Stanbic Holdings Plc · NSEKE:SBIC
Stanbic — H1 2022 Earnings Presentation
35 slides from Stanbic's earnings presentation, Jun 30, 2022
Slide 1: Financial Results Presentation for the half year ended 30 June 2022
Stanbic Holdings Plc FINANCIAL RESULTS PRESENTATION For the half year ended 30 June 2022 Lake Naivasha, Kenya | Kenya/South Sudan is our home, we drive her growth
Slide 2: Table of Contents
T A B L E O F C O N T E N T S 01 WELCOME REMARKS 03 PURPOSEFUL TRANSFORMATION AS WE DELIVER OUR STRATEGY 02 OPERATING ENVIRONMENT 04 DELIVERING SUSTAINABLE RETURNS Tsavo Parks and Chyulu Hills Complex, Kenya | Kenya/South Sudan is our home, we drive her growth
Slide 3: Welcome Remarks and Operating Environment
WELCOME REMARKS AND OPERATING ENVIRONMENT PATRICK MWEHEIRE CHIEF EXECUTIVE, STANBIC HOLDINGS PLC The Meru Conservation Area, Kenya | Kenya/South Sudan is our home, we drive her growth
Slide 4: Operating Environment
OPERATING ENVIRONMENT Global economic recovery slowed down by various challenges RUSSIA-UKRAINE CONFLICT RISING INFLATION IN US & EUROPE ▪ Russia-Ukraine war has resulted ▪ High inflation rates in the US has POLITICAL LANDSCAPE to increased geopolitical risks, led the US FED to respond by weaker eco
Slide 5: Operating Environment: Inflation and Benchmark rate movements
OPERATING ENVIRONMENT Inflation and Benchmark rate movements Inflation Rate Macro Economic factors in Kenya 23.5% 25.0% 20.0% 18.3% June June Indicator 15.0% 2021 2022 9.1% 10.0% 6.3% 7.9% 6.8% Central Bank Rate 7.00% 7.50% 3.6% 4.4% 3.2% 5.0% 2.0% 0.0% 91 Day T-Bill 7.03% 8.10% Kenya Tanzania Ugand
Slide 6: Purposeful Transformation as We Deliver Our Strategy
PURPOSEFUL TRANSFORMATION AS WE DELIVER OUR STRATEGY CHARLES MUDIWA CHIEF EXECUTIVE, STANBIC BANK The Kenya Lakes System, The Great Rift Valley , Kenya | Kenya/South Sudan is our home, we drive her growth
Slide 7: Recap of Our Strategy
RECAP OF OUR STRATEGY Our Purpose Kenya / South Sudan is our home, we drive her growth To be a leading financial services organisation in Kenya and South Sudan, delivering exceptional client Our Vision experiences and superior value Our strategic priorities: What we need to do to deliver our Transfo
Slide 8: 4 Priority Areas to Drive Growth & Future-Ready Transformation
4 PRIORITY AREAS TO DRIVE GROWTH & FUTURE-READY TRANSFORMATION Value focus: Volume focus: Focus segments: Accelerate organic growth Exponentially grow business • Wholesale Clients Build on strong position by increasing Strengthen core 1 SoW in MNCs and capturing more – build on existing • Business &
Slide 9: Delivering Our Strategy - Strengthen the Core (Defend)
DELIVERING OUR STRATEGY - STRENGTHEN THE CORE (DEFEND) Sustain and grow core business Staying true to our purpose Customer numbers growth DADA (Women support) ✓ Value of loans: KES 4.8b ✓ Total customer base grew by 20% year on year SMEs ✓ Value of loans: KES 8.5b ✓ Active customers grew by 39% year
Slide 10: Delivering Our Strategy - Future Ready Transformation (Grow)
DELIVERING OUR STRATEGY - FUTURE READY TRANSFORMATION (GROW) We will Enhance customer experience Strategic partnerships drive some ecosystems… Digital lending ✓ Instant loans: KES 8.1b since inception ▪ Over 22k customers Customer onboarding ✓ Over 90% accounts opened digitally Mjeki - distributor f
Slide 11: Delivering Our Strategy - Future Ready Transformation (Grow)
DELIVERING OUR STRATEGY - FUTURE READY TRANSFORMATION (GROW) Volume of non-branch channel transactions Value transacted through digital channels BNA’s BNA’s Internet 5% Internet banking banking 15% Mobile Mobile 98% banking >100% banking 24% 28% Unayo Unayo >100% Agency >100% banking Value Agency Vo
Slide 12: Delivering Our Strategy – Driving Sustainable Growth
