Ncba Group Plc · NSEKE:NCBA
Ncba — H1 2022 Earnings Presentation
40 slides from Ncba's earnings presentation, September 2022
Slide 1: Investor Briefing September 2022
INVESTOR BRIEFING sant!
Slide 2: Contents
CONTENTS WHO WE ARE STRATEGY UPDATE H1 2022 FINANCIAL PERFORMANCE OUTLOOK 2 ncbagroup.com Go for it
Slide 3: Disclaimer and Note on Forward-Looking Financial Projections
WHO WE ARE Disclaimer and Note on Forward-Looking Financial Projections NCBA Group PLC a nd its subsidiaries (collectively “NCBA Group” or “ the Group”) may periodically provide oral and/or written forward-looking financial projections to the Group’s stakeholders who include but are not limited to i
Slide 4: Our History
WHO WE ARE Our History NCBA Group PLC, officially started operations on Tuesday, 1st October 2019 following the merger of NIC Group PLC (NIC) and Commercial Bank of Africa Limited (CBA) • First incorporated as National Industrial Credit 60 • Opened it’s doors 59 years ago and was the largest years a
Slide 5: Our Purpose and Value
WHO WE ARE Our Purpose and Value DRIVEN OPEN OUR PURPOSE: To be the Financial Services RESPONSIVE Partner that Inspires Your Growth TRUSTED Welcome to the bank that banks on your OUR CUSTOMER PROMISE ambition At NCBA, our customers are at the heart of everything we do – we are driven by Welcome to t
Slide 6: Our Regional Footprint
WHO WE ARE Our Regional Footprint KEY GROUP HIGHLIGHTS CUSTOMERS >60M UGANDA STAFF 4 Branches 10.1M Customers 2,946 BRANCHES 101 CÔTE D'IVOIRE ATMs KENYA Purely Digital 5.49M Customers 84 Branches 31M Customers 93 CASH DEPOSIT MACHINES RWANDA 5 Branches TANZANIA 34 2.74M Customers 8 Branches 11.69M
Slide 7: Fitch Rating
WHO WE ARE Fitch Rating In its latest assessment, Fitch affirmed its rating of NCBA Group and NCBA Bank as B+ Negative Outlook Positive Highlights: Areas of Attention: Strong Business Profile: Strong franchise and diverse business model: The Loan quality: The operating enlarged post-merger business
Slide 8: Awards & Accolades
WHO WE ARE Awards & Accolades • Best Bank in Kenya 2022 - Global Finance • Most Preferred Asset Finance Bank in Kenya - Annual Road Safety Awards 2022 • 3rd Best in Customer Experience - Kenya Bankers Association • 5th Best employer by LinkedIn • Among Top 10 most valuable brands in Kenya - Brand Fi
Slide 9: Operating Environment
OPERATING ENVIRONMENT OPERATING ENVIROMENT 9
Slide 10: Global: Firming stagflation risks to result in more growth sensitive policymaking
OPERATING ENVIRONMENT Global: Firming stagflation risks to result in more growth sensitive policymaking Global Growth Downgrades Inflation to remain elevated as supply dislocations persist Revised Estimates as at July 2022 (High food and energy prices) 2022(rev) 2022(prev) Brent Crude Oil Prices (%Y
Slide 11: Kenya Macroeconomic Environment: Key Indicators
OPERATING ENVIRONMENT Kenya Macroeconomic Environment: Key Indicators Sectoral Contribution to Overall GDP Growth 12% 11.00% • Annual headline inflation rate at 8.5% (Aug- 10% 9.30% 22) up 277bps YTD driven by high food and 8% 7.50% 7.40% 6.80% fuel costs linked to supply and supply chain 6% disrupt
Slide 12: Kenya 2022 Post-Election View
OPERATING ENVIRONMENT Kenya 2022 Post-Election View An undisruptive electoral cycle and confidence in institutional strength should reduce the political risk premium on the economy, enhance sentiments paving way for investments. Key Tailwinds: • Policy continuity with little deviation from the prior
Slide 13: Update on Strategic Priorities
STRATEGIC PRIORITIES UPDATE ON STRATEGIC PRIORITIES 13
Slide 14: Our Strategic Priorities: 2020 - 2024
STRATEGIC PRIORITIES Our 5 Strategic Priorities: 2020 - 2024 1 Become a Distinguished Brand Known For Customer Experience 2 Scale Retail 3 Deepen 4 Digital Banking: Expand Leadership in Transformation Distribution Corporate Banking & Asset Finance Increase • Thoughtfully grow our retail footprint to
Slide 15: Strategic Roadmap
