issue
Standard Bank Tier I Capital Preference Share Issue: Increase of SBPP Issue November/ December 2006 1
Slide 2: Overview
Overview • SBPP private placement – Summary termsheet – Key dates – Purpose of issue – Investor considerations – risk profile – Pricing – Return – Detailed termsheet • Standard Bank Group financial review 2
Slide 3: SBPP private placement
SBPP private placement 3
Slide 4: Summary of issue
Summary of issue Issuer Standard Bank Group Limited Instrument Non-redeemable non-cumulative non- participating preference share (SBPP) Size R500 million to R1 billion private placement R4.5 billion nominal presently in issue Maturity Perpetual Listing JSE Dividend rate 70% of prime calculated on a
Slide 5: Key dates
Key dates • Offer opens Wednesday 15 November 2006 • Offer closes 12h00 on 1 December 2006 – In the event of an oversubscription, all allocations will be scaled back proportionately. No feedback will be given as to the size of the book prior to closing • Listing and settlement on 8 December 2006 5
Slide 6: Purpose of issue
Purpose of issue The preference share capital which qualifies as tier I capital is being raised to maintain a cost effective, prudent capital base for the group. This will accommodate current strong balance sheet growth and potential acquisitions. 6
Slide 7: Investor considerations – risk profile
Investor considerations – risk profile • The preference shares are not redeemable. They may be sold on the JSE. Standard Bank is not obliged to buy the preference shares back. Since the issue of the preference shares in July 2004, an average value of around R4 million has traded daily on the JSE wit
Slide 8: Pricing considerations
Pricing considerations The SBPP shares were issued in July 2004 at 70% of prime and have traded in a range of 57.12% to 69.82% of prime (after stripping out dividends) over the past 2 years. On 9 November 2006 the shares closed at 69.33% of prime (with the prime rate at 12%). At this level, each sha
Slide 9: Pricing considerations
Pricing considerations More recently (since 25 August 2006), it seems as if the price as a percentage of prime has reached a peak, with the high of 69.82% for SBPP being reached on 2 November 2006 Comparative Bank Preference Share Levels as % of Prime 71% 70% 69% % of Prime 68% 67% 66% 65% 64% 63% 2
Slide 10: Pricing considerations
Pricing considerations With Prime and 3-month JIBAR rising recently, so has the yield on SBPP Jibar vs. SBPP Yield vs. Prime 9.00% 12.25% 12.00% 8.50% 11.75% 8.00% Jibar/ SBPP Yield 11.50% 7.50% 11.25% Prime 7.00% 11.00% 10.75% 6.50% 10.50% 6.00% 10.25% 5.50% 10.00% 19-Oct-04 24-Mar-06 30-Nov-04 13-
Slide 11: Pricing considerations
Pricing considerations SBPP vs. the average of the Big 5 Banks in terms of clean price and yield as a % of Prime: Clean Price Yield as a % of Prime 71.00% 123.00 69.00% 118.00 67.00% 65.00% 113.00 63.00% 108.00 61.00% 103.00 59.00% 98.00 57.00% 19/10/04 19/02/05 19/06/05 19/10/05 19/02/06 19/06/06 1
Slide 12: Detailed pricing calculations
Detailed pricing calculations • Preference shares issued pursuant to this placement are entitled to dividends (assuming the board declares the dividends) for the full dividend period from 1 July 2006 to 31 December 2006 even though the shares will only be issued on 8 December 2006. • The share price
Slide 13: Return
Return Since preference dividends are not taxable, we present the preference dividend yield as equivalent pre-tax returns at various marginal tax rates for different prime interest rates Tax rate Prime at Current implied risk premium 11.00% 12.00% 13.00% (Current) 0% 7.70% 8.40% 9.10% -0.376% 9% 8.4
Slide 14: Return
Return Investment Effective Post tax annual yield yield* SBPP 8.16%** 8.16% RSA Government Retail Bond (2-year) 8.50% 5.10% Average Money Market Unit Trust 8.05% 4.83% Average Fixed Income Unit Trust 8.13% 4.88% *assuming 40% tax rate for individuals **effective yield given the average prime rate pr
Slide 15: Termsheet
Termsheet Issuer: Standard Bank Group Limited (“the Company”). Description: Non-redeemable non-cumulative non-participating preference shares with a par value of R0.01 each. Listing: JSE Securities Exchange South Africa Purpose for issue: To raise cost effective Tier I capital for the Standard Bank
