Kcb Group Plc · NSEKE:KCB
Kcb — Q1 2023 Earnings Presentation
40 slides from Kcb's earnings presentation, May 24, 2023
Slide 1: Q1 2023 Performance
TI < ot Q12023 Perform Nairobi, 24 May 202: For People. For Better.
Slide 2: Disclaimer
Disclaimer The information contained herein has been prepared by KCB Group Plc (“KCB”). This presentation has been prepared for information purposes only and is not and does not form part of any offer for sale or solicitation of any offer to subscribe for or purchase or sell any securities nor shall
Slide 3: Group Overview
Group Overview For People. For Better. Closer. Connected. Courageous.
Slide 4: Q1 2023 Group Overview
Q12023 Investor Presentation Group Overview | Our wide regional footprint enables us to promote regional commerce, facilitate economic growth, and link millions of people to possibilities on the African continent and beyond. Appendices For Better. ~K pp
Slide 5: Well diversified portfolio of businesses in the region
KCB Group has a well diversified portfolio of businesses in the region to build the scale required to match the meaningful role we seek to play in Eastern Africa. Our Key Subsidiaries KCB Bank Kenya Ethiopia Rep Office 100% National Bank of Kenya 9, pies KCB Bancassurance 100% KCB Bank Tanzani CB Ba
Slide 6: Group Overview: governance structure
Q1 2023 Investor Presentation Group Overview | We create value supported by a clearly defined governance structure which provides for oversight, delegation and clear lines of authority. Accountable to shareholders For Better. Accountable to the Board Audit and Risk | ut © Human Resources Z and Gover
Slide 7: Senior management team
Q1 2023 Investor Presentation Group Overview | Our senior management team mandated to ensure we remain well positioned and responsive to regional opportunities for growth. Lawrence Kimathi Group Chief Executive Officer Group Finance Director { \ Bonnie Okumu | Dr. Leonard Mwithiga’ Rosalind Gichuru
Slide 8: Digital channels enhance financial access
Q1 2023 Investor Presentation Group Overview | We continue to enhance financial access through our digital channels which offer ease of use, convenience and seamless service to customers. i of transactions by number conducted through non branch channels 15 53 3 @ Mobile Lending 95% m Mobi Service* 7
Slide 9: Growth in mobile lending book
Q1 2023 Investor Presentation Group Overview | We drive financial inclusion evidenced by consistent growth in the mobile lending book to personal customers and micro enterprises. _ Growth in value of mobile loans disbursed driven by Fuliza and KCB Mobi loan. m Fuliza personal A\67% YoY growth m= KCB
Slide 10: Growth in value of digital transactions
Q1 2023 Investor Presentation Group Overview | 35% growth in the value of transactions conducted through digital channels driven by merchant POS, internet and mobile banking. i A58% of transactions by value conducted through non branch channels A&R YoY growth in value of branch transactions to KShs
Slide 11: Non funded income from digital channels
Q1 2023 Investor Presentation Group Overview | Non funded income (NFI) from digital channels grew by 38% supported by increased usage of internet banking, mobile banking and merchant POS terminals. Digital channels non funded income in Q1 2023 (KShs M) YoY Change ——3 Mobile bonking I 1.992 33% |e Ag
Slide 12: Operating Environment
For People. For Better. | Closer. Connected. Courageous.