STRATEGIC PRIORITIES Strategic Roadmap We are Here Our phased approach allows us to focus on investing in our growth agenda anchored on a solid organizational foundation D Implement 5 Strategic C Priorities B Deploy the Operating Model A Survive the of the Future Integrate Unexpected our Turbulence
Slide 16: Distinguished Brand Known for Customer Experience
STRATEGIC PRIORITIES Distinguished Brand Known for Customer Experience 1 Notable growth of NCBA brand consideration over time as we continue to make intentional investments to position the brand in the mind and hearts of our customers Brand Consideration Trend I would not consider it I would serious
Slide 17: Scaling Retail Banking
STRATEGIC PRIORITIES Scaling Retail Banking 2 Benefits accruing from enhance network reach and enhanced operational efficiencies 2022 Update • 16 branches opened in Kenya 2022 since the Target to open New Branches Performance implementation of 12 New Branches the strategy • 2 branches have broken •
Slide 18: Deepening Leadership in Corporate Banking
STRATEGIC PRIORITIES Deepening Leadership in Corporate Banking 33 • # 1 FX provider in the market • Highest corporate deposits, with >60 new corporates on boarded in 2022 • Deep expertise in key sectors, enabling thought leadership • Integrating core banking system into ERPs of key customers to enab
Slide 19: Deepening Leadership in Asset Finance
STRATEGIC PRIORITIES Deepening Leadership in Asset Finance 3 Leveraging our market leadership to drive the climate risk agenda by pioneering leasing of electric vehicles (KES 2Bn Investment) /Finance 5,000 vehicles Partnered with Market Share Develop • CFAO Motors to lease strategic 250 Vehicles par
Slide 20: Digital Transformation
STRATEGIC PRIORITIES Digital Transformation 4 We are the market leader in digital financial services and we continue to expand our regional reach and grow our disbursements Loans Disbursed Product Country Partner (Inception to Date) Product Customers Volume Value M-Shwari Safaricom Loop M-Shwari 31.
Slide 21: Digital Transformation: Digital Business Contribution
STRATEGIC PRIORITIES Digital Transformation: Digital Business Contribution 4 This business has steadily increased its contribution to Group PBT, while providing significant cost efficiencies KES 583.7Bn KES 35.6Bn Disbursements Deposits YoY+34% (KES 434Bn) YoY+24% (KES27.3Bn) KES 12.6Bn 1.14% Revenu
Slide 22: Digital Transformation: Digital Business: Big Bet
STRATEGIC PRIORITIES Digital Transformation: Digital Business: Big Bet 4 We will become more essential to our customers by establishing a payments platform business that addresses their need for simplicity. In turn, this will increases the scalability of our Business and create new incentives to “en
Slide 23: Digital Transformation: Regional Expansion
STRATEGIC PRIORITIES Digital Transformation: Regional Expansion 4 We see an opportunity for NCBA to be relevant to ~500M customers across Africa Horn of Africa Cluster • Pursuing partnership with local telco players to support NCBA Group’s market entry into Ethiopia, Africa’s last frontier market. •
Slide 24: Digital Transformation
STRATEGIC PRIORITIES Digital Transformation 4 Delivering on efficiencies to drive business growth and better service management 1. NCBA Now 2. Retail Digital Finance 58% Mobile banking consolidation project • 100% of active customers migrated to NCBA Now Increase in monthly disbursement in H1 2022 c
Slide 25: 2022 Priorities
STRATEGIC PRIORITIES 2022 Priorities 4 key areas of focus this year across the Group 1 2 3 4 Customer Business Controls Regional Business Experience Growth Performance Deliver Brand Love Enhance top line Implement robust Eliminate drag to growth controls Group Performance and create foundation for g
Slide 26: Financial Performance
FINANCIAL PERFOMANCE FINANCIAL PERFORMANCE 26
Slide 27: H1 2022 Group Performance Highlights
