Standard Bank Group Limited · JSE:SBK
Standard Bank — The Standard Bank of South Africa — Debt Investor Presentation (September 2012)
29 slides from Standard Bank's debt investor presentation, September 2012
Slide 1: The Standard Bank of South Africa Limited Fact Sheet September 2012
The Standard Bank of South Africa Limited Fact Sheet September 2012
Slide 2: Contact details
Contact details Libby King Arno Daehnke SBSA Chief Financial Officer Head: Treasury and Capital Management Tel: +27 11 636 1167 Tel: +27 11 378 8704 Email: Libby.King@standardbank.co.za Email: Arno.Daehnke@standardbank.co.za Ashley Pillay Ann Hunter Head: Capital Management Head: Strategic Funding T
Slide 3: Agenda
Agenda Overview of Operating Environment, Group Strategy and 1 Impact on SBSA 2 Balance Sheet Management 2.1 Funding Position and Strategy 2.2 Capital Position and Strategy 3 Conclusion 2
Slide 4: Overview of Operating Environment, Group Strategy and Impact on SBSA
Overview of Operating Environment, Group Strategy and Impact on SBSA Fact Sheet
Slide 5: SA operating environment
SA operating environment • SA relatively well positioned compared to developed markets • Low interest rates generally: – not good for net interest income – good for consumer credit impairments • Constrained economic growth has led to less client activity (particularly corporate clients) • Ongoing re
Slide 6: Group strategy
Group strategy • The financial crisis of 2008 resulted in a review of the Group’s strategy and a subsequent refinement of the strategy to narrow the focus from broadly emerging markets to Africa • Africa is at our core – with focus on connection to other selected emerging markets • China continues t
Slide 7: Group strategy: Impact on SBSA
Group strategy Impact on SBSA • SBSA will become the primary balance sheet for the booking of transactions and risk positions for CIB’s products • Has been enabled through the introduction of the Macro Prudential Limit by the SARB in 2010 • Benefits of this: – cheaper funding cost – diversification
Slide 8: Financial highlights
Financial highlights 1H12 FY11 SBSA Group * Income Statement Headline earnings Rm 4 666 9 318 Profit attributable to the ordinary shareholder Rm 4 676 9 298 Statement of financial position Ordinary shareholder's equity Rm 56 916 55 593 Total assets Rm 953 142 921 689 Loans and advances Rm 636 054 61
Slide 9: Balance Sheet Management
Balance Sheet Management Fact Sheet
Slide 10: Balance sheet management strategy integrated across capital and funding
Balance sheet management strategy integrated across capital and funding • Optimising the deployment and returns on Shareholder Value capital and liquidity • Centralised prioritisation, allocation and pricing of financial resources, informed Liquidity Capital through group strategic goals, regulatory
Slide 11: SBSA loans and advances
SBSA loans and advances • Net loans and advances increased by 4% Composition of funding-related liabilities (R25bn) from FY11 to 1H12, of which; 8% 7% 20% Corporate Funding: 20% (Dec'11: 22%) • PBB: 5% (+ R 20bn) Financial Institutions: 24% (Dec'11: 25%) 20% Government & Parastatals: 11% (Dec'11: 11
Slide 12: Funding Position and Strategy
Funding Position and Strategy Fact Sheet
Slide 13: Structurally sound funding base
Structurally sound funding base Prudent liquidity risk management: Liquidity ratio Jun’12 SBSA FirstRand Nedbank ABSA • Three-pillar approach: Loan-to-deposit 87.4% 88.0% 92.9% 91.4% Loan-to-liability 63.3% 67.8% 81.3% 71.5% Liquid asset-to-deposit 16.2% 21.3% 17.9% 15.8% Tactical Structural Conting
Slide 14: SBSA term funding base
SBSA term funding base SBSA Funding & Term Contactual Profile per segment 300 19 27% of total base 250 39 200 49 5 R201bn contractual long term funding: 51 150 Rbn 89 9 15 • Bond market an important source of long 100 8 33 17 term funding 38 54 115 50 96 50 19 0 12 8 7 Demand Short Term Medium Term
Slide 15: Preparing for the Basel III liquidity regime
Preparing for the Basel III liquidity regime Basel III readiness: Planned Timeline • Standard Bank has conducted a comprehensive financial, business LCR NSFR 2012 and economic Basel III impact analysis Observation Period Observation Period • Product pricing now includes cost of phased-in Basel III r
