FirstRand Limited · JSE:FSR
FirstRand — FY2009 Earnings Presentation
106 slides from FirstRand's earnings presentation, September 2009
Slide 1: FirstRand Limited Results for the year ended 30 June 2009
FIRSTRAND LIMITED RESULTS for the year ended 30 June 2009
Slide 2: Introduction
introduction FIRSTRAND ae enereascenees Penman een eneen ener ener ene e eee ee eee rene eneenene Doan eaneneeeeenensanesees saeearerececenensercees PrPrOerrerereseerrrrrererrrerrerrrererrerirrireereririrerrrirrerrgy
Slide 3: Macro environment
Macro environment • Global economy is recovering • Driven by policy stimulus, recovery in global trade and inventory restocking • Deleveraging in Anglo-Saxon economies will constrain growth • The South African economy is in a tough spot • Domestic demand fell at fastest pace since mid-1980s • Employ
Slide 4: FirstRand's earnings: R7 billion profit in 2009
FirstRand’s earnings: R7 1 billion profit in 2009, R7.1 2009 ROE = 14% 12,000 +32% (8%) 10,000 23% +23% 8,000 +19% (32%) +13% 6,000 4,000 2 000 2,000 - 2004 2005 2006 2007 2008 2009
Slide 5: FirstRand Limited financial review
FIRSTRAND LIMITED financial review Johan Burger
Slide 6: Key financial ratios
Key financial ratios R millions Jun ’09 Jun ’08 % change FirstRand Group Normalised earnings – pro forma 7 151 10 398 T (31) Diluted normalised EPS – pro forma (cents) 126.8 184.4 T (31) Normalised return on equity – pro forma 14% 22% T Normalised net asset value 52 905 51 637 S 2 Dividend per share
Slide 7: Unpacking franchise performance
Unpacking franchise performance Normalised earnings (R millions) Jun ’09 Jun ’08 % change FNB 3 756 4 654 (19) FNB Africa 514 499 3 RMB 1 536 3 008 (49) WesBank 324 573 (43) OUTsurance 307 270 14 Corporate Centre and other (381) (190) (>100) Banking activities 6 056 8 814 (31) Momentum 1 649 2 004 (
Slide 8: Secondary market activities and bad debts impact performance
Secondary market activities and bad debts impact performance Normalised earnings (R millions) Jun ’09 Jun ’08 % change Net interest income 17 120 17 155 − Non-interest revenue – primary market 21 849 19 413 13 Non-interest revenue – secondary market 269 2 169 (88) Top line income 39 238 38 737 1 Cre
Slide 9: Net interest income
Net interest income
Slide 10: Increased funding cost impacts margin
Increased funding cost impacts margin % of average interest-earning banking assets % J June 2008 5 18 5.18 Capital endowment effect 0.02 Liability price movement (0 23) (0.23) Asset price movement (0.01) June 2009 4.96
Slide 11: Advances growth impacted by de-risking
Advances growth impacted by de-risking Balance sheet Strategic, market and operational Normalised change changes change Euroloans ▲6% Corporate Reverse repos ▲4% ▼17 % ▲5% R122 m Money market ▲7% Netting (LROS) ▲5% 5% Commercial ▲11% Netting (LROS) ▲1% ▲12% R27m Retail ▼1% ▼1% Market activity reduct
Slide 12: NPLs and bad debts continue upward trend
NPLs and bad debts continue upward trend Bad debts close to peak 6.0 2.0 1.8 5.6 1.8 5.0 1.6 1.4 1.4 4.0 4.2 1.3 1.3 1.2 34 3.4 1.0 1.1 3.0 1.0 Long-run expected loss: 0.9 2.8 2.9 2.6 0.8 0.8 0.8 20 2.0 2.3 05 0.5 0.4 0.6 1.5 0.3 1.5 0.4 1.0 1.2 1.1 0.2 0.0 0.0 Jun '99 Jun '00 Jun '01 Jun '02 Jun '0
Slide 13: Retail cycle peaking – risk in corporate
Retail cycle peaking – risk in corporate Bad debts 12 months 6 months 6 months Percentage of average advances Jun ’09 Dec ’08 Jun ’08 R t il Retail 27 2.7 24 2.4 22 2.2 - Residential mortgages 1.6 1.5 1.2 - Credit card 11.2 9.8 8.5 - Vehicle and asset finance* 2.4 2.2 2.2 Wholesale 0.6 0.7 0.3 Total
Slide 14: Early adjustment on credit strategies – HomeLoans
Early adjustment on credit strategies shows desired outcome – HomeLoans FNB HomeLoans arrears* • Arrears A and d NPL ttrends d stabilised t bili d att year-end d • Continued improvement after year-end 5% • NPL monthly inflow down 60% from its peak 0% * Where more than 1 full payment is in arrears ar
Slide 15: Early adjustment on credit strategies – WesBank
