I&m Group Plc · NSEKE:IMH
I&m — Investor Presentation (April 2019)
55 slides from I&m's investor presentation, Apr 9, 2019
Slide 1: Investor Presentation
Investor Presentation 9 April 20191 Page 1
Slide 2: Table of Contents
Table of Contents Part 1: Introduction to I&M Holdings Group Part 2: 2018 The Year in Perspective Part 3: Subsidiary Performance Part 4: Appendices 2 Page 2
Slide 3: Part 1: Introduction to I&M Holdings Group
Part 1: Introduction to I&M Holdings Group 3
Slide 4: I&M Holdings PLC
I&M Holdings PLC Introduction • I&M Holdings Plc, formerly known as City Trust Limited (CTL) was incorporated on 16th August 1950; one of the oldest companies to list on the Nairobi Securities Exchange (NSE). • I&M Holdings was licensed and approved as a non-operating holding company in June 2013 fo
Slide 5: I&M Holdings PLC (IMHP) Group Structure
I&M Holdings PLC (IMHP) Group Structure 5
Slide 6: I&M Holdings Plc Board of Directors
I&M Holdings Plc Board of Directors Mr Daniel Ndonye Mr Suresh B R Shah, MBS Chairman Non-Executive Director Independent Non Executive Director Mr Michael Turner Dr. Nyambura Koigi Mr Sarit S. Raja Shah Independent Non- Independent Non- Group Executive Executive Director Executive Director Director
Slide 7: Group Operating Model
Group Operating Model *The Group Secretariat team members functionally report to the Group Executive Director and the Group Nominated Directors (GND) but administratively report to General Manager – Strategy & Transformation at I&M Bank Ltd, Kenya. # Functionaries with Group Roles include Heads of I
Slide 8: Part 2: 2018 The Year in Perspective
Part 2: 2018 The Year in Perspective 8
Slide 9: Economic Overview - Global & Sub-Saharan Africa
Economic Overview - Global & Sub-Saharan Africa • Global economy fraught with highlights of political tensions, trade conflicts and tighter financial conditions in key markets in 2018. • Overall growth remained at 3.7%, similar to that recorded in 2017. • The United States economy registered strong
Slide 10: Kenyan Economy
Kenyan Economy • Began to rebound last year which led to improved business confidence. • Various macroeconomic factors impacted both the banking industry and the country’s economy. • GDP grew at an estimated 5.5 percent from 4.9 percent in 2017. • CBK reduced the interest rate to 9 percent in July 2
Slide 11: Group Strategy
Group Strategy The 6 key strategic objectives will support achievement of the its 3 key goals: 1. Group Investments 2. Regulatory Compliance 3 key goals • Ensuring zero tolerance for non • Hold and manage investments in regional and domestic entities compliance across all entities - Support growth o
Slide 12: Group Consolidated Performance: 2018
Group Consolidated Performance: 2018 12
Slide 13: Growth compared to prior year
IMHP Group Growth December FY 2018 vs December FY 2017 Non Funded Customer Deposits Loans & Advances Income 26 9 32 % % % 16 PBT % Growth compared to prior year 13
Slide 14: I&M Holdings PLC - Financial Highlights (Income Statement)
I&M Holdings PLC - Financial Highlights (Consolidated) – Income Statement Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 18 vs 17 Particulars Kshs Mn Kshs Mn Kshs Mn Kshs Mn Kshs Mn Y-Y % ▲ Net Interest Income 10,404 12,647 15,522 15,554 15,594 0% Non Funded Income 3,930 4,727 4,973 5,763 7,597 32% Total Operat
Slide 15: I&M Holdings PLC - Financial Highlights (Balance Sheet)
I&M Holdings PLC - Financial Highlights (Consolidated) – Balance Sheet Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 18 vs 17 Particulars Kshs Mn Kshs Mn Kshs Mn Kshs Mn Kshs Mn Y-Y % ▲ Cash & Bank Balances 11,275 9,948 11,084 11,880 14,867 25% Investments & Placements 43,398 44,118 52,783 57,226 85,832 50% Lo
Slide 16: Ratio Analysis
Ratio Analysis Consolidated 2014 2015 2016 2017 2018 Cost/Income Ratio 38% 38% 36% 37% 37% Net NPA 1.0% 2.4% 3.3% 7.3% 5.8% Return on Assets 3.3% 3.7% 3.7% 3.0% 2.9% Return 20% 21% 20% 15% 17% on Equity Loan : 98% 96% 92% 90% 78% Deposit Ratio NPA: Non Performing Assets