FINANCIAL PERFORMANCE H1 2022 Group Performance Highlights Group performance supports path to financial targets Income Statement Balance Sheet Highlights Highlights (Amounts in KES B) (Amounts in KES B) Operating Customer 468 7% YoY Profit 17.5 27% YoY 11% Deposits 51% Net Interest Income 14.9 11% Y
Slide 28: H1 2022 Subsidiary Performance
FINANCIAL PERFORMANCE H1 2022 Subsidiary Performance The Group has continued to deliver solid results as we record improvements in the performance of our subsidiaries H1 2022 H1 2021 ∆% Amounts in KES Millions Kenya 11,621 7,936 >46% Banking Tanzania (471) (245) 92% Subsidiaries Uganda 293 (174) >10
Slide 29: H1 2022 Statement of Profit & Loss
FINANCIAL PERFORMANCE H1 2022 Statement of Profit & Loss We have focused on generating sustainable revenue across all income lines thus sustaining momentum in operating profits Amounts in KES Millions NCBA Bank Kenya NCBA Group Consolidated H1 2022 H1 2021 ∆% H1 2022 H1 2021 ∆% Interest Income 22,34
Slide 30: H1 2022 Statement of Financial Position
FINANCIAL PERFORMANCE H1 2022 Statement of Financial Position Our balance sheet continues to expand on the back of healthy deposit growth Amounts in KES Millions NCBA Bank Kenya NCBA Group Consolidated H1 2022 H1 2021 ∆% H1 2022 H1 2021 ∆% Assets Net Loans and Advances 224,828 215,519 4% 250,499 239
Slide 31: Gross Loans and Advances
FINANCIAL PERFORMANCE Gross Loans and Advances Corporate business remains a key contributor to the lending book Amounts in KES Billions Corporate Banking Retail Banking Digital Loans KES 277 Bn KES 278 Bn 7% 19 17 6% 33% 86 31% 91 60% 166 175 63% H1 2021 H1 2022 31 ncbagroup.com Go for it
Slide 32: Customer Deposits Analysis
FINANCIAL PERFORMANCE Customer Deposits Analysis Our strong Foreign Currency deposit mobilization has enabled NCBA to be the #1 FX provider in the market . Additionally our deposit mix is intentionally shifting towards lower priced CASA Currency (KES B) Product Type (KES B) Term Deposit CASA LCY FCY
Slide 33: Other Metrics
FINANCIAL PERFORMANCE Other Metrics Digital Loans Disbursements Cost of Risk KES Bn 7.4% 584 434 339 4.1% 3.4% 2020 2021 H1 2022 2020 2021 H1 2022 Digital loans disbursements Cost of Risk • 35% growth in digital loan • Significant improvement in asset quality disbursements between 2020-2021
Slide 34: Shareholders Returns
FINANCIAL PERFORMANCE Shareholders Returns Sustained return to share holders Group Bank H1‘21: KES4.7 KES71,732Mn H1‘21: 12.78% 20.8% KES 2.8 H1‘21: KES 64,567Mn Return on Equity Earnings Per Share Core Capital H1‘21: KES2.0 H1‘21: KES 15,978 KES17,933Mn H1‘21: 1.75% 2.62 % KES 0.75 Single Borrower
Slide 35: Our HY 2022 Guidance
FINANCIAL PERFORMANCE Our HY 2022 Guidance We are on track to deliver against the FY guidance 35 ncbagroup.com Go for it
Slide 36: What Makes Us Different?
WHO WE ARE Our customers benefit from the Group’s What commitment to customer service excellence, superior digital banking platform and our broad Makes Us array of products Different? • Customer Centric Culture • Integrated Core Banking Platform • Strong Relationship Management • Digital Leadership
Slide 37: Appendix
FINANCIAL PERFOMANCE APPENDIX 37
Slide 38: Press Release
PRESS RELEASE NCBA Group PLC reports a pre-tax profit of KES 11.2 billion in half-year results Nairobi, August 29th 2022: NCBA Group PLC has posted a profit before tax of KES 11.2 billion in its half-year results ending June 30th 2022, which is a 51% increase compared to KES 7.4 billion reported dur
Slide 39: Press Release
PRESS RELEASE NCBA Group launched an ambitious branch expansion agenda last year which has seen it open 18 branches across the region in the last 18 months. This year alone, the Group has opened four branches in Busia, Utawala, Kenol and River Road and plans to open seven more branches by the end of
Slide 40: Go for it
contact@ncbagroup.com +254 20 2884444/ 0711 056444/ 0732 156444 NCBA Bank @ncbabankkenya @NCBABankKenya NCBA Group Web Chat ncbagroup.com Go for it 40