Early adjustment on credit strategies shows desired outcome – WesBank 10% WesBank motor arrears* • Arrears showing decreasing trend p • Continued improvement p post yyear-end 5% g-07 Feb-08 g-08 Feb-09 May-07 Nov-07 May-08 Nov-08 May-09 Aug Aug * Arrears defined as number of accounts which are more
Slide 16: Asset growth impacted by de-leveraging
Asset growth impacted by de-leveraging • Although macro indicators are improving, asset growth is expected to remain low in the short to medium term as consumers de de-leverage leverage 1.7 1.6 1.5 Credit to GDP rratio dex: 1970 = 1) 14 1.4 1.3 1.2 (ind 1.1 1.0 09 0.9 0.8 70 72 74 76 78 80 82 84 86
Slide 17: NPL inflow declines as interest rates provide relief
NPL inflow declines as interest rates provide relief Quarterly net NPL movement (R billion) Nominal disposable income growth % y/y 40 35 30 4.1 3.7 25 20 15 1.8 10 1.5 5 0 80 82 85 87 90 92 95 97 00 02 05 07 10 Q1 Sep '08 Q2 Dec '08 Q3 March '09 Q4 June '09
Slide 18: Origination strategies aligned to macro view
Origination strategies aligned to macro view FSR macro outlook vs SA long-run average growth rates Retail Corporate p • Retail cycle close to its peak • Rebalance in-force book • Increased lending in selective • Target defensive sectors sub segments sub-segments
Slide 19: Liability strategy
Liability strategy • Maintain liquidity buffers • Continued strong focus on deposit franchise • Retail comprises 19% of funding mix • Further de-risking of international balance sheet
Slide 20: Non-interest revenue
Non-interest Non interest revenue
Slide 21: NIR negatively impacted by risk and investment income
NIR negatively impacted by risk and investment income R millions Jun ’09 Jun ’08 % change Client activities/primary markets 21 849 19 413 13 - Transactional income 15 298 13 722 11 - Annuity fair value income 3 342 3 527 (5) - Operational associates income 742 492 51 - Other Oth primary i income* i
Slide 22: Level of economic activity drives transactional income
Level of economic activity drives transactional income R millions Transactional revenue breakdown by franchise* 18,000 11% 6% 7% 16,000 15,298 14,000 6% 13,722 12,000 10 000 10,000 8,000 6,000 4,000 81% 2,000 FNB FNB Africa RMB WesBank Wesbank 0 Transactional Fair value Investment Other Jun '08 Jun
Slide 23: Lending and flow businesses remain robust
Lending and flow businesses remain robust R millions (5%) R millions Jun ’09 Jun ’08 % change 4,000 Annuity 3 342 3 527 (5) 3,342 , 3,527 - Lending 1 804 1 987 (9) 3,000 - Client flows 1 538 1 540 - 2,000 120% Client flows 1 538 1 540 - - Forex 1 047 1 109 (6) 1,000 - Debt -10% 345 315 22 10 -Equity
Slide 24: Risk income hit hard by offshore legacy portfolios
Risk income hit hard by offshore legacy portfolios R millions 4,500 R millions Jun ’09 Jun ’08 % change Risk (1 154) (742) (56) 3,000 - Equities (1 230) (1 714) 28 - Commodities 120 170 (29) 1,500 120% - Interest rates (148) 664 (>100) (56%) - Credit (312) (48) (>100) 10 0 -10% 22 -742 - Forex 416 1
Slide 25: Private equity impacted by impairments and lower realisations
Private equity impacted by impairments andd lower l realisations li ti R millions Jun ’08 Jun ’09 3,000 (37%) 37% 2,500 2,370 2,000 49% 51% 63% 1 487 1,487 63% 1,500 1,000 500 Profit on realisations -10% Annuity income 22% 0 Private equity Other Transactional Fair value Unrealised profits at R1.2 bi
Slide 26: Costs
Costs
Slide 27: Slowing top line impacts cost to income ratio
Slowing top line impacts cost to income ratio R millions 1% 8% Top line CAGR 15% Costs CAGR 14% Top line and costs are calculated on normalised basis
Slide 28: Capital
Capital
Slide 29: Capital strategy in line with Basel II developments
Capital strategy in line with Basel II developments • Ti 1 quality Tier lit • Economic capital backed by Tier 1 • Gearing • Leverage ratios are monitored • Pro-cyclicality • C Capital it l ttargets t ddefined fi d as b bands d tto ensure we h have b buffers ff tto ttake k iinto t account the effects
