Absa Group Limited · JSE:ABG
Absa — Barclays Africa Group — Investor Day (November 2013)
121 slides from Absa's investor day presentation, Nov 28, 2013
Slide 1: Retail and Business Banking Investor Day
Barclays Africa Group Retail and Business Banking Investor Day November 2013
Slide 2: Africa Retail and Business Banking
Africa Retail and Business Banking Becoming Africa‟s „Go-To‟ bank by delivering on our Power of 12 strategy Company confidential
Slide 3: Large contributor to Barclays Africa Group
Large contributor to Barclays Africa Group Revenue (1H13) Headline earnings (1H13) 7% 12% 19% Retail and Business Banking 26% Corporate, Investment Bank and Wealth 62% 74% Financial Services South Africa remains bulk of 1H13 RBB revenue and earnings 18% 15% SA and other Rest of Africa * 82% 85% 3 |
Slide 4: Our journey to date…
Our journey to date… 2012 2Q13 New Retail SA leadership team P Developed a 12 point plan to regain P Fix our lending businesses P market traction and remediate business, IT and operational Fix our collection „shops‟ P shortcomings Started muscle building RBB P 1Q13 leadership with combination of bes
Slide 5: Our journey to date…
Our journey to date… 3Q13 4Q13 continued… Strong outward focus in P Big focus on talent, resourcing, P Business and Retail businesses growth strategy and our operating and good early signs of balance model for our Rest of Africa sheet and customer growth franchises Completed the Barclays Africa / Hu
Slide 6: How we run this business
How we run this business Governance and structures aligned to allow councils to drive transformation of the group whilst Exco structures design, run and implement strategy and day-to-day management of RBB across business and functions Customers and clients Africa RBB Councils South Africa A group of
Slide 7: Power of 12
The power of 12 R Results NPS Respect Helping people I Information Invest for growth Integrity achieve their Reduce cost of Service Live‟s made much easier A Access ambitions - in the delivery right way T Transparency Pervasive control Excellence S Speed culture; Costs Stewardship 1. Put the custome
Slide 8: 9 Strategic deliverables
9 Strategic deliverables 2 Sunrise 9 Partnerships 8 Marketing • Build seamless channel experience • Consolidate and grow existing retail • Escalate the key messages to market • Reshape and reduce branch footprint partnerships through Prosper campaign • Enhance digital experience • Develop new partne
Slide 9: Aligned to Barclays global RBB strategies
Aligned to Barclays global RBB strategies Retail Banking Retail Banking Business Banking Personal and Business Global RBB RBB Europe South Africa Rest of Africa Africa Banking UK Aligning with Barclays Net Promoter Score Net Promoter Score Net Promoter Score Net Promoter Score Net Promoter Score RBB
Slide 10: We believe we now have the right leadership team in place
We believe we now have the right leadership team in place, a credible and clearly articulated plan which we are executing. We hope at the end of today, we will have earned the right to be heard, that at the end of 2014 we will have earned the right to be trusted and that by the end of 2015 we will h
Slide 11: Retail Bank South Africa
Retail Bank South Africa Arrie Rautenbach Cape Town Nov 2013
Slide 12: Ability to compete
An informed strategic approach ... The Attractiveness of the market / Absa Retail Management view economy High South African market will continue to be challenging “Profitable business” “Our business is largely de-risked, Ability to compete with focus on opportunities for growth” Low High We are sha
Slide 13: Retail Bank strategic leadership messages and themes
Retail Bank strategic leadership messages and themes 2012 2013 2014 Inward and Inward and Outward and stabilisation focus upward focus growth focus • Balance sheet focus: growth; asset and liability • Governance and functional focus and returns • Structure development; alignment through councils rol
Slide 14: Governance underpins our strategy development process
Governance underpins our strategy development process Africa RBB Exco Chair: CEO Africa RBB Africa RBB strategy & performance Monthly Retail Exco Retail Manco • Chair: CEO Retail Markets • Chair: CEO Retail Markets • RM Financial & sales • Set RM portfolio strategic performance agenda & align functi
Slide 15: Functional support
Overview of business model which guides approach to the market Customer Product Channel Absa Home Loans Sales & Service • Branch Network Absa Vehicle & Commercial • ATM network Asset Finance • Branchless origination • Customer Value propositions • Customer analytics Card EDCON Digital Banking Servic
Slide 16: Retail Banking leadership team
