Diamond Trust Bank Kenya Ltd. · NSEKE:DTK
Diamond Trust Bank Kenya — Investor Presentation (2021)
47 slides from Diamond Trust Bank Kenya's investor presentation, 2021
Slide 1: Investor Presentation FY 2020
INVESTOR PRESENTATION FY 2020 ENRICHING LIVES
Slide 2: Agenda
Who We Are Macro Economic Highlights DTB’s COVID-19 Response to Key Stakeholders DTB’s Strategy- DTB Vision 2020 Managing Risks and Building Resilience Remodeling the Business Pivoting to Digital Financial Performance Outlook
Slide 3: Who We Are
WHO WE ARE DTB’s COVID-19 Macro Economic DTB’s Strategy- Managing Risks Remodeling the Business Financial Who We Are Response to Outlook Highlights DTB Vision 2020 and Building Resilience Pivoting to Digital Performance Key Stakeholders
Slide 4: DTB Group Structure & Footprint
DTB GROUP STRUCTURE & FOOTPRINT as at December 2020 : 257,997 639,580 : 221,022 : 162,749 Customers : 2,812 : 1,027 2,231 : 531 : 626 Employees :47 : 69 134 : 28 : 33 Branches :4 157 : 67 : 39 ATMs : 51 DTB’s COVID-19 Macro Economic DTB’s Strategy- Managing Risks Remodeling the Business Financial Wh
Slide 5: What Differentiates DTB
WHAT DIFFERENTIATES DTB Commitment to a sustained Solid brand organisation-wide culture equity built of service excellence. over 75 years Diversified Strong capital base distribution anchored on shareholders channels and resources and standing footprint Established regional Extensive product network
Slide 6: Macro-Economic Highlights
MACRO- ECONOMIC HIGHLIGHTS 6
Slide 7: Macro-Economic Highlights- East Africa
MACRO- ECONOMIC HIGHLIGHTS- EAST AFRICA GDP Growth 6.8% 5.4% 5.6% 4.5% 4.1% 3.1% 1.0% 1.0% Kenya Tanzania Uganda Burundi Source: Respective Central 2019 2020(Expected) Banks Exchange Rate to USD Kenya 109.21 KShs- USD 101.32 -7.8% Tanzania 2,298 TShs- USD 2,288 -0.4% Uganda 3,702 UShs- USD 3,704 +0.
Slide 8: Macro-Economic Highlights- Kenya
MACRO- ECONOMIC HIGHLIGHTS- KENYA Trend in Inflation and Central Bank Rate (%) 8.25 8.25 7.25 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.17 5.78 5.84 6.01 5.33 5.62 5.69 5.33 4.84 4.59 4.36 4.36 4.2 4.67 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb 2020 2020 2020 2020 2020 2
Slide 9: DTB's COVID-19 Response to Key Stakeholders
DTB’s COVID-19 RESPONSE TO KEY STAKEHOLDERS 9
Slide 10: DTB's COVID-19 Response to Key Stakeholders
DTB’s COVID-19 RESPONSE TO KEY STAKEHOLDERS • Committed the equivalent of over KShs 100 million to COVID support in East Africa, of which KShs 50 million was contributed to the National Emergency Relief Fund in Kenya and UShs 250 million to the National Response Fund in Uganda. (supporting more than
Slide 11: DTB's COVID-19 Response: Customers and Community
DTB’s COVID-19 RESPONSE TO KEY STAKEHOLDERS • Repayment holidays granted for facilities valued at KShs 82 billion (37% of loan book) across the Group. • Provided easier access to credit to MSMEs for working capital and asset purchases under the Credit Guarantee Scheme sponsored by the Customers Nati
Slide 12: DTB's COVID-19 Response: Employees