Slide 13: Operating Environment: tailwinds and headwinds
Q12023 Investor Presentation Gi Tailwinds Strong projected GDP growth rates across the region in the medium term despite the slowing growth globally. Receipt of risk-based pricing approvals for KCB Bank Kenya and NBK to support lending and appropriate pricing levels. Improved confidence in the busin
Slide 14: Operating Environment: ESG practices
Q1 2023 Investor Presentation | Operating Environment As we deepen our presence in the region, we seek to embed best ESG practices as we endeavor to build a future-proof responsible business. Leading the transition to a low carbon future Impactful partnerships <= We have supported our banking subsid
Slide 15: KCB Foundation Strategic Priorities
Q1 2023 Investor Presentation KCB [A 10 Strategic Priorities. Pillars: Delivery Vehicles: Sub Segments: Strategic Thrusts: Expected Targets: For People. For Better. ZJiajiri Self Employment Enterprise Development Construction, Manufacturing, Beauty & Personal Care, Domestic Care, Automotive, | Opera
Slide 16: Progress in Q1 2023 scaling up Education program
Q1 2023 Investor Presentation B Fl [ele Progress in Q1 2023 in scaling up the Education program. Activity 2023 Education Scholarship Programme Focused Mentorship @ Integral support for ‘additional encumbrances KCSE Performance 2022 cohort For People. For Better. | Operating Environment Progress 1,05
Slide 17: Products, policies and programmes for social and economic impact
Q12023 Investor Presentation | Operating Environment We leverage our products, policies and programmes to deliver social and economic impact in the markets we operate in. Driving financial inclusion and literacy through innovative solutions. through LPG gas solutions, infrastructure financing can ac
Slide 18: Ratings and rankings among leading institutions
Q1 2023 Investor Presentation | Operating Environment We take pride in having consistently been rated and ranked among the leading financial institutions in the continent based on various parameters. Among top Most Valuable Brands in Kenya by Brand Finance One of only two Kenyan Brands to receive AA
Slide 19: Financial Performance
Financial Performanc For People. For Better. | Closer. Connected. Courageous.
Slide 20: Balance sheet growth to KShs 1.63 trillion
Q1 2023 Investor Presentation Financial Performance 40% growth in balance sheet to KShs 1.63 trillion driven by strong loan and deposits growth across all our businesses and the consolidation of TMB. _ Funding Utilization Increase in net loans and advances, 23% from organic growth and 9% from the co
Slide 21: Balance sheet growth across subsidiaries
Q1 2023 Investor Presentation Financial Performance Significant momentum in balance sheet growth across all subsidiaries driven by increased lending on the back of continued recovery in economic activities. _ Proportion of assets in m KCB Kenya 16% subsidiaries outside of KCB Bank Kenya, up = TMB 34
Slide 22: Gross loans growth
Q1 2023 Investor Presentation Financial Performance Strong growth in gross loans across all segments catapulting KCB’s loan book beyond a trillion-shillings, a first for our region. _ Growth in gross customer loans driven by increased lending in personal, trade, and manufacturing sectors. Organic an
Slide 23: 35.0% 200.0 30.0% 150.0 100.0 25.0% 50.0 20.0% 0.0 15.0% -50.0 10.0% -100.0 5.0%
35.0% 200.0 30.0% 150.0 100.0 25.0% 50.0 20.0% 0.0 15.0% -50.0 10.0% -100.0 5.0% -150.0 0.0% -200.0
Slide 24: Non-performing loan coverage
Q1 2023 Investor Presentation Financial Performance The non-performing loan book has adequate coverage from provisions and securities held. ——_ 98% Increase in provisions charge in Q1 2023 to KShs 4.1 billion to build up coverage for downgraded facilities. Coverage ratios IFRS Coverage Regulatory Co
Slide 25: Sectoral contribution to gross loans and NPL stock
Q1 2023 Investor Presentation Financial Performance Contribution to the stock of non-performing loans concentrated within a few sectors as legacy NPLs in trade and real estate continue to decline. _ Share of gross loans in Mining and Quarrying 0.6% Im 1.9% personal and household sector. Financial Se
Slide 26: NPL ratios per segment and subsidiary
Q1 2023 Investor Presentation Financial Performance Improvements in asset quality in NBK, South Sudan and Tanzania helped to offset the deterioration registered in KCB Kenya, Uganda and BPR. NPL ratios per segment mQ122 mFY22 ™Q123 19.7% 33.5% Checkoff SME & Micro Mortgage Corporate NPL ratios per s
