Slide 1: Financial Results Presentation for the year ended 31 December 2020
STANBIC HOLDINGS PLC FINANCIAL RESULTS PRESENTATION FOR THE YEAR ENDED 31 DECEMBER 2020
Slide 2: Table of Contents
2 TABLE OF CONTENTS 1. 2020 OVERVIEW • Reflecting on our Growth journey • Operating Environment • Purposeful In Our Response • Trusted Financial Partner 2. MANAGING RISK AND CONDUCT • Doing the right business, the right way 3. DELIVERING SUSTAINABLE RETURNS • Financial Highlights • Summary Income St
Slide 3: 2020 Overview
2020 OVERVIEW 1 • • Reflecting on our growth journey Operating Environment • Purposeful In Our Response • Trusted Financial Partner
Slide 4: Reflecting on our growth journey
4 REFLECTING ON OUR GROWTH JOURNEY Branches SHARE CAPITAL • 2008- 12 Branches with Zero Cash Deposit Machines • 2020- 26 Branches that all have Cash Deposit Machines KES millions 51,731 ATMs • 2008- 40 ATMs 40,141 • 2020- 54 ATMs Cash Deposit Machines (CDMs) 27,241 • 2015- 1st CDM installed in 2015
Slide 5: Operating Environment
5 OPERATING ENVIRONMENT Macroeconomic indicators in Kenya 8% Real GDP growth 10 0.08 4% 8 0.06 5.2% 5.1% 5.8% 5.4% 5.2% 6 0% (5.5%) 0.04 (1.1%) 4 (4%) 0.02 2 0 0 (8%) Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Q1:19 Q2:19 Q3:19 Q4:19 Q1:20 Q2:20 Q3:20 2019 2020 91-day Tbill Central bank rat
Slide 6: Operating Environment (continued)
6 OPERATING ENVIRONMENT (continued) Stability in a shifting landscape GLOBAL HEALTH EMERGENCY CLIMATE CHANGE REGULATORY RISK (COVID-19) • Disruption of supply chain • Higher inflation due to failed crops • Changing competitive landscape • Currency volatility • Reduced agricultural exports • Increase
Slide 7: Operating Environment (continued)
7 OPERATING ENVIRONMENT (continued) Gradual reopening of Economies with moderate restrictions to contain the spread of Covid-19 ❑ Resumption of local and international ❑ Partial re-opening of schools in 2020 with 100% flights reopening in January 2021 ❑ Resumption of the normal Bank opening ❑ Scalin
Slide 8: Purposeful in our response - recap of our strategy
8 PURPOSEFUL IN OUR RESPONSE- RECAP OF OUR STRATEGY Our strategy is anchored on supporting our clients, employees and the community in the face of Covid-19 Our purpose – the reason we exist – Kenya is our home, we drive her growth Our vision – what we aspire to – to be the leading financial services
Slide 9: Purposeful in our response (continued)
9 PURPOSEFUL IN OUR RESPONSE (continued) Focused and deliberate in our actions to keep Kenya moving THREE PHASE APPROACH 1. RESPOND 2. RESTORE 3. REBOUND Address immediate Covid-19 threat Facilitate return to growth Adapt to the new normal Rapid response strategies with positive societal impact Comi
Slide 10: Walking the journey with our clients
10 WALKING THE JOURNEY WITH OUR CLIENTS Uplifting Our Clients Financially 1st Bank to issue moratoriums. Repayment holidays and moratoriums to 7,203 clients Lowered interest rate in line with regulations saving our clients KES 665m in interest Restructured loans worth KES 40b, KES 3.1b was to SMEs I
Slide 11: Our people, our priority
11 OUR PEOPLE, OUR PRIORITY Provided psychosocial support to all employees and their dependents Over KES 7.8m spent on protective gears - face masks, sanitizers and thermometers for all staff Over 60% of staff enabled to work remotely Catered for the cost of testing and treating Covid-19 cases Our E
Slide 12: Safe guarding and supporting our communities
12 SAFE GUARDING AND SUPPORTING OUR COMMUNITIES Stanbic and partners collaboratively spent over KES 147m Donated 192 Oxygen Therapy Units in partnership with various partners Donated Personal Protective Equipments (PPEs) Our Communities Donated 1,000 handwashing stations across Kenya (SEE) Facilitat