Slide 17: IMHP Highlights 2018 Full Year
IMHP Highlights 2018 Full Year Highlights We have continued to make steady progress around product development, the digitization of core banking systems and Performance processes, efficient service delivery and improved internal controls. Overview We have also partnered with our communities through
Slide 18: IMHP Performance 2018
2018 Performane Kshs’ million IMHP PERFORMANCE 2018 +1,603 (+16%) 11,498 1,834 9,895 648 337 40 40 PBT 2017 Opex Net Interest Share of Profit Loan Non Funded PBT 2018 [Increase] Income of Joint Venture Provisions Income [Increase] [Increase] [Decrease] [Increase] Gradual shift / Pivot to Non Funded
Slide 19: NFI, Fee/Cost vs Fee/Income
NFI [Kshs Mn] Fee/Cost vs Fee/Income +32% 7,597 Fee/Cost Fee/Income 1,778 +59% 90% 5,763 1,117 72% 73% 2,567 +40% 67% 1,829 2,159 -2% 2,207 33% 1,094 +79% 27% 24% 27% 610 2017 2018 2015 2016 2017 2018 Fees & Commissions on Loans FX Income We have deepened our relationship Other Fees & Commissions ma
Slide 20: IMHP Non Performing Loans Exposure 2018
2018 NPL Kshs’ million IMHP NON PERFORMING LOANS EXPOSURE 23,831 19,485 7,792 56% 13,454 (40%) 10,377 10,377 11,693 (60%) 44% NIL Gross NPL 2017 Gross NPL Loan Loss Net NPL Discounted Net NPLs Loan Provisions Value of Exposure Provisions Securities Discounted Value of Securities • Increased coverage
Slide 21: IMHP PBT 2018 Subsidiaries Percentage Contribution
IMHP PBT 2018 Subsidiaries Percentage Contribution I&M KENYA* I&M RWANDA* KSHS ‘BN 8.8 77% 11% 1.3 BANK ONE* I&M TANZANIA* 0.6 5% 3% 0.4 Remaining 3%: Other Subsidiaries and elimination * Bank Operations & Bancassurance 21
Slide 22: Trend Analysis
Trend Analysis Tototna 6
Slide 23: Performance Trend Analysis [1 of 2]
Performance Trend Analysis [1 of 2] Total Assets (Kshs Bn) Deposits (Kshs Bn) CAGR +15% CAGR +17% +20% +26% +14% +15% +10% 289 +11% 213 240 169 192 211 147 133 2015 2016 2017 2018 2015 2016 2017 2018 Loans (Kshs Bn) PBT (Kshs Bn) CAGR +9% CAGR +4% +9% +4% +16% +13% -7% +5% 167 11.5 153 10.2 10.6 9.9
Slide 24: Performance Trend Analysis [2 of 2]
Performance Trend Analysis [2 of 2] Revenue (Kshs Mn) Fee/Income Ratio NII NFI CAGR +10% +9% +18% +4% 23,191 33% 20,495 21,317 27% 27% 17,374 24% 15,554 15,594 12,647 15,522 4,727 4,973 5,763 7,597 2015 2016 2017 2018 2015 2016 2017 2018 Non Funded Income (Kshs Mn) Net Interest Income (Kshs Mn) CAGR
Slide 25: Value to Shareholders [1 of 2]
Value to Shareholders [1 of 2] Dividend Payout (Kshs Mn) Dividend Per Share Interest rate capping CAGR +5% +11% CAGR +4% +5% 0% 1,612 +11% 1,373 1,447 1,447 0% 0% 3.50 3.50 3.50 3.90 2015 2016 2017 2018 2015 2016 2017 2018 Shareholders Funds (Kshs Bn) Earnings Per Share CAGR +15% CAGR +4% +19% +8% +
Slide 26: Value to Shareholders [2 of 2]
Value to Shareholders [2 of 2] NAV per Share (Kshs) NAV/Share vs Price/Share NAV 127 Kshs 123 Closing Price 113 CAGR +13% 100 101 +13% +8% +17% 114 85 114 123 101 86 86 90 2015 2016 2017 2018 2019 139 113 130 130 129 2015 2016 2017 2018 12 Month Highs [Price] Price to Book Value Ratio Price to Earni
Slide 27: Subsidiary Performance
Subsidiary Performance Tototna 6
Slide 28: I&M Bank Limited – Kenya
I&M Bank Limited – Kenya • Launched the Customer Value propositions comprising I&M Premium Select, I&M Premium Esteem, I&M Young Professionals and I&M Business to provide personalized offerings. • Rollout of the Digital Factory “iCUBE” to developing transformative digital financial solutions aimed a
Slide 29: I&M Bank [Kenya] – Financial Highlights
I&M Bank [Kenya] – Financial Highlights 2018 Full Year Highlights Kenya’s economy began to rebound last year as a result of stability in the Performance political environment which led to improved business confidence. 2018 Overview demonstrated the continued ability of I&M Bank to deliver consistent
Slide 30: I&M Bank (T) Limited, Tanzania