DELIVERING OUR STRATEGY – DRIVING SUSTAINABLE GROWTH Education Financial Inclusion & Enterprise Development ▪ KES 37.9m grant funding to MSMEs. ▪ Over 50k individuals trained on digital literacy (futureNidigital). Health – Cancer screening ▪ 131 computers donated to support education in counties. ▪
Slide 13: Trusted Financial Partner
TRUSTED FINANCIAL PARTNER What are we known for? ▪ Best Investment Bank in Kenya 2013 – 2022 ▪ Best Trade Finance Bank in Kenya 2016 – 2021 ▪ Best Private Bank in Kenya 2017 - 2019 ▪ Best FX provider in Kenya 2014 - 2018 ▪ Best Corporate Bank 2016, 2017 ▪ Safest Bank in Kenya 2017, 2018 ▪ 2nd larges
Slide 14: Managing Risk - Doing the Right Business, the Right Way
MANAGING RISK - DOING THE RIGHT BUSINESS, THE RIGHT WAY Leveraged data analytics to proactively manage risks Embedded risk culture to manage risk and limit losses Managing costs Digitised lending & payments 14
Slide 15: Delivering Sustainable Returns
DELIVERING SUSTAINABLE RETURNS DENNIS MUSAU CHIEF FINANCIAL AND VALUE OFFICER Boma National Park, South Sudan | Kenya/SouthSudan is our home, we drive her growth
Slide 16: Income Statement Highlights
INCOME STATEMENT HIGHLIGHTS KES 15.2b 5.04% 48.2% Revenue Net interest margin Cost to Income 2021: KES 12.4b 2021: 48.9% 2021: 4.30% 23% 17% 1% 16.9% 1.10% KES 4.8b Credit Loss ratio Profit after tax Return on Equity 2021: 13.4% 2021: 1.64% 2021: KES 3.5b 37% 26% 33% 16
Slide 17: Strong Business Momentum
STRONG BUSINESS MOMENTUM KEY TAKEOUTS June 2022 June 2021 Change KES m KES m % The Group (Kenya Bank, South Sudan branch, SBG Securities and Stanbic Insurance Agency Limited) reported a Net interest income 8,343 6,901 21 profit after tax of KES 4.8b; Non-interest income 6,860 5,482 25 ❑ Improvement
Slide 18: Steady Revenue Growth
STEADY REVENUE GROWTH KES millions KES millions 8,000 14,000 7,000 12,000 11,494 6,000 10,132 10,000 5,000 8,343 4,525 Trading and other income 8,000 6,901 Interest income 4,000 3,361 6,000 Interest expense 3,000 Net fees and commissions 3,150 3,231 Net interest income 2,000 4,000 1,000 2,335 2,121
Slide 19: Operating Expenses and Credit Impairment
OPERATING EXPENSES AND CREDIT IMPAIRMENT KES millions KES millions 8,000 49.0% 2,000 48.9% 7,000 1,609 1,557 48.8% 1,502 1,500 6,000 1,261 3,662 48.6% 5,000 Other operating 2,983 expenses 1,000 4,000 48.4% Staff costs 48.2% 3,000 48.2% CTI 500 2,000 3,673 3,076 48.0% 1,000 - Credit imp General debt
Slide 20: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS KES 217b KES 236b KES 342b Customer deposits Total assets Customer loans 2021: KES 165b 2021: KES 233b 2021: KES 329b 4% 31% 1% 8.55% 35.9% 16.2% NPL ratio Liquidity ratio Total capital ratio 2021: 9.87% Statutory minimum: 20% Statutory minimum:14.5% 13% 20
Slide 21: Growth in Key Performance Drivers
GROWTH IN KEY PERFORMANCE DRIVERS KEY TAKEOUTS KES millions 2022 2021 % change Assets Financial investments 52,570 82,213 (36%) ❑ Strong growth in customer loans with Loans and advances to banks 26,943 42,483 (37%) a 31% YoY growth. Loans and advances to customers 217,097 165,146 31% Other assets 31
Slide 22: Double Digit Loan Book Growth
DOUBLE DIGIT LOAN BOOK GROWTH Net Loans and advances to customers Loans and advances by business unit KES millions 2022 KEY TAKEOUTS 250,000 CHNW 24% 217,097 CIB ❑Loan growth across all business BCC segments and mainly from 200,000 59% 17% Trade, Power and Infrastructure 165,146 sectors. 150,000 100
Slide 23: Sustained Improvement in Loan Book Quality
SUSTAINED IMPROVEMENT IN LOAN BOOK QUALITY NPL and CLR 12.00% 9.9% 9.6% 9.3% 9.0% 8.6% 10.00% 9.87% 9.56% 9.25% 9.05% 8.00% 8.55% 1.0% 1.9% 2.0% 1.8% 6.00% 1.7% 90.4% 4.00% 88.5% 88.5% 88.7% 89.2% 2.00% 1.64% 1.41% 1.40% 1.11% 1.10% 0.00% Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Q2 2021 Q3 2021 Q4 2021 Q1
Slide 24: Deposits
