Absa Group Limited · JSE:ABG
Absa — Debt Investor Presentation (November 2019)
24 slides from Absa's debt investor presentation, November 2019
Slide 1: Absa Group Limited Fixed Income Investor Roadshow
Absa Group Limited Fixed Income Investor Roadshow
Slide 2: Table of Contents
Table of Contents 1. Group Performance Update 2. Liquidity and Capital Position 3. Fixed Income Overview 4. Appendix 2 | Absa Group Limited Fixed Income Deal Roadshow | November 2019
Slide 3: Group Performance Update
Group Performance | 1 Update
Slide 4: Normalised performance in line with guidance
Normalised performance in line with guidance Change Normalisation 1H181 1H191 Rm (%) adjustments Net interest income 20 874 22 667 9 113 Non-interest income 15 854 16 404 3 (32) Total income 36 728 39 071 6 81 Impairment losses 3 117 3 695 19 - Operating expenses 20 834 22 136 6 (863) Other* 832 760
Slide 5: Loan growth momentum maintained
Loan growth momentum maintained Gross customer loans (Rbn) 600 7% 1H18 1H19 500 400 23% 300 200 100 14% 16% 0 RBB CIB RBB CIB South Africa Absa Regional Operations Source: Absa Group Limited Results Booklet 30 June 2019 5 | Absa Group Limited Fixed Income Deal Roadshow | November 2019
Slide 6: Credit impairments trended upward off a low base
Credit impairments trended upward off a low base Stage 3 loans (%) Credit loss ratio (%) 1H18 1H19 5.3 5.1 RBB SA 0.99 1.12 4.8 Everyday Banking 4.58 4.93 VAF 1.42 1.39 Home Loans 0.05 0.13 Relationship Banking 0.28 0.32 1H18 FY18 1H19 Expected range through-the cycle (bps): CIB SA 0.30 0.18 • RBB S
Slide 7: Separation to date
Separation to date 7 | Absa Group Limited Fixed Income Deal Roadshow | November 2019
Slide 8: Separation update in ARO
Separation update in ARO Absa Uganda head office night before launch day Branches after branding Absa Uganda rebranded head office Corporate wear New look ATMs 8 | Absa Group Limited Fixed Income Deal Roadshow | November 2019
Slide 9: Liquidity and Capital Position
Liquidity and Capital Position 2
Slide 10: Asset and liability management position in line with risk appetite
Asset and liability management position in line with risk appetite Absa Group Key Risk Metrics1 HY 19 HY 18 o The liquidity position of the Group remained healthy, in line with Net Stable Funding Ratio (NSFR) (%) 111.4 106.0 risk appetite, and above the minimum regulatory requirements. o LCR was con
Slide 11: Capitalised in excess of regulatory requirements
Capitalised in excess of regulatory requirements Absa Group Limited can optimise its capital position further through the issuance of AT1 18% 16.0% 16% 15.4% 13.3% 14% 12.5% 12.7% 12% 11.9% 10% 11.5% 11.1% 8% 8.9% 9.3% 6.7% 6% 7.4% 7.5% 4% 4% 2% 4% 0% 1,3 4 2 ,5 CET 1 Tier 1 CAR Leverage Barclays Co
Slide 12: Excess loss absorption capacity c. 8% of RWA
Excess loss absorption capacity c. 8% of RWA Impairments, Operating profit before income tax and impairments and Payout ratio* 35 70% Rbn 30 60% 25 50% 20 40% 15 30% 10 20% 5 10% 0 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Impairment Losses Operating profit before income tax and Impa
Slide 13: Group asset and earnings mix
Group asset and earnings mix Group Exposure Split (Rbn and %) Absa Group Limited Absa Bank Limited (Holding Company) Amount (R’bn) Amount (R’bn) % Contribution Assets R1,373bn R1,154bn 84% Income R39bn R26bn 67% RWA R844bn R589bn 70% NAV R118bn R90bn 76% CET1 R95bn R65bn 68% Headline Earnings Mix (%
Slide 14: Fixed Income Overview
Fixed Income Overview 3
Slide 15: Group ZAR debt maturity profile
Group ZAR debt maturity profile 12,000 R Millions 10,000 8,000 6,000 4,000 2,000 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Absa Bank Senior AGL Tier 2 Absa Bank Tier 2 AGL AT1 Source: Absa Group Limited Note: Graph excludes unlisted, NCDs and structured notes Graphed to call date wher
Slide 16: Evolution of capital market instrument pricing
Evolution of capital market instrument pricing Pricing Points for 5year Senior, Tier II and AT1 Floating Rate Notes1 Bps over Jibar 700 650 600 550 500 450 Idiosyncratic stress 400 Cabinet ABL Reshuffle 350 Introduction to curatorship Basel III Draft Recovery & 300 Resolution Regime National ANC Ele
Slide 17: Additional Tier I vs. Tier II Comparison under SA regulations
Additional Tier I vs. Tier II Comparison under SA regulations Shared Features Additional Tier 1 & Tier II • After 5 years, and every interest payment date thereafter Callable • No explicit or implicit indications that the instruments would or might be called, redeemed or purchased Coupon step-up • N
Slide 18: Term Sheet Additional Tier 1 Subordinated Notes
Term Sheet Additional Tier 1 Subordinated Notes Draft Absa Group Subordinated Additional 1 Term Sheet Issuer Absa Group Limited (“Absa Group”) Manager & Dealer Absa Corporate and Investment Bank Documentation ZAR50bn DMTN Programme* Issuance listing and settlement Interest Rate Market of the JSE Iss
Slide 19: Appendix
Appendix 4
Slide 20: Proceeds from Issuance at the Group entity invested in Absa Bank issuance
Proceeds from Issuance at the Group entity is currently invested in Absa Bank Issuance o Due to minority interest rules under Basel III, Absa Group is expected to continue capital issuances at a Holding Company level. All capital issuance at Group are down-streamed to operating entities, on a back-t
Slide 21: Implementing the no creditor worse-off key attribute in South Africa
Implementing the no creditor worse-off (NCWO) than in liquidation key attribute in South Africa via an amendment to the Insolvency Act Existing (simplified insolvency hierarchy) Proposed (simplified insolvency hierarchy) Discussion points Other eg tax Other eg tax Covered deposits will be senior t
Slide 22: 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 23: Contacts
Contacts Absa Group Limited Syndicate Deon Raju – Absa Group Treasurer Matthew Duggan – Head Tel no. 011- 895 7107 / deon.raju@absa.africa Tel no. 011- 895 7864 / matthew.duggan@absa.africa Rolf van den Heever – Head, Capital Market Execution & BSM Muhammad Motala Tel no. 011- 895 6381/ rolf.vandenh
Slide 24: Disclaimer
Disclaimer This document has been compiled by Absa Corporate and Investment Bank (“Absa CIB”), a division of 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 East, 170 Main Street, Johannesburg ("Ab
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