FirstRand Limited · JSE:FSR
FirstRand — UBS Warburg Conference October 2002
43 slides from FirstRand's conference presentation, October 2002
Slide 1: FirstRand International Strategy
FirstRand International Strategy
Slide 2: Agenda: strategic importance, guidelines, current position, clusters
• Strategic importance • Strategic guidelines • Current position • Cluster overview
Slide 3: Strategic importance of international
• Greater emphasis as part of FirstRand’s outward focus • One of the components of the growth strategy • An evolving strategy
Slide 4: Getting the basics right to outward focus
Getting the basics right Outward focus Collaboration June June June 1998 2001 2002 International
Slide 5: Agenda: strategic guidelines
• Strategic importance • Strategic guidelines • Current position • Cluster overview
Slide 6: Group clusters and strategy guideline formulation
Group Cluster Division Profit Centres Market Segments Retail Corporate Wealth Health Strategy Guideline formulation and proposal
Slide 7: Components of Strategy
Components of Strategy We are a Not targeting Sustainable Extension of Rand % offshore competitive domestic specialist income advantage strategy FirstRand will No “one-size-fits-all” co-ordinate strategy from the centre Strategic alignment
Slide 8: Cluster structure: Retail, Corporate, Wealth, Health, FRC
Retail Corporate Wealth Health FRC
Slide 9: Capital, Risk, Compliance
• Centrally managed as for South Africa Capital • Includes Treasury function Risk • Holistic risk management Compliance • Co-ordinated tax, regulatory and capital monitoring
Slide 10: Multi brand or single international brand?
? Multi brand as in South Africa? OR Single international brand?
Slide 11: Agenda: current position
• Strategic importance • Strategic guidelines • Current position • Cluster overview
Slide 12: International versus local split
ADGA 65/0 Including Translation Gains
Slide 13: International versus local: return on capital
INTERNATIONAL 28% LOCAL 72% Return on capital (excluding translation gains) => 11% Return on capital (including translation gains) => 20%
Slide 14: International versus local split
INTERNATIONAL 24% LOCAL 76%
Slide 15: Our international operations are a significant size
INTERNATIONAL 9% LOCAL 91% Our international operations are a significant size
Slide 16: Agenda: cluster overview
• Strategic importance • Strategic guidelines • Current position • Cluster overview
Slide 17: Retail cluster
Retail Corporate Wealth Health FRC
Slide 18: African Subsidiaries: success story
African Subsidiaries Success story: •ROC 30+% •20-30% Market share Universal banking Looking for growth - Africa
Slide 19: African Subsidiaries net income before taxation
African Subsidiaries • 20.5% of the retail cluster net income before taxation • Strong growth • Close to South Africa • Ability to use common infrastructural elements Net income before taxation R million 2002 2001 %change FNB Botswana 252 180 40.0 FNB Namibia 235 195 20.5 FNB Swaziland 24 15 60.0 Af
Slide 20: Wesbank
Wesbank • Looking for growth • High market share • Requirements: – Must have a partner – Must leverage off South African cost base • Looking at Africa, UK and Australia
Slide 21: The Need for International Expansion?
The Need for International Expansion? Our goals and • Find alternative sources of growth objectives • Leverage off our low rand cost base • Defend against and learn to compete against global competitors
Slide 22: Why Africa?
Why Africa? – Relative familiarity Potential – Exportable pockets of excellence African Opportunity – Closeness/shortness of supply lines – African country commitment to reform (i.e. NEPAD, IMF) – Strengthening bi-lateral relationships – Increased SA corporate investment in Africa (piggy back opport
Slide 23: Corporate cluster
Retail Corporate Wealth Health FRC
Slide 24: Corporate cluster: presence and target markets
Presence Target Market South Africa Africa Project Finance South Africa South African leg Structured Finance UK, Hong Kong, Africa, Australia, Trade Financing Australia Asia, UK, Europe Commodity Trading South Africa Africa South Africa, Australia, Africa Corporate Finance Australia South Africa, Au
Slide 25: Lending, debt and equity markets presence
Presence Target Market South Africa, Client led Corporate Lending Dublin US, Emerging South Africa Debt Market Market bonds Equity Market South Africa Cross-markets Electronic trade costing and Tradestream Dublin management system UK (London), Balance sheets (Banking Group Treasury) Dublin, Mauritiu
Slide 26: Project Finance: African participation
Project Finance Guinea Ghana Benin Cameroon Congo Zaire Zambia Angola Mozambique Botswana Zimbabwe Participates in projects & commodity transactions > $2.1bn
Slide 27: Project Finance: clients and projects
Project Finance Clients • Governments, parastatals, private sector companies Projects • Oil and gas • Infrastructure (ports, roads) • Telecommunications • Mining and beneficiation sectors • Power / energy Total assets grown by 90% (compounded annually)
Slide 28: Project Finance: African transactions
Project Finance • 42% of all new transactions closed are transactions in Africa • Number of transaction closed in Africa expected to exceed number of transactions closed in SA & outside Africa in near future • NIBT increased by 50% compound growth over the last two years to R100 million
Slide 29: Financial Markets Capability
Financial Markets Capability • 15 full time analysts, arbitrageurs and traders focus on non South African financial markets • US high yield corporates • Emerging market sovereigns and corporates • Various convertibles • Based in Johannesburg and London
Slide 30: Resources
Resources • Early stage investments in Resource Counters • Mostly in Africa
Slide 31: Trade Services
Trade Services • Single electronic platform • Low cost producer • White-labelling for African banks • ISO 9001 - first in Africa • Multiple delivery channels • Some complex structuring
Slide 32: Trade Services growth
Trade Services Growth • Trade Services: Internationalisation – NIBT increased by 83% & 100% respectively over the last 2 yrs from R23m to over R100m
Slide 33: Why Success in Africa
Why Success in Africa….. • African success driven by : – Jurisdiction knowledge – Personal relationships – Risk understanding and appetite – Origination capability – Quick issue resolution
Slide 34: Strategic Intent
Strategic Intent • Origination – SA related – Africa – Deal by deal in other emerging markets • Secondary markets trading, arbitrage and distribution • Opportunistic approach • Exploit retail footprint in Africa
Slide 35: Wealth cluster
Retail Corporate Wealth Health FRC
Slide 36: Wealth Management
Wealth Management Fiduciary and Retail Asset Multi Manager; Private Banking Management Institutional & Retail 13,000 clients 6,000 clients 2,600 clients $1.6bn assets $1.5bn assets under under management management Combined as single Private Wealth Management entity
Slide 37: Geographical Distribution - Ashburton Clients
Geographical Distribution - Ashburton Clients Channel Islands 31% South Africa 46% East Africa 7% Europe 16%
Slide 38: Geographical Distribution - Ansbacher Clients
Geographical Distribution - Ansbacher Clients Carribean 23% Channel Islands 77%
Slide 39: International Asset Management Capability
International Asset Management Capability Retail Institutional Fundamental Ashburton $1.6bn Multi-management MIMM * MIMM $0.5bn $1bn * Including hedge funds
Slide 40: Ansbacher Funds Flow
Ansbacher Funds Flow Deposits from Fiduciary business on Ansbacher islands London Property Private Financial Finance Client Markets Lending
Slide 41: Top of the mind
Top of the mind • Brand • Cross-sell • Distribution
Slide 42: International: differentiated niche player
• International a significant component • On the radar screen • Will evolve along cluster lines • Collaboration • Africa Differentiated niche player
Slide 43: FirstRand