Stanbic Holdings Plc · NSEKE:SBIC
Stanbic — FY2018 Earnings Presentation
37 slides from Stanbic's earnings presentation, 2019
Slide 1: Financial performance for the full year ended 31 December 2018
Stanbic Holdings Plc Financial performance for the full year ended 31 December 2018
Slide 2: Contents
Contents Section Page 1. Welcome and remarks 3 2. Operating environment 4 3. Recap of our strategy 6 4. Measuring our strategic progress 8 5. Financial outcome 15 Corporate and Investment Banking (CIB) 24 Personal and Business Banking (PBB) 27 Stanbic Insurance Agency Limited (SIAL) 30 SBG S
Slide 3: Welcome and remarks
Welcome and remarks Stanbic Bank Moving Forward'” ‘A Member of Standard Bank Group
Slide 4: Operating environment
Operating environment Charles Mudiwa Chief Executive, Stanbic Bank
Slide 5: Operating environment
Operating environment Macro-economic Market threats Regulatory environment Market opportunities environment ▪ 1st year adoption of ▪ Government’s Big 4 ▪ Cyber security risk & Inflation impact on customer ▪ Dec 2018 5.7% vs. Dec IFRS 9 ▪ Technological ▪ Central Bank Rate cut innovations safety 2017
Slide 6: Recap of our strategy
Recap of our strategy Charles Mudiwa Chief Executive, Stanbic Bank
Slide 7: Recap of our strategy
Recap of our strategy Our Purpose Kenya is our home, we drive her growth To be a leading financial services organisation in Kenya delivering exceptional Our Vision client experiences and superior value In executing our strategy our key focus areas are We measure our progress using five strategic val
Slide 8: Measuring our strategic progress
Measuring our strategic progress Charles Mudiwa Chief Executive, Stanbic Bank
Slide 9: Measuring our progress on client focus
Measuring our progress on client focus Valuable things for our clients through; Accelerating access to working capital and financing requirements evidenced by a 12% growth in loans 2019 focus areas; We completed landmark investment banking transactions Continue to simplify processes to respond
Slide 10: Measuring our progress on employee engagement
Measuring our progress on employee engagement Growth and development through; Investment in employees development and career growth (2018 training cost): KES 61m 2019 focus areas; International assignments to develop new skills Comprehensive wellness program including flexi hours Continue to
Slide 11: Measuring our progress on risk and conduct
Measuring our progress on risk and conduct 2018 developments; We invested in new ways of working to improve efficiency and service delivery 2019 focus areas; Reviewed our risk appetite to support our clients Enhanced controls and relations with third parties to Continue to regularly review a
Slide 12: Becoming more relevant in our communities
Measuring our progress: Becoming more relevant in our communities Social, Economic and Environmental impact (SEE) 108years in existence We have partnered We continue to support infrastructural KES 30m invested and Our Heritage with KMRC to support and energy development projects in over 500 clients
Slide 13: Becoming more relevant in our communities
Measuring our progress: Becoming more relevant in our communities Social, Economic and Environmental impact (SEE) We are the title sponsors for Kenya’s national We responded to a fire in a busy trading We were platinum sponsors for Eldoret Marathon. 7’circuit market by providing sewing machines to E
Slide 14: 2018 results highlights
Measuring our progress: 2018 results highlights Total revenue Customer loans 16% The Group (Kenya Bank, South Sudan branch, SBG 12% 2018: KES 22b Up 2018: KES 146.6b Securities and Stanbic Insurance Agency Limited) Up reported a profit after tax of KES 6.3b 2017: KES 19b 2017: KES 130.5b Total r
Slide 15: Financial Outcome
Financial Outcome Andrew Njonjo Financial Controller
Slide 16: Summary income statement
Summary income statement Dec-2018 Dec-2017 KES millions KES millions Change % Net interest income 12,130 10,644 14 Non-interest revenue 9,965 8,420 18 Total income 22,095 19,064 16 Operating expenses (11,082) (10,902) (2) Pre-provision profit 11,013 8,162 35 Credit impairment charges (2,065) (2,761)
Slide 17: Revenue
Revenue Net interest revenue Non-interest revenue 25 000 12 000 KES millions KES millions 20 000 10 000 8 000 15 000 Interest income Trading and other 6 000 income 10 000 Interest expense Net fees and Net interest income 4 000 commissions 5 000 2 000 - - Dec 2018 Dec 2017 Dec 2018 Dec 2017 Net fees
Slide 18: Credit impairment and operating expenses
Credit impairment and operating expenses Credit impairment charges Operating expenses 5,000 KES millions 3% KES millions 12 000 57% 58.0% 4,000 2.1% 2% 3,000 10 000 56.0% General debt 8 000 54.0% 2,000 Other operating 2% provision expenses Specific debt 1,000 1.4% 6 000 52.0% Staff costs provision 1
Slide 19: Summarised group balance sheet
Summarised group balance sheet Dec-18 Dec-17 Change KES millions KES millions % Assets Financial investments 72,260 76,245 (5%) Loans and advances to banks 28,381 12,744 >100% Loans and advances to customers 146,604 130,536 12% Other assets 30,491 16,201 88% Property and equipment 2,234 2,307 (3%) I