DTB’s COVID-19 RESPONSE TO KEY STAKEHOLDERS • Segregation of teams into different workspaces across the Group. Employees • Investment of KShs 34 million on staff protective equipment such as facemasks, hand sanitisers, thermometers and PPEs at DTB workplaces across East Africa. Investment of KShs 34
Slide 13: DTB's Approach to Sustainability
DTB’s APPROACH TO SUSTAINABILITY DTB’s approach to sustainability involves connecting directly with people and making a lasting impact on their lives. DTB gives careful consideration to the impact of our business activities on the interests of our stakeholders— customers, employees, the larger commu
Slide 14: DTB's Strategy- DTB Vision 2020
DTB’s Strategy- DTB VISION 2020 Our business strategy, DTB Vision 2020: ➢ envisioned DTB as a ‘one- bank, one customer’ omnichannel regional bank. ➢ entailed providing seamless and consistent customer experience, across borders, through a multiplicity of channels – traditional (branches, agency bank
Slide 15: Managing Risks and Building Resilience
MANAGING RISKS AND BUILDING RESILIENCE 15
Slide 16: Sector-wise Restructures- Group
SECTOR-WISE RESTRUCTURES- Facilities Restructured Relating to GROUP 1% 1% COVID-19 (FY 2020) 2% 3% 4% 6% 5% Trade 7% 26% 26% Real Estate 6% Manufacturing Tourism,restaurants and hotels 8% Overall Loan Transport & communications Facilities 7% Book Agriculture Restructured Building & construction KShs
Slide 17: Sector-wise Restructures- Kenya
SECTOR-WISE RESTRUCTURES- KENYA 3% 1% Facilities Restructured Relating to 2% 3% COVID-19 (FY 2020) 2% 22% 6% 5% TRADE 8% 31% 8% REAL ESTATE TOURISM MANUFACTURING Overall Loan TRANSPORT AND COMMUNICATION 9% Facilities 8% Book AGRICULTURE Restructured KShs 165 Bn PERSONAL HOUSEHOLD KShs 63 Bn FINANCIA
Slide 18: Sector-wise Analysis of Loan Book and NPLs- Group
SECTOR-WISE ANALYSIS OF LOAN BOOK AND NPLs- GROUP 49.6 27.3 25.7 18.5 13.5 14.8 FY 2020 (%) 7.2 8.6 6.5 4.3 6.0 4.8 4.9 3.2 1.2 0.3 0.1 0.2 1.3 0.0 1.4 0.6 46.5 Loans Sector-wise NPA % of total NPA 25.7 20.1 15.9 18.4 17.4 9.9 FY 2019 (%) 7.3 8.4 6.5 4.5 5.3 3.7 4.9 0.1 1.4 0.2 2.4 0.0 0.4 1.2 - Loa
Slide 19: Balance Sheet Highlights- Group
BALANCE SHEET HIGHLIGHTS- GROUP Provision Movement Provision Split (KShs Mn) (KShs Mn) 4,517 9,641 1,103 1,650 1,627 1,232 Dec-19 Dec-20 Stage 1 Stage 2 Stage 3 DTB’s COVID-19 Macro Economic DTB’s Strategy- Managing Risks Remodeling the Business Financial 19 Who We Are Response to Outlook Highlights
Slide 20: Loanbook Performance- Non Performing Loans- Group
LOANBOOK PERFORMANCE- NON PERFORMING LOANS- NPL Movement (%) GROUP 14.1 12.0 12.0 11.9 10.3 8.2 7.1 7.6 6.7 3.4 1.3 0.6 NPL ratio stable and FY 2018 FY 2019 FY 2020 well below industry average. Industr Gross NPL Ratio (Kenya) Group Gross NPL Ratio Group COR Kenya Gross NPL Ratio Specific Provision/
Slide 21: Loanbook Performance- Non Performing Loans
LOANBOOK PERFORMANCE- NON PERFORMING LOANS Evolution of NPLs (Gross of Interest in Suspense ) + Coverage Ratio (Specific Provision/ NPLs Coverage Ratio) (%) 10.3% 11.9% 8.3% 22.8 8.2% 7.9% 7.6% 19.7 8.8% 8.6% 8.3% 17.5 18.0 8.2% 16.6 15.9 KShs Bn 14.6 13.9 12.9 13.3 43.3% 41.9% 44.4% 43.3% 32.0% 43.