DEPOSITS KES millions KES millions 250,000 CIB BCC CHNW 1% 300,000 256,682 4% 7% 2022 200,000 67,931 67,488 250,000 235,649 232,946 26% LC acceptances 201,551 Current accounts 200,000 62% 150,000 Savings accounts 62,974 54,187 150,000 Call deposits Fixed deposits 100,000 100,000 50,000 104,744 111,2
Slide 25: Funding, Liquidity and Capital Remain Solid to Support Growth
FUNDING, LIQUIDITY AND CAPITAL REMAIN SOLID TO SUPPORT GROWTH Funding Liquidity ratio (Bank only) Capital adequacy ratio (Bank only) 120% RWA - Risk weighted assets 60.0% 53.3% 20.0% 100% 18.1% 50.0% 18.0% 17% 16% 16.2% 16.1% 3% 16.0% 14.5% 5% 14.1% 14.5% 80% 2% 14.0% 2% 40.0% 7% 8% 35.9% 12.0% 10.5
Slide 26: Measuring Up Against Our 2022 Outlook
MEASURING UP AGAINST OUR 2022 OUTLOOK 2022 full year target H1 2022 Actual Customer loan growth Above industry 31% Customer deposit growth Above industry 1% Return on Equity 18.1% 16.9% Non funded income 50.0% 45% Cost to income ratio 45.5% 48.2% NPL ratio 7.2% 8.55% 26
Slide 27: Subsidiary and Segment Performance
SUBSIDIARY AND SEGMENT PERFORMANCE DENNIS MUSAU CHIEF FINANCIAL AND VALUE OFFICER Birds eye view of Lake Bogoria, Kenya | Kenya/South Sudan is our home, we drive her growth
Slide 28: Subsidiaries Continue to Show Strong Performance
SUBSIDIARIES CONTINUE TO SHOW STRONG PERFORMANCE Stanbic Holdings PLC PAT: 4.8b 37% up Stanbic Bank Kenya Stanbic South Sudan Stanbic Bancassurance SBG Securities Intermediary Ltd Jun 2022 YoY VAR Jun 2022 YoY VAR Jun 2022 YoY VAR Jun 2022 YoY VAR PAT KES 4.7b 43% up PAT KES 80m (27%) PAT KES 40m (4
Slide 29: Summary Performance of Corporate and Investment Banking (CIB)
SUMMARY PERFORMANCE OF CORPORATE AND INVESTMENT BANKING (CIB) KEY TAKEOUTS KES millions 2022 2021 % change ❑ Growth in interest income as a result of margin Net interest income 4,098 3,132 31 improvement and growth in loan book. Non-interest revenue 4,853 3,947 23 ❑ Growth in non-interest revenue du
Slide 30: Summary Performance of Business and Commercial Clients (BCC)
SUMMARY PERFORMANCE OF BUSINESS AND COMMERCIAL CLIENTS (BCC) KEY TAKEOUTS KES millions 2022 2021 % change Net interest income 2,020 1,858 9 ❑ Growth in net interest income as a result of growth in customer loans and customer deposits. Non-interest revenue 1,296 870 49 ❑ Increase in non-interest reve
Slide 31: Summary Performance of Consumer and High Networth (CHNW)
SUMMARY PERFORMANCE OF CONSUMER AND HIGH NETWORTH (CHNW) KEY TAKEOUTS KES millions 2022 2021 % change Net interest income 2,225 1,911 16 ❑ Growth in interest income as a result of growth in customer loans and margin improvement. Non-interest revenue 711 664 7 ❑ Increase in non-interest revenue mainl
Slide 32: Summary Performance of Stanbic Bancassurance Intermediary Limited
SUMMARY PERFORMANCE OF STANBIC BANCASSURANCE INTERMEDIARY LIMITED KEY TAKEOUTS KES millions 2022 2021 % change This performance reflects: Total revenue 145 161 (10) ❑ One off transaction that did not recur this year. Excluding this, revenue grew by 20% year on year. ❑ Increase in gross written premi
Slide 33: Summary Performance of SBG Securities
SUMMARY PERFORMANCE OF SBG SECURITIES KEY TAKEOUTS KES millions 2022 2021 % change SBG Securities posted total revenue of KES 113m for the half year ending 30th June 2022, Brokerage commission indicating an 11% year-on-year increase. 57.5 70.5 (18) This revenue performance reflects: Other revenue ❑
Slide 34: Key Takeaways Summary H1 2022
KEY TAKEAWAYS SUMMARY H1 2022 ▪ We delivered solid business performance as we supported our clients in their growth journeys; ▪ Profit after tax up 37% driven by revenue growth and lower impairment charges. ▪ Return on Equity up to double digit at 16.9% (2021: 13.4%). ▪ Better asset quality; ▪ NPL r
Slide 35: Thank You
THANK YOU Shimba Hills National Reserve, Kenya | Kenya/South Sudan is our home, we drive her growth