Retail Banking leadership team Arrie Rautenbach Head: Retail Banking Simon Just Avinash Singh Johan van Schalkwyk Pierre Loubser Carel Gronum Wessel Steffens Jim Campbell Cowyk Fox Head: Head : Head : Customer Head: Head: Head: Head: Head : Transactional Private Bank & network Consumer Loans Home Lo
Slide 17: RBB Investor Day: Home Loans
Signposting RBB Investor Day Home Loans Presentation November 2013 Carel Grönum V2
Slide 18: Redefined our strategy, reviewed our operating model
Redefined our strategy, reviewed our operating model and translated these into clear initiatives Clear strategy Operating model • Strong team • Total value chain, with co-creation and • Winning partnerships co-accountability across all functions • Right deal, first time, on time, all the time • New
Slide 19: Performance improved on the back of a clear strategy
Performance improved on the back of a clear strategy and new leadership team 1H13 Value drivers (YTD) • Headline earnings of R156 million • Registrations up 21% YoY without sacrificing • Total book gross customer margin improved quality or profitability to 1.76% from 1.74% • New business market shar
Slide 20: Mortgage industry remains profitable through the cycle
Mortgage industry remains profitable through the cycle yielding a marginal positive RoA Mortgage LLR by year Mortgage cumulative RoA 3.0% 1.5% 2.5% 2.0% 1.5% 1.0% 1.0% 0.5% 0.0% 2006 2007 2008 2009 2010 2011 2012FY 2013H1 0.5% Absa Bank1 Bank2 Bank3 Market Mortgage cumulative PAT 8 000 0.0% 6 000 4
Slide 21: Absa versus the market
Absa versus the market – sustainable profitable growth Market value (Rbn) and Average Delphi per Segment Absa's share (%) per LTV band 6 months ending 3Q13 3Q13 8 30% 680 675 7 25% 670 6 20% 665 5 660 4 15% 655 3 650 10% 2 645 5% 1 640 635 0 0% Township <500000 500 - 1500 - >2700000 <= 70 71 - 80 81
Slide 22: Flow quality and pricing improving
Flow quality and pricing improving Flow default rates and pricing to prime (%) Flow LTVs 85% 65% 6% 80% 60% 5% 75% 55% 4% 70% 50% 3% 65% 45% 2% 1% 60% 40% 0% 55% 35% -1% 50% 30% -2% 45% 25% 40% 20% 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 Average concession (%) Average L
Slide 23: Improvement in the quality of the total book
Leading to an improvement in the quality of the total book. 60% Absa LTV's (Stock) 35% Total NPL Coverage and Legal % of Book 30% 50% 25% 40% 20% 30% 15% 20% 10% 10% 5% 0% 0% 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 Average LTV (book) % LTV > 85% (book) Legal Legal%% of
Slide 24: Front book, back book analysis
Front book, back book analysis Front book from 1 January 2010 Pricing and NIM (bp) 00% 200 8.00% Impairments 150 50% 6.00% 100 00% 4.00% 50 RoRC Book Size 50% 0 2.00% Back book Front book 0% 0.00% Concession (bps) Client margin (bps) 50% 1.5% -2.00% Credit loss ratio (%) 1.2% 00% -4.00% 0.9% 50% 0.6
Slide 25: Challenging conditions are expected to continue
Challenging conditions are expected to continue Strategic response Low growth • Collections & Recoveries • Efficiency Low flows • Retention • “One bite” Interest rate up • Precise on what we don‟t want • Back Book • Pockets of growth Pressure on consumers 2014 Regulation costs up • Growth • Distress
Slide 26: Executing transform initiatives and run initiatives
Executing 8 “transform” initiatives and well defined “run” initiatives across the value chain Transform 1 Micro-segmentation and value propositions 2 Affordable housing 3 New sales process 4 Distressed customers 5 Credit underwriting and pricing 6 Technology feasibility study 7 Risk and control envi
Slide 27: Way forward
Way forward 1 Address the right issues to transform our business and respond to our challenges Address the issues/aspects in the right manner Geared for execution, execution, execution Further embed our strategy 27 | RBB investor day | November 2013
Slide 28: Absa Vehicle and Asset Finance
Signposting Absa Vehicle and Asset Finance 28 November 2013
Slide 29: Embarked on a growth strategy in 2012
Embarked on a growth strategy in 2012 • Integrated 4 business units, VAF & CAF (2012), & AVMS & Fleet Card (2013). • AVMS and Fleet Card inclusion strengthens our holistic value proposition. • Benefits of our integrated approach adopted already evident in 2012 and 2013 • We are now entering a new Ou
Slide 30: Key successes
Key successes Operating • Bedded down Fleet Card and AVMS integration Model • Identified Cross-sell opportunities – teams are engaging customers collectively Collections • Collections, recoveries and risk capabilities well established and bedded down. • Digitization and automation (Ke Nako) roll-out
Slide 31: Strong loans growth underpinning the financial performance