Slide 30: Understanding the cyclical impact on banking ROEs
Understanding the cyclical impact on banking ROEs 31% 30% 30% 28% 30% 26% 26% 24% 25% Cyclical excess 22% 21% 20% 21% 20% 20% Cyclical deficit 15% 14% 13% 14% 13% 12% 13% 10% 10% Jun '04 Jun '05 Jun '06 Jun '07 Jun '08 Jun '09 Return on equity (adjusted for the cycle) Return on equity (actual) Avera
Slide 31: Momentum continues to produce premium returns
Momentum continues to produce premium returns 30% 24% 25% 24% 25% 23% Momentum continues to generate capital
Slide 32: Banking Group's capital position remains robust
Banking Group’s capital position remains robust FRBH capital adequacy (%) FRBH Tier 1% Total % Capital adequacy ratio 12.33 14.57 14.57 13.75 Regulatory minimum 7.00 9.50* 2.24 2.63 0.95 Target 10.00 12.00 – 13.50 0.82 FRB Tier 1% Total % 11.38 10.30 Capital adequacy ratio 10.70 13.11 Regulatory min
Slide 33: Momentum strengthens capital base
Momentum strengthens capital base R millions 1.8 x CAR 1.6 x CAR 1.4 x CAR Momentum continues to generate capital
Slide 34: Long-term growth and return objectives
Long-term growth and return objectives
Slide 35: Integrated approach ensures sustainable growth
Integrated approach ensures s stainabilit and gro sustainability growth th Integrated approach Sustainable growth Response BU strategy aligned with group funding strategy Review of business strategy Exit certain secondary market activities Business Earnings Build franchise vs risk income str
Slide 36: Momentum Group financial & operating review
MOMENTUM O U GGROUP OU financial & operating review Nicolaas Kruger
Slide 37: Resilient business model mitigates impact of markets
Resilient business model mitigates i impactt off markets k t Negative impact of economic environment • Market impact on investment businesses • Slowdown in new business volumes Resilient operational p p performance New business • Individual risk and group new business volumes remain robust • Satisfa
Slide 38: Negative impact of economic environment
Negative impact of economic environment
Slide 39: Challenging market conditions
Challenging market conditions 31,000 70 29,000 60 Reduction in asset-based fees 27,000 50 25,000 40 Reduction in bonus -29% stabilisation reserves 23,000 30 +3% Increase in maturity 21,000 20 guarantee reserves 19,000 10 17,000 0 Jun ’08 Dec ’08 Jun ’09 JSE All-Share All Share Index SA Volatility In
Slide 40: Reduction in personal disposable income impacts lapse rates
Reduction in personal disposable income impacts lapse rates 10% Actual Projected* 30% 8% 25% 6% Slowdown in new business volumes 20% 4% Increase in lapse rates 2% 15% 0% Gradual projected recovery 10% -2% Dec Dec Dec Dec Dec Dec Jun Jun Jun 5% 4% 03 04 05 06 07 08 09 10 11 -4% -6% 0% Growth in perso
Slide 41: Investment-related business dominates
Investment-related business dominates % of total earnings 1% Other 40% Risk 59% Investment
Slide 42: Financial performance satisfactory given markets
Financial performance satisfactory given markets June ’09 June ’08 % change Normalised earnings (Rm) 1 649 2 004 (18) Return on Equity (%) 23 30 Annualised new business (Rm) 8 078 8 405 (4) Value of new business (Rm) 544 596 (9)
Slide 43: Unpacking the decline in earnings
Unpacking the Unpacking decline the declineininoperating earnings profit R millions 2,200 2 004 -2% -18% 2,000 -19% 1,800 +3% 1 649 +1% -3% +2% 1 600 1,600 1,400 1,200 1,000 800 Jun 08 New business Markets Margins and Systems FNB Insurance Investment Jun 09 strain experience integration income
Slide 44: Resilient operational performance: New business
Resilient operational performance New business Diversification Existing operations Capital management
Slide 45: Economic environment impacted new business volumes
Economic environment impacted new business volumes R millions (APE) 3,500 -3% 3% 3,000 -15% 2,500 +>100% 2,000 , 1,500 -5% 1,000 +22% +37% 500 -2% % 0 Retail Retail lump Institutional Group FNB Short-term Health recurring sums investments Insurance June 2008 June 2009
