Absa Group Limited · JSE:ABG

Absa — Barclays Africa Group — FY2015 Earnings Presentation

26 slides from Absa's earnings presentation, Mar 1, 2016

  1. Slide 1: Barclays Africa Group Limited FY15 results presentation

    Barclays Africa Group Limited FY15 results presentation 1 March 2016

  2. Slide 2: Strategic update

    Strategic update Maria Ramos

  3. Slide 3: Financial review

    Financial review David Hodnett

  4. Slide 4: Pre-provision profit drove earnings growth

    Pre-provision profit drove earnings growth FY15 FY14 Change Pre-provision profit (Rbn) Rm Rm % 8% Net interest income 38 407 35 601 8 29.5 5% Non-interest income 28 791 27 524 5 5% 27.3 Total revenue 67 198 63 125 6 26.0 Credit impairments (6 920) (6 290) 10 Operating expenses (37 661) (35 848) 5 Ot

  5. Slide 5: Gaining traction in growing annuity revenue…

    Gaining traction in growing annuity revenue… Retail SA Transactional and Deposits Corporate SA net revenue* (Rm) non-interest income (Rm) 14% 5% 3 950 16% 6 847 3 474 20% 3 000 1% 6 552 1% 6 465 FY13 FY14 FY15 FY13 FY14 FY15 Note: *Excluding Custody and Trustee 5

  6. Slide 6: … in the rest of Africa …

    … in the rest of Africa … RBB Rest of Africa revenue (Rm) WIMI Rest of Africa net premiums (Rm) 26% 12% 25% 775 8 869 617 495 FY13 FY14 FY15 Markets Rest of Africa net revenue (Rm) 1% 23% 7 893 19% 1 423 7 780 1 157 974 FY13 FY14 FY15 FY13 FY14 FY15 6

  7. Slide 7: … and in less capital intensive activities

    … and in less capital intensive activities SA Card acquiring volumes SA (Rbn) Business Banking SA electronic banking revenue (Rm) +14% 10% 241 +18% 744 211 +10% 179 4% 679 651 FY13 FY14 FY15 FY13 FY14 FY15 7

  8. Slide 8: Loan pricing and rest of Africa lift margin

    Loan pricing and rest of Africa lift margin Change in net interest margin* (basis points) 7 481 3 (3) 2 1 (6) 4 8 0 465 Loans 8 Deposits 2 FY14 Pricing Mix Pricing Mix Endowment Capital Hedge ** Rest of Other FY15 Africa Note: * Average interest bearing assets; ** interest rate risk management 8

  9. Slide 9: Strong net interest margin trend

    Strong net interest margin trend Net interest margin (%)* Hedge contribution (Rm) 4.81 1 974 4.65 1 730 1 494 4.46 1 110 4.23 FY12 FY13 FY14 FY15 FY12 FY13 FY14 FY15 Note: * Average interest bearing assets 9

  10. Slide 10: Strong CIB and rest of Africa loan growth

    Strong CIB and rest of Africa loan growth YoY change in net customer loans (Rbn) 249% (2%) 11% 14.5 0.2 703.4 21% 33.8 26% 6% 8% 9.4 2.1 6% 2% 0% 1% 0.8 1.2 (0.3) 0.3 5.1 636.3 FY14 Home CPF * VAF ** Card Personal RBB Rest Other CIB CIB reverse Other FY15 Loans Loans of Africa RBB repos Note: * Comm

  11. Slide 11: Non-interest income growth improving

    Non-interest income growth improving FY15 Change Mix * Non-interest income mix (Rbn) Rm % % Other Trading Fees Retail and Business Banking 18 238 7 63 5% 2% 4.7  Retail Banking SA 12 282 5 42 4.4 4.0  Business Banking SA 3 336 5 12 3.9 4.4 4.4  RBB Rest of Africa 2 620 21 9 20.2 18.6 18.7 CIB 5 9

  12. Slide 12: Continue saving to invest for growth

    Continue saving to invest for growth FY15 Change Mix Group operating JAWS (%)** Rm % % Staff costs 20 902 8 56 1.4 Property-related costs 5 209 (1) 14 Information technology 2 274 5 6 Amortisation 475 (6) 1 Marketing costs 1 740 8 5 -1.0 Professional fees 2 179 16 6 Cash transportation 884 7 2 Other

  13. Slide 13: Building portfolio provisions increases charge

    Building portfolio provisions increases charge FY15 FY14 FY15 FY14 Provision to performing loans (bps) Credit loss ratio 73 NPL cover (%) 70 (bps) 64 Retail and Business 129 132 44 44 52 Banking 49 45 Retail Banking SA 128 133 42 43 Cards * 607 619 70 72 VAF 98 101 39 46 Mortgages ** 30 37 22 25 FY1