Slide 27: Net interest margin and yields
Q1 2023 Investor Presentation Financial Performance Decline in net interest margin due to increased cost of funds as a result of the high-interest-rate environment. Rollout of risk-based pricing to support appropriate funding/lending spread. ———— loans and government securities offset by decline in
Slide 28: Customer deposits growth
Q1 2023 Investor Presentation Financial Performance Customer deposits increased to KShs 1.2 trillion, driven by organic growth in demand and term deposits in the existing businesses and the acquisition of TMB. > A41.5% Increase in customer deposits, 18% from organic growth and 23% from the consolida
Slide 29: Capital adequacy ratios
Q1 2023 Investor Presentation Financial Performance All subsidiaries are compliant with core and total capital requirements and are adequately capitalized to drive growth of risk weighted assets. _ Buffers in KCB Bank Kenya improved by 20 basis points in Q1 2023. On track to achieve a minimum buffer
Slide 30: Strong first quarter performance with PBT of KShs 14 billion
Q1 2023 Investor Presentation Financial Performance The Group delivered strong first quarter performance for the second year in a row with PBT of KShs. 14 billion supported by increased revenues which offset rise in costs and provisions. _ A27T% Increase in revenue driven by interest income, service
Slide 31: PBT contribution per subsidiary
Q1 2023 Investor Presentation Financial Performance 101% increase in PBT from subsidiaries outside of KCB Bank Kenya driven by Uganda, Burundi, South Sudan & Tanzania businesses and the consolidation of TMB. i PBT contribution from mKCB Kenya (22%) subsidiaries outside of KCB Bank Kenya in Q1 23, up
Slide 32: Q1 2023 actual against 2023 projection
Q1 2023 Investor Presentation Financial Performance Mixed performance against our key parameters in Q1 2023 with strong growth in loans, deposits and non funded income offset by rising operating and borrowing costs. LL» negative jaws. | Cost/Income ratio 44%-46% 51.2% NIMs impacted by rising costs o
Slide 33: Appendices
For People. For Better. | Closer. Connected. Courageous.
Slide 34: Overview of key financial ratios
Q1 2023 Investor Presentation Appendices Overview of key financial ratios KCB GROUP Q12023 H1 22 FY 22 KCB Kenya KCB Group VEN Return on average equity 21.2% | UW Cost to income 43.9% 17.3% IGross NPL to gross loans 19.7% 60.7% NPL regulatory coverage 61.4% 31.8% Debt to equity 46.6% eich Non funded
Slide 35: Summary statement of financial position
Q1 2023 Investor Presentation Appendices Summary statement of financial position as at 31 March 2023 KCB Group KCB Bank Kenya KShs Billion Q122 Q122 Q123 Cash and balances with central bank 44.5 31.0 Balances with other institutions 40.7 10.1 Investments in Govt & other securities 281.8 195.9 Net lo
Slide 36: Summary statement of Profit or Loss
Q12023 Investor Presentation Appendices Summary statement of Profit or Loss for the year ended 31 March 2023 KCB Group KCB Bank Kenya KShs Billion Q122.Q123 Q122 Q123 Interest income 26.6 33.6 19.6 21.9 Interest expense (6.9) (11.6) (4.7) (8.0) Net interest income 19.7 22.1 14.9 13.8 Foreign exchang
Slide 37: Key operating data
Q12023 Investor Presentation Group Overview | Operating Environment | Financial Performance | Appendices Key operating data Q12022 H12022 FY 2022 KCB Footprint Branches Number of Customers (Million) ATMs! Agency outlets? POS/Merchant outlets? Total number of employees KCB Share Information Earnings
Slide 38: KCB regional footprint and key macros
Q12023 Investor Presentation Appendices KCB regional footprint and key macros as at 31 March 2023 Kenya! Tanzania South Sudan Rwanda Uganda Burundi DR Congo KCB Footprint Branches 298 16 14 154 13 6 106 ATMs 552 7 14 76 15 8 87 Agency outlets 18,916 418 48 711 390 170 3,086 POS/Merchant outlets 5,79
Slide 39: Company information
Q1 2023 Investor Presentation Company information Registered office KCB Group Pic Kencom House Moi Avenue P. O. Box 48400 —- 00100 Nairobi, Kenya Contact information KCB Investor Relations investorrelations@kcbgroup.com www.kcbgroup.com For People. For Better. Stock listing Primary Nairobi Securitie
Slide 40: ete TOKaDRHICE
For People. For Better. ete TOKaDRHICE