I&m Group Plc · NSEKE:IMH
I&m — H1 2019 Earnings Presentation
51 slides from I&m's earnings presentation, Sep 10, 2019
Slide 1: Investor Presentation
Investor Presentation 10 September 2019 Page 1
Slide 2: Introduction to I&M Holdings Group
Introduction to I&M Holdings Group Page 2
Slide 3: Economic Overview
Economic Overview Page 3
Slide 4: Economic Overview - Global & Sub-Saharan Africa
Economic Overview - Global & Sub-Saharan Africa • The global economy is facing a confluence of risks including escalating US-China trade wars disputes, uncertainty in Brexit, US-Iran escalating tensions affecting the oil supply and increasing climate risks, which are all disrupting the global econom
Slide 5: Subsidiary Economies
Subsidiary Economies Kenya • Kenya’s real gross domestic product is projected to grow by 5.7% in 2019 • So far in 2019, a strong pick-up in economic activity was underway as reflected by real growth in consumer spending and stronger investor sentiment. • Agriculture remains a key driver of growth in
Slide 6: Kenyan Banking Sector Overview
Kenyan Banking Sector Overview Significant consolidations • CBA/NIC • KCB/National Bank • CBA/Jamii Bora Banking Sector Charter -To instil discipline in the banking sector, the Central Bank of Kenya proposed to introduce a Banking Sector Charter, which came into effect in March 2019. This is exp
Slide 7: Performance June 2019
Performance June 2019 Page 7
Slide 8: Growth compared to prior year
IMHP Group Growth June 2019 vs June 2018 Non Funded Customer Deposits Loans & Advances Income 12 6 22 % % % 15 PBT Growth compared to prior year Page 8 %
Slide 9: IMHP Highlights June 2019
IMHP Highlights June 2019 The Group continued to deliver market driven financial solutions for its customers, sustained efforts in Customer Service delivery standards, Performance improved internal controls and ramped up efforts in its digital transformation Overview journey to achieve this set of r
Slide 10: Highlights June 2019 vs Prior Year
[I&M Holdings] Highlights June 2019 vs Prior Year Profit Before Tax 15% Fee/Cost Ratio Return on Assets Absolute 11% Absolute 0.1% Fee/Income Ratio Customer Deposits Loans & Advances Absolute 4% 6% Fee/Income Cost/IncomeRatio Ratio 12% Fee/Income Net Ratio Non Interest Income Fee/Income Interest Inc
Slide 11: 2019 June Performance
2019 June Performance Kshs’ million IMHP PERFORMANCE JUNE 2019 +822 (+15%) 6,220 816 5,398 354 303 95 152 PBT June 2018 Opex [Increase] Share of Profit Net Interest Loan Provisions Non Funded PBT June 2019 of Joint Venture Income [Decrease] Income [Decrease] [Increase] [Increase] PBT growth of Kshs
Slide 12: IMHP June 2019 PBT Contribution
IMHP JUNE 2019 PBT CONTRIBUTION I&M KENYA* I&M RWANDA* KSHS ‘BN 5.0 80% 7% 0.4 BANK ONE* I&M TANZANIA* 0.4 7% 3% 0.2 Page 12 * Bank Operations & Bancassurance
Slide 13: I&M Holdings PLC - Financial Highlights (Income Statement)
I&M Holdings PLC - Financial Highlights (Consolidated) – Income Statement Dec-16 Dec-17 Dec-18 Jun-18 Jun-19 * 19 vs 18 Particulars Kshs Mn Kshs Mn Kshs Mn Kshs Mn Kshs Mn Y-Y % ▲ Net Interest Income 15,522 15,554 15,594 6,866 7,018 2% Non Funded Income 4,973 5,763 7,597 3,720 4,536 22% Total Operat
Slide 14: I&M Holdings PLC - Financial Highlights (Balance Sheet)
I&M Holdings PLC - Financial Highlights (Consolidated) – Balance Sheet Dec-16 Dec-17 Dec-18 Jun-18 Jun-19 * 19 vs 18 Particulars Kshs Mn Kshs Mn Kshs Mn Kshs Mn Kshs Mn Y-Y % ▲ Cash & Bank Balances 11,084 11,880 14,867 12,882 20,142 56% Investments & Placements 52,783 57,226 85,832 86,145 99,481 15%