  14. Slide 14: Capital levels remain strong

    Capital levels remain strong Barclays Africa Group Common Equity Tier 1 ratio (%) 2.1 (1.2) 11.9 (1.4) 0.5 11.9 Top end of the Board range 9.5% - 11.5% FY14 RWA growth Profit Dividend Other FY15 14

  15. Slide 15: Return on assets continues to drive higher RoE

    Return on assets continues to drive higher RoE Return on assets (%) Return on equity (%) 1.37 17.0 16.7 1.33 1.29 15.5 14.4 1.17 FY12 FY13 FY14 FY15 FY12 FY13 FY14 FY15 15

  16. Slide 16: Strong returns across diversified franchise

    Strong returns across diversified franchise Divisional RoRC (%)* Headline earnings by segment FY15 *** FY14 FY15 24.9 10% 23.2 10% 21.7 20.1 CIB 19.5 44% 26.0% 17.1 16% RBB 6% 64.2% 14% Retail Banking SA Business Banking SA RBB Rest of Africa CIB SA CIB Rest of Africa WIMI RBB CIB WIMI** Note: * Ret

  17. Slide 17: RBB drove group earnings growth

    RBB drove group earnings growth Headline earnings growth (Rm) 6% 11% 48% 14% 10% 140 (264) 1 173 206 0 14 287 13 032 14% FY14 RBB CIB WIMI Head office and FY15 other FY15 pre-provision profit growth 10% 6% 10% 8% 17

  18. Slide 18: Retail Banking SA momentum continues …

    Retail Banking SA momentum continues …  Strong 16% earnings growth Headline earnings* (Rm)  Sustainable profitable Home Loans FY14 FY15 growth  Vehicle and Asset Finance bolstered by performance of joint ventures 9% 2672  Card entrenching leading position 2457  Transactional benefited from acco

  19. Slide 19: …as customer trends continue to improve

    …as customer trends continue to improve YoY growth in customer numbers (%) Average revenue per customer 6 10% 14% 12% 3 2 1 Mass market Middle Affluent and Total FY13 FY14 FY15 market Private 19

  20. Slide 20: Stabilizing Business Banking SA

    Stabilizing Business Banking SA  Improving balance sheet growth Headline earnings (Rm)  Planned migration to digital channels FY14 FY15 4% impacts revenue 5% 2 230 2 135 2 175  Stable credit impairments 2 069  Investment in people and systems  Maintained attractive returns (17%) (66) (55) Busin

  21. Slide 21: WIMI strategy delivers growth …

    WIMI strategy delivers growth …  Short-term insurance margins within Change in headline earnings (Rm) target range 21% (%) (30%)  Continued revenue growth outside SA 5% 24 0 (24) 11% 23% 22 1 464  Strong growth in SA Life 12% 38 80  Assets under management increased by R15bn 1 324  Life embedde

  22. Slide 22: … in AUMs and new business volumes

    … in AUMs and new business volumes Change in assets under management Embedded value of new business (Rm) and administration (Rbn) 14% 270 14 236 236 49% 10 (23%) 5 182 FY14 FY15 -14 1H14 2H14 1H15 2H15 Flows Market 22

  23. Slide 23: Credit impairments dampen CIB’s topline growth

    Credit impairments dampen CIB’s topline growth  Revenues benefit from integrated Headline earnings (Rm) regional client offering 8% (>100%)  Rest of Africa contributes 37% of 985 545 earnings  Strong balance sheet growth 9% 626 20% 6%  Substantial increase in credit impairments 391 3 940 3 734 

  24. Slide 24: Client focus generates robust revenue growth

    Client focus generates robust revenue growth  Strong balance sheet-led revenue growth Revenue by business (Rbn) in rest of Africa 11% 7.4 FY14 FY15  Corporate SA maintains double digit Rest of Africa topline growth 6.6 10% South Africa  Deeper client relationships lift Banking revenue (3%)  Mark

  25. Slide 25: Strong growth across Rest of Africa portfolio

    Strong growth across Rest of Africa portfolio  Positive JAWs and lower taxation offset Headline earnings (Rbn) higher credit impairments 17%  Remains accretive with earnings up 17% 2.31 FY14 FY15  Markets drove CIB growth 1.97  WIMI expands into East Africa 20%  Improving RBB momentum 1.47  Cl

  26. Slide 26: Disclaimer

    Disclaimer Forward-looking statements Certain statements (words such as ‘anticipates’, ‘estimates’, ‘expects’, ‘projects’, ‘believes’, ‘intends’, ‘plans’, ‘may’, ‘will’ and ‘should’ and similar expressions in this document are forward looking. These relate to, among other things, the plans, objectiv

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