Absa Group Limited · JSE:ABG
Absa — Non-Deal Roadshow (March 2019)
27 slides from Absa's roadshow presentation, March 2019
Slide 1: Absa Group Limited International Fixed Income Non-Deal Roadshow
Absa Group Limited International Fixed Income Non-Deal Roadshow March 2019
Slide 2: Table of Contents
Table of Contents 1. Overview of the Group 2. Strategic Update 3. Group Financial and Operating Performance 4. Capital Position and Themes 5. Funding and Liquidity Position 6. Appendix
Slide 3: Overview of the Group
Overview of the Group (1
Slide 4: Absa Group Limited at a glance
Absa Group Limited at a glance We are a regional African banking group headquartered in South Africa, offering diversified financial services through an integrated set of products and services, across personal and business banking, corporate and investment banking, wealth, investment management and
Slide 5: A pan-African group with diverse shareholders and earnings mix
A pan-African group with diverse shareholders and earnings mix Top 10 Ordinary Shareholders Group Exposure Split (Rbn and %) Absa Group Limited Absa Bank Limited (Holding Company) (South Africa) Asset R1,288bn R1,080bn (84%) Income R77bn R52bn (68%) RWA R819bn R570bn (70%) NAV R121bn R85bn (70%) CET
Slide 6: Strategic Update
Strategic Update | 2
Slide 7: A strategy for growth
A strategy for growth Three strategic commitments • Growing our portfolio while contributing to the growth of the markets we serve • Reducing costs by creating a more efficient and effective organisation • Delivering top, sustainable returns that maximise long-term value Three strategic targets To g
Slide 8: Separation journey
Separation journey FX trading (CIB) 103 of 198 services terminated in line with Complete Acquiring Transitional Services (debit card) rebranding (ARO) Agreement Corporate migration Issuing (credit channels Core (CIB) (ARO) card) Fincrime migration systems (ARO) Front end (Group) Retail application C
Slide 9: Separation remains on track
Separation remains on track Spend to date Separation spend and remaining contribution (Rbn) • Project execution and support R7.6bn • Group systems rebuild (HR re-platform, Corporate channels and financial crime) • Technology infrastructure replacement • Localizing contracts • Removing ‘Member of Bar
Slide 10: Group Financial and Operating Performance
Group Financial and Operating Performance 3
Slide 11: Normalised performance in line with guidance
Normalised performance in line with guidance Change Normalisation FY161 FY172 FY182 Rm (%) adjustments Net interest income 42 003 42 319 43 425 3 330 Non-interest income 30 391 30 671 32 235 5 525 Total income 72 394 72 990 75 660 4 855 Impairment losses 8 751 7 022 6 324 (10) - Operating expenses 3
Slide 12: Normalised salient features
Normalised salient features FY17 FY18 % % Diluted headline EPS growth 4 4 Dividend per share growth 4 4 Net asset value per share growth 5 4 Return on equity 16.5 16.8 Profit after regulatory capital charge (Rbn) 2.6 2.7 Net interest margin 4.83 4.64 Operating JAWS (3) (2) Cost to income ratio 56.7
Slide 13: Credit impairments improved further
Credit impairments improved further Underlying Credit loss ratio (%) FY17 FY18 FY18 1 RBB SA 1.10 0.94 1.06 26% Retail Banking 1.20 1.04 1.15 Card 4.53 3.42 3.58 (20%) (10%) Vehicle and Asset Finance 0.87 1.02 1.11 Home Loans 0.30 0.05 0.16 Personal Loans 6.09 5.51 5.80 Business Banking 0.43 0.35 0.