Slide 46: Risk products support retail new business
Risk products support retail new business R millions (API) -5% Endowments and RA’s -25% impacted by: • Pressure on disposable income -4% • New commission dispensation +13% Risk new business satisfactory
Slide 47: Money market unit trusts support retail lump sum investments
Money market unit trusts support retail lump sum investments R millions -3% -13% Shift from living to guaranteed annuities +28% +7% RMB Unit Trust (money market) sales strong -38% Global crisis impacted negatively on offshore linked products +83% Endowments impacted by pressure on -52% disposable in
Slide 48: Strong group new business
Strong group new business R millions (APE) 800 700 +22% 600 Umbrella funds – growth in broker footprint 500 +21% 400 Up and cross cross-sell sell initiatives 300 Good progress in corporate risk 200 broker channel 100 +28% 0 Jun 08 Jun 09 Umbrella funds Group risk
Slide 49: New business margins sustained
New business margins sustained Value of new business as % of present value of future premiums 3 0% 3.0% 2.6% 2.5% 2.2% 2.2% 2.2% 2.2% 2.0% 1 5% 1.5% 1.0% 0.5% 0.0% 2005 2006 2007 2008 2009 Momentum margin Margin added to RMBAM
Slide 50: Resilient operational performance: Diversification
Resilient operational performance New business Diversification Existing operations Capital management
Slide 51: New business benefits from channel diversification
New business benefits from channel diversification Contribution to APE
Slide 52: Internal bank channel contributes to segment diversification
Internal bank channel contributes to segment diversification Contribution to retail recurring API
Slide 53: Product diversification provides protection
Product diversification provides protection R millions (APE)
Slide 54: Build growth platform through geographical diversification
Build growth platform through geographical hi l di diversification ifi ti 11 countries in African continent Profitable in 5 countries 90 000 lives Momentum Namibia launched with FNB Namibia
Slide 55: Resilient operational performance: Existing operations
Resilient operational performance New business Diversification E i ti operations Existing ti Capital management
Slide 56: FNB Life growth continues
FNB Life growth continues Minimal exposure to equity markets Mass market segment less affected by negative conditions 374 800 301 500 Increased marketing efforts for funeral policies paying off New business mix: 175 500 178 400 • Credit Life 61% • Funeral 35% • PA 4%
Slide 57: Good progress in healthcare administration
Good progress in healthcare administration Lives under administration 553 200 +16% 477 000 System integration completed 374 800 Take-on of large restricted 301 500 scheme gives scale Month-on-month profitability 175 500 178 400
Slide 58: Short-term insurance maiden profit
Short-term insurance maiden profit Claims ratio in line with target Slower new business
Slide 59: Early terminations (lapses and surrenders) normalising
Early terminations (lapses and surrenders) normalising Quarterly number of early terminations as % of in-force policy count 3% 2%
Slide 60: Contextualising RMBAM investment performance
Contextualising RMBAM investment performance Asset managers of life insurers B ti Boutique managers RMBAM Alexander Forbes Global Large Manager Watch survey: 3-year performance ranking
Slide 61: Operational performance underpins embedded value
Operational performance underpins embedded value R millions Embedded value profit
Slide 62: Unpacking the contribution from operations
Unpacking the contribution from operations R millions
Slide 63: Resilient operational performance: Capital management
Resilient operational performance New business Diversification Existing operations Capital Cap a management a age e
Slide 64: Strengthened capital base
Strengthened capital base R millions 1.8 x CAR 1.6 x CAR 1.4 x CAR Momentum continues to generate capital
Slide 65: Return on capital in line with targeted return