Slide 16: Bank issuance in the local debt capital market - 2012
Bank issuance in the local debt capital market - 2012 2012 local market overview: 9 SA bank 2012 issuance profile • To date, SA banks have issued approximately 8 R38.5bn (senior and capital qualifying notes) in the 7 Maquarie Group Mauritius Comm Bank local debt capital market 6 Capitec Rbn 5 Af ric
Slide 17: SBSA issuance in the local debt capital market - 2012
SBSA issuance in the local debt capital market - 2012 2012 Ytd SA Bank issuance Standard Bank 7% 2% 2% ABSA 16% 38% Nedbank SBSA funding during 2012: 10% First Rand 8% Investec • SBSA has issued approximately R15bn senior and 17% Capitec capital qualifying bonds in 2012 Ytd Af rican Bank • 45% of is
Slide 18: Strategic funding action points
Strategic funding action points General: • Optimise Group longer term funding - raise volumes in tenors with profiles driven by demand (refinancing, new asset growth and regulations) for the relevant group borrowers in the most favourable instrument and market at the time, at best pricing • Maintain
Slide 19: Capital Position and Strategy
Capital Position and Strategy Fact Sheet
Slide 20: Capital ratios: RWA to Total Assets
Capital ratios Sound capital position: Weak Capital Strong Capital Position & Position & • In excess of internal capital High Risk High Risk adequacy ratio (CAR) targets Weighting Weighting US RWA to Total Assets ratio • On track to meet phased-in Basel III China South Af rica regulatory CAR targets
Slide 21: Proposed SARB phase-in arrangements and minimum capital ratios
Proposed SARB phase-in arrangements and minimum capital ratios 13% 10.50% SARB Minimum ratios 9.88% 9.25% 2.00% 11% 8.63% 2.00% Capital as a % of Risk Weighted Assets 7.00% 8.00% 2.00% 7.00% 6.00% 1.50% 2.00% 9% 2.00% 1.50% 3.00% 1.50% 2.50% 3.50% 1.50% 2.50% 1.50% 1.88% 7% 1.25% 0.625% 1.75% 1.50%
Slide 22: Tier 1 capital ratios and risk-weighted assets
Tier 1 capital ratios and risk-weighted assets 600 11.5 11.4 12 10.6 10.7 10.2 9.8 10 400 9.5 8 Rbn 6 200 4 2 366 388 381 368 389 430 455 0 0 1H09 FY09 1H10 FY10 1H11 FY11 1H12* % Basel II Tier 1 regulatory minimum Risk-weighted assets Tier 1 • SBSA’s Tier 1 ratio increased to 10.2% on 31 July 2012
Slide 23: Tier 1 Ratio: FY11 to 1H12
Tier 1 Ratio: FY11 to 1H12 13 12 (0.7) 11 1.0 (0.6) (0.5) 10 (0.2) (0.2) 9 8 7 6 10.7 9.5 5 % FY11 Headline Dividends Growth in RWA Scaling f actor Basel 2.5 Other 1H12 earnings stressed VAR 22
Slide 24: Rationale behind raising Basel III compliant AT1 and T2 capital
Overview of rational behind raising Basel III compliant AT1 and T2 capital Basel 3 Phasing out of Tier 2 capital - SBSA 20 20 18 18 16 16 14 14 Rbn 12 12 10 10 8 8 • Grandfathering of current Tier 2 and preference 6 6 4 4 share instruments effective 1 January 2013 2 2 0 0 • New capital instruments r
Slide 25: Overview of Basel III compliant AT1 and T2 capital - Illustrative
Overview of Basel III compliant AT1 and T2 capital - Illustrative Instrument Additional Tier 1 Tier 2 Type Issuer The Standard Bank of South Africa Limited (Bank) The Standard Bank of South Africa Limited (Bank) Main Features • Perpetual NC5 • 10 NC 5 • Deeply subordinated • Subordinated • Non-cumul
Slide 26: Capital management actions
Capital management actions • In light of Basel III proposals, plans are underway to strengthen SBSA’s capital position • Completed: – Equity capital injection of R2.5 billion into SBSA on 31 July 2012 • Ongoing: – Retention of equity capital in SBSA – RWA optimisation – Efficient utilisation of capi
Slide 27: Conclusion
Conclusion i) Standard Bank
Slide 28: Conclusion
Conclusion 27 Financial Position Funding Action Points Capital Action Points • Alignment to Group • Diversification of funding • Standard Bank Group strategy sources well capitalised • Strong performance by • Issue of new instruments PBB SA • Issuing of Basel III • Domestic bond market compliant ins
Slide 29: Thank You
Thank You i) Standard Bank
The Standard Bank of South Africa — Debt Investor Presentation (September 2012) on 6ix