Strong loans growth underpinning the financial performance 3Q loans and advances (Rm) Market share 40% 49425 44056 35% FirstRand 34.1% 30% Nedcor 24.1% 25% 16848 15722 Absa 21.4% 20% 1503 1351 Standard Bank 18.5% 267 248 15% Jun 13 Dec 12 Feb 13 Sep 12 Sep 13 Jan 13 Mar 13 Oct 12 Jul 13 Nov 12 Apr 1
Slide 32: Solid 1H13 results from integrated business
Solid 1H13 results from integrated business Revenue (Rm) Headline earnings (Rm) 600 1700 1600 500 1500 10% 400 39% 1400 300 1300 200 1200 100 1100 1000 0 1H12 1H13 1H12 1H13 RoEC (%): 19.2 26.2 32 | RBB investor day | November 2013
Slide 33: Strong sales momentum in 2012 and 1H13
Strong sales momentum in 2012 and 1H13 Production (Rm) Customer loans (Rm) 50000 48237 48000 46024 46000 10416 44000 42664 42000 41254 40998 40000 9845 8667 38000 36000 2012 2013 2011 H1 2011 H2 2012 H1 2012 H2 2013 H1 H1 H2 33 | RBB investor day | November 2013
Slide 34: Bulk of deals booked in the better risk categories
Bulk of deals booked in the better risk categories Bookings by risk category (% of scored Legal book segmented(Rm) business) 50% 1800 45% 1600 40% 1400 35% 1200 30% 1000 25% 800 20% 600 15% 10% 400 5% 200 0% 0 Nov-12 Feb-12 May-12 Sep-12 Oct-12 Dec-12 Feb-13 May-13 Jun-12 Jan-12 Jul-12 Jan-13 Jun-13
Slide 35: Debt counselling book also improving
Debt counselling book also improving Total book (Rm) Total up to date book (UTD) 600 60% 100% 90% 500 50% 80% 70% Percent (line) 400 40% 60% 300 30% 50% 40% 200 20% 30% 20% 100 10% 10% - 0% 0% Oct-12 Nov-12 Feb-12 May-12 Sep-12 Dec-12 Feb-13 May-13 Jan-12 Jan-13 Mar-12 Jun-12 Jul-12 Mar-13 Jun-13 Ap
Slide 36: Strong CAF growth
Strong CAF growth Total CAF Book (Rbn) CAF production (Rm) 10000 9000 15.5 8000 7000 4672 6000 4505 5000 4000 3000 5054 2000 4185 3579 1000 11.5 0 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May June 2011 2012 2013 H1 H2 36 | RBB investor day | November 2013
Slide 37: …and improving CAF arrears
…and improving CAF arrears 5.0% Outstanding CAF capital arrear volume (%) 4.5% Total arrears 4.0% 3.5% 3.0% 3 month arrears 2.5% 2.0% 1 month arrears 1.5% 1.0% 0.5% 2 month arrears 0.0% Nov-12 Sep-12 Jun-13 Jan-13 Mar-13 Jul-12 Jul-13 Oct-12 Feb-13 Apr-13 Aug-12 May-13 Dec-12 37 | RBB investor day |
Slide 38: All businesses poised for further growth
All 4 businesses poised for further growth Vehicle and Asset Finance Absa Vehicle Management Solutions • High quality book • World class collections and • Re-entering public service recovery processes tenders • Digitization and automation • Expand product range to non- • Investment in people and ena
Slide 39: Absa Card
Signposting Investor Day, Absa Cape Town, Card South Africa 28 November 2013
Slide 40: Absa Card is 4 businesses
Absa Card is 4 businesses Payment Commercial Card Consumer Credit Prepaid Cards Acceptance Cards 270k Bank 6 of top 7 Number 3 1.6m Contactless cards Market leader in prepaid Retail merchants By number of cards Consumer accounts Traditional Barclaycard Absa & Co- Commercial point of sale and Absa br
Slide 41: Absa Card and Barclaycard enable payments
Absa Card and Barclaycard enable consumers to make payments and businesses to take payments Consumers paying businesses c.£440bn global revenue Consumer Businesses s Businesses businesses Consumers consumers paying paying Businesses paying consumers Consumers Businesses 41 | RBB investor day | Novem
Slide 42: Very attractive franchise
Very attractive franchise Profit before tax (Rm) Receivables (Rm) CAGR 24% Rm CAGR 5% 0 Pre tax Trading volumes ROA (%) 5.8 8.5 12.0 13.9 13.5 Issuing volumes 58.6 54.6 58.0 59,7 63,4 (Rbn) 42 | RBB investor day | November 2013
Slide 43: Strong growth in payment acceptance
Strong growth in payment acceptance Rbn Volumes and YoY growth • Largest acquirer in Africa 180 • Barclaycard is #8 globally 160 140 30% 120 9% 8% 100 31% 80 60 40 79 103 111 121 157 82 20 0 2008 2009 2010 2011 2012 1H13 82 43 | RBB investor day | November 2013
Slide 44: Live with Payment Pebble, a killer app
Live with Payment Pebble, a “killer app” With your Payment Pebble….get paid Why it‟s a where you least expect it. "killer app”? The Absa Payment Pebble turns a smartphone or tablet into a mobile point Who is it Mobile merchants, small startups, large corporates, food franchises, locksmiths, for? plu
Slide 45: Exciting transition in consumer issuing
Exciting transition in consumer issuing 2010-2012 2008-2010 Note: Bubble size represents average book size during period. 45 | RBB investor day | November 2013
Slide 46: Delinquency roll rates are stable
Delinquency roll rates are stable and accounts in collections have been falling Delinquent balance roll rates Collections volumes (K) 120 12 Average balance per account in 120-150dpd 100 10 150-180 collection dpd 80 8 30-60dpd 60 6 60-90dpd 30-60dpd 40 Number of accounts in 4 collection 20 2 To buck