I&M Bank (T) Limited, Tanzania • Development of a comprehensive Medium Term Strategy aimed at enhancing the market share, brand positioning and driving growth in corporate and retail banking. • Launched e-wallet payment solution SPENN based on an application powered by Block chain • Introduction of
Slide 31: I&M Bank [Tanzania] – Financial Highlights
I&M Bank [Tanzania] – Financial Highlights 2018 Full Year Highlights Performance improved year on year, though behind target, mainly affected by Performance growth in loan provisions due to growth in NPA book, as economic activities Overview slowed down. The impact of Government shifting its account
Slide 32: Bank One Limited, Mauritius
Bank One Limited, Mauritius • Launch of new custody offering earning the Bank the award for the Best Private Bank in Mauritius. • Deepening E-Commerce business focused on new product development and entry into new markets leading to improved business volumes and better visibility. • Introduction of
Slide 33: Bank One [Mauritius] – Financial Highlights
Bank One [Mauritius] – Financial Highlights 2018 Full Year Highlights 2018 has been a strong growth momentum. Performance Overview A number of new initiatives have been launched and we have created capacity Reported PBT to prepare for future growth arising from momentum that the bank has created. (2
Slide 34: Bancassurance – Kenya
Bancassurance – Kenya I&M Insurance Agency Limited & Youjays Insurance Brokers Limited • On 31st March 2018, I&M Insurance Agency acquired 100% of the issued share capital of Youjays Insurance Brokers a well established brokerage firm that was set up in 1987 and generally enjoys a very good reputati
Slide 35: Advisory I&M Burbidge Capital Limited Kenya & Uganda
Advisory I&M Burbidge Capital Limited Kenya & Uganda • 2018 was a record year for the advisory business, having advised on and successfully closed on a number of transactions and achieved a 62% growth in revenue from 2017 and a 118% growth in profit before tax. • The Company implemented new strategi
Slide 36: Other Entities
Other Entities I&M Realty Limited, Kenya • Group’s new headquarters, 1 PARK Avenue, at the junction of 1st Parklands Avenue and Limuru Road nears completion. • As per planned restructuring, the property located at Eldama Park, previously owned by Giro Commercial Bank Limited, was transferred to I&M
Slide 37: Appendices
Appendices Tototna 6
Slide 38: Our Legacy
Our Legacy From strength to strength 38
Slide 39: I&M Holdings Plc: Key Milestones
I&M Holdings Plc: Key Milestones 45 years of existence Two leading I&M 1st European DFIs Tier II First bank in I&M acquires – Proparco & Capital– Kenya to Launch of I&M I&M Biashara Bank DEG became launch E- Employee Share approx. Incorporated of Kenya Shareholders Commerce Ownership Plan USD 7Mn 19
Slide 40: I&M Holdings Plc: Key Milestones - Continued
I&M Holdings Plc: Key Milestones - Continued 45 years of existence Set up of I&M I&M Bank delves Holdings as a non I&M Bank into Bancassurance I&M forms a operating holding (Rwanda) & Bank with the formation Real Estate company, listed on One moved to I&M of I&M Insurance Co. I&M Realty the NSE Hold
Slide 41: I&M Holdings Plc: Key Milestones - Continued
I&M Holdings Plc: Key Milestones - Continued 45 years of existence Acquired 65% EIB and shares in I&M responsAbility Launch of iMara Burbidge provide debt Strategy Capital Limited financing 2016 2016 2017 2016 2017 2018 CDC Group plc I&M Insurance Agency Acquired 100% stake becomes a significant acq
Slide 42: I&M Holdings Plc Top Shareholders
I&M Holdings Plc Top Shareholders SHAREHOLDER NAME NO. OF SHARES % Minard Holdings Limited 88,325,016 21.4% Tecoma Limited 76,044,808 18.4% Ziyungi Limited 73,548,000 17.8% CDC Group plc 41,881,500 10.1% Other Shareholders (all less than 5%) 133,606,045 32.3% TOTAL ISSUED SHARES 413,405,369 100.0% A
Slide 43: I&M Holdings Director Profiles