Slide 22: Loanbook Performance- Non Performing Loans
LOANBOOK PERFORMANCE- NON PERFORMING LOANS Top 10 NPLs as a % of Total NPLs 83% 74% 75% 72% 72% 70% 67% 64% 62% 58% Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Bank Group DTB’s COVID-19 Macro Economic DTB’s Strategy- Managing Risks Remodeling the Business Financial 22 Who We Are Response to Outlook Highlight
Slide 23: Strong Capital Buffers
STRONG CAPITAL BUFFERS Core Capital to RWA (%) Total Capital to RWA (%) Kenya Kenya 21.1 20.9 22.5 20.7 18.7 19.1 14.5 14.5 14.5 10.5 10.5 10.5 FY 2018 FY 2019 FY 2020 FY 2018 FY 2019 FY 2020 Min Core Capital/RWA Core Capital /RWA Min Total Capital/RWA Total Capital /RWA Adequate Group Group capital
Slide 24: Liquidity
LIQUIDITY Liquidity (%) 54.8 56.0 Kenya 53.5 Stable liquidity 20.0 20.0 20.0 levels across the Group FY 2018 FY 2019 FY 2020 Min. Liquidity (Statutory) DTB Kenya Group 56.0 56.2 56.3 Draw down of USD 100 million from Development Financial Institutions: 20.0 20.0 20.0 IFC- USD 50 million, AfDB- USD 4
Slide 25: Remodeling the Business Pivoting to Digital
REMODELING THE BUSINESS PIVOTING TO DIGITAL 25
Slide 26: Channel Performance- FY 2020
CHANNEL PERFORMANCE- FY 2020 Group Kenya 12% 88% Branches 79% of transactions 21% 2% ATMs done outside Branches of transactions branches done outside branches 2% POS 5% 2% ATMs 87% of mobile banking Nearly 74% of DTB customers POS KShs 120 million subscribe to mobile subscribers use the foregone in
Slide 27: DTB Mobile Banking- m24/7
DTB MOBILE BANKING- m24/7 Using m24/7 mobile banking platform our customers can: ➢ open a Bank 24/7 digital account in under 5 minutes. ➢ make seamless payments to settle their credit card balances. ➢ worry less about security by authenticating transactions using leading biometrics such as facial re
Slide 28: Channel Performance- Kenya Mobile Banking
CHANNEL PERFORMANCE- KENYA MOBILE BANKING No. of Mobile Banking (m24/7) Transactions (Mn) 26.6 20.0 m24/7 transaction count up by 33% FY 2020 FY 2019 Value of m24/7 Transactions (KShs Bn) 92.0 63.0 m24/7 transaction values up by 46% FY 2020 FY 2019 DTB’s COVID-19 Remodeling the Business Macro Econom
Slide 29: Channel Performance- Kenya
CHANNEL PERFORMANCE- KENYA Mobile Banking Transaction type (% value) Nearly KShs 200 bn transferred through 57.1% 53.9% the m24/7 channel from Jan 2020 to Dec 2020 Customers deposits using mobile platforms 133% 21.8% 21.4% up by 14.3% 13.0% 11.5% 6.6% 0.2% 0.2% B2B B2C FUNDS TRANSFER C2B BILL PAYMEN
Slide 30: DTB Internet Banking- i24/7
DTB INTERNET BANKING- i24/7 Using i24/7 our internet banking platform, is a ‘walk in the park’ experience for our customers as they can: ➢ pay their taxes real time on KRA’s iTax portal. ➢ no longer queue in long lines to pay bills to Kenya Power and Nairobi Water. ➢ easily transfer foreign currency
