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Standard Bank — The Standard Bank of South Africa — Debt Investor Presentation (January 2016)
23 slides from Standard Bank's debt investor presentation, January 2016
Slide 1: Investor briefing
Investor briefing January 2016 RESTRICTED
Slide 2: Contact details
Contact details Paul Burgoyne David Kinsey Treasurer and Head: Money Markets, SBSA Head: Investor Relations Tel: +27 11 415 8200 Tel: +27 11 631 3931 Email: Paul.Burgoyne@standardbank.co.za Email: David.Kinsey@standardbank.co.za Ann Hunter Alexi Contogiannis Head: Strategic Funding Executive: Debt P
Slide 3: Agenda
Agenda 1. South Africa macro environment 2. Debt capital markets overview 3. SBSA treasury update 3 The Standard Bank of South Africa Investor briefing – January 2016
Slide 4: South Africa macro environment
South Africa macro environment
Slide 5: Upside risks have materialised
Upside risks have materialised • 3 risks to the SARB’s CPI forecast: – The Rand – Food inflation – Electricity prices • First half of 2016 contains country-specific risks: – 2016 Budget – Platinum sector wage negotiations – Local municipal elections – Current account deficit may widen – S&P and Fitc
Slide 6: Interest rates: risks linger in H1:2016
Interest rates: risks linger in H1:2016 • Base case assumption: – SARB hikes by 100bps in 2016 anchoring inflation expectations – Inflation averages 6.5% in 2016 – 2016 Budget – expenditure ceiling remains intact, budget deficit projections remain in place due to an increase in taxes and reduced exp
Slide 7: Debt capital markets overview
Debt capital markets overview
Slide 8: 2015 issuance overview
2015 issuance overview Actual listed debt issuances by sector 2015 issuance totals R123bn, 12.4% 60 higher than the 2014 full-year tally of 50 R109.4bn 40 Banks drove this Rbn improvement, with 30 total financial issuance rising to 20 R65bn (2015) from 10 R49bn (2014) 0 Corporate issuance SOC Munici
Slide 9: Financial issuance environment
Financial issuance environment Financial bond issuance tenors (%): 2011 Financial bond issuance tenors (%): 2015 Bank preparation for NSFR has 4 9 11 driven up the 28 proportion of long- 36 term funding: 31 • >10 year - 4% (2011) to 36% (2015) 57 24 • 8 – 10 years – 11% (2011) to 24% (2015) • 4-7 ye
Slide 10: Redemptions due in 2016
Redemptions due in 2016 Redemption by month Total redemptions: 14 12 - FY:2016: R68bn 10 - Q1:2016: R17bn 8 Rbn - SBSA: R8bn (R5bn 6 senior and R3bn sub-ordinated) 4 2 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Corporate Financial Municipal SOE Financial bond redemptions 8 7 6 5 Rbn 4 3 2 1 0
Slide 11: Credit spread developments for year tenors
Credit spread developments for 5 year tenors 300 Credit spread widening has been uniform across the credit rating spectrum 26.4% 250 2014 –Dec 2015 % increase from Jan 39.2% Spreads (bps) Increased pricing differential 40.7% between highly 200 rated vs lower rated credit 20.3% 150 Bank NCD spreads 6
Slide 12: SBSA treasury update
SBSA treasury update
Slide 13: Liquidity management and Basel III
Liquidity management and Basel III • Liquidity Coverage Ratio (LCR) – Framework and SARB national discretion finalised – The Basel III LCR was successfully implemented on 01 January 2015 – SBSA remains comfortable that it will be able to meet the Basel III LCR on a continuous basis as per the phase-
Slide 14: SBSA funding structure – counterparties and tenor
SBSA funding structure – counterparties and tenor 300 SBSA: R986bn (funding related liabilities) 20 250 200 175 150 66 Rbn 68 33 17 100 14 21% 79% 10 13 47 Wholesale 50 89 79 89 funding 48 Retail deposits - Demand More than 1 day More than 1 More than 6 to 1 month month to 6 months months Other liab
Slide 15: Capital management
Capital management % Rbn SBSA capital adequacy under Basel III Rm SBSA Tier 2 maturity profile: call dates 7 000 1 000 18.0 900 16.0 6 000 800 14.0 5 000 700 12.0 600 4 000 10.0 500 8.0 3 000 400 6.0 300 2 000 200 4.0 2.0 1 000 100 - - - FY11 FY12 FY13 FY14 Sep-15 2016 2017 2018 2019 2020 2022 Risk-
Slide 16: SBSA debt capital and long term funding platforms
SBSA debt capital and long term funding platforms Rbn SBSA redemption profile SBSA loan and debt capital market composition 35 (%) 30 4 25 21 20 47 15 ZAR96bn 7 10 5 22 - 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2030 Senior bonds Capital bonds Senior bonds Capital bonds USD p
Slide 17: Appendix
WU Standard Bank
Slide 18: Standard Bank Research macroeconomic forecasts
Standard Bank Research macroeconomic forecasts 2014a 2015 2016 2017 Growth data Expenditure data on GDP %y/y 1.5 1.4 0.8 1.7 Current account balance % of GDP -5.4 -4.2 -4.7 -2.7 Prices CPI Inflation % y/y 6.1 4.6 6.5 6.4 Interest rates Prime interest rate (period-end) % 5.75 6.25 7.25 7.50 08 Jan 20
Slide 19: Latest bond taps and new issuances – financials
Latest bond taps and new issuances – financials (Source: SBR) Issuer Bond Code Nominal Coupon/Clearing yield Settlement date Tenor Credit rating Type of note GRINDROD BANK GLB02 0.160 (J+220) 15-Oct-15 3 Baa3.za Floating THE STANDARD BANK OF SOUTH AFRICA SBK24 0.880 (J+350) 19-Oct-15 5 AA Floating L
Slide 20: Screenshot of SBSA's market making screen
Screenshot of SBSA’s market making screen 20 The Standard Bank of South Africa Investor briefing – January 2016
Slide 21: Thank you
WU Standard Bank
Slide 22: Notes
WU Standard Bank
Slide 23: Notes
Notes 23 The Standard Bank of South Africa Investor briefing – January 2016
The Standard Bank of South Africa — Debt Investor Presentation (January 2016) on 6ix