Slide 47: Early vintage loss curves show seasoning
Early vintage loss curves show seasoning 10% New vintages season at higher charge-off rates (%) 8% 6% Pre 2010 4% 2012 2% 2010 2013 2011 0% Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 47 | RBB investor day | November 2013
Slide 48: SARB data indicates the market has outpaced us on the issuing side
SARB data indicates the market has outpaced us on the issuing side, but we are the leader in our core segment Credit Card market share Credit Card receivables: proprietary offerings of the top 4 banks 40% Rbn 20 40% 35% 32% Highest market share 33% 15 30% Comp B 30% 10 20% 27% 24% *Absa group 5 10%
Slide 49: Non bank market co-brand opportunity
Non bank market co-brand opportunity Today Future • Co-brand products 11% of the total Contribution to our total 18 receivables (%) market receivables 16 • Virgin Money a 5% share and 14 Woolworths Financial Services 12% 12 of co-brand balances. 10 • We have 17% share of co-brand 8 balances through
Slide 50: We just launched Avios
We just launched Avios • Offer a Platinum MasterCard and earn Avios for day to day expenses • Take out the card and access all of the benefits regardless of primary bank • Average cardholder will earn enough Avios for a domestic reward flight redemption in 12 months • 1 Avios for every R10 spent • D
Slide 51: We will add co brands to Virgin Money and Avios
We will add co brands to Virgin Money and Avios • No monthly or annual fee • Develop robust pipeline of new • No initiation or purchase fees. product launches to further grow • Simple flat fee structure our co-brand presence • Virgin Money partner Discounts. • New co-brand with a leading global • Au
Slide 52: Play to our core global Barclaycard and Absa strengths
Play to our core global Barclaycard and Absa strengths Strategic Innovation Analytics Customer Decision and CRM/Marketing management science Barclaycard partnerships Analytics Absa Card has received great value from our integrated relationships with Absa Group and Absa Card Barclaycard, and our part
Slide 53: Lots of opportunity in core retail propositions business
Lots of opportunity in core retail propositions business 2014 Growth opportunities • We have world class credit risk management capabilities supporting our card business, • Significantly improved risk and product segmentation with a new developing leading edge predictive risk New business scorecard
Slide 54: Personal Loans – Positioned to Grow
Personal Loans – “Positioned to Grow” Pierre Loubser Head: Personal Loans Retail Markets 28 November 2013 5 4
Slide 55: Financial health of the business remains sound
Financial health of the business remains sound Yields (%) Revenue (Rm) Headline earnings (Rm) 2500 800 20% 600 17% 2000 400 14% 1500 200 11% 1000 0 8% -200 5% 500 2010 2011 2012 1H13 -400 0 -600 Yield on advances 1H13 2008 2009 2010 2011 2012 1H13 2008 2009 2010 2011 2012 Net interest margin Loans (
Slide 56: Strategy focused on low risk, high income existing customers
Strategy focused on low risk, high income existing customers Risk mix of new bookings (%) Income of Absa loan customers (%) 100 100 90 90 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 2010 2011 2012 2013 2010 2011 2012 2013 Superior quality Higher quality Medium quality Lower quality 0-3K >3K-
Slide 57: Book largely middle and affluent
Book largely middle and affluent [1%] Private Revolving Loan Bank [80%] [2%] No term R15K – R150K Variable Retail Personal Loan Affluent [23%] 12 – 84 Months R15K – R150K Core Middle [16%] Market [70%] [2%] [1%] Fixed Personal loan Instant loan Express loan 12 – 60 Months Entry Level Bank 35 Days 1
Slide 58: Increase in higher ticket sizes off robust credit risk assessment
Increase in higher ticket sizes off the back of robust credit risk assessment Portfolio - Term and loan size Instalment to income 60 60 5% 3% 4% 11% 50 54 50 51 52 52 48% 47% 40 40 52% 51% Rands (R'000) Months 30 35 30 33 31 31 20 20 49% 49% 38% 42% 10 10 0 0 2010 2011 2012 2013 2010 2011 2012 2013
Slide 59: New business remains healthy, driven by de-risking
New business remains healthy, driven by de-risking New business vintage performance May-12 Sep-12 May-13 Sep-13 Jul-12 Jul-13 Dec-11 Oct-12 Oct-13 Feb-12 Jun-12 Aug-12 Dec-12 Feb-13 Jun-13 Aug-13 Nov-11 Nov-12 Jan-12 Mar-12 Jan-13 Mar-13 Apr-12 Apr-13 Bookings (Rm) 3MOB 6MOB 3MOB Hurdle 6MOB Hurdle
Slide 60: Collections strategies enhanced
Collections strategies enhanced Delinquency trend Delinquency by Cycle 11% 6% 11% 11% 5% 5% 5% 5% 10% 10% 4% 4% 3% Arrear Book 3% 3% 2% 3% 9% 2% 2% 1% Cycle 1 Cycle 2-3 Cycle 4-6 8% 0% 2011 2012 YTD 2011 2012 YTD Source: PL Risk Management
Slide 61: Limited exposure to debt counseling