Slide 15: Ratio Analysis
Ratio Analysis Consolidated 2016 2017 2018 Jun-18 Jun-19 Cost/Income Ratio 36% 37% 37% 40% 40% Net NPA 3.3% 7.3% 5.8% 5.5% 4.9% Return on Assets 3.7% 3.0% 2.9% 2.7% 2.9% Return on Equity 20% 15% 17% 16% 16% Loan / Deposit Ratio 92% 90% 78% 77% 73% NPA: Non Performing Assets Page 15
Slide 16: NFI Fee/Cost vs Fee/Income
NFI [Kshs Mn] Fee/Cost vs Fee/Income +22% 4,536 Fee/Cost Fee/Income +13% 3,720 891 98% 90% 87% 790 +4% 1,290 73% 1,243 +2% 1,227 1,207 39% +1.4x 33% 35% 1,128 480 27% Jun-18 Jun-19 2017 FY 2018 FY Jun-18 Jun-19 Fees & Commissions on Loans FX Income Continued growth in Non Funded Income as a Other Fe
Slide 17: Consolidated Loans & Advances and NPLs
I&M Holdings Consolidated Loans & Advances and NPLs Balance Sheet (Kshs Mn) Income Statement (Kshs Mn) Gross Non Performing Loans Interest on Advances +2.4% +14% 23,832 24,399 8,965 10,250 Jun-18 Jun-19 Loan Loss Provisions -21% 1,412 1,109 Dec-18 Jun-19 Jun-18 Jun-19 Gross NPA 13% 13% Net NPA 6% 5%
Slide 18: IMHP Non Performing Loans Exposure
June 2019 NPL Kshs’ million IMHP NON PERFORMING LOANS EXPOSURE 24,399 23,831 13,454 62% 15,234 (56%) 10,377 38% 9,165 9,165 (44%) NIL Gross NPL Gross NPL Loan Loss Net NPL Discounted Net NPLs Dec 2018 Jun 2019 Provisions Value of Exposure Loan Securities Provisions Discounted Value of Securities • I
Slide 19: Trend Analysis
Trend Analysis Page 19
Slide 20: Performance Trend Analysis [1 of 2]
Performance Trend Analysis [1 of 2] Total Assets (Kshs Bn) Deposits (Kshs Bn) CAGR +10% CAGR +12% +12% +20% +12% 317 +26% 289 283 237 240 213 211 169 2017 2018 Jun-18 Jun-19 2017 2018 Jun-18 Jun-19 Loans (Kshs Bn) PBT (Kshs Bn) CAGR +4% +9% +6% +16% 167 163 172 11.5 153 9.9 +15% 5.4 6.2 2017 2018 Ju
Slide 21: Performance Trend Analysis [2 of 2]
Performance Trend Analysis [2 of 2] Revenue (Kshs Mn) Fee/Income Ratio NII NFI +9% 39% 23,191 35% 21,317 33% +9% 27% 15,554 15,594 10,586 11,554 6,866 7,018 5,763 7,597 3,720 4,536 2017 2018 Jun-18 Jun-19 2017 2018 Jun-18 Jun-19 Non Funded Income (Kshs Mn) Net Interest Income (Kshs Mn) +32% 0% 7,597
Slide 22: Value to Shareholders [1 of 2]
Value to Shareholders [1 of 2] Dividend Payout (Kshs Mn) Dividend Per Share Interest rate capping CAGR +5% +11% CAGR +4% +5% 0% 1,612 +11% 1,373 1,447 1,447 0% 0% 3.50 3.50 3.50 3.90 2015 2016 2017 2018 2015 2016 2017 2018 Shareholders Funds (Kshs Bn) Earnings Per Share CAGR +4% +16% +17% +8% +3% -7
Slide 23: Value to Shareholders [2 of 2]
Value to Shareholders [2 of 2] NAV per Share (Kshs) NAV/Share vs Price/Share Share price has been indexed (2x) to reflect the bonus issue NAV Kshs 127 134 Closing Price 123 1:1, effected on 10 May 2019 100 101 +16% 94 +8% 85 114 123 134 114 116 86 90 2015 2016 2017 2018 2019* 139 113 130 130 115 201
Slide 24: Subsidiaries Performance
Subsidiaries Performance Page 24
Slide 25: IMHP Performance June 2019 vs June 2018
2019 June Performance Kshs’ million IMHP PERFORMANCE JUNE 2019 VS JUNE 2018 +822 (+15%) 235 184 95 6,220 72 938 5,398 PBT June 2018 I&M Bank Other I&M Bank Bank One I&M Bank PBT June 2019 Kenya Subsidiaries Rwanda [Decrease] Tanzania [Increase] [Increase] [Decrease] [Decrease] PBT: Profit Before Tax
Slide 26: I&M Bank Kenya
I&M Bank Kenya Page 26
Slide 27: I&M Bank (Kenya) Limited