Slide 20: Customer loans and advances
Customer loans and advances Dec 2018 Loans and advances by product 150 000 146 604 145 000 14% Home loans 140 000 12% 135 000 Overdrafts 130 536 63% 11% 130 000 Vehicle asset finance(VAF) 125 000 Term lending 120 000 Dec 2018 Dec 2017 Customer loans and advances grew by 12% year on year mainly on
Slide 21: Customer loans and advances: Non performing loans (NPLs)
Customer loans and advances: Non performing loans (NPLs) KES millions NPLs by business unit 16 000 38.0% 36.7% 37.0% Dec 2018 Dec 2017 14 000 36.0% 12 000 35.0% PBB PBB Loan loss 10 000 34.0% 29% provision 40% CIB 8 000 33.0% Discounted value CIB 60% 32.0% of security 71% 6 000 31.0% Coverage ratio
Slide 22: Customer deposits
Customer deposits KES millions Customer deposits grew by 24% year on year with core 250 000 accounts accounting for 87% of total deposits 191 585 200 000 Customer deposits by business unit 154 661 150 000 Dec 2018 Dec 2017 100 000 PBB 50 000 PBB CIB 45% CIB 47% 53% - 55% Dec-18 Dec-17 Dec 2018 cus
Slide 23: Funding, liquidity and capital
Funding, liquidity and capital 120% Assets funded mainly from customer deposits 100% 15% 17% Capital adequacy ratio (Bank only) 7% 3% 80% 2% 2% 10% 20.0% 16% 60% 17.4% 18.0% 16.9% 16.0% 15.4% 40% 14.6% 14.5% 66% 14.5% 62% 14.0% 20% 10.5% 12.0% 10.5% 0% 10.0% Dec-18 Dec-17 8.0% Customer deposits De
Slide 24: Corporate and Investment Banking (CIB)
Corporate and Investment Banking (CIB) Anton Marais Executive, Corporate and Investment Banking
Slide 25: CIB summary performance
CIB summary performance Dec-2018 Dec-2017 Change Increase in net interest income as a result of KES millions KES millions % growth in the customer balance sheet Higher non interest revenue due to fees Net interest income 6,412 5,718 12 from increased trade finance volumes, key Non-interest reven
Slide 26: CIB 2019 strategic priorities
CIB 2019 strategic priorities We want to deliver value to We want to partner with our We aspire to be the our clients through our deep clients to unlock their undisputed financial services sector expertise by focusing dreams provider of choice on: Client centricity We want to do valuable things for
Slide 27: Personal Business Banking (PBB)
Personal Business Banking (PBB) Maurice Matumo Executive, Personal and Business Banking
Slide 28: PBB summary performance
PBB summary performance Dec-2018 Dec-2017 Change Strong balance sheet growth on our focus KES millions KES millions % segments driven by acquisition of new to bank Net interest income 5,718 4,926 16 customers Non-interest revenue 2,441 2,040 20 Increase in net interest income explained by Total
Slide 29: PBB 2019 strategic priorities
PBB 2019 strategic priorities Re-organising the Enhancing our funding business to better serve Digital transformation mobilization efforts our clients Leveraging on ecosystems Effective cost to drive growth in chosen Enhance risk awareness management markets
Slide 30: Stanbic Insurance Agency Limited (SIAL)
Stanbic Insurance Agency Limited (SIAL) Julia Shisia Executive, SIAL
Slide 31: Stanbic Insurance Agency summary performance
Stanbic Insurance Agency summary performance Dec-2018 Dec-2017 Change Revenue uplift due to: KES millions KES millions % Increased volumes from embedded Net interest income 9 8 13 products aligned to growth in the loan book Fees and commission 249 166 50 Improved revenue from stand alone and T
Slide 32: Stanbic Insurance Agency 2019 strategic priorities
Stanbic Insurance Agency 2019 strategic priorities Increase penetration on the Bank’s customer base Deeper collaboration with Corporate and Investment Banking sectors Embedding insurance solutions to customers in personal markets and SME space Partnerships with specific brokers locally and i
Slide 33: SBG Securities (SBGS)
SBG Securities (SBGS) Bethuel Karanja Executive Director, SBG Securities
Slide 34: SBGS summary performance
SBGS summary performance Dec-2018 Dec-2017 Change SBG Securities posted revenues of KES 353m for KES millions KES millions % the full year ending 31st December 2018, indicating a 15% year on year growth Brokerage commission 260 252 3 This revenue performance reflects: Other revenue 93 55 69 St
Slide 35: Solid net income improvement over the last 3 years
Solid net income improvement over the last 3 years PAT ('000) ROE (%) 100% 90,000 The improvement in net income over the last 3 years, as a result of: 77,089 80,000 A 20% cumulative growth in total income, 80% 70,000 supported by steady market share gains and growth in advisory revenues 60,000
Slide 36: SBGS 2019 strategic priorities
SBGS 2019 strategic priorities 2018 market highlights The Kenya equities market posted stable turnover while competition for market share continued to intensify Although local investors were generally net buyers, the NASI index declined 18% in 2018, primarily driven by heightened sell-off activi
Slide 37: Q&A
Q&A