Limited exposure to debt counseling Absa % to Industry (in relation to loans portfolio of all Banks (Absa, FNB, Nedbank, SBSA) under debt review) Fixed rate DC inflows 8.0% 160 7.5% 140 141 7.0% 120 6.5% 100 6.0% 92 Rm 80 84 5.5% 60 5.0% 40 4.5% 20 4.0% 0 Nov-12 Sep-12 Feb-13 Sep-13 Jan-13 Apr-13 Ju
Slide 62: Credit loss rate on our portfolio remains low
Credit loss rate on our portfolio remains low Impairment and credit loss rates 12.0% 1 200 10.6% 10.0% 9.6% 1 000 Impairments (Rm) 8.0% 800 6.2% Loss Rate 6.0% 600 4.3% 990 1 005 4.3% 3.5% 4.0% 400 573 509 479 2.0% 423 200 0.0% - 2008 2009 2010 2011 2012 H1 2013 Impairment Charge (RHS) Loss Rate Sou
Slide 63: Topical issues
Topical issues • Credit amnesty • NCA affordability rules • Deterioration in customer health • Credit life insurance • In duplum • Emolument orders 63 | RBB investor day | November 2013
Slide 64: Strategic aligned to RBB / Group
Strategic aligned to RBB / Group Personal Loans ambition To be the „Go-To‟ bank for personal loans, making lives much easier Translated to 3 focus areas and 6 strategic initiatives Ensuring every existing Ensuring correct segment Deliver propositions qualifying customer / risk mix digitally borrows
Slide 65: Significant opportunity within existing customer base
Significant opportunity within existing customer base Absa share of customer PL borrowing 35% 33% (average for 6 months to August 2013) 32% 30% 19% 25% 24% 21% 20% 17% 15% 10% 9% 81% 5% 4% 3% 0% Entry Level Middle Affluent Private On-us Off-us Main bank market share Personal loan market share 65 | R
Slide 66: Large retention opportunity
Large retention opportunity Early settled (>= 1day) Off-us customer loan sizes R 350 R 500 R 450 R 300 R 400 R 250 R 350 R 300 R 200 Millions Millions R 250 R 150 R 200 R 100 R 150 R 100 R 50 R 50 R- R- Jan'12 Jul'12 Jan'13 Sep'12 Mar'12 Nov'12 Mar'13 May'12 May'13 Mar'12 Jul'12 Jan'12 Jan'13 Mar'13
Slide 67: How we will improve share of wallet from existing customers
How we will improve share of wallet from existing customers Visible limits New Preferential marketing offers for approach primary built on customers We know you relationship so we can help you Marketing Active analytics retention 67 | RBB investor day | November 2013
Slide 68: Pricing optimization remains a key focus area
Pricing optimization remains a key focus area 68 | RBB investor day | November 2013
Slide 69: Digital programme and analytical capabilities are key enablers
Digital programme and analytical capabilities are key enablers Our billboard ambition “Get a loan in less than 10 minutes and less than 10 steps” – to fulfil your personal needs Existing customer log on Just 4 key entries! Visible Credit Limit Loan Amount R5,000 Loan Term 12 “You could Credit Protec
Slide 70: Personal loans story: Be the Go-To bank
Personal loans story: Be the „Go-To‟ bank for personal loans, making lives much easier Delivery through Barclays Impact to date „Go –To‟ vision STAIRs framework ...making customers lives much Speed easier - LiMME 50% of monthly flow to be • Instant lending across all channels 50% Customer experience
Slide 71: Why we will win
Why we will win • New team / Exco in place with strong analytical capabilities across value chain • Well positioned with healthy portfolio (saw the signs and acted) • Clear on plan, opportunities and execution • Collaboration using UK / US credit analytics 71 | RBB investor day | November 2013
Slide 72: Transactional Banking and Deposits
Transactional Banking and Deposits Simon Just November 2013
Slide 73: Introducing our retail transactional franchise
Introducing our retail transactional franchise Debit Financial headlines FY H1 2012 2013 Current Demand Revenue (Rbn) 9.6 4.6 Transactional Investments Savings and Accounts Accounts (m) 10.5 10.1 Transmission Notice Transactional (m) 7.5 7.2 Savings & investments (m) 2.9 3.0 Transactional Rewards (m
Slide 74: Key challenges coming into 2013
Key challenges coming into 2013 Retail Market share declines • Primary customer account growth, slowing rates of acquisition • Dormant and inactive account clean-up • Loss of social grants tender • Silent attrition and customer- initiated closures • Deposits growth 74 | RBB investor day | November 2
Slide 75: Tailwinds in Retail impact transactional franchise
Tailwinds in Retail impact transactional franchise Broader Absa challenges for primary account Risk growth Appetite • Brand positioning Customer Deposits growth experience & Lending • Sales channels Primary proposition effectiveness Accounts • Marketing Unsecured effectiveness Transaction Customer r
Slide 76: Back to basics - key findings driving management actions