I&M Bank (Kenya) Limited • Online E-learning platform and other programs to drive performance, nurture talent, and build capacities. • As at July 2019, 66.01% of the total Bank’s transactions were routed through alternate banking channels. The drive to migrate to alternate channels continues to be a
Slide 28: I&M Bank Kenya – Financial Highlights
I&M Bank Kenya – Financial Highlights Highlights Loans [Kshs Bn] Deposits [Kshs Bn] June YTD 2019 vs June YTD 2018 +6% +15% Reported PBT 129.5 137.3 201.8 2018: 3.9bn 174.8 4.9bn Net Revenue 2018: 8.1bn 9.0bn Cost/Income Jun-18 Jun-19 Jun-18 Jun-19 2018: 35% 34% Assets [Kshs Bn] Equity [Kshs Bn] Fee
Slide 29: Regional Banking Affiliates
Regional Banking Affiliates Page 29
Slide 30: I&M Bank Rwanda – Financial Highlights
I&M Bank Rwanda – Financial Highlights Highlights Loans [Kshs Bn] Deposits [Kshs Bn] June YTD 2019 vs June YTD 2018 +9% -1% 19.8 21.8 21.5 Reported PBT 2018: 0.63bn 18.2 0.44bn Net Revenue 2018: 1.6bn 1.5bn Cost/Income Jun-18 Jun-19 Jun-18 Jun-19 2018: 54% 72% Assets [Kshs Bn] Equity [Kshs Bn] Fee/I
Slide 31: Bank One Limited, Mauritius
Bank One Limited, Mauritius • BOM has initiated the National payment switch which is expected to enhance transfer orders through the card payments system and the instant payments system as part of phase 1. The bank has successfully integrated with the system and exploring further capacities. • The B
Slide 32: Bank One [Mauritius] – Financial Highlights
Bank One [Mauritius] – Financial Highlights Highlights Loans [Kshs Bn] Deposits [Kshs Bn] June YTD 2019 vs June YTD 2018 +7% +36% 67.6 105.2 Reported PBT 63.1 2018: 1.0bn 77.4 0.8bn Net Revenue 2018: 2.2bn 2.1bn Cost/Income Jun-18 Jun-19 Jun-18 Jun-19 2018: 42% 50% Assets [Kshs Bn] Equity [Kshs Bn]
Slide 33: I&M Bank (Tanzania) Limited
I&M Bank (Tanzania) Limited • Development of a workflow management tool. • Launch of the Phase 1 of Bank Genie – a customer acquisition solution to increase customer base, went live on June 2019 on pilot basis with Phase II - Integration of the solution to the agency network currently in progress. •
Slide 34: I&M Bank Tanzania – Financial Highlights
I&M Bank Tanzania – Financial Highlights Highlights Loans [Kshs Bn] Deposits [Kshs Bn] June YTD 2019 vs June YTD 2018 0% -3% Reported PBT 15.2 15.1 14.4 13.9 2018: 0.24bn 0.17bn Net Revenue 2018: 0.69bn 0.73bn Cost/Income Jun-18 Jun-19 Jun-18 Jun-19 2018: 66% 65% Assets [Kshs Bn] Equity [Kshs Bn] Fe
Slide 35: Appendices
Appendices Page 35
Slide 36: Our Legacy
Our Legacy From strength to strength Page 36
Slide 37: I&M Holdings PLC
I&M Holdings PLC Introduction • I&M Holdings Plc, formerly known as City Trust Limited (CTL) was incorporated on 16th August 1950; one of the oldest companies to list on the Nairobi Securities Exchange (NSE). • I&M Holdings was licensed and approved as a non-operating holding company in June 2013 fo
Slide 38: I&M Holdings PLC (IMHP) Structure
I&M Holdings PLC (IMHP) Structure Page 38
Slide 39: I&M Holdings Director Profiles
I&M Holdings Director Profiles Mr. Daniel Ndonye is a chartered accountant by profession, having worked with Deloitte & Touche for over 30 years, 20 of which he was the Managing/Senior Partner. He holds a Bachelor of Commerce degree from the University of Nairobi. He is a fellow of the Institute of
Slide 40: I&M Holdings Director Profiles - Continued
I&M Holdings Director Profiles - Continued Mr. Oliver Fowler joined the board in August 2015. He is a qualified Kenyan Advocate, an English Solicitor and a Senior Partner at Kaplan & Stratton Advocates. His work encompasses commercial work, particularly financial, corporate and taxation matters and