Return on capital in line with targeted return 30% 24% 25% 24% 25% 23% Momentum continues to generate capital
Slide 66: Improving outlook
Improving outlook • Gradual recoveryy of economic conditions • Subdued new business levels • Gradual stabilisation of persistency • Earnings remain sensitive to investment markets • Strategic focus • Further product, segment, channel and geographical diversification • Maximise benefits of the integr
Slide 67: Banking Group financial & operating review
BANKING GROUP financial & operating review Sizwe Nxasana
Slide 68: Tough year for Banking Group
Tough year for Banking Group • N Normalised li d earnings i d down 31% • ROE down to 13% (2008: 20%) • Key y drivers • Legacy portfolios • Bad debts
Slide 69: Losses from legacy portfolios continued, but reducing
Losses from legacy portfolios continued, but reducing • R335m R335 lloss iin FY2009 (i (incl. l R219 R219m iimpairment i t& Dealstream R116m losses on positions assumed on default) International • Positions remain $18m equities • No losses in last q quarter Developed markets credit • Losses in FY200
Slide 70: Impairment charge totals R8bn; tough times not over yet
Impairment charge totals R8bn; tough times not over yet R millions 1,400 1,200 1,000 800 600 400 200 - Residential Credit card Vehicle and asset Other retail Wholesale mortgages g g finance 6m to Jun '08 6m to Dec '08 6m to Jun '09
Slide 71: FNB financial & operating review
financial & operating review
Slide 72: Mixed performance from local segments
Mixed performance from local segments Profit before tax (R millions) June ’09 June ’08 % change Mass 1 215 1 160 ▲ 5 Consumer (292) 1 159 ▼ (>100) HomeLoans (1 754) (381) ▼ (>100) Card Issuing (108) 106 ▼ (>100) Other Consumer 1 570 1 434 ▲ 9 Wealth 298 444 ▼ (33) FNB Other and Support pp 340 ((2))
Slide 73: Unpacking performance of HomeLoans
Unpacking performance of HomeLoans Profit before tax *(R (R millions) June ’09 09 June ’08 08 FNB HomeLoans (1 754) (381) • Year-on-year decline of R1 373 million – mainly attributed to: • R1 273m increase in bad debt charge • Higher funding and liquidity costs of R300 million • If endowment earning
Slide 74: FNB South Africa maintains ROE and CIR
FNB South Africa maintains ROE and CIR June ’09 June ’08 % change Costs (R millions) 13 838 13 018 6 Cost to income (%) 57.5 57.3 ROE (%) 26 33 Bad debt ratio (%) 2.39 1.55
Slide 75: FNB Africa shows solid growth despite investment in footprint
FNB Africa shows solid growth despite investment in footprint Profit before tax (R millions) June ’09 June ’08 % change FNB Botswana 654 529 ▲ 24 FNB Namibia 551 569 ▼ (3) FNB Swaziland 95 74 ▲ 28 Other (78) (16) ▼ (>100) FNB Africa 1 222 1 156 ▲ 6 • Good operating performance in FNB Botswana Botswa
Slide 76: FNB Africa key ratios
FNB Africa key ratios June ’09 June ’08 % change Costs (R millions) 1 460 1 138 28 Cost to income (%) 52.0 46.9 ROE (%) 27 34 Bad debt ratio (%) 0.58 0.72
Slide 77: FNB prospects
FNB prospects • Operating environment remains tough • Consumers rebuild balance sheets • Continued impact of debt counseling • Slow earnings recovery • The worst of the endowment impact still to come • FNB HomeLoans and Card Issuing lending books showing early signs of improvement due to stringent o
Slide 78: FNB prospects
FNB prospects • Sustainable ROE • G Grow deposit d it franchise f hi • Cross-sell ratio (Jun ’08 = 1.97, Jun ’09 = 2.02) • Credit origination g through g own channels • Continue to invest in footprint and innovation • Keep growing African presence – leverage off local skills and p operating Group p
Slide 79: RMB financial & operating review
financial & operating review
Slide 80: Disappointing performance from RMB
Disappointing performance from RMB Profit before tax R millions 5,000 4 000 4,000 (51%) 3 000 3,000 2 000 2,000 1,000 , 0 Jun 01 Jun 02 Jun 03 Jun 04 Jun 05 Jun 06 Jun 07 Jun 08 Jun 09
Slide 81: Other