Slide 31: Channel Performance- Kenya Internet Banking
CHANNEL PERFORMANCE- KENYA INTERNET BANKING No. of Internet Banking (i24/7) Transactions (Thousands) 616 503 i24/7 transactions up by 23% FY 2020 FY 2019 Value of i24/7 Transactions (KShs Bn) 135 110 Average of 2,353 transactions done per business day on i24/7 FY 2020 FY 2019 DTB’s COVID-19 Remodeli
Slide 32: Channel Performance- Kenya
CHANNEL PERFORMANCE- KENYA No. of POS Acquiring Transactions (Thousands) 479 POS transaction count up by 437 10% FY 2020 FY 2019 Value of POS Acquiring Transactions (KShs Bn) 2.9 POS transaction value up by 2.7 7% FY 2020 FY 2019 DTB’s COVID-19 Remodeling the Business Macro Economic DTB’s Strategy-
Slide 33: Channel Performance- Kenya
CHANNEL PERFORMANCE- KENYA No. of ATM Transactions (Thousands) 911 Decline in number of 708 ATM transactions by 22% Increased shift in FY 2020 FY 2019 transactions Value of ATM Transactions (KShs Bn) to a more cash-less 11.3 economy 8.9 ATM transaction value down by 21% FY 2020 FY 2019 DTB’s COVID-1
Slide 34: Financial Performance
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Slide 35: Balance Sheet Highlights- Group
BALANCE SHEET HIGHLIGHTS- GROUP FY 19 FY 20 Net Loans & KShs 199 Bn KShs 209 Bn 5% Advances Gov- KShs 147 Bn 12% ASSETS Securities KShs 131 Bn Total KShs 425 Bn 10% Assets KShs 386 Bn Customer KShs 298 Bn 6% LIABILITIES Deposits KShs 280 Bn DTB’s COVID-19 Financial Macro Economic DTB’s Strategy- Man
Slide 36: Balance Sheet Highlights- Funding, Liquidity and Capital
BALANCE SHEET HIGHLIGHTS- FUNDING, LIQUIDITY AND CAPITAL GROUP Funding Liquidity Capital 2% 2% 5% 3% 6% 7% 56.3% 56.0% 17% 16% 19.7% 19.5% 18.0% 17.6% 14.5% 14.5% 10.5% 10.5% 70% 73% 20.0% 20.0% Dec-20 Dec-19 FY 2020 FY 2019 FY 2020 FY 2019 Customer Deposits Equity Min. Liquidity (Statutory) Group C
Slide 37: Balance Sheet Highlights- Kenya
BALANCE SHEET HIGHLIGHTS- KENYA FY 19 FY 20 Net Loans & KShs 150 Bn KShs 155 Bn 3% Advances Gov- KShs 111 Bn 13% ASSETS Securities KShs 98 Bn Total KShs 312 Bn 9% Assets KShs 287 Bn Customer KShs 208 Bn 5% LIABILITIES Deposits KShs 199 Bn DTB’s COVID-19 Financial Macro Economic DTB’s Strategy- Manag
Slide 38: Total Assets- Subsidiaries Contribution (%)
TOTAL ASSETS- SUBSIDIARIES CONTRIBUTION (%) FY 2020 15% 12% 1% 0.9% 0.1% 72% DTB Kenya DTB Tanzania DTB Uganda DTB Burundi DTBI DTB’s COVID-19 Financial Macro Economic DTB’s Strategy- Managing Risks Remodeling the Business Who We Are Response to Performance Outlook 38 Highlights DTB Vision 2020 and
Slide 39: Net Loan Book- Contribution by Subsidiaries