I&M Holdings Director Profiles Mr. Daniel Ndonye is a chartered accountant by profession, having worked with Deloitte & Touche for over 30 years, 20 of which he was the Managing/Senior Partner. He holds a Bachelor of Commerce degree from the University of Nairobi. He is a fellow of the Institute of
Slide 44: I&M Holdings Director Profiles - Continued
I&M Holdings Director Profiles - Continued Mr. Oliver Fowler joined the board in August 2015. He is a qualified Kenyan Advocate, an English Solicitor and a Senior Partner at Kaplan & Stratton Advocates. His work encompasses commercial work, particularly financial, corporate and taxation matters and
Slide 45: Group Management Structure
I&M Holdings PLC Group Management Structure Group Management Structure The structure and process for Group Management Structure is as follows Board - I&M Holdings The Board is adequately represented in terms of independent non-executive directors. These non-executive Directors not only support the C
Slide 46: Subsidiary briefs
Subsidiary briefs 46 Page 46
Slide 47: Subsidiary Briefs I&M Bank Limited, Kenya
Subsidiary Briefs I&M Bank Limited, Kenya • Incorporated in 1974 and converted into a fully fledged commercial bank in 1996 • Strategic alliances & technical assistance with DFIs have led to improved governance standards, state-of-art systems, policies and procedures in areas of AML, ESM, & Risk Man
Slide 48: Subsidiary Briefs I&M Bank (T) Limited, Tanzania
Subsidiary Briefs I&M Bank (T) Limited, Tanzania • Incorporated in 2002. I&M Bank & its partners acquired I&M Bank (T) in 2010 • I&M Bank (T) shareholding: • I&M Bank (Kenya) – 70.38% • The Kibo Fund LLC – 20.02% • Proparco – 4.62% • Mr. Michael N. Shirima – 4.98% • In 2014 the Bank commissioned its
Slide 49: Subsidiary Briefs I&M Bank (Rwanda) Plc, Rwanda
Subsidiary Briefs I&M Bank (Rwanda) Plc, Rwanda • Incorporated in 1963 it was the first commercial bank in Rwanda • I&M together with 2 DFIs acquired 80% shareholding of BCR from Actis LLP on 17th July 2012, making the ultimate Shareholding of I&M Bank (Rwanda): • I&M Bank Group – 55.00% • DEG – 12.
Slide 50: Subsidiary Briefs Bank One Limited, Mauritius
Subsidiary Briefs Bank One Limited, Mauritius • Incorporated in 1997 and was taken over by I&M Bank and CIEL Group in 2008. • 50/50 Joint Venture with CIEL Group, – a reputed and diversified industrial conglomerate. • Fully-fledged commercial bank offering on-shore and off-shore banking services hav
Slide 51: Subsidiary Briefs Non Banking Subsidiaries
Subsidiary Briefs Non Banking Subsidiaries I&M Burbidge Capital Limited, Kenya (IMBC) • Incorporated in May 2010 and is domiciled in the Republic of Kenya. • I&M Group acquired 65% shareholding in August 2016 • The current shareholding is as per below • I&M Holdings – 65% • Mr. Edward Burbidge – 35%
Slide 52: Subsidiary Briefs Non Banking Subsidiaries
Subsidiary Briefs Non Banking Subsidiaries I&M Insurance Agency Limited, Kenya • Incorporated on 23 July 2014 as a limited liability company in Kenya and commenced operations on 1 August 2014. • The company is regulated by Insurance Regulatory Authority under the Insurance Act (Cap 487) of the Laws
Slide 53: Subsidiary Briefs Non Banking Subsidiaries - Continued
Subsidiary Briefs Non Banking Subsidiaries - Continued I&M Realty Limited, Kenya • The company is a wholly owned subsidiary of I&M Holdings • Incorporated on 30th October 2014 as a limited liability company in Kenya • Commenced operations in November 2015. • It is the real estate holding company of
Slide 54: Disclaimer
DISCLAIMER The contents herein have been presented in good faith. The information, statements and opinions set out in this presentation and subsequent discussion do not constitute a public offer for the purposes of any applicable law or an offer to sell or solicitation of any offer to purchase any s
Slide 55: Thank You
I&M HOLDINGS PLC I&M BANK HOUSE Thank 2ND NGONG AVENUE P.O. BOX 30238 – 00100 You + 254 (0)20 3221002 INVEST@IMBANK.CO.KE 55 Page 55