Slide 16: Termsheet
Termsheet Preference dividend: If declared, 6 monthly, calculated in arrears. Non-cumulative. Where a preference dividend is not declared, no ordinary dividends may be declared. Ordinary dividend payments may only resume when preference dividends resume. Where a dividend is declared, it will be calc
Slide 17: Termsheet
Termsheet Dividend periods: The six-monthly periods prior to 31 December and 30 June of each year, being the dividend dates. Dividend rate: 70% of the daily prime rate. Ranking: Each preference share will rank as regards to dividends and a repayment of capital on the winding-up of the Company prior
Slide 18: Termsheet
Termsheet Change in tax clause: If there is a change to the Income Tax Act, 1962 that results in preference dividends being declared to be taxable in the hands of the holders and a deductible expense in the hands of the Company, then the Company shall increase the preference dividend in question by
Slide 19: Financial review
Financial review 19
Slide 20: Full details of financial results can be accessed as follows
Full details of financial results can be accessed as follows: Standard Bank Group financial information is available on the group’s investor relations website at www.standardbank.co.za Direct links to relevant information are: 2005 annual report (audited): http://www.standardbank.co.za/site/investor
Slide 21: Group financial highlights
Group financial highlights June 2006 June 2005 Normalised Normalised Headline earnings growth (%) Ç 18 Ç 23 Headline eps (cents) 359.0 304.8 Headline eps growth (%) Ç 18 Ç 22 Fully diluted headline eps growth (%) Ç 18 Ç 21 ROE (%) 24.2 23.7 NAV per share (cents) 3 231 2 644 Dividend cover (times) 2.
Slide 22: Group income statement review
Group income statement review June 2006 % June 2005 Rm Change Rm Net interest income 7 636 23 6 192 Non-interest revenue 9 048 20 7 566 Credit impairment charges 1 300 >100 638 Operating expenses 9 039 16 7 759 Normalised headline earnings 4 869 18 4 126 Banking activities 4 539 18 3 850 Investment
Slide 23: Normalised headline earnings mix by major business unit
Normalised headline earnings mix by major business unit Personal & Business Banking 7 5 Corporate & Investment Banking 43 Central and other 45 Investment M anagement & Life Insurance 23
Slide 24: Group headline earnings per share
Group headline earnings per share 700 361 600 500 299 243 400 215 359 300 182 305 156 200 249 222 181 100 153 127 0 2000 2001 2002 2003 2004N 2005N 2006N Headline EPS 1st half Headline EPS 2nd half N - normalised 24
Slide 25: Group return on equity
Group return on equity 25.2 3 500 23.7 24.2 22.6 25 22.4 3 000 20.3 3 231 20.1 2 830 20 2 500 19.8 2 464 17.8 2 000 17.0 2 154 15 1 939 1 957 14.8 1 500 13.4 12.0 11.8 10 1 397 1 000 5 500 0 0 Ç15% 2000 2001 2002 2003 2004N 2005N HY2006N NAV per share ROE Ave cost of equity N - normalised 25
Slide 26: Group loans and advances
Group loans and advances June 2006 % June 2005 Rbn Change Rbn Personal & Business Banking 230 28 180 Corporate & Investment Banking 179 56 115 Central and other 6 - 6 Banking activities 416 38 302 26
Slide 27: Personal & Business Banking SA loans and advances
Personal & Business Banking SA loans and advances June 2006 % June 2005 Rbn Change Rbn Home loans 143 31 109 Card debtors 14 44 10 Instalment sales and finance leases 44 17 38 Other lending 32 22 26 Credit impairments (3) 27 (2) Net loans and advances 230 28 180 27
Slide 28: Group credit loss trends
Group credit loss trends 5 4 % of Advances 3 2 1 1.06 0.99 1.07 0.90 0.70 0.43 0.40 0 2000 2001 2002 2003 2004 2005 HY2006 Income statement charge Balance sheet provision NPLs 28
Slide 29: Capital adequacy of banking operations
Capital adequacy of banking operations June 2006 June 2005 % % Group Tier I 10.6 10.8 Tiers II & III 4.1 4.2 Total 14.7 15.0 SBSA Tier I 8.1 8.5 Tiers II & III 4.3 4.8 Total 12.4 13.3 29
Slide 30: THANK YOU
THANK YOU 30
Standard Bank Group — Debt Investor Presentation (November 2006) on 6ix