Other Profit before tax R millions • Reducing losses in legacy SPJi portfolios as projected • Managed exit continues • RMB Resources – small profit • Central costs for enhancement of operating platforms
Slide 82: Equity Trading – legacy portfolios remained a factor
Equity Trading – legacy portfolios remained a factor Profit before tax R millions • Reported R782m net loss for the year • Selling down offshore legacy portfolios • Losses incurred on Dealstream default • Profitable 2nd half • No losses in legacy portfolio (<$18m) during last quarter • Local core bu
Slide 83: FICC – a mixed picture
FICC – a mixed picture Profit before tax R millions • Strong client income • Lower client activity in 2nd half • Trading businesses • Poor 2nd half performance in Fixed Income impacted results • Results adversely affected by non- recurring items • Counterparty impairments • Losses on exit of Brazili
Slide 84: Private Equity – a story of two halves
Private Equity – a story of two halves Profit before tax R millions • Private Equity delivered strong profitability • Strong 1st half • Large realisations • Good associate income maintained • Loss in 2nd half • No realisations – investment focus • Lower associate income • Impairments raised • Curren
Slide 85: Investment Banking performance reflects franchise strength
Investment Banking performance reflects franchise strength Profit before tax • Good year for Investment Banking R millions • Contributions across the board • Healthy deal pipeline maintained • Significant transactions • Remains leader in BEE • Second half impacted by • Slowing corporate activity • C
Slide 86: Focus on Primary Market activities in SA, Africa
Revised game plan – focus on Primary Markets Primary Market Activities Secondary Markets Principal Financing Prop Advisory (Debt) Hedging g g Execution ecu o Trading ad g Investing (Equity) South Africa Focus on SADEC Primary Market activities in SA, Africa Africa ((and trade corridors with Asia)) D
Slide 87: RMB prospects
RMB prospects • Legacy portfolios – rate of losses has slowed but cannot rule out further MTM volatility • New strategic direction • African track record and group platform to leverage • Strong franchise, strong client relationships & partners • Ability to write new business at good margins and pric
Slide 88: WesBank financial & operating review
financial & operating review
Slide 89: WesBank earnings reflect tough cycle
WesBank earnings reflect tough cycle Profit before tax* R millions (48%) * Excludes R203 million loss on sale of MotorOne and impairments to goodwill
Slide 90: Beginning of earnings recovery
Beginning of earnings recovery Profit before tax (South Africa) R millions
Slide 91: Bad debts still impacting income statement
Bad debts still impacting income statement R millions June ’09 June ’08 % change Interest income 3 717 3,717 3 747 3,747 ▼ (1%) Non interest revenue* 2,942 2,565 ▲ 15% Total revenue 6 659 6,659 6 312 6,312 ▲ 5% Credit impairment charge (2,745) (2,072) ▲ 32% Operating expenses** (3,408) (3,344) ▲ 2%
Slide 92: The bad debt mix is shifting
The bad debt mix is shifting • Peak in retail arrears and repossessions well past, but debt counseling remains a challenge • Dealer failures impacted corporate bad debts • Corporate provisions on the rise Motor Corporate R millions R millions 900 3.5% 900 3.5% 800 3.0% 800 3.0% 700 700 2.5% 2.5% 600
Slide 93: Continued asset contraction
Continued asset contraction • Advances declined 7% year-on-year • Retail new business production down 15% (19% down in prior year) • Corporate new business production down 26% (7% up in prior year) R millions R millions 100,000 6,000 97,500 5,000 95,000 4,000 92,500 90,000 3,000 87,500 2,000 85,000
Slide 94: In a tough year, managing costs was crucial
In a tough year, managing costs was crucial i l Key ratios: WesBank June ’09 09 June ’08 08 Change Costs* (R millions) 3 408 3 344 ▲2% Cost to income* (%) 51.2 53.0 ▼ ROE (%) 7 12 ▼ * Excludes R203 million loss on sale of MotorOne and impairments to goodwill
Slide 95: What remains internationally?