NET LOAN BOOK- CONTRIBUTION BY SUBSIDIARIES 74% 75% 17% 16% 8% 8% 1% 1% DTB Kenya DTB Tanzania DTB Uganda DTB Burundi FY 2020 FY 2019 DTB’s COVID-19 Financial Macro Economic DTB’s Strategy- Managing Risks Remodeling the Business Who We Are Response to Performance Outlook 39 Highlights DTB Vision 202
Slide 40: Total Deposits- Contribution by Subsidiaries
TOTAL DEPOSITS- CONTRIBUTION BY SUBSIDIARIES FY 2020 16% 70% 13% 1% DTB Kenya DTB Tanzania DTB Uganda DTB Burundi DTB’s COVID-19 Financial Macro Economic DTB’s Strategy- Managing Risks Remodeling the Business Who We Are Response to Performance Outlook 40 Highlights DTB Vision 2020 and Building Resil
Slide 41: Deposit Mix Group FY 2020
DEPOSIT MIX GROUP FY 2020 Kenya 30% 60% 9% 1% Fixed Call Savings Current Group 33% 52% 13% 2% DTB’s COVID-19 Financial Macro Economic DTB’s Strategy- Managing Risks Remodeling the Business Who We Are Response to Performance Outlook 41 Highlights DTB Vision 2020 and Building Resilience Pivoting to Di
Slide 42: P&L Highlights
P&L FY 2019 FY 2020 HIGHLIGHTS Kenya Figures in KShs Group 13.8 Bn 13.0 Bn Net Interest 20.1 Bn 19.3 Bn Income -6% -4% Total Non- 3.2 Bn 4.0 Bn Interest 5.5 Bn 5.8 Bn 25% Income 5% Gross 16.9 Bn 17.0 Bn Operating 25.6 Bn 25.1 Bn 0.6% Income -2% 6.7 Bn 6.8 Bn Operating 11.9 Bn 12.3 Bn Expenses 2% 3%
Slide 43: P&L Highlights Group
P&L HIGHLIGHTS GROUP Operating Expenses Credit Impairment 7,037 6,936 14,000 49.5% 49.1% 49.0% 12,000 48.5% 10,000 48.0% 8,000 47.5% 6,000 47.0% 46.5% 46.5% 4,000 46.0% 1,025 915 2,000 45.5% 101 110 - 45.0% Dec-20 Dec-19 Credit Impairment General Provision Specific Provision Staff costs Other Operat
Slide 44: P&L Highlights: Subsidiary PBT Contribution
P&L HIGHLIGHTS Subsidiary PBT Contribution (KShs Mn) 664.4 DTB Tanzania -43% 1,159.0 DTB Tanzania 27% of Group 436.9 DTB Uganda -25% PBT contributed by 582.5 subsidiaries DTB Uganda 207.5 DTBI 26% 164.7 DTBI 104.6 DTB Burundi -27% 143.2 DTB Burundi FY 2020 FY 2019 DTB’s COVID-19 Financial Macro Econ
Slide 45: Key Financial Ratios
KEY FINANCIAL FY 2018 FY 2019 FY 2020 RATIOS Kenya Group Return on Equity 12.8% 11.5% 5.7% 13.1% 12.1% 5.4% Return on Asset 2.1% 2.0% 1.0% 1.9% 1.9% 0.94% NPL Ratio 6.3% 6.9% 11.7% 6.0% 6.6% 10.1% NPL Coverage 43.0% 34.1% 43.3% 44.6% 33.2% 43.3% Ratio Cost of Risk 1.0% -0.0% 3.2% 1.3% 0.6% 3.4% Fee
Slide 46: Outlook
OUTLOOK ➢ Cautious optimism on economic rebound. ➢ Similar rate of balance sheet growth. ➢ NIMS broadly similar to 2020. ➢ Continued efforts to reduce DTB’s cost of funds. ➢ Lower interest yield. ➢ Continued focus on fee income driven by digital products and services offerings. ➢ Overheads to be tig
Slide 47: We welcome all feedback via email
We welcome all feedback via email on dtbinvestorrelations@dtbafrica.com
Diamond Trust Bank Kenya — Investor Presentation (2021) on 6ix