Slide 41: Group Strategy
Group Strategy The 6 key strategic objectives will support achievement of the its 3 key goals: Achieve optimal Support growth of the Maintaining strong Group and Capital group; A B investor relations; C Structure; 1. Group Investments 2. Regulatory Compliance • Hold and manage investments in regiona
Slide 42: Subsidiary briefs
Subsidiary briefs Page 42
Slide 43: Subsidiary Briefs: I&M Bank Limited, Kenya
Subsidiary Briefs I&M Bank Limited, Kenya • Incorporated in 1974 and converted into a fully fledged commercial bank in 1996 • Strategic alliances & technical assistance with DFIs have led to improved governance standards, state-of-art systems, policies and procedures in areas of AML, ESM, & Risk Man
Slide 44: Subsidiary Briefs: I&M Bank (T) Limited, Tanzania
Subsidiary Briefs I&M Bank (T) Limited, Tanzania • Incorporated in 2002. I&M Bank & its partners acquired I&M Bank (T) in 2010 • I&M Bank (T) shareholding: • I&M Bank (Kenya) – 70.38% • The Kibo Fund LLC – 20.02% • Proparco – 4.62% • Mr. Michael N. Shirima – 4.98% • In 2014 the Bank commissioned its
Slide 45: Subsidiary Briefs: I&M Bank (Rwanda) Limited, Rwanda
Subsidiary Briefs I&M Bank (Rwanda) Limited, Rwanda • Incorporated in 1963 it was the first commercial bank in Rwanda • I&M together with 2 DFIs acquired 80% shareholding of BCR from Actis LLP on 17th July 2012, making the ultimate Shareholding of I&M Bank (Rwanda): • I&M Bank Group – 55.00% • DEG –
Slide 46: Subsidiary Briefs: Bank One Limited, Mauritius
Subsidiary Briefs Bank One Limited, Mauritius • Incorporated in 1997 and was taken over by I&M Bank and CIEL Group in 2008. • 50/50 Joint Venture with CIEL Group, – a reputed and diversified industrial conglomerate. • Fully-fledged commercial bank offering on-shore and off-shore banking services hav
Slide 47: Subsidiary Briefs: Non Banking Subsidiaries
Subsidiary Briefs Non Banking Subsidiaries I&M Burbidge Capital Limited, Kenya (IMBC) • Incorporated in May 2010 and is domiciled in the Republic of Kenya. • I&M Group acquired 65% shareholding in August 2016 • The current shareholding is as per below • I&M Holdings – 65% • Mr. Edward Burbidge – 35%
Slide 48: Subsidiary Briefs: Non Banking Subsidiaries
Subsidiary Briefs Non Banking Subsidiaries I&M Insurance Agency Limited, Kenya • Incorporated on 23 July 2014 as a limited liability company in Kenya and commenced operations on 1 August 2014. • The company is regulated by Insurance Regulatory Authority under the Insurance Act (Cap 487) of the Laws
Slide 49: Subsidiary Briefs: Non Banking Subsidiaries - Continued
Subsidiary Briefs Non Banking Subsidiaries - Continued I&M Realty Limited, Kenya • The company is a wholly owned subsidiary of I&M Holdings • Incorporated on 30th October 2014 as a limited liability company in Kenya • Commenced operations in November 2015. • It is the real estate holding company of
Slide 50: Disclaimer
DISCLAIMER The contents herein have been presented in good faith. The information, statements and opinions set out in this presentation and subsequent discussion do not constitute a public offer for the purposes of any applicable law or an offer to sell or solicitation of any offer to purchase any s
Slide 51: Thank You
I&M HOLDINGS PLC I&M BANK HOUSE Thank 2ND NGONG AVENUE P.O. BOX 30238 – 00100 You + 254 (0)20 3221002 INVEST@IMBANK.CO.KE Page 51