Back to basics - key findings driving management actions • New to Transactional sales measurement and incentives drive sale and activation behaviour – onboarding customer contact is also key. • In middle to affluent segments, inactive Transmission accounts require intensive upgrade management. • Tra
Slide 77: Our 2013 early turnaround agenda focused on three core themes
Our 2013 early turnaround agenda focused on three core themes Go-To-Market Re-engage Speed & transparency • Kick starting primary • Fix and restart broken • Simplify account account sales in our customer contact opening and switching network processes processes for customers in all channels • Get ba
Slide 78: Key successes in 2013 driven by early turnaround agenda
Key successes in 2013 driven by early turnaround agenda… Back in market with price leadership and packages • Gold Value Bundle • Rewards incl. Debit • The App • 2 New TV Ads • ATMS Increased market awareness 78 | RBB investor day | November 2013
Slide 79: Key successes in 2013 driven by the early turnaround agenda
Key successes in 2013 driven by the early turnaround agenda Back in market with price Reactivated our sales leadership and packages network • Big Cheque In • Gold Value • Primary account Bundle drive (70k) • Rewards incl. • New incentives and Debit management • The App information • 2 New TV Ad‟s •
Slide 80: New to transactional account growth and new packaged offerings
Key successes in 2013: New to transactional account growth and positive impact of new packaged offerings New to Transactional growth • Measuring new to transactional sales Big Cheque (NTT) In Launch • New to transactional shift from less than 10% of cheque sales to 31% W5 July W1 July W2 July W3 Jul
Slide 81: Key successes in 2013 driven by the early turnaround agenda
Key successes in 2013 driven by the early turnaround agenda Back in market with price Reactivated our sales Started to re-engage our leadership and packages network customers • Big Cheque In • Gold Value • Primary account • 54 customer Bundle drive engagement • Rewards incl. • New Incentives and int
Slide 82: Savings and investments
Savings and investments Strong book growth in 2nd half of 2013 Q2: Marketing campaign Q3: Marshmallows • New product launches: Depositor Plus and Notice Select 2013 Monthly Book Growth • Reposition S&I within the Group and (Rm) in market with Marshmallow campaign -242 -241 313 431 272 804 632 775 1
Slide 83: Key successes: pricing revenue optimisation
Key successes in 2013 driven by the early turnaround agenda Pricing - revenue optimisation • Best value bundle in market • R181m NIR uplift YTD • Sekulula NIR uplift through revenue recovery 84 | RBB investor day | November 2013
Slide 84: Value leadership and competitiveness
Value leadership and competitiveness FinWeek bundled comparison R 431.40 FinWeek R 323.00 R 258.47 R 273.78 • Gold Value Bundle the most competitive amongst four large Absa FNB Nedbank Standard Bank banks‟ Gold offers Solidarity mainstream comparison “ … we applaud Absa for the R 82.00 R 97.00 R 102
Slide 85: Key successes in 2013 driven by the early turnaround agenda
Key successes in 2013 driven by the early turnaround agenda Pricing - revenue Account opening and Workplace Banking optimisation onboarding • Best value bundle • New value in market propositions • R181m NIR uplift • New tactical switching • Edcon pilot YTD process • Pod progress • Sekulula • Switch
Slide 86: We recently reset our ambition and statements of strategic intent
We recently reset our ambition and statements of strategic intent To be the „GO-TO‟ transactions, savings and deposits banking Ambition partner in South Africa, the financial hub in our customer‟s lives. Statements of strategic intent 1. Grow Primary Accounts Dominate primary account growth in 18 mo
Slide 87: Our 7 key strategies for turnaround
Our 7 key strategies for turnaround Strategic - Continue focus on sales turnaround sales drive on 1 primary - New to transactional focus - Conversion of secondary to primary accounts - Workplace anking - 2013 run-rates sustained - New radically simplified Simplified product continuum product - New e
Slide 88: Our 7 key strategies for turnaround
Our 7 key strategies for turnaround - New retention and activation centre Product and - Closure and dormancy rules 4 customer - Onboarding and activation - Lifecycle management – upgrade engagement strategy and use - Digital sales / engagement platform - Account opening and onboarding Digital 5 enga
Slide 89: Our 7 key strategies for turnaround
Our 7 key strategies for turnaround - Inorganic opportunities – retailers 7 Deposit break- and aggregators - Click 2 Save – radical digitisation out - New Moneybuilder account - Consistent market presence 90 | RBB investor day | November 2013
Slide 90: What does success look like?