Slide 14: Group loan growth improving
Group loan growth improving Gross customer loans (Rbn) South Africa Absa Regional Operations 5% 25% 11% 26% 25% Source: Financial results booklet for the reporting period ended 31 December 2018 * Percentage data points on both graphs represent year-on-year percentage changes 14
Slide 15: Capital Position and Themes
Capital Position and Themes 4
Slide 16: The Group is strongly positioned in the Market
The Group is strongly positioned in the Market Common Equity Tier 1 ABG SBG NED FSR Leverage Ratio ABG SBG NED FSR 1 Note: * All peer data is based on financial results for full year 31 December 2016, 2017 and 2018 (with the exception of FirstRand Group which is provided for 6months ending 31 Decemb
Slide 17: Capitalised in excess of regulatory requirements
Capitalised in excess of regulatory requirements Absa Group Limited Regulatory Capital Levels 11.1% 8.9% 7.4% 4% 1 2 Barclays Contribution Impact SARB Minimum Requirement1 Source: Absa Group Limited Results Booklet 31 December 2018 Notes: * SARB minimum requirements excludes Pillar 2B and D-SIB; 1 .
Slide 18: Funding and Liquidity Management
5 Funding and Liquidity Management
Slide 19: Asset & Liability Management position in line with risk appetite
Asset & Liability Management position in line with risk appetite Absa Group Key Risk Metrics1 FY 18 FY 17 o The liquidity position of the Group remained strong, in line with risk appetite, and above the minimum regulatory requirements. Net Stable Funding Ratio (NSFR) (%) 110.1 - o The NSFR became ef
Slide 20: Appendix
Appendix 6
Slide 21: South African Bank Credit Ratings
South African Bank Credit Ratings Comparable Senior Credit Ratings Global LT Foreign Currency Group: Ba1 Group: Ba1 Baa3 Bank: Baa3 Bank: Baa3 Bank: Baa3 Bank: Baa3 Global LT Local Currency Nat’l LT National Scale - Bank: Aa1.za Bank: Aaa.za Bank: Aa1.za Bank: Aa1.za Group: B+ Global LT Foreign Curr
Slide 22: South Africa Macroeconomic Fundamentals
South Africa Macroeconomic Fundamentals Trade and Current Account South African GDP Shows Muted But Stable Growth % of GDP Government Debt Household Debt Source for all charts: StatsSA, NAAMSA, SARB, BER, Absa Research Source for all charts: StatsSA, SARB, BER, Bloomberg. 22
Slide 23: Issuance at the Group entity is currently down-streamed to Absa Bank Limited
Issuance at the Group entity is currently down- streamed to Absa Bank Limited Losses follow the hierarchy of claims, as they arise in the operating entities. No creditor is worse off (NCWO) than in liquidation, as ascribed by the FSB Key Attributes of Effective Resolution Regimes Due to minority
Slide 24: Key features of the proposed Resolution Framework
Key features of the proposed Resolution Framework The resolution framework will be implemented via amendments to amongst others the Insolvency Act (IA) and the Financial Sector Regulation Act (FSRA). Some of the key proposed features of the framework are listed below: Key feature Highlights Observat
Slide 25: Quick Links
Quick Links • Liquidity Coverage Ratio (Jan 2013) - http://www.bis.org/publ/bcbs238.htm • Net Stable Funding Ratio (Oct 2014) - http://www.bis.org/bcbs/publ/d295.htm • TLAC - http://www.financialstabilityboard.org/wp-content/uploads/TLAC-Condoc-6-Nov-2014-FINAL.pdf Basel / FSB / EBA • MREL - https:/
Slide 26: Contacts
Contacts Absa Group Limited Treasury Fixed Income Sales Jason Quinn – Director Group Finance Beyers Roux – Head Tel no. 011- 350 7565 / Jason.quinn@absa.co.za Tel no. 011 895 5511 / beyers.roux@absa.co.za Deon Raju – Absa Group Treasurer Anastasia Lite Tel no. 011- 895 7107 / deon.raju@absa.co.za Te
Slide 27: Disclaimer
Disclaimer This document has been compiled by Absa Bank Limited, a registered bank in the Republic of South Africa (Registration number 1986/04794/06) and with its registered office at Absa Towers West, 15 Troye Street, Johannesburg ("Absa"). Absa is regulated by the South African Reserve Bank and i