Standard Bank Group Limited · JSE:SBK
Standard Bank — Investor Presentation (2006)
20 slides from Standard Bank's investor presentation, 2006
Slide 1: Investing in Russia: Opportunities and Possibilities
“INVESTING IN RUSSIA: OPPORTUNITIES AND POSSIBILITIES” Jacko Maree Chief Executive Officer, Standard Bank
Slide 2: Investing in Russia
Investing in Russia “Opportunities and Possibilities” z Financial services in Russia and South Africa - How do the industries compare? - Why are we active in both markets? z Parallels in sector development - What is the relevance of our SA experience to Russia? z Standard Bank – one of the world’s l
Slide 3: Opportunities and possibilities
“Opportunities and possibilities” z Russia has one of the most dynamic and fastest growing banking industries in global emerging markets (GEMs) z Standard Bank has a well-established Russian franchise and has been very active in the recent development of this market z Despite rapid growth, many area
Slide 4: Why are we already in Russia? Fastest growing banking markets in GEMs
Why are we already in Russia? Russia – one of the fastest growing banking markets in GEMs Private sector credit - size and trends 250 80% 70% Nominal PSC (US$bn) 200 60% 150 50% % GDP 40% 100 30% 20% 50 10% 0 0% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Russia SA Russia % GDP
Slide 5: Why are we already in Russia? Across most market segments
Why are we already in Russia? Across most market segments Total wholesale finance market 25000 21,285 Wholesale finance 20000 z Grown from $167m market in 1999 to $21bn 15000 market in 2004 US$ (m) 12,081 10000 8,496 z The third largest wholesale market in GEMs (and 3,951 largest syndicated loan mar
Slide 6: Our role in Russia's development
Our role in Russia’s development Standard Bank has a well-established Russian franchise z 1997 – opened Moscow representative office z 2002 - established ZAO Standard Bank z 2003 - granted Russian banking license We serve Russian and international clients with a full range of products denominated in
Slide 7: Russian FIG syndicated loan league table
Our role in Russia’s development Russian FIG syndicated loan league table 2005 – July 2006 Bank No of deals Amount US$m No of deals Value Commerzbank 27 3,131 1 7 Raiffeisen 25 3,228 2 6 Standard Bank 22 2,254 3 9 Deutsche 17 3,930 4 4 Dresdner 15 4,384 5 1 Sumitomo 14 4,326 6 2 Mitsubishi 14 4,071
Slide 8: Building long term Russian relationships – Nomos Bank
Supporting our Russian clients Building long term Russian relationships – Nomos Bank Original SB service Additional SB services New relationships 2001 Resource Banking Introduced to $17m Structured gold loan Polymetal Renewed and extended every year Precious metal trading 2002 Major gold mining $47m
Slide 9: Future opportunities
Future opportunities Most areas of Russian financial services remain very underdeveloped: z State banks control 66% of total assets - no private sector bank has a share of >4% z 80% of existing banks have capital bases of less than $10m. z No listed private sector banks Wholesale banking: z Wholesal
Slide 10: Following trends seen in SA?
Following trends seen in SA? SA Wealth management •Pensions •Fund management Retail banking boom Penetration rates rise •Disposable income growth •Falling unemployment Russia •Economic expansion Corporate lending •Initially supply driven •Local banks disintermediated by corporate bonds and foreign l
Slide 11: Stylised growth-cycle of GEM wholesale banking markets
Following trends seen in SA? Stylised growth-cycle of GEM wholesale banking markets Letter of credit Struct. trade finance Syndicated lending Bonds Equity Competition from commercial banks Competition from global investment banks RUSSIA SOUTH AFRICA The development of the Russian domestic bond marke
Slide 12: Russia needs deeper capital markets
Following trends seen in SA? Russia needs deeper capital markets – bond market development is a crucial stage Development of debt markets (% GDP) 200 Total debt outstanding/GDP 2004 (%) 180 160 140 120 100 Euro area 80 Turk Brazil 60 SA China 40 India GEM ave. HK 20 Russ 0 0 20 40 60 80 100 120 140
Slide 13: Retail banking penetration also lagging – GEM mortgage banking
Following trends seen in SA? Retail banking penetration also lagging – GEM mortgage banking Mortgage/GDP levels (2004) 90% 80% ASIA EMEA AND LATAM 70% 60% 50% 40% 30% 20% 10% 0% Colombia Phil EU HK Chile Panama US India Ukraine Peru Sing Thai Indon China Malay Bolivia Brazil Turkey Mexico Russia Uru
Slide 14: Our strategic vision
Our strategic vision “We are committed to making a real difference to financial services in South Africa and other emerging markets.” z Maintain our position as a leading financial services company in SA z Enhance our international, global emerging market franchise through: - increasing the scale of
Slide 15: A leading GEM franchise: top banks in EMEA and LatAm
A leading GEM franchise… Top 20 banks in EMEA and LatAm (end 2005, US$m) 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 San-Chile Nedbank Unibanco Hapoalim Standard Garanti Sberbank Leumi First Rand Itau Bradesco Pekao Is Bank Akbank B do Brazil ABSA YKB OTP Komercni With assets of $120bn, we
Slide 16: Domestic market shares
A leading GEM franchise… Domestic market shares – assets, deposits, mortgages and credit cards Deposits Assets 35% 40% 30% 30% 25% 20% 20% 10% 15% 0% 10% Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00
Slide 17: Trends in ROE and domestic bond yields
A leading GEM franchise… Trends in ROE and domestic bond yields Standard Bank ROE and 10 year bond yields 30 ROE 25 20 "Franchise Value" (%) 15 10 5 10 - year bond 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Consistent track record of rising profitability and ‘franchise value’
Slide 18: Russia – a top priority market
Russia – a top priority market z Proven expertise in exploiting the expected growth trends in Russia over the next decade. Our strategy includes: z Increasing the scale of our existing wholesale and banking activities - Positioning ourselves for the expected maturing of the wholesale banking markets
Slide 19: Investing in Russia - Conclusion
Investing in Russia - Conclusion z As a leading GEM financial institution, Standard Bank has a well-established Russian franchise z We have played an active role in the rapid development of the market, serving Russian and international clients z The underdeveloped nature of most areas of Russian fin
Slide 20: Standard Bank
W Standard Bank