What does success look like? • Net active account growth Primary account turnaround plan o Sustain strong growth in new to transactional account sales o Reduction in Channel normalised account Continued sales, service World-class closures lending and cost „Go-To‟ recovery and o Retention of /efficie
Slide 91: Rest of Africa – Retail Bank
Rest of Africa – Retail Bank Investor Day – Cape Town Rajal Vaidya November 2013
Slide 92: Rest of Africa – a strong retail franchise
Rest of Africa – a strong retail franchise • Unique competitive Region Total advantage – top 3 in 8 markets About Us Presence 1864 Since • Loyal customer base – estimated 1 out of every 8 Customers 3.1m bankable customers in target Footprint Branches 549 market bank with us ATM‟s 1,354 • Talented, e
Slide 93: Income composition and geographical split
Income composition and geographical split FY12 income diversification by product FY12 regional contribution to income Loans Income North Africa Cards 2% 2% 13% 5% 26% Liabilities 15% East & West Africa 13% 22% 8% ALM 36% Southern Africa Insurance 58% FX Commissions Indian Ocean Other 96 | RBB invest
Slide 94: Customer assets and liabilities composition
Customer assets and liabilities composition Product Contribution - Customer Region Contribution - Customer Assets Assets Personal Loans North Africa 2% 1% 7% Mortgages 11% 10% 17% East & West Africa 28% Auto 73% 51% Southern Africa Other Cards Indian Ocean Product Contribution - Customer Region Cont
Slide 95: Barclays Africa Regional Retail Team
Rajal Vaidya Barclays Africa Retail Director 6 years in Barclays, 23 years in banking Brighton Banda Head of Assets Vimal Kumar 1.5 years in Barclays Director, Lending 13 years in Banking Zahid Mustafa - Peo Motshegare - 2 years in Barclays Kenya Botswana 18 years in Banking Satrajit Saha 6 years in
Slide 96: Our management process
Our management process RBB Africa Executive Committee Barclays Africa Executive Committee Africa RBB Executive Committee Rest of Africa Retail Bank Rest of Africa retail Engagement model Weekly team meeting Initiative status SEGMENT/ RETAIL / Weekly COUNTRY updates PRODUCT MANAGEMENT WORK COMMITTEE
Slide 97: Our ambition
Our ambition • We will be the leading Pan-African Franchise to bank with, work for and invest in • We will be agile and deliver innovative customer solutions in a controlled manner while ensuring sustained profitability in all our markets Statements of strategic intent Customer Brand We will offer b
Slide 98: Barclays Africa Retail strategy
Barclays Africa Retail strategy Segments Propositions Solutions Enablers Transformational Transactional Digital Project Sunrise Borrowing Barclays Direct MASS • HR: Colleague Premier Savings AFFLUENT Sales Agenda productivity Protection EMERGING Payment Reposition Barclays Drive NPS ↑ Prestige Afric
Slide 99: Achieved traction against our strategy…
Achieved traction against our strategy… 2011 – Council Initiatives 2011/2012 – Alpha Initiatives Financial Results RETAIL CARDS RETAIL CARDS Revenues (Rm) Barclays Direct * Worldmiles X-Border Alliance 20% platform Clearly Barclays Chip & Pin Self Service points of contact Customer 6,129 6,667 Cross
Slide 100: Key initiatives underpinning our Go-To bank vision (1 of 2)
Built on our success…we are executing key initiatives underpinning our „Go-To‟ bank vision (1 of 2) 1 Premier 2 Prestige To continue to build a world class Develop and launch the most Premier Business through the comprehensive and competitive delivery of a holistic relationship Emerging Affluent seg
Slide 101: Key initiatives underpinning our Go-To bank vision (2 of 2)
Built on our success…we are executing key initiatives underpinning our „Go-To‟ bank vision (2 of 2) 7 Emerging payments 8 Debit/Prepaid Build greater transactional Build new solutions for our relationship with customers customers through the delivery of through the delivery of a mobile enhanced Debi
Slide 102: Customers are at the heart of everything we do
Customers are at the heart of everything we do Revised credit protection model on unsecured loans will be implemented in all markets by Q1 2014 - this is a market and continent first Barclays Direct now live in 11 markets Credit Card usage and Loan on Phone campaigns launched to drive book growth Wo
Slide 103: New business and sales
New business and sales United Nations - won the tender to Landing the Ackermans provide banking services to all UN account from one of our major agencies in Uganda competitors in Botswana CASA 277 000 new to Winning of Shoprite tender across 6 bank accounts opened markets - Botswana, Ghana, Mauritiu
Slide 104: Digital roadmap
