Momentum Group Limited · JSE:MTM
Momentum — Momentum Metropolitan Holdings — Merger or Acquisition (June 2017)
17 slides from Momentum's merger presentation, Jun 12, 2017
Slide 1: MMI Holdings and African Bank: a partnership to facilitate Financial Wellness
MMI Holdings and African Bank: 12 June 2017 a partnership to facilitate Financial Wellness
Slide 2: Nature of the commercial relationship
Nature of the commercial relationship A mutually beneficial relationship on three fronts Insurance Banking Lending 01
Slide 3: Lending
Lending • African Bank (ABL) credit expertise will be leveraged to enable the offering of lending solutions to MMI clients to fulfill their Financial Wellness goals • Distribution will be via MMI’s established sales channels using the Metropolitan Retail branding • African Bank will be the exclusive
Slide 4: Insurance
Insurance • Metropolitan’s full range of insurance products will be made available to African Bank clients on an exclusive basis • Over time, Metropolitan will have agents in all of African Bank’s nearly 400 branches • Agent roll-out done in phases, 3 years to have full coverage in branches • Produc
Slide 5: Products and Target Market
Products and Target Market Lending Insurance • Unsecured personal loans • Initial product offering: life insurance, funeral cover & • Term <= 72 months long term savings products • Loan amounts up to R200k • Over time, short-term, health • Average loan amount target = insurance and wills will be R60
Slide 6: Structure
Structure How to achieve 50/50 share of economic value 05
Slide 7: Structure: Lending
Structure: Lending Capital contributed 51% (MMI) Funding provided on 50/50 basis / 49% (African Bank) MMI and African Bank 51:49 joint venture Compensates MMI and ABL for Profit shared on 50/50 basis services rendered in the JV 06
Slide 8: Structure: Insurance
Structure: Insurance Metropolitan will pay a percentage of monthly premium, percentage reflects 50% of new business margin at inception • Executed through a 50/50 value share agreement • Partners share the lapse risk by spreading out the value share over the lifetime of the policy ABL will share 50%
Slide 9: Responsibilities of the partners
Responsibilities of the partners • Two management committees from MMI and ABL will oversee the ventures • Operational responsibilities will be fulfilled by each of the JV partners, in line with regulatory requirements and expertise Lending Insurance MMI ABL MMI ABL • Sales &Advice • Credit risk • Pr
Slide 10: Accounting effects
Accounting effects Lending Consolidated onto MMI’s balance sheet and reported as part of Metropolitan Retail This venture will consist of MMI Insurance selling products through a new distribution channel , thus there will be no accounting impact 09
Slide 11: Financial Prospects
Financial Prospects High level financial targets 10
Slide 12: Financial prospects: Lending
Financial prospects: Lending Capital injections over the first 5 years by each party Aspire for lending book in excess of 5 Years R10bn and pre-tax earnings of over Funding provided over the first 5 R500m pa years by each party 11
Slide 13: Financial prospects: Insurance
Financial prospects: Insurance Limited capital We expect to have injections. Material inforce premiums in effort to recruit and 5 Years excess of R1bn in 5 train around 400 new agents for ABL branches years’ time 12
Slide 14: Future developments
Future developments Banking capabilities 13
Slide 15: Banking
Banking • African Bank will act as the sponsoring bank to transactional banking capabilities over time • A card-based solution will be available with African Bank providing the bank identification number (BIN) • This venture will be structured as a service relationship where MMI leverages African Ba
Slide 16: Quote on alliances and partnerships in insurance
“There is no doubt in my mind that the future will be won on the bases of the alliances, partnerships and joint ventures formed by insurance companies today. Anyone that thinks they can survive on their own in this environment is fooling themselves.” Gary Reader Head of Global Insurance, KPMG Intern
Slide 17: Thank you
Thank you omentum x METROPOLITAN GUARDRISK
Momentum Metropolitan Holdings — Merger or Acquisition (June 2017) on 6ix