What remains internationally? • C l l performing Carlyle f i wellll – in i hholding ldi pattern tt • Australian finance book in rundown (A$23m remains) • WorldMark Australia weathering g market storm – remains p profitable • Refocus international aspirations to Africa in line with Group strategy
Slide 96: WesBank – cautiously optimistic
WesBank – cautiously optimistic • Easing g in bad debt and arrear levels • Selective broadening of credit appetite and continued repricing • Continued pressure on corporate customers • Greater contribution from non-lending operations • Sustained benefits of cost management and headcount reduction Or
Slide 97: OUTsurance financial & operating review
financial & operating review
Slide 98: OUTsurance – another solid performance
OUTsurance – another solid performance • Premium income up 18% • Headline earnings up 14% • Claims and cost ratio: 60.5% • Launch of Australian business, Youi, in line with business plan • Prospects • Continued focus on organic growth, client service and efficiency gains in personal lines business •
Slide 99: FirstRand Ltd strategic review
FIRSTRAND LTD strategic review
Slide 100: Refining the Group's strategy – our objectives
Refining the Group’s strategy – our objectives • C Committed itt d tto integrated i t t d financial fi i l services i strategy t t • Platform to participate in all profit pools associated with lending, transactional and savings activities • Consolidate our position as a leading African financial ser
Slide 101: Focus on international markets where we can achieve our objectives
Focus on international markets where we can achieve our objectives • Consolidate position in markets that strengthen position as a leading African financial services group • Africa the focus with FirstRand’s objective to position itself as a strong regional player • Africa-Asia corridor • India stra
Slide 102: Group prospects
Group prospects • M Macro environment i t remains i ttough h • Consumer will remain under pressure • Further job losses remain a risk • Retail transaction volumes and asset g growth will stay y subdued • Corporate lending portfolios still showing signs of stress
Slide 103: Group prospects
Group prospects • Gradual earnings recovery • Top line growth subdued • Margin under pressure – endowment • Bad debts should start to unwind • Offshore secondary market exposure reduced • Limited opportunity for realisations in private equity investment cycle • Momentum’s Momentum s defensive busine
Slide 104: FirstRand
2009 FIRSTRAND ae enereascenees Penman een eneen ener ener ene e eee ee eee rene eneenene Doan eaneneeeeenensanesees saeearerececenensercees Adee eenrareaeceneneazens Soa ns areneaeceneerensansareresecesensenens
Slide 105: FirstRand's NAV vs share price
FirstRand’s NAV vs share price Cents Cents 1000 NAV CAGR (incl. dividends and Discovery) = 29.5% 2,500 2,260 NAV CAGR (excl. dividends and Discovery) = 16% 2 900 Retained NAV per share – 1999: R2.02, 2009: R8.87 887 864 Cumulative dividend value (incl. Discovery) = R5.71 827 800 2,000 700 1,406 1,69
Slide 106: FirstRand Limited Results for the year ended June 2009
FIRSTRAND LIMITED RESULTS for the year ended 30 June 2009