Digital roadmap Pitch in: Live in all markets Internet Banking: Pingit: Botswana, Egypt, Botswana, Ghana, Kenya, Delivered so far… Ghana, Kenya Mauritius, Seychelles, and Zambia Tanzania, Zambia and Zimbabwe Mobile Banking: Hello SMS alerts: Botswana, Ghana, Money: Botswana, Ghana, Kenya, Mauritius,
Slide 105: In summary
In summary • Unique competitive advantage – top 3 in 8 markets • Healthy CASA ratio of 72% • 2011/2012 Initiatives have been successful in building our financial momentum – Revenue growth of 20% CAGR between 2007 and 2012 • Mature management process and engagement model • Continued success in 2013 t
Slide 106: Barclays Africa: Business Banking
Signposting Barclays Africa: Business Banking Investor Day 27th – 28th November 2013
Slide 107: Business Banking Africa management structure
Business Banking Africa management structure Roy Ross Head: Business Banking Africa Happy Ralinala Tezza Bryant Craig Robertson Jan Moganwa Ekow Duker Pieter Steyn Banie Claasen Noah Naidoo Brienne van der Liza Bergh Head: Business Head: Coverage Head: Coverage Head: Product & Head: Customer Head: C
Slide 108: Our strategy on a page
Our strategy on a page To put world class banking solutions within reach of every business in our targeted markets Sectors Coverage Products Relationship Transaction & Deposits Lending Bancassurance Retail including Local Agriculture Other franchise Government Commercial 2 segments Enterprise Select
Slide 109: Strong 1H13 growth off a low base
Strong 1H13 growth off a low base Headline earnings (Rm) Credit impairments (Rm) 900 748 1H12 800 2H12 1H13 700 600 500 400 326 240 255 300 218 162 200 90 100 11 13 0 1H12 2H12 1H13 . CPF loans Commercial Rest of Africa* RoEC (%): 10.5 9.8* 19.6 Note: * Barclays Bank Mozambique, National Bank of Com
Slide 110: More stable equity portfolio
More stable equity portfolio Headline earnings from Equities and Africa* Value of Equity portfolio (Rm) (Rm) 0 2647 2660 2550 -50 -100 1H12 2H12 -150 1H13 -200 -250 -300 1110 976 910 -350 -400 519 473 487 -450 231 153 66 -500 1H12 2H12 1H13 Listed equity Unlisted Investment Inventories . equity prop
Slide 111: Key challenges
Key challenges • Client attrition • Declining market share • Uncompetitive online capability • Subdued asset growth • Poor revenue growth 115 | RBB investor day | November 2013
Slide 112: Addressing these challenges
Addressing these challenges Barclays Africa Business Banking Business Banking South Africa 116 | RBB investor day | November 2013
Slide 113: We created Business Banking Africa as a focused business unit in 2013
We created Business Banking Africa as a focused business unit in 2013 October 2013 August 2013 Initial focus May 2013 First on top 6 Business countries Early 2013 Establish Banking Late 2012 Business Bank council Business Bank in RBB Africa is a distinct Recognise proposition SMEs drive and focus 50
Slide 114: Benefits of sector focus – agriculture
Benefits of sector focus – agriculture • Focus on core customers Agriculture market share (%) • Growing asset book 36 35 34 • Geographic and commodity diversity • Good returns 32 30 2008 2009 2010 2011 2012 . Source: Equidem Management Sciences 118 | RBB investor day | November 2013
Slide 115: Repositioning our transactional franchise
Repositioning our transactional franchise 121 | RBB investor day | November 2013
Slide 116: Our journey to becoming the Go-To business bank
Our journey to becoming the „Go-To‟ business bank • Investing in people • Digital and Transactional banking franchise • Improving Net Promoter Score • Core focus on risk management • Growing rest of Africa franchise 122 | RBB investor day | November 2013
Slide 117: RBB Africa
Signposting RBB Africa Ed Carrell Investor Day, Cape Town, South Africa 28 November 2013
Slide 118: A complex legacy (2012)
A complex legacy (2012) • Multiple independent factories and shops • Confusing to insiders, baffling to customers • High cost • Control breakages Required a decisive response with a simple set of actions – Aligning operations, technology and enabling services to customers and business priorities – F
Slide 119: The heavy lifting (2013 to 2015)
The heavy lifting (2013 to 2015) Example: Client on-boarding in Retail From To • Paper based • Straight through • Product based • Easy • Hub and spoke via 3rd party • Once and done • Error prone • Flexible and expandable • High re-work • Efficient • High cost 126 | RBB investor day | November 2013
Slide 120: Key COO priorities
Key COO priorities • Invest in our people Professionalise Operations • Scale and synergy Management • Africa Hubs • Barclays Shared Services Core • Global Centres of Excellence Competencies • Outsource • Re-define and re-build customer processes to be cheaper and faster through the coalescence of: R
Slide 121: | RBB investor day | November 2013
129 | RBB investor day | November 2013