Slide 13: Trusted Financial Partner
13 TRUSTED FINANCIAL PARTNER BEST BEST INVESTMENT INVESTMENT BANK MOST INNOVATIVE AND BANK IN KENYA BY IN KENYA GROUND-BREAKING EMEA BY EURO MONEY 2020 DEAL IN 2019 Stanbic HoldingsTITLE [ADD PRESENTATION Plc IN Financial Results SLIDE MASTER MODE]Presentation / PAGE 13 for the year ended 31 Decembe
Slide 14: Managing Risk and Conduct
V 2 MANAGING RISK AND CONDUCT Stanbic IT CAN BE.. ‘A member of Standard Bank Group
Slide 15: Doing the right business, the right way
15 DOING THE RIGHT BUSINESS, THE RIGHT WAY Restructures 40% 32% 20 30% 20% 16% 18% 14% 3 13% 10% KES 40b 5% 2% 1% 0% 0% 0% 0% consumer loans Manufacturing Mining Communication Agriculture Energy Hotel Trade & Tourism & Construction Real Estate & Insurance Personal Finance Building Transport & 17 CIB
Slide 16: Delivering Sustainable Returns
DELIVERING SUSTAINABLE RETURNS • Financial Highlights • Summary Income Statement 3 • • • • Revenue Operating Expenses and Credit Impairment Summarized Group Balance Sheet Customer Loans and Advances • Customer Deposits • Funding, Liquidity and Capital • Summary Performance of CIB, PBB, SIAL, SBGS
Slide 17: Financial Highlights
17 DELIVERING SUSTAINABLE RETURNS Financial Highlights 28% 7% 46% 19% KES 10% 52.2% 3.80 5,192 million Return on equity Cost to income Dividend per share Profit after tax 2019: 14% 2019: 56.2% 2019: 7.05 2019: KES 6,380 million 4% 12% 19% 6% KES KES KES 23,236 million 158,181 million 217,444 million
Slide 18: Summary Income Statement
18 DELIVERING SUSTAINABLE RETURNS Summary Income statement Dec 2020 Dec 2019 Change KEY TAKEOUTS KES m KES m % Net interest income 12 795 13 348 (4) The Group (Kenya Bank, South Sudan branch, SBG Securities and Stanbic Insurance Non-interest income 10 441 11 433 (9) Agency Limited) reported a profit
Slide 19: Revenue
19 REVENUE KES millions KES millions 25,000 8,000 20,000 6,000 20,961 6,326 20,302 6,381 15,000 5,107 4,000 4,060 13,348 10,000 12,795 2,000 7,507 7,613 5,000 0 0 December 2020 December 2019 December 2020 December 2019 Interest income Interest expense Net interest income Net fees and commissions Tra
Slide 20: Operating Expenses and Credit Impairment
20 OPERATING EXPENSES AND CREDIT IMPAIRMENT KES millions KES millions 16,000 58% 6,000 56% 5,000 4,876 4,862 12,000 56% 4,000 8,000 54% 3,000 3,151 2,000 2,256 52% 4,000 52% 1,000 895 13 0 50% 0 December 2020 December 2019 Credit imp General debt Specific debt provision provision Staff costs Other o
Slide 21: Income Statement - Credit Impairment Charges
21 INCOME STATEMENT - CREDIT IMPAIRMENT CHARGES KES millions KES millions 5,000 5,000 1,377 4,876 4,876 4,000 4,000 348 3,000 3,151 3,000 3,151 Stage 2: KES 27m 2,000 Stage 3: KES 321m 2,000 1,000 1,000 0 December 2020 December 2019 0 December 2019 Covid-19 Deterioration in December 2020 Credit impa
Slide 22: Balance Sheet - Provisions
22 BALANCE SHEET - PROVISIONS Increase in provisions as behaviour scores and client ratings deteriorated and defaults rose Balance sheet provision movement Balance sheet provision split KES millions KES millions KEY TAKEOUTS 25,000 20,000 ◼ Provisions increased as net provisions raised exceeded writ
Slide 23: Balance Sheet – Gross Loans and Provisions
23 BALANCE SHEET – GROSS LOANS AND PROVISIONS Provisions increased more than loans Gross loans and advances Provisions KES millions KES millions 200,000 20,000 176,595 6% 166,987 25,037 16,000 19,346 150,000 25,777 32,913 125,781 12,000 114,728 15,307 100,000 11,046 8,000 50,000 4,000 2,058 2,074 1,
Slide 24: Summarised Group Balance Sheet
24 SUMMARISED GROUP BALANCE SHEET KES millions 2020 2019 % change Assets Financial investments 87 584 70 078 25% Loans and advances to banks 38 119 38 377 (1%) Loans and advances to customers 158 181 152 817 4% Other assets 30 733 28 316 9% Property and equipment 3 762 3 661 3% Intangible assets 10
Slide 25: Customer Loans and Advances
25 CUSTOMER LOANS AND ADVANCES Net Loans and advances to customers Loans and advances by business unit KES millions 46% 160,000 2020 48% 2019 52% 158,181 CIB 155,000 152,817 PBB 54% Loans and advances by product 150,000 64% 7% 64% 9% 9% 2020 2019 145,000 Home loans December 2020 December 2019 12% Ov
Slide 26: Customer Loans and Advances: Non-Performing Loans
26 CUSTOMER LOANS AND ADVANCES: NON-PERFORMING LOANS (NPLS) KES millions 25,000 39% 40% NPLs by business unit 20,000 39% 38% 15,000 37% 10,000 36% 36% 45% 2020 55% 31% 2019 5,000 35% 0 34% CIB 69% December 2020 December 2019 PBB Discounted value of security Loan loss provision Coverage ratio NPLs by
Slide 27: Customer Deposits
27 CUSTOMER DEPOSITS Deposits Customer deposits by business unit 250,000 48% KES millions 217,444 200,000 46% 2020 2019 194,222 54% 150,000 CIB 52% PBB 100,000 Customer deposits by product 50,000 27% 22% 60% 57% 0 December 2020 December 2019 2020 LC acceptances 2019 Current accounts Savings accounts
Slide 28: Funding, Liquidity and Capital
28 FUNDING, LIQUIDITY AND CAPITAL Funding Liquidity ratio (Bank only) Capital adequacy ratio (Bank only) RWA - Risk weighted assets 100% 60% 20% 18.1% 18.3% 58% 16% 16% 56% 3% 50% 16.0% 80% 2% 7% 15.2% 3% 15% 13% 14.5% 14.5% 10% 40% 60% 10.5% 10.5% 30% 10% 40% 66% 64% 20% 5% 20% 10% 0% 0% 0% Decembe
Slide 29: Summary Performance of Corporate and Investment Banking (CIB)
29 SUMMARY PERFORMANCE OF CORPORTATE AND INVESTMENT BANKING (CIB) KEY TAKEOUTS ❑ Decline in interest income as a result KES millions 2020 2019 % change of margin squeeze Net interest income 5 924 6 433 (8%) ❑ Lower non-interest revenue due to lower fees from reduced transaction Non-interest revenue
Slide 30: Summary Performance of Personal and Business Banking (PBB)
30 SUMMARY PERFORMANCE OF PERSONAL AND BUSINESS BANKING (PBB) KEY TAKEOUTS KES millions 2020 2019 % change ❑ Decline in interest income as a result of Net interest income 6 871 6 915 (1) margin squeeze and muted growth in Non-interest revenue 2 312 2 644 (13) customer loans Total Income 9 183 9 560
Slide 31: Summary Performance of Stanbic Insurance Agency Limited (SIAL)
31 SUMMARY PERFORMANCE OF STANBIC INSURANCE AGENCY LIMITED (SIAL) KEY TAKEOUTS This performance reflects: KES millions 2020 2019 % change ❑ Decreased revenue from embedded Net interest income 9 9 (3) products Fees and commission 215 277 (22) ❑ Slow uptake on standalone insurance products owing to th
Slide 32: Summary Performance of SBG Securities
32 SUMMARY PERFORMANCE OF SBG SECURITIES KEY TAKEOUTS ❑ SBG Securities posted total revenue of KES 260m for the full year ending KES millions 2020 2019 % change 31st December 2020, indicating a 37% year-on-year decline. Brokerage commission 189 253 (25) This revenue performance reflects: Other reven
Slide 33: Outlook
OUTLOOK 4 Stanbic IT CAN BE.. ‘A member of Standard Bank Group
Slide 34: Outlook: Truly human, Truly digital
34 OUTLOOK Covid-19 has given us a unique opportunity to re-invent ourselves as we continue to respond to the evolving needs of our clients, employees and the community at large Supported by client led capabilities Our business units Data & AI Consumer and High Net Worth Business and Commercial Trul
Slide 35: Thank You
THANK YOU dete ITCANBE